UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)





þ
            Quarterly
      Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
quarterly period ended September 30, 2009





o
            Transition
      Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
transition period from
                to





Commission
File Number 000-03125





MEDCLEAN
TECHNOLOGIES, INC.


(Exact
Name of Registrant as Specified in Its Charter)





Delaware
                
                21-0661726(State
      or other Jurisdiction of
                
                (I.R.S.
      Employerincorporation
      or organization)
                
                Identification
      Number)





3
Trowbridge Drive


Bethel,
Connecticut 06801


(Address
of Principal Executive offices)





(203)
798-1080


(Issuer’s
Telephone Number)





Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section


13 or
15(d) of the Exchange Act during the preceding 12 months (or for such
shorter


period
that the registrant was required to file such reports), and (2) has
been


subject
to such filing requirements for the past 90 days.


Yesþ No  o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):





Large
      Accelerated Filer  o
                
                Accelerated
      Filer                           oNon-Accelerated
      Filer    o
                
                Smaller
      Reporting Companyþ





Indicate
by check mark whether the registrant is a shell company (as defined
in


Rule
12b-2 of the Exchange Act). Yeso Noþ





As of
November 9, 2009, 561,542,968 shares of the issuer’s common stock (par value
$0.0001 per share) were outstanding.





TABLE OF
CONTENTS








PagePART
      I—FINANCIAL INFORMATIONItem
      1: Financial Statements
                        F1
      – F15Item
      2: Management's Discussion and Analysis or Plan of
    Operation
                        3Item
      3: Quantitative and Qualitative disclosures about Market
    Risk
                        7Item
      4: Controls and Procedures
                        7PART
      II—OTHER INFORMATIONItem
      1: Legal Proceedings
                        8Item1A:
      Risk Factors
                        8Item
      2: Unregistered Sales of Equity Securities and Use of
    Proceeds
                        8Item
      3: Defaults Upon Senior Securities
                        8Item
      4: Submission of Matters to a Vote of Security Holders
                        8Item
      5: Other Information
                        8Item
      6: Exhibits
                        9Signatures
                        9





2





PART
I—FINANCIAL INFORMATION





Item
1. Financial Statements





INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS





PAGECONDENSED
      CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2009 (UNAUDITED) AND
      DECEMBER 31, 2008
                        F2UNAUDITED
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFOR
      THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND
2008
                        F3UNAUDITED
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
                        F4NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        F5




F-1





MEDCLEAN
TECHNOLOGIES, INC.


CONDENSED
CONSOLIDATED BALANCE SHEETS





September
      30,
                
                
                December
      31,2009
                
                
                2008(Unaudited)ASSETSCurrent
      assetsCash
                
                $
                249,225
                
                
                $
                1,922,401Accounts
      receivable, net of $15,589 and $23,081 allowance as of September 30, 2009
      and December 31, 2008, respectively
                
                
                265,809
                
                
                
                176,284Revenues
      in excess of billings
                
                
                7,679
                
                
                
                7,679Inventory
                
                
                838,538
                
                
                
                886,351Prepaid
      expenses
                
                
                42,717
                
                
                
                24,925Total
      current assets:
                
                
                1,403,968
                
                
                
                3,017,640Property,
      plant and equipment, net
                
                
                243,455
                
                
                
                285,304Other
      assetsDeposits
                
                
                38,260
                
                
                
                38,260Total
      assets
                
                $
                1,685,683
                
                
                
                3,341,204LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable and accrued liabilities
                
                $
                241,882
                
                
                $
                653,785Payroll
      liabilities
                
                
                244,381
                
                
                
                390,857Deferred
      revenue
                
                
                230,648
                
                
                
                136,691Customer
      deposits
                
                
                87,520
                
                
                
                386,428Billings
      in excess of revenue
                
                
                618,673
                
                
                
                620,639Notes
      payable
                
                
                211,722
                
                
                
                202,947Total
      current liabilities:
                
                
                1,634,826
                
                
                
                2,391,347Stockholders'
      equityCommon
      stock, $0.0001 par value; 3,500,000,000 shares authorized; 561,542,968
      shares issued and outstanding as of September 30, 2009 and December 31,
      2008
                
                
                56,154
                
                
                
                56,154Additional
      paid in capital
                
                
                24,302,081
                
                
                
                20,988,502Accumulated
      deficit
                
                
                (24,307,378
                )
                
                
                (20,094,799
                )Total
      stockholders' equity:
                
                
                50,857
                
                
                
                949,857Total
      liabilities and stockholders' equity
                
                $
                1,685,683
                
                
                $
                3,341,204





See the
accompanying notes to the unaudited condensed consolidated financial
statements


F-2





MEDCLEAN
TECHNOLOGIES, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)





Three
      months ended September 30,
                    
                    
                    Nine
      months ended September 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008RevenuesContract
      revenues earned
                    
                    $
                    1,229,361
                    
                    
                    $
                    571,243
                    
                    
                    $
                    1,229,361
                    
                    
                    $
                    1,425,466Sales
      and service revenues
                    
                    
                    326,931
                    
                    
                    
                    177,515
                    
                    
                    
                    1,099,113
                    
                    
                    
                    529,273Total
      revenues
                    
                    
                    1,556,292
                    
                    
                    
                    748,758
                    
                    
                    
                    2,328,474
                    
                    
                    
                    1,954,739Cost
      of sales
                    
                    
                    642,043
                    
                    
                    
                    482,239
                    
                    
                    
                    1,141,080
                    
                    
                    
                    1,291,321Gross
      profit
                    
                    
                    914,249
                    
                    
                    
                    266,519
                    
                    
                    
                    1,187,394
                    
                    
                    
                    663,418Operating
      expensesSalaries
      and wages
                    
                    
                    250,768
                    
                    
                    
                    339,227
                    
                    
                    
                    3,314,347
                    
                    
                    
                    1,029,217General
      and administrative expenses
                    
                    
                    299,811
                    
                    
                    
                    1,015,049
                    
                    
                    
                    1,121,347
                    
                    
                    
                    2,098,740Depreciation
                    
                    
                    20,998
                    
                    
                    
                    19,585
                    
                    
                    
                    65,157
                    
                    
                    
                    63,900Total
      operating expenses
                    
                    
                    571,577
                    
                    
                    
                    1,373,861
                    
                    
                    
                    4,500,851
                    
                    
                    
                    3,191,857Income
      (loss) from operations
                    
                    
                    342,672
                    
                    
                    
                    (1,107,342
                    )
                    
                    
                    (3,313,457
                    )
                    
                    
                    (2,528,439
                    )Other
      income and expensesInterest
      and other income
                    
                    
                    -
                    
                    
                    
                    40,290
                    
                    
                    
                    944
                    
                    
                    
                    40,904Interest
      expense
                    
                    
                    (3,366
                    )
                    
                    
                    (253,324
                    )
                    
                    
                    (900,066
                    )
                    
                    
                    (1,867,256
                    )Net
      Income (loss) before income taxes
                    
                    
                    339,306
                    
                    
                    
                    (1,320,376
                    )
                    
                    
                    (4,212,579
                    )
                    
                    
                    (4,354,791
                    )Provision
      for income taxes (benefit)
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      income (loss)
                    
                    $
                    339,306
                    
                    
                    $
                    (1,320,376
                    )
                    
                    $
                    (4,212,579
                    )
                    
                    $
                    (4,354,791
                    )Income
      (loss) per common share, basic
                    
                    $
                    0.00
                    
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.01
                    )
                    
                    $
                    (0.03
                    )Income
      (loss) per common share, fully diluted
                    
                    $
                    0.00
                    
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.01
                    )
                    
                    $
                    (0.03
                    )Weighted
      average common shares outstanding, basic
                    
                    
                    561,542,968
                    
                    
                    
                    336,645,470
                    
                    
                    
                    561,542,968
                    
                    
                    
                    127,553,445Weighted
      average common shares outstanding, fully diluted
                    
                    
                    561,542,968
                    
                    
                    
                    336,645,470
                    
                    
                    
                    561,542,968
                    
                    
                    
                    127,553,445





See the
accompanying notes to the unaudited condensed consolidated financial
statements


F-3




MEDCLEAN
TECHNOLOGIES, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)





Nine
      months ended September 30,2009
                
                
                2008Cash
      flows from operating activities:Net
      loss
                
                $
                (4,212,579
                )
                
                $
                (4,354,791
                )Adjustments
      to reconcile net income (loss) to net cash used in operating
      activitiesDepreciation
                
                
                65,157
                
                
                
                63,900Fair
      value of common stock, options and warrants issued for services
      rendered
                
                
                3,313,579
                
                
                
                1,693,261Common
      stock issued in settlement of preferred dividends and liquidated
      damages
                
                
                
                
                
                
                598,577Common
      stock issued in settlement of debt
                
                
                
                
                
                
                1,159,733Loss
      on disposal of fixed assets
                
                
                
                
                
                
                22,249(Increase)
      decrease in:Accounts
      receivable
                
                
                (89,525
                )
                
                
                411,812Revenues
      in excess of billings
                
                
                
                
                
                
                (7,679
                )Inventory
                
                
                47,813
                
                
                
                305,932Prepaid
      expenses
                
                
                (17,792
                )
                
                
                55,350Increase
      (decrease) in:Accounts
      payable and accrued liabilities
                
                
                (549,604
                )
                
                
                (270,850
                )Deferred
      revenue
                
                
                93,957
                
                
                
                (79,796
                )Customer
      deposits
                
                
                (298,908
                )
                
                
                -Billings
      in excess of revenue
                
                
                (1,966
                )
                
                
                (636,371
                )Dividend
      payable
                
                
                -
                
                
                
                (864,013
                )Net
      cash used in operating activities
                
                
                (1,649,868
                )
                
                
                (1,902,686
                )Cash
      flows from investing activities:Purchase
      of equipment
                
                
                (23,308
                )
                
                
                (7,307
                )Net
      cash used in investing activities
                
                
                (23,308
                )
                
                
                (7,307
                )Cash
      flows from financing activities:Proceeds
      from issuance of notes payable
                
                
                -
                
                
                
                350,000Repayments
      of notes payable
                
                
                -
                
                
                
                (418,985
                )Proceeds
      from sale of common stock
                
                
                -
                
                
                
                4,946,000Cost
      of insurance of preferred stock and warrants
                
                
                -
                
                
                
                (85,500
                )Net
      cash provided by financing activities
                
                
                -
                
                
                
                4,791,515(Decrease)
      increase in cash and cash equivalents
                
                
                (1,673,176
                )
                
                
                2,881,522Cash
      and cash equivalents, beginning of period
                
                
                1,922,401
                
                
                
                212,215Cash
      and cash equivalents, end of period
                
                $
                249,225
                
                
                $
                3,093,737Supplemental
      disclosures of cash flow information:Cash
      paid during the period for:Interest
                
                $
                1,324
                
                
                $
                94,903Taxes
                
                $
                -
                
                
                $
                -Supplemental
      disclosures of non-cash investing and financing
activities:Common
      stock issued in exchange for notes payable
                
                $
                -
                
                
                $
                1,225,000Accrual
      of preferred stock dividends
                
                
                -
                
                
                
                210,000Common
      stock issued in settlement of preferred stock dividends
                
                
                -
                
                
                
                383,577Common
      stock issued in settlement of liquidated damages
                
                
                -
                
                
                
                215,000





See the
accompanying notes to the unaudited condensed consolidated financial
statements


F-4





MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





A summary
of the significant accounting policies applied in the presentation of the
accompanying financial statements are as follows:





General





The
accompanying unaudited condensed consolidated financial statements of MedClean
Technologies, Inc. and subsidiaries, (“MedClean” or the “Company” or “MTI”),
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.





In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included.  Accordingly, the results from operations for the three and
nine-month period ended September 30, 2009, are not necessarily indicative of
the results that may be expected for the year ending December 31,
2009.  The unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated December 31, 2008 financial
statements and footnotes thereto included in the Company's Form 10-K filed with
the SEC on March 24, 2009 and amended on April 17, 2009.





The
consolidated financial statements as December 31, 2008 have been derived from
the audited consolidated financial statements at that date but do not include
all disclosures required by the accounting principles generally accepted in the
United States of America.





Business and Basis of
Presentation





On
January 2, 2009, the Company merged its wholly owned subsidiary, Aduromed
Corporation into Aduromed Industries Inc. and changed its corporate name from
Aduromed Industries, Inc. to MedClean Technologies, Inc.





MedClean
is in the business of providing solutions for managing medical waste on site
including designing, selling, installing and servicing on site (i.e. "in-situ ") turnkey systems
to treat regulated medical waste. The Company provides these systems to
hospitals and other medical facilities as efficient, safe, cost effective and
legally compliant solutions to incineration, off site hauling of untreated waste
and other alternative treatment technologies and methodologies. The MedClean
Series System is offered in three configurations: Containerized System, Mobile
System and the Fixed System (our traditional fixed installation).





Accounts
Receivable




The
Company assesses the realization of its receivables by performing ongoing credit
evaluations of its customers' financial condition. Through these evaluations,
the Company may become aware of a situation where a customer may not be able to
meet its financial obligations due to deterioration of its financial viability,
credit ratings or bankruptcy. The Company’s reserve requirements are based on
the best facts available to the Company and are reevaluated and adjusted as
additional information is received. The Company’s reserves are also based on
amounts determined by using percentages applied to certain aged receivable
categories. These percentages are determined by a variety of factors including,
but not limited to, current economic trends, historical payment and bad debt
write-off experience. Allowance for doubtful accounts for accounts and notes
receivable was $15,589 and $23,081 as of September 30, 2009 and December 31,
2008, respectively.


F-5





MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Revenue
recognition





Prior to
2009 the Company recognized revenues from fixed-price and modified fixed-price
construction type contracts on the percentage-of-completion method, measured by
the percentage of cost incurred to date to estimated total cost for each
contract. That method was used because management considers total cost to be the
best available measure of progress on the contracts. Because of inherent
uncertainties in estimating costs, it was at least reasonably possible that the
estimates used will change within the near term. Prior to 2009, the Company has
billed 25% of the contract at signing, 50% upon delivery of components, and the
final 25% upon completion of installation and start-up. Beginning in 2009 the
Company will recognize revenues upon completion of the system installation for
system installed inside a health care facility.  Clients will be
invoiced 60% of the contracts at signing, 20% upon delivery of components, and
the final 20% upon completion of installation and start-up.





Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance. Selling, general and administrative costs are
charged to expense as incurred. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are determined. Changes in
job performance, job conditions, and estimated profitability may result in
revisions to costs and income, which are recognized in the period in which the
revisions are determined. Changes in estimated job profitability resulting from
job performance, job conditions, contract penalty provisions, claims, change
orders, and settlements, are accounted for as changes in estimates in the
current period.





Revenues
from direct sales of our On-Demand container unit are recognized as the Company
ships units. The Company provides a one year warranty on the systems it
installs. The Company also obtains a one year warranty on the system components
from the component manufacturer, thereby mitigating potential warranty costs.
Accordingly, the Company has accrued no reserve for warranty. On the installed
base after the warranty term has expired, the Company offers a maintenance
agreement of one or more years to the customer. The Customer is billed for, and
pays for the maintenance agreement in advance. Revenues from such maintenance
agreements are recognized ratably over the lives of the maintenance agreements,
with the excess of the amount collected over the amount recognized as deferred
revenue. At September 30, 2009 and December 31, 2008 the Company had $230,648
and $136,691 in deferred revenue from maintenance agreements. There are no sales
of container units for the nine months ended September 30, 2009 and
2008.





Revenues
from the sale of accessories and repairs and replacement parts are recognized
when shipped to the customer in accordance with a valid contract or order
agreement. The contract or order agreement specifies delivery terms and pricing,
and is considered to reasonably assure collection from the
customer.





Revenues
and cost from multi-year rental contracts on our mobile unit will be recognized
ratably over the life of the rental contract.


F-6


MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Segment
information





Accounting
Standards Codification (“ASC”) establishes standards for reporting information
regarding operating segments in annual financial statements and requires
selected information for those segments to be presented in interim financial
reports issued to stockholders. ASC also establishes standards for related
disclosures about products and services and geographic areas. Operating segments
are identified as components of an enterprise about which separate discrete
financial information is available for evaluation by the chief operating
decision maker, or decision-making group, in making decisions how to allocate
resources and assess performance. The Company applies the management approach to
the identification of our reportable operating segment as provided in accordance
with ASC. The information disclosed herein materially represents all of the
financial information related to the Company’s principal operating
segment.





Reclassification




Certain
reclassifications have been made to prior periods’ data to conform to the
current year’s presentation. These reclassifications had no effect on reported
income or losses.




Fair Value of Financial
Instruments





ASC
requires disclosure of the fair value of certain financial instruments. The
carrying value of cash and cash equivalents, accounts payable and accrued
liabilities, and short-term borrowings, as reflected in the consolidated balance
sheets, approximate fair value because of the short-term maturity of these
instruments.  All other significant financial assets, financial
liabilities and equity instruments of the Company are either recognized or
disclosed in the consolidated financial statements together with other
information relevant for making a reasonable assessment of future cash flows,
interest rate risk and credit risk. Where practicable the fair values of
financial assets and financial liabilities have been determined and disclosed;
otherwise only available information pertinent to fair value has been
disclosed.





Use of
estimates





The
preparation of the accompanying financial statements, in conformity with
generally accepted accounting principles, requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting periods. Actual results could differ from those
estimates.





Cash and cash
equivalents





The
Company considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.





The
Company maintains cash deposits with financial institutions, which from time to
time may exceed federally insured limits.  The Company has not
experienced any losses and believes it is not exposed to any significant credit
risk from cash. At September 30, 2009, the Company has no cash balances on
deposit in any one account with a financial institution in excess of the
federally insured limits.


F-7


MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Control by principal
stockholders





The
directors, executive officers, participants in the Master Restructuring
Agreement and their affiliates or related parties, own beneficially and in the
aggregate, the majority of the voting power of the outstanding shares of the
common stock of the Company. Accordingly, the directors, executive officers and
participants in the Master Restructuring Agreement and their affiliates or
related parties, if they voted their shares uniformly, would have the ability to
control the approval of most corporate actions, including increasing the
authorized capital stock of the Company and the dissolution, merger or sale of
the Company's assets.





Dependence on principal
customer





For 2009
and going forward, we do not anticipate that the loss of any one customer will
have a significant adverse impact on our business.





Property, plant and
equipment





The
Company has property, plant and equipment that consist of automobiles, computers
and related accessories, and office furniture.  The depreciation is
calculated using the straight line method over the life of the
property.  All property has a useful life of 3 to 10
years.  The following table summarizes these assets as of September
30, 2009 and December 31, 2008:




September
      30,
                
                
                December
      31,2009
                
                
                2008Office
      Furniture
                
                $
                164,525
                
                
                $
                164,525Computers
      and Accessories
                
                
                212,017
                
                
                
                206,091Leasehold
      Improvements
                
                
                135,380
                
                
                
                117,997511,922
                
                
                
                488,613Accumulated
      Depreciation
                
                
                268,467
                
                
                
                203,309$
                243,455
                
                
                $
                285,304




Inventory





The
Company maintains an inventory, which consists primarily of component parts,
spare parts and disposable goods.  The average cost method is utilized
in valuing the inventory, and is stated at the lower of cost or
market.  The following table summarizes these assets as of September
30, 2009 and December 31, 2008:





September
      30,
                    
                    
                    December
      31,2009
                    
                    
                    2008Component
      & spare parts
                    
                    $
                    786,052
                    
                    
                    $
                    754,476Consumables
                    
                    
                    52,486
                    
                    
                    
                    21,234Advance
      payments
                    
                    
                    0
                    
                    
                    
                    110,641Total
      inventory
                    
                    $
                    838,538
                    
                    
                    $
                    886,351




F-8





MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Earnings (loss) per common
share





The net
earnings (loss) per common share are computed by dividing the net loss for the
period by the weighted average number of shares outstanding for the period.
Outstanding warrants and options for the three-month and nine-month periods
ending September 30, 2009 and 2008 amounting to 619,096,836 and 43,943,271
respectively were not included in the calculation for net loss per common share
because it would be antidilutive or exceeded the average market price of the
Company’s common stock for period.





Outstanding
Preferred A and B class of stock nor the common stock equivalents associated
with the conversion feature for the periods ending September 30, 2008 amounting
to 22,043,862 of both classes of Preferred stock were neither included in the
calculation for net loss per common share as it would be
antidilutive.





The
numerator and denominator used in the basic and diluted earnings (loss) per
share of common stock computations are presented in the following
table:





Nine months ended September 30,
                  
                  
                  Three months ended September 30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008NUMERATOR
      FOR BASIC ANDDILUTED
      EPS (LPS)Net
      income (loss) per statement of operations
                  
                  $
                  (4,212,579
                  )
                  
                  $
                  (4,354,791
                  )
                  
                  $
                  339,306
                  
                  
                  $
                  (1,320,376
                  )Dividend
      payable to preferred stockholders
                  
                  
                  -
                  
                  
                  
                  (210,000
                  )
                  
                  
                  -Net
      income (loss) to common stockholders
                  
                  $
                  (4,212,579
                  )
                  
                  $
                  (4,564,791
                  )
                  
                  $
                  339,306
                  
                  
                  $
                  (1,320,376
                  )DENOMINATOR
      FOR BASIC AND DILUTED EPS (LPS)Weighted
      average shares of common stock outstanding
                  
                  
                  561,542,968
                  
                  
                  
                  127,553,445
                  
                  
                  
                  561,542,968
                  
                  
                  
                  336,645,470Basic
      and diluted EPS (LPS)
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.03
                  )
                  
                  $
                  0.00
                  
                  
                  $
                  (0.00
                  )




For the
three month period ended September 30, 2009, the Company did not consider
247,156,997 warrants and 503,388,594 vested options in the dilutive earnings per
share due to the related strike price exceeded the applicable market price of
the Company’s common stock.




Recent Accounting
Pronouncements




With
the exception of those stated below, there have been no recent accounting
pronouncements or changes in accounting pronouncements during the nine months
ended September 30, 2009, as compared to the recent accounting
pronouncements described in the Annual Report that are of material significance,
or have potential material significance, to the Company.


F-9




MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)




Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting
Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards
Codification(the “Codification”) as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with U.S.
GAAP. Rules and interpretive releases of the SEC under authority of federal
securities laws are also sources of authoritative U.S. GAAP for SEC registrants.
All guidance contained in the Codification carries an equal level of authority.
The Codification superseded all existing non-SEC accounting and reporting
standards. All other non-grandfathered, non-SEC accounting literature not
included in the Codification is non-authoritative. The FASB will not issue new
standards in the form of Statements, FASB Staff Positions or Emerging Issues
Task Force Abstracts. Instead, it will issue Accounting Standards Updates
(“ASUs”). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.




Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurements and
Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments
to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using certain techniques. ASU
2009-05 also clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in
an active market for the identical liability at the measurement date and the
quoted price for the identical liability when traded as an asset in an active
market when no adjustments to the quoted price of the asset are required are
Level 1 fair value measurements. Adoption of ASU 2009-05 did not have a material
impact on the Company’s consolidated results of operations or financial
condition.




In
October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue
Arrangements, (amendments to FASB ASC Topic 605, Revenue Recognition) (“ASU
2009-13”) and ASU 2009-14, Certain Arrangements That Include
Software Elements, (amendments to FASB ASC Topic 985, Software) (“ASU
2009-14”). ASU 2009-13 requires entities to allocate revenue in an
arrangement using estimated selling prices of the delivered goods and services
based on a selling price hierarchy. The amendments eliminate the residual method
of revenue allocation and require revenue to be allocated using the relative
selling price method. ASU 2009-14 removes tangible products from the scope
of software revenue guidance and provides guidance on determining whether
software deliverables in an arrangement that includes a tangible product are
covered by the scope of the software revenue guidance. ASU 2009-13 and ASU
2009-14 should be applied on a prospective basis for revenue arrangements
entered into or materially modified in fiscal years beginning on or after
June 15, 2010, with early adoption permitted. The Company does not expect
adoption of ASU 2009-13 or ASU 2009-14 to have a material impact on the
Company’s consolidated results of operations or financial
condition.


F-10




MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
2 - GOING CONCERN MATTERS





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern, which contemplates the realization
of assets and satisfaction of liabilities and commitments in the normal course
of business. The Company has incurred substantial recurring losses, which raises
substantial doubt about its ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.





The
Company has available cash and cash equivalents of approximately
$249,225 at September 30, 2009 which it intends to utilize for working
capital purposes and to continue developing its business. To supplement its cash
resources, the Company has been pursuing a number of alternative financing
arrangements with various investment entities. We are currently looking to
secure additional working capital to provide the necessary funds for us to
execute our business plan through various sources, including bank facilities,
bridge loans and equity offerings. However, we continue to incur significant
operating losses and the resultant reduction of our cash position.  We
cannot assure that we will be able to obtain additional funding, and the lack
thereof would have a material adverse impact on our business. Moreover, any
equity funding could be substantially dilutive to existing stockholders. The
aforementioned factors raise substantial doubt about our ability to continue as
a going concern. In the event the Company is unable to continue as a going
concern it may pursue a number of different options, including, but not limited
to, filing for protection under the federal bankruptcy code.





NOTE
2 – CONTRACTS IN PROCESS





The
Company enters into construction type contracts to furnish and install its
systems in hospitals. There were five outstanding contracts at September 30,
2009 and December 31, 2008.  The following table summarizes these
outstanding contracts:





Contract
                      
                      
                      Revenue
                      
                      
                      Amounts
                      
                      
                      Revenues in
                      
                      
                      Billings in excessAmount
                      
                      
                      Recognized
                      
                      
                      Billed
                      
                      
                      excess of Billings
                      
                      
                      of RevenuesOutstanding contracts at September 30, 20091,327,930
                      
                      
                      
                      949,221
                      
                      
                      
                      1,327,930
                      
                      
                      
                      -
                      
                      
                      
                      378,709231,257
                      
                      
                      
                      29,347
                      
                      
                      
                      21,668
                      
                      
                      
                      7,679
                      
                      
                      
                      -287,029
                      
                      
                      
                      163,939
                      
                      
                      
                      215,271
                      
                      
                      
                      -
                      
                      
                      
                      51,332282,948
                      
                      
                      
                      -
                      
                      
                      
                      188,632
                      
                      
                      
                      -
                      
                      
                      
                      188,6322,129,164
                      
                      
                      
                      1,142,507
                      
                      
                      
                      1,753,501
                      
                      
                      
                      7,679
                      
                      
                      
                      706,193Outstanding
      contracts at December 31, 20081,327,930
                      
                      
                      
                      949,221
                      
                      
                      
                      1,327,930
                      
                      
                      
                      -
                      
                      
                      
                      378,709231,257
                      
                      
                      
                      29,347
                      
                      
                      
                      21,668
                      
                      
                      
                      7,679
                      
                      
                      
                      -287,029
                      
                      
                      
                      163,939
                      
                      
                      
                      215,271
                      
                      
                      
                      -
                      
                      
                      
                      51,332282,948
                      
                      
                      
                      -
                      
                      
                      
                      188,632
                      
                      
                      
                      -
                      
                      
                      
                      188,632559,594
                      
                      
                      
                      528,426
                      
                      
                      
                      530,392
                      
                      
                      
                      -
                      
                      
                      
                      1,9662,688,758
                      
                      
                      
                      1,670,933
                      
                      
                      
                      2,283,893
                      
                      
                      
                      7,679
                      
                      
                      
                      620,639




F-11





MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
3 – NOTE PAYABLE





The
Company’s outstanding unsecured note bears a 12% interest rate and matured on
December 15, 2003. Both parties have entered a verbal agreement to extend the
maturity date on this note indefinitely. No accrued interest has been paid on
this note to date. As of September 30, 2009 and December 31, 2008 the balance
due was $211,722 and $202,947 respectively.





NOTE
4 – CAPITAL STOCK





The
Company is authorized to issue 3,500,000,000 shares of common stock, with a
$0.0001 par value per share as of April 22, 2009 as approved by the majority of
the Company stockholders. Prior to the April 22, 2009 share increase, the
Company was authorized to issue 1,400,000,000 shares of common stock with a
$0.0001 par value per share. In addition, the Company is authorized to issue
60,000,000 shares of preferred stock with a $0.0001 par value per
share.





As of
September 30, 2009 and December 31, 2008, the Company has 561,542,968 shares of
common stock and no preferred stock issued and outstanding.





NOTE
5 – WARRANTS AND OPTIONS





Warrants




The
following table summarizes the changes in warrants outstanding and related
prices for the shares of the Company’s common stock at September 30,
2009:




Exercise Price
                                                
                                                Number
                                                  Outstanding
                                                
                                                
                                                Warrants
                                                  Outstanding
                                                  Weighted
                                                  Average
                                                  Remaining
                                                  Contractual Life
                                                  (years)
                                                
                                                
                                                Weighted
                                                  Average
                                                  Exercise price
                                                
                                                
                                                Number
                                                  Exercisable
                                                
                                                
                                                Warrants
                                                  Exercisable
                                                  Weighted
                                                  Average
                                                  Exercise Price$
                                                0.0040
                                                
                                                
                                                47,397,500
                                                
                                                
                                                
                                                3.83
                                                
                                                
                                                $
                                                0.0040
                                                
                                                
                                                
                                                47,397,500
                                                
                                                
                                                $
                                                0.00400.0075
                                                
                                                
                                                167,419,111
                                                
                                                
                                                
                                                3.85
                                                
                                                
                                                
                                                0.0075
                                                
                                                
                                                
                                                167,419,111
                                                
                                                
                                                
                                                0.00750.0250
                                                
                                                
                                                28,000,000
                                                
                                                
                                                
                                                3.85
                                                
                                                
                                                
                                                0.0250
                                                
                                                
                                                
                                                28,000,000
                                                
                                                
                                                
                                                0.02500.0900
                                                
                                                
                                                600,000
                                                
                                                
                                                
                                                3.46
                                                
                                                
                                                
                                                0.0900
                                                
                                                
                                                
                                                600,000
                                                
                                                
                                                
                                                0.09000.2400
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                2.74
                                                
                                                
                                                
                                                0.2400
                                                
                                                
                                                
                                                100,000
                                                
                                                
                                                
                                                0.24000.3788
                                                
                                                
                                                2,204,386
                                                
                                                
                                                
                                                1.32
                                                
                                                
                                                
                                                0.3788
                                                
                                                
                                                
                                                2,204,386
                                                
                                                
                                                
                                                0.37880.5571
                                                
                                                
                                                1,436,000
                                                
                                                
                                                
                                                0.84
                                                
                                                
                                                
                                                0.5571
                                                
                                                
                                                
                                                1,436,000
                                                
                                                
                                                
                                                0.5571Total
                                                
                                                
                                                247,156,997
                                                
                                                
                                                
                                                3.81
                                                
                                                
                                                $
                                                0.0156
                                                
                                                
                                                
                                                247,156,997
                                                
                                                
                                                $
                                                0.0128




F-12





MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
5 – WARRANTS AND OPTIONS (continued)





Transactions
involving the Company’s warrant issuance are summarized as follows:




Number of
                                    Shares
                                  
                                  
                                  Weighted
                                    Average
                                    Price Per
                                    ShareOutstanding
      at December 31, 2007
                                  
                                  
                                  32,476,672
                                  
                                  
                                  $
                                  0.3585Granted
                                  
                                  
                                  503,570,577Exercised
                                  
                                  
                                  (93,861,853
                                  )Canceled
      or expired
                                  
                                  
                                  (27,609,286
                                  )Outstanding
      at December 31, 2008
                                  
                                  
                                  414,576,110
                                  
                                  
                                  
                                  0.0265Granted
                                  
                                  
                                  167,419,113ExercisedCanceled
      or expired
                                  
                                  
                                  (334,838,226
                                  )Outstanding
      at September 30, 2009
                                  
                                  
                                  247,156,997
                                  
                                  
                                  $
                                  0.0156




On June
30, 2009, pursuant to its private offer to exchange all of the Company's
existing Common Stock Purchase Warrants with Initial Exercise Dates between July
11, 2008 and August 29, 2008 ("Existing Warrants") for newly issued Common Stock
Purchase Warrants with a new lower exercise price of $0.0075 per share,
exercisable for one-half the original number of shares of our common stock, par
value $0.0001 per share ("Common Stock"), and without a "cashless exercise"
right, the Company exchanged 334,838,226 Existing Warrants for 167,419,113
common stock purchase warrants with an exercise price of $0.0075 per share and
28,000,000 common stock purchase warrants with an exercise price of $0.025
remain outstanding.  The fair value of the newly issued common stock
warrants, determined using the Black-Scholes Option Pricing Model did not exceed
the fair value of the existing warrants at the time of the
exchange.





Stock
options





The
following table summarizes the changes in options outstanding and the related
prices for the shares of the Company's common stock issued to employees and
directors of the Company at September 30, 2009:





Options Outstanding
                                                    
                                                    
                                                    
                                                    Options ExercisableExercise Prices
                                                    
                                                    
                                                    Number
                                                      Outstanding
                                                    
                                                    Weighted Average
                                                      Remaining
                                                      Contractual Life
                                                      (Years)
                                                    
                                                    Weighted
                                                      Average
                                                      Exercise Price
                                                    
                                                    Number
                                                      Exercisable
                                                    
                                                    Weighted
                                                      Average
                                                      Exercise Price$
                                                    0.004
                                                    
                                                    
                                                    
                                                    539,358,950
                                                    
                                                    4.63
                                                    
                                                    $
                                                    0.004
                                                    
                                                    503,388,594
                                                    
                                                    $
                                                    0.004Total
                                                    
                                                    
                                                    
                                                    539,358,950
                                                    
                                                    4.63
                                                    
                                                    $
                                                    0.004
                                                    
                                                    503,388,594
                                                    
                                                    $
                                                    0.004




F-13


MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
5 – WARRANTS AND OPTIONS (continued)





Transactions
involving stock options issued to employees are summarized as
follows:




Weighted
                      AverageNumber
      of
                    
                    
                    PriceShares
                    
                    
                    Per ShareOutstanding
      at December 31, 2007:
                    
                    
                    11,531,315
                    
                    
                    $
                    0.098Granted
                    
                    
                    71,634,000
                    
                    
                    $Exercised
                    
                    
                    —Canceled
      or expired
                    
                    
                    (4,806,365
                    )Outstanding
      at December 31, 2008:
                    
                    
                    78,358,950
                    
                    
                    $
                    0.072Granted
                    
                    
                    461,000,000Exercised
                    
                    
                    -
                    
                    
                    
                    -Canceled
      or expiredOutstanding
      at September 30, 2009:
                    
                    
                    539,358,950
                    
                    
                    $
                    0.004





On May 1,
2009, the Company issued options to purchase 461,000,000 shares of the Company’s
common stock in consideration of employees accepting  no and or
reduced compensation for a specified period of time. The option grants as
approved by the Compensation Committee were fully vested when issued and the
exercise price is $0.004 per share.





The fair
value for these awards was estimated using the Black-Scholes option pricing
model with the following weighted average assumptions, assuming no expected
dividends:




Expected
      life (years)
                  
                  
                  5Expected
      volatility
                  
                  
                  255.30
                  %Risk-free
      interest rate
                  
                  
                  1.98
                  %Dividend
      yield
                  
                  
                  —
                  %





During
the nine-month period ended September 30, 2009, the Company re-priced certain
employee options initially with exercise prices from $0.05 to $0.557 to $0.004
per share with other terms remaining the same.  The fair value of the
fully vested re-priced options was charged to current period
operations.





The fair
values of the fully vested re-priced employee options were determined using the
Black Scholes option pricing model with the following assumptions:




Dividend
      yield:
                    
                    
                    -0-
                    %Volatility
                    
                    
                    255.30
                    %Risk
      free rate:
                    
                    
                    1.98
                    %





The
expected volatilities are based on the historical volatility of the Company’s
common stock.  The observation is made on a daily
basis.  The observation period covered is consistent with the expected
life of the options.  The expected life of stock options is based on
the minimum vesting period required.  The risk-free rate is consistent
with the expected terms of the stock options and is based on the United States
Federal Reserve data system yield curve in effect at the time of
grant.


F-14


MEDCLEAN
TECHNOLOGIES, INC.


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2009





NOTE
5 – WARRANTS AND OPTIONS (continued)





During
the nine months ended September 30, 2009 and 2008, the stock compensation
expenses were $3,313,579 and $1,693,261, respectively.





NOTE
6 – FAIR VALUE OF FINANCIAL INSTRUMENTS





The
Company adopted certain provisions of FASB ASC Topic 820 to evaluate the fair
value of certain of its financial assets required to be measured on a recurring
basis. Under FASB ASC Topic 820, based on the observability of the inputs used
in the valuation techniques, the Company is required to provide the following
information according to the fair value hierarchy. The fair value hierarchy
ranks the quality and reliability of the information used to determine fair
values. Financial assets and liabilities carried at fair value will be
classified and disclosed in one of the following three categories:





•
            
            Level
      1 — Quoted prices in active markets for identical assets or
      liabilities.•
            
            Level
      2 — Inputs other than Level 1 that are observable, either directly or
      indirectly, such as quoted prices for similar assets or liabilities;
      quoted prices in markets that are not active; or other inputs that are
      observable or can be corroborated by observable market data for
      substantially the full term of the assets or
  liabilities.•
            
            Level
      3 — Unobservable inputs that are supported by little or no market activity
      and that are significant to the fair value of the assets or
      liabilities.





As of
September 30, 2009, the Company’s cash and cash equivalents of $249,225
were valued using quoted prices generated by market transactions involving
identical assets, or Level 1 assets as defined under FASB ASC Topic
820.





The
Company adopted the provisions of FASB ASC Topic 825, “Financial Instruments,” which
require disclosures about the fair value of financial instruments in interim as
well as annual financial statements. The following table summarizes the carrying
amount and fair value of the Company’s financial instruments as of
September 30, 2009:





September 30, 2009CarryingFinancial instruments
                  
                  Amount
                  
                  
                  Fair ValueCash
      and cash equivalents
                  
                  $
                  249,225
                  
                  
                  $
                  249,225Accounts
      receivable, net
                  
                  
                  265,809
                  
                  
                  
                  265,809Accounts
      payable and accrued liabilities
                  
                  
                  241,882
                  
                  
                  
                  241,882$
                  756,916
                  
                  
                  $
                  756,916





For cash
and cash equivalents, accounts receivable, and accounts payable, the carrying
amount approximates fair value because of the relative short maturity of those
instruments.


F-15


Item
2. Management's Discussion and Analysis or Plan of Operation





Forward
Looking Statements





The
Company is including the following cautionary statement in this Interim Report
on Form 10-Q for any forward-looking statements made by, or on behalf of, the
Company. Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance and underlying
assumptions and other statements which are other than statements of historical
facts. Certain statements contained herein are forward-looking statements and
accordingly involve risks and uncertainties which could cause actual results or
outcomes to differ materially from those expressed in the forward-looking
statements. Our expectations, beliefs and projections are expressed in good
faith and are believed by us to have a reasonable basis, including without
limitation, management’s examination of historical operating trends, data
contained in our records and other data available from third parties, but there
can be no assurance that management’s expectation, beliefs or projections will
result or be achieved or accomplished. In addition to other factors and matters
discussed elsewhere herein, the following are important factors that, in our
view, could cause actual results to differ materially from those discussed in
the forward-looking statements: technological advances by our competitors,
changes in health care reform, including reimbursement programs, changes to
regulatory requirements relating to environmental approvals for the treatment of
infectious medical waste, capital needs to fund any delays or extensions of
development programs, delays in the manufacture of new and existing products by
us or third party contractors, market acceptance of our products, the loss of
any key employees, delays in obtaining federal, state or local regulatory
clearance for new installations and operations, changes in governmental
regulations, availability of capital on terms satisfactory to us. We are also
subject to numerous Risk Factors relating to manufacturing, regulatory,
financial resources and personnel as described in our Annual Report on Form
10-K. We disclaim any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof.





Results
of Operations





Three
Months Ended September 30, 2009 Compared to Three Months Ended September 30,
2008





Net
Revenue





Total
revenue for the quarter ended September 30, 2009 was $1,556,292 compared with
$748,758 for the same period in 2008, an increase of $807,534 or
107.8%.





Revenues
derived from the sale of consumables, component parts, service billings and
amortization of maintenance contracts increased $149,416 or 84% in the current
quarter to $326,931. The increase in revenue was attributable to increased
billings for goods and services from an increased install base of hospitals that
have previously purchased our MedClean system.





In the
current quarter, we recognized revenue from two system installations with
revenues of $1,213,069 and $16,291 from the balance of a system install. The
remaining contracts in backlog have not yet been scheduled.


3


Gross
Profit




The gross
profit for the three months ended September 30, 2009 was $914,249 (58.7% of
total revenue) compared with a gross profit of $266,519 (35.6% of total revenue)
for the same three month period of 2008.





In 2009,
we introduced a revised sale pricing structure for our products with higher
gross profit margins as compared to prior years.  In this period we
recognized revenue on two system sales under this new pricing structure and our
gross profit margins increased from 35.6% to 58.7%, or a 65%
increase.  In addition, by carefully managing the business we have
been able to ensure that we are invoicing for all services preformed and
therefore, have been able to increase our total gross profit and revenue from
the comparable period, last year.





The
components of costs of revenues for products include direct materials, shipping
and rigging costs and contract labor primarily used to install, repair and
maintain our equipment.




Operating
Expenses




Total
operating expenses for the three months ended September 30, 2009 was $571,577
compared with $1,373,861 for the same three month period in 2008, a decrease of
$802,284. In the three months ended September 30, 2008, we recognized non-cash
equity based compensation to service providers and employee of $785,000 as
compared to $35,424 recorded as equity based compensation for the three months
ended September 30, 2009




Interest
and Other Income





Interest
income for the three month period ended September 30, 2009 was $-0- compared to
$7,515 for the same period, last year. In 2008, we recorded a onetime gain of
$32,775 in other income during the period. The Company invests its excess cash
in a money market account.





Interest
expense





Interest
expense and amortization for the three month period ended September 30, 2009 was
$3,366 compared with $253,324 in the same three month period of 2008. In the
three months ended September 30, 2009, we recognized non-cash amortization
expense amounting to $-0- compared to $246,352 in the same three month period of
2008.  The decrease was due to the conversion of debt to common stock as a
result of the Master Restructuring Agreement signed on August 4,
2008.




Net
Income (loss)




Net
income for the current quarter was $339,306 compared to a net loss for the same
period in 2008 of $(1,320,376).





Nine
Months Ended September 30, 2009 Compared to Nine Months Ended September 30,
2008





Net
Revenue





Total
revenue for the nine months ended September 30, 2009 was $2,328,474 compared
with $1,954,739 for the same nine month period of 2008, an increase of $373,735
or 19.1%





Revenues
derived from the sale of consumables, component parts, service billings and
amortization of maintenance contracts more than doubled to $1,099,113 in the
first nine months of 2009. The increase in revenue was attributable to increased
billings for goods and services from an increased install base of hospitals that
have previously purchased our MedClean system.





For the
first nine months of 2009, we recognized revenue from two system installations
totally $1,213,069 and $16,291 from the balance of a system install. The
remaining contracts in backlog have not yet been scheduled.


4


Orders
for the MedClean system are contracted by purchase order and are billed in 3
increments. Consumables and component parts are billed when shipped and service
contracts are invoiced at the start of the service period and revenue is
pro-rated over the life of the contract.





Gross
Profit




The gross
profit for the nine months ended September 30, 2009 was $1,187,394 (51.0% of
total revenue) compared with a gross profit of $663,418 (33.9% of total revenue)
for the same nine month period of 2008.





In 2009,
we introduced a revised sale pricing structure for our products with higher
gross profit margins as compared to prior years.  As such, our gross
profit margins increased from 33.9% to 51.0%, or a 50.4% increase.  In
addition, our total gross profit increased due to our increase in revenue from
the comparable period, last year.





The
components of costs of revenues for products include direct materials, shipping
and rigging costs and contract labor primarily used to install, repair and
maintain our equipment.




Operating
Expenses




Total
operating expenses for the nine month period ended September 30, 2009 were
$4,500,851 compared with $3,191,857 for the same nine month period of 2008, an
increase of $1,308,994. In the nine months ended September 30, 2009, we
recognized non-cash equity based compensation expense amounting to $3,313,579
compared to $1,693,261 in the same nine month period of 2008.  The increase
was due to the amount of new options issued in the period. On May 1, 2009, the
Company issued options to purchase 461 million shares of MedClean’s common stock
in consideration of employees accepting no and or reduced compensation for a
specified period of time. The option grants as approved by the Compensation
Committee were fully vested when issued with a strike price of $0.004 per
share.





Interest
and Other Income





Interest
income for the nine month period ended September 30, 2009 was $944 compared to
$8,128 for the same period, last year. In 2008, we recorded a onetime gain of
$32,775 in other income during the period. The Company invests its excess cash
in a money market account.





Interest
Expense




Interest
expense for the nine months ended September 30, 2009 was $900,066 compared with
$1,867,256 of interest income in the same nine month period of
2008.




In the
nine month period ending September 30, 2009 we recognized non-cash amortization
expense for warrants issued amounting to $889,967 compared to $1,764,178 in the
same nine month period of 2008. The decrease was due to conversion of debt to
common stock as a result of the Master Restructuring Agreement signed on August
4, 2008.




Net
loss




Net loss
for the nine months ended September 30, 2009 was $(4,212.579) compared to a net
loss for the same nine month period in 2008 of $(4,354,791).


5


Financial
Condition





Liquidity
and Capital Resources





The
Company’s cash on hand and working capital as of September 30, 2009 and December
31, 2008 are as follows:




September
      30,
                  
                  
                  December
      31,2009
                  
                  
                  2008Cash
      on hand
                  
                  $
                  249,225
                  
                  
                  $
                  1,922,401Working
      capital
                  
                  $
                  (230,858
                  )
                  
                  $
                  626,293




The
Company has purchased $23,308 in new fixed assets in the first nine months of
2009. Under current conditions the Company anticipates purchasing approximately
$10,000 in additional fixed assets in 2009.





Net cash
used in operating activities totaled $1,649,868 for the nine months ended
September 30, 2009.





Our
accounts receivable balance may have dramatic swings from one period to
another depending upon the timing and the amount of milestone billings
included in the balance at the end of any accounting period. There are
three milestone billings representing a percentage of the contract value
for each installment and our payment terms are ``upon receipt''. Receivable
balances are typically paid within 15 days of the invoice date. Billings
for maintenance contracts and consumables are due within 45 days and are
more numerous but much smaller in value than milestone billings. We review
our outstanding receivable balances on a regular basis to ensure that the
allowance for bad debt is adequate.   Due to the varying nature in the
timing and amounts of the receivable balances as noted above, the change in
the allowance for doubtful account will not necessarily correlate with the
increase or decrease in the accounts receivable balance. The accounts receivable
balance as of September 30, 2009 was $265,809 net of an allowance of $15,589, an
increase of $89,525 from year end.





Our
inventory balance may have dramatic swings from one period to another
depending upon the expected installation date of our MedClean systems and our
accounts payable balances can have similar swings depending on payment
terms and any volume purchases or discounts we may take advantage of from
time to time. During the nine months ended September 30, 2009, the Company
decreased its inventory on hand by $47,813 to $838,538.





To
supplement its cash resources, the Company has been pursuing a number of
alternative financing arrangements with various investment entities. We are
currently looking to secure additional working capital to provide the necessary
funds for us to execute our business plan through various sources, including
bank facilities, bridge loans and equity offerings. However, we continue to
incur significant operating losses and the resultant reduction of our cash
position.  We cannot assure that we will be able to obtain additional
funding, and the lack thereof would have a material adverse impact on our
business.  Moreover, any equity funding could be substantially
dilutive to existing stockholders. The aforementioned factors raise substantial
doubt about our ability to continue as a going concern. In the event the Company
is unable to continue as a going concern it may pursue a number of different
options, including, but not limited to, filing for protection under the federal
bankruptcy code.


6


Item
3. Quantitative and Qualitative Disclosures about Market Risk





Not
required





Item
4. Controls and Procedures





As of the
nine month period ended September 30, 2009 covered by this report, the Company
carried out, under the supervision and with the participation of the Company's
management, including its Chief Executive Officer and Chief Financial Officer,
an evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934). Based upon and as of the date of
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the design and operation of these disclosure controls and
procedures are effective.





There has
been no change in our internal control over financial reporting that occurred
during the last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.


7


PART
II—OTHER INFORMATION





Item 1: Legal
Proceedings.





The
Company has no pending legal proceedings. From time to time, it may be involved
in various claims, lawsuits or disputes with third parties, and actions
involving allegations of breach of contract incidental to the normal business
operations of the Company’s business.





Item
1A: Risk Factors.





There
have been no material changes from the risk factors previously disclosed in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2008.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds





There
were no unregistered sales of the Company’s equity securities during the quarter
ended September 30, 2009.





Item
3. Defaults upon Senior Securities.





There has
been no default in the payment of principal, interest, sinking or purchase fund
installment, or any other material default not cured within 30 days, with
respect to any indebtedness of the Company exceeding 5 percent of its total
assets.





Item
4. Submission of Matters to a Vote of Security Holders.





There
were no matters submitted to security holders of the Company during the period
covered by this report.





Item
5: Other Information





None


8


Item
6. Exhibits





NUMBER
            
            DESCRIPTION
      OF EXHIBIT31.1*
            
            Certification
      by the Principal Executive Officer of Registrant pursuant to Section 302
      of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule
      15d-14(a)).31.2*
            
            Certification
      by the Principal Financial Officer of Registrant pursuant to Section 302
      of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule
      15d-14(a)).32.1*
            
            Certification
      by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.32.2*
            
            Certification
      by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.





* Filed
herein.





SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.





Registrant





MEDCLEAN
TECHNOLOGIES, INC.





Date:
      November 9, 2009
            
            Date:
      November 9, 2009By:
      /s/ Scott Grisanti
            
            By:
      /s/ Cheryl Kaine SadowskiScott
      Grisanti,
            
            Cheryl
      Kaine SadowskiPresident
      and
            
            Treasurer
      andChief
      Executive Officer
            
            Chief
      Financial Officer(Principal
      Executive Officer)
            
            (Principal
      Financial and Accounting Officer)


9