Manhattan Scientifics, Inc., a Delaware corporation (formerly Grand Enterprises, Inc) ("Grand") was established on July 31, 1992 and has three wholly-owned subsidiaries: Metallicum, Inc., ("Metallicum"), Tamarack Storage Devices, Inc. ("Tamarack") and Teneo Computing, Inc. ("Teneo") (collectively "the Company"), a development stage enterprise. Currently, Metallicum is the only operating subsidiary; and Tamarack and Teneo are dormant. On June 12, 2008, the Company acquired Metallicum, Inc, for 15,000,000 shares of Company's common stock. The Company has a long standing relationship with Los Alamos Laboratories in New Mexico. During 2008, the Company refocused its efforts from the development of its fuel cell technologies to its current focus on the development of advanced materials through the acquisition of Metallicum.

OVERVIEW

Manhattan Scientifics, Inc. is a technology incubator that acquires, develops and commercializes life-enhancing technologies in various fields, with emphasis in the areas of advanced materials, alternative energy, electronics and medical technology. In that capacity, we have previously identified emerging technologies through strategic alliances with scientific laboratories, educational institutions, and scientists and leaders in industry and government.

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

In the recent past, we have worked to develop and commercialize three technologies:

Micro fuel cell technology, which is designed to become an ultra efficient miniature electricity generator that converts hydrogen into electricity by chemical means, for portable electronic devices, including cellular telephones, as a substitute for lithium ion and other batteries in common use today.

Mid-range fuel cell technology, which is an ultra efficient medium-size electricity generating device that converts hydrogen into electricity, with potential applications including personal transportation, cordless appliances, power tools, wheelchairs, bicycles, boats, emergency home generators, military field communications and laptop computers.

Haptics "Touch and Feel" computer applications, which is a technology that allows computer users to be able to touch and feel any objects they see on their computer screen with the aid of special "mouse." Detailed texture, object-weight, stickiness, viscosity and object density can be "felt" or sensed. Management believes this haptics technology may positively impact the way computers are used everywhere by introducing the ability to "touch." (Please see Haptics "Touch and Feel" Internet Applications and Investment in Novint Technologies, Inc."

On October 20, 2009, we announced today that we entered into a non-binding letter of intent with Edward R. Flynn, Ph.D. and his company, Senior Scientific, LLC, to acquire all the manufacturing and marketing rights, together with all commercial rights associated with Dr. Flynn's patents and intellectual property in the emerging field of nanomedicine. Dr. Flynn's work is focused on the biomagnetic detection of cancer and other diseases through magnetic field sensors with enhanced accuracy.

OUR DEVELOPMENT MODEL

We intend to profit from the development of potentially disruptive or sea-change technologies. Our business model is to: (i) identify significant technologies,
(ii) acquire them or the rights to them, (iii) secure the services of inventors, engineers or other staff who were instrumental in their creation, (iv) provide or contract for suitable work facilities, laboratories, and other aids where appropriate, (v) prototype the technologies to demonstrate "proof of principle" feasibility, (vi) secure patent and or other intellectual property protection,
(vii) secure early customers for product trials where feasible and appropriate, and (viii) commercialize through licenses, sales or cooperative efforts with other manufacturing and distribution firms. Our license agreement with Carpenter Technologies Corporation and the revenues generated by our license agreement is one example of our success in acquiring, developing and commercializing life-enhancing technologies.

ADVANCED MATERIALS (METALLICUM, INC.)

In June 2008, we acquired Metallicum, Inc. ("Metallicum") and its licensed patented technology. We entered into a stock purchase agreement with Metallicum, Inc. to acquire all of the outstanding capital in exchange for 15,000,000 shares of our common stock. An additional 15,000,000 shares of our common stock will be payable to Metallicum in the event of meeting certain milestones.

Metallicum is a nanotechnology start-up company located in Santa Fe, New Mexico. Metallicum has focused on the development and manufacture of nanostructured metals for medical implants and other applications. Metallicum intends to establish manufacturing partner relationships with major Fortune 500 metals companies and strategic partnering with significant customers in the medical device & prosthetics industries as well as in auto, truck, & aircraft manufacturing industries. Metallicum's initial products include nanostructured bulk metals and alloys in the form of rod, bar, wire and foil.

We purchased Metallicum to acquire its licensed rights to patented technology. The technology is comprised of three US Patents (US Patent numbers 7152448, 6197129 and 6399215) for which Metallicum (subsequently, Manhattan) had been assigned an exclusive license rights by Los Alamos National Security LLC (LANL). Under the license rights, Metallicum had all rights, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements on the patents or trade secrets whether or not patentable or registerable under copyright or similar laws.

In January 2009, we entered into a patent license agreement with Los Alamos National Security, LLC for the exclusive licensing use of certain technology relating to the manufacture and application of nanostructuring metals and alloys. Pursuant to such agreement we provided a non-refundable fee and 2,000,000 shares of our common stock. Additionally, we are required to pay an annual license fee starting in February 2010 and royalties on future net sales.

The technology is expected to trim thousands of pounds from airplanes and hundreds of pounds from cars without sacrificing structural strength or adding significant cost. The nanostructured metals also have wide implications for use in the medical device and prosthetics industries including dental implants, replacements for hips, shoulders, knees and cardio vascular stents. In December 2008, a manufacturing joint venture partner in Albuquerque, N.M. received U.S. Food and Drug Administration 510(k) clearance to market nanostructured titanium metal dental implants using our technology. This clearance positions us closer to our goal of commercializing our technology for nanostructured metals. We are in talks with many of the key manufacturers of dental implants and have signed material testing agreements with several manufacturers.

In September 2009, we entered into a license agreement with Carpenter Technologies Corporation. wherein Carpenter will fully develop, manufacture and market a new class of high strength metals under an exclusive license from Manhattan Scientifics and the Los Alamos National Laboratory. The contract includes minimum annual payments to Manhattan Scientifics during a 4 year period together with royalty payments as a % of gross sales.. The proprietary process will enable super-strength metals and alloys to make products that weigh far less than in the past and without significant cost premiums. A patented new form of titanium metal originally developed by Russian scientists in concert with scientists at the Los Alamos National Laboratory is expected initially to significantly improve medical prosthetics. Studies have shown that bone integrates with these new metals up to 20 times faster than with conventional metals. In December, 2008, FDA approval was received for the $2 billion dental implant market. Carpenter is studying and considering other applications, including the transportation industry where stronger, lighter metals may impact fuel economy.

RESULTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008.

REVENUES. We had $607,000 and $629,000 in revenues during the three and nine month periods ended September 30, 2009. We had no revenues for the three or nine month periods ended September 30, 2008. During the three month period ended September 30, 2009, we entered into a technology transfer agreement which we received $600,000. We will be entitled to annual payment including certain royalties.

GENERAL AND ADMINISTRATIVE. General and administrative expenses consists of consultants, contractors, accounting, legal, travel, rent, telephone and other day to day operating expenses. General and administrative expenses were $215,000 for the three months ended September, 2009 compared with $238,000 for the three months ended September 30, 2008. General and administrative expenses decreased as a result of lower professional fees.

General and administrative expenses were $755,000 for the nine months ended September, 2009 compared with $1,722,000 for the nine months ended September 30, 2008. General and administrative expenses decreased in 2009 as a result of a 2008 grant of options for 18,000,000 shares of common stock with an exercise price of $0.013 granted to a consultant and our former CEO who currently serves a senior consultant. These options replaced 16,000,000 options previously granted with an exercise price of $0.05 per share. The value of these options totaled $1,034,000 which was valued using the Black-Scholes option pricing model based upon the following assumptions: stock price of $0.06 at grant date; 5 year term; volatility of 144%; and discount rate of 3.18%.

RESEARCH AND DEVELOPMENT. Research and development expenses were $25,000 and $25,000 for three and nine months ended September 30, 2009 compared to $52,000 and $156,000 in the same periods of the prior year reflecting the amortization of our patents. We fully amortized these patents in 2008.

NET INCOME (LOSS). Our net income (loss) was $354,000 for three months ended September 30, 2009 compared to $(188,000) for the three months ended September 30, 2008. The increase in net income resulted from revenue of $607,000 during the third quarter from our technology transfer agreement which we consummated in September 2009.

Our net loss was $(188,000) for nine months ended September 30, 2009 compared to $(1,861,000) for the nine months ended September 30, 2008. The decrease in net loss resulted from revenue of $607,000 in September 2009 from our technology transfer agreement and a decrease in general and administrative expense as a result of a decrease in stock options granted for services.

LIQUIDITY AND PLAN OF OPERATIONS

Until 2009, we have relied primarily upon private placements and subscription sales of stock to fund our continuing activities and acquisitions. To a limited extent, we have also relied upon borrowing from our officers. We intend to fund our future operations with tour revenues augmented by private placements of our stock, if necessary.

At September 30, 2009, our significant assets include our cash on hand. portfolio of intellectual property, 1,075,648 shares of common stock of Novint. We also have our contracts with third parties pertaining to technology development, acquisition, and licensing, and our strategic alliances with various scientific laboratories, educational institutions, scientists and leaders in industry and government.

We had an increase of $59,000 in cash and cash equivalents for the nine months ended September 30, 2009 compared with a $210,000 increase in cash and cash equivalents in the nine months ended September 30, 2008. The decrease in cash generated in 2009 resulted from lower proceeds from the issuance of common stock net of offering costs ($567,000) partially offset by less cash used in operating activities as a result of revenue from our technology transfer agreement. The increase in cash used in operating activities was the result of revenue of $607,000 from our technology transfer agreement.

Working capital was a deficit of $992,000 on September 30, 2009 compared with a deficit of $1,165,000 on December 31, 2008.

Stockholders' equity totaled a deficit of $692,000 on September 30, 2009 compared with a deficit of $842,000 on December 31, 2008. During April 2008 through January 2009, we sold approximately $1,100,000 from a private placement offering at a price of $0.02 per share.

We have one full-time employee. We do not expect any significant change in the total number of employees in the near future. We intend to continue to identify and target appropriate technologies for possible acquisition and licensing over the next 12 months.

Based upon current projections, our principal cash requirements for the next 12 months consists of (1) fixed expenses, including rent, payroll, investor relations services, public relations services, bookkeeping services, graphic design services, consultant services, and reimbursed expenses; and (2) variable expenses, including technology research and development, milestone payments, intellectual

property protection, utilities and telephone, office supplies, additional consultants, legal and accounting. As of September 30, 2009, we had $626,000 in cash. We intend to satisfy our capital requirements for the next 12 months by continuing to pursue private placements to raise capital, using our common stock as payment for services in lieu of cash where appropriate, borrowing as appropriate, and our cash on hand. However, we do not know if those resources will be adequate to cover our capital requirements.

RECENTLY ISSUED ACCOUNTING STANDARDS

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

Effective July 1, 2009, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 105-10, "Generally Accepted Accounting Principles." ASC 105-10 establishes the FASB Accounting Standards Codification ("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 GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification supersedes all existing non-SEC accounting and reporting standards. The FASB will now issue new standards in the form of 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 changes in the Codification. References made to FASB guidance have been updated for the Codification throughout this document.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

Use of Estimates

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

License Agreements

In 2008, we obtained licenses to the rights of certain patents regarding nanostructured materials developed by another company as a result of the acquisition of Metallicum. The purchase price paid for these licenses was $305,000, which represents its fair value. We obtained an exclusive license on two patents and a non-exclusive license on the third patent. The value attributable to license agreements is being amortized over the period of its estimated benefit period of 10 years. At September 30, 2009, accumulated amortization was $37,000. Under the terms of the agreement, we may be required to pay royalties, as defined, to the licensors.

Investments - Available-for-Sale Investments

Investments that we designate as available-for-sale are reported at fair value, with unrealized gains and losses, net of tax, recorded in accumulated other comprehensive income (loss). We determine the cost of the investment sold based on the specific identification method. Our available-for-sale investments include Marketable equity securities. We acquire these equity investments for the promotion of business and strategic objectives. We record the realized gains or losses on the sale or exchange of marketable equity securities in gains (losses) on other equity investments, net

Stock-Based Compensation:

The Company follows the provisions of FASB ASC 718 Compensation - Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values. The Company estimates the expected term, which represents the period of time from the grant date that the Company expects its stock options to remain outstanding, using the simplified method as permitted by SAB 107 and SAB 110. Under this method, the expected term is estimated as the mid-point between the time the options vest and their contractual terms. The Company continues to apply the simplified method because it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected terms due to the limited period of time its equity shares have been publicly traded and the limited number of its options which have so far vested and become eligible for exercise.

The estimated fair value of grants of stock options and warrants to nonemployees of the Company is charged to expense, if applicable, in the financial statements. The Company did not issue any options or warrants during the three and nine months ended September 30, 2009.

OFF BALANCE SHEET ARRANGEMENTS