UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
Current Report
 
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 31,2011
MANHATTAN SCIENTIFICS, INC.
(Name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
Incorporation or organization)
 
405 Lexington Avenue, 32 nd Floor
New York, New York
(Address of principal executive offices)
000-28411
(Commission File Number)
85-0460639
(I.R.S. Employer
Identification Number)
 
 
10174
(Zip Code)

Registrant’s telephone number, including area code: (212) 551-0577
 
N/A
(Former name or former address, if changed since last report)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
1
 
 
Item 1.01
Entry into a Material Definitive Agreement.
 
On May 31, 2011, Manhattan Scientifics, Inc. (the “Company”) entered into an Agreement and Plan of Reorganization (“Nanomedicine Agreement”) by and among the Company, Scientific Nanomedicine, Inc. (“Nanomedicine”), Edward, R. Flynn (“Flynn”) and Edward R. Flynn and Maureen A. Flynn, as Co-Trustees of the Edward R. Flynn and Maureen A. Flynn Revocable Trust u/t/a dated 10/25/2006 (“Trust”); and entered into a Purchase Agreement (“Senior Scientific Agreement”) by and among the Company, Senior Scientific LLC, (“Senior Scientific”) and Flynn.

Under the Nanomedicine Agreement, the Company has agreed to purchase all of the common stock of Nanomedicine.  The purchase price for the common stock of Nanomedicine is 21,667,000 restricted shares of the Company’s voting common stock (less 7,667,000 shares already issued pursuant to the Acquisition Option Agreement, dated February 8, 2010 (“Option Agreement”), among the Company, Nanomedicine, Flynn and Senior Scientific.  Nanomedicine holds the commercial rights to technology and intellectual property with respect to the early detection of diseases using nano technologies owned by Senior Scientific.

Under the Senior Scientific Agreement, the Company has agreed to purchase all of the membership interests of Senior Scientific.  The purchase price for the membership interests of Senior Scientific is 1,000 restricted shares of the Company’s voting common stock.  Senior Scientific operates a research laboratory in New Mexico.

The closing of the acquisitions were subject to customary closing conditions.  The Nanomedicine Agreement is attached as Exhibit 10.1 hereto and is incorporated herein by reference.  The Senior Scientific Agreement is attached as Exhibit 10.2 hereto and is incorporated herein by reference.  The foregoing description of the Nanomedicine Agreement and Senior Scientific Agreement does not purport to be complete and is qualified in its entirety by reference to the attached agreements.
 
Item 2.01
Completion of Acquisition or Disposition of Assets.
 
The information contained in Item 1.01 of this Form 8-K is incorporated herein by reference.
 
Item 3.02
Unregistered Sales of Equity Securities
 
In connection with the acquisition of Nanomedicine and Senior Scientific, the Company issued 14,001,000 unregistered shares of its common stock, valued at $952,000.  The common shares were authorized for issuance pursuant to an exemption under Section 4(2) of the Securities Act of 1933.
 
Item 8.01
Other Events.
 
On June 6, 2011, the Company issued a press release announcing the completion of the acquisitions.  A copy of the press release is furnished under this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
 
Item 9.01
Financial Statements and Exhibits
 
(a)  
Financial Statements of Business Acquired.
 
The Financial Statements of Nanomedicine and Senior Scientific for the year ended December 31, 2010 and the quarters ended March 31, 2011 and March 31, 2010 will be filed as an exhibit to a Current Report on Form 8-K within seventy-one (71) days of the date hereof.
 
(b)  
Pro Forma Financial Information.
 
The Unaudited Pro Forma Condensed Financial Information of the Company, giving effect to the acquisitions, will be filed as an Exhibit to a Current Report on Form 8-K within seventy-one (71) days of the date hereof.
 
 (d) Exhibits
 
Exhibit No.
 
Description
 
 
 
10.1
 
Agreement and Plan of Reorganization by and among the Company, Scientific Nanomedicine, Inc., Edward, R. Flynn and Edward R. Flynn and Maureen A. Flynn, as Co-Trustees of the Edward R. Flynn and Maureen A. Flynn Revocable Trust u/t/a dated 10/25/2006.
10.2
 
Purchase Agreement by and among the Company, Senior Scientific LLC and Edward R. Flynn.
99.1
 
Press Release, dated June 6, 2011.
 
2
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  MANHATTAN SCIENTIFICS, INC.  
       
Date: June 6, 2011 
By:
/s/ Emmanuel Tsoupanarias  
    Name: Emmanuel Tsoupanarias  
    Title: Chief Executive Officer  
       


 
3
Exhibit 10.1
AGREEMENT AND PLAN OF REORGANIZATION
 
THIS AGREEMENT, dated May 31, 2011, by and among Manhattan Scientific, Inc., a Delaware corporation (“Manhattan”), Scientific Nanomedicine, Inc., a Delaware corporation (“Nanomedicine”), Edward, R. Flynn (“Flynn”), and Edward R. Flynn and Maureen A. Flynn, as Co-Trustees of the Edward R. Flynn and Maureen A. Flynn Revocable Trust u/t/a dated 10/25/2006 (“Trust”), the sole share shareholder of Nanomedicine.
 
W I T N E S S E T H:
 
Trust is the owner of all of the issued and outstanding capital stock of Nanomedicine. Trust wishes to exchange all of the capital stock of Nanomedicine for stock of Manhattan in the amount and upon the terms and conditions hereinafter set forth.
 
Senior Scientifics LLC and Flynn have previously assigned to Nanomedicine all interest in technology generally related to detection of biological materials, including detection and treatment of cancer, with application to other areas of biology as well, as set forth in the Technology Transfer Agreement between Senior Scientific LLC and Nanomedicine (the “Transfer Agreement”); which Transfer Agreement has been provided to Manhattan and acknowledged by Manhattan.
 
Manhattan, Nanomedicine, Flynn and Senior Scientifics LLC, on February 8, 2010, entered into an Acquisition Option Agreement (“Option Agreement”) to create an option for Manhattan to purchase Nanomedicine, including all IP assigned to Nanomedicine under the Transfer Agreement and Manhattan has issued a deposit of 7,667,000 shares (the “Deposit”) pursuant to the Option Agreement, of which 1,667,000 shares were for payment in lieu of required cash payment of $100,000 required under the Option Agreement.
 
The Boards of Directors of Manhattan and Nanomedicine deem it advisable and in the best interest of such corporations and their shareholders that the exchange described above be completed on the terms and conditions hereinafter set forth and in accordance with all applicable laws, and have adopted resolutions to that effect.
 
 In consideration of these premises, the parties hereto agree as follows:
 
1.   Definitions
 
Assinged IP.   The meaning defined in the Transfer Agreement.
 
Closing.   The closing of the Reorganization.
 
Closing Date .  The date of the Closing pursuant to Section 3.
 
Code.   The Internal Revenue Code of 1986, as amended.
 
Nanomedicine Shares.   All the issued and outstanding authorized stock of Nanomedicine which is 10,000 shares of $.0001 par value common stock
 
Reorganization .  The exchange of restricted voting capital common stock of Manhattan for all of the Nanomedicine Shares, pursuant to Section 368(a)(1)(B) of the Code.
 
2.
Reorganization .
 
2.1
Qualifying “B” Reorganization .  Manhattan and Nanomedicine agree to complete the Reorganization on or before the Closing Date.  Pursuant to the requirements of Section 368(a)(1)(B) of the Code and the regulations promulgated thereunder, Manhattan will issue and deliver 21,667,000 restricted shares of its voting common stock in exchange for the 10,000 shares of Nanomedicine held by Trust.  Immediately after the exchange, Manhattan shall have control (as defined in section 368(c) of the Code) of Nanomedicine and be the sole owner of its share.
 
 
1
 
 
2.2
Implementation of Reorganization .  Trust shall cause Nanomedicine to (i) take all corporate actions and obtain all approvals and consents necessary to complete the Reorganization, and (ii) on the Closing Date, deliver and transfer the certificate representing the Nanomedicine Shares, together with a stock power duly endorsed in blank.
 
3.
Closing
 
The Closing shall take place in Albuquerque, New Mexico at 4:00 p.m. (New Mexico time) on May 31, 2011, or at such other place, date and time as Trust and Manhattan may agree in writing.
 
4.
Conditions to Manhattan's Obligations
 
The obligations of Manhattan to effect the Closing shall be subject to the satisfaction at or prior to the Closing of the following condition which may be waived by Manhattan in writing:
 
4.1
Accuracy of Representations .   The representations of Dr. Flynn and Nanomedicine in this Agreement shall be true and accurate in all material respects at and as of Closing.
 
4.2
Receipt of Nanomedicine Shares .   The Trust shall have delivered to Manhattan at Closing the Nanomedicine Shares.
 
5.
Conditions to Trusts' Obligations
 
The obligations of Trust and Nanomedicine to effect the Closing shall be subject to the satisfaction at or prior to the Closing of the following condition which may be waived by Trust:
 
5.1 
Accuracy of Representations .   The representations of Manhattan in this Agreement shall be true and accurate in all material respects at and as of Closing.
 
5.2 
Receipt of Manhattan Common Stock .   Manhattan shall have delivered to the Trust at Closing certificates representing 21,667,000 shares (less the Deposit) issued in the name of the Trust.
 
6.
Representations, Warranties and Covenants.
 
Except as disclosed in a disclosure letter (the “Disclosure Letter”) required to be delivered pursuant to this Agreement, which is deemed to constitute an integral part of this Agreement, the Parties make the following representations.
 
6.1. 
Each of Manhattan and Nanomedicine represents and warrants to the other that it is a corporation (in the case of Manhattan and Nanomedicine) duly organized, validly existing, and in good standing under the laws of its state of incorporation or organization, having a place of business as set forth above, that it has the power and authority to enter into this Agreement and that all corporate and other action required to be taken on behalf of such party to authorize the execution and delivery of this Agreement and to carry out the transactions contemplated herein, has been duly and properly taken and no consent is required from any other party.
 
6.2. 
Each of Dr. Flynn and Nanomedicine represents and warrants that the Trust is the sole owner of 100% of the shares of Nanomedicine, and that no other party has any rights to any shares or other ownership interest in Nanomedicine, and that Dr. Flynn has complete and sole authority to transfer the shares of Nanomedicine, and that such shares shall be fully paid and nonassessable.
 
6.3. 
Each of Dr. Flynn and Nanomedicine and Manhattan represents and warrants that it has disclosed to the other Party any written or electronic mail communications actually received by it which alleges it has violated or, by conducting its obligations as currently proposed under this Agreement, would violate, any of the Intellectual Property rights of any third party.
 
 
2
 
 
6.4. 
Other than as disclosed to Manhattan in a disclosure letter dated as the date hereof, Dr. Flynn represents that, to his actual knowledge, Senior Scientific LLC had the right to assign the Assigned IP as set forth in the Transfer Agreement; and that it obtained its rights fully in accordance with applicable laws, rules and regulations; and that it has not granted any licenses or other rights to any of the Assigned IP (except for reserved rights to the US government in developments made under US government grants); and covenants that it shall not grant any licenses or other rights to any of the Assigned IP (except for reserved rights to the US government in developments made under US government grants).  Manhattan, Nanomedicine and Dr. Flynn acknowledge that Dr. Flynn has not searched for patents owned or patent applications filed by others that may be similar to the Assigned IP and, accordingly, neither Nanomedicine, nor Dr. Flynn warrants that exercise of the Assigned IP does not or will not infringe on patent or other rights of other parties.
 
6.5 
Dr. Flynn represents that Nanomedicine has good and marketable title in all personal property owned by it, in each case free and clear of all liens. The assets, listed in the Disclosure Letter, comprise all of the assets, properties and rights of every type and description, used in, or necessary to, the conduct of the Business and are adequate to conduct the Business as it is currently conducted.
 
6.6. 
Dr. Flynn represents that (a) the financial statements provided to the Seller, and included in the Disclosure Letter, fairly represent the financial position of Nanomedicine and (b) Nanomedicine has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and Dr. Flynn has no knowledge of a tax deficiency, either asserted or threatened.
 
6.7
Dr. Flynn represents that Nanomedicine is a not a party to, or bound by, any contract, arrangement, commitment or understanding (whether written or oral) that is to be performed after the date of this Agreement, other than (a) the Lease Agreement between the Regents of the University of New Mexico that currently expires on May 31, 2011 and (b) the obligation to prepare research reports for the National Institutes of Health before April 1, 2012.  Dr. Flynn shall prepare and submit the research reports before the due dates.
 
6.8
Dr. Flynn and Manhattan shall enter into a consulting agreement as a condition precedent to the completion of the Merger.
 
6.9
For a period of one year from the date of issuance by Manhattan, any Manhattan common stock received by the Trust, Dr. Flynn or his designees shall be subject to the Slow Sell and Governance restrictions set forth on Exhibit A attached hereto.
 
6.10
Each Party to this Agreement hereby intends and agrees to take all reasonable actions to cause the Merger to qualify as a reorganization within the meaning of Section 368 of the Code.
 
6.11
From and after the Closing Date, to the extent reasonably requested, the Parties shall assist and cooperate with each other in the preparation of any tax returns, audits or government reports.  Further, from and after the Closing Date, the Parties shall, upon reasonable request, make available all information, records and documents reasonably available which are necessary for the preparation of tax return, audit or government report or resolution of any dispute.
 
6.12
Manhattan shall, before the Closing Date, name a registered agent in New Mexico and establish a new registered office in New Mexico.  The registered agent shall be Gerald Grafe at his address in Corrales, New Mexico.
 
7
Miscellaneous.
 
7.1. 
Further Assurances . Each Party hereby agrees to execute and deliver any further assignments and other documents as the other Party reasonably believes to be necessary to effect the provisions of this Agreement, or other enjoyment of the rights granted to such other Party hereunder.
 
7.2. 
Force Majeure. The parties shall not be responsible for any failure to perform due to the occurrence of any events beyond their reasonable control which render their performance impossible or onerous. Dr. Flynn's death or disability shall not void the obligations of Manhattan under this Agreement.
 
 
3
 
 
7.3. 
Headings. The headings of the articles, paragraphs, and clauses used in this Agreement are included for convenience only and are not to be used in interpreting or construing this Agreement.
 
7.4. 
Governing Law . This Agreement and all disputes concerning its execution, formation, interpretation, performance, breach, termination, validity, or enforceability shall be governed by and interpreted and enforced in accordance with the laws of the United States of America and the State of New Mexico, without regard to any principles of conflicts of law. In any action brought arising out of this Agreement, including without limitation any action to enforce the terms of this Agreement or to recover damages from a breach of this Agreement, but not including actions against third parties for infringement of IP rights, the parties agree to the exclusive jurisdiction and venue of the state court of general jurisdiction and, if appropriate, to a federal court sitting in the state of New Mexico, and agree that neither party shall raise any objection to such personal jurisdiction or venue.
 
7.5
Trademarks and Publicity. No party shall use any trademark of any other party without first obtaining express written permission from the other. No party shall make any public disclosure, including press releases, disclosing the business relationship of any of the parties hereto or any aspect thereof or identifying the other party, without the express written permission of the party to be identified. Manhattan, Nanomedicine and Dr. Flynn will cooperate in drafting a joint press release announcing the signing of this Agreement, and on other joint press releases from time to time. Neither party shall disclose specific terms of this Agreement, without the prior consent of the other party or to the extent required by applicable law or regulation, in which case the parties shall discuss the claimed lawful or regulatory duty before making disclosure of all or any part of this Agreement.
 
7.6. 
Dispute Resolution. Any disputes arising from or related to this Agreement shall be addressed and resolved in three phases. First, an offended party shall notify the other parties in writing of the events or occurrences that give rise to a dispute. Within ten days of the actual receipt of the notice, responsible representatives of the parties shall meet and, in good faith, attempt to address and resolve the dispute through negotiation. If the negotiations fail to resolve the dispute, the parties shall jointly select a mediator and, within twenty days of the failed negotiations, participate in mediation at a location within the State of New Mexico selected by the mediator. Unless otherwise agreed by the parties, the mediation shall conclude within forty-five days of the receipt of the initial notice required under this paragraph. If the parties fail to resolve fully their dispute through mediation, then any party may file a lawsuit against another party.
 
7.7. 
Attorney's Fees. In the event legal proceedings arising out of or relating to this Agreement are initiated by either party against the other, the substantially prevailing party shall be entitled to recover its reasonable expenses and costs, including attorneys’ fees.
 
7.8. 
Waiver. No claim or right arising out of a material breach of this Agreement can be discharged in whole or in part by a waiver of the claim or rights unless it is in writing and signed by the aggrieved party.
 
7.9. 
Notices. All notices and other communications required herein shall be in writing and shall be either delivered personally or be sent by certified mail, postage prepaid, return receipt requested. Items delivered personally shall be deemed delivered one day after dispatch; items sent by certified or registered mail shall be deemed delivered three (3) days after mailing. The addresses of the parties for purposes of this provision are:
 
Manhattan:
 
Chief Executive Officer
Manhattan Scientifics, Inc.
405 Lexington Avenue, 27th Floor
New York, New York
 
Dr. Flynn:
 
Dr. Edward Flynn
11109 County Club Drive N.E.
Albuquerque, New Mexico 87111
 
 
4
 
 
7.10. 
Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto, and shall supersede the terms and conditions of any and all prior agreements (including the Option Agreement), understandings, promises, representations, and writings made by either party to the other concerning the subject matter and the terms and conditions hereof. No subsequent modification, amendment, or extension of this Agreement or any of the terms and conditions hereof shall be of any force or effect unless it is in writing and signed by a duly authorized officer or representative of each of the parties.
 
7.11. 
Severability. The unenforceability, invalidity, or illegality of any provisions of this Agreement shall not render the other provisions unenforceable, invalid, or illegal. Any unenforceable, invalid, or illegal provision shall be severed from this Agreement only to the extent to make the resulting provision enforceable, valid, and legal.
 
7.12. 
Counterparts. This Agreement may be executed in counterparts with the same force and effect as if all signatures appeared on the same document.
 
8.13. 
Good Faith . The parties also promise at all times during the business relationship established by this Agreement to execute and fulfill their contractual obligations in good faith, and they, and each of them, expressly promise at all times to treat each other fairly. All parties have had opportunity to review this Agreement with counsel of their choice, and no provision shall be construed for or against either party due to the identity of the party drafting such provision.
 
 
 
5
 
 
INTENDING TO BE LEGALLY BOUND, THE PARTIES, THROUGH THEIR AUTHORIZED AGENT(S), HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST EXPRESSED ABOVE.
 
 
Scientific Nanomedicine, Inc.
 
Edward Flynn, Ph.D .
     
/s/ Edward R. Flynn   /s/ Edward R. Flynn
Edward R. Flynn, Ph.D., President
 
Edward Flynn, Ph.D., an individual
     
Edward R. Flynn and Maureen A. Flynn as
Co-Trustees of the Edward R. Flynn and Maureen A. Flynn Revocable Trust u/t/a dated 10/25/2006 .
 
Manhattan Scientifics, Inc.
     
/s/ Maureen A. Flynn   /s/ Emmanuel Tsoupanarias
Maureen A. Flynn, Ph.D., Co-Trustee
 
Emmanuel Tsoupanarias, CEO
     
/s/ Edward Flynn    
Edward Flynn, Ph.D., Co-Trustee
   

 
 
6
 
 
Exhibit A
 
Slow Sell Restrictions.
 
Dr. Flynn, the Trust, and any transferees of the shares issued under this Agreement, shall not in the aggregate sell in any business day more than 2% of the trading volume of the previous business day. Private sales (sales directly to Manhattan, or sales to private parties not via the public markets) shall not count against this limit. Shares transferred in such private sales shall remain subject to these restrictions and the recipient must execute a proxy as set forth below.
 
Governance Restrictions .
 
All shares issued under this Agreement shall be subject to a proxy as set forth below.
 
PROXY
 
The undersigned stockholder of MANHATTAN SCIENTIFICS, INC., a Delaware corporation (the “Company”), hereby irrevocably constitutes and appoints Emmanuel Tsoupanarias or any subsequent Chief Executive Officer of Manhattan Scientifics (“CEO”), with full power of substitution, as the agent, attorney-in-fact and proxy of the undersigned, for and in the name, place and stead of the undersigned, to vote all of the shares of the Company’s common stock which the undersigned would be entitled to vote if then personally present at any such annual or special meeting in the manner specified and on any other business as may properly come before the meeting or by written consent of stockholders of the Company as specified by the law of the State of Delaware, but only to the extent such business concerns any of: authorization or retirement of numbers of shares or classes of shares, splits or combinations of shares, and choice of trading exchange.  This irrevocable proxy shall continue in force for one year after issuance of the shares.  This proxy shall cease to be enforceable upon a written release by the CEO or upon the sale by the undersigned stockholder of the stock underlying this proxy, which stockholder shall not be restricted from selling except as described herein or as prohibited by law.
 
In order to enable the aforesaid covenants to be enforced, the undersigned hereby consents to the placing of legends and/or stop-transfer orders with the transfer agent of the Company’s securities with respect to any of the securities registered in the name of the undersigned or beneficially owned by the undersigned.
 
 
Edward R. Flynn and Maureen A. Flynn as
Co-Trustees of the Edward R. Flynn and Maureen A. Flynn Revocable Trust u/t/a dated 10/25/2006 .
 
/s/ Maureen A. Flynn
Maureen A. Flynn, Ph.D., Co-Trustee
 
/s/ Edward Flynn
Edward Flynn, Ph.D., Co-Trustee

 
 
7
Exhibit 10.2
 
Purchase Agreement among Senior Scientific LLC, Edward R. Flynn, Ph.D.,
and Manhattan Scientifics, Inc.


This Purchase Agreement (“ Agreement ”), dated as of May 31, 2011, is made by and among Senior Scientific LLC, a New Mexico limited liability company having a place of business in Albuquerque, NM (“ SS ”), Edward R. Flynn, Ph.D. (" Dr. Flynn ") and Manhattan Scientifics, Inc., a Delaware corporation having a place of business in New York, New York (“ MSI ” and together with SS and Dr. Flynn, the “ Parties ”).
 
1. 
Background.
 
1.1. 
SS is a limited liability company, wholly owned by Dr. Flynn, established for the development of technology generally related to detection of biological materials, including detection and treatment of cancer, with application to other areas of biology as well.
 
1.2. 
SS and Dr. Flynn have previously assigned to Scientific Nanomedicine, Inc. (“SNMI”) all interest in technology generally related to detection of biological materials, including detection and treatment of cancer, with application to other areas of biology as well, as set forth in the Technology Transfer Agreement between Senior Scientific LLC and SNMI (the “ Transfer Agreement ”); which Transfer Agreement has been provided to MSI and acknowledged by MSI.
 
1.3. 
MSI, SS, SNMI and Dr. Flynn, on February 8, 2010, entered into an Acquisition Option Agreement (“ Option Agreement ”) for the purchase of SNMI, including all IP assigned to SNMI under the Transfer Agreement.
 
1.4 
MSI advances technologies with potential world-changing impact to the threshold of commercialization by following the principles of purpose, dedication and cooperation.
 
1.5 
MSI desires to acquire SS for purposes of raising capital and securing partnerships with industry leaders suitable for successful commercialization of the technology, and Dr. Flynn desires to sell SS to MSI.
 
In consideration of the premises and of the covenants, representations, warranties and agreements herein contained, the Parties have reached the following agreement:
 
2. 
Definitions . The following terms shall have the meanings set forth below.
 
2.1. 
Assigned IP . Assigned IP as defined in the Transfer Agreement.
 
3. 
Acquisition of SS .
 
3.1
SS Purchase Price . Dr. Flynn hereby agrees to transfer, or cause the transfer, to MSI, and MSI, in reliance on the representations and warranties contained herein, and subject to the terms and conditions of this Agreement, agrees to purchase all of the membership interests in SS for a total purchase price of 1,000 shares of the restricted stock of MSI (the “ SS Purchase Price ”).
 
3.2
Transfer of Interests and Terms of Payment . MSI shall issue to Dr. Flynn or his designee restricted shares equal to the SS Purchase Price.  Simultaneously with the payment of the SS Purchase Price, Dr. Flynn shall deliver to MSI the Assignment of Limited Liability Company Interest transferring the ownership of SS (the “ Merger ”).
 
3.3
Closing .  Subject to the terms and conditions of this Agreement, the Closing shall take place on or before 5:00 P.M. EST on May 31, 2011 (the “ Closing Date ”).
 
 
1
 
 
4. 
Representations, Warranties and Covenants.
 
Except as disclosed in a disclosure letter (the “Disclosure Letter”) required to be delivered pursuant to this Agreement, which is deemed to constitute an integral part of this Agreement, the Parties make the following representations.
 
4.1. 
Each of MSI and SS represents and warrants to the other that it is a corporation (in the case of MSI) or limited liability company (in the case of SS) duly organized, validly existing, and in good standing under the laws of its state of incorporation or organization, having a place of business as set forth above, that it has the power and authority to enter into this Agreement and that all corporate and other action required to be taken on behalf of such party to authorize the execution and delivery of this Agreement and to carry out the transactions contemplated herein, has been duly and properly taken and no consent is required from any other party.
 
 4.2. 
Each of Dr. Flynn and SS represents and warrants that Dr. Flynn is the sole owner of 100% of the membership interests of SS, and that no other party has any rights to any shares or other ownership interest in SS, and that Dr. Flynn has complete and sole authority to transfer the membership interests of SS, and that such shares shall be fully paid and nonassessable.
 
 4.3. 
Each of Dr. Flynn, SS and MSI represents and warrants that it has disclosed to the other Party any written or electronic mail communications actually received by it which alleges it has violated or, by conducting its obligations as currently proposed under this Agreement, would violate, any of the Intellectual Property rights of any third party.
 
4.4. 
Other than as disclosed to MSI in a disclosure letter dated as the date hereof, each of SS and Dr. Flynn represents that, to its actual knowledge, it owned and had the right to assign the Assigned IP as set forth in the Transfer Agreement; and that it obtained its rights fully in accordance with applicable laws, rules and regulations; and that it has not granted any licenses or other rights to any of the Assigned IP (except for reserved rights to the US government in developments made under US government grants); and covenants that it shall not grant any licenses or other rights to any of the Assigned IP (except for reserved rights to the US government in developments made under US government grants).  MSI, Dr. Flynn and SS acknowledge that SS and Dr. Flynn have not searched for patents owned or patent applications filed by others that may be similar to the Assigned IP and, accordingly, neither SS nor Dr. Flynn warrants that exercise of the Assigned IP does not or will not infringe on patent or other rights of other parties.
 
4.5 
Dr. Flynn represents that SS has good and marketable title in all personal property owned by them, in each case free and clear of all liens.  The assets, listed in the Disclosure Letter, comprise all of the assets, properties and rights of every type and description, used in, or necessary to, the conduct of the Business and are adequate to conduct the Business as it is currently conducted.
 
4.6. 
Dr. Flynn represents that (a) the financial statements provided to the Seller, and included in the Disclosure Letter, fairly represent the financial position of SS and (b) SS has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and Dr. Flynn has no knowledge of a tax deficiency, either asserted or threatened.

4.7
Dr. Flynn represents that SS is not a party to, or bound by, any contract, arrangement, commitment or understanding (whether written or oral) that is to be performed after the date of this Agreement, other than (a) the Lease Agreement between the Regents of the University of New Mexico that currently expires on May 31, 2011 and (b) the obligation to prepare research reports for the National Institutes of Healrh before April 1, 2012.  Dr. Flynn shall prepare and submit the research reports before the due dates.

4.8
Dr. Flynn and MSI shall enter into a consulting agreement as a condition precedent to the completion of the Merger.

 
2
 
 
4.9
Each Party to this Agreement hereby intends and agrees to take all reasonable actions to cause the Merger to qualify as a reorganization within the meaning of Section 368 of the Code.
 
4.10
From and after the Closing Date, to the extent reasonably requested, the Parties shall assist and cooperate with each other in the preparation of any tax returns, audits or government reports.  Further, from and after the Closing Date, the Parties shall, upon reasonable request, make available all information, records and documents reasonably available which are necessary for the preparation of tax return, audit or government report or resolution of any dispute.

4.11
MSI shall, before the Closing Date, name a registered agent in New Mexico and establish a new registered office in New Mexico.  The registered agent shall be Gerald Grafe at his address in Corrales, New Mexico.

5. 
Miscellaneous.
 
5.1. 
Further Assurances . Each Party hereby agrees to execute and deliver any further assignments and other documents as the other Party reasonably believes to be necessary to effect the provisions of this Agreement, or other enjoyment of the rights granted to such other Party hereunder.
 
5.2. 
Force Majeure. The parties shall not be responsible for any failure to perform due to the occurrence of any events beyond their reasonable control which render their performance impossible or onerous. Dr. Flynn's death or disability shall not void the obligations of MSI under this Agreement.
 
5.3. 
Headings. The headings of the articles, paragraphs, and clauses used in this Agreement are included for convenience only and are not to be used in interpreting or construing this Agreement.
 
5.4. 
Governing Law . This Agreement and all disputes concerning its execution, formation, interpretation, performance, breach, termination, validity, or enforceability shall be governed by and interpreted and enforced in accordance with the laws of the United States of America and the State of New Mexico, without regard to any principles of conflicts of law. In any action brought arising out of this Agreement, including without limitation any action to enforce the terms of this Agreement or to recover damages from a breach of this Agreement, but not including actions against third parties for infringement of IP rights, the parties agree to the exclusive jurisdiction and venue of the state court of general jurisdiction and, if appropriate, to a federal court sitting in the state of New Mexico, and agree that neither party shall raise any objection to such personal jurisdiction or venue.
 
5.5. 
Trademarks and Publicity. No party shall use any trademark of any other party without first obtaining express written permission from the other. No party shall make any public disclosure, including press releases, disclosing the business relationship of any of the parties hereto or any aspect thereof or identifying the other party, without the express written permission of the party to be identified. MSI, Dr. Flynn and SS will cooperate in drafting a joint press release announcing the signing of this Agreement, and on other joint press releases from time to time. Neither party shall disclose specific terms of this Agreement, without the prior consent of the other party or to the extent required by applicable law or regulation, in which case the parties shall discuss the claimed lawful or regulatory duty before making disclosure of all or any part of this Agreement.
 
5.6. 
Dispute Resolution. Any disputes arising from or related to this Agreement shall be addressed and resolved in three phases. First, an offended party shall notify the other parties in writing of the events or occurrences that give rise to a dispute. Within ten days of the actual receipt of the notice, responsible representatives of the parties shall meet and, in good faith, attempt to address and resolve the dispute through negotiation. If the negotiations fail to resolve the dispute, the parties shall jointly select a mediator and, within twenty days of the failed negotiations, participate in mediation at a location within the State of New Mexico selected by the mediator. Unless otherwise agreed by the parties, the mediation shall conclude within forty-five days of the receipt of the initial notice required under this paragraph. If the parties fail to resolve fully their dispute through mediation, then any party may file a lawsuit against another party.
 
 
3
 
 
5.7. 
Attorney's Fees. In the event legal proceedings arising out of or relating to this Agreement are initiated by either party against the other, the substantially prevailing party shall be entitled to recover its reasonable expenses and costs, including attorneys’ fees.
 
5.8. 
Waiver. No claim or right arising out of a material breach of this Agreement can be discharged in whole or in part by a waiver of the claim or rights unless it is in writing and signed by the aggrieved party.
 
5.9. 
Notices. All notices and other communications required herein shall be in writing and shall be either delivered personally or be sent by certified mail, postage prepaid, return receipt requested. Items delivered personally shall be deemed delivered one day after dispatch; items sent by certified or registered mail shall be deemed delivered three (3) days after mailing. The addresses of the parties for purposes of this provision are:
 
5.9.1. 
MSI: 
 
Chief Executive Officer
Manhattan Scientifics, Inc.
405 Lexington Avenue, 27th Floor
New York, New York
   
5.9.2. 
SS and Dr. Flynn:
 
Edward Flynn, sole member of Senior Scientific LLC
11109 County Club Drive N.E.
Albuquerque, New Mexico 87111
     
5.10. 
Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto, and shall supersede the terms and conditions of any and all prior agreements (including the Option Agreement), understandings, promises, representations, and writings made by either party to the other concerning the subject matter and the terms and conditions hereof. No subsequent modification, amendment, or extension of this Agreement or any of the terms and conditions hereof shall be of any force or effect unless it is in writing and signed by a duly authorized officer or representative of each of the parties.
 
5.11. 
Severability. The unenforceability, invalidity, or illegality of any provisions of this Agreement shall not render the other provisions unenforceable, invalid, or illegal. Any unenforceable, invalid, or illegal provision shall be severed from this Agreement only to the extent to make the resulting provision enforceable, valid, and legal.
 
5.12. 
Counterparts. This Agreement may be executed in counterparts with the same force and effect as if all signatures appeared on the same document.
 
5.13. 
Good Faith . The parties also promise at all times during the business relationship established by this Agreement to execute and fulfill their contractual obligations in good faith, and they, and each of them, expressly promise at all times to treat each other fairly. All parties have had opportunity to review this Agreement with counsel of their choice, and no provision shall be construed for or against either party due to the identity of the party drafting such provision.
 
 
4
 
 
INTENDING TO BE LEGALLY BOUND, THE PARTIES, THROUGH THEIR AUTHORIZED AGENT(S), HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST EXPRESSED ABOVE.
 
 
Senior Scientific LLC
   
     
/s/ Edward R. Flynn    
Edward R. Flynn, Ph.D., sole member
   
     
   
Manhattan Scientifics, Inc.
     
/s/ Edward R. Flynn   /s/ Emmanuel Tsoupanarias
Edward Flynn, Ph.D., an individual
 
Emmanuel Tsoupanarias, CEO



 
5
Exhibit 99.1
Manhattan Scientifics Acquires Senior Scientific to Speed Applications of
Early Cancer Detection and Treatment Technology

ALBUQUERQUE, N.M.--(BUSINESS WIRE)-- In a move to accelerate applications of a novel cancer detection and treatment technology, Manhattan Scientifics (OTCBB: MHTX. OB - News ) today announced that it has acquired all of Senior Scientific, LLC and its affiliate Scientific Nanomedicine Inc. Primarily developed by Edward R. Flynn, Ph.D, the groundbreaking nanotechnology can detect and measure initial cancers and cancer metastases much earlier than is possible with current techniques. The technology is applicable to breast, prostate, ovarian, pancreatic, brain, and other cancers years earlier than current diagnostic techniques. Terms of the acquisition will be filed in a Form 8K with the SEC. The technology uses magnetic nanoparticles combined with antibodies that target specific kinds of cancer cells. Special instrumentation can precisely locate and accurately count the number of cancer cells present based on the nanoparticles bound by antibodies to the cancer cells. The nanoparticles are nontoxic, and the instrumentation does not require radiation or strong magnetic fields. The new technology can detect, locate, and measure tumors that are only 1/1000 the size required by conventional imaging techniques. As an example, the new technology can detect breast cancer several years earlier than is possible with a mammogram.
 
The system can be used for both diagnostics and targeted therapies. Manhattan Scientifics has applied for 24 patents to protect the inventions and three leading research hospital cancer centers in the U.S have expressed interest in collaborations with this technology.
 
Manhattan CEO Manny Tsoupanarias said, “It gives me great pleasure to announce this acquisition and to welcome Dr. Flynn and his team to the Manhattan Scientifics’ family. Dr. Flynn has transitioned from his earlier role as a key Los Alamos Laboratory nuclear physicist applying his knowledge of physics and avoiding the use of the scalpel in his approach to dealing with cancer. He and his colleagues at Senior Scientific and at the University of New Mexico Health Science Center have developed a novel, out-of-the-box approach to early detection and treatment of cancer. The technology is in keeping with our company’s focus on commercializing nanotechnologies in the field of advanced medicine.
 
“Three years ago we acquired Metallicum Inc. another nano technology for advanced medicine, which propelled our company to a cash-flow-positive state. Together with our Fortune/1000 industrial partner (NYSE: CRS - News ) we remain extremely optimistic about future prospects for our Metallicum unit. Now, with the acquisition of Senior Scientific, LLC, we anticipate repeating our history and expanding our overall business,” Tsoupanarias said.
 
Marvin Maslow, Founder & Chairman Emeritus of Manhattan Scientifics, said, “The Senior Scientific technology is stunning and the enthusiastic acceptance of it for experimental clinical work by America's most important cancer hospitals and cancer research centers is equally stunning. Our team leaders, V. Gerald Grafe and Spencer Falk, in collaboration with Dr. Richard Larson of the University of New Mexico, have shown great determination to accelerate the commercialization process.”
 
Edward R. Flynn, PhD, founder of Senior Scientific and Chief Scientist said, “I will continue to play a major role in developing this technology towards experimental and clinical applications. The past grants I received from the National Institutes of Health helped take the technology from concept to a working prototype. Now with the major commercializing role of Manhattan Scientifics, we can rapidly advance the technology from the laboratory to a clinical environment working cooperatively with the major cancer research centers in the U.S. This is truly an exciting time.”
 
About Manhattan Scientifics
 
Manhattan Scientifics Inc. ( http://www.mhtx.com/ ) is located in New Mexico, New York and Montreal. It is focused on technology transfer and commercialization of disruptive technologies in the nano medicine space. The company is presently developing commercial medical prosthetics applications for its ultra fine grain metals and plans to commercialize the cancer research work and nano medical applications developed by Senior Scientific LLC, a unit of the Company.
 
 
 
 
 
Forward-looking statement
 
This press release contains forward-looking statements, which are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected in such forward-looking statements. Management at Manhattan Scientifics believes that purchase of its shares should be considered to be at the high end of the risk spectrum. Forward-looking statements speak only as of the date made and are not guarantees of future performance. We undertake no obligation to publicly update or revise any forward-looking statements.
 
Contact:
 
Manhattan Scientifics, Inc.
Public Relations:
Stanton Public Relations & Marketing
Michael Kassin, 646-502-3528
AStanton@StantonPRM.com
or
Investor Relations:
Marvin Maslow, 917-923-3300
marvin@mhtx.com
or
Info@SeniorScientific.com
or
U.S. & Canadian Investor Relations
Hawk Associates
Frank Hawkins, 305-451-1888
f.hawkins@hawkassociates.com
or
European Contact:
Herbert Strauss, +43-316-296-316
email: herbert"at"eu-ir.com
or
http://us.lrd.yahoo.com/SIG=16elo749r/EXP=1308596335/**http%3A//cts.businesswire.com/ct/CT%