MANHATTAN SCIENTIFICS INC

LEASES

The Company leases a facility with terms of month to month for its headquarters. The Company adopted ASC 842 on January 1, 2019 and has evaluated that has no impact on the financial statements as under the practical expedient the leases consist of terms less than one year, and therefore is not required to capitalize the lease.

As of March 31, 2021, the Company owns 52,516,508 shares of Imagion, resulting in a noncontrolling interest of Imagion’s issued and outstanding common stock. Based upon Imagion’s trading price on March 31, 2021, approximately $0.12 per share, the fair value of the Imagion shares was approximately $6,199,000. During the three months ended March 31, 2021, the Company recorded an unrealized gain in its investment of $324,000.

On March 22, 2021, the Company entered into a settlement with a third party, which the Company granted 15,000,000 shares of common stock options to purchase 15,000,000 shares of common stock at an exercise price of $0.0154. The options price was based on the closing market price of common stock on October 1, 2020. The Settlement is for the Employment Agreement with a third party, dated January 12, 2015 to which the Company agreed to issued common shares.

The Company had Stockholders’ equity of $4,808,000 and the working capital deficit was $533,000 on March 31, 2021. The Company had a decrease of $99,000 in cash and cash equivalents for the three months ended March 31, 2021.

The Company used approximately $3,000 of cash for investing activities in the three months ended March 31, 2021 as compared to receiving $80,000 of cash for investing activities in the three months ended March 31, 2020. This decrease in cash received in investing activities, is primarily attributed to proceeds from sale of investment of Imagion Biosystems shares during the three months ended March 31, 2020.