UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K/A
AMENDMENT
NO. 1
| x |
Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934 for the fiscal year ended December 31,
2007
|
| o |
Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934 for the transition period from
___to___
|
Commission
File Number 1-32639
MANHATTAN
PHARMACEUTICALS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction of incorporation or organization)
|
36-3898269
(I.R.S.
Employer Identification No.)
|
|
810
Seventh Avenue, 4th
Floor, New York, New York
(Address
of Principal Executive Offices)
|
10019
(Zip
Code)
|
(212)
582-3950
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Stock, $0.001 par value
|
OTC
Bulletin Board
|
|
Securities
registered pursuant to Section 12(g) of the Exchange Act:
None
|
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act.
o
Yes x No
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act.
o
Yes x No
Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. x
Yes o No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
|
Large
accelerated filer o
|
Accelerated
filer o
|
|
Non-accelerated
filer o (Do not check if
a smaller reporting company)
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). o
Yes x No
The
aggregate market value of the voting and non-voting common equity of the
registrant held by non-affiliates of the registrant on April 15, 2008 based
on
the closing price of the common stock as reported on the OTC Bulletin Board
on
such date was $6,681,721.
As
of
April 15, 2008 there were 70,624,232 outstanding shares of common stock, par
value $.001 per share.
The
Company is filing this Amendment No. 1 on Form 10-K/A to its Annual Report
on
Form 10-K for the year ended December 31, 2007 to furnish the information
required in Part III (Items 10, 11, 12, 13 and 14). This report is limited
in
scope to the items identified above and should be read in conjunction with
the
Form 10-K. Other than the furnishing of the information identified above, this
report does not modify or update the disclosure in the Form 10-K in any
way.
Item
10. Directors and Executive Officers of the Registrant.
Biographical
Summaries of Our Members of Board of Directors
The
members of the Board of Directors (each a "Director and collectively,
"Directors") are:
|
Name
|
|
Age
|
|
Position(s)
Held
|
|
Director
Since
|
|
|||
|
Douglas
Abel
|
|
|
46
|
|
|
President,
Chief Executive Officer and Director
|
|
|
2005
|
|
|
Neil
Herskowitz
|
|
|
51
|
|
|
Director
|
|
|
2004
|
|
|
Malcolm
Hoenlein
|
|
|
64
|
|
|
Director
|
|
|
2004
|
|
|
Timothy
McInerney
|
|
|
47
|
|
|
Director
|
|
|
2004
|
|
|
Richard
I. Steinhart
|
|
|
51
|
|
|
Director
|
|
|
2004
|
|
|
Michael
Weiser, M.D.
|
|
|
45
|
|
|
Director
|
|
|
2003
|
|
Douglas
Abel
has been
our President and Chief Executive Officer and a director since April 2005.
Mr.
Abel was President and CEO of Tarpan Therapeutics, Inc., a privately-held
biopharmaceutical company, from November 2004 until April 2005, when Tarpan
was
acquired by us. Prior to becoming President and CEO of Tarpan, Mr. Abel served
as Vice President of the Dermatology Business Unit at Biogen Idec where he
worked from August 2000 to November 2004. While at Biogen, he led more than
100
employees to support the launch of AMEVIVE®. Before that, Mr. Abel was at
Allergan Pharmaceuticals from December 1987 to August of 2000, with his most
recent position being Director of BOTOX® Marketing. Mr. Abel received his A.B.
in chemistry from Lafayette College and an M.B.A. from Temple
University.
Neil
Herskowitz
was
appointed to our Board of Directors in July 2004. He has served as the Managing
Member of ReGen Partners LLC, an investment fund located in New York, and as
the
President of its affiliate, Riverside Contracting LLC since June 1998. Mr.
Herskowitz currently serves as a director of Innovive Pharmaceuticals (OTCBB:
IVPH) a publicly traded pharmaceutical development company. He also serves
on
the board of directors of Starting Point Services for Children, a not-for-profit
corporation, and of Vacation Village, a 220-unit development in Sullivan County,
New York. Mr. Herskowitz received a B.B.A. in Finance from Bernard M. Baruch
College in 1978.
Malcolm
Hoenlein
was
appointed to our Board of Directors in July 2004. Since January 2001, he is
also
a director of Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX). Mr. Hoenlein
currently serves as the Executive Vice Chairman of the Conference of Presidents
of Major American Jewish Organizations, a position he has held since 1986.
He
also serves as a director of Bank Leumi. Mr. Hoenlein received his B.A. from
Temple University and his M.A. from the University of Pennsylvania.
Timothy
McInerney
has been
a director of Manhattan since July 2004. Mr. McInerney serves as a partner
at Riverbank Capital Securities, Inc., a position he has held since June
2007. Mr. McInerney currently serves on the board of directors of ZIOPHARM
Oncology Inc. (NASDAQ: ZIOP). From 1992 to March 2007, Mr. McInerney was a
Managing Director of Paramount BioCapital, Inc. where he oversaw the overall
distribution of Paramount’s private equity product. Prior to 1992, Mr.
McInerney was a research analyst focusing on the biotechnology industry at
Ladenburg, Thalman & Co. Prior to that, Mr. McInerney held equity
sales positions at Bear, Stearns & Co. and Shearson Lehman Brothers,
Inc. Mr. McInerney also worked in sales and marketing for Bristol-Myers
Squibb. He received his B.S. in pharmacy from St. John’s University at New
York. He also completed a post-graduate residency at the New York
University Medical Center in drug information systems.
Richard
I. Steinhart
has been
a director of the Company since July 2004. Since April 2006, Mr. Steinhart
has
served as Chief Financial Officer of Electro-Optical Sciences, Inc., a
publicly-held medical device company. From May 1992 to April 2006, Mr. Steinhart
was principal of Forest Street Capital, a boutique investment banking, venture
capital, and management consulting firm. Prior to Forest Street Capital, from
May 1991 to May 1992, he was the Vice President and Chief Financial Officer
of
Emisphere Technologies, Inc., a publicly held biopharmaceutical company that
is
working to develop and commercialize a proprietary oral drug delivery system.
Prior to joining Emisphere Technologies, Mr. Steinhart spent seven years at
CW
Group, Inc., a venture capital firm focused on medical and healthcare
investments, where he was a General Partner and Chief Financial Officer. Mr.
Steinhart has previously served as a director of a number of privately-held
companies, including ARRIS Pharmaceuticals, Inc., a biotechnology company
involved with rational drug design; Membrex, Inc., a laboratory equipment
manufacturing company; and Photest, Inc., a diagnostics company. He began his
career working as a certified public accountant and continues to be a New York
State Certified Public Accountant. Mr. Steinhart holds a Bachelors of Business
Administration and Masters of Business Administration from Pace
University.
1
Michael
Weiser, M.D., Ph.D.,
has
served as a director of Manhattan since February 2003. Dr. Weiser
currently serves as founder and co-chairman of Actin Biomed, a position he
has
held since December 2006. Previously, he served as Director of Research of
Paramount BioSciences, Inc. Dr. Weiser completed his Ph.D. in Molecular
Neurobiology at Cornell University Medical College and received his M.D. from
New York University School of Medicine, where he also completed a Postdoctoral
Fellowship in the Department of Physiology and Neuroscience. Dr. Weiser
currently serves on the boards of directors of Hana Biosciences, Inc. (NASDAQ:
HNAB), Chelsea Therapeutics International Ltd. (NASDAQ: CHTP), Emisphere
Technologies Inc. (NASDAQ: EMIS), ZIOPHARM Oncology Inc. (NASDAQ: ZIOP), and
VioQuest Pharmaceuticals Inc. (OTCBB: VQPH), as well as several other privately
held biotechnology companies.
There
are
no family relationships among any of the executive officers, Directors and
key
employees of the Company.
Biographical
Summaries of Current Executive Officers
|
Name
|
|
Age
|
|
Position
|
|
Douglas
Abel
|
|
46
|
|
President
& Chief Executive Officer and Director
|
|
Michael
G. McGuinness
|
|
54
|
|
Chief
Operating Officer, Chief Financial Officer &
Secretary
|
Douglas
Abel
has been
President and Chief Executive Officer and a director of our company since April
2005. His complete biography is set forth above under the caption “Biographical
Summaries of Nominees for the Board of Directors.”
Michael
G. McGuinness
has been
our Chief Financial Officer and Secretary since July 2006. Mr. McGuinness was
appointed Chief Operating Officer on April 1, 2008. Prior to joining Manhattan,
Mr. McGuinness served as chief financial officer of Vyteris Holdings (Nevada),
Inc. (OTCBB: VYHN), a product-based drug delivery company, from September 2001
to April 2006, and from 1998 to 2001 he was chief financial officer of
EpiGenesis Pharmaceuticals, a privately-held biotechnology company. Mr.
McGuinness received a BBA in public accounting from Hofstra
University.
None
of
our executive officers is related to any other executive officer or to any
of
our Directors.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our officers,
directors and persons who are the beneficial owners of more than 10% of our
common stock to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of our common
stock. Officers, directors and beneficial owners of more than 10% of our common
stock are required by SEC regulations to furnish us with copies of all Section
16(a) forms they file. Based solely on a review of the copies of the Forms
3, 4
and 5 and amendments that we received with respect to transactions during 2007,
we believe that all such forms were filed on a timely basis.
2
Committees
of the Board and Director Independence
Independence
of the Board of Directors
The
Company's common stock has not been listed on a national securities exchange
since the Company voluntarily de-listed its shares from the American Stock
Exchange effective March 26, 2008 and therefore the Company is not subject
to
any corporate governance requirements regarding independence of board or
committee members. However, the Company has chosen the definition of
independence contained in the rules of the American Stock Exchange (the "AMEX")
as benchmark to evaluate the independence of its directors. Under the AMEX
listing standards, an "independent director" of a company means a person who
is
not an officer or employee of the company or its subsidiaries and who the board
of directors has affirmatively determined does not have a relationship that
would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. After review of all relevant transactions or
relationships between each director, or any of his family members, and
Manhattan, its senior management and its independent registered public
accounting firm, the Board has determined that all of our directors are
independent directors within the meaning of the applicable AMEX listing
standard, except for Mr. Abel, our President and Chief Executive Officer and
Timothy McInerney.
Board
Committees
The
Board
of Directors has three standing committees: an Audit Committee, a Compensation
Committee and a Nominating and Corporate Governance Committee. The following
table provides membership for each of the Board committees:
|
Name
of Committee
|
|
Membership
|
|
Audit
|
|
Messrs.
Herskowitz, Hoenlein and Steinhart (Chair)
|
|
|
|
|
|
Compensation
|
|
Messrs.
Herskowitz, Hoenlein, Steinhart and Weiser (Chair)
|
|
|
|
|
|
Nominating
and Governance
|
|
Messrs.
Herskowitz, Hoenlein and Steinhart
(Chair)
|
Audit
Committee
The
Audit
Committee oversees the Company’s accounting and financial reporting process. For
these purposes, the Audit Committee performs several functions. For example,
the
Committee evaluates and assesses the qualifications of the independent
registered public accounting firm; determines the engagement of the independent
registered public accounting firm; determines whether to retain or terminate
the
existing independent registered public accounting firm; reviews and approves
the
retention of the independent registered public accounting firm to perform any
non-audit services; reviews the financial statements to be included in the
Company’s Annual Report on Form 10-K; and discusses with management and the
independent registered public accounting firm the results of the annual audit
and the results of the Company’s quarterly financial statements. The Board of
Directors adopted a written Audit Committee Charter, a copy of which can be
found on our company website at www.manhattanpharma.com
.
Compensation
Committee
The
Compensation Committee of the Board of Directors oversees our compensation
policies, plans and programs. The Compensation Committee reviews and approves
corporate performance goals and objectives relevant to the compensation of
our
executive officers and other senior management; reviews and recommends to the
Board the compensation and other terms of employment of our Chief Executive
Officer and our other executive officers; administers our equity incentive
and
stock option plans; and makes recommendations to the Board concerning the
issuance of awards pursuant to those plans. All current members of the
Compensation Committee, except for Dr. Weiser who serves as Chair of the
Compensation Committee, are independent (as independence is currently defined
under applicable AMEX listing standards). The Board of Directors has adopted
a
written charter of the Compensation Committee, a copy of which can be found
on
our company website at www.manhattanpharma.com.
3
Nominating
and Governance Committee
The
Nominating and Governance Committee considers and recommends to the Board
persons to be nominated for election by the stockholders as directors. In
addition to nominees recommended by directors, the Nominating and Governance
Committee will consider nominees recommended by stockholders if submitted in
writing to the Secretary of the Company at the address of Company’s principal
offices. The Board believes that any candidate for director, whether recommended
by stockholders or by the Board, should be considered on the basis of all
factors relevant to the needs of the Company and the credentials of the
candidate at the time the candidate is proposed. Such factors include relevant
business and industry experience and demonstrated character and judgment. All
current members of the Nominating and Corporate Governance Committee are
independent (as independence is currently defined under applicable AMEX listing
standards). The Board of Directors adopted a written charter of the Nominating
and Governance Committee, a copy of which can be found on our company website
at
www.manhattanpharma.com.
Although
we have not adopted a formal process for stockholder communications with our
Board of Directors, we believe stockholders should have the ability to
communicate directly with the Board so that their views can be heard by the
Board or individual directors, as applicable, and that appropriate and timely
responses are provided to stockholders. All communications regarding general
matters should be directed to the Secretary of the Company at the address below
and should prominently indicate on the outside of the envelope that it is
intended for the complete Board of Directors or for any particular director(s).
If no designation is made, the communication will be forwarded to the entire
board. Stockholder communications to the Board should be sent to:
Corporate
Secretary
Attention:
Board of Directors [or name(s) of particular directors]
Manhattan
Pharmaceuticals, Inc.
810
Seventh Avenue, 4 th
Floor
New
York,
NY 10019
Code
of Ethics
We
have
adopted a Code of Business Conduct and Ethics that applies to all officers,
directors and employees of our company. A copy of our Code of Business Conduct
and Ethics is available on our company’s website at www.manhattanpharma.com.
If we
make any substantive amendments to the Code of Business Conduct and Ethics
or
grant any waiver from a provision of the code to an executive officer or
director, we will promptly disclose the nature of the amendment or waiver by
filing with the SEC a current report on Form 8-K.
4
Item
11. Executive Compensation.
Summary
Compensation of Executive Officers
The
following table sets forth all of the compensation awarded to, earned by or
paid
to (i) each individual serving as our principal executive officer during our
last completed fiscal year and (ii) the two most highly compensated executive
officers, other than the principal executive officer, that served as an
executive officer at the conclusion of the fiscal year ended December 31, 2007
and who received total compensation in excess of $100,000 during such fiscal
year (collectively, the “named executives”).
|
Name
and
Principal
Position
|
Year
|
Salary
|
Bonus
|
Option
Awards
|
Non-Equity
Incentive
Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
All
Other
Compensation
|
Total
|
||||||||
|
Douglas
Abel
Chief
Executive Officer and President
|
2007
2006
|
$345,000
$325,000
|
$180,000(3)
$150,000
|
$910,224
(5)
$1,156,065
(5)
|
$0
$0
|
$0
$0
|
$42,333
(4)
$116,776
(4)
|
$1,477,557
$1,748,841
|
||||||||
|
Alan
G. Harris (1)
Chief
Medical Officer
|
2007
2006
|
$288,333
$252,083
|
$0
$107,500
|
$292,530
(5)
$98,837
(5)
|
$0
$0
|
$0
$0
|
$9,000
(6)
$8,800
(6)
|
$589,863
$467,220
|
||||||||
|
Michael
McGuinness(2)
Chief
Operating and Financial Officer, Secretary
|
2007
2006
|
$238,333
$98,229
|
$100,000(3)
$60,000
|
$95,528
(5)
$23,622
(5)
|
$0
$0
|
$0
$0
|
$9,000
(6)
$0
|
$442,861
$181,851
|
_________________________
|
(1)
|
Dr.
Harris was appointed our Chief Medical Officer on February 1, 2006.
Dr.
Harris’ employment with us ended effective December 31,
2007.
|
|
(2)
|
Mr.
McGuinness was appointed our Chief Financial Officer on July 10,
2006 and
Chief Operating Officer on April 1,
2008.
|
|
(3)
|
The
Company has accrued for such bonuses but has not paid such bonuses.
Payment of such bonuses are contingent upon the Company raising additional
financing and shall be paid as follows: (i) 50% will be paid when
the
Company has consummated a financing transaction with gross proceeds
(net
of commissions) to the Company of at least $1,000,000 and (ii) the
remaining 50% will be paid when the Corporation has consummated a
financing transaction with gross proceeds (net of commissions) to
the
Corporation of at least $2.5 million (cumulative, including the $1
million
financing transaction referred to
above).
|
|
(4)
|
For
2007 represents a payment in the amount of $33,333, which represents
the
approximate amount of additional expense incurred by Mr. Abel relating
to
his commuting between Boston and New York and a tax “gross up” to cover
the additional tax liability to Mr. Abel from such payment, and a
matching
contributions by us pursuant to our company’s 401(k) retirement plan of
$9,000. For 2006 represents a payment in the amount of $83,333, which
represents the approximate amount of additional expense incurred
by Mr.
Abel relating to his commuting between Boston and New York and a
tax
“gross up” to cover the additional tax liability to Mr. Abel from such
payment, reimbursement of certain commuting expenses of $24,643 and
a
matching contributions by us pursuant to our company’s 401(k) retirement
plan of $8,800.
|
|
(5)
|
Represents
the amount of share-based costs recognized by us during 2007 under
SFAS
No. 123(R). See Note 3 to our Consolidated Financial Statements included
in our annual report for 2007 on Form 10-K and for 2006 on Form 10-KSB
for
the assumptions made in the valuation.
|
|
(6)
|
Represents
matching contributions by us pursuant to our company’s 401(k) retirement
plan.
|
5
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth information regarding the unexercised options held
by
each of our named executive officers as of December 31, 2007.
|
Option
Awards
|
|||||
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
|
Douglas
Abel
|
2,923,900
0
|
0
250,000
|
$1.50
$0.95
|
04/01/2015
04/25/2017
|
|
|
Alan
Harris
|
300,000
100,000
|
0
0
|
$1.35
$0.95
|
12/31/2009
12/31/2009
|
|
|
Michael
McGuinness
|
73,333
20,000
0
|
146,667
40,000
320,000
|
$0.70
$1.35
$0.95
|
07/10/2016
07/10/2016
04/25/2017
|
|
Employment
Agreements
Douglas
Abel. We
entered into an employment agreement and an extension to that employment
agreement with Mr. Abel dated April 1, 2005, whereby Mr. Abel agreed to serve
as
our President and Chief Executive Officer for a period of four years in exchange
for (i) an annual base salary of $300,000, subject to a retroactive increase
in
the amount of $25,000 upon the Company’s completing a financing transaction of
at least $5,000,000, (ii) a signing bonus in the amount of $200,000, which
was
payable in two installments during the first year of the agreement, (iii) a
discretionary performance-based bonus in an amount equal to up to 50% of Mr.
Abel’s base salary, and (iv) an option to purchase 2,923,900 shares of our
common stock at $1.50 per share with three-year annual vesting, purchasable
for
a 10-year term. In accordance with the terms of his employment agreement and
as
a result of our private placement financing that we completed in August 2005,
Mr. Abel’s salary was increased to $325,000 retroactive to April 1, 2005. The
employment agreement contains customary provisions relating to confidentiality,
work-product assignment, non-competition and non-solicitation. In the event
Mr.
Abel’s employment is terminated by us (other than for cause) during the term of
the agreement, including a termination upon a change of control (as defined
in
the agreement), we are required to pay a severance payment ranging from between
6 and 12 month of base salary, depending upon the circumstances of such
termination.
Alan
G. Harris. We
entered into an employment agreement with Dr. Harris dated January 26, 2006,
whereby Dr. Harris agreed to serve as our Chief Medical Officer for a period
of
three years commencing on February 1, 2006. Mr. Harris’ employment with Company
ended on December 31, 2007. The employment agreement provided that, in exchange
for his services, Dr. Harris would receive (i) an annual base salary of
$275,000; (ii) a guaranteed cash bonus of $50,000; (iii) an annual milestone
bonus on each anniversary of the employment agreement during the term of the
agreement in an amount up to 30% of his annual base salary, at the discretion
of
our chief executive officer and the Board; and (iv) an option to purchase
300,000 shares of our common stock at an exercise price equal to the last
closing sale price of our common stock on February 1, 2006, such options to
vest
in equal amounts over three years and be exercisable for a 10-year term. In
the
event Dr. Harris' employment is terminated by us upon a change of control and
the fair market value of our common stock, as determined in the good faith
discretion of the Board, is less than $40,000,000 on the date of the change
of
control, Dr. Harris shall continue to receive his base salary and benefits
for a
period of three months from the date of termination. In the event such
termination is for a reason other than for cause or pursuant to a change of
control, Dr. Harris shall be entitled to receive his base salary for a period
of
six months from the date of termination.
Dr.
Harris executed a Separation and Release Agreement (the "Separation Agreement")
with the Company which provides for, among other things, (i) the termination
of
Dr. Harris's employment effective December 31, 2007; (ii) continuation of his
base salary through February 29, 2008 in accordance with the Company's standard
payroll practices; (iii) the amendment of certain outstanding option grants
to
provide for the immediate vesting of the unvested portion of the grant issued
on
February 1, 2006 and the immediate vesting of one-third of the options granted
on April 25, 2007 and to extend the expiration date of such option grants;
and
(iv) the waiver of the Company's right to enforce the covenants against
competition contained in Section 6(a) of his employment agreement. The
Separation Agreement further provides for mutual general releases.
6
Michael
G. McGuinness. Mr.
McGuinness’ employment with us is governed by an employment agreement dated July
7, 2006. The agreement provides for an initial three-year term of employment
ending July 2009, subject to additional one-year renewal periods upon the mutual
agreement of the parties. Pursuant to the agreement, Mr. McGuinness is entitled
to an annual base salary of $205,000 and an annual bonus, payable in the
discretion of our Board, of up to 30 percent of his annual base salary. Mr.
McGuinness is also entitled to certain other fringe benefits that are made
available to our senior executives from time to time, including medical and
dental insurance and participation in our 401(k) plan.
In
addition, in accordance with the terms of the employment agreement, we issued
to
Mr. McGuinness two 10-year stock options pursuant to our 2003 Stock Option
Plan.
The first option relates to 220,000 shares of common stock and is exercisable
at
a price of $0.70, the closing price of our common stock on the date of his
employment agreement. The second option relates to 60,000 shares and is
exercisable at a price of $1.35 per share. Both options vest in three annual
installments commencing July 10, 2007. To the extent Mr. McGuinness’ employment
with us is terminated prior to the end of such 10-year term, the options shall
remain exercisable for a period of 90 days.
Mr.
McGuinness’ employment agreement further provides that in the event we terminate
his employment with us other than as a result of death, for “cause,”
“disability” or upon a “change of control” (as those terms are defined in the
agreement), then (1) Mr. McGuinness will continue receiving his base salary
and
fringe benefits for a period of six months following such termination, provided,
that our obligation to pay such compensation shall be offset by any amounts
received by Mr. McGuinness from subsequent employment during such 6-month
period, and (2) the vesting of the stock options issued to Mr. McGuinness in
accordance with the employment agreement will accelerate and be deemed vested
as
of the date of termination and will remain exercisable for a period of 90 days
following such termination. In the event we terminate Mr. McGuinness’ employment
during the term of the agreement upon a “change of control” and, if at the time
of such termination, the aggregate value of our outstanding common stock is
less
than $80 million, then (i) Mr. McGuinness will continue receiving his base
salary and fringe benefits for a period of six months following such termination
and (ii) the portions of the stock options issued in accordance with the
employment agreement that have vested as of the date of such termination or
that
are scheduled to vest in the calendar year of such termination will be deemed
vested and will remain exercisable for a period of 90 days following such
termination.
Compensation
of Directors
7
The
following table shows the compensation earned by each of our non-employee
directors for the year ended December 31, 2007:
|
Name
|
Fees
Earned or
Paid
in
Cash
|
Option
Awards
(1)
|
All
Other
Compensation
|
Total
|
|
Neil
Herskowitz
|
$27,500
|
$7,948(3)
|
$0
|
$35,448
|
|
Malcolm
Hoenlein
|
$25,000
|
$7,948(4)
|
$0
|
$32,948
|
|
Timothy
McInerney
|
$24,000
|
$7,948(5)
|
$0
|
$31,948
|
|
Joan
Pons Gimbert (2)
|
$12,000
|
$7,948(6)
|
$0
|
$19,948
|
|
Richard
I. Steinhart
|
$27,000
|
$7,948(7)
|
$0
|
$34,948
|
|
Michael
Weiser
|
$24,500
|
$7,948(8)
|
$0
|
$32,448
|
|
(1)
|
Represents
the amount of share-based costs recognized by us during 2006 under
SFAS
No. 123(R). See Note 3 to our Consolidated Financial Statements included
in our annual report for 2006 on Form 10-KSB for the assumptions
made in
the valuation.
|
|
(2)
|
Joan
Pons Gimbert resigned from the Board in July
2007.
|
|
(3)
|
As
of April 21, 2008, Mr. Herskowitz has options to purchase an aggregate
of
216,010 shares of our common stock.
|
|
(4)
|
As
of April 21, 2008, Mr. Hoenlein has options to purchase an aggregate
of
216,010 shares of our common stock.
|
|
(5)
|
As
of April 21, 2008, Mr. McInerney has options to purchase an aggregate
of
236,010 shares of our common stock.
|
|
(6)
|
As
of April 21, 2008, Mr. Pons Gimbert has options to purchase an aggregate
of 133,334 shares of our common
stock.
|
|
(7)
|
As
of April 21, 2008, Mr. Steinhart has options to purchase an aggregate
of
216,010 shares of our common stock.
|
|
(8)
|
As
of April 21, 2008, Mr. Weiser has options to purchase an aggregate
of
230,000 shares of our common stock.
|
Compensation
Committee Interlocks and Insider Participation
There
were no interlocks or other relationships with other entities among our
executive officers and directors that are required to be disclosed under
applicable SEC regulations relating to compensation committee interlocks and
insider participation.
8
Item
12. Security Ownership of Certain Beneficial Owners and
Management.
The
following table sets forth information regarding ownership of shares of our
common stock, as of April 15, 2008:
| o |
by
each person known by us to be the beneficial owner of 5% or more
of
our common stock;
|
| o |
by
each of our directors and executive officers;
and
|
| o |
by
all of our directors and executive officers as a
group.
|
Except
as
otherwise indicated, each person and each group shown in the table has sole
voting and investment power with respect to the shares of common stock
indicated. For purposes of the table below, in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934, as amended, a person is deemed to be the
beneficial owner, of any shares of our common stock over which he or she has
or
shares, directly or indirectly, voting or investment power or of which he or
she
has the right to acquire beneficial ownership at any time within 60 days. As
used in this prospectus, "voting power" is the power to vote or direct the
voting of shares and "investment power" includes the power to dispose or direct
the disposition of shares. Common stock beneficially owned and percentage
ownership as of April 15, 2008 was based on 70,624,232 shares outstanding.
Unless otherwise indicated, the address of each beneficial owner is c/o
Manhattan Pharmaceuticals, Inc., 810 Seventh Avenue, 4th Floor, New York, New
York 10019.
|
Name
of Beneficial Owners, Officers and Directors
|
Number
of Shares
Beneficially
Owned
|
Percentage
Beneficially
Owned
|
|
Douglas
Abel (1)
|
3,495,566
|
4.7
|
|
Michael
McGuinness (2)
|
576,667
|
*
|
|
Michael
Weiser (3)
|
2,538,651
|
3.6
|
|
Timothy
McInerney (4)
|
966,857
|
1.3
|
|
Neil
Herskowitz (5)
|
323,128
|
*
|
|
Richard
I. Steinhart (6)
|
154,977
|
*
|
|
Malcolm
Hoenlien (7)
|
150,535
|
*
|
|
All
directors and officers as a group (8)(7
persons)
|
8,206,381
|
10.8
|
|
Joan
Pons Gimbert(9)
Josep
Samitier 1-5, Barcelona Science Park
08028
Barcelona, Spain
|
4,092,483
|
5.8
|
|
Lester
Lipschutz (10)
1650
Arch Street, Philadelphia, PA 19103
|
8,941,873
|
12.7
|
|
Lindsay
Rosenwald (11)
787
Seventh Avenue
New
York, NY 10019
|
4,224,268
|
5.9
|
|
Nordic
Biotech Venture Fund II K/S(12)
Ostergrade
5, 3rd floor, DK-1100
Copenhagen
K, Denmark
|
25,000,000
|
26.1
|
*
Less
than 1.0%
9
|
|
(1)
|
Includes
3,440,566 shares issuable upon exercise of vested portions of
options.
|
|
|
(2)
|
Includes
566,667 shares issuable upon exercise of vested portions of
options.
|
|
|
(3)
|
Includes
163,334 shares issuable upon the exercise of vested portions of options,
and 127,754 shares issuable upon exercise of
warrants.
|
|
|
(4)
|
Includes
183,334 shares issuable upon exercise of vested portions of options;
and
115,863 shares issuable upon exercise of
warrants.
|
|
|
(5)
|
Includes
149,344 shares issuable upon exercise of vested portions of options,
and
19,444 shares issuance upon exercise of warrants; 77,288 shares held
by
Riverside Contracting, LLC, a limited liability company of which
Mr.
Herskowitz is a member holding 50% ownership and 44,168 shares held
by
ReGen Capital II, LLC, a limited liability company of which Mr. Herskowitz
is a member holding 50% ownership.
|
|
|
(6)
|
Includes
149,344 shares issuable upon exercise of vested portions of
options.
|
|
|
(7)
|
Includes
149,344 shares issuable upon exercise of vested portions of
options.
|
|
|
(8)
|
Includes
4,801,933 shares issuable upon exercise of vested portions of options;
263,061 shares issuable upon the exercise of warrants; 77,288 shares
held
by Riverside Contracting, LLC, a limited liability company of which
Mr.
Herskowitz is a member holding 50% ownership and 44,168 shares held
by
ReGen Capital II, LLC, a limited liability company of which Mr. Herskowitz
is a member holding 50% ownership.
|
|
(9)
|
Includes
3,957,037 shares held by Oleoyl-Estrone Developments ("OED") and
133,334
shares issuable upon exercise of options which are currently exercisable.
Mr. Pons is the chief executive officer of OED. Mr. Pons disclaims
beneficial ownership of the shares owned by OED.
|
|
|
|
(10)
|
Includes
8,941,873 shares of Common Stock held by separate trusts for the
benefit
of Dr. Rosenwald or his family with respect to which Mr. Lipschutz
is
either trustee or investment manager and in either case has investment
and
voting power. Mr. Lipschutz disclaims beneficial ownership of these
shares, except to the extent of his pecuniary interest therein, if
any. The foregoing information is derived from a Schedule 13G filed
on behalf of the reporting person on August 1, 2007
|
|
|
(11)
|
Includes
3,183,497 shares held directly by Dr. Rosenwald, 1,040,658 shares
issuable
upon the exercise of warrants, 80 shares held by the Dr. Rosenwald's
wife,
over which Dr. Rosenwald may be deemed to have sole voting and dispositive
power, although he disclaims beneficial ownership of such shares
except
with regard to his pecuniary interest therein, if any, and 33 shares
held
by Dr. Rosenwald’s children, over which Dr. Rosenwald may be deemed to
have sole voting and dispositive power, although he disclaims beneficial
ownership of such shares except with regard to his pecuniary interest
therein, if any. The foregoing information is derived from a Schedule
13G/A filed on behalf of the reporting person on February 13,
2008.
|
|
(12)
|
Includes
(i) 17,857,143
shares are issuable upon exercise of Nordic's right to put, or our
right
to call, all or a portion of Nordic's equity interest in Hedrin
Pharmaceuticals General Partner ApS, a Danish limited partnership,
of
which we and Nordic are partners, and (ii) 7,142,857 shares are issuable
upon exercise of an outstanding warrant held by the selling
securityholder. Does not include 17,857,143 additional shares which
may
become issuable upon exercise of Nordic's right to put, or our right
to
call, all or a portion of Nordic's equity interest in Hedrin
Pharmaceuticals General Partner ApS upon
the FDA's determination that Hedrin is a medical device prior to
September
30, 2008 and Nordic's investment of an additional $2.5 million in
exchange
in Hedrin Pharmaceuticals General Partner
ApS.
|
10
Equity
Compensation Plans
The
following table summarizes securities authorized for issuance under our equity
compensation plans as of December 31, 2007:
|
Plan
Category
|
|
(a)
Number
Of Securities
To
Be Issued Upon
Exercise
Of
Outstanding
Options,
Warrants
and Rights
|
|
(b)
Weighted-Average
Exercise
Price Of
Outstanding
Options,
Warrants
and Rights
|
|
(c)
Number
Of Securities
Remaining
Available For
Future
Issuance Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected
In
Column (a))
|
|
|||
|
Equity
Compensation Plan Approved by Shareholders
|
|
|
8,033,838
|
|
|
$1.26
|
|
3,475,626
|
|
|
|
Equity
Compensation Plan Not Approved by Shareholders
|
|
|
0
|
|
|
0
|
|
|||
|
TOTAL
|
|
|
8,033,838
|
|
|
$1.26
|
|
|
3,475,626
|
|
11
Item
13. Certain Relationships and Related Transactions.
Oleoylestrone
Developments, SL
Pursuant
to the terms of a license agreement dated February 15, 2002 between us and
Oleoylestrone Developments, SL, or OED, which was terminated in November 2007,
we had an exclusive, worldwide license to U.S. and foreign patents and patent
applications relating to certain technologies. Although we were not obligated
to
pay royalties to OED, the license agreement required us to make certain
performance-based milestone payments. As of April 15, 2008, OED held
approximately 5.6% of our outstanding common stock. Additionally, Mr. Pons,
a
member of our board of directors, is the chief executive officer of
OED.
We
also
entered into a consulting agreement with OED, which became effective in February
2002 and was terminated along with the termination of the license agreement
in
November 2007. Pursuant to our consulting agreement, we paid OED a fee of $6,250
per month The fees associated with the consulting agreement were expensed as
incurred. Pursuant the consulting agreement, OED agreed to appoint a member
to
serve as a member of our Scientific Advisory Board and to render consulting
and
advisory services to us. Such services included research, development and
clinical testing of our technology as well as the reporting of the findings
of
such tests, assistance in the filing of patent applications and oversight and
direction of efforts in regards to personnel for clinical development. For
the
periods ended December 31, 2007 and 2006 and from inception, fees paid to OED
were $68,750, $325,000 and $931,250, respectively.
Paramount
BioCapital, Inc.
In
February 2007, we engaged Paramount BioCapital, Inc., as our placement agent
in
connection with the private placement. In consideration for its services, we
paid aggregate cash commissions of approximately $600,000 and issued to
Paramount a 5-year warrant to purchase an aggregate of 509,275 shares at an
exercise price of $1.00 per share. At the time of the engagement, Timothy
McInerney was an employee of Paramount BioCapital, Inc. or one of its
affiliates. The sole shareholder of Paramount BioCapital, Inc. is Lindsay A.
Rosenwald, M.D. Dr. Rosenwald beneficially owns more than 5 percent of our
common stock. On March 30, 2007, we entered into a series of subscription
agreements with various institutional and other accredited investors for the
issuance and sale in a private placement of an aggregate of 10,185,502 shares
of
our common stock for total gross proceeds of approximately $8.56 million. Of
the
total amount of shares issued, 10,129,947 were sold at a per share price of
$0.84, and an additional 55,555 shares were sold to an entity affiliated with
Neil Herskowitz, a director of Manhattan, at a per share price of $0.90, the
closing sale price of our common stock on March 29, 2007. Pursuant to the
subscription agreements, we also issued to the investors 5-year warrants to
purchase an aggregate of 3,564,897 shares of our common stock at an exercise
price of $1.00 per share. The warrants are exercisable during the period
commencing September 30, 2007 and ending March 30, 2012.
Private
Placement
As
described above, on March 30, 2007, we issued and sold in a private placement
transaction an aggregate of 10,185,502 shares of our common stock. Of the total
amount of shares issued, 10,129,947 were sold at a per share price of $0.84,
and
an additional 55,555 shares were sold to an entity affiliated with Neil
Herskowitz, a director of Manhattan, at a per share price of $0.90, the closing
sale price of our common stock on March 29, 2007. In addition to the shares
of
common stock, we also issued to the investors 5-year warrants to purchase an
aggregate of 3,564,897 shares of our common stock at an exercise price of $1.00
per share. The warrants are exercisable during the period commencing September
30, 2007 and ending March 30, 2012. Accordingly, we received net proceeds of
$7.9 million from the sale of these shares and warrants. We engaged Paramount
BioCapital, Inc., as our placement agent in connection with the private
placement, as discussed above.
The
Hedrin JV
We
and
Nordic Biotech Advisors ApS, through its investment fund, Nordic Biotech Venture
Fund II K/S, entered into a joint venture agreement on January 31, 2008, which
was amended on February 18, 2008, pursuant which (i) Nordic contributed cash
in
the amount of $2.5 million to Hedrin Pharmaceuticals General Partner ApS, a
newly formed Danish limited partnership, or the Hedrin JV, in exchange for
50%
of the equity interests in the Hedrin JV, and (ii) we contributed certain assets
to North American rights (under license) to our Hedrin product to the Hedrin
JV
in exchange for $2.0 million in cash and 50% of the equity interests in the
Hedrin JV. Pursuant to the joint venture agreement, if the FDA determines that
Hedrin is a medical device prior to September 30, 2008, Nordic is required
to
pay an additional $2.5 million in exchange for an additional equity interest
in
the Hedrin JV and we will be entitled to receive from the Hedrin JV $1.5 million
in cash and additional equity interests in the Hedrin JV such that Nordic and
we
each will have a 50% equity interest in the Hedrin JV. Pursuant to the terms
of
the joint venture agreement, Nordic has the right to nominate one person for
election or appointment to our board of directors.
12
The
Hedrin JV will be responsible for the development and commercialization of
Hedrin for the North American market and all associated costs including clinical
trials, if required, regulatory costs, patent costs, and future milestone
payments owed to Thornton & Ross Ltd., or T&R, the licensor of Hedrin.
The Hedrin JV will engage us to provide management services to the Hedrin JV
in
exchange for an annualized management fee, which for 2008, on an annualized
basis, is $527,000. The profits of the Hedrin JV will be shared by us and Nordic
in accordance with our respective equity interests in the Hedrin JV, of which
we
each currently hold 50%, except that Nordic is entitled to receive a minimum
return each year from the Hedrin JV equal to 6% on Hedrin sales, as adjusted
for
any change in Nordic’s equity interest in the Hedrin JV, before any distribution
is made to us. If the Hedrin JV realizes a profit in excess of the Nordic
minimum return in any year, then such excess shall first be distributed to
us
until our distribution and the Nordic minimum return are in the same ratio
as
our respective equity interests in the Hedrin JV and then the remainder, if
any,
is distributed to Nordic and us in the same ratio as our respective equity
interests. However, in the event of a liquidation of the Hedrin JV, Nordic’s
distribution in liquidation must equal to the amount Nordic invested in the
Hedrin JV ($5 million if the payment milestone described above is met, $2.5
million if it is not met) plus 10% per year, less the cumulative distributions
received by Nordic from the Hedrin JV before any distribution is made to us.
If
the Hedrin JV’s assets in liquidation exceed the Nordic liquidation preference
amount, then any excess shall first be distributed to us until our distribution
and the Nordic liquidation preference amount are in the same ratio as our
respective equity interests in the Hedrin JV and then the remainder, if any,
is
distributed to Nordic and us in the same ratio as our respective equity
interests. Further, in no event shall Nordic’s distribution in liquidation be
greater than assets available for distribution in liquidation.
The
Hedrin JV's board of directors will consist of four members, two members
appointed by us and two members appointed by Nordic. Nordic has the right to
appoint one of the directors as chairman of the board. The chairman has certain
tie breaking powers. In the event that the payment milestone described above
is
not achieved by June 30, 2008, then the Hedrin JV 's board of directors will
increase to five members, two appointed by us and three appointed by
Nordic.
Pursuant
to the joint venture agreement, Nordic has the right to put all or a portion
of
its interest in the Hedrin JV in exchange for such number of shares of our
common stock equal to the amount of Nordic’s investment in the Hedrin JV divided
by $0.14, as adjusted from time to time for stock splits and other specified
events, multiplied by a conversion factor, which is (i) 1.00 for so long as
Nordic's distributions from the Hedrin JV are less than the amount of its
investment, (ii) 1.25 for so long as Nordic's distributions from the Hedrin
JV
are less than two times the amount of its investment but greater than or equal
to the amount of its investment amount, (iii) 1.50 for so long as Nordic's
distributions from the Hedrin JV are less than three times the amount of its
investment but greater than or equal to two times the amount of its investment
amount, (iv) 2.00 for so long as Nordic's distributions from the Hedrin JV
are
less than four times the amount of its investment but greater than or equal
to
three times the amount of its investment amount and (v) 3.00 for so long as
Nordic’s distributions from Hedrin JV are greater than or equal to four times
the amount of its investment. The put right expires upon the earlier to occur
of
(i) February 25, 2018 and (ii) 30 days after the date when Nordic's
distributions from the Hedrin JV exceed five times the amount Nordic has
invested in the Hedrin JV (or 10 days after such date if we have provided Nordic
notice thereof).
Pursuant
to the joint venture agreement, we have the right to call all or a portion
of
Nordic's equity interest in the Hedrin JV in exchange for such number of shares
of our common stock equal to the portion of Nordic's investment in the Hedrin
JV
that we call by the dollar amount of Nordic's investment as of such date in
the
Hedrin JV, divided by $0.14, as adjusted from time to time for stock splits
and
other specified events. The call right is only exercisable by us if the price
of
our common stock has closed at or above $1.40 per share for 30 consecutive
trading days. During the first 30 consecutive trading days in which our common
stock closes at or above $1.40 per share, we may exercise up to 25% of the
call
right. During the second 30 consecutive trading days in which our common stock
closes at or above $1.40 per share, we may exercise up to 50% of the call right
on a cumulative basis. During the third consecutive 30 trading days in which
our
common stock closes at or above $1.40 per share, we may exercise up to 75%
of
the call right on a cumulative basis. During the fourth consecutive 30 days
in
which our common stock closes at or above $1.40 per share, we may exercise
up to
100% of the call right on a cumulative basis. Nordic may refuse the call, either
by paying $1.5 million multiplied by the percentage of Nordic's investment
being
called or forfeiting an equivalent portion of the put right, calculated on
a pro
rata basis for the percentage of the Nordic equity interest called by us. The
call right expires on February 25, 2013.
13
In
connection with our joint venture agreement, on February 25, 2008, Nordic paid
us a non-refundable fee of $150,000 in exchange for the right to receive a
warrant to purchase up to 7,142,857 shares of our common stock at $0.14 per
share, as adjusted from time to time for stock splits and other specified
events, if Nordic did not exercise all or part of its put right on or before
April 30, 3008. As of April 30, 2008, Nordic had not exercised all or any
portion of its put right and we issued the warrant to Nordic.
We
believe that all of the transactions set forth above were made on terms no
less
favorable to us than could have been obtained from unaffiliated third parties.
All such transactions have been reviewed by the audit committee of our Board
of
Directors and approved by them. All future transactions between us and our
officers, directors and principal shareholders and their affiliates will be
on
terms no less favorable than could be obtained from unaffiliated third parties
and will be approved by our audit committee or another independent committee
of
our Board of Directors.
Item
14. Principal Accounting Fees and Services.
The
following is a summary of the fees billed to us by J.H. Cohn LLP, our
independent registered public accounting firm, for professional services
rendered for fiscal years ended December 31, 2007 and 2006:
|
J.H.
Cohn LLP
|
|||||||
|
Fee
Category
|
Fiscal
2007 Fees
|
|
Fiscal
2006 Fees
|
||||
|
Audit
Fees
|
$
|
103,940
|
$
|
100,111
|
|||
|
Audit-Related
Fees (1)
|
11,520
|
22,943
|
|||||
|
Tax
Fees (2)
|
18,708
|
21,165
|
|||||
|
All
Other Fees (3)
|
-
|
-
|
|||||
|
Total
Fees
|
$
|
134,168
|
$
|
144,219
|
|||
| (1) |
Audit-Related
Fees consist principally of assurance and related services that are
reasonably related to the performance of the audit or review of the
Company’s financial statements but not reported under the caption “Audit
Fees.” These fees include review of registration
statements.
|
| (2) |
Tax
Fees consist of fees for tax compliance, tax advice and tax
planning.
|
| (3) |
All
Other Fees consist of aggregate fees billed for products and services
provided by the independent registered public accounting firm, other
than
those disclosed above.
|
Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
of
Independent Registered Public Accounting Firm
At
present, our audit committee approves each engagement for audit or non-audit
services before we engage our independent registered public accounting firm
to
provide those services. Our audit committee has not established any pre-approval
policies or procedures that would allow our management to engage our independent
registered public accounting firm to provide any specified services with only
an
obligation to notify the audit committee of the engagement for those services.
None of the services provided by our independent registered public accounting
firm for fiscal 2007 was obtained in reliance on the waiver of the pre-approval
requirement afforded in SEC regulations.
14
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
of Exhibit
|
|
|
31.1†
|
Certifications
of Chief Executive Officer Pursuant to Rule 13a-14(a), as Adopted
Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
31.2†
|
Certifications
of Chief Financial Officer Pursuant to Rule 13a-14(a), as Adopted
Pursuant
to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
†
|
Filed
herewith. All other exhibits previously filed.
|
15
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by
the undersigned, thereunto duly authorized this 29th day of April
2008.
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MANHATTAN
PHARMACEUTICALS, INC.
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By:
/s/ Douglas Abel
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Douglas
Abel
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Chief
Executive Officer and President
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Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been
signed below by the following duly authorized executive officers on behalf
of
the Registrant and in the capacities and on April 29, 2008.
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Title
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/s/
Douglas Abel
Douglas
Abel
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Chief
Executive Officer, President and Director
(principal
executive officer)
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/s/
Michael G. McGuinness
Michael
G. McGuinness
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Chief
Operating and Financial Officer
(principal
accounting and financial officer),
Secretary
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16
EXHIBIT
31.1
CERTIFICATION
I,
Douglas Abel, certify that:
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1.
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I
have reviewed this Amendment No. 1 to the Annual Report on Form 10-K/A
of
Manhattan Pharmaceuticals, Inc. (the “Registrant”);
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2.
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Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
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3.
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Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this report;
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4.
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The
Registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d - 15(e)) for the
Registrant and have:
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(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b)
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the Registrant's internal control over
financial reporting that occurred during the Registrant's most recent fiscal
quarter (the Registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect,
the
Registrant’s internal control over financial reporting; and
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5.
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The
Registrant's other certifying officer(s) and I have disclosed, based
on
our most recent evaluation of internal control over financial reporting,
to the Registrant’s auditors and the audit committee of the Registrant’s
board of directors (or persons performing the equivalent functions):
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(a)
All
significant deficiencies and material weaknesses in the design or operation
of
internal control over financial reporting which are reasonably likely to
adversely affect the Registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any
fraud, whether or not material, that involves management or other employees
who
have a significant role in the Registrant’s internal control over financial
reporting.
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Date:
April 29, 2008
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/s/
Douglas Abel
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Douglas
Abel
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Chief
Executive Officer
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EXHIBIT
31.2
CERTIFICATION
I,
Michael G. McGuinness, certify that:
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1.
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I
have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A
of
Manhattan Pharmaceuticals, Inc. (the “Registrant”);
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2.
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Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
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3.
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Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this report;
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4.
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The
Registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d - 15(e)) for the
Registrant and have:
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(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b)
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the Registrant's internal control over
financial reporting that occurred during the Registrant's most recent fiscal
quarter (the Registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect,
the
Registrant’s internal control over financial reporting; and
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5.
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The
Registrant's other certifying officer(s) and I have disclosed, based
on
our most recent evaluation of internal control over financial reporting,
to the Registrant’s auditors and the audit committee of the Registrant’s
board of directors (or persons performing the equivalent functions):
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(a)
All
significant deficiencies and material weaknesses in the design or operation
of
internal control over financial reporting which are reasonably likely to
adversely affect the Registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any
fraud, whether or not material, that involves management or other employees
who
have a significant role in the Registrant’s internal control over financial
reporting.
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Date:
April 29, 2008
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/s/
Michael G. McGuinness
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Michael
G. McGuinness
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Chief
Operating and Financial Officer
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