Manhattan Scientifics and Metallicum’s Nanometals
Who is Manhattan Scientifics?
Manhattan Scientifics (OTCMKTS:MHTX) is a technology incubator that seeks to acquire, develop and commercialize life-enhancing technologies in various fields, with emphasis in the areas of nanotechnology. They are currently focused on two opportunities: a nanostructured metals technology (Metallicum), and a nanoparticle-based technology that provides highly sensitive cancer detection (Senior Scientific). MHTX trades as an over-the-counter (OTC) company, and therefore must be subjected to a great deal of scrutiny as most OTC companies lose investors’ money. The Company has a current market cap of $58 million and a deficit of $59 million. MHTX has been up over +67% year-to-date on news of their work on cancer detection.
The first focus of Manhattan on nanometals comes from their entity named Metallicum which was acquired by the company in 2008 for consideration of $350,000. Metallicum went on to realize an agreement with Carpenter Technology Corporation (NYSE:CRS), a $2.8 billion specialty metals company, that has been providing them with a small revenue stream over the past 5 years.
The Carpenter Agreement
In September of 2009, Metallicum entered into an agreement with Carpenter to sell certain nanostructured metal technologies for $600,000 along with royalties on future product sales. Manhattan would also provide consulting services to Carpenter, specifically those of the Metallicum founder Dr. Lowe, for additional revenues as well. Yearly revenues from Manhattan, the majority of which are from Carpenter, are as follows:
- 2014 (Q1/Q2/Q3): $488,000
- 2013: $652,000
- 2012: $693,000
- 2011: $687,000
- 2010: $1,686,000
Manhattan does leave investors with the promising statement that ” we expect to receive a minimum of $9 million in royalties from Carpenter during the period from 2015 to 2017 “. They go on to say “we anticipate, however, that we will receive additional royalties before 2015”.
In addition to the Carpenter agreement, Manhattan also entered into a licensing agreement in January 2013 with a party granting certain licensing rights to the Company’s nanostructured metal technology. As consideration, Manhattan received $180,000 in January 2013 and will receive another $120,000 at future dates.
It’s surprising that for the past 5 years Manhattan has not been able to commercialize their nanometals technology to obtain additional revenue sources other than just Carpenter. That was not from lack of trying, however, as they have been attempting to focus on nanometal dental implants.
Nanometal Dental Implants
Manhattan has been promoting this application of their nanometals technology for the past four years and made the below promising statement in their 2011 10-K:
In December 2008, a manufacturing joint venture partner in Albuquerque, N.M. received U.S. Food and Drug Administration 510(k) clearance to market nanostructued titanium metal dental implants using our technology. This clearance positions us closer to our goal of commercializing our technology for nanostructured metals. We are in talks with many of the key manufacturers of dental implants and have signed material testing agreements with several manufacturers.
And investors would have no reason to doubt this. In January 2009, Danlin and BASIC Dental Implants received FDA approval to market nano-titanium dental implants using Metallicum’s nanometals technology. Metallicum was said to receive revenue from the transfer of nanostructured metal from Metallicum to Danlin equal to 10% of the revenue from the sales of BASIC dental implants that were made from the supplied nanostructured metal. As of December 31, 2011, Metallicum had received approximately $1,000 of income related to the sales of BASIC dental implants. In 2012, Metallicum terminated this joint venture with Danlin. Who was Danlin? It seems to be a one man outfit of which little information can be found using Google, except for a court case where they were sued for patent infringement for a dental implant.
Manhattan’s foray into dental implants is not over yet though. In November of 2013, another OTC company with lots of promises, Sigma Labs, assigned complete interest of “its critical patent on advanced dental implant technology” to Manhattan “thereby enabling commercialization to proceed unencumbered”. Updates on the progress of this agreement with Sigma Labs are nowhere to be found in the 2014 10Qs.
In the meantime, Manhattan has focused on promoting their promising nanoparticle-based cancer detection technology, news of which has occupied every one of their 2014 press releases. In our next article on Manhattan, we’ll take a closer look at this second part of their business.
Pure-play disruptive tech stocks are not only hard to find, but investing in them is risky business. That's why we created “The Nanalyze Disruptive Tech Portfolio Report,” which lists 20 disruptive tech stocks we love so much we’ve invested in them ourselves. Find out which tech stocks we love, like, and avoid in this special report, now available for all Nanalyze Premium annual subscribers.