NEW YORK, Aug. 14, 2006 (PRIMEZONE) -- Manhattan Pharmaceuticals, Inc. (AMEX:MHA) today announced financial results for the six months ended June 30, 2006. Net loss for the period was approximately $4.7 million, or $0.08 per share compared to a net loss of $15 million, or $0.43 per share for the corresponding period in 2005. The loss for the 2005 period included an $11.9 million in-process research and development charge. As of June 30, 2006, the Company had cash, cash equivalents and short-term investments of $6.5 million.
During the financial closing process for the June 30, 2006 period, Manhattan Pharmaceuticals concluded that an error occurred in the preparation of its financial statements for the three months ended March 31, 2006 and will require a restatement.
The restatement is a result of the Company, in error, recording a research and development expense that should have been recorded as a prepaid expense and not disclosing a related material commitment. This error was discovered by the Company as part of the financial closing process for the period ended June 30, 2006. To rectify this error, the Company restated its financial statements for the three months ended March 31, 2006. The restatement reduced research and development expenses by $0.4 million to $1.6 million, increased prepaid expenses by $0.4 million to $0.5 million, and fully disclosed the terms of the material commitment. The restatement decreased net loss per common share to $0.04 from a net loss per common share of $0.05. The Company's previously issued financial statements for the period ended March 31, 2006 should no longer be relied upon. The Company filed restated financial statements today through an amended Quarterly Report on Form 10-QSB/A (Amendment No.1) for the three months ended March 31, 2006.
On July 10, 2006, Manhattan Pharmaceuticals strengthened its finance function with the appointment of Michael G. McGuinness to the position of Chief Financial Officer. The accounting error was discovered by the Company following this appointment. The Company believes the error was inadvertent. In addition, the Company does not expect the restatement to impact its ongoing operations. The Company believes the restatement will have no effect on reported results for any other past or future periods.
For more detailed information, including this amended Quarterly Report on Form 10-QSB/A (Amendment No.1) for the three months ended March 31, 2006 filed today please visit http://www.sec.gov/edgar.shtml or the company website http://www.manhattanpharma.com.
About Manhattan Pharmaceuticals, Inc.
Manhattan Pharmaceuticals, Inc., a development-stage pharmaceutical company, acquires and develops proprietary prescription drugs for large, underserved patient populations. In view of the worldwide obesity epidemic, the company is developing OE, an orally administered novel therapeutic for the treatment of obesity. To meet the needs of other major, underserved medical markets while lowering development risks, Manhattan Pharmaceuticals is also developing PTH (1-34), a peptide believed to be a regulator of epidermal cell growth, for psoriasis, and Propofol Lingual Spray, a convenient, proprietary lingual spray formulation of propofol, the world's best-selling general anesthetic, as a sedative-hypnotic for use during diagnostic and therapeutic procedures. (http://www.manhattanpharma.com)
Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. Drug discovery and development involve a high degree of risk. Factors that might cause such a material difference include, among others, uncertainties related to the ability to attract and retain partners for our technologies, the identification of lead compounds, the successful preclinical development thereof, the completion and results of clinical trials, including clinical trials involving oleoyl-estrone, the FDA review process and other governmental regulation, our pharmaceutical collaborator's ability to successfully develop and commercialize drug candidates, issues relating to drug formulation and manufacturing, competition from other pharmaceutical companies, product pricing and third party reimbursement, and other factors described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-KSB for the year ended December 31, 2005. The Company assumes no obligation to update these statements, except as required by law.