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EX-31.1 - MedClean Technologies, Inc.v185404_ex31-1.htm
EX-32.1 - MedClean Technologies, Inc.v185404_ex32-1.htm
EX-32.2 - MedClean Technologies, Inc.v185404_ex32-2.htm
EX-31.2 - MedClean Technologies, Inc.v185404_ex31-2.htm

UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2010

or

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: 000-03125

MEDCLEAN TECHNOLOGIES, INC.
(Exact Name of registrant as specified in its charter)

Delaware
 
21-0661726
(State or other Jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification Number)

3 Trowbridge Drive
Bethel, Connecticut 06801
(Address of principal executive offices)

(203) 798-1080
(Registrant’s telephone number, including area code)
 
Copies to:
 
Joseph M. Lucosky, Esq.
195 Rt. 9 South, 2nd floor
Manalapan, NJ 07726
Tel No.: (732) 409-1212
Fax No.: (732) 577-1188

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.    Yes þ   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes o   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:

o
Large Accelerated Filer
 
o
Accelerated Filer
         
o
Non-Accelerated Filer
 
þ
Smaller Reporting Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o   No þ

As of May 17, 2010, there were 701,774,623 shares outstanding of the registrant’s common stock.
 

 


 
Page
PART I—FINANCIAL INFORMATION 
   
Item 1. Financial Statements
3
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
4
   
Item 3. Quantitative and Qualitative disclosures about Market Risk
6
   
Item 4. Controls and Procedures
6
   
PART II—OTHER INFORMATION
   
Item 1. Legal Proceedings
7
   
Item1A. Risk Factors
7
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
7
   
Item 3. Defaults Upon Senior Securities
7
   
Item 4. (Removed and Reserved)
7
   
Item 5. Other Information
7
   
Item 6. Exhibits
7
   
Signatures
8
 
2

 
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
PAGE
   
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2010 (UNAUDITED) AND DECEMBER 31, 2009
F-1
   
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
F-2
   
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
F-3
   
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
F-4
 
3

 
MEDCLEAN TECHNOLOGIES, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
March 31,
   
December 31,
 
   
2010
   
2009
 
   
(unaudited)
       
ASSETS
           
Current assets
           
Cash
  $ 464,872     $ 534,425  
Accounts receivable, net of $15,589 allowance
    175,913       144,117  
Revenues in excess of billings
    7,679       7,679  
Inventory
    793,686       815,634  
Prepaid expenses
    115,912       32,646  
  Total current assets:
    1,558,062       1,534,501  
                 
Property, plant and equipment, net
    194,631       212,801  
                 
Other assets
               
  Deposits
    32,808       32,808  
                 
Total assets
  $ 1,785,501       1,780,110  
                 
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
               
Current liabilities
               
Accounts payable and accrued liabilities
  $ 429,283     $ 253,742  
Payroll liabilities
    426,478       401,408  
Deferred revenue
    155,057       236,500  
Advances received
    275,000       -  
Billings in excess of revenue
    618,673       657,673  
Notes payable
    217,572       214,647  
  Total current liabilities:
    2,122,063       1,763,970  
                 
Stockholders' (deficit) equity
               
Preferred stock, $0.0001 par value, 60,000,000 shares authorized, none issued outstanding
               
Common stock, $0.0001 par value; 3,500,000,000 shares authorized; 698,914,623 and 675,478,445 shares issued and outstanding as of March 31, 2010 and December 31, 2009, respectively
    69,891       67,548  
Additional paid in capital
    26,641,965       25,411,906  
Accumulated deficit
    (27,048,418 )     (25,463,314 )
  Total stockholders' (deficit) equity:
    (336,562 )     16,140  
                 
Total liabilities and stockholders' (deficit) equity
  $ 1,785,501     $ 1,780,110  
 
 
See the accompanying notes to these unaudited condensed consolidated financial statements
 
F-1

 
MEDCLEAN TECHNOLOGIES, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
   
Three months ended March 31,
 
   
2010
   
2009
 
Revenues
           
  Sales and service revenues
  $ 268,867     $ 417,428  
                 
Cost of sales
    165,453       273,072  
                 
Gross profit
    103,414       144,356  
                 
Operating expenses
               
  Salaries and wages
    1,192,309       1,114,246  
  General and administrative expenses
    471,165       443,134  
  Depreciation
    22,353       23,110  
Total operating expenses
    1,685,827       1,580,490  
                 
Loss from operations
    (1,582,413 )     (1,436,134 )
                 
Other income and expenses
               
  Interest and other income
    234       906  
  Interest expense
    (2,925 )     (448,497 )
                 
Net Loss before income taxes
    (1,585,104 )     (1,883,725 )
                 
Provision for income taxes (benefit)
    -       -  
                 
Net Loss
  $ (1,585,104 )   $ (1,883,725 )
                 
Loss per common share, basic and fully diluted
  $ (0.00 )   $ (0.00 )
                 
Weighted average common shares outstanding, basic and fully diluted
    683,811,787       561,542,968  
 
 
See the accompanying notes to these unaudited condensed consolidated financial statements
 
F-2

 
MEDCLEAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 
   
Three months ended March 31,
 
   
2010
   
2009
 
Cash flows from operating activities:
           
Net loss
  $ (1,585,104 )   $ (1,883,725 )
Adjustments to reconcile net loss to net cash used in operating activities
               
Depreciation
    23,739       23,110  
Fair value of common stock, options and warrants issued for services rendered
    1,139,290       1,049,536  
(Increase) decrease in:
               
Accounts receivable
    (31,796 )     (73,970 )
Inventory
    21,948       (218,317 )
Prepaid expenses
    (83,266 )     (98,156 )
Increase (decrease) in:
               
Accounts payable
    178,466       (308,086 )
Payroll liabilities
    25,070       (49,617 )
Deferred revenue
    (81,443 )     86,588  
Billings in excess of revenue
    (39,000 )     386,428  
Deposits payable
    -       (386,428 )
Net cash used in operating activities
    (432,096 )     (1,472,637 )
                 
Cash flows from investing activities:
               
Purchase of equipment
    (5,569 )     (23,309 )
Net cash used in investing activities
    (5,569 )     (23,309 )
                 
Cash flows from financing activities:
               
Proceeds from exercise of warrants
    93,112       -  
Proceeds from lender advances
    275,000       -  
Net cash provided by financing activities
    368,112       -  
                 
(Decrease) increase in cash and cash equivalents
    (69,553 )     (1,495,946 )
                 
Cash and cash equivalents, beginning of period
    534,425       1,922,401  
                 
Cash and cash equivalents, end of period
  $ 464,872     $ 426,455  
                 
Supplemental disclosures of cash flow information:
               
Cash paid during the period for:
               
Interest
  $ -     $ 588  
Taxes
  $ -     $ -  
 
 
See the accompanying notes to these condensed consolidated financial statements
 
F-3

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the presentation of the accompanying financial statements are as follows:

General

The accompanying unaudited condensed consolidated financial statements of MedClean Technologies, Inc. and subsidiaries, (“MedClean” or the “Company” or “MCLN”), have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Accordingly, the results from operations for the three-month period ended March 31, 2010, are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.  The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2009 financial statements and footnotes thereto included in the Company's Form 10-K filed with the SEC on March 3, 2010.

The consolidated financial statements as December 31, 2009 have been derived from the audited consolidated financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America.

Business and Basis of Presentation

On January 2, 2009, the Company merged its wholly owned subsidiary, Aduromed Corporation into Aduromed Industries Inc. and changed its corporate name from Aduromed Industries, Inc. to MedClean Technologies, Inc.

MedClean is in the business of providing solutions for managing medical waste on site including designing, selling, installing and servicing on site (i.e. “in-situ”) turnkey systems to treat regulated medical waste. The Company provides these systems to hospitals and other medical facilities as efficient, safe, cost effective and legally compliant solutions to incineration, off site hauling of untreated waste and other alternative treatment technologies and methodologies. The MedClean Series System is offered in three configurations: Containerized System, Mobile System and the Fixed System (our traditional fixed installation).

Accounts Receivable
 
The Company assesses the realization of its receivables by performing ongoing credit evaluations of its customers financial condition. Through these evaluations, the Company may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The Company’s reserve requirements are based on the best facts available to the Company and are reevaluated and adjusted as additional information is received. The Company’s reserves are also based on amounts determined by using percentages applied to certain aged receivable categories. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience. Allowance for doubtful accounts for accounts and notes receivable was $15,589 as of March 31, 2010 and December 31, 2009.

F-4

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition

The Company recognizes revenues upon completion of the system installation and customer acceptance.  Clients will be invoiced upon the following milestones, contract signing, delivery of components, and the completion and acceptance of installation and start-up.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result in revisions to costs and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period.

The Company provides a one year warranty on the systems it installs. The Company also obtains a one year warranty on the system components from the component manufacturer, thereby mitigating potential warranty costs. Accordingly, the Company has accrued no reserve for warranty. On the installed base after the warranty term has expired, the Company offers a maintenance agreement of one or more years to the customer. The Customer is billed for, and pays for the maintenance agreement in advance. Revenues from such maintenance agreements are recognized ratably over the lives of the maintenance agreements, with the excess of the amount collected over the amount recognized as deferred revenue. At March 31, 2010 and December 31, 2009 the Company had $155,057 and $236,500 in deferred revenue from maintenance agreements.

Revenues from the sale of our mobile unit, accessories, repairs and replacement parts are recognized when shipped to the customer in accordance with a valid contract or order agreement. The contract or order agreement specifies delivery terms and pricing, and is considered to reasonably assure collection from the customer.

Revenues and cost from multi-year rental contracts on our mobile unit will be recognized ratably over the life of the rental contract.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company maintains cash deposits with financial institutions, which from time to time may exceed federally insured limits.  The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash. At March 31, 2010 and December 31, 2009, the Company has cash balances on deposit in one account with a financial institution in excess of the federally insured limits.

Estimates

The preparation of the accompanying financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Reclassification

Certain reclassifications have been made to prior periods’ data to conform to the current year’s presentation. These reclassifications had no effect on reported income or losses.

F-5

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Segment information

Accounting Standards Codification (“ASC”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The Company applies the management approach to the identification of our reportable operating segment as provided in accordance with ASC. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.
 
Control by principal stockholders 

The directors, executive officers, participants and their affiliates or related parties, own beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, the directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of the Company's assets.

Dependence on principal customer

For 2010 and going forward, the Company does not anticipate that the loss of any one customer will have a significant adverse impact on our business.

Fair Values

In the first quarter of fiscal year 2008, the Company adopted Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”).  ASC 820-10 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. ASC 820-10 delays, until the first quarter of fiscal year 2009, the effective date for ASC 820-10 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of ASC 820-10 did not have a material impact on the Company’s financial position or operations. Refer to Footnote 7 for further discussion regarding fair valuation.

Stock based compensation

Effective for the year beginning January 1, 2006, the Company has adopted ASC subtopic 718-10, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.  Pro-forma disclosure is no longer an alternative. This statement does not change the accounting guidance for share based payment transactions with parties other than employees provided in ASC 718-10.

As more fully described in Note 6 below, the Company granted equity based compensation over the years to employees of the Company under its equity plans.  The Company granted non-qualified stock options to purchase 22,500,000 and -0- shares of common stock during the three-month period ended March 31, 2010 and 2009, respectively, to employees and directors of the Company.

F-6

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

ASC subtopic 825-10 requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments.

Derivative Liability

On April 1, 2010, subsequent to these financial statements, the Company issued a $600,000 Convertible Promissory Note that matures April 1, 2013. The Promissory Note bear a onetime interest charge at a rate of 6% and will be convertible into Company’s common stock at any time at a conversion rate of 70% of the lowest closing price in the 20 trading days previous to the conversion.

Therefore, in accordance with Accounting Standards Codification subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”), on April 1, 2010, the Company will be required to bifurcate the fair value of any identified embedded derivatives from the host contract and mark to market each reporting period. In addition, previously classified equity instruments such as non employee warrants and options will be required to be reclassified outside of equity and mark to market to fair value each reporting period.

Inventory

The Company maintains an inventory, which consists primarily of component parts, spare parts and disposable goods.  The average cost method is utilized in valuing the inventory, and is stated at the lower of cost or market.  The following table summarizes these assets as of March 31, 2010 and December 31, 2009:

   
March 31, 2010
   
December 31, 2009
 
Component & spare parts
 
$
759,243
   
$
767,325
 
Consumables
   
34,443
     
30,980
 
Advance payments
           
17,329
 
Total inventory
 
$
793,686
   
$
815,634
 

Property, plant and equipment

The Company has property, plant and equipment that consist of automobiles, computers and related accessories, and office furniture.  The depreciation is calculated using the straight line method over the life of the property.  All property has a useful life of 3 to 10 years.  The following table summarizes these assets as of March 31, 2010 and December 31, 2009:

   
March 31, 2010
   
December 31, 2009
 
Office Furniture
 
$
170,094
   
$
164,525
 
Computers and Accessories
   
208,802
     
208,801
 
Leasehold Improvements
   
135,380
     
135,380
 
     
514,276
     
508,706
 
Accumulated Depreciation
   
319,645
     
295,905
 
   
$
194,631
   
$
212,801
 

During the three-month periods ended March 31, 2010 and 2009, depreciation expense charged to operations was $23,739 and $23,110, respectively, of which $1,386 and $0 was included as part of cost of sales, respectively
 
F-7

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
Earnings (loss) per common share

The net earnings (loss) per common share are computed by dividing the net loss for the period by the weighted average number of shares outstanding for the period. Outstanding warrants and options for the three-month  periods ending March 31, 2010 and 2009 amounting to 666,162,460 and 49,201,769 respectively were not included in the calculation for net loss per common share because it would be antidilutive or exceeded the average market price of the Company’s common stock for period.

The numerator and denominator used in the basic and diluted earnings (loss) per share of common stock computations are presented in the following table:

   
For the quarter ended March 31,
 
   
2010
   
2009
 
NUMERATOR FOR BASIC AND DILUTED EPS (LPS)
           
Net loss per statement of operations
 
$
(1,585,104
)
 
$
(1,883,725
)
                 
DENOMINATOR FOR BASIC AND DILUTED EPS (LPS)
               
   Weighted average shares of common stock outstanding
   
683,811,787
     
561,542,968
 
                 
Basic and diluted EPS (LPS)
 
$
(0.00
)
 
$
(0.00
)

Recent accounting pronouncements
 
In February 2010 the FASB issued Update No. 2010-09 “Subsequent Events (Topic 855)” (“2010-09”). 2010-09 clarifies the interaction of Accounting Standards Codification 855 “Subsequent Events” (“Topic 855”) with guidance issued by the Securities and Exchange Commission (the “SEC”) as well as the intended breadth of the reissuance disclosure provision related to subsequent events found in paragraph 855-10-50-4 in Topic 855. This update is effective for annual or interim periods ending after June 15, 2010. Management is currently evaluating whether these changes will have any material impact on its financial position, results of operations or cash flows.
 
In February 2010 the FASB issued Update No. 2010-08 “Technical Corrections to Various Topics” (“2010-08”). 2010-08 represents technical corrections to SEC paragraphs within various sections of the Codification. Management is currently evaluating whether these changes will have any material impact on its financial position, results of operations or cash flows.
 
In January 2010 the FASB issued Update No. 2010-06 “Fair Value Measurements and Disclosures—Improving Disclosures about Fair Value Measurements” (“2010-06”). 2010-06 requires new disclosures regarding significant transfers between Level 1 and Level 2 fair value measurements, and disclosures regarding purchases, sales, issuances and settlements, on a gross basis, for Level 3 fair value measurements. 2010-06 also calls for further disaggregation of all assets and liabilities based on line items shown in the statement of financial position. This amendment is effective for fiscal years beginning after December 15, 2010 and interim periods within those fiscal years. The Company is currently evaluating whether adoption of this standard will have a material impact on its financial position, results of operations or cash flows.
 
 
In January 2010 the FASB issued Update No. 2010-05 “Compensation—Stock Compensation—Escrowed Share Arrangements and Presumption of Compensation” (“2010-05”). 2010-05 re-asserts that the Staff of the Securities Exchange Commission (the “SEC Staff”) has stated the presumption that for certain shareholders escrowed share represent a compensatory arrangement. 2010-05 further clarifies the criteria required to be met to establish a position different from the SEC Staff’s position. The Company does not believe this pronouncement will have any material impact on its financial position, results of operations or cash flows.
 
F-8

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 
In January 2010 the FASB issued Update No. 2010-04 “Accounting for Various Topics—Technical Corrections to SEC Paragraphs” (“2010-04”). 2010-04 represents technical corrections to SEC paragraphs within various sections of the Codification. Management is currently evaluating whether these changes will have any material impact on its financial position, results of operations or cash flows.
 
In January 2010 the FASB issued Update No. 2010-02 “Accounting and Reporting for Decreases in Ownership of a Subsidiary—a Scope Clarification” (“2010-02”) an update of ASC 810 “Consolidation.” 2010-02 clarifies the scope of ASC 810 with respect to decreases in ownership in a subsidiary to those of a subsidiary or group of assets that are a business or nonprofit, a subsidiary that is transferred to an equity method investee or joint venture, and an exchange of a group of assets that constitutes a business or nonprofit activity to a non-controlling interest including an equity method investee or a joint venture. Management, does not expect adoption of this standard to have any material impact on its financial position, results of operations or operating cash flows. Management does not intend to decrease its ownership in any of its wholly-owned subsidiaries.
 
In January 2010 the FASB issued Update No. 2010-01 “Accounting for Distributions to Shareholders with Components of Stock and Cash—a consensus of the FASB Emerging Issues Task Force” (“2010-03”) an update of ASC 505 “Equity.” 2010-03 clarifies the treatment of stock distributions as dividends to shareholders and their affect on the computation of earnings per shares. Management does not expect adoption of this standard to have any material impact on its financial position, results of operations or operating cash flows.

NOTE 2 - GOING CONCERN MATTERS

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has incurred substantial recurring losses, which raises substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has available cash and cash equivalents of approximately $464,872 at March 31, 2010 which it intends to utilize for working capital purposes and to continue developing its business. To supplement its cash resources, the Company has been pursuing a number of alternative financing arrangements with various investment entities. We are currently looking to secure additional working capital to provide the necessary funds for us to execute our business plan through various sources, including bank facilities, bridge loans and equity offerings. However, we continue to incur significant operating losses and the resultant reduction of our cash position.  We cannot assure that we will be able to obtain additional funding, and the lack thereof would have a material adverse impact on our business. Moreover, any equity funding could be substantially dilutive to existing stockholders. The aforementioned factors raise substantial doubt about our ability to continue as a going concern. In the event the Company is unable to continue as a going concern it may pursue a number of different options, including, but not limited to, filing for protection under the federal bankruptcy code.
 
F-9

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 3 – CONTRACTS IN PROCESS

The Company entered into construction type contracts to furnish and install its systems in hospitals. There were four outstanding contracts at March 31, 2010 and December 31, 2009.  The following table summarizes these outstanding contracts:
 
Contract
 
Revenue
   
Amounts
   
Revenues in
   
Billings in excess
 
Amount
 
Recognized
   
Billed
   
excess of Billings
   
of Revenues
 
Outstanding contracts at March 31, 2010:
                       
 
1,327,930
   
949,221
     
1,327,930
     
-
     
378,709
 
 
231,257
   
29,347
     
21,668
     
7,679
     
-
 
 
287,029
   
163,939
     
215,271
     
-
     
51,332
 
 
282,948
   
-
     
188,632
     
-
     
188,632
 
                                   
$
2,129,164
   
1,142,507
(1)
 
$
1,753,501
   
$
7,679
   
$
618,673
 
                                   
Outstanding contracts at December 31, 2009:
                         
$
1,327,930
 
$
949,221
   
$
1,327,930
   
$
-
   
$
378,709
 
 
231,257
   
29,347
     
21,668
     
7,679
     
-
 
 
287,029
   
163,939
     
215,271
     
-
     
51,332
 
 
282,948
   
-
     
188,632
     
-
     
188,632
 
 
78,000
   
-
     
39,000
     
-
     
39,000
 
$
2,207,164
 
$
1,142,507
   
$
1,792,501
   
$
7,679
   
$
657,673
 

 
(1)
Revenue recognized in prior years on outstanding contracts.

NOTE 4 – NOTE PAYABLE

The Company’s outstanding unsecured note bears a 12% interest rate and matured on December 15, 2003. Both parties have entered a verbal agreement to extend the maturity date on this note indefinitely. No accrued interest has been paid on this note to date. As of March 31, 2010 and December 31, 2009 the balance due was $217,572 and $214,647 respectively.  

NOTE 5 –ADVANCES

On March 31, 2010, the Company received advance partial proceeds from a convertible promissory note executed April 1, 2010.  See subsequent events footnote below.

NOTE 6 – CAPITAL STOCK

The Company is authorized to issue 3,500,000,000 shares of common stock, with a $0.0001 par value per share as of April 22, 2009 as approved by the majority of the Company stockholders. Prior to the April 22, 2009 share increase, the Company was authorized to issue 1,400,000,000 shares of common stock with a $0.0001 par value per share. In addition, the Company is authorized to issue 60,000,000 shares of preferred stock with a $0.0001 par value per share.

As of March 31, 2010 and December 31, 2009, the Company has 698,914,623 and 675,478,445 shares of common stock and no preferred stock issued and outstanding, respectively.

During the three month period ended March 31, 2010, the Company issued an aggregate of 6,200,000 shares of its common stock in exchange for services rendered.  The valuations of common stock issued for services were based on the value of the services rendered, which did not differ materially from the fair value of the common stock during the period the services were rendered.
 
F-10

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 7 – WARRANTS AND OPTIONS

Warrants
 
The following table summarizes the changes in warrants outstanding and related prices for the shares of the Company’s common stock at March 31, 2010:
 
Exercise Price
  
Number
Outstanding
  
  
Warrants
Outstanding
Weighted
Average
Remaining
Contractual Life
(years)
  
  
Weighted
Average
Exercise price
  
  
Number
Exercisable
  
  
Warrants
Exercisable
Weighted
Average
Exercise Price
  
$    
0.0040
   
28,000,000
     
3.33
   
$
0.0040
     
28,000,000
   
$
0.0040
 
     
0.0075
   
78,971,031
     
3.34
     
0.0075
     
78,971,031
     
0.0075
 
     
0.0250
   
28,000,000
     
3.34
     
0.0250
     
28,000,000
     
0.0250
 
     
0.0900
   
600,000
     
296
     
0.0900
     
600,000
     
0.0900
 
     
0.2400
   
100,000
     
2.24
     
0.2400
     
100,000
     
0.2400
 
     
0.3788
   
2,204,386
     
0.81
     
0.3788
     
2,204,386
     
0.3788
 
     
0.5571
   
1,436,000
     
0.33
     
0.5571
     
1,436,000
     
0.5571
 
     
Total
   
139,311,417
     
3.27
   
$
0.0172
     
139,311,417
   
$
0.0172
 

Transactions involving the Company’s warrant issuance are summarized as follows:
 
  
 
Number of
Shares
   
Weighted
Average
Price Per
Share
 
Outstanding at December 31, 2008
   
414,576,110
   
$
0.0265
 
Granted
   
167,419,113
         
Exercised
   
(90,260,439
)
       
Canceled or expired
   
(334,838,226
)
       
Outstanding at December 31, 2009
   
156,896,558
     
0.0212
 
Granted
   
-
         
Exercised
   
(17,585,141
)
   
(0.0064
)
Canceled or expired
   
-
         
Outstanding at March 31, 2010
   
139,311,417
   
$
0.0172
 
 
During the three month period ended March 31, 2010, the Company issued an aggregate of 16,741,475 shares of common stock in exchange for the exercise of 17,585,138 warrants.  The exercise prices ranged from $0.004 to $0.0075 resulting in proceeds of $93.112. 5,433,966 warrants were exercised on a cashless basis.

F-11

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

Stock options

The following table summarizes the changes in options outstanding and the related prices for the shares of the Companys common stock issued to employees and directors of the Company at March 31, 2010:

   
  
Options Outstanding
  
 
  
Options Exercisable
  
Exercise Prices
 
  
Number
Outstanding
  
Weighted Average
Remaining
Contractual Life
(Years)
  
Weighted
Average
Exercise Price
  
Number
Exercisable
  
Weighted
Average
Exercise Price
  
$ 0.00400      
542,743,584
 
4.13
 
$
0.00400
 
532,230,251
 
$
0.00400
 
  .000844      
80,883,534
 
5.61
 
$
0.00844
 
26,961,178
   
0.00844
 
  0.028      
22,500,000
 
4.79
   
0.028
 
22,500,000
   
0.028
 
Total
     
646,127,118
 
4.34
 
0.00539
 
581,691,429
 
0.00513
 
 
  Transactions involving stock options issued to employees are summarized as follows:
 
  
  
 
  
  
Weighted
Average
  
  
  
Number of
  
  
Price
  
  
  
Shares
  
  
Per Share
  
Outstanding at December 31, 2008:
   
78,358,950
   
$
0.072
 
Granted
   
551,883,534
     
0.00467 
 
Exercised
   
         
Canceled or expired
   
(5,515,666
)
       
Outstanding at December 31, 2009:
   
624,726,818
   
$
0.004
 
Granted
   
22,500,000
     
0.028
 
Exercised
   
(494,700
)
   
(0.004
Canceled or expired
   
(605,000
   
  (0.004
)
Outstanding at March 31, 2010:
   
646,127,118
   
$
0.00539
 

On January 14, 2010, the Company granted options to purchase 22,500,000 shares of the Company’s common stock to directors. The option grants as approved by the Compensation Committee were fully vested when issued and the exercise price is $0.028 per share for five years.

The fair value for these awards was estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming no expected dividends:
 
Expected life (years)
   
5
 
Expected volatility
   
363.22
%
Risk-free interest rate
   
2.51
%
Dividend yield
   
%
 
The aggregate fair value of vesting options of $1,021,110 was charged to current period operations.

NOTE 8 — FAIR VALUE

ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants
 
F-12

 
MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
 
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2010:

   
March 31, 2010
 
   
Carrying
       
Financial instruments
 
Amount
   
Fair Value
 
Cash and cash equivalents
 
$
464,872
   
$
464,872
 
Accounts receivable, net
   
175,913
     
175,913
 
Accounts payable and accrued liabilities
   
429,283
     
429,283
 
   
$
1,070,068
   
$
1,070,068
 

For cash and cash equivalents, accounts receivable, and accounts payable, the carrying amount approximates fair value because of the relative short maturity of those instruments.

The Company adopted the provisions of ASC 825-10 prospectively effective as of the beginning of Fiscal 2008.  For financial assets and liabilities included within the scope of ASC 825-10, the Company was required to adopt the provisions of ASC 825-10 prospectively as of the beginning of Fiscal 2009.  The adoption of ASC 825-10 did not have a material impact on our consolidated financial position or results of operations.

NOTE 9 – SUBSEQUENT EVENTS

Subsequent events have been evaluated through May 14, 2010, a date that the financial statements were issued.

On April 1, 2010, subsequent to these financial statements, the Company issued a $600,000 Convertible Promissory Note that matures April 1, 2013. The Promissory Note bear a onetime interest charge at a rate of 6% and will be convertible into Company’s common stock at any time at a conversion rate of 70% of the lowest closing price in the 20 trading days previous to the conversion in exchange for $275,000 cash and a promissory note of $325,000 (net of payment of $275,000) bearing a onetime interest charge of 6.66%, due three years from date of issuance (April 1, 2013).

F-13

 
 MEDCLEAN TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010

NOTE 9 – SUBSEQUENT EVENTS (continued)

As a result of this transaction, the Company is required, effective April 1, 2010 to bifurcate the identified embedded derivative at the date of inception and mark to market each reporting period.  On April 1, 2010, subsequent to these financial statements, the Company recorded a noncash charge to operations of $271,283 representing the excess of derivative liabilities of $871,283 and the net face value of the promissory note of $600,000.

F-14

 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the United States Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements (collectively the “Filings”) and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
 
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.  The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

Results of Operations

Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009

Net Revenue

Total revenue for the quarter ended March 31, 2010 was $268,867 compared with $417,428 for the same period in 2009, a decrease of $148,561 or 35.6%.

Revenues derived from the sale of consumables, component parts, service billings and amortization of maintenance contracts decreased by $148,561 or 35.6% in the current quarter to $268,867. We did not have revenues during the quarters ended March 31, 2010 and 2009 attributable to contract revenues.

4

 
Gross Profit
 
The gross profit for the three months ended March 31, 2010, was $103,414 (38.5% of total revenue) compared with a gross profit of $144,356 (34.6% of total revenue) for the same three month period of 2009.

In this period, our gross profit margins increased from 34.6% to 38.5%, or a 11.3% increase.   By carefully managing the business we have been able to ensure that we are invoicing for all services preformed and therefore, we have been able to increase our total gross profit from the comparable period, last year.

The components of costs of revenues for products include direct materials, depreciation, shipping and rigging costs and contract labor primarily used to install, repair and maintain our equipment.
 
Operating Expenses
 
Total operating expenses for the three months ended March 31, 2010, was $1,685,827 compared with $1,580,490 for the same three month period in 2009, an increase of $105,337. In the three months ended March 31, 2010, we recognized non-cash equity based compensation to service providers and employees of $1,078,532 as compared to $604,552 recorded as equity based compensation for the three months ended March 31, 2009. 
 
Interest and Other Income

Interest and other income for the three month period ended March 31, 2010, was $234 compared to $906 for the same period in 2009.

Interest expense

Interest expense and amortization for the three month period ended March 31, 2010, was $2,925 compared with $448,497 in the same three month period of 2009. In the three months ended March 31, 2009, we recognized non-cash amortization expense amounting to $444,984, compared to $-0- in the same three month period of 2010.  
 
Net Income (loss)
 
Net loss for the three month period ended March 31, 2010, was $1,585,104, compared to $1,883,725 for the same period in 2009.

Liquidity and Capital Resources

The Company’s cash on hand and working capital as of March 31, 2010, and December 31, 2009, are as follows:
 
   
March 31,
   
December 31,
 
   
2010
   
2009
 
             
Cash on hand
 
$
464,872
   
$
534,425
 
                 
Working capital (deficit)
 
$
(564,001
)
 
$
(229,469
)
 
The Company purchased $5,569 in new fixed assets during the three month period ended March 31, 2010. Under current conditions, the Company anticipates purchasing approximately $15,000 in additional fixed assets in 2010.
Net cash used in operating activities totaled $432,096 for the three months ended March 31, 2010.

Our accounts receivable balance may have dramatic swings from one period to another depending upon the timing and the amount of milestone billings included in the balance at the end of any accounting period. There are three milestone billings representing a percentage of the contract value for each installment and our payment terms are

5

 
“upon receipt.” Receivable balances are typically paid within 15 days of the invoice date. Billings for maintenance contracts and consumables are due within 45 days and are more numerous but much smaller in value than milestone billings. We review our outstanding receivable balances on a regular basis to ensure that the allowance for bad debt is adequate.   Due to the varying nature in the timing and amounts of the receivable balances as noted above, the change in the allowance for doubtful account will not necessarily correlate with the increase or decrease in the accounts receivable balance. The accounts receivable balance as of March 31, 2010, was $175,913 net of an allowance of $15,589, a decrease of $31,796 from year ended December 31, 2009.  

Our inventory balance may have dramatic swings from one period to another depending upon the expected installation date of our MedClean systems and our accounts payable balances can have similar swings depending on payment terms and any volume purchases or discounts we may take advantage of from time to time. During the three months ended March 31, 2010, the Company decreased its inventory on hand by $21,948 to $793,686.

To supplement its cash resources, the Company has been pursuing a number of alternative financing arrangements with various investment entities. We are currently looking to secure additional working capital to provide the necessary funds for us to execute our business plan through various sources, including bank facilities, bridge loans and equity offerings. However, we continue to incur significant operating losses and the resultant reduction of our cash position.  We cannot assure that we will be able to obtain additional funding, and the lack thereof would have a material adverse impact on our business.  Moreover, any equity funding could be substantially dilutive to existing stockholders. The aforementioned factors raise substantial doubt about our ability to continue as a going concern. In the event the Company is unable to continue as a going concern it may pursue a number of different options, including, but not limited to, filing for protection under the federal bankruptcy code.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and (ii) accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations.  Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties.  Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control.  Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
 
6

 
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company's internal control over financial reporting as of March 31, 2010. In making this assessment, our Chief Executive Officer and
Chief Financial Officer used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework.  Based on this evaluation, Our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2010, our internal control over financial reporting was effective.
 
(b) Changes in Internal Control over Financial Reporting.  There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC on March 3, 20010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of the Company’s equity securities during the quarter ended March 31, 2010 that were not otherwise disclosed on a Form 8-K.

Item 3. Defaults upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any indebtedness of the Company.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.
 
 
Description
     
31.1*
 
Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).
31.2*
 
Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).
32.1*
 
Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
 
Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
* Filed herewith
 
7

 
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 thereunto duly authorized.

   
 
MEDCLEAN TECHNOLOGIES, INC.
   
   
Date: May 17, 2010
By: /s/ David Laky
 
Name: David Laky
 
Title: Chief Executive Officer and Principal Executive Officer
 
         
   
   
Date: May 17, 2010
By: /s/ Cheryl K. Sadowski
 
Name: Cheryl K. Sadowski
 
Title: Chief Financial Officer and Principal Financial Officer
 
         

8