**Back
          to Table of Contents**
 **Index
          to Financial Statements**





**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





(Mark
      One)





ý
            
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                the fiscal year ended December 31, 2005ORo
            
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934





For
      the
      transition period from ____________ to ____________





Commission
      file number: 333-125699





**NEURO-HITECH
      PHARMACEUTICALS, INC.**


(Name
      of
      Small Business Issuer in Its Charter)





**Delaware**
            
            20-4121393(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)One
                Penn Plaza, Suite 2514, New York, NY
            
            10119(Address
                of principal executive offices)
            
            (Zip
                Code)





**(212)
      798-8100**


(Registrant’s
      telephone number, including area code)







(Former
      name, former address and former fiscal year, if changed since last
      report)




Securities
      registered pursuant to Section 12(b) of the Exchange Act: None.




Title
                of each class
            
            Name
                of each exchange on which registered




Securities
                registered pursuant to Section 12(g) of the Act:None.(Title
                of Class)







Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o





Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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
ý   No
o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will 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-KSB or any
      amendment to this Form 10-KSB. ý





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





State
      issuer’s revenues for its most recent fiscal year. $208,343





State
      the
      issuer’s aggregate market value of the voting and non-voting common equity held
      by non-affiliates computed by reference to the price at which the common equity
      was sold, or the average bid and asked prices of such common equity, as of
      a
      specified date within the past 60 days. Approximately
      $54.4 million as of March 27, 2006.





State
      the
      number of shares outstanding of each of the issuer’s classes of common stock, as
      of the latest practicable date.





Class
            
            Outstanding
                at March 27, 2006Common
                Stock, $0.001 par value per share
            
            9,431,256
                sharesClass
                A Common Stock, $0.001 par value per share
            
            100
                shares




Transitional
      Small Business Disclosure Format (check one):   Yes
o   No
ý





**Back
          to Table of Contents**
 **Index
          to Financial
          Statements**


**TABLE
      OF CONTENTS**





**ITEM
                NUMBER AND CAPTION**
            **PAGE****PART
                I**Item
                1.
            Description
                of Business
            1Item
                2.
            Description
                of Property
            20Item
                3.
            Legal
                Proceedings
            20Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            20**PART
                II**Item
                5.
            Market
                for Common Equity, Related Stockholder Matters and
                Small Business Issuer Purchases of Equity Securities
            21Item
                6.
            Management’s
                Discussion and Analysis or Plan of
                Operations
            23Item
                7.
            Financial
                Statements
            26Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial Disclosure
            26Item
                8A.
            Controls
                and Procedures
            26Item
                8B.
            Other
                Information
            26**PART
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control
                Persons; Compliance with Section 16(a) of the Exchange
                Act
            27Item
                10.
            Executive
                Compensation
            29Item
                11.
            Security
                Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters
            31Item
                12.
            Certain
                Relationships and Related
                Transactions
            32Item
                13.
            Exhibits
            33Item
                14.
            Principal
                Accountant Fees and Services
            35








**Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**PART
      I.**





**Item
      1.****Description
      of Business.**





**Description
      of the Company**





We
      are an
      early stage pharmaceutical company engaged in the development and
      commercialization Huperzine A (“HupA”) for a variety of degenerative
      neurological disorders. Through a collaboration with the Alzheimer’s Disease
      Cooperative Study (“ADCS”), formed in 1991 as a cooperative agreement between
      the National Institute of Aging and the University of California San Diego,
      for
      advancing the research of drugs for treating patients with Alzheimer’s disease
      (“AD”), the National Institutes of Health (“NIH”) and Georgetown University
      Medical Center (“Georgetown”), the Company has completed Phase I studies and is
      currently conducting Phase II clinical trials for HupA. HupA is a cholinesterase
      inhibitor that the Company believes may be effective in the treatment of AD
      and
      Mild Cognitive Impairment (“MCI”), although, to date, its efforts have been
      focused upon HupA’s effectiveness in AD.





**History**





We
      were
      originally formed on February 1, 2005, as Northern Way Resources, Inc., a Nevada
      corporation, for the purpose of acquiring exploration and early stage natural
      resource properties. On January 24, 2006, we entered into an Agreement and
      Plan
      of Reorganization (the “Merger Agreement”) by and among us, Marco Hi-Tech JV
      Ltd., a privately held New York corporation (“Marco”), and Marco Acquisition I,
      Inc., a newly formed wholly-owned Delaware subsidiary of ours (“Acquisition
      Sub”). Upon closing of the transactions contemplated under the Merger Agreement
      (the “Merger”), Acquisition Sub was merged with and into Marco, and Marco became
      a wholly-owned subsidiary of ours. The merger was consummated on that date
      and
      in connection with that merger, we changed our name to Neuro-Hitech
      Pharmaceuticals, Inc.





Pursuant
      to the Merger Agreement, at closing, shareholders of Marco received .5830332
      shares of our Common Stock for each issued and outstanding share of Marco’s
      common stock, par value $.01 per share. As a result, at closing of the Merger,
      we issued 6,164,006 shares of our Common Stock to the former stockholders of
      Marco, which represented approximately 80% of our outstanding Common Stock
      following the Merger, in exchange for 100% of the outstanding capital stock
      of
      Marco.





All
      references to the “Company” for periods prior to the closing of the Merger refer
      to Marco, and references to the “Company” for periods subsequent to the closing
      of the Merger refer to Neuro-Hitech and its subsidiaries.





Marco
      was
      incorporated in the State of New York on December 11, 1996. Through 2005, Marco
      was focused primarily on licensing proprietary HupA technology from independent
      third-party developers and investigators, including the Mayo Foundation for
      Medical Education and Research in Rochester, Minnesota (the “Mayo Foundation”),
      and conducting analytical work and clinical trials of HupA, and until such
      time
      operated with no full-time employees and minimal internal resources. In
      addition, from time to time, Marco has imported and sold inventories of natural
      huperzine and other dietary supplement ingredients to vitamin and supplement
      suppliers to generate revenues. In 2005, Marco determined to raise additional
      capital to pursue additional approvals and undertake necessary studies for
      the
      development and commercialization of HupA, including securing rights to
      third-party transdermal patch technology.





After
      the
      Merger, the Company succeeded to the business of Marco as its sole line of
      business and adopted the name Neuro-Hitech Pharmaceuticals, Inc.





**Description
      of the Business**





**AD
      and MCI**





AD
      is a
      chronic neurodegenerative disorder characterized by a loss of cognitive ability,
      severe behavioral abnormalities, and ultimately death. MCI is a relatively
      new
      classification of memory disorder that is characterized by noticeable memory
      loss, but otherwise normal behavior. According to the Mayo Clinic, MCI converts
      to AD at a rate of 10 to 15% a year.




-1-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





According
      to the ADCS there is no known cure for AD or MCI. However, for some people
      in
      the early and middle stages of the disease, the drugs donepezil (Aricept®),
      rivastigmine (Exelon®), or galantamine (Razadyne®, previously known as Reminyl®)
      may help prevent some symptoms from becoming worse for a limited time. Another
      drug, memantine (Namenda®), has been approved to treat moderate to severe AD,
      although it also is limited in its effects. Also, some medicines may help
      control behavioral symptoms of AD such as sleeplessness, agitation, wandering,
      anxiety, and depression. Treating these symptoms often makes patients more
      comfortable and makes their care easier for caregivers.





**Huperzine
      A**





HupA
      is a
      compound that is used in China as a prescription drug for treating AD and other
      forms of dementia. The Company has sought to identify and license HupA compounds
      for approval as HupA drugs.





Both
      pre-clinical and animal and human clinical studies using United States Food
      and
      Drug Administration (“FDA”) and other protocol end points conducted both in
      China and in the U.S. suggest that HupA:





·
            may
                prove to be more efficacious in improving cognitive function in patients
                suffering from dementia than the other currently approved drugs for
                early
                and middle stage AD;


·
            may
                have significantly longer inhibitory action at lower doses than the
                other
                approved drugs for early and middle stage
                AD;


·
            may
                prove to not induce the unpleasant side effects resulting from use
                of
                other approved drugs for early and middle stage
                AD;


·
            may
                be effective not only in increasing the brain’s acetylcholine levels, but
                also levels of other important neurotransmitters such as dopamine
                and
                noradrenaline;


·
            may
                have high oral bioavailability, and good penetration through the
                blood-brain barrier; and


·
            may
                exhibit neuroprotective properties, and may significantly decrease
                neuronal cell death due to glutamate-induced excitotoxicity.





Although
      not being pursued by the Company at this time, Chinese clinical studies have
      indicated that HupA may also have potential in the treatment of myasthenia
      gravis, a progressive autoimmune disease resulting in neuromuscular failure,
      which, untreated can lead to blindness and death from respiratory failure.
      In a
      1986 study by Y.S. Cheng et al., it was shown that HupA controlled the clinical
      manifestations of the disease in 99% of the 128 patients treated. Additional
      research at the Walter Reed Institute of Research indicates that HupA may also
      have application as a nerve gas antidote.





**Licenses/Patents**





The
      Company holds an exclusive license for two composition of matter patents and
      four process patents for Racemic Huperzine A, HupA and their analogues and
      derivatives from the Mayo Foundation. The Company holds licenses from the Mayo
      Foundation under the following patents: United States Patent Nos. 4,929,731,
      5,104,880, 5,106,979, 5,547,960, 5,663,344, 5,869,672.





The
      Company has an exclusive worldwide license to the four patents pursuant to
      a
      Technology License Contract with the Mayo Foundation (the “Mayo Licensing
      Agreement”) and rights to patents or future developments. The Company made an
      initial, nonrefundable royalty payment of $82,500 when it entered into the
      Mayo
      Licensing Agreement in 1997 and upon filing of an investigational new drug
      application (IND) the Company paid $25,000 to Mayo in 2002, and will be required
      to make, once FDA approval is received, quarterly royalty payments of 5% of
      net
      sales of the Licensed Products and 1% of net sales of any Natural Products
      (as
      such terms are defined in the Mayo Licensing Agreement) sold by the Company
      prior to May 29, 2007, with a minimum annual royalty of $300,000. The Company
      is
      also obligated to make certain maintenance and milestone royalties payments.
      Prior to obtaining FDA approval of a Licensed or a Natural Product the Company
      is obligated to pay the Mayo Foundation $10,000 annually. The Company also
      has
      an option to license any patents that issue as a result of continuations,
      continuations-in-part, divisional or foreign applications filed based on the
      licensed patent upon payment of $15,000. The Mayo Foundation has the option
      under the Mayo Licensing Agreement to purchase products from the Company at
      a
      30% discount to market.




-2-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**Strategy**





The
      Company’s strategy is to make HupA available in both oral and transdermal form.
      The Company believes that HupA can effectively be delivered transdermally
      because of its low dosage requirement and low molecular weight.





The
      Company’s primary focus is completing the Phase II clinical trial for HupA in
      conjunction with Georgetown University Medical Center (“Georgetown”) and the
      ADCS. The Company presently anticipates that this phase will be completed in
      the
      fourth quarter of 2006, with data compilation expected to be completed in the
      first quarter of 2007, subject to the study recruitment level. In December
      2003,
      the Company entered into a clinical research agreement, which was amended in
      November 2005, with Georgetown pursuant to which Georgetown will provide the
      Company with Phase II research. The costs associated with this agreement total
      $3,146,667 and will be partially funded by the National Institutes of Health.
      Our portion of the total cost is $1,846,667 and payable in installments upon
      the
      achievement of certain milestones. Our portion of the total cost would increase
      if the total cost of the program was increased at our election. This agreement
      may be terminated by either party upon 30 days notice and expires on August
      31,
      2007.





On
      February 1, 2006, the Company entered into an exclusive development agreement
      (the “Development Agreement”) with Org Syn Laboratory, Inc. (“Org Syn”) for the
      development by Org Syn of synthetic HupA. Under the terms of the Development
      Agreement, Org Syn received an aggregate of $175,894 upon the execution of
      the
      Development Agreement, $175,916 six months from the execution date and an
      additional $67,664 seven months from the execution date (subject to the
      achievement of certain milestones) for services rendered under the Development
      Agreement. The Development Agreement may be terminated by the Company if Org
      Syn
      fails to achieve certain stated milestones.





On
      March
      15, 2006, the Company entered into a development agreement with Xel
      Herbaceuticals, Inc. (“XEL”) for XEL to develop a HupA Transdermal Delivery
      System (“Delivery Product”). Under the terms of the agreement, the Company paid
      XEL a $250,000 fee upon the execution of the agreement and will pay XEL $92,500
      per month during the development of the Delivery Product, which development
      is
      estimated to take approximately 16 months. The monthly payment is subject to
      quarterly adjustment and subject to a limit on aggregate development cost
      overruns of $250,000. XEL has agreed to pay any cost overruns in excess of
      $250,000. The Company and XEL intend to seek domestic and foreign patent
      protection for the Delivery Product.





If
      the
      Company elects to exercise its right to license the Delivery Product in the
      United States and Canada (“North America”) and to develop the Delivery Product
      on its own, the Company will pay XEL an initial license fee of $400,000 and
      up
      to an aggregate of $2.4 million in additional payments upon the achievement
      of
      certain milestones, including completion of a prototype, initial submission
      to
      the FDA, completion of phases of clinical studies and completion of the FDA
      submission and FDA approval. Similarly, if the Company elects to exercise its
      option to license the Delivery Product worldwide excluding China, Taiwan, Hong
      Kong, Macau and Singapore (“Worldwide”), and develop the Delivery Product on its
      own, the Company will pay XEL an additional initial license fee of $400,000
      and
      up to an aggregate of $2.4 million in additional payments upon the achievement
      of comparable milestones. If XEL fails to obtain a U.S. or international patent,
      the corresponding license fee and milestone payments will be reduced by 50%
      until such time as XEL obtains such patent, at which time the unpaid 50% of
      all
      such milestone payments previously not made will be due.





The
      Company will also be obligated to pay XEL royalty payments of between 7% and
      10%
      of net sales, with such royalty payments subject to reduction upon the
      expiration of the patent or the launch of a generic product in the applicable
      territory. If a patent has not been issued in either the United States or
      Canada, the royalty payments will be subject to reduced rates of between 3%
      and
      5% of net sales. Royalty payments for sales in the Worldwide territory will
      be
      subject to good faith negotiations between the parties.




-3-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





If
      the
      Company exercises its right to license the Delivery Product in North America
      and
      to develop the Delivery Product with a third party, the Company will pay XEL
      50%
      of any initial signing fees and milestone fees (excluding any research and
      development fees) paid by such third party. Similarly, in the event that the
      Company decides to exercise its option to license the Delivery Product Worldwide
      and to develop the Delivery Product with a third party, the Company will pay
      XEL
      50% of any initial signing fees and milestone fees (excluding any research
      and
      development fees) paid by such third party. If XEL fails to obtain a U.S. or
      international patent, the percentage of the corresponding fees will be reduced
      to 25%. The Company will pay XEL 20% of any royalty payments received by the
      Company from third-party sublicensees or if the Delivery Product is not
      protected by at least one patent, 10% of any royalty received by the Company
      from sublicensees.





If
      the
      Company elects not to exercise its right to license the Delivery Product and
      XEL
      elects to further develop the Delivery Product without the Company, XEL will
      be
      obligated to pay the Company 30% of any net profits realized up to a maximum
      of
      two times the amount paid by the Company to XEL during development, excluding
      the initial $250,000 signing fee. Upon such election, XEL will be entitled
      to
      full ownership of the intellectual property of the Delivery Product. If the
      Company elects to exercise its rights to license the Delivery Product in North
      America, but not Worldwide, XEL will have certain rights to obtain intellectual
      property protection in any country outside North America upon payment to the
      Company for such rights, such fees to be negotiated in good faith by the
      parties.





The
      Company currently intends to focus upon the development of collaborative, joint
      and strategic alliances and licensing arrangements with various pharmaceutical
      companies for marketing the Company’s products once FDA approval is obtained,
      although there can be no assurance that FDA approval will be obtained. The
      Company presently believes the estimated additional costs to bring the product
      to market as an oral dose drug, after completing two Phase III clinical trials,
      will be substantial and no assurances as to future cost can be made.  Upon
      obtaining FDA approval for HupA, it is anticipated that the Company’s
      collaborative partners, if the Company is successful in obtaining collaborative
      partners, will be primarily responsible for the sale and distribution of HupA
      products. Efforts will be made to reach licensing agreements with collaborative
      partners to participate in earlier phases of the drug development process for
      the Company’s products, reducing the need for it to obtain financing for the
      additional development costs. This strategy may enable the Company to gain
      access to the marketing expertise and resources of the Company’s potential
      partners and to lower its capital requirements.





Although
      the Company’s primary focus is the commercialization of HupA, the Company also
      investigates and considers other drugs and compounds with neurological
      applications.





**Marketing**





According
      to the ADCS, AD is both the most common cause of dementia and the fourth leading
      cause of death in the industrialized world, affecting approximately one in
      five
      persons over the age of 80 years. Currently, AD afflicts some 4.5 million
      Americans, including approximately 5% of the U.S. population between the ages
      of
      65 and 74, and nearly half of those over 85. According to the ACDS, the annual
      cost of caring for those with AD is in excess of $100 billion in the United
      States alone. Finding a way to delay the onset of symptoms by five years may
      reduce by half the number afflicted, with a corresponding savings in
      cost.





In
      addition to the market for AD, compounds such as HupA may provide potential
      benefits to patients diagnosed with MCI by slowing down the advent of AD or
      other forms of dementia. According to the Mayo Clinic, MCI afflicts up to 20%
      of
      the non-demented population over 65.





A
      marketing study funded by the Company has shown that patient compliance is
      a
      crucial factor in determining patient and doctor choice in choosing a medication
      for AD. Often it is the responsibility of a caregiver to remind the patient
      to
      take the orally given medications. Recognizing this, the Company hopes to
      develop and license a multi-day transdermal patch, which, if successfully
      realized, will be able to be applied to the patient for more than one day.
      The
      Company believes that some advantages of a transdermal delivery may
      include:





·
            avoidance
                of first-pass metabolism; better control of drug and metabolite plasma
                levels leading to improved therapy with reduced side
                effects;


·
            avoidance
                of non-compliance resulting, for example, from patients forgetting
                to take
                the medication; and


·
            improved
                quality of life for caregiver who only needs to replace the patch
                up to
                once per week.






-4-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**


**Research
      and Development**





The
      Company spent approximately $678,798, $494,633 and $243,010 in the fiscal years
      ended December 2005, 2004 and 2003, respectively, on research and
      development.





**Manufacturing
      and Raw Materials**





The
      Company does not have, and does not intend to establish, manufacturing
      facilities to produce its product candidates in the near or mid-term. The
      Company plans to control capital expenditures by using contract manufacturers
      to
      produce product candidates. It is the Company’s belief that there are a
      sufficient number of high quality GLP (Good Laboratory Practice) and GMP (Good
      Manufacturing Practice) contract manufacturers available, and the Company has
      had discussions and in some instances established relationships to fulfill
      its
      production needs for research and clinical use.





The
      manufacturer of Neuro-Hitech’s product candidates or any future product, whether
      done by third-party contractors as planned or internally, will be subject to
      rigorous regulations, including the need to comply with the FDA’s current GMP
      standards. As part of obtaining FDA approval for each product, each of the
      manufacturing facilities must be inspected, approved by and registered with
      the
      FDA. In addition to obtaining FDA approval of the prospective manufacturer’s
      quality control and manufacturing procedures, domestic and foreign manufacturing
      facilities are subject to periodic inspection by the FDA and/or foreign
      regulatory authorities.





The
      Company currently attempts to manage the risk associated with sole-sourced
      raw
      materials by active inventory management. A material shortage, contamination,
      and/or recall could adversely affect the manufacturing of the Company’s
      products.





**Government
      Regulation**





The
      research and development, manufacture and marketing of controlled-release
      pharmaceuticals are subject to regulation by U.S., Canadian and foreign
      governmental authorities and agencies. Such national agencies and other federal,
      state, provincial and local entities regulate the testing, manufacturing, safety
      and promotion of the Company’s products. Regulations applicable to the Company’s
      products may change as the currently limited number of approved
      controlled-release products increases and regulators acquire additional
      experience in this area.





**United
      States Regulation**





**New
      Drug Application**





The
      Company will be required by the FDA to comply with New Drug Application (“NDA”)
      procedures for its products prior to commencement of marketing by the Company
      or
      the Company’s licensees. New drug compounds and new formulations for existing
      drug compounds are subject to NDA procedures. These procedures include (a)
      preclinical laboratory and animal toxicology tests; (b) scaling and testing
      of
      production batches; (c) submission of an investigational new drug application
      (“IND”), and subsequent approval is required before any human clinical trials
      can commence; (d) adequate and well controlled replicate human clinical trials
      to establish the safety and efficacy of the drug for its intended indication;
      (e) the submission of an NDA to the FDA; and (f) FDA approval of an NDA prior
      to
      any commercial sale or shipment of the product, including pre-approval and
      post-approval inspections of its manufacturing and testing facilities. If all
      of
      these data in the product application is owned by the applicant, the FDA will
      issue its approval without regard to patent rights that might be infringed
      or
      exclusivity periods that would affect the FDA’s ability to grant an approval if
      the application relied upon data which the applicant did not own. The Company
      currently intends to generate all data necessary to support FDA approval of
      the
      applications the Company files.





Preclinical
      laboratory and animal toxicology tests may have to be performed to assess the
      safety and potential efficacy of the product. The results of these preclinical
      tests, together with information regarding the methods of manufacture of the
      products and quality control testing, are then submitted to the FDA as part
      of
      an IND requesting authorization to initiate human clinical trials. Once the
      IND
      notice period has expired, clinical trials may be initiated, unless a hold
      on
      clinical trials has been issued by the FDA.




-5-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





Clinical
      trials involve the administration of a pharmaceutical product to individuals
      under the supervision of qualified medical investigators that are experienced
      in
      conducting studies under “Good Clinical Practice” guidelines. Clinical studies
      are conducted in accordance with protocols that detail the objectives of a
      study, the parameters to be used to monitor safety and the efficacy criteria
      to
      be evaluated. Each protocol is submitted to the FDA and to an Institutional
      Review Board prior to the commencement of each clinical trial. Clinical studies
      are typically conducted in three sequential phases, which may overlap. In Phase
      I, the initial introduction of the product into human subjects, the compound
      is
      tested for absorption, safety, dosage, tolerance, metabolic interaction,
      distribution, and excretion. Phase II involves studies in a limited patient
      population with the disease to be treated to (1) determine the efficacy of
      the
      product for specific targeted indications, (2) determine optimal dosage and
      (3)
      identify possible adverse effects and safety risks. In the event Phase II
      evaluations demonstrate that a pharmaceutical product is effective and has
      an
      acceptable safety profile, Phase III clinical trials are undertaken to further
      evaluate clinical efficacy of the product and to further test its safety within
      an expanded patient population at geographically dispersed clinical study sites.
      Periodic reports on the clinical investigations are required.





The
      Company, or the FDA, may suspend clinical trials at any time if it is believed
      that clinical subjects may be exposed to unacceptable health risks. The results
      of the product development, analytical laboratory studies and clinical studies
      are submitted to the FDA as part of an NDA for approval of the marketing and
      commercialization of a pharmaceutical product.





In
      certain companies where the objective is to develop a generic version of an
      approved product already on the market in controlled-release dosages, an
      Abbreviated New Drug Application (“ANDA”) may be filed in lieu of filing an NDA.
      Under the ANDA procedure, the FDA waives the requirement to submit complete
      reports of preclinical and clinical studies of safety and efficacy and instead
      requires the submission of bio-equivalency data, that is, demonstration that
      the
      generic drug produces the same effect in the body as its brand-name counterpart
      and has the same pharmacokinetic profile, or change in blood concentration
      over
      time. The advantages of an ANDA over an NDA include reduced research and
      development costs associated with bringing a product to market, and generally
      a
      shorter review and approval time at the FDA. This procedure is not available
      to
      the Company’s planned products but might be available to the Company’s
      competitors if the Company receives FDA approval for one or more of its
      products.





**Exclusivity
      Issues**





Under
      U.S. law, the expiration of a patent on a drug compound does not create a right
      to make, use or sell that compound. There may be additional patents relating
      to
      a person’s proposed manufacture, use or sale of a product that could potentially
      prohibit such person’s proposed commercialization of a drug
      compound.





The
      Food
      Drug and Cosmetic Act (“FDC”) contains non-patent market exclusivity provisions
      that offer protection to pioneer drug products and are independent of any patent
      coverage that might also apply. Five years of exclusivity are granted to the
      first approval of a “new chemical entity.” Three years of exclusivity may apply
      to products which are not new chemical entities, but for which new clinical
      investigations are essential to the approval. For example, a new indication
      for
      use, or a new dosage strength of a previously approved product, may be entitled
      to exclusivity, but only with respect to that indication or dosage strength.
      Exclusivity only offers protection against a competitor entering the market
      via
      the ANDA route, and does not operate against a competitor that generates all
      of
      its own data and submits a full NDA.





If
      applicable regulatory criteria are not satisfied, the FDA may deny approval
      of
      an NDA or an ANDA or may require additional testing. Product approvals may
      be
      withdrawn if compliance with regulatory standards is not maintained or if
      problems occur after the product reaches the market. The FDA may require further
      testing and surveillance programs to monitor the pharmaceutical product that
      has
      been commercialized. Noncompliance with applicable requirements can result
      in
      additional penalties, including product seizures, injunction actions and
      criminal prosecutions.




-6-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**Additional
      Regulatory Considerations**





Sales
      of
      the Company’s products by licensees outside the United States and Canada are
      subject to regulatory requirements governing the testing, registration and
      marketing of pharmaceuticals, which vary widely from country to
      country.





In
      addition to the regulatory approval process, pharmaceutical companies are
      subject to regulations under provincial, state and federal law, including
      requirements regarding occupational safety, laboratory practices, environmental
      protection and hazardous substance control, and may be subject to other present
      and future local, provincial, state, federal and foreign regulations, including
      possible future regulations of the pharmaceutical industry. The Company believes
      that it is in compliance in all material respects with such regulations as
      are
      currently in effect.





**Environmental
      Laws**





The
      Company is subject to comprehensive federal, state, and provincial environmental
      laws and regulations that govern, among other things, air polluting emissions,
      waste water discharges, solid and hazardous waste disposal, and the remediation
      of contamination associated with current or past generation handling and
      disposal activities, including the past practices of corporations as to which
      the Company is the successor. The Company does not expect that compliance with
      such environmental laws will have a material effect on its capital expenditures,
      earnings or competitive position in the foreseeable future. There can be no
      assurance, however, that future changes in environmental laws or regulations,
      administrative actions or enforcement actions, or remediation obligations
      arising under environmental laws will not drain the Company’s capital
      expenditures, and affect its earnings or competitive position.





**Competition**





The
      Company seeks to develop and market (either on its own or by license to third
      parties) proprietary pharmaceutical products based on HupA. The Company’s
      competition consists of those companies which develop drugs to treat AD, MCI
      and
      other forms of dementia, and companies that develop AD and MCI drugs and drug
      delivery systems for theses drugs.





In
      recent
      years, research into AD and MCI has increased as the population ages. An
      increasing number of pharmaceutical companies are interested in the development
      and commercialization of products that treat these diseases. The Company also
      expects that competition in the field of drug delivery will significantly
      increase in the future since smaller specialized research and development
      companies are beginning to concentrate on this aspect of the business. For
      each
      area, some of the major pharmaceutical companies have invested and are
      continuing to invest significant resources in the development of these products,
      and some have invested funds in specialized drug delivery
      companies.





Other
      companies may develop new drug formulations and products for AD or MCI, or
      may
      improve existing drug formulations and products more efficiently than the
      Company can. In addition, almost all of the Company’s competitors have vastly
      greater resources than the Company does. While the Company’s product development
      capabilities and exclusive patent licenses may help it maintain a market
      position in the field of drug delivery, there can be no assurance that others
      will not be able to develop these capabilities, or alternative technologies
      outside the scope of the Company’s patents, if any, or that even if patent
      protection is obtained, these patents will not be successfully challenged in
      the
      future.





**Employees**





As
      of
      March 27, 2006, the Company had no full-time employees and its activities were
      directed by the efforts of Reuben Seltzer and Alan Kestenbaum and several
      part-time personnel. Messrs. Seltzer and Kestenbaum, and other personnel, are
      primarily employed by other organizations and will continue to participate
      on a
      part-time basis and will not devote full-time efforts to the affairs of the
      Company for the foreseeable future. The Company may hire several full-time
      employees to be engaged in administration, research and
      development.




-7-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**Corporate
      Information**





The
      Company’s corporate headquarters are located at One Penn Plaza, New York, NY
      10119. The Company’s telephone number is (212) 798-8100, and its fax number is
      (212) 798-8183.




**Risk
      Factors**




Investing
      in the Company’s common stock involves a high degree of risk. Prospective
      investors should carefully consider the risks described below, together with
      all
      of the other information included or referred to in this Annual Report on Form
      10-KSB, before purchasing shares of the Company’s common stock. There are
      numerous and varied risks, known and unknown, that may prevent the Company
      from
      achieving its goals. The risks described below are not the only ones the Company
      will face. If any of these risks actually occur, the Company’s business,
      financial condition or results of operation may be materially adversely
      affected. In such case, the trading price of the Company’s common stock could
      decline and investors in the Company’s common stock could lose all or part of
      their investment.




**Risks
      Related to the Company and the Company’s Business**




***The
      failure to complete development of HupA, obtain government approvals, including
      required FDA approvals, or to comply with ongoing governmental regulations
      could
      delay or limit introduction of proposed products and result in failure to
      achieve revenues or maintain the Company’s ongoing
      business.***




The
      Company’s research and development activities, and the manufacture and marketing
      of its intended products, are subject to extensive regulation for safety,
      efficacy and quality by numerous government authorities in the United States
      and
      abroad. Before receiving FDA clearance to market the Company’s proposed
      products, the Company will have to demonstrate that its products are safe and
      effective on the patient population and for the diseases that are to be treated.
      Clinical trials, manufacturing and marketing of drugs are subject to the
      rigorous testing and approval process of the FDA and equivalent foreign
      regulatory authorities. The FDA and other federal, state and foreign statutes
      and regulations govern and influence the testing, manufacture, labeling,
      advertising, distribution and promotion of drugs and medical devices. As a
      result, clinical trials and regulatory approval can take a number of years
      or
      longer to accomplish and require the expenditure of substantial financial,
      managerial and other resources.




In
      order
      to be commercially viable, the Company must successfully research, develop,
      obtain regulatory approval for, manufacture, introduce, market and distribute
      its technologies. For each drug the Company must successfully meet a number
      of
      critical developmental milestones, including:




·
            demonstrate
                benefit from each specific drug
                technology,




·
            demonstrate
                through pre clinical and clinical trials that the drug and patient
                specific therapy is safe and effective,
                and




·
            establish
                a viable Good Manufacturing Process capable of potential scale
                up.




The
      time
      frame necessary to achieve these developmental milestones may be long and
      uncertain, and the Company may not successfully complete these milestones for
      any of its intended products in development.




In
      addition to the risks previously discussed, HupA is subject to additional
      developmental risks which include the following:




·
            the
                uncertainties arising from the rapidly growing scientific aspects
                of drug
                therapies and potential treatments,




·
            uncertainties
                arising as a result of the broad array of potential treatments related
                to
                neurological disease, and




·
            anticipated
                expense and time believed to be associated with the development and
                regulatory approval of treatments for neurological
                disease.






-8-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




In
      order
      to conduct clinical trials that are necessary to obtain approval by the FDA
      to
      market a product, it is necessary to receive clearance from the FDA to conduct
      such clinical trials. The FDA can halt clinical trials at any time for safety
      reasons or because the Company or its clinical investigators do not follow
      the
      FDA’s requirements for conducting clinical trials. If the Company is unable to
      receive clearance to conduct clinical trials or the trials are halted by the
      FDA, the Company would not be able to achieve any revenue from such product,
      as
      it is illegal to sell any drug or medical device for human consumption without
      FDA approval.




***Data
      obtained from clinical trials is susceptible to varying interpretations, which
      could delay, limit or prevent regulatory clearances.***




Data
      already obtained, or in the future obtained, from pre clinical studies and
      clinical trials (as of the date of this Annual Report Phase II clinical trials
      of HupA have been undertaken) do not necessarily predict the results that will
      be obtained from later pre clinical studies and clinical trials. Moreover,
      pre-clinical and clinical data is susceptible to varying interpretations, which
      could delay, limit or prevent regulatory approval. The Company is also not
      able
      to assure that the results of the tests already conducted will be consistent
      with prior observations or support the Company’s applications for regulatory
      approval. A number of companies in the pharmaceutical industry have suffered
      significant setbacks in advanced clinical trials, even after promising results
      in earlier trials. The failure to adequately demonstrate the safety and
      effectiveness of an intended product under development could delay or prevent
      regulatory clearance of a potential drug, resulting in delays to
      commercialization, and could materially harm the Company’s business. The
      Company’s clinical trials may not demonstrate sufficient levels of safety and
      efficacy necessary to obtain the requisite regulatory approvals for the
      Company’s drugs, and thus its proposed drugs may not be approved for marketing.
      Even after approval, further studies could result in withdrawal of FDA and
      other
      regulatory approvals and voluntary or involuntary withdrawal of products from
      the market.




The
      Company may encounter delays or rejections based upon additional government
      regulation from future legislation or administrative action or changes in FDA
      policy during the period of development, clinical trials and FDA regulatory
      review. The Company may encounter similar delays in foreign countries. Sales
      of
      the Company’s products outside the U.S. would be subject to foreign regulatory
      approvals that vary from country to country. The time required to obtain
      approvals from foreign countries may be shorter or longer than that required
      for
      FDA approval, and requirements for foreign licensing may differ from FDA
      requirements. The Company may be unable to obtain requisite approvals from
      the
      FDA and foreign regulatory authorities, and even if obtained, such approvals
      may
      not be on a timely basis, or they may not cover the uses that the Company
      requests.




In
      the
      future, the Company may select drugs which may contain controlled substances
      which are subject to state, federal and foreign laws and regulations regarding
      their manufacture, use, sale, importation and distribution. For such drugs
      containing controlled substances, the Company and any suppliers, manufacturers,
      contractors, customers and distributors may be required to obtain and maintain
      applicable registrations from state, federal and foreign law enforcement and
      regulatory agencies and comply with state, federal and foreign laws and
      regulations regarding the manufacture, use, sale, importation and distribution
      of controlled substances. These regulations are extensive and include
      regulations governing manufacturing, labeling, packaging, testing, dispensing,
      prescription and procurement quotas, record keeping, reporting, handling,
      shipment and disposal. Failure to obtain and maintain required registrations
      or
      comply with any applicable regulations could delay or preclude the Company
      from
      developing and commercializing drugs containing controlled substances and
      subject the Company to enforcement action. In addition, because of their
      restrictive nature, these regulations could limit the Company’s
      commercialization of drugs containing controlled substances.




As
      a
      result, the Company’s drug and technology research program may be curtailed,
      redirected or eliminated at any time.




-9-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***Because
      the Company has accumulated deficits in the research and development of HupA
      since inception, there is no guarantee that the Company will ever become
      profitable even if one or more of the Company’s drugs are approved for
      commercialization.***




Since
      inception the Company has recorded operating losses. As of December 31, 2005,
      the Company had a stockholder’s equity of approximately $(49,526) and an
      accumulated deficit of approximately $(2,626,445). In addition, the Company
      expects to incur increasing operating losses over the next several years as
      the
      Company continues to incur increasing costs for research and development and
      clinical trials, compliance with governmental regulations and in other
      development activities. The Company’s ability to generate revenue and achieve
      profitability depends upon its ability, alone or with others, to complete the
      development of its proposed products, obtain the required regulatory approvals
      and manufacture, market and sell its proposed products. Development is costly
      and requires significant investment. In addition, the Company may choose to
      license rights to particular drugs. The license fees for such drugs may increase
      the Company’s costs.




The
      Company has not generated any revenue from the commercial sale of its proposed
      products in development or any drugs and do not expect to receive such revenue
      in the near future. The Company’s primary activity to date has been research and
      development. Revenues to date are primarily from sales of inventory of imported
      huperzine, which may be continued by the Company, but which may be reduced
      or
      eliminated entirely as the Company refocuses its efforts on drug development
      and
      approval.




A
      substantial portion of the research results and observations on which the
      Company relies were performed by third-parties at those parties’ facilities,
      cost and expense. The Company cannot be certain as to when or whether to
      anticipate commercializing and marketing its proposed products in development,
      and do not expect to generate sufficient revenues from proposed product sales
      to
      cover its expenses or achieve profitability in the near future.




***The
      Company has limited cash available, and the Company may not have sufficient
      cash
      to continue its business operations.***




As
      of
      March 27, 2006 the Company had approximately $4.2 million in cash and cash
      equivalents which reflects the completion of a private placement in January
      2006. Prior to the closing of the private placement, the Company had $90,606
      in
      cash and cash equivalents at December 31, 2005. For the year ended December
      31,
      2005, the Company’s net losses were $954,841, and its accumulated deficit was
      $(2,626,445). Moreover, the Company expects this rate to increase in future
      months as the Company engages in further expenditures to develop its business
      infrastructure and pursue its business plan. Presently, the Company expects
      that
      its available cash, cash equivalents and interest income, are sufficient to
      meet
      its operating expenses and capital requirements for a period of at least twelve
      months, however, if the Company fails to raise additional capital it may not
      have sufficient cash to meet its operating expenses and capital requirements
      in
      the future. Even with additional capital, the Company may not be able to execute
      its current business plan and fund business operations long enough to achieve
      positive cash flow. Furthermore, the Company may be forced to reduce its
      expenses and cash expenditures to a material extent, which would impair the
      Company’s ability to execute its business operations.




***Acceptance
      of the Company’s products in the marketplace is uncertain and failure to achieve
      market acceptance will prevent or delay its ability to generate
      revenues.***




The
      Company’s future financial performance will depend, at least in part, upon the
      introduction and acceptance of the Company’s proposed HupA products by
      physicians, patients, payors and the broader medical community. Even if approved
      for marketing by the necessary regulatory authorities, the Company’s products
      may not achieve market acceptance. The degree of market acceptance will depend
      upon a number of factors, including:




·
            the
                receipt of regulatory clearance of marketing claims for the uses
                that the
                Company is developing;




·
            the
                establishment and demonstration of the advantages, safety and efficacy
                of
                HupA;




·
            pricing
                and reimbursement policies of government and third party payors such
                as
                insurance companies, health maintenance organizations and other health
                plan administrators;




·
            the
                Company’s ability to attract corporate partners, including pharmaceutical
                companies, to assist in commercializing the Company’s intended products;
                and




·
            the
                Company’s ability to market its
                products.






-10-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***The
      Company may face costly and time consuming litigation from third parties which
      claim that the Company’s products infringe on their intellectual property
      rights, particularly because there is substantial uncertainty about the validity
      and breadth of medical patents.***




There
      is
      significant litigation in the biotechnology field regarding patents and other
      intellectual property rights. Biotechnology companies of roughly the Company’s
      size and financial position have gone out of business after fighting and losing
      an infringement battle. The Company may be exposed to future litigation by
      third
      parties based on claims that the Company’s technologies, products or activities
      infringe the intellectual property rights of others or that the Company has
      misappropriated the trade secrets of others. This risk is exacerbated by the
      fact that the validity and breadth of claims covered in medical technology
      patents and the breadth and scope of trade secret protection involve complex
      legal and factual questions for which important legal principles are unresolved.
      In particular, there are many patents relating to specific genes, nucleic acids,
      polypeptides or the uses thereof to treat Alzheimer’s disease and other central
      nervous system diseases. Some of these may encompass genes or polypeptides
      that
      the Company utilizes in its drug development activities. Any litigation or
      claims against the Company, whether or not valid, could result in substantial
      costs, could place a significant strain on the Company’s financial and
      managerial resources and could harm the Company’s reputation. Most of the
      Company’s license agreements would likely require that the Company pay the costs
      associated with defending this type of litigation. In addition, intellectual
      property litigation or claims could force the Company to do one or more of
      the
      following:




·
            cease
                selling, incorporating or using any of the Company’s HupA products and/or
                products that incorporate the challenged intellectual property, which
                would adversely affect the Company’s future
                revenue;




·
            pay
                significant damages and the patentee could prevent the Company from
                using
                the patented genes or polypeptides for the identification or development
                of drug compounds;




·
            obtain
                a license from the holder of the infringed intellectual property
                right,
                which license may be costly or may not be available on reasonable
                terms,
                if at all; or




·
            redesign
                the Company’s products, which would be costly and time
                consuming.




As
      of
      March 27, 2006, the Company has not engaged in discussions, received any
      communications, nor does the Company have any reason to believe that any third
      party is challenging or has the proper legal authority to challenge the
      Company’s intellectual property rights or those of the actual patent holders, or
      the Company’s licenses.




***If
      the Company is unable to adequately protect or enforce its rights to
      intellectual property or secure rights to third party patents, the Company
      may
      lose valuable rights, experience reduced market share, assuming any, or incur
      costly litigation to protect such rights.***




The
      Company’s ability to obtain licenses to patents, apply for new patents on a HupA
      product, maintain trade secret protection and operate without infringing the
      proprietary rights of others will be important to its commercializing any
      products under development. Therefore, any disruption in access to the
      technology could substantially delay the development of HupA.




The
      patent positions of biotechnology and pharmaceutical companies, including ours,
      which also involve licensing agreements, are frequently uncertain and involve
      complex legal and factual questions. In addition, the coverage claimed in a
      patent application can be significantly reduced before the patent is issued.
      Consequently, the Company’s patent applications and any issued and licensed
      patents may not provide protection against competitive technologies or may
      be
      held invalid if challenged or circumvented. The Company’s competitors may also
      independently develop drug technologies or products similar to the Company’s or
      design around or otherwise circumvent patents issued or licensed to the Company.
      In addition, the laws of some foreign countries may not protect the Company’s
      proprietary rights to the same extent as U.S. law.




-11-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




The
      Company also relies upon trade secrets, technical know how and continuing
      technological innovation to develop and maintain the Company’s competitive
      position. The Company generally will seek to require its employees, consultants,
      advisors and collaborators to execute appropriate confidentiality and assignment
      of inventions agreements. These agreements typically provide that all materials
      and confidential information developed or made known to the individual during
      the course of the individual’s relationship with the Company is to be kept
      confidential and not disclosed to third parties except in specific
      circumstances, and that all inventions arising out of the individual’s
      relationship with the Company shall be the its exclusive property. These
      agreements may be breached, or unavailable, and in some instances, the Company
      may not have an appropriate remedy available for breach of the agreements.
      Furthermore, the Company’s competitors may independently develop substantially
      equivalent proprietary information and techniques, reverse engineer the
      Company’s information and techniques, or otherwise gain access to its
      proprietary technology. The Company may be unable to meaningfully protect its
      rights in trade secrets, technical know how and other non patented
      technology.




Although
      the Company’s trade secrets and technical know how are important, the Company’s
      continued access to the patents and ability to develop, and apply for, new
      patents is a significant factor in the development and commercialization of
      HupA. Aside from the general body of scientific knowledge from other drug
      processes and technology, these patents and processes, to the best of the
      Company’s knowledge and based upon its current scientific data, are the only
      intellectual property necessary to develop its proposed drugs. The Company
      does
      not believe that it is or will be knowingly violating any other patents in
      developing HupA.




***The
      Company may have to resort to litigation to protect its rights for certain
      intellectual property, or to determine their scope, validity or enforceability.***




Enforcing
      or defending the Company’s rights is expensive, could cause diversion of its
      resources and may not prove successful. Any failure to enforce or protect the
      Company’s rights could cause it to lose the ability to exclude others from using
      HupA or to develop or sell competing products.




***The
      Company may rely on third party contract research organizations, service
      providers and suppliers to support development and clinical testing of its
      products.***




Failure
      of any of these contractors to provide the required services in a timely manner
      or on reasonable commercial terms could materially delay the development and
      approval of the Company’s products, increase its expenses and materially harm
      its business, financial condition and results of operations.




Key
      components of the Company’s drug technologies may be provided by sole or limited
      numbers of suppliers, and supply shortages or loss of these suppliers could
      result in interruptions in supply or increased costs.




Certain
      components used in the Company’s research and development activities such as
      naturally occurring or synthetic Huperzine are currently purchased from a single
      or a limited number of sources primarily located in China in the case of
      naturally occurring supplies. The reliance on a sole or limited number of
      suppliers could result in:




·
            potential
                delays associated with research and development and clinical and
                pre
                clinical trials due to an inability to timely obtain a single or
                limited
                source component;




·
            potential
                inability to timely obtain an adequate supply;
                and




·
            potential
                of reduced control over pricing, quality and timely
                delivery.




The
      Company does not have long-term agreements with any of its suppliers, and
      therefore the supply of a particular component could be terminated without
      penalty to the supplier. Any interruption in the supply of components could
      cause the Company to seek alternative sources of supply or manufacture these
      components internally. If the supply of any components is interrupted,
      components from alternative suppliers may not be available in sufficient volumes
      within required timeframes, if at all, to meet the Company’s needs. This could
      delay the Company’s ability to complete clinical trials, obtain approval for
      commercialization or commence marketing, or cause the Company to lose sales,
      incur additional costs, delay new product introductions or harm the Company’s
      reputation. Further, components from a new supplier may not be identical to
      those provided by the original supplier. Such differences if they exist could
      affect product formulations or the safety and effect of the Company’s products
      that are being developed and delay regulatory approvals.




-12-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***Due
      to the Company’s limited marketing, sales and distribution experience, the
      Company may be unsuccessful in its efforts to sell its products, enter into
      relationships with third parties or develop a direct sales
      organization.***




The
      Company has yet to establish marketing, sales or distribution capabilities
      for
      its proposed products. Until such time as the Company’s products are further
      along in the regulatory process, the Company will not devote meaningful time
      and
      resources to this effort. At the appropriate time, the Company intends to enter
      into agreements with third parties to sell its products or the Company may
      develop its own sales and marketing force. The Company may be unable to
      establish or maintain third party relationships on a commercially reasonable
      basis, if at all. In addition, these third parties may have similar or more
      established relationships with the Company’s competitors.




If
      the
      Company does not enter into relationships with third parties for the sales
      and
      marketing of its products, the Company will need to develop its own sales and
      marketing capabilities. The Company has limited experience in developing,
      training or managing a sales force. If the Company chooses to establish a direct
      sales force, the Company may incur substantial additional expenses in
      developing, training and managing such an organization. The Company may be
      unable to build a sales force on a cost effective basis or at all. Any such
      direct marketing and sales efforts may prove to be unsuccessful. In addition,
      the Company will compete with many other companies that currently have extensive
      marketing and sales operations. The Company’s marketing and sales efforts may be
      unable to compete against these other companies. The Company may be unable
      to
      establish a sufficient sales and marketing organization on a timely basis,
      if at
      all.




The
      Company may be unable to engage qualified distributors. Even if engaged, these
      distributors may:




·
            fail
                to satisfy financial or contractual obligations to the
                Company;




·
            fail
                to adequately market the Company’s
                products;




·
            cease
                operations with little or no notice;
                or




·
            offer,
                design, manufacture or promote competing
                products.




If
      the
      Company fails to develop sales, marketing and distribution channels, the Company
      would experience delays in product sales and incur increased costs, which would
      harm the Company’s financial results. If the Company is unable to convince
      physicians as to the benefits of its intended products, it may incur delays
      or
      additional expense in its attempt to establish market acceptance.




Broad
      use
      of the Company’s drug technology may require physicians to be informed regarding
      its intended products and the intended benefits. The time and cost of such
      an
      educational process may be substantial. Inability to successfully carry out
      this
      physician education process may adversely affect market acceptance of the
      Company’s products. The Company may be unable to timely educate physicians
      regarding its intended products in sufficient numbers to achieve the Company’s
      marketing plans or to achieve product acceptance. Any delay in physician
      education may materially delay or reduce demand for the Company’s products. In
      addition, the Company may expend significant funds towards physician education
      before any acceptance or demand for the Company’s products is created, if at
      all.




-13-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***The
      Company will require additional funding which will be significant and may have
      difficulty raising needed capital in the future because of its limited operating
      history and business risks associated with HupA.***




The
      Company’s business currently does not generate significant revenue from the
      Company’s proposed products and its limited revenue may not be sufficient to
      meet its future capital requirements. The Company does not know when, or if,
      this will change. The Company has expended and will continue to expend
      substantial funds in the research, development and clinical and pre clinical
      testing of its drug technology. The Company will require additional funds to
      conduct research and development, establish and conduct clinical and pre
      clinical trials, establish commercial scale manufacturing arrangements and
      to
      provide for the marketing and distribution of its products. Additional funds
      may
      not be available on acceptable terms, if at all. If adequate funds are
      unavailable from any available source, the Company may have to delay, reduce
      the
      scope of or eliminate one or more of its research or development programs or
      product launches or marketing efforts which may materially harm the Company’s
      business, financial condition and results of operations.




The
      Company’s long term capital requirements are expected to depend on many factors,
      including:




·
            the
                number of potential products and technologies in
                development;




·
            continued
                progress and cost of the Company’s research and development
                programs;




·
            progress
                with pre clinical studies and clinical
                trials;




·
            the
                time and costs involved in obtaining regulatory
                clearance;




·
            costs
                involved in preparing, filing, prosecuting, maintaining and enforcing
                patent claims;




·
            costs
                of developing sales, marketing and distribution channels and the
                Company’s
                ability to sell its drugs;




·
            costs
                involved in establishing manufacturing capabilities for clinical
                trial and
                commercial quantities of the Company’s
                drugs;




·
            competing
                technological and market
                developments;




·
            market
                acceptance or the Company’s
                products;




·
            costs
                for recruiting and retaining management, employees and consultants;
                and




·
            costs
                for training physicians.




The
      Company may consume available resources more rapidly than currently anticipated,
      resulting in the need for additional funding. In the near future, the Company
      may seek to raise any necessary additional funds through the exercising of
      warrants, equity or debt financings, collaborative arrangements with corporate
      partners or other sources, which may be dilutive to existing stockholders or
      otherwise have a material effect on the Company’s current or future business
      prospects. In addition, in the event that additional funds are obtained through
      arrangements with collaborative partners or other sources, the Company may
      have
      to relinquish economic and/or proprietary rights to some of the Company’s
      technologies or products under development that the Company would otherwise
      seek
      to develop or commercialize by itself. If adequate funds are not available,
      the
      Company may be required to significantly reduce or refocus its development
      efforts with regards to its drug technology, compounds and drugs.




-14-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***The
      market for the Company’s products is rapidly changing and competitive, and new
      drug mechanisms, drug technologies, new therapeutics, new drugs and new
      treatments which may be developed by others could impair the Company’s ability
      to maintain and grow its business and remain
      competitive.***




The
      pharmaceutical and biotechnology industries are subject to rapid and substantial
      technological change. Developments by others may render the Company’s
      technologies and intended products noncompetitive or obsolete, or the Company
      may be unable to keep pace with technological developments or other market
      factors.




Technological
      competition from pharmaceutical and biotechnology companies, universities,
      governmental entities and others diversifying into the field is intense and
      is
      expected to increase. Many of these entities have significantly greater research
      and development capabilities and budgets than the Company do, as well as
      substantially more marketing, manufacturing, financial and managerial resources.
      These entities represent significant competition for the Company. Acquisitions
      of, or investments in, competing pharmaceutical or biotechnology companies
      by
      large corporations could increase such competitors’ financial, marketing,
      manufacturing and other resources.




The
      Company’s resources are limited and the Company may experience management,
      operational or technical challenges inherent in such activities and novel
      technologies.




***Competitors
      have developed or are in the process of developing technologies that are, or
      in
      the future may be, the basis for competition.***




Some
      of
      these technologies may have an entirely different approach or means of
      accomplishing similar therapeutic effects compared to HupA. The Company’s
      competitors may develop drug technologies and drugs that are safer, more
      effective or less costly than its intended products and, therefore, present
      a
      serious competitive threat to the Company.




***The
      Company has no manufacturing capabilities. If third-party manufacturers of
      the
      Company’s product candidates fail to devote sufficient time and resources to the
      Company’s concerns, or if their performance is substandard, its clinical trials
      and product introductions may be delayed.***




Currently,
      the Company has no internal manufacturing capabilities for any of its product
      candidates. The Company cannot be sure that the Company will be able to: (i)
      acquire or build facilities that will meet quality, quantity and timing
      requirements; or (ii) enter into manufacturing contracts with others on
      acceptable terms. Failure to accomplish these tasks would impede the Company’s
      efforts to bring its product candidates to market, which would adversely affect
      its business. Moreover, if the Company decides to manufacture one or more
      product candidates, the Company would incur substantial start-up expenses and
      need to expand the Company’s facilities and hire additional
      personnel.




The
      Company currently expects to utilize third-party manufacturers to produce the
      drug compounds used in clinical trials and for the potential commercialization
      of future products. If the Company is unable to obtain or retain third-party
      manufacturers, the Company will not be able to commercialize its products.
      The
      Company’s reliance on contract manufacturers also will expose the Company to the
      following risks:




·
            contract
                manufacturers may encounter difficulties in achieving volume production,
                quality control and quality assurance and also may experience shortages
                in
                qualified personnel. As a result, the Company’s contract manufacturers
                might not be able to meet its clinical schedules or adequately manufacture
                the Company’s products in commercial quantities when
                required;




·
            switching
                manufacturers may be difficult because the number of potential
                manufacturers is limited. It may be difficult or impossible for the
                Company to find a replacement manufacturer quickly on acceptable
                terms, or
                at all;






-15-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




·
            the
                Company’s contract manufacturers may not perform as agreed or may not
                remain in the contract manufacturing business for the time required
                to
                successfully produce, store or distribute the Company’s products;
                and




·
            if
                the Company’s primary contract manufacturer should be unable to
                manufacture any of its product candidates for any reason, or should
                fail
                to receive FDA approval or Drug Enforcement Administration approval,
                commercialization of the Company’s product candidates could be delayed
                which would negatively impact its
                business.




Third-party
      manufacturers also must comply with the FDA, the Drug Enforcement Administration
      and other regulatory requirements for their facilities. The Company does not
      have control over third-party manufacturers’ compliance with the regulations and
      standards established by these agencies. In addition, manufacture of product
      candidates on a limited basis for investigational use in animal studies or
      human
      clinical trials does not guarantee that large-scale, commercial production
      is
      viable. Small changes in methods of manufacture can affect the safety, efficacy,
      controlled release or other characteristics of a product. Changes in methods
      of
      manufacture, including commercial scale-up, can, among other things, require
      the
      performance of new clinical studies.




***The
      Company’s product development efforts may not result in commercial
      products.***




The
      Company intends to continue its aggressive research and development program.
      Successful product development in the biotechnology industry is highly
      uncertain, and very few research and development projects produce a commercial
      product. Products that appear promising in the early phases of development,
      such
      as in early human clinical trials, may fail to reach the market for a number
      of
      reasons, such as:




·
            the
                product did not demonstrate acceptable clinical trial results even
                though
                it demonstrated positive preclinical trial
                results;




·
            the
                product was not effective in treating a specified condition or
                illness;




·
            the
                product had harmful side effects on
                humans;




·
            the
                necessary regulatory bodies, such as the FDA, did not approve the
                Company’s product for an intended
                use;




·
            the
                product was not economical for the Company to
                commercialize;




·
            other
                companies or people have or may have proprietary rights over the
                Company’s
                product, such as patent rights, and will not let the Company sell
                it on
                reasonable terms, or at all; or




·
            the
                product is not cost effective in light of existing
                therapeutics.




As
      a
      result, there can be no assurance that any of the Company’s products currently
      in development will ever be successfully commercialized.




***If
      the Company fails to negotiate or maintain successful collaborative arrangements
      with third parties, the Company’s development and commercialization activities
      may be delayed or reduced.***




In
      the
      past, the Company has entered into, and expect to enter into in the future,
      collaborative arrangements with third parties, such as universities,
      governmental agencies, charitable foundations, manufacturers, contract research
      organizations and corporate partners, who provide the Company with funding
      and/or who perform research, development, regulatory compliance, manufacturing
      or commercialization activities relating to some or all of the Company’s product
      candidates. If the Company fails to secure or maintain successful collaborative
      arrangements, its development and commercialization activities may be delayed
      or
      reduced.




-16-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




The
      Company currently depends and will continue to depend heavily on third parties
      for support in research and development and clinical and pre clinical testing.
      The Company expects to conduct activities with Georgetown and Xel, among others,
      to provide the Company with access to a HupA testing and for a transdermal
      HupA
      patch. The Company also expects to conduct activities with Org Syn to develop
      synthetic methods to produce HupA. Under certain circumstances, the
      universities, and other collaborators, may acquire certain rights in newly
      developed intellectual property developed in conjunction with the
      Company.




Research
      and development and clinical trials involve a complex process, and these
      universities’ facilities may not be sufficient. Inadequate facilities could
      delay clinical trials of the Company’s drugs and result in delays in regulatory
      approval and commercialization of its drugs, either of which would materially
      harm the Company’s business. The Company may utilize a portion of its available
      cash to establish an independent facility to replace or supplement university
      facilities.




These
      collaborative agreements can be terminated under certain conditions by the
      Company’s partners. The Company’s partners may also under some circumstances
      independently pursue competing products, delivery approaches or technologies.
      Even if the Company’s partners continue their contributions to the Company’s
      collaborative arrangements, they may nevertheless determine not to actively
      pursue the development or commercialization of any resulting products. Also,
      the
      Company’s partners may fail to perform their obligations under the collaborative
      arrangements or may be slow in performing their obligations. In addition, the
      Company’s partners may experience financial difficulties at any time that could
      prevent them from having available funds to contribute to these collaborations.
      In these circumstances, the Company’s ability to develop and market potential
      products could be severely limited.




***If
      the Company is unable to hire and retain additional qualified personnel, the
      Company’s ability to grow its business may be harmed.***




The
      Company is a small company. If the Company is unable to continue to attract,
      retain and motivate highly qualified management and scientific personnel and
      to
      develop and maintain important relationships with leading academic institutions
      and scientists, the Company may not be able to achieve its research and
      development objectives. Competition for personnel and academic collaborations
      is
      intense. Loss of the services of Reuben Seltzer or Alan Kestenbaum could
      adversely affect progress of the Company’s research and development
      programs.




Although
      the Company has outsourced and intends to continue to outsource its development
      programs, the Company also may need to hire additional qualified personnel
      with
      expertise in preclinical testing, clinical research and testing, government
      regulation, formulation and manufacturing and sales and marketing. The Company
      competes for qualified individuals with numerous biopharmaceutical companies,
      universities and other research institutions and other emerging entrepreneurial
      companies. Competition for such individuals, particularly in the New York City
      area, where the Company is located, is intense and the Company cannot be certain
      that the Company’s search for such personnel will be successful. Attracting and
      retaining qualified personnel will be critical to the Company’s success. Skilled
      employees in the Company’s industry are in great demand. The Company is
      competing for employees against companies located in the New York metropolitan
      area that are more established than the Company is and has the ability to pay
      more cash compensation than the Company does. the Company will require
      experienced scientific personnel in many fields in which there are a limited
      number of qualified personnel and will have to compete with other technology
      companies and academic institutions for such personnel. As a result, depending
      upon the success and the timing of clinical tests, the Company may continue
      to
      experience difficulty in hiring and retaining highly skilled employees,
      particularly scientists. If the Company is unable to hire and retain skilled
      scientists, its business, financial condition, operating results and future
      prospects could be materially adversely affected.




***The
      Company’s business may incur substantial expense to comply with environmental
      laws and regulations.***




The
      Company may incur substantial costs to comply with environmental laws and
      regulations. In addition, the Company may discover currently unknown
      environmental problems or conditions. The Company is subject to extensive
      federal, state, provincial and local environmental laws and regulations which
      govern the discharge, emission, storage, handling and disposal of a variety
      of
      substances that may be used in, or result from, the Company’s operations.
      Environmental laws or regulations (or their interpretation) may become more
      stringent in the future.




-17-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***If
      users of the Company’s products are unable to obtain adequate reimbursement from
      third party payors, or if new restrictive legislation is adopted, market
      acceptance of the Company’s products may be limited and the Company may not
      achieve anticipated revenues.***




The
      continuing efforts of government and insurance companies, health maintenance
      organizations and other payors of healthcare costs to contain or reduce costs
      of
      health care may affect the Company’s future revenues and profitability, and the
      future revenues and profitability of the Company’s potential customers,
      suppliers and collaborative partners and the availability of capital. For
      example, in certain foreign markets, pricing or profitability of prescription
      pharmaceuticals is subject to government control. In the United States, given
      recent federal and state government initiatives directed at lowering the total
      cost of health care, the U.S. Congress and state legislatures will likely
      continue to focus on health care reform, the cost of prescription
      pharmaceuticals and on the reform of the Medicare and Medicaid systems. While
      the Company cannot predict whether any such legislative or regulatory proposals
      will be adopted, the announcement or adoption of such proposals could materially
      harm the Company’s business, financial condition and results of
      operations.




The
      Company’s ability to commercialize its products will depend in part on the
      extent to which appropriate reimbursement levels for the cost of its products
      and related treatment are obtained by governmental authorities, private health
      insurers and other organizations, such as HMOs. Third party payors are
      increasingly challenging the prices charged for medical drugs and services.
      Also, the trend toward managed health care in the United States and the
      concurrent growth of organizations such as HMOs, which could control or
      significantly influence the purchase of health care services and drugs, as
      well
      as legislative proposals to reform health care or reduce government insurance
      programs, may all result in lower prices for or rejection of the Company’s
      drugs. The cost containment measures that health care payors and providers
      are
      instituting and the effect of any health care reform could materially harm
      the
      Company’s ability to operate profitably.




***Changes
      in the healthcare industry that are beyond the Company’s control may be
      detrimental to its business.***




The
      healthcare industry is changing rapidly as the public, government, medical
      professionals and the pharmaceutical industry examine ways to broaden medical
      coverage while controlling the increase in healthcare costs. Potential changes
      could put pressure on the prices of prescription pharmaceutical products and
      reduce the Company’s business or prospects. The Company cannot predict when, if
      any, proposed healthcare reforms will be implemented, and these changes are
      beyond the its control.




***The
      Company’s limited operating history makes evaluating its common stock more
      difficult, and therefore, investors have limited information upon which to
      rely.***




An
      investor can only evaluate the Company’s business based on a limited operating
      history. The Company’s operations are expected to change dramatically as the
      Company evolves from primarily a “virtual” technology holding company with no
      full-time employees to a capitalized company with larger internal operations
      and
      costs. This limited history may not be adequate to enable an investor to fully
      assess the Company’s ability to develop HupA and proposed drugs, obtain FDA
      approval, and achieve market acceptance of the Company’s proposed products and
      respond to competition, or conduct such affairs as are presently
      contemplated.




***The
      Company does not currently have specific plans for its available cash and its
      management will have broad discretion in determining future
      allocation.***




The
      principal purposes of the Company’s cash are to conduct research and development
      of HupA, pursue steps towards regulatory approval for HupA, arrange for
      synthesis and manufacturing of products, hire employees and expand the Company’s
      access to facilities. Currently, the Company does not have specific plans for
      all of its available cash. The Company expects to use a percentage of its cash
      for general corporate purposes, including working capital, salaries,
      professional fees, pursuing further financing alternatives, development of
      HupA,
      regulatory approvals and capital expenditures.




-18-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***The
      Company’s compliance with the reporting requirements of federal securities laws
      and SEC rules concerning internal controls may be time consuming, difficult
      and
      expensive.***




The
      Company is a public reporting company and, accordingly, subject to the
      information and reporting requirements of the Exchange Act and other federal
      securities laws, including compliance with the Sarbanes-Oxley Act. It may be
      time consuming, difficult and costly for the Company to develop and implement
      the internal controls and reporting procedures required by the Sarbanes-Oxley
      Act. The costs of preparing and filing annual and quarterly reports, proxy
      statements and other information with the SEC and furnishing audited reports
      to
      stockholders would cause the Company’s expenses to be higher than they would be
      if the Company remained privately-held and did not consummate the Merger. The
      Company may need to hire additional financial reporting, internal controls
      and
      other finance personnel in order to develop and implement appropriate internal
      controls and reporting procedures. If the Company is unable to comply with
      the
      internal controls requirements of the Sarbanes-Oxley Act, the Company may not
      be
      able to obtain the independent accountant certifications required by the
      Sarbanes-Oxley Act. Additionally, the Company will incur substantial expenses
      in
      connection with the preparation of a registration statement and related
      documents to register certain shares of the Company’s common stock which it is
      obligated to register.




***Because
      the Company became public by means of a reverse merger, it may not be able
      to
      attract the attention of major brokerage firms.***




There
      may
      be risks associated with the Company becoming public through a “reverse merger.”
Securities analysts of major brokerage firms may not provide coverage of the
      Company since there is no incentive to brokerage firms to recommend the purchase
      of the Company’s common stock. No assurance can be given that brokerage firms
      will, in the future, want to conduct any secondary offerings on behalf of the
      Company.




**Risks
      Relating to the Company’s Common Stock**




***Applicable
      SEC rules governing the trading of “penny stocks” may limit the trading and
      liquidity of the Company’s common stock in the future, which could affect its
      trading price.***




The
      Company’s common stock is quoted on the OTCBB. If the Company’s common stock
      trades below $5.00 per share in the future, it may be considered a “penny stock”
and subject to SEC rules and regulations which impose limitations upon the
      manner in which such shares may be publicly traded. These regulations require
      the delivery, prior to any transaction involving a penny stock, of a disclosure
      schedule explaining the penny stock market and the associated risks. Under
      these
      regulations, certain brokers who recommend such securities to persons other
      than
      established customers or certain accredited investors must make a special
      written suitability determination regarding such a purchaser and receive such
      purchaser’s written agreement to a transaction prior to sale. These regulations
      have the effect of limiting the trading activity of the common stock and
      reducing the liquidity of an investment in the common stock.




***The
      market price of the Company’s common stock is likely to be highly volatile and
      subject to wide fluctuations.***




The
      market price of the Company’s common stock is likely to be highly volatile and
      could be subject to wide fluctuations in response to a number of factors, some
      of which are beyond the Company’s control, including:




·
            announcements
                of new products or services by the Company’s
                competitors;




·
            quarterly
                variations in the Company’s revenues and operating
                expenses;




·
            announcements
                of technological innovations or new products or services by the Company;
                and




·
            sales
                of the common stock by the Company’s founders or other selling stock
                holders.






-19-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




***There
      may be a limited public market for the Company’s securities and the Company may
      fail to qualify for Nasdaq or other listing.***




Although
      the Company intends to apply for listing of its common stock on either the
      Nasdaq Stock Market or a registered exchange, there can be no assurance if
      and
      when initial listing criteria could be met or if such application would be
      granted, or that the trading of the common stock will be sustained. In the
      event
      that the common stock fails to qualify for initial or continued inclusion on
      the
      Nasdaq Stock Market or for initial or continued listing on a registered stock
      exchange, trading, if any, in the common stock, would then continue to be
      conducted on the OTCBB and in what are commonly referred to as “pink sheets.” As
      a result, an investor may find it more difficult to dispose of, or to obtain
      accurate quotations as to the market value of the common stock, and the common
      stock would become substantially less attractive for margin loans, for
      investment by financial institutions, as consideration in future capital raising
      transactions or other purposes.




***The
      common stock is controlled by insiders.***




The
      founders of Marco and certain affiliated parties beneficially own a large
      percentage of the Company’s outstanding shares of common stock. Such
      concentrated control of the Company may adversely affect the price of the common
      stock. The Company’s principal security holders may be able to control matters
      requiring approval by security holders, including the election of directors.
      Such concentrated control may also make it difficult for stockholders to receive
      a premium for their shares of common stock in the event of a merger with a
      third
      party or different transaction that requires stockholder approval. In addition,
      certain provisions of Delaware law could have the effect of making it more
      difficult or more expensive for a third party to acquire, or of discouraging
      a
      third party from attempting to acquire, control of the Company. Accordingly,
      under certain circumstances, investors may have no effective voice in the
      management of the Company. ****




***The
      Company does not expect to pay dividends for the foreseeable
      future.***




The
      Company currently intends to retain any future earnings to support the
      development and expansion of its business and does not anticipate paying cash
      dividends in the foreseeable future. Any payment of future dividends will be
      at
      the discretion of the board of directors after taking into account various
      factors, including but not limited to the Company’s financial condition,
      operating results, cash needs, growth plans and the terms of any credit
      agreements that the Company may be a party to at the time.




***Mergers
      of the type the Company just completed are usually heavily scrutinized by the
      SEC and the Company may encounter difficulties or delays in obtaining future
      regulatory approvals.***




Historically,
      the SEC and Nasdaq have not generally favored transactions in which a
      privately-held company merges into a largely inactive company with publicly
      traded stock, and there is a significant risk that the Company may encounter
      difficulties in obtaining the regulatory approvals necessary to conduct future
      financing or acquisition transactions, or to eventually achieve a listing of
      shares on one of the Nasdaq stock markets or on a national securities exchange.
      On June 28, 2005, the SEC adopted rules dealing with private company mergers
      into dormant or inactive public companies. As a result, it is likely that the
      Company will be scrutinized carefully by the SEC and possibly by the National
      Association of Securities Dealers or Nasdaq, which could result in difficulties
      or delays in achieving SEC clearance of any future registration statements
      or
      other SEC filings that the Company may pursue, in attracting NASD-member
      broker-dealers to serve as market-makers in the Company’s stock, or in achieving
      admission to one of the Nasdaq stock markets or any other national securities
      market. As a consequence, the Company’s financial condition and the value and
      liquidity of the Company’s shares may be negatively impacted.




**Item
      2.****Description
      of Property.**





The
      Company’s office space at One Penn Plaza, Suite 2514, New York, New York 10119
      is provided by Marco Realty, an affiliate of Alan Kestenbaum, an officer,
      director and principal shareholder of the Company, at no expense to the Company.
      The Company does not maintain any dedicated office or laboratory facilities
      at
      this time.




**Item
        3.****Legal
        Proceedings.**





None.





**Item
      4.****Submission
      of Matters to a Vote of Security Holders.**





None.




-20-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**PART
      II**





**Item
                5.**
            **Market
                for Common Equity, Related Stockholder Matters and Small Business
                Issuer
                Purchases of Equity
                Securities.**





Our
      common stock is quoted on the Over-the-Counter Bulletin Board under the symbol
      “NHPI.”





The
      following table sets forth the range of the high and low bid prices for our
      common stock since February 2, 2006, the first day our stock was traded on
      the
      Over-the-Counter Bulletin Board market, as reported by the National Quotation
      Bureau, and represents interdealer quotations, without retail markup, markdown
      or commission and may not be reflective of actual transactions.





Bid
                Price Per ShareHigh
            LowFebruary
                2006 - March 2006
            $10.73
            $5.49





**Stockholders**





As
      of
      March 27, 2006, we believe there were approximately 126 holders of record of
      our
      common stock. We believe that a greater number of holders of our common stock
      are “street name” or beneficial holders, whose shares are held of record by
      banks, brokers and other financial institutions.





**Dividends**





We
      have
      never declared or paid any cash dividends on our common stock. We currently
      intend to retain all available funds and any future earnings to fund the
      development and growth of our business and do not anticipate declaring or paying
      any cash dividends on our common stock in the foreseeable future.





**Equity
      Compensation Plan Information**





As
      of
      December 31, 2005, we had not adopted any equity compensation plans. **** We
      subsequently adopted a 2006 Non-Employee Directors Stock Option Plan and a
      2006
      Incentive Stock Plan on January 24, 2006. A summary of the key features of
      the
      plans is provided in Item 10 below.





**Recent
      Sales of Unregistered Securities**





The
      following unregistered equity securities were sold by us during the fiscal
      year
      ended December 31, 2005.





We
      completed an offering of 3,000,000 shares of our common stock at a price of
      $0.001 per share to Keith Andrews, our former president, chief executive
      officer, secretary, treasurer and a former director. The total amount received
      from this offering was $3,000. These shares were issued pursuant to Regulation
      S
      of the Securities Act.





We
      completed an offering of 4,555,000 shares of our common stock at a price of
      $0.005 per share to a total of fifteen purchasers on March 9, 2005. The total
      amount received from this offering was $22,775. We completed this offering
      pursuant to Regulation S of the Securities Act. The purchasers were as
      follows:





Name
                of Purchaser
            
            Number
                of Shares PurchasedSteven
                Andrews
            
            
            360,000Henry
                Touwslager
            
            
            320,000Johnny
                Reinsma
            
            
            320,000Janine
                Brunelle
            
            
            320,000Dave
                Packman
            
            
            320,000Jason
                Schlombs
            
            
            275,000Peter
                Ruzyski
            
            
            360,000Greg
                Funk
            
            
            275,000Robin
                Bjorklund
            
            
            275,000Darryl
                Woronchak
            
            
            360,000Amber
                Houssian
            
            
            275,000Mike
                Hamer
            
            
            360,000Chris
                Norton
            
            
            275,000Ian
                Zweig
            
            
            230,000Elaine
                Zweig
            
            
            230,000






-21-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





We
      completed an offering of 17,250 shares of our common stock at a price of $0.10
      per share to a total of fifteen shareholders on March 29, 2005. The total amount
      received from this offering was $1,725. We completed this offering pursuant
      to
      Regulation S of the Securities Act. The purchasers were as follows:





Name
                of Purchaser
            
            Number
                of Shares PurchasedJancis
                Andrews
            
            
            800Dana
                Torrell
            
            
            1,000Brenden
                Torrell
            
            
            1,800Tara
                Torrell
            
            
            1,200Cal
                Wang
            
            
            750Jorcelyn
                Wang
            
            
            1,500Aziza
                Ilicic
            
            
            1,000Dan
                Ilicic
            
            
            1,000Jeff
                Warkentin
            
            
            1,300Michelle
                Warkentin
            
            
            1,300Doug
                Kwan
            
            
            900Tyler
                Dawson
            
            
            1,100Craig
                Turner
            
            
            1,100Ryan
                Graham
            
            
            1,200Shannon
                Graham
            
            
            1,300





**Regulation
      S Compliance**





Each
      offer or sale was made in an offshore transaction;





Neither
      we, a distributor, any respective affiliates nor any person on behalf of any
      of
      the foregoing made any directed selling efforts in the United States;





Offering
      restrictions were, and are, implemented;





No
      offer
      or sale was made to a U.S. person or for the account or benefit of a U.S.
      person;




-22-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





Each
      purchaser of the securities certifies that it was not a U.S. person and was
      not
      acquiring the securities for the account or benefit of any U.S.
      person;





Each
      purchaser of the securities agreed to resell such securities only in accordance
      with the provisions of Regulation S, pursuant to registration under the Act,
      or
      pursuant to an available exemption from registration; and agreed not to engage
      in hedging transactions with regard to such securities unless in compliance
      with
      the Act;





The
      securities contain a legend to the effect that transfer is prohibited except
      in
      accordance with the provisions of Regulation S, pursuant to registration under
      the Act, or pursuant to an available exemption from registration; and that
      hedging transactions involving those securities may not be conducted unless
      in
      compliance with the Act; and





We
      are
      required, either by contract or a provision in our bylaws, articles, charter
      or
      comparable document, to refuse to register any transfer of the securities not
      made in accordance with the provisions of Regulation S pursuant to registration
      under the Act, or pursuant to an available exemption from registration;
      provided, however, that if any law of any Canadian province prevents us from
      refusing to register securities transfers, other reasonable procedures, such
      as
      a legend described in paragraph (b)(3)(iii)(B)(3) of Regulation S have been
      implemented to prevent any transfer of the securities not made in accordance
      with the provisions of Regulation S.





The
      securities described in the above transactions were subsequently registered
      on a
      Registration Statement on Form SB-2 filed with the Securities and Exchange
      Commission.





**Item
                6.**
            **Management’s
                Discussion and Analysis or Plan of
                Operation.**





**FORWARD-LOOKING
      STATEMENTS**





This
      Annual Report on Form 10-KSB contains forward-looking statements (as defined
      in
      Section 27A of the Securities Act and Section 21E of the Exchange Act). To
      the
      extent that any statements made in this Report contain information that is
      not
      historical, these statements are essentially forward-looking. Forward-looking
      statements can be identified by the use of words such as “expects,” “plans”
“will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,”
“projects” and other words of similar meaning. These statements are subject to
      risks and uncertainties that cannot be predicted or quantified and consequently,
      actual results may differ materially from those expressed or implied by such
      forward-looking statements. Such risks and uncertainties include those outlined
      in “Risk Factors” above and include, without limitation, the Company’s limited
      cash and ability to raise capital to finance the growth of the Company’s
      operations, the ability of the Company to develop its products and obtain
      necessary governmental approvals, the Company’s ability to protect its
      proprietary information, the Company’s ability to attract or retain qualified
      personnel, including scientific and technical personnel and other risks detailed
      from time to time in the Company’s filings with the SEC, or
      otherwise.





Information
      regarding market statistics contained in this Report is included based on
      information available to the Company that it believes is accurate. It is
      generally based on industry and other publications that are not produced for
      purposes of securities offerings or economic analysis. The Company has not
      reviewed or included data from all sources, and cannot assure investors of
      the
      accuracy or completeness of the data included in this Report. Forecasts and
      other forward-looking information obtained from these sources are subject to
      the
      same qualifications and the additional uncertainties accompanying any estimates
      of future market size, revenue and market acceptance of products and services.
      The Company does not undertake any obligation to publicly update any
      forward-looking statements. As a result, investors should not place undue
      reliance on these forward-looking statements.




-23-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS**





All
      references to the “Company” for periods prior to the closing of the Merger refer
      to Marco, and references to the “Company” for periods subsequent to the closing
      of the Merger refer to Neuro-Hitech and its subsidiaries.




THE
      FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED
      IN
      THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS ANNUAL
      REPORT ON FORM 10-KSB .




**History**




We
      were
      originally formed on February 1, 2005, as Northern Way Resources, Inc., a Nevada
      corporation, for the purpose of acquiring exploration and early stage natural
      resource properties. On January 24, 2006, we entered into the Merger by which
      Marco became a wholly-owned subsidiary of ours. In connection with the Merger,
      we changed our name to Neuro-Hitech Pharmaceuticals, Inc.




Marco
      was
      incorporated in the State of New York on December 11, 1996. Through 2005, Marco
      conducted analytical work and clinical trials of HupA and was focused primarily
      on licensing proprietary HupA technology from independent third-party developers
      and investigators, including the Mayo Foundation, and until such time operated
      with no full-time employees and minimal internal resources. In addition, from
      time to time, Marco has imported and sold inventories of natural huperzine
      and
      other dietary supplement ingredients to vitamin and supplement suppliers to
      generate revenues. In 2005, Marco decided to raise additional capital to pursue
      additional approvals and undertake necessary studies for the development and
      commercialization of HupA, including funding development and securing rights
      to
      third-party transdermal patch technology and may change its manner of operations
      to reflect increased activity, including personnel needs.




**Overall
      Operating Results**




We
      had
      revenues of $208,343 in the year ended December 31, 2005, a 23.6% increase
      from
      the $159,264 in revenue achieved in the prior year. The increase in revenue
      was
      a result of an increase in product sales to our single customer of natural
      huperzine.




Cost
      of
      goods sold as a percentage of our revenue was 49.3% for the year ended December
      31, 2005, compared with 48.7% for the year ended December 31, 2004. Our total
      selling, general and administrative expenses increased 33.2% from $802,012
      in
      the year ended December 31, 2004 to $1,068,504 in the year ended December 31,
      2005. The increase in these expenses is largely attributable to an increase
      in
      Research and Development Costs, Professional Fees, Commissions and Royalties
      and
      Other Expenses. We also experienced customary increases in Salaries and Payroll
      Taxes.




Our
      Research and Development costs increased 37.2% from $494,633 in the year ended
      December 31, 2004 to $678,798 in the year ended December 31, 2005 largely as
      a
      result of an increase in the costs paid to sponsored third parties to perform
      research and conduct clinical trials. The increase in payments of Professional
      Fees from $24,367 in the year ended December 31, 2004 to $57,258 in the year
      ended December 31, 2005 was a result of an increase in legal costs associated
      with our financing activities and the Merger. In 2005, we also incurred other
      expenses that we did not incur in 2004 as a result of financing activities
      and
      in contemplation of the Merger. The increase in Commissions and Royalties from
      $6,554 in the year ended December 31, 2004 to $16,433 in the year ended December
      31, 2005 was a result of additional payments triggered under our agreement
      with
      the Mayo Foundation.




**Plan
      of Operation**




The
      Company is an early stage pharmaceutical company engaged in the development
      and
      commercialization of HupA for Alzheimer’s disease and other degenerative
      neurological disorders. Through a collaboration with ADCS, and Georgetown,
      the
      Company has completed Phase I studies and is currently conducting Phase II
      clinical trials for HupA. HupA is a cholinesterase inhibitor that the Company
      believes may be effective in the treatment of AD and MCI, although, to date,
      its
      efforts have been focused upon HupA’s effectiveness in AD.




-24-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




The
      Company’s current strategy is to make HupA available in both oral and
      transdermal form. As part of these efforts, on March 15, 2006, the Company
      entered into a development agreement with XEL to develop a transdermally
      delivered product. The Company believes that HupA can effectively be delivered
      transdermally because of its low dosage requirement, and low molecular weight.
      The Company currently intends to focus upon the development of collaborative,
      joint and strategic alliances and licensing arrangements with various
      pharmaceutical companies for marketing the Company’s products once FDA approval
      is obtained although there is no assurance that FDA approval will be obtained. The
      Company presently believes the estimated additional costs to bring the product
      to market as an oral dose drug, after completing two Phase III clinical trials,
      will be substantial and no assurances as to future cost can be
      made.




Upon
      obtaining FDA approval for HupA, it is anticipated that the Company’s
      collaborative partners, if the Company is successful in obtaining collaborative
      partners, will be primarily responsible for the sale and distribution of HupA
      products. Efforts will be made to reach licensing agreements with collaborative
      partners to participate in earlier phases of the drug development process for
      the Company’s products, reducing the likelihood of the need for it to obtain
      financing for the additional development costs. This strategy may enable the
      Company to gain access to the marketing expertise and resources of the Company’s
      potential partners, and to lower its capital requirements.




A
      marketing study funded by the Company has shown patient compliance is a crucial
      factor in determining patient and doctor choice in choosing a medication for
      AD.
      Often it is the responsibility of a caregiver to remind the patient to take
      the
      orally given medications. Recognizing this, the Company hopes to develop and
      license a multi-day transdermal patch, which, if successfully realized, will
      be
      able to be applied to the patient for more than one day. Although the Company’s
      primary focus is the commercialization of HupA, the Company may also investigate
      and consider other drugs and compounds with neurological applications.




**Capital
      Resources and Cash Requirements**




In
      January 2006, the Company received total gross proceeds of $4,375,000 from
      a
      private placement of securities to certain accredited investors that purchased
      1,750,000 shares of the Company’s common stock and warrants to purchase 437,500
      shares of the Company’s common stock (the “Offering”). The Offering was
      completed on January 30, 2006.




The
      principal purposes of the funding from the Offering are to continue clinical
      trials, development of transdermal technologies, synthetic processes of HupA
      and
      general working capital. The Company may also use funds from the Offering to
      acquire additional products or technologies and for other working capital needs,
      such as the costs related to being a public company including SEC compliance.
      The proceeds of the Offering are not expected to be sufficient to provide
      funding to pursue many avenues of investigation of the technology, and are
      planned to be primarily devoted to clinical testing and development of
      transdermal patch technology.




The
      Company has not yet determined all of its expected expenditures, accordingly,
      management will have significant flexibility in applying a substantial portion
      of the net proceeds of the Offering. Pending use of the net proceeds as
      described above, the Company may invest the net proceeds of the Offering in
      short-term, interest-bearing, investment-grade securities or accounts.




The
      amounts and timing of the Company’s actual expenditures will depend upon
      numerous factors, including the progress of the Company’s efforts. The foregoing
      discussion represents the Company’s best estimate of its allocation of the net
      proceeds of the Offering based upon current plans and estimates regarding
      anticipated expenditures. Actual expenditures may vary substantially from these
      estimates, and the Company may find it necessary or advisable to reallocate
      the
      net proceeds within the above-described uses or for other purposes.




The
      Company anticipates, based on current plans and assumptions relating to
      operations, that the net proceeds of the Offering will be sufficient to satisfy
      its contemplated cash requirements to implement its business plan for at least
      twelve months. In the event that the proceeds of the Offering prove to be
      insufficient to fund the implementation of its business plan (due to a change
      in
      the Company’s plans or a material inaccuracy in its assumptions, or as a result
      of unanticipated expenses, technical difficulties or other unanticipated
      problems), the Company will be required to seek additional financing sooner
      than
      currently anticipated in order to proceed with such implementation. Additional
      funds may not be available on acceptable terms, if at all. If adequate funds
      are
      unavailable from any available source, the Company may have to delay, reduce
      the
      scope of or eliminate one or more of its research or development programs or
      product launches or marketing efforts which may materially harm the Company’s
      business, financial condition and results of operations.




-25-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




The
      Company has no off balance sheet arrangements.




**Item
                7.**
            **Financial
                Statements**





Our
      Financial Statements and the Report of the Independent Accountants appears
      at
      the end of this annual report.





**Item
                8.**
            **Changes
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure.**





Not
      applicable.





**Item
      8A. Controls and Procedures**





The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in the Company’s reports under the
      Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
      and reported within the time periods specified in the SEC’s rules and forms, and
      that such information is accumulated and communicated to the Company’s
      management, including its Chief Executive Officer and Chief Financial Officer,
      as appropriate, to allow timely decisions regarding required disclosure. In
      designing and evaluating the disclosure controls and procedures, management
      recognized that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving the desired control
      objectives, and management necessarily was required to apply its judgment in
      evaluating the cost-benefit relationship of possible controls and
      procedures.





**Evaluation**





The
      Company carried out an evaluation, under the supervision, and with the
      participation, of the Company’s management, including the Company’s Chief
      Executive Officer and the Company’s Chief Financial Officer, of the
      effectiveness of the Company’s disclosure controls and procedures as of December
      31, 2005. Based on the foregoing, the Company’s Chief Executive Officer and
      principal financial officer concluded that the Company’s disclosure controls and
      procedures were effective as of December 31, 2005.





There
      have been no significant changes during the quarter covered by this report
      in
      the Company’s internal control over financial reporting or in other factors that
      could significantly affect the internal control over financial
      reporting.





**Item
      8B. Other Information**





Not
      applicable.




-26-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**PART
      III**





**Item
                9.**
            **Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act.**





**Di** r **ectors
      and Executive Officers**




The
      following table sets forth information regarding the members of the Company’s
      board of directors and its executive officers. All of the Company’s executive
      officers and directors were appointed on January 24, 2006, the effective date
      of
      the Merger. All directors hold office until the first annual meeting of the
      stockholders of the Company and until the election and qualification of their
      successors or their earlier removal or retirement. Officers are elected annually
      by the board of directors and serve at the discretion of the board.





**Name**
            
            **Age**
            
            **Position**(1)John
                D. Abernathy
            
            68
            
            DirectorMark
                Auerbach
            
            67
            
            Chairman
                of the Board of DirectorsAlan
                Kestenbaum
            
            44
            
            Executive
                Vice President and DirectorReuben
                Seltzer
            
            49
            
            President,
                Chief Executive Officer and DirectorNicholas
                LaRosa
            
            41
            
            Chief
                Financial Officer





(1)
            Each
                of the persons performs services for the Company on a part-time basis
                and
                is primarily involved in those activities and for those organizations
                described below.




**John
      D. Abernathy** has been
      a director since January 2006, is a member of the Compensation Committee of
      the
      Board and is Chairman of the Audit Committee of the Board. Mr. Abernathy served
      as chief operating officer of Patton Boggs LLP, a law firm, from January 1995
      until his retirement in May 2004, and Mr. Abernathy served as managing partner
      of the accounting firm BDO Seidman from 1983 to 1990. Since July 2001, Mr.
      Abernathy has served on the board of directors of Par Pharmaceutical Company,
      Inc. (“Par”) and as a chairman of its audit committee since September 2003. Mr.
      Abernathy is also a director of Sterling Construction Company, Inc. (AMEX:STV),
      a civil construction company and chairs its audit committee.





**Mark
      Auerbach** has
      been
      a director since January 2006, is Chairman of the Board, is a member of the
      Compensation Committee of the Board and is a member of the Audit Committee
      of
      the Board. Mr. Auerbach has served as Executive Chairman of the board of
      directors since September 2003, and as director since 1990, of Par, and as
      a
      director of Optimer Pharmaceuticals, Inc., a biopharmaceutical company with
      a
      portfolio of late-stage anti-infective products and a range of preclinical
      antibiotics from carbohydrate drug discovery platform, since May 2005. From
      June
      1993 through December 2005, Mr. Auerbach has served as Senior Vice President
      and
      Chief Financial Officer of Central Lewmar L.P., a distributor of fine papers.





**Alan
      Kestenbaum** has
      been
      serving as Executive Vice President of the Company since January 2006. Mr.
      Kestenbaum has been executive vice president and a director of Marco and Marco
      Hi-Tech JV LLC, a raw material and ingredient distribution company serving
      the
      dietary supplement industry (“Marco LLC”) since January 2002. Mr. Kestenbaum
      founded in 1985, and is currently chief executive officer of, Marco
      International Corp., an international finance investment and trading company
      specializing in raw materials. In March **** 2004,
      Mr.
      Kestenbaum founded and is currently chairman and chief executive officer of
      International Metals Enterprises. Since **** May **** 2004,
      Mr.
      Kestenbaum has been chairman of the board of Globe Metallurgical, Inc. Mr.
      Kestenbaum received a B.A. in Economics cum laude from Yeshiva University,
      New
      York. From June 1999 to June 2001, Mr. Kestenbaum was the chief executive
      officer of Aluminium.com a provider of online metal trading services. In July
      2001, following Mr. Kestenbaum’s resignation and after the board of directors of
      Aluminium.com voted to cease operations, a group of former consultants filed
      an
      involuntary chapter 7 petition against Aluminum.com. This petition was
      subsequently dismissed by the Bankruptcy court and Aluminium.com wound down
      its
      affairs in good order, including paying all of its creditors and returning
      surplus cash to its shareholders.




-27-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**Reuben
      Seltzer** has been
      serving as President and Chief Executive Officer of the Company since January
      2006. Mr. Seltzer has been chief executive and president of Marco since 1996,
      president of Marco LLC, since January 2002 and a director and consultant for
      Hi-Tech Pharmacal Co., Inc. (NASDAQ: HITK), a pharmaceutical company since
      1992.
      Mr. Seltzer received a B.A. in Economics from Queens College, a J.D. degree
      from
      Benjamin N. Cardozo School of Law, and an L.L.M. from New York University.





**Nicholas
      LaRosa** has been
      serving as Chief Financial Officer of the Company since January 2006. Since
      February 2005, Mr. LaRosa has served as controller of Marco Hi-Tech JV Ltd.
      Prior thereto since 1999, Mr. LaRosa served as assistant controller of Loeb
      Partners Corp., a privately owned investment banking firm. Mr. LaRosa received
      a
      B.A. degree in accounting from St. John’s University and an M.A. degree in
      finance from Wagner College.





**Affiliated
      Scientists**





·
            **Dr.
                Paul Aisen.**Principal Investigator Georgetown University, Dr. Aisen relocated
                from
                Mount Sinai to Georgetown in June 1999 and established the ADCS site
                at
                Georgetown. Dr. Aisen also developed and conducted the ADCS Multicenter
                Trial of Prednisone and conducted other trials for other compounds
                in AD.
                Dr. Aisen is the principal investigator of our Phase II clinical
                trial.




·
            **Dr.
                Robert Moriarity.**University of Illinois, is the Chief Scientific Officer of Org Syn.
                Dr.
                Moriarty received his Ph.D. degree from Princeton University and
                completed
                his postdoctoral assignment at the University of Munich and Harvard
                University. Dr. Moriarty will be working with us under the terms
                of our
                agreement with Org Syn to develop synthetic
                HupA.




·
            **Dr.
                Dinesh Patel.**Dr. Patel is the Chairman of the Board and Co-founder of XEL. Dr.
                Patel
                has been the recipient of numerous awards, including U.S. Small Business
                Administration’s Business Achiever Award, and Scientific and Technology
                Award (State of Utah), and Entrepreneur of the Year Award (Mountain
                West
                Venture Group). Dr. Patel has agreed to serve as a formal scientific
                advisor to us during the development by XEL of the Product pursuant
                to the
                terms of the Development Agreement.




**Board
      Committees**





The
      Board
      has two (2) standing committees: the Audit Committee and the Compensation
      Committee. The functions of each of these committees and their members are
      specified below. The Board has determined that each director who serves on
      these
      committees is “independent.”





The
      members of the committees are identified in the following table.





**Director**
            
            **Audit
                Committee**
            
            **Compensation
                Committee**John
                D. Abernathy
            
            Chair
            
            XMark
                Auerbach
            
            X
            
            X





The
      Audit
      Committee is currently comprised of Messrs. Abernathy and Auerbach, each of
      whom
      meets each of the independence and other requirements for audit committee
      members under the rules of The Nasdaq Stock Market. The Board of Directors
      has
      determined that Mr. Abernathy and Mr. Auerbach are each an “audit committee
      financial expert” as defined by SEC regulations. The Audit Committee assists the
      Board in its oversight of our financial accounting, reporting and controls
      by
      meeting with members of management and our independent auditors. The committee
      has the responsibility to review our annual audited financial statements, and
      meets with management and the independent auditors at the end of each quarter
      to
      review the quarterly financial results. In addition, the committee considers
      and
      approves the employment of, and approves the fee arrangements with, independent
      auditors for audit and other functions. The Audit Committee reviews our
      accounting policies and internal controls.





The
      Compensation Committee is currently comprised of Messrs. Abernathy and Auerbach.
      The Compensation Committee recommends cash-based and stock compensation for
      executive officers of the Company, administers the company’s equity incentive
      plans and makes recommendations to the Board regarding such
      matters.




-28-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**Code
      of Ethics**





The
      Board
      is committed to legal and ethical conduct in fulfilling its responsibilities.
      The Board expects all directors, as well as officers and employees, to act
      ethically at all times. Additionally, the Board expects the Chief Executive
      Officer, the Chief Financial Officer, and all senior financial and accounting
      officials to adhere to the Company’s Code of Ethics which was adopted on
      February 23, 2006. We intend to post our Code of Ethics on an Internet website
      as soon as the website is established. A copy of the Code of Ethics will be
      made
      available free of charge by contacting us at (212) 798-8100. A copy of the
      Code
      of Ethics has been filed as Exhibit 14.1 to this Annual Report on Form
      10-K.





**Item
                10.**
            **Executive
                Compensation.**





**Summary
      Compensation Table**




The
      following Summary Compensation Table sets forth, for the years indicated, all
      cash compensation paid, distributed or accrued for services, including salary
      and bonus amounts, rendered in all capacities by the Company’s chief executive
      officer and all other executive officers who received or are entitled to receive
      remuneration in excess of $100,000 during the stated periods.





Annual
                Compensation
            
            Long-term
              CompensationAwards
            
            PayoutsName
                and Principal Position (1)
            
            Fiscal
              Year
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Securities
                Underlying Options/
              SARs
                (#)
            
            LTIP
              Payouts
              ($)
            
            All
                Other Compensation
              ($)Reuben
                Seltzer
            
            
            2005
            
            $
            165,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —*Chief
              Executive Officer*
            
            
            2004
            
            $
            180,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —2003
            
            $
            180,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —Alan
                Kestenbaum
            
            
            2005
            
            $
            73,333
            
            
            —
            
            
            —
            
            
            —
            
            
            —*Executive
              Vice President*
            
            
            2004
            
            $
            80,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —2003
            
            $
            60,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —





(1)
            Keith
                Andrews, our former sole executive officer, was not compensated for
                services he provided to the Company from its inception through the
                closing
                of the Merger.





**Options
      Grants in Last Fiscal Year**





As
      of
      fiscal year end 2005, no options had been granted by the Company.





**Employment
      and Indemnification Agreements**




Presently,
      the executives of the Company do not perform services pursuant to written
      employment agreements. It is anticipated that the executives will enter into
      new
      two-year employment agreements under which Mr. Seltzer shall serve as Chief
      Executive Officer of the Company and Mr. Kestenbaum as Executive Vice President.
      Neither of such executives will be required to devote full-time efforts to
      the
      affairs of the Company. Mr. Seltzer is expected to be compensated at an annual
      rate of $225,000 per annum and be entitled to receive such bonus compensation
      as
      determined by the board of directors from time to time and Mr. Kestenbaum is
      expected to be compensated at an annual rate of $80,000 per annum and be
      entitled to receive such bonus compensation as determined by the board of
      directors from time to time. On January 24, 2006, Mr. Seltzer and Mr. Kestenbaum
      were granted options to purchase 220,000 shares and 70,000 shares of our common
      stock, respectively, each at an exercise price of $2.50 per share. One-third
      of
      the shares granted vested on the date of grant and the remaining shares vest
      in
      equal proportions on the second and third anniversaries of the grant
      date.




-29-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





The
      Company has agreed to indemnify each of its directors and executive officers
      to
      the fullest extent of the law permitted or required by Delaware pursuant to
      indemnification agreements with each such person.





**Stock
      Option Plans**




On
      January 24, 2006, Neuro-Hitech’s shareholders approved the Company’s 2006
      Non-Employee Directors Stock Option Plan (the “Directors Plan”). Key features of
      the Directors Plan include:





·
            Non-employee
                directors of the Company and its subsidiaries are eligible to participate
                in the Directors Plan. The term of the Directors Plan is ten years.
                400,000 shares of common stock have been reserved for issuance under
                the
                Directors Plan.




·
            Options
                may only be issued as non-qualified stock
                options.




·
            Each
                newly elected or appointed non-employee director shall be granted
                an
                option to purchase 50,000 shares of common stock at an exercise price
                equal to the fair market value of our common stock; 16,666 of which
                will
                vest immediately (or six months following appointment in order for
                the
                plans to comply with Rule 16b-3 under the Securities Exchange Act
                of
                1934); and 16,667 on each of the second and third anniversaries of
                the
                date of appointment.




·
            The
                initial non-employee director who was appointed Chairman of the Board
                received an option to purchase 300,000 shares of common stock at
                an
                exercise price of $2.50 per share; 100,000 of which vested immediately
                and
                100,000 of which shall vest on each of the second and third anniversaries
                of the date of appointment.




·
            Stockholder
                approval is required in order to replace or reprice
                options.




·
            The
                Directors Plan is administered by the board of directors or a committee
                designated by the board.




·
            The
                option term may not exceed ten
                years.




·
            Upon
                a “change in control” any unvested options shall vest and become
                immediately exercisable.




On
      January 24, 2006, Neuro-Hitech’s stockholders adopted the 2006 Incentive Stock
      Plan (the “Incentive Plan”). Key features of the Incentive Plan
      include:





·
            The
                Company’s officers, directors, key employees and consultants are eligible
                to participate in the Incentive Plan. The Incentive Plan terminates
                on
                January 23, 2016.





·
            The
                Incentive Plan provides for the grant of options and the issuance
                of
                restricted shares. An aggregate of 400,000 shares of Neuro-Hitech
                Common
                Stock has been reserved under the Incentive Plan.





·
            Both
                incentive and nonqualified stock options may be granted under the
                Incentive Plan.





·
            The
                exercise price of options granted pursuant to this Incentive Plan
                is
                determined by the Compensation Committee but shall not be less than
                100%
                of the fair market value of the Neuro-Hitech Common Stock at the
                date of
                grant.





·
            For
                holders of 10% or more of the combined voting power of all classes
                of the
                Company’s stock, options may not be granted at less than 110% of the fair
                market value of the Neuro-Hitech Common Stock at the date of
                grant.





·
            The
                option term may not exceed ten
                years.






-30-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**


**Director
      Compensation**





On
      January 24, 2006, the Board adopted a Non-Employee Directors Stock Option Plan
      (the “Director Plan”) (as more fully described under “Stock Option Plans”) in
      order to attract and retain the services of highly-qualified non-employee
      directors.





Upon
      appointment to the position of Chairman of the Board of Directors, Mr. Auerbach
      was granted a five-year option to purchase 300,000 shares of Neuro-Hitech Common
      Stock at $2.50 per share, 100,000 of which shares vest immediately upon grant
      and 100,000 of which shares vest on each of the second and third anniversaries
      of the date of appointment.





Upon
      appointment to the Board of Directors, Mr. Abernathy was granted a five-year
      option to purchase 50,000 shares of Neuro-Hitech Common Stock at a purchase
      price of $2.50 per share; 16,666 shares of which vest immediately upon grant
      and
      16,666 shares of which vest on each of the second and third anniversaries of
      the
      date of appointment.





Messrs.
      Auerbach and Abernathy will receive $100,000, and $40,000, respectively, per
      year as a director’s fee.





**Item
                11.**
            **Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.**





**Security
      Ownership of Certain Beneficial Owners and Management**




The
      following table sets forth information regarding the number of shares of the
      Company’s common stock beneficially owned as of March 27, 2006:





·
            each
                person who is known by the Company to beneficially own 5% or more
                of the
                Company’s common stock;




·
            each
                of the Company’s directors and executive officers;
                and




·
            all
                of the Company’s directors and executive officers, as a
                group.




Except
      as
      otherwise set forth below, the address of each of the persons listed below
      is
      c/o Neuro-Hitech Pharmaceuticals, Inc., One Penn Plaza, Suite 2514, New York,
      NY
      10119.





**Name
                and Address of****Beneficial
                Owner**
            
            **Number
                of Shares Beneficially Owned**(1)
            
            **Percentage
                of Shares Beneficially Owned**(2)**5%
                or Greater Stockholders:**Hi-Tech
                Pharmacal Co., Inc.
              369
                Bayview Avenue
              Amityville,
                NY 11701
            
            
            1,125,610(3
            )
            
            11.9
            %W.S.
                Investments, L.P.
              47
                Hulfish Street
              Suite
                305
              Princeton,
                NJ 08542
            
            
            618,647
            
            
            6.6
            %






-31-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




**Directors
                and Executive Officers:**John
                D. Abernathy
            
            
            50,000
            
            
            *Mark
                Auerbach
            
            
            300,000(4
            )
            
            3.1
            %Alan
                Kestenbaum
            
            
            2,183,843(5
            )
            
            23.1
            %Reuben
                Seltzer
            
            
            1,138,943(5
            )
            
            12.0
            %Nicholas
                LaRosa
            
            
            0
            
            
            —All
                Directors and Executive Officers as a Group
            
            
            3,627,786
            
            
            37.5
            %





*
            Less
                than 1%


(1)
            Unless
                otherwise indicated, includes shares owned by a spouse, minor children
                and
                relatives sharing the same home, as well as entities owned or controlled
                by the named person. Also includes options to purchase shares of
                common
                stock exercisable within sixty (60) days. Unless otherwise noted,
                shares
                are owned of record and beneficially by the named
                person.


(2)
            Based
                upon 9,431,256 shares of common stock outstanding on March 27, 2006,
                but
                does not include shares reserved under the Company’s option plans or
                warrants sold in the Offering.


(3)
            Reuben
                Seltzer is a director of Hi-Tech Pharmacal Co., Inc. and disclaims
                beneficial ownership as to any of the shares owned by Hi-Tech Pharmacal
                Co., Inc.


(4)
            Includes
                200,000 shares of Neuro-Hitech Common Stock owned by immediate family
                members of Mr. Auerbach.


(5)
            Excludes
                50 shares of Class A Common Stock held by each of Reuben Seltzer
                and Alan
                Kestenbaum, which together constitutes 100% of the outstanding shares
                of
                Class A Common Stock. The holders of Class A Common Stock are entitled
                to
                elect that number of directors that would equal one-half of the number
                of
                directors that would at any time be required to serve on the board
                of
                directors of the Company in order to constitute the entire board
                of
                directors, plus one additional member of the board of
                directors.




**Item
      12. Certain Relationships and Related
      Transactions.**





The
      Company has entered into indemnification agreements with each of its directors
      and executive officers.





On
      January 5, 2006, Mark Auerbach, a director, and his wife purchased an aggregate
      of 367,046 shares of Marco common stock pursuant to a securities purchase
      agreement with Marco for an aggregate purchase price of $321,000. Prior to
      the
      Merger, Mr. Auerbach transferred an aggregate of such 24,012.36 shares to his
      son and daughter-in-law. Upon the effectiveness of the Merger, such shares
      of
      Marco common stock were converted into 200,000 shares of Neuro-Hitech Common
      Stock.





On
      January 5, 2006, John Abernathy, a director, purchased 57,173.42 shares of
      Marco
      common stock for a purchase price of $50,001 pursuant to a securities purchase
      agreement with Marco. Upon the effectiveness of the Merger, such shares of
      Marco
      common stock were converted into 33,334 shares of Neuro-Hitech Common
      Stock.





On
      January 24, 2006 Hi-Tech Pharmacal Co., Inc., W.S. Investments, L.P., and Alan
      Kestenbaum purchased $150,000, $125,000, and $150,000, and on January 27, 2006
      Reuben Seltzer purchased $50,000 of Units in the Offering at the same price,
      and
      subject to the same terms, as other subscribers in the Offering. Each unit
      consisted of (i) 10,000 shares of Neuro-Hitech Common Stock and (ii) a
      detachable, transferable three-year warrant to purchase 2,500 shares of
      Neuro-Hitech Common Stock. The units were sold at a purchase price of $25,000
      per unit.




-32-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**Item
      13. Exhibits.**





**Exhibit
                No.**
            **Description**
            **Location**2.1
            Agreement
                and Plan of Merger, dated January 17, 2006, between Northern Way
                Resources, Inc., a Nevada corporation and Northern Way Resources,
                Inc., a
                Delaware corporation
            Incorporated
                by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
                filed on January 23, 20062.2
            Certificate
                of Ownership and Merger merging Northern Way Resources, Inc., a Nevada
                corporation into Northern Way Resources, Inc., a Delaware corporation
            Incorporated
                by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K
                filed on January 23, 20062.3
            Articles
                of Merger merging Northern Way Resources, Inc., a Nevada corporation
                into
                Northern Way Resources, Inc., a Delaware corporation
            Incorporated
                by reference to Exhibit 2.3 to the Registrant’s Current Report on Form 8-K
                filed on January 23, 20062.4
            Agreement
                and Plan of Merger, dated January 17, 2006, between Northern Way
                Resources, Inc., a Nevada corporation and Northern Way Resources,
                Inc., a
                Delaware corporation
            Incorporated
                by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
                filed on January 23, 20062.5
            Agreement
                of Merger and Plan of Reorganization, dated as of January 24, 2006,
                by and
                among Neurotech Pharmaceuticals, Inc., Marco Hi-Tech JV Ltd., and
                Marco
                Acquisition I, Inc.
            Incorporated
                by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
                filed on January 30, 20063.1
            Certificate
                of Incorporation of Neurotech Pharmaceuticals, Inc.
            Incorporated
                by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
                filed on January 23, 20063.2
            Certificate
                of Merger of Marco Acquisition I, Inc. with and into Marco Hi-Tech
                JV
                Ltd.
            Incorporated
                by reference to Exhibit 3.5 to the Registrant’s Current Report on Form 8-K
                filed on January 30, 20063.3
            Certificate
                of Merger of Marco Acquisition I, Inc. with and into Marco Hi-Tech
                JV
                Ltd.
            Incorporated
                by reference to Exhibit 3.6 to the Registrant’s Current Report on Form 8-K
                filed on January 30, 20063.4
            Certificate
                of Amendment of Certificate of Incorporation of Neurotech Pharmaceuticals,
                Inc., changing name to Neuro-Hitech Pharmaceuticals, Inc.
            Incorporated
                by reference to Exhibit 3.7 to the Registrant’s Current Report on Form 8-K
                filed on January 30, 20063.5
            By-laws
                of Neurotech Pharmaceuticals, Inc.
            Incorporated
                by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K
                filed on January 23, 20064.1
            Form
                of Common Stock Purchase Warrant Certificate
            Incorporated
                by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K
                filed on January 30, 20064.2
            Warrant
                to purchase common stock of Marco-Hitech JV Ltd. issued to Brown
                Brothers
                Harriman & Co.
            Incorporated
                by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K
                filed on January 30, 20064.3
            Warrant
                to purchase common stock of Marco-Hitech JV Ltd. issued to Barry
                Honig
            Incorporated
                by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K
                filed on January 30, 2006






-33-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




**Exhibit
              No.**
            **Description**
            **Location**4.4
            Form
                of Marco Hi-Tech JV Ltd. Registration Rights Agreement
            Incorporated
                by reference to Exhibit 10.4 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.1
            Neurotech
                Pharmaceuticals, Inc. 2006 Incentive Stock Plan
            Incorporated
                by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.2
            Neurotech
                Pharmaceuticals, Inc. 2006 Non-Employee Directors Stock Option
                Plan
            Incorporated
                by reference to Exhibit 10.2 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.3
            Form
                of Private Placement Subscription Agreement
            Incorporated
                by reference to Exhibit 10.3 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.4
            Securities
                Purchase Agreement, dated January 5, 2006, by and between Marco Hi-Tech
                JV
                Ltd. and the investors signatory thereto
            Incorporated
                by reference to Exhibit 10.5 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.5
            Director
                and Officer Indemnification Agreement dated January 24, 2006, between
                Neurotech Pharmaceuticals, Inc. and Reuben Seltzer
            Incorporated
                by reference to Exhibit 10.6 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.6
            Director
                and Officer Indemnification Agreement dated January 24, 2006, between
                Neurotech Pharmaceuticals, Inc. and Alan Kestenbaum
            Incorporated
                by reference to Exhibit 10.7 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.7
            Director
                and Officer Indemnification Agreement dated January 24, 2006, between
                Neurotech Pharmaceuticals, Inc. and John Abernathy
            Incorporated
                by reference to Exhibit 10.8 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.8
            Director
                and Officer Indemnification Agreement dated January 24, 2006, between
                Neurotech Pharmaceuticals, Inc. and Mark Auerbach
            Incorporated
                by reference to Exhibit 10.9 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.9
            Director
                and Officer Indemnification Agreement dated January 24, 2006, between
                Neurotech Pharmaceuticals, Inc. and Nicholas LaRosa
            Incorporated
                by reference to Exhibit 10.10 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.10
            Lockup
                Agreement, dated as of January 23, 2006, by and among Marco Hi-Tech
                JV
                Ltd. and the signatories thereto
            Incorporated
                by reference to Exhibit 10.11 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.11
            Technology
                License Contract, dated as of June 1, 1997, by and between Mayo Foundation
                for Medical Education and Research and Marco Hi-Tech JV
                Ltd.
            Incorporated
                by reference to Exhibit 10.12 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.12
            Clinical
                Research Agreement, dated March 1, 2002, by and between Georgetown
                University and Marco Hi-Tech JV Ltd.
            Incorporated
                by reference to Exhibit 10.13 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.13
            Offer
                Letter, dated January 6, 2006, to John Abernathy from Marco Hi-Tech
                JV
                Ltd.
            Incorporated
                by reference to Exhibit 10.14 to the Registrant’s Current Report on Form
                8-K filed on January 30, 200610.14
            Offer
                Letter, dated January 5, 2006, to Mark Auerbach from Marco Hi-Tech
                JV
                Ltd.
            Incorporated
                by reference to Exhibit 10.15 to the Registrant’s Current Report on Form
                8-K filed on January 30, 2006






-34-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**Exhibit
              No.**
            **Description**
            **Location**14.1
            Code
                of Ethics
            Provided
                herewith16.1
            Letter
                from Dale, Matheson, Carr-Hilton Labonte, dated as of January 27,
                2006
            Incorporated
                by reference to Exhibit 16.1 to the Registrant’s Current Report on Form
                8-K filed on February 6, 200631.1
            Certification
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002
            Provided
                herewith31.2
            Certification
                of the Chief Financial Officer Pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002
            Provided
                herewith32.1
            Certification
                of the Chief Executive Officer and Chief Financial Officer Pursuant
                to 18
                U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley
                Act
                of 2002
            Provided
                herewith





**Item
      14. Principal Accountant Fees and
      Services.**





During
      the fiscal years ended December 31, 2005 and 2004, the aggregate fees billed
      by
      Moore Stephens, P.C.:




**2005**
            
            **2004**Audit
                Fees
            
            $
            15,000
            
            $
            4,500Audit
                Related Fees
            
            $
            —
            
            $
            —Tax
                Fees
            
            $
            3,000
            
            $
            1,500All
                Other Fees
            
            $
            6,000
            
            $
            —





*Audit
      Fees* .
      Consists of fees billed for professional services rendered for the audit of
      our
      annual consolidated financial statements and review of the quarterly
      consolidated financial statements and services that are normally provided by
      Moore Stephens, P.C., in connection with statutory and regulatory filings or
      engagements.




*Audit-Related
      Fees* .
      Consists of fees billed for assurance and related services that are reasonably
      related to the performance of the audit or review of our consolidated financial
      statements and are not reported under “Audit Fees.”





*Tax
      Fees* .
      Consists of fees billed for professional services for tax compliance, tax advice
      and tax planning.




*All
      Other Fees* .
      Consists of fees for products and services other than the services reported
      above, including fees associated with the review of the Company’s periodic
      reports and reports on Form 8-K.




-35-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**





**INDEX
      TO FINANCIAL STATEMENTS**




PageReport
                of Independent Registered Public Accounting
                Firm
            
            F-1Balance
                Sheet - December 31, 2005
            
            F-2Statements
                of Operations - Years Ended December 31, 2005 and
                2004
            
            F-3Statements
                of Changes in Stockholders' Equity [Deficit] -
                Years Ended December 31, 2005 and 2004
            
            F-4Statements
                of Cash Flows - Years Ended December 31, 2005 and
                2004
            
            F-5Notes
                to Financial Statements
            
            F-6








-36-
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM**





To
      the
      Stockholders and the Board of Directors of


Marco
      Hi-Tech JV, Ltd.





We
      have
      audited the accompanying balance sheet of Marco Hi-Tech JV, Ltd. [Neuro-Hitech
      Pharmaceuticals, Inc. as of January 24, 2006 [Note 9]] as of December 31, 2005,
      and the related statements of operations, changes in stockholders' [deficit],
      and cash flows for each of the two years in the period ended December 31, 2005.
      These financial statements and the financial statement schedule referred to
      below are the responsibility of the Company's management. Our responsibility
      is
      to express an opinion on these financial statements based on our
      audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the Company's internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Marco Hi-Tech JV, Ltd. as of
      December 31, 2005, and the results of operations and its cash flows for each
      of
      the two years in the period ended December 31, 2005, in conformity with
      accounting principles generally accepted in the United States of America.








MOORE
      STEPHENS, P. C.


Certified
      Public Accountants.





New
      York,
      New York


March
      16,
      2006




F-1
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**BALANCE
      SHEET AS OF DECEMBER 31, 2005.**





***Assets:*****Current
                Assets:**Cash
                and Cash Equivalents
            
            $
            90,606Accounts
                Receivable
            
            
            52,125**Total
                Current Assets**
            
            
            142,731**Total
                Assets**
            
            $
            142,731***Liabilities
                and Stockholders' [Deficit]:*****Current
                Liabilities:**Accounts
                Payable and Accrued Expenses
            
            $
            149,953Due
                to Affiliate
            
            
            42,304**Total
                Liabilities**
            
            
            192,257**Stockholders'
                [Deficit]:**Convertible
                Preferred Stock - Series B, $1.00 Par Value Per Share 50,000 Authorized;
                0
                Issued and Outstanding
            
            
            —Convertible
                Preferred Stock - Series A, $1.00 Par Value Per Share 18,000 Authorized;
                12,005 Issued and Outstanding
            
            
            12,005Common
                Stock, $.01 Par Value Per Share 30,000,000 Authorized; 8,654,112
                Issued
                and Outstanding
            
            
            86,541Additional
                Paid-in Capital
            
            
            2,478,373Accumulated
                Deficit
            
            
            (2,626,445
            )**Total
                Stockholders' [Deficit]**
            
            
            (49,526
            )**Total
                Liabilities and Stockholders' [Deficit]**
            
            $
            142,731






See
      Notes
      to Financial Statements.




F-2
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**STATEMENTS
      OF OPERATIONS**


**Years
                ended****December
                31,****2
                0 0 5**
            
            **2
                0 0 4****Revenue:**Product
                Sales
            
            $
            208,343
            
            $
            159,264**Cost
                of Revenues:**Cost
                of Goods Sold
            
            
            102,637
            
            
            77,494**Gross
                Profit**
            
            
            105,706
            
            
            81,770**Selling,
                General and Administrative Expenses:**Research
                and Development Costs
            
            
            678,798
            
            
            494,633Salaries
                and Payroll Taxes
            
            
            284,173
            
            
            265,420Insurance
            
            
            5,532
            
            
            3,752Commissions
                and Royalties
            
            
            16,433
            
            
            6,554Professional
                Fees
            
            
            57,258
            
            
            24,367Travel
                and Entertainment
            
            
            1,199
            
            
            —Office
                Expense
            
            
            2,127
            
            
            1,495Licensing
                Expense
            
            
            —
            
            
            3,443Other
                Taxes
            
            
            3,208
            
            
            2,348Other
                Expense
            
            
            19,956
            
            
            —**Total
                Selling, General and Administrative Expenses**
            
            
            1,068,504
            
            
            802,012**Operating
                [Loss]**
            
            
            (962,798
            )
            
            (720,242
            )**Other
                Income:**Interest
                Income - Net
            
            
            7,957
            
            
            7,461**[Loss]
                Before Provision for Income Taxes**
            
            
            (954,841
            )
            
            (712,781
            )**Provision
                for Income Taxes**
            
            
            —
            
            
            —**Net
                [Loss]**
            
            $
            (954,841
            )
            $
            (712,781
            )**Basic
                and Diluted [Loss] Earnings Per Common Share**
            
            $
            (.11
            )
            $
            (.09
            )**Weighted
                Average Number of Common Shares Outstanding for Basic and Diluted
                [Loss]
                Earnings Per Common Share**
            
            
            8,327,056
            
            
            8,000,000






See
      Notes
      to Financial Statements.




F-3
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**STATEMENTS
      OF CHANGES IN STOCKHOLDERS' [DEFICIT]**


**Convertible**
            
            **Convertible**
            
            
            
            **Capital
                in**
            
            
            
            **Total****Preferred
                Stock**
            
            **Preferred
                Stock**
            
            **Common**
            
            **Excess
                of**
            
            **Accumulated**
            
            **Stockholders'****Series
                B**
            
            **Series
                A**
            
            **Stock**
            
            **Par
                Value**
            
            [**Deficit****]**
            
            **[****Deficit****]****Balance
                at January 1, 2004**
            
            $
            5,000
            
            $
            12,005
            
            $
            80,000
            
            $
            1,979,914
            
            $
            (958,823
            )
            $
            1,118,096Sales
                of Series B ConvertiblePreferred
                Stock - $1.00 Par Value
            
            
            5,000
            
            
            —
            
            
            —
            
            
            495,000
            
            
            —
            
            
            500,000Net
                [Loss]
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (712,781
            )
            
            (712,781
            )**Balance
                at December 31, 2004**
            
            
            10,000
            
            
            12,005
            
            
            80,000
            
            
            2,474,914
            
            
            (1,671,604
            )
            
            905,315Conversion
                of Series B ConvertiblePreferred
                Stock - $1.00 Par Value
            
            
            (10,000
            )
            
            —
            
            
            6,541
            
            
            3,459
            
            
            —
            
            
            —Net
                [Loss]
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (954,841
            )
            
            (954,841
            )**Balance
                at December 31, 2005**
            
            $
            —
            
            $
            12,005
            
            $
            86,541
            
            $
            2,478,373
            
            $
            (2,626,445
            )
            $
            (49,526
            )






See
      Notes
      to Financial Statements.




F-4
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**STATEMENTS
      OF CASH FLOWS**


**Years
                ended****December
                31,****2
                0 0 5**
            
            **2
                0 0 4****Operating
                Activities:**Net
                [Loss]
            
            $
            (954,841
            )
            $
            (712,781
            )Adjustments
                to Reconcile Net [Loss] to Net Cash [Used for] Operating
                Activities:Changes
                in Assets and Liabilities:[Increase]
                Decrease in:Accounts
                Receivable
            
            
            (29,370
            )
            
            (3,690
            )Inventory
            
            
            12,587
            
            
            (9,642
            )Due
                to/from Affiliate
            
            
            27,669
            
            
            38,548Prepaid
                Expenses
            
            
            472,345
            
            
            160,483Income
                Tax Receivable
            
            
            35,067
            
            
            —Increase
                [Decrease] in:Accounts
                Payable and Accrued Expenses
            
            
            22,457
            
            
            13,054Total
                Adjustments
            
            
            540,755
            
            
            198,753**Net
                Cash - Operating Activities**
            
            
            (414,086
            )
            
            (514,028
            )**Financing
                Activities:**Proceeds
                from the Issuance of Preferred Stock
            
            
            —
            
            
            500,000**Net
                [Decrease] in Cash and Cash Equivalents**
            
            
            (414,086
            )
            
            (14,028
            )**Cash
                and Cash Equivalents - Beginning of Years**
            
            
            504,692
            
            
            518,720**Cash
                and Cash Equivalents - End of Years**
            
            $
            90,606
            
            $
            504,692**Supplemental
                Disclosures of Cash Flow Information:**Cash
                paid during the years for:Interest
            
            $
            —
            
            $
            14Income
                Taxes
            
            $
            —
            
            $
            —






See
      Notes
      to Financial Statements.




F-5
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**NOTES
      TO FINANCIAL STATEMENTS**





***[1]
      Nature of Operations***





Marco
      Hi-Tech JV, Ltd. ["Marco"] was incorporated in 1996. Marco's operations
      consisted of supplying various raw materials and ingredients to the nutrition
      industry. Marco changed its operations during 2002. The Company currently is
      focused on the coordinating of research and development studies related to
      the
      development of a clinically proven treatment for Alzheimer's disease [Note
      9].





***[2]
      Summary of Significant Accounting Policies***





***Cash
      and Cash Equivalents -*** For
      purposes of the statement of cash flows, we consider all highly liquid debt
      instruments purchased with a maturity of three months or less to be cash
      equivalents.





We
      have
      no cash equivalents as of December 31, 2005.





***Accounts
      Receivable -*** As
      of
      December 31, 2005, upon evaluation of our accounts receivable, management
      estimates that all receivables will be collectible. Accordingly, we have not
      established an allowance for doubtful accounts.





***Inventory
      -*** Inventory
      is stated at the lower of average cost or market.





***Use
      of Accounting Estimates -*** The
      preparation of 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 revenues and expenses during the reporting period.
      Actual results could differ from those estimates.





***Revenue
      Recognition -*** Revenues
      from product sales are recognized when products are shipped to the
      customer.





***Research
      and Development Costs -*** All
      research and development costs are expensed as incurred and include costs paid
      to sponsored third parties to perform research and conduct clinical
      trials.





***Concentrations
      of Credit Risk -*** Financial
      statement items which potentially subject us to concentrations of credit risk
      are cash and cash equivalents and trade accounts receivable arising from our
      normal business activities. To mitigate cash risks, we place our cash with
      a
      high credit quality financial institution. At December 31, 2005, we had
      approximately $19,000 in this financial institution that is subject to normal
      credit risk beyond federally insured amounts. We routinely assess the financial
      strength of our customers and based upon factors concerning credit risk,
      establish an allowance for uncollectible accounts, if deemed necessary.




F-6
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**NOTES
      TO FINANCIAL STATEMENTS, Sheet #2**





***[2]
      Summary of Significant Accounting Policies
      [Continued]***





***Earnings
      Per Share -*** We have
      adopted the provisions of SFAS No. 128. Basic earnings per share is computed
      by
      dividing income available to common stockholders by the weighted average number
      of common shares outstanding during the period. SFAS No. 128 also requires
      a
      dual presentation of basic and diluted earnings per share on the face of the
      statement of operations for all companies with complex capital structures.
      Diluted earnings per share reflects the amount of earnings for the period
      available to each share of common stock outstanding during the reporting period,
      while giving effect to all dilutive potential common shares that were
      outstanding during the period, such as common shares that could result from
      the
      potential exercise or conversion of securities into common stock.





The
      computation of diluted earnings per share does not assume conversion, exercise,
      or contingent issuance of securities that would have an antidilutive effect
      on
      per share amounts [i.e., increasing earnings per share or reducing loss per
      share]. The dilutive effect of outstanding options and warrants and their
      equivalents are reflected in dilutive earnings per share by the application
      of
      the treasury stock method which recognizes the use of proceeds that could be
      obtained upon exercise of options and warrants in computing diluted earnings
      per
      share. It assumes that any proceeds would be used to purchase common stock
      at
      the average market price during the period. Options and warrants will have
      a
      dilutive effect only when the average market price of the common stock during
      the period exceeds the exercise price of the options or warrants.





***Stock-Based
      Compensation*** -
      We
      account for stock-based compensation utilizing the intrinsic value method in
      accordance with the provisions of Accounting Principles Board Opinion No. 25
      (APB 25), "Accounting for Stock Issued to Employees" and related
      Interpretations. Accordingly, no compensation expense is recognized because
      the
      exercise prices of these employee stock options equal or exceed the estimated
      fair market value of the underlying stock on the dates of grant.





In
      December 2004, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial Accounting Standards ("SFAS") No. 123R, "Share-Based
      Payment". SFAS No. 123R is a revision of SFAS No. 123, "Accounting for Stock
      Based Compensation", and supersedes APB 25. Among other items, SFAS 123R
      eliminates the use of APB 25 and the intrinsic value method of accounting,
      and
      requires companies to recognize the cost of employee services received in
      exchange for awards of equity instruments, based on the grant date fair value
      of
      those awards, in the financial statements. The effective date of SFAS 123R
      is
      the first interim or annual period beginning after December 15, 2005. We will
      adopt SFAS 123R effective January 1, 2006. SFAS 123R requires companies to
      adopt
      its requirements using a "modified prospective" method. Under the "modified
      prospective" method, compensation cost is recognized in the financial statements
      beginning with the effective date, based on the requirements of SFAS 123R for
      all share-based payments granted after that date, and based on the requirements
      of SFAS 123 for all unvested awards granted prior to the effective date of
      SFAS
      123R. The "modified retrospective" method also permits entities to restate
      financial statements of previous periods based on proforma disclosures made
      in
      accordance with SFAS 123.





We
      currently utilize a standard option pricing model (i.e., Black-Scholes) to
      measure the fair value of stock options granted to employees. While SFAS 123R
      permits entities to continue to use such a model, the standard also permits
      the
      use of a "lattice" model. We have not yet determined which model we will use
      to
      measure the fair value of employee stock options upon the adoption of SFAS
      123R.





SFAS
      123R
      also requires that the benefits associated with the tax deductions in excess
      of
      recognized compensation cost be reported as a financing cash flow, rather than
      as an operating cash flow as required under current literature. We have not
      yet
      determined what effect, if any, this change will have on future


periods.




F-7
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**NOTES
      TO FINANCIAL STATEMENTS, Sheet #3**




***[2]
      Summary of Significant Accounting Policies
      [Continued]***





***Reclassification
      -*** Certain
      items in the comparative financial statements have been reclassified to conform
      to the current year's presentation.





***Income
      Taxes -*** We
      follow the provisions of Statement of Financial Accounting Standards ["SFAS"]
      No. 109, "Accounting for Income Taxes." Under the asset and liability method
      of
      SFAS 109, deferred income tax assets and liabilities are recognized for the
      future tax consequences attributable to differences between the financial
      statement carrying amounts of existing assets and liabilities and available
      net
      operating loss carryforwards and their respective tax basis. Deferred income
      tax
      assets and liabilities are measured using enacted tax rates expected to apply
      to
      taxable income in the years in which those temporary differences are expected
      to
      be recovered or settled. Under SFAS 109, the effect on deferred income tax
      assets and liabilities of a change in tax rates is recognized in income in
      the
      period that includes the enactment date.





***[3]
      Research and License Agreement***





During
      1997, we entered into an agreement with the Mayo Foundation for Medical
      Education and Research [the "Mayo Foundation"]. In accordance with this
      agreement, the Mayo Foundation granted us a license to use its patent rights
      for
      the development of a clinically proven treatment for Alzheimer’s Disease. The
      amounts payable to the Mayo Foundation under this agreement are as
      follows:





***Royalties
      -*** Initial
      royalty payment of $ 82,500. Amount is nonrefundable and does not represent
      an
      advance on future royalties.





Five
      percent (5%) of the Net Sales of any Licensed Product


One
      percent (1%) of the Net Sales of any Natural Product





Minimum
      annual royalties of $300,000 beginning in the year we receive approval from
      the
      Food and Drug Administration ["FDA"].





As
      of
      December 31, 2005, we continue to coordinate the research and development
      efforts needed in order to complete the clinical studies and have not received
      FDA approval. In addition, there have not been any sales of any licensed product
      during the year ended December 31, 2005.





***Milestone
      Royalties -*** We
      are to
      pay the Mayo Foundation royalties upon the occurrence of certain milestones
      throughout the process of ultimately obtaining FDA approval. The total amount
      of
      royalties payable under these milestones are $3,225,000. As of December 31,
      2005, we have paid $25,000 in milestone royalties. This amount is attributed
      to
      achieving the first milestone; the FDA approval of an investigational new drug
      application.





***Maintenance
      Royalties -*** We
      are to
      pay the Mayo Foundation $10,000 each year until the time we obtain FDA
      approval.





The
      initial royalty payment of $82,500 along with the milestone and maintenance
      royalty payments of $25,000 and $10,000, respectively, were charged to research
      and development costs. Upon the expiration of the Mayo Foundation's
      last-to-expire patents related to the licensed product, the agreement expires
      and there will be no further royalty obligation to the Mayo
      Foundation.




F-8
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**NOTES
      TO FINANCIAL STATEMENTS, Sheet #4**





***[4]
      Clinical Research Agreement***





During
      2003, we entered into a Clinical Research Agreement with a University. In
      accordance with this agreement, the University shall carry out agreed upon
      research pertaining to the development of an FDA approved treatment for
      Alzheimer’s Disease. The costs associated with this agreement total $ 3,146,667.
      This amount will be partially funded by the National Institutes of Health [the
      "NIH"] which is part of the U.S. Department of Health and Human Services. The
      NIH grant amount is $1,300,000. Our portion of the total cost of $1,846,667
      is
      payable to the University in several installments no later than August 31,
      2007.
      The installments are due based upon the occurrence of certain events. In
      accordance with this agreement, upon contract signing, we paid $660,000, and
      upon the enrollment of the first subject, we paid $165,000. These amounts are
      expensed as research and development costs as the costs are incurred. As of
      December 31, 2005, we have expensed $1,033,731 of these amounts. As of December
      31, 2005, expenses incurred have exceeded payments by $41,453 and a liability
      has been accrued as a component of accrued expenses.





This
      agreement expires on August 31, 2007.





***[5]
      Securities Purchase Agreement***





In
      July
      of 2003, we entered into an agreement with an investor for the sale of our
      Series B Convertible Preferred stock. In accordance with the Agreement, we
      authorized the issuance and sale to the investor of 15,000 shares of the Series
      B Convertible Preferred Stock and the reservation of an aggregate of 980,568
      shares of Common Stock for issuance upon conversion of the Preferred Stock.
      The
      15,000 shares of Series B Convertible Preferred Stock were to be sold in three
      equal installments of 5,000 shares at each scheduled closing date. The sales
      price was $100 per share for an aggregate price of $500,000 for each individual
      closing. As of December 31, 2004, we received $1,000,000 under this Agreement
      for the sale of 10,000 shares to the Investor. In January 2005, the investor
      chose not to participate in the third closing. Instead, the investor converted
      the 10,000 Series B preferred shares into 654,112 common shares.





***[6]
      Income Taxes*** **





For
      2005
      and 2004, we have current income tax expense of $-0- and $-0-, respectively.
      Deferred taxes based upon differences between the financial statements and
      tax
      basis of assets and liabilities and available net operating loss carryforwards
      are summarized as follows:





As
                of December 31,2
                0
                0 5
            
            2
                0
                0 4Net
                Operating Loss Carryforward
            
            $
            1,160,107
            
            $
            730,429Valuation
                Allowance
            
            
            (1,160,107
            )
            
            (730,429
            )***Totals***.
            
            $
            —
            
            $
            —





For
      the
      years ended December 31, 2005 and 2004, the valuation allowance for net deferred
      tax assets increased $429,678 and $319,000, respectively. Based upon the level
      of historical tax losses, we have established the valuation allowance against
      the entire net deferred tax asset.




F-9
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**NOTES
      TO FINANCIAL STATEMENTS, Sheet #5**





***[6]
      Income Taxes [Continued]*** **





As
      of
      December 31, 2005, we have net operating loss carryforward of $2,588,452. Our
      net operating loss carryforward at December 31, 2005 expire as set forth in
      the
      following table.





Year
                Carryforwards Expire
            
            Amount2012
            
            $
            153,4522021
            
            
            20,9322022
            
            
            112,5782023
            
            
            633,9682024
            
            
            712,6812025
            
            
            954,841$
            2,588,452





The
      utilization of the net operating loss could be limited based upon provisions
      established in Section 382 of the Internal Revenue Code.





***[7]
      Stockholders' Equity***





During
      2004, as part of a Securities Purchase Agreement [Note 5], we completed the
      sale
      of 5,000 shares of Series B Convertible Preferred Stock, Par Value $1.00 per
      share, at an issue price of $100 per share.





Series
      A
      and B shares could be converted, at any time by each holder into shares of
      Common Stock equal to; the original issuance price of the shares divided by
      the
      conversion price. The original issuance price per share for both Series A and
      B
      shares is $100 per share. The Conversion Price is $1.2323 per Series A share
      and
      $1.52879 per Series B share. The original issuance price is subject to
      adjustment for any stock splits, stock dividends, recapitalizations or the
      like.





***[8]
      Related Party Transactions***





During
      2005 and 2004, we have recorded allocated salary and payroll taxes totaling
      $8,640 and $8,978, respectively. These expenses are allocated from an affiliated
      company. In November 2005, we borrowed $25,000 from an affiliated company.
      The
      affiliate is related through common ownership. During 2005 and 2004, we did
      not
      incur any rent expense. The use of office space is provided by an entity owned
      by our majority shareholder and is considered to be immaterial. This arrangement
      is expected to remain the same for 2006.




F-10
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**


**MARCO
      HI-TECH JV, LTD.**


**[NEURO-HITECH
      PHARMACEUTICALS, INC. AS OF JANUARY 24, 2006 [NOTE 9]]**


**NOTES
      TO FINANCIAL STATEMENTS, Sheet #6**




***[9]
      Subsequent Events***





On
      January 24, 2006, we entered into an Agreement and Plan of Reorganization with
      Neuro-Hitech Pharmaceuticals, Inc. [formerly Northern Way Resources, Inc.].
      Neuro-Hitech Pharmaceuticals, Inc. acquired 100% of our outstanding stock in
      exchange for 6,164,006 shares of their common stock. This type of transaction
      is
      a capital transaction in substance, rather than a business combination. It
      is
      equivalent to the issuance of our stock for net monetary assets, accompanied
      by
      a recapitalization. The accounting is identical to that resulting from a reverse
      acquisition, except that no goodwill or other intangible is recorded. For
      accounting purposes, we are the acquiring entity.





The
      following unaudited pro forma combined results of operations accounts for the
      acquisition as if it had occurred at the beginning of the fiscal years
      presented.





2
                0
                0 5
            
            2
                0
                0 4Total
                Revenue
            
            $
            208,343
            
            $
            159,264Net
                [Loss]
            
            $
            (974,923
            )
            $
            (727,541
            )Basic
                and Diluted [Loss] Per Common Share
            
            $
            (.12
            )
            $
            (.09
            )Weighted
                Average Number of Common Shares Outstanding for Basic and Diluted
                [Loss]
                Per Common Share
            
            
            7,961,506
            
            
            7,961,506





These
      proforma amounts may not be indicative of results that actually would have
      occurred if the combination had been in effect on the date indicated or which
      may be obtained in the future.




F-11
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
      duly
      caused this report to be signed on its behalf by the undersigned thereunto
      duly
      authorized.




**NEURO-HITECH
              PHARMACEUTICALS, INC.**Date: March
              31, 2006
            By:
            /s/ Reuben
              SeltzerName:  
                Reuben Seltzer
              Title:    
                President, Chief Executive Officer and
              Principal
                Executive Officer


In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.





**SIGNATURE**
            
            **TITLE**
            
            **DATE**/s/
                Reuben Seltzer
            
            President,
                Chief Executive Officer,
            
            March
                31, 2006Reuben
                Seltzer
            
            Principal
                Executive Officer and Director/s/
                Nicholas LaRosa
            
            Chief
                Financial Officer and
            
            March
                31, 2006Nicholas
                LaRosa
            
            Principal
                Accounting Officer/s/
                John Abernathy
            
            Director
            
            March
                31, 2006John
                Abernathy/s/
                Mark Auerbach
            
            Director
            
            March
                31, 2006Mark
                Auerbach/s/
                Alan Kestenbaum
            
            Director
            
            March
                31, 2006Alan
                Kestenbaum