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

                                    FORM 10-Q


      [X]            Quarterly Report Pursuant to Section
                         13 or 15(d) of the Securities
                              Exchange Act of 1934


                  For the quarterly period ended March 31, 2007

                                       or

        [   ]  Transition Report Pursuant to Section 13 or 15(d) of the
                          Securities Exchange Act of 1934

                          Commission file number 1-7265


                               AMBASE CORPORATION


             (Exact name of registrant as specified in its charter)


           Delaware                                 95-2962743
   (State of incorporation)              (I.R.S. Employer Identification No.)

                           100 PUTNAM GREEN, 3RD FLOOR
                          GREENWICH, CONNECTICUT 06830

              (Address of principal executive offices)     (Zip Code)

                                 (203) 532-2000

              (Registrant's telephone number, including area code)


     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.

YES     X        NO  ______
     -------

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

Large Accelerated Filer         Accelerated Filer       Non-Accelerated Filer X
                        -------                   -----                ---------

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).

YES              NO     X
     -------         -------------

     At  April  30,  2007,  there  were  44,968,519  shares  outstanding  of the
registrant's common stock, $0.01 par value per share.



<PAGE>



AmBase Corporation

Quarterly Report on Form 10-Q
March 31, 2007
<TABLE>
<CAPTION>
<S>                                                                                                        <C>
TABLE OF CONTENTS                                                                                           Page
                                                                                                           ------

PART I - FINANCIAL INFORMATION

Item 1.      Financial Statements (unaudited).....................................................................1

Item 2.      Management's Discussion and Analysis of
                   Financial Condition and Results of Operations.................................................16

Item 3.      Quantitative and Qualitative Disclosures About Market Risk..........................................19

Item 4T.     Controls and Procedures.............................................................................20

PART II - OTHER INFORMATION

Item 1.      Legal Proceedings...................................................................................20

Item 1A.     Risk Factors........................................................................................20

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds.........................................21

Item 3.      Defaults Upon Senior Securities.....................................................................21

Item 4.      Submission of Matters to a Vote of Security Holders.................................................21

Item 5.      Other Information...................................................................................21

Item 6.      Exhibits............................................................................................21

Signatures   ....................................................................................................22
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                       AMBASE CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                   (Unaudited)
                 (in thousands, except for share and per share amounts)
<S>                                                                                   <C>             <C>
                                                                                      March 31,       December 31,
                                                                                           2007               2006
                                                                                       ========          =========
Assets:
Cash and cash equivalents.........................................................    $   2,336         $    2,601
Investment securities:
    Held to maturity (market value $35,438 and $34,625, respectively).............       35,436             34,623
    Available for sale, carried at fair value ....................................          802              1,417
                                                                                       --------           --------
Total investment securities.......................................................       36,238             36,040
                                                                                       --------           --------
Real estate owned:
  Land............................................................................          554                554
  Buildings and improvements......................................................        1,900              1,900
                                                                                       --------           --------
                                                                                          2,454              2,454
  Less:  accumulated depreciation.................................................         (296)              (283)
                                                                                       --------           --------
Real estate owned, net............................................................        2,158              2,171
Other assets......................................................................          305              1,336
                                                                                       --------           --------
Total assets......................................................................   $   41,037         $   42,148
                                                                                       ========           ========
Liabilities and Stockholders' Equity:
Liabilities:
Accounts payable and accrued liabilities..........................................   $      635         $    1,171
Supplemental retirement plan......................................................       16,517             16,282
Other liabilities.................................................................           27                 28
                                                                                       --------           --------
Total liabilities.................................................................       17,179             17,481
                                                                                       --------           --------
Commitments and contingencies (Note 3)............................................            -                  -

Stockholders' equity:
Common stock ($0.01 par value, 200,000,000 authorized, 46,410,007 issued and
   44,968,519 outstanding)........................................................          464                464
Paid-in capital...................................................................      548,044            548,044
Accumulated other comprehensive loss..............................................          (52)              (336)
Accumulated deficit...............................................................     (523,214)          (522,121)
Treasury stock, at cost - 1,441,488 and 1,441,488 shares, respectively............       (1,384)            (1,384)
                                                                                       --------           --------
Total stockholders' equity........................................................       23,858             24,667
                                                                                       --------           --------
Total liabilities and stockholders' equity........................................   $   41,037         $   42,148
                                                                                       ========           ========
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>

                       AMBASE CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Operations
                           Three Months Ended March 31
                                   (Unaudited)
                      (in thousands, except per share data)
<S>                                                                      <C>              <C>
                                                                                Three Months
                                                                             2007            2006
Revenues:                                                                    ====            ====
Rental income.....................................................       $      -         $    41

Operating expenses:
Compensation and benefits.........................................          1,132            1,088
Professional and outside services.................................            464              718
Property operating and maintenance................................             23               31
Depreciation  ....................................................             13               13
Insurance.........................................................             19               17
Other operating...................................................             38               46
                                                                         --------         --------
                                                                            1,689            1,913
                                                                         --------         --------
Operating loss....................................................         (1,689)          (1,872)
                                                                         --------         --------
Interest income...................................................            465              420
Realized gains on sales of investment securities..................            156                -
                                                                         --------         --------
Loss before income taxes..........................................         (1,068)          (1,452)
Income tax expense................................................            (25)             (33)
                                                                         --------         --------
Net loss..........................................................       $ (1,093)        $ (1,485)
                                                                         ========         ========
Net loss per common share:
Net loss - basic..................................................       $  (0.02)        $ (0.03)
                                                                         ========         =======
Net loss - assuming dilution......................................       $  (0.02)        $ (0.03)
                                                                         ========         =======
Weighted average common shares outstanding:
Basic.............................................................         44,969          45,829
                                                                         ========         =======
Diluted...........................................................         44,969          45,829
                                                                         ========         =======
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
<TABLE>
<CAPTION>
                       AMBASE CORPORATION AND SUBSIDIARIES
             Consolidated Statements of Comprehensive Income (Loss)
                           Three Months Ended March 31
                                   (Unaudited)
                                 (in thousands)
<S>                                                                    <C>         <C>
                                                                             Three Months
                                                                         2007        2006
                                                                        ======      ======

Net loss............................................................   $(1,093)    $(1,485)

Amortization of minimum pension liability adjustment................       284           -

Unrealized holding gains on investment securities
     available for sale.............................................         -         (89)
                                                                       -------     ------

Comprehensive loss..................................................   $  (809)    $(1,574)
                                                                       =======     ======
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
                       AMBASE CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                           Three Months Ended March 31
                                   (Unaudited)
                                 (in thousands)
<S>                                                                                     <C>         <C>

                                                                                           2007          2006
Cash flows from operating activities:                                                      ====          ====
Net loss..............................................................................  $(1,093)    $   (1,485)
Adjustments to reconcile net loss to net cash used by
       operations:
    Depreciation and amortization.....................................................       13             13
    Accretion of discount - investment securities.....................................      (22)             -
     Realized gains on investment securities available for sale.......................     (156)             -
    Stock-based compensation expense..................................................        -             22
    Amortization of minimum pension liability adjustment..............................      284              -
Changes in other assets and liabilities:
    Accrued interest receivable.......................................................     (133)             5
    Other assets......................................................................    1,211             12
    Accounts payable and accrued liabilities..........................................     (536)          (775)
    Supplemental retirement plan and other liabilities................................      234            462
    Other, net........................................................................        1              2
                                                                                        --------    ----------
Net cash used by operating activities.................................................     (197)        (1,744)
                                                                                        --------    ----------
Cash flows from investing activities:
Maturities of investment securities - held to maturity................................   14,112         28,098
Purchases of investment securities - held to maturity.................................  (14,950)       (26,978)
Sales of investment securities - available for sale...................................      770              -
                                                                                        --------     ---------
Net cash (used) provided by investing activities......................................      (68)         1,120
                                                                                        --------     ---------
Cash flows from financing activities:
Common stock repurchased..............................................................        -           (563)
                                                                                        --------     ---------
Net cash used by financing activities.................................................        -           (563)
                                                                                        --------     ---------
Net decrease in cash and cash equivalents.............................................     (265)        (1,187)
Cash and cash equivalents at beginning of period......................................    2,601          2,852
                                                                                        --------     ---------
Cash and cash equivalents at end of period............................................  $ 2,336      $   1,665
                                                                                        ========     =========
Supplemental cash flow disclosures:
Income taxes paid.....................................................................  $    32      $     427
                                                                                        ========     =========
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.


<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 1 - Organization

     The accompanying  consolidated  financial  statements of AmBase Corporation
and its wholly-owned  subsidiaries  (the "Company") are unaudited and subject to
year-end adjustments.  All material intercompany  transactions and balances have
been eliminated. In the opinion of management,  the interim financial statements
reflect all adjustments,  consisting only of normal recurring adjustments unless
otherwise  disclosed,  necessary for a fair statement of the Company's financial
position  and  results  of  operations.  Results  for  interim  periods  are not
necessarily  indicative of results for the full year. Certain  reclassifications
have been made to the prior year  consolidated  financial  statements to conform
with the current year presentation.  The consolidated  financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") for interim financial information and with the
instructions  to Form 10-Q and Article 10 of Regulation  S-X. The preparation of
financial  statements  in  conformity  with  GAAP  requires  management  to make
estimates and assumptions,  that it deems  reasonable,  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 such estimates and assumptions.  The unaudited interim financial statements
presented herein should be read in conjunction  with the Company's  consolidated
financial  statements filed in its Annual Report on Form 10-K for the year ended
December 31, 2006.

     The  Company's  assets  currently   consist  primarily  of  cash  and  cash
equivalents,  investment  securities,  and real estate owned.  The Company earns
non-operating   revenue   principally   consisting  of  investment  earnings  on
investment securities and cash equivalents.  The Company continues to evaluate a
number of possible acquisitions,  and is engaged in the management of its assets
and liabilities, including the contingent assets, as described in Part II - Item
1.  From  time to  time,  the  Company  and its  subsidiaries  may be named as a
defendant  in  various   lawsuits  or   proceedings.   The  Company  intends  to
aggressively  contest all  litigation and  contingencies,  as well as pursue all
sources for contributions to settlements.

     The  Company's  management  expects  that  operating  cash  needs  for  the
remainder  of 2007  will be met  principally  by the  receipt  of  non-operating
revenue  consisting of investment  earnings on  investment  securities  and cash
equivalents,  and the Company's current financial resources.  See Note 10 herein
for information  regarding the anticipated  Supplemental  Plan lump-sum  benefit
payment of $16,676,115  (to Mr. Bianco,  the Company's  Chairman,  President and
Chief  Executive  Officer),  expected to be paid on or about May 31,  2007.  The
anticipated lump-sum Supplemental Plan benefit payment to Mr. Bianco is expected
to be paid to him from the Company's available financial resources.

Note 2 - Recent Accounting Pronouncements

     In September 2006, the Financial  Accounting Standard Board ("FASB") issued
SFAS No. 175, "Fair Value Measurements" ("SFAS157").  SFAS No. 175 defines fair
values, establishes a framework for measuring fair value and expands disclosures
about fair value  measurements.  SFAS No. 157 is effective  for the Company in
2008. The Company is currently  evaluating the potential impact of adopting SFAS
No. 157.

     In February 2007,  the FASB issues SFAS No.  159,"The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - including  an Amendment of FASB
Statement  No.  115"  ("SFAS159").  SFAS No.  159  permits  entities  to measure
eligible  financial assets,  financial  liabilities and certain other assets and
liabilities at fair value on an  instrument-by-instrument  basis. The fair value
measurement  election is irrevocable  once made and  subsequent  changes in fair
value must be recorded in earnings. The effect of adoption will be reported as a
cumulative-effect  adjustment to beginning retained  earnings.  The Company will
adopt SFAS No. 159 in 2008 and is currently evaluating if it will elect the fair
value option for any of its eligible financial instruments and other items.

     Effective  January 1, 2007,  the Company  adopted the Financial  Accounting
Standards Board ("FASB") Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes," an interpretation  of FASB Statement 109,  "Accounting for Income
Taxes" ("FIN 48").  FIN 48 applies to all "tax  positions"  accounted  for under
FASB  Statement  109. FIN 48 refers to "tax  positions" as positions  taken in a
previously  filed tax return or  positions  expected to be taken in a future tax
return that are reflected in measuring current of deferred income tax assets and
liabilities reported in the financial statement. FIN 48 clarifies the accounting
for income taxes by prescribing a minimum  recognition  threshold a tax position
is required to meet before being recognized in the financial statements.  FIN 48
also provides guidance on derecognition,  measurement,  classification, interest
and penalties,  accounting in interim  periods,  disclosure and transition.  The
adoption  of FIN 48 had no effect on the  Company's  results  of  operations  or
financial position.

<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     In  September  2006,  the FASB issued  Statement  of  Financial  Accounting
Standards No. 158, "Employer's  Accounting for Defined Benefit Pension and Other
Postretirement  Plans,  an  Amendment  of SFAS No. 87, 88, 106 and 132R"  ("SFAS
158").  SFAS 158  requires an  employer to (i)  recognize  in its  statement  of
financial position an asset for a plan's over funded status or a liability for a
plan's under funded  status;  (ii) measure a plan's  assets and its  obligations
that  determine  its funded status as of the end of the  employer's  fiscal year
(with limited exceptions); and (iii) recognize changes in the funded status of a
defined  benefit  postretirement  plan in the year in which the  changes  occur.
Those changes will be reported in comprehensive income of a business entity. The
requirement  to recognize the funded status of a benefit plan and the disclosure
requirements  are  effective  as of the  end of the  fiscal  year  ending  after
December 15, 2006, for entities with publicly traded equity  securities,  and at
the end of the fiscal year ending after June 15, 2007,  for all other  entities.
The requirement to measure plan assets and benefit obligations as of the date of
the employer's fiscal year-end  statement of financial position is effective for
fiscal years ending after December 15, 2008. We do not believe that the adoption
of SFAS 158 will have a material effect on the Company's  consolidated financial
statements as the Company intends to terminate its Supplemental  Retirement Plan
(the "Supplemental Plan") on or about May 31, 2007, as further discussed in Note
11 herein. The Company will continue to recognize an expense through to the date
on which the Supplemental Plan will terminate. The ultimate liability related to
the  final  termination  of  the  Supplemental  Plan  is  not  reflected  as all
conditions for the final  termination of the Supplemental Plan have not yet been
met.

Note 3 - Legal Proceedings

     The information  contained in Item 8 - Note 10 in AmBase's Annual Report on
Form 10-K for the year ended  December 31, 2006,  is  incorporated  by reference
herein and the defined  terms set forth below have the same meaning  ascribed to
them in that  report.  There have been no  material  developments  in such legal
proceedings, except as set forth below.

     The Company is or has been a party in a number of lawsuits or  proceedings,
including the following:

     Supervisory  Goodwill  Litigation.  On April 13,  2007,  Senior Judge Smith
("Judge  Smith") of the United  States  Court of Federal  Claims  (the "Court of
Claims"  or the  "Court")  issued  an  order  scheduling  pre-trial,  and  trial
deadlines  and dates,  including  scheduling a trial to commence on February 11,
2008.

     The Court order stated that pursuant to the status conference held on April
12, 2007, the Court  scheduled oral argument for November 2007 at the U.S. Court
of Federal Claims,  to decide whether the trial schedule below can be avoided by
summary judgment.  The parties were ordered to submit their respective positions
with regard to summary judgment, in writing, on or before October 31, 2007.

     The Court  scheduled  pre-trial and trial  deadlines and dates according to
the following schedule:  December 7, 2007 - Parties exchange exhibit and witness
lists;  December 21, 2007 - Plaintiffs  and FDIC-R file Appendix A  submissions;
January 21, 2008 - Defendant  files Appendix A submissions;  February 11, 2008 -
Trial to commence.

     The Court further scheduled a pretrial conference to be held on January 30,
2008, in U.S. Court of Federal Claims.

     Both the Court of Federal  Claims and the Court of appeals  for the Federal
Circuit have issued numerous  decisions in cases that involve claims against the
United  States  based upon its breach of its  contracts  with  savings  and loan
institutions  through its 1989 enactment of FIRREA.  In particular,  the Federal
Circuit  has issued  decisions  rejecting  Takings  Clause  claims  advanced  by
shareholders of failed thrifts. Castle v. United States, 301F.3d 1328 (Fed. Cir.
2002;  Bailey v. United  States,  341F.3d  1342 (Fed.  Cir.  2003)  petition for
certiorari which was filed January 26, 2004. In April 2004, the Company filed an
amicus brief in support of the petition for certiorari filed by Bailey.  In June
2004, the United States  Supreme Court denied the petition for certiorari  filed
by Bailey.  The Court of Claims opinions in the Company's case, as well as other
decisions in Winstar-related cases are publicly available on the Court of Claims
web site at www.cofc.uscourts.gov.  Decisions in other Winstar-related cases may
be  relevant  to  the  Company's   Supervisory  Goodwill  claims,  but  are  not
necessarily  indicative of the ultimate  outcome of the Company's  actions.  The
Company can give no assurances  regarding,  the commencement  date of a trial or
the ultimate outcome of the litigation.


<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 4 - Cash and Cash Equivalents

     Highly  liquid  investments,   consisting  principally  of  funds  held  in
short-term  money market  accounts with  original  maturities of less than three
months, are classified as cash equivalents.

Note 5 - Investment Securities

     Investment securities - held to maturity consist of U.S. Treasury Bills and
a U.S.  Treasury  Note  with  original  maturities  of one  year or less and are
carried at amortized  cost based upon the  Company's  intent and ability to hold
these investments to maturity.

     Investment  securities  - available  for sale,  consist of  investments  in
equity  securities  held for an indefinite  period and are carried at fair value
with net unrealized gains and losses recorded  directly in a separate  component
of stockholders' equity.



<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>

Investment securities consist of the following:
<S>                          <C>            <C>            <C>               <C>             <C>           <C>
                                             March 31, 2007                                 December 31, 2006
                             =======================================          ======================================
                                               Cost or                                        Cost or
                              Carrying       Amortized         Fair           Carrying      Amortized           Fair
(in thousands)                   Value            Cost        Value              Value           Cost          Value
                              ========      ==========      =======           ========      =========        ========
Held to Maturity:
U.S. Treasury Bills........  $  18,978        $ 18,978     $ 18,983          $  18,187       $ 18,187      $  18,196
U.S. Treasury Note.........     16,458          16,458       16,455             16,436         16,436         16,429
                             -----------     -----------   ---------         ---------       ---------     ----------
                                35,436          35,436       35,438             34,623         34,623         34,625
                             -----------     -----------   ---------         ---------       ---------     ----------
Available for Sale:
Equity Securities..........        802             664          802              1,417          1,279          1,417
                             -----------     -----------   ---------         ---------       ---------     ----------
                             $  36,238       $  36,100      $36,240          $  36,040       $ 35,902      $  36,042
                             =========       ===========   =========         =========       =========     ==========
</TABLE>
     The gross unrealized gains (losses) on investment securities,  at March 31,
2007 and December 31, 2006 consist of the following:

<TABLE>
<CAPTION>
<S>                                                                                          <C>           <C>

(in thousands)                                                                                 2007           2006
                                                                                              =======       ======
Held to Maturity:.
Gross unrealized gains..................................................................     $      5      $     9
                                                                                             ========      =======
Gross unrealized losses.................................................................     $     (3)     $    (7)
                                                                                             ========      =======
Available for Sale:
Gross unrealized gains..................................................................     $    138      $   138
                                                                                             ========      =======
Gross unrealized losses.................................................................     $      -      $     -
                                                                                             ========      =======
</TABLE>
     The realized gain on the sales of investment  securities available for sale
for the three months ended March 31, 2007 was as follows:
<TABLE>
<CAPTION>
<S>                                                                                          <C>
                                                                                            Three Months
(in thousands)                                                                                   2007
                                                                                            ============

Net sale proceeds.......................................................................     $      770
Cost basis..............................................................................           (614)
                                                                                             ------------
Realized gains..........................................................................     $      156
                                                                                             ============
</TABLE>
     No  investment  securities  were sold during the three month  period  ended
March 31, 2006.



<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 6 - Property Owned

     As of March 31, 2007,  the Company owns one commercial  office  building in
Greenwich,  Connecticut  that contains  approximately  14,500  square feet.  The
Company utilizes a small portion of the office space for its executive  offices,
with the remaining  square  footage  available for lease to  unaffiliated  third
parties.

     Although the portion of the building not being utilized by the Company is
currently  unoccupied and available for lease,  based on the Company's  analysis
including but not limited to current market rents in the area,  leasing  values,
and comparable  property sales,  the Company believes the property's fair market
value exceeds the property's current carrying value; and, therefore the carrying
value of the property as of March 31, 2007, has not been impaired.

     Depreciation  expense is recorded on a  straight-line  basis over 39 years.
The  building  and   improvements  are  carried  at  cost,  net  of  accumulated
depreciation of $296,000 and $283,000,  at March 31, 2007 and December 31, 2006,
respectively.

     Rental income for the three months ended March 31, 2006, is attributable to
operating  leases  with  tenants.  Minimum  lease  rentals are  recognized  on a
straight-line  basis over the terms of the  leases.  The  cumulative  difference
between lease revenue  recognized  under this method and the  contractual  lease
payment  terms,  if any, is recorded as deferred rent  receivable or payable and
would be  included  in other  assets or other  liabilities  on the  Consolidated
Balance Sheets.  Revenue from tenant  reimbursement of common area  maintenance,
utilities and other  operating  expenses are  recognized  pursuant to the tenant
lease agreements when earned and due from tenants.

     Property  operating and maintenance  expenses for common area  maintenance,
utilities,  real estate taxes and other reimbursable  operating expenses are not
reduced  by  amounts  reimbursable  by  tenants  pursuant  to  applicable  lease
agreements.

Note 7 - Income Taxes

     The Company and its 100% owned  domestic  subsidiaries  file a consolidated
federal income tax return.  The Company recognizes both the current and deferred
tax consequences of all transactions  that have been recognized in the financial
statements,  calculated  based on the provisions of enacted tax laws,  including
the tax rates in effect for current and future  years.  Net  deferred tax assets
are  recognized  immediately  when a more likely than not criterion is met; that
is, greater than 50%  probability  exists that the tax benefits will actually be
realized  sometime in the future.  The Company has calculated a net deferred tax
asset of $31  million  as of March  31,  2007 and  December  31,  2006,  arising
primarily from net operating loss ("NOL") carryforwards, alternative minimum tax
("AMT")  credits (not including the anticipated tax effects of NOL's expected to
be generated  from the  Company's tax basis in Carteret  Savings Bank,  F.A. and
subsidiaries  ("Carteret"),  resulting from the election decision, as more fully
described below). A valuation  allowance has been established for the entire net
deferred tax asset as management,  at the current time, has no basis to conclude
that realization is more likely than not.

     As a  result  of the  Office  of  Thrift  Supervision's  December  4,  1992
placement of Carteret in  receivership,  under the  management of the Resolution
Trust Corporation  ("RTC")/Federal  Deposit Insurance Corporation ("FDIC"),  and
then proposed Treasury Reg. ss.1.597-4(g),  the Company had previously filed its
1992 and subsequent federal income tax returns with Carteret  disaffiliated from
the Company's  consolidated  federal income tax return. Based upon the impact of
Treasury  Reg.  ss.1.597-4(g),  which was issued in final form on  December  20,
1995, a continuing review of the Company's tax basis in Carteret, and the impact
of prior year tax return  adjustments  on the Company's  1992 federal income tax
return as filed,  the Company decided not to make an election  pursuant to final
Treasury  Reg.   ss.1.597-4(g)  to  disaffiliate  Carteret  from  the  Company's
consolidated  federal  income tax return  effective  as of December 4, 1992 (the
"Election Decision").

     The Company has made numerous  requests to the RTC/FDIC for tax information
pertaining to Carteret and the resulting successor institution, Carteret Federal
Savings Bank ("Carteret  FSB");  however,  all of the information  still has not
been received. Based on the Company's Election Decision, as described above, and
the receipt of some of the requested information from the RTC/FDIC,  the Company
has  amended  its 1992  consolidated  federal  income tax return to include  the
federal  income tax  effects of Carteret  and  Carteret  FSB (the "1992  Amended
Return").  The  Company is still in the  process of  amending  its  consolidated
federal income tax returns for 1993 and subsequent years.



<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     The Company anticipates that, as a result of filing a consolidated  federal
income tax return with  Carteret FSB, a total of  approximately  $170 million of
tax NOL  carryforwards  will be  generated  from  the  Company's  tax  basis  in
Carteret/Carteret  FSB as tax losses are  incurred by Carteret FSB of which $158
million are still available for future use. Based on the Company's filing of the
1992  Amended  Return,  approximately  $56  million  of  NOL  carryforwards  are
generated  for  tax  year  1992  which  expire  in  2007,   with  the  remaining
approximately  $102 million of NOL  carryforwards  to be generated,  expiring no
earlier than 2008. These NOL  carryforwards  would be available to offset future
taxable income,  in addition to the NOL carryforwards as further detailed below.
The Company can give no assurances  with regard to the 1992 Amended  Return,  or
amended  returns for subsequent  years, or the final amount or expiration of NOL
carryforwards ultimately generated from the Company's tax basis in Carteret.

     In March 2000, the Company filed several carryback claims and amendments to
previously filed carryback claims with the IRS (the "Carryback  Claims") seeking
refunds from the IRS of  alternative  minimum tax and other federal income taxes
paid by the Company in prior years plus  applicable  IRS interest,  based on the
filing of the 1992 Amended Return.  In April 2003, IRS examiners issued a letter
to the Company  proposing to disallow the Carryback  Claims.  The Company sought
administrative review of the letter by protesting to the Appeals Division of the
IRS. In February  2005,  IRS Appeals  officials  completed  their  review of the
Carryback  Claims,  and disallowed  them.  The Company is currently  considering
whether to file suit for the tax refunds it seeks,  plus interest,  with respect
to the Carryback Claims. Even if the Company files suit, the Company can give no
assurances  as to the final  amounts of  refunds,  if any, or when they might be
received.

     Based upon the Company's  federal  income tax returns as filed from 1993 to
2005  (subject  to IRS  audit  adjustments),  excluding  the  NOL  carryforwards
utilized  in  2005,  and  excluding  the NOL  carryforwards  generated  from the
Company's tax basis in Carteret/Carteret  FSB, as noted above at March 31, 2007,
the  Company  has  NOL  carryforwards  aggregating  approximately  $30  million,
available  to  reduce  future  federal  taxable  income  which  expire if unused
beginning in 2009. The Company's federal income tax returns for years subsequent
to 1992 have not been reviewed by the IRS.

     The utilization of certain  carryforwards  is subject to limitations  under
U.S.  federal income tax laws. In addition,  the Company has  approximately  $21
million of AMT credit  carryforwards  ("AMT Credits"),  which are not subject to
expiration.  Based on the filing of the Carryback  Claims,  as further discussed
above,  the  Company is seeking to realize  approximately  $8 million of the $21
million of AMT Credits.



<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 8 - Comprehensive Income (Loss)

     Comprehensive  income  (loss) is  composed  of net income  (loss) and other
comprehensive  income  (loss)  which  includes  the change in  unrealized  gains
(losses)  on  investment  securities  available  for  sale  and  recognition  of
additional minimum pension liability, as follows:
<TABLE>
<CAPTION>
<S>                            <C>             <C>               <C>
                                               Three Months Ended
(in thousands)                                   March 31, 2007
                               ================================================
                               Minimum         Unrealized        Accumulated
                               Pension         Gains (Losses)    Other
                               Liability       on Investment     Comprehensive
                               Adjustment      Securities        Income (Loss)
                               =========       ===========       ============
Balance beginning of period..  $    (474)      $       138       $       (336)

Reclassification adjustment for
  gains realized in net loss.          -               (67)                (67)

Change during the period.....        284                67                 351
                               ---------       -----------       --------------
Balance end of period........  $    (190)      $       138       $         (52)
                               =========       ===========       ==============
</TABLE>
<TABLE>
<CAPTION>
<S>                            <C>             <C>               <C>
                                               Three Months Ended
(in thousands)                                   March 31, 2006
                               ================================================
                               Minimum         Unrealized        Accumulated
                               Pension         Gains (Losses)    Other
                               Liability       on Investment     Comprehensive
                               Adjustment      Securities        Income (Loss)
                               ==========      =============     =============

Balance beginning of period..  $  (1,326)      $       (69)      $      (1,395)

Change during the period.....          -               (89)                (89)
................................---------       -------------     ---------------
Balance end of period........  $  (1,326)      $      (158)      $      (1,484)
                               =========       =============       ============
</TABLE>


<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 9 - Stock-Based Compensation

     Under the  Company's  1993  Stock  Incentive  Plan (the "1993  Plan"),  the
Company may grant to officers and employees of the Company and its subsidiaries,
stock options ("Options"),  stock appreciation rights ("SARs"), restricted stock
awards ("Restricted Stock"), merit awards ("Merit Awards") and performance share
awards ("Performance  Shares"),  through May 28, 2008. An aggregate of 5,000,000
shares of the  Company's  Common Stock are reserved for issuance  under the 1993
Plan (upon the exercise of Options and Stock Appreciation Rights, upon awards of
Restricted  Stock  and  Performance  Shares);  however,  of  such  shares,  only
2,500,000 shares in the aggregate shall be available for issuance for Restricted
Stock  Awards and Merit  Awards.  Such shares shall be  authorized  but unissued
shares of Common  Stock.  As of March 31,  2007,  there  were  4,124,000  shares
available  for future stock option  grants.  Options may be granted as incentive
stock options  ("ISOs")  intended to qualify for  favorable tax treatment  under
Federal tax law or as nonqualified stock options ("NQSOs").  SARs may be granted
with  respect to any Options  granted  under the 1993 Plan and may be  exercised
only when the underlying Option is exercisable.  The 1993 Plan requires that the
exercise  price of all  Options  and SARs be equal to or  greater  than the fair
market value of the Company's  Common Stock on the date of grant of that Option.
The term of any ISO or  related  SAR  cannot  exceed  ten years from the date of
grant,  and the term of any NQSO cannot  exceed ten years and one month from the
date of  grant.  Subject  to the  terms  of the  1993  Plan  and any  additional
restrictions  imposed  at the  time  of  grant,  Options  and any  related  SARs
ordinarily will become exercisable  commencing one year after the date of grant.
Options granted  generally have a ten year  contractual  life and generally have
vesting  terms of two years from the date of grant.  In the case of a "Change of
Control" of the Company (as defined in the 1993 Plan),  Options granted pursuant
to the 1993 Plan may become fully exercisable as to all optioned shares from and
after the date of such Change in Control in the  discretion  of the Committee or
as  may  otherwise  be  provided  in  the  grantee's  Option  agreement.  Death,
retirement, or absence for disability will not result in the cancellation of any
Options.

     Effective  January 1, 2006, the Company adopted the fair value  recognition
provisions  of SFAS 123R,  using the modified  prospective  application  method.
Under this method,  stock-based  compensation expense for the three months ended
March  31,  2007 and March  31,  2006,  includes  compensation  expense  for all
stock-based  compensation  awards  granted  prior to,  but not yet  vested as of
January 1, 2006, based on the grant date fair value estimated in accordance with
the original provisions of SFAS 123.  Stock-based  compensation  expense for all
stock-based compensation awards granted after January 1, 2006, for which vesting
is based  solely on  employment  service,  will be based on the grant  date fair
value  estimated in accordance  with the  provisions  of SFAS 123R.  The Company
recognizes these compensation costs for only those shares expected to vest, on a
straight-line  basis over the requisite  service  period of the award,  which is
generally the option vesting term of two years.

     During  the three  months  ended  March 31,  2007 and March 31,  2006,  the
Company recorded compensation expense of $0 and $22,000, respectively,  relating
to unvested stock  options.  Compensation  expense  relating to stock options is
recorded  as a  reduction  to  additional  paid in capital in the  statement  of
stockholders' equity.

     The fair  value of each  option  award was  estimated  on the date of grant
using the  Black-Scholes-Merton  option valuation model  ("Black-Scholes")  that
uses the assumptions  noted in the following  table.  Expected  volatilities are
based  on  historical  volatility  of the  Company's  stock.  The  Company  uses
historical data to estimate option  exercises and employee  terminations  within
the valuation  model. The expected term of options granted is estimated based on
the  contractual  lives of option  grants,  option vesting period and historical
data and represents  the period of time that options  granted are expected to be
outstanding. The risk-free interest rate for periods within the contractual life
of the option is based on the U.S.  Treasury bond yield in effect at the time of
grant. No adjustments were made in 2007 or 2006 to the input assumptions for the
calculation of the fair value of stock options granted prior years.

     The  Black-Scholes  option  valuation  model  requires  the input of highly
subjective assumptions, including the expected life of the stock-based award and
stock price volatility. The assumptions noted herein represent management's best
estimates,   but  these  estimates   involve  inherent   uncertainties  and  the
application of management  judgment.  As a result, if other assumptions had been
used, our recorded  stock-based  compensation expense could have been materially
different from that depicted  herein.  In addition,  we are required to estimate
the  expected  forfeiture  rate and only  recognize  expense  for  those  shares
expected to vest. If our actual forfeiture rate is materially different from our
estimate, the share-based compensation expense could be materially different.



<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     The Company believes that the use of the Black-Scholes model meets the fair
value  measurement   objectives  of  SFAS  123R  and  reflects  all  substantive
characteristics  of the instruments  being valued. No stock options were granted
during the year to date period ending March 31, 2007 or March 31, 2006.  The per
share grant date  weighted  average  estimated  values of employee  stock option
grants under the 1993 Plan, as well as the  assumptions  used to calculate  such
values granted in January 2005, were are as follows:
<TABLE>
<CAPTION>
<S>                                                                               <C>
                                                                                        2005
                                                                                  -----------------
         Weighted average fair value at grant date..............................        $0.39
         Expected dividend yield................................................            0%
         Risk-free interest rate................................................         4.24%
         Expected volatility....................................................         0.44
         Expected life in years.................................................            6
</TABLE>
     The following  table reports stock option  activity  during the three month
period ended March 31, 2007:
<TABLE>
<CAPTION>
<S>                                                <C>            <C>        <C>
                                                                               Weighted
                                                                  Weighted      Average
                                                                   Average     Remaining
                                                   Number of      Exercise    Contractual
                                                    Shares          Price    Life (in years)
                                                   ---------      --------    ---------------
         Outstanding at January 1, 2007......      1,240,000       $ 1.01
         Expired.............................       (364,000)        1.19
                                                   ---------       ======
         Outstanding at March 31, 2007.......        876,000       $ 0.94          5.98
                                                   =========       ======          ====
         Exercisable at March 31, 2007.......        876,000       $ 0.94          5.98
                                                   =========       ======          ====
</TABLE>

     At March 31, 2007,  the exercise  price of stock  options  outstanding  and
exercisable was greater than the market price of the Company's stock; therefore,
no intrinsic value for stock options is reflected above.

The following table presents information regarding non-vested share activity
during the three month period ended March 31, 2007:
<TABLE>
<CAPTION>
<S>                                                <C>            <C>
                                                                  Weighted
                                                                   Average
                                                   Number of      Grant-Date
                                                    Shares        Fair Value
                                                   ---------      ----------
         Non-vested at January 1, 2007.......        204,000       $ 0.47
         Vested during period................       (204,000)        0.47
                                                   ---------       ======
         Non-vested at March 31, 2007........              -            -
                                                   =========       ======
</TABLE>

     The total fair value of shares  vested  during the three month period ended
March 31, 2007 and March 31, 2006, was $96,000 and $134,000, respectively. As of
March 31,  2007,  there  was no  unrecognized  compensation  costs  relating  to
non-vested share-based compensation arrangements for stock options granted under
the 1993 Plan.

     Options to purchase  876,000  shares of common  stock for the three  months
ended March 31, 2007, and 1,440,000  shares of common stock for the three months
ended March 31, 2006, were excluded from the computation of diluted earnings per
share because these options were antidilutive.



<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 10 - Pension and Savings Plans

     The Company  sponsors a non  tax-qualified  supplemental  retirement  plan,
initially  adopted by the  Company in 1985,  and as amended  and  restated  (the
"Supplemental  Plan"),  under  which only one current  executive  officer of the
Company is currently the sole participant.  The cost of the Supplemental Plan is
accrued but not funded.

     The liability for the  Supplemental  Plan, which is accrued but not funded,
increased  to  $16,517,000  at March 31, 2007 from  $16,282,000  at December 31,
2006. The Supplemental Plan liability  reflects the March 31, 2007 present value
of the  anticipated  May  31,  2007  lump-sum  payment  amount  of  $16,676,115,
utilizing a 5.75% discount rate factor.  The Supplemental  Plan liability can be
further affected by changes in discount rates,  mortality,  and experience which
could be different from those assumed.

     The  Personnel  Committee  of the Board of  Directors  of the Company  (the
"Personnel  Committee") reviewed the Supplemental Plan and the Company's related
liability,  including the  desirability of continuing to maintain and administer
the  Supplemental  Plan, the untying of Mr. Bianco's future  employment with the
Company  from the  timing  of his  Supplemental  Plan  benefit  payment(s),  the
Company's overall financial position, and the desirability of continued accruals
under the  Supplemental  Plan after Mr.  Bianco's  current  employment  contract
expires on May 31, 2007. In connection with this review, the Personnel Committee
considered various options, including whether or not to terminate and/or curtail
the Supplemental Plan. Mr. Bianco (the Company's  Chairman,  President and Chief
Executive  Officer,  and the former  President  and Chief  Executive  Officer of
Carteret  Savings  Bank,  FA), is the only  current  employee of the Company who
participates in the Supplemental Plan and his Supplemental Plan benefit is fully
vested.  For purposes of computing his accrued  benefit  under the  Supplemental
Plan,  Mr.  Bianco had 14.67 years of credited  service as of December 31, 2005,
and assuming  continued  employment  with the Company,  will have 16.08 years of
credited service upon the expiration of his current employment contract with the
Company on May 31, 2007. His accrual  percentage under the Supplemental  Plan is
4%, in effect from the time of his initial  employment with the Company,  and in
accordance with the Supplemental Plan (prior to the amendment  described below),
he had the  entitlement  to receive his  Supplemental  Plan  benefit in either a
lump-sum or an annuity upon termination of his employment with the Company.

     During March 2006, the Company entered into a new employment agreement with
Mr. Bianco to extend his employment  with the Company for an additional five (5)
years beyond May 31, 2007, until May 31, 2012 (the "2007 Employment Agreement").
As part of the 2007  Employment  Agreement terms (i) Mr. Bianco's annual rate of
base salary will not increase  from his current  rate of base salary  during the
first three years of the 2007  Employment  Agreement (the amount of Mr. Bianco's
base salary for the fourth and fifth years of the 2007 Employment Agreement term
to be determined by the Personnel Committee, in its sole discretion, although in
no event less than $625,000 per annum); (ii) Mr. Bianco's service accruals under
the  Supplemental  Plan will cease as of May 31, 2007;  (iii) Mr. Bianco's Final
Average  Earnings (as defined in the Supplemental  Plan) for  Supplemental  Plan
benefit calculation  purposes,  are capped as of December 31, 2004; and (iv) Mr.
Bianco's annual bonus  opportunity  will no longer be linked to recovery efforts
in connection with the Company's Supervisory Goodwill litigation. Instead, on or
about  May  31,  2007,  Mr.  Bianco  will  receive  a  lump-sum  payment  of his
Supplemental  Plan benefit of  $16,676,115,  which amount was  calculated on the
basis of a 5.75% discount rate, a "RP-2000"  projected to 2004 mortality  table,
and 16.08 years of credited service,  and the Company and Mr. Bianco have agreed
to a long term incentive bonus formula,  at varying  percentages ranging from 5%
to  10%,  or  more,  based  upon  recoveries  received  by the  Company  for its
investment in Carteret Savings Bank, through litigation or otherwise  (including
the  Company's  Supervisory  Goodwill  litigation).   The  anticipated  lump-sum
Supplemental  Plan benefit  payment to Mr.  Bianco is expected to be paid to him
from the Company's available financial resources.

     The  Supplemental  Plan has  been  amended  to  provide  for its  automatic
termination  immediately following the payment to Mr. Bianco of his Supplemental
Plan  lump-sum  benefit  on or  about  May 31,  2007.  In  accordance  with  the
accounting for the Supplemental Plan's scheduled termination on or about May 31,
2007,  in  accordance  with  GAAP,  the  ultimate   liability  relating  to  the
anticipated  termination  of  the  Supplemental  Plan  is not  reflected  in the
financial   statements  presented  herein,  as  all  conditions  for  the  final
termination  of the  Supplemental  Plan have not yet been met.  The Company will
continue to recognize an expense for the Supplemental  Plan and the Supplemental
Plan liability will increase through the date on which the Supplemental  Plan is
terminated.



<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     Based  on  the  2007   Employment   Agreement  and  the  amendment  of  the
Supplemental  Plan, each as described above, the Company revised the calculation
of the Supplemental  Plan liability to reflect a 5.75% discount rate as of April
1, 2006, as set forth in the  agreements.  The  Supplemental  Plan liability was
increased by an expense of $235,000 in the first  quarter  ended March 31, 2007,
to reflect  the March 31, 2007  present  value of the  anticipated  May 31, 2007
lump-sum  payment  amount of  $16,676,115,  utilizing  the 5.75%  discount  rate
factor.

     An  additional  Supplemental  Plan  expense of $284,000 was recorded in the
three month  period  ended March 31, 2007,  to amortize  the  Supplemental  Plan
minimum pension liability adjustment.  The minimum pension liability adjustment,
which is included as a component  of  stockholders'  equity  within  accumulated
other comprehensive loss in the Company's consolidated financial statements, was
$1,326,000 as of March 31, 2006, and is being amortized on a straight line basis
over the 14-month period ending May 31, 2007 as an additional  Supplemental Plan
expense of $284,000 per quarter. This resulted in an aggregate Supplemental Plan
expense of  $519,000  for the first  quarter  period  ended March 31,  2007,  as
compared to $464,000 for the first  quarter  period  ended March 31,  2006.  The
amortization  of the  additional  minimum  pension  liability of $284,000 in the
three month  period ended March 31,  2007,  although  recorded as a component of
compensation expense in the Company's consolidated statement of operations, does
not result in a  decrease  in total  stockholders'  equity,  as its  recognition
results in an increase in one component and a corresponding  decrease in another
component  of  stockholders'  equity.  See Part I - Item 1 - Note 8,  herein for
further information.

     The Company  sponsors the AmBase 401(k) Savings Plan (the "Savings  Plan"),
which is a "Section 401(k) Plan" within the meaning of the Internal Revenue Code
of 1986, as amended (the "Code"). The Savings Plan permits eligible employees to
make  contributions  of up to 15% of  compensation,  which  are  matched  by the
Company at a percentage  determined  annually.  The employer  match is currently
100% of the amount the employee elects to defer.  Employee  contributions to the
Savings Plan are invested at the employee's  discretion,  in various  investment
funds. The Company's  matching  contributions are invested in the same manner as
the compensation reduction  contributions.  The Company's matching contributions
to the Savings Plan, charged to expense, were $50,000 for the three months ended
March 31, 2007 and  $52,000  for the three  months  ended  March 31,  2006.  All
contributions are subject to maximum limitations contained in the Code.

Note 11 - Common Stock Repurchase Plan

     In January 2002, the Company  announced a common stock repurchase plan (the
"Repurchase  Plan") which allows for the  repurchase by the Company for up to 10
million shares of its common stock in the open market.

     The Repurchase Plan is conditioned upon favorable  business  conditions and
acceptable prices for the common stock.  Purchases under the Repurchase Plan may
be made,  from  time to time,  in the  open  market,  through  block  trades  or
otherwise.  Depending on market  conditions and other factors,  purchases may be
commenced or suspended any time or from time to time without prior notice.
<TABLE>
<CAPTION>
<S>                                        <C>             <C>           <C>                   <C>
                                           (a) Total          (b)         (c) Total Number
                                           Number of         Average      Shares Purchased           (d) Maximum Number
                                              Shares       Price Paid    as Part of Publicly       Shares that may yet be
                                           Purchased        per Share      Announced Plans     Purchased under the Plan
                                           ---------    ---------------  -------------------  ---------------------------------
Beginning balance January 1, 2007.........         -           -               1,315,000               8,685,000
January 1, 2007 - January 31, 2007........         -           -               1,315,000               8,685,000
February 1, 2007 - February 28, 2007......         -           -               1,315,000               8,685,000
March 1, 2007 - March 31, 2007............         -           -               1,315,000               8,685,000
                                           --------
Total....................................         -
                                           ========
</TABLE>
     During April 2007,  the Company  repurchased an aggregate of 110,000 shares
of common stock from unaffiliated parties at a purchase price,  including broker
commissions, of $0.48 per share pursuant to the Company's Repurchase Plan.






<PAGE>
     Item 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS OF OPERATIONS

     This quarterly report may contain  "forward-looking  statements" within the
meaning of Section 27A of the  Securities  Act of 1933,  as amended (the "Act"),
and  Section  21E of the  Securities  Exchange  Act of  1934,  as  amended  (the
"Exchange  Act"),  or  make  oral  statements  that  constitute  forward-looking
statements. The Company intends such forward-looking statements to be covered by
the safe harbor  provisions  for  forward-looking  statements  contained  in the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
inherently subject to risks and uncertainties, many of which cannot be predicted
or  quantified.  The  forward-looking  statements  may relate to such matters as
anticipated  financial  performance,   future  revenues  or  earnings,  business
prospects,  projected  ventures,  anticipated  market  performance,  anticipated
litigation  results or the timing of pending  litigation,  and similar  matters.
When  used  in  this   Annual   Report,   the  words   "estimates,"   "expects,"
"anticipates,"  "believes,"  "plans," "intends" and variations of such words and
similar  expressions  are intended to identify  forward-looking  statements that
involve risks and uncertainties. The Private Securities Litigation Reform Act of
1995 provides a safe harbor for forward-looking  statements.  In order to comply
with the terms of the safe harbor,  the Company  cautions readers that a variety
of factors could cause the Company's  actual results to differ  materially  from
the  anticipated  results  or  other  expectations  expressed  in the  Company's
forward-looking  statements.  These risks and  uncertainties,  many of which are
beyond the Company's control,  include,  but are not limited to: (i) transaction
volume in the securities markets; (ii) the volatility of the securities markets;
(iii)  fluctuations  in interest  rates;  (iv) risks inherent in the real estate
business,  including,  but not limited to tenant defaults,  changes in occupancy
rates or real estate values; (v) changes in regulatory  requirements which could
affect the cost of doing  business;  (vi)  general  economic  conditions;  (vii)
changes  in the rate of  inflation  and the  related  impact  on the  securities
markets;  (viii)  changes in federal and state tax laws;  and (ix) risks arising
from  unfavorable  decisions  in our current  material  litigation  matters,  or
unfavorable  decisions in other  supervisory  goodwill cases.  These are not the
only risks that we face.  There may be additional risks that we do not presently
know of or that we currently  believe are immaterial which could also impair our
business and financial position.

     Undue reliance  should not be placed on these  forward-looking  statements,
which are  applicable  only as of the date  hereof.  The Company  undertakes  no
obligation  to revise or update  these  forward-looking  statements  to  reflect
events or circumstances that arise after the date of this quarterly report or to
reflect  the  occurrence  of  unanticipated  events.  Accordingly,  there  is no
assurance that the Company's expectations will be realized.

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations,  which follows,  should be read in conjunction with the consolidated
financial  statements and related notes, which are contained in Part I - Item 1,
herein and the Company's  Annual Report on Form 10-K for the year ended December
31, 2006.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's assets at March 31, 2007, aggregated  $41,037,000  consisting
principally of cash and cash equivalents of $2,336,000, investment securities of
$36,238,000  and  real  estate  owned of  $2,158,000.  At March  31,  2007,  the
Company's  liabilities  aggregated  $17,179,000.  Total stockholders  equity was
$23,858,000.

     The liability for the Company's non tax-qualified  supplemental  retirement
plan, initially adopted by the Company in 1985, and as amended and restated (the
"Supplemental Plan"), which is accrued but not funded,  increased to $16,517,000
at March 31, 2007 from $16,282,000 at December 31, 2006. The  Supplemental  Plan
liability  reflects the March 31, 2007 present value of the  anticipated May 31,
2007 lump-sum  payment  amount of  $16,676,115,  utilizing a 5.75% discount rate
factor.  The  Supplemental  Plan liability can be further affected by changes in
discount rates,  mortality,  and experience  which could be different from those
assumed.



<PAGE>
     The anticipated May 31, 2007 lump-sum  Supplemental Plan benefit payment to
Mr. Bianco is expected to be paid to him from the Company's  available financial
resources.  The Supplemental  Plan has been amended to provide for its automatic
termination  immediately following the payment to Mr. Bianco of his Supplemental
Plan  lump-sum  benefit  on or  about  May 31,  2007.  In  accordance  with  the
accounting for the Supplemental Plan's scheduled termination on or about May 31,
2007,  in  accordance  with  GAAP,  the  ultimate   liability  relating  to  the
anticipated  termination  of  the  Supplemental  Plan  is not  reflected  in the
financial   statements  presented  herein,  as  all  conditions  for  the  final
termination  of the  Supplemental  Plan have not yet been met.  The Company will
continue to recognize an expense for the Supplemental  Plan and the Supplemental
Plan liability will increase through the date on which the Supplemental  Plan is
terminated.

     For a further  discussion of the  Supplemental  Plan and Mr.  Bianco's 2007
Employment  Agreement,  see  Part  I -  Item  1  -  Note  10  to  the  Company's
consolidated financial statements.

     For the three  months  ended March 31,  2007,  cash of $197,000 was used by
operations, including the payment of prior year accruals and operating expenses,
partially offset by the receipt of interest income and investment earnings.  The
cash needs of the Company for the first three  months of 2007 were  satisfied by
the receipt of investment  earnings  received on investment  securities and cash
equivalents and the Company's current financial  resources.  Management believes
that the Company's capital  resources are sufficient to continue  operations for
2007.

     See  Part I - Item  1,  Note  10 to the  Company's  consolidated  financial
statements for information regarding the anticipated  Supplemental Plan lump-sum
benefit payment of $16,676,115 (to Mr. Bianco, the Company's Chairman, President
and Chief Executive Officer),  expected to be paid on or about May 31, 2007. The
anticipated  May 31, 2007  lump-sum  Supplemental  Plan  benefit  payment to Mr.
Bianco is  expected  to be paid to him from the  Company's  available  financial
resources.  The Supplemental  Plan has been amended to provide for its automatic
termination  immediately following the payment to Mr. Bianco of his Supplemental
Plan lump-sum benefit on or about May 31, 2007.

     Upon termination of the Supplemental Plan, the Company will no longer incur
an expense for the  Supplemental  Plan,  which is  included  as a  component  of
compensation   and  benefits  in  the  Company's   Consolidated   Statement  of
Operations,  included in Part I - Item I herein.  The Supplemental  Plan expense
was $519,000 for the three months ended May 31, 2007,  compared to $464,000 for
the three  months  ended March 31,  2006.  See Results of  Operations  below for
further information.

     Likewise,  the  Supplemental  Plan lump-sum benefit payment to Mr. Bianco
will decrease in the Company's cash  equivalents  and  investment  securities by
approximately  $16.7  million,  which will result in a decrease in the  interest
income earned by the Company  beginning in June 2007. See Item 3 - Quantitative
and Qualitative  Disclosure  about Market Risk for  information  concerning the
Company's  weighted average  interest rate yield on investment  securities as of
March 31, 2007.

     For the three months ended March 31, 2006,  cash of $1,744,000  was used by
continuing  operations,  including  the  payment  of  prior  year  accruals  and
operating  expenses  partially offset by the receipt of rental income,  interest
income, and investment earnings.

     The Company continues to evaluate a number of possible  acquisitions and is
engaged  in  the  management  of  its  assets  and  liabilities,  including  the
contingent  assets.  Discussions  and  negotiations  are ongoing with respect to
certain of these  matters.  The  Company  intends to  aggressively  contest  all
litigation and contingencies, as well as pursue all sources for contributions to
settlements.  For a  discussion  of  lawsuits  and  proceedings,  including  the
Supervisory Goodwill litigation see Part I - Item 1 - Note 3.

     As of March 31, 2007,  the Company owns one commercial  office  building in
Greenwich,  Connecticut.  The  building is  approximately  14,500  square  feet;
approximately  3,500  square feet is  utilized by the Company for its  executive
offices; the remaining space is currently unoccupied and available for lease.

     There are no material  commitments for capital expenditures as of March 31,
2007.  See  Part I - Item 1 - Note 10 to the  Company's  consolidated  financial
statements for information regarding the anticipated  Supplemental Plan lump-sum
benefit payment of $16,676,115 (to Mr. Bianco, the Company's Chairman, President
and Chief  Executive  Officer),  expected  to be paid on or about May 31,  2007.
Inflation  has had no material  impact on the  business  and  operations  of the
Company.

     No shares of common  stock were  purchased  by the Company  pursuant to the
Company's  Repurchase  Plan during the three month  period ended March 31, 2007.
See Part I - Item 1 - Note 11 for further  details with regard to the  Company's
common stock repurchase plan.


<PAGE>
     Results of  Operations  for the Three  Months  ended March 31, 2007 vs. the
Three Months Ended March 31, 2006

     The  Company's  main source of operating  revenue has recently  been rental
income earned on real estate owned. The Company also earns non-operating revenue
consisting  principally of investment earnings on investment securities and cash
equivalents.  The Company's management expects that operating cash needs for the
remainder  of 2007  will be met  principally  by the  receipt  of  non-operating
revenue  consisting of investment  earnings on  investment  securities  and cash
equivalents, and the Company's current financial resources.

     As indicated  herein,  rental income from real estate owned  represents the
Company's  remaining  property  and was $ - for the three months ended March 31,
2007,  as compared to $41,000 for the three  months  ended March 31,  2006.  The
decreased amount in the 2007 period,  compared to $41,000 in the 2006 period, is
due to unoccupied office space currently  available for lease,  versus occupancy
in the same 2006 period.

     Although the portion of the  building not being  utilized by the Company is
currently  unoccupied and available for lease, based on the Company's  analysis,
including but not limited to current market rents in the area,  leasing  values,
and comparable  property sales,  the Company believes the property's fair market
value exceeds the property's current carrying value; and, therefore the carrying
value of the property as of March 31, 2007 has not been impaired.

     Compensation and benefits increased to $1,132,000 in the three months ended
March 31, 2007,  compared with  $1,088,000 in same 2006 period.  The increase is
primarily due to an increased Supplemental Retirement Plan ("Supplemental Plan")
expense in the three  month  period  ended  March 31,  2007 versus the same 2006
period as further described below, offset slightly by a lower level of incentive
compensation accruals in 2007 versus 2006.

     The Supplemental Plan expense was $519,000 for the three months ended March
31, 2007,  compared to $464,000 for the three months ended March 31, 2006.  Upon
termination of the Supplemental  Plan, as further  described in Part I - Item 1,
Note 10 to the Company's consolidated  financial statement,  the Company will no
longer incur an expense for the Supplemental Plan.

     The increased Supplemental Plan expense is due to recognition of an expense
for the three  month  period  ended  March 31,  2007 of  $235,000,  recorded  to
increase the  Supplemental  Plan liability to reflect the March 31, 2007 present
value of the  anticipated  May 31, 2007 lump-sum  payment amount of $16,676,115,
utilizing a 5.75%  discount rate factor based on the 2007  Employment  Agreement
between the Company and Mr. Bianco and the amendment of the Supplemental Plan as
further  described  in Part I - Item 1 - Note 10 to the  Company's  consolidated
financial statements.

     An  additional  Supplemental  Plan  expense of $284,000 was recorded in the
three  months ended March 31, 2007,  to amortize the  Supplemental  Plan minimum
pension liability adjustment. The minimum pension liability adjustment, which is
included  as a  component  of  stockholders'  equity  within  accumulated  other
comprehensive  loss in the  Company's  consolidated  financial  statements,  was
$1,326,000 as of March 31, 2006, and is being amortized on a straight line basis
over the 14-month  from April 1, 2006,  through May 31, 2007,  as an  additional
Supplemental Plan expense of $284,000 per quarter. This resulted in an aggregate
Supplemental Plan expense of $519,000 for the three month period ended March 31,
2007,  as compared to $464,000  for the three month period ended March 31, 2006.
The amortization of the additional  minimum pension liability of $284,000 in the
three month  period ended March 31,  2007,  although  recorded as a component of
compensation expense in the Company's consolidated statement of operations, does
not result in a  decrease  in total  stockholders'  equity,  as its  recognition
results in an increase in one component and a corresponding  decrease in another
component of stockholders'  equity.  See Part I - Item 1 - Notes 8 and 10 to the
Company's consolidated financial statements for further information.
<PAGE>

     No stock option was  recorded in the three months ended March 31, 2007,  as
all  previously  granted  outstanding  options  vested as of January 2, 2007. No
stock  option  awards have been granted  since  January  2005.  During the three
months  ended March 31,  2006,  the  Company  recorded  $22,000 of  compensation
expense  relating to stock  options in  accordance  with SFAS 123R.  For further
information  regarding the Company's adoption of SFAS 123R and its impact on the
Company's  financial  statements,  see Part I - Item 1 - Note 9 to the Company's
consolidated financial statements.

     Professional  and outside  services were $464,000 in the three months ended
March 31, 2007, and $718,000 in the respective 2006 period.  The decrease in the
2007 three month period as compared to the respective 2006 period is principally
the  result of a lower  level of legal and  professional  fees  relating  to the
Supervisory  Goodwill  litigation in 2007 versus 2006. The 2006 period  included
the  Supervisory  Goodwill  litigation  expenses  incurred  in  connection  with
discovery in 2006,  relating to the Show Cause hearing and, to a lesser  extent,
other corporate professional fees.

     Property  operating  and  maintenance  expenses  were $23,000 for the three
months ended March 31, 2007,  compared to $31,000 in the respective 2006 period.
The decreased expenses in 2007 compared to the 2006 period are due to a decrease
in the  level of  repairs  and  maintenance  expenses.  Property  operating  and
maintenance expenses have not been reduced by tenant reimbursements.

     Interest  income in the three  months  ended March 31,  2007,  increased to
$465,000  from  $420,000  in  the  respective  2006  period.   The  increase  is
principally  due to an increased  yield on  investments  due to rising  interest
rates. The Supplemental  Plan lump-sum benefit payment to Mr. Bianco, as further
described in Part I - Item 1, Note 10 to the  Company's  consolidated  financial
statements,  will  decrease in the Company's  cash  equivalents  and  investment
securities by  approximately  $16.7 million,  which will result in a decrease in
the interest  income earned by the Company  beginning in June 2007. See Item 3 -
Quantitative  and  Qualitative  Disclosure  about  Market  Risk for  information
concerning  the  Company's  weighted  average  interest rate yield on investment
securities as of March 31, 2007.

     For the three  months  ended  March 31,  2007,  realized  gains on sales of
investment securities available for sale were $156,000. No investment securities
available for sale were sold in the three months ended March 31, 2006.

     The income tax provisions of $25,000 and $33,000 for the three months ended
March 31, 2007 and March 31, 2006,  respectively are primarily attributable to a
provision for a minimum tax on capital to the state of Connecticut. Income taxes
applicable to operating  income (loss) are generally  determined by applying the
estimated  effective  annual  income tax rates to pretax  income  (loss) for the
year-to-date interim period.  Income taxes applicable to unusual or infrequently
occurring items are provided in the period in which such items occur.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company holds  short-term  investments  as a source of  liquidity.  The
Company's  interest rate sensitive  investments with maturity dates of less than
one year consist of the following:
<TABLE>
<CAPTION>
<S>                                                 <C>                 <C>        <C>                  <C>
                                                        March 31, 2007                 December 31, 2006
                                                   ==========================      ===========================
                                                    Carrying            Fair       Carrying             Fair
                                                      Value             Value        Value              Value
(in thousands)                                     ----------           -----      --------             ------

U.S. Treasury Bills and Notes...............       $  35,436          $ 35,438     $ 34,623           $ 34,625
                                                   ==========         ========     =========          ========
Weighted average interest rate..............            4.67%                          4.65%
                                                   ==========                      =========
</TABLE>
     The Company's  current  policy is to minimize the interest rate risk of its
short-term  investments by investing in U.S.  Treasury Bills with  maturities of
less than one year. There were no significant changes in market exposures or the
manner in which interest rate risk is managed during the period.

     The Company's  portfolio of equity  securities has exposure to equity price
risk. Equity price risk is defined as the potential loss in fair value resulting
from an adverse  change in prices.  The equity  securities  are primarily in the
form of preferred stock in utility companies. The equity securities are held for
an indefinite period and are carried at fair value with net unrealized gains and
losses recorded directly in a separate component of stockholder's equity.
<PAGE>
     The table below  summarizes  the Company's  equity price risk and shows the
effect of a hypothetical 20% increase and 20% decrease in market price as of the
dates indicated  below. The selected  hypothetical  changes are for illustrative
purposes  only and are not  necessarily  indicative  of the  best or worse  case
scenarios.
<TABLE>
<CAPTION>
<S>                                                                    <C>              <C>
(In thousands)                                                            March 31,     December 31,
                                                                            2007             2006
Equity Securities Available for Sale:                                  ==========       ==========

Fair value........................................................            $802           $1,417
                                                                             =====            =====
Hypothetical fair value at a 20% increase in market price.........            $962           $1,700
                                                                             =====            =====
Hypothetical fair value at a 20% decrease in market price.........            $642           $1,134
                                                                             =====            =====
</TABLE>

Item 4.  CONTROLS AND PROCEDURES

     Our  disclosure  controls  and  procedures  include our  controls and other
procedures to ensure that information required to be disclosed in this and other
reports under the  Securities  Exchange Act of 1934,  as amended the  ("Exchange
Act"),  is accumulated and  communicated to our management,  including our Chief
Executive  Officer  and  Chief  Financial  Officer  to  allow  timely  decisions
regarding  required  disclosure and to ensure that such information is recorded,
processed, summarized and reported within the time periods.

     Our Chief Executive  Officer and Chief Financial  Officer have conducted an
evaluation of our disclosure controls and procedures as of March 31, 2007. Based
upon this evaluation,  our Chief Executive  Officer and Chief Financial  Officer
have concluded  that our disclosure  controls and procedures (as defined in Rule
13a-15(e)  promulgated  under the Exchange  Act) are  sufficiently  effective to
ensure that the  information  required to be  disclosed  by us in the reports we
file (under the  Exchange  Act) are  sufficiently  effective  to ensure that the
information  required  to be  disclosed  by us in the  reports we file under the
Exchange Act is recorded,  processed,  summarized  and  reported  with  adequate
timeliness.

     There have been no changes  during the most  recent  fiscal  quarter in our
internal  control over  financial  reporting as defined in Rule 13a-15(f) of the
Exchange  Act  that  have  materially  affected,  or are  reasonably  likely  to
materially affect our internal control over financial reporting.

STOCKHOLDER INQUIRIES

     Stockholder inquiries,  including requests for the following: (i) change of
address;  (ii) replacement of lost stock  certificates;  (iii) Common Stock name
registration changes; (iv) Quarterly Reports on Form 10-Q; (v) Annual Reports on
Form 10-K; (vi) proxy material;  and (vii) information regarding stock holdings,
should be directed to:

         American Stock Transfer and Trust Company
         59 Maiden Lane
         New York, NY  10038
         Attention:  Shareholder Services
         (800) 937-5449 or (718) 921-8200 Ext. 6820

     Copies of Quarterly  reports on Form 10-Q,  Annual Reports on Form 10-K and
Proxy  Statements can also be obtained  directly from the Company free of charge
by sending a request to the Company by mail as follows:

         AmBase Corporation
         100 Putnam Green, 3rd Floor
         Greenwich, CT  06830
         Attn:  Shareholder Services

     In addition,  the Company's public reports,  including Quarterly Reports on
Form 10-Q,  Annual  Reports on Form 10-K and Proxy  Statements,  can be obtained
through the Securities and Exchange  Commission EDGAR Database over the Internet
at  www.sec.gov.  Materials  filed  with the SEC may also be read or  copied  by
visiting the SEC's Public Reference Room, 450 Fifth Street, NW,  Washington,  DC
20549. Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
<PAGE>
PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

     For a discussion of the Company's legal proceedings, including a discussion
of the Company's Supervisory Goodwill litigation, see Part I - Item 1 - Note 3 -
Legal Proceedings.

Item 1A. RISK FACTORS

     There have been no material changes from risk factors previously  disclosed
in the Company's Annual Report on Form 10-K for the year ended December 31, 2006
in response to Item 1A to Part I of Form 10-K.

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3.  DEFAULTS UPON SENIOR SECURITIES

None.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

Item 5.  OTHER INFORMATION

None.

Item 6.  EXHIBITS

      Exhibit 31.1 Rule 13a-14(a) Certification of Chief Executive Officer
      Exhibit 31.2 Rule 13a-14(a) Certification of Chief Financial Officer
      Exhibit 32.1 Section 1350 Certification of Chief Executive Officer
      Exhibit 32.2 Section 1350 Certification of Chief Financial Officer





<PAGE>


SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

AMBASE CORPORATION



/s/  John P. Ferrara
--------------------
By    JOHN P. FERRARA
      Vice President, Chief Financial Officer and Controller
      (Duly Authorized Officer and Principal Financial and
      Accounting Officer)


Date:  May 15, 2007