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, 2008

                                       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, a non-accelerated  filer, or a smaller reporting company.
See definition of "large accelerated filer",  "accelerated  filer", and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer __ Accelerated Filer __ Non-Accelerated Filer X
Smaller Reporting Company  __

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

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

     At  May  9,  2008,  there  were  43,599,264   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, 2008
<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.................................................14

Item 3.      Quantitative and Qualitative Disclosures About Market Risk..........................................17

Item 4T.     Controls and Procedures.............................................................................17

PART II - OTHER INFORMATION

Item 1.      Legal Proceedings...................................................................................18

Item 1A.     Risk Factors........................................................................................18

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds.........................................18

Item 3.      Defaults Upon Senior Securities.....................................................................18

Item 4.      Submission of Matters to a Vote of Security Holders.................................................18

Item 5.      Other Information...................................................................................18

Item 6.      Exhibits............................................................................................18

Signatures   ....................................................................................................19
</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,
                                                                                           2008               2007
                                                                                       ========          =========
Assets:
Cash and cash equivalents.........................................................    $   2,355         $    2,894
Investment securities:
    Held to maturity (market value $15,405 and $16,329, respectively).............       15,373             16,313
                                                                                       --------           --------
Total investment securities.......................................................       15,373             16,313
                                                                                       --------           --------
Real estate owned:
  Land............................................................................          554                554
  Buildings and improvements......................................................        1,900              1,900
                                                                                       --------           --------
                                                                                          2,454              2,454
Accumulated depreciation..........................................................         (347)              (334)
                                                                                       --------           --------
Real estate owned, net............................................................        2,107              2,120
Other assets......................................................................           35                232
                                                                                       --------           --------
Total assets......................................................................    $  19,870         $   21,559
                                                                                       ========           ========
Liabilities and Stockholders' Equity:
Liabilities:
Accounts payable and accrued liabilities..........................................    $   1,675         $      962
Other liabilities.................................................................           16                 19
                                                                                       --------           --------
Total liabilities.................................................................        1,691                981
                                                                                       --------           --------
Commitments and contingencies (Note 3)............................................            -                  -

Stockholders' equity:
Common stock ($0.01 par value, 200,000,000 authorized, 46,410,007 issued and
   43,669,664 outstanding in 2008 and 43,858,664 outstanding in 2007).............          464                464
Additional paid-in capital........................................................      548,044            548,044
Accumulated deficit...............................................................     (528,375)          (526,057)
Treasury stock, at cost - 2,740,443 and 2,551,343 shares, respectively............       (1,954)            (1,873)
                                                                                       --------           --------
Total stockholders' equity........................................................       18,179             20,578
                                                                                       --------           --------
Total liabilities and stockholders' equity........................................    $  19,870         $   21,559
                                                                                       ========           ========
</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
                                                                             2008            2007
                                                                             ====            ====

Operating expenses:
Compensation and benefits.........................................       $     500        $   1,132
Professional and outside services.................................           1,867              464
Property operating and maintenance................................              22               23
Depreciation  ....................................................              13               13
Insurance.........................................................              18               19
Other operating...................................................              51               38
                                                                         ---------        ---------
                                                                             2,471            1,689
                                                                         ---------        ---------
Operating loss....................................................          (2,471)          (1,689)
                                                                         ---------        ---------
Interest income...................................................             153              465
Realized gains on sales of investment securities..................               -              156
                                                                         ---------        ---------
Loss before income taxes..........................................          (2,318)          (1,068)
Income tax expense................................................               -              (25)
                                                                         ---------        ---------
Net loss..........................................................       $  (2,318)       $  (1,093)
                                                                         =========        =========
Net loss per common share:
Net loss - basic..................................................       $   (0.05)        $  (0.02)
                                                                         =========         ========
Net loss - assuming dilution......................................       $   (0.05)        $  (0.02)
                                                                         =========         ========
Weighted average common shares outstanding:
Basic.............................................................          43,729           44,969
                                                                         =========         ========
Diluted...........................................................          43,729           44,969
                                                                         =========         ========
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>

                       AMBASE CORPORATION AND SUBSIDIARIES
                 Consolidated Statements of Comprehensive Loss
                           Three Months Ended March 31
                                   (Unaudited)
                                 (in thousands)

<S>                                                                      <C>         <C>
                                                                             Three Months
                                                                         2008        2007
                                                                        ======      =====

Net loss............................................................   $(2,318)    $(1,093)

Amortization of minimum pension liability adjustment................         -         284
                                                                       -------     -------
Comprehensive loss..................................................   $(2,318)    $  (809)
                                                                       =======     =======
</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>
                                                                                           2008          2007
Operating activities:                                                                      ====          ====
Net loss..............................................................................  $(2,318)      $ (1,093)
Adjustments to reconcile net loss to net cash used by
       operating activities:
Depreciation and amortization.........................................................       13             13
Accretion of discount - investment securities.........................................        -            (22)
Realized gains on investment securities available for sale............................        -           (156)
Amortization of minimum pension liability adjustment..................................        -            284
Changes in other assets and liabilities:
    Accrued interest receivable.......................................................        7          (133)
    Other assets......................................................................      197          1,211
    Accounts payable and accrued liabilities..........................................      713           (536)
    Other liabilities.................................................................       (3)           234
    Other, net........................................................................       (1)             1
                                                                                        -------       --------
Net cash used by operating activities.................................................   (1,392)          (197)
                                                                                        -------       --------
Investing activities:
Maturities of investment securities - held to maturity................................    7,100         14,112
Purchases of investment securities - held to maturity.................................   (6,166)       (14,950)
Sales of investment securities - available for sale...................................        -            770
                                                                                        -------       --------
Net cash provided (used) by investing activities......................................      934            (68)
                                                                                        -------       --------
Financing activities:
Common stock purchased for treasury...................................................      (81)             -
                                                                                        -------       --------
Net cash used by financing activities.................................................      (81)             -
                                                                                        -------       --------
Net change in cash and cash equivalents...............................................     (539)          (265)
Cash and cash equivalents at beginning of period......................................    2,894          2,601
                                                                                        -------       --------
Cash and cash equivalents at end of period............................................  $ 2,355       $  2,336
                                                                                        =======       ========
Supplemental cash flow disclosures:
Income taxes paid.....................................................................  $     1       $     32
                                                                                        =======       ========
</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 and Basis of Presentation

     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  presentation  of  the  Company's
financial  position,  results of operations and cash flows.  Results for interim
periods are not  necessarily  indicative  of results for the full year.  Certain
reclassifications  may 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, 2007.

     The  Company's  assets  currently   consist  primarily  of  cash  and  cash
equivalents, investment securities, and real estate owned. The Company currently
earns  non-operating  revenue  principally  consisting of 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  believes that  operating cash needs for the next
twelve months will be met  principally  by the receipt of earnings on investment
securities and cash equivalents, and the Company's current financial resources.

Note 2 - Recent Accounting Pronouncements

     In September 2006, the Financial  Accounting Standard Board ("FASB") issued
SFAS No. 157, "Fair Value  Measurements"  ("SFAS No. 157"). SFAS No. 157 defines
fair values,  establishes  a framework  for  measuring  fair value of assets and
liabilities,  and  expands  disclosure  requirements  regarding  the fair  value
measurement.  SFAS 157 does not expand the use of fair value measurements.  This
statement,  as issued,  is effective for financial  statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.  FASB Staff  Position (FSP) FAS No. 157-2 was issued in February 2008 and
deferred the effective date of SFAS 157 for nonfinancial  assets and liabilities
to fiscal years beginning after November 2008. As such, the Company adopted SFAS
157 as of January 1, 2008 for financial  assets and liabilities  only. There was
no significant  effect on the Company's  financial  statements.  As of March 31,
2008, the Company's financial assets include held to maturity  investments.  The
Company determines fair value for such investments based on quoted market prices
in active  markets  (i.e.  Level 1 as defined  under SFAS 157).  The  Company is
continuing to carry such  investments  at amortized  cost.  The Company does not
believe that the adoption of SFAS 157 to  non-financial  assets and  liabilities
will significantly effect its financial statements.

     In February  2007,  the FASB issued  SFAS 159,  "The Fair Value  Option for
Financial  Assets and Liabilities - including an amendment of FASB Statement No.
115" ("SFAS 159").  SFAS 159 expands the use of fair value  accounting  but does
not affect existing standards which requires assets or liabilities to be carried
at fair value.  The objective of SFAS 159 is to improve  financial  reporting by
providing  companies  with the  opportunity  to mitigate  volatility in reported
earnings caused by measuring related assets and liabilities  differently without
having to apply complex hedge accounting  provisions.  Under SFAS 159, a company
may elect to use fair  value to measure  eligible  items at  specified  election
dates and report  unrealized  gains and losses on items for which the fair value
option has been elected in earnings at each subsequent  reporting date. Eligible
items include,  but are limited to, accounts  receivable,  accounts payable, and
issued debt. If elected,  SFAS 159 is effective for fiscal years beginning after
November 15, 2007. The Company has not elected to measure any additional  assets
or liabilities  at fair value that are not already  measured at fair value under
existing standards.

     In December  2007,  the FASB issued SFAS No. 141 (revised  2007,  "Business
Combinations"   ("SFAS  141(R)").   SFAS  141(R)   establishes   principles  and
requirements  for how an  acquirer  recognizes  and  measures  in its  financial
statements the  identifiable  assets  acquired,  the  liabilities  assumed,  any
non-controlling  interest in the acquiree and the goodwill acquired. SFAS 141(R)
also establishes disclosure  requirements to enable the evaluation of the nature
and financial effects of the business combination.  SFAS 141(R) is effective for
fiscal years  beginning  after  December  15,  2008.  The Company will apply the
provisions of SFAS 141(R) to any acquisition after January 1, 2009.
<PAGE>
                      AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     In  December  2007,  the  FASB  issued  SFAS  No.  160,   "Accounting   for
Noncontrolling Interests" ("SFAS 160"). SFAS 160 clarifies the classification of
noncontrolling   interests  in   consolidated   balance   sheets  and  reporting
transactions   between  the  reporting  entity  and  holders  of  noncontrolling
interests. Under this statement,  noncontrolling interests are considered equity
and  reported  as  an  element  of  consolidated  equity.  Further,  net  income
encompasses all consolidated  subsidiaries with disclosure of the attribution of
net income between  controlling and  noncontrolling  interests.  SFAS No. 160 is
effective  prospectively  for fiscal years  beginning  after  December 15, 2008.
Currently,  there  are no  noncontrolling  interest  in  any  of  the  Company's
subsidiaries.

Note 3 - Legal Proceedings

     The  information  contained  in  Item 8 - Note 10 in the  Company's  Annual
Report on Form 10-K for the year ended  December 31, 2007,  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  - Trial  testimony  of fact  and  expert
witnesses for the Company, the DOJ, and the FDIC was completed on April 4, 2008.
At trial, fact witness and expert witness testimony was presented by AmBase, and
by the  United  States  Government  represented  by the  Department  of  Justice
("DOJ").   In   addition,   the   FDIC-Receiver   (purporting   to   act   as  a
plaintiff-intervener  in its  capacity  as  successor-in-interest  to  Carteret)
participated  in the trial and the  examination  of  witnesses.  The Company put
forth  various  theories of damages,  including  claims for the  recovery of the
value of Carteret as of the date of the breach or the date of judgment,  as well
as for the recovery of certain  so-called  "wounded  bank"  damages  incurred by
Carteret as a result of the breach.  The DOJ  responded  with various  theories,
including,  among  other  things,  that  Carteret  would  have  failed  even  if
Supervisory  Goodwill  was  counted.  The  DOJ  also  challenged  the  Company's
calculations  of the value of Carteret  and the damages  theories  and  evidence
underlying the Company's "wounded bank" claims. The FDIC has essentially adopted
the Company's  damages claims  evidence,  but has continued to argue (along with
DOJ) that the FDIC-Receiver is entitled to recover on these claims.

     The Government and the FDIC-Receiver  claim that the Carteret  receivership
deficit consists of the FDIC's  subrogated  claim against the thrift,  interest,
taxes, and administrative  expenses charged by the FDIC-Receiver to the Carteret
receivership  estate.  Because  the  receivership  deficit  continues  to accrue
interest,  it grows on a daily basis.  The  FDIC-Receiver  alleges  that,  as of
December 31, 2007,  the  receivership  deficit was  approximately  $321 million,
which  included  the FDIC's  subrogated  claim and other  claims of $24 million,
interest  on the  subrogated  claim  in  excess  of  $180  million,  (which  the
FDIC-Receiver  claims is owed to the FDIC from the Carteret  receivership),  and
estimated  federal  income  taxes  including  interest  and  penalty  thereon of
approximately $114 million, which the FDIC has described as contingent. At trial
the FDIC-Receiver did not present any expert testimony  articulating a theory of
damages  for  Carteret.  While  the  failure  to seek  damages  in excess of the
receivership deficit has previously been held to be cause for dismissal for lack
of standing, the FDIC-Receiver has stated that it believes it still has standing
in the Company's case based upon the damage theories the Company presented.  The
Company believes that the FDIC-Receiver's receivership deficit claims are wrong,
but this must be decided by the courts.

     After the completion of trial testimony, the Court held a status conference
in April 2008 pursuant to which the Court issued a post trial  scheduling  order
providing  for the filing of post trial briefs and proposed  findings of fact by
the  Company,  and DOJ and the  FDIC.  Such  post-trial  briefing  is  currently
scheduled to be concluded by September 2008. The Court has not yet established a
date for the parties'  presentation of closing  arguments.  The Company believes
any  decision  rendered  by Judge  Smith  on  damages,  as well as his  decision
relating to his  authority  to review and  consider  the validity of the alleged
receivership  deficit,  will likely be appealed to the U.S. Court of Appeals for
the Federal Circuit.


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

     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. See e.g., Castle v. United States,  301F.3d 1328
(Fed.  Cir. 2002);  Bailey v. United States,  341 F. 3d 1342 (Fed. Cir 2003). In
June 2004,  the United States  Supreme Court denied the petition for  certiorari
filed by Bailey.  The Court of Federal Claims  decisions and certain  filings in
the Company's  case, as well as other  decisions in Winstar  related cases,  are
publicly   available   on  the   Court   of   Federal   Claims   web   site   at
www.cofc.uscourts.gov. In addition, decisions in Winstar related cases that have
been issued by the U.S.  Court of  Appeals,  the court that hears  appeals  from
decisions  by the  Court of  Claims,  may be found on that  court's  web site at
www.cafc.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.

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
with  original  maturities  of over three  months which are carried at amortized
cost based upon the Company's  intent and ability to hold these  investments  to
maturity.

     Investment securities consist of the following:
<TABLE>
<CAPTION>
<S>                           <C>            <C>            <C>              <C>            <C>            <C>
                                             March 31, 2008                                 December 31, 2007
                             ======================================          =======================================
                                               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........  $  15,373       $  15,373     $ 15,405          $  16,313       $ 16,313      $  16,329
                             ---------       ---------     --------          ---------       --------      ---------
                             $  15,373       $  15,373     $ 15,405          $  16,313       $ 16,313      $  16,329
                             =========       =========     ========          =========       ========      =========
</TABLE>
     The gross unrealized gains (losses) on investment securities,  at March 31,
2008 and December 31, 2007 consist of the following:
<TABLE>
<CAPTION>
<S>                                                                                           <C>           <C>
(in thousands)                                                                                 2008          2007
                                                                                              ======        ======
Held to Maturity:
Gross unrealized gains..................................................................      $   32        $   17
                                                                                              ======        ======
Gross unrealized losses.................................................................      $    -        $   (1)
                                                                                              ======        ======
</TABLE>

     Realized gains on the sales of investment securities available for sale for
the three months ended March 31 as follows:

<TABLE>
<CAPTION>
<S>                                                                                              <C>
(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, 2008.
<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 6 - Property Owned

     The Company owns one commercial  office building in Greenwich,  Connecticut
that  contains   approximately   14,500  square  feet.   The  Company   utilizes
approximately  3,500 square feet for its executive offices;  the remaining space
is currently unoccupied and available for lease.

     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, 2008, has not been impaired.

     Depreciation  expense for buildings is calculated on a straight-line  basis
over 39 years. Tenant improvements,  if any, would be typically depreciated over
the lesser of the remaining life of the tenants'  lease or the estimated  useful
lives of the  improvements.  The building and  improvements are carried at cost,
net of accumulated  depreciation of $347,000 and $334,000, at March 31, 2008 and
December 31, 2007, respectively.

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 $32 million as of
March 31, 2008 and December 31, 2007,  arising primarily from net operating loss
("NOL")  carryforwards,  alternative  minimum tax ("AMT") credits (not including
the anticipated tax effects of NOL's which could 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.

     There were no  unrecognized  tax benefits at December 31, 2007 or March 31,
2008.  Further,  no significant  changes in unrecognized income tax benefits are
currently  expected  to occur  over the next  year.  Interest  and/or  penalties
related to under payments of income taxes,  if applicable,  would be included in
interest  expense  and  operating  expenses,   respectively.   The  accompanying
financial  statements  do not include any amounts for any such  interest  and/or
penalties.  The Company's federal income tax returns for the years subsequent to
1992 have not been reviewed by the IRS or state  authorities and the Company has
not been notified of any potential tax audits by any federal, state or local tax
authorities.  As such,  the  Company  believes  the statute of  limitations  for
federal and state purposes are generally closed for tax years prior to 2004.

     Based upon the Company's  federal  income tax returns as filed from 1993 to
2006 (subject to IRS audit adjustments),  excluding all effects of the inclusion
of  Carteret/Carteret  FSB from  December 4, 1992 forward as noted above,  as of
March 31, 2008, the Company has NOL carryforwards  aggregating approximately $33
million,  available  to reduce  future  federal  taxable  income which expire if
unused beginning in 2009.

     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
below,  the  Company is seeking to realize  approximately  $8 million of the $21
million of AMT Credits.

     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").



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

     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.  The Company believes, as a result of remaining consolidated with
Carteret FSB for federal  income tax return  purposes,  that the  Company's  tax
basis in  Carteret/Carteret  FSB can be  converted  into  NOL's  which  could be
available  to  carryforward/carryback  into  various  federal  income tax return
years.  However;  since all of the  Carteret  FSB tax  information  has not been
received the Company is unable to determine with certainty, the amount of or the
years  in  which  any   NOL's  may   ultimately   be   generated;   if  the  NOL
carryforwards/carrybacks  will be  utilized in prior  federal  income tax return
years; or the final expiration dates of any of the NOL  carryforwards/carrybacks
ultimately generated.

     Based on information  received to date, and prior to the recognition of the
1992 tax losses  expected to be generated as a result of amending the  Company's
1992  federal  income  tax  return,  as further  described  below,  the  Company
estimated  that as of December  1992 it initially  had a remaining  tax basis in
Carteret/Carteret FSB of approximately $158 million.

     Based on the Company's Election Decision,  described above, and the receipt
of some of the requested information from the RTC/FDIC,  the Company amended its
1992  consolidated  federal  income tax return to include the federal income tax
effects of Carteret and Carteret FSB, (the "1992  Amended  Return").  As part of
the 1992  Amended  Return,  approximately  $56  million,  (of the  initial  $158
million),  of  Carteret/Carteret  FSB tax basis is expected to be converted into
NOL  carryforwards  in tax year 1992 and will have expired in 2007,  unless they
are  absorbed  in earlier  years  based on  inclusion  of  certain  items in the
consolidated  group.  The  Company  is still in the  process  of  reviewing  its
consolidated federal income tax returns for 1993 and subsequent years.

     The  Carteret/Carteret  FSB  tax  basis,  of  approximately  $102  million,
remaining after  recognition of the 1992 Amended  Return,  may be converted into
NOL   carryforwards/carrybacks   as  additional  tax  losses  are  generated  by
Carteret/Carteret  FSB and may be carried  back or carried  forward to other tax
years;  utilized in other tax years; or could begin to expire in 2008 based upon
the year any NOL's are ultimately generated.  The Company can give no assurances
with regard to the 1992 Amended Return,  subsequent  year returns,  or the final
amount or expiration of NOL  carryforwards/carrybacks  ultimately generated,  if
any, from the Company's tax basis in Carteret/Carteret FSB.

     Any  NOL's   ultimately   generated   from  the   Company's  tax  basis  in
Carteret/Carteret FSB, would be in addition to the NOL  carryforwards/carrybacks
generated based on the Company's federal income tax returns as previously filed,
as further detailed above.

     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. On April 29, 2008, the Company filed suit
in the U.S.  District Court for the District of Connecticut  for the tax refunds
it seeks, plus interest,  with respect to the Carryback Claims.  The Company can
give no  assurances  as to the final  amounts of  refunds,  if any, or when they
might be received as a result of this tax refund suit.



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

     The FDIC has previously  filed a federal income tax return for Carteret FSB
for 1995 (as well as other years),  which  indicates that Carteret FSB allegedly
could owe a 1995 federal  income tax liability of $32 million,  which  including
interest and penalty thereon,  could be in excess of $110 million.  The FDIC has
stated to the United States Court of Federal Claims ("Court of Claims") that the
tax amounts are only estimates and are highly  contingent.  Based on proceedings
in other  Supervisory  Goodwill  cases,  it is possible  that the IRS may try to
collect the alleged  Carteret  FSB federal  income  taxes from the  Carteret FSB
receivership.

     The Company  believes the Carteret FSB federal  income tax returns filed by
the FDIC were  improperly  filed and are neither  accurate nor valid. As part of
the Supervisory  Goodwill legal proceedings,  the Company presented to the Court
of Claims  various  arguments to support the position that no federal income tax
would be owed as a result of the Carteret FSB  receivership  operations  for tax
year 1995,  or any other tax year;  however,  the  Department of Justice and the
FDIC have  stated to the Court of Claims  that they do not  believe the Court of
Claims has jurisdiction  over that issue. The Supervisory  Goodwill  proceedings
remain pending in the Court of Claims.

     Based on the  information  received to date,  if the correct  Carteret  FSB
federal  income tax results were included with the  Company's  originally  filed
federal income tax returns,  the Company based upon  consultation with its legal
and tax advisors  believes that no additional  material federal income tax would
be owed by the Company for tax year 1995 (or any other tax year).  This analysis
included  among other items,  a review of the  Carteret  FSB federal  income tax
returns as prepared by the FDIC and the correction of errors originally reported
therein, the proper application of federal NOL carryforwards and carrybacks, and
the adherence to provisions  contained in the Internal Revenue Code, as amended.
The Company;  however,  can give no assurances of the final amounts,  if any, of
federal income taxes owed by the Carteret FSB  receivership or by the Company as
a result of the Carteret FSB receivership operations.

     The Company is  continuing  to try to resolve  these matters as part of the
Supervisory Goodwill legal process and is also continuing to review the Carteret
FSB  federal  income tax returns  and the  results of their  inclusion  with the
Company's  federal income tax returns as previously  filed.  The Company is also
pursuing the Carryback Claims,  as further described above,  which could have an
impact  on  the  analysis  of  the  prior  year  tax  information.  For  further
information on the Supervisory Goodwill legal proceedings, see Note 3 herein.

     The  discussion of the Carteret FSB federal  income tax results is intended
to provide  details as to the potential  interrelationship  of the Carteret FSB
federal income tax returns with the Company's  federal income tax positions.  It
is not a reflection of any federal  income tax liability of the Company  arising
from the Carteret receivership operations.

Note 8 - Comprehensive Income (Loss)

     Comprehensive  income  (loss) for the three months ended March 31, 2007 was
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>



<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. The Board of Directors and
Personnel  Committee  have  approved an amendment to the 1993 Plan to extend the
termination  date for the period  during which  awards may be granted  under the
1993 Plan for an additional 10 years to May 28, 2018 from May 28, 2008,  subject
to the  approval  by a  majority  vote  of  the  Company's  stockholders  at the
Company's  Annual  Meeting  of  stockholders  scheduled  for  May 16,  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, 2008,
there were 4,134,000  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  of  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.

     No stock based compensation  expense was recorded in the three months ended
March 31, 2008 or March 31, 2007, as all previously granted options vested as of
January 2, 2007.  No stock option  awards have been granted  since January 2005.



<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 have been
granted since January 2005.

     The following  table reports stock option  activity  during the three month
period ended March 31, 2008:
<TABLE>
<CAPTION>
<S>                                                   <C>                 <C>            <C>
                                                                                          Weighted
                                                                          Weighted        Average
                                                                          Average         Remaining
                                                      Number of           Exercise       Contractual
                                                       Shares              Price         Life (in years)
                                                      ---------           --------       ---------------
         Outstanding at January 1, 2008......          876,000              $0.93
         Expired.............................          (10,000)              3.65
                                                      ---------           ========
         Outstanding at March 31, 2008.......          866,000              $0.90             5.04
                                                      =========           =========           ====
         Exercisable at March 31, 2008.......          866,000              $0.90             5.04
                                                      =========           =========           ====
</TABLE>
     At March 31, 2008,  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 included herein.

     There were no  outstanding  option  shares  vesting  during the three month
period ended March 31, 2008.  The total fair value of shares  vested  during the
three month  period ended March 31,  2007,  was  $96,000.  As of March 31, 2008,
there was no  remaining  unamortized  compensation  cost  related to  non-vested
share-based  compensation  arrangements for stock options granted under the 1993
Plan.

     Options to purchase  866,000  shares of common  stock for the three  months
ended March 31,  2008,  and 876,000  shares of common stock for the three months
ended March 31, 2007, were excluded from the computation of diluted earnings per
share because these options were antidilutive.

Note 10 - Pension and Savings Plans

     The  Company   previously   sponsored  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 was the sole  participant.  The cost of the  Supplemental
Plan was accrued but not funded.

     In  accordance  with an amendment to the  Supplemental  Plan, as previously
adopted  in March  2006,  the  liability  for the  Supplemental  Plan was  fully
satisfied on May 31, 2007, by the lump-sum  benefit  payment of $16,676,115  (to
Mr. Bianco, the Company's Chairman,  President and Chief Executive Officer), and
immediately  thereafter,  the Supplemental Plan  automatically  terminated.  The
lump-sum Supplemental Plan benefit payment was paid from the Company's available
financial resources. There was no Supplemental Plan expense for the three months
ended March 31, 2008,  compared to $519,000 for the three months ended March 31,
2007. As a result of the  termination  of the  Supplemental  Plan, as of June 1,
2007,  no further  Supplemental  Plan expense will be recognized by the Company.
See the  Company's  Annual  Report on Form 10-K for the year ended  December 31,
2007, Item 8, Note 7 for further information.


<PAGE>

                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

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, 2008.........                                     2,424,855               7,575,145
January 1, 2008 - January 31, 2008........   189,100          $0.43            2,613,955               7,386,045
February 1, 2008 - February 28, 2008......         -           -               2,613,955               7,386,045
March 1, 2008 - March 31, 2008............         -           -               2,613,955               7,386,045
                                            -------
Total....................................   189,100
                                            =======
</TABLE>
<PAGE>
FORWARD LOOKING STATEMENTS

     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  Quarterly  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, 2007

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

BUSINESS OVERVIEW

     AmBase is a holding company which, through a wholly-owned subsidiary,  owns
a commercial office building in Greenwich,  Connecticut.  The Company previously
owned an insurance company and a savings bank.

     In February  1991,  the  Company  sold its  ownership  interest in The Home
Insurance  Company and its subsidiaries.  On December 4, 1992,  Carteret Savings
Bank,  FA  ("Carteret")  was  placed  in  receivership  by the  Office of Thrift
Supervision ("OTS").

     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  associated  with its legal
claims,  as described in Part I - 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.



<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     The Company's assets at March 31, 2008, aggregated  $19,870,000  consisting
principally of cash and cash equivalents of $2,355,000, investment securities of
$15,373,000  and  real  estate  owned of  $2,107,000.  At March  31,  2008,  the
Company's  liabilities  aggregated  $1,691,000.  Total  stockholders  equity was
$18,179,000.

     For the three months ended March 31, 2008,  cash of $1,392,000  was used by
operations,  primarily  due to the  payment of legal  expenses  relating  to the
Supervisory  Goodwill  trial and to a lesser  extent  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 three
months of 2008 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 the next twelve months.

     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  rental  income,  interest  income,  and
investment earnings. The cash needs of the Company for the first three months of
2007 were  satisfied by the  Company's  financial  resources  and the receipt 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 associated with its legal claims. 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, 2008,  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.

     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, 2008, has not been impaired.

     There are no material  commitments for capital expenditures as of March 31,
2008. Inflation has had no material impact on the business and operations of the
Company.

     Pursuant to the Company's  common stock  repurchase  plan (the  "Repurchase
Plan"),  during the three months ended March 31, 2008,  the Company  repurchased
for  approximately  $81,000 an aggregate of 189,100  shares of common stock from
unaffiliated  parties  at  various  prices.  See  Part I - Item 1 - Note  11 for
further details with regard to the Repurchase Plan.

     Results of  Operations  for the Three  Months  ended March 31, 2008 vs. the
Three Months Ended March 31, 2007

     The Company currently earns non-operating revenue consisting principally of
investment earnings on investment securities and cash equivalents. The Company's
management believes that operating cash needs for the next twelve months will be
met principally by the receipt of investment  earnings on investment  securities
and  cash  equivalents  and  the  Company's  current  financial  resources.  The
Company's main source of revenue in 2007 was non-operating revenue consisting of
investment earnings.

     No rental  income  from real estate  owned was earned for the three  months
ended March 31, 2008 or for the three months ended March 31, 2007


<PAGE>
     Compensation  and benefits  decreased to $500,000 in the three months ended
March 31, 2008,  compared with  $1,132,000 in the  respective  2007 period.  The
decrease is primarily due to a decrease in the Supplemental  Plan expense in the
three month period ended March 31, 2008,  as a result of the  Supplemental  Plan
termination  as of May 31,  2007,  versus  the  same  2007  periods  as  further
described below and a lower level of incentive compensation accruals in the 2008
period versus the same 2007 period.

     There was no Supplemental Plan expense for the three months ended March 31,
2008,  compared to $519,000  for the three  months  ended March 31,  2007.  As a
result of the  termination  of the  Supplemental  Plan,  as of June 1, 2007,  no
further Supplemental Plan expense will be recognized by the Company.

     The  Supplemental  Plan  expense  reflects  recognition  of an  expense  of
$235,000 for the three month  period ended March 31, 2007,  recorded to increase
the  Supplemental  Plan  liability  to the  present  value  of the 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.

     An  additional  Supplemental  Plan  expense of $284,000 in the three months
ended March 31, 2007,  was recorded to amortize  the  Supplemental  Plan minimum
pension liability adjustment.  The minimum pension liability  adjustment,  which
was 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 was amortized on a straight line basis over
the 14-month  period from April 1, 2006,  through May 31, 2007, as an additional
Supplemental  Plan  expense of $284,000  per quarter.  The  amortization  of the
additional minimum pension liability in the 2007 period,  although recorded as a
component of  compensation  expense in the Company's  consolidated  statement of
operations,  did 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.

     No stock based compensation  expense was recorded in the three month period
ended March 31, 2008 or 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.

     Professional  and outside  services  increased to  $1,867,000  in the three
months ended March 31, 2008, compared to $464,000 in the respective 2007 period.
The increase in the 2008 three month period as compared to the  respective  2007
period is  principally  the result of a higher  level of legal and  professional
fees relating to the  Supervisory  Goodwill  litigation in 2008 versus 2007. The
Supervisory  Goodwill  litigation  expenses for the 2008 period include expenses
relating to the  preparation  for the trial and actual trial  expenses  incurred
during February and March 2008. The Supervisory  Goodwill litigation expenses in
the 2007 period  included  expenses  incurred in connection  with  discovery and
preparation  expert  reports and  deposition  of the  Company's  and  government
witnesses.

     Interest  income in the three  months  ended March 31,  2008,  decreased to
$153,000  from  $465,000  in  the  respective  2007  period.   The  decrease  is
principally due to a lower level of cash  equivalents and investment  securities
as a result of the Supplemental Plan lump-sum benefit payment to Mr. Bianco. The
payment  decreased the Company's cash  equivalents and investment  securities by
approximately  $16.7  million,  resulting in a decrease in the  interest  income
earned by the Company  beginning in June 2007; the decreased  interest income is
also due to a decreased  investment  yield in the period  ending March 31, 2008,
compared  with  the  respective  2007  period.  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, 2008.

     For the three  months  ended  March 31,  2007,  realized  gains on sales of
investment securities available for sale were $156,000.

     The Company  recognized  no income tax provision for the three months ended
March 31,  2008,  as compared  with $25,000 for the three months ended March 31,
2007.  The income tax provision is 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.


<PAGE>
     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, 2008               December 31, 2007
                                                   ========================       =========================
                                                   Carrying            Fair       Carrying             Fair
                                                      Value           Value          Value            Value
(in thousands)                                     --------          ------       --------           ------

U.S. Treasury Bills and Notes...............        $15,373          $15,405      $16,313           $16,329
                                                    =======          =======      ========          =======

Weighted average interest rate..............           2.88%                         4.77%
                                                    =======                       ========
</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 held no portfolio of equity  securities as of March 31, 2008 or
December 31, 2007.

     Item 4T. 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, 2008. 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 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.



<PAGE>
     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.

     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, 2007
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 14, 2008