U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

   [X]    Quarterly report under Section 13 or 15(d) of the Securities
            Exchange Act of 1934

              For the quarterly period ended   March 31, 2007
                                               --------------

   [ ]    Transition report under Section 13 or 15(d) of the Exchange Act

              For the transition period from __________  to  ___________


                    Commission File Number:   1-10526
                                            -----------


                           UNITED-GUARDIAN, INC.
-------------------------------------------------------------------------
         (Exact name of registrant as specified in its charter)


          Delaware                                11-1719724
-------------------------------      ------------------------------------
(State or other jurisdiction of      (I.R.S. Employer Identification No.)
 incorporation or organization)


                230 Marcus Boulevard, Hauppauge, New York 11788
-------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (631) 273-0900

-------------------------------------------------------------------------
                         (Registrant's telephone number)

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



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

                                                                Yes [X]  No [ ]




                             Cover Page 1 of 2 Pages

<page>

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

                                                                Yes [ ]  No [X]



         APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                         DURING THE PRECEDING FIVE YEARS

     Indicate  by check mark  whether the  registrant  filed all  documents  and
reports  required  to be filed by Section  12, 13 or 15(d) of the  Exchange  Act
after the distribution of securities under a plan confirmed by a court.

                                                                Yes [ ]  No [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date:

                        4,942,539 shares of common stock,
                           par value $.10 per share,
                               (as of May 1, 2007)

     Transitional Small Business Disclosure Format (Check one): Yes [ ]  No [X]































                             Cover Page 2 of 2 Pages

<page>
                              UNITED-GUARDIAN, INC.

                                      INDEX

                                                                        Page No.
                                                                       ---------
Part I.  FINANCIAL INFORMATION

   Item 1 - Financial Statements

              Consolidated Statements of Income -  Three Months
                Ended March 31, 2007 and 2006 (unaudited)...............     2

              Consolidated Balance Sheets -
                March 31,2007 (unaudited) and December 31, 2006.........   3-4

              Consolidated Statements of Cash Flows - Three Months
                ended March 31, 2007 and 2006 (unaudited)...............     5

              Consolidated Notes to (unaudited) Financial Statements....  6-12

   Item 2 - Management's Discussion and Analysis of Financial
              Condition and Results of Operations....................... 12-16

   Item 3 - Controls and Procedures.....................................    16

Part II. OTHER INFORMATION

   Item 1 - Legal Proceedings...........................................    17

   Item 2 - Changes in Securities and Use of Proceeds...................    17

   Item 3 - Defaults Upon Senior Securities.............................    17

   Item 4 - Submission of Matters to a Vote of Security Holders.........    17

   Item 5 - Other Information...........................................    17

   Item 6 - Exhibits and Reports On Form 8-K............................    17

Signatures..............................................................    17



















                                        1
<page>
                          Part I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

                              UNITED-GUARDIAN, INC.
                        CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)


                                                         THREE MONTHS ENDED
                                                               MARCH 31,
                                                          2007          2006
                                                         ------        ------
Revenue:
  Net sales                                           $ 4,227,426   $ 2,864,797
                                                       ----------    ----------
Costs and expenses:
  Cost of sales                                         1,813,026     1,352,611
  Operating expenses                                      730,206       641,124
                                                       ----------    ----------
                                                        2,543,232     1,993,735
                                                       ----------    ----------
      Income from operations                            1,684,194       871,062


Other income (expense):
  Investment income                                       125,393        80,423
  Other                                                       (42)         -
                                                         ---------    ----------
      Income before income taxes                        1,809,545       951,485

Provision for income taxes                                649,500       329,500
                                                        ---------     ---------
      Net income                                      $ 1,160,045   $   621,985
                                                        =========     =========
Earnings per common share
   (basic and diluted)                                $       .23   $       .13
                                                        =========     =========
Weighted average shares - basic                         4,942,289     4,940,183
                                                        =========     =========
Weighted average shares - diluted                       4,944,876     4,944,311
                                                        =========     =========















                 See notes to consolidated financial statements

                                        2
<page>
                              UNITED-GUARDIAN, INC.
                           CONSOLIDATED BALANCE SHEETS

                                              MARCH 31,         DECEMBER 31,
                                                2007               2006
                                            ------------       -------------
              ASSETS                         (UNAUDITED)         (AUDITED)
Current assets:
     Cash and cash equivalents           $   3,523,510      $    3,027,486
     Temporary investments                     534,681             527,825
     Marketable securities                   7,424,101           7,346,653
     Accounts receivable, net of
       allowance for doubtful accounts
       of 47,000 at March 31, 2007
       and December 31,2006,
       respectively                          2,060,327           1,421,788
     Inventories (net)                       1,331,777           1,923,068
     Prepaid expenses and other
        current assets                         265,300             165,288
     Deferred income taxes                     524,661             534,761
                                           -----------         -----------
              Total current assets          15,664,357          14,946,869
                                           -----------         -----------

Property, plant and equipment:
     Land                                       69,000              69,000
     Factory equipment and fixtures          3,156,761           3,119,797
     Building and improvements               2,161,419           2,161,418
     Waste disposal plant                      133,532             133,532
                                           -----------         -----------
                                             5,520,712           5,483,747
       Less: Accumulated depreciation        4,682,598           4,634,954
                                           -----------         -----------
                                               838,114             848,793
                                           -----------         -----------

Other assets                                   148,430             148,430
                                           -----------         -----------
                                        $   16,650,901      $   15,944,092
                                           ===========         ===========


















                 See notes to consolidated financial statements

                                        3
<page>
                              UNITED-GUARDIAN, INC.
                           CONSOLIDATED BALANCE SHEETS

                                             MARCH 31,         DECEMBER 31,
                                               2007                2006
                                          ---------------      ------------
                                            (UNAUDITED)         (AUDITED)
LIABILITIES AND
STOCKHOLDERS' EQUITY

Current liabilities:
   Dividends payable                       $     -             $1,087,271
   Accounts payable                           169,039             222,625
   Current loans payable                        7,988               7,988
   Taxes payable                              594,929              65,438
   Accrued expenses                           724,782             579,913
                                            ---------           ---------
         Total current liabilities          1,496,738           1,963,235
                                            ---------           ---------


 Loans payable                                 12,648              14,645
 Accrued pension liability                    703,504             706,162
 Deferred income taxes                         34,360              34,360
                                            ---------           ---------
                                              750,512             755,167
                                            ---------           ---------

Stockholders' equity:
   Common stock $.10 par value,
      authorized, 10,000,000 shares;
      5,004,739 and 5,004,339 shares
      issued, respectively, and
      4,942,539 and 4,942,139
      shares outstanding, respectively        500,474             500,434
   Capital in excess of par value           3,793,263           3,792,478
   Accumulated other comprehensive loss      (549,039)           (566,130)
   Retained earnings                       11,018,583           9,858,538
   Treasury stock, at cost; 62,200 shares    (359,630)           (359,630)
                                            ---------           ---------
         Total stockholders' equity        14,403,651          13,225,690
                                            ---------           ---------
                                         $ 16,650,901        $ 15,944,092
                                           ==========          ==========














                 See notes to consolidated financial statements

                                        4
<page>
                                  UNITED-GUARDIAN, INC.
                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                       (UNAUDITED)
                                                           THREE MONTHS ENDED
                                                                MARCH 31,
                                                              ------------
                                                         2007             2006
                                                       -------          -------
Cash flows provided by operating activities:

  Net income                                       $ 1,160,045      $   621,985
  Adjustments to reconcile net earnings
    to net cash flows from operations:
      Depreciation and amortization                     47,644           48,336
      Increase in provision for doubtful accounts         -             (10,500)
      Increase (decrease) in cash resulting from
        changes in operating assets and liabilities:
         Accounts receivable                          (638,539)        (237,653)
         Inventories                                   591,291         (737,641)
         Prepaid expenses and other current
           and non-current assets                     (100,012)          38,615
         Accounts payable                              (53,586)         294,261
         Accrued pension costs                          (2,658)            -
         Accrued expenses and taxes payable            674,360          136,970
                                                    ----------       ----------
      Net cash provided by operating activities      1,678,545          154,373
                                                    ----------       ----------
Cash flows from investing activities:

   Acquisition of property, plant and equipment        (36,965)         (17,832)
   Net change in temporary investments                  (6,856)            (579)
   Purchase of marketable securities                   (50,257)         (33,000)
                                                    ----------       ----------
      Net cash used in investing
         activities                                    (94,078)         (51,411)
                                                    ----------       ----------
Cash flows from financing activities:

   Payment of long term debt                            (1,997)            -
   Proceeds from exercise of stock options                 825           14,040
   Dividends paid                                   (1,087,271)      (1,086,391)
                                                    ----------       ----------
     Net cash used in financing activities          (1,088,443)      (1,072,351)
                                                    ----------       ----------

Net increase (decrease) in cash and cash
      equivalents                                      496,024         (969,389)

Cash and cash equivalents at beginning of period     3,027,486        3,425,593
                                                    ----------       ----------
Cash and cash equivalents at end of period         $ 3,523,510      $ 2,456,204
                                                    ==========       ==========





                 See notes to consolidated financial statements

                                        5
<page>
                              UNITED-GUARDIAN, INC.
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

     1. In the opinion of the  Registrant  (also  referred to hereinafter as the
"Company"),   the  accompanying   unaudited  financial  statements  contain  all
adjustments  (consisting of only normal recurring accruals) necessary to present
fairly the financial position as of March 31, 2007 and the results of operations
for the three  months  ended March 31, 2007 and 2006.  The  accounting  policies
followed  by the  Company are set forth in the  Company's  financial  statements
included  in its Annual  Report on Form 10-KSB for the year ended  December  31,
2006.

     2. The results of operations  for the three months ended March 31, 2007 and
2006 are not  necessarily  indicative of the results to be expected for the full
year.

     3.  Stock-Based  Compensation:  At March  31,  2007,  the  Company  had two
stock-based  employee  compensation plans, which are more fully described in the
Company's  Annual  Report on Form 10-KSB for the year ended December 31, 2006.

     The Company  follows the  Financial  Accounting  Standards  Board  ("FASB")
Statement of Financial  Accounting  Standards  ("SFAS") No. 123R, which requires
that the fair value of all share-based  payments to employees,  including grants
of employee stock options, be recognized as expense in the financial statements.

     At March 31,  2007 the  Company  had  3,900  share-based  awards  that were
outstanding and exercisable, with a weighted-average exercise price of $3.42, an
aggregate  intrinsic value of $23,016,  and a weighted-average remaining term of
5.04 years.  All of those options were fully vested as of December 31, 2006. The
Company did not grant any options  during the three  months ended March 31, 2007
and 2006.

     As of March 31, 2007 there was no remaining unrecognized  compensation cost
related to the non-vested  share-based  compensation  arrangements granted under
the Company's plans.

     The Company did not record any compensation expense during the three months
ended March 31, 2007 and 2006 under the provisions of FAS 123R.

     The Company  received  proceeds of $825 and $14,040 from options  exercised
under all share-based payment  arrangements for the three months ended March 31,
2007 and 2006 respectively.

     4. Marketable Securities

                                                                     Unrealized
    March 31, 2007                        Cost        Fair Value     Gain/(Loss)
    ------------------                 ----------     ----------     -----------
     Available for Sale:
       U.S. Treasury and agencies      $3,001,026    $3,009,351     $     8,325
       Fixed income mutual funds        4,269,430     4,161,657        (107,773)
       Equity and other mutual funds      231,102       253,093          21,991
                                       ----------     -----------    -----------
                                       $7,501,558    $7,424,101     $   (77,457)
                                       ==========     ===========    ===========





                                        6
<page>
                                                                     Unrealized
    December 31, 2006                     Cost        Fair Value     Gain/(Loss)
    -----------------                  ----------     ----------     -----------
     Available for Sale:
       U.S. Treasury and agencies      $3,001,026     $3,003,399     $    2,373
       Fixed income mutual funds        4,220,084      4,091,754       (128,330)
       Equity and other mutual funds      230,192        251,500         21,308
                                       ----------     -----------    -----------
                                       $7,451,302     $7,346,653     $ (104,649)
                                       ==========     ===========    ===========

     5. Inventories - Net

     Inventories consist of the following:        March 31,     December 31,
                                                    2007            2006
                                                ----------      ----------
     Raw materials and work in process          $  275,659      $  313,319
     Finished products and fine chemicals        1,056,118       1,609,749
                                                ----------      ----------
                                                $1,331,777      $1,923,068
                                                ==========      ==========

     One of the Company's  pharmaceutical  products,  Renacidin  Irrigation,  is
currently  manufactured  for the Company by a third party that is in the process
of  relocating  Renacidin  production  to a new  manufacturing  facility,  which
requires the approval of the U.S. Food and Drug Administration ("FDA"). In order
to avoid running out of product while the application  was pending,  the Company
had  brought  in  sufficient  inventory  to last until at least the end of 2007,
which was when FDA approval had been  expected.  This resulted in an increase of
approximately  $1 million in the Company's  finished goods inventory at December
31,  2006 as  compared  with  December  2005.  The  Company  expects all of that
inventory to be sold prior to its expiration  date. On May 7, 2007, much earlier
than expected,  the Company received  notification that the FDA had approved its
application for the new manufacturing  facility,  and expects  production in the
new facility to begin late this year or early in 2008. The Company believes that
it will have  sufficient  inventory  to last until it receives  product from the
newly approved facility.

     As of March 31, 2007, the Company has reserved $109,000 for slow moving and
obsolete inventory.

     6. For purposes of the Statement of Cash Flows,  the Company  considers all
highly liquid  investments  purchased with a maturity of three months or less to
be cash equivalents.

     Cash  payments  for taxes were  $120,009  and $49,802 for the three  months
ended March 31, 2007 and 2006, respectively.  No payments were made for interest
during these periods.

     The Company  paid  dividends of  $1,087,271  and  $1,086,391  for the three
months ended March 31, 2007 and 2006, respectively.

     7. Income Taxes/FIN 48 Disclosure

     The  Company  adopted  the  provisions  of FIN 48 (see  "RECENT  ACCOUNTING
PRONOUNCEMENTS") on January 1, 2007. The implementation of FIN 48 did not result
in  any  adjustment  to the  Company's  beginning  tax  positions.  The  Company
continues to fully  recognize  its tax benefits  which are offset by a valuation


                                        7
<page>
allowance  to the extent that it is more likely than not that the  deferred  tax
assets  will not be  realized.  As of  January 1, 2007 and March 31,  2007,  the
Company did not have any unrecognized tax benefits.

     The Company files a consolidated  Federal income tax return in the U.S. The
Company and its subsidiaries file separate income tax returns in New York State.
The Internal  Revenue Service ("IRS") has examined the Company's U.S. income tax
returns through 2004. The Company is subject to examination by the IRS for years
2005 and 2006 and by New York State for years 2003 through 2006.

     The  Company's  policy is to  recognize  interest  and  penalties  in Other
Expense.


     8. Comprehensive Income (Loss)

            The components of comprehensive income (loss) are as follows:
<table>
<caption>
                                                          Three months ended March 31,
                                                              2007            2006
                                                             ------          ------
<S>                                                       <C>             <C>
Net income                                                $1,160,045      $  621,985
                                                          ----------      ----------
Other comprehensive income (loss):
   Unrealized gain (loss) on marketable
     securities during period .....................           27,191         (36,727)
                                                           ----------      ----------
   Other comprehensive income gain (loss) before tax          27 190         (36,727)

Income tax expense (benefit) related to other
   comprehensive income ...........................           10,100         (13,800)
                                                          ----------      ----------
Other comprehensive income (loss), net of tax......           17,091         (22,927)
                                                          ----------      ----------
Comprehensive income net of tax ...................       $1,177,136      $  599,058
                                                          ==========      ==========
</table>
     Accumulated other  comprehensive  income (loss) comprises  unrealized gains
and losses on marketable securities and liability for pension benefit net of the
related tax effect.

         9. Earnings Per Share

     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share for the  three months  ended  March 31, 2007 and 2006.













                                        8
<page>
                                                         Three months ended
                                                              March 31,
                                                         2007           2006
                                                        ------         ------
Numerator:
   Net income                                        $1,160,045     $  621,985
                                                      =========      =========
Denominator:
   Denominator for basic earnings
   per share (weighted average
   shares)                                            4,942,289      4,940,183

Effect of dilutive securities:
   Employee stock options                                 2,587          4,128
                                                      ---------      ---------

Denominator for diluted earnings
   per share (adjusted weighted-average
   shares) and assumed conversions                    4,944,876      4,944,311
                                                      =========      =========
Basic and diluted earnings per share                 $     0.23     $     0.13
                                                      =========      =========


     10. The company  sponsors a  non-contributory  defined benefit plan for its
employees  and has  adopted  FAS 158 (see  "RECENT  ACCOUNTING  PRONOUNCEMENTS")
effective  December  31,  2006.  A  measurement  period from  October 1, 2005 to
October  1,  2006  has been  used for the year  ended  December  31,  2006.  The
following table sets forth the components of the projected net periodic  benefit
costs for the years ending December 31, 2007 and ended December 31, 2006.

                                                       Projected
                                                         2007            2006
                                                       ---------      ---------
Service cost                                           $ 126,132      $ 111,449
Interest cost                                            144 358        158,489
Expected return on plan assets                          (137,632)      (162,412)
Amortization of net loss                                  49,051         61,444
Effects of special events                                   -            91,817
Amortization of prior service costs                        7,461          7,461
                                                       ---------      ---------
Net periodic benefit costs                             $ 189,370      $ 268,248
                                                       =========      =========

     The  company has made  contributions  of $50,000 to the plan in each of the
three months  ended March 31, 2007 and 2006.  The company  expensed  $47,342 and
$44,108 for net periodic benefit costs for the three months ended March 31, 2007
and 2006, respectively.

     11.  The  Company  has  two  reportable  business  segments:  the  Guardian
Laboratories  Division  ("Guardian"),  which develops and manufactures  cosmetic
ingredients,  personal and health care products,  pharmaceuticals  and specialty
industrial   products;   and  Eastern  Chemical   Corporation   ("Eastern"),   a
wholly-owned  subsidiary  of the  Company,  which  distributes  a line  of  fine
chemicals, test solutions, dyes and reagents.

     The accounting policies used to develop segment  information  correspond to
those described in the summary of significant  accounting  policies as set forth


                                        9
<page>
in the Annual Report for the year ended December 31, 2006.  Segment  earnings or
losses are based on earnings or losses from operations  before income taxes. The
reportable   segments  are  distinct   business  units  operating  in  different
industries.   They  are  separately   managed,   with  separate   marketing  and
distribution  systems.  The following  information about the two segments is for
the  three months ended March 31, 2007 and 2006.
<table>
<caption>
                                                                Three months ended March 31,
                                                     2007                                            2006
                                     ------------------------------------            ------------------------------------
                                     GUARDIAN       EASTERN         TOTAL            GUARDIAN       EASTERN         TOTAL
                                   ------------   ------------   -----------       ------------   ------------   -----------
<S>                                <C>            <C>            <C>               <C>            <C>            <C>
Revenues from external customers   $ 3,990,650    $   236,776    $ 4,227,426       $ 2,581,034    $   283,763    $ 2,864,797
Depreciation and amortization           22,425           -            22,425            22,168           -            22,168
Segment income before income
  taxes                              1,774,870         (7,750)     1,767,120           887,193         22,334        909,527

Segment assets                       3,488,308        420,067      3,908,375         3,292,436        445,742      3,738,178

Capital expenditure                     36,965           -            36,965            16,713            -           16,713

Reconciliation to Consolidated Amounts

                                                                               Three Months Ended March 31,
Income before income taxes                                           2007                                            2006
----------------------------                                     -----------                                     -----------
Total earnings for reportable segments                           $ 1,767,120                                     $   909,527
Other income, net                                                    125,351                                          80,423
Corporate headquarters expense                                       (82,926)                                        (38,465)
                                                                  ----------                                      ----------
Consolidated earnings before income taxes                        $ 1,809,545                                     $   951,485
                                                                  ==========                                      ==========
Assets
------
Total assets for reportable segments                             $ 3,908,375                                     $ 3,738,178
Corporate headquarters                                            12,742,526                                      11,241,997
                                                                  ----------                                      ----------
      Total consolidated assets                                  $16,650,901                                     $14,980,175
                                                                  ==========                                      ==========
Other Significant items
-----------------------
<caption>
                                                                    Three months ended March 31,
                                                     2007                                           2006
                                   ------------------------------------------       -------------------------------------------
                                     Segment                     Consolidated          Segment                     Consolidated
                                      Totals       Corporate        Totals              Totals        Corporate       Totals
                                   ------------   ------------   -------------      -------------   ------------   -------------
<S>                                  <C>            <C>             <C>               <C>            <C>             <C>
Capital expenditures                 $ 36,965       $   -           $ 36,965          $ 16,713       $  1,119        $ 17,832
Depreciation and amortization          22,425         25,219          47,644            22,168         26,168          48,336
</table>






                                       10
<page>
<table>
Geographic Information
----------------------
<caption>
                                                       2007                                2006
                                           ---------------------------         ---------------------------
                                             Revenues      Long-Lived            Revenues      Long-Lived
                                                             Assets                              Assets
                                           -----------    -------------        -----------    -------------
<S>                                        <C>           <C>                   <C>           <C>
United States                              $ 2,152,086   $      838,114        $ 1,377,758   $      917,976
France                                         270,984                             245,600
Other countries                              1,804,356                           1,241,439
                                           -----------    -------------        -----------    -------------
                                           $ 4,227,426   $      838,114        $ 2,864,797   $      917,976
                                           ===========    =============        ===========    =============

                                                     Revenues
                                           ---------------------------
                                               2007            2006
                                           -----------    -------------
Major Customers
---------------
Customer A (Guardian)**                    $ 1,638,580     $ 1,128,726
Customer B (Guardian)**                        180,055         168,847
Customer C (Guardian)**                        571,803         162,796
All other customers                          1,836,988       1,404,428
                                           -----------     -----------
                                           $ 4,227,426     $ 2,864,797
                                           ===========     ===========
</table>
     ** At March 31, 2007 Customers A and C had balances  approximating  43% and
24% of net  accounts  receivable,  respectively.  Customer  B did  not  have  an
outstanding  balance at March 31, 2007.  At March 31, 2006  Customers A, B and C
had  balances  approximating  26%,  12%  and  5%  of  net  accounts  receivable,
respectively.

     12.  Subsequent Events

     On May 7, 2007,  the Company  received  notification  from the FDA that the
Company's application for approval of a new manufacturing facility for Renacidin
Irrigation was approved. The Company expects to begin production later this year
or early in 2008.


RECENT ACCOUNTING PRONOUNCEMENTS

     In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements,"
to define  fair  value,  establish  a  framework  for  measuring  fair  value in
accordance with generally accepted accounting principles, and expand disclosures
about fair value  measurements.  SFAS No. 157 will be effective for fiscal years
beginning  after  November  15,  2007,  which for the  Company  will be the 2008
calendar (and fiscal) year.  The Company is assessing the impact the adoption of
SFAS No. 157 will have on the  Company's  consolidated  financial  position  and
results of operations.

     In September 2006, the FSAB issued SFAS No. 158, "Employers  Accounting for
Defined Benefit Pension and other  Postretirement  Plans". SFAS No. 158 improves
reporting   obligations   for  pensions  by  recognizing   the   over-funded  or

                                       11
<page>
under-funded  status of plan as an asset or liability.  The Company  adopted the
initial   requirements   in  its  fiscal  year  ended  December  31,  2006.  The
pronouncement  does not change how the plan assets and  obligations are measured
under SFAS 87 and SFAS 106 nor does it change the  approach  for  measuring  the

     annual  benefit  cost  reported in  earnings.  Rather,  it  eliminates  the
provisions  that permit assets and obligations to be measured as of the date not
more than three  months  prior to the  balance  sheet  date,  instead  requiring
measurement as of the reporting date,  which is effective for fiscal year ending
December  31, 2008 for the  Company.  In  addition  the  pronouncement  requires
previously  unrecognized  items, such as actuarial gains and unrecognized  prior
service costs or credits to be recognized in the balance sheet as a component of
other comprehensive income (loss).

     In February  2007,  the FASB issued SFAS No. 159,  The Fair Value Option of
Financial  Assets and  Financial  Liabilities  (SFAS 159).  SFAS 159 provides an
option to report selected financial assets and financial  liabilities using fair
value.  The  standard  establishes  required  presentation  and  disclosures  to
facilitate  comparisons  with  companies  that use  different  measurements  for
similar assets and liabilities. SFAS 159 is effective for fiscal years beginning
after  November  15,  2007,  with  early  adoption  allowed  if SFAS 157 is also
adopted.  The Company is currently evaluating the impact of adopting SFAS 159 on
its consolidated financial statements.

     On  January  1,  2007,   the  Company   adopted  the   provisions  of  FASB
Interpretation  No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"),
an interpretation of FASB Statement No. 109,  "Accounting for Income Taxes." FIN
48  prescribes  a  recognition  threshold  and  measurement  attribute  for  the
financial  statement  recognition  and  measurement  of a tax position  taken or
expected  to be taken in a tax  return.  The  interpretation  requires  that the
Corporation  recognize the impact of a tax position in the financial  statements
if that position is more likely than not of being  sustained on audit,  based on
the  technical  merits  of  the  position.  FIN 48  also  provides  guidance  on
derecognition,  classification,  interest and  penalties,  accounting in interim
periods  and  disclosure.  In  accordance  with the  provisions  of FIN 48,  any
cumulative  effect  resulting  from the change in accounting  principle is to be
recorded as an adjustment to the opening balance of deficit. The adoption of FIN
48 did not result in a material impact on the Company's  financial  position
or results of operations.

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

FORWARD LOOKING STATEMENTS

     Statements  made in this Form 10-QSB  which are not purely  historical  are
forward-looking  statements  with  respect  to  the  goals,  plans,  objectives,
intentions,  expectations,  financial condition,  results of operations,  future
performance  and  business of the  Company.  Forward-looking  statements  may be
identified  by the use of such words as  "believes,"  "may,"  "will,"  "should,"
"intends," "plans," "estimates," or "anticipates" or other similar expressions.

     Forward-looking  statements involve inherent risks and  uncertainties,  and
important  factors  (many of which are beyond our  control)  could cause  actual
results  to  differ  materially  from  those  set  forth in the  forward-looking
statements.  In addition to those specific risks and  uncertainties set forth in
the  Company's  reports  currently on file with the SEC, some other factors that
may affect the future results of operations of the Company are: the  development


                                       12
<page>
of products that may be superior to those of the Company; changes in the quality
or  composition  of the  Company's  products;  lack of market  acceptance of the
Company's  products;  the  Company's  ability to develop new  products;  general
economic  or  industry  conditions;  intellectual  property  rights;  changes in
interest rates;  new legislation or regulatory  requirements;  conditions of the
securities  markets;  the  Company's  ability  to  raise  capital;   changes  in
accounting   principals,   policies  or   guidelines;   financial  or  political
instability;  acts  of  war  or  terrorism;  and  other  economic,  competitive,
governmental,  regulatory  and  technical  factors that may affect the Company's
operations, products, services and prices.

     Accordingly,  results  actually  achieved may differ  materially from those
anticipated as a result of such forward-looking statements, and those statements
speak only as of the date they are made.  The Company  does not  undertake,  and
specifically disclaims, any obligation to update any forward-looking  statements
to reflect events or circumstances occurring after the date of such statements.

OVERVIEW

     The  Company  is a  Delaware  corporation  that  operates  in two  business
segments: Guardian and Eastern. Guardian conducts research, product development,
manufacturing  and marketing of cosmetic  ingredients,  personal and health care
products,  pharmaceuticals,  and  specialty  industrial  products.  The products
manufactured by Guardian are marketed through marketing partners,  distributors,
direct advertising, mailings, and trade exhibitions. Its most important personal
care  product  line is its  LUBRAJEL(R)  line of  water-based  moisturizing  and
lubricating  gels.  It  also  sells  two  pharmaceutical   products,  which  are
distributed primarily through drug wholesalers and surgical supply houses. There
are also indirect  sales to the Veteran's  Administration  and other  government
agencies in the United States, and to some hospitals and physicians.

     Guardian's  pharmaceutical products are distributed primarily in the United
States.  Its personal  care  products are  marketed  worldwide  primarily by its
marketing  partners,  the largest of which is International  Specialty  Products
Inc. ("ISP").  Approximately  one-half of Guardian's personal care products will
be sold to foreign customers, either directly or through its marketing partners.

     While the Company does have  competition in the marketplace for some of its
products,  many of its products or processes are either unique in their field or
have some unique  characteristics,  and therefore are not in direct  competition
with the products or processes of other pharmaceutical, chemical, or health care
companies. Guardian's research and development department is actively working on
the development of new products to expand the Company's personal care line.

     The  Company  has been issued  many  patents  and  trademarks,  and intends
whenever  possible  to make  efforts to obtain  patents in  connection  with its
product development program.

     Eastern  distributes a line of fine organic chemicals,  research chemicals,
test solutions,  indicators, dyes and reagents.  Eastern's products are marketed
through  advertising  in trade  publications  and  direct  mailings.  Since  the
Company's business  activities and marketing efforts over the past several years
have  focused  increasingly  on the Guardian  division,  the Company has reduced
Eastern's  inventory levels in order to make it more marketable in the event the
Company  decides  to sell it at some  future  date.  This has  resulted  in some
reduction in sales as compared with previous years.  Sales of this division have
also  declined  as a result  of  increased  competition  from  new and  existing
competitors.


                                       13
<page>
Critical Accounting Policies

     As disclosed in our Annual  Report on Form 10-KSB for the fiscal year ended
December 31, 2006, the  discussion  and analysis of our financial  condition and
results of operations are based on our consolidated financial statements,  which
have been  prepared  in  conformity  with  U.S.  generally  accepted  accounting
principles.  The preparation of those financial  statements  required us to make
estimates  and  assumptions  that  affect  the  amount of  assets,  liabilities,
revenues and expenses  reported in those financial  statements.  Those estimates
and assumptions can be subjective and complex,  and consequently  actual results
could differ from those estimates and assumptions.  Our most critical accounting
policies relate to revenue recognition, concentration of credit risk, inventory,
pension costs,  patents and other  intangible  assets,  and income taxes.  Since
December 31, 2006, there have been no significant changes to the assumptions and
estimates related to those critical accounting policies.

     The  following  discussion  and  analysis  covers  material  changes in the
financial condition of the Company since the year ended December 31, 2006, and a
comparison  of the results of  operations  for the three  months ended March 31,
2007 and  March  31,  2006.  This  discussion  and  analysis  should  be read in
conjunction  with  "Management's  Discussion  and Analysis or Plan of Operation"
included  in the  Company's  Annual  Report on Form  10-KSB  for the year  ended
December 31, 2006.

RESULTS OF OPERATIONS

     Revenue
     -------

     For the  three-month  period  ended March 31,  2007,  consolidated  revenue
increased  $1,362,629 (47.6%) versus the comparable period in 2006. Guardian had
a sales  increase of  $1,409,616  (54.6%)  and  Eastern had a sales  decrease of
$46,987 (16.6%).

     Guardian's  increase in sales was  primarily  attributable  to increases in
sales  in  its  three  main  product   categories   (pharmaceuticals,   cosmetic
ingredients, and medical products), as discussed below:

     (a)  Pharmaceuticals:  On March 1, 2007  Guardian  increased  prices on its
pharmaceutical  products, which resulted in customers purchasing unusually large
quantities  of product in  February  in order to avoid the price  increase.  The
result was an increase in sales of $676,257  (119%) for the three  months  ended
March 31, 2007 when  compared  with the same period in 2006.  This  increase was
primarily  attributable  to the price  increase.  Because of the unusually large
orders in February,  sales in March were about half of what the average  monthly
sales  would  have  been had there not been a price  increase,  and the  Company
expects sales of these  products to continue to be lower for the next few months
while its  distributors  work off the extra inventory,  then gradually  increase
back to normal levels.  The Company  expects  pharmaceutical  sales for the full
year to be comparable to 2006.

     (b)  Cosmetic  Ingredients:  For the three  months  ended  March  31,  2007
Guardian's sales of cosmetic ingredients  increased by $622,438 (37.3%). Most of
that  increase  was   attributable  to  sales  to  one  large   distributor  for
distribution  globally.  Sales  of  the  Company's  line  of  Lubrajel  products
increased by $767,538 (39.6%),  again attributable  primarily to increased sales
to that same distributor. The increase in sales was due to a general increase in
business as opposed to any significant  increase in the number of new customers,
and most of the sales increases were  attributable to increased sales in Western

                                       14
<page>
and Eastern  Europe and  Asia-Pacific.  The Company cannot yet determine if such
sales increases will continue for the balance of the year.

     (c) Medical  (non-pharmaceutical)  products: Sales of the Company's medical
lubricants  increased  by  $153,976  (42%)  for the first  three  months of 2007
compared  with the same period in 2006.  This increase was  attributable  to the
steadily  increasing  demand over the past three years for these products by the
Company's existing customers as opposed to sales to any new customers.


     The  decrease  in Eastern  sales is believed  to be a  continuation  of the
gradual  decline  in  Eastern's  sales  over the past  few  years.  Some of that
decrease is attributable to normal fluctuations in Eastern's business,  but much
of the decrease  was the result of the  Company's  continuing  efforts to reduce
Eastern's  inventory  levels,  which has  resulted in an  inability to fill some
orders from existing stock as it might have been able to do in the past. This is
part of a  continuing  effort  on the  part of the  Company  to put  more of its
resources  into the growth of Guardian.  The Company is  monitoring  closely the
profitability of Eastern and evaluating the  advisability of discontinuing  that
operation,  which it intends to do if and when it  determines  that the  Eastern
operation is no longer profitable.

     Cost of Sales
     -------------

     Cost of Sales as a percentage  of sales  decreased  4.3% from 47.2% for the
three  months ended March 31, 2006 to 42.9% for the  comparable  period in 2007.
This  decrease  was  primarily  due to (a) a decrease  in the cost of one of the
Company's  primary  raw  materials,  and (b) a  positive  variance  in  overhead
absorption  created by an increase in production  during the first quarter ended
March 31, 2007 when compared with the same period in 2006.

     Operating Expenses
     ------------------

     Operating  Expenses  increased  $89,082  (13.9%) for the three months ended
March 31, 2007 compared with the  comparable  period in 2006.  This increase was
attributable to increases in medical costs,  legal fees, Board of Director fees,
freight costs, and payroll and payroll-related costs.

     Other Income
     ------------

     Other Income increased $44,970 (55.9%) for the three months ended March 31,
2007. The increase was mainly  attributable to higher investment  income,  which
was the result of higher investment balances and an increase in interest rates.

     Provision for Income Taxes
     --------------------------

     The Provision  for Income Taxes  increased  $320,000  (97.1%) for the three
months ended March 31, 2007 when  compared with the  comparable  period in 2006.
This increase was due to an $858,060  (90.2%)  increase in earnings before taxes
in 2007 as compared with 2006.

     The Company's  effective  income tax rate increased 1.3% from 34.6% for the
three  months ended March 31, 2006 to 35.9% for the  comparable  period in 2007.



                                       15
<page>
Differences in the effective  income tax rate from the statutory  federal income
tax rate arise  primarily  from capital loss  carryforwards,  state taxes net of
federal benefits, and foreign and domestic production tax benefits.

LIQUIDITY AND CAPITAL RESOURCES

     Working capital  increased by $1,183,985  from  $12,983,634 at December 31,
2006 to $14,167,619 at March 31, 2007. The current ratio increased from 7.6 to 1
at December 31, 2006 to 10.5 to 1 at March 31, 2007. The increase in the current
ratio was  primarily  due to the effect of a decrease in dividends  payable from
December 31, 2006 to March 31, 2007 offset by the increases in taxes payable and
accrued expenses.

     The  Company  has  no  commitments  for  any  further  significant  capital
expenditures during the remainder of 2007, and believes that its working capital
is and will continue to be sufficient to support its operating  requirements for
at least the next twelve months.

     The Company  generated cash from  operations of $1,678,545 and $154,373 for
the three  months  ended March 31, 2007 and March 31,  2006,  respectively.  The
increase  was  primarily  due  to  increases  in  net  income  from  operations,
inventory, and accrued expenses, offset by a decrease in accounts receivable.

     During the three-month  period  ended  March 31,  2007 and March 31,  2006,
$94,078 and $51,411 was used in investment activities,  respectively. The change
is mainly due to the reinvestment of investment income.

     Cash used in financing  activities  was  $1,088,443  and $1,072,351 for the
three months ended March 31, 2007 and March 31, 2006, respectively. The increase
was due to a decrease in  proceeds  from the  exercise of stock  options in 2007
compared with 2006.

Item 3.  Controls and Procedures

  (a) Evaluation of Disclosure Controls and Procedures

     Within 90 days prior to the filing of this Quarterly  Report on Form 10-QSB
the  Company's  principal  executive  officer and  principal  financial  officer
evaluated the effectiveness of the design and operation of Company's  disclosure
controls and procedures (as defined in Rules  13a-14(c) and 15d-14(c)  under the
Securities  Exchange Act of 1934 (the  "Exchange  Act")) and concluded  that the
Company's  disclosure  controls  and  procedures  are  effective  to ensure that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is accumulated and  communicated to the Company's
management,  including its officers,  as appropriate  to allow timely  decisions
regarding required disclosure, and are effective to ensure that such information
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the Securities and Exchange Commission's rules and forms.

   (b) Changes in Internal Controls

     The Company's  principal  executive officer and principal financial officer
have also concluded there were no significant  changes in the Company's internal
controls or in other  factors that could  significantly  affect  these  controls
subsequent to the date of their  evaluation,  including any  corrective  actions
with regard to significant deficiencies and material weaknesses.




                                       16
<page>
                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS: NONE
ITEM 2 - CHANGES IN 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 AND REPORTS ON FORM 8-K

     a. Exhibits

        31.1  Certification of Kenneth H. Globus, President and principal
              executive officer of the Company,  pursuant to Section 302 of the
              Sarbanes-Oxley Act of 2002

        31.2  Certification of Robert S. Rubinger, Chief Financial Officer of
              the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of
              2002

        32.1  Certification  of Kenneth H. Globus, President and principal
              executive officer of the Company, pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002.

        32.2  Certification of Robert S. Rubinger, Chief Financial Officer of
              the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of
              2002.

     b. Reports on Form 8-K

     There was one  report on Form 8-K filed  during the  fiscal  quarter  ended
March 31, 2007. It was filed on March 28, 2007 and related to the issuance of an
earnings release by the Company on March 28, 2007.


                                   SIGNATURES

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


                                      UNITED-GUARDIAN, INC.
                                       (Registrant)

                                      By:  /S/ KENNETH H. GLOBUS
                                           ---------------------
                                           Kenneth H. Globus
                                           President


                                       By: /S/ ROBERT S. RUBINGER
                                           ----------------------
                                           Robert S. Rubinger
                                           Chief Financial Officer

Date:  May 8, 2007




                                       17