**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**




**FORM
      10-QSB**




(Mark
      One)


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


For
      the
      quarterly period ended September 30, 2007




o
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**




For
      the
      transition period from __________ to ___________




Commission
      File Number   001-33426






NEURO-HITECH,
                INC.**(Exact
                name of Small Business Issuer as Specified in its
                Charter)**Delaware
            
            20-4121393**(State
                or Other Jurisdiction of**
            
            **(I.R.S.
                Employer****Incorporation
                or Organization)**
            
            **Identification
                No.)**One
                Penn Plaza, Suite 1503, New York, NY 10019**(Address
                of Principal Executive Offices)**(212)
                594-1215**(Issuer’s
                Telephone Number, Including Area Code)**(Former
                Name, Former Address and Former Fiscal Year
              If
                Changed Since Last Report)






Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.Yes x No o




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


o Yes x No





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: November 1, 2007





Common
      Stock   12,452,233





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








**PART
      I. FINANCIAL INFORMATION**




**Item
      1.**  **Financial
      Statements**




**Neuro-Hitech,
        Inc. and Subsidiaries**


**Consolidated
        Balance Sheet**
  **September
                  30, 2007****ASSETS:**
              
              **(Unaudited)**Current
                  Assets:Cash
                  and Cash Equivalents
              
              $
              3,182,685Accounts
                  Receivable
              
              
              87,555Inventory
              
              
              74,186Prepaid
                  Expenses
              
              
              24,611Deferred
                  Charges
              
              
              -Total
                  Current Assets
              
              
              3,369,037Property
                  and Equipment, net
              
              
              4,997Other
                  Assets:Security
                  Deposit
              
              
              13,226**Total
                  Assets**
              
              **$**
              **3,387,260****LIABILITIES
                  AND STOCKHOLDERS' EQUITY:**Current
                  Liabilities:Accounts
                  Payable and Accrued Expenses
              
              $
              1,356,150Total
                  Current LiabilitiesStockholders'
                  Equity:Common
                  Stock $.001 Par Value, Authorized: 44,999,900, Issued and Outstanding:
                  12,452,233
              
              
              12,452Common
                  Stock - Class A $.001 Par Value, Authorized: 100, Issued and Outstanding:
                  0
              
              
              -Additional
                  Paid-in Capital
              
              
              34,050,096Deferred
                  Compensation
              
              
              (1,222,523
              )Accumulated
                  Deficit
              
              
              (30,808,915
              )Treasury
                  Stock, at cost
              
              
              -Total
                  Stockholders' Equity
              
              
              2,031,110**Total
                  Liabilities and Stockholders' Equity**
              
              **$**
              **3,387,260**


The
        accompanying notes are an integral part of these unaudited consolidated
        financial statements




1


**Neuro-Hitech,
        Inc. and Subsidiaries**


**Consolidated
        Statements of Operations**
  **Three
                  Months Ended**
              
              **Nine
                  Months Ended****Sept
                  30, 2007**
              
              **Sept
                  30, 2006**
              
              **Sept
                  30, 2007**
              
              **Sept
                  30, 2006****(Unaudited)**
              
              **(Unaudited)**
              
              **(Unaudited)**
              
              **(Unaudited)**Sales
              
              $
              112,455
              
              $
              182,800
              
              $
              363,740
              
              $
              260,140Cost
                  of Goods Sold
              
              
              56,203
              
              
              95,111
              
              
              167,262
              
              
              124,637Gross
                  Profit
              
              
              56,252
              
              
              87,689
              
              
              196,478
              
              
              135,503Operating
                  Expenses:Selling,
                  General and Administrative Expenses
              
              
              645,271
              
              
              326,269
              
              
              2,122,347
              
              
              822,635Research
                  and Development Costs
              
              
              760,158
              
              
              685,401
              
              
              2,482,821
              
              
              1,879,020Share-Based
                  Compensation
              
              
              1,129,945
              
              
              106,815
              
              
              1,793,309
              
              
              302,642Amortization
                  of Deferred Compensation
              
              
              31,870
              
              
              -
              
              
              249,024Registration
                  Payment Arrangement
              
              
              490,550
              
              
              -
              
              
              490,550
              
              
              -Total
                  Operating Expenses
              
              
              3,057,794
              
              
              1,118,485
              
              
              7,138,051
              
              
              3,004,297(Loss)
                  from Operations
              
              
              (3,001,542
              )
              
              (1,030,796
              )
              
              (6,941,573
              )
              
              (2,868,794
              )Other
                  Income:Interest
                  and Dividend Income
              
              
              46,586
              
              
              37,254
              
              
              166,874
              
              
              110,192Total
                  Other Income
              
              
              46,586
              
              
              37,254
              
              
              166,874
              
              
              110,192(Loss)
                  Before Provision for IncomeTaxes
              
              
              (2,954,956
              )
              
              (993,542
              )
              
              (6,774,699
              )
              
              (2,758,602
              )Provision
                  for Income Taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -**Net
                  (Loss)**
              
              **$**
              **(2,954,956**
              **)**
              **$**
              **(993,542**
              **)**
              **$**
              **(6,774,699**
              **)**
              **$**
              **(2,758,602**
              **)****Basic
                  and Diluted (Loss) per Weighted Average Common Shares
                  Outstanding**
              
              **$**
              **(0.24**
              **)**
              **$**
              **(0.11**
              **)**
              **$**
              **(0.55**
              **)**
              **$**
              **(0.30**
              **)****Weighted
                  Average - Common Shares Outstanding**
              
              
              **12,356,931**
              
              
              **9,441,606**
              
              
              **12,272,348**
              
              
              **9,339,232**




The
      accompanying notes are an integral part of these unaudited consolidated
      financial statements




2


**Neuro-Hitech,
        Inc. and Subsidiaries**
 **Consolidated
        Statements of Cash Flows**
  **For
                  The NineMonths Ended****September
                  30,****(Unaudited)**
              
              **(Unaudited)****2007**
              
              **2006**Cash
                  flows used in operating activities:Net
                  (Loss)
              
              $
              (6,774,699
              )
              $
              (2,758,602
              )Adjustments
                  to Reconcile Net (Loss) to Net Cash (Used In) Operating
                  Activities:Share-Based
                  Compensation Expense
              
              
              1,793,309
              
              
              302,642Amortization
                  of Deferred Compensation
              
              
              249,024
              
              
              -Registration
                  Payment Arrangement
              
              
              490,550Depreciation
                  Expense
              
              
              2,249
              
              
              999Other
                  Share-Based Selling, General and Administrative Expenses
              
              
              394,614
              
              
              -Change
                  in operating assets and liabilities:(Increase)
                  Decrease in Assets:Accounts
                  Receivable
              
              
              (61,755
              )
              
              (106,025
              )Inventory
              
              
              (42,895
              )
              
              (22,711
              )Prepaid
                  Expenses
              
              
              (690
              )
              
              (319,144
              )Deferred
                  Charges
              
              
              93,750
              
              
              -Security
                  Deposits
              
              
              (13,226
              )Increase
                  (Decrease) in Liabilities:Accounts
                  Payable and Accrued Expenses
              
              
              80,630
              
              
              631,103Net
                  cash (used in) Operating activities
              
              
              (3,789,139
              )
              
              (2,271,738
              )Cash
                  flows from investing activities:Investment
                  in Property and Equipment
              
              
              -
              
              
              (8,995
              )Net
                  cash (used in) Investing activities
              
              
              -
              
              
              (8,995
              )Cash
                  flows from financing activities:Net
                  Proceeds from Private Placement Offering of Common Stock
              
              
              2,220,805
              
              
              -Proceeds
                  from the Sale of Stock
              
              
              45,824
              
              
              5,020,294Net
                  cash provided by Financing activities
              
              
              2,266,629
              
              
              5,020,294Net
                  (decrease) increase in cash and cash equivalents
              
              
              (1,522,510
              )
              
              2,739,561Cash
                  and cash equivalents, beginning of period
              
              
              4,705,195
              
              
              88,192Cash
                  and cash equivalents, end of period
              
              $
              3,182,685
              
              $
              2,827,753**Cash
                  Paid For:**Income
                  Taxes
              
              $
              -
              
              $
              -Interest
              
              $
              -
              
              $
              -


**Supplemental
        Disclosure of Non-Cash Investing and Financing
        Activities:**




During
        the nine months ended September 30, 2007, options held by the Company's
        executive officers and board of directors vested as to 885,372 shares of
        the
        Company's common stock. The Company recognized an aggregate compensation
        cost of
        $1,793,309 for the vesting of the aforementioned options for the nine months
        ended September 30, 2007.




The
        Company entered into a service agreement and issued 100,000 warrants measured
        at
        fair value as of February 14, 2007, the date the service agreement was ratified
        by the Company's board of directors. The fair value of these warrants
        approximated $255,000 and was recognized as Deferred Compensation in the
        Stockholders' Equity section of the Balance Sheet. During the first nine
        months
        of 2007, the Company ratably recognized approximately $79,000 of expenses
        for
        the amortization of Deferred Compensation in accordance with the service
        term.
  In
          connection with the Q-RNA merger, the Company entered into a consulting
          agreement and issued 500,000 non-qualified stock options valued at their
          grant
          date fair value as of the date of the merger closing. The total fair value
          of
          these options approximated $1,309,000 and was recognized as Deferred
          Compensation in the Stockholders' Equity section of the Balance Sheet.
          During
          2007, in accordance with vesting terms of the options, the Company recognized
          approximately $170,000 of expense for the amortization of Deferred
          Compensation.




During
        the third quarter of 2007, 100,729 shares of common stock were issued to
        investors that purchased common stock and warrants from the Company in the
        2006
        Private Offering and the 2007 Private Offering. The aforementioned registration
        rights agreements required the Company to pay an amount equal to 1% payable
        in
        the Company’s common stock, up to a maximum 6%, of the aggregate dollar amount
        of securities purchased by such investors. The shares of common stock issued
        to
        these investors had an aggregate value of approximately $491,000 and were
        expensed as Registration Payment Arrangement which is reflected in the Selling,
        General and Administrative Expense caption of the Statement of Operations.
  The
          Company granted to a Scientific Advisory Board member 45,000 non-qualified
          stock
          options measured at their grant date fair value. The options were immediately
          vested in full and the Company recognized an aggregate compensation cost
          of
          approximately $194,000 upon granting of these options.




During
        the third quarter of 2007, the Company accrued an expense of $69,154 for
        directors fees that would have been paid on September 28, 2007. On October
        1,
        2007, the day following the last day of the calendar quarter for which the
        fees
        otherwise would have been paid, the Company issued options to purchase 26,940
        shares of the Company’s common stock to the non-management directors that
        elected to receive compensation for their service in the form of options
        pursuant to the terms of the Non-Management Directors Deferral Program.
        Similarly, the Company accrued an expense of $10,622 for compensation that
        would
        have otherwise been paid to one of its officers during the third quarter
        of
        2007. On October 1, 2007, the officer received an option to purchase 4,138
        shares of the Company’s common stock pursuant to the terms of the Officers
        Deferral Program.




The
        accompanying notes are an integral part of these consolidated financial
        statements




3


NEURO-HITECH,
      INC. AND SUBSIDIARIES


NOTES
      TO
      THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS


September
      30, 2007


(Unaudited)




**(1)**  **Nature
      of Operations**





Neuro-Hitech,
      Inc. (the “Company” or “Neuro-Hitech”) is an early stage pharmaceutical company
      engaged in the acquisition and development of therapies for Alzheimer’s disease
      and other degenerative neurological disorders. The Company is focused primarily
      on technologies that address large unmet medical needs and investigational
      compounds that have the potential to show clinical improvements versus current
      treatments for Alzheimer’s disease, Epilepsy and other central nervous system
      applications.





On
      November 29, 2006, the Company completed an acquisition by merger of Q-RNA,
      Inc. (“Q-RNA”), a New York-based biotechnology company focused on diseases such
      as Alzheimer’s, Epilepsy and Parkinson’s disease. The acquisition of Q-RNA
      provides the Company with a pipeline of compounds, many of which have been
      discovered and developed internally. The Company believes that these
      compounds provide it with significant research and development
      opportunities.





The
      accompanying unaudited financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      for interim financial information and with the instructions to Form 10-QSB
      and
      Item 310(b) of Regulation S-B. Accordingly, they do not include all of the
      information and footnotes required by accounting principles generally accepted
      in the United States of America for complete financial statements. In the
      opinion of management, all adjustments considered necessary in order to make
      the
      interim financials not misleading have been included and all such adjustments
      are of normal recurring nature. The results of operations for the three months
      and nine months ended September 30, 2007 are not necessarily indicative of
      the
      results that can be expected for the year ending December 31, 2007. The
      unaudited consolidated interim financial statements should be read in
      conjunction with the Company’s audited consolidated financial statements and
      notes thereto for the year ended December 31, 2006 as reported in Form
      10-KSB.





The
      accounting policies followed by the Company are set forth in Note 2 of the
      Company’s consolidated financial statements in the December 31, 2006 Form
      10-KSB. For further information refer to the consolidated financial statements
      and footnotes included in the Company’s Annual Report on Form 10-KSB for the
      year ended December 31, 2006.





Liquidity





The
      accompanying consolidated financial statements have been prepared on a
      going-concern basis, which contemplates the continuation of operations,
      realization of assets, and liquidation of liabilities in the ordinary course
      of
      business. For the nine months ending September 30, 2007, the Company
      generated a net loss of approximately $6,775,000. As of September 30, 2007,
      the
      Company has funded its working capital requirements primarily through the sale
      of equity to founders, institutional and individual investors. Management
      intends to fund future operations through entrance into the commercial
      marketplace, as well as additional equity offerings.





There
      can
      be no assurance that the Company will be successful in obtaining financing
      at
      the level needed for long-term operations or on terms acceptable to the Company.
      In addition, there can be no assurance, assuming the Company is successful
      in
      commercializing its product, realizing revenues and obtaining new equity or
      debt
      offerings that the Company will achieve profitability or positive cash flow.
      As
      discussed above, the Company is incurring significant losses, which give rise
      to
      questions about its ability to continue as a going concern. The accompanying
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.





4


**(2)**  **Summary
      of Significant Accounting Policies**





Principles
      of Consolidation





The
      consolidated financial statements include the accounts of the Company and its
      wholly owned subsidiaries. All inter-company balances and transactions have
      been
      eliminated.





Cash
      and
      Cash Equivalents




Cash
      and
      cash equivalents consist of highly liquid financial instruments with an original
      maturity of three months or less from the date acquired.





Revenue
      Recognition





Revenues
      from product sales are recognized when products are shipped to the
      customer.





Research
      and Development Costs




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





Share-Based
      Compensation





Effective
      January 1, 2006, the Company adopted Statement of Financial Accounting
      Standards No. 123(R), (“SFAS No. 123(R)”), “Share-Based Payment,” which requires
      the Company to record as an expense in its financial statements the fair value
      of all stock-based compensation awards. The Company currently utilizes the
      Black-Scholes option pricing model to measure the fair value of stock options
      granted to employees using the “modified prospective” method. Under the
“modified prospective” method, compensation cost is recognized in the financial
      statements beginning with the effective date, based on the requirements of
      SFAS
      No. 123(R) for all share-based payments granted after that date, and based
      on
      the requirements of SFAS No. 123(R) for all unvested awards granted prior to
      the
      effective date of SFAS No. 123(R).





The
      Company recognized an aggregate share-based compensation cost of $1,129,945
      for
      the three months ended September 30, 2007 and $1,793,309 for the nine months
      ended September 30, 2007, in accordance with the vesting of the aforementioned
      options granted during such interim periods.





Class
      A
      Common Stock





Immediately
      prior to listing of the Company’s Common Stock on the NASDAQ Capital Market, the
      Chief Executive Officer and Executive Vice President of the Company at that
      time, surrendered all of the Class A Common Stock they owned. The shares were
      repurchased for $2 and as of September 30, 2007, no Class A Common Stock remains
      outstanding.





Deferred
      Compensation





In
      accordance with EITF Abstract No. 96-18, “Accounting for Equity Instruments That
      Are Issued to Other Than Employees for Acquiring, or in Conjunction with
      Selling, Goods or Services,” the Company initially measures the fair value of
      any equity granted to consultants on the date of grant and subsequently
      remeasures such grants in accordance with promulgated accounting principles
      using the Black-Scholes pricing model. Amounts are initially recorded as
      Deferred Compensation in the Stockholders’ Equity section of the balance sheet
      and are subsequently remeasured and charged to the appropriate expense over
      the
      period to which the service relates.





5


**(3)**  **Common
      Stock Transactions**





Recapitalization





On
      January 18, 2006, Northern Way Resources, Inc., a Nevada corporation
      (“Northern-NV”) was merged with and into Northern Way Resources Inc., a Delaware
      corporation (“Northern-DE”) for the sole purpose of changing its state of
      incorporation from Nevada to Delaware pursuant to an Agreement and Plan of
      Merger dated January 12, 2006 (“Reincorporation Merger Agreement”), which was
      approved through an action by written consent of a majority of the stockholders
      on the same date (“Reincorporation Merger”). Under the terms of the
      Reincorporation Merger, each share of Northern-NV was exchanged for one share
      of
      Northern-DE. In connection with the Reincorporation Merger, Northern-DE changed
      its name to Neurotech Pharmaceuticals, Inc. (“Neurotech”).




On
      January 24, 2006 Neurotech entered into an Agreement of Merger and Plan of
      Reorganization by and among Neurotech, Marco Hi-Tech J.V. Ltd., a privately
      held
      New York corporation (“Marco”), and Marco Acquisition I, Inc., (“Acquisition
      Sub”) a newly formed wholly-owned Delaware subsidiary of Neurotech. Upon closing
      of the merger transactions contemplated under the Merger Agreement (the
“Merger”), Acquisition Sub was merged with and into Marco, and Marco became a
      wholly-owned subsidiary of Neurotech.





On
      January 25, 2006, Neurotech filed a Certificate of Amendment to its Certificate
      of Incorporation in the State of Delaware in order to change its name to
      Neuro-Hitech Pharmaceuticals, Inc.





For
      accounting purposes, the acquisition was treated as an issuance of shares for
      cash by Marco with Marco as the acquirer. The accounting is identical to that
      resulting from a reverse acquisition except that no goodwill or other intangible
      assets are recorded.




On
      August
      11, 2006, Neuro-Hitech Pharmaceuticals, Inc. amended its Certificate of
      Incorporation to change its name to “Neuro-Hitech, Inc.”





Private
      Placement Offering





Immediately
      after the closing of the Merger on January 24, 2006, there were 7,027,252 shares
      of Neuro-Hitech Common Stock issued and outstanding and 100 shares of
      Neuro-Hitech Class A Common Stock issued and outstanding.





Prior
      to
      the closing of the Merger, the Company’s predecessor, Marco completed a private
      offering in which Marco received total gross proceeds of $996,006, which
      after the closing of the Merger, were converted into 664,004 shares of the
      Company’s common stock. Subsequent to the closing of the Merger, Neuro-Hitech
      completed a private offering of 1,750,000 shares of its common stock and
      warrants to purchase 437,500 shares of its common stock for $4,375,000 in cash
      (the “2006 Private Offering”). The exercise price of the warrants is $5.00 per
      share. The warrants expire on January 23, 2009.





Placement
      agent, legal, accounting, printing and other costs related to these offerings,
      in the aggregate amount of $353,127, were charged to additional paid-in capital
      in the year ended December 31, 2006.





Between
      November 29, 2006 and March 15, 2007, the Company conducted a private placement
      offering of its securities with institutional and individual investors and
      received total net proceeds of $5,358,330 from the offering. The investors
      received an aggregate of 1,076,396 shares of the Company’s common stock and
      warrants to purchase an additional 538,198 shares of the Company’s common stock
      (the “2007 Private Offering”). The common stock was sold in the offering at
      $5.125 per share and the exercise price of the warrants is $7.00 per share.
      The
      warrants expire on November 29, 2011.





Business
      Combination





On
      November 29, 2006 Neuro-Hitech completed the acquisition of Q-RNA, Inc., a
      New
      York-based biotechnology company focused on diseases such as Alzheimer’s,
      Epilepsy and Parkinson’s disease. Neuro-Hitech privately issued merger
      consideration to the Q-RNA security holders consisting of an aggregate of:
      (i)
      1,800,000 shares of Neuro-Hitech common stock, (ii) warrants to purchase 600,356
      shares of Neuro-Hitech common stock at an exercise price of $13 per share,
      and
      (iii) warrants to purchase 600,356 shares of Neuro-Hitech common stock at
      an exercise price of $18 per share.  In addition, Neuro-Hitech assumed
      Q-RNA employee stock options now exercisable for 199,288 shares of Neuro-Hitech
      common stock. The weighted average exercise price of these stock options is
      $12.66. The Neuro-Hitech common stock issued as merger consideration will be
      subject to a lock-up of up to two years and therefore is not freely transferable
      during that period.





6


Other
      Issuances




During
      the third quarter of 2007, the Company accrued an expense of $69,154 for
      directors’ fees that would have been paid on September 28, 2007. On October 1,
      2007, the day following the last day of the calendar quarter for which the
      fees
      otherwise would have been paid, the Company issued options to purchase 26,940
      shares of the Company’s common stock to the non-management directors that
      elected to receive compensation for their service in the form of options
      pursuant to the terms of the Non-Management Directors Deferral Program. The
      number of shares underlying the options issued was determined by dividing the
      amount deferred by the Black-Scholes “value” of the last fair market value
      option grant made in the preceding fiscal year, as set forth in the Company’s
      audited financial statements for that preceding fiscal year.





Similarly,
      the Company accrued an expense of $10,622 for compensation that would have
      otherwise been paid to one of its officers during the third quarter of 2007.
      On
      October 1, 2007, the officer received an option to purchase 4,138 shares of
      the
      Company’s common stock pursuant to the terms of the Officers Deferral Program.
      The number of shares underlying the option issued was determined by dividing
      the
      amount deferred by the Black-Scholes “value” of the last fair market value
      option grant made in the preceding fiscal year, as set forth in the Company’s
      audited financial statements for that preceding fiscal year.




Registration
        Payment ArrangementDuring the third quarter of 2007, 100,729 shares of
        common stock were issued to investors that purchased common stock and warrants
        from the Company in the 2006 Private Offering and the 2007 Private Offering.
        The
        shares were issued in accordance with the provisions of a Registration Rights
        Agreement dated as of January 5, 2006 between the Company and the purchasers
        of
        securities in the 2006 Private Offering and a Registration Rights Agreement
        dated November 29, 2006 between the Company and the purchasers of securities
        in
        the 2007 Private Offering. The aforementioned registration rights agreements
        required the Company to pay an amount equal to 1% payable in the Company’s
        common stock, up to a maximum 6%, of the aggregate dollar amount of securities
        purchased by such investors if the Company did not file a resale registration
        statement or have such registration statement declared effective by the dates
        set forth in each agreement. The shares of common stock issued to these
        investors had an aggregate value of approximately $491,000 and were expensed
        as
        a Registration Payment Arrangement which expense is reflected in the Selling,
        General and Administrative Expense caption of the Statement of Operations.
        The
        Company issued the maximum 6% of shares and is under no obligation to issue
        any
        additional shares pursuant to the terms of the registration rights agreements
        described above.




**(4)
      Employment Contract**





On
      August
      27, 2007, Dr. Gary Shearman became the Company’s Chief Executive Officer,
      President and a member of the Company’s board of directors. Dr. Shearman’s base
      salary will be $450,000 per year. In addition, Dr. Shearman will be eligible
      to
      receive bonus compensation of up to 50% of his base salary, in amounts to be
      determined by the Compensation Committee of the Board following Dr. Shearman’s
      achievement of certain performance objectives. The term of the agreement is
      four
      years from August 27, 2007, unless earlier terminated or extended and the fixed
      and determinable salary to be paid under the agreement is $450,000 or $1,800,000
      in the aggregate.





In
      connection with his employment by the Company and in accordance with the terms
      of his employment agreement, on August 22, 2007, Dr. Gary Shearman was granted
      an option to purchase 800,000 shares of the Company’s common stock at an
      exercise price of $5.35 per share. The option to purchase 240,000 shares vested
      immediately on August 27, 2007 and the remaining 560,000 shares shall vest
      in
      equal one-third increments on the first, second and third anniversaries of
      the
      commencement of the term of his employment.





7


**(5)**  **Research
      and Development Agreements**





Georgetown
      University





In
      December 2003, the Company entered into a clinical research agreement, which
      was
      amended in November 2005, with Georgetown University (“Georgetown”) pursuant to
      which Georgetown will provide the Company with Phase II research. The costs
      associated with this agreement originally totaled $3,146,667 and would be
      partially funded by the National Institutes of Health. The Company’s portion of
      the total cost was $1,846,667 and is payable in installments upon the
      achievement of certain milestones.





On
      December 8, 2006, the Company announced the expansion in the size of the Phase
      II clinical trial by 60 participants, an increase of 40%.  The Company’s
      portion of the total cost increased by an additional $1,934,270, and is payable
      in quarterly installments of approximately $316,000 payable at the end of a
      quarter and a final $670,300 payment at the conclusion of the trial. This
      agreement may be terminated by either party upon 30 days notice. The Company
      expects to make additional payments to Georgetown of approximately $1,302,300,
      or an aggregate of approximately $3,780,900, until the conclusion of the Phase
      II clinical trials. The Company expects to report top-line data during January
      2008.





Additionally,
      on October 4, 2007, the Company announced that it entered into an amendment
      of
      the Clinical Research Agreement between the Company and Georgetown University.
      This amendment expands the Phase II clinical trial to extend the open label
      phase of the clinical studies of Huperzine A for approximately six to eight
      months. As a result of the amendment, and to accommodate the open-label
      extension, the period of performance is extended until December 31, 2008 and
      the
      Company’s obligation under the contract is increased by $255,905, which amount
      the Company expects to pay in the second quarter of 2008.





For
      the
      nine months ended September 30, 2007 and 2006, the total cost incurred by the
      Company was $867,167 and $702,500, respectively. The total costs incurred since
      inception of the agreement is approximately $2,795,000 as of September 30,
      2007
      and is reflected in the Research and Development Cost caption of the Statement
      of Operations.





Org
      Syn
      Laboratory, Inc.





On
      February 1, 2006, the Company entered into an exclusive development agreement
      with Org Syn for the development of synthetic Huperzine A. Org Syn received
      an
      aggregate of $243,600 upon the execution of the agreement and may receive up
      to
      an additional $171,851 upon the delivery of the synthetic Huperzine A. The
      Company expects the obligations under the contract to be fully performed by
      the
      end of 2007. **** The
      Development Agreement may be terminated by the Company if Org Syn fails to
      achieve certain stated milestones.





Xel
      Herbaceuticals, Inc.





On
      March
      15, 2006, the Company entered into a development agreement with Xel
      Herbaceuticals, Inc. (“XEL”) for the development of the Huperzine A Transdermal
      Delivery System (“Product”). Under the terms of the agreement, the Company paid
      XEL a $250,000 fee upon the execution of the agreement and paid an additional
      $92,500 per month during the development of the Product, which was completed
      in
      July 2007. The $250,000 fee paid upon the execution of the agreement was
      amortized ratably over the term of the agreement. Beginning in August 2007,
      the
      Company began paying XEL an additional $92,500 per month on a month-to-month
      basis to fund the further development of the Product. The Company and XEL intend
      to seek domestic and foreign patent protection for the Product.




8


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




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





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





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





For
      the
      nine months ended September 30, 2007 and 2006, the total research and
      development costs incurred in connection with the Company’s agreement with XEL
      were approximately $860,000 and $757,000, respectively, and are reflected in
      the
      Research and Development Cost caption of the Statement of
      Operations.





Dalhousie
      License Agreements (PARTEQ)





As
      part
      of the acquisition of Q-RNA, the Company assumed exclusive License Agreements
      with PARTEQ Research and Development Innovations (“PARTEQ”), the technology
      licensing arm of Queens University, Kingston, Ontario, Canada, which license
      agreements were renewed in the third quarter of 2007 to extend the right of
      the
      Company to license any innovations and developments thereunder for an additional
      year.





The
      Exclusive Patent License Agreement with PARTEQ (the “Alzheimer’s Agreement”)
      grants the Company an exclusive worldwide license to all innovations and
      developments, including the patent applications and additional filings, related
      to specified patents for research on Alzheimer’s disease. The Company made a
      one-time license fee payment of C$25,000 when it entered into the Alzheimer’s
      Agreement in 2005 and will be required to make quarterly royalty payments equal
      to 3% of net sales of the licensed products (as such term is defined in
      Alzheimer’s Agreement), with minimum annual royalties of C$10,000 for 2007,
      C$20,000 for 2008, C$30,000 for 2009 and C$40,000 for 2010 and each subsequent
      calendar year. The Company is also required to pay fixed annual fees of
      C$256,802 in quarterly installments of C$64,200 beginning on January 1, 2008,
      as
      well as the following milestone payments: C$100,000 upon completion of a Phase
      I
      trial of a licensed product, C$250,000 upon completion of a Phase II trial
      of a
      licensed product, and C$1,000,000 upon the first FDA approval (as such term
      is
      defined in the Alzheimer’s Agreement). The Company also has the right to
      sub-license with the payment of 20% of all non-royalty sublicensing
      consideration.




9


The
      Exclusive Patent License Option Agreement with PARTEQ (the “Epilepsy Agreement”)
      grants the Company a three-year option to acquire an exclusive worldwide license
      to all innovations and developments, including the patent applications and
      additional filings, related to specified patents for research on Epilepsy.
      The
      Company made a non-refundable, non-creditable option payment of C$10,000 when
      it
      entered into the Epilepsy Agreement in 2006. The Company is also required to
      pay
      fixed annual fees of C$150,800 in quarterly installments of C$37,700 beginning
      on December 1, 2007. If the Company exercises its option, the Company will
      make
      a non-refundable, non-creditable license payment of C$17,500 at the time of
      such
      exercise. If the Company exercises its option, it will be required to make
      quarterly royalty payments of 3% of net sales of the licensed products (as
      such
      term is defined in Epilepsy Agreement), with a minimum annual royalty of
      C$10,000 through the second anniversary of the license, C$20,000 through the
      third anniversary of the license, C$30,000 through the fourth anniversary of
      the
      license and C$40,000 through the fifth anniversary of the license and each
      subsequent anniversary. If the Company exercises its option, it is also
      obligated to make the following milestone payments: C$100,000 upon completion
      of
      a Phase I trial of a licensed product, C$250,000 upon completion of a Phase
      II
      trial of a licensed product, and C$1,000,000 upon the first FDA approval (as
      such term is defined therein). If the Company exercises its option, the Company
      also has the right to sub-license with the payment of 20% of all non-royalty
      sublicensing consideration. ****





For
      the
      nine months ended September 30, 2007 and 2006, the total research and
      development costs incurred with respect to the Company’s agreements with PARTEQ
      were approximately $33,000 and $0, respectively, and are reflected in the
      Research and Development caption of the Statement of Operations.




The
      following is a summary of fixed and determinable research and development costs
      of the Company (unaudited).




Year
            
            Amount2008
            
            $
            1,700,000Thereafter
            
            
            -Total
            
            $
            1,700,000




10


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





**FORWARD-LOOKING
      STATEMENTS**




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





All
      references to the “Company” refer to Neuro-Hitech, Inc. and its
      subsidiaries.




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




**History**




The
      Company is an early stage pharmaceutical company engaged in the acquisition
      and
      development of therapies for Alzheimer’s disease and other degenerative
      neurological disorders. The Company is focused primarily on technologies that
      address large unmet medical needs and investigational compounds that have the
      potential to show clinical improvements versus current treatments.





The
      Company’s most advanced product candidate, Huperzine A, is in Phase II clinical
      trials in the U.S. and is being tested for efficacy and safety in the treatment
      of mild to moderate Alzheimer’s disease. Huperzine A is a cholinesterase
      inhibitor that the Company believes may be effective in the treatment of
      Alzheimer’s disease and Mild Cognitive Impairment (“MCI”), although, to date,
      the Company’s efforts have been focused upon Huperzine A’s effectiveness in
      Alzheimer’s disease. Through a collaboration with the Alzheimer’s Disease
      Cooperative Study (“ADCS”), the Company has completed two Phase I studies. ADCS
      was formed in 1991 as a cooperative agreement between the National Institute
      of
      Aging and the University of California San Diego, with the goal of advancing
      the
      research of drugs for treating patients with Alzheimer’s disease, the National
      Institutes of Health (“NIH”) and Georgetown University Medical Center
      (“Georgetown”).





The
      Company concluded patient recruitment for its Phase II clinical trials in May
      2007 and anticipates reporting top-line data during January 2008.





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





The
      Company is also studying the transdermal delivery of Huperzine A. The Company
      believes that Huperzine A can effectively be delivered transdermally because
      of
      its low dosage requirement and low molecular weight. The Company believes that
      a
      transdermal patch is the ideal way to deliver any Alzheimer’s treatment because
      the patch may provide the drug for transdermal delivery for up to between three
      and five days while avoiding the gastrointestinal tract. The Company expects
      to
      begin Phase I clinical trials in the second quarter of 2008 and to report study
      results later that year.





11


The
      Company is also pursuing the optimization and pre-clinical development of
      certain compounds that were being developed by Q-RNA, Inc., including NHT0012,
      which is one of a number of second generation disease modifying drugs for
      Alzheimer’s disease that inhibit A-beta and Tau oligomerization and NHT1107,
      which is one of a large pharmaceutical library of drugs designed for the
      treatment of Epilepsy that offer both anti-ictogenic (ability to treat Epilepsy)
      and anti-epileptogenic (ability to prevent Epilepsy) properties.





**Results
      of Operations**





The
      following discussion provides comparisons of the Company’s results of operations
      for the quarter ended September 30, 2007 with the quarter ended September 30,
      2006 and the nine months ended September 30, 2007 to the nine months ended
      September 30, 2006.





The
      Company had revenues from operations of $112,455 for the quarter ended September
      30, 2007, a 38.5% decrease from the $182,800 in revenue achieved for the quarter
      ended September 30, 2006. The decrease in revenue was the result of a decrease
      in product sales to the Company’s sole customer.  The Company had revenues
      from operations of $363,740 for the nine months ended September 30, 2007, a
      39.8% increase from the $260,140 in revenue achieved for the nine months ended
      September 30, 2006. The increase in revenue was solely a result of an increase
      in product sales to the Company’s sole customer.





Cost
      of
      goods sold as a percentage of the Company’s revenue was 49.9% for the quarter
      ended September 30, 2007, compared with 52.0% for the quarter ended September
      30, 2006. Cost of goods sold as a percentage of the Company’s revenue was 45.9%
      for the nine months ended September 30, 2007, compared with 47.9% for the nine
      months ended September 30, 2006.





The
      Company’s total selling, general and administrative expenses increased from
      $326,269 for the quarter ended September 30, 2006 to $645,271 for the quarter
      ended September 30, 2007, an increase of $319,002, or 97.7%. This increase
      was
      the result of increases in salaries and employee benefit expenses resulting
      from
      the Company’s expansion of its executive management team following the
      acquisition of Q-RNA and the employment of a new Chief Executive Officer.
      Additionally, a portion of the increase is attributable to professional fees,
      occupancy costs, investor relations, and NASDAQ listing fees. The Company’s
      total selling, general and administrative expenses increased from $822,635
      for
      the nine months ended September 30, 2006 to $2,122,347 for the nine months
      ended
      September 30, 2007, an increase of $1,299,712, or approximately 158%. The
      increase is attributable to increased salaries and benefit expenses,
      professional fees, investor relations, occupancy costs and NASDAQ listing
      fees.





The
      Company’s research and development costs increased from $685,401 for the quarter
      ended September 30, 2006 to $760,158 for the quarter ended September 30, 2007,
      an increase of $74,757, or approximately 10%.  The increase in research and
      development expenses is attributable to the expansion of the Company’s clinical
      development programs. The Company expects operating expenses in the remainder
      of
      2007 and 2008 to increase further as the Company continues to expand its
      research and development activities, including its planned IND for the
      trandsdermal patch and increases in headcount to staff these activities. The
      Company’s research and development costs increased from $1,879,020 for the nine
      months ended September 30, 2006 to $2,482,821 for the nine months ended
      September 30, 2007, an increase of $603,801, or approximately 32.1%.  The
      increase in research and development expenses is attributable to the expansion
      of the Company’s clinical development programs.





The
      Company’s share based compensation costs increased from $106,815 for the quarter
      ended September 30, 2006 to $1,129,945 for the quarter ended September 30,
      2007.  The increase in share based compensation expenses is attributable to
      stock options and warrants granted to employees, directors, and advisors during
      the three months ended September 30, 2007 and changes in accounting for stock
      based compensation. The Company’s share based compensation costs increased from
      $302,642 for the nine months ended September, 2006 to $1,793,309 for the nine
      months ended September 30, 2007.  The increase in share based compensation
      expenses is attributable to stock options and warrants granted to employees,
      directors, and advisors during the nine months ended September 30, 2007.





12


In
      December 2003, the Company entered into a clinical research agreement, which
      was
      amended in November 2005, with Georgetown pursuant to which Georgetown will
      provide the Company with Phase II research on Huperzine A. The costs associated
      with this agreement originally totaled $3,146,667 and was partially funded
      by
      the National Institutes of Health. The Company’s portion of the total cost was
      $1,846,667, payable in installments upon the achievement of certain
      milestones.  On December 8, 2006, the Company announced the expansion in
      the size of the Phase II clinical trial by 60 participants, an increase of
      40%.  The Company’s portion of the total cost increased by an additional
      $1,934,270, to an aggregate of $3,780,937, and is payable in quarterly
      installments of approximately $316,000 payable at the end of a quarter and
      $670,300 at the conclusion of the trial. This agreement may be terminated by
      either party upon 30 days notice. The Company expects to report top-line data
      during January 2008 at which time it expects to make the $670,300 payment to
      Georgetown.





On
      October 4, 2007, the Company announced that it entered into an amendment of
      the
      Clinical Research Agreement between the Company and Georgetown. This amendment
      expands the Phase II clinical trial to extend the open label phase of the
      clinical studies of Huperzine A for approximately six to eight months. The
      extension should provide the Company additional data with respect to the
      patients that are participating in the open-label phase of the clinical studies.
      As a result of the amendment, and to accommodate the open-label extension,
      the
      period of performance is extended until December 31, 2008. Additionally, the
      Company’s obligation under the contract is increased by $255,905, which amount
      the Company expects to pay in the second quarter of 2008.





On
      February 1, 2006, the Company entered into an exclusive development agreement
      with Org Syn for the development by Org Syn of synthetic Huperzine A, in
      accordance with the terms of the Agreement. Org Syn received an aggregate of
      $243,600 upon the execution of the Agreement and may receive up to an additional
      $171,851 upon the delivery of the synthetic Huperzine A. The Company expects
      the
      obligations under the contract to be fully performed by the end of
      2007.




On
      March
      15, 2006, the Company entered into a Development Agreement with XEL for XEL
      to
      develop a Huperzine A transdermal delivery system (the “Product”). Under the
      terms of the agreement, the Company paid XEL a $250,000 fee upon the execution
      of the Agreement and paid XEL $92,500 per month during the development of the
      Product, which was completed in July 2007. Beginning in August 2007, the Company
      began paying XEL an additional $92,500 per month on a month-to-month basis
      to
      fund the further development of the Product. If the Company exercises its right
      to license the Product in North America and to develop the Product with a third
      party, the Company would be required to make an additional payment of
      approximately $400,000 by March 31, 2008 and up to an aggregate of $2.4 million
      in additional payments upon the achievement of certain milestones, including
      completion of a prototype, initial submission to the FDA, completion of phases
      of clinical studies and completion of the FDA submission and FDA
      approval.  If
      the
      Company elects to exercise the licensing rights described above, the additional
      payments that the Company has been making to XEL to further develop the Product
      would be applied toward the additional payments payable to XEL upon the
      achievement of those milestones.





As
      part
      of the acquisition of Q-RNA, the Company assumed exclusive license agreements
      with PARTEQ, which license agreements were renewed in the third quarter of
      2007
      to extend the right of the Company to license any innovations and developments
      thereunder for an additional year.




Under
      the
      terms of the exclusive PARTEQ Licensing Agreement, the Company made an initial
      one-time license fee of C$25,000 and is obligated to pay fixed annual fees
      of
      C$256,802 in quarterly installments of C$64,200 for the Alzheimer’s research
      beginning on January 1, 2008. The Company may also be required to make quarterly
      royalty payments of 3% of net sales of the licensed products, with a minimum
      annual royalty of C$10,000 for 2007, C$20,000 for 2008, C$30,000 for 2009 and
      C$40,000 for 2010 and each subsequent calendar year. Until such time as the
      Company has a licensed product, the Company will not have to make any quarterly
      payments. The Company is also obligated to make the following milestone
      payments: C$100,000 upon completion of a Phase I trial of a licensed product,
      C$250,000 upon completion of a Phase II trial of a licensed product, and
      C$1,000,000 upon the first FDA approval (as such term is defined in the PARTEQ
      Licensing Agreement). The Company does not currently anticipate having a
      licensed product in the near term. The Company also has the right to sub-license
      with the payment of 20% of all non-royalty sublicensing
      consideration.





13


Under
      the
      terms of the PARTEQ Licensing Option Agreement, which provides the Company
      an
      option to acquire an exclusive worldwide license to all innovations and
      developments for certain compounds (including pyrimidine, heterocyclic,
      beta-alanine, uracil, diuracil, beta amino acid analogs and related compounds)
      and patents/patent applications related thereto from PARTEQ for Epilepsy
      research, including the patent applications and additional filings, the Company
      made an initial payment of C$10,000. The Company is also required to pay fixed
      annual fees of C$150,800 in quarterly installments of C$37,700 beginning on
      December 1, 2007. If the Company exercises its option, the Company will make
      a
      non-refundable, non-creditable license payment of C$17,500 at the time of such
      exercise and will be required to make quarterly royalty payments of 3% of net
      sales of the licensed products, with a minimum annual royalty of C$10,000
      through the second anniversary of the license, C$20,000 through the third
      anniversary of the license, C$30,000 through the fourth anniversary of the
      license and C$40,000 through the fifth anniversary of the license and each
      subsequent anniversary. The Company does not anticipate having a licensed
      product in the near term and until such time will not be required to make
      quarterly payments. If the Company exercises its option, the Company is also
      obligated to make the following milestone payments: C$100,000 upon completion
      of
      a Phase I trial of a licensed product, C$250,000 upon completion of a Phase
      II
      trial of a licensed product, and C$1,000,000 upon the first FDA approval (as
      such term is defined therein). If the Company exercises its option, the Company
      also has the right to sub-license with the payment of 20% of all non-royalty
      sublicensing consideration. ****





The
      Company invests any cash and cash equivalents not used for working capital
      in
      short-term, interest-bearing, investment-grade securities or accounts. In the
      nine months ended September 30, 2007, the Company generated $166,874 from
      interest and dividend income, compared to $110,192 generated in the nine months
      ended September 30, 2006. The increase is largely attributable to the increase
      in the balance of the Company’s cash and cash equivalents during the current
      nine month period.





**Liquidity
      and Capital Resources**




The
      Company has generated limited revenue from operations to date, and expects
      to
      continue generating limited operating revenue for several years. Substantially
      all of the Company’s operations to date have been funded through the sale of its
      securities, and the Company expects this to continue in the foreseeable
      future.





The
      principal uses of the Company’s cash and cash equivalents are concluding the
      Phase II clinical trials, developing alternative delivery technologies,
      improving on the synthetic processes, and continuing to fund pre-clinical
      compounds associated with the agreements with PARTEQ. Although the Company
      has
      developed plans related to its operations, management continues to retain
      significant flexibility for the uses of Company funds. In addition to meeting
      its working capital needs, the Company may also use its cash and cash
      equivalents to acquire additional products or technologies.





During
      the three month and nine month periods ended September 30, 2007, the Company
      experienced an increase in selling, general and administrative expenses incurred
      during the comparable periods in 2006. The increases were largely attributable
      to increases in salaries and employee benefit expenses resulting from the
      Company’s expansion of its executive management team following the acquisition
      of Q-RNA and the employment of a new Chief Executive Officer. As a result of
      those increases, the forecasted expansion of its research and development
      activities, including its planned IND for the trandsdermal patch and increases
      in headcount to staff these activities and the absence of any additional capital
      raised by the Company since March 15, 2007, the Company anticipates, based
      on
      current plans and assumptions related to operations, that its cash and cash
      equivalents are insufficient to satisfy its contemplated cash requirements
      to
      implement its business plan for the next twelve months.





Prior
      to
      January 31, 2008, the Company expects to make payments of approximately $986,300
      to Georgetown pursuant to the terms of its clinical research agreement with
      Georgetown and an additional payment of $255,905 by the end of the second
      quarter of 2008. The payments to Georgetown include a quarterly payment and
      the
      payment of a one time fee at the conclusion of the Phase II trials and payment
      for the extension of the open label phase of the clinical studies of
      Huperzine A. The Company will also begin making payments to PARTEQ of
      $101,900 each quarter as a result of the renewal of the Alzheimer’s Agreement
      and Epilepsy Agreement with PARTEQ. The Company may also incur additional
      expenses if it pursues certain contractual rights or activities that are at
      its
      discretion, including exercising its option to license the Product in North
      America from XEL, pursuant to which it would pay XEL an initial license fee
      of
      $400,000 and up to an aggregate of $2.4 million in additional payments upon
      the
      achievement of certain milestones. The successful conclusion of its Phase II
      trials would also result in increased expenses, including additional purchases
      of Huperzine A and additional development costs.





14


In
      order
      to continue to fund the implementation of its business plan, the Company is
      actively engaged in raising additional financing through existing investors
      and
      potential new investors. Additional funds may not be available or not available
      on acceptable terms, if at all. Given the anticipated cash expenditures, the
      potential cash requirements and the lack of sufficient cash to fully fund those
      expenses, the Company is continually analyzing alternative ways in which it
      can
      preserve its cash and cash equivalents, including the potential delay, reduction
      in scope of or elimination of some of its research or development programs.
      If
      the Company is unable to raise additional financing and is forced to take such
      measures, they may materially harm the Company’s prospects, financial condition
      and future operations.





**Critical
      Accounting Policies**





Our
      financial statements are prepared in accordance with accounting principles
      generally accepted in the United States of America. Preparing financial
      statements in accordance with generally accepted accounting principles requires
      management to make estimates and assumptions which affect the reported amounts
      of assets and liabilities and the disclosure of contingent assets and
      liabilities at the balance sheet dates, and the recognition of revenues and
      expenses for the reporting periods. These estimates and assumptions are affected
      by management’s application of accounting policies.





Research
      and Development Costs




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





Share-Based
      Compensation





Effective
      January 1, 2006, the Company adopted Statement of Financial Accounting
      Standards No. 123(R), (“SFAS No. 123(R)”), “Share-Based Payment,” which requires
      the Company to record as an expense in its financial statements the fair value
      of all stock-based compensation awards. The Company currently utilizes the
      Black-Scholes option pricing model to measure the fair value of stock options
      granted to employees using the “modified prospective” method. Under the
“modified prospective” method, compensation cost is recognized in the financial
      statements beginning with the effective date, based on the requirements of
      SFAS
      No. 123(R) for all share-based payments granted after that date, and based
      on
      the requirements of SFAS No. 123(R) for all unvested awards granted prior to
      the
      effective date of SFAS No. 123(R).





Deferred
      Compensation





In
      accordance with EITF Abstract No. 96-18, “Accounting for Equity Instruments That
      Are Issued to Other Than Employees for Acquiring, or in Conjunction with
      Selling, Goods or Services,” the Company initially measures the fair value of
      any equity granted to consultants on the date of grant and subsequently
      remeasures such grants in accordance with promulgated accounting principles
      using the Black-Scholes pricing model. Amounts are initially recorded as
      Deferred Compensation in the Stockholders’ Equity section of the balance sheet
      and are subsequently charged to the appropriate expense over the period to
      which
      the service relates.





**Item
      3.****Controls
      and Procedures**





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





15


The
      Company carried out an evaluation, under the supervision, and with the
      participation, of the Company’s management, including the Company’s Chief
      Executive Officer and the Company’s Chief Financial Officer, of the
      effectiveness of the Company’s disclosure controls and procedures as of
      September 30, 2007. Based on the foregoing, the Company’s Chief Executive
      Officer and principal financial officer concluded that the Company’s disclosure
      controls and procedures were effective as of September 30, 2007.





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




16


**PART
      II.**  **OTHER
      INFORMATION**





**Item
      2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered
      Securities.**





On
      September 26, 2007, the Company issued 100,729 **** shares
      of
      common stock to investors that purchased common stock and warrants from the
      Company in the 2006 Private Offering and the 2007 Private Offering. The shares
      were issued in accordance with the provisions of a Registration Rights Agreement
      dated as of January 5, 2006 between the Company and the purchasers of securities
      in the 2006 Private Offering and a Registration Rights Agreement dated November
      29, 2006 between the Company and the purchasers of securities in the 2007
      Private Offering. The aforementioned registration rights agreements required
      the
      Company to pay an amount equal to 1% payable in the Company’s common stock, up
      to a maximum 6%, of the aggregate dollar amount of securities purchased by
      such
      investors.





The
      Company believes that each of the issuances of securities described in this
      Item
      2 to be exempt from registration under Section 4(2) of the Securities
      Act.





**Item
      6.**  **Exhibits.**





31.1
            
            Certification
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.31.2
            
            Certification
                of the Chief Financial Officer Pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                of the Chief Executive Officer and Chief Financial Officer Pursuant
                to 18
                U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley
                Act
                of 2002.




17


**SIGNATURES**





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




**Neuro-Hitech,
                Inc.**(Registrant)Date:
                November 14, 2007
            By:
            /s/ Gary
              T.
              ShearmanGary
              T. ShearmanPresident
                and Chief Executive Officer


Date:
                  November 14, 2007
              By:
              /s/ David
                J.
                BarrettDavid
                J. BarrettChief
                    Financial Officer




18