**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**




**FORM
      10-QSB**




(Mark
      One)





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





For
      the
      quarterly period ended March
      31, 2007




** ̈**
            **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
      **ý** No ** ̈**





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


࿲
      Yes **ý** No





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: May 5, 2007





Common
      Stock  12,331,388





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








**PART
      I. FINANCIAL INFORMATION**





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


**Neuro-Hitech,
                  Inc. and Subsidiaries****Consolidated
                  Balance Sheet****(Unaudited)**
  **ASSETS:**
              
              **As
                  of March 31, 2007**Current
                  Assets:Cash
                  and Cash Equivalents
              
              $
              5,061,996Accounts
                  Receivable
              
              
              163,950Subscription
                  Receivable
              
              
              144,525Inventory
              
              
              41,213Prepaid
                  Expenses
              
              
              152,825Deferred
                  Charges
              
              
              81,840Total
                  Current Assets
              
              
              5,646,349Property
                  and Equipment, net
              
              
              6,496**Total
                  Assets**
              
              **$**
              **5,652,845****LIABILITIES
                  AND STOCKHOLDERS' EQUITY:**Current
                  Liabilities:Accounts
                  Payable and Accrued Expenses
              
              $
              968,404Total
                  Current LiabilitiesStockholders'
                  Equity:Common
                  Stock $.001 Par Value Authorized: 44,999,900, Issued & Outstanding:
                  12,323,351
              
              
              12,323Common
                  Stock - Class A Stock $.001 Par Value Authorized: 100, Issued
                  & Outstanding: 100
              
              
              -Additional
                  Paid-in Capital
              
              
              31,571,217Deferred
                  Compensation
              
              
              (1,417,166
              )Accumulated
                  Deficit
              
              
              (25,481,933
              )Total
                  Stockholders' Equity
              
              
              4,684,441**Total
                  Liabilities and Stockholders' Equity**
              
              **$**
              **5,652,845**
  The
          accompanying notes are an integral part of these consolidated financial
          statements.
  
  **Neuro-Hitech,
                    Inc. and Subsidiaries****Consolidated
                    Statements of Operations****(Unaudited)**
  **For
                    the three months endedMarch 31,****2007**
                
                **2006**Sales
                
                $
                194,400
                
                $
                68,040Cost
                    of Goods Sold
                
                
                (100,555
                )
                
                (28,198
                )Gross
                    Profit
                
                
                93,845
                
                
                39,842Operating
                    Expenses:Selling,
                    General and Administrative Expenses
                
                
                662,322
                
                
                223,712Research
                    and Development Costs
                
                
                735,781
                
                
                669,012Share-Based
                    Compensation
                
                
                188,732
                
                
                89,012Amortization
                    of Deferred Compensation
                
                
                15,935
                
                
                -Total
                    Operating Expenses
                
                
                1,602,770
                
                
                981,736(Loss)
                    from Operations
                
                
                (1,508,925
                )
                
                (941,894
                )Other
                    Income:Interest
                    and Dividend Income
                
                
                61,206
                
                
                30,479Total
                    Other Income
                
                
                61,206
                
                
                30,479(Loss)
                    Before Provisions for IncomeTaxes
                
                
                (1,447,719
                )
                
                (911,415
                )Provisions
                    for Income Taxes
                
                
                -
                
                
                -**Net
                    (Loss)**
                
                **$**
                **(1,447,719**
                **)**
                **$**
                **(911,415**
                **)****Basic
                    and Diluted (Loss) per Weighted Average Common Shares
                    Outstanding**
                
                **$**
                **(0.12**
                **)**
                **$**
                **(0.10**
                **)****Weighted
                    Average - Common Shares Outstanding**
                
                
                **12,118,777**
                
                
                **8,974,839**
  The
            accompanying notes are an integral part of these consolidated financial
            statements.


**Neuro-Hitech,
                  Inc. and Subsidiaries****Consolidated
                  Statements of Cash Flows****(Unaudited)**
  **For
                  The Three Months Ended****March
                  31,****2007**
              
              **2006**Cash
                  flows used in operating activities:Net
                  (Loss)
              
              $
              (1,447,719
              )
              $
              (911,415
              )Adjustments
                  to Reconcile Net (Loss) to Net Cash (Used In) Operating
                  Activities:Share-based
                  Compensation Expense
              
              
              188,732
              
              
              89,012Amortization
                  of Deferred Compensation
              
              
              15,935
              
              
              -Depreciation
                  Expense
              
              
              749
              
              
              -Change
                  in operating assets and liabilities:(Increase)
                  Decrease in Assets:Accounts
                  Receivable
              
              
              (282,674
              )
              
              (22,365
              )Inventory
              
              
              (9,920
              )
              
              (24,552
              )Prepaid
                  Expenses
              
              
              (128,904
              )
              
              (329,215
              )Deferred
                  Charges
              
              
              11,910
              
              
              -Increase
                  (Decrease) in Liabilities:Accounts
                  Payable and Accrued Expenses
              
              
              (227,339
              )
              
              282,585Total
                  Adjustments
              
              
              (431,511
              )
              
              (4,535
              )Net
                  cash (used in) Operating activities
              
              
              (1,879,230
              )
              
              (915,950
              )Cash
                  flows from financing activities:Net
                  Proceeds from Private Placement Offering of Common Stock
              
              
              2,220,755
              
              
              4,085,874Proceeds
                  from Exercise of Stock Options
              
              
              15,276
              
              
              996,002Net
                  cash provided by Financing activities
              
              
              2,236,031
              
              
              5,081,876Net
                  increase in cash and cash equivalents
              
              
              356,801
              
              
              4,165,926Cash
                  and cash equivalents, beginning of periods
              
              
              4,705,195
              
              
              90,606Cash
                  and cash equivalents, end of periods
              
              $
              5,061,996
              
              $
              4,256,532
  **Supplemental
                    Disclosure of Non-Cash Investing and Financing
                    Activities:**The
                    Company entered into a service agreement and issued 100,000 warrants
                    valued at fair market value as of grant date the contract was
                    signed. The
                    fair value of these options approximated $255,000 and was recognized
                    as
                    Deferred Compensation in the Stockholders' Equity section of
                    the Balance
                    Sheet. During the first quarter of 2007, in accordance with vesting
                    terms
                    of the options, the Company recognized approximately $16,000
                    of expense
                    for the amortization of Deferred Compensation.In
                    connection with a private placement offering of the Company’s securities
                    that occurred between January through March 15, 2007, the Company
                    entered
                    into a stock subscription agreement for the issuance of 30,000
                    shares of
                    common stock and share purchase warrants for an additional 15,000
                    shares.
                    The transaction totaled $144,525 and was fully collected by the
                    Company in
                    April 2007.During
                    the quarter ended March 31, 2007, options held by the Company's
                    executive
                    officers vested as to 124,791 shares of the Company's common
                    stock. The
                    Company recognized an aggregate compensation cost of $188,732
                    for the
                    vesting of the aforementioned options for the quarter ended March
                    31,
                    2007.The
                    accompanying notes are an integral part of these consolidated
                    financial
                    statements.


1


NEURO-HITECH,
      INC. AND SUBSIDIARIES


NOTES
      TO
      THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS


March
      31,
      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 focuses particularly
      on technologies that address large unmet medical needs and have the potential
      to
      enter clinical development within 12 to 24 months after acquisition, and on
      driving development in a rapid, cost-effective manner. The Company’s current
      portfolio consists of small molecule drugs in development to treat large, unmet
      medical needs - Alzheimer’s disease, Epilepsy and Myasthenia
      Gravis.





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. Q-RNA believes that these compounds
      provided 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 (consisting of normal recurring accruals)
      considered necessary in order to make the interim financials not misleading
      have
      been included and all such adjustments are of normal recurring nature. The
      operating results for the three months ended March 31, 2007 are not necessarily
      indicative of the results that can be expected for the year ending December
      31,
      2007.





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.





**(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. Approximately $194,000 and $5,653,000 of consolidated revenue and
      assets, after eliminations, respectively are based upon the accounts of the
      parent and $0 and $0 of consolidated revenue and assets, after eliminations
      respectively, of the subsidiary.





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.





2


**(3)**
              **Stock
                  Subscription
                  Receivable**
 In
          connection with a private placement offering of the Company’s securities that
          occurred between January 1, 2007 and March 15, 2007, the Company entered
          into a
          stock subscription agreement for the issuance of 30,000 shares of the Company’s
          common stock and warrants to purchase an additional 15,000 shares of the
          Company’s common stock. The transaction totaled approximately $144,525 and was
          fully collected by the Company in April 2007.
 
 In
          accordance with authoritative guidance promulgated by the SEC, the amount
          is
          reflected in the Current Assets section of the Balance Sheet as the amount
          was
          received in full prior to issuance of the financial statements.


**(4)**
            **Stock
                Based Compensation**





In
      January  2006, the Company adopted the provisions of SFAS No. 123(R),
“Share-Based Payment.” The Company determined that based upon further evaluation
      of the two methods available for disclosure that the modified prospective
      adoption method was more appropriate. Using the modified prospective adoption
      method of SFAS 123(R), the Company recognized the fair value of compensation
      cost for all share-based payments granted after January 2006, plus any awards
      granted to employees prior to January 2006 that remained unvested at the time,
      over the service (vesting) period. Under this method of adoption, no restatement
      of prior period was made.





The
      Company did not grant any stock options for the quarter ending March 31,
      2007.





During
      the quarter ended March 31, 2007, options held by the Company's executive
      officers vested as to 124,791 shares of the Company’s common stock. The
      Company recognized an aggregate compensation cost of $188,732 for the vesting
      of
      the aforementioned options for the quarter ended March 31, 2007.




**(5)**
            **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, 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. Historical operations information
      prior to January 2006 is that of Marco only. The accounting is identical to
      that
      resulting from a reverse acquisition except that no goodwill or other intangible
      assets are recorded. Pro forma information is not presented as of the date
      of
      this transaction as Neurotech was considered a public shell and accordingly,
      the
      transaction was not considered a business combination.




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





Private
      Placement Offering





3


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 million
      in cash. The exercise price of the warrants was $5.00 per
      share. ****





On
      November 29, 2006 Neuro-Hitech closed on the sale in a private offering of
      612,200 shares of its common stock and warrants to purchase 306,100 shares
      of
      its common stock for $3,137,525 in cash.  The exercise price of the
      warrants was $7.00 per share.





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
      January 1, 2007 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 $2,280,716 from the offering. The investors
      received an aggregate of 464,196 shares of the Company’s common stock and
      warrants to purchase an additional 232,098 shares of the Company’s common stock.
      The common stock was sold in the offering at $5.125 per share and the exercise
      price of the warrants was $7.00 per share.





Placement
      agent, legal, accounting, printing and other costs related to these offerings,
      in the aggregate amount of $158,200, were charged to additional paid-in capital
      in the period ended March 31, 2007.





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 securityholders 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 was
      $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 not freely transferable
      during the lock-up period.





**(6)**
            **Research
                and License Agreements**





Georgetown
      University





In
      December 2003, the Company entered into a clinical research agreement, which
      was
      amended in November 2005, with Georgetown pursuant to which Georgetown will
      provide the Company with Phase II research. The costs associated with this
      agreement 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 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 $5,080,937, and is payable in quarterly installments of approximately
      $316,000 and $140,000 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 $1,850,000, or an aggregate
      of $3,696,667, until the conclusion of the Phase II clinical trials which the
      Company expects to occur later this year.





For
      the
      three months ended March 31, 2007, the total cost incurred by the Company was
      $250,000 and
      the
      total costs incurred since inception of the agreement is approximately
      $2,177,500 and is reflected in the Research and Development Cost caption of
      the
      Statement of Operations.


4





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 $209,727 upon the execution of the Agreement and may receive up
      to
      an additional $209,727 upon the delivery of the synthetic
      Huperzine A. **** 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 XEL to develop a Huperzine A Transdermal
      Delivery System (“Delivery Product”). Under the terms of the agreement, the
      Company paid XEL a $250,000 fee upon the execution of the agreement and will
      pay
      XEL $92,500 per month during the development of the Delivery Product, which
      development is estimated to take approximately 16 months. The $250,000 fee
      paid
      upon the execution of the agreement is amortized ratably over the term of the
      agreement and is reflected in Deferred Charges caption of the Balance Sheet
      as
      of March 31, 2007 for $81,840. The monthly payment is subject to quarterly
      adjustment and subject to a limit on aggregate development cost overruns of
      $250,000. XEL has agreed to pay any cost overruns in excess of $250,000. The
      Company and XEL intend to seek domestic and foreign patent protection for the
      Delivery Product.




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





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





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





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





5


For
      the
      three months ended March 31, 2007, the total research and development costs
      incurred in connection with the Company’s agreement with XEL were approximately
      $277,500 **** 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.





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 related to research on Alzheimer’s disease. The Company
      made a one-time license fee 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 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. 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
      Alzheimer’s Agreement). The Company also has the right to sub-license with the
      payment of 20% of all non-royalty sublicensing consideration.




Under
      the
      terms of the Alzheimer’s Agreement which was amended in early 2007, the Company
      will pay fixed annual fees of C$256,802.





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 related to 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. 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, 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. ****





For
      the
      three months ended March 31, 2007, the total research and development costs
      incurred with respect to the Company’s agreements with PARTEQ were approximately
      $3,493 and are reflected in the Research and Development caption of the
      Statement of Operations.





Under
      the
      terms of the Epilepsy Agreement which was amended in early 2007, the Company
      will pay fixed annual fees of C$150,800.





The
      following is a summary of fixed and determinable research and development costs
      of the Company, excluding any exercise of the option under the Epilepsy
      Agreement and any milestone payments to XEL.





Year
            
            Amount2008
            
            $
            2,300,000Thereafter
            
            
            -Total
            
            $
            2,300,000








6


**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 contain information that
      is
      not historical, these statements are essentially forward-looking.
      Forward-looking statements can be identified by the use of words such as
“expects,” “plans” “will,” “may,” “anticipates,” “believes,” “should,”
“intends,” “estimates,” “projects” and other words of similar meaning. These
      statements are subject to risks and uncertainties that cannot be predicted
      or
      quantified and consequently, actual results may differ materially from those
      expressed or implied by such forward-looking statements. Such risks and
      uncertainties include those outlined in “Risk Factors” 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” for periods prior to the closing of the Merger refer
      to Marco, and references to the “Company” for periods subsequent to the closing
      of the Merger refer to Neuro-Hitech and its subsidiaries.





THE
      FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED
      IN
      THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS 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 particularly on technologies
      that
      address large unmet medical needs and have the potential to enter clinical
      development within 12 to 24 months after acquisition, and on driving development
      in a rapid, cost-effective manner.





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 anticipates concluding patient recruitment by the end of April 2007
      and
      obtaining top-line data during the fourth quarter of 2007.





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 trial in the first quarter of 2008 and to report study
      results later that year.


7





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-ictogenci (ability to treat Epilepsy)
      and anti-epileptogenic (ability to prevent Epilepsy) properties.





**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.





Between
      January 1, 2007 and March 15, 2007, the Company conducted a private placement
      offering of its securities with institutional and individual investors and
      received total gross proceeds of $2,379,005 from these sales. Costs and expenses
      related to these offerings, including placement agent, legal, accounting and
      other costs, totaled in the aggregate, approximately $158,200 and were charged
      to additional paid-in-capital.





The
      investors received an aggregate of 464,196 shares of the Company’s common stock
      and warrants to purchase 232,098 shares of the Company’s common stock. The
      common stock was sold in the offering at $5.125 per share and the exercise
      price
      of the warrants was $7.00 per share. The private offerings that took place
      between January 1, 2007 and March 15, 2007 concluded
      the Company’s previously disclosed private offering of up to $9.3 million of
      Company common stock and warrants (the “ Offering ”).





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.





Although
      the Company has developed initial plans and assumptions related to its
      operations, management retains significant flexibility in applying a substantial
      portion of the net proceeds of the Offerings. Pending use of the net proceeds,
      the Company may invest the net proceeds of the offerings in short-term,
      interest-bearing, investment-grade securities or accounts. In the three months
      ended March 31, 2007, the Company generated $61,206 from interest and dividend
      income, compared to $30,479 generated in the three months ended March 31, 2006.
      The increase is largely attributable to the increase in the Company’s cash and
      cash equivalents.





**Results
      of Operations**





The
      following discussion provides a comparison of the Company’s results of
      operations for the quarter ended March 31, 2007 to the quarter ended March
      31,
      2006.





The
      Company had revenues from operations of $194,400 for the quarter ended March
      31,
      2007, a 185.7% increase from the $68,040 in revenue achieved from the quarter
      ended March 31, 2006. The increase in revenue was solely a result of an increase
      in product sales to the Company’s sole customer of natural huperzine.




Cost
      of
      goods sold as a percentage of the Company’s revenue was 51.7% for the quarter
      ended March 31, 2007, compared with 41.4% for the quarter ended March 31, 2006.
      The decrease in the cost of goods sold as a percentage of the Company’s revenue
      was attributable to the sale by the Company of natural huperzine to XEL at
      cost.





The
      Company’s total selling, general and administrative expenses increased from
      $223,712 for the quarter ended March 31, 2006 to $698,129 for the quarter ended
      March 31, 2007, an increase of $474,417, or approximately 212%. 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. Additionally, a portion of the increase in the selling,
      general and administrative expenses from the prior year is attributable to
      increased legal and rent costs.


8





The
      Company’s research and development costs increased from $669,012 for the quarter
      ended March 31, 2006 to $735,781 for the quarter ended March 31, 2007, an
      increase of $66,769, or approximately 10.0%.  The increase in research and
      development expenses is attributable to the expansion of the Company’s clinical
      development program and an additional $45,000 payment made to PARTEQ during
      this
      quarter resulting from late billing by PARTEQ. The Company expects operating
      expenses in 2007 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 share based compensation costs increased from $89,012 for the quarter
      ended March 31, 2006 to $188,732 for the quarter ended March 31, 2007, an
      increase of approximately 105.3%.  The increase in share based compensation
      expenses is attributable to employees receiving share based compensation in
      the
      three months ended March 31, 2007 that were not employed by the Company in
      the
      three months ended March 31, 2006.





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 would be partially funded
      by the National Institutes of Health. The Company’s portion of the total cost
      was $1,846,667 and 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 $5,080,937, and is payable in quarterly
      installments of approximately $316,000 and $140,000 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
      $1,850,000, or an aggregate of $3,696,667, until the conclusion of the Phase
      II
      clinical trials which the Company expects to occur later this year.





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
      $209,727 upon the execution of the Agreement and may receive up to an additional
      $209,727 upon the delivery of the synthetic Huperzine A.





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 will pay XEL $92,500 per month during the development
      of
      the Product, which development is estimated to occur in the latter half of
      2007
      in accordance with the original estimates and the existing schedule. The monthly
      payment is subject to quarterly adjustment and subject to a limit on aggregate
      development cost overruns of $250,000. **** XEL
      has
      agreed to pay any cost overruns in excess of $250,000. The Company expects
      that
      if all of the milestones under its contract with XEL are achieved, the Company
      would be required to make additional payments in calendar year 2007 of
      approximately $655,500.




As
      part
      of the acquisition of Q-RNA, the Company assumed exclusive license agreements
      with PARTEQ. 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 $256,802 for the Alzheimer’s research. 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.





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 has also paid $3,493 to PARTEQ
      under the terms of this agreement during the three months ended March 31, 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. ****


9





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





**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
      recognized that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving the desired control
      objectives, and management necessarily was required to apply its judgment in
      evaluating the cost-benefit relationship of possible controls and
      procedures.





Evaluation





The
      Company carried out an evaluation, under the supervision, and with the
      participation, of the Company’s management, including the Company’s Chief
      Executive Officer and the Company’s Chief Financial Officer, of the
      effectiveness of the Company’s disclosure controls and procedures as of March
      31, 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 March 31, 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.


10


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





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





On
      February 14, 2007, the Company’s board of directors approved the issuance of a
      warrant to purchase 100,000 shares of the Company’s common stock to Crystal
      Research Associates, LLC (“CRA”), in connection with a letter agreement between
      the Company and CRA. The warrant is exercisable at a price of $7.15 per share
      and vests over the two year term of the agreement.





**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.





11


**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:
                    May 15, 2007
                /s/
                    Reuben SeltzerReuben
                    SeltzerPresident
                    and Chief Executive OfficerDate:
                    May 15, 2007
                /s/
                    David BarrettDavid
                    BarrettChief
                    Financial Officer








12