##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-KSB



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(Mark One)

|x | Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------

For the fiscal year ended March 31, 2007

or



| ̈ | 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: 0-2040



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THE ST. LAWRENCE SEAWAY
CORPORATION

(Name of Small Business Issuer in its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Indiana                                                        |  | 35-1038443                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



|                                                           |  |           
|---------------------------------------------------------- |  | ----------
|Hanna II, Suite P, 6011 E. Hanna Ave. Beach Grove, Indiana |  | 46203     
|(Address of Principal Executive Offices)                   |  | (Zip Code)

Issuers Telephone Number (317) 639-5292

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common
Stock, par value $1.00 per share

(Title of class)



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Check whether the issuer is not
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. ̈

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 ̈

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No  x

The issuers revenues for its fiscal year ended March 31, 2007 were $5,596.

The aggregate market value of common stock held by non-affiliates of the issuer as of June 11, 2007 was approximately $810,000.

The number of shares of common stock of the issuer outstanding as of June 11, 2007 was 427,069.

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



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##### Table of Contents

THE ST. LAWRENCE SEAWAY CORPORATION

FORM 10-KSB INDEX



|                                                                                                                         |  |      
|------------------------------------------------------------------------------------------------------------------------ |  | -----
|                                                                                                                         |  | PAGE 
|PART I                                                                                                                   |  |      
|                                                                                                                         | 
|Item 1  Description of Business                                                                                         |  | 1-3  
|                                                                                                                         | 
|Item 2  Description of Property                                                                                         |  | 3    
|                                                                                                                         | 
|Item 3  Legal Proceedings                                                                                               |  | 3    
|                                                                                                                         | 
|Item 4  Submission of Matters to a Vote of Security Holders                                                             |  | 3    
|                                                                                                                         | 
|PART II                                                                                                                  |  |      
|                                                                                                                         | 
|Item 5  Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities  |  | 4    
|                                                                                                                         | 
|Item 6  Managements Discussion and Analysis or Plan of Operation                                                       |  | 4-9  
|                                                                                                                         | 
|Item 7  Financial Statements                                                                                            |  | 9    
|                                                                                                                         | 
|Item 8  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                            |  | 9    
|                                                                                                                         | 
|Item 8A  Controls and Procedures                                                                                        |  | 10   
|                                                                                                                         | 
|Item 8B  Other Information                                                                                              |  | 10   
|                                                                                                                         | 
|PART III                                                                                                                 |  |      
|                                                                                                                         | 
|Item 9  Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act |  | 11-12
|                                                                                                                         | 
|Item 10  Executive Compensation                                                                                         |  | 12-13
|                                                                                                                         | 
|Item 11  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                 |  | 14-16
|                                                                                                                         | 
|Item 12  Certain Relationships and Related Transactions                                                                 |  | 16-17
|                                                                                                                         | 
|Item 13  Exhibits                                                                                                       |  | 17-19
|                                                                                                                         | 
|Item 14  Principal Accountant Fees and Services                                                                         |  | 19   
|                                                                                                                         | 
|SIGNATURES                                                                                                               |  | 20   



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##### Table of Contents

PART I

It
em 1  Description of Business.

The St. Lawrence Seaway Corporation (the Company) is an
Indiana corporation organized on March 31, 1959. Prior to 1998, the Company principally engaged in farming, timber, harvesting and other traditional agricultural activities. The Company is currently engaged in investing in drug development
programs and in evaluating other alternatives to its former business, including continuing its evaluation of operating companies for acquisition, merger or investment. Pending any such transaction, the Company will continue its practice of
maintaining any cash assets in relatively liquid interest/dividend bearing money market investments. Eventually such assets may be used for an acquisition or for a partial payment of an acquisition or for the commencement of a new business.

Zimmerman Investment. The Company entered into a Stock and Warrant Purchase Agreement (the Purchase Agreement) on
January 10, 2007 with Bernard Zimmerman & Company, Inc., an investment and merchant banking company (the Investor), pursuant to which the Investor has agreed to purchase: (i) 75,000 shares of the Companys common
stock for a total purchase price of $75,000; and (ii) a ten year warrant for a total purchase price of $2,500 which permits the Investor to purchase up to 250,000 shares of the Companys common stock at an exercise price of $1.00 per share
(the Warrant). The common stock and the Warrant will be sold to the Investor pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. The common stock being sold to the Investor will
represent approximately 15% of the outstanding common stock of the Company after the common stock investment is made. If the Investor exercises all of the Warrants issued in the Transaction, the Investor would own approximately 43.2% of the issued
and outstanding Common Stock of the Company if no other shares are issued.

Under the terms of the Purchase Agreement, and subject to
shareholder approval, it is contemplated that the Company will convert to a Delaware corporation immediately prior to the closing and issue all existing stockholders and to holders of certain currently held outstanding options and warrants of
current officers and directors who are entitled to receive such distributions upon the exercise of such outstanding instruments (if they exercise their options or warrants before their expiration), on a pro rata basis, a tracking stock evidencing
the Companys medical investments, consisting of the Companys investments in, and ventures with, New York University School of Medicine and T3 Therapeutics, LLC (the Development Company). The tracking stock, to be designated
as Class A Common Stock, will be non-voting, non-transferable and held in book entry form only. The Purchase Agreement does not contemplate any issuance of Class A Common Stock to the Investor in connection with the Investors
acquisition of the Companys common stock and the Warrant.

Research Funding. In recent years, the Company has examined several
investment and acquisition opportunities in technology and Internet-related fields, but ultimately determined that they were not suitable for the Company. The Company has broadened its search to opportunities to participate in funding the
development of pharmaceuticals and health-related products. The following is a summary of the two ventures the Company has entered into.

In January 2002, the Company entered into a Research Funding Agreement with New York University School of Medicine, New York, New York, under which the Company provided funding for the further development of certain NYU medical discoveries
and technology, in return for which the Company is entitled to receive license fees from the future commercial uses of such discoveries. Such technology is subject to pending NYU patent applications and generally relates to treatment of certain
prostate



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##### Table of Contents

enlargements and prostate cancers. Under the Research Funding Agreement, the Company agreed to provide research funding of $25,000 for each of eight calendar
quarters, in exchange for which the Company is entitled to receive 1.5% of future license revenues from the sale, license or other commercialization of the patents. The first payment was made in connection with the execution of the Research Funding
Agreement in January 2002. The Company had the option to provide additional funds for up to three additional years of development, in exchange for which the Companys share of license revenue from the patents would increase to a maximum of
3.75%. The Company did not exercise this option. Development and commercialization of the patents is highly speculative and subject to numerous scientific, financial, practical and commercial uncertainties. There can be no assurances that the
Company will receive any license revenues as a result of this Research Funding Agreement.

In a separate matter, the Company entered into a
joint venture agreement as of June 25, 2002 (the Original Agreements), under which it has provided development funding to a newly-formed private Delaware limited liability company, the Development Company, for specified drug
treatment protocols for thyroid and cardiovascular disease, in exchange for an equity interest in the Development Company. Such treatments are in early stage development and involve the use of novel formulations of hormones, delivered in controlled
release formulations. Funding provided by the Company is being used for the purpose of financing development of new formulations of such hormones, and to conduct animal and human clinical trials.

Under the Original Agreement, (i) T3 Therapeutics, Inc. (the Founder Company) contributed to the Development Company all of its right,
title and interest in the design, development and research of certain medicinal products in exchange for an 87.5% Class A ownership stake in the Development Company, (ii) the Company provided development funding of $750,000 to the
Development Company in exchange for a 12.5% preferential Class B ownership stake in the Development Company, and (iii) Mr. Edward Grier, a vice president and director of the Company, was granted an option to purchase 25 Class B units in
the Development Company. In connection with the consummation of the transactions contemplated by the Original Agreement, Mr. Grier purchased 25 Class A units in the Development Company from the Founder Company for $150,000, which resulted
in the Founder Company having an 85% Class A ownership stake in the Development Company and Mr. Grier having a 2.5% Class A ownership stake in the Development Company. In addition, the Original Agreement provided for a follow-on
investment by the Company of an additional $750,000 if certain preliminary FDA testing approvals were secured, with a corresponding increase in the Companys ownership stake in the Development Company to 25%.

As of November 16, 2005, the Company, the Founder Company and Mr. Grier (together with the Founder Company, the Other Members)
entered into an Amended and Restated Limited Liability Company Agreement (the Amendment) of the Development Company, which amended and restated the Original Agreement to, among other things, provide for satisfaction of any contingent
follow-on investment obligation of the Company in exchange for its making a $50,000 investment on or about the time of execution of the Amendment, and for the conversion of all of the Companys preferential Class B interests in the Development
Company (including certain redemption, registration and contingent additional unit rights), as well as all of the interests of Mr. Grier and the Founder Company, into a single non-preferential class of unit interests. The $50,000 follow-on
investment increased the Companys ownership stake in the Development Company to 25%, subject to adjustment and dilution. As of March 31, 2007, the Companys ownership stake in the Development Company has been diluted to approximately
21.8% upon the issuance by the Development Company of Development Company units to the original patent licensor in exchange for the original patent licensors modified royalty agreement with the Development Company. The Development Company has
in 2007 sold an additional 5% of its units to outside investors, diluting the Companys ownership stake in the Development Company to approximately 20.8%. Further dilution of the Companys ownership stake is expected as the Development
Company raises additional capital to fund operations.



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If the product is licensed by Development Company to a pharmaceutical partner the Company is entitled to
a portion of Development Companys resulting royalties and progress payments. The amount of ownership and royalties to be received by the Company is subject to adjustment, based upon (i) ownership and license arrangements that the
Development Company makes with laboratories that provide research and formulation expertise and products, (ii) development or licensing transactions, or (iii) other sources of financing. Development and commercialization of the treatment
protocols is highly speculative and subject to numerous scientific, practical, financial and commercial uncertainties.

As of the
conversion, Mr. Grier was a 2.5% Member of the Development Company and had an option to purchase an approximate 2.5% (25 units) additional ownership stake in the Development Company.

Financing Arrangements. The Company currently has no debt for borrowed funds or similar obligations or contingencies. The Company does not have a
formal arrangement with any bank or financial institution with respect to the availability of financing in the future.

Licenses and
Trademarks, etc. The business of the Company is not currently dependent upon any patent, trademark, franchise or license.

Governmental Regulation. The Company believes it is in compliance with all federal, state and local regulations.

Employees. The Company has no employees at this time.

Item 2  Description of Property.

At March 31, 2007 and 2006, the Company did not own any real
estate.

Item 3  Legal Proceedings.

Not applicable.

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

Not applicable.



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##### Table of Contents

PART II

Item 5  Market For Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

Market Information. The Companys common stock is not currently listed for trading on any exchange. The following table sets forth the high and low sales price for each quarterly period during the fiscal
years 2007 and 2006, as reported by the OTC Bulletin Board. The common stock is quoted under the ticker symbol STLS.OB. Such price data reflects inter-dealer prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.



|            |  |         |  |       |  |      
|----------- |  | ------- |  | ----- |  | -----
|Fiscal Year |  | Quarter |  | High  |  | Low  
|2007        |  | First   |  | $6.85 |  | $1.30
|            |  | Second  |  | $4.50 |  | $3.00
|            |  | Third   |  | $7.95 |  | $3.00
|            |  | Fourth  |  | $4.30 |  | $4.26
|2006        |  | First   |  | $1.80 |  | $0.61
|            |  | Second  |  | $1.25 |  | $0.80
|            |  | Third   |  | $1.20 |  | $0.90
|            |  | Fourth  |  | $1.70 |  | $0.90

Number of Stockholders. As of May 9, 2007, there were approximately 1,100 holders of
record of the Companys common stock. This number does not include beneficial owners whose shares are held in street name.

Dividends. It is the present policy of the Board of Directors of the Company to retain earnings, if any, to finance the future expansion of the Company. No cash dividends were paid during the fiscal years ended March 31, 2007
and 2006 and no cash dividends are expected to be paid in the future.

Item 6  Managements Discussion and Analysis or Plan of Operation.

You should read the
following discussion and analysis of the Companys financial condition and results of operations together with the Companys financial statements and related notes included elsewhere in this report. The notes to the financial statements
set forth the Companys critical accounting policies, including policies related to asset valuation. These policies are summarized below under Critical Accounting Policies.



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Results of Operations for the Fiscal Year Ended March 31, 2007 as Compared to the Fiscal Year
Ended March 31, 2006.

Interest and dividend income increased by $1,204, or 27.4%, from $4,392 for the fiscal year ended
March 31, 2006 to $5,596 for the fiscal year ended March 31, 2007. This increase is a result of higher interest rates on the Companys cash balances, offset in part by the Companys lower cash balances during the fiscal year
ended March 31, 2007.

Consulting fees were $0 and $0 for the fiscal years ended March 31, 2007 and 2006, respectively. In an
effort to conserve cash and reduce operating expenses, consulting payments were curtailed during fiscal 2006.

General and administrative
expenses increased by $3,377, or 3.7%, from $91,277 for the fiscal year ended March 31, 2006 to $94,654 for the fiscal year ended March 31, 2007. The increase in general and administrative expenses in the fiscal year ended March 31,
2007 was due primarily to an increase in annual meeting expenses due to the Companys planned annual meeting on July 10, 2007, partially offset by a reduction in legal expenses.

The following table summarizes the significant component of these expenses, and presents a comparison of such components for the fiscal years ended
March 31, 2007 and March 31, 2006:



|                                                                        |  |                                     |        |      |   |       
|----------------------------------------------------------------------- |  | ----------------------------------- | ------ | ---- | - | ------
|                                                                        |  | For the Fiscal Year Ended March 31,
|                                                                        |  | 2007                                |        | 2006
|Executive compensation, management fees, salaries and employee benefits |  | $                                   | 1,210  |      | $ | 1,425 
|Office rent and operations                                              |  |                                     | 1,647  |      |   | 1,821 
|Stock services, proxy, annual meeting and SEC report compliance         |  |                                     | 22,294 |      |   | 9,319 
|Professional fees (accounting & legal)                                  |  |                                     | 69,503 |      |   | 78,712
|Total                                                                   |  | $                                   | 94,654 |      | $ | 91,277
|                                                                        |  |                                     |        |      |   |       



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The Company restated its financial statements for the year ended March 31, 2005, and for the first
three quarters of fiscal 2006 for the correction of an error. Upon review of tax basis financial information from the Development Company, it was noted that research and development costs were capitalized for tax purposes. The Company did not adjust
the results of Development Companys operations to expense such costs as incurred in accordance with GAAP. Accordingly, the equity in the loss of the Development Company has been restated to properly reflect its value in accordance with the
equity method of accounting. The effect of this change as of March 31 is as follows:



|                                                                                                                |  |      |          |   |      |   |          |  
|--------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                                                                                |  | 2006 |          |   | 2005 |  
|Reconciliation of Retained Earnings (Deficit):                                                                  |  |      |          |   |      |   |          |  
|Beginning retained earnings (March 31, 2005 and 2004) as previously reported                                    |  | $    | 137,050  |   |      | $ | 207,768  |  
|Adjustment for understatement of equity in the loss of T3 Therapeutics (net of taxes of nil):                   |  |      |          |   |      |   |          |  
|2004 adjustment effecting 2005 beginning retained earnings                                                      |  |      |          |   |      |   | (35,000  | )
|2005 and 2004 adjustments effecting 2006 beginning retained earnings                                            |  |      |          |   |      |   | (70,000  | )
|Beginning retained earnings, as restated                                                                        |  |      | 67,050   |   |      |   | 172,768  |  
|Net loss (as restated in 2005)                                                                                  |  |      | (726,885 | ) |      |   | (105,718 | )
|Retained earnings (deficit), end of year                                                                        |  | $    | (659,835 | ) |      | $ | 67,050   |  
|Reconciliation of 2005 Net Loss:                                                                                |  |      |          |   |      |   |          |  
|Net loss March 31, 2005, as previously reported                                                                 |  |      |          |   |      | $ | (70,718  | )
|Adjustment of 2005 net income for understatement of equity in the loss of T3 Therapeutics (net of taxes of nil) |  |      |          |   |      |   | (35,000  | )
|Net loss March 31, 2005, as restated                                                                            |  |      |          |   |      | $ | (105,718 | )
|Loss per share, as originally reported                                                                          |  |      |          |   |      | $ | (.18     | )
|Loss per share, as restated                                                                                     |  |      |          |   |      | $ | (.27     | )

In addition, during the year ended March 31, 2006, the Company recorded a loss in the amount
of $630,000 on the other than temporary decline in the value of its original investment in the Development Company.



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As a result of the above items, the Company had a loss of $726,885 before provision for income taxes for
the fiscal year ended March 31, 2006, as compared to a loss of $105,718 (as restated) before provision for income taxes for the fiscal year ended March 31, 2005.

No income tax was paid for the fiscal years ended March 31, 2007 and March 31, 2006.

The Company is currently evaluating strategic alternatives, including the complete liquidation and dissolution of the Company, and the appropriate timing
thereof to afford the Company with an optimum opportunity to find and complete favorable merger or sale agreements with respect to the Company or its assets in an effort to maximize the total return on its shareholders investment. On
January 10, 2007 the Company entered into a Stock and Warrant Purchase Agreement with Bernard Zimmerman & Company, Inc. (the Investor), pursuant to which the Investor has agreed to purchase: (i) 75,000 shares of the
Companys common stock for a total purchase price of $75,000, and (ii) a ten year warrant for a total purchase price of $2,500 which permits the Investor to purchase up to 250,000 shares of the Companys common stock at an exercise
price of $1.00 per share. For additional terms and conditions of the Purchase Agreement (including the proposals to reincorporate in Delaware and to issue a Class A tracking stock) , please see the Companys Current Report on Form 8-K
filed on January 10, 2007 and the Companys Current Report on Form 8-K filed on April 19, 2007.

Liquidity and Capital
Resources. At March 31, 2007, the Company had cash on hand of $69,524, substantially all of which was in cash and money market funds, and net working capital of $32,096. In November 2005, the Company used cash in the amount of $50,000 to
make its follow-on investment in the Development Company. On January 31, 2006, Mr. Joel Greenblatt, Chairman of the Companys Board of Directors exercised an additional warrant to purchase 16,667 shares of the Companys common
stock at an exercise price of $3 per share, which resulted in the Company receiving $50,001, in cash on such date as payment for such shares. Subject to the consummation of the transactions contemplated by the Purchase Agreement, the Company
believes it has sufficient capital resources to continue its current business for the next twelve months.

The Company has no commitment
for any capital expenditure and foresees none. However, the Company will incur routine fees and expenses incident to its reporting duties as a public company, and expenses relating to its office operations. The Companys cash requirements for
the next twelve months are relatively modest, consisting principally of legal, accounting and other expenses relating to filings required under the Securities Exchange Act of 1934.

The Company paid no cash dividends in the fiscal years ended March 31, 2007 and 2006.

The Company is currently evaluating strategic alternatives, including the complete liquidation and dissolution of the Company, and the appropriate timing
thereof to afford the Company with an optimum opportunity to find and complete favorable merger or sale agreements with respect to the Company or its assets in an effort to maximize the total return on its shareholders investment. On
January 10, 2007 the Company entered into a Stock and Warrant Purchase Agreement (the Purchase Agreement) with Bernard Zimmerman & Company, Inc. (the Investor), pursuant to which the Investor has agreed to
purchase: (i) 75,000 shares of the Companys common stock for a total purchase price of $75,000, and (ii) a ten year warrant for a total purchase price of $2,500 which permits the Investor to purchase up to 250,000 shares of the
Companys common stock at an exercise price of $1.00 per share (the Transaction). Even if the terms of the Purchase Agreement are approved by the Companys stockholders, there is a possibility that the Transaction will not
close. The Purchase Agreement contains a number of conditions to closing. If one or more of these conditions is not satisfied or waived, then the Transaction may not close. Whether or not the Transaction closes, there may be no distribution of the
Class A tracking stock to the Companys



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stockholders due to unforeseen circumstances, including, but not limited to, tax liabilities or state or federal securities laws issues related to such
issuance, though the Company currently intends to do so immediately after the closing of the Transaction, if approved. For additional terms and conditions of the Purchase Agreement (including the proposals to reincorporate in Delaware and to issue a
Class A tracking stock) , please see the Companys Form 8-K filed on January 10, 2007 and the Companys Form 8-K filed on April 19, 2007.

The Company does not have a formal arrangement with any bank or financial institution with respect to the availability of financing in the future.

On June 13, 2006, Mr. Greenblatt exercised an additional warrant to purchase 16,667 shares of the Companys common stock at an exercise
price of $3 per share, which resulted in the Company receiving $50,001 in cash on such date as payment for the shares.

Critical
Accounting Policies and Estimates. Managements Discussion and Analysis of Financial Conditions and Results of Operations discusses, among other things, the Companys financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including
those relating to investments, liabilities and operating expenses. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes
the following critical account policy, among others, affect its more significant judgments and estimates used in the preparation of the financial statements.

Valuation of Other Investments: The Company reviews for impairment investments made in the Development Company on an on-going basis or whenever events or changes in circumstances indicate that the
carrying amount of any asset may not be recoverable. In the event of impairment, the asset is written down to its fair market value.

Recent Accounting Changes and New Accounting Pronouncements. See PART I, Item 7, Financial Statements and accompanying notes thereto.

Safe harbor statement under the Private Securities Litigation Reform Act of 1995

This
report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect the Companys current views with respect to future events
and financial performance. The words believe, expect, anticipate, and similar expressions identify forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a
variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed in any such forward-looking statements, including those mentioned below and those detailed from time to time in the
Companys filings with the Securities and Exchange Commission. These factors include, but are not limited to:



| |  |  | the timing and necessity of a complete liquidation and dissolution of the company, if any;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | the ability to successfully complete development and commercialization of products, including the cost, timing, scope and results of pre-clinical and clinical
testing;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | the ability to successfully complete product research and further development, including animal, pre-clinical and clinical studies;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | the ability of the developers to manage multiple late stage clinical trials for a variety of product candidates;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | significant uncertainties and requirements to attain government testing and sales approvals and licenses;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | the volume and profitability of product sales;
| | - |  | ----------------------------------------------



| |  |  | changes in existing and potential relationships with financing, corporate or laboratory collaborators;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the cost, delivery and quality of clinical and commercial grade materials supplied by contract manufacturers or laboratories;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | the timing, cost and uncertainty of obtaining regulatory approvals;
| | - |  | -------------------------------------------------------------------



| |  |  | the ability to obtain substantial additional funding or to enter into development or licensing arrangements with well-funded partners or licensees;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the ability to attract manufacturing, sales, distribution and marketing partners and other strategic alliances;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | the ability to develop and commercialize products before competitors; and
| | - |  | -------------------------------------------------------------------------



| |  |  | the dependence on certain founders and key management members of the developer, or physicians with expertise in the field.
| | - |  | --------------------------------------------------------------------------------------------------------------------------

Item 7  Financial Statements.

Annexed hereto starting on Page 21 of this Form 10-KSB.

Item 8  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

On
May 25, 2006, the Company accepted the resignation of its previous independent accountants, Sallee & Company, Inc. (Previous Accountants), and on May 25, 2006 engaged Mahoney Sabol & Company, LLP (New
Accountants) as the Companys new principal independent registered public accounting firm to audit its financial statements for the fiscal year ended March 31, 2006.

The reports of the Previous Accountants on the Companys financial statements for each of the Companys fiscal years ended March 31, 2005
and 2004 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

The decision to change independent accountants was approved by the Board of Directors of the Company.

During the fiscal years ended March 31, 2005 and 2004, and through May 25, 2006, the Company had no disagreement with the Previous Accountants on any matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement, if not resolved to the satisfaction of the Previous Accountants, would have caused the Previous Accountants to make reference to the subject matter of the disagreement in connection with its report on
the Companys financial statements for such fiscal periods.



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Item 8A  Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. The
Companys Chairman of the Board and President and Treasurer have evaluated the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d15(e) under the Securities Exchange
Act of 1934, as amended (the Exchange Act) as of the end of the period covered by this Annual Report (the Evaluation Date). Based upon such evaluation, such officers have concluded that, as of the Evaluation Date, the
Companys disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company required to be included in the Companys reports filed or submitted under the Exchange Act.

(b) Changes in Internal Control Over Financial Reporting. There has not been any change in the Companys internal control over
financial reporting that occurred during the Companys last fiscal quarter, that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

Item 8B  Other Information

Not applicable.



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##### Table of Contents

PART III

Item 9  Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act.

Set forth in the following table are the names and ages of all persons who were members of the Board of Directors of the Company at March 31, 2007, all positions and offices with the Company held by such persons,
their business experience, the period during which they have served as members of the Board of Directors and other directorships in reporting companies held by them.



|                                         |  |     |  |               |  |                                                                                                                                                                                                                                                                                                          |  |                   
|---------------------------------------- |  | --- |  | ------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------
|Directors/Position in Company            |  | Age |  | DirectorSince |  | Business Experience During Last Five Years                                                                                                                                                                                                                                                               |  | OtherDirectorships
|Jack C. Brown Secretary                  |  | 87  |  | 1959          |  | Retired attorney at Law, Indianapolis, Indiana.                                                                                                                                                                                                                                                          |  | None              
|                                         |  |     |  |              
|Joel M. Greenblatt Chairman of the Board |  | 49  |  | 1993          |  | Managing Partner of Gotham Capital III L.P. (Gotham) and its predecessors since 1985. Gotham is a private investment partnership which owns securities, equity interests, distressed
debt, trade claims and bonds, derivatives and options and warrants of issuers engaged in a variety of businesses. |  | None              
|                                         |  |     |  |              
|Daniel L. Nir President and Treasurer    |  | 46  |  | 1993          |  | Managing Partner of Gracie Capital, L.P. since December, 1998; Manager of Sargeant Capital Ventures, LLC since December 1997; Managing Partner of Gotham prior thereto.                                                                                                                                  |  | None              
|                                         |  |     |  |              
|Edward B. Grier III Vice President       |  | 48  |  | 1993          |  | Limited Partner of Gracie Capital, L.P. since January 1999; Vice President of Gotham from 1992-1994 and a limited partner of Gotham from January 1, 1995 through December 31, 1998.                                                                                                                      |  | None              

Directors of the Company were elected by a plurality of the votes cast at the last Annual Meeting
of Shareholders. Each Directors current term of office will expire at the next Annual Meeting of Shareholders or when a successor is duly elected and qualified. The Company did not hold an Annual Meeting of Shareholders during the fiscal year
ended March 31, 2006. Executive officers of the Company are elected annually for a term of office expiring at the Board of Directors meeting immediately following the next succeeding Annual Meeting of Shareholders, or until their successors are
duly elected and qualified.

While the Company does not have a formal audit committee, the Board of Directors has determined that
Mr. Grier meets the requirements adopted by the Securities and Exchange Commission (the SEC) for qualification as an audit committee financial expert. Mr. Grier, as Vice President of the Company, is not
independent of the Company as that term is used in the SECs proxy rules.



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##### Table of Contents

Code of Ethics. The Board of Directors has adopted a Code of Ethics, as defined under the federal
securities laws, that applies to all directors and officers of the Company. A copy of the Code of Ethics has been filed with the SEC as Exhibit 14 to the Companys Annual Report on Form 10-K for 2004.

Section 16(a) Beneficial Ownership Reporting Compliance. Based solely on a review of Forms 3 and 4 and amendments thereto furnished to the
Company during the fiscal year ended March 31, 2007 and Forms 5 and amendments thereto furnished to the Company with respect to the fiscal year ended March 31, 2007, no director, officer or beneficial owner of more than 10% of the
Companys equity securities failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during the fiscal year ended March 31, 2007.

Item 10  Executive Compensation.

Except as noted below, neither the Companys Chief Executive
Officer nor any other executive officers of the Company (collectively the Named Executives) received salary, bonus or other annual compensation for rendering services to the Company during the fiscal years ended March 31, 2007,
2006, and 2005.

During the fiscal year ended March 31, 2005, the Company paid to Jack C. Brown, Secretary and a Director, a monthly
fee of $500 for administrative services that he renders to the Company. Such fee is on a month to month arrangement. During the fiscal years ended March 31, 2007 and 2006, no such fee was paid in an effort to conserve cash balances and reduce
operating expenses.

Summary Compensation Table. As permitted by Item 402 of Regulation S-B, the Summary Compensation Table has
been omitted as there was no compensation awarded to, earned by or paid to any executive officer which is required to be reported in such Table for any fiscal year covered thereby. In addition, no transactions between the Company and a third party
where the primary purpose of the transaction was to furnish compensation to any executive officer were entered into for any fiscal year covered thereby.

Option/SAR Grants in Fiscal Year Ended March 31, 2007. No options or stock appreciation rights were granted in the fiscal year ended March 31, 2007. On September 20, 2002, the options originally
granted to Mr. Brown on June 18, 1983 were amended by extending the expiration date thereof from September 21, 2002 to September 21, 2007.

Aggregated Option/SAR Exercises in Fiscal Year Ended March 31, 2007 and Fiscal Year-End Option/SAR Values. The Company has a stock option plan originally adopted by the shareholders on June 12, 1978,
and revised and approved by the shareholders on June 13, 1983, September 21, 1987 and August 28, 1992. The Company currently has one outstanding Stock Option Agreement entered into pursuant to the Plan. The options granted
thereunder expire on September 21, 2007. No options were exercised during the fiscal year ended March 31, 2007. The following table presents the value of unexercised options held by Jack C. Brown at fiscal year end. There are currently no
outstanding stock appreciation rights.



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##### Table of Contents

|                     |  |                               |  |                  |  |                                          |  |                                                                 |  |   |                  |     |  |  
|-------------------- |  | ----------------------------- |  | ---------------- |  | ---------------------------------------- |  | --------------------------------------------------------------- |  | - | ---------------- | --- |  | -
|                     |  | (#) SharesAcquiredon Exercise |  | ($)ValueRealized |  | Number of Options/SARs atFiscal Year End |  | Value of Unexercised in theMoney Options/SARs atFiscal Year End
|Name                 |  |                               |  | (#)Exercisable   |  | (#)Unexercisable                         |  | ($)Exercisable                                                  |  |   | ($)Unexercisable
|Joel M. Greenblatt   |  | 0                             |  | 0                |  | 0                                        |  | 0                                                               |  |   | 0                |     |  | 0
|Daniel L. Nir        |  | 0                             |  | 0                |  | 0                                        |  | 0                                                               |  |   | 0                |     |  | 0
|Edward B. Grier, III |  | 0                             |  | 0                |  | 0                                        |  | 0                                                               |  |   | 0                |     |  | 0
|Jack C. Brown        |  | 0                             |  | 0                |  | 15,000                                   |  | 0                                                               |  | $ | 19,500           | (1) |  | 0

---

|(1) | Based on the closing sale price of $4.30 on March 20, 2007, the date closest to the fiscal year end
on which a trade occurred. The options have an exercise price of $3.00 per share.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Long-Term Incentive Plans - Awards
in Fiscal Year Ended March 31, 2007. Not applicable.

Compensation of Directors. The By-laws of the Company provide for
Directors to receive a fee of $100 for each meeting of the Board of Directors which they attend plus reimbursement for reasonable travel expense. No fees were paid to Directors for meetings in fiscal year 2007.

Compensation Committee Interlock and Insider Participation. The Board of Directors does not have any standing audit, nominating or compensation
committees or any other committees performing similar functions. Therefore, there are no relationships or transactions involving members of the Compensation Committee during the fiscal year ended March 31, 2007 required to be reported pursuant
to Item 402(j) of Regulation S-B.



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##### Table of Contents

Item 11  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Security Ownership of Certain Beneficial Owners. The following table sets forth as of June 11, 2007, with respect to the persons known to us to be the beneficial owners of 5% or more of the Companys common stock. We know
of no person, other than those listed in the Managements Shareholdings Table, below, who owns more than 5% of the Companys common stock.

PRINCIPAL SHAREHOLDERS TABLE



|              |  |                                                            |  |                                           |  |                  |  
|------------- |  | ---------------------------------------------------------- |  | ----------------------------------------- |  | ---------------- | -
|Title ofClass |  | Beneficial Owner                                           |  | Amount and Nature of Beneficial
Ownership |  | Percent of Class |  
|Common        |  | Ronald Alan Zlatniski 731 Prince Road Greensboro, NC 27455 |  | 40,663                                    |  | 9.5              | %

No other person or group has reported that it is the beneficial owner of more than 5% of the
outstanding common stock of the Company.



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##### Table of Contents

Security Ownership of Management. The following table sets forth information as of June 11,
2007 with respect to the beneficial share ownership of the Companys directors and executive officers, and of all directors and officers as a group.

MANAGEMENTS SHAREHOLDINGS TABLE



|       |  |                                                                        |  |         |         |  |      |  
|------ |  | ---------------------------------------------------------------------- |  | ------- | ------- |  | ---- | -
|Common |  | Joel M. Greenblatt 100 Jericho Quadrangle
Suite 212 Jericho, NY 11753  |  | 93,750  | 1, 3    |  | 20.5 | %
|       |  |                                                                        | 
|Common |  | Daniel L. Nir 100 Jericho Quadrangle Suite 212 Jericho, NY 11753       |  | 56,250  | 2, 3    |  | 12.1 | %
|       |  |                                                                        | 
|Common |  | Jack C. Brown 320 N. Meridian St. Suite 818 Indianapolis, IN 46204     |  | 20,456  | 4       |  | 4.6  | %
|       |  |                                                                        | 
|Common |  | Edward B. Grier III 100 Jericho Quadrangle
Suite 212 Jericho, NY 11753 |  | 0       |         |  | *    |  
|       |  |                                                                        | 
|Common |  | All directors and officers as a group (4 persons)                      |  | 170,456 | 1, 2, 4 |  | 33.5 | %

---

|* | Less than 1%
|- | ------------

|1 | Includes 29,166 shares subject to a currently exercisable common stock warrant transferred from the
Windward Group L.L.C.
|- | -------------------------------------------------------------------------------------------------------------------------

|2 | Includes 37,500 shares subject to a currently exercisable common stock warrant transferred from the
Windward Group L.L.C.
|- | -------------------------------------------------------------------------------------------------------------------------

|3 | On January 30, 2006, Windward Group L.L.C. was dissolved and the Companys common stock
and stock warrants owned by it were distributed to its members, Joel M. Greenblatt and Daniel L. Nir, at a ratio of 62.5% and 37.5%, respectively. After the dissolution on January 30, 2006, Mr. Greenblatt owned 31,250 shares of the
Companys common stock and a then currently exercisable warrant to purchase 62,500 shares of the Companys common stock, and Mr. Nir owned 18,750 shares of the Companys common stock and a currently exercisable warrant to
purchase 37,500 shares of the Companys common stock. Mr. Greenblatt exercised his common stock warrant to purchase 16,667 shares of the Companys common stock on January 31, 2006 and another 16,667 shares on June 13, 2006,
bringing his holdings to 64,584 shares of common stock and a warrant to purchase 29,166 shares of common stock.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|4 | Includes 15,000 shares subject to currently exercisable stock options granted on June 11, 1983, as
amended, and expiring on September 21, 2007, with a per share exercise price of $3.00.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Securities Authorized
for Issuance Under Equity Compensation Plan



|                                                           |  |                                                                                             |  |                                                                             |      |                                                                                                                                            |  
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ---- | ------------------------------------------------------------------------------------------------------------------------------------------ | -
|Plan Category                                              |  | Number of Securitiesto be issued
uponexercise of outstandingoptions, warrants andrights (a) |  | Weighted-averageexercise price
ofoutstandingoptions, warrantsand rights (b) |      | Number of securitiesremaining availablefor
future issuanceunder equitycompensation plans(excluding securitiesreferenced in column (a))
(c)
|Equity compensation plans approved by security holders     |  | 15,000                                                                                      |  | $                                                                           | 3.00 |                                                                                                                                            | 
|Equity compensation plans not approved by security holders |  |                                                                                            |  |                                                                             |     |                                                                                                                                            | 

Item 12  Certain Relationships and Related Transactions.

On June 25, 2002, the Company
entered into a joint venture agreement under which the Company provided development funding in an initial amount of $750,000 to a newly-formed private limited liability company, T3 Therapeutics, LLC (the Development Company) in exchange
for a 12.5% ownership interest in the Development Company. The agreement provided for a follow-on contribution of an additional $750,000 if certain preliminary FDA testing approvals were secured with a corresponding increase in the Company s
ownership stake to 25% of the Development Company. The Company and the Development Company have mutually agreed to cancel the additional investment requirement of $750,000. Edward B. Grier, Vice President and a Director of the Company, has agreed to
serve as the Companys representative to the Development Company and has authority to act on the Companys behalf with respect to the business and affairs of the Development Company. Mr. Grier has been granted an option by the
Development Company to purchase up to 25 Class B Units of the Development Company at a price per unit of $6,000. The strike price of the option was calculated based on the price per unit paid by the Company. Due to the nature of the investment and
the uncertainties inherent in the development and commercialization of the treatment protocols by the Development Company, no meaningful value can be assigned to the option. The option was exercisable upon grant and expires, to the extent it has not
been exercised or sooner terminated, on June 25, 2012. If Mr. Grier resigns voluntarily as the Companys representative or is removed by the Company from that position without cause, the option shall remain exercisable for a period of
one year from the date of resignation or removal, and then shall terminate. If Mr. Grier ceases to be the Companys representative by reason of death or disability, the option shall remain exercisable for a period of six months following
his death or disability, and then shall terminate. If Mr. Grier is removed as representative for cause, the option shall immediately terminate. In addition, at the time of the Companys investment, Mr. Grier purchased 25 Class A
Units of the Development Company from existing unitholders for $150,000, or $6,000 per Class A Unit.

On September 20, 2002, the
Stock Warrant held by Windward Group L.L.C. for the purchase of 100,000 shares of common stock at $3.00 per share, which was to expire on September 21, 2002, was



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##### Table of Contents

extended by the Board of Directors for an additional five years, such that it now expires on September 21, 2007. Mr. Nir and Mr. Greenblatt
had membership interests in the Windward Group. On January 30, 2006, Windward Group L.L.C. was dissolved and the Companys common stock and stock warrants owned by it were distributed to its members, Joel M. Greenblatt and Daniel L. Nir,
at a ratio of 62.5% and 37.5%, respectively.

No options or stock appreciation rights were granted in the fiscal year ended March 31,
2007. On September 20, 2002, the options originally granted to Mr. Brown on June 18, 1983 were amended by extending the expiration date thereof from September 21, 2002 to September 21, 2007.

Item 13  Exhibits.



| | (3) | (i) Articles of Incorporation of The St. Lawrence Seaway Corporation, as amended (incorporated by reference to Exhibit (C) (3) (i) to the Annual Report of The St.
Lawrence Seaway Corporation for the fiscal year ended March 31, 1991).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(ii) By-Laws of The St. Lawrence Seaway
Corporation (incorporated by reference to Exhibit (C) (3) (ii) to the Annual Report of The St. Lawrence Seaway Corporation on Form 10-K for the fiscal year ended March 31, 1987).



| | (10) | (i) Stock Option Agreements, each dated September 21, 1987, between The St. Lawrence Seaway Corporation and each of Jack C. Brown, Philip I. Berman, and Albert Friedman
(incorporated by reference to Exhibit (C) (10) (i) to the Annual Report of The St. Lawrence Seaway Corporation on Form 10K for the fiscal year ended March 31, 1988).
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(ii) Agreement, dated July 31, 1986 by and between The St. Lawrence Seaway Corporation and Bernard Zimmerman & Company, Inc. (incorporated
by reference to Exhibit 2 to the 10-Q of The St. Lawrence Seaway Corporation for the 6 months ended June 30, 1986).

(iii) St. Clair
Farm Property Option and Sale Agreement, dated March 31, 1992 (incorporated by reference to the Exhibit (C) (10) (iii) to the Annual Report of The St. Lawrence Seaway Corporation on Form 10K for the fiscal year ended
March 31, 1992).

(iv) Airport Farm Property Option and Sale Agreement, dated March 25, 1993 (incorporated by reference to Form
10-K for the Fiscal Year ended March 31, 1993 (the 1993 10-K)).

(v) Amendment No. 1 to Stock Option Agreement between
The St. Lawrence Seaway Corporation and Jack C. Brown dated August 28, 1992 (incorporated by reference to the 1993 10-K).

(v)(a)
Amendment to Stock Option Agreement dated September 15, 1997 (incorporated by reference to Form 10-K for the fiscal year ended March 31, 1998 (the 1998 10-K.)).

(v)(b) Amendment to Stock Option Agreement dated September 20, 2002 (incorporated by reference to Exhibit 10(v)(b) to the Form 10-K for the fiscal
year ended March 31, 2003).



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##### Table of Contents

(vi) Amendment No. 1 to Stock Option Agreement between The St. Lawrence Seaway Corporation and
Albert Friedman dated August 28, 1992 (incorporated by reference to the 1993 10-K).

(vii) Amendment No. 1 to the Warrant issued
to Bernard Zimmerman & Co. Inc. dated August 28, 1992 (incorporated by reference to the 1993 10-K).

(vii)(a) Amendment
No. 2 to Common Stock Purchase Warrant, dated September 15, 1997 (incorporated by reference to the 1998 10-K).

(vii)(b)
Amendment No. 3 to Common Stock Purchase Warrant, dated September 20, 2002 (incorporated by reference to Exhibit 10(vii)(b) to the Form 10-K for the fiscal year ended March 31, 2003).

(viii) Stock Option Agreement, dated August 28, 1992 between The St. Lawrence Seaway Corporation and Wayne J. Zimmerman (incorporated by reference to
the 1993 10-K).

(ix) Stock Sale Agreement, dated June 24, 1993 between Bernard Zimmerman & Co., Inc. and Industrial
Development Partners (incorporated by reference to Exhibit 7(a) to Current Report on Form 8-K dated September 30, 1993).

(x)
Assignment and Assumption Agreement dated as of July 30, 1993 (incorporated by reference to Exhibit 7(b) to Current Report on Form 8-K dated September 30, 1993).

(xi) Agreement dated as of January 24, 2002 by and between New York University and St. Lawrence Seaway Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
February 8, 2002).

(xii) Amended and Restated Limited Liability Agreement of T3 Therapeutics, LLC dated as of November 16, 2005
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 21, 2005).

(xiii) Stock and Warrant
Purchase Agreement by and between the Company and Bernard Zimmerman & Company, Inc. dated as of January 10, 2007 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 10, 2007).

(xiv) Letter Agreement by and between the Company and Bernard Zimmerman & Company, Inc. dated as of April 16, 2007 (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 18, 2007).

(xv) Letter Agreement by and between the Company
and Bernard Zimmerman & Company, Inc. dated as of April 18, 2007 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 18, 2007).



| | (14) | Code of Ethics (incorporated by reference to Exhibit 14 to the 2004 10-K).
| | ---- | --------------------------------------------------------------------------



| | (16) | Letter on change in The St. Lawrence Seaway Corporations certifying accountant (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed June 1,
2006).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (31.1) | Certification by Principal Executive Officer Pursuant to Rule 13a-14(a).
| | ------ | ------------------------------------------------------------------------



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##### Table of Contents

| | (31.2) | Certification by Principal Financial Officer Pursuant to Rule 13a-14(a).
| | ------ | ------------------------------------------------------------------------



| | (32.1) | Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
| | ------ | ----------------------------------------------------------------------------



| | (32.2) | Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
| | ------ | ----------------------------------------------------------------------------

Item 14  Principal Accountant Fees and Services.

The independent auditor for the Company for the
fiscal years ended March 31, 2007 and 2006 is the firm of Mahoney Sabol & Company, LLP.

The following aggregate fees were
billed to the Company for professional services rendered by its independent auditors for the fiscal years ended March 31, 2007 and 2006:



|                    |  |      |       |      |   |       
|------------------- |  | ---- | ----- | ---- | - | ------
|                    |  | 2007 |       | 2006
|Audit Fees:         |  | $    | 7,000 |      | $ | 11,400
|                    |  |     
|Audit-Related Fees: |  | $    | 5,512 |      | $ | 4,000 
|                    |  |     
|Tax Fees:           |  |      |      |      | $ | 1,200 
|                    |  |     
|All Other Fees:     |  |      |      |      |   |      

The Board of Directors, acting as Audit Committee, has not adopted pre-approval policies and
procedures with respect to services provided by the independent auditor, as all services are approved by the Board prior to the services being provided.



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##### Table of Contents

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.



THE ST. LAWRENCE SEAWAY CORPORATIONBy:

/s/ Daniel L. NirDaniel L. NirPresident, Treasurer and DirectorDate:

June 27, 2007


In accordance with the Exchange Act, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.



|                                             |  |  |  |                                     |  |  |  |              
|-------------------------------------------- |  |  |  | ----------------------------------- |  |  |  | -------------
|Signatures                                   |  |  |  | Title                               |  |  |  | Date         
|                                             |  |  |  |                                    
|/s/ Daniel L. Nir                            |  |  |  | President, Treasurer and Director   |  |  |  | June 27, 2007
|Daniel L. Nir                                |  |  |  |                                     |  |  |  |              
|(Principal Financial and Accounting Officer) |  |  |  |                                     |  |  |  |              
|                                             |  |  |  |                                    
|/s/ Joel M. Greenblatt                       |  |  |  | Chairman of the Board, and Director |  |  |  | June 27, 2007
|Joel M. Greenblatt                           |  |  |  |                                     |  |  |  |              
|(Principal Executive Officer)                |  |  |  |                                     |  |  |  |              
|                                             |  |  |  |                                    
|/s/ Jack C. Brown                            |  |  |  | Secretary and Director              |  |  |  | June 27, 2007
|Jack C. Brown                                |  |  |  |                                     |  |  |  |              
|                                             |  |  |  |                                    
|/s/ Edward B. Grier III                      |  |  |  | Director                            |  |  |  | June 27, 2007
|Edward B. Grier III                          |  |  |  |                                     |  |  |  |              



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Shareholders of The St. Lawrence Seaway
Corporation

Indianapolis, Indiana

We have audited the
accompanying balance sheets of The St. Lawrence Seaway Corporation (the Company) as of March 31, 2007 and 2006, and the related statements of operations, shareholders equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material respects, the financial position of The St. Lawrence Seaway Corporation as of March 31, 2007 and 2006 and the results of its operations and cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been
prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, and may require additional capital during fiscal 2008 to fund continuing
operations. These items raise substantial doubt about the Companys ability to continue as a going concern through March 31, 2008. Managements plans in regards to these matters are also described in Notes 1 and 7. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Mahoney Sabol &
Company, LLP

Certified Public Accountants

Glastonbury, Connecticut

June 25, 2007



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THE ST. LAWRENCE SEAWAY CORPORATION

BALANCE SHEETS

MARCH 31, 2007 AND 2006



|                                                                                                                                                |  |      |          |   |      |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                                                                                                                |  | 2007 |          |   | 2006 |  
|ASSETS                                                                                                                                          | 
|Current assets:                                                                                                                                 |  |      |          |   |      |   |          |  
|Cash and cash equivalents                                                                                                                       |  | $    | 69,524   |   |      | $ | 122,978  |  
|Interest and other receivables                                                                                                                  |  |      | 133      |   |      |   | 175      |  
|                                                                                                                                                |  |      |          |   |      |   |          |  
|Total current assets                                                                                                                            |  |      | 69,657   |   |      |   | 123,153  |  
|Other assets:                                                                                                                                   |  |      |          |   |      |   |          |  
|T3 Therapeutics Note 6                                                                                                                         |  |      | 83,400   |   |      |   | 90,000   |  
|                                                                                                                                                |  |      |          |   |      |   |          |  
|Total assets                                                                                                                                    |  | $    | 153,057  |   |      | $ | 213,153  |  
|                                                                                                                                                |  |      |          |   |      |   |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                            | 
|                                                                                                                                                |  |     
|Current liabilities:                                                                                                                            |  |      |          |   |      |   |          |  
|Accounts payable and accrued expenses                                                                                                           |  | $    | 37,561   |   |      | $ | 52,000   |  
|                                                                                                                                                |  |      |          |   |      |   |          |  
|Total current liabilities                                                                                                                       |  |      | 37,561   |   |      |   | 52,000   |  
|Commitments and contingencies                                                                                                                   |  |      |          |   |      |   |          |  
|Shareholders equity:                                                                                                                           |  |      |          |   |      |   |          |  
|Common stock, par value $1 per share; 4,000,000 authorized, 427,069 and 410,402 issued and outstanding at March 31, 2007 and 2006,
respectively |  |      | 427,069  |   |      |   | 410,402  |  
|Additional paid-in capital                                                                                                                      |  |      | 443,920  |   |      |   | 410,586  |  
|Retained earnings (deficit)                                                                                                                     |  |      | (755,493 | ) |      |   | (659,835 | )
|                                                                                                                                                |  |      |          |   |      |   |          |  
|Total shareholders equity                                                                                                                      |  |      | 115,496  |   |      |   | 161,153  |  
|                                                                                                                                                |  |      |          |   |      |   |          |  
|Total liabilities and shareholders equity                                                                                                      |  | $    | 153,057  |   |      | $ | 213,153  |  
|                                                                                                                                                |  |      |          |   |      |   |          |  

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



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THE ST. LAWRENCE SEAWAY CORPORATION

STATEMENTS OF OPERATIONS

YEARS ENDED MARCH 31, 2007 AND 2006



|                                                     |  |                       |         |   |      |   |          |  
|---------------------------------------------------- |  | --------------------- | ------- | - | ---- | - | -------- | -
|                                                     |  | YEARS ENDED MARCH 31, |        
|                                                     |  | 2007                  |         |   | 2006 |  
|Revenues:                                            |  |                       |         |   |      |   |          |  
|Interest and dividends                               |  | $                     | 5,596   |   |      | $ | 4,392    |  
|                                                     |  |                       |         |   |      |   |          |  
|Total revenues                                       |  |                       | 5,596   |   |      |   | 4,392    |  
|Operating costs and expenses:                        |  |                       |         |   |      |   |          |  
|Consulting fees-Note 3                               |  |                       | 0       |   |      |   | 0        |  
|Equity in loss of T3 Therapeutics  Note 6           |  |                       | 6,600   |   |      |   | 10,000   |  
|General and administrative                           |  |                       | 94,654  |   |      |   | 91,277   |  
|                                                     |  |                       |         |   |      |   |          |  
|Total operating expenses                             |  |                       | 101,254 |   |      |   | 101,277  |  
|                                                     |  |                       |         |   |      |   |          |  
|Other income (expense):                              |  |                       |         |   |      |   |          |  
|Impairment loss  T3 Therapeutics Note 6            |  |                       | 0       |   |      |   | 630,000  |  
|                                                     |  |                       |         |   |      |   |          |  
|Income (loss) before tax provision                   |  |                       | (95,658 | ) |      |   | (726,885 | )
|Provision for income taxes/(tax benefit)             |  |                       | 0       |   |      |   | 0        |  
|                                                     |  |                       |         |   |      |   |          |  
|Net income (loss)                                    |  | $                     | (95,658 | ) |      | $ | (726,885 | )
|                                                     |  |                       |         |   |      |   |          |  
|Per Share Data:                                      |  |                       |         |   |      |   |          |  
|                                                     |  |                      
|Weighted average number of common shares outstanding |  |                       |         |   |      |   |          |  
|Basic                                                |  |                       | 423,736 |   |      |   | 396,429  |  
|                                                     |  |                       |         |   |      |   |          |  
|Diluted                                              |  |                       | 446,531 |   |      |   | 396,429  |  
|                                                     |  |                       |         |   |      |   |          |  
|Basic earnings per share:                            |  |                       |         |   |      |   |          |  
|Income (loss) per share basic                        |  | $                     | (.23    | ) |      | $ | (1.83    | )
|                                                     |  |                       |         |   |      |   |          |  
|Income (loss) per share diluted                      |  | $                     | (.21    | ) |      | $ | (1.83    | )
|                                                     |  |                       |         |   |      |   |          |  

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



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THE ST. LAWRENCE SEAWAY CORPORATION

STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED MARCH 31, 2007
AND 2006



|                                                    |  |              |         |                 |   |                           |  |   |          |  
|--------------------------------------------------- |  | ------------ | ------- | --------------- | - | ------------------------- |  | - | -------- | -
|                                                    |  | Common Stock |         | Paid-in Capital |   | RetainedEarnings(Deficit) | 
|Balances at March 31, 2004 (as previously reported) |  | $            | 393,735 |                 | $ | 377,252                   |  | $ | 207,768  |  
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Adjustment for equity in T3 Therapeutics            |  |              |         |                 |   |                           |  |   | (35,000  | )
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Balances at March 31, 2004 (as restated)            |  |              | 393,735 |                 |   | 377,252                   |  |   | 172,768  |  
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Net loss for 2005                                   |  |              |         |                 |   |                           |  |   | (105,718 | )
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Balances at March 31, 2005, (as restated)           |  |              | 393,735 |                 |   | 377,252                   |  |   | 67,050   |  
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Exercise of Warrant                                 |  |              | 16,667  |                 |   | 33,334                    |  |   |          |  
|Net loss for 2006                                   |  |              |         |                 |   |                           |  |   | (726,885 | )
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Balances at March 31, 2006                          |  | $            | 410,402 |                 | $ | 410,586                   |  | $ | (659,835 | )
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Exercise of Warrant                                 |  |              | 16,667  |                 |   | 33,334                    |  |   |          |  
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Net loss for 2007                                   |  |              |         |                 |   |                           |  |   | (95,658  | )
|                                                    |  |              |         |                 |   |                           |  |   |          |  
|Balances at March 31, 2007                          |  | $            | 427,069 |                 | $ | 443,920                   |  | $ | (755,493 | )
|                                                    |  |              |         |                 |   |                           |  |   |          |  

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



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THE ST. LAWRENCE SEAWAY CORPORATION

STATEMENTS OF CASH FLOW

YEARS ENDED MARCH 31, 2006 AND 2005



|                                                                           |  |                       |          |   |      |   |          |  
|-------------------------------------------------------------------------- |  | --------------------- | -------- | - | ---- | - | -------- | -
|                                                                           |  | YEARS ENDED MARCH 31, |         
|                                                                           |  | 2007                  |          |   | 2006 |  
|Cash flows from operating activities:                                      |  |                       |          |   |      |   |          |  
|Net income (loss)                                                          |  | $                     | (95,658  | ) |      | $ | (726,885 | )
|Adjustments to reconcile net income to net cash from operating activities: |  |                       |          |   |      |   |          |  
|Equity in loss of T3 Therapeutics                                          |  |                       | 6,600    |   |      |   | 10,000   |  
|Impairment loss  T3 Therapeutics                                          |  |                       | 0        |   |      |   | 630,000  |  
|(Increase) decrease in current assets:                                     |  |                       |          |   |      |   |          |  
|Other receivables                                                          |  |                       | 42       |   |      |   | (94      | )
|Increase in current liabilities:                                           |  |                       |          |   |      |   |          |  
|Accounts payable and accrued expenses                                      |  |                       | (14,439  | ) |      |   | 33,083   |  
|                                                                           |  |                       |          |   |      |   |          |  
|Net cash from operating activities                                         |  |                       | (103,455 | ) |      |   | (53,896  | )
|                                                                           |  |                      
|Cash flows from investing activities:                                      |  |                       |          |   |      |   |          |  
|T3 Therapeutics                                                            |  |                       | 0        |   |      |   | (50,000  | )
|                                                                           |  |                       |          |   |      |   |          |  
|Net cash from investing activities                                         |  |                       | 0        |   |      |   | (50,000  | )
|Cash flows from financing activities:                                      |  |                       |          |   |      |   |          |  
|Exercise of stock warrant                                                  |  |                       | 50,001   |   |      |   | 50,001   |  
|                                                                           |  |                       |          |   |      |   |          |  
|Net cash from financing activities                                         |  |                       | 50,001   |   |      |   | 50,001   |  
|Net decrease in cash and cash equivalents                                  |  |                       | (53,454  | ) |      |   | (53,895  | )
|Cash and cash equivalents, beginning                                       |  |                       | 122,978  |   |      |   | 176,873  |  
|                                                                           |  |                       |          |   |      |   |          |  
|Cash and cash equivalents, ending                                          |  | $                     | 69,524   |   |      | $ | 122,978  |  
|                                                                           |  |                       |          |   |      |   |          |  
|Supplemental disclosures of cash flow information:                         |  |                       |          |   |      |   |          |  
|Cash paid for income taxes                                                 |  | $                     |         |   |      | $ |         |  
|Cash paid for interest expenses                                            |  | $                     |         |   |      | $ |         |  

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



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THE ST. LAWRENCE SEAWAY CORPORATION

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accompanying
policies observed in the preparation of the financial statements for The St. Lawrence Seaway Corporation (the Company).

BASIS OF PRESENTATION:

The accounts are maintained on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America
for financial statement purposes. Under this method, revenue is recognized when earned and expenses are recognized when incurred.

GOING CONCERN:

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses of $95,568 and $726,885
for the years ended March 31, 2007 and 2006, respectively. These losses have significantly weakened the Companys financial condition and its ability to meet current operating expenses. In addition, the Companys working capital has
decreased $39,057 to $32,096 at March 31, 2007 and $71,153 at March 31, 2006. The appropriateness of using the going concern basis is dependent on, among other things, the Companys ability to raise additional capital to fund
operating losses, and further reduce operating expenses. The uncertainty of obtaining these goals raises doubt about the Companys ability to continue as a going concern through March 31, 2008. The financial statements do not include any
adjustments to the carrying value of the assets and liabilities that might be necessary as a consequence of these uncertainties.

EARNINGS PER SHARE:

The Company follows Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share. SFAS No. 128 simplifies the
standards for computing earnings per share (EPS) and makes them comparable to international EPS standards. Basic EPS is based on the weighted average number of common shares outstanding for the period, excluding the effects of any potentially
dilutive securities. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Net income (loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding during the period.

Basic and diluted income (loss) per common share was calculated
using the following number of shares:



|                                 |  |         |  |        
|-------------------------------- |  | ------- |  | -------
|                                 |  | 2007    |  | 2006   
|Average shares outstandingbasic |  | 423,736 |  | 396,429
|                                 |  |         |  |        
|Diluted shares                   |  | 446,531 |  | 396,429
|                                 |  |         |  |        



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THE ST. LAWRENCE SEAWAY CORPORATION



INCOME TAXES:

The
Company utilizes the asset and liability method of accounting for deferred income taxes as prescribed by the Statement of Financial Accounting Standards No. 109 (SFAS 109) Accounting for Income Taxes. This method requires the
recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the tax return and financial statement reporting bases of certain assets and liabilities.

No material deferred tax benefits or liabilities exist as of the dates of the balance sheets.

CASH AND CASH EQUIVALENTS:

The Company has defined cash as including cash on hand and cash in interest bearing and
non-interest bearing operating bank accounts. Highly liquid instruments purchased with original maturities of three months or less are considered to be cash equivalents.

The Company maintains cash balances at two financial institutions (a bank and a brokerage firm). The bank accounts is insured by the Federal Deposit Insurance Corporation (FDIC) for balances up to $100,000. The
brokerage account is not insured. At various times throughout the year, cash balances exceeded FDIC limits. At March 31, 2007 and 2006, the Company had uninsured cash balances totaling $68,911 and $122,971 respectively.

USE OF ESTIMATES:

The preparation of financial statements in accordance
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NEW PRONOUNCEMENTS:

The Company has implemented all new accounting pronouncements that are in effect and that may impact our financial statements
and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial statements.

RESTATEMENT:

The Company restated its financial statements for the year ended March 31, 2005, and for the first three quarters of fiscal 2006
for the correction of an error. Upon review of tax basis financial information from the Development Company, it was noted that research and development costs were capitalized for tax purposes. The Company did not adjust the results of T3
Therapeutics, LLC (the Development Company) operations to expense such costs as incurred in accordance with GAAP. Accordingly, the equity in the loss of the Development Company has been restated to properly reflect its value in
accordance with the equity method of accounting. The effect of this change as of March 31 is as follows:



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|                                                                                              |  |      |          |   |      |   |          |  
|--------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                                                              |  | 2006 |          |   | 2005 |  
|Reconciliation of Retained Earnings (Deficit):                                                |  |      |          |   |      |   |          |  
|Beginning retained earnings (March 31, 2005 and 2004) as previously reported                  |  | $    | 137,050  |   |      | $ | 207,768  |  
|Adjustment for understatement of equity in the loss of T3 Therapeutics (net of taxes of nil): |  |      |          |   |      |   |          |  
|2004 adjustment effecting 2005 beginning retained earnings                                    |  |      |          |   |      |   | (35,000  | )
|2005 and 2004 adjustments effecting 2006 beginning retained earnings                          |  |      | (70,000  | ) |      |   |          |  
|Beginning retained earnings, as restated                                                      |  |      | 67,050   |   |      |   | 172,768  |  
|Net loss (as restated in 2005)                                                                |  |      | (726,885 | ) |      |   | (105,718 | )
|Retained earnings (deficit), end of year                                                      |  | $    | (659,835 | ) |      | $ | 67,050   |  



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|                                                                                                                |  |      |  |      |          |  
|--------------------------------------------------------------------------------------------------------------- |  | ---- |  | ---- | -------- | -
|                                                                                                                |  | 2006 |  | 2005 |         
|Reconciliation of 2005 Net Loss:                                                                                |  |      |  |      |          |  
|                                                                                                                |  |     
|Net loss March 31, 2005, as previously reported                                                                 |  |      |  | $    | (70,718  | )
|                                                                                                                |  |     
|Adjustment of 2005 net income for understatement of equity in the loss of T3 Therapeutics (net of taxes of nil) |  |      |  |      | (35,000  | )
|                                                                                                                |  |     
|Net loss March 31, 2005, as restated                                                                            |  |      |  | $    | (105,718 | )
|                                                                                                                |  |     
|Loss per share, as originally reported                                                                          |  |      |  | $    | (.18     | )
|                                                                                                                |  |     
|Loss per share, as restated                                                                                     |  |      |  | $    | (.27     | )

CONCENTRATIONS OF CREDIT RISK:

The Companys financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

SFAS no. 107, Fair Value of Financial Instruments, requires disclosure of
the fair value of financial instruments for which the determination of fair value is practicable. SFAS No. 107 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction
between willing parties. The carrying amounts of the Companys financial instruments (cash and cash equivalents) approximate their fair value because of the short maturity of these instruments.

STOCK BASED COMPENSATION:

On December 16, 2004, the Financial
Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment (SFAS 123(R)), which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation.
SFAS 123(R) requires expense for all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. For the
Company, this statement was effective as of April 1, 2006. The Company adopted the modified prospective method, under which compensation cost is recognized beginning with the effective date. The modified prospective method recognizes
compensation cost based on the requirements of SFAS 123(R) for all share-based payments granted after the effective date and, based on the requirements of SFAS 123, for all awards granted to employees prior to the effective date that remain unvested
on the effective date. The Company was not required to record any expenses under SFAS 123(R) for share based awards currently outstanding. However, the amount of expense recorded under SFAS 123(R) will depend upon the number of share based awards
granted in the future and their valuation.



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NOTE 2. SHAREHOLDERS EQUITY

The Company, as of March 31, 2007, had a common stock warrant outstanding for the purchase of 66,666 shares of common stock at $3.00 per share. The warrant was originally issued in connection with the sale by the
Company of 50,000 shares of common stock during 1986 to Bernard Zimmerman & Co. Inc. The warrant and common stock were subsequently sold and transferred to The Windward Group, L.L.C. (formerly Industrial Development Partners), pursuant to
an agreement dated September 30, 1993. The warrant expires on September 21, 2007.

On January 30, 2006, Windward Group L.L.C. was dissolved
and the Companys common stock and stock warrants owned by it were distributed to its members, Joel M. Greenblatt and Daniel L. Nir, at a ratio of 62.5% and 37.5%, respectively. After the dissolution on January 30, 2006,
Mr. Greenblatt owned a currently exercisable warrant to purchase 62,500 shares of the Companys common stock, and Mr. Nir owned a currently exercisable warrant to purchase 37,500 shares of the Companys common stock. On
January 31, 2006 and on June 13, 2006 Mr. Greenblatt, Chairman of the Companys Board of Directors, exercised warrants to purchase 16,667 shares of the Companys common stock at an exercise price of $3 per share, which
resulted in the Company receiving $50,001, in cash on such dates as payment for such shares.

The Company has a stock option plan originally adopted by the
shareholders on June 12, 1978, and revised and approved by the shareholders on June 13, 1983, September 21, 1987 and August 28, 1992. The Company currently has one outstanding Stock Option Agreement entered into pursuant to
the Plan. On September 20, 2002, the options originally granted to Jack C. Brown on June 18, 1983 were amended by extending the expiration date thereof from September 21, 2002 to September 21, 2007. No options were granted or
exercised in the fiscal years ended March 31, 2007 and 2006. As of March 31, 2007 and 2006, there were 15,000 shares outstanding, with a weighted average life remaining of .5 and 1.5 years, respectively. There are currently no outstanding
stock appreciation rights.

The Company has 4,000,000 authorized $1 par value common shares. As of March 31, 2007 and 2006, there were 427,069 and
410,402 common shares issued and outstanding, respectively. In addition, the company did not declare or pay any dividends during the fiscal years ended March 31, 2007 or 2006.



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NOTE 3. RELATED PARTIES

During the fiscal years ending March 31, 2007 and 2006, the Company paid to Jack C. Brown, Secretary and a Director, no annual administrative fees.

NOTE 4. INCOME TAXES

At March 31, 2007, the Company had approximately $740,000 in loss carry forwards. If not used, these carry
forwards will begin to expire in 2014. No tax benefits have been recognized in these financial statements. Provisions for any deferred federal and state tax liabilities are immaterial to these financial statements.

NOTE 5. RESEARCH INVESTMENTS

The Company entered into a Research
Funding Agreement with New York University School of Medicine, New York, New York, under which the Company provided funding for the further development of certain NYU medical discoveries and technology, in return for which the Company is entitled to
receive license fees from the future commercial uses of such discoveries. Such technology is subject to pending NYU patent applications and generally relates to treatment of certain prostate enlargements and prostate cancers. Under the Research
Funding Agreement, the Company agreed to provide research funding of $25,000 for each of eight calendar quarters, in exchange for which the Company is entitled to receive 1.5% of future license revenues from the sale, license or other
commercialization of the patents. The first payment was made in connection with the execution of the Research Funding Agreement in January 2002. The Company had the option to provide additional funds for up to three additional years of development,
in exchange for which the Companys share of license revenue from the patents would increase to a maximum of 3.75%. The Company did not exercise this option. Development and commercialization of the patents are highly speculative and subject to
numerous scientific, financial, practical and commercial uncertainties. There can be no assurances that the Company will receive any license revenues as a result of its investment.

NOTE 6. T3 THERAPEUTICS INVESTMENT

As of June 25, 2002, the Company entered into a joint venture agreement (the
Original Agreement) under which it has provided development funding to a newly-formed private limited liability company, T3 Therapeutics, LLC, a Delaware limited liability company (the Development Company), for specified drug
treatment protocols for thyroid and cardiovascular disease, in exchange for an equity interest in the Development Company. Such treatments are in early stage development and involve the use of novel formulations of hormones, delivered in controlled
release formulations. Funding provided by the Company is being used for the purpose of financing development of new formulations of such hormones, and to conduct animal and human clinical trials.

Under the Original Agreement, (i) the T3 Therapeutics, Inc. (the Founder Company) contributed to the Development Company all of its right, title and
interest in the design, development and research of certain medicinal products in exchange for an 87.5% Class A ownership stake in the Development Company, (ii) the Company provided development funding of $750,000 to the Development
Company in exchange for a 12.5% preferential Class B ownership stake in the Development Company, and (iii) Mr. Edward Grier, a vice president and director of the Company, was granted an option to purchase 25 Class B units in the
Development Company. In connection with the consummation of the transactions contemplated by the



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Original Agreement, Mr. Grier purchased 25 Class A units in the Development Company from the Founder Company for $150,000, which resulted in the
Founder Company having an 85% Class A ownership stake in the Development Company and Mr. Grier having a 2.5% Class A ownership stake in the Development Company. In addition, the Original Agreement provided for a follow-on investment
by the Company of an additional $750,000 if certain preliminary FDA testing approvals were secured, with a corresponding increase in the Companys ownership stake in the Development Company to 25%.

As of November 16, 2005, the Company, the Founder Company and Mr. Grier (together with the Founder Company, the Other Members) entered into an
Amended and Restated Limited Liability Company Agreement (the Amendment) of the Development Company, which amended and restated the Original Agreement to, among other things, provide for satisfaction of any contingent follow-on
investment obligation of the Company in exchange for its making a $50,000 investment on or about the time of execution of the Amendment, and for the conversion of all of the Companys preferential Class B interests in the Development Company
(including certain redemption, registration and contingent additional unit rights), as well as all of the interests of Mr. Grier and the Founder Company, into a single non-preferential class of unit interests. The $50,000 follow-on investment
increased the Companys ownership stake in the Development Company to 25%, subject to adjustment and dilution. The Companys ownership stake in the Development Company has been diluted to approximately 21.8% upon the issuance by the
Development Company of Development Company units to the original patent licensor in exchange for the original patent licensors modified royalty agreement with the Development Company. The Development Company has in 2007 sold an additional 5%
of its units to outside investors, diluting the Companys ownership stake in the Development Company to approximately 20.8%. Further dilution of the Companys ownership stake is expected as the Development Company raises capital to fund
operations.

Prior to the follow-on investment noted above, the Company carried the investment at the March 31, 2005 restated value of $680,000. As
the $50,000 investment increased the Companys equity share by 12.5% (prior to subsequent dilution noted above), the Company reviewed the original 12.5% investment for impairment, and concluded that the original investment should be reduced to
equal the value of the follow-on investment. As such, the Company recorded a loss on the other than temporary decline in the value of its original investment balance. Accordingly, an impairment loss of $630,000 was recorded during the fiscal year
ended March 31, 2006. A reconciliation of the investment account is as follows:



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|                                             |  |   |        
|-------------------------------------------- |  | - | -------
|Balance March 1, 2005 (as restated)          |  | $ | 680,000
|Add: Follow-on investment, November 16, 2005 |  |   | 50,000 
|                                             |  |   |        
|Subtotal                                     |  |   | 730,000
|Less:                                        |  |   |        
|Impairment loss                              |  |   | 630,000
|Equity in loss                               |  |   | 10,000 
|                                             |  |   |        
|Balance, March 31, 2006                      |  | $ | 90,000 
|Equity in loss                               |  |   | 6,600  
|                                             |  |   |        
|Balance, March 31, 2007                      |  | $ | 83,400 

If the product is licensed by Development Company to a pharmaceutical partner the Company is entitled to a portion
of Development Companys resulting royalties and progress payments. The amount of ownership and royalties to be received by the Company is subject to adjustment, based upon (i) ownership and license arrangements that the Development
Company makes with laboratories that provide research and formulation expertise and products, (ii) development or licensing transactions, or (iii) other sources of financing. Development and commercialization of the treatment protocols is
highly speculative and subject to numerous scientific, practical, financial and commercial uncertainties.

As of the conversion, Mr. Grier was a 2.5%
Member of the Development Company and had an option to purchase an approximate 2.5% (25 units) additional ownership stake in the Development Company.

NOTE
7  PURCHASE AGREEMENT:

The Company entered into a Stock and Warrant Purchase Agreement (the Purchase Agreement) on January 10, 2007
with Bernard Zimmerman & Company, Inc., an investment and merchant banking company (the Investor), pursuant to which the Investor has agreed to purchase: (i) 75,000 shares of the Companys common stock for a total
purchase price of $75,000; and (ii) a ten year warrant (the Warrant) for a total purchase price of $2,500 which permits the Investor to purchase up to 250,000 shares of the Companys common stock at an exercise price of $1.00
per share (the Transaction ). The common stock and the Warrant will be sold to the Investor pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. The common stock being sold to the
Investor will represent approximately 15% of the outstanding common stock of the Company after the closing of the Transaction . If the Investor exercises all of the Warrants issued in the Transaction, the Investor would own approximately 43.2% of
the issued and outstanding Common Stock of the Company if no other shares are issued.

Under the terms of the Purchase Agreement, and subject to
shareholder approval, it is contemplated that the Company will convert to a Delaware corporation immediately prior to the closing and issue all existing stockholders and to holders of certain currently held outstanding options and warrants of
current officers



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and directors who are entitled to receive such distributions upon the exercise of such outstanding instruments (if they exercise their options or warrants
before their expiration), on a pro rata basis, a tracking stock evidencing the Companys investments in, and ventures with, New York University School of Medicine and T3 Therapeutics, LLC (the Development Company). The tracking
stock, to be designated as Class A Common Stock, will be non-certificated, non-voting, non-transferable and held in book entry form only. The Purchase Agreement does not contemplate any issuance of Class A Common Stock to the Investor in
connection with the Investors acquisition of the Companys common stock and the Warrant. As of March 31, 2007, the Purchase Agreement had not been ratified by shareholder vote.

Even if the terms of the Purchase Agreement are approved by the Companys stockholders, there is a risk that the transaction will not close. The Purchase Agreement
contains a number of conditions to closing. If one or more of these conditions is not satisfied or waived, then the Transaction may not close. Whether or not the Transaction closes, there may be no distribution of the Class A tracking stock to
the Companys stockholders due to unforeseen circumstances, including, but not limited to, tax liabilities or state or federal securities laws issues related to the issuance, though the Company currently intends to do so immediately after the
closing of the Transaction, if approved.



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