**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 WASHINGTON,
        D.C. 20549
 
 **FORM
        10-K**
 
 **x** **ANNUAL
        REPORT UNDER SECTION 13 OR 15(d) OF THE**
 **SECURITIES
        EXCHANGE ACT OF 1934**
 
 For
        the
        fiscal year ended December 31, 2007
 
 ** ̈** **TRANSITION REPORT UNDER SECTION 13 OR SECTION 15(d) OF THE EXCHANGE
        ACT**
 
 For
        the
        transition period from _____ to _____
 
 *Commission
        file number 000-51968*
 
 **CELSIA
                  TECHNOLOGIES, INC.**(Exact
                  Name of Registrant As Specified In its Charter)
 
 Nevada
              1395
                  Brickell Avenue, Suite 800, Miami Florida 33131
              91-2015441(State
                  or other jurisdiction of incorporation or organization)
              (Address
                  of principal executive offices) (zip code)
              (IRS
                  Employer Identification No.)
 
 Registrant’s
        telephone number, including area code: 305-529-6290
 ________________________________
 
 Securities
        registered under Section 12(b) of the Act
 
 **NONE**
  Securities
        registered pursuant to Section 12(g) of the Act:
  **NONE**
  (Title
        of
        Class)
 ________________
 
 Indicate
        by check mark if the registrant is a well-known seasoned issuer, as defined
        in
        Rule 405 of the Securities Act.  Yes o No x
 
 Indicate
        by check mark if the registrant is not required to file reports pursuant
        to
        Section 13 or 15(d) of the Act.  YesoNox
 
 Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
        during the preceding 12 months (or for such shorter period that the
        registrant was required to file such reports) and (2) has been subject to
        such filing requirements for the past
        90 days.  Yes x No o
  Indicate
        by check mark if disclosure of delinquent filers pursuant to Item 405 of
        Regulation S-K is not contained herein, and will not 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-K or any
        amendment to this Form 10-K. x
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, a non-accelerated filer, or a smaller reporting company.
        See
        definitions of “large accelerated filer,” “accelerated filer” and “smaller
        reporting company” in Rule 12-b-2 of the Exchange Act. (Check
        One):
  Large
        accelerated filer o Accelerated
        filer o Non-accelerated
        filer o   Smaller
        Reporting Company x
 
 Indicate
        by check mark whether the registrant is a shell company (as defined by
        Rule 12b-2 of the Act).  Yes o No x
 
 The
        aggregate market value of the voting common stock held by non-affiliates
        computed by reference to the price at which the stock was last sold as quoted
        on
        the OTC Bulletin Board (OTCBB), as of June 29, 2007 was approximately
        $8,747,688.
  The
        number of shares of common stock outstanding as of February 25, 2008 was
        85,273,680.
 
 **Documents
        Incorporated By Reference:** None.
 
 
 **TABLE
        OF CONTENTS**
   PagePART
                  I.
              
              1Item
                  1.
              Business
              1Item
                  2.
              Properties
              11Item
                  3.
              Legal
                  Proceedings
              12Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              12PART
                  II.
              
              12Item
                  5.
              Market
                  For Common Equity and Related Stockholder Matters and Issuer Purchases
                  of
                  Equity Securities
              12Item
                  6.
              Selected
                  Financial Data
              13Item
                  7.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operation
              13Item
                  8.
              Financial
                  Statements
              17Item
                  9.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              17PART
                  III.
              
              19Item
                  10.
              Directors,
                  Executive Officers, Promoters, Control Persons and Corporate Governance;
                  Compliance with Section 16(a) of the Exchange Act
              19Item
                  11.
              Executive
                  Compensation
              23Item
                  12.
              Security
                  Ownership of Certain Beneficial Owners and Management
              26Item
                  13.
              Certain
                  Relationships and Related Transactions, and Director
                  Independence
              28Item
                  14.
              Principal
                  Accountant Fees and Services
              29PART
                  IV.
              
              30Item
                  15.
              Exhibits
                  and Financial Statement Schedules
              30
 
 -i-
  **FORWARD-LOOKING
        STATEMENTS**
  This
        Annual Report on Form 10-K contains forward-looking statements within the
        meaning of Section 21E of the Securities Exchange Act of 1934. These statements
        involve risks and uncertainties, including, among other things, statements
        regarding our business strategy, future revenues and anticipated costs and
        expenses. Such forward-looking statements include, among others, those
        statements including the words “expects,” “anticipates,” “intends,” “believes,”
“may,” “will,” “should,” “could,” “plans,” “estimates,” and similar language or
        the negative of such terms. Our actual results may differ significantly from
        those projected in the forward-looking statements. Factors that might cause
        or
        contribute to such differences include, but are not limited to, those discussed
        in Item 7 “Management’s Discussion and Analysis of Financial Condition and
        Results of Operations.” You are cautioned not to place undue reliance on the
        forward-looking statements, which speak only as of the date of this report.
        Although we believe that the expectations reflected in the forward-looking
        statements are reasonable, we do not know whether we can achieve positive
        future
        results, levels of activity, performance, or goals. Actual events or results
        may
        differ materially. We undertake no obligation to publicly release any revisions
        to the forward-looking statements or reflect events or circumstances taking
        place after the date of this document.
  **PART
        I.**
  **Item
        1.**  **Business**
  ***Company
        Overview***
  In
        this
        Annual Report on Form 10-K, unless the context requires otherwise, (1) “Celsia,”
“we,” “our,” “us” and “the Company” refer to Celsia Technologies, Inc., a Nevada
        corporation formerly known as iCurie, Inc., and its subsidiaries, including
        without limitation, Celsia Technologies UK Limited, a United Kingdom company
        formerly known as iCurie Lab Holdings Limited or Celsia UK, Celsia Technologies
        Korea, Inc., a Korean company formerly known as iCurie Lab Inc., or Celsia
        Korea, and Celsia Technologies Taiwan, Inc. or Celsia Taiwan (2) “iCurie” refers
        to iCurie, Inc., which was the name of Celsia Technologies, Inc. prior to
        September 2006, and (3) “Cedar Mountain” refers to Cedar Mountain Distributors,
        Inc., which was the name of iCurie, Inc. prior to the July 8, 2005 share
        exchange described herein.
  Celsia’s
        business strategy is to become a leader in developing and commercializing
        next-generation cooling solutions which are focused on the computer, flat
        panel
        display, LED-lighting, and communications industries. We develop, manufacture,
        market, sell and/or license our patented thermal management cooling devices.
        We
        believe that our products absorb, transport and dissipate heat more efficiently
        than current heat-pipe/heat-sink cooling solutions. Our unique cooling device
        uses microfluidic physics to manage liquid and vapor at very high speeds
        through
        micro-channels within the assemblies.
  As
        an
        example, the current industry-leading cooling technology solutions,
        heat-pipes/heat-sinks, were developed when PC processors such as the Pentium
        I®
& Pentium II®, with much lower speeds and cooling demands, were the industry
        standards. With the rapid development of faster processors, such as the latest
        Intel and AMD series, the cooling industry has produced many versions of
        the
        limited heat-pipe and/or heat-sink solutions. However, this aging technology
        is
        becoming less effective as faster processors produce increased heat levels.
        Battery life is substantially eroded in laptops due to heat and the energy
        required to operate one or more cooling systems. We believe our solutions
        offer
        lighter, thinner, smaller, faster, more efficient and less energy-consuming
        products. Moreover, we believe that our coolers will be more cost efficient
        than
        conventional coolers.
  1
  ***Corporate
        History***
  The
        Company was incorporated in Nevada under the name KNETX Skates Corporation
        on
        December 23, 1999, and changed its name to Cedar Mountain Distributors, Inc.,
        or
        Cedar Mountain, on June 9, 2000. Prior to July 8, 2005, the Company was a
        public
“shell” company with nominal assets. On July 8, 2005, Cedar Mountain entered
        into a “share exchange with the shareholders of Celsia UK (a company formed in
        the United Kingdom in March 2004), whereby the shareholders of Celsia UK
        exchanged all of the outstanding common shares of Celsia UK for common stock
        of
        Cedar Mountain. The common stock of Cedar Mountain issued to Celsia UK’s
        shareholders in the share exchange represented approximately 95% of Cedar
        Mountain’s outstanding common stock. Therefore, as a result of the share
        exchange, the shareholders of Celsia UK acquired control of Cedar Mountain,
        Celsia UK became a wholly-owned subsidiary of Cedar Mountain, Cedar Mountain
        succeeded to the business and operations of Celsia UK and the management
        of
        Celsia UK assumed similar management positions with Cedar Mountain. To reflect
        this succession and continuation of the business of Celsia UK (then known
        as
        iCurie Lab Holdings Limited), Cedar Mountain’s name was changed to iCurie,
        Inc.
  Celsia
        UK
        acquired its intellectual property from Celsia Korea in March 2004, and acquired
        an 80.2% equity interest in Celsia Korea (a company formed in South Korea
        in
        2000) in December 2004. Celsia UK acquired the remaining 19.8% of Celsia
        Korea
        on September 1, 2005. Therefore, as a result of the acquisition, Celsia Korea
        became a wholly-owned subsidiary of Celsia UK. This transaction was more
        fully
        described in our 8-K filed with the SEC on September 1, 2005.
  On
        March
        13, 2006, iCurie, Inc. and its subsidiaries began operating under the brand
        name
        Celsia Technologies. In September 2006, the Company changed its corporate
        name
        to Celsia Technologies, Inc. On November 21, 2007, a wholly-owned subsidiary,
        Celsia Technologies Taiwan, Inc., was formed in Taiwan. In December 2007,
        the
        Company’s Design and Manufacturing Operations were relocated from Korea to
        Taiwan.
  ***Industry
        Overview***
  The
        thermal management industry is an estimated $5 billion business annually.
        We are
        focused on initially commercializing our cooling solutions in four different
        markets. These targeted markets are: the PC market, the LED lighting market,
        the
        LED flat panel display market and the electronic communication and entertainment
        market.
  Adaptation
        of new technologies (such as LED technology), as well as stronger and more
        powerful micro processors, are important factors that are expected to increase
        demand for new and more efficient thermal solutions.
  2
  In
        addition to our targeted markets, we anticipate subsequent deployment of
        our
        technology in numerous markets, such as medical equipment, air conditioning,
        energy equipment, defense and automotive markets.
  ***Technology
        Overview***
  Our
        product portfolio is based on registered and pending patents for unique cooling
        system technologies. We believe that our technology when used in a total
        thermal
        management solution enables higher performance than current cooling systems,
        with no noise or vibrations, and can be commercially manufactured using
        well-known processes at a cost comparable to traditional cooling products.
        Our
        technologies are designed to be used either as a stand-alone cooling solution,
        or as part of a cooling system.
  ***Market
        Information***
  As
        the PC
        industry uses ever more-powerful chips, including video/graphic chips, cooling
        has become an increasingly critical issue, yet there have been few technological
        innovations in this area. The industry is highly fragmented, the market need
        is
        significant, and we believe we have a very competitive technology. As a result,
        we believe we can capture a significant share of the performance segment
        of the
        computer cooling industry, across the Desktop, Notebook and Server
        segments.
  The
        Telecommunications industry requires an ever increasing bandwidth while
        performing in some of the most extreme environments. Celsia’s Technologies
        performance advantages offers significant performance improvements in this
        market area. The marketability of our product spans across many industries
        where
        heat emission calls for cooling. Companies in these industries need components
        with higher performance; are familiar with managing complex supply chains;
        and
        are willing to accept new technologies to gain competitive advantage. Several
        industries where our technologies are applicable are LED lighting, medical
        and military applications.
  We
        intend
        to address our target markets with a model that incorporates a mix of licensing
        arrangements, through which we can enter certain markets indirectly through
        the
        efforts of third parties, direct product sales and sales together with
        complementing distribution partners. We believe this distribution strategy,
        together with a manufacturing strategy based on outsourcing will enable us
        to
        rapidly gain market share without large investments in marketing resources
        or in
        manufacturing capacity.
  ***Commercialization***
  We
        are
        currently employing three parallel sales models to take our cooling technology
        to the market.
  The
        first
        is a licensing model, which we will use in specific industries or industry
        segments. We believe that giving licensing partners exclusive rights in certain
        specific areas represents an expedient way of creating revenues with relatively
        lower financial risks. We believe that this model will also help to create
        visibility and credibility for our technology in other industries. We plan
        to
        pursue this sales alternative when we can find synergies between our technology
        and our partners’ manufacturing capabilities. We have entered into two strategic
        patent license and sales exclusivity partnerships, one with Asia Vital
        Components, or AVC and one with Yeh-Chiang Technology Corp, or
        YCTC.
  3
  The
        second sales model is through direct sales activities, either through an
        internal Celsia sales force or through joint ventures. We plan to pursue
        this
        strategy when a technology shift is taking place in a particular industry
        that
        can be taken advantage of by us, or when an industry is fragmented and barriers
        to entry are low. Under this model, we plan to manage our supply, manufacturing,
        and distribution chains through sub contractors or by utilizing the
        manufacturing expertise of our supply partners.
  The
        third
        sales model is through distribution partnerships, where we partner with strong
        industry leaders in our target markets. This sales model is designed to serve
        as
        a strong complement, and faster method, of selling our cooling devices to
        the
        market place. Pursuant to this strategy, we have entered into (i) a sales
        and
        development agreement with Graftech AET in the US (ii) and a sales agent
        contract with Kubo Kinzoku and Techno Associe in Japan.
  ***Competition***
  Although
        we believe that our technology represents the next generation cooling solution
        in our target markets, we face and will continue to face intense competition.
        This competition consists of companies attempting to develop and market products
        similar to ours, as well as products incorporating alternative technologies.
        Although we believe that we have a degree of market exclusivity with respect
        to
        some of our products due to registered or pending intellectual property rights,
        there can be no guarantees that competitors will not successfully market
        products similar to ours, whether or not such products may infringe on our
        intellectual property rights. Even if we are ultimately successful in
        challenging competitors’ use of our intellectual property, any such challenge
        will likely be both expensive and time consuming, and our competitive position
        could be adversely affected notwithstanding successful legal actions to enforce
        our intellectual property rights.
  In
        addition, there are several alternative technologies currently being developed
        and marketed to address the same market demands as our products. Although
        we
        believe our technologies provides a highly competitive solution when compared
        to
        alternative technologies, it is possible that the market may adopt one of
        these
        alternative technologies, which may in turn become a recognized industry
        standard. Wide market adoption of one or more of these alternative technologies
        would have an adverse affect on our competitive position. In addition, we
        may
        also face competition from technologies not yet developed, whether such future
        technologies address the cooling issues directly or indirectly through the
        development of products, which produce less heat and therefore do not require
        an
        improved cooling solution.
  In
        addition to the various forms of competition faced by us, it is likely that
        many
        of our competitors will be much larger and better capitalized than we are,
        with
        substantially more resources to devote to the development, manufacture, and
        sales of cooling technology solutions. Such competitors may also benefit
        from
        existing relationships and reputations within the PC, Telecommunications
        and the
        LED-lighting industries.
  4
  ***Management
        Team***
  Our
        senior management is led by Joseph C Formichelli, our President and Chief
        Executive Officer, George A. Meyer, our Chief Operating Officer, and Jorge
        A.
        Fernandez, our Chief Financial Officer. Other members of our management team
        include senior level executives who have extensive experience in management,
        business development, marketing and sales, and systems development. In addition
        to our management team, we believe we have assembled a highly capable and
        active
        Board of Directors.
  ***Product
        & Technology Solutions***
  *Key
        Technology*
  Celsia
        NanoSpreadersTM were developed with one simple goal in mind: cool today's silicon
        chips, LEDs, LCDs, and other electronic components better than any other
        technology in its price band.
  The
        goal
        is realized through a patented copper encased two-phase vapor chamber that
        is
        thin (from 1.5mm), light, and delivers up to 30% lower thermal resistance
        (better cooling) than heat pipes when used as part of a total cooling
        solution.
  NanoSpreadersTM
        can be attached directly to single or multiple heat sources, simplifying
        cooling
        solution design, and are an excellent means of transporting heat over a long
        distance. They can be easily shaped and integrated with complementary cooling
        components such as fins and fans and can even be affixed to an enclosure
        wall to
        maximize heat dissipating surface area.
  We
        have
        been granted patents and have patents pending in the United States, Korea,
        Japan, China, Russia, and Taiwan and the 17 member countries of the European
        Union. Celsia continues to develop new applications for its current technology
        and new technologies and continues to file patents for these
        developments.
  Our
        NanoSpreadersTM are used in applications ranging from computers, telecom
        infrastructure, and LED lighting. In all cases the NanoSpreaderTM technology
        provides the highest performance at a price point similar to competing
        technologies.
  *Computer
        Applications*
  During
        fiscal year ended December 31, 2007, we continued to make technical advances
        which are applicable to the most demanding computer applications. This has
        allowed us to develop new solutions for the server, graphics and high end
        RAM
        market segments which are expected to go to production during the first quarter
        of 2008 .
  *Telecom
        OEM’s*
  We
        have
        developed products for a variety of telecom applications and we have
        demonstrated a significant performance improvement over the competition.
        This
        performance advantage, up to 30%, allows Celsia to get design wins at major
        original equipment manufacturers, or OEM’s.
  5
  ***Sales
        and Marketing***
  *Sales*
  We
        execute our commercialization strategy either by interacting directly with
        the
        potential customer (direct sales), or indirectly through partnerships (licensing
        or distribution partners), as described under “Commercialization”
above.
  We
        manage
        all customer opportunities in projects where our sales and engineering resources
        are deployed. The projects are initiated either through direct contacts with
        the
        customer, through our strategic partners or through customer inquiries generated
        through marketing activities such as public relations.
  We
        are
        currently managing 20 to 25 design projects. Our projects are being managed
        through different stages, starting with initial designs, samples and quotes,
        and
        ending with design wins and commercial purchase orders. We have projects
        in all
        stages as well as in most of our targeted markets. We have also received
        and
        executed several commercial orders.
  *Marketing*
  We
        employ
        a coordinated marketing strategy which includes initiatives such as direct
        lead
        generation, public relations, technology conference presentations and customer
        relations management. This gives us numerous alternatives in regards to
        marketing messages and competitive positioning. Regardless of the competitive
        environment, we feel confident going to the target market with business
        proposals that will lower barriers to entry. We plan to utilize
        price-performance trade-offs to rapidly create partnerships and make in-roads
        to
        targeted markets.
  The
        marketing strategy will be a combination of different marketing initiatives. We
        plan to base this strategy on a business-to-business marketing approach,
        where
        value is primarily determined by business economic use and large-unit
        transactions are the norm. The marketing philosophy, however, will go beyond
        a
        fixation on transactions, which very often leads to lost customers and low
        brand
        awareness in the short-term. Our ambition is to build a mutually advantageous
        long-term relationship with the customers, not just sell a product. This
        calls
        for knowing the customer well enough to deliver relevant products in a timely
        fashion and meeting their specific needs.
  We
        plan
        to build value through marketing based assets, such as brand, customer and
        employee relationships, channel relationships, supplier relationships, and
        intellectual capital. Our strategy is to minimize our ownership of physical
        assets. We aim to effectively employ and manage outsourced manufacturing
        capacity. Our belief is that value creation derives from building intellectual
        capital instead of owning fixed assets such as factories, buildings, etc.
        However, we do have limited manufacturing capacity at our Taiwan facility
        which
        enables us to ship sample products, supply initial ramp volumes, and help
        ensure
        our control of the manufacturing process.
  On
        March
        13, 2006, the Company re-branded itself as “Celsia Technologies,” which reflects
        its ambition to establish the Company’s unique technology under a strong brand
        in the thermal management marketplace. The Company changed its corporate
        name to
        reflect this re-branding in September 2006.
  6
  *Manufacturing
        Operations*
  During
        fiscal 2007, we continued to ship test and sample units to numerous potential
        customers in our targeted industries. The samples have been produced in our
        own
        pilot plant. The Company has also received ongoing production orders during
        the
        later part of 2007 and has executed shipments against these production orders.
  Our
        product does not call for a complex manufacturing set up, the number of
        components is very limited, and we have identified key manufacturing partners.
        One important criterion has been a thorough knowledge in manufacturing of
        thermal management products.
  We
        also
        believe that the manufacturing capacity of our strategic licensing and
        manufacturing partner, YCTC, will supply the significant portion of the capacity
        necessary for expected 2008 volumes.
  ***Research
        and Development Expenditures***
  Research
        and development expenditures were approximately $594,016 and $747,000 for
        the
        years ended 2007 and 2006, respectively.
  ***Employees***
  As
        of
        December 31, 2007, Celsia had 22 full-time employees. Four employees are
        located
        in the US, five employees are located in Korea, and thirteen employees are
        located in Taiwan.
  ***Financing
        Activities***
  *May
        2007 Convertible Debenture Financing*
  Overview
  On
        May
        25, 2007, the Company issued 8% Secured Convertible Debentures due May 25,
        2010
        (together with the Debenture issued on August 17, 2007 described below, the
        “Debentures”) in the aggregate principal amount of $8,142,847 to certain
        individuals and entities, together with warrants exercisable for a total
        of
        70,752,778 shares of the Company’s common stock at a price of $0.144, for an
        aggregate of $6,850,000 in cash and the surrender of previously outstanding
        promissory notes of the Company totaling $1,292,847.
  The
        sale
        of Debentures and warrants, or the “Debenture Offering”, was executed pursuant
        to a Securities Purchase Agreement dated as of May 25, 2007 between the Company
        and certain purchasers, or the Purchase Agreement. In connection with the
        Debenture Offering, the Company entered into a Security Agreement, Registration
        Rights Agreement and related documents, each dated as of May 25, 2007, with
        certain purchasers as holders of the Debentures.
  7
  On
        August
        17, 2007, the Company issued an additional 8% Secured Convertible Debenture
        due
        May 25, 2010 in the principal amount of $350,000, together with a warrant
        to
        purchase 2,800,000 shares of the Company’s common stock at a price of $0.144,
        for $350,000 in cash, on the same terms as the Company’s Debentures and warrants
        issued on May 25, 2007.
  The
        Debenture holders are entitled to receive, subject to certain limitations
        and
        restrictions, interest on the aggregate unconverted and then outstanding
        principal amount of their Debentures at the rate of 8% per annum, payable
        quarterly, in cash or Company common stock at the discretion of the Company.
        The
        Debentures are secured by substantially all of the Company’s assets. The
        Debenture holders have the right to convert the Debentures at any time into
        shares of the Company’s common stock at an initial conversion price of $0.125
        (currently $0.0625, as described below). The initial exercise price of the
        related warrants was $0.144 per share (currently $0.072, as described below).
        The conversion price of the Debentures and warrants are subject to adjustment
        upon certain events.
  In
        connection with the Debenture Offering, the Company and the holders of the
        Debentures entered into a Registration Rights Agreement dated May 25, 2007
        obligating the Company to register the shares of its common stock issuable
        upon
        conversion of the Debentures and exercise of the related warrants. The
        Registration Rights Agreement required the Company to file an initial
        registration statement by November 21, 2007 and to have the registration
        statement declared effective within 90 days of filing, which requirements
        were
        satisfied when Registration No. 333-147564 was filed on November 21, 2007
        and
        declared effective on December 11, 2007. Because the prospectus and related
        registration only registered a portion of the shares of common stock issuable
        upon conversion of the Debentures and exercise of warrants held by the Debenture
        holders, the Registration Rights Agreement requires the Company to register
        the
        remaining shares of common stock in one or more additional registration
        statements, subject to certain conditions. Upon certain events specified
        in the
        Registration Rights Agreement, the Company is obligated to pay cash liquidated
        damages to the Debenture holders.
  Compensation
        to Placement Agent
  In
        connection with the Debenture Offering, the placement agents (i) received
        a cash
        fee of approximately $618,000 and (ii) are entitled to receive warrants to
        purchase 5,120,000 shares of the Company’s common stock at a price of $0.144
        (currently $0.072, as described below).
  Compensation
        to Series A & B Preferred Shareholders
  As
        part
        of the Debenture Offering, each holder of our Series A Preferred Stock and
        Series B Preferred Stock who certified their status as an accredited investor
        was issued 2.19 shares of our common stock for each share of Preferred Stock
        held. As of December 31, 2007, 46,517,737 shares of common stock have been
        issued and the remaining 3,986,959 shares have been recorded as common stock
        subscribed. The Company obtained consent from the Series A & B Preferred
        Shareholders to approve the Convertible Debenture and modify the terms of
        the
        preferred stock, as described herein.
  Upon
        issuing the Debentures, the Company triggered certain anti-dilution provisions
        in the Company's outstanding warrants which lowered the conversion price
        and
        increased the number of shares issuable upon the exercise of such warrants.
        See
        Note 6 in the Notes to the Financial Statements. Certain holders of warrants
        agreed to the removal of future anti-dilution protection under their outstanding
        warrants.
  8
  Adjustment
        to Conversion Price and Warrants
  The
        Company triggered adjustments to the conversion price of the Debentures and
        the
        exercise price of the Warrants as a result of the Company not meeting certain
        financial milestones during the second and third quarters of 2007, which
        adjustments became effective November 15, 2007. The conversion price of the
        Debentures adjusted to $0.0625. The warrants issued to the Debenture holders
        and
        the Placement Agents in the Debenture Offering adjusted to increase the number
        of shares issuable upon exercise of the warrants to 147,105,556 and 10,240,000,
        respectively, and the exercise price was reduced to $0.072 per share.
  *Notes
        Payable*
  On
        February 20, 2007 and April 20, 2007, the Company issued Secured Convertible
        Promissory Notes, or the Notes, in an aggregate principal amount of $1,000,000
        and $150,000, respectively, to certain purchasers, or the Noteholders, pursuant
        to the terms of Securities Purchase Agreements dated as of February 20, 2007
        by
        and between the Company and the Noteholders. The Notes carried an annual
        interest rate of 10%, with all principal and accrued interest being due and
        payable on June 20, 2007; provided, however, that upon the terms and subject
        to
        the conditions of the Notes, all outstanding principal and interest on the
        Notes
        would automatically convert into securities of the Company issued pursuant
        to a
        Company financing meeting certain conditions, or a Qualified Financing, if
        such
        Qualified Financing was effectuated on or prior to June 20, 2007. The
        obligations evidenced by the Notes were secured by a pledge of substantially
        all
        of the Company’s assets, including the capital stock of Celsia Technologies UK
        Limited and Celsia Technologies Korea, Inc. In connection with the issuance
        of
        the Notes, the Company’s then Chief Executive Officer and Chief Financial
        Officer agreed to transfer approximately 735,000 shares of Company common
        stock
        held by such executives to the Noteholders in the event that a Qualified
        Financing did not occur on or prior to June 20, 2007.
  The
        Debenture Offering consummated on May 25, 2007 met the conditions of a Qualified
        Financing, and the Notes, totaling principal of $1,150,000, interest of $27,847,
        and a 10% premium on principal totaling $115,000, were automatically converted
        into Debentures. Upon completion of the transaction, the 735,000 shares of
        Common Stock pledged by the Company's then Chief Executive Officer and Chief
        Financial Officer were returned.
  *Summary
        of Prior Financings*
  *Series
        B Offering*
  Overview
  On
        December 16, 2005, the Company issued 3,063,402 shares of its newly designated
        Series B Preferred Stock, $0.001 par value per share, to certain individuals
        and
        entities or the Series B Holders, together with warrants (the “Series B
        Warrants”) to purchase approximately 1,531,700 shares of the Company’s common
        stock, for an aggregate of $3,063,402 in cash. In connection with the Series
        B
        Offering, the Company entered into the Series B Registration Rights Agreement
        dated as of December 16, 2005 with the Series B Holders and Indigo Securities
        LLC and Bridgehead Group Limited (collectively, the “Series B Placement
        Agents”). Pursuant to the Series B Registration Rights Agreement, the Company
        was required to file a registration statement covering the common stock
        (i) into which the Series B Preferred Stock is convertible and
        (ii) for which the Series B Warrants and Series B Placement Agent Warrants,
        are exercisable within six (6) months after the Company’s Registration Statement
        on Form SB−2 (Registration No. 333−128856) (filed pursuant to the Series A
        Offering and Registration Rights Agreement) is declared effective. The Series
        B
        Registration Rights Agreement was amended on May 25, 2007 in connection with
        our
        issuance of Debentures to reflect the subordination of rights under the Series
        B
        Registration Rights Agreement to the registration rights entered into by
        the
        Company with the Debenture holders on May 25, 2007.
  9
  *Series
        A Offering*
  Overview
  Effective
        as of July 11, 2005, the Company issued 20,995,239 shares of Series A
        Preferred Stock, together with warrants exercisable for a total of 6,441,874
        shares of our common stock, to various parties (referred to in this report
        as
        the “Series A Shareholders”) in exchange for approximately $12.48 million
        in cash (at a cash price of $0.88 per share of Series A Preferred Stock)
        and the
        transfer to us of $4.6 million of previously issued promissory notes issued
        by
        various parties (we refer to these transactions collectively as the
“Series A Offering”). In connection with the Series A Offering, we
        also entered into a Registration Rights Agreement dated as of July 11, 2005
        with
        Celsia UK shareholders, Series A Shareholders, and certain additional parties,
        as described in this section under “Series A Registration Rights
        Agreement.”
  Series
        A Registration Rights Agreement
  The
        Series A Registration Rights Agreement required us to use our reasonable
        best
        efforts to file the registration statement by September 8, 2005 and cause
        the
        registration statement to become effective no later than one hundred and
        twenty
        (120) days after July 11, 2005. Under the terms of the Series A Registration
        Rights Agreement, if the registration statement was not filed within 60 days
        of
        July 11, 2005 or declared effective within 120 days of July 11, 2005 (each
        a
“Non-Registration Event”), then for each 30 day period during the pendency of
        such a Non-Registration Event, we were required to pay to the purchasers
        of the
        Series A Preferred Stock an amount equal to one percent (1%) of the purchase
        price paid for the Series A Preferred Stock ($0.88 per share), which could
        be
        paid in cash or in shares of Series A Preferred Stock (valued at $0.88 per
        share), at the Company’s option. The registration statement was filed on October
        6, 2005 and the registration statement was declared effective in April 2006.
        As
        a result of the Non-Registration Events, in August 2006, the Company issued
        970,550 shares of Series A Preferred Stock to the purchasers of Series A
        Preferred Stock.
  ***Stock
        Dividends and Amendment to Articles***
  In
        the
        third quarter of 2006, the Company declared a dividend of shares of our common
        stock equal to 25% of the number of shares of Series A Preferred Stock and
        Series B Preferred Stock held by holders of record of Series A Preferred
        Stock
        and Series B Preferred Stock on September 30, 2006 (the “Stock Dividend”),
        resulting in the issuance of 5,798,253 shares of Series A Preferred Stock
        and
        765,851 shares of Series B Preferred Stock. On August 10, 2006 the Company
        paid
        an 8% Series A stock dividend to Series A shareholders, resulting in the
        issuance of 1,655,746 shares of Series A Preferred Stock.
  10
  In
        September 2006, the Company amended its Amended and Restated Articles of
        Incorporation to (i) provide that neither the Stock Dividend nor the
        amendment to the Company’s stock incentive plan to increase the number of shares
        available under such plan to 15 million shares would trigger any conversion
        adjustment or other anti-dilution or pre-emptive rights of the Series A
        Preferred Stock or Series B Preferred Stock and (ii) reflect the Company’s
        name change from “iCurie, Inc.” to “Celsia Technologies, Inc.”
  On
        May
        25, 2007, in connection with the Debenture Offering, the Company further
        amended
        and restated its Articles of Incorporation to increase the number of authorized
        shares of Common Stock from 150,000,000 to 500,000,000 and to modify the
        terms
        of the Company’s Series A Preferred Stock and Series B Preferred Stock to waive
        any unpaid dividends on the Series A Preferred Stock and reduce the Series
        A
        Preferred dividend rate from 8% to 2% (payable in cash or registered shares
        of
        Common Stock and including a waiver of any currently accrued but unpaid
        dividends), and remove (i) any conversion price adjustment provisions
        relating to the issuance of additional securities (including the issuance
        of the
        Debentures) or distributions on Company securities other than Common Stock,
        (ii) the Series A Preferred Stock’s right of first refusal (iii) the
        right of the Series A Preferred Stockholders to appoint directors and the
        special approval rights of such directors, and (iv) the voting rights of
        the
        Series A Preferred and Series B Preferred (other than voting rights required
        by
        law).
  **Item
        1A**  **Risk
        Factors.**
  Not
        applicable.
  **Item
        1B.**  **Unresolved
        Staff Comments.**
  Not
        applicable.
  **Item
        2.**  **Properties.**
  Our
        U.S.
        corporate headquarters is located at 1395 Brickell Avenue, Suite 800, Miami,
        Florida 33131, and our phone number is 305-529-6290. Celsia Korea, which
        is the
        Company’s sales and administrative office for the region, is located in Seoul,
        Korea. Our telephone number in Korea is 011-82-2-3452-2005. Celsia Taiwan,
        which
        is our Design and Manufacturing center, is located in Taipei, Taiwan. The
        Company’s telephone number in Taiwan is 011-866-935-186945. We believe that
        Taiwan is an excellent location to recruit highly skilled engineers. The
        main
        goals of the Taiwan office are to develop and industrialize the planned
        technology portfolio, lab prototypes and pre-serial manufacturing, as well
        as
        quality control.
  We
        currently lease a facility for research, manufacturing, and administration
        in
        Taipei, Taiwan and office space in Seoul, Korea. Our leased facility in Taiwan
        consists of approximately 2,079 square meters used for product manufacturing
        and
        design and administrative offices. Approximate monthly rent for the Taiwan
        facility is 190,476NT$ (approximately $5,879). The lease on this space expires
        in September 2009. Our leased facility in Korea consists of approximately
        122
        square meters used for administrative offices. Approximate monthly rent for
        the
        Korea facility is 2,300,000KWON (approximately $2,504). The lease on this
        space
        expires in October 2009.
  11
  **Item
        3.**  **Legal
        Proceedings**
  On
        October 19, 2007, the Company’s former President, Chief Executive Officer, and
        member of our Board of Directors, filed a lawsuit in the Miami-Dade County
        Circuit court claiming failure to pay bonuses, severance, and other benefits
        in
        connection with his previously reported termination by the Company. We have
        filed a motion for arbitration pursuant to the employment contract between
        the
        Company and our former Chief Executive Officer. We believe the claims are
        without merit and intend to defend the action vigorously.
  **Item
        4.**  **Submission
        of Matters to a Vote of Security Holders**
  None.
  **PART
        II.**
  **Item
        5.**  **Market
        For Common Equity and Related Stockholder Matters and Issuer Purchases of
        Equity
        Securities**
  ***Market
        Information***
  Our
        common stock is available for quotation on the Over the Counter Bulletin
        Board
        maintained by the National Association of Securities Dealers under the symbol
        “CSAT.OB.” There is no assurance that our common stock will continue to be
        quoted or that any liquidity exists for our shareholders. The following table
        provides the quarterly high and low bids per share of common stock reported
        on
        the Over the Counter Bulletin Board for all four quarters of 2006 and 2007.
        The
        following quotations reflect inter-dealer prices, without retail mark-up,
        mark-down or commission, and may not represent actual transactions. The source
        of this information is NASDAQ Over the Counter Bulletin Board Research
        Reports.
  **Fiscal
                  2006**
              
              
              **High**
              
              
              **Low**First
                  Quarter
              
              $
              1.30
              
              $
              0.74Second
                  Quarter
              
              $
              0.90
              
              $
              0.35Third
                  Quarter
              
              $
              0.70
              
              $
              0.21Fourth
                  Quarter
              
              $
              0.25
              
              $
              0.11**Fiscal
                  2007**First
                  Quarter
              
              $
              0.25
              
              $
              0.12Second
                  Quarter
              
              $
              0.17
              
              $
              0.07Third
                  Quarter
              
              $
              0.18
              
              $
              0.08Fourth
                  Quarter
              
              $
              0.12
              
              $
              0.03
 
 12
  ***Holders***
  As
        of
        February 25, 2008, the approximate number of holders of record of our common
        stock, which is our only class of common equity, is 167. This number does
        not
        include holders of securities in street name.
  ***Dividends***
  We
        have
        not paid any cash dividends on our common stock or our preferred stock. The
        declaration and payment of cash dividends in the future will be determined
        by
        our Board of Directors considering the conditions then existing, including
        our
        earnings, financial condition, capital requirements and other
        factors.
  ***Securities
        Authorized for Issuance Under Equity Compensation
        Plans***
  The
        following table provides information as of December 31, 2007 with respect
        to the
        Company’s common shares that may be issued under the Celsia 2005 Stock Incentive
        Plan, which was approved by our shareholders and is our only equity compensation
        plan:
  **EQUITY
        COMPENSATION PLAN INFORMATION**
  Number
                  of securities to be issued upon exercise of outstanding options,
                  warrants
                  and rights
                (a)
              
              Weighted-average
                  exercise price of outstanding options, warrants and rights
                (b)
              
              Number
                  of securities remaining available for future issuance under equity
                  compensation plans (excluding securities reflected in column
                  (a))
                (c)Celsia
                  2005 Stock Incentive Plan
              
              
              17,642,500
              
              $
              0.16
              
              
              7,967,672
 
 During
        the year ended December 31, 2007, we did not repurchase any shares as part
        of
        any publicly announced plan or program or otherwise. Currently, there are
        no
        compensation plans in effect under which our securities are authorized for
        issuance that were adopted without the approval of our security
        holders.
  **Item
        6.**  **Selected
        Financial Data**
  Not
        Applicable.
  **Item
            7.** **Management’s
            Discussion and Analysis of Financial Condition and Results of
            Operation**
  The
        following discussion contains forward-looking statements. These forward-looking
        statements are subject to certain risks and uncertainties that could cause
        actual results to differ materially from historical results or anticipated
        results, including those set forth in this report and the Company’s public
        filings. The following discussion and analysis should be read in conjunction
        with the Company's financial statements and notes thereto included elsewhere
        in
        this report. See “Forward-Looking Statements” on page 1 of this Annual
        Report.
  13
  ***Management’s
        Discussion and Analysis of Financial Condition and Results of
        Operations***
  Our
        operations include research, development, sales and marketing of our own
        patented technology portfolio as well as the operation of a pilot plant.
        During
        the year ended December 31, 2007, we continued to develop and commercialized
        technology and succeeded in achieving several design wins at key OEMs. We
        continue to engage with key OEM’s who are finding our technology an attractive
        solution to their thermal management problems. We have been able to provide
        better performance than competing technologies at a competitive price. This
        allows the OEM’s to either offer higher performance or to run their systems
        cooler. We continue to achieve design wins in all of our key target markets,
        LED’s, Graphics Chips, high end CPUs, communications equipment and memory
        applications.
  We
        signed
        one sales and distribution contract and added two direct salespeople during
        the
        fiscal year 2007 which is in line with our go to market strategy.
  The
        Company has produced revenues of $699,946 for the twelve months ended December
        31, 2007 compared to $104,085 for the twelve months ended December 31, 2006.
        The
        revenues for the three months ended December 31, 2007 were $208,266. The
        revenues are a result of customers paying for test samples and commercial
        deliveries. Cost of sales for the twelve months ended December 31, 2007 were
        approximately $1.1 million compared to $0.7 million for the same period last
        year. This is attributable to increased production activity originating from
        an
        increasing demand for our products.
  On
        May
        25, 2007, the Company obtained additional funds through the issuance of its
        Debentures in the aggregate amount of $8,142,847, of which $6,850,000 was
        paid
        in cash and the remainder through the surrender of previously outstanding
        promissory notes of the Company. On August 17, 2007, we issued an additional
        Debenture in the principal amount of $350,000 on the same terms as the Company’s
        debentures issued on May 25, 2007. Both issuances were accompanied by warrants
        to purchase the Company’s common stock. The Debentures are due on May 25,
        2010.
  In
        connection with the Debenture offering, the company’s placement agents received
        a cash fee of $618,000 and warrants to purchase the Company’s common stock. In
        addition, each holder of Preferred Stock who certified their status as an
        accredited investor was issued 2.19 shares of Common Stock for each share
        of
        Preferred Stock held. The Company has recorded a one-time financing expense
        of
        $6,060,564 for the 50,504,696 shares of Common Stock issued to the holders
        of
        Company preferred stock. Furthermore, upon issuing the Debentures, the Company
        triggered certain anti dilution provisions in the Company’s warrants, which
        lowered the conversion price and increased the number of shares the warrant
        is
        convertible for and recorded a deemed dividend of $652,318. This entry will
        have
        no cash impact.
  Pursuant
        to the terms of the Debenture and the Purchase Agreement, in the event that
        we
        did not satisfy certain financial milestones during any two consecutive quarters
        of fiscal 2007, (i) the conversion price of the Debenture would be reduced,
        and
        only reduced, to 50% of the then effective conversion price and (ii) Midsummer
        Ventures, L.P., a Debenture holder, shall have the right to appoint two
        additional members to our Board of Directors, which shall consist of seven
        (7)
        members following such appointment. Accordingly, as a result of our second
        and
        third quarter financial results, such 50% reduction requirement was triggered.
        Consequently, we
        have
        recorded a one-time financing expense of $3,430,591 for the beneficial
        conversion feature resulting from the conversion price adjustment. In addition,
        effective November 15, 2007, the warrants issued to the Debenture holders
        and
        the placement agents were adjusted such that the number of shares issuable
        upon
        exercise of the warrants increased to 147,105,556 and 10,240,000, respectively,
        and the exercise price of such warrants will be reduced by 50%. As of the
        date
        of this Annual Report, Midsummer Ventures, L.P. has not
        designated the two additional members to our Board of
        Directors.
  14
  We
        are
        currently operating with tight cost controls in order to manage our
        commercialization process. A majority of our expenses for the twelve months
        ended December 31, 2007 and 2006 were from selling and administrative expenses,
        which include research and development costs. The selling and administrative
        expenses for the twelve months ended December 31, 2007 were approximately
        $3.9
        million compared to approximately $6.1 million for the same period last year.
        The main cost drivers are personnel costs, professional fees, and travel
        expenses. The decrease in expenses is due to a company wide initiative to
        reduce
        expenses and personnel, as well as accrued executive bonus in 2006 which
        never
        materialized.
  In
        connection with the debenture financing, we incurred legal, due diligence,
        and
        placement agent fees of approximately $2,131,000. We have recorded these
        expenses as deferred charges and these expenses will be amortized over the
        length of the loan period. We have recorded amortization of deferred financing
        costs of approximately $410,000 for the year ended December 31, 2007.
        Additionally, we recorded an interest expense of approximately $1.4 million
        for
        year ended December 31, 2007. Approximately $400,000 is pertaining to the
        debenture financing which was added to the convertible debenture balance
        on
        January 1, 2008 at the election of the Company. The remaining $1 million
        in
        interest expense results from amortization of a debt discount recorded based
        upon the fair value of the warrants issued to the debenture holders and has
        no
        cash impact on us.
  We
        expect
        our product development, and project management activities to continue to
        be
        driven by commercial opportunities and undertaken as a result of potential
        customers requesting test units. The test orders that we receive from potential
        customers are fulfilled either by (1) modification of already
        commercialized products or (2) new solutions designed together with the
        potential customer. During the fiscal year ended 2007, the majority of our
        R&D resources were dedicated to customer projects and for the design of
        products with commercial opportunities. This is expected to continue during
        the
        fiscal year ended 2008.
  During
        the second half of fiscal 2007, we were focused on re-aligning our resources
        and
        reducing expenditures. In December 2007, we relocated our engineering and
        pilot
        line facilities from Seoul, Korea to Taipei, Taiwan. Our Korean staff and
        facilities were downsized to a sales and administrative support function
        only.
        The net result is a more responsive unit in Taiwan at lower costs.
  Any
        capital expenditures over the next twelve months will be focused on
        complementing this new Taiwan pilot plant with specific volume related equipment
        and on specific research and development related test equipment. All investments
        will be driven by commercialization opportunities, customer driven projects,
        and/or commercial volumes. We
        have
        hired a new sales executive in order to efficiently continue to execute
        our business
        plan and make sure that we fully capitalize on the market opportunity.
  15
  During
        the fiscal year ended December 31, 2007, we analyzed our expenses, reduced
        cash
        outlays and strengthened our product offering and marketing strategy. Our
        product test orders have led to
        several related test product deliveries ,
        as well
        as commercial orders. Test products
        are used by potential customers to examine our products' features and
        compatibility with customer products. Although such testing procedures can
        involve numerous steps and significant timelines, in several instances our
        test
        products have advanced beyond the test phases and been incorporated into
        commercial products. The mix between sample order deliveries and commercial
        deliveries continues to increase in favor of commercial deliveries. Once our
        products are shipped to our customers, our Company has no additional commitment
        in order to recognize revenues.
  ***Liquidity
        and Capital Resources***
  Our
        main
        source of liquidity has historically been from monies raised from various
        financings as described herein. During fiscal 2007, we raised an aggregate
        amount of $8,000,000 in cash through the issuance of the Debentures in May
        2007,
        which was later increased by $350,000 in August 2007. Our operational cash
        outflow has been reduced to approximately $300,000 per month, as compared
        to
        $500,000 per month in 2006. Our main use of cash during fiscal 2007 was related
        to product development driven by customer projects and general and
        administrative expenses.
  We
        have a $322,582 note payable to a third party that
        matured in 2007 and that we have not paid. Although it is entitled to do
        so, the
        payee has not demanded payment.
  Based
        on
        our current operating plan, we anticipate using our cash mainly to continue
        commercialization efforts and to expand the distribution network for our
        technology solutions. The main cash uses will be for sales and marketing,
        general and administrative, and research and development expenses. Investments
        will be focused on product development and manufacturing. All investments
        will
        be driven by commercialization opportunities. The total cash need for the
        next
        twelve months is estimated to be approximately $3.6 million, starting at
        January
        1, 2008. The main portion of the cash need is for sales activities, operating
        expenses, cost of sales, and a smaller portion is for investments in
        manufacturing and R&D. We expect to fund these activities through the cash
        received from the debenture financing and cash generated from operations.
        We
        currently believe that our cash is sufficient to fund our operations through
        December 2008.
  The
        ratio
        between current assets and current liabilities at December 31, 2007 was
        approximately 1.9. However, a significant portion, approximately $1 million,
        of
        current liabilities relates to expenses that are expected to have limited
        cash
        impact.
  ***Significant
        Estimates***
  We
        prepare our financial statements in conformity with accounting principles
        generally accepted in the United States of America, which require management
        to
        make estimates and assumptions that affect the reported amounts in the financial
        statements. Although these statements are based on management’s best knowledge
        of current events and actions that we may undertake in the future, actual
        results could differ from those estimates. Significant estimates required
        to be
        made by management include the valuation of 1) investments, 2) equity
        securities issued, 3) prepaid royalties, 4) registration rights,
        5) intangible assets, and 6) accounting for convertible
        debentures.
  ***Recent
        Accounting Pronouncements***
  See
        Note
        1 of the Notes to Consolidated Financial Statements included in Item 8 of
        this
        Annual Report for Recent Accounting Pronouncements.
  16
  ***Off-Balance
        Sheet Arrangements***
  We
        do not
        have any off-balance sheet arrangements that have or are reasonably likely
        to
        have a current or future effect on our financial condition, changes in financial
        condition, revenues or expenses ,
        results
        of operations, liquidity, capital expenditures or capital resources that
        is
        material to investors.
  ***Market
        Risks***
  The Company operates
        in the United States, the United Kingdom, Taiwan, and South Korea, each of
        which
        has its own currency. This may cause the Company to experience and be exposed
        to
        different market risks such as changes in interest rates and currency
        deviations.
  **Item
        7A.**  **Quantitative
        and Qualitative Disclosures about Market Risk.**
  Not applicable .
  **Item
            8.** **Financial
            Statements**
  The financial statements and report of an independent registered certified public accounting
        firm are included herein immediately following the signature page to this
        report.
  **Item
            9.** **Changes
            in and Disagreements with Accountants on Accounting and Financial
            Disclosure**
  None .
  **Item
        9A(T).**  **Controls
        and Procedures**
  **Disclosure
        Controls and Procedures**
  Disclosure
        controls and procedures are controls and other procedures that are designed
        to
        ensure that information required
        to be disclosed in company reports filed or submitted under the Securities
        Exchange Act of 1934, or the “Exchange Act,” is recorded, processed, summarized
        and reported ,
        within
        the time periods specified in the SEC’s rules and forms. Disclosure controls and
        procedures include without limitation, controls and procedures designed to
        ensure that information required to be disclosed in company reports filed
        or
        submitted under the Exchange Act is accumulated and communicated to management,
        including our chief executive officer and chief financial officer, as
        appropriate to allow timely decisions regarding disclosure.
  17
  **Management’s
        Report on Internal Control Over Financial Reporting**
  Management
        is responsible for establishing and maintaining adequate “internal control over
        financial reporting” as defined in Rules 13a-15(f) and 15d-15(f) under the
        Exchange Act. Internal control over financial reporting refers to the process
        designed by, or under the supervision of, our Chief Executive Officer and
        Chief
        Financial Officer, and effected by our Board of Directors, management and
        other
        personnel, to provide reasonable assurance regarding the reliability of
        financial reporting and the preparation of financial statements for external
        purposes in accordance with generally accepted accounting principles, and
        includes those policies and procedures that:
  (i)
              pertain
                  to the maintenance of records that, in reasonable detail, accurately
                  and
                  fairly reflect the transactions and dispositions of our assets;
  (ii)
              provide
                  reasonable assurance that transactions are recorded as necessary
                  to permit
                  preparation of financial statements in accordance with generally
                  accepted
                  accounting principles, and that receipts and expenditures are being
                  made
                  only in accordance with authorizations of our management and directors;
                  and
  (iii)
              provide
                  reasonable assurance regarding prevention or timely detection of
                  unauthorized acquisition, use or disposition of our assets that
                  could have
                  a material effect on our financial statements.
  Management
        has used the framework set forth in the report entitled “Internal
        Control— Integrated Framework” published by the Committee of Sponsoring Organizations of the
        Treadway Commission to evaluate the effectiveness of our internal control
        over
        financial reporting. Based on its evaluation, our management concluded that
        there is a material weakness in our internal control over financial reporting.
        A
        material weakness is a deficiency, or a combination of control deficiencies,
        in
        internal control over financial reporting such that there is a reasonable
        possibility that a material misstatement of the Company’s annual or interim
        financial statements will not be prevented or detected on a timely basis.
  The
        Company’s material weakness in its internal control over financial reporting
        relates to the monitoring and review of work performed by our Chief Financial
        Officer in the preparation of audit and financial statements, footnotes and
        financial data provided to the Company’s registered public accounting firm in
        connection with the annual audit. All of our financial reporting is carried
        out
        by our Chief Financial Officer. This lack of accounting staff results in
        a lack
        of segregation of duties necessary for an effective system of internal control.
        The material weakness identified did not result in the restatement of any
        previously reported financial statements or any other related financial
        disclosure, nor does management believe that it had any effect on the accuracy
        of the Company’s financial statements for the current reporting
        period.
  In
        order
        to mitigate this material weakness to the fullest extent possible, all quarterly
        financial reports are reviewed by the Chief Executive Officer as well as
        the
        Audit Committee for reasonableness. All unexpected results are investigated.
        At
        any time, if it appears that any control can be implemented to continue to
        mitigate such weaknesses, it is immediately implemented. We intend to implement
        appropriate procedures for monitoring and review of work performed by our
        Chief
        Financial Officer.
  During
        the most recently completed fiscal quarter, there has been no change in our
        internal control over financial reporting that has materially affected or
        is
        reasonably likely to materially affect, our internal control over financial
        reporting.
  This
        annual report does not include an attestation report of the company's registered
        public accounting firm regarding internal control over financial reporting.
        Management's report was not subject to attestation by the company's registered
        public accounting firm pursuant to temporary rules of the Securities and
        Exchange Commission that permit the company to provide only management's
        report
        in this annual report.
  18
  **Item
        9B.**  **Other
        Information**
  None .
  **PART
        III.**
  **Item
            10.** **Directors,
            Executive Officers, Promoters, Control Persons and Corporate Governance;
            Compliance with Section 16(a) of the Exchange
            Act**
  The
        following table sets forth certain information about our executive officers
        and
        directors.
  **Name**
              **Age**
              **Position**Joseph
                  Formichelli
              65
              President
                  and Chief Executive OfficerJorge
                  Fernandez
              32
              Chief
                  Financial OfficerGeorge
                  Meyer
              51
              Chief
                  Operating OfficerAlan
                  Benaim
              34
              DirectorDavid
                  H. Clarke
              66
              DirectorPeter
                  Rugg
              60
              DirectorCharles
                  Resnick
              56
              DirectorGregory
                  J. Osborn
              42
              DirectorDr.
                  Jeong-Hyun Lee
              43
              Director*Alan
                  Miller
              54
              Director*
  ***Dr.
        Lee and Mr. Miller resigned from the Board of Directors on March 24, 2007
        and
        July 13, 2007, respectively.**
  **Joseph
        Formichelli** has been
        our CEO since August 2007. He is a technology industry veteran with more
        than 30
        years of experience, including IBM, Toshiba and Gateway. During his career,
        he
        has held senior executive positions in manufacturing, quality assurance,
        engineering, logistics, supply chain and product management. At IBM he served
        as
        vice president of operations for the IBM PC company, and vice president and
        general manager of the highly successful ThinkPad line of notebook computers.
        He
        also served as the executive vice president and general manager of Toshiba’s
        computer systems group where he oversaw the US, Latin America and South America
        business. Mr. Formichelli successfully converted Toshiba’s computer business
        from a technology driven, indirect sales organization to one of e-business,
        customer relations management, direct sales and revamped their manufacturing
        operations. Subsequent to Toshiba, Mr. Formichelli was executive vice president
        of operations at Gateway Computers and executive vice president of operations
        at
        RadioShack .
  19
  **Jorge
        Fernandez** has been
        our Chief Financial Officer since September 2007. He joined Celsia in October
        2005, as the Corporate Controller. Prior to joining Celsia, Mr. Fernandez
        served
        as the Finance Director for Tiger Direct (NYSE: SYX), a Fortune 1000 computer
        and electronics retailer, served as Finance Director-Latin America for
        PRG-Schultz (NASDAQ: PRGX), an accounts payable recovery audit services firm;
        served as VP Finance for Fiera Group, an e-commerce startup in Latin America.
        Mr. Fernandez began his career as part of the assurance practice at Arthur
        Andersen LLP, where he managed audit engagements in South Florida. Mr. Fernandez
        is a Certified Public Accountant licensed in the State of Florida.
  **George
        Meyer** has
        been
        our Chief Operating Officer **** since
        September 2007. **** He
        joined
        Celsia in December, 2005 as Vice President Sales & Marketing, General
        Manager for the Americas & Europe regions. He is a proven thermal management
        industry veteran with nearly three decades of experience driving global growth
        at Thermacore International, Inc. (a leading supplier of thermal management
        solutions), and brings extensive in-depth market and technical knowledge
        to the
        company. He is responsible for developing key customer relationships, managing
        the product portfolio, and growing sales throughout the industry. During
        his 28
        year career at Thermacore, Mr. Meyer held various positions including Chairman
        and General Manager of Thermacore Korea and Taiwan, as well as Vice President,
        Worldwide Sales & Marketing. While at Thermacore, Mr. Meyer was instrumental
        in establishing relationships and design wins with the military, aerospace
        and
        leading technology companies such as Intel, Hewlett-Packard, Apple, Sun
        Microsystems and Silicon Graphics. Mr. Meyer holds 10 patents in the field
        of
        electronics thermal management.
  **Alan
        Benaim** has
        been
        a member of our Board of Directors since May 2007. Mr. Benaim is a vice
        president at Midsummer Capital, a New York City based Hedge Fund group that
        acts
        as a fundamental investor with a medium-term horizon in exchange-listed small
        to
        mid-size growth companies. Mr. Benaim has over nine years experience in
        investment banking, corporate finance and principal investing. At Midsummer,
        Mr.
        Benaim is involved in the evaluation, due diligence and execution of
        investments. Prior to Midsummer, Mr. Benaim spent seven years in various
        roles
        at JPMorgan Chase based in London and New York, executing a wide spectrum
        of
        transactions in mergers and acquisitions advisory, structured finance, bank
        financing, bond issuance, equity issuance and financial derivatives, across
        more
        than 20 countries in the US, Europe, Middle East, Africa and Asia. Mr. Benaim
        was promoted to Vice President at JPMorgan Chase and is credited with helping
        build and develop the European Metals & Mining industry group from the
        bottom up into the top league table ranked industry group. Following JPMorgan
        Chase, Mr. Benaim gained investment experience in both early stage venture
        capital and middle market private equity, having evaluated and executed
        investments in companies within the technology, healthcare, security and
        manufacturing and engineering industries. Mr. Benaim has an MBA from Columbia
        University Graduate School of Business and a Bachelor of Science degree in
        Economics from the London School of Economics.
  **David
        H. Clarke** has
        been
        a member of our Board of Directors since July 2005. Mr. Clarke retired as
        Chairman of the Board and Chief Executive Officer of Jacuzzi Brands, Inc.,
        in
        September 2006 shortly before the company’s sale to Apollo Management. Prior to
        joining Jacuzzi Brands in 1995, Mr. Clarke was Vice Chairman of Hanson PLC
        from
        1993 and Deputy Chairman and Chief Executive Officer of Hanson Industries,
        the
        U.S. arm of Hanson, from 1992. Prior to 1992, Mr. Clarke served as President
        of
        Hanson Industries. Mr. Clarke is presently Executive Vice Chairman of United
        Pacific Industries a diversified manufacturing company listed on the Hong
        Kong
        Stock Exchange. United Pacific Industries has a number of production facilities
        in the People Republic of China and has distribution or production facilities in the
        United Kingdom, France, Australia, New Zealand and other countries. Mr. Clarke
        is also a member of the Board of Fiduciary Trust International a company
        engaged
        in investment management.
  20
  **Peter
        Rugg** has
        been
        a member of our Board of Directors since July 2005. Mr. Rugg is a Senior
        Partner
        of Tatum LLC in New York. He has over 30 years of diversified business
        experience with special competence in capital structure and creative financing
        alternatives. Mr. Rugg has extensive experience in international natural
        resource businesses and offshore business migration. He has experience in
        commercial and investment banking, merger and acquisitions, turnaround
        situations, project finance and corporate restructuring, during a long career
        at
        JP Morgan. Mr. Rugg has managed public company financial reporting, investor
        relations, tax compliance and audit, budget and planning and information
        technology systems including relational database, desktop and multi-currency
        accounting, as CFO of Triton Energy (NYSE). He is a founder of Nviro Cleantech
        plc (London-AIM). He sits on a number of non-profit and emerging growth company
        boards.
  **Charles
        Resnick** has
        been
        a member of our Board of Directors since August 2007. Mr. Resnick is the
        managing partner of Inflexion Partners. Mr. Resnick is an accomplished
        business executive with a 25-year career in global general management,
        operations, financial management, and strategic relationships in the technology,
        banking, and consumer packaged goods sectors. He has held senior management
        positions in the United States, South America, Mexico, and Western Europe
        with
        Danka Business Systems, Tropicana Products, Mellon Bank, PepsiCo and The
        Procter
& Gamble Company. He has extensive experience with both domestic and
        international mergers and acquisitions, and has been involved in over 100
        acquisitions and divestitures, including a $1.8 billion acquisition for Danka
        Business Systems. He was also a lead participant in negotiating the GATT
        and NAFTA Agreements as Undersecretary in the Bush administration (1990-1993).
        In his most recent position, he was a founder and Vice President of
        Corporate Development and Marketing of Mimeo, Inc. and was instrumental in
        building a strategic business and investment relationship with Hewlett-Packard
        and UPS. In addition, he was one of the lead Mimeo executives that raised a
        total of $41 million in financing. He holds both an A.B. degree and a
        M.B.A. from St. Louis University .
  **Gregory
        J. Osborn** has
        been
        a member of our Board of Directors since July 2005. Mr. Osborn is a managing
        partner at IndiGo Ventures. Prior to launching IndiGo Ventures, he founded
        Seed
        Capital, which provided new business development, strategic partnering and
        fundraising services for cutting-edge Internet companies, and served as head
        of
        business development for FreeRide.com. His background in finance and investment
        began on Wall Street, working at the headquarters of L.F. Rothschild & Co.,
        Drexel, Burnham, Lambert, as an Account Executive, Smith Barney Harris &
Upham, as Vice President, Paine Webber, as First Vice President and Senior
        Vice
        President of Axiom Capital Management. Mr. Osborn holds a B.S. in Finance
        and
        Economics from Ramapo State College. Mr. Osborn serves on the Board of Directors
        of Powerhouse Technologies Group, Inc., Children of Bellevue and
        ideavilliage.com. Mr. Osborn also serves as corporate advisor to Advance
        Nanotech Inc. He serves as Executive Chairman of Tasker Products,
        Inc.
  21
  **Dr.
        Jeong-Hyun Lee** founded
        Celsia Korea in 2000 and was the Chief Technology Officer of Celsia from
        September 1, 2004 to September 16, 2006. Dr. Lee received his doctorate
        from Case Western University and formerly worked with NASA and Samsung. Dr.
        Lee
        pioneered the core technology that dissipates heat quickly and efficiently
        from
        devices such as PCs, laptops and other chip driven devices. Dr. Lee resigned
        from the Board of Directors on March 24, 2007
  **Alan
        B. Miller** became
        a
        member of our Board of Directors in July 2005. Mr. Miller has over twenty-five
        years of Wall Street and financial expertise, including his tenure from 1990
        to
        2003 as founder and president of Winchester Investment Securities, an investment
        banking and general securities firm based in Overland Park, Kansas. Winchester,
        which had five branches and forty-five registered representatives, had
        participated in private placements, IPOs, market making and general securities
        trading. Also from 1990 to 2003, Mr. Miller was president and senior
        analyst of Trendways Wall Street Watch, a stock market newsletter and hotline.
        Mr. Miller has served as vice president of the investment firm of Duggan
        and Co.
        and began his career as a registered representative with Stern Brothers in
        Kansas City, Missouri where he became one of the firm’s top producing
        stockbrokers. Mr. Miller was a former director of Hansen Gray & Company,
        Inc, a significant shareholder of the Company. Mr. Miller resigned from the
        Board of Directors in July 2007.
  ***Board
        Composition and Committees***
  The
        Company currently has five (5) Directors on its Board of Directors. All members
        of our Board of Directors will hold office until the next annual meeting
        of
        stockholders and election and qualification of their successors.
  The
        Board
        of Directors of Celsia has established an Audit Committee consisting of David
        H.
        Clarke and Peter Rugg and has determined that Mr. Rugg, chairman of the Audit
        Committee, is (i) an “audit committee financial expert,” as defined by
        SEC’s regulations, and (ii) independent, as defined under SEC regulations
        and the rules of the Nasdaq stock market. The Board of Directors of Celsia
        has
        also established a Compensation Committee consisting of David H. Clarke and
        Peter Rugg.
  ***Code
        of Ethics***
  We
        have
        adopted a Code of Business Conduct and Ethics that embodies policies encouraging
        individual and peer integrity, ethical behavior and our responsibilities
        to our
        employees, customers, suppliers, stockholders, and the public, and
        includes:
 •
                Prohibiting
                    conflicts of interest (including protecting corporate
                    opportunities);
  •
                Protecting
                    our confidential and proprietary information and that of our
                    customers and
                    vendors;
  •
                Treating
                    our employees, customers, suppliers and competitors
                    fairly;
  •
                Encouraging
                    full, fair, accurate, timely and understandable disclosure;
                    and
  •
                Protecting
                    and properly using company assets.
  •
                Complying
                    with laws, rules and regulations (including insider trading laws);
                    and
  •
                Encouraging
                    the reporting of any unlawful or unethical
                    behavior
  22
  The
        code
        applies to every officer, director and employee. We also expect that those
        with
        whom we do business (including our agents, consultants, suppliers and customers)
        will also adhere to the code .
        All of
        our officers, directors and employees must carry out their duties in accordance
        with the policies set forth in this code and with applicable laws and
        regulations.
  **Item
                  11.**
              **Executive
                  Compensation**
  ***Annual
        Compensation***
  The
        following table sets forth information for each of our named executive officers
        for the fiscal years ended December 31, 2007
        and 2006.
  **SUMMARY
        COMPENSATION TABLE** **(1)**
  **Name
                  and Principal Position**
              
              **Year**
              
              **Salary**
                **($)**
              
              **Bonus
                  ($)**
              
              **Stock
                  Awards ($) (6)(7)**
              
              **Option
                  Awards ($)(7)**
              
              **All
                  Other Compensation ($)(8)**
              
              **Total
                  ($)**Joseph
                  Formichelli,
                
                Chief
                  Executive Officer
              
              2007
                
                2006
              
              $90,000(2)
                
                -
              
              -
                
                -
              
              -
                
                -
              
              $9,800
                
                -
              
              -
                
                -
              
              $9,800
                
                -George
                  Meyer,
                
                Chief
                  Operating Officer
              
              2007
                
                2006
              
              $230,458
                
                -
              
              $8,569
                  (5)
                
                -
              
              -
                
                -
              
              $3,267
                
                -
              
              $1,400
                
                -
              
              $243,694
                
                -Jorge
                  Fernandez,
                
                Chief
                  Financial Officer
              
              2007
                
                2006
              
              $152,000
                
                -
              
              $17,700
                
                -
              
              -
                
                -
              
              $3,267
                
                -
              
              -
                
                -
              
              $172,967
                
                -Hakan
                  Wretsell,
                
                Chief
                  Executive Officer (3)
              
              2007
                
                2006
              
              $210,340
                
                $262,500
              
              $22,983
                  (5)
                
                -
              
              -
                
                $40,030
              
              -
                
                $5,969
              
              $1,400
                
                $4,200
              
              $234,723
                
                $312,699Michael
                  Karpheden,
                
                Chief
                  Financial and
                Operating
                  Officer (4)
              
              2007
                
                2006
              
              $185,250
                
                $220,500
              
              $11,584
                  (5)
                
                -
              
              -
                
                $21,445
              
              -
                
                $5,969
              
              $1,400
                
                $4,200
              
              $198,234
                
                $252,114
 
 _______________________________
 (1)
                Includes
                    only those columns relating to compensation awarded to, earned
                    by, or paid
                    to the executive officers in fiscal 2007 and 2006. All other
                    columns have
                    been omitted.
  (2)
                This
                    amount is paid by the Company to Core Strategies, LLC pursuant
                    to an
                    agreement dated August 21, 2007, whereby Core provides general
                    management
                    services to the Company at amonthlybase cash fee of $20,000. Mr. Formichelli is engaged by the Company
                    through such agreement.
  (3)
                Mr.
                    Wretsell was terminated from all executive officer positions
                    held with the
                    Company and its subsidiaries in August
                    2007.
  (4)
                Mr.
                    Karpheden resigned from all executive officer positions held
                    with the
                    Company and its subsidiaries in August 2007.
  23
  (5)
                All
                    bonuses paid in 2007 were earned in 2006.
  (6)
                Mr.
                    Karpheden forfeited 305,687 and 306,356 shares of common stock
                    for the
                    years ended December 31, 2007 and 2006. Mr. Wretsell forfeited
                    435,877
                    shares of common stock for the years ended December 31,
                    2007.
  (7)
                Refer
                    to Note 7 to the financial statements included in this Annual
                    Report for
                    details on all assumptions made for purposes of calculating the
                    stock
                    based compensation expense.
  (8)
                Represents
                    car allowances receivedbyMessrs.
                    Wretsell, Karpheden and Meyer.
 ***Employment
        Arrangements with Named Executive Officers***
  ***Joseph
        Formichelli*** . **** Mr.
        Formichelli is engaged as the Chief Executive Officer of the Company pursuant
        to
        an agreement and statement of work, dated August 21, 2007, between the Company
        and Core Strategies, LLC, or Core, whereby, among other things, Core provides
        general management services to the Company. The Company pays a monthly base
        cash fee of $20,000 for the services that Core provides. Pursuant to the
        arrangement, Mr. Formichelli is entitled to receive a stock option to purchase
        6,000,000 shares of Company common stock. One-twelfth of such option shares
        will
        vest quarterly.
  ***George
        Meyer*** .
        Mr.
        Meyer’s employment agreement, dated May 24, 2007 provides for an annual base
        salary of $264,000. Mr. Meyer may be eligible to earn a bonus from us payable
        in
        any combination of cash, options or common stock and other incentives as
        determined by the Compensation Committee. In the event that Mr. Meyer is
        terminated without cause, he will receive an amount equal to six (6) months
        of
        his base salary as severance. Mr. Meyer has also agreed to non-competition
        and
        non-solicitation provision that will be in effect during his employment and
        for
        one year thereafter.
  ***Jorge
        Fernandez*** *.* ****** Mr.
        Fernandez has been our Chief Financial Officer since September, 2007. Mr.
        Fernandez does not have a written employment agreement with us. His employment
        arrangement provides for an annual base salary
        of $180,000, and he is eligible to receive stock options upon the same terms
        as
        the rest of senior management.
  ***Hakan*** ***Wretsell*** .
        Effective August, 2007, Mr. Wretsell no longer serves as our Chief Executive
        Officer.
  ***Michael*** ***Karpheden*** .
        Effective August, 2007, Mr. Karpheden no longer serves as our Chief Financial
        Officer.
  ***Change
        of Control Arrangements***
  ***Joseph
        Formichelli*** *.* In
        the
        event that the Company is sold or a change of control is deemed to have
        occurred, all of the unvested shares granted pursuant to Mr. Formichelli’s
        arrangement with the Company will immediately vest.
  There
        are no change
        of control arrangements for any other named executive officer of the Company
        in
        place at this time.
  24
  ***Outstanding
        Equity Awards*** ***(1)***
  The following table
        sets forth information relating to outstanding equity awards as of December
        31,
        2007:
  **OUTSTANDING
        EQUITY AWARDS AT FISCAL YEAR END(1)**
 **Option
                    Awards****Name
                    and Principal Position**
                
                **Number
                    of Securities Underlying Unexercised Options (#)
                    Exercisable**
                
                **Number
                    of Securities Underlying Unexercised Options (#)
                    Unexercisable**
                
                **Option
                    Exercise Price ($)**
                
                **Option
                    Expiration Date**Joseph
                    Formichelli,
                  Chief
                    Executive Officer
                
                
                500,000
                
                
                5,500,000
                    (3
                (3)
                $
                0.0625
                
                
                2017George
                    Meyer,
                  Chief
                    Operating Officer
                
                
                166,667
                  
                  69,440
                  
                  333,333
                
                
                1,833,333
                  
                  55,560
                  
                  166,667
                (3)
                  
                  (4)
                  
                  (4)
                $
                  
                  $
                  
                  $
                0.0625
                  
                  0.19
                  
                  0.88
                
                
                2017
                  
                  2016
                  
                  2015Jorge
                    Fernandez,
                  Chief
                    Financial Officer
                
                
                166,667
                  
                  120,000
                
                
                1,833,333
                  
                  0
                (3)
                $
                  
                  $
                0.0625
                  
                  0.88
                
                
                2017
                  
                  2015Hakan
                    Wretsell,
                  Chief
                    Executive Officer (2)
                
                
                81,695
                  
                  326,779
                
                
                0
                  
                  0
                
                $
                  
                  $
                0.19
                  
                  0.88
                
                
                2016
                  
                  2015Michael
                    Karpheden,
                  Chief
                    Financial &Operating
                    Officer (2)
                
                
                81,695
                  
                  326,779
                
                
                0
                  
                  0
                
                $
                  
                  $
                0.19
                  
                  0.88
                
                
                2016
                  
                  2015
 (1)
                Includes
                    only those columns relating to compensation awarded to, earned
                    by, or paid
                    to the directors in fiscal 2007. All other columns have been
                    omitted.
  (2)
                The
                    options issued to Messrs. Wretsell and Karpheden expired 90 days
                    after
                    their departure from the Company. As of December 31, 2007, all
                    outstanding
                    options issued to Messrs. Karpheden and Wretsell were forfeited.
  (3)
                These
                    options vest quarterly over 11 quarters commencing on March 31,
                    2008.
  (4)
                These
                    options vest quarterly over 4 quarters commencing on March 31,
                    2008.
 **DIRECTOR
        COMPENSATION** **(1)**
  Our
        directors do not receive cash compensation for serving as directors. Directors
        who are not currently employees are eligible to receive grants of stock options
        under our 2005 Stock Incentive Plan.
  25
  **Name**
              
              **Fees
                  Earned or Paid in Cash ($)**
              
              **Option
                  Awards ($)**
              
              **Total
                  ($)**David
                  Clarke
              
              $
              8,000
              
              $
              20,000
              
              $
              28,000Alan
                  Miller
              
              $
              9,000
              
              $
              20,000
              
              $
              29,000Peter
                  Rugg
              
              $
              8,000
              
              $
              20,000
              
              $
              28,000Greg
                  Osborn (2)
              
              
              -
              
              
              -
              
              
              -
 
  (1)  Includes
        only those columns relating to compensation awarded to, earned by, or paid
        to
        the directors in fiscal 2007. All other columns have been omitted.
  (2)  Pursuant
        to an agreement dated January 10, 2006, Indigo Ventures LLC, of which Greg
        Osborn is a managing partner, was to receive a monthly fee of $15,000 for
        consulting services provided through May 31, 2007 for a total of $75,000
        in
        fiscal 2007. This amount, along with an additional $15,000 from 2006 was
        settled
        with the issuance of 1,440,000 shares of common stock and a warrant to purchase
        720,000 shares of common stock.
  **Item
                  12.**
              **Security
                  Ownership of Certain Beneficial Owners and
                  Management**
  The
        following table sets forth, as of February 25, 2008, information regarding
        the
        beneficial ownership of shares of our common stock by each person known by
        us to
        own five percent or more of the outstanding shares of our common stock, by
        each
        of our executive officers, by each of our directors, and by all executive
        officers and directors as a group. Beneficial ownership of shares is determined
        in accordance with SEC rules and generally includes any shares over which
        a
        person exercises sole or shared voting or investment power. The information
        set
        forth below, including ownership percentages and voting power percentages,
        is
        based on an aggregate of 85,273,680 shares of common stock outstanding as
        of
        February 25, 2008. All shares of common stock underlying Series A Preferred
        Stock, Series B Preferred Stock or Debentures owned by each person and common
        stock underlying warrants, stock options or other stock-based awards that
        are
        presently exercisable or exercisable within 60 days of the date of this filing
        by each person are deemed to be outstanding and beneficially owned by the
        person
        holding the Series A Preferred Stock, Series B Preferred Stock or Debentures,
        stock options, warrants, and other stock-based awards respectively, for the
        purpose of computing the ownership percentage of that person, but are not
        considered outstanding for the purpose of computing the percentage ownership
        of
        any other person.
  Unless
        otherwise indicated, to our knowledge, each person listed in the table below
        has
        sole voting and investment power with respect to the shares shown as
        beneficially owned by such person, except to the extent applicable law gives
        spouses shared authority. Except as otherwise noted, each shareholder’s address
        is c/o Celsia Technologies, Inc., 1395 Brickell Avenue, Suite 800, Miami,
        Florida, 33131.
  26
  **Non-Management
        Beneficial Holders**
  **Name
                  And Address**
                **Of
                  Beneficial Owners**
              
              **Shares
                  of**
                **Common
                  Stock**
              
              **Percentage
                  of**
                **Class**AMF
                  Capital(1)(formerly Hansen Gray & Company, Inc.)
                6100
                  Neil Road, Suite 500
                Reno,
                  Nevada 89511
              
              9,629,376
              
              11.16%
  **Officers
        and Directors**
 
 **Name
                  And Address**
                **Of
                  Executive Officers**
              
              **Shares
                  of**
                **Common
                  Stock**
              
              **Percentage
                  of**
                **Class**Jeong
                  Hyun Lee, Ph.D.(2)*
              
              12,445,474
              
              14.41%Hakan
                  Wretsell(3)*
              
              1,743,509
              
              2.04%Michael
                  Karpheden(4)*
              
              916,392
              
              1.07%Joseph
                  Formichelli(5)
              
              1,000,000
              
              1.16%Jorge
                  Fernandez(6)
              
              453,334
              
              0.53%George
                  Meyer(7)
              
              958,334
              
              1.11%Gregory
                  Osborn(8)
              
              885,726
              
              1.04%Peter
                  Rugg(9)
              
              597,085
              
              0.70%David
                  Clarke(10)
              
              420,000
              
              0.49%Alan
                  Miller(11)*
              
              420,000
              
              0.49%Alan
                  Benaim(12)
              
              -
              
              -Charles
                  Resnick(13)
              
              -
              
              -Current
                  Officers and Directors as a Group(14)
              
              4,314,479
              
              4.85%
  *
              No
                  longer an officer or director of the Company as of February 25,
                  2008, as
                  described further herein.
  (1)
                Includes
                    8,629,376 shares of Common Stock and warrants to purchase 1,000,000
                    shares
                    of common stock.
  27
  (2)
                Includes
                    (i) 11,348,332 shares of common stock and (ii) warrants to purchase
                    1,097,142 shares of common stock. Dr. Lee is also the sole general
                    partner
                    of CHL Investment Partnership which owns 2,493,505 shares, and
                    may be
                    deemed to beneficially own the shares held by such
                    entity.
  (3)
                Includes
                    1,743,509 shares of common stock.
  (4)
                Includes
                    916,392 shares of common stock.
  (5)
                  Includes
                      options to acquire 1,000,000 shares of common stock which will
                      be
                      exercisable within sixty (60) days.
 (6)
                Includes
                    options to acquire 453,334 shares of common stock which will
                    be
                    exercisable within sixty (60) days.
  (7)
                Includes
                    options to acquire 958,334 shares of common stock which will
                    be
                    exercisable within sixty (60) days.
  (8)
                Includes
                    (i) 591,221 shares of common stock, (ii) 211,646 shares of Series
                    A
                    Preferred Stock and (iii) warrants to purchase 82,859 shares
                    of common
                    stock. Mr. Osborn is a Managing Partner of Indigo Ventures LLC,
                    which
                    beneficially owns 1,115,843 shares of our common stock (which
                    includes
                    warrants to purchase 352,578 shares of common stock and 763,265
                    shares of
                    Series A Preferred Stock).
  (9)
                Includes
                    (i) 118,187 shares of common stock, (ii) 42,328 shares of Series
                    A
                    Preferred Stock, (iii) options to acquire 420,000 shares of common
                    stock
                    which will be exercisable within sixty (60) days and (iv) warrants
                    to
                    purchase 16,570 shares of common stock.
  (10)
                Includes
                    options to acquire 420,000 shares of common stock which will
                    be
                    exercisable within sixty (60) days. Mr. Clarke is affiliated
                    with GSB
                    Holdings, Inc., which beneficially owns 506,665 shares of our
                    common stock
                    (which includes (i) 153,259 shares of common stock, (ii) 253,975
                    shares of
                    Series A Preferred Stock and (iii) warrants to purchase 99,431
                    shares of
                    common stock).
  (11)
                Includes
                    options to acquire 420,000 shares of common stock which will
                    be
                    exercisable within sixty (60) days. Mr. Miller is a director
                    of AMF
                    Capital (formerly Hansen Gray & Company, Inc.), a significant
                    shareholder of the Company, as reported
                    above.
  (12)
                Mr.
                    Benaim is a Vice President of the investment advisor to Midsummer
                    Ventures, L.P., which beneficially owns 82,500,000 shares of
                    the Company
                    (which includes (i) 40,000,000 shares upon conversion of debenture,
                    (ii)
                    warrants to purchase 42,500,000 shares of common stock).
  (13)
                Mr.
                    Resnick is affiliated with Inflexion Fund, L.P., which beneficially
                    owns
                    11,200,000 shares of the Company (which includes (i) 5,600,000
                    shares upon
                    conversion of debenture, (ii) warrants to purchase 5,600,000
                    shares of
                    common stock).
  (14)
                Eight
                    individuals. Does not include Messrs. Lee, Wretsell, Karpheden
                    or
                    Miller.
  **Item
            13.** **Certain
            Relationships and Related Transactions, and Director
            Independence**
  ***Related
        Transactions***
  In
        connection with the acquisition of Celsia Korea and its intellectual property
        in
        2004, Celsia UK agreed to pay CHL Investment Partnership and Hansen Gray
        a
        royalty fee equal to two percent (2%) of Company revenues over $25 million,
        up
        to an aggregate royalty of $50 million. CHL Investment Partnership receives
        fifty-seven percent (57%) and Hansen Gray receives forty-three percent (43%)
        of
        such royalty. This arrangement is documented in a Revenue Share Agreement
        dated
        as of May 18, 2005. At the closing of the Series A Offering, Hansen Gray
        received a cash advancement of $500,000 against its right to receive these
        royalty payments from us. On July 18, 2007, the Company and AMF Capital,
        Inc.,
        or AMF, (formerly known as Hansen Gray & Company) entered into a Settlement
        Agreement and Release pursuant to which the Company and AMF resolved certain
        claims of AMF against the Company. Pursuant to the Settlement Agreement,
        the
        Company paid $100,000 in cash to AMF against its right to receive the royalty
        payments and issued to AMF a warrant to purchase 1,000,000 shares of common
        stock of the Company at an exercise price of $0.88 per share, and AMF released
        the Company from any and all claims except for certain specified contractual
        rights as set forth in the Settlement Agreement.
  28
  Indigo
        Ventures LLC, where Greg Osborn is a managing partner, received a monthly
        fee of
        $15,000 for consulting services. This consulting agreement was cancelled
        on May
        1, 2007.
  ***Director
        Independence***
  David
        H.
        Clarke and Peter Rugg have been determined to be “independent” under the rules
        of the Nasdaq stock market.
  **Item
            14.** **Principal
            Accountant Fees and Services**
  ***Audit
        Fees***
  The
        aggregate fees billed for professional services rendered by our principal
        accountant for the audit of the Company’s annual financial statements and review
        of the financial statements included in the Company’s Forms 10-QSB or services
        that are normally provided by the accountant in connection with statutory
        and
        regulatory filings or engagements for fiscal years ended December 31, 2007
        and
        2006 were $105,000 and $105,250, respectively.
  ***Audit
        Related Fees***
  The
        aggregate fees billed for assurance and related services by our principal
        accountant that are reasonably related to the performance of the audit or
        review
        of our financial statements, other than those previously reported
        in this Item 14, for the fiscal years ended December 31, 2007 and 2006 were
        $7,825 and $4,750, respectively.
  ***Tax
        Fees***
  The
        aggregate fees billed for professional services rendered by our principal
        accountant for tax compliance, tax advice and tax planning for the fiscal
        years
        ended December 31, 2007 and 2006 were $9,650 and $9,650,
        respectively.
  29
  ***All
        Other Fees***
  The aggregate fees
        billed for products and services provided by the principal accountant, other
        than those previously in this Item 14, for the fiscal years ended December
        31,
        2006 and 2005 were $0 and $0, respectively.
  ***Board
        of Directors/Audit Committee***
  It
        is the
        policy of the Company for all work performed by our principal accountant
        to be
        approved in advance by the Audit Committee. The Audit Committee approved
        all of
        the services described above in this Item 14 in advance.
  **PART
        IV.**
  **Item
        15.** **Exhibits
        and Financial Statement Schedules**
  (a)(1)
        Financial Statements
  The
        following is a list of the Financial Statements included in Item 8 of Part
        II of
        this Annual Report.
  Report
        of
        Independent Registered Certified Public Accounting Firm
  Consolidated
        Balance Sheets as of December 31, 2007 and 2006
  Consolidated
        Statements of Operations for the Years Ended December 31, 2007 and
        2006
  Consolidated
        Statements of Stockholders’ Equity for the Years ended December 31, 2007  and
        2006
  Consolidated
        Statements of Cash Flows for the Years Ended December 31, 2007 and  2006.
  Notes
        to
        Consolidated Financial Statements
  (a)(2)
        Financial Statement Schedules
  Schedules
        not included herein are omitted because they are inapplicable or not required
        or
        because the required information is given in the financial statements and
        notes
        thereto.
  (a)(3)
        Exhibits
  A
        list of
        exhibits filed herewith is contained in the exhibit index that immediately
        precedes such exhibits and is incorporated herein by reference.
  30
 **SIGNATURES**
  Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of
        1934, the registrant has caused this report on Form 10-K to be signed on
        its
        behalf by the undersigned, thereunto duly authorized.
  **CELSIA
                  TECHNOLOGIES, INC.**Date:
                  February 28, 2008
              By:
              /s/
                  Joseph FormichelliJoseph
                  Formicehelli, President and Chief
                Executive
                  Officer (Principal Executive Officer)Date:
                  February 28, 2008
              By:
              /s/
                  Jorge FernandezJorge
                  Fernandez, Chief Financial Officer (Principal Financial and Accounting
                  Officer)
   **POWER
        OF ATTORNEY**
  KNOW
        ALL
        PERSONS BY THESE PRESENTS, that each person whose signature appears below
        hereby
        constitutes and appoints Jorge Fernandez as his or her attorney-in-fact and
        agents, each with full power of substitution, for him or her in his or her
        name,
        place and stead, in any and all capacities, to sign any and all immaterial
        amendments to this Annual Report, and to file the same, with all exhibits
        thereto and all other documents in connection therewith, with the SEC, granting
        unto said attorneys-in-fact and agents, and each of them, full power and
        authority to do and perform each and every act and thing requisite and necessary
        to be done, as fully to all intents and purposes as he or she might or could
        do
        in person, hereby ratifying and confirming all that said attorneys-in-fact
        and
        agents or any of them, or his, her or their substitute or substitutes, may
        lawfully do or cause to be done or by virtue hereof.
   Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report on
        form
        10-K has been signed below by the following persons on behalf of the registrant
        and in the capacities and on the dates indicated.
  **Signature**
              
              **Title**
              
              **Date**/s/
                  Joseph Formichelli*
              
              President
                  and Chief Executive Officer
              
              February
                  28, 2008Joseph
                  Formichelli
              
              (Principal
                Executive
                Officer)/s/
                  Jorge A. Fernandez*
              
              Chief
                  Financial Officer
              
              February
                  28, 2008Jorge
                  A. Fernandez
              
              (Principal
                  Financial and Accounting Officer)/s/
                  Alan Benaim*
              
              Director
              
              February
                  28, 2008Alan
                  Benaim/s/
                  David H. Clarke*
              
              Director
              
              February
                  28, 2008David
                  H. Clarke/s/
                  Peter Rugg*
              
              Director
              
              February
                  28, 2008Peter
                  Rugg/s/
                  Gregory Osborn*
              
              Director
              
              February
                  28, 2008Gregory
                  Osborn/s/
                  Charles Resnick*
              
              Director
              
              February
                  28, 2008Charles
                  Resnick 31
 **Supplemental
        Information to be Furnished With Reports Filed Pursuant to Section 15(d)
        of the
        Exchange Act By Non-reporting Issuers:**
  No
        annual
        report or proxy material has been sent to security holders of the Company.
        If
        such report or proxy material is furnished to security holders subsequent
        to the
        filing of the annual report on this Form, the registrant shall furnish copies
        of
        such material to the Securities and Exchange Commission when it is sent to
        security holders.
   32
  **INDEX
        TO FINANCIAL STATEMENTS**
  **Celsia
        Technologies Inc. and Subsidiaries**
 **Consolidated
        Financial Statements**
 **Years
        Ended December 31, 2007 and 2006**
  Page**Report
                  of Independent Registered Certified Public Accounting
                  Firm**
              F-1**Financial
                  Statements:**Consolidated
                  Balance Sheet as of December 31, 2007 and 2006
              F-2Consolidated
                  Statements of Operations for the years ended December 31, 2007
                  and
                  2006
              F-3Consolidated
                  Statement of Stockholders' Equity for the years ended December
                  31, 2007
                  and 2006
              F-4Consolidated
                  Statements of Cash Flows for the years ended December 31, 2007
                  and
                  2006
              F-5Notes
                  to Consolidated Financial Statements
              F-6
 
 33
  **Report
          of Independent Registered Public Accounting Firm**
 
 
 To
          the
          Board of Directors and Shareholders
 Celsia
          Technologies, Inc.
 
 We
          have
          audited the consolidated balance sheets of Celsia Technologies, Inc. as
          of
          December 31, 2007 and 2006, and the related consolidated statements of
          operations, stockholders’ equity (deficit) 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. An audit includes examining,
          on a
          test basis, evidence supporting amounts and disclosures in the financial
          statements. An audit also includes 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 consolidated financial statements referred to above present
          fairly,
          in all material respects, the financial position of Celsia Technologies,
          Inc. at
          December 31, 2007 and 2006 and the results of their operations and their
          cash
          flows for the years then ended in conformity with accounting principles
          generally accepted in the United States of America.
 
 The
          accompanying consolidated financial statements have been prepared assuming
          the
          Company will continue as a going concern. As described in note 1, at December
          31, 2007 the Company and its subsidiaries have commenced limited revenue
          producing operations and have an accumulated deficit of $40,292,494. These
          conditions raise substantial doubt about the Company’s ability to continue as a
          going concern. The consolidated financial statements do not include any
          adjustments that might result from the outcome of this uncertainty. Management’s
          plans in regard to its future operations are also discussed in note
          1.
   **PKF**
                    
                    Certified
                      Public Accountants
                    A
                      Professional Corporation
  February
          28, 2008
 New
          York,
          New York
 
 F-1
 
 Celsia
              Technologies, Inc. and Subsidiaries
 Consolidated
              Balance Sheets
 as
              of
              December 31, 2007 and 2006
 (US
              Dollars)
 2007
                    
                    2006AssetsCurrent
                        AssetsCash
                        and cash equivalents
                    
                    $
                    3,046,624
                    
                    $
                    295,400Receivable
                    
                    
                    298,799
                    
                    
                    55,452Inventory
                    
                    
                    74,465
                    
                    
                    128,513Prepaid
                        expenses
                    
                    
                    45,661
                    
                    
                    34,292Other
                    
                    
                    31,785
                    
                    
                    40,627Total
                        current assets
                    
                    
                    3,497,334
                    
                    
                    554,284Guarantee
                        deposits
                    
                    
                    26,157
                    
                    
                    130,806Advance
                        payments
                    
                    
                    154,287
                    
                    
                    135,103Furniture
                        and equipment, net (note 1)
                    
                    
                    639,947
                    
                    
                    693,972Deferred
                        Charges (note 1)
                    
                    
                    1,721,630
                    
                    
                    -Royalty
                        Advance (note 3)
                    
                    
                    -
                    
                    
                    500,000Intangible
                        Assets, net (note 3)
                    
                    
                    85,049
                    
                    
                    25,624Total
                        assets
                    
                    $
                    6,124,404
                    
                    $
                    2,039,789Liabilities
                        and Stockholders' Equity (Deficit)Current
                        liabilitiesAccounts
                        payable
                    
                    $
                    282,055
                    
                    $
                    420,770Bond
                        Payable (note 4)
                    
                    
                    322,582
                    
                    
                    302,305Accrued
                        expensesPayroll
                        and Related
                    
                    
                    652,917
                    
                    
                    1,293,616Other
                    
                    
                    576,917
                    
                    
                    96,810Other
                    
                    
                    26,545
                    
                    
                    19,624Total
                        current liabilities
                    
                    
                    1,861,016
                    
                    
                    2,133,125Convertible
                        Debenture, net of $4,092,051 unamoritized discount. (note 6)
                    
                    
                    4,400,796
                    
                    
                    -Accrual
                        for Employee Retirement Benefits (note 3)
                    
                    
                    86,683
                    
                    
                    147,112Total
                        liabilities
                    
                    
                    6,348,495
                    
                    
                    2,280,237Stockholders'
                        Equity (Deficit) (note 6 & 7)Preferred
                        Stock, Series A; $.001 par value; 30,000,000 shares authorized;
                        22,320,598
                        in 2007 and 23,061,505 in 2006 issued and outstanding
                    
                    
                    22,321
                    
                    
                    23,061Preferred
                        Stock, Series B; $.001 par value; 7,000,000 shares authorized;
                        3,063,402
                        in 2007 and 2006 issued and outstanding
                    
                    
                    3,063
                    
                    
                    3,063Common
                        stock; $.001 par value; 500,000,000 shares authorized; 85,273,680
                        in 2007
                        and 36,382,402 in 2006 issued and outstanding
                    
                    
                    85,273
                    
                    
                    36,382Common
                        stock subscribed
                    
                    
                    6,158
                    
                    
                    3,069Additional
                        paid-in-capital
                    
                    
                    40,032,066
                    
                    
                    23,549,358Other
                        comprehensive loss
                    
                    
                    (80,478
                    )
                    
                    (118,564
                    )Accumulated
                        (deficit)
                    
                    
                    (40,292,494
                    )
                    
                    (23,736,817
                    )Total
                        stockholders' equity (deficit)
                    
                    
                    (224,091
                    )
                    
                    (240,448
                    )Total
                        liabilities and stockholders' equity (deficit)
                    
                    $
                    6,124,404
                    
                    $
                    2,039,789
 See
          notes
          to consolidated financial statements
  F-2
 Celsia
            Technologies, Inc. and Subsidiaries
 Consolidated
            Statements of Operations
 for
            the
            years ended December 31, 2007 and 2006
 (US
            Dollars)
 Years
                      EndedDecember
                      31,2007
                  
                  2006Revenue
                  
                  $
                  699,946
                  
                  $
                  104,085Costs
                      and expensesCost
                      of Sales
                  
                  
                  1,170,687
                  
                  
                  713,526Selling
                      and Administrative expenses
                  
                  
                  3,948,208
                  
                  
                  6,133,966Depreciation
                  
                  
                  210,435
                  
                  
                  34,601Amortization
                      of deferred financing cost (note 1)
                  
                  
                  409,521
                  
                  
                  -Miscellaneous
                      (income) expense
                  
                  
                  10,379
                  
                  
                  (56,071
                  )Total
                      costs and expenses
                  
                  
                  5,749,230
                  
                  
                  6,826,022Operating
                      (loss)
                  
                  
                  (5,049,284
                  )
                  
                  (6,721,937
                  )Other
                      income (expenses)Financing
                      Expense (note 6)
                  
                  
                  (9,491,155
                  )
                  
                  -Net
                      Loss on Disposal of furniture and equipment
                  
                  
                  (45,966
                  )
                  
                  (45,900
                  )Loss
                      on Investment
                  
                  
                  -
                  
                  
                  (110,670
                  )Interest
                      and other income
                  
                  
                  95,605
                  
                  
                  140,208Interest
                      expense (notes 5 and 6)
                  
                  
                  (1,412,559
                  )
                  
                  (29,920
                  )Total
                      other income (expenses)
                  
                  
                  (10,854,075
                  )
                  
                  (46,282
                  )Net
                      (loss)
                  
                  $
                  (15,903,359
                  )
                  $
                  (6,768,219
                  )Dividend
                      on Series A Preferred Stock (note 7)
                  
                  $
                  (241,458
                  )
                  $
                  (3,447,088
                  )Deemed
                      Dividend on Series A & B Preferred Stock (note 6)
                  
                  $
                  (652,318
                  )
                  $
                  -Net
                      Loss Attributable to Common Shareholders
                  
                  $
                  (16,797,135
                  )
                  $
                  (10,215,307
                  )Net
                      Loss per Share:Basic
                      and Diluted
                  
                  $
                  (0.26
                  )
                  $
                  (0.32
                  )Weighted
                      Average Shares Outstanding
                  
                  
                  64,634,634
                  
                  
                  31,509,898
  See
          notes to consolidated financial
          statements
  F-3
 
 Celsia
            Technologies, Inc. and Subsidiaries
 Consolidated
            Statement of Stockholders' Equity (Deficit)
 for
            the
            Years Ended December 31, 2007 and 2006


OtherCommon
                    &
              
              Additional
              
              Common
              
              Unearned
              
              ComprehensivePreferred
              
              Paid-in
              
              Stock
              
              Stock
              
              Income
              
              AccumulatedStock
              
              Capital
              
              Subscribed
              
              Compensation
              
              (Loss)
              
              (Deficit)
              
              TotalBalance
                  @ December 31, 2005
              
              $
              53,375
              
              $
              19,161,937
              
              $
              167
              
              $
              (114,660
              )
              $
              (77,432
              )
              $
              (13,641,589
              )
              $
              5,381,798Apply
                  Deferred Compensation against Paid in Capital
              
              
              -
              
              
              (114,660
              )
              
              -
              
              
              114,660
              
              
              -
              
              
              -
              
              
              -Stock
                  Compensation (Common)
              
              
              (77
              )
              
              281,669
              
              
              2,902
              
              
              -
              
              
              -
              
              
              -
              
              
              284,494Registration
                  Rights Penalty
              
              
              970
              
              
              901,641
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              902,611Series
                  A Dividend
              
              
              1,675
              
              
              1,553,027
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,554,702
              )
              
              -Common
                  Stock Dividend
              
              
              6,563
              
              
              1,765,744
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,772,307
              )
              
              -Foreign
                  currency translation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (41,132
              )
              
              -
              
              
              (41,132
              )Net
                  loss for the year
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (6,768,219
              )
              
              (6,768,219
              )Balance
                  @ December 31, 2006
              
              $
              62,506
              
              $
              23,549,358
              
              $
              3,069
              
              $
              -
              
              $
              (118,564
              )
              $
              (23,736,817
              )
              $
              (240,448
              )Stock
                  Compensation (Common)
              
              
              188
              
              
              269,982
              
              
              (898
              )
              
              -
              
              
              -
              
              
              -
              
              
              269,272Common
                  Stock issued as Financing Expense
              
              
              46,517
              
              
              6,010,060
              
              
              3,987
              
              
              
              
              
              
              
              
              
              
              
              6,060,564Issuance
                  of Stock and Warrants for Service
              
              
              1,440
              
              
              147,970
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              149,410Issuance
                  of Warrants as Settlement
              
              
              
              
              
              32,700
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              32,700Issuance
                  of Warrants with Debenture and Repricing
              
              
              
              
              
              6,591,118
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              6,591,118Beneficial
                  Conversion Feature
              
              
              
              
              
              3,430,591
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              3,430,591Series
                  A Dividend
              
              
              6
              
              
              287
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              293Foreign
                  currency translation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              38,086
              
              
              -
              
              
              38,086Deemed
                  Dividend on Series A & B Stock
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (652,318
              )
              
              (652,318
              )Net
                  loss for the year
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (15,903,359
              )
              
              (15,903,359
              )Balance
                  @ December 31, 2007
              
              $
              110,657
              
              $
              40,032,066
              
              $
              6,158
              
              $
              -
              
              $
              (80,478
              )
              $
              (40,292,494
              )
              $
              (224,091
              )
  See
        notes to consolidated financial
        statements
  F-4


Celsia
        Technologies, Inc. and Subsidiaries
 Consolidated
        Statements of Cash Flows
 (US
        Dollars)


Years
                EndedDecember
                31,2007
            
            2006Cash
                flows from operating activities:Net
                (loss)
            
            $
            (15,903,359
            )
            $
            (6,768,219
            )Adjustments
                to reconcile net (loss) to net cash (used)by
                operating activities:Depreciation
            
            
            210,435
            
            
            34,601Amortization
                of Deferred Charges
            
            
            409,521
            
            
            -Amortization
                of Debt Discount
            
            
            970,205
            
            
            -Issuance
                of warrants for service
            
            
            149,410
            
            
            -Issuance
                of warrants as settlement
            
            
            32,700
            
            
            -Beneficial
                Conversion Feature
            
            
            3,430,591
            
            
            -Financing
                Expense
            
            
            6,060,564
            
            
            -Stock
                Based Compensation
            
            
            269,566
            
            
            284,494Loss
                on Investment
            
            
            -
            
            
            110,670Accrued
                Registration Rights Penalty settled with Preferred Stock
            
            
            -
            
            
            902,611Loss
                on Disposal of Furniture and Equipment
            
            
            -
            
            
            45,900Changes
                to certain other accounts:Receivable
            
            
            (243,347
            )
            
            40,117Inventory
            
            
            54,048
            
            
            (128,513
            )Advance
                payments
            
            
            (19,184
            )
            
            (10,158
            )Prepaid
                expenses
            
            
            (11,369
            )
            
            4,708Royalty
                Advance
            
            
            500,000
            
            
            -Accounts
                payable
            
            
            (138,715
            )
            
            (34,282
            )Accrued
                expenses
            
            
            (160,592
            )
            
            104,946Accrual
                for Employee Retirement Benefits
            
            
            (60,429
            )
            
            147,112Other
            
            
            42,547
            
            
            (72,249
            )Net
                cash (used) by operating activities
            
            
            (4,407,408
            )
            
            (5,338,262
            )Cash
                flows from investing activities:Deposits
            
            
            104,649
            
            
            (3,430
            )Purchase
                of furniture and equipment
            
            
            (156,410
            )
            
            (141,191
            )Net
                cash (used) by investing activities
            
            
            (51,761
            )
            
            (144,621
            )Cash
                flows from financing activities:Short-term
                borrowings
            
            
            -
            
            
            (231,683
            )Deferred
                Finance Charge
            
            
            (1,139,607
            )
            
            -Proceeds
                from issuance of Convertible Debt
            
            
            8,350,000
            
            
            -Net
                cash (used) provided by financing activities
            
            
            7,210,393
            
            
            (231,683
            )Net
                (decrease) increase in cash and cash equivalents
            
            
            2,751,224
            
            
            (5,714,566
            )Cash
                and cash equivalents - beginning of period
            
            $
            295,400
            
            $
            6,009,966Cash
                and cash equivalents - end of period
            
            $
            3,046,624
            
            $
            295,400Supplemental
                cash flow disclosureNoncash
                financing activityDuring
                2007 and 2006 the Company recorded stock compensationarrangements
                for certain employees and directors
            
            $
            150,291
            
            $
            284,494During
                2007, the Company recorded a premium on the conversion ofissued
                notes payable to convertible debenture as a deferred finance
                charge
            
            $
            115,000
            
            $
            -During
                2007, the Company issued warrants to placement agentsfor
                convertible debenture as a deferred finance charge
            
            $
            876,544
            
            $
            -During
                2006 the Company issued Preferred Stock as a PreferredStock
                Dividend
            
            $
            -
            
            $
            1,554,702During
                2007 and 2006 the Company issued Common Stock as a PreferredStock
                Dividend
            
            $
            271
            
            $
            1,772,307During
                2006 the Company issued Preferred Stock Series A Sharesto
                settle the Registration Rights Penalty
            
            $
            -
            
            $
            902,611During
                2007 and 2006 Preferred Shares were converted into Common Shares
            
            $
            741
            
            $
            560Cash
                paid during the year for interest
            
            $
            390
            
            $
            6,439




See
      notes to consolidated financial
      statements


F-5


Celsia
        Technologies, Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 December
        31, 2007
 
 
 **Note
        1 - Summary of significant accounting policies**
 
 **Organization**
 
 Celsia
        Technologies, Inc. (the "Company" or "Celsia"), a US Corporation incorporated
        in
        Nevada, is formerly known as iCurie, Inc. Celsia's operations consist of
        research, development, and commercialization of next-generation cooling
        solutions. The Company was founded in 2000 to address the emerging heat problem
        that now threatens the development of higher-performing microelectronic
        products. Celsia is taking this innovative thermal management technology
        from
        the laboratory to high volume manufacturing, and operating as both a licensor
        of
        the technology and a vertically integrated provider of customized applications.
 
 The
        Company's corporate headquarters is located in Miami, USA with subsidiaries
        in
        London, United Kingdom, Seoul, South Korea, and Taipei, Taiwan. During 2007,
        the
        Company relocated its Design and Manufacturing operations from Seoul, Korea
        to
        Taipei, Taiwan. Our operations in Seoul, Korea remain as a sales and
        administrative office for the region. Our patented NanoSpreaderTM is a completely
        new alternative to conventional cooling devices. By utilizing a nano scale
        environment, the laws of physics are manipulated enabling our cooling technology
        to be thinner, lighter and deliver significantly higher thermal conductivity
        (heat transfer capacity) versus conventional options such as Heat Pipes.
        And, we
        can supply our plate-shaped heat spreaders in virtually any shape that a
        design
        engineer requires. As a result, customers are able to achieve improved product
        performance without trading off size, weight or cost considerations.
 
 Celsia
        Technologies, Inc.'s subsidiaries consist of (i) Celsia Technologies UK Limited
        ("UK Subsidiary"), a United Kingdom Company formerly known as iCurie Lab
        Holdings Limited, (ii) Celsia Technologies Korea, Inc. ("Korea Subsidiary"),
        a
        Korean Company formerly known as iCurie Lab, Inc, and (iii) Celsia Technologies
        Taiwan, Inc. ("Taiwan Subsidiary"). In consolidation, all significant
        intercompany balances and transactions have been eliminated.
 
 **Financial
        reporting**
 
 The
        Company prepares its financial statements in conformity with accounting
        principles generally accepted in the United States of America, which require
        management to make estimates and assumptions that affect the reported amounts
        in
        the financial statements. Although these statements are based on management's
        best knowledge of current events and actions that the Company may undertake
        in
        the future, actual results could differ from those estimates.
 
 Significant
        estimates required to be made by management include the valuation of
        investments, equity securities issued, prepaid royalties, registration rights,
        intangible assets, and accouting for convertible debentures.
 
 **Going
        Concern**
 
 The
        accompanying financial statements have been prepared assuming the Company
        will
        continue as a going concern, which contemplates the realization of assets
        and
        satisfaction of liabilities in the normal course of business. The Company
        and
        its Subsidiaries have recently commenced limited revenue producing operations
        and have sustained accumulated losses approximately $40.3 and $23.7 million
        as
        of December 31, 2007 and 2006. The Company and its Subsidiaries have funded
        operations through equity and debt financing since inception. All these factors
        raise substantial doubt over the Company's ability to continue as a going
        concern.
 
 **Cash
        and Cash Equivalents**
 
 Cash
        and
        cash equivalents include all cash balances and highly liquid investments,
        including time deposits, which are readily convertible into known amounts
        of
        cash and have an original maturity dates of three months or less. The Company
        and its Subsidiary's cash and cash equivalents are maintained in banks and
        financial institutions in the United States, United Kingdom, South Korea,
        and
        Taiwan, and they have not experienced any losses on their cash balances.
 
 **Inventory**
 
 Inventory
        consists of finished goods ready to be sold to customers. Inventories are
        carried at the lower of cost or market value.
 
 **Investment**
 
 The
        UK
        Subsidiary owns 527,000 shares of an entity affiliated through common
        management. During 2006, the Company recorded a $110,670 loss on investment
        to
        bring its carry basis down to its estimated net realizable value. These shares
        have been fully reserved and carry a book value of $ 0 as of December 31,
        2007
        and 2006.
 
 **Revenue
        recognition**
 
 The
        Company's policy is to record revenue as earned when the following attributes
        are met.
 
 -
              Persuasive
                  evidence of a sale arrangement
                  exists.
 -
              Delivery
                  has occurred to the customers.
 -
              The
                  sales price to the customer is fixed or
                  determinable.
 -
              Collection
                  is reasonably assured.
 
 The
        Company recognized revenues of $699,946 and $104,085 for the years ended
        December 31, 2007 and 2006, respectively, from customer orders for test samples
        and commercial deliveries.
 
 **Deferred
        costs**
 
 In
        connection with obtaining debt financing as described in Note 6, the Company
        incurred legal and other related fees. Deferred financing costs incurred
        in
        connection with long-term financing amounted to $2,131,150 and are being
        amortized on a straight-line basis over the stated term of the loan.
        Amortization expense for the year ended December 31, 2007 amounted to $409,521.
  F-6
  **Furniture
        and equipment**
 
 Furniture
        and equipment at December 31, 2007 and 2006 are summarized as
        follows:
 2007
                
                2006Vehicles
                
                $
                73,331
                
                $
                54,157Machinery
                
                
                596,505
                
                
                625,659Furniture
                    and fixtures
                
                
                429,148
                
                
                344,7741,098,984
                
                
                1,024,590Accumulated
                    depreciation
                
                
                (459,037
                )
                
                (330,618
                )$
                639,947
                
                $
                693,972
  Furniture
        and equipment are stated at cost. Major renewals and betterments, which prolong
        the useful life or enhance the value of assets, are capitalized. Depreciation
        is
        computed using the straight-line method over the estimated life of five years
        for machinery and equipment, furniture and fixtures, and vehicles. Depreciation
        expense for the years ended December 31, 2007 and 2006 amounted to $210,435
        and
        $34,601, respectively.
 
 **Net
        Loss per Share**
 
 Basic
        Loss per share is computed by dividing net loss attributable to common
        shareholders for the period by the weighted average number of common shares
        outstanding during the period. Diluted earnings per share is computed by
        dividing net earnings by the weighted average number of shares plus the dilutive
        effect of convertible debt and preferred shares and outstanding options and
        warrants. Approximately 22 million and 3 million shares to be issued upon
        conversion of Series A and Series B, respectively, Preferred Shares were
        excluded from the calculation of diluted earnings per share for the period
        ended
        December 31, 2007 and 2006, respectively, because they were anti-dilutive.
        Approximately 136 million shares to be issued upon conversion of the convertible
        debentures were excluded from the calculation of diluted earnings per share
        as
        of December 31, 2007 because they were anti-dilutive.
 
 **Long-lived
        assets**
 
 Long-lived
        assets are reviewed for impairment whenever events or changes in circumstances
        indicate that the carrying amount of the assets may not be recoverable. When
        the
        aggregate undiscounted future cash flows is less than the carrying value
        of the
        asset, an impairment loss is recognized, based on the fair value of the asset.
 
 **Business
        risks**
 
 The
        Company is subject to the risks associated with start-up and high growth
        companies such as the risks of raising adequate capital, producing profitable
        operations, and operating in various countries throughout the world.
 
 **Research
        and development costs**
 
 Research
        and development costs are expensed as incurred and amounted to $594,016 and
        $747,588 for the years ended December 31, 2007 and 2006,
        respectively.
 
 **Foreign
        currency translation**
 
 The
        reporting and functional currency of the Company and its UK Subsidiary is
        the
        U.S. Dollar, while the functional currency of the Korea and Taiwan subsidiaries
        are the Korean Won and the New Taiwanese Dollar, respectively.
 
 The
        assets and liabilities of the Korea and Taiwan Subsidiaries have been translated
        into U.S. Dollars at the prevailing period-end rate of exchange, while the
        related income and expense items were translated at the average rate of exchange
        during the period. The resulting translation adjustments are accumulated
        in a
        separate component of stockholders' equity (deficit).
 
 The
        Company follows Financial Accounting Standards No. 130 (SFAS 130) "Reporting
        Comprehensive Income." SFAS 130 requires a Company to report comprehensive
        income (loss) and its components in a full set of financial statements.
        Comprehensive income (loss) includes the change in equity during a period
        from
        transactions and other events and circumstances from non-owner sources, such
        as
        unrealized gains (losses) on foreign currency translation adjustments. Changes
        in unrealized foreign currency translation gains (losses) for the years ended
        December 31, 2007 and 2006 amounted to $38,086 and $(41,132), respectively.
        Accordingly, comprehensive loss for the years ended December 31, 2007 and
        2006
        amounted to $15,865,273 and $6,809,351, respectively.
 
 **Fair
        value of financial instruments**
 
 The
        Company's cash, receivables, accounts payable, short-term debt, bonds payable,
        and the face amount of its convertible debentures represent financial
        instruments whose carrying amounts reasonably approximate their fair
        value.
 
 **Recent
        accounting pronouncements**
 
 In
        July
        2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
        No. 48, "Accounting for Uncertainty in Income Taxes—an interpretation of FASB
        Statement No. 109" ("FIN 48"), which provides clarification related to the
        process associated with accounting for uncertain tax positions recognized
        in
        consolidated financial statements. FIN 48 prescribes a more-likely-than-not
        threshold for financial statement recognition and measurement of a tax position
        taken, or expected to be taken, in a tax return. FIN 48 also provides guidance
        related to, among other things, classification, accounting for interest and
        penalties associated with tax positions, and disclosure requirements. FIN
        48 is
        effective for fiscal years beginning after December 15, 2006. The adoption
        of
        this statement did not have a material effect on the Company's financial
        position or results of operations.
 
 In
        September 2006, the FASB issued SFAS No. 157, “Fair Value
        Measurements” (“SFAS 157”), which provides guidance for
        measuring the fair value of assets and liabilities, as well as requires expanded
        disclosures about fair value measurements. SFAS 157 indicates that fair value
        should be determined based on the assumptions marketplace participants would
        use
        in pricing the asset or liability, and provides additional guidelines to
        consider in determining the market-based measurement . SFAS No. 157 is effective
        for fiscal years beginning after November 15, 2007. The adoption of this
        standard is not expected to have a material effect on the Company’s results of
        operations or financial position.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits all
        entities to choose to measure eligible items at fair value at specified election
        dates. SFAS No. 159 is effective for fiscal years beginning after November
        15,
        2007. The adoption of this standard is not expected to have a material effect
        on
        the Company’s results of operations or financial position.
  F-7
  In
        December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS
        141(R)”), which replaces SFAS 141. SFAF 141(R) requires assets and liabilities
        acquired in a business combination, contingent consideration, and certain
        acquired contingencies to be measured at their fair values as of the date
        of
        acquisition. SFAS 141(R) also requires that acquisition-related costs and
        restructuring costs be recognized separately from the business combination.
        SFAS
        141(R) is effective for fiscal years beginning after December 15, 2008 and
        will
        be effective for business combinations entered into after January 1, 2009.
 
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements, an Amendment ARB No. 51” (“SFAS 160”). SFAS
        160 clarifies the accounting for noncontrolling interests and establishes
        accounting and reporting standards for the noncontrolling interest in a
        subsidiary, including classification as a component of equity. SFAS 160 is
        effective for fiscal years beginning after December 15, 2008. The Company
        does
        not currently have any minority interests.
 
 **Note
        2 - Income Taxes**
 
 The
        Company recognizes deferred tax assets and liabilities created by temporary
        differences between the financial statement and tax basis of assets and
        liabilities. Deferred tax assets and liabilities are computed on such temporary
        differences, including available net operating loss carry forwards and tax
        credits, by applying enacted statutory tax rates applicable to the years
        when
        such differences are expected to reverse. A valuation allowance is provided
        on
        deferred tax assets to the extent that it is more likely than not that such
        deferred tax assets will not be realized.
 
 The
        Company currently operates in the United States, while its Subsidiaries operate
        in the United Kingdom South Korea, and Taiwan. Operating loss carryforwards
        in
        the United States approximated $6,800,000 at December 31, 2007, and can be
        carried forward for 20 years, expiring in the years 2025-2027. Operating
        loss
        carryforwards in the United Kingdom approximated $5,000,000 at December 31,
        2007, and can be carried forward indefinitely, provided the Company (i) doesn't
        cease operations and (ii) doesn't change its business nature, while operating
        loss carryforwards in South Korea approximated $6,300,000 at December 31,
        2007,
        and expire in the years 2008-2012. At December 31, 2007, the Company has
        a
        deferred tax asset of approximately $5,600,000 and has recorded a full valuation
        allowance against the deferred tax asset resulting from these tax loss
        carry-forwards.
 
 **Note
        3 - Commitments and Contingencies**
 
 **Operating
        Leases**
 
 The
        Company has a lease in Seoul, Korea for its Sales and Administrative office
        which expires in October 2009. The Company has a lease in Taipei, Taiwan
        for its
        Design and Manufacturing Center which expires in September 2009. As of December
        31, 2007, the minimum future rental commitments under all non-cancelable
        operating leases with terms greater than one year, are as follows:
 Year
                    Ending December 31,2008
                
                $
                100,5992009
                
                $
                77,953$
                178,552
 
 Rent
        expense for the year ended December 31, 2007 and 2006 amounted to $214,352
        and
        $98,387, respectively.
 
 **Employment
        contracts**
 
 The
        Company has entered into employment agreements with some of its officers
        /
        employees for terms ranging between one and two years. Under the terms of
        the
        contracts these officers / employees are entitled to minimum compensation
        of
        approximately $274,000 in 2008. Other employees contracts have expired and
        are
        employed at will with no minimum compensation.
 
 On
        August
        15, 2007, the Company entered into an agreement with Core Strategies, LLC
        (“Core
        Strategies”) which provides services of several Core Strategies partners
        including Joseph Formichelli as Chief Executive Officer of the Company on
        a
        full-time basis, and a marketing and sales executives on a part-time basis.
        The
        agreement is effective from August 15, 2007 through August 14, 2009. The
        Company
        pays Core Strategies $20,000 per month and has issued 8,000,000 warrants
        to
        purchase the Company’s common stock.
 
 **Accrual
        for Employment Retirement Benefits**
 
 The
        Company has recorded a liability of $86,683 and $147,112 as of December 31,
        2007
        and 2006, respectively, as a result of a legal decision by the Korean Supreme
        Court in 2006 related to employment benefits. The Company believes that this
        potential liability will not be paid within the current year, and it has
        therefore been recorded as a long term liability.
  **Commitments
        to a third party**
 
 According
        to an agreement between the Korea Subsidiary and Sae Han IT, on May
        21,  2004,
        The
        Korea Subsidiary is to provide 25 percent of gross margin to B.A.C. Network
        (BAC) from the micro cooling systems business for 3 years from the initial
        sales
        to  include
        only LG Electronics, LGIBM, and others to which LG Electronics and LGIBM
        will
        supply the Company's products. Gross margin is determined based on the
        difference between suppliers' unit cost and selling price to purchaser. Through
        December 31, 2007 and 2006, no qualifying sales have occurred.
 
 **Royalty
        Agreement**
 
 On
        May
        18, 2005, the UK Subsidiary entered into a Royalty Agreement with CHL Investment
        Partnership ("CHL") and Hansen Gray & Company, Inc. ("Hansen Gray"). The
        terms of the agreement call for a payment of 1.14% and 0.86% of revenue to
        CHL
        and Hansen Gray, respectively, once the UK Subsidiary's revenue exceeds $25
        million. The agreement is terminated once the aggregate payment to CHL and
        Hansen Gray totals $50 million. During 2005, the Company paid a Royalty Advance
        to Hansen Gray totaling $500,000.
 
 On
        July
        18, 2007, the Company and AMF Capital, Inc. (formerly known as Hansen Gray
&
Company, Inc) (“AMF”) entered into a Settlement Agreement and Release pursuant
        to which the Company and AMF resolved certain claims of AMF against the Company.
        Pursuant to the Settlement Agreement, the Company paid a Royalty Advance
        of
        $100,000 in cash to AMF and issued to AMF a warrant to purchase 1,000,000
        shares
        of common stock of the Company at an exercise price of $0.88 per share, and
        AMF
        released the Company from any and all claims except for certain specified
        contractual rights as set forth in the Settlement Agreement. The Company
        has
        recorded a full valuation allowance resulting from these prepaid royalties.
 
 CHL
        is an
        organization in which Dr. Jeong Hyun Lee (a former Director of the Company)
        holds an interest in. Hansen Gray is an entity in which Alan Miller (a former
        Director of the Company) holds an interest in.
  F-8
  **Intangible
        Assets**
 
 In
        April
        2007, Celsia acquired certain assets and liabilities together with two sales
        executives and a thermal management customer base from CheongNam International
        Co. Ltd. ("CNIT"), a Korean entity, for approximately $70,000. The Company
        has
        recorded assets of approximately $88,000, liabilities of approximately $82,000
        and intangible asset (which is the value assigned to the acquired customer
        list)
        of approximately $64,000. The Company is amortizing this customer list over
        36
        months.
 
 The
        Company has also recorded an intangible asset for costs incurred with filing
        approved patents and trademarks of approximately $34,000.
 
 **Registration
        Rights**
 
 The
        Company entered into a registration rights agreement with the Preferred Series
        B
        share holders dated December 16, 2005. Under the terms of the Registration
        Rights Agreement, the Company was required to use its best efforts to file
        a
        Registration Statement covering the underlying Common Stock within six months
        after the Company's Registration Statement on Form SB-2 (SEC File
        No. 333-128856) was declared effective. The Company was required to
        maintain the effectiveness of the Initial Registration Statement through
        the
        first anniversary of the Closing Date and was to use its best efforts to
        maintain the effectiveness of the Initial Registration Statement through
        the
        second anniversary of the Closing Date. This agreement was amended on May
        25,
        2007 to reflect the subordination of rights under this agreement to the
        registration rights agreement entered into by the Company on May 25, 2007
        as
        described below.
 
 The
        Company entered into a registration rights agreement with the Convertible
        Debenture Holders dated May 25, 2007 (see Note 6). Under the terms of the
        Registration Rights Agreement, the Company is required to file a Registration
        Statement (the "Initial Registration Statement") covering the Common Stock
        (i) into which the Debentures are convertible and (ii) for which the
        Warrants and Placement Agent Warrants are exercisable (collectively, the
        “Registrable Securities”) within 30 days of a demand by Debenture Holders or
        within six (6) months after the Closing Date. If the Initial Registration
        Statement is not filed on or prior to its Filing Date, or in certain other
        circumstances, the Company shall pay to each Debenture Holder an amount in
        cash
        equal to 1.0% of the aggregate purchase price paid by such Debenture Holder
        pursuant to the Purchase Agreement for any unregistered securities then held
        by
        such Debenture Holder. The Company has fulfilled its requirements by filing
        the
        Registration Statement on Form SB-2 (SEC File No. 333-147564) which was declared
        effective on December 11, 2007.
 
 **Litigation**
 
 On
        October 19, 2007, the Company's former President, CEO, and Board of Director,
        filed a lawsuit in the Miami-Dade County Circuit Court claiming failure to
        pay
        bonses, severance, and other benefits in connection with his previously reported
        termination by the Company. The Company has filed a motion for Arbitration
        as
        provided by the employment contract with the Company. The Company believes
        the
        employee's claims are without merit and intends to defend the action vigorously.
        The settlement of this action is not expected to have a material impact on
        the
        Company's financial position.
 
 **Note
        4 - Bond payable**
 
 The
        bond
        payable (Won 300 million) at December 31, 2007 and 2006, was issued to a
        third
        party in December 2002 and matures in December 2007. The bond carries no
        interest and has been discounted using a 7% interest rate.
 
 The
        bond
        payable at December 31, 2007 and 2006 is:
 2007
                
                2006Face
                    Amount
                
                $
                322,582
                
                $
                322,597Less:
                    Discount
                
                
                (93,926
                )
                
                (93,908
                )Plus:
                    Amortization of discount
                
                
                93,926
                
                
                73,616Carrying
                    value
                
                $
                322,582
                
                $
                302,305
 
 **Note
        5 - Notes Payable**
 
 On
        February 20, 2007 and April 20, 2007, the Company issued Secured Convertible
        Promissory Notes (the “Notes”) in an aggregate principal amount of $1,000,000
        and $150,000, respectively, to certain purchasers (the “Noteholders”) pursuant
        to the terms of Securities Purchase Agreements dated as of February 20, 2007
        by
        and between the Company and the Noteholders. The Notes carry an annual interest
        rate of 10%, with all principal and accrued interest being due and payable
        on
        June 20, 2007; provided, however, that upon the terms and subject to the
        conditions of the Notes, all outstanding principal and interest on the Notes
        will automatically convert into securities of the Company issued pursuant
        to a
        Company financing meeting certain conditions (a “Qualified Financing”), if such
        Qualified Financing is effectuated on or prior to June 20, 2007. All principal
        and accrued interest on the Notes shall become payable prior to
        June 20, 2007 upon certain events of default relating to, among
        things, the bankruptcy or dissolution of the Company, the sale of substantially
        all of the Company’s assets and certain breaches by the Company of the terms and
        conditions of the Notes and related agreements. The obligations evidenced
        by the
        Notes were secured by a pledge of substantially all of the Company’s assets,
        including the capital stock of Celsia Technologies UK Limited and Celsia
        Technologies Korea, Inc. In connection with the issuance of the Notes, the
        Company’s former Chief Executive Officer and former Chief Financial Officer had
        agreed to transfer approximately 735,000 shares of Company common stock held
        by
        such executives to the Noteholders in the event that a Qualified Financing
        does
        not occur on or prior to June 20, 2007.
 
 On
        May
        25, 2007, the Company issued Convertible Debentures which met the conditions
        of
        a Qualified Financing. The Notes, totaling principal of $1,150,000, interest
        of
        $27,847, and a 10% premium on principal totaling $115,000, were automatically
        converted into the Convertible Notes (see Note 6). Upon completion of the
        transaction, the 735,000 shares of Company common stock pledged by the Company's
        former Chief Executive Officer and former Chief Financial Officer were returned
        to them.
 
 **Note
        6 - Convertible Debentures**
 
 On
        May
        25, 2007, the Company issued 8% Secured Convertible Debentures due May 25,
        2010
        (the “Debentures”) in the aggregate principal amount of $8,142,847 to certain
        individuals and entities, together with warrants exercisable for a total
        of
        70,752,778 shares of the Company’s common stock at a price of $0.144, for an
        aggregate of $6,850,000 in cash and the surrender of previously outstanding
        promissory notes of the Company totaling $1,292,847 (see Note 5). The Company
        used the Black Scholes option-pricing model to value the warrants issued
        to the
        Debenture Holders and applied it to the principal amount to determine the
        convertible debt discount. The Company will amortize the discount over the
        life
        of the Debenture (36 months).
 
 On
        August
        17, 2007, the Company issued an additional 8% Secured Convertible Debenture
        due
        May 25, 2010 in the principal amount of $350,000, together with a warrant
        to
        purchase 2,800,000 shares of the Company’s common stock at a price of $0.144,
        for $350,000 in cash, on the same terms as the Company’s debentures and warrants
        issued on May 25, 2007.
 
 The
        convertible debentures payable at December 31, 2007 is summarized as
        follows:
 Face
                    Amount
                
                $
                8,492,847Less:
                    Discount
                
                
                (5,062,256
                )Plus:
                    Amortization of discount
                
                
                970,205Carrying
                    value
                
                $
                4,400,796
  F-9
 The
        sale
        of Debentures and Warrants (the “Debenture Offering”) was effected pursuant to a
        Securities Purchase Agreement dated as of May 25, 2007 between the Company
        and
        the Debenture Holders (the “Purchase Agreement”). In connection with the
        Debenture Offering, the Company entered into a Security Agreement and
        Registration Rights Agreement, each dated as of May 25, 2007, with the Debenture
        Holders (see Note 3).
 
 In
        connection with the Debenture Offerings, the placement agents (i) received
        a
        cash fee of approximately $618,000 and (ii) are entitled to receive warrants
        to
        purchase 5,120,000 shares of the Company’s common stock at a price of $0.144.
        The Company has recorded payments to the placement agents as a deferred cost
        (see Note 1).
 
 As
        part
        of the debt financing, each holder of Series A & B Preferred Stock who
        certified their status as an accredited investor was issued 2.19 shares of
        Common Stock for each share of Preferred Stock held. The Company has recorded
        a
        financing expense of $6,060,564 representing the fair value of the 50,504,696
        shares of Common Stock issued as an inducement to the Series A & B Preferred
        Shareholders to consent to the convertible debenture. As of December 31,
        2007,
        46,517,737 shares of Common Stock have been issued and the remaining 3,986,959
        shares have been recorded as Common Stock subscribed. As part of the same
        consent, the Series A & B Preferred Shareholders agreed to modify the terms
        of the preferred stock to eliminate their seniority to the Debenture holders
        in
        regards to the sale or liquidation of the Company, forfeit any unpaid and
        undeclared dividends through May 24, 2007, lower the dividend rate on the
        Series
        A Preferred Stock to two percent per annum (2%) going forward, and eliminate
        certain additional rights of the preferred stock. In addition, the Series
        A
& B Preferred Shareholders waived any future anti-dilution
        rights.
 
 Upon
        issuing the Debentures, the Company triggered certain anti-dilution provisions
        in the Company's warrants which lowered the conversion price and increased
        the
        number of shares the warrant is convertible for. The Company used the
        Black-Scholes option-pricing model to determine the fair market value of
        the
        adjusted warrants and recorded a deemed dividend of $652,318 (see note
        7).
 
 The
        Debenture Holders shall be entitled to receive interest on the aggregate
        unconverted and then outstanding principal amount of their Debentures at
        the
        rate of 8% per annum, payable quarterly, in cash or Common Stock at the
        discretion of the Company, and subject to certain limitations and restrictions.
        The Debentures are secured by substantially all of the Company’s assets. The
        Debenture Holders have the right to convert the Debentures at any time into
        shares of Common Stock at an initial conversion price of $0.125. The exercise
        price of the Warrants and Placement Agent Warrants are $.144 per share. The
        initial conversion price of the Debentures and the exercise price of the
        Warrants and Placement Agent Warrants are subject to adjustment upon certain
        events.
 
 The
        Company triggered adjustments to the conversion price of the Debenture and
        the
        exercise price of the Warrants as a result of the Company's financial results
        for the period ending September 30, 2007, which became effective November
        15,
        2007. The Debenture Holders now have the right to convert the Debentures
        at any
        time into shares of Common Stock at a conversion price of $0.0625. The number
        of
        Warrants issued to the Debenture Holders and the Placement Agents increased
        to
        147,105,556 and 10,240,000, respectively, and the exercise price was reduced
        to
        $0.072 per share.
 
 The
        Company used the Black Scholes option-pricing model to value the adjusted
        warrants issued to the Debenture Holders and applied it to the principal
        amount
        to determine the convertible debt discount which totaled $5,062,256. The
        Company
        will amortize the discount over the life of the Debenture (36 months). During
        the year ended December 31, 2007, the Company amortized $970,205 of the debt
        discount into interest expense. As a result of the adjustment to the conversion
        price, the Company has recognized a beneficial conversion feature and has
        recorded a Financing Expense totaling $3,430,591 for the year ended December
        31,
        2007.
 
 **Note
        7 - Stockholders' equity**
 
 **Capital
        stock**
 
 At
        December 31, 2007, the Company had an authorized number of shares of 500,000,000
        Common Shares and 100,000,000 of Preferred Shares, 30,000,000 of which has
        been
        designated as Preferred Series A Shares and 7,000,000 of which has been
        designated Preferred Series B Shares. The total issued and outstanding shares
        were 85,273,680 Common Shares, 22,320,598 Preferred Series A Shares, and
        3,063,402 Preferred Series B Shares.
 
 During
        the years ended December 31, 2007 and 2006, 740,907 and 560,030 shares of
        Preferred Series A were converted to Common Shares, respectively, at a rate
        of
        1:1. On September 30, 2006, the Company issued 6,564,104 common shares (valued
        at $1,772,307) to Series A and Series B Preferred Shareholders as a 25% common
        stock dividend.
 
 **Share
        Exchange Agreement and Series A Offering**
  Effective
        as of July 11, 2005, the Company issued 20,995,239 shares of Series A Preferred
        Stock, together with warrants exercisable for a total of 6,441,895 shares
        of the
        Company's common stock at prices ranging from $0.88 - $1.32, to various parties
        in exchange for approximately $12.48 million in cash (at a cash price of
        $0.88
        per share of Series A Preferred Stock) and the transfer of $4.6 million of
        previously issued promissory notes issued by various parties. (These
        transactions are collectively referred as the “Series A Offering").
 
 In
        connection with the Series A Offering, the Company entered into a Registration
        Rights Agreement dated as of July 11, 2005 with the Company's shareholders,
        Series A Shareholders, and certain additional parties. Under the terms of
        the
        Registration Rights Agreement, if a registration statement is not filed within
        60 days of July 11, 2005 or declared effective within 120 days of July 11,
        2005
        (each a "Non-registration Event"), then for each 30 day period during the
        pendancy of such a Non-Registration Event, the company is required to pay
        to the
        selling shareholders liquidated damages in an amount equal to one percent
        (1%)
        of the aggregated price such selling shareholders paid for the Company's
        series
        A Preferred stock (deemed to be $0.88 per share), which the company may pay
        in
        cash or additional shares of series A Preferred Stock (valued at $0.88 per
        share), at the company's option. The registration statement was filed on
        October
        6, 2005 and was declared effective in April 2006. On August 10, 2006, the
        Company issued 970,550 Series A Preferred Shares valued at $902,611 to Preferred
        Series A Share Holders in settlement of the Non-Registration Events. This
        agreement was amended on May 25, 2007 to reflect the subordination of rights
        under this agreement to the registration rights agreement entered into by
        the
        Company on May 25, 2007 (see Note 3).
  F-10
  **Terms
        of Series A Preferred**
 
 Subject
        and subordinate to the liquidation rights of the Company’s Secured Convertible
        Promissory Noteholders, the holders of the Series A Preferred shall be
        entitled to receive in preference to the holders of the Series B and Common
        Stock a per share amount equal to $0.88 plus any accrued, unpaid dividends,
        in
        the event of any sale or dissolution of the Company. The holders of the
        Series A Preferred have the right to convert the Series A Preferred at
        any time into shares of Common Stock at an initial conversion rate of 1:1,
        as
        defined. At the option of the Company, if certain criteria as defined in
        the
        agreement are met, the Series A Preferred can be converted into Common
        Stock.
 
 Prior
        to
        May 25, 2007, the holders of Series A Preferred Stock were entitled to receive
        cumulative, compounding dividends at a rate of eight percent (8%) per annum
        as,
        when and if declared by the Board of Directors of the Company. The dividends
        may
        be paid in cash or shares of Series A Preferred Stock (valued at original
        issue
        price) at the sole discretion of the Company. Holders of Series A Preferred
        Stock also receive on an as-converted basis any distributions paid on the
        common
        stock. No dividends may be paid on common stock unless all unpaid cumulative
        dividends on the Series A Preferred Stock are paid. On August 10, 2006, the
        Company issued approximately 1,700,000 shares of Series A Preferred Stock
        as
        dividends to all holders of record on July 11, 2006, valued at approximately
        $1,500,000. As of May 25, 2007, the Series A Preferred Stock consented to
        waive
        any unpaid and undeclared dividends which resulted in the elimination of
        approximately $1,172,000 in accumulated, unpaid and undeclared dividends
        (see
        Note 6). In addition, the Series A Preferred Shareholders consented to lower
        the
        compounding dividend rate to two percent (2%) per annum. As of December 31,
        2007, accumulated, undeclared dividends on the Series A Preferred Shares
        totaled
        approximately $241,000.
 
 **Terms
        of Series B Preferred**
 
 Subject
        and subordinate to the liquidation rights of the Company’s Secured Convertible
        Promissory Noteholders and Series A Preferred Stock, the holders of the
        Series B Preferred shall be entitled to receive in preference to the holders
        of
        the Common Stock a per share amount equal to $1.00, in the event of any sale
        or
        dissolution of the Company. The holders of the Series B Preferred have the
        right to convert the Series B Preferred at any time into shares of Common
        Stock at an initial conversion rate of 1:1, as defined. At the option of
        the
        Company, if certain criteria as defined in the agreement are met, the
        Series B Preferred can be converted into Common Stock. Holders of the
        Series B Preferred Stock receive on an as-converted basis any distributions
        paid
        on the Common Stock.
 
 **Stock
        Compensation**
 
 Through
        December 31, 2007, the Company has granted approximately 4.6 million of its
        common stock to employees and others, of which approximately 4.4 million
        common
        shares have vested. These shares issuances were valued between $0.07-0.50
        based
        upon management's estimate of the fair value of the common stock on the date
        of
        issuance. These stocks grants have certain vesting provisions through May
        2009.
        During the years ended December 31, 2007 and 2006, approximately 191,000
        and 1.4
        million shares, respectively, have vested and a charge to compensation expense
        of $47,421 and $228,851, respectively, was recorded. The remaining unvested
        shares valued at approximately $28,500 are being amortized over their respective
        vesting periods.
 
 **Employee
        Stock Options**
 
 On
        January 1, 2006, the Company adopted the fair value recognition provisions
        of
        Statement of Financial Accounting Standards (SFAS) No. 123R, “Share-Based
        Payment,” using the modified prospective method. For the years ended December
        31, 2007 and 2006, the Company recognized stock-based compensation of $172,664
        and $150,718, respectively. The Company considers voluntary termination behavior
        as well as trends of actual option forfeitures when estimating its forfeiture
        rate. Given the limited history of outstanding options, the Company has
        estimated a 0% forfeiture rate and has only recorded actual forfeitures as
        incurred.
 
 Stock
        options issued under the Company’s Long-term Incentive Plans are granted with an
        exercise price equal or greater than the market price of the Company’s stock at
        the date of grant and expire ten years from the date of grant. These options
        generally vest over a two- or three-year period. During the years ended December
        31, 2007 and 2006, the Company issued 14,210,000 and 774,604 options,
        respectively, to purchase common stock valued at $278,516 and $156,952,
        respectively.
 
 The
        fair
        value of each option granted is estimated on the date of grant using the
        Black-Scholes option-pricing method. Given its limited trading history, the
        Company used volatility from companies in the same industry. The Company
        estimated the expected option life and the expected forfeiture rate. The
        risk-free rate is based on the U.S. Treasury yield curve in effect at the
        time
        of grant for the estimated life of the option. The Company has not made any
        dividend payments on common stock nor does it have plans to pay dividends
        in the
        foreseeable future. The following assumptions were used to estimate the fair
        value of options granted during the year ended December 31, 2007 and 2006
        using
        the Black-Scholes option-pricing model:
  2007
                
                2006Risk
                    free interest rate
                
                
                7.33-8.25
                %
                
                7.53-8.25
                %Expected
                    Term (years)
                
                
                5
                
                
                5Expected
                    volatility
                
                
                100.00
                %
                
                100.00
                %Dividend
                    Yield
                
                
                0.00
                %
                
                0.00
                %
  Information
        about all employee options outstanding is as follows:
 For
                    the years ended December 31,
                
                **2007**
                
                **2006****Weighted
                    Average**
                
                
                
                **Weighted
                    Average****Shares**
                
                **Exercise
                    Price**
                
                **Shares**
                
                **Exercise
                    Price**Options
                    Outstanding at beginning of period
                
                
                3,176,015
                
                $
                0.79
                
                
                2,510,337
                
                $
                0.88Granted
                
                
                14,210,000
                
                $
                0.0625
                
                
                774,604
                
                $
                0.53Cancelled
                
                
                (1,268,515
                )
                $
                0.81
                
                
                (108,926
                )
                $
                0.88Options
                    Outstanding at end of period
                
                
                16,117,500
                
                $
                0.15
                
                
                3,176,015
                
                $
                0.79
  The
        weighted average remaining contractual life of options outstanding at December
        31, 2007 was 10 years. A summary of employee options outstanding and employee
        options exercisable as of December 31, 2007 under the Company's plan is set
        forth below:
  Outstanding
                
                
                
                
                
                Exercisable**Weighted****Average****Exercise**
                
                **#
                    of Options**
                
                **Remaining**
                
                **Weighted**
                
                **#
                    of Options**
                
                **Weighted****Contractual**
                
                **Average**
                
                
                
                **Average****Price**
                
                **Outstanding**
                
                **Life**
                
                **Exercise
                    Price**
                
                **Exercisable**
                
                **Exercise
                    Price**$
                0.0625
                
                
                14,210,000
                
                
                10
                    years
                
                $
                0.0625
                
                
                2,064,171
                
                $
                0.0625$
                0.19
                
                
                212,500
                
                
                9
                    years
                
                $
                0.19
                
                
                156,940
                
                $
                0.19$
                0.50
                
                
                125,000
                
                
                8
                    years
                
                $
                0.50
                
                
                109,375
                
                $
                0.50$
                0.88
                
                
                1,530,000
                
                
                8
                    years
                
                $
                0.88
                
                
                1,363,333
                
                $
                0.88$
                1.00
                
                
                40,000
                
                
                8
                    years
                
                $
                1.00
                
                
                40,000
                
                $
                1.00
  The
        weighted average remaining contractual life of
        options outstanding at December 31, 2006 was 9 years. A summary of employee
        options outstanding and employee options exercisable as of December 31, 2006
        under the Company's plan is set forth below:
 Outstanding
                
                
                
                
                
                Exercisable**Weighted****Average****Exercise**
                
                **#
                    of Options**
                
                **Remaining**
                
                **Weighted**
                
                **#
                    of Options**
                
                **Weighted****Contractual**
                
                **Average**
                
                
                
                **Average****Price**
                
                **Outstanding**
                
                **Life**
                
                **Exercise
                    Price**
                
                **Exercisable**
                
                **Exercise
                    Price**$
                0.19
                
                
                375,890
                
                
                10
                    years
                
                $
                0.19
                
                
                194,778
                
                $
                0.19$
                0.50
                
                
                125,000
                
                
                9
                    years
                
                $
                0.50
                
                
                46,875
                
                $
                0.50$
                0.88
                
                
                2,401,411
                
                
                9
                    years
                
                $
                0.88
                
                
                1,842,170
                
                $
                0.88$
                1.00
                
                
                273,714
                
                
                10
                    years
                
                $
                1.00
                
                
                85,994
                
                $
                1.00
 
 **Warrants
        to Purchase Common Stock**
 
 During
        2005, the Company issued various warrants to various parties in connection
        with
        the Series A and B Offerings. On May 25, 2007, upon issuing the Debentures,
        the
        Company triggered certain anti-dilution provisions in these warrant agreements
        which lowered the conversion price and increased the number of shares the
        warrant is convertible for. The Company used the Black-Scholes option-pricing
        model to determine the fair market value of the adjusted warrants and recorded
        a
        deemed dividend of $652,318. The tables below show the effect of the repriced
        warrants and increase in the number of shares.
  F-11
  On
        September 11, 2006, the Company issued warrants to purchase 1,500,000 of
        Celsia
        common stock to a third party as part of a distribution agreement. As part
        of
        the same agreement, the Company received warrants to purchase 500,000 shares
        of
        the distributors common stock. The warrants vest 25% in December 2006, 25%
        in
        December 2007, and 50% contingent upon acheivement of volume thresholds.
        The
        agreement was executed with the intention that the value of each warrant
        to be
        materially similar in value. Management has estimated the fair market value
        of
        both issuances using the Black-Scholes Option pricing model and has valued
        the
        warrant issuance to them at approximately $220,000. The Company has recorded
        an
        expense totaling approximately $139,000 related to this issuance as of December
        31, 2007. No value was assigned to the warrants received by the
        Company.
 
 On
        May
        25, 2007, the Company issued warrants to purchase 70,752,778 shares of Celsia
        common stock to the Debenture Holders (see Note 6). The Company valued the
        warrants to determine the discount on the debenture. In addition, the Company
        become obligated to issue warrants to purchase 5,120,000 shares of Celsia
        common
        stock to the Placement Agents and recorded $355,328 as deferred
        charges.
 
 On
        July
        18, 2007, the Company issued AMF Capital, Inc. a warrant to purchase 1,000,000
        shares of common stock of the Company at an exercise price of $0.88 per share
        as
        part of a settlement (see Note 3). The Company recorded an expense of $32,700
        for the issuances.
 
 On
        August
        17, 2007, the Company issued warrants to purchase 2,800,000 of Celsia common
        stock to the Debenture Holders (see Note 6). The Company valued the warrants
        to
        determine the discount on the debenture.
 
 The
        Company triggered adjustments to the exercise price of the Debenture Warrants
        as
        a result of the Company's financial results for the period ending September
        30,
        2007, which became effective on November 15, 2007. The number of Warrants
        issued
        to the Debenture Holders and the Placement Agents increased to 147,105,556
        and
        10,240,000, respectively, and the exercise price was reduced to $0.072 per
        share. The Company recorded a deferred charge of $521,216 for the additional
        warrants issued to the placement agent.
 
 During
        the year ended December 31, 2007, the Company issued warrants to purchase
        1,300,000 shares of common stock to a consultant and recorded $59,410 as
        a
        consulting expense. During the year ended December 31, 2007, the Company
        issued
        1,440,000 shares of common stock and warrants to purchase 720,000 in
        satisfaction of a $90,000 outstanding liability.
 
 A
        summary
        of the issued and outstanding warrants are as follows:
  **Old**
                
                **Old**
                
                **Anti-Dilution**
                
                **Anti-Dilution****Exercise**
                
                **#
                    of Warrants**
                
                **Exercise**
                
                **#
                    of Warrants**
                
                **#
                    of Warrants**
                
                **Expiration****Price**
                
                **Outstanding**
                
                **Price**
                
                **Outstanding**
                
                **Exercisable**
                
                **Date**$
                0.072
                
                
                720,000
                
                
                n/a
                
                
                n/a
                
                
                720,000
                
                
                December
                    2012$
                0.11
                
                
                1,300,000
                
                
                n/a
                
                
                n/a
                
                
                1,300,000
                
                
                December
                    2012$
                0.144
                
                
                78,672,778
                
                $
                0.072
                
                
                157,345,556
                
                
                157,345,556
                
                
                May
                    2012$
                0.32
                
                
                1,500,000
                
                
                n/a
                
                
                n/a
                
                
                750,000
                
                
                September
                    2011$
                0.88
                
                
                1,000,000
                
                
                n/a
                
                
                n/a
                
                
                1,000,000
                
                
                July
                    2012$
                0.88
                
                
                681,018
                
                $
                0.144
                
                
                681,018
                
                
                681,018
                
                
                July
                    2009$
                0.88
                
                
                1,186,820
                
                $
                0.36
                
                
                2,862,308
                
                
                2,862,308
                
                
                July
                    2010$
                1.09
                
                
                1,097,142
                
                $
                0.36
                
                
                2,646,027
                
                
                2,646,027
                
                
                July
                    2010$
                1.10
                
                
                2,759,357
                
                $
                0.45
                
                
                6,789,387
                
                
                6,789,387
                
                
                July
                    2010$
                1.32
                
                
                2,759,357
                
                $
                0.53
                
                
                6,882,126
                
                
                6,882,126
                
                
                July
                    2010$
                1.50
                
                
                772,190
                
                $
                0.60
                
                
                1,941,836
                
                
                1,941,836
                
                
                December
                    2010$
                3.00
                
                
                765,850
                
                $
                1.16
                
                
                1,986,069
                
                
                1,986,069
                
                
                December
                    2010
 **Warrants
        to Purchase Preferred Stock**
 
 During
        2005, the Company issued various warrants to placement agents in connection
        with
        the Series A and B Offerings. A summary of these warrants are as
        follows:
 **Old**
                
                **Old**
                
                **New**
                
                **New****Exercise**
                
                **#
                    of Warrants**
                
                **Exercise**
                
                **#
                    of Warrants**
                
                **#
                    of Warrants**
                
                **Expiration****Price**
                
                **Outstanding**
                
                **Price**
                
                **Outstanding**
                
                **Exercisable**
                
                **Date**$
                0.88
                
                
                1,364,528
                
                $
                0.144
                
                
                1,364,528
                
                
                1,364,528
                
                
                July
                    2010$
                1.50
                
                
                210,000
                
                $
                0.144
                
                
                210,000
                
                
                210,000
                
                
                December
                    2010
 
 **Note
        8 - Subsequent Event**
 
 On
        January 1, 2008, the Company elected to accrete the initial interest payment
        due
        under the 8% Secured Convertible Debenture pursuant to the terms of the
        Debenture. The interest due that was rolled into the convertible debenture
        balance was approximately $405,000.




F-12





**EXHIBIT
      INDEX**


**Exhibit
                  No.**
              **Description**2.1*
              Share
                  Exchange Agreement dated July 8, 2005, by and among Cedar Mountain
                  Distributors, Inc. and the shareholders of iCurie Lab Holdings
                  Limited.2.2*
              Form
                  of Subscription Agreement entered into between Celsia and cash
                  purchasers
                  of Series A Preferred Stock.2.3*
              Preferred
                  Stock Purchase Agreement dated July 11, 2005, by and among Celsia
                  and
                  purchasers of Series A Preferred Stock exchanging promissory notes
                  therefor.2.4*
              Share
                  Transfer Agreement dated August 26, 2005, by and between iCurie
                  Lab
                  Holdings Limited and Mr. Won Gyu Moon.2.5**
              Form
                  of Subscription Agreement entered into between Celsia and purchasers
                  of
                  Series B Preferred Stock.3(i).1
              Amended
                  and Restated Articles of Incorporation of Celsia (incorporated
                  by
                  reference to Exhibit 3(i).1 to Celsia’s Quarterly Report on Form 10-QSB
                  for the quarterly period ended June 30, 2005).3(i).2**
              Certificate
                  of Designation to Amended and Restated Articles of Incorporation
                  of Celsia
                  Technologies, Inc.3(i).3***
              Amendment
                  to Amended and Restated Articles of Incorporation of Celsia Technologies,
                  Inc.3(ii).1
              Amended
                  and Restated Bylaws of Celsia (Incorporated by reference to Exhibit
                  3(ii).1 to Celsia’s Quarterly Report on Form 10-QSB for the quarterly
                  period ended June 30, 2005).4.1*
              Form
                  of Warrant issued to Placement Agents (for common stock, Series
                  A
                  Preferred Stock and Series B Preferred Stock).4.2*
              Form
                  of $0.88 Warrants issued to purchasers of Series A Preferred
                  Stock.4.3*
              Form
                  of $1.10 and $1.32 Warrants issued to purchasers of Series A Preferred
                  Stock and $1.50 and $3.00 Warrants issued to purchasers of Series
                  B
                  Preferred Stock.4.4*
              Warrant
                  dated July 11, 2005 between Celsia and Dr. Jeong Hyun Lee,
                  Ph.D.4.5*+
              Celsia
                  2005 Stock Incentive Plan.4.6*+
              Form
                  of Option Grant under Celsia 2005 Stock Incentive
                  Plan.
  34
  4.7*+
              Form
                  of Restricted Stock Grant under Celsia 2005 Stock Option Incentive
                  Plan.10.1*
              Registration
                  Rights Agreement dated July 11, 2005 by and between Celsia and
                  certain
                  holders of Celsia securities.10.2*
              Placement
                  Agent Agreement dated March 17, 2005 by and among Axiom Capital
                  Management
                  Inc., Indigo Securities, LLC, and iCurie Lab Holdings Limited (the
                  “Placement Agent Agreement”).10.3*
              Extension
                  of Placement Agent Agreement dated May 20, 2005 by and among the
                  parties
                  to the Placement Agent Agreement.10.4*
              Lock-Up
                  and Leak-Out Agreement dated July 11, 2005 by and among Celsia,
                  Hakan
                  Wretsell, Michael Karpheden, and Dr. Jeong Hyun Lee,
                  Ph.D.10.5*+
              Employment
                  Agreement dated July 11, 2005 by and between iCurie Lab Holdings
                  Limited
                  and Hakan Wretsell.10.6*+
              Employment
                  Agreement dated July 11, 2005 by and between iCurie Lab Holdings
                  Limited
                  and Michael Karpheden.10.7*+
              Employment
                  Agreement dated July 11, 2005 by and among iCurie Lab Holdings
                  Limited,
                  iCurie Lab, Inc. and Dr. Jeong Hyun Lee, Ph.D.10.8*
              Revenue
                  Share Agreement dated May 18, 2005 by and among iCurie Lab Holdings
                  Limited, Hansen Gray & Company, Inc. and CHL Investment
                  Partnership.10.9*
              Securities
                  Purchase Agreement dated July 11, 2005 by and between Celsia and
                  Hansen
                  Gray & Company, Inc.10.10*
              Note
                  Cancellation Agreement dated July 11, 2005 by and between Celsia
                  and Dr.
                  Jeong Hyun Lee, Ph.D.10.11*
              Indemnification
                  Agreement dated July 11, 2005 by and between Celsia and Dr. Jeong
                  Hyun
                  Lee, Ph.D.10.12**
              Registration
                  Rights Agreement dated December 16, 2005 by and among Celsia, holders
                  of
                  Series B Preferred Stock and certain other parties.10.13**
              Patent
                  License and Sales Exclusivity Agreement dated November 9, 2005
                  by and
                  between iCurie Lab Holdings, Ltd. and Asia Vital Components Co.,
                  Ltd.10.14***+
              Agreement
                  dated August 18, 2006 by and among Celsia Technologies Korea, Inc.,
                  Celsia
                  Technologies UK Limited, iCurie, Inc. and Dr. Jeong Hyun Lee,
                  Ph.D.14**
              Code
                  of Ethics.21
              Subsidiaries
                  of Celsia Technologies, Inc.24
              Power
                  of Attorney (included on signature
                  page).
  35
  31.1
              Certification
                  of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.31.2
              Certification
                  of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.32.1
              Certification
                  of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.32.2
              Certification
                  of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.


_______________


***** Included
      as an exhibit to the Company’s Registration Statement on Form SB-2 (SEC File No.
      333−127193), filed with the SEC on October 6, 2005.




**
      Included as an exhibit to the Company’s annual report on Form 10-KSB for the
      fiscal year ended December 31, 2005.




***
      Included as an exhibit to the Company’s quarterly report on Form 10-QSB for the
      fiscal year ended September 30, 2006.




+
      Represents a management contract or compensatory plan or
      arrangement.





36