FORM 10-QSB
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

              /x/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2006

                                       OR

             / / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

              For the transition period from            to
                                             ----------    ----------

                         Commission File Number 0-23901

                                    GSV, INC.

        (Exact name of small business issuer as specified in its charter)

<TABLE>
<S>                                             <C>

           Delaware                                         13-3979226
(State or other jurisdiction of                 (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>

                     191 Post Road West, Westport, CT 06880
                    (Address of principal executive offices)

                                 (203) 221-2690
                          (Issuer's telephone number)


Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing  requirements  for the past 90 days.
Yes |X| No |_|

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:  7,472,695 shares,  excluding 168,600
shares held in Treasury.

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|.
<PAGE>
                           GSV, INC. AND SUBSIDIARIES

                              INDEX TO FORM 10-QSB

                                                                        Page
                                                                       Number

PART I.  FINANCIAL INFORMATION                                            3

Item 1.  Financial Statements:                                            3

         Consolidated Balance Sheet (unaudited)                           3

         Consolidated Statements of Operations for the
         Three Months ended March 31, 2006 and 2005 (unaudited)           4

         Consolidated Statements of Cash Flows for the
         Three Months ended March 31, 2006 and 2005 (unaudited)           5

         Notes to Consolidated Financial Statements                       6

Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                            10

Item 3.  Controls and Procedures                                         14

PART II. OTHER INFORMATION                                               15

Item 6.  Exhibits                                                        15

SIGNATURES                                                               16
<PAGE>
                          PART I. FINANCIAL INFORMATION

Item 1. - Financial Statements

                           GSV, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 2006

<TABLE>
<S>                                                                           <C>

                ASSETS
CURRENT ASSETS
        Cash and cash equivalents                                             $    283,837
        Accounts Receivable and other current assets                                 3,512
                                                                              -------------
                Total current assets                                               287,349

        Investments                                                                 50,000
        Other long-term assets - geologic studies                                2,316,721
        Investments - oil & gas wells, net accumulated depletion                   119,652
        Property and equipment, net accumulated depreciation                         4,674
        Other assets                                                                    --
                                                                              -------------
                                                                                 2,491,047

                Total assets                                                  $  2,778,396
                                                                              =============

                LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
        Accounts  Payable                                                     $    110,172
        Other Current Liabilities                                                   50,576
        Accrued Interst                                                             42,658
                                                                              -------------
                Total current liabilities                                          203,406

        Note Payable                                                               756,249
                                                                              -------------
                Total liabilities                                                  959,655


STOCKHOLDERS' EQUITY
        Series B Preferred stock, $0.001 par value; 1,500,000                        1,500
                shares authorized; 1,500,000 shares issued and
                oustanding
        Series C Preferred stock, $0.001 par value; 200,000                            200
                shares authorized; 200,000 shares issued and
                oustanding
        Common Stock, $0.001 par value; 75,000,000 shares                            7,641
                authorized; 7,641,295 issued;  7,472,695 outstanding
        Additional paid-in capital                                              41,045,985
        Treasury stock                                                            (558,998)
        Accumulated deficit                                                    (38,677,587)
                                                                              -------------
                Total stockholders' equity                                       1,818,741
                                                                              -------------
                Total liabilities and stockholders' equity                    $  2,778,396
                                                                              =============

</TABLE>

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


                                       -3-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENT OF OPERATIONS
                  For the three months March 31, 2006 and 2005
<TABLE>
<S>                                                          <C>                    <C>
                                                                     2006                  2005
                                                             --------------------   --------------------

Oil and gas income                                            $          (5,988)     $         165,614
Other income                                                                 --                     --
                                                              ------------------     ------------------
     Total Revenues                                                      (5,988)               165,614

General and administrative expenses                                      85,732                222,453
                                                              ------------------     ------------------
     Total operating expenses                                            85,732                222,453

     Income (Loss) from operations before other                         (91,720)               (56,839)
        income and expenses

     Interest income, net                                                    --                      6
     Interest expense                                                   (14,234)                (9,648)
     Writedown of investments                                                --                     --
     Gain on sale of investments                                             --                     --
                                                              ------------------     ------------------
     NET INCOME (LOSS)                                        $        (105,954)     $          (66,481)
                                                              ==================     ==================
Net loss per common share:
Loss per common share from
     operations - basic                                       $           (0.01)     $           (0.01)
                                                              ==================     ==================

Weighted average common shares
     outstanding, basic                                               7,472,695               7,472,695
                                                              ==================     ==================
</TABLE>

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


                                       -4-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENT OF CASH FLOWS
               For the Three Months Ended March 31, 2006 and 2005

<TABLE>
<S>                                                     <C>                             <C>
                                                                   2006                           2005
                                                         -------------------------      -------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                               (105,954)                         (66,481)
Adjustments to reconcile net loss to net cash flows
     from operating activities:
Preferred Stock issued for settlement                                    30,000                               --
Non-cash value of warrants and beneficial conversion                                                          --
Depreciation                                                                750                              750
Depletion                                                                    --                           97,164
Increase (decrease) in cash from changes in:
Account receivable and other current assets                             214,680                          (23,049)
Other assets                                                                 --                            4,599
Accounts payable and other current liabilities                           13,695                           22,827
                                                              ------------------               ------------------
       Net cash flows from operating activities                         153,170                           35,810

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment - oil & gas wells                                (41,071)                              --
                                                              ------------------               ------------------
       Net cash flows from investing activities                         (41,071)                              --
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in notes payable                                         --                          (25,000)
                                                              ------------------               ------------------
       Net cash flows from financing activities                              --                          (25,000)
                                                              ------------------               ------------------
       Net increase in cash                                             112,098                           10,810

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                            171,738                          167,223
                                                              ------------------               ------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                   283,837                         178,033
                                                              ==================               ==================
</TABLE>

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


                                       -5-
<PAGE>
                           GSV, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Description of the Business and Basis of Presentation

Since July 2003 the Company's business  operations have been focused on managing
its existing investments in oil and gas assets and entering into new investments
in  this  industry.  Currently,  it  has  been  pursuing  opportunities  in  the
alternative energies arena, specifically in the biodiesel sector. From June 2001
to July 2003, its business operations included managing its existing investments
and entering into new business operations through acquisitions or mergers.

Prior to June 2001,  the Company had sought to identify  and develop  attractive
early  stage  Internet  companies  in  exchange  for  equity  positions  in such
companies.  The  Company  has  since  made  substantial  write  downs  of  these
investments to more  accurately  reflect  current market  valuations,  and these
investments do not represent a significant  asset.  As of March 31, 2006,  these
investments  were  valued  at  approximately  1.8%  of the  total  value  of the
Company's assets. The Company is continuing to investigate  whether or not there
are any business prospects through which material value can be realized from the
remaining Internet investments.

Effective June 1, 2002, the Company  acquired  working  interests in two oil and
gas wells in the state of Louisiana pursuant to an asset purchase agreement with
Polystick U.S. Corporation ("Polystick"), a privately held New York corporation.
Additionally,  the  Company  acquired  an  option,  including  a right  of first
refusal,  to purchase other oil and gas properties  held by Polystick U.S. Corp.
The  consideration  consisted  of  $550,000  in cash and  850,000  shares of the
Company's common stock valued at $0.25 per share.

On July 21, 2003, the Company  entered into an Agreement and Plan of Merger (the
"Merger  Agreement")  with Polystick,  Cybershop,  L.L.C.,  a New Jersey limited
liability company and wholly-owned subsidiary of the Company ("Merger Sub"), and
Polystick Oil & Gas, Inc., a Delaware corporation and a wholly-owned  subsidiary
of Polystick ("POGI"),  pursuant to which, on the same day, POGI was merged into
Merger Sub (the  "Merger") and in  consideration  thereof the company  issued to
Polystick  4,500,000  shares of Common  Stock and  1,500,000  shares of Series B
Preferred Stock.

As a result of the Merger,  the Company,  through Merger Sub, acquired interests
in certain oil and gas properties in Texas and an undivided  one-third  interest
in Century  Royalty LLC  ("Century"),  a Texas  limited  liability  company that
manages the oil and gas  properties in Texas plus an additional  interest in the
Louisiana  properties  in which the Company  already held an  interest.  Century
Royalty LLC also holds the rights to certain geologic studies.

On May 20, 2004, the Company elected to participate in  re-completion  of one of
the wells in Louisiana.  The work was  successfully  completed on June 10, 2004.
The total cost to the Company was  $74,063.  The Company has seen an increase in
revenues as a result of the re-completion of this well.

On November 1, 2004, the working interest partnership started work on a re-entry
prospect in Texas. After reaching 6,000 feet and logging, it was determined that
it was not  economical  to compete  the well and it was  decided on  November 8,
2004, to plug and abandon the well.  Production  from the wells in Louisiana was
suspended  temporarily on or about February 9, 2006, because the water level had
risen in one of the wells.  On or about May 8, 2006 work to recomplete the wells
in a different sand zone was completed and production was restarted. The Company


                                      -6-
<PAGE>
expects  that its share of the costs of  recompletion,  which is estimated to be
about $48,000,  will be deducted from the royalty  payments the Company receives
from the operator or the Company may be asked to pay this amount directly to the
operator.  Also,  because of the delay  between sales of gas by the operator and
the Company's receipt of royalty payments from the operator, the Company expects
that the temporary suspension of production will have the effect of reducing its
royalty revenues for the second and possibly the third quarter of 2006.

The  Company's  management  has little  practical  experience in the oil and gas
industry.  The Company's management relies to a great extent on the employees of
Century  Royalty LLC to monitor and  implement  strategy with respect to our oil
and gas assets.  The inexperience of the Company's  management may detrimentally
affect the  Company's  operations  and results  because,  for example,  it could
prevent  the Company  from taking  advantage  of  opportunities  that arise on a
timely  basis or cause  the  Company  to take  actions  that a more  experienced
management team might determine are not in the Company's best interests.

The information presented as of March 31, 2006 is unaudited, but, in the opinion
of management of the Company, the accompanying  unaudited consolidated financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
adjustments) that the Company  considers  necessary for the fair presentation of
the  Company's  financial  position  as of March 31,  2006,  the  results of its
operations  for the three  month  periods  ended March 31, 2006 and 2005 and its
cash  flows for the  three-month  periods  ended  March 31,  2006 and 2005.  The
consolidated  financial  statements  included herein have been prepared  without
audit  pursuant to the rules and  regulations  of the  Securities  and  Exchange
Commission.  Accordingly,  certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles  have  been  condensed  or  omitted.  These  consolidated
financial  statements  should be read in conjunction with the Company's  audited
consolidated  financial  statements  and  accompanying  notes for the year ended
December 31, 2005,  included in the  Company's  Annual  Report on Form 10-KSB as
filed with the Securities and Exchange Commission.  Certain prior period amounts
have been reclassified to conform to the current period presentation.

2.   Investments

The Company has investments in four internet-related  companies, which have been
accounted for using the cost method.

As described above,  the Company  acquired working  interests in two oil and gas
wells  effective  June 1,  2002 for  $550,000  in cash and  common  stock of the
Company  valued at $212,500,  for a total  investment of $762,500.  The asset is
depleted on a periodic basis using the units of production method. In the fourth
quarter of 2002, the properties exhibited a marked decrease in the volume of oil
and gas  produced.  On May 20,  2004,  the  Company  elected to  participate  in
re-completion  of one of the  wells in  Louisiana.  The  work  was  successfully
completed  on June 10,  2004.  The total cost to the  Company was  $74,063.  The
Company has seen an increase  in  revenues as a result of the  re-completion  of
this well.  Production from the wells in Louisiana was suspended  temporarily on
or about  February  9,  2006,  because  the water  level had risen in one of the
wells.  On or about May 8, 2006 work to recomplete the wells in a different sand
zone was completed and production was  restarted.  The Company  expects that its
share of the costs of recompletion, which is estimated to be about $48,000, will
be deducted from the royalty  payments the Company receives from the operator or
the  Company may be asked to pay this amount  directly  to the  operator.  Also,
because of the delay  between  sales of gas by the  operator  and the  Company's
receipt of royalty  payments  from the  operator,  the Company  expects that the


                                      -7-
<PAGE>
temporary  suspension of production will have the effect of reducing its royalty
revenues for the second and possibly the third quarter of 2006.  An  independent
reserve  study  performed  effective  March 2006  estimated  that the  remaining
reserve in the wells  including PDP and PDNP,  net of expenses and discounted at
10% was $263,847.

As  described  above,  on July 21,  2003,  the Company  entered  into the Merger
Agreement,  pursuant to which,  on the same day, POGI was merged into Merger Sub
and in consideration thereof the Company issued to Polystick 4,500,000 shares of
Common Stock and  1,500,000  shares of Series B Preferred  Stock.  Each share of
Series B Preferred  Stock is convertible at any time at the holder's option into
a number of shares of Common  Stock  equal to $1.00  divided  by the  conversion
price then in effect.  The conversion price is initially $1.00. No dividends are
payable on the Series B Preferred Stock,  except that in the event dividends are
declared  with  respect  to  Common  Stock,  each  holder  of share of  Series B
Preferred  Stock shall be  entitled to receive an amount  equal to the amount of
dividends  that would have been paid on the shares of Common Stock issuable upon
conversion  of such  shares of Series B  Preferred  Stock has such  shares  been
converted into Common Stock immediately before such dividend was declared.  Upon
any Liquidation  Event, the holders of the outstanding  Series B Preferred Stock
will be entitled  to be paid an amount  equal to $1.00 per share plus the amount
of any declared and unpaid dividends thereon. If upon any Liquidation Event, the
net assets of the Company  are  insufficient  to permit  payment in full of such
preferential  amount to the holders of Series B Preferred Stock, then the entire
net assets of the Company will be  distributed  ratably among the holders of the
Series B Preferred Stock.

In connection with and as a condition to the Merger, the Company redeemed all of
its existing  outstanding  Series A Preferred Stock, par value $0.001 per share,
for  $400,001,  plus  dividends  payable.  The  Company  paid  $263,801  of  the
redemption price in cash and $200,000 by a full recourse promissory note bearing
interest at a rate of 8% per annum and due September 4, 2004,  secured by a lien
on all of the Company's assets.

As a result of the  merger,  the  Company  acquired  through  Cybershop  L.L.C.,
interests in certain oil and gas properties in Texas and an undivided  one-third
interest in Century,  which manages the oil and gas properties in Texas, plus an
additional  interest in the Louisiana  properties  in which the Company  already
held an interest. Century also holds the rights to certain geologic studies that
are included in other long term assets on the accompanying  balance sheet. These
geologic  studies are currently  being carried without  amortization,  since the
data relates to properties which are currently under  evaluation,  but for which
there are yet no established  reserves.  The Company expects to begin a drilling
program for the subject  properties in 2006, at which time  amortization  of the
geologic  studies will begin.  If the drilling  program is not  successful,  the
Company  will likely  record an  impairment  loss of some or all of the carrying
value of its geologic studies.

3.   Stockholders' Equity

As described in Note 5 below,  on January 3, 2006,  the Company  issued  200,000
shares of Series C preferred stock to 116 Newark Avenue Corporation.

4.   Net Loss Per Common Share

Basic net loss per common  share is  calculated  by dividing net loss per common
share after effect of adjustable  common stock warrants,  as explained below, by
the weighted  average  number of shares of common stock  outstanding  during the
period as follows:


                                      -8-
<PAGE>
<TABLE>
<S>                      <C>              <C>            <C>             <C>             <C>            <C>
                                                        Three Months ending March 31
                                           2006                                           2005
                          ----------------------------------------       ----------------------------------------
                                                         Per                                            Per
                          Loss            Shares         Share           Loss            Shares         Share
                          ----------------------------------------       ----------------------------------------
Loss from continuing
operations                $ (105,954)     7,472,695      $ (0.01)        $ (66,481)      7,472,695      $ (0.01)
Effect of preferred
stock dividends
                          -----------     ---------      --------        ----------      ---------      --------
Net loss available
for common
shareholders              $ (105,954)     7,472,695      $ (0.01)        $ (66,481)      7,472,695      $ (0.01)

                          ===========     =========      ========        ===========     =========      ========
</TABLE>

5.   Lease Termination and Issuance of Series C Preferred Stock

On January 3, 2006,  the Company  entered  into a  Termination,  Settlement  and
Release Agreement with 116 Newark Avenue  Corporation,  dated as of November 30,
2005, pursuant to which the Company agreed to terminate the lease for its former
offices  in Jersey  City,  New  Jersey.  Under the terms of the  agreement,  the
Company  paid 116  Newark  $70,000  in cash,  issued  a  promissory  note in the
principal  amount of $356,249.04  and 200,000 shares of Series C preferred stock
to 116 Newark and  reimbursed  116 Newark  for  $10,000 of its legal  fees.  The
promissory  note matures on November 29, 2007 and bears interest at a rate of 7%
per annum. Payment and performance under the promissory note has been guaranteed
by Polystick and secured by a pledge agreement  between Polystick and 116 Newark
pursuant to which Polystick has pledged 356,249 shares of the Company's Series B
preferred stock that it holds to 116 Newark.


                                      -9-
<PAGE>
                           GSV, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Overview

Since  July 2003 our  business  operations  have been  focused on  managing  our
existing  investments in oil and gas assets and entering into new investments in
this industry. Currently, we have been pursuing opportunities in the alternative
energies  arena,  specifically in the biodiesel  sector.  From June 2001 to July
2003, our business  operations  included  managing our existing  investments and
entering into new business operations through acquisitions or mergers.

Prior to June 2001, we had sought to identify and develop attractive early stage
Internet  companies in exchange for equity positions in such companies.  We have
since made  substantial  write  downs of these  investments  to more  accurately
reflect  current  market  valuations,  and these  investments do not represent a
significant  asset.  As of March 31,  2006,  these  investments  were  valued at
approximately  1.8%  of  the  total  value  of  our  assets.  We  are  presently
investigating  whether or not there are any  business  prospects  through  which
material value can be realized from the remaining Internet investments.

Effective June 1, 2002, we acquired  working  interests in two oil and gas wells
in the state of Louisiana pursuant to an asset purchase agreement with Polystick
U.S.  Corporation  ("Polystick"),  a privately  held New York  corporation.  The
consideration  consisted  of $550,000  in cash and 850,000  shares of our common
stock  valued at $0.25 per share.  Additionally,  we acquired a one-year  option
valued at $80,210, including a right of first refusal, to purchase other oil and
gas properties held by Polystick.

On July  21,  2003,  we  entered  into an  Agreement  and  Plan of  Merger  with
Polystick,  Cybershop,  L.L.C.,  a New  Jersey  limited  liability  company  and
wholly-owned  subsidiary of GSV, Inc. and Polystick Oil & Gas,  Inc., a Delaware
corporation  and  wholly-owned  subsidiary  of Polystick  ("POGI"),  pursuant to
which,  on  the  same  day,  POGI  was  merged  into  Cybershop,  L.L.C.  and in
consideration  thereof  we issued to  Polystick  4,500,000  shares of our common
stock and 1,500,000 shares of our Series B convertible preferred stock.

As a result of the merger we acquired,  through Cybershop  L.L.C.,  interests in
certain oil and gas properties in Texas and an interest in Century  Royalty LLC,
a Texas  limited  liability  company that manages the oil and gas  properties in
Texas  plus an  additional  interest  in the  Louisiana  properties  in which we
already held an interest.  Century  Royalty LLC also holds the rights to certain
geologic  studies.  Century Royalty has a carried interest with this partnership
of 20% for the first well drilled in the first 5 prospects  or $1.25  million of
investment,  whichever  comes  first.  Century  Royalty has a 20%  participation
interest in all  subsequent  wells  drilled in the first 5 prospects.  For later
prospects, Century Royalty is entitled to an 80% participation interest. Century
Royalty's  net carried  interest  falls to 14% after  royalty  payments  for the
leases.  Due to the  existence of these  revenue  overrides,  the  operations of
Century Royalty LLC are included in the accompanying statements of operations.

Our management has little practical experience in the oil and gas industry.  Our
management  relies to a great extent on the employees of Century  Royalty LLC to
monitor and  implement  strategy  with  respect to our oil and gas  assets.  Our
management's  inexperience may  detrimentally  affect our operations and results
because, for example, it could prevent us from taking advantage of opportunities
that arise on a timely basis or cause us to take actions that a more experienced
management team might determine are not in our best interests.

The  sole  shareholder  of  Polystick  is  RT  Sagi  Holding  Ltd.,  an  Israeli
corporation.  The sole stockholder of RT Sagi and indirect owner of Polystick is
Mr. Sagi Matza.  Effective as of the  consummation of the Merger,  Mr. Matza was
appointed to our board of directors as the designee of Polystick.  Polystick has
the right to elect two additional  persons to our board of directors but has not
yet done so.


                                      -10-
<PAGE>
Each share of Series B convertible preferred stock is convertible at any time at
the  holder's  option  into a number of shares  of common  stock  equal to $1.00
divided by the conversion price then in effect.  The terms upon which the Series
B convertible  preferred  stock may be converted into common stock are set forth
in  the  Certificate  of  Designations,  Preferences  and  Rights  of  Series  B
Convertible  Preferred Stock filed by the Company with the Secretary of State of
the State of Delaware on July 18, 2003 ("Series B Certificate of Designations").
As of May 15, 2006, the Series B convertible  preferred stock owned by Polystick
was convertible into 1,500,000 shares of common stock.

No dividends are payable on the Series B  convertible  preferred  stock,  except
that in the event  dividends  are declared with respect to the common stock each
holder of shares of Series B  convertible  preferred  stock will be  entitled to
receive an amount equal to the amount of dividends  that would have been paid on
the shares of common stock  issuable upon  conversion of such shares of Series B
convertible  preferred  stock had such shares of Series B convertible  preferred
stock been  converted  into common  stock  immediately  before the  dividend was
declared.

Upon  any  Liquidation  Event,  as  defined  in  the  Series  B  Certificate  of
Designations,  the holders of the  outstanding  Series B  convertible  preferred
stock will be entitled, before any distribution or payment is made to any holder
of  common  stock  or any  other  Junior  Stock  (as  defined  in the  Series  B
Certificate of Designations), to be paid an amount equal to $1.00 per share plus
the amount of any declared and unpaid dividends thereon. If upon any Liquidation
Event our net assets distributable among the holders of the Series B convertible
preferred  stock  are  insufficient  to  permit  the  payment  in  full  of such
preferential amount to the holders of the Series B convertible  preferred stock,
then our net assets will be distributed  ratably among the holders of the Series
B convertible  preferred stock in proportion to the amounts they otherwise would
have been entitled to receive.

The Series B Certificate of Designations  provides that so long as any shares of
Series B convertible  preferred stock are outstanding,  we will not, without the
written  approval of the holders of at least a majority of the  then-outstanding
Series B convertible  preferred stock,  increase the maximum number of directors
constituting our board of directors to more than seven. The Series B Certificate
of  Designations  also  provides  that,  so  long  as any  shares  of  Series  B
convertible  preferred  stock  are  outstanding,  the  holders  of the  Series B
convertible  preferred stock,  voting separately as a class, will be entitled to
designate  and elect three of the  members of our board of  directors.  Also,  a
vacancy in any  directorship  elected by the holders of the Series B convertible
preferred  stock may be filled only by vote or written consent of the holders of
at least a  majority  of the then  outstanding  shares of  Series B  convertible
preferred  stock.  The Series B convertible  preferred stock has no other voting
rights except as provided by applicable law.

In  connection  with and as a condition  to  consummation  of the merger in July
2003, we redeemed all of our outstanding  Series A convertible  preferred stock,
par value  $0.001  per share,  for  $400,001  plus  dividends  payable.  We paid
$263,801  of the  redemption  price in cash and  $200,000 by a  promissory  note
secured by a lien on all of our assets.

In June 2001, we sublet to  Nekema.com  our former  offices in Jersey City,  New
Jersey  through  December 31, 2008.  The rent on the sublease was  guaranteed by
Lumbermens Mutual Casualty Company,  d/b/a Kemper Insurance  Company,  until May
2003. In September 2002 Nekema ceased  business  operations and defaulted on the
sublease.  Kemper  Insurance  Company  made all  payments  of rent due under the
sublease  through May 2003. We ceased paying rent under the lease for this space
in July 2003. On May 5, 2004 we filed a proof of claim against  Nekema's  estate
in the United States Bankruptcy Court for the Southern District of New York. The
proof of claim was for the total sum of  $421,455.15 as permitted by law and the
court approved a settlement of $363,048.88. On November 15, 2005, the trustee in
the bankruptcy filed a notice of filing of final accounts. On February 15, 2006,
we received $22,300.77 in settlement of our claim.

On January 3,  2006,  we entered  into a  Termination,  Settlement  and  Release
Agreement  with 116 Newark  Avenue  Corporation,  dated as of November 30, 2005,
pursuant  to which we agreed to  terminate  the lease for our former  offices in
Jersey City, New Jersey.  Under the terms of the  agreement,  we paid 116 Newark
$70,000 in cash, issued a promissory note in the principal amount of $356,249.04
and 200,000 shares of Series C preferred  stock to 116 Newark and reimbursed 116
Newark for $10,000 of its legal fees.  The  promissory  note matures on November
29, 2007 and bears interest at a rate of 7% per annum.  Payment and  performance
under the promissory note has been guaranteed by Polystick U.S.  Corporation and
secured by a pledge agreement between Polystick and 116 Newark pursuant to which
Polystick  has pledged  356,249  shares of our Series B preferred  stock that it
holds to 116 Newark.


                                       -11-
<PAGE>
Off-Balance Sheet Transactions

There are no off-balance  sheet  arrangements that have or are reasonably likely
to have a current  or future  effect on the small  business  issuer's  financial
condition,  changes in financial  condition,  revenues or  expenses,  results of
operations,  liquidity,  capital  expenditures  or  capital  resources  that  is
material to investors.

Results of Operations

Three Months Ended March 31, 2006 compared to Three Months Ended March 31, 2005

Revenues: Revenues for the quarter decreased by $171,602, or 103.6%, to negative
$5,988 in 2006 from  $165,614  in 2005.  This  decrease  was due to a  temporary
suspension of production from the wells. Production from the two Louisiana wells
was suspended  temporarily on or about February 9, 2006, because the water level
had risen in one of the wells.  On or about May 8, 2006 work to  recomplete  the
wells in a different sand zone was completed and  production  was restarted.  We
expect that our share of the costs of  recompletion,  which is  estimated  to be
about  $48,000,  will be deducted from the royalty  payments we receive from the
operator or we may be asked to pay this amount  directly to the operator.  Also,
because of the delay  between  sales of gas by the  operator  and our receipt of
royalty payments from the operator,  we expect that the temporary  suspension of
production will have the effect of reducing our royalty  revenues for the second
and possibly the third quarter of 2006.

General  and  administrative:   General  and  administrative   expenses  consist
primarily  of  payroll  and  payroll   related   expenses  for   administrative,
information  technology,  accounting,  and  management  personnel,  legal  fees,
depletion and general corporate  expenses.  General and administrative  expenses
decreased by $136,721,  or 61.5%, to $85,732 in the quarter ended March 31, 2006
from  $222,453 in the quarter  ended March 31, 2005,  primarily as a result of a
drop in depletion resulting from the temporary suspension of production from the
Louisiana wells.

Interest  expense:  Interest  expense  for the  quarter  ended  March  31,  2006
increased  $4,586 or 47.5% to $14,234 in the  quarter  ended  March 31,  2006 as
compared with $9,648 in the corresponding period of the preceding year due to an
increase in notes payable which  resulted from the issuance in January 2006 of a
note in the principal amount of $356,249.04 to 116 Newark Avenue  Corporation in
connection  with the  termination  of the lease for our former offices in Jersey
City, New Jersey.

Net Losses: Loss from operations  increased by $39,473 from $66,481 in the first
quarter of 2005, or ($0.01) per basic and diluted  common share,  to $105,954 in
the first quarter of 2006, or ($0.01) per basic and diluted common share.

Liquidity and Capital Resources

Net cash  provided by  operations  increased by  $117,360,  from $35,810 for the
three months ended March 31, 2005,  to $153,170 for the three months ended March
31, 2006. The increase in cash provided by operations was primarily due payments
from the operator of the Louisiana wells against accounts receivable. Production
from the wells was suspended  temporarily on or about February 9, 2006,  because
the water  level had risen in one of the wells.  On or about May 8, 2006 work to
recomplete  the wells in a different  sand zone was completed and production was
restarted.  We  expect  that our share of the  costs of  recompletion,  which is
estimated to be about  $48,000,  will be deducted  from the royalty  payments we
receive from the operator or we may be asked to pay this amount  directly to the
operator.  Also,  because of the delay  between sales of gas by the operator and
our receipt of royalty payments from the operator,  we expect that the temporary
suspension of production  will have the effect of reducing our royalty  revenues
for the second and possibly the third quarter of 2006.

Net cash  provided by investing  activities  during the three months ended March
31, 2006, was $(41,071),  as compared to $0 in the  corresponding  period of the
prior year.

Net cash  provided by financing  activities  during the quarter  ended March 31,
2006,  was $0, as  compared  to  $(25,000)  in the prior  year.  This  change is
attributable  to the  repayment of an  outstanding  note in the first quarter of
2005.

In 2003, we issued to Polystick  4,500,000  shares of common stock and 1,500,000
shares of Series B convertible  preferred  stock valued at $2,625,000 to acquire
assets in a non-cash transaction.

In 2003, we issued to Polystick  4,500,000  shares of common stock and 1,500,000
shares of Series B convertible  preferred  stock valued at $2,625,000 to acquire
assets in a non-cash transaction.


                                       -12-
<PAGE>
On February 11, 2004, we borrowed $25,000 from Brooks Station Holdings,  Inc., a
private investment corporation ("Brooks Station").  In partial consideration for
the loan, we issued 100,000 shares of common stock to Brooks  Station.  On March
18,  2004,  we  borrowed  another  $25,000  from  Brooks  Station and in partial
consideration  for the loan issued  another  100,000  shares of common  stock to
Brooks Station. Each loan was evidenced by a promissory note bearing interest at
8% per annum  secured by a lien on all of our assets.  On September 20, 2004, we
negotiated  an  extension  of the  maturity  of the notes  from  their  original
maturity  date of  September  1, 2004 to March 1, 2005.  On March 10,  2005,  we
repaid the note issued on February 11, 2004 and  negotiated  an extension of the
maturity of the note dated March 18, 2004 to September 1, 2005. We also extended
to the same date the  maturity  of an 8%  secured  promissory  note we issued to
Brooks Station on July 21, 2003 in the principal  amount of $200,000.  On August
31, 2005,  we repaid the March 18, 2004 note and  negotiated an extension of the
maturity  date of the July 21, 2003 note to March 1, 2006. On March 20, 2006, we
repaid $20,000 of the accrued and unpaid  interest on the July 21, 2003 note and
negotiated an extension of the maturity date of the note to September 1, 2006.

On May 11, 2004, we sold a convertible  promissory note in the principal  amount
of $200,000 and a warrant to purchase up to 1,142,857 shares of our common stock
at a  price  of $.70  per  share  to D.  Emerald  Investments  Ltd.,  a  private
investment  corporation  ("Emerald").  The note bears interest at the rate of 8%
per annum and is convertible  into shares of our common stock at a price of $.70
per share.  The aggregate  purchase price of these  securities was $200,000.  In
connection with the sale of these securities we agreed that if Emerald exercises
the  warrant  in full  and  converts  the  convertible  note in full,  then,  at
Emerald's  request,  we will appoint a person designated by Emerald to our Board
of Directors and, in addition, for so long as Emerald holds at least eighty-five
percent (85%) of the common stock issued upon such exercise and  conversion,  we
will  nominate such person (or a different  person  designated by Emerald) to be
reelected  to the Board of  Directors  in  connection  with any  meeting  of our
stockholders  at which  directors are to be elected.  We also agreed that within
120 days of the  exercise of the warrant  and/or  conversion  of the note for an
aggregate of at least 428,572  shares of common stock (subject to adjustment for
dilutive  events as set forth in the warrant and the note) we will  register all
of the shares  issuable upon  conversion of the note and exercise of the warrant
under the Securities  Act of 1933.  Additionally,  we granted  Emerald rights to
have the shares  included in other  registration  statements we may file for the
public  offering of our  securities  for cash  proceeds.  In 2004, we recorded a
charge  to  operations  of  $129,000  for  the  value  of the  warrants  and the
beneficial conversion feature of the convertible note.

Our  principal  stockholder,  Polystick,  entered  into a guaranty  and a pledge
agreement  with Emerald  under which  Polystick  pledged  200,000  shares of our
Series B  convertible  preferred  stock as  collateral  security  for the  note.
Polystick  also  entered  into a  voting  agreement  with  Emerald  under  which
Polystick  agreed that if we fail to fully and timely fulfill our obligations to
appoint or nominate a  representative  for  election to our board of  directors,
then,  at  Emerald's  request,  Polystick  will  vote  its  shares  of  Series B
convertible  preferred stock in favor of a nominee  designated by Emerald in any
election  of  directors  occurring  during  such time and for so long as Emerald
holds at least 85% of the common stock  issued upon  exercise of the warrant and
conversion of the note.  Polystick  also agreed that,  provided  that  Polystick
continues  to have the right to  designate  and  elect  three  directors  to the
Company's  board  of  directors  under  the  terms of the  Series B  convertible
preferred  stock,  any  such  nominee  will  count  as  one of  such  directors.
Additionally, Polystick agreed to use all its power and authority as provided by
our  by-laws  and the  Series  B  convertible  preferred  stock to  convene,  at
Emerald's  request,  meetings  of  stockholders  as may be  necessary  to  elect
Emerald's nominee to the board of directors.

On July 3, 2005,  we entered into an agreement  with Emerald dated as of May 10,
2005,  pursuant to which we agreed to extend and renew the note and the warrant.
Under the terms of the  agreement,  the  maturity  date of the note was extended
from May 10,  2006 to May 10, 2007 and  Emerald's  right to convert the note and
all accrued  interest on the note into common stock at a price of $.70 per share
was extended  until any time prior to May 10, 2006.  The term of the warrant was
also extended from May 10, 2005 to May 10, 2006.


                                      -13-
<PAGE>
On January 3,  2006,  we entered  into a  Termination,  Settlement  and  Release
Agreement  with 116 Newark  Avenue  Corporation,  dated as of November 30, 2005,
pursuant  to which we agreed to  terminate  the lease for our former  offices in
Jersey City, New Jersey.  Under the terms of the  agreement,  we paid 116 Newark
$70,000 in cash, issued a promissory note in the principal amount of $356,249.04
and 200,000 shares of Series C preferred  stock to 116 Newark and reimbursed 116
Newark for $10,000 of its legal fees.  The  promissory  note matures on November
29, 2007 and bears interest at a rate of 7% per annum.  Payment and  performance
under the  promissory  note has been  guaranteed  by Polystick  and secured by a
pledge  agreement  between  Polystick and 116 Newark pursuant to which Polystick
has pledged  356,249 shares of our Series B Preferred Stock that it holds to 116
Newark.  116 Newark has the right to include any shares of common stock received
upon  conversion  of the Series C  preferred  stock and upon  conversion  of the
pledged  shares  as  part of any  registration  statement  that  we may  file in
connection  with any public offering of our securities  (excluding  registration
statements on Forms S-4 and S-8).

We believe that our existing  capital  resources  will enable us to maintain our
operations at existing  levels for at least the next 12 months.  However,  it is
difficult to project our capital needs. We cannot assure you that any additional
financing or other  sources of capital  will be available to us upon  acceptable
terms,  if at all. The inability to obtain  additional  financing,  when needed,
would have a material  adverse effect on our business,  financial  condition and
operating results.

Forward-Looking Statements:

Some of the  statements  in this  report  are  forward-looking  statements  that
involve  risks  and  uncertainties.  These  forward-looking  statements  include
statements about our plans, objectives, expectations, intentions and assumptions
that are not statements of historical fact. You can identify these statements by
the following words:

- "may"
- "will"
- "should"
- "estimates"
- "plans"
- "expects"
- "believes"
- "intends"

and similar expressions. We cannot guarantee our future results,  performance or
achievements.  Our actual results and the timing of corporate  events may differ
significantly from the expectations discussed in the forward-looking statements.
You  are  cautioned  not  to  place  undue  reliance  on  any  forward-  looking
statements.  Potential  risks and  uncertainties  that  could  affect our future
operating  results  include,  but are not  limited  to,  our  limited  operating
history,  history of losses,  need to raise  additional  capital,  the high risk
nature of our business,  and other risks  described in our Annual Report on Form
10-KSB for the year ended December 31, 2004.

Item 3. Controls and Procedures

We performed an evaluation  under the supervision and with the  participation of
our management,  including our chief executive and chief financial  officer,  of
the effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of 1934, as amended)
as of March  31,  2006.  A  control  system,  no matter  how well  designed  and
operated,  can provide only  reasonable,  not absolute,  assurance  that it will
detect or uncover failures within our company to disclose  material  information
otherwise  required  to be set  forth in our  periodic  reports.  Following  the
evaluation  described above,  our management,  including our chief executive and
chief financial  officer,  concluded that based on the evaluation our disclosure
controls and procedures were effective at that time.

There has been no change in our internal  control over  financial  reporting (as
defined in Rules  13a-15(f) and 15d-15(f)  under the Securities  Exchange Act of
1934, as amended)  that  occurred in the quarter ended March 31, 2006,  that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.


                                      -14-
<PAGE>
                           PART II. OTHER INFORMATION

Item 6. Exhibits

31.1 Certification of Chief Executive and Chief Financial  Officer pursuant to
     Section 302  of the  Sarbanes-Oxley  Act  of  2002.
32.1 Certification of Chief Executive and Chief Financial  Officer pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002.


                                      -15-
<PAGE>
                                   SIGNATURES

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


Date: May 15, 2006                      By:     /s/ Gilad Gat
                                                ---------------------
                                                Gilad Gat
                                                Chief Executive Officer and
                                                President
                                                (principal executive officer)
                                                Chief Financial Officer
                                                (principal financial and
                                                accounting officer)


                                      -16-
<PAGE>
                                 Exhibit Index
Exhibit         Description
-------         -----------

31.1            Certification  of Chief Executive and Chief Financial  Officer
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1            Certification  of Chief Executive and Chief Financial  Officer
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.