**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-QSB**

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

| Delaware                                                                      | 20-4397836                                       |
|-------------------------------------------------------------------------------|--------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) | (IRS                Employer Identification No.) |

 No      o

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**INDEX**

|                    |                                                                                                                                                                                                                                                                                                                                                                        | **Page**   |
|-------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| PART                I.  | FINANCIAL                INFORMATION                                                                                                                                                                                                                                                                                                                                        | F-1        |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                1.  | Condensed                Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                  | F-1        |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
|                    | Balance                Sheet as of June 30, 2006 (unaudited) and December 31, 2005                (restated)                                                                                                                                                                                                                                                                | F-1        |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
|                    | Statement                of Losses for the three and six months ended June 30, 2006 (unaudited),                for the three months ended June 30, 2005, for the period from January                25, 2005 (Inception) to June 30, 2005 (restated), and for the period                from                January 25, 2005 (Inception) to June 30, 3006 (unaudited) | F-2        |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
|                    | Statement                of Changes in Stockholders’ Equity for the period from January 25, 2005                (Inception) to June 30, 2006 (unaudited)                                                                                                                                                                                                              | F-3        |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
|                    | Statement                of Cash Flows for the six months ended June 30, 2006 (unaudited),                for the                period from January 25, 2005 (Inception) to June 30, 2005 (restated),                and                for the period from March 18, 2005 (Inception) to June 30, 2006                (unaudited)                                         | F-4        |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
|                    | Notes                to Unaudited Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                               | F-5        |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                2.  | Management’s                Discussion and Analysis or Plan of Operation                                                                                                                                                                                                                                                                                              |  2    |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                3.  | Controls                and Procedures                                                                                                                                                                                                                                                                                                                                      |  12   |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| PART                II. | OTHER                INFORMATION                                                                                                                                                                                                                                                                                                                                            |       |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                1.  | Legal                Proceedings                                                                                                                                                                                                                                                                                                                                            |  II-1 |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                2.  | Unregistered                Sales of Equity Securities and Use of Proceeds                                                                                                                                                                                                                                                                                                  |  II-1 |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                3.  | Defaults                Upon Senior Securities                                                                                                                                                                                                                                                                                                                              |  II-1 |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                4.  | Submission                of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                                                                          |  II-1 |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                5.  | Other                Information                                                                                                                                                                                                                                                                                                                                            |  II-1 |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Item                6.  | Exhibits                                                                                                                                                                                                                                                                                                                                                                    |  II-1 |
|                    |                                                                                                                                                                                                                                                                                                                                                                        |       |
| Signatures              |                                                                                                                                                                                                                                                                                                                                                                        |  II-2 |

----

**PART      I — FINANCIAL INFORMATION**

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

|  **FIIC                HOLDINGS, INC**             |
|---------------------------------------------------------|
| **(A                DEVELOPMENT STAGE COMPANY)**        |
| **CONDENSED                CONSOLIDATED BALANCE SHEET** |

|                                                                                                                                                                                                                                                     |   |   | June                30, 2006 (Unaudited)  |   |   | December                      31, 2005 (Restated- Note L) |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|-----------------------------------------------------------|
| ASSETS                                                                                                                                                                                                                                                   |   |   |                                           |   |   |                                                      |
| Current                assets:                                                                                                                                                                                                                           |   |   |                                           |   |   |                                                      |
| Cash                and cash equivalents                                                                                                                                                                                                                 |   | $      | 693                                            |   | $      | 1,714                                                     |
| Prepaid                expenses and deposits                                                                                                                                                                                                             |   |   | 46,994                                         |   |   | -                                                         |
| Restricted                cash                                                                                                                                                                                                                           |   |   | 88,827                                         |   |   | -                                                         |
| Total                current assets                                                                                                                                                                                                                      |   |   | 136,514                                        |   |   | 1,714                                                     |
|                                                                                                                                                                                                                                                     |   |   |                                           |   |   |                                                      |
| Property,                plant and equipment, net of accumulated depreciation of                $1,561                                                                                                                                                   |   |   | 9,679                                          |   |   | -                                                         |
|                                                                                                                                                                                                                                                     |   |   |                                           |   |   |                                                      |
| Other                assets:                                                                                                                                                                                                                             |   |   |                                           |   |   |                                                      |
| Restricted                cash                                                                                                                                                                                                                           |   |   | -                                              |   |   | 258,000                                                   |
| Prepaid                expenses                                                                                                                                                                                                                          |   |   | -                                              |   |   | 12,500                                                    |
| License                agreement (Note D)                                                                                                                                                                                                                |   |   | -                                              |   |   | 109,792                                                   |
| Loan                fees, net of accumulated amortization of $351,006 and $141,859 at                June 30,                2006 and December 31, 2005 respectively                                                                                     |   |   | 632,605                                        |   |   | 297,607                                                   |
| Total                other assets                                                                                                                                                                                                                        |   |   | 632,605                                        |   |   | 677,899                                                   |
|                                                                                                                                                                                                                                                     |   |   |                                           |   |   |                                                      |
| Total                assets                                                                                                                                                                                                                              |   | $      | 778,798                                        |   | $      | 679,613                                                   |
|                                                                                                                                                                                                                                                     |   |   |                                           |   |   |                                                      |
| LIABILITIES                AND DEFICIENCY IN STOCKHOLDERS' EQUITY                                                                                                                                                                                        |   |   |                                           |   |   |                                                      |
| Current                liabilities:                                                                                                                                                                                                                      |   |   |                                           |   |   |                                                      |
| Accounts                payable and accrued expenses                                                                                                                                                                                                     |   | $      | 735,387                                        |   | $      | 551,617                                                   |
| Notes                payable, bridge loan (Note E)                                                                                                                                                                                                       |   |   | 92,000                                         |   |   | 350,000                                                   |
| Notes                payable-convertible (Note F)                                                                                                                                                                                                        |   |   | 876,536                                        |   |   | 125,994                                                   |
| Notes                payable-related parties (Note G)                                                                                                                                                                                                    |   |   | 39,000                                         |   |   | 39,000                                                    |
| Total                current liabilities                                                                                                                                                                                                                 |   |   | 1,742,923                                      |   |   | 1,066,611                                                 |
|                                                                                                                                                                                                                                                     |   |   |                                           |   |   |                                                      |
| Commitments                and contingencies (Note K)                                                                                                                                                                                                    |   |   |                                           |   |   |                                                      |
|                                                                                                                                                                                                                                                     |   |   |                                           |   |   |                                                      |
| DEFICIENCY                IN STOCKHOLDERS' EQUITY                                                                                                                                                                                                        |   |   |                                           |   |   |                                                      |
| Preferred                stock, $0.001 par value: 3,000,000 shares authorized, 0 issued and                outstanding                                                                                                                                   |   |   | -                                              |   |   | -                                                         |
| Common                stock, $0.001 par value: 100,000,000 shares authorized; 14,985,591                and                10,843,377 shares issued and outstanding as of June 30, 2006 and                December                31, 2005 respectively |   |   | 14,985                                         |   |   | 10,843                                                    |
| Additional                paid in capital                                                                                                                                                                                                                |   |   | 2,365,196                                      |   |   | 626,999                                                   |
| Deficit                accumulated during development stage                                                                                                                                                                                              |   |   | (3,344,306                                     | )      |   | (1,024,840                                                |
| Total                deficiency in stockholders' equity                                                                                                                                                                                                  |   |   | (964,125                                       | )      |   | (386,998                                                  |
| Total                liabilities and deficiency in stockholders' equity                                                                                                                                                                                  |   | $      | 778,798                                        |   | $      | 679,613                                                   |

----

| **FIIC                HOLDINGS, INC**                         |
|---------------------------------------------------------------|
| **(A                DEVELOPMENT STAGE COMPANY)**              |
| **CONDENSED                CONSOLIDATED STATEMENT OF LOSSES** |
| **(Unaudited)**                                               |

|                                                                          |   |    | For                the three months endedJune                30,  |   |    | For                the six monthsendedJune                30,  |   |   | For                the periodJanuary                25, 2005 (date of inception)through                                     June 30,   |   |   | For                the periodJanuary                25, 2005 (date of inception) through June 30,  |   |
|-------------------------------------------------------------------------------|--------|---------|------------------------------------------------------------------------|--------|---------|---------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------|--------|
|                                                                          |   |    | 2006                                                              |   |    | 2005                                                           |   |   | 2006                                                                                                                                                       |   |   | 2005                                                                                                    |   |   | 2006 |   |
|                                                                          |   |    |                                                                   |   |    | Restated                -See                Note L             |   |   |                                                                                                                                                            |   |   | Restated                -See                Note L                                                 |   |   |   |   |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Operating                expenses:                                       |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| General                and administrative                                     |   | $       | 348,147                                                                |   | $       | 184,882                                                             |   | $      | 1,097,834                                                                                                                                                       |   | $      | 220,609                                                                                                 |   | $ | 1,936,190 |   |
| Depreciation                                                                  |   |    | 937                                                                    |   |    | -                                                                   |   |   | 1,561                                                                                                                                                           |   |   | -                                                                                                       |   |   | 1,561 |   |
| Acquisition                costs (Note B)                                     |   |    | -                                                                      |   |    | -                                                                   |   |   | 301,199                                                                                                                                                         |   |   | -                                                                                                       |   |   | 301,199 |   |
| Total                operating expenses                                       |   | $       | 349,084                                                                |   | $       | 184,882                                                             |   | $      | 1,400,594                                                                                                                                                       |   | $      | 220,609                                                                                                 |   | $ | 2,238,950 |   |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Loss                from operations                                           |   | $  | (349,084                                                               | )      | $  | (184,882                                                            | )      | $      | (1,400,594                                                                                                                                                      | )      | $      | (220,609                                                                                                | )      | $  | (2,238,950 | ) |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Other                expenses:                                                |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Debt                issuance costs                                            |   |    | 208,095                                                                |   |    | -                                                                   |   |   | 633,924                                                                                                                                                         |   |   | -                                                                                                       |   |   | 775,783 |   |
| Interest                expense, net                                          |   |    | 114,844                                                                |   |    | -                                                                   |   |   | 284,949                                                                                                                                                         |   |   | 789                                                                                                     |   |   | 329,572 |   |
| Total                other expenses                                           |   |    | 322,939                                                                |   |    | -                                                                   |   |   | 918,873                                                                                                                                                         |   |   | 789                                                                                                     |   |   | 1,105,355 |   |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Net                (loss) before provision for income taxes                   |   |    | (672,023                                                               | )      |    | (184,882                                                            | )      |   | (2,319,467                                                                                                                                                      | )      |   | (221,398                                                                                                | )      |   | (3,344,305 | ) |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Provision                for income taxes                                     |   |    | -                                                                      |   |    | -                                                                   |   |   | -                                                                                                                                                               |   |   | -                                                                                                       |   |   | - |   |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| NET                LOSS                                                       |   | $       | (672,023                                                               | )      | $       | (184,882                                                            | )      | $      | (2,319,467                                                                                                                                                      | )      | $      | (221,398                                                                                                | )      | $ | (3,344,305 | ) |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Loss                per common share (basic and assuming dilution)            |   | $       | (0.05                                                                  | )      | $       | (0.02                                                               | )      | $      | (0.17                                                                                                                                                           | )      | $      | (0.02                                                                                                   | )      |   |   |   |
|                                                                          |   |    |                                                                   |   |    |                                                                |   |   |                                                                                                                                                            |   |   |                                                                                                    |   |   |   |   |
| Weighted                average common shares outstanding (basic and diluted) |   |    | 14,647,261                                                             |   |    | 9,792,000                                                           |   |   | 13,463,727                                                                                                                                                      |   |   | 9,196,906                                                                                               |   |   |   |   |

----

| **FIIC                HOLDINGS, INC**                                                                       |
|-------------------------------------------------------------------------------------------------------------|
| **A                DEVELOPMENT STAGE COMPANY)**                                                             |
| **CONDENSED                CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS'                EQUITY**    |
| **FOR                THE PERIOD JANUARY 25, 2005 (DATE OF INCEPTION) THROUGH JUNE 30,                2006** |
| **(Unaudited)**                                                                                             |

|                                                                                                                                                    |   |   | Common                Shares |   |   | Stock                  Amount |   |   | Additional                      Paid in Capital |   |   | Deficit                          Accumulated During Development                          Stage |   |   | Total                        Deficiency in Stockholders' Equity |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------|--------|--------|-------------------------------|--------|--------|-------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------|--------|
| Balance,                January 25, 2005 (Date of Inception)                                                                                            |   |   | -                            |   | $      | -                             |   | $      | -                                               |   | $      | -                                                                                              |   | $      | -                                                               |   |
| Common                stock issued to founder in February, 2005 at $0.001 per share (par                value)                                          |   |   | 1                            |   |   | -                             |   |   | 1,000                                           |   |   | -                                                                                              |   |   | 1,000                                                           |   |
| Common                stock issued in March, 2005 in exchange forlicensing agreement at                $0.001 per share (par value)                     |   |   | 9,792,000                    |   |   | 9,792                         |   |   | -                                               |   |   | -                                                                                              |   |   | 9,792                                                           |   |
| Common                stock issued in September, 2005 for services rendered at $0.50 per                share                                           |   |   | 400,000                      |   |   | 400                           |   |   | 199,600                                         |   |   | -                                                                                              |   |   | 200,000                                                         |   |
| Common                stock issued in November, 2005 for debt issuance costs at $0.50 per                share                                          |   |   | 651,376                      |   |   | 651                           |   |   | 325,037                                         |   |   | -                                                                                              |   |   | 325,688                                                         |   |
| Value                attributed to 460,000 5 year warrants at $0.87 per share issued in                October, 2005 as additional incentive to lender  |   |   | -                            |   |   | -                             |   |   | 91,084                                          |   |   | -                                                                                              |   |   | 91,084                                                          |   |
| Value                attributed to 23,077 5 year warrants at $0.87 per share issued in                December , 2005 as additional incentive to lender |   |   | -                            |   |   | -                             |   |   | 10,278                                          |   |   | -                                                                                              |   |   | 10,278                                                          |   |
| Net                loss-December 31, 2005                                                                                                               |   |   | -                            |   |   | -                             |   |   | -                                               |   |   | (1,024,840                                                                                     | )      |   | (1,024,840                                                      | )      |
| Balance,                December 31, 2005 (Restated - Note L)                                                                                           |   |   | 10,843,377                   |   | $      | 10,843                        |   | $      | 626,999                                         |   | $      | (1,024,840                                                                                     | )      | $      | (386,998                                                        | )      |
| Common                stock issued in January, 2006 for debt issuance costs at $0.50 per                share                                           |   |   | 200,000                      |   |   | 200                           |   |   | 99,800                                          |   |   | -                                                                                              |   |   | 100,000                                                         |   |
| Common                stock issued in February, 2006 at merger at $0.001 per share (par                value)                                           |   |   | 1,198,547                    |   |   | 1,199                         |   |   | -                                               |   |   | -                                                                                              |   |   | 1,199                                                           |   |
| Common                stock issued in February, 2006 for services rendered at $0.50 per                share                                            |   |   | 825,000                      |   |   | 825                           |   |   | 411,675                                         |   |   | -                                                                                              |   |   | 412,500                                                         |   |
| Common                stock issued in February, 2006 for debtissuance costs at $0.50 per                share                                           |   |   | 800,000                      |   |   | 800                           |   |   | 399,200                                         |   |   | -                                                                                              |   |   | 400,000                                                         |   |
| Beneficial                conversion feature of convertible debentures                                                                                  |   |   | -                            |   |   | -                             |   |   | 180,000                                         |   |   | -                                                                                              |   |   | 180,000                                                         |   |
| Value                attributed to 35,000 5 year warrants at $0.87 per share issued in                February, 2006 as debt issuance cost              |   |   | -                            |   |   | -                             |   |   | 15,589                                          |   |   | -                                                                                              |   |   | 15,589                                                          |   |
| Value                attributed to 890,995 5 year warrants at $1.04 per share issued in                February, 2006 as debt issuance cost             |   |   | -                            |   |   | -                             |   |   | 137,092                                         |   |   | -                                                                                              |   |   | 137,092                                                         |   |
| Common                stock issued to founder in April, 2006 at $0.001 per share (par                value)                                             |   |   | 127,000                      |   |   | 127                           |   |   | -                                               |   |   | -                                                                                              |   |   | 127                                                             |   |
| Common                issued in April, 2006 forservices rendered at $0.50 per                share                                                      |   |   | 125,000                      |   |   | 125                           |   |   | 62,375                                          |   |   | -                                                                                              |   |   | 62,500                                                          |   |
| Common                stock issued in May, 2006 for debtissuance costs at $0.50 per                share                                                |   |   | 866,667                      |   |   | 866                           |   |   | 432,466                                         |   |   | -                                                                                              |   |   | 433,332                                                         |   |
| Net                Loss                                                                                                                                 |   |   | -                            |   |   | -                             |   |   | -                                               |   |   | (2,319,466                                                                                     | )      |   | (2,319,466                                                      | )      |
| Balance-June                30, 2006 (Unaudited)                                                                                                        |   | $      | 14,985,591                   |   | $      | 14,985                        |   | $      | 2,365,196                                       |   | $      | (3,344,306                                                                                     | )      | $      | (964,125                                                        | )      |

----

| **FIIC                HOLDINGS, INC**                             |
|-------------------------------------------------------------------|
| **(A                DEVELOPMENT STAGE COMPANY)**                  |
| **CONDENSED                CONSOLIDATED STATEMENT OF CASH FLOWS** |
| **(Unaudited)**                                                   |

|                                                                                                    |   |   | For                the six                months ended June                30, 2006  |   |   | For                the period January 25, 2005 (date of                inception) Through June 30, 2005(Restated                - See                Note L)  |   |   | For                the period January 25, 2005 (date of inception) Through June 30,                2006(Restated-Note L)  |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Net                (loss)                                                                               |   | $      | (2,319,466                                                                                     | )      | $      | (221,398                                                                                                                                                           | )      | $      | (3,344,306                                                                                                                     | )      |
| Adjustments                to reconcile net (loss) to cash used in operating                activities: |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Depreciation                                                                                            |   |   | 1,561                                                                                          |   |   | -                                                                                                                                                                  |   |   | 1,561                                                                                                                          |   |
| Common                stock issued for services rendered                                                |   |   | 475,127                                                                                        |   |   | 1,000                                                                                                                                                              |   |   | 676,127                                                                                                                        |   |
| Acquisition                costs                                                                        |   |   | 301,199                                                                                        |   |   | -                                                                                                                                                                  |   |   | 301,199                                                                                                                        |   |
| Amortization                of debt discount for convertible debentures and warrants                    |   |   | 258,223                                                                                        |   |   | -                                                                                                                                                                  |   |   | 275,301                                                                                                                        |   |
| Amortization                of debt issuance costs                                                      |   |   | 598,324                                                                                        |   |   | -                                                                                                                                                                  |   |   | 740,183                                                                                                                        |   |
| (Increase)                decrease in:                                                                  |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Prepaid                expenses and deposits                                                            |   |   | 75,298                                                                                         |   |   | (12,500                                                                                                                                                            | )      |   | 62,798                                                                                                                         |   |
| Increase                (decrease) in:                                                                  |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Due                to related parties                                                                   |   |   | -                                                                                              |   |   | -                                                                                                                                                                  |   |   | 104,977                                                                                                                        |   |
| Accounts                payable and other accrued expenses                                              |   |   | 83,780                                                                                         |   |   | 232,995                                                                                                                                                            |   |   | 430,420                                                                                                                        |   |
| Net                cash used in operations                                                              |   |   | (525,954                                                                                       | )      |   | 97                                                                                                                                                                 |   |   | (751,740                                                                                                                       | )      |
|                                                                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Net                proceeds from (payments for) restricted cash                                         |   |   | 169,173                                                                                        |   |   | -                                                                                                                                                                  |   |   | (88,827                                                                                                                        | )      |
| Cash                paid for acquisition                                                                |   |   | (200,000                                                                                       | )      |   | -                                                                                                                                                                  |   |   | (200,000                                                                                                                       | )      |
| Acquisition                of fixed assets                                                              |   |   | (11,240                                                                                        | )      |   | -                                                                                                                                                                  |   |   | (11,240                                                                                                                        | )      |
| Net                cash used in investing activities                                                    |   |   | (42,067                                                                                        | )      |   | -                                                                                                                                                                  |   |   | (300,067                                                                                                                       | )      |
|                                                                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Proceeds                from notes payable-related parties                                              |   |   | -                                                                                              |   |   | -                                                                                                                                                                  |   |   | 39,000                                                                                                                         |   |
| Proceeds                from notes payable, net of repayments                                           |   |   | 567,000                                                                                        |   |   | -                                                                                                                                                                  |   |   | 1,013,500                                                                                                                      |   |
| Net                cash provided by financing activities                                                |   |   | 567,000                                                                                        |   |   | -                                                                                                                                                                  |   |   | 1,052,500                                                                                                                      |   |
|                                                                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Increase                (decrease) in cash and cash equivalents                                         |   |   | (1,021                                                                                         | )      |   | 97                                                                                                                                                                 |   |   | (61,934                                                                                                                        | )      |
| Cash                and cash equivalents beginning of the period                                        |   |   | 1,714                                                                                          |   |   | -                                                                                                                                                                  |   |   | -                                                                                                                              |   |
| Cash                and cash equivalents end of the period                                              |   | $      | 693                                                                                            |   | $      | 97                                                                                                                                                                 |   | $      | 693                                                                                                                            |   |
|                                                                                                    |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| SUPPLEMENTAL                DISCLOSURES OF CASH FLOW INFORMATION:                                       |   |   |                                                                                           |   |   |                                                                                                                                                               |
| Cash                paid during period for interest                                                     |   | $      | -                                                                                              |   | $      | -                                                                                                                                                                  |   | $      | -                                                                                                                              |   |
| Cash                paid during period for taxes                                                        |   | $      | -                                                                                              |   | $      | -                                                                                                                                                                  |   | $      | -                                                                                                                              |   |
| Non-cash                financing and investing activities:                                             |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Common                stock issued in exchange for services                                             |   | $      | 475,127                                                                                        |   | $      | 1,000                                                                                                                                                              |   | $      | 613,500                                                                                                                        |   |
| Shares                issued for license fees                                                           |   | $      | -                                                                                              |   | $      | -                                                                                                                                                                  |   | $      | 9,792                                                                                                                          |   |
| Shares                issued for debt issuance costs                                                    |   | $      | 933,333                                                                                        |   | $      | -                                                                                                                                                                  |   | $      | 1,259,021                                                                                                                      |   |
| Beneficial                conversion feature of convertible notes-warrants                              |   | $      | 137,092                                                                                        |   |   |                                                                                                                                                               |   | $      | 228,176                                                                                                                        |   |
| Beneficial                conversion feature of convertible notes                                       |   | $      | 180,000                                                                                        |   | $      | -                                                                                                                                                                  |   | $      | 180,000                                                                                                                        |   |
| Value                of warrants issued for debt issuance costs                                         |   | $      | 15,589                                                                                         |   |   |                                                                                                                                                               |   | $      | 15,589                                                                                                                         |   |
| Acquisitions:                                                                                           |   |   |                                                                                           |   |   |                                                                                                                                                               |   |   |                                                                                                                           |   |
| Common                stock retained                                                                    |   | $      | 1,199                                                                                          |   | $      | -                                                                                                                                                                  |   | $      | 1,199                                                                                                                          |   |
| Assets                acquired                                                                          |   |   | -                                                                                              |   |   | -                                                                                                                                                                  |   |   | -                                                                                                                              |   |
| Liabilities                assumed                                                                      |   |   | 86,448                                                                                         |   |   | -                                                                                                                                                                  |   |   | 86,448                                                                                                                         |   |
| Expenses                relating to acquisition                                                         |   |   | 13,552                                                                                         |   |   |                                                                                                                                                               |   |   | 13,552                                                                                                                         |   |
| Cash                paid                                                                                |   |   | 200,000                                                                                        |   |   | -                                                                                                                                                                  |   |   | 200,000                                                                                                                        |   |
| Total                acquisition paid/acquisition cost                                                  |   | $      | 301,199                                                                                        |   | $      | -                                                                                                                                                                  |   | $      | 301,199                                                                                                                        |   |

----

**FIIC      HOLDINGS, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE      30, 2006**

**(UNAUDITED)**

**NOTE      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

----

**FIIC      HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

| Leasehold                improvements  | 5                years |
|----------------------------------------|------------------------|
| Automobiles                            | 5                years |
| Furniture                and equipment | 5                years |
| Computer                Equipment      | 3                years |

----

**FIIC        HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

----

**FIIC      HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

|                                                                                                                                                         |   |   | From                January 25, 2005 (date of inception) to June                30, 2005(Restated - Note L) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------|--------|
| Net                loss attributable to common stockholders -as reported                                                                                     |   | $      | (221,398                                                                                                    | )      |
| Add.                Total stock based employee compensation expense as reported under                intrinsic value method (APB No. 25)                     |   |   | -                                                                                                           |   |
| Deduct                Total stock based employee compensation expense as reported under                fair                value based method (SFAS No. 123) |   |   | -                                                                                                           |   |
| Net                loss -Pro Forma                                                                                                                           |   | $      | (221,398                                                                                                    | )      |
| Net                loss attributable to common stockholders - Pro forma                                                                                      |   | $      | (221,398                                                                                                    | )      |
| Basic                (and assuming dilution) loss per share -as reported                                                                                     |   | $      | (0.02                                                                                                       | )      |
| Basic                (and assuming dilution) loss per share - Pro forma                                                                                      |   | $      | (0.02                                                                                                       | )      |

----

**FIIC        HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

**NOTE      B - MERGER AND CORPORATE RESTRUCTURE**

----

**FIIC        HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE        B - MERGER AND CORPORATE RESTRUCTURE        (Continued)**

| Common                stock retained                     |   | $      | 1,199   |
|----------------------------------------------------------|--------|--------|---------|
| Assets                acquired                           |   |   | — |
| Liabilities                assumed                       |   |   | 86,448  |
| Expenses                relating to acquisition          |   |   | 13,552  |
| Cash                paid                                 |   |   | 200,000 |
| Total                consideration paid/acquisition cost |   | $      | 301,199 |

**NOTE      C - PROPERTY AND EQUIPMENT**

|                                                           |   | June                30, 2006 |    | December                31, 2005(Restated - Note L) |
|----------------------------------------------------------------|--------|------------------------------|---------|-----------------------------------------------------|
| Computer                equipment and furniture                |   | $                            | 11,240  |                                                | $ | — |
| Less:                accumulated depreciation and amortization |   |                         | (1,561) |                                                |   | — |
|                                                           |   |                         |    |                                                |   |   |
| Net                property and equipment                      |   | $                            | 9,679   |                                                | $ | — |

**NOTE      D - LICENSE AGREEMENT **

----

**FIIC        HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      D - LICENSE AGREEMENT (continued)**

**NOTE      E - BRIDGE LOAN PAYABLE**

|                                                                                                                                                                                                                                                                                                                                        |   | June                30, 2006 |    | December                31, 2005(Restated - Note L) |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|-----------------------------------------------------|
| Senior                secured promissory note payable, exchangeable upon closing of merger                for a                senior secured convertible note                                                                                                                                                                              |   | $                            | — |                                                | $ | 350,000 |
| Senior                secured convertible note payable, exchanged from senior secured promissory                note after closing of merger in February 2006, the Company is currently                in                default for repayment of principal and accrued interest under the                terms of                the Note. |   |                         | 92,000  |                                                |   | — |
| Total                                                                                                                                                                                                                                                                                                                                       |   |                         | 92,000  |                                                |   | 350,000 |
| Less:                current portion                                                                                                                                                                                                                                                                                                        |   |                         | (92,000 | )                                                   |   | (350,000 |
| Long                term portion                                                                                                                                                                                                                                                                                                            |   | $                            | — |                                                | $ | — |

----

**FIIC        HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      F - CONVERTIBLE NOTES PAYABLE **

|                                                                                                                                                                                                                                                                                          |   |   | June                30,2006 |   |   |   | December                31, 2005(Restated - Note L) |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------|--------|--------|--------|-----------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                          |   |   |                        |   |   |   |                                                |   |
| Note                payable accruing interest at 10% per annum, payable on October 7,                2006;                conversion price of 0.50per                share; the Company issued 115,000 5 yr warrants at 0.87 per share                as                additional incentive  |   | $      | 50,000                      |   |   | $      | 50,000                                              |   |
| Debt                discount - value attributed to warrants attached to notes, net of                accumulated amortization of $17,078 and $5,693 at June 30, 2006 and                December 31, 2005 respectively                                                                        |   |   | (5,693                      | )      |   |   | (17,078                                             | )      |
| Note                payable-net                                                                                                                                                                                                                                                               |   |   | 44,307                      |   |   |   | 32,922                                              |   |
|                                                                                                                                                                                                                                                                                          |   |   |                             |   |   |   |                                                     |   |
| Note                payable accruing interest at 10% per annum, payable on October 7,                2006;                conversion price of 0.50 per                share; the Company issued 115,000 5 yr warrants at 0.87 per share                as                additional incentive |   |   | 50,000                      |   |   |   | 50,000                                              |   |
| Debt                discount - value attributed to warrants attached to notes, net of                accumulated amortization of $17,078 and $5,693 at June 30, 2006 and                December 31, 2005 respectively                                                                        |   |   | (5,693                      | )      |   |   | (17,078                                             | )      |
|                                                                                                                                                                                                                                                                                          |   |   |                             |   |   |   |                                                     |   |
| Note                payable-net                                                                                                                                                                                                                                                               |   |   | 44,307                      |   |   |   | 32,922                                              |   |
|  Note                payable accruing interest at 10% per annum, payable on October 31,                2006;                conversion price of 0.50 per share; the Company issued 115,000 5                yr                warrants at 0.87 per share as additional incentive         |   |   | 50,000                      |   |   |   | 50,000                                              |   |
|                                                                                                                                                                                                                                                                                          |   |   |                             |   |   |   |                                                     |   |
| Debt                discount - value attributed to warrants attached to notes, net of                accumulated amortization of $15,181 and $3,795 at June 30, 2006 and                December 31, 2005 respectively                                                                        |   |   | (7,590                      | )      |   |   | (18,976                                             | )      |
|                                                                                                                                                                                                                                                                                          |   |   |                             |   |   |   |                                                     |   |
| Note                payable-net                                                                                                                                                                                                                                                               |   |   | 42,410                      |   |   |   | 31,024                                              |   |
|                                                                                                                                                                                                                                                                                          |   |   |                             |   |   |   |                                                     |   |
| Note                payable accruing interest at 10% per annum, payable on December 6,                2006;                conversion price of 0.50per                share; the Company issued 115,000 5 yr warrants at 0.87 per share                as                additional incentive |   |   | 50,000                      |   |   |   | 50,000                                              |   |
|                                                                                                                                                                                                                                                                                          |   |   |                             |   |   |   |                                                     |   |
| Debt                discount - value attributed to warrants attached to notes, net of                accumulated amortization of $13,283 and $1,898 at June 30, 2006 and                December 31, 2005 respectively                                                                        |   |   | (9,488                      | )      |   |   | (20,873                                             | )      |
|                                                                                                                                                                                                                                                                                          |   |   |                             |   |   |   |                                                     |   |
| Note                payable-net                                                                                                                                                                                                                                                               |   |   | 40,512                      |   |   |   | 29,127                                              |   |

----

**FIIC        HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      F - CONVERTIBLE NOTES PAYABLE (continued)**

|                                                                                                                                                                                                                                                                     |   |   | June                30, 2006  |   |   | December                31, 2005(Restated - Note L) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------|--------|--------|-----------------------------------------------------|--------|
| Note                payable accruing interest at 8% per annum, payable on January 17,                2007;                conversion price of 0.65 per share; as an additional incentive the                Company                issued 800,000 shares of common stock |   |   | 300,000                            |   |   | —                                             |   |
|                                                                                                                                                                                                                                                                     |   |   |                                    |   |   |                                                     |   |
| Note                payable accruing interest at 8% per annum, payable on February 24,                2007;                conversion price of 0.25 per share; as additional incentive the Company                issued 100,000 shares of common stock                  |   |   | 100,000                            |   |   | —                                             |   |
|                                                                                                                                                                                                                                                                     |   |   |                                    |   |   |                                                     |   |
| Debt                discount - beneficial conversion feature, net of accumulated amortization                of $30,000 at June 30, 2006                                                                                                                                 |   |   | (60,000                            | )      |   | —                                             |   |
|                                                                                                                                                                                                                                                                     |   |   |                                    |   |   |                                                     |   |
| Note                payable-net                                                                                                                                                                                                                                          |   |   | 40,000                             |   |   | —                                             |   |
|                                                                                                                                                                                                                                                                     |   |   |                               |   |   |                                                |   |
| Note                payable accruing interest at 8% per annum, payable on February 24,                2007;                conversion price of 0.25 per share; as additional incentive the Company                issued 100,000 shares of common stock                  |   |   | 100,000                            |   |   | —                                             |   |
|                                                                                                                                                                                                                                                                     |   |   |                                    |   |   |                                                     |   |
| Debt                discount - beneficial conversion feature, net of accumulated amortization                of $30,000 at June 30, 2006                                                                                                                                 |   |   | (60,000                            | )      |   | —                                             |   |
|                                                                                                                                                                                                                                                                     |   |   |                                    |   |   |                                                     |   |
| Note                payable-net                                                                                                                                                                                                                                          |   |   | 40,000                             |   |   | —                                             |   |
|                                                                                                                                                                                                                                                                     |   |   |                                    |   |   |                                                     |   |
| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share                                                                                                                                 |   |   | 25,000                             |   |   | ___                                                 |   |
|                                                                                                                                                                                                                                                                     |   |   |                               |   |   |                                                |   |
| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share                                                                                                                                 |   |   | 25,000                             |   |   | ___                                                 |   |
|                                                                                                                                                                                                                                                                     |   |   |                               |   |   |                                                |   |
| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share                                                                                                                                 |   |   | 15,000                             |   |   | ___                                                 |   |
|                                                                                                                                                                                                                                                                     |   |   |                               |   |   |                                                |   |
| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share                                                                                                                                 |   |   | 50,000                             |   |   | ___                                                 |   |
|                                                                                                                                                                                                                                                                     |   |   |                               |   |   |                                                |   |
| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share                                                                                                                                 |   |   | 50,000                             |   |   | ___                                                 |   |
|                                                                                                                                                                                                                                                                     |   |   |                               |   |   |                                                |   |
| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share                                                                                                                                 |   |   | 25,000                             |   |   | ___                                                 |   |
|                                                                                                                                                                                                                                                                     |   |   |                               |   |   |                                                |   |

| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share |   |   | 50,000 |   |   | ___    |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                     |   |   |   |   |   |   |   |
| Note                payable accruing interest at 8% per annum, payable April 25, 2007;                conversion price of 0.50 per share |   |   | 70,000 |   |   | ___    |   |
|                                                                                                                                     |   |   |   |   |   |   |   |
| Note                payable accruing interest at 8% per annum, payable May 2, 2007; conversion                price of 0.50 per share    |   |   | 15,000 |   |   | ___    |   |

----

**FIIC      HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      F - CONVERTIBLE NOTES PAYABLE (continued)**

|                                 |   | June                30, 2006 |   |   | December                31, 2005(Restated - Note L) |
|--------------------------------------|--------|------------------------------|--------|--------|-----------------------------------------------------|
|                                 |   |                         |   |   |                                                |
| Total                                |   | 876,536                      |   |   | 125,994                                             |
|                                 |   |                         |   |   |                                                |
| Less:                current portion |   | (876,536                     | )      |   | (125,994)                                           |
|                                 |   |                         |   |   |                                                |
| Long                term portion     | $      | —                      |   | $      | —                                             |

**NOTE      G - NOTES PAYABLE -RELATED PARTIES**

|                                                                                                                                                                                                                                                                                                                                       |   |   | June                30, 2006  |   |   | December                31, 2005(Restated - Note L) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------|--------|--------|-----------------------------------------------------|--------|
| Note                payable to a shareholder, principal and interest note of $6,000 payable                on                December 31, 2005, extended to March 31, 2006; the Company is currently                in                default for repayment of this note, management is negotiating an                additional extension |   | $      | 12,000                             |   | $      | 12,000                                              |   |
|                                                                                                                                                                                                                                                                                                                                       |   |   |                                    |   |   |                                                     |   |
| Note                payable to a shareholder, principal and interest of $7,500, payable                on                December 31, 2005, extended to December 31, 2006: management is                negotiating an additional extension                                                                                                |   |   | 15,000                             |   |   | 15,000                                              |   |
|                                                                                                                                                                                                                                                                                                                                       |   |   |                                    |   |   |                                                     |   |
| Note                payable to a shareholder, principal and interest of $5,000, payable                on                December 31, 2005, extended to March 31, 2006; the Company is currently                in                default for repayment of this note, management is negotiating an                additional extension     |   |   | 10,000                             |   |   | 10,000                                              |   |
|                                                                                                                                                                                                                                                                                                                                       |   |   |                                    |   |   |                                                     |   |
| Note                payable to a shareholder, principal and interest of $1,000, payable                on                December 31, 2005, extended to June 30, 2006                                                                                                                                                                      |   |   | 2,000                              |   |   | 2,000                                               |   |
|                                                                                                                                                                                                                                                                                                                                       |   |   |                                    |   |   |                                                     |   |
| Total                                                                                                                                                                                                                                                                                                                                      |   |   | 39,000                             |   |   | 39,000                                              |   |
|                                                                                                                                                                                                                                                                                                                                       |   |   |                                    |   |   |                                                     |   |
| Less:                current portion                                                                                                                                                                                                                                                                                                       |   |   | (39,000                            | )      |   | (39,000                                             | )      |
|                                                                                                                                                                                                                                                                                                                                       |   |   |                                    |   |   |                                                     |   |
| Long                term portion                                                                                                                                                                                                                                                                                                           |   | $      | —                            |   | $      | —                                             |   |

----

**FIIC      HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      H - CAPITAL STOCK**

----

**FIIC        HOLDINGS, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE        30, 2006**

**(UNAUDITED)**

**NOTE      I - OPTIONS AND WARRANTS**

|                                                                                                        |   |                    Warrants                Outstanding(as                of 6/30/06) |   |                                                               |   |                                           |   |                  Warrants                Exercisable(as                of 6/30/06) |   |                                           |
|-------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|------------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------|------------------------------------------------|
| Exercise                Prices                                                                              |   | Number                Outstanding                                                                   |   | Weighted                Average Remaining Contractual Life (Years) |   | Weighted                Average Exercise Price |   | Number                Exercisable                                                       |   | Weighted                Average Exercise Price |
| $                 0.87 |   | 1,808,307                                                                                           |   | 3.75                                                               |   | $0.87                                          |   | 1,808,307                                                                               |   | 3.75                                           |
| 0.87                                                                                                        |   | 518,077                                                                                             |   | 4.25                                                               |   | 0.87                                           |   | 518,077                                                                                 |   | 4.25                                           |
| 1.04                                                                                                        |   | 890,995                                                                                             |   | 4.25                                                               |   | 1.04                                           |   | 890,995                                                                                 |   | 4.25                                           |
|                                                                                                        |   | 3,217,379                                                                                           |   | 3.96                                                               |   |                                           |   | 3,217,379                                                                               |   | 3.96                                           |

|                                                               |   |   | Number                of Warrants   |   |   | Weighted                Average Price Per Share   |   |
|--------------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------------------------|--------|
| Outstanding                at January 25, 2005 (date of inception) |   |   | —                                       |   | $      | —                                                     |   |
| Granted                                                            |   |   | 2,291,384                                     |   |   | 0.87                                                        |   |
| Exercised                                                          |   |   | —                                       |   |   | —                                                     |   |
| Canceled                or expired                                 |   |   | —                                       |   |   | —                                                     |   |
| Outstanding                at December 31, 2005                    |   |   | 2,291,384                                     |   | $      | 0.87                                                        |   |
| Granted                                                            |   |   | 925,995                                       |   |   | 1.03                                                        |   |
| Exercised                                                          |   |   | —                                       |   |   | —                                                     |   |
| Canceled                or expired                                 |   |   | —                                       |   |   | —                                                     |   |
| Outstanding                at June 30, 2006                        |   |   | 3,217,379                                     |   | $      | 0.92                                                        |   |

----

**FIIC          HOLDINGS, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE          30, 2006**

**(UNAUDITED)**

**NOTE      J - RELATED PARTY TRANSACTIONS**

**NOTE      K - COMMITMENTS AND CONTINGENCIES**

----

**FIIC          HOLDINGS, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

**JUNE          30, 2006**

**(UNAUDITED)**

**NOTE      L - RESTATEMENT OF FINANCIAL STATEMENTS**

----

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

*This      10−QSB contains forward-looking statements. Our actual results could differ      materially from those set forth as a result of general economic conditions      and      changes in the assumptions used in making such forward-looking statements.      The      following discussion and analysis of our financial condition and results of      operations should be read together with the audited consolidated financial      statements and accompanying notes and the other financial information appearing      else where in this report. The analysis set forth below is provided pursuant      to      applicable Securities and Exchange Commission regulations and is not intended      to      serve as a basis for projections of future events. Refer also to "Cautionary      Note Regarding Forward Looking Statements" and “Updates to Risk Factors”below.*

The      following discussion of our financial condition and results of operations as      of      June 30, 2006 should be read in conjunction with our financial statements and      the related notes as provided under Item 1. With respect to the discussion      within this Item 2, the terms “FIIC,” “we,” “us,” and “our” refer to FIIC, Inc.      and FIIC Holdings, Inc.

**Cautionary      Note About Forward-Looking Statements**

| ·   | the                possible effect of inflation, changes in interest rates and other                economic                changes on our costs, including the possible effect of future changes                in                operating costs and capital                expenditures; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | competitive                developments, including announcements by competitors of new products                or                services or significant contracts, acquisitions, strategic partnerships,                joint ventures or capital                commitments; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | this                being a start−up situation, the timing of cash requirements, our ability                to fund our proposed working capital requirements and the expected                projected profitability; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                ability to protect our intellectual property, including maintaining                our                exclusive license to use the FIIC Underwriting Data and                Standards; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                ability to obtain all necessary government certifications and/or                licenses                to conduct our insurance business, and the cost of complying with                current                and future governmental                regulations; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | market                acceptance of our products and                services; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | the                accuracy of our underwriting model; |
|--------------------|--------------------------------------------------------|

| ·   | variations                in quarterly operating results; |
|--------------------|-----------------------------------------------------------|

| ·   | the                depth and liquidity of the market for our common                stock; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | the                timing and size of any future offerings of our securities;                and |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | general                economic and other national                conditions. |
|--------------------|-------------------------------------------------------------------------------|

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**Overview**

**Plan      of Operation**

**Start−Up      Plan**

***Licensing      of FIIC Database Content and Technology***

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***Merger      with a Public Company***

***Bridge      Financing and Private Placement***

*Bridge      Financing*

*Private      Placement*

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***Establishment      and Licensing of Insurance Entities***

**Capital      Resources and Liquidity**

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**Use      of Available Funds**

***Debt      Repayment***

***Entity      Financing***

***Operating      Expenses***

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***Launch      of Revenue−Producing Insurance Operations***

| ·   | market                acceptance and the growth rate of demand, if any, for FIIC's Investor                Protection policies; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                lead time required to execute and generate a revenue stream from                customer                contracts; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in the size of the required working capital reserve or other regulatory                requirements; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | availability                of opportunities for strategic acquisition of other companies with                technology, resources, customers or know−how that will further the growth                of the FIIC's insurance business;                and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                accuracy of FIIC's projections regarding its operating costs, including                the costs of regulatory compliance, personnel, legal and accounting                costs                and the cost of funds. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Product      Research and Development**

**Acquisition      of Plant and Equipment and Other Assets**

**Off-Balance      Sheet Arrangements**

**Inflation      **

**Employees**

**Recent      Accounting Pronouncements **

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**Updates      to Risk Factors**

*Any      investment in our common stock involves a high degree of risk. Investors should      carefully consider the risks described below and all of the information      contained in the Company’s Annual Report on Form 10-KSB, as filed April 12,      2006, before engaging in transactions in the Company’s common stock. The      Company’s business, financial condition or results of operations could be      materially adversely affected by these risks if any of them actually occur.      The      trading price of the Company’s common stock could decline due to any of these      risks, and an investor may lose all or part of his investment.*

*Some      of these factors have affected the Company’s financial condition and operating      results in the past or are currently affecting the Company. This Quarterly      Report on Form 10-QSB also contains forward-looking statements that involve      risks and uncertainties. The Company’s actual results could differ materially      from those anticipated in these forward-looking statements as a result of      certain factors, including the risks faced by the Company described below and      in      the Annual Report on Form 10-KSB. With respect to this discussion, the terms      “FIIC,” “the Company,” “we,” and “our” refer to FIIC Holdings, Inc. and its      wholly-owned subsidiary FIIC, Inc.*

***Risks      Related to Our Operations***

**FIIC      has no operating history, expects to initially incur losses and cannot assure      you that it will achieve profitability. **

**Any      change in our relationship with the exclusive licensor of the FIIC Database      Content and Technology, which we will use to sell and underwrite its policies,      could prevent us from accurately assessing potential insureds’ risk profiles      when issuing policies and from writing policies in a timely manner, thereby      reducing our future revenues or increasing our costs.**

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| ·   | reliance                on FIIC LLC to maintain the FIIC Database Content and Technology                and                provide adequate support services if and when we encounter a problem; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | reliance                on FIIC LLC to ensure the security of the FIIC Database Content and                Technology Data and Standards from our competitors; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                possibility that FIIC LLC may not be able to obtain adequate information                from its third-party sources in a timely manner or on commercially                reasonable terms; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | that                we may have difficulty locating an alternative set of applicable                underwriting data and standards and similar user interface, if available                at all, should FIIC LLC breach the terms of the license agreement                or                become unable to fulfill its                obligations. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Risks      Relating to Regulatory Requirements***

**Our      planned insurance entities all require certain licensing and/or certifications      from certain government agencies, without which they will be unable to operate      and unable to generate revenues.**

**We      may be subject to increased regulation regarding the use of personal information      received from investors.**

**If      we fail to maintain effective internal controls over financial reporting, we      may      be subject to litigation and/or costly remediation and the price of our common      stock may be adversely affected. **

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***Risks      Related to FIIC’s Capital Structure***

**Our      capital needs are uncertain and we will likely need to raise additional funds,      which may not be available on favorable terms, if at all, thereby potentially      disrupting the initial growth of our insurance business and our ability to      generate revenue. **

| ·   | market                acceptance and the growth rate of demand, if any, for our Investor                Protection policies; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                lead time required to execute and generate a revenue stream from                customer                contracts; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in the size of the required working capital reserve or other regulatory                requirements; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | availability                of opportunities for strategic acquisition of other companies with                technology, resources, customers or know-how that will further the                growth                of our insurance business; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                accuracy of our projections regarding our operating costs, including                the                costs of regulatory compliance, personnel, legal and accounting costs                and                the cost of funds. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**If      we are unable to meet our obligations      resulting from the Bridge Financing, certain relationships key to the potential      success of our business could be disrupted.**

** **

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

**Evaluation      of Disclosure Controls and Procedures**

**Changes      in Internal Control Over Financial Reporting**

There      were no changes in the Registrant’s internal control over financial reporting      that occurred during the most recent fiscal quarter that have materially      affected, or are reasonably likely to materially affect, its internal control      over financial reporting for that period.

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**PART      II — OTHER INFORMATION**

**Item      1. **
**Legal      Proceedings.**

**Item      2. **
**Unregistered      Sales of Equity Securities and Use of Proceeds.**

**Item      3.**  **Defaults      Upon Senior Securities**

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

**Item      5. **
**Other      Information.**

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

| **Exhibit** |   | **Item**                                                                                                                                                                                   |
|-------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        |   | Certification                of Chief Executive Officer pursuant to Section 302(a) of the                Sarbanes-Oxley Act of 2002                                                        |
| 31.2        |   | Certification                of Chief Financial Officer pursuant to Section 302(a) of the                Sarbanes-Oxley Act of 2002                                                        |
| 32.1        |   | Certification                of Chief Executive Officer and Chief Financial Officer pursuant to                Section                906 of the Sarbanes-Oxley Act of                2002 |

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**SIGNATURES**

|                                               |                               |                                                                                                                                            |
|----------------------------------------------------|------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                                               | FIIC                HOLDINGS, INC. |
|                                          |                          |                                                                                                                                       |
| Date: August                8, 2006           | By:                      | /s/ James                W.                France                                   |
|                                               |                               | James                W. France President                and Chief Executive Officer (Principal                Executive Officer)                |
|                                               |                               |                                                                                                                                            |
|                                               |                               |                                                                                                                                            |
| Date:                August                8, 2006 | By:                                |  /s/                Wade L.                Estep                |
|                                               |                               | Wade                L. Estep Chief                Financial Officer (Principal                Accounting Officer)                               |
|                                               |                               |
|                                               |                               |

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**EXHIBIT      INDEX**

| **Exhibit** |   | **Item**                                                                                                                                                                                   |
|-------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        |   | Certification                of Chief Executive Officer pursuant to Section 302(a) of the                Sarbanes-Oxley Act of 2002                                                        |
| 31.2        |   | Certification                of Chief Financial Officer pursuant to Section 302(a) of the                Sarbanes-Oxley Act of 2002                                                        |
| 32.1        |   | Certification                of Chief Executive Officer and Chief Financial Officer pursuant to                Section                906 of the Sarbanes-Oxley Act of                2002 |

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