**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**








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


For
      the
      quarterly period ended September
      30, 2006




o TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For
      the
      transition period from _____________________ to ______________





Commission
      file number 000-33339





FIIC
      HOLDINGS, INC.





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





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





1585
      Bethel Road, First Floor, Columbus, Ohio 43220





(Address
      of principal executive offices)





(614)
      326-5469


(Issuer’s
      telephone number)





N/A


(Former
      name, former address and former fiscal year, if changed since last
      report)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.


Yes x Noo





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


Yes x   No o





As
      of
      November 6, 2006, there were 15,198,924 shares issued and outstanding of
      the registrant’s common stock.





Transitional
      Small Business Disclosure Format:


Yes o  No x





**INDEX**




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








**PART
      I — FINANCIAL INFORMATION**





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


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





December
                31,September
                30,
            
            20052006
            
            (Restated-(Unaudited)
            
            Note
                L)ASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            566
            
            $
            1,714Prepaid
                expenses and deposits
            
            
            59,801
            
            
            -Restricted
                cash
            
            
            60
            
            
            -Total
                current assets
            
            
            60,427
            
            
            1,714Property,
                plant and equipment, net of accumulated depreciation of
                $2,498
            
            
            8,743
            
            
            -Other
                assets:Restricted
                cash
            
            
            -
            
            
            258,000Prepaid
                expenses
            
            
            -
            
            
            12,500License
                agreement (Note D)
            
            
            -
            
            
            109,792Loan
                fees, net of accumulated amortization of $602,221 and $141,859 at
                September 30, 2006 and December 31, 2005 respectively
            
            
            402,057
            
            
            297,607Total
                other assets
            
            
            402,057
            
            
            677,899Total
                assets
            
            $
            471,227
            
            $
            679,613LIABILITIES
                AND DEFICIENCY IN STOCKHOLDERS’ EQUITYCurrent
                liabilities:Accounts
                payable and accrued expenses
            
            $
            906,141
            
            $
            551,617Notes
                payable, bridge loan (Note E)
            
            
            92,000
            
            
            350,000Notes
                payable-convertible (Note F)
            
            
            964,307
            
            
            125,994Notes
                payable-related parties (Note G)
            
            
            39,000
            
            
            39,000Total
                current liabilities
            
            
            2,001,448
            
            
            1,066,611Commitments
                and contingencies (Note K)DEFICIENCY
                IN STOCKHOLDERS’ EQUITYPreferred
                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; 15,038,924
                and
                10,843,377 shares issued and outstanding as of September 30, 2006
                and
                December 31, 2005 respectively
            
            
            15,039
            
            
            10,843Additional
                paid in capital
            
            
            2,391,810
            
            
            626,999Deficit
                accumulated during development stage
            
            
            (3,937,070
            )
            
            (1,024,840
            )Total
                deficiency in stockholders’ equity
            
            
            (1,530,221
            )
            
            (386,998
            )Total
                liabilities and deficiency in stockholders’ equity
            
            $
            471,227
            
            $
            679,613See
                the accompanying footnotes to the unaudited condensed consolidated
                financial information


F-1


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




For
                  the period
              
              For
                  the periodFor
                  the nine months
              
              January
                  25, 2005 (date
              
              January
                  25, 2005 (dateFor
                  the three months ended September 30,
              
              ended
                  September 30,
              
              of
                  inception) through
              
              of
                  inception) through2006
              
              2005
              
              2006
              
              September
                  30, 2005
              
              September
                  30, 2006Restated-See
                  Note L
              
              
              
              Restated-See
                  Note L
              
              Restated-See
                  Note LOperating
                  expenses:General
                  and administrative
              
              $
              229,208
              
              $
              305,657
              
              $
              1,327,042
              
              $
              526,266
              
              $
              2,165,399Depreciation
              
              
              937
              
              
              -
              
              
              2,498
              
              
              -
              
              
              2,498Total
                  operating expenses
              
              
              230,144
              
              
              305,657
              
              
              1,329,540
              
              
              526,266
              
              
              2,167,897Other
                  expenses:Interest
                  expense, net
              
              
              126,558
              
              
              7,115
              
              
              411,507
              
              
              7,904
              
              
              456,130Debt
                  issuance costs
              
              
              236,061
              
              
              -
              
              
              869,985
              
              
              -
              
              
              1,011,844Acquisition
                  costs (Note B)
              
              
              -
              
              
              -
              
              
              301,199
              
              
              -
              
              
              301,199Total
                  other expenses
              
              
              362,619
              
              
              7,115
              
              
              1,582,690
              
              
              7,904
              
              
              1,769,173Net
                  (loss) before provision for income taxes
              
              
              (592,763
              )
              
              (312,772
              )
              
              (2,912,230
              )
              
              (534,170
              )
              
              (3,937,070
              )Provision
                  for income taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -NET
                  LOSS
              
              $
              (592,763
              )
              $
              (312,772
              )
              $
              (2,912,230
              )
              $
              (534,170
              )
              $
              (3,937,070
              )Loss
                  per common share (basic and assuming dilution)
              
              $
              (0.04
              )
              $
              (0.03
              )
              $
              (0.21
              )
              $
              (0.06
              )Weighted
                  average common shares outstanding (basic and diluted)
              
              
              14,995,446
              
              
              9,861,566
              
              
              13,979,911
              
              
              8,617,545See
                  the accompanying footnotes to the unaudited condensed consolidated
                  financial information
  F-2
 
 **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 SEPTEMBER
                  30,
                  2006****(Unaudited)**
 
 DeficitAccumulated
              
              TotalAdditional
              
              During
              
              Deficiency
                  inCommon
              
              Stock
              
              Paid
                  in
              
              Development
              
              Stockholders’Shares
              
              Amount
              
              Capital
              
              Stage
              
              EquityBalance,
                  January 25, 2005 (Date of Inception)
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Common
                  stock issued to founder in February, 2005 at $0.001 per share (par
                  value)
              
              
              1
              
              
              -
              
              
              1,000
              
              
              -
              
              
              1,000Common
                  stock issued in March, 2005 in exchange for licensing agreement
                  at $0.001
                  per share (par value)
              
              
              9,792,000
              
              
              9,792
              
              
              -
              
              
              -
              
              
              9,792Common
                  stock issued in September, 2005 for services rendered at $0.50
                  per
                  share
              
              
              400,000
              
              
              400
              
              
              199,600
              
              
              -
              
              
              200,000Common
                  stock issued in November, 2005 for debt issuance costs at $0.50
                  per
                  share
              
              
              651,376
              
              
              651
              
              
              325,037
              
              
              -
              
              
              325,688Value
                  attributed to 460,000 5 year warrants at $0.87 per share issued
                  in
                  October, 2005 as additional incentive to lender
              
              
              -
              
              
              -
              
              
              91,084
              
              
              -
              
              
              91,084Value
                  attributed to 23,077 5 year warrants at $0.87 per share issued
                  in December
                  , 2005 as additional incentive to lender
              
              
              -
              
              
              -
              
              
              10,278
              
              
              -
              
              
              10,278Net
                  loss-December 31, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,024,840
              )
              
              (1,024,840
              )Balance,
                  January 1, 2006:
              
              
              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
              
              
              -
              
              
              100,000Common
                  stock issued in February, 2006 at merger at $0.001 per share (par
                  value)
              
              
              1,198,547
              
              
              1,199
              
              
              -
              
              
              -
              
              
              1,199Common
                  stock issued in February, 2006 for services rendered at $0.50 per
                  share
              
              
              825,000
              
              
              825
              
              
              411,675
              
              
              -
              
              
              412,500Common
                  stock issued in February, 2006 for debt issuance costs at $0.50
                  per
                  share
              
              
              800,000
              
              
              800
              
              
              399,200
              
              
              -
              
              
              400,000Beneficial
                  conversion feature of convertible debentures
              
              
              -
              
              
              -
              
              
              180,000
              
              
              -
              
              
              180,000Value
                  attributed to 35,000 5 year warrants at $0.87 per share issued
                  in
                  February, 2006 as debt issuance cost
              
              
              -
              
              
              -
              
              
              15,589
              
              
              -
              
              
              15,589Value
                  attributed to 890,995 5 year warrants at $1.04 per share issued
                  in
                  February, 2006 as debt issuance cost
              
              
              -
              
              
              -
              
              
              137,092
              
              
              -
              
              
              137,092Common
                  stock issued to founder in April, 2006 at $0.001 per share (par
                  value)
              
              
              127,000
              
              
              127
              
              
              -
              
              
              -
              
              
              127Common
                  issued in April, 2006 for services rendered at $0.50 per
                  share
              
              
              125,000
              
              
              125
              
              
              62,375
              
              
              -
              
              
              62,500Common
                  stock issued in May, 2006 for debt issuance costs at $0.50 per
                  share
              
              
              866,667
              
              
              866
              
              
              432,467
              
              
              -
              
              
              433,333Common
                  stock issued in September, 2006 for debt issuance costs at $0.50
                  per
                  share
              
              
              53,333
              
              
              54
              
              
              26,613
              
              
              -
              
              
              26,667Net
                  Loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,912,230
              )
              
              (2,912,230
              )Balance-September
                  30, 2006 (Unaudited)
              
              
              15,038,924
              
              $
              15,039
              
              $
              2,391,810
              
              $
              (3,937,070
              )
              $
              (1,530,221
              )See
                  the accompanying footnotes to the unaudited condensed consolidated
                  financial information
  F-3
 
 **FIIC
                  HOLDINGS, INC****(A
                  DEVELOPMENT STAGE COMPANY)****CONDENSED
                  CONSOLIDATED STATEMENT OF CASH FLOWS****(Unaudited)**
 
 For
                  the period
              
              For
                  the periodJanuary
                  25, 2005
              
              January
                  25, 2005Nine
                  months ended
              
              (date
                  of inception)
              
              (date
                  of inception)September
                  30,
              
              Through
                  September 30,
              
              Through
                  September 30,2006
              
              2005
              
              2006
                  (Restated-Note L)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  (loss)
              
              $
              (2,912,230
              )
              $
              (534,170
              )
              $
              (3,937,070
              )Adjustments
                  to reconcile net (loss) to cash used in operating
                  activities:Depreciation
              
              
              2,498
              
              
              -
              
              
              2,498Common
                  stock issued for services rendered
              
              
              475,127
              
              
              201,000
              
              
              676,127Organization costs
              
              
              101,199
              
              
              -
              
              
              101,199Amortization
                  of debt discount for convertible debentures and warrants
              
              
              310,404
              
              
              -
              
              
              327,482Amortization
                  of debt issuance costs
              
              
              871,139
              
              
              -
              
              
              1,012,998(Increase)
                  decrease in:Prepaid
                  expenses and deposits
              
              
              62,491
              
              
              (12,500
              )
              
              49,991Increase
                  (decrease) in:Due
                  to related parties
              
              
              -
              
              
              -
              
              
              104,977Accounts
                  payable and other accrued expenses
              
              
              254,525
              
              
              307,046
              
              
              601,165Net
                  cash used in operations
              
              
              (834,847
              )
              
              (38,624
              )
              
              (1,060,634
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Release
                  of previously restricted cash
              
              
              257,940
              
              
              -
              
              
              (60
              )Acquisition
                  of fixed assets
              
              
              (11,240
              )
              
              -
              
              
              (11,240
              )Net
                  cash provided (used in) investing activities
              
              
              246,700
              
              
              -
              
              
              (11,300
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from notes payable-related parties
              
              
              -
              
              
              39,000
              
              
              39,000Proceeds
                  from notes payable, net of repayments
              
              
              587,000
              
              
              -
              
              
              1,033,500Net
                  cash provided by in financing activities
              
              
              587,000
              
              
              39,000
              
              
              1,072,500Increase
                  (decrease) in cash and cash equivalents
              
              
              (1,148
              )
              
              376
              
              
              566Cash
                  and cash equivalents beginning of the period
              
              
              1,714
              
              
              -
              
              
              -Cash
                  and cash equivalents end of the period
              
              $
              566
              
              $
              376
              
              $
              566SUPPLEMENTAL
                  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
              
              $
              201,000
              
              $
              676,127Shares
                  issued for debt issuance costs
              
              $
              960,000
              
              $
              -
              
              $
              1,285,688Beneficial
                  conversion feature of convertible notes-warrants
              
              $
              137,092
              
              
              
              
              $
              228,176Beneficial
                  conversion feature of convertible notes
              
              $
              180,000
              
              $
              -
              
              $
              180,000Value
                  of warrants issued for debt issuance costs
              
              $
              15,589
              
              
              
              
              $
              15,589Acquisitions:Common
                  stock retained
              
              $
              1,199
              
              $
              -
              
              $
              1,199Assets
                  acquired
              
              
              -
              
              
              -
              
              
              -Liabilities
                  assumed
              
              
              86,448
              
              
              -
              
              
              86,448Expenses
                  relating to acquisition
              
              
              13,552
              
              
              
              
              
              13,552Cash
                  paid
              
              
              200,000
              
              
              -
              
              
              200,000Total
                  acquisition paid/acquisition cost
              
              $
              301,199
              
              $
              -
              
              $
              301,199See
                  the accompanying footnotes to the unaudited condensed consolidated
                  financial information
 
 F-4
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 General
 
 The
        accompanying unaudited condensed consolidated financial statements have been
        prepared in accordance with accounting principles generally accepted in the
        United States of America for interim financial information and with the
        instructions to Form 10-QSB. Accordingly, they do not include all of the
        information and footnotes required by generally accepted accounting principles
        for complete financial statements.
  In
        the
        opinion of management, all adjustments (consisting of normal recurring accruals)
        considered necessary for a fair presentation have been included. The results
        from operations for the three and nine month period ended September 30, 2006
        and
        2005 are not necessarily indicative of the results that may be expected for
        the
        year ended December 31, 2006, or for any other period. These unaudited condensed
        consolidated financial statements, and notes thereto, should be read in
        conjunction with the audited financial statements for the year ended December
        31, 2005, as restated, and the notes thereto, included in the Company’s Current
        Report on Form 8-K/A, as filed with the Securities and Exchange Commission
        on
        June 6, 2006.
 
 Business
        and Basis of Presentation
 
 FIIC
        Holdings, Inc. (the “Company”), a development stage company, was incorporated
        under the laws of the State of Delaware on January 26, 2006. Currently, the
        Company has limited operations and is a development stage company as defined
        by
        Statement of Financial Accounting Standards No. 7 ("SFAS 7"). The Company
        is
        devoting substantially all of its efforts to establishing a new business.
        The
        Company plans to introduce an insurance product to entrepreneurial business
        enterprises designed to insure third party investors. The success of the
        business will depend on its ability to raise sufficient capital to bring
        the
        business plan to fruition.
 
 On
        February 28, 2006, the Company’s predecessor FIIC, Inc. (“FIIC”) consummated a
        business combination with Nicklebys.com, Inc. (“NBYS”) pursuant to an Agreement
        and Plan of Merger ("Merger Agreement") (the “Merger”). In accordance with SFAS
        No. 141, FIIC, Inc. was the acquiring entity. While the transaction is accounted
        for using the purchase method of accounting, in substance the Merger Agreement
        provided for a recapitalization of the FIIC's capital structure. As a result
        of
        the Merger, there was a change in control of NBYS. Also, subsequently, NBYS's
        name was changed from Nicklebys.com, Inc. to FIIC Holdings, Inc. From January
        1999 until the consummation of the Merger, NBYS was an inactive publicly
        registered shell corporation with no significant assets or operations (see
        Note
        B).
 
 The
        unaudited condensed consolidated financial statements include the accounts
        of
        the Company and its wholly owned subsidiary, FIIC, Inc., a Delaware corporation,
        incorporated on January 25, 2005 and Federated Group Agency, Inc., a Delaware
        corporation, incorporated on December 22, 2005. All significant inter-company
        transactions and balances have been eliminated in consolidation.
 
 To
        date
        the Company has incurred expenses, and has sustained losses. Consequently,
        its
        operations are subject to all risks inherent in the establishment of a new
        business enterprise. For the period from inception through September 30,
        2006,
        the Company has accumulated losses of $3,937,070. Also, at September 30,
        2006,
        its current liabilities exceeded current assets by $1,941,021.
  F-5
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Revenue
        Recognition
 
 The
        Company recognizes revenue in accordance with Staff Accounting Bulletin No.
        104,
        REVENUE RECOGNITION ("SAB 104"), which superseded Staff Accounting Bulletin
        No.
        101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS ("SAB 101"). SAB 101 requires
        that four basic criteria must be met before revenue can be recognized: (1)
        persuasive evidence of an arrangement exists; (2) delivery has occurred;
        (3) the
        selling price is fixed and determinable; and (4) the ability to collect is
        reasonably assured. Determination of criteria (3) and (4) are based on
        management’s judgments regarding the fixed nature of the selling prices of the
        products delivered and the ability to collect those amounts. Provisions for
        discounts and rebates to customers, estimated returns and allowances, and
        other
        adjustments are provided for in the same period the related sales are recorded.
        The Company defers any revenue for which the product has not been delivered
        or
        is subject to refund until such time that the Company and the customer jointly
        determine that the product has been delivered or no refund will be
        required.
  SAB
        104
        incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
        MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting
        for
        arrangements that may involve the delivery or performance of multiple products,
        services and/or rights to use assets.
 
 Advertising
 
 The
        Company follows the policy of charging the costs of advertising to expenses
        as
        incurred. The Company incurred no advertising costs during the nine month
        period
        ended September 30, 2006 and 2005, respectively.
  Property
        and Equipments
 
 Property
        and equipment are recorded at cost. Minor additions and renewals are expensed
        in
        the year incurred. Major additions and renewals are capitalized and depreciated
        over their estimated useful lives. Depreciation is calculated using the
        straight-line method over the estimated useful lives. Estimated useful lives
        of
        major depreciable assets are as follows:
 
 Leasehold
                  improvements
              5
                  yearsAutomobiles
              5
                  yearsFurniture
                  and equipment
              5
                  yearsComputer
                  Equipment
              3
                  years
 
 Concentrations
        of Credit Risk
 
 Financial
        instruments and related items, which potentially subject the Company to
        concentrations of credit risk, consist primarily of cash, cash equivalents
        and
        related party receivables. The Company places its cash and temporary cash
        investments with credit quality institutions. At times, such investments
        may be
        in excess of the FDIC insurance limit.
 
  F-6
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Stock
        Based Compensation
  Prior
        to
        the January 1, 2006 adoption of the Financial Accounting Standards Board
        (“FASB”) Statement No. 123(R), “Share-Based Payment” (“SFAS 123R”), the
        Company accounted for stock-based compensation using the intrinsic value
        method
        prescribed in Accounting Principles Board (“APB”) Opinion No. 25,
“Accounting for Stock Issued to Employees,” and related interpretations.
        Accordingly, because the stock option grant price equaled the market price
        on
        the date of grant, and any purchase discounts under the Company’s stock purchase
        plans were within statutory limits, no compensation expense was recognized
        by
        the Company for stock-based compensation. As permitted by SFAS No. 123,
“Accounting for Stock-Based Compensation” (“SFAS 123”), stock-based compensation
        was included as a pro forma disclosure in the notes to the consolidated
        financial statements. The Company did not issue any stock options from January
        25, 2005 (date of inception) through September 30, 2006.
 
 Effective
        January 1, 2006, the beginning of the Company’s first fiscal quarter of 2006,
        the Company adopted the fair value recognition provisions of SFAS 123R, using
        the modified-prospective transition method. Under this transition method,
        stock-based compensation expense was recognized in the consolidated financial
        statements for granted, modified, or settled stock options. Compensation
        expense
        recognized included the estimated expense for stock options granted on and
        subsequent to January 1, 2006, based on the grant date fair value estimated
        in
        accordance with the provisions of SFAS 123R, and the estimated expense for
        the
        portion vesting in the period for options granted prior to, but not vested
        as of
        January 1, 2006, based on the grant date fair value estimated in accordance
        with
        the original provisions of SFAS 123. Results for prior periods have not been
        restated, as provided for under the modified-prospective method.
 
 Total
        stock-based compensation expense recognized in the consolidated statement
        of
        earnings for the nine month period ending September 30, 2006 was $0, net
        of tax
        effect.
  SFAS
        123(R) requires forfeitures to be estimated at the time of grant and revised,
        if
        necessary, in subsequent periods if actual forfeitures differ from those
        estimates. In the Company’s pro forma information required under SFAS 123 for
        the periods prior to fiscal 2006, the Company accounted for forfeitures as
        they
        occurred.
  Upon
        adoption of SFAS 123(R), the Company is using the Black-Scholes option-pricing
        model as its method of valuation for share-based awards granted beginning
        in
        fiscal 2006, which was also previously used for the Company’s pro forma
        information required under SFAS 123. The Company’s determination of fair value
        of share-based payment awards on the date of grant using an option-pricing
        model
        is affected by the Company’s stock price as well as assumptions regarding a
        number of highly complex and subjective variables. These variables include,
        but
        are not limited to the Company’s expected stock price volatility over the term
        of the awards, and certain other market variables such as the risk free interest
        rate.
 
 The
        following table shows the effect on net earnings and earnings per share had
        compensation cost been recognized based upon the estimated fair value on
        the
        grant date of stock options for the period from inception through
        September 30, 2005, in accordance with SFAS 123, as amended by SFAS No. 148
“Accounting for Stock-Based Compensation - Transition and
        Disclosure:
  F-7
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Stock
        Based Compensation (continued)
 
 From
                  January 25, 2005 (date of inception) toSeptember
                  30, 2005Net
                  loss attributable to common stockholders -as reported
              
              $
              (534,170
              )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
              
              $
              (534,170
              )Net
                  loss attributable to common stockholders - Pro forma
              
              $
              (534,170
              )Basic
                  (and assuming dilution) loss per share -as reported
              
              $
              (0.06
              )Basic
                  (and assuming dilution) loss per share - Pro forma
              
              $
              (0.06
              )
  Disclosure
        for the three and nine month periods ended September 30, 2006 is not
        presented because the amounts are recognized in the consolidated financial
        statements.
  New
        Accounting Pronouncements
 
 In
        March
        2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
        Conditional Asset Retirement Obligations, an interpretation of FASB Statement
        No. 143", which requires an entity to recognize a liability for the fair
        value
        of a conditional asset retirement obligation when incurred if the liability's
        fair value can be reasonably estimated. The Company is required to adopt
        the
        provisions of FIN 47 no later than its last quarter of fiscal 2006. The Company
        does not expect the adoption of this Interpretation to have a material impact
        on
        its consolidated financial position, results of operations or cash flows.
 
 In
        May
        2005 the FASB issued Statement of Financial Accounting Standards (SFAS) No.
        154,
        "Accounting Changes and Error Corrections, a replacement of APB Opinion No.
        20
        and FASB Statement No. 3." SFAS 154 requires retrospective application to
        prior
        periods' unaudited financial statements for changes in accounting principle,
        unless it is impracticable to determine either the period-specific effects
        or
        the cumulative effect of the change. SFAS 154 also requires that retrospective
        application of a change in accounting principle be limited to the direct
        effects
        of the change. Indirect effects of a change in accounting principle, such
        as a
        change in non-discretionary profit-sharing payments resulting from an accounting
        change, should be recognized in the period of the accounting change. SFAS
        154
        also requires that a change in depreciation, amortization, or depletion method
        for long-lived, non-financial assets be accounted for as a change in accounting
        estimate affected by a change in accounting principle. SFAS 154 is effective
        for
        accounting changes and corrections of errors made in fiscal years beginning
        after December 15, 2005. Early adoption is permitted for accounting changes
        and
        corrections of errors made in fiscal years beginning after the date this
        Statement is issued. The Company does not expect the adoption of this SFAS
        to
        have a material impact on its consolidated financial position, results of
        operations or cash flows.
 
 On
        February 16, 2006 the FASB issued SFAS 155, “Accounting for Certain Hybrid
        Instruments,” which amends SFAS 133, “Accounting for Derivative Instruments and
        Hedging Activities,” and SFAS 140, “Accounting for Transfers and Servicing of
        Financial Assets and Extinguishments of Liabilities.” SFAS 155 allows financial
        instruments that have embedded derivatives to be accounted for as a whole
        (eliminating the need to bifurcate the derivative from its host) if the holder
        elects to account for the whole instrument on a fair value basis. SFAS 155
        also
        clarifies and amends certain other provisions of SFAS 133 and SFAS 140. This
        statement is effective for all financial instruments acquired or issued in
        fiscal years beginning after September 15, 2006. The Company does not
        expect its adoption of this new standard to have a material impact on its
        financial position, results of operations or cash flows.
 
  F-8
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 New
        Accounting Pronouncements (continued)
 
 In
        March
        2006, the FASB issued FASB Statement No. 156, “Accounting for Servicing of
        Financial Assets” - an amendment to FASB Statement No. 140. Statement 156
        requires that an entity recognize a servicing asset or servicing liability
        each
        time it undertakes an obligation to service a financial asset by entering
        into a
        service contract under certain situations. The new standard is effective
        for
        fiscal years beginning after September 15, 2006. The Company does not
        expect its adoption of this new standard to have a material impact on its
        financial position, results of operations or cash flows.
  In
        September 2006, the FASB issued SFAS 157, *Fair
        Value Measurements*, which defines fair value, establishes a framework for
        measuring fair value in generally accepted accounting principles (“GAAP”), and
        expands disclosures about fair value measurements. The Company will be required
        to adopt SFAS 157 effective for the fiscal year beginning January 1, 2008.
        The
        requirements of SFAS 157 will be applied prospectively except for certain
        derivative instruments that would be adjusted through the opening balance
        of
        retained earnings in the period of adoption. The Company is currently evaluating
        the impact of the adoption of SFAS 157 on the Company's consolidated financial
        statements and the management believes that the adoption of SFAS 157 will
        not
        have a significant impact on its consolidated results of operations or financial
        condition.
  In
          September 2006, the FASB issued SFAS 158. SFAS 158 amends previous standards.
          It
          requires employers to fully recognize the obligations associated with defined
          benefit pension, retiree healthcare and other postretirement (OPEB) plans
          in
          their balance sheets. Previous standards required an employer to disclose
          the
          complete funded status of its plan only in the notes to the financial statements
          and provided that an employer delay recognition of certain changes in plan
          assets and obligations that affected the costs of providing benefits resulting
          in an asset or liability that often differed from the plan's funded status.
          SFAS
          158 requires a defined benefit pension or postretirement plan sponsor (a)
          recognize in its statement of financial position an asset for a plan's
          overfunded status or a liability for the plan's underfunded status, (b)
          measure
          the plan's assets and its obligations that determine its funded status
          as of the
          end of the employer's fiscal year (with limited exceptions), and (c) recognize,
          as a component of other comprehensive income, the changes in the funded
          status
          of the plan that arise during the year but are not recognized as a component
          of
          net periodic benefit cost pursuant to SFAS 87, “Employers' Accounting for
          Pensions,” or SFAS 106, “Employer's Accounting for Postretirement Benefits Other
          Than Pensions.” It also requires an employer to disclose additional information
          on how delayed recognition of certain changes in the funded status of a
          defined
          benefit postretirement plan affects net periodic benefit costs for the
          next
          fiscal year.
 
 The
          effect of SFAS 158 is to adjust AOCI at the end of each year, for both
          underfunded and overfunded pension and OPEB plans, to an amount equal to
          the
          remaining unrecognized SFAS 87 and SFAS 106 deferrals for unamortized actuarial
          losses or gains, prior service costs, or transition obligations, such that
          remaining deferred costs result in an AOCI equity reduction and deferred
          gains
          result in an AOCI equity addition.
 
 The
          year-end AOCI measure is volatile based on fluctuating investment returns
          and
          discount rates. Favorable changes include higher returns that increase
          plan
          assets and higher discount rates that reduce the discounted benefit
          obligation.
 
 SFAS
          158
          is effective for initial recognition of a defined benefit postretirement
          plan
          and related disclosure for fiscal years ending after December 15, 2006. The
          Company does not expect the adoption of this SFAS to have a material impact
          on
          its consolidated financial position, results of operations or cash flows.
 
 Reclassifications
 
 Certain
        reclassifications have been made in prior year’s financial statements to conform
        to classifications used in the current year.
  **NOTE
        B - MERGER AND CORPORATE RESTRUCTURE**
  On
        July
        19, 2005, FIIC, Inc., a Delaware corporation (“FIIC”), entered in to an
        Agreement and Plan of Merger (the “Agreement”) with Nicklebys.com, Inc., a
        publicly held Colorado corporation (“NBYS”), Nicklebys Acquisition Corp., a
        privately held Nevada corporation and wholly owned subsidiary of the
        Nicklebys.com, Inc. (the “Merger Sub”) and certain principal shareholders of
        NBYS.
 
 The
        Merger closed February 28, 2006 through the Merger Sub, which merged with
        and
        into FIIC, with FIIC being the surviving corporation. NBYS issued shares
        of its
        common stock on a one-for-one basis to the stockholders of FIIC in exchange
        for
        100% of the issued and outstanding shares of common stock of FIIC. Additionally,
        NBYS assumed options and warrants to purchase shares of its common stock
        on the
        same terms and conditions as previously issued by FIIC. Pursuant to the
        Agreement, the NBYS assumed FIIC's 2005 Stock Option, Deferred Stock and
        Restricted Stock Plan as the stock option plan of NBYS.
  As
        a
        result of the Merger, there was a change in control of the public entity.
        In
        accordance with SFAS No. 141, FIIC was the acquiring entity. While the
        transaction is accounted for using the purchase method of accounting, in
        substance the Merger is a recapitalization of FIIC's capital structure. For
        accounting purposes, the Company accounted for the transaction as a reverse
        acquisition and FIIC is the surviving entity. The total purchase price and
        carrying value of net assets acquired was $301,199. The Company did not
        recognize goodwill or any intangible assets in connection with the transaction.
        From January 1999 until the date of the consummation of the Merger, NBYS
        was an
        inactive corporation with no significant assets and liabilities. In connection
        with the change in control, the Board of Directors and management of FIIC
        became
        the Board of Directors and management of NBYS.
 
 In
        connection with the Merger, NBYS also cancelled 500,000 shares of its common
        stock held by certain stockholders in exchange for aggregate cash remuneration
        of $200,000. Immediately following the closing of the Merger, NBYS distributed
        any remaining NBYS assets to one of its directors and principal
        shareholders.
  Immediately
        prior to the Merger, NBYS effectuated a 1-for-2.00317 reverse stock split
        of its
        common stock. Additionally, immediately following the Merger, NBYS
        reincorporated from the State of Nevada to the State of Delaware and changed
        its
        corporate name from Nicklebys.com, Inc. to FIIC Holdings, Inc. FIIC Holdings,
        Inc. is the continuing public reporting company.
 
 In
        connection with the merger, FIIC used the purchase method of accounting.
        Total
        cash consideration was $301,199, of which $200,000 was paid to NBYS
        shareholders, plus $86,448 was paid to NBYS to satisfy NBYS pre-merger
        liabilities. In addition, on June 16, 2006 the Company paid another $13,552
        for
        additional post-closing costs associated with the Merger.
 
  F-9
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        B - MERGER AND CORPORATE RESTRUCTURE (Continued)**
 
 The
        Merger resulted in the assumption of FIIC’s operations and liabilities and as a
        result the accompanying financial statements reflect the operations of the
        Company’s wholly-owned subsidiary FIIC, Inc. since its inception as of January
        25, 2005.
 
 Effective
        with the consummation of the Merger, all previously outstanding shares held
        by
        FIIC's shareholders were exchanged for an aggregate of 11,643,377 shares
        of the
        NBYS’s common stock. The value of the stock that was issued was the historical
        cost of the Company's net tangible assets, which did not differ materially
        from
        their fair value.
 
 The
        total
        consideration paid was $301,199 and the significant components of the
        transaction are as follows:
 
 Common
                  stock retained
              
              $
              1,199Assets
                  acquired
              
              
              —Liabilities
                  assumed
              
              
              86,448Expenses
                  relating to acquisition
              
              
              13,552Cash
                  paid
              
              
              200,000Total
                  consideration paid/acquisition cost
              
              $
              301,199
  In
        accordance with SOP 98-5, the Company expensed $301,199 as acquisition
        costs.
  **NOTE
        C - PROPERTY AND EQUIPMENT**
 
 Major
        classes of property and equipment at September 30, 2006 and December 31,
        2005
        consist of the followings:
 
 September
                  30, 2006
              
              December
                  31, 2005
                Restated-See
                  Note LComputer
                  equipment and furniture
              
              $
              11,241
              
              $
              —Less:
                  accumulated depreciation and amortization
              
              
              (2,498
              )
              
              —Net
                  property and equipment
              
              $
              8,743
              
              $
              —
 
 Depreciation
        and amortization expense was $2,498 and $0 for the nine months ended September
        30, 2006 and 2005, respectively.
   F-10
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        D - LICENSE AGREEMENT**
  The
        Company has a license agreement to use software developed by FIIC Research
&
Development, LLC (“Licensor”), a related party. Pursuant to the terms of the
        license agreement, the Licensor will also host and support the software
        application and allow the Company to sublicense to third parties. The software
        will be used by the Company in its operations and sale of product and will
        be
        amortized commencing upon the Company’s being licensed to launch its insurance
        business.
 
 As
        consideration for the license agreement in March 2005, FIIC, Inc. issued
        to the
        Licensor 9,792,000 shares of its common stock (total par value $9,792) and
        issued warrants to purchase an additional 1,808,307 shares of its common
        stock
        at an exercise price of $.87 per share. Such warrants will expire five years
        after the date of issuance. The shares and warrants issued in relation to
        the
        license agreement were subsequently distributed by the Licensor to its members,
        and exchanged for shares of NBYS in the Merger. As further consideration
        for the
        license agreement, the Company also agreed to pay $100,000 in cash to the
        Licensor. Additionally, pursuant to the license agreement, the Company shall
        pay
        the Licensor 3% of net premiums for Hosting and Support services on a quarterly
        basis.
 
 In
        April
        2006, the Company issued 127,000 shares to a current director and shareholder
        valued at $0.001 per share, to correct a mathematical error in the calculation
        of shares owed to this individual as a member of FIIC Research &
Development, LLC pursuant to the license agreement between that limited
        liability company and the Company executed in March 2005. The total licensing
        fee of $109,919 was expensed as of September 30, 2006; $39,095 of the
        balance remains payable as of September 30, 2006.
 
 **NOTE
        E - BRIDGE LOAN PAYABLE**
  A
        summary
        of bridge loan notes payable at September 30, 2006 and December 31, 2005
        is as
        follows:
  September
                  30, 2006
              
              December
                  31, 2005
                Restated-See
                  Note LSenior
                  secured promissory note payable, exchangeable upon closing of merger
                  for a
                  senior secured convertible note
              
              $
              —
              
              $
              350,000Senior
                  secured convertible note payable, exchanged from senior secured
                  promissory
                  note after closing of merger in February 2006
              
              
              92,000
              
              
              —Total
              
              
              92,000
              
              
              350,000Less:
                  current portion
              
              
              (92,000
              )
              
              (350,000
              )Long
                  term portion
              
              $
              —
              
              $
              —
  On
        November 29, 2005, FIIC, Inc. engaged in a bridge financing transaction in
        which
        it issued a $350,000 senior secured promissory note, exchangeable upon the
        closing of the Merger for a senior secured convertible promissory note,
        convertible into the Company’s common stock at any time at a rate of $1.00 per
        share, including accrued and unpaid interest. On February 28, 2006,
        concurrent with the closing of the Merger, the Company entered into a securities
        purchase agreement, pursuant to which the Company issued a $350,000 Senior
        Secured Convertible Promissory Note bearing annual interest at 12% and a
        warrant
        to purchase 890,995 shares of the Registrant's common stock, in exchange
        for the
        senior secured note previously issued. In accordance with APB #14, the fair
        value attributed to the warrants was recorded to debt discount and additional
        paid-in capital. The respective portion was amortized with the repayment
        of
        $258,000 on February 28, 2006. Total debt discount was $137,092 with accumulated
        amortization of $137,092 at September 30, 2006.
 
  F-11
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        E - BRIDGE LOAN PAYABLE (continued)**
 
 At
        the
        time of the original bridge financing closing, $92,000 in fees was released
        for
        payment and the net proceeds of $258,000 were held in escrow until the closing
        of the merger. On February 28, 2006, immediately subsequent to execution
        of the
        securities purchase agreement and the issuance of the senior secured convertible
        promissory note in exchange for the prior note, the parties executed an
        amendment to the Securities Purchase Agreement, extending the term of the
        senior
        secured convertible note, providing for partial repayment of that note and
        releasing certain pledge agreements entered into in support of that note.
        As a
        result $258,000 was released from escrow and repaid to the lender, and the
        Company became obligated to pay an additional $3,500 legal fee to lender’s
        counsel and accrued interest to date on the loan. Under the terms of the
        amendment to the Securities Purchase Agreement executed in conjunction with
        the
        senior secured convertible promissory note, the remaining $92,000 and accrued
        interest was due May 29, 2006. On September 1, 2006, the parties executed a
        second amendment to the Securities Purchase Agreement and convertible note,
        further extending the maturity date of the note to September 30, 2006. This
        note is currently in default due to lack of payment of the amounts owed upon
        amendment and upon maturity; however, management is negotiating with lender
        for
        an additional extension. The balance outstanding was $92,000 and $350,000
        at
        September 30, 2006 and December 31, 2005 respectively.
 
 The
        value
        of warrants granted during the period ended March 31, 2006 was determined
        using
        the Black-Scholes option pricing model and the following assumptions: warrant
        remaining life of 5 years, a risk free interest rate of 4.50%, a dividend
        yield
        of 0% and volatility of 150%.
 
 **NOTE
        F - CONVERTIBLE NOTES PAYABLE**
  A
        summary
        of convertible promissory notes payable at September 30, 2006 and December
        31,
        2005 is as follows:
 September
                    30, 2006
                
                December
                    31, 2005Note
                    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
                
                $
                50,000Debt
                    discount - value attributed to warrants attached to notes, net
                    of
                    accumulated amortization of $22,771 and $5,693 at September 30,
                    2006 and
                    December 31, 2005 respectively
                
                
                (-0-
                )
                
                (17,078
                )Note
                    payable-net
                
                
                50,000
                
                
                32,922Note
                    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
                
                
                50,000Debt
                    discount - value attributed to warrants attached to notes, net
                    of
                    accumulated amortization of $22,771 and $5,693 at September 30,
                    2006 and
                    December 31, 2005 respectively
                
                
                (-0-
                )
                
                (17,078
                )Note
                    payable-net
                
                
                50,000
                
                
                32,922Note
                    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
                
                
                50,000Debt
                    discount - value attributed to warrants attached to notes, net
                    of
                    accumulated amortization of $20,873 and $3,795 at September 30,
                    2006 and
                    December 31, 2005 respectively
                
                
                (1,898
                )
                
                (18,976
                )Note
                    payable-net
                
                
                48,102
                
                
                31,024
  F-12
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        F - CONVERTIBLE NOTES PAYABLE (continued)**
 
 Note
                  payable accruing interest at 10% per annum, payable on December
                  6, 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
              
              
              50,000Debt
                  discount - value attributed to warrants attached to notes, net
                  of
                  accumulated amortization of $18,976 and $1,898 at September 30,
                  2006 and
                  December 31, 2005 respectively
              
              
              (3,795
              )
              
              (20,873
              )Note
                  payable-net
              
              
              46,205
              
              
              29,127Note
                  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 $52,500 at September 30, 2006
              
              
              (37,500
              )
              
              —
 Note
                  payable-net
              
              
              62,500
              
              
              —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 $52,500 at September 30, 2006
              
              
              (37,500
              )
              
              —Note
                  payable-net
              
              
              62,500
              
              
              —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
              
              
              25,000Note
                  payable accruing interest at 8% per annum, payable April 25, 2007;
                  conversion price of $0.50 per share
              
              
              50,000
              
              
              ___
 
  F-13
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        F - CONVERTIBLE NOTES PAYABLE (continued)**
 
 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
              
              
              ___Note
                  payable, accruing interest at 8% per annum, payable September 15,
                  2007;
                  conversion price of $0.50 per share
              
              
              20,000Total
              
              
              964,307
              
              
              125,994Less:
                  current portion
              
              
              (964,307
              )
              
              (125,994
              )Long
                  term portion
              
              $
              —
              
              $
              —
 
 In
        February 2006, the Company issued convertible notes to the investors in exchange
        for $180,000, exclusive of placement costs and fees. The convertible notes
        accrue interest at 8% per annum and are due and payable one year from the
        date
        of the note, i.e. February 2007. Note holders have the option to convert
        any
        unpaid note principal, together with accrued and unpaid interest, to the
        Company’s common stock at a rate of $0.25 per share.
  In
        late
        April and early May 2006, the Company issued convertible notes to the investors
        in exchange for $325,000, exclusive of placement costs and fees. The convertible
        notes accrue interest at 8% per annum and are due and payable one year from
        the
        date of the note, i.e. April 2007 and May 2007, respectively. Note holders
        have
        the option to convert any unpaid note principal, together with accrued and
        unpaid interest, to the Company’s common stock at a rate of $0.50 per share.
  In
        September 2006, the Company issued a convertible note to an investor in exchange
        for $20,000, exclusive of placement costs and fees. The convertible note
        accrues
        interest at 8% per annum and is due and payable one year from the date of
        the
        note, i.e. September 2007. The note holder has the option to convert any
        unpaid
        note principal, together with accrued and unpaid interest, to the Company’s
        common stock at a rate of $0.50 per share.
 
 In
        accordance with EITF 98-5, the Company recognized an imbedded beneficial
        conversion feature present in the convertible notes. For each note issuance,
        the
        Company allocated a portion of the proceeds equal to the intrinsic value
        of that
        feature to additional paid-in capital. The Company recognized and measured
        aggregate proceeds equal to the principal value of the notes, which is equal
        to
        the intrinsic value of the imbedded beneficial conversion feature, to additional
        paid in capital and a discount against the convertible notes payable. The
        debt
        discount attributed to the beneficial conversion feature is amortized over
        the
        convertible notes payable maturity period one year as interest
        expense.
 
  F-14
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        G - NOTES PAYABLE -RELATED PARTIES**
  A
        summary
        of promissory notes payable to related parties at September 30, 2006 and
        December 31, 2005 is as follows:
  September
                  30, 2006
              
              December
                  31, 2005
                Restated-See
                  Note LNote
                  payable to a shareholder, principal and interest note of $6,000
                  payable on
                  December 31, 2005, extended to March 31, 2006; management is negotiating
                  an additional extension
              
              $
              12,000
              
              $
              12,000Note
                  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
              
              
              15,000Note
                  payable to a shareholder, principal and interest of $5,000, payable
                  on
                  December 31, 2005, extended to March 31, 2006; management is negotiating
                  an additional extension
              
              
              10,000
              
              
              10,000Note
                  payable to a shareholder, principal and interest of $1,000, payable
                  on
                  December 31, 2005, extended to June 30, 2006
              
              
              2,000
              
              
              2,000Total
              
              
              39,000
              
              
              39,000Less:
                  current portion
              
              
              (39,000
              )
              
              (39,000
              )Long
                  term portion
              
              $
              —
              
              $
              —
  **NOTE
        H - CAPITAL STOCK**
  The
        Company is authorized to issue 3,000,000 shares of preferred stock with par
        value $.001 per share, 100,000,000 shares of common stock with par value
        of
        $.001 per share.
  The
        Company had 15,038,924 and 10,843,377 shares of common stock issued and
        outstanding at September 30, 2006 and December 31, 2005, respectively. As
        of September 30, 2006 and December 31, 2005 the Company had no preferred
        stock issued and outstanding.
 
 In
        March
        2005, the Company issued 9,792,001 shares to the founders in exchange for
        services relating to formation of the Company. The Company charged $9,792
        to
        expenses in relation to the issuance.
 
 In
        November 2005, the Company issued 400,000 shares to various consultants in
        exchange for services valued at $0.50 per share. The shares issued were valued
        at approximately $0.50 per share. The compensation cost of $200,000 was charged
        to operations relating to this issuance.
 
 In
        November 2005, the Company issued 651,376 shares towards debt issuance costs.
        The shares were valued at $325,688 or $0.50 per share.
 
 In
        January 2006, the Company issued 800,000 shares towards debt issuance costs.
        The
        shares were valued at $400,000 or $0.50 per share.
 
  F-15
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  In
        February 2006, the Company issued 200,000 shares towards debt issuance costs.
        The shares were valued at $100,000 or $0.50 per share.
 
 In
        February 2006, the Company issued 825,000 shares to various consultants in
        exchange for services valued at $412,500. The shares issued were valued at
        approximately $0.50 per share. The compensation cost of $412,500 was charged
        to
        operations relating to this issuance.
 
 In
        February 2006, pursuant to the Merger Agreement, all previously outstanding
        shares owned by the FIIC's stockholders were exchanged for an aggregate of
        11,643,377 shares of the Company’s common stock. The value of the stock that was
        issued was the historical cost of the Company's net tangible assets, which
        did
        not differ materially from their fair value. The former NBYS shareholders
        retained 1,198,547 shares in the Company.
 
 The
        Company valued the shares issued for consulting services at the rate which
        represents the fair value of the services received which did not differ
        materially from the value of the stock issued.
  In
        April
        2006, the Company issued 127,000 shares to a current director and shareholder
        valued at $0.001 per share, to correct a mathematical error in the calculation
        of shares owed to this individual as a member of FIIC Research & Development
        LLC pursuant to the license agreement between that limited liability company
        and
        the Company executed in March 2005.
 
 In
        April
        2006, the Company issued 125,000 shares a consultant in exchange for services
        valued at $62,500 and a cash payment of $125. The shares issued were valued
        at
        approximately $0.50 per share. Consulting services of $62,500 was charged
        to
        operations relating to this issue.
 
 In
        May
        2006, the Company issued 866,667 shares towards debt issuance costs. The
        shares
        were valued at $433,334 or $0.50 per share.
 
 In
        September 2006, the Company issued 53,333 shares towards debt issuance costs.
        These shares were valued at $26,667 or $0.50 per share.
 
 **NOTE
        I - OPTIONS AND WARRANTS**
  Warrants
 
 The
        following table summarizes the changes in warrants outstanding and the related
        prices for the shares of the Company’s common stock. These warrants were granted
        in lieu of cash consideration for contractual rights, compensation for services
        performed by consultants or in connection with debt or equity financing;
        each
        warrant provide the right to purchase one share of the Company’s common stock.
  Warrants
                  Outstanding
                (as
                  of 9/30/06)
              
              
              
              
              
              Warrants
                  Exercisable
                (as
                  of 9/30/06)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
              
              
              3.50
              
              $
              0.87
              
              
              1,808,307
              
              $
              0.870.87
              
              
              518,077
              
              
              4.00
              
              $
              0.87
              
              
              518,077
              
              $
              0.871.04
              
              
              890,995
              
              
              4.00
              
              $
              1.04
              
              
              890,995
              
              $
              1.043,217,379
              
              
              3.71
              
              
              
              
              
              3,217,379
  F-16
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        I - OPTIONS AND WARRANTS (continued)**
 
 Transactions
        involving warrants are summarized as follows:
 
 Number
                  of Warrants
              
              Weighted
                  Average Price Per ShareOutstanding
                  at January 25, 2005 (date of inception)
              
              
              —
              
              $
              —Granted
              
              
              2,291,384
              
              
              0.87Exercised
              
              
              —
              
              
              —Canceled
                  or expired
              
              
              —
              
              
              —Outstanding
                  at December 31, 2005
              
              
              2,291,384
              
              $
              0.87Granted
              
              
              925,995
              
              $
              1.03Exercised
              
              
              —
              
              
              —Canceled
                  or expired
              
              
              —
              
              
              —Outstanding
                  at September 30, 2006
              
              
              3,217,379
              
              $
              0.92
 
 The
        Company did not grant any compensatory warrants to employees during the period
        ended September 30, 2006 and 2005. Compensation expense of $0 was charged
        to
        operations for the period ended September 30, 2006 and 2005 in relation to
        the
        outstanding warrants.
 
 Stock
        Option Plan
 
 In
        April
        2005, FIIC, Inc. adopted the FIIC 2005 Stock Option, Deferred Stock and
        Restricted Stock Plan, which was assumed by the Company as part of the Merger.
        As of September 30, 2006 and December 31, 2005, no options or stock awards
        have
        been granted under the Plan.
 
 **NOTE
        J - RELATED PARTY TRANSACTIONS**
  The
        Company has received unsecured, non-interest bearing advances from a related
        party totally $147,500 (including $100,000 for the license fee - refer to
        note
        D). Of this amount, $39,905 and $104,977 remains unpaid as of September 30,
        2006
        and December 31, 2005 respectively.
 
 The
        Company has expensed monthly consulting fees of an aggregate of $25,000 per
        month for seven individuals who are directors and/or officers or who are
        intended to serve as key personnel. As of September 30, 2006 and December
        31,
        2005, there remains $322,000 and $228,000 respectively unpaid and included
        in
        accounts payable and accrued expenses.
 
 Effective
        February 1, 2005, the Company entered into a sublease agreement with a related
        party for office space and overhead expenses at $5,000 per month. As of
        September 30, 2006 and December 31, 2005, there remains $55,000 and $43,000
        respectively unpaid and included in accounts payable and accrued expenses
        arising from this sublease agreement.
 
 In
        April
        2006, the Company issued 127,000 shares to a current director and shareholder
        valued at $0.001 per share, to correct a mathematical error in the calculation
        of shares owed to this individual as a member of FIIC Research & Development
        LLC pursuant to the license agreement between that limited liability company
        and
        the Company executed in March 2005.
   F-17
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        K - COMMITMENTS AND CONTINGENCIES**
  Operating
        Lease Commitments
 
 In
        February 1, 2005, the Company entered into a sublease agreement with a related
        party for office space and overhead expenses on month to month basis at $5,000
        per month. Total lease rental expense for the nine months ended September
        30,
        2006 and 2005, was $45,000 and $40,000, respectively.
  Employment
        and Consulting Agreements
 
 As
        of
        September 30, 2006, the efforts of the Company’s named executive officers,
        directors and key personnel have been primarily for no, nominal and/or deferred
        compensation. On February 7, 2006, FIIC executed a written consulting agreement
        with Chief Executive Officer, James France, documenting his consulting
        arrangement and confirming the continuance of such arrangement until such
        time
        as the Company has sufficient funds to formalize the terms of and execute
        an
        employment agreement with Mr. France. The Company intends to enter formal
        employment agreements with all of its executive officers and key personnel
        as it
        seeks to license and launch its insurance operations.
 
 The
        Company has consulting agreements with outside contractors to provide certain
        marketing and financial advisory services. The Agreements are generally for
        a
        term of 12 months from inception and renewable automatically from year to
        year
        unless either the Company or Consultant terminates such engagement by written
        notice.
 
 Litigation
 
 The
        Company may be subject to legal proceedings and claims which arise in the
        ordinary course of its business. Although occasional adverse decisions or
        settlements may occur, the Company believes that the final disposition of
        such
        matters should not have a material adverse effect on its financial position,
        results of operations or liquidity. The Company had no pending legal proceedings
        as of September 30, 2006.
 
 **NOTE
        L - RESTATEMENT OF FINANCIAL STATEMENTS**
 
 Subsequent
        to the original issuance of the December 31, 2005 financial statements,
        management determined that the accounting for warrants issued in connection
        with
        certain convertible debt issuances (refer to Note F) was incorrect, in that
        a
        portion of the proceeds of the debt should have been allocated to the fair
        value
        of the warrants to the lenders and a third party.
 
 Therefore,
        management has restated the carrying value of the notes by recording a discount
        equal to the fair value of the warrants issued to the lenders at the closing
        date and recognizing additional paid in capital. The discount will be amortized
        into interest expense over the term of the notes. Further, management has
        recognized loan fees and additional paid in capital equal to the fair value
        of
        the warrants issued to the third party. The fees will be amortized over the
        term
        of the related loans.
  The
        warrants were valued using the Black-Scholes option valuation model with
        a
        resulting allocation of the aggregate proceeds from the notes attributed
        to the
        warrants of $91,084 and loan fees of $10,278. The following assumptions were
        utilized to value the warrants; current fair value of common stock of $0.50;
        exercise per share of $0.87; expected life of 5 years; expected volatility
        of
        150%; a risk free rate of return of 4.5%; and an expected yield of
        0.0%.
 
 All
        of
        the above noted transactions occurred subsequent to October 1, 2005; therefore,
        the Unaudited Condensed Consolidated Statement of Losses and Unaudited Condensed
        Consolidated Statement of Cash Flows for the periods ended September 30,
        2005
        were unaffected by the respective restatement as of December 31, 2005.
 
  F-18
 **FIIC
            HOLDINGS, INC.**
 **(A
            DEVELOPMENT STAGE COMPANY)**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**
 **SEPTEMBER
            30, 2006**
 **(UNAUDITED)**
  **NOTE
        M - SUBSEQUENT EVENTS**
 
 In
        October 2006, the Company entered into three convertible promissory notes
        for a
        combined total of $60,000. The notes all accrue interest at 8.0% annually
        and
        all interest and principal mature in October 2007. The entire amount of the
        principal and accrued interest is convertible at any time by the holder at
        a
        rate of $0.50 per share. As additional incentive, each holder received a
        loan
        closing fee of restricted shares of the Company; the combined total of 160,000
        shares being  issued.
  On
        November 1, 2006, the Company and Oceanus Value Fund, L.P. executed a third
        amendment to their existing securities purchase agreement and convertible
        note,
        extending the maturity date of the note to December 31, 2006.
 
  F-19
  **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
        September 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
        information contained in this Report includes some statements that are not
        purely historical and that are “forward-looking statements” within the meaning
        of Section 27A of the Securities Act and Section 21E of the Exchange Act,
        and as
        such, may involve risks and uncertainties. These forward-looking statements
        relate to, among other things, expectations of the business environment in
        which
        we operate, perceived opportunities in the market and statements regarding
        our
        mission and vision. In addition, any statements that refer to projections,
        forecasts or other characterizations of future events or circumstances,
        including any underlying assumptions, are forward-looking statements. You
        can
        generally identify forward-looking statements as statements containing the
        words
“anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,”
“projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the
        negatives of such terms, but the absence of these words does not mean that
        a
        statement is not forward-looking. For example, our forward-looking statements
        may include statements regarding:
  ·
              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 our 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.
  For
        a
        discussion of the risks, uncertainties, and assumptions that could affect
        our
        future events, developments or results, you should carefully review the “Risk
        Factors” set forth under “Item 1. Description of Business,” in our Annual Report
        on Form 10-KSB for the year ended December 31, 2005, as filed with the SEC
        on
        April 12, 2006, and “Updates to Risk Factors,” below. In light of these risks,
        uncertainties and assumptions, the future events, developments or results
        described by our forward-looking statements herein could turn to be materially
        different from those we discuss or imply.
 
  2
  **Overview**
  Since
        our
        incorporation in January 2005, we have generated no revenue and have had
        only
        start−up operations. Upon receipt of the necessary governmental approvals and
        licenses and establishment of its planned insurance subsidiaries, we plan
        to
        introduce an insurance product to insure third−party investors in new and
        existing businesses which meet its underwriting criteria. These planned
        insurance subsidiaries include: FIIC Risk Retention Group (“FIIC RRG”), to
        underwrite and issue insurance policies; Federated Insurance Captive, an
        agency
        captive insurance company providing reinsurance (“FIC”); and Federated Group
        Agency (“FGA”), a master group agency providing operational services. We
        anticipate receipt of the necessary licenses from the Washington, D.C.
        Department of Insurance and Securities Regulation (“D.C. DISR”) and from one
        state, likely Ohio, by the end of 2006; receipt of such licenses has been
        delayed due to limited cash flow, the time and expense needed to complete
        the
        Merger and subsequent restatement of our financial statements as of December
        31,
        2005. Until such time, all start−up costs, such as the reserve requirements and
        initial working capital for establishment of these entities, any operational
        expenses, and other requirements will be funded by a combination of debt
        and
        equity financing.
  **Plan
        of Operation**
  Since
        our
        inception we have dedicated our efforts to implementation of a start−up plan
        intended to secure the financing, governmental approvals, and management
        team
        necessary for launch of our planned insurance operations. The key components
        of
        this plan are the execution of a license arrangement for use of the FIIC
        Database Content and Technology upon which FIIC's underwriting and marketing
        functions will rely, completion of a merger with a public company, the
        completion of bridge financing and private placement, and the formation and
        licensing of FIIC's planned insurance entities. We believe we will be able
        to
        complete these steps by the end of 2006, enabling us to launch our insurance
        operations and to generate initial revenues during the fourth quarter of
        2006 or
        first quarter of 2007. However, there are many factors that may influence
        our
        ability to achieve this timeline, as discussed in detail in the “Risk Factors”
included in our Annual Report on Form 10-KSB for the year ended December
        31,
        2005 and the “Updates to Risk Factors” below.
  **Start−Up
        Plan**
  ***Licensing
        of FIIC Database Content and Technology***
  On
        March
        17, 2005, FIIC entered into a Database Access and Content License, Hosting
        and
        Support Agreement with FIIC Research and Development, LLC (“FIIC LLC”); the
        parties amended this agreement on November 7, 2005, in relation to the receipt
        of certain bridge financing from Oceanus Value Fund, L.P. (the “Bridge
        Financing”). FIIC LLC developed the FIIC Database Content and Technology,
        including an extensive database of insurance underwriting data and standards
        for
        use in connection with insurance policies that insure investors against the
        risk
        of the loss of capital in certain business entities, specially−designed
        supporting software applications, and technology and database−specific workflow
        definitions, decision processes and models for managing such applications
        and
        utilizing the database and its contents. The license agreement provides us
        an
        exclusive and perpetual license to access and use the FIIC Database Content
        and
        Technology to obtain the underwriting data, standards and other information
        for
        the purpose of underwriting its Investor Protection policies. We also have
        the
        right to grant nonexclusive sublicenses to third parties involved in
        underwriting Investor Protection policies, while FIIC LLC is obligated to
        continue to host, maintain and augment the FIIC Database Content and Technology.
        In consideration for the license, FIIC issued to FIIC LLC 9,792,000 shares
        of
        its common stock, 5− year warrants to purchase 1,808,307 shares of its common
        stock at an exercise price of $0.87 per share and became obligated to pay
        a
        $100,000 fee. In April 2006, the Company issued 127,000 shares to a current
        director and shareholder valued at $0.001 per share, to correct a mathematical
        error in the calculation of shares owed to this individual as a member of
        FIIC
        Research & Development LLC pursuant to that license agreement. The total
        licensing fee of $109,919 was expensed prior to June 30, 2006, but $39,095
        of
        the balance remained payable to FIIC LLC as of September 30, 2006.
 
  3
  ***Merger
        with a Public Company***
  The
        completion of the merger with Nicklebys.com, Inc. on February 28, 2006 satisfied
        the second aspect of our start−up plan. Our management believed that becoming a
        public company would afford increased market liquidity and enhanced access
        to
        the capital markets, allowing us to better manage and satisfy our significant
        funding requirements during the start−up and initial operational period.
        Further, management believes that our status as a public company will enable
        us
        to make further acquisitions of assets or businesses in support of the intended
        long−term growth of our insurance business using our securities as consideration
        and will offer a competitive advantage when competing with other parties
        in the
        marketplace for such acquisitions. In addition, becoming a public company
        has
        provided us with increased visibility in the financial and insurance communities
        within a short timeframe and is providing increased transparency for our
        initial
        investors and customers. Although the merger cost us approximately $367,000
        in
        legal, accounting and other related expenses beyond the merger consideration
        itself, including all closing costs, our management believes that we have
        had
        greater access to funding sources for our start−up activities based on our
        becoming a public company, and that we will continue to reap the benefits
        in the
        near future.
 
 ***Bridge
        Financing and Private Placement***
  We
        engaged in a Bridge Financing and planned a Private Placement, as described
        below, to provide the initial funds necessary to establish the working capital
        reserves with the D.C. DISR in conjunction with the formation and licensing
        of
        our planned insurance entities. Although we received funding from the Bridge
        Financing, we have ultimately not relied on this transaction to fund our
        operational activities as originally anticipated. However, we continue to
        anticipate receipt of significant funding from the planned Private Placement.
        As
        of September 30, 2006, we estimate that the Bridge Financing, as amended,
        cost
        us approximately $120,000 in legal, accounting, consulting and other related
        fees and expenses. In addition, we anticipate that the Private Placement
        will
        cost us approximately $400,000 in such expenses and commissions.
  *Bridge
        Financing*
  In
        August
        2005, FIIC, Inc. entered a consulting agreement with Bridgewater Capital
        Corporation (“Bridgewater”) for general business advisory and consulting
        services, including assisting FIIC, Inc. to locate and secure bridge financing.
        Subsequently, Bridgewater introduced FIIC, Inc. to Oceanus Value Fund, L.P.
        (“Oceanus”) and assisted in bridge financing negotiations. In November 2005,
        FIIC, Inc. executed a note purchase agreement with Oceanus under which it
        issued
        a $350,000 Senior Secured Promissory Note bearing annual interest at 12%.
        On
        February 28, 2006, concurrent with the closing of the Merger, we entered
        into a
        securities purchase agreement with Oceanus, pursuant to which we issued a
        $350,000 Senior Secured Convertible Promissory Note bearing annual interest
        at
        12% and a warrant to purchase 890,995 shares of the Registrant’s common stock,
        in exchange for the senior secured note previously issued to FIIC, Inc. in
        November 2005. We refer collectively to the issuance of these notes and warrants
        as the Bridge Financing. Immediately subsequent to execution of the securities
        purchase agreement and the issuance of the senior secured convertible note
        in
        February 2006, the parties also executed an amendment to the securities purchase
        agreement, extending the term of the convertible note to May 29, 2006,
        providing for partial repayment of the note and releasing certain pledge
        agreements entered into in support of the note. On September 1, 2006, the
        parties executed a second amendment to the securities purchase agreement
        and
        convertible note, further extending the maturity date of the convertible
        note to
        September 30, 2006. The other terms and conditions of the note and the
        security and guaranty associated with it are described in greater detail
        in our
        Current Report on Form 8-K/A filed on June 6, 2006 with the SEC. As of September
        30, 2006, we had not paid the pending principal balance of $92,000 or
        accrued interest of $6,473 and were in default under the terms of the amended
        Oceanus Note. On November 1, 2006, we executed a further amendment to the
        securities purchase agreement convertible extending the term of the convertible
        note to December 31, 2006.
 
 *Private
        Placement*
  As
        previously described in our Current Report on Form 8-K/A filed on June 6,
        2006
        with the SEC, we have engaged a placement agent in connection with a planned
        private placement (the “Private Placement”) of our common stock. Although
        originally intended to be conducted concurrent with the merger process, to
        date
        we have not yet launched the Private Placement due to ongoing negotiations
        with
        the Placement Agent and timing issues arising from the restatement of our
        financial statements for the year ended December 31, 2005. When completed,
        if at
        all, we anticipate that the net proceeds from the Private Placement will
        be used
        to repay outstanding short-term debt and to fund the working capital reserve
        account required to obtain a license from the Washington, D.C. Department
        of
        Insurance and Securities Regulation, in support of our planned application
        to
        establish a Risk Retention Group, or RRG. We must successfully establish
        an RRG
        and obtain a license for the RRG before launching our insurance operations.
        Funds received beyond those needed to repay debt and fund the regulatory
        working
        capital reserve, if any, will be used for general corporate purposes, including
        working capital, marketing and expanding our technical employee base.
 
  4
  THIS
        QUARTERLY REPORT IS NOT AN OFFER OF SECURITIES FOR SALE. ANY SECURITIES SOLD
        IN
        THE PRIVATE PLACEMENT WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
        1933,
        AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES UNLESS
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN
        EXEMPTION FROM SUCH REGISTRATION.
 
 ***Establishment
        and Licensing of Insurance Entities***
  Our
        revenue model primarily depends on its use and management of the FIIC
        Underwriting Data and Standards, as licensed from FIIC LLC, in support of
        the
        sale of Investor Protection insurance policies through FIIC RRG, with
        reinsurance and operational support provided by FIC and FGA, respectively.
        However, we are unable to launch our planned insurance operations and therefore
        cannot generate any operational revenues until these insurance entities are
        formed and licensed as required by the D.C. DISR. The key items required
        to
        complete this stage of FIIC's start−up plan are the completion and submission of
        the licensing application and the funding of the required working capital
        reserves. We are in the process of preparing the application for the
        establishment and licensing of the three entities; initial drafts of the
        feasibility studies required by the applications were completed in October
        2006.
        Further, the D.C. DISR requires a company to maintain one dollar in working
        capital on reserve for every $2.00 of insurance premium to be written prior
        to
        the establishment and licensing of a RRG. In support of FIIC RRG, FIIC will
        provide an initial reserve of $100,000 cash and an additional $400,000 pursuant
        to a FIIC, Inc. Surplus Note to satisfy the funding requirements. In support
        of
        FIC, FIIC will provide an initial reserve of $100,000 cash and an additional
        $300,000 pursuant to a FIIC, Inc. Surplus Note to satisfy the funding
        requirements. It is estimated that each Surplus Note would be repaid over
        a
        five−year period subject to the approval of the D.C. DISR. However, due to
        recent and ongoing reviews by the D.C. DISR and other regulators of the surplus
        levels of various RRGs, the D.C. DISR may require even greater surplus levels
        at
        its discretion. FIIC applied a portion of the funding received from its May
        2006
        issuance of convertible notes in a private transaction towards the required
        actuarial feasibility studies, which were completed in October 2006. However,
        we
        do not anticipate filing the completed application until FIIC has the necessary
        capital to fund the required reserves, likely upon receipt of the Private
        Placement net proceeds. Once the application is filed, we expect the operating
        structure for the three new insurance entities to be formally established
        and
        licensed within 90 days, including the licensing of FIIC RRG and FIC in the
        District of Columbia and at least one state, likely Ohio.
  **Capital
        Resources and Liquidity**
  To
        date,
        we have primarily obtained financing for our Merger and other aspects of
        the
        Plan of Operation presented above via debt financing. Most recently, in
        September 2006, we borrowed $20,000 of funds from an existing shareholder
        via a
        one-year convertible note. As of September 30, 2006, we owe $39,000 in principal
        under demand notes from certain stockholders and another $1,137,000 in principal
        under convertible notes, as compared to $39,000 in demand notes as of September
        30, 2005. We anticipate that additional funds will become available to FIIC
        in
        subsequent debt financings and through the planned Private Placement, to
        fund
        our planned launch and growth of operations over the coming twelve
        months.
  As
        of
        September 30, 2006, we had cash and cash equivalents and restricted cash
        of $566
        and current liabilities of $2,001,448 as compared to cash and cash equivalents
        of $376 and current liabilities of $446,046 as of September 30, 2005. As
        of
        September 30, 2006, we had an accumulated operating deficit of $3,937,070,
        as
        compared to the accumulated operating deficit of $334,170 as of September
        30,
        2005. This deficit has continued to increase in the subsequent months, and
        will
        continue to do so at least until our insurance entities become fully licensed
        and operational.
 
  5
  **Use
        of Available Funds**
  We
        believe that if we can successfully launch and complete the Private Placement,
        or complete an equivalent round of financing, prior to the end of the fiscal
        year, our current capital resources will be sufficient to cover all startup
        costs, reserve requirements and operating expenses for twelve months, including
        the anticipated initial six months of its insurance operations. While we
        have
        raised capital to met our working capital and financing needs in the past,
        additional financing is required in order to meet our current and projected
        cash
        flow deficits from operations and development. We are seeking financing,
        which
        may take the form of debt, convertible debt or equity, in order to provide
        the
        necessary working capital. We currently have no commitments for financing.
        There is no guarantee that we will be successful in raising the funds required.
        FIIC currently anticipates allocating its capital resources as
        follows:
  ***Debt
        Repayment***
  To
        the
        extent possible, we will defer repayment of all outstanding debt obligations
        until receipt of net proceeds from either the planned Private Placement or
        an
        equivalent round of financing. To the extent some amount of principal or
        interest is to be repaid prior to such financing, we are relying on the net
        proceeds from our recent convertible note issuances. Our management believes
        that a majority, if not all, of our currently outstanding convertible notes
        as
        of September 30, 2006, in the aggregate principal amount of $1,137,000 will
        convert into equity upon maturity and thus not require repayment; if such
        conversion were to occur we would issue over time at least 2,443,538 shares
        of
        our common stock, not including any shares issuable upon conversion of accrued
        interest.
  For
        the
        nine months ended September 30, 2006, net interest expense related to
        outstanding debt was $411,507, an increase from $7,904 from the inception
        in
        January 2005 through September 30, 2005.
  ***Entity
        Financing***
  As
        noted
        above, we intend to fund the working capital reserves of FIIC RRG and FIC
        in the
        amounts of $500,000 and $400,000, respectively, from the anticipated net
        proceeds of the Private Placement. However, due to recent and ongoing reviews
        by
        the D.C. DISR and other regulators of the surplus levels of various RRGs,
        the
        D.C. DISR may require even greater reserve levels at its discretion. In
        addition, FIIC intends to provide FIIC RRG and FIC each with approximately
        $50,000 for formation and associated initial start−ups costs. FIIC also intends
        to provide FGA with initial working capital of $529,500, to fund its services
        in
        support of FIIC RRG and FIC, including regulatory reporting, backroom
        operations, underwriting, claims and accounting. The management agreement
        between FGA and each of the other insurance entities will detail which vendors
        and suppliers will be responsible for reinsurance support, legal services,
        accounting services, actuarial support, and other services beyond the abilities
        of FGA's own personnel. FIIC anticipates that FGA's operational expenses
        for the
        first six months of its management agreement with FIIC RRG and FIC will total
        approximately $270,000. Subject to this agreement, FIIC RRG and FIC will
        provide
        certain management fees to FGA for its services, but the initial grant of
        working capital will cover FGA's start−up costs and ensure its ability to meet
        its contractual obligations until such time as the insurance operations are
        fully functional.
  ***Operating
        Expenses***
  Any
        funds
        received beyond those needed to repay debt, fund the regulatory working capital
        reserves and provide the insurance entities with initial working capital
        will be
        used for our general corporate purposes, including initial product development,
        marketing and employee costs. Within the next twelve months, including the
        anticipated initial six months of its revenue−producing insurance operations, we
        anticipate spending up to $83,000 on intellectual property rights and product
        development costs, including payment of the $39,095 owed to FIIC LLC under
        the
        license agreement for the FIIC Database Content and Technology, $12,000 on
        Dun
& Bradstreet information fees, $1,000 on web services and support and
        $30,000 on the part−time employment of an information technology specialist.
        During this period, we also anticipate incurring up to $93,000 in legal expenses
        relating to the launch of its operations and general corporate governance
        and
        $150,000 in audit−related expenses. We also plan to spend up to $40,000 towards
        market development in the next twelve months, including designing and placing
        its advertising on−line and developing other sales tools. Other anticipated
        operating expenses during this initial period include payment of $177,000
        in
        consulting fees, approximately $60,000 in overhead expenses such as copy,
        fax
        and phone charges and basic travel expenses, and additional funds, as available,
        towards reducing our accumulated deficit. There are no plans nor is there
        any
        necessity to purchase any significant equipment, beyond basic office computers
        and related technology.
   6
  Within
        the first six months of the launch of our insurance operations, we will rely
        on
        our executive officers, supported by independent consultants, to fulfill
        all
        operational functions. We do not anticipate hiring additional part−time or
        full−time employees until we approach the operational benchmark of 100 policies
        sold, although we may continue partial or occasional payment of the accrued
        consulting fees earlier if there are available, unallocated funds. We anticipate
        initiating payment of executive salaries shortly after the planned insurance
        subsidiaries are established and fully licensed for operations and each
        individual executes an employment agreement.
  For
        the
        three months ending September 30, 2006, our total operating expenses were
        $230,144, as compared to $305,657 for three month period ending September
        30,
        2005. Operating expenses for the three months ending September 30, 2006,
        consisted of $229,208 of general and administrative expenses and $937 of
        depreciation. The period-to-period decrease reflects our initial start-up
        costs
        and costs associated with the launch of the merger process. We anticipate
        that
        general and administrative expenses will grow in coming periods as we establish
        our operating entities and launch our operations. During the three month
        period
        ending September 30, 2006, we incurred other (non-operating) expenses of
        $362,619, as compared to $7,115 of other expenses for the three months ending
        September 30, 2005. Acquisitions costs of $301,199 represented a significant
        portion of the other expenses for the nine months ending September 30, 2006;
        during that period net interest expense totaled $411,507 and our debt issuance
        costs totaled $869,985. We anticipate that we will continue to incur significant
        interest expense in relation to the notes currently outstanding, until such
        time
        as we repay the debt or convert the notes, where applicable under their terms,
        into equity securities of the Company.
 
 ***Launch
        of Revenue−Producing Insurance Operations***
  Upon
        launch of our insurance operations, we anticipate generating revenues primarily
        from the sale of our Investor Protection insurance policies. In the initial
        six
        months of our insurance operations, we project issuing 17 policies at a maximum
        total investment per business of $250,000, generating an average premium
        of ten
        percent (10%) and thereby yielding $425,000 gross premiums revenue in this
        initial operational period. Based on our management’s analysis of new business
        starts in the Ohio area, its initial target market, we believe that this
        level
        of performance represents a projected market penetration of about 0.23%.
        Further, we will generate related revenues from a $50 fee per application,
        regardless of the number of resulting policies issued.
  We
        anticipate receipt of 27 applications within initial six months of operations,
        generating gross application fee revenues of approximately $1,350. We anticipate
        that actual premium rates will range from 8 to 18 percent based on the risk
        group of the subject business per the FIIC Underwriting Data and Standards,
        and
        that eventually the application fee may also become variable. We also believe
        that beginning in year two of its operations overall average premium rates
        may
        slightly decline, reflecting lower rates for renewals, the potential impact
        of
        competition, and any actual claims experiences. We believe that FIIC may
        be able
        to write up to 2,000 policies per year in our initial target geographic markets,
        but continue to project revenues and expenses on a significantly more
        conservative basis, since it is unknown how quickly the concept of the Investor
        Protection policy will penetrate the market and how swiftly competition may
        absorb some of the potential market.
  Since
        the
        funds in the regulatory working capital reserves cannot be used to fund
        operations, we may also need additional capital to continue to adequately
        grow
        its business post−launch of its insurance operations. The amount of additional
        capital we may need to raise through public or private equity or debt financings
        over the next few years will depend on many factors, including:
 
 ·
              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;
   7
  ·
              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 its operating costs, including
                  the
                  costs of regulatory compliance, personnel, legal and accounting
                  costs and
                  the cost of funds.
  We
        cannot
        be certain that additional sources of liquidity will be available when needed
        in
        the future and that our actual cash requirements will not be greater than
        anticipated. If financing is not available when needed on favorable terms,
        we
        will evaluate whether to scale back further development of FIIC's insurance
        products and services, to limit our marketing activities, to sell some or
        all of
        our technology, intellectual property or assets, to merge with another entity,
        or to terminate our operations.
  **Product
        Research and Development**
 
 We
        do not
        anticipate undertaking any research and development activities during the
        next
        twelve months, other than any remaining efforts in support of the launch
        of our
        Investor Protection Policy.
 
 **Acquisition
        of Plant and Equipment and Other Assets**
  We
        do not
        own any material property, plant or equipment. We do not anticipate the
        acquisition of any material property, plant or equipment during the next
        12
        months.
  **Off-Balance
        Sheet Arrangements**
  As
        of
        September 30, 2006, we did not have any off-balance sheet
        arrangements.
 
 **Inflation**
 
 In
        the
        opinion of management, inflation has not had a material effect on the operations
        of the Company.
 
 **Employees**
  As
        of
        September 30, 2006, the efforts of FIIC's named executive officers, directors
        and key personnel have been primarily for no, nominal and/or deferred
        compensation. Prior to February 7, 2006, we had not entered any employment
        or
        other long−term compensation agreements with our executive officers or other key
        personnel. We intend to enter formal employment agreements with all of our
        executive officers and key personnel as we seek to license and launch our
        insurance operations. However, on February 7, 2006, FIIC, Inc. executed a
        written consulting agreement with Jim France documenting his consulting
        arrangement and confirming the continuance of such arrangement until such
        time
        as FIIC, Inc. had sufficient funds to formalize the terms of and execute
        an
        employment agreement with Mr. France; FIIC Holdings, Inc. assumed this
        consulting arrangement as a result of the merger process. We anticipate that
        the
        terms of all of our employment agreements with its officers will provide
        for
        cash and equity compensation an appropriate level for a start−up company, but
        also recognize the professional experience and forms of expertise each
        individual brings to FIIC's business. We also anticipate that employment
        agreements with our officers and other key personnel will include provisions
        setting forth any severance arrangements, as well as confidentiality and
        non−competition clauses.
 
 In
        order
        for us to attract and retain quality personnel, we anticipate we will have
        to
        offer competitive salaries to future employees. We anticipate that it may
        become
        desirable to add full and or part time employees to discharge certain critical
        functions during the next 12 months. These positions include a senior insurance
        underwriter, credit analyst, financial analyst, additional financial officers
        and a claims manager. This projected increase in personnel is dependent upon
        our
        ability to generate revenues and obtain sources of financing. There is no
        guarantee that we will be successful in raising the funds required or generating
        revenues sufficient to fund the projected increase in the number of
        employees.
 
  8
  **Recent
        Accounting Pronouncements**
  We
        have
        adopted all relevant recently issued accounting pronouncements; for additional
        details see the notes to our unaudited condensed consolidated financial
        statements under Item 1. The adoption of the accounting pronouncements is
        not
        anticipated to have a material effect on our operations.
 
 **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***
  **We
        have no operating history, expect to initially incur losses and cannot assure
        you that we will achieve profitability.**
  We
        have
        not yet launched our insurance operations and thus we have not generated
        any
        revenues from sales of Investor Protection or other insurance policies, or
        sublicenses of the FIIC Database Content and Technology. We have incurred
        significant expense to obtain an exclusive, perpetual license and hosting
        and
        support agreement allowing use and providing for maintenance of the FIIC
        Database Content and Technology, including the FIIC Underwriting Data and
        Standards. We continue to incur substantial costs to establish our insurance
        entities and to gain all necessary governmental licenses and certifications
        to
        conduct our insurance business. We expect that our expenses will continue
        to
        increase as we launch our insurance products and services, due to increased
        marketing expenses as we seek to develop customer relationships and maintain
        existing relationships with our business and technology resources. We also
        anticipate that we will incur costs to establish and/or improve our financial
        and disclosure controls, expand and train our workforce and to maintain
        regulatory compliance as our insurance underwriting grows.
  As
        of
        September 30, 2006, we had an accumulated deficit of approximately $3,937,070.
        We expect to continue to incur losses over at least the next year, and the
        amount of future losses is uncertain. Our ability to generate revenue and
        become
        profitable will depend on obtaining and maintaining regulatory approvals
        in the
        U.S., achieving market acceptance for our Investor Protection policies and
        related services and successfully executing our business plan. Sales of our
        Investor Protection policies cannot begin until our insurance entities receive
        all necessary regulatory approvals. If we fail to generate significant revenues
        from commercial sales of such investor protection policies, fail to obtain
        necessary regulatory approvals, or if revenues fail to grow at a pace rapid
        enough to offset anticipated increases in expenses, we may never 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.**
   9
  We
        rely
        on a Database Access Content License, Hosting and Support Agreement with
        FIIC
        LLC to access the FIIC Underwriting Data and Standards used to underwrite
        our
        Investor Protection policies. Under this agreement, we have exclusive,
        perpetual, worldwide rights to access the FIIC Database Content and Technology
        via FIIC LLC’s proprietary technology and to use it to underwrite and sell
        Investor Protection policies. However, these exclusive rights may be terminate
        or may be terminated if we breach the terms of the license agreements and
        fail
        to cure the breach.
  Our
        reliance on this license subjects us to various risks that could harm our
        business, including:
 
 ·
              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.
  Disruption
        or termination of our agreement with FIIC LLC could delay or suspend our
        overall
        efforts to create a market for our Investor Protection policies. The loss
        of the
        license or FIIC LLC’s failure to maintain the licensed technology and data could
        require us to cease providing products or services using such licensed
        technology, which would likely result in a significant loss of revenue for
        our
        business. In consideration for the license, we issued to shares of our common
        stock, 5-year warrants to purchase shares of our common stock and became
        obligated to pay a $100,000 cash fee. As of June 30, 2006, the entire licensing
        fee had been expensed, but as of September 30, 2006 we still owe FIIC LLC
        $39,095.
  ***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
        cannot
        assure you that we will be able to obtain the regulatory approvals necessary
        for
        the establishment and operation of our planned insurance entities on a timely
        basis, if at all. Any delays in receipt or failure to receive such clearances
        or
        approvals, the loss or impairment of previously received clearances or
        approvals, or failure to comply with existing or future regulatory requirements
        would have a material adverse effect on our business, prospects, financial
        condition and results of operations. We cannot assure you that we will be
        able
        to maintain compliance with all regulatory requirements over time. Changes
        in
        existing laws, regulations or policies and the adoption of new laws, regulations
        or policies could prevent us from, or could affect the timing of, achieving
        compliance with regulatory requirements, including current and future regulatory
        approvals, where necessary.
  **We
        may be subject to increased regulation regarding the use of personal information
        received from investors.**
  Use
        of
        certain data collected from investors may be subject to regulation by various
        federal, state and local regulatory authorities. Compliance with existing
        federal, state and local laws and regulations in the United States designed
        to
        protect the public from the misuse of personal information in the marketplace
        and adverse publicity or potential litigation concerning the commercial use
        of
        such information may increasingly affect our operations, including the sharing
        of such information with FIIC LLC pursuant to the license agreement for
        maintenance of the FIIC Database Content and Technology, and could result
        in
        substantial expense for regulatory compliance, limitations on access to
        important information, litigation expense and a loss of revenue. Furthermore,
        investors may become less willing to provide personal information over time
        as
        other companies’ failures to adequately protect customer personal information
        become publicized.
   10
  **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.**
  As
        a
        private company, FIIC, Inc. did not previously have to report on its disclosure
        controls and procedures or its internal controls over financial reporting,
        and
        as a developing company is only in the process of implementing formal procedures
        intended to satisfy the requirements of Section 404 and other related provisions
        of the Sarbanes-Oxley Act of 2002. However, beginning with our fiscal year
        ending December 31, 2007, we will have to fully comply with these requirements.
        Failure to establish the required controls or procedures, or any failure
        of
        those controls or procedures once established, could adversely impact our
        public
        disclosures regarding our business, financial condition or results of
        operations. Upon review of the required internal controls over financial
        reporting and disclosure controls and procedures, our management and/or our
        auditors may identify material weaknesses and/or significant deficiencies
        that
        need to be addressed. Any actual or perceived weaknesses or conditions that
        need
        to be addressed in our internal controls over financial reporting, disclosure
        of
        management’s assessment of our internal controls over financial reporting or
        disclosure of our public accounting firm’s attestation to or report on
        management’s assessment of our internal controls over financial reporting could
        have an adverse impact on the price of our common stock and may lead to claims
        against us.
  ***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.**
  We
        believe that we will have sufficient cash and cash equivalents to meet projected
        operating requirements for approximately the next 12 months upon completion
        of
        either the planned Private Placement or an equivalent round of financing.
        Since
        we did not complete the Private Placement within the third quarter, or to
        date
        have failed to raise the net proceeds sought, we will need to seek additional
        funds from public and private stock offerings, borrowings under credit lines
        or
        other sources as we continue to plan the Private Placement because, pursuant
        to
        district and federal insurance law, the Washington, D.C. Department of Insurance
        and Securities Regulation (“D.C. DISR”), requires a company to maintain one
        dollar in working capital on reserve for every $2.00 of insurance premium
        to be
        written prior to the establishment and licensing of a risk retention group,
        or
        RRG. We are in the process of preparing an application for the establishment
        and
        licensing of an RRG for submission to the D.C. DISR, pending the funding
        of
        necessary working capital reserve. We anticipate filing of the complete
        application during the fourth quarter of 2006. If we are unable to fund or
        successfully complete the required study or the minimum working capital reserve,
        then it will be unable to launch its operations. Since the funds in the working
        capital reserve cannot be used to fund operations, we may also need additional
        capital to continue to grow our business in keeping with market demand if
        early
        product sales are steady.
  The
        amount of additional capital we may need to raise through public or private
        equity or debt financings over the next few years will depend on many factors,
        including:
 
 ·
              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.
  We
        cannot
        be certain that additional sources of liquidity will be available when needed
        in
        the future and that our actual cash requirements will not be greater than
        anticipated. If we require additional capital at a time when investment in
        insurance companies or in the financial services market in general is limited
        due to the then prevailing market or other conditions, we may not be able
        to
        raise such funds at the time that we desire or any time thereafter. If we
        are
        unable to obtain this financing on terms favorable to us, we may be unable
        to
        execute our long-term business plan and may be required to scale back further
        development of our insurance products and services, to limit our marketing
        activities, to sell some or all of our technology, intellectual property
        or
        assets, to merge with another entity, or terminate our operations.
   11
  **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.**
  As
        a
        result of the Bridge Financing, as defined and discussed in detail under
“Bridge
        Financing and Private Placement” **** under
        Item 2 herein, Oceanus holds a senior secured convertible promissory note
        convertible into shares of our common stock at any time (the “Oceanus Note”),
        including accrued and unpaid interest, and a warrant to purchase additional
        shares of our common stock. Immediately subsequent to execution of the
        securities purchase agreement and the Oceanus note, the parties executed
        an
        amendment to the securities purchase agreement, extending the term of the
        Oceanus Note, providing for partial repayment of the Oceanus Note and releasing
        certain pledge agreements entered into in support of the Oceanus Note. On
        September 1, 2006, the parties executed a second amendment to the
        securities purchase agreement and convertible note, further extending the
        maturity date of the convertible note to September 30, 2006. As of September
        30,
        2006, we were in default on the amended Oceanus Note, as we had not paid
        the
        pending principal balance of $92,000, nor accrued interest of $6,473. Although
        we subsequently executed a further amendment extending the maturity date
        of the
        convertible note to December 31, 2006, no further payment has been made towards
        the pending principal balance and accrued interest owed.
  In
        support of the Oceanus Note, we executed a security agreement in favor of
        the
        noteholder, pledging all of our existing and hereafter acquired assets,
        including our license for the FIIC Database Content and Technology, as security
        for the Oceanus Note, and FIIC, Inc. also provided a subsidiary guaranty.
        In
        addition, our Chief Executive Officer, President and director, James France,
        has
        executed a pledge agreement guarantying our obligations under the convertible
        note with an aggregate 571,000 shares of his common stock. Because we have
        not
        fulfilled our payment obligations under the convertible note, if the noteholder
        chooses not to convert the Oceanus Note to alternatively satisfy such
        obligations, under the pledge agreements the noteholder would be entitled
        to the
        pledged shares. Although the noteholder could not obtain control of the Company
        upon receipt of the pledged shares and exercise of our warrant to purchase
        common stock, the noteholder would obtain a more significant stake in FIIC.
        Further, upon enforcement of the pledge agreement, Mr. France would lose
        all of
        his current holdings of our common stock, and thus may be less likely to
        exercise his outstanding warrants to re-establish an ownership position and/or
        may be less inclined to serve in leadership positions. Finally, if the
        noteholder seeks to exert control over the rights to the FIIC Database Content
        and Technology on which our business model relies, the noteholder could disrupt
        our business to the detriment of our results of operations and our other
        stockholders.
  **Item
        3. Controls and Procedures.**
  **Evaluation
        of Disclosure Controls and Procedures**
  As
        of the
        end of the period covered by this report on Form 10-QSB, our Chief Executive
        Officer and our Chief Financial Officer performed an evaluation of the
        effectiveness of our disclosure controls and procedures as defined in Rule
        13a-15(e) or Rule 15d-15(e) under the Exchange Act. Based on that evaluation,
        our Chief Executive Officer and Chief Financial Officer concluded that as
        of the
        end of the period covered by this report on Form 10-QSB, our disclosure controls
        and procedures were effective in timely recording, processing, summarizing and
        reporting material information relating to FIIC Holdings, Inc. required to
        be
        included in our Exchange Act filings.
  **Changes
        in Internal Control Over Financial Reporting**
  There
        were no changes in our 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.
 
  12
  **PART
        II — OTHER INFORMATION**
  **Item
        1. Legal Proceedings.**
  None.
  **Item
        2. Unregistered Sales of Equity Securities and Use of
        Proceeds.**
  On
        September 14, 2006, FIIC Holdings, Inc. (“Registrant”), a Delaware corporation,
        entered into a Convertible Promissory Note (the “note”), providing an aggregate
        of $20,000 in proceeds to the Registrant. The note was issued to a current
        shareholder of the company (the “holder”). The note bears simple interest at 8%
        per annum, and the principal and any accrued interest is due and payable
        on or
        before September 15, 2007. The entire amount of outstanding principal and
        accrued interest of the note are convertible at any time at the option of
        the
        holder into restricted shares of Registrant's Common Stock at a rate of $0.50
        per share. However, the note automatically converts into restricted shares
        of
        Registrant's Common Stock at the close of Registrant's next round of equity
        financing yielding gross proceeds of at least $2,000,000. Upon any conversion,
        the note will cease to represent a debt, and will instead signify only that
        the
        holder has a right to receive certificates evidencing the Common Stock to
        which
        the holder is entitled. The holder also received a loan closing fee of 53,333
        restricted shares of the Registrant's Common Stock, par value $0.001 per
        share.
  Registrant
        issued the note and the Common Stock related to the loan closing fee, pursuant
        to Section 4(2) of the Securities Act of 1933, as amended (the “Securities
        Act”). The holder executed a detailed subscription agreement, including
        representations to the Registrant that, among other things, (1) he is an
        accredited investor within the meaning of Regulation D, promulgated under
        the
        Securities Act; (2) he is aware of the risks of the investment; and (3) the
        note
        was not offered or issued as part of any public offering. No underwriters
        participated in this transaction.
  **Item
        3. Defaults Upon Senior Securities**
  As
        previously reported on a Current Report on Form 8-K/A filed with the SEC
        on June
        6, 2006, and as discussed under Part I - Item 2, “Bridge Financing and Private
        Placement” above, in February 2006, the Registrant entered into a securities
        purchase agreement with Oceanus Value Fund, L.P. (“Oceanus”), pursuant to which
        we issued a $350,000 Senior Secured Convertible Promissory Note bearing annual
        interest at 12% (the “Oceanus Note”) and a warrant to purchase 890,995 shares of
        the Registrant’s common stock (the “Oceanus Warrant”). Immediately subsequent to
        execution of the securities purchase agreement and the issuance of the Oceanus
        Note, the parties executed an amendment to the securities purchase agreement,
        extending the term of the Oceanus Note, providing for partial repayment of
        the
        Oceanus Note and releasing certain pledge agreements entered into in support
        of
        the Oceanus Note. A legal fee of $3,500 associated with the amendment, and
        accrued interest through February 28, 2006 was due and payable immediately
        on
        February 28, 2006. On September 1, 2006, the parties executed a second
        amendment to the securities purchase agreement and convertible note, further
        extending the maturity date of the note to September 30, 2006. As the Registrant
        had not paid the pending principal balance of $92,000, nor accrued interest
        of
        $6,473, as of September 30, 2006, the Registrant was in default under the
        terms
        of the amended Oceanus Note. The Registrant executed a further extension
        to the
        securities purchase agreement and convertible note on November 1, 2006,
        extending the maturity date of the convertible note to December 31, 2006.
 
 **Item
        4. Submission of Matters to a Vote of Security Holders.**
  The
        Registrant did not submit any matters to a vote of its security holders during
        the three-months ended September 30, 2006.
  **Item
        5. Other Information.**
  None.
  II-1
 
 **Item
        6. Exhibits.**
  (a)
        Exhibits.
  **Exhibit**
              
              **Item**4.1
              
              Amendment
                  No. 2 to Securities Purchase Agreement and 12% Senior Secured Convertible
                  Promissory Note dated September 1, 20064.2
              
              Amendment
                No. 3 to
                Securities Purchase Agreement and 12% Senior Secured Convertible
                Promissory Note dated November 1, 200631.1
              
              Certification
                  of Chief Executive Officer pursuant to Section 302(a) of the
                  Sarbanes-Oxley Act of 200231.2
              
              Certification
                  of Chief Financial Officer pursuant to Section 302(a) of the
                  Sarbanes-Oxley Act of 200232.1
              
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to Section
                  906 of the Sarbanes-Oxley Act of
                  2002
   II-2
  **SIGNATURES**
 
 In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
   FIIC
                  HOLDINGS, INC.Date:
                  November 10, 2006
              By:
              /s/ James
                  W. FranceJames
                  W. France
                President
                  and Chief Executive Officer
                (Principal
                  Executive Officer)Date:
                  November 10, 2006
              By:
              /s/
                  Wade L. EstepWade
                  L. Estep
                Chief
                  Financial Officer
                (Principal
                  Accounting Officer)
   II-3
  **EXHIBIT
        INDEX**
 **Exhibit**
                  
                  **Item**4.1
                  
                  Amendment
                      No. 2 to Securities Purchase Agreement and 12% Senior Secured
                      Convertible
                      Promissory Note dated September 1, 20064.2
                  
                  Amendment
                    No. 3 to
                    Securities Purchase Agreement and 12% Senior Secured Convertible
                    Promissory Note dated November 1, 200631.1
                  
                  Certification
                      of Chief Executive Officer pursuant to Section 302(a) of the
                      Sarbanes-Oxley Act of 200231.2
                  
                  Certification
                      of Chief Financial Officer pursuant to Section 302(a) of the
                      Sarbanes-Oxley Act of 200232.1
                  
                  Certification
                      of Chief Executive Officer and Chief Financial Officer pursuant
                      to Section
                      906 of the Sarbanes-Oxley Act of
                      2002
    II-4