**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**








**Form
      10-QSB**





**(x)**
            **Quarterly
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934**
              **for
                the quarterly period ended March 31,
                2006**





**(
              )**
            **Transition
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934**





Commission
      file number: **333-64840**




**iCURIE,
      INC.**


(Exact
      Name of Small Business Issuer as Specified in Its Charter)





**Nevada**
            **91-2015441**(State
                or Other Jurisdiction of Incorporation or Organization)
            (I.R.S.
                Employer
              Identification
                No.)





**1395
      Brickell Avenue, Suite 800**


**Miami,
      Florida 33131**


(Address
      of Principal Executive Offices)





**(305)
      529-6290**


(Issuer’s
      Telephone Number, Including Area Code)








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





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





State
      the
      number of shares outstanding of each of the issuer’s classes of common stock, as
      of the latest practicable date.





Class
              -------
              Common
                Stock
            Outstanding
                as of May 9, 2006
              ------------------------------------------
              29,689,022








Transitional
      Small Business Disclosure Format: Yes  o No x








**PART
      I**


**FINANCIAL
      INFORMATION**





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




iCurie,
                  Inc. and SubsidiariesConsolidated
                  Balance Sheetas
                  of March 31, 2006Unaudited
                  (US Dollars)AssetsCurrent
                  AssetsCash
                  and cash equivalents
              
              $
              4,531,779Short
                  Term Financial Instrument
              
              
              10,294Receivable
              
              
              8,842Inventory
              
              
              38,485Advance
                  payments
              
              
              151,727Prepaid
                  expenses
              
              
              19,500Other
              
              
              18,712Total
                  current assets
              
              
              4,779,339Guarantee
                  deposits
              
              
              176,703Investment
                  (note 1)
              
              
              110,670Furniture
                  and equipment, net (note 1)
              
              
              631,040Royalty
                  Advance (note 3)
              
              
              500,000Total
                  assets
              
              $
              6,197,752Liabilities
                  and Stockholders' EquityCurrent
                  liabilitiesAccounts
                  payable
              
              $
              387,899Short-term
                  borrowings (note 5)
              
              
              242,279Accrued
                  expensesRegistration
                  Rights (note 3)
              
              
              923,790Payroll
                  and Related
              
              
              210,803Other
              
              
              130,775Other
              
              
              8,468Total
                  current liabilities
              
              
              1,904,014Bond
                  payable (note 6)
              
              
              274,906Total
                  liabilities
              
              
              2,178,920Stockholders'
                  equity (note 4)Preferred
                  Stock, Series A; $.001 par value; 30,000,000 shares authorized;
                  20,995,239
                  issued & outstanding
              
              
              20,995Preferred
                  Stock, Series B; $.001 par value; 7,000,000 shares authorized;
                  3,063,402
                  issued & outstanding
              
              
              3,063Common
                  stock; $.001 par value; 150,000,000 shares authorized; 29,609,022
                  issued
                  & outstanding
              
              
              29,610Common
                  stock Subscribed
              
              
              138Additional
                  paid-in-capital
              
              
              19,114,343Other
                  comprehensive loss
              
              
              (85,949
              )Accumulated
                  (deficit)
              
              
              (15,063,368
              )Total
                  stockholders' equity
              
              
              4,018,832Total
                  liabilities and stockholders' equity
              
              $
              6,197,752
  See
      notes
      to consolidated financial statements.


F-1




iCurie,
                  Inc. and SubsidiariesConsolidated
                  Statements of OperationsFor
                  the three months ended March 31, 2006 and 2005Unaudited
                  (US Dollars)Three
                  Months EndedMarch
                  31,2006
              
              2005Revenue
              
              $
              2,566
              
              $
              -Costs
                  and expensesCost
                  of Sales
              
              
              98,980
              
              
              -Selling
                  and Administrative expenses
              
              
              1,302,035
              
              
              1,086,702Depreciation
              
              
              5,618
              
              
              10,318Amortization
                  of deferred financing cost (note 1)
              
              
              -
              
              
              41,013Miscellaneous
              
              
              4,602
              
              
              39,831Total
                  costs and expenses
              
              
              1,411,235
              
              
              1,177,864Operating
                  (loss)
              
              
              (1,408,669
              )
              
              (1,177,864
              )Other
                  income (expenses)Net
                  Loss on Disposal of furniture and equipment
              
              
              (45,900
              )
              
              -Interest
                  and other income
              
              
              43,387
              
              
              634Interest
                  expense (notes 5 and 6)
              
              
              (10,598
              )
              
              (32,851
              )Total
                  other income (expenses)
              
              
              (13,111
              )
              
              (32,217
              )Net
                  (loss)
              
              $
              (1,421,780
              )
              $
              (1,210,081
              )Dividend
                  on Series A Preferred Stock (Note 4)
              
              $
              (336,977
              )
              $
              -Net
                  Loss Attributable to Common Shareholders
              
              $
              (1,758,757
              )
              $
              (1,210,081
              )Net
                  Loss per Share:Basic
                  and Diluted
              
              $
              (0.06
              )
              $
              (0.05
              )Weighted
                  Average Shares OutstandingBasic
                  and Diluted
              
              
              29,521,258
              
              
              24,935,047






See
      notes to consolidated financial
      statements


F-2


iCurie,
                  Inc. and SubsidiariesConsolidated
                  Statements of Cash Flowsfor
                  the Three Months Ended March 31, 2006 and 2005(US
                  Dollars)2006
              
              2005Cash
                  flows from operating activities:Net
                  (loss)
              
              $
              (1,421,780
              )
              $
              (1,210,081
              )Adjustments
                  to reconcile net (loss) to net cash (used)by
                  operating activities:Depreciation
              
              
              5,618
              
              
              10,318Amortization
              
              
              -
              
              
              41,013Beneficial
                  conversion feature on long-term debt
              
              
              -
              
              
              33,329Stock
                  Based Compensation
              
              
              67,330
              
              
              -Loss
                  on Disposal of Furniture and Equipment
              
              
              45,900
              
              
              -Imputed
                  interest
              
              
              (6,654
              )
              
              (4,773
              )Changes
                  to certain other accounts:
              
              
              
              
              
              -Receivable
              
              
              86,727
              
              
              (123,102
              )Inventory
              
              
              (38,485
              )
              
              -Advance
                  payments
              
              
              (26,782
              )
              
              7,777Prepaid
                  expenses
              
              
              19,500
              
              
              (1,102
              )Accounts
                  payable
              
              
              (67,153
              )
              
              (113,285
              )Accrued
                  expenses
              
              
              (20,112
              )
              
              145,774Other
              
              
              (41,204
              )
              
              84,623Net
                  cash (used) by operating activities
              
              
              (1,397,095
              )
              
              (1,129,509
              )Cash
                  flows from investing activities:Short-term
                  loan
              
              
              -
              
              
              (1,357
              )Deposits
              
              
              (49,327
              )
              
              -Acquisition
                  of short-term financial instrument
              
              
              (10,294
              )
              
              (375
              )Guarantee
                  deposits
              
              
              -
              
              
              (953
              )Other
              
              
              -
              
              
              4,063Purchase
                  of furniture and equipment
              
              
              (47,087
              )
              
              (69,545
              )Net
                  cash (used) by investing activities
              
              
              (106,708
              )
              
              (68,167
              )Cash
                  flows from financing activities:Short-term
                  borrowings
              
              
              10,596
              
              
              261,798Long-term
                  borrowings
              
              
              15,020
              
              
              508,759Deferred
                  financing fees
              
              
              -
              
              
              (50,000
              )Issuance
                  of common stock
              
              
              -
              
              
              197,732Repurchase
                  of common stock
              
              
              -
              
              
              (192,959
              )Repayment
                  of convertible bond
              
              
              -
              
              
              5,623Net
                  cash provided by financing activities
              
              
              25,616
              
              
              730,953Net
                  (decrease) in cash and cash equivalents
              
              
              (1,478,187
              )
              
              (466,723
              )Cash
                  and cash equivalents - beginning of year
              
              
              6,009,966
              
              
              1,019,044Cash
                  and cash equivalents - end of year
              
              $
              4,531,779
              
              $
              552,321Supplemental
                  cash flow disclosureNoncash
                  financing activityDuring
                  2006 the Company recorded stock compensationarrangements
                  for certain employees and directors
              
              $
              67,330
              
              $
              -




See
      notes to consolidated financial
      statements






F-3




iCurie,
        Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 March
        31,
        2006
 
 **Note
        1 - Summary of significant accounting policies**
 
 **Organization**
 
 iCurie,
        Inc.'s (the "Company" or "iCurie") operations consist of research, development,
        and commercialization of next-generation cooling solutions. The Company was
        founded in 2000 to address the emerging heat problem that now threatens the
        development of higher-performing microelectronic products. iCurie anticipates
        to
        be the first Company to take this innovative thermal management technology
        from
        the laboratory to high volume manufacturing, and operate as both a licensor
        of
        the technology and a vertically integrated provider of customized
        applications.
  The
        Company's corporate headquarters is located in Miami, USA with subsidiaries
        in
        London, United Kingdom and Seoul, South Korea. Our Design and Manufacturing
        operations are based in Seoul. Our patented NanoSpreadersTM are a completely new
        alternative to conventional cooling devices. By utilizing a nano scale
        environment, the laws of physics are manipulated enabling our cooling technology
        to be thinner, lighter and deliver significantly higher thermal conductivity
        (heat transfer capacity) versus conventional options such as Heat Pipes.
        And, we
        can supply our plate-shaped heat spreaders in virtually any shape that a
        design
        engineer requires. As a result, customers are able to achieve unsurpassed
        product performance without trading off size, weight or cost
        considerations.
 
 iCurie,
        Inc.'s subsidiaries consist of (i) iCurie Lab Holdings Limited ('iCurie UK"),
        a
        United Kingdom Company and (ii) iCurie Lab, Inc. ("iCurie Korea"), a Korean
        Company. In consolidation, all significant intercompany balances and
        transactions have been eliminated.
 
 **Financial
        reporting**
 
 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. They do not include
        all of the information and footnotes required by accounting principles generally
        accepted in the United States of America 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.
        Operating results for the three month period ended March 31, 2006 are not
        necessarily indicative of the results that may be expected for the year ended
        December 31, 2006.
 
 The
        Company prepares its financial statements in conformity with accounting
        principles generally accepted in the United States of America, which require
        management to make estimates and assumptions that affect the reported amounts
        in
        the financial statements. Although
        these statements are based on management's best knowledge of current events
        and actions that the Company may undertake in the future, actual results
        could differ
        from those estimates.
 
 Significant
        estimates required to be made by management include the valuation of 1)
        investments, 2) equity securities issued, and 3) registration
        rights.
 
 **Going
        Concern**
 
 The
        accompanying financial statements have been prepared assuming the Company will
        continue as a going concern, which contemplates the realization of assets
        and satisfaction
        of liabilities in the normal course of business. The Company and its
        Subsidiaries have recently commenced limited revenue producing operations
        and
        have sustained
        accumulated losses since inception of approximately $15 million. The Company
        and
        its Subsidiaries have funded operations through equity and debt financing since
        inception. All these factors raise substantial doubt over the Company's ability
        to continue as a going concern.
 
 **Cash
        and Cash Equivalents**
 
 Cash
        and
        cash equivalents include all cash balances and highly liquid
        investments, including
        time deposits, which are readily convertible into known amounts of cash and
        have
        an original maturity of three months or less. The Company and its Subsidiary's
        cash and cash equivalents are maintained in banks and financial institutions
        in
        the United States, United Kingdom and South Korea, and they have not experienced
        any losses on their cash balances.
 
 **Investment**
 
 iCurie
        UK
        owns 527,000 shares of an entity affiliated through commom management. These
        shares have been valued at $110,670 which is management's estimate of its
        fair
        market value as of fair market value as of March 31, 2006.
 
 F-4
 **Revenue
        recognition**
 
 The
        Company's policy is to record revenue as earned when the following attributes
        are met.
 
 -
        Persuasive evidence of a sale arrangement exists.
 -
        Delivery has occurred to the customers.
 -
        The
        sales price to the customer is fixed or determinable.
 -
        Collection is reasonably assured.
 
 **Deferred
        costs**
 
 In
        connection with obtaining debt and equity financing, iCurie UK incurred placement
        agent fees from a third party equal to 10% of the amount financed. Deferred
        financing costs incurred in connection with long-term financing amounted
        to $329,406 and were being amortized on a straight-line basis over
        the
        stated term of the loans. The long-term debt financing arrangement has been converted
        to preferred stock and, therefore, the Company has no additional financing fees
        related to this transaction. Amortization expense for the three months ended March
        31,
        2006 and 2005 amounted to $0 and $41,013, respectively.
 
 **Furniture
        and equipment**
 
 Furniture
        and equipment at March 31, 2006 are summarized as follows:
 
 Vehicles
                
                $
                51,849Machinery
                
                
                549,156Furniture
                    and fixtures
                
                
                216,896817,901Accumulated
                    depreciation
                
                
                (186,861
                )$
                631,040
 Furniture
        and equipment are stated at cost. Major renewals and betterments,
        which prolong
        the useful life or enhance the value of assets, are capitalized. Depreciation
        is computed
        using the straight-line method over the estimated life of five years for machinery
        and equipment, furniture and fixtures, and vehicles. Depreciation expense
        for
        the three months ended March 31, 2006 and 2005 amounted to $5,618 and $10,318,
        respectively.
 
 **Net
        Loss per Share**
 
 Basic
        Loss per share is computed by dividing net loss attributable to common
        shareholders for the period by the weighted average number of common shares
        outstanding during the period. Diluted earnings per share is computed by
        dividing net earnings by the weighted average number of shares plus the dilutive
        effect of convertible preferred shares and outstanding options and warrants.
 
 Approximately
        21 million and 3 million shares to be issued upon conversion of Series A
        and
        Series B, respectively, Preferred Shares were excluded from the calculation
        of
        diluted earnings per share for the period ended March 31, 2006, respectively,
        because they were anti-dilutive. The weighted average shares outstanding
        used in
        the comparative 2005 periods is based upon the shares issued by the Company
        to
        effect the July 2005 reverse acquisition.
 
 **Long-lived
        assets**
 
 Long-lived
        assets are reviewed for impairment whenever events or changes in circumstances
        indicate that the carrying amount of the assets may not be recoverable. When
        the
        aggregate undiscounted future cash flows is less than the carrying value
        of the
        asset, an impairment loss is recognized, based on the fair value of the
        asset.
 
 **Business
        risks**
 
 The
        Company is subject to the risks associated with start-up and high growth
        companies such as the risks of raising adequate capital, producing profitable
        operations, and operating in various countries through-out the
        world.
 
 **Research
        and development costs**
 
 Research
        and development costs are expensed as incurred and amounted to $133,844 and
        $242,456 for the three months ended March 31, 2006 and 2005,
        respectively.
 
 F-5
 **Foreign
        currency translation**
 
 The
        reporting and functional currency of iCurie US and UK is the U.S. Dollar,
        while
        the functional currency of iCurie Korea is the Korean Won.
 
 The
        assets and liabilities of iCurie Korea have been translated into U.S. Dollars
        at
        the prevailing
        period-end rate of exchange, while the related income and expense items were
        translated at the average rate of exchange during the period. The resulting
        translation adjustments are accumulated in a separate component of stockholders'
        equity.
 
 The
        Company follows Financial Accounting Standards No. 130 (SFAS 130) "Reporting Comprehensive
        Income." SFAS 130 requires a Company to report comprehensive income (loss)
        and
        its components in a full set of financial statements. Comprehensive income
        (loss) includes the change in equity during a period from transactions and other
        events and circumstances from non-owner sources, such as unrealized gains
        (losses) on foreign currency translation adjustments. Changes in unrealized
        foreign currency
        translation gains (losses) during the first three months of 2006 and 2005
        amounted to ($8,517) and ($9,299), respectively. Accordingly, comprehensive
        loss
        for the three months ended March 31, 2006 and 2005 amounted to $1,430,297
        and
        $1,219,380, respectively.
 
 **Fair
        value of financial instruments**
 
 The
        Company's cash, receivables, accounts payable, short-term debt, and bonds
        payable represent financial instruments whose carrying amounts reasonably
        approximate their fair value.
 
 **Note
        2 - Income Taxes**
 
 The
        Company recognizes deferred tax assets and liabilities created by temporary differences
        between the financial statement and tax basis of assets and liabilities. Deferred
        tax assets and liabilities are computed on such temporary differences, including
        available net operating loss carry forwards and tax credits, by applying enacted
        statutory tax rates applicable to the years when such differences are expected
        to reverse. A valuation allowance is provided on deferred tax assets to the extent
        that it is more likely than not that such deferred tax assets will not be
        realized.
 
 The
        Company currently operates in the United States, while its Subsidiaries operate
        in the United Kingdom and South Korea. Operating loss carryforwards in the
        United States approximated
        $1,800,000 at December 31, 2005, and can be carried forward for 20 years.
        Operating loss carryforwards in the United Kingdom approximated $6,900,000
        at December
        31, 2005, and can be carried forward indefinitely, provided the Company (i)
        doesn't cease operations and (ii) doesn't change its business nature, while
        operating loss carryforwards in South Korea approximated $3,100,000 at December
        31, 2005, and expire in the years 2007-2010. The Company has a deferred tax
        asset of approximately $3,500,000 and has recorded a full valuation allowance
        against the deferred tax asset resulting from these tax loss
        carry-forwards.
 
 **Note
        3 - Commitments**
 
 **Operating
        Leases**
 
 The
        Company has two leases in Seoul, Korea for its pilot plant, as well as for
        its
        administrative and research office. The leases expire in July 2006 and March
        2008. At December 31, 2005, the minimum future rental commitments under all
        non-cancelable operating leases with terms greater than one year, are as
        follows:
 
 Year
                    Ending December 31,2006
                
                $
                109,2862007
                
                $
                51,0892008
                
                $
                12,772$
                173,148
 **Employment
        contracts**
 
 The
        Corporation has entered into employment agreements with 26 of its officers
        /
        employees for terms ranging between two and three years. Under the terms
        of the
        contracts these officers / employees are entitled to compensation, bonuses
        and
        stock options based upon performance as defined in the respective agreements.
 
 **Commitments
        to a third party**
 
 According
        to an agreement between iCurie Korea and Sae Han IT, on May 21,  2004, iCurie
        Korea is to provide 25 percent of gross margin to B.A.C. Network (BAC) from
        the
        micro cooling systems business for 3 years from the initial sales to  include
        only LG Electronics, LGIBM, and others to which LG Electronics and LGIBM
        will
        supply the Company's products. Gross margin is determined based on the
        difference between suppliers' unit cost and selling price to purchaser. 
Through March 31, 2006, no qualifying sales have occurred.
 
 F-6
 **Royalty
        Agreement**
 
 On
        May
        18, 2005, iCurie UK entered into a Royalty Agreement with CHL Investment
        Partnership ("CHL") and Hansen Gray & Company, Inc. ("Hansen Gray"). The
        terms of the agreement call for a payment of 1.14% and 0.86% of revenue to
        CHL
        and Hansen Gray, respectively, once iCurie UK's revenue exceeds $25 million.
        The
        agreement is terminated once the aggregate payment to CHL and Hansen Gray
        totals
        $50 million. During 2005, the Company paid a Royalty Advance to Hansen Gray
        totaling $500,000.
 
 CHL
        is an
        organization in which Dr. Jeong Hyun Lee (the Company's Chief Technology
        Officer
        and Director) holds an interest in. Hansen Gray is an entity affiliated through
        common management.
 
 **Registration
        Rights**
 
 The
        Company has entered into a registration rights agreement with the preferred
        series A share holders dated July 11, 2005. Under the terms of the Registration
        Rights Agreement, if a registration statement is not filed within 60 days
        of
        July 11, 2005 or declared effective within 120 days of July 11, 2005 (each
        a
        "Non-registration Event"), then for each 30 day period during the pendancy
        of
        such a Non-Registration Event, the company is required to pay to the selling
        shareholders liquidated damages in an amount equal to one percent (1%) of
        the
        aggregated price such selling shareholders paid for the Company's series
        A
        Preferred stock (deemed to be $0.88 per share), which the company may pay
        in
        cash or additional shares of series A Preferred Stock (valued at $0.88 per
        share), at the company's option.
 
 The
        registration statement was filed on October 6, 2005 and was declared effective
        on April 17, 2006. The registration rights penalty has been recorded by
        management as its estimated fair market value on the date of the Preferred
        Stock
        Offering and is being revalued at each Balance Sheet date with any adjustments
        reflected in the Statement of Operations. At March 31, 2006, included in
        accrued
        expenses is approximately $900,000 which represents the fair market value
        of
        this liability.
 
 The
        Company has entered into a registration rights agreement with the preferred
        series B share holders dated December 16, 2005. Under the terms of the
        Registration Rights Agreement, the Company is required to file a Registration
        Statement covering the underlying Common Stock within six months after the
        Company's Registration Statement on Form SB-2 (SEC File No. 333-127193) is
        declared effective. The Company is required to maintain the effectiveness
        of the
        Initial Registration Statement through the first anniversary of the Closing
        Date
        and shall use its best efforts to maintain the effectiveness of the Initial
        Registration Statement through the second anniversary of the Closing Date.
        The
        Company believes it will be able to meet the requirements of the agreement
        and
        has not recorded any liability.
 
 **Note
        4 - Stockholders' equity**
 
 **Capital
        stock**
 
 At
        March
        31, 2006, the Company had an authorized number of shares of 150,000,000 Common
        Shares and 100,000,000 of Preferred Shares, 30,000,000 of which has been
        designated as Preferred Series A Shares and 7,000,000 of which has been
        designated Preferred Series B Shares. The total issued and outstanding shares
        were 29,609,022 Common Shares, 20,995,239 Preferred Series A Shares, and
        3,063,402 Preferred Series B Shares.
 
 The
        Company issued Preferred Series A and Series B Shares during 2005. No additional
        Preferred Series shares have been issued during the period ended March 31,
        2006.
 
 **Terms
        of Series A Preferred**
 
 In
        the
        event of any sale or dissolution of the Company, the holders of the
        Series A Preferred shall be entitled to receive in preference to the
        holders of the Series B and Common Stock a per share amount equal to $0.88
        plus
        any accrued, unpaid dividends. The holders of the Series A Preferred have
        the right to convert the Series A Preferred at any time into shares of
        Common Stock at an initial conversion rate of 1:1, as defined. At the option
        of
        the Company, if certain criteria as defined in the agreement are met, the
        Series A Preferred can be converted into Common Stock. The conversion price
        of the Series A Preferred and the exercise price of the Warrants are
        subject to a weighted average antidilution adjustment. The Series A
        Preferred vote together with the Common Stock and not as a separate class.
        Each
        share of Series A Preferred has a number
        of
        votes equal to the number of shares of Common Stock then issuable upon
        conversion of such share of Series A Preferred. So long as 50% or more of
        the Series A Preferred Stock remains outstanding, the holders of the Series
        A
        Preferred Stock are entitled to elect two directors of the Company, and so
        long
        as 25% or more of the Series A Preferred Stock remain outstanding, the holders
        of the Series A Preferred Stock are entitled to elect one director of the
        Company. The directors elected by the Series A Preferred Stock and the holders
        of the Series A Preferred Stock each have approval rights over specified
        corporate actions. Subject to certain exceptions, in the event the Company
        proposes to offer or sell any new securities, the Company shall first make
        an
        offering of such new securities to each holder of Series A Preferred
        Stock.
 
 The
        holders of Series A Preferred Stock are entitled to receive cumulative,
        compounding dividends at a rate of eight percent (8%) per annum as, when
        and if
        declared by the Board of Directors of the Company. The dividends may be paid
        in
        cash or shares of Series A Preferred Stock (valued at original issue price)
        at
        the sole discretion of the Company. Holders of Series A Preferred Stock also
        receive on an as-converted basis any distributions paid on the common stock.
        No
        dividends may be paid on common stock unless all unpaid cumulative dividends
        on
        the Series A Preferred Stock are paid. As of March 31, 2006, accumulated,
        undeclared dividends on the Series A Preferred Shares totaled
        $988,466.
 
 F-7
 **Terms
        of Series B Preferred**
 
 Subject
        and subordinate to the liquidation rights of the Company’s Series A
        Preferred Stock, in the event of any sale or dissolution of the Company,
        the
        holders of the Series B Preferred shall be entitled to receive in
        preference to the holders of the Common Stock a per share amount equal to
        $1.00.
        The holders of the Series B Preferred have the right to convert the
        Series B Preferred at any time into shares of Common Stock at an initial
        conversion rate of 1:1, as defined. At the option of the Company, if certain
        criteria as defined in the agreement are met, the Series B Preferred can be
        converted into Common Stock. The conversion price of the Series B Preferred
        and the exercise price of the Warrants are subject to a weighted average
        antidilution adjustment. The Series B Preferred vote together with the
        Common Stock and not as a separate class. Each share of Series B Preferred
        has a number of votes equal to the number of shares of Common Stock then
        issuable upon conversion of such share of Series B Preferred. The Series B
        Preferred does not carry any dividend.
 
 **Stock
        Compensation**
 
 Through
        March 31, 2006, the Company has issued approximately 4.7 million of its common
        stock to employees and others. These shares issuances were valued between
        $0.07-0.50 based upon management's estimate of the fair value of the common
        stock on the date of issuance. These stocks grants have certain vesting
        provisions through June 2007. For the period ended March 31, 2006, 456,377
        shares have vested and a charge to compensation expense of $57,747 was recorded.
        The remaining unvested shares totaling $101,210 will be expensed over the
        remaining vesting term.
 
 **Employee
        Stock Options**
 
 On
        January 1, 2006, the Company adopted the fair value recognition provisions
        of
        Statement of Financial Accounting Standards (SFAS) No. 123R, “Share-Based
        Payment,” using the modified prospective method. Consequently, for the three
        months ended March 31, 2006, the Company’s results of operations reflected
        compensation expense for new stock options granted and vested under its stock
        incentive plans during the first three months of fiscal year 2006 and the
        unvested portion of previous stock option grants which vested during the
        first
        three months of fiscal year 2006. The amount recognized in the financial
        statements related to stock-based compensation was $9,583 for the three months
        ended March 31, 2006.
 
 Stock
        options issued under the Company’s Long-term Incentive Plans are granted with an
        exercise price equal or greater than the market price of the Company’s stock at
        the date of grant and expire ten years from the date of grant. These options
        generally vest over a two- or three-year period. During the quarter ended
        March
        31, 2006, the Company issued 156,000 options to purchase common stock valued
        at
        $54,132 which vests over a 2 year period. During March 31, 2006, the Company
        recorded compensation expense of $1,388 related to this issuance.
 
 Prior
        to
        the first quarter of fiscal year 2006, the Company accounted for its stock-based
        employee compensation arrangements in accordance with the provisions and
        related
        interpretations of Accounting Principles Board Opinion No. 25, “Accounting for
        Stock Issued to Employees.” No shares were issued or vested during the three
        months ended March 31, 2005 and therfore, no compensation cost for stock-based
        compensation has been disclosed for the period.
 
 The
        fair
        value of each option granted is estimated on the date of grant using the
        Black-Scholes option-pricing method. The Company uses historical data to
        estimate the expected price volatility, the expected option life and the
        expected forfeiture rate. The risk-free rate is based on the U.S. Treasury
        yield
        curve in effect at the time of grant for the estimated life of the option.
        The
        Company has not made any dividend payments nor does it have plans to pay
        dividends in the foreseeable future.
 
 The
        fair
        value of each option granted is estimated on the date of grant using the
        Black-Scholes option-pricing method. Given its limited trading history, the
        Company used volatility from companies in the same industry. The Company
        estimated the expected option life and the expected forfeiture rate. The
        risk-free rate is based on the U.S. Treasury yield curve in effect at the
        time
        of grant for the estimated life of the option. The Company has not made any
        dividend payments nor does it have plans to pay dividends in the foreseeable
        future. The following assumptions were used to estimate the fair value of
        options granted during the three months ended March 31, 2006 using the
        Black-Scholes option-pricing model:
 
 
 Risk
                  free interest rate
              
              
              5.73
              %Expected
                  Term (years)
              
              
              5Expected
                  volatility
              
              
              100.00
              %Dividend
                  Yield
              
              
              0.00
              %
  A
        summary
        of the option activity for the three months ended March 31, 2006 is as
        follows:
  **Weighted
                    Average****Shares**
                
                **Exercise
                    Price**Options
                    Outstanding at January 1, 2006
                
                
                2,510,337
                
                $
                0.880Granted
                
                
                156,000
                
                $
                1.000Options
                    Outstanding at March 31, 2006
                
                
                2,666,337
                
                $
                0.89
   F-8
 
 **Warrants
            to Purchase Common Stock**
  A
            summary
            of the issued and outstanding warrants at March 31, 2006 are summarized
            as
            follows:
 **Amount**
                  
                  **Issue
                      Date**
                  
                  **Exercise
                      Price**
                  
                  **Expiration
                      Date**Warrants
                      to purchase Common Stock
                  
                  
                  10,028,078
                  
                  
                  July
                      2005-Dec 2005
                  
                  $
                  0.88
                      to $3.00
                  
                  
                  2010Warrants
                      to purchase Preferred Stock
                  
                  
                  1,574,528
                  
                  
                  July
                      2005-Dec 2005
                  
                  $
                  0.88-$1.50
                  
                  
                  2010
  **Note
        5 - Short-term borrowing**
 
 Short-term
        borrowing at March 31, 2006 consists of a bank loan payable with interest
        at
        5.92% per annum with an outstanding balance of $242,279 (Won
        234,000,000).
 
 **Note
        6 - Bond payable**
 
 The
        bond
        payable (Won 300 million) at March 31, 2006, was issued to Asia Vital Components
        in December 2002 and matures in December 2007. The bond carries no interest
        and
        has been discounted using a 7% interest rate. At March 31, 2005 the unamortized
        bond discount amounted to $33,942, respectively.
 
 The
        bond
        payable at December 31, 2005 is summarized as follows:
 
 Face
                    Amount
                
                $
                308,848Less:
                    Discount
                
                
                (89,905
                )Plus:
                    Amortization of discount
                
                
                55,963Carrying
                    value
                
                $
                274,906
 Under
        the
        original terms, the bond was convertible into 6,667 shares (an approximate
        2%
        ownership) of common stock in the Subsidiary (iCurie Korea); however, Asia
        Vital
        Components has waived its right to convert the bond into common
        stock.





F-9




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





Management
      believes the following discussion is relevant to an assessment and understanding
      of the plan of operation of iCurie, Inc. and its subsidiaries (collectively
“we”
or the “Company”) as of March 31, 2006. The discussion should be read in
      conjunction with the unaudited condensed consolidated financial statements
      and
      notes thereto included in this Form 10-QSB.  iCurie, Inc. is operating
      under the brand name Celsia Technologies.




*Plan
      of Operation*




Our
      operations include research, development, sales and marketing of our own
      patented technology portfolio as well as operating our pilot plant. We believe
      our technology is ready for commercialization and we are currently involved
      with
      potential customers in
      several projects designed to commercially produce and sell our
      products .
      Furthermore, technology companies face challenges as they develop and
      manufacture new and more powerful components and products, which generate heat
      and require a solution to dissipate the heat. We believe that the heat emission
      problem has accelerated and is now seriously threatening the development of
      new
      heat generating products in several industries. Our cooling solutions
      should therefore enable companies to develop new products with higher
      performance, increased efficiency and with smaller size. We want to become
      a
      world leader in developing and commercializing this next generation of cooling
      solutions for the PC, LED-lighting, and the flat panel display industries.
      Management has decided to focus the main part of our resources on the Nano
      Spreader TechnologyTM (NST). This technology path is meant to be a more
      economical and faster way to commercialize our products compared to our MCS
      technology. Our technology is described in our annual report on Form 10-KSB
      for
      the fiscal year ended December 31, 2005.




There
      can
      be no assurance that we will be able to commercialize our product portfolio
      without having to raise additional money over the next twelve months. If the
      company decides and that it is necessary to raise additional capital in order
      to
      accelerate the growth of the business, there can be no assurance that we will be
      able
      to successfully raise such capital if needed. The company is working with tight
      cost controls in order to manage its commercialization process. A
      majority of our expenses in the quarters ended March 31 2006 and 2005 were
      from
      selling, general and administrative expenses, which include research and
      development costs. The selling, general and administrative expenses as of March
      31, 2006 were approximately $1.3 million compared to approximately $1.1 million
      for the same period last year. This is mainly attributable to increased
      personnel costs.




We
      expect
      our research and development activities to continue to be focused on product
      projects undertaken in conjunction with potential customers relating to the
      use
      and/or modification of our product for
      use
      by such customers .




We
      expect
      our c apital
      expenditures over the next twelve months to be focused on complementing our
      pilot plant with specific volume related equipment and on specific research
      and
      development related test equipment. All such expenditures will be generated
      in
      Seoul, South Korea, where our research and development headquarters are located. All
      investments will be driven by commercialization opportunities.




3


We
      believe we are sufficiently staffed to execute our 2006 business plan. Planned
      new employees are strictly replacement hirings. However, if opportunities arise
      with what we believe significant upsides with reasonable risks, we are prepared
      to reevaluate and change our plans.




During
      the quarter ended March 31, 2006, we continued to make progress towards building
      the Company and commercializing our technology. We have received product test
      results, which led to certain
      related test product orders , and also
      continued discussions and price negotiations with potential customers and
      strategic partners.




*Liquidity
      of the Company*




Our
      main
      sources of liquidity are the approximate $10.0 million in net cash proceeds
      generated from our 2005 Series A Preferred Stock offering as well as the $2.8
      million in net proceeds from our Series B offering in 2005. The cash outflows
      for the first quarter has been approximately $500,000 per month, which was
      consistent with our plans. Our main use of cash during the first quarter has
      been related to product development and general and administrative expenses.
      Prior to the Series A Preferred Stock issuance in July 2005, the Company had
      limited liquidity and approximately $2.5 million in convertible
      debt.





Based
      on
      our current operating plan, we anticipate using our cash mainly to continue
      our
      efforts to commercialize our cooling solutions. The main cash uses will be
      for sales and marketing, general and administrative, and research and
      development expenses. Investments will be focused on product development and
      manufacturing. All investments will be driven by commercialization
      opportunities. The total cash need for the next twelve months is estimated
      to
      approximately $6.9 million, starting at April 1, 2006. The main portion of
      the cash need is for operating expenses and a smaller portion is for investments
      in manufacturing and R&D. The company also plans to redeem a short-term loan
      of 234,000,000 Won (approximately $242,279). We expect to fund these activities
      out of our current cash reserve of approximately $4.5 million as of March 31,
      2006 and through cash generated from operations, which is expected to occur
      in
      the fourth quarter of 2006.




The
      ratio
      between current assets and current liabilities at March 31, 2006 was
      approximately 2.5. However, a significant portion of current liabilities relates
      to penalties payable pursuant to the Registration Rights Agreement with the
      Series A Preferred Stock holders which will have no cash impact as the Company
      is planning to settle such penalties by issuing additional shares of Series
      A
      Preferred Stock as permitted under the Registration Rights Agreement.




In
      the
      event the Company is not able to commercialize its products in anticipated
      volumes during the next twelve  months,
      and is unable to contain expenses without adversely affecting operations, the
      Company will require additional capital in order to continue its operations.
      There can be no assurance that we will be able to obtain the necessary funds
      in
      a timely manner or the terms on which such funds may be obtained. Since
      inception, we have not generated material revenue from operations and there
      can
      be no assurance that we will generate revenue in the future. We may also
      determine to raise additional capital if such capital can be raised on terms
      which we deem appropriate.




4


*Significant
      Estimate* *s*




The
      Company prepares its financial statements in conformity with accounting
      principles generally accepted in the United States of America, which require
      management to make estimates and assumptions that affect the reported amounts
      in
      the financial statements. Although these statements are based on management's
      best knowledge of current events and actions that the Company may undertake
      in
      the future, actual results could differ from those estimates. Significant
      estimates required to be made by management include the valuation of 1)
      investments, 2) equity securities issued, and 3) registration rights
      penalties.




*Recent
      accounting pronouncement*




In
      December 2004, the Financial Accounting Standards Board issued SFAS No.123(R),
      "Share-Based Payment," which replaces SFAS No. 123, "Accounting for Stock-Based
      Compensation," and supersedes APB Opinion No. 25, "Accounting for Stock Issued
      to Employees." SFAS No. 123(R) requires compensation costs relating to
      share-based payment transactions be recognized in financial statements. The
      pro
      forma disclosure previously permitted under SFAS No. 123 will no longer be
      an
      acceptable alternative to recognition of expenses in the financial statement.
      SFAS No. 123(R) is effective for awards beginning January 1, 2006. The company
      is required to record all stock based compensation at their fair values upon
      adoption of this policy in 2006.




*Off
      Balance Sheet Arrangements*




We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that is material to investors.




*Market
      Risks*




The Company operates
      in the
      United States, the United Kingdom and
      South Korea ,
      each of
      which has its own currency. This
      may
      cause the Company to
      experience and be exposed to different market risks such as changes in interest
      rates and currency deviations .




*Forward-Looking
      Statements*




When
      used
      in this Form 10-QSB or other filings by the Company with the Securities and
      Exchange Commission, in our press releases or other public or shareholder
      communications, or in oral statements made with the approval of an authorized
      Company officer, the words or phrases “would be”, “will allow”, “intends to”,
“will likely result”, “are expected to”, “will continue”, “is anticipated”,
“estimate”, “project”, or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private Securities
      Litigation Reform Act of 1995.




5


We
      caution readers not to place undue reliance on any forward-looking statements,
      which speak only as of the date made, and advise readers that forward-looking
      statements involve various risks and uncertainties. We do not undertake, and
      specifically disclaim, any obligation to update any forward-looking statements
      to reflect occurrences or unanticipated events or circumstances after the date
      of such statement.










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




We
      have
      evaluated, with the participation of our Chief Executive Officer and Chief
      Financial Officer, the effectiveness of the design and operation of our
      disclosure controls and procedures as of Mach 31, 2006 pursuant to Exchange
      Act
      Rule 15d-15. Based upon that evaluation, the Chief Executive Officer and Chief
      Financial Officer concluded that our disclosure controls and procedures are
      effective in timely alerting them to material information relating to the
      Company required to be included in our periodic SEC filings. There were no
      changes made in our internal control over financial reporting, as such term
      is
      defined in Exchange Act Rule 15d-15(f), during the period covered by this report
      that have materially affected, or are reasonably likely to materially affect,
      these controls subsequent to the date of their last evaluation.




**PART
      II**


**OTHER
      INFORMATION**





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




During
      the period covered by this report, the Company issued 292,987 shares of common
      stock to certain employees, which issuances were not registered under the
      Securities Act of 1933, as amended (the “Securities Act”). The issuances of such
      securities were exempt from registration under the Securities Act pursuant
      to
      Section 4(2) thereof. We made this determination in part based on the
      representations of the recipients of such securities which included, in
      pertinent part, that such parties were either (i) not “U.S. Persons” as defined
      in Regulation S of the Securities Act or (ii) “accredited investors” within the
      meaning of Rule 501 of Regulation D promulgated under the Securities
      Act.




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




3(i).1
            Amended
                and Restated Articles of Incorporation of iCurie, Inc. (incorporated
                by
                reference to Exhibit 3(i).1 to iCurie, Inc.’s Quarterly Report on Form
                10-QSB for the quarterly period ended June 30,
                2005).




6


3(i).2
            Certificate
                of Designation to Amended and Restated Articles of Incorporation
                of
                iCurie, Inc. (incorporated by reference to Exhibit 3(i).2 to iCurie,
                Inc.’s Annual Report on Form 10-KSB for the fiscal year ended December
                31,
                2005).




3(ii).1
            Amended
                and Restated Bylaws of iCurie, Inc. (Incorporated by reference to
                Exhibit
                3(ii).1 to iCurie, Inc.’s Quarterly Report on Form 10-QSB for the
                quarterly period ended June 30,
                2005).




4.1*
            Form
                of Warrant issued to Placement Agents (for common stock, Series A
                Preferred Stock and Series B Preferred
                Stock).




4.2*
            Form
                of $0.88 Warrants issued to purchasers of Series A Preferred
                Stock.




4.3*
            Form
                of $1.10 and $1.32 Warrants issued to purchasers of Series A Preferred
                Stock and $1.50 and $3.00 warrants issued to purchasers of Series
                B
                Preferred Stock.




4.4*
            Warrant
                dated July 11, 2005 between iCurie, Inc. and Dr. Jeong Hyun Lee,
                Ph.D.




4.5*
            iCurie,
                Inc. 2005 Stock Incentive Plan.




4.6*
            Form
                of Option Grant under iCurie, Inc. 2005 Stock Incentive
                Plan.




4.7*
            Form
                of Restricted Stock Grant under iCurie, Inc. 2005 Stock Option Incentive
                Plan.




31.1
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002




31.2
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002




32.1
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002




32.2
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002







*  Included
      as an exhibit to iCurie, Inc.’s Registration Statement on Form SB-2, SEC File
      No. 333-128856, and incorporated herein by reference.





+  Represents
      a management contract or compensatory plan or arrangement.





7


**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.




**iCURIE,
                INC**.
              (Registrant)Date: May
              10,
              2006
            By:
            /s/Hakan
              WretsellHakan
              WretsellChief
              Executive Officer By:
            /s/Michael
              KarphedenMichael
              KarphedenChief
              Financial Officer






8


**EXHIBIT
      INDEX**




31.1
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002




31.2
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002




32.1
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002




32.2
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002




9