**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 June 30,
                2006**





o
            **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
            
            Outstanding
                as of August 2, 2006Common
                Stock
            
            29,994,295




Transitional
      Small Business Disclosure Format: Yes o No x










**PART
      I**


**FINANCIAL
      INFORMATION**





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




iCurie,
        Inc. and Subsidiaries
 Consolidated
        Balance Sheet
 as
        of
        June 30, 2006
 Unaudited
        (US Dollars)
  AssetsCurrent
                  AssetsCash
                  and cash equivalents
              
              $
              2,925,382Short
                  Term Financial Instrument
              
              
              10,543Receivable
              
              
              30,604Inventory
              
              
              34,906Advance
                  payments
              
              
              145,224Other
              
              
              18,939Total
                  current assets
              
              
              3,165,598Guarantee
                  deposits
              
              
              128,255Investment
                  (note 1)
              
              
              —Furniture
                  and equipment, net (note 1)
              
              
              664,750Royalty
                  Advance (note 3)
              
              
              500,000Total
                  assets
              
              $
              4,458,603Liabilities
                  and Stockholders' EquityCurrent
                  liabilitiesAccounts
                  payable
              
              $
              346,869Accrued
                  expensesRegistration
                  Rights (note 3)
              
              
              923,790Payroll
                  and Related
              
              
              120,635Other
              
              
              146,064Other
              
              
              27,051Total
                  current liabilities
              
              
              1,564,409Accrual
                  for Employee Retirement Benefits (note 3)
              
              
              165,607Bond
                  payable (note 5)
              
              
              286,382Total
                  liabilities
              
              
              2,016,398Stockholders'
                  equity (note 4)Preferred
                  Stock, Series A; $.001 par value; 30,000,000 shares authorized;
                  20,697,437
                  issued & outstanding
              
              
              20,697Preferred
                  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; 29,994,295
                  issued
                  & outstanding
              
              
              29,996Common
                  stock Subscribed
              
              
              109Additional
                  paid-in-capital
              
              
              19,193,924Other
                  comprehensive loss
              
              
              (91,242
              )Accumulated
                  (deficit)
              
              
              (16,714,342
              )Total
                  stockholders' equity
              
              
              2,442,205Total
                  liabilities and stockholders' equity
              
              $
              4,458,603
  See
        notes
        to consolidated financial statements
  F-1
  iCurie,
          Inc. and Subsidiaries Consolidated
            Statements of Operations Unaudited
              (US Dollars)
 **Three
                    Months Ended**
                  **June
                    30,**
                ****
                **Six
                    Months Ended**
                  **June
                    30,**
                ********
                ****
                **2006**
                ****
                **2005**
                ****
                **2006**
                ****
                **2005**Revenue
                
                $
                19,994
                
                $
                —
                
                $
                22,560
                
                $
                —Costs
                    and expensesCost
                    of Sales
                
                
                185,274
                
                
                —
                
                
                284,254
                
                
                —Selling
                    and Administrative expenses
                
                
                1,383,128
                
                
                1,182,026
                
                
                2,685,163
                
                
                2,268,728Depreciation
                
                
                6,539
                
                
                10,707
                
                
                12,157
                
                
                21,025Amortization
                    of deferred financing cost (note 1)
                
                
                —
                
                
                54,903
                
                
                —
                
                
                95,916Miscellaneous
                
                
                (1,902
                )
                
                (29,038
                )
                
                2,700
                
                
                10,793Total
                    costs and expenses
                
                
                1,573,039
                
                
                1,218,598
                
                
                2,984,274
                
                
                2,396,462Operating
                    (loss)
                
                
                (1,553,045
                )
                
                (1,218,598
                )
                
                (2,961,714
                )
                
                (2,396,462
                )Other
                    income (expenses)Net
                    Loss on Disposal of furniture and equipment
                
                
                —
                
                
                —
                
                
                (45,900
                )
                
                —Loss
                    on Investment
                
                
                (110,670
                )
                
                
                
                
                (110,670
                )Interest
                    and other income
                
                
                29,304
                
                
                16,096
                
                
                72,691
                
                
                16,730Interest
                    expense (notes 5 and 6)
                
                
                (16,563
                )
                
                (211,553
                )
                
                (27,161
                )
                
                (244,404
                )Total
                    other income (expenses)
                
                
                (97,929
                )
                
                (195,457
                )
                
                (111,040
                )
                
                (227,674
                )Net
                    (loss)
                
                $
                (1,650,974
                )
                $
                (1,414,055
                )
                $
                (3,072,754
                )
                $
                (2,624,136
                )Dividend
                    on Series A Preferred Stock (Note 4)
                
                $
                (340,721
                )
                $
                —
                
                $
                (677,698
                )
                $
                —Net
                    Loss Attributable to Common Shareholders
                
                $
                (1,991,695
                )
                $
                (1,414,055
                )
                $
                (3,750,452
                )
                $
                (2,624,136
                )Net
                    Loss per Share:Basic
                    and Diluted
                
                $
                (0.07
                )
                $
                (0.06
                )
                $
                (0.13
                )
                $
                (0.11
                )Weighted
                    Average Shares OutstandingBasic
                    and Diluted
                
                
                29,761,545
                
                
                24,935,047
                
                
                29,640,109
                
                
                24,935,047
  See
          notes
          to consolidated financial statements
  F-2





iCurie,
        Inc. and Subsidiaries
 Consolidated
        Statements of Cash Flows for
          the
          Six Months Ended June 30, 2006 and 2005 (US
            Dollars)


**2006**
              
              **2005**Cash
                  flows from operating activities:Net
                  (loss)
              
              $
              (3,072,754
              )
              $
              (2,624,136
              )Adjustments
                  to reconcile net (loss) to net cash (used) by
                  operating activities:Depreciation
              
              
              12,157
              
              
              21,025Amortization
              
              
              —
              
              
              95,916Beneficial
                  conversion feature on long-term debt
              
              
              —
              
              
              153,053Loss
                  on Investment
              
              
              110,670Stock
                  Based Compensation
              
              
              132,111
              
              
              —Loss
                  on Disposal of Furniture and Equipment
              
              
              45,901
              
              
              —Imputed
                  interest, net
              
              
              (12,844
              )
              
              8,254Changes
                  to certain other accounts:
              
              
              
              
              
              —Receivable
              
              
              64,695
              
              
              57,608Inventory
              
              
              (34,906
              )
              
              —Advance
                  payments
              
              
              (20,279
              )
              
              (7,468
              )Prepaid
                  expenses
              
              
              39,000
              
              
              (5,005
              )Accounts
                  payable
              
              
              (108,183
              )
              
              (50,676
              )Accrued
                  expenses
              
              
              (80,132
              )
              
              1,080,961Accrual
                  for Employee Retirement Benefits
              
              
              165,607Other
              
              
              (42,707
              )
              
              101,128Net
                  cash (used) by operating activities
              
              
              (2,801,664
              )
              
              (1,169,340
              )Cash
                  flows from investing activities:Deposits
              
              
              (879
              )
              
              (29
              )(Acquisition)
                  redemption of short-term financial instrument
              
              
              (10,543
              )
              
              19,322Purchase
                  of furniture and equipment
              
              
              (79,058
              )
              
              (182,830
              )Net
                  cash provided (used) by investing activities
              
              
              (90,480
              )
              
              (163,537
              )Cash
                  flows from financing activities:Short-term
                  borrowings
              
              
              (231,683
              )
              
              232,172Long-term
                  borrowings
              
              
              39,243
              
              
              1,008,373Deferred
                  financing fees
              
              
              —
              
              
              (100,000
              )Issuance
                  of common stock
              
              
              —
              
              
              110,643Offering
                  Costs
              
              
              
              
              
              (755,127
              )Net
                  cash (used) provided by financing activities
              
              
              (192,440
              )
              
              496,061Net
                  (decrease) in cash and cash equivalents
              
              
              (3,084,584
              )
              
              (836,816
              )Cash
                  and cash equivalents - beginning of period
              
              
              6,009,966
              
              
              1,019,044Cash
                  and cash equivalents - end of period
              
              $
              2,925,382
              
              $
              182,228Supplemental
                  cash flow disclosureNoncash
                  financing activityDuring
                  2006 the Company recorded stock compensationarrangements
                  for certain employees and directors
              
              $
              132,111
              
              $
              —During
                  2005 the Company recorded a beneficial conversion featureon
                  certain Long-term debt.
              
              
              
              
              $
              192,959


See
        notes
        to consolidated financial statements


F-3




iCurie,
      Inc. and Subsidiaries


Notes
      to
      Consolidated Financial Statements


June
      30,
      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 being 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 NanoSpreaderTM is a completely new
      alternative to conventional cooling devices. By utilizing a nano scale
      environment, the laws of physics are manipulated enabling our cooling technology
      to be thinner, lighter and deliver significantly higher thermal conductivity
      (heat transfer capacity) versus conventional options such as Heat Pipes. And,
      we
      can supply our plate-shaped heat spreaders in virtually any shape that a design
      engineer requires. As a result, customers should be able to achieve improved
      product performance without trading off size, weight or cost
      considerations .





i Curie,
      Inc.’s subsidiaries consist of (i) Celsia Technologies UK Limited (“UK
      Subsidiary”), a United Kingdom Company formerly known as iCurie Lab Holdings
      Limited, and (ii) Celsia Technologies Korea, Inc. (“Korea Subsidiary”), a Korean
      Company formerly known as iCurie Lab, Inc. In consolidation, all significant
      intercompany balances and transactions have been eliminated. The Company is
      doing business under the brand name Celsia Technologies .





**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 six month period ended June 30, 2006 are not
      necessarily indicative of the results that may be expected for the
      year ended
      December 31, 2006.





T he
      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 $16.7
      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.




F-4


iCurie,
        Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 June
        30,
        2006




**Investment**





The
      UK
      Subsidiary owns 527,000 shares of an entity affiliated through common
      management. These shares have been fully reserved
      and carry a book value of $ 0 as of June 30, 2006.





**Revenue
      recognition**





The
      Company’s policy is to record revenue as earned when the following attributes
      are met.





-
            Persuasive
                evidence of a sale arrangement
                exists.


-
            Delivery
                has occurred to the customers.


-
            The
                sales price to the customer is fixed or
                determinable.


-
            Collection
                is reasonably assured.





**Deferred
      costs**





In
      connection with obtaining debt and equity financing, the UK subsidiary 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 six
      months ended June 30, 2006 and 2005 amounted to $0
      and $95,916, respectively.


**Furniture
        and equipment**
  Furniture
        and equipment at June 30, 2006 are summarized as follows:
  Vehicles
              
              $
              54,157Machinery
              
              
              562,519Furniture
                  and fixtures
              
              
              281,470898,146Accumulated
                  depreciation
              
              
              (233,396
              )$
              664,750




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 six months ended June 30, 2006 and 2005 amounted to $12,157
      and
      $21,025, 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 periods ended June 30, 2006
      and 2005, 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 $455,852 and
      $464,832 for the six months e nded
      June
      30, 2006 and 2005, respectively.




F-5


iCurie,
        Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 June
        30,
        2006


**Foreign
      currency translation**





The reporting
      and functional currency of the Company and its UK Subsidiary is the U.S. Dollar,
      while the functional currency of Korea
      Subsidiary is the Korean Won.





The
      assets and liabilities of the Korea Subsidiary 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
      six
      months of 2006 and 2005 amounted to ($13,810) and $4,619, respectively.
      Accordingly, comprehensive loss for the six months ended June 30, 2006 and
      2005
      amounted to $ 3,086,564
      and $2,619,517, 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. One lease expires in March 2008 and the
      other renews on a quarterly basis. 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
              
              $
              40,8012007
              
              $
              51,0892008
              
              $
              12,772$
              104,662





F-6




iCurie,
        Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 June
        30,
        2006


**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 .





**Accrual
      for Employment Retirement Benefits**





The
      Company has recorded a liability of $165,607 for the period ended June 30,
      2006.
      The accrual is a result of a recent legal decision by the Korean Supreme Court
      which presents a potential liability to the Company. The Company believes it
      will not realize this liability within the current year, and it has therefore
      been recorded as a long term liability.





**Commitments
      to a third party**





According
      to an agreement between the Korea Subsidiary and Sae Han IT, on May 21, 2004,
      The Korea Subsidiary is to provide 25 percent of gross margin to B.A.C. Network
      (BAC) from the micro cooling systems business for 3 years from the initial
      sales
      to include only LG Electronics, LGIBM, and others to which LG Electronics and
      LGIBM will supply the Company's products. Gross margin is determined based
      on
      the difference between suppliers' unit cost and selling price to
      purchaser.  Through June 30, 2006, no q ualifying
      sales have occurred.





**Royalty
      Agreement**





On
      May
      18, 2005, the UK Subsidiary entered into a Royalty Agreement with CHL Investment
      Partnership ("CHL") and Hansen Gray & Company, Inc. ("Hansen Gray"). The
      terms of the agreement call for a payment of 1.14% and 0.86% of revenue to
      CHL
      and Hansen Gray, respectively, once the UK Subsidiary's revenue exceeds $25
      million. The agreement is terminated once the aggregate payment to CHL and
      Hansen Gray totals $50 million. During 2005, the Company paid a Royalty Advance
      to Hansen Gray totaling $500,000.




CHL
      is an
      organization in which Dr. Jeong Hyun Lee (the Company's Chief Technology Officer
      and Director) holds an interest in. H ansen
      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 at 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
      June 30, 2006, included in accrued expenses is approximately $900,000 which
      represents the fair market value of this li ability.





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. 333-128856) 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 liabi lity.





**Note
      4 - Stockholders' equity**





**Capital
      stock**





At
      June
      30, 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 29,994,295 Common Shares, 20,697,437 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 June 30, 2006.
      During the period ended June 30, 2006, 297,802 shares of Preferred Series A
      were
      converted to Common Shares at a rate of 1:1. As a result, the Company has issued
      20,154 shares of Common Stock for accrued divide nds
      to
      the Series A shareholders upon conversion.




F-7




iCurie,
        Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 June
        30,
        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 is 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 Seri es
      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 June 30, 2006, accumulated,
      undeclared dividends on the Series A Preferred Shares
      totaled $1,314,328.





**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
      June 30, 2006, the Company has issued approximately 4.75 million of its common
      stock to employees and others, of which approximately 3.7 million common shares
      have vested. These shares issuances were valued between $0.07-0.50 based upon
      management's estimate of the fair value of the common stock on the date of
      issuance. These stocks grants have certain vesting provisions through June
      2007.
      During the six months ended June 30, 2006, 891,321 shares have vested and a
      charge to compensation expense of $104,776 was recorded. The remaining unvested
      shares totaling $73,470 at June 30, 2006 will be amortized in future periods.





**Employee
      Stock Options**





On
      January 1, 2006, the Company adopted the fair value recognition provisions
      of
      Statement of Financial Accounting Standards (SFAS) No. 123R, “Share-Based
      Payment,” using the modified prospective method. Consequently, for the six
      months ended June 30, 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 six months of fiscal year 2006 and the unvested
      portion of previous stock option grants which vested during the six three months
      of fiscal year 2006. The amount recognized in the financial statements related
      to stock-based compensation was $27, 334
      for
      the six months ended June 30, 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 six months ended
      June 30, 2006, the Company issued 241,000 options to purchase common stock
      valued at $89,440 which vests over a 2 year period. During the six months ended
      June 30, 2006, the Company recorded compensation expense of
      $10,944 related to this issuance.




F-8




iCurie,
        Inc. and Subsidiaries
 Notes
        to
        Consolidated Financial Statements
 June
        30,
        2006


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 six months ended June 30, 2006 using the
      Black-Scholes option- pricing
      model:




Risk
                  free interest rate
              
              
              8.02
              %Expected
                  Term (years)
              
              
              5Expected
                  volatility
              
              
              100.00
              %Dividend
                  Yield
              
              
              0.00
              %




A
        summary
        of the option activity for the six months ended June 30, 2006 is as
        follows:


**Shares**
              
              **Weighted
                    Average**
                  **Exercise
                    Price**Options
                  Outstanding at December 31, 2006
              
              
              2,510,337
              
              $
              0.88Granted
              
              
              241,000
              
              $
              0.74Options
                  Outstanding at June 30, 2006
              
              
              2,751,337
              
              $
              0.87




**Warrants
        to Purchase Common Stock**


A
        summary
        of the issued and outstanding warrants at June 30, 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 - Bond payable**





The
      bond
      payable (Won 300 million) at June 30, 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 June 30, 2006 the
      unamortized bond
      discount amounted to $29,922.




The
        bond
        payable at June 30, 2006 is summarized as follows:


Face
                  Amount
              
              $
              316,305Less:
                  Discount
              
              
              (92,076
              )Plus:
                  Amortization of discount
              
              
              62,153Carrying
                  value
              
              $
              286,382




U nder
      the
      original terms, the bond was convertible into 6,667 shares (an approximate
      2%
      ownership) of common stock in the Korea Subsidiary; however, Asia Vital
      Components has waived its
      right to convert the bond into common stock.





**Note
      6 - Solicitation of shareholder consent**





During the six
      months ended June 30, 2006, the Company solicited written consent from certain
      of its shareholders with respect to (i) a change in the company's name to Celsia
      Technologies, Inc., (ii) an increase in the number of shares of the Company
      common stock subject to the Company's incentive stock option plan, (iii) a
      proposed distribution of common stock, (iv) certain agreements and waivers
      from
      the holders of the Company's Series A and Series B Preferred Stock relating
      to
      the effect of certain contemplated corporate actions on the terms of such stock
      and (v) a proposed amendment to the Company's Amended and Restated Articels
      of
      Incorporation to reflect certain of the matters referred to above. As of June
      30, 2006, the Company
      was in the process of obtaining such consent.




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 June 30, 2006. The discussion should be read in
      conjunction with the unaudited condensed consolidated financial statements
      and
      notes thereto included in this Form 10-QSB.




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 technologies 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.




The
      Company signed three sales and distribution contracts during the quarter ended
      June 30 2006, which is in line with our go to market strategy. These contracts
      are with; Graftech’s subsidiary AET (USA), Kubo Kinzoku (Japan), and Lighting
      Science Group (USA).




The
      Company has produced revenues of $22,560 for the six months ended June 30,
      2006
      compared to $0 for the same period last year. The revenues for the three months
      ended June 30, 2006 were $19,994. The revenues are a result of customers paying
      for test samples, and smaller commercial deliveries.




The
      Company is currently contemplating financing alternatives to
      raise
      additional capital to
      support its growth strategy. There can be no assurance that we will be
      able
      to successfully raise such capital ,
      or that
      we will be able to commercialize our product portfolio without additional
      funds .
      The
      Company is working with tight cost controls in order to manage its
      commercialization process. A
      majority of our expenses in the quarters ended June 30, 2006 and 2005 were
      from
      selling and administrative expenses, which include research and development
      costs. The selling and administrative expenses for the six months ended June
      30,
      2006 were approximately $2.7 million compared to approximately $2.3 million
      for
      the same period last year. The increase compared to last year is mainly
      attributable to increased personnel costs.




2




We
      expect
      our research, development, and project management 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.




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 are significant upsides with reasonable risks, we are
      prepared to reevaluate and change our plans.




During
      the quarter ended June 30, 2006, we continued to make progress towards building
      the Company and commercializing our technology. We
      have
      received product test orders, which have led to
      several related test product deliveries.  Such
      test
      products are used by potential customers to examine our
      products' features and compatibility with customer products. 
Although such testing procedures can involve numerous steps and significant
      timelines, in certain instances our test products have advanced beyond the
      test
      phases and been incorporated on a limited basis into commercial products.





*Liquidity
      and Capital Resources*




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 outflow
      for
      the first half of 2006 has been approximately $500,000 per month, which was
      consistent with our plans and included a pay off of a short-term loan in May
      2006 of $231,683. Our main use of cash during the first six months of 2006
      has
      been related to product development driven by customer projects, general and
      administrative expenses and, as stated above, a pay off of short-term loan.
      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 technology solutions. The main cash uses will
      be
      for sales and marketing, general and administrative, and research and
      development expenses. Investments will be focused on product development and
      manufacturing. All investments will be driven by commercialization
      opportunities. The total cash need for the next twelve months is estimated
      to
      approximately $6.5 million, starting at July 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. We expect to fund these activities out of our
      current cash reserve of approximately $2.9 million as of June 30, 2006 and
      through cash generated from operations, which is expected to occur in the fourth
      quarter of 2006. Furthermore, t he
      company is currently contemplating financing
      alternatives to raise additional capital .




3




The
      ratio
      between current assets and current liabilities at June 30, 2006 was
      approximately 2.0. 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.




*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
      adopted this policy on January 1, 2006 and records all stock based compensation
      at their fair values.




*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.




4




*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.




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 June 30, 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 67,317 shares **,** which
      issuances were not registered under the Securities Act of 1933, as amended
      (the
“Securities Act”): The issuance 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.




5




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




During
      the period covered by this report, the Company solicited written consents from
      certain of its shareholders with respect to (i) a change in the Company’s name
      to “Celsia Technologies, Inc.,” (ii) an increase in the number of shares of the
      Company common stock subject to the Company’s incentive stock option plan, (iii)
      a proposed distribution of common stock, (iv) certain agreements and waivers
      from the holders of the Company’s Series A and Series B Preferred Stock relating
      to the effects of certain contemplated corporate actions on the terms of such
      stock and (v) a proposed amendment to the Company’s Amended and Restated
      Articles of Incorporation to reflect certain of the matters referred to above.
      As of June 30, 2006, the Company was in the process of obtaining such
      consents.




**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).




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.




6




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:August
              2, 2006
            By:
            /s/ Hakan WretsellHakan
                Wretsell
              Chief
                Executive Officer




By:
            /s/ Michael KarphedenMichael
                Karpheden
              Chief
                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