UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington
 
 **FORM
        10-QSB**
 **Mark
        One**
 
 x
              QUARTERLY
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 
 For
        the
        quarterly period ended September 30, 2007
 
 
  ̈
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                  ACT
 
 For
        the
        transition period from__________ to __________
 
 Commission
        file number:0-49638
 
 INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 (Exact
        name of small business issuer as specified in its charter)
 
 Nevada
              76-0621102(State
                  or other jurisdiction of incorporation or organization)
              (IRS
                  Employer Identification No.)
  10245
        Sunrise Place NE, Bainbridge Island, WA  98110
 (Address
        of principal executive offices)
 
 (206)
        842-3729
 (Issuer's
        telephone number)
 
 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
         ̈
 
 Indicate
        by check mark whether the registrant is a shell company (as defined by Rule
        12b-2 of the Exchange Act).
 Yes
 ̈   No
        x
 
 **APPLICABLE
        ONLY TO CORPORATE ISSUERS**
 
 State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date: As of November 13, 2007, the Issuer had
        12,796,787 shares of common stock, par value $0.001 per share, issued and
        outstanding.
 
 Transitional
        Small Business Disclosure Format (Check one): Yes  ̈  No x
  
  
  **TABLE
        OF CONTENTS**
 
 
 **PART
                  I - FINANCIAL
                  INFORMATION**ITEM
                  1.
              FINANCIAL
                  STATEMENTS.
              1ITEM
                  2.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF
                  OPERATION.
              21ITEM
                  3.
              CONTROLS
                  AND PROCEDURES.
              24**PART
                  II - OTHER INFORMATION**ITEM
                  6.
              EXHIBITS.
              25SIGNATURES
              26
 
  ***Table
            of Contents***
  **PART
        I - FINANCIAL INFORMATION**
 
 
 **ITEM
                  1.**
              **FINANCIAL
                  STATEMENTS**Consolidated
                  Balance Sheet as of September 30, 2007 (unaudited)
              2Consolidated
                  Statements of Operations for the three and nine months ended September
                  30,
                  2007 and 2006 (unaudited)
              3Consolidated
                  Statements of Shareholders' Equity for the nine months ended
                  September 30, 2007 (unaudited)
              4Consolidated
                  Statements of Cash Flows for the nine months ended September 30,
                  2007 and
                  2006 (unaudited)
              5Notes
                  to the Consolidated Financial Statements
              6-20
  Page
            1
 ***Table
            of Contents***
 
 INTERNATIONAL
        COMMERCIAL TELEVISION INC. AND
        SUBSIDIARIES
 
 CONSOLIDATED
        BALANCE SHEET
 AS
        OF
        SEPTEMBER 30, 2007
 (Unaudited)
 
 
 September
                  30,2007ASSETSCURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              732,843Accounts
                  receivable (net)
              
              
              2,529,505Inventory
              
              
              253,505Prepaid
                  expenses and deposits
              
              
              201,888Deferred
                  tax asset, less valuation allowance of $2,702,300
              
              
              -Total
                  current assets
              
              
              3,717,741FURNITURE
                  AND EQUIPMENT:Furniture
                  and equipment
              
              
              120,169Less
                  accumulated depreciation
              
              
              108,741Furniture
                  and equipment, net
              
              
              11,428Total
                  assets
              
              $
              3,729,169LIABILITIES
                  AND SHAREHOLDERS' EQUITYCURRENT
                  LIABILITIES:Accounts
                  payable and accrued liabilities
              
              $
              1,094,019Accounts
                  payable and accrued liabilities – related parties
              
              
              11,781Due
                  to related parties
              
              
              172,217Total
                  current liabilities
              
              
              1,278,017NOTE
                  PAYABLE TO SHAREHOLDER
              
              
              590,723COMMITMENTS
                  AND CONTINGENCIES (NOTE 4)SHAREHOLDERS’
                  EQUITY:Common
                  stock, $0.001 par value, 100,000,000shares authorized, 12,796,787
                  issued
                  and outstanding
              
              
              2,698Additional
                  paid-in-capital
              
              
              1,568,638Subscriptions
                  receivable
              
              
              (27,500
              )Retained
                  earnings
              
              
              316,593Total  shareholders’
                  equity
              
              
              1,860,429Total  liabilities
                  and shareholders’ equity
              
              $
              3,729,169
 
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  Page
            2
 ***Table
            of Contents***
 
 INTERNATIONAL
                  COMMERCIAL TELEVISION INC. AND SUBSIDIARIESCONSOLIDATED
                  STATEMENTS OF OPERATIONS
                FOR
                  THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND
                  2006(Unaudited)For
                  the three months ended
              
              
              For
                  the nine months endedSeptember
                  30, 2007
              
              
              September
                  30, 2006
              
              
              September
                  30,2007
              
              
              September
                  30,2006NET
                  SALESInfomercial
                  products
              
              $
              3,266,592
              
              
              $
              1,035,466
              
              
              $
              8,101,390
              
              
              $
              1,538,0393,266,592
              
              
              
              1,035,466
              
              
              
              8,101,390
              
              
              
              1,538,039COST
                  OF SALESInfomercial
                  products
              
              $
              1,011,567
              
              
              $
              244,074
              
              
              $
              2,308,154
              
              
              $
              518,0181,011,567
              
              
              
              244,074
              
              
              
              2,308,154
              
              
              
              518,018GROSS
                  PROFT
              
              
              2,255,025
              
              
              
              791,392
              
              
              
              5,793,236
              
              
              
              1,020,021OPERATING
                  EXPENSES:Depreciation
              
              
              1,589
              
              
              
              2,173
              
              
              
              4,768
              
              
              
              9,033General
                  and administrative
              
              
              230,134
              
              
              
              142,743
              
              
              
              603,647
              
              
              
              451,462Selling
                  and marketing
              
              
              1,433,273
              
              
              
              447,824
              
              
              
              3,906,628
              
              
              
              589,188Rent
              
              
              7,606
              
              
              
              6,643
              
              
              
              23,334
              
              
              
              15,801Total
                  operating expenses
              
              
              1,672,602
              
              
              
              599,383
              
              
              
              4,538,377
              
              
              
              1,065,484OPERATING
                  INCOME (LOSS)
              
              
              582,423
              
              
              
              192,009
              
              
              
              1,254,859
              
              
              
              (45,463
              )INTEREST
                  (INCOME) EXPENSE:Interest
                  (income) expense
              
              
              (1,102
              )
              
              
              1,268
              
              
              
              (4,312
              )
              
              
              3,080INCOME
                  (LOSS) BEFORE INCOME TAXES
              
              
              583,525
              
              
              
              190,741
              
              
              
              1,259,171
              
              
              
              (48,543
              )INCOME
                  TAXESIncome
                  tax expense
              
              
              198,399
              
              
              
              64,852
              
              
              
              428,118
              
              
              
              64,852Tax
                  benefit of net operating loss carry forward
              
              
              (198,399
              )
              
              
              (64,852
              )
              
              
              (428,118
              )
              
              
              (64,852
              )INCOME
                  TAXES
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -NET
                  INCOME (LOSS)
              
              $
              583,525
              
              
              $
              190,741
              
              
              $
              1,259,171
              
              
              $
              (48,543
              )BASIC
                  NET INCOME (LOSS) PER SHARE
              
              $
              0.05
              
              
              $
              0.02
              
              
              $
              0.11
              
              
              $
              (0.00
              )FULLY
                  DILUTED NET INCOME (LOSS) PER SHARE
              
              $
              0.04
              
              
              $
              0.02
              
              
              $
              0.10
              
              
              $
              (0.00
              )
 
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  Page
            3
 ***Table
            of Contents***
 
 INTERNATIONAL
        COMMERCIAL TELEVISION INC. AND SUBSIDIARIES
 
 CONSOLIDATED
        STATEMENTS OF SHAREHOLDERS’ EQUITY
 
 
 Common
                  Stock
              
              
              Additional$0.001
                  par value
              
              
              Paid-In
              
              
              Retained
              
              
              SubscriptionsShares
              
              
              Amount
              
              
              Capital
              
              
              Earnings
              
              
              Receivable
              
              
              Deficiency
                  in AssetsBalances,
                  January 1, 2006
              
              
              10,635,188
              
              
              $
              536
              
              
              $
              392,285
              
              
              $
              (1,286,114
              )
              
              $
              -
              
              
              $
              (893,293
              )Issuance
                  of common stock
              
              
              58,000
              
              
              
              58
              
              
              
              56,443
              
              
              
              -
              
              
              
              
              
              
              
              56,501Amortization
                  of deferred compensation under non-qualified stock option
                  plan
              
              
              -
              
              
              
              -
              
              
              
              16,000
              
              
              
              -
              
              
              
              
              
              
              
              16,000Net
                  income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              343,536
              
              
              
              
              
              
              
              343,536Balances,
                  December 31, 2006
              
              
              10,693,188
              
              
              
              594
              
              
              
              464,728
              
              
              
              (942,578
              )
              
              
              -
              
              
              
              (477,256
              )Issuance
                  of common stock
              
              
              2,103,599
              
              
              
              2,104
              
              
              
              1,427,596
              
              
              
              -
              
              
              
              -
              
              
              
              1,429,700Subscriptions
                  receivable
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (27,500
              )
              
              
              (27,500
              )Stock
                  issuance costs
              
              
              -
              
              
              
              -
              
              
              
              (323,686
              )
              
              
              -
              
              
              
              -
              
              
              
              (323,686
              )Net
                  income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,259,171
              
              
              
              -
              
              
              
              1,259,171Balances,
                  September 30, 2007
              
              
              12,796,787
              
              
              $
              2,698
              
              
              $
              1,568,638
              
              
              $
              316,593
              
              
              $
              (27,500
              )
              
              $
              1,860,429
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  Page
            4
 ***Table
            of Contents***
 
 INTERNATIONAL
                  COMMERCIAL TELEVISION INC. AND SUBSIDIARIESCONSOLIDATED
                  STATEMENTS OF CASH FLOWS
                FOR
                  THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006(Unaudited)September
                  30,2007
              
              
              September
                  30,2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  income (loss)
              
              $
              1,259,171
              
              
              $
              (48,543
              )Adjustments
                  to reconcile net income (loss) to net cash provided by (used in)
                  operating
                  activities:Depreciation
              
              
              4,768
              
              
              
              9,033Amortization
                  of deferred compensation under nonqualified stock option
                  plan
              
              
              -
              
              
              
              8,000Change
                  in assets and liabilities:Increase
                  in accounts receivable
              
              
              (1,974,311
              )
              
              
              (390,874
              )Increase  in
                  inventory
              
              
              (14,818
              )
              
              
              (170,328
              )Increase
                  in prepaid expenses
              
              
              (113,389
              )
              
              
              (16,017
              )Increase
                  in accounts payable and accrued liabilities
              
              
              229,766
              
              
              
              546,704Net
                  cash used in operating activities
              
              
              (608,813
              )
              
              
              (62,025
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Additions
                  to property and equipment
              
              
              -
              
              
              
              (9,302
              )Net
                  cash used in financing activities
              
              
              -
              
              
              
              (9,302
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from issuance of common stock
              
              
              1,078,514
              
              
              
              56,500Advances
                  from related parties
              
              
              295,895
              
              
              
              236,546Payments
                  to related parties
              
              
              (418,227
              )
              
              
              (233,619
              )Net
                  cash provided by financing activities
              
              
              956,182
              
              
              
              59,427NET
                  (DECREASE) INCREASE IN CASH
              
              
              347,369
              
              
              
              (11,900
              )CASH,
                  beginning of the period
              
              
              385,474
              
              
              
              21,050CASH,
                  end of period
              
              $
              732,843
              
              
              $
              9,150SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOWS INFORMATION:Interest
                  paid
              
              $
              4,476
              
              
              $
              3,080Income
                  taxes paid
              
              $
              -
              
              
              $
              -
  The
        accompanying notes are an integral part of these consolidated financial
        statements.
  Page
            5
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
 
 **Note
        1 - Summary of significant accounting policies**
 
 Interim
        reporting
 
 The
        accompanying unaudited consolidated interim financial statements have been
        prepared by the Company in accordance with the rules and regulations of
        Regulation S-B as promulgated by the Securities and Exchange
        Commission.  In the opinion of management, the accompanying unaudited
        consolidated interim financial statements contain all adjustments necessary
        (consisting of normal recurring accruals) to present fairly the financial
        information contained therein.  The accompanying unaudited interim
        consolidated financial statements do not include all disclosures required
        by
        generally accepted accounting principles in the United States of
        America.  The results of operations for the nine month period ended
        September 30, 2007, may not necessarily be indicative of the results that
        may be
        expected for the year ended December 31, 2007. These financial statements
        and
        notes should be read in conjunction with our audited consolidated financial
        statements and notes thereto for the year ended December 31, 2006, included
        in
        our Annual Report on form 10-KSB.
 
 Organization
 
 International
        Commercial Television Inc., (the “Company” or “ICTV”) was organized under the
        laws of the state of Nevada on June 25, 1998.
 
 On
        April
        1, 2000, the Company entered into a Share and Option Purchase Agreement with
        the
        trustees of The Better Block Trust (“BBT”), which owned or controlled all of the
        equity interest in Windowshoppc.com Limited (“WSL”), R.J.M. Ventures Limited
        (“RJML”) and Better Blocks International Limited (“BBIL”).  Under the
        agreement, the Company purchased all of the equity interest in WSL and RJML,
        an
        option to purchase all of the equity in BBIL and obtained a license to all
        of
        the assets owned by BBIL.  The purchase price under the agreement was
        8,000,000 shares of the Company’s common stock and a $590,723 promissory note.
        In 2003, the BB Trust agreed to forego all interest owed in connection with
        this
        note and the Company and BB Trust have amended the promissory note to reflect
        this.  The gain of $148,483 was capitalized to additional paid in
        capital in connection with the amount of accrued interest forgiven on the
        note.  The option exercise price is the issuance of an additional
        500,000 shares of the Company’s common stock.  For accounting
        purposes, the acquisition has been treated as an acquisition of ICTV by WSL
        and
        RJML and as a recapitalization of WSL and RJML.
 
 Strategic
        Media Marketing Corp. (“SMM”) was incorporated in the Province of British
        Columbia on February 11, 2003, and has a December 31 fiscal
        year-end.
 
 Windowshoppc.com
        Limited was organized under the laws of New Zealand on June 25, 1999 and
        has a
        fiscal year-end of March 31.  During the 1999 fiscal year, at the
        direction of management, WSL was removed from the New Zealand Registrar of
        Companies.  All assets and commitments of WSL have been transferred or
        assigned directly to ICTV.
 
 R.J.M.
        Ventures Limited was organized under the laws of New Zealand on April 23,
        1998
        and has a fiscal year-end of March 31.  During the  1999
        fiscal year, at the direction of management, RJML was removed from the New
        Zealand Registrar of Companies.  All assets and commitments of RJML
        have been transferred or assigned directly to ICTV.
  Page
            6
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        1 - Summary of significant accounting policies (continued)**
 
 Nature
        of operations
 
 The
        Company sells various consumer products.  The products are primarily
        marketed and sold throughout the United States and internationally via
        infomercials.  Although the companies are incorporated in Nevada and
        British Columbia, operations are currently run from Washington State and
        British
        Columbia.
 
 These
        consolidated financial statements have been prepared on a going concern basis,
        which assumes that the Company will continue in operation for the foreseeable
        future and be able to realize its assets and discharge its liabilities and
        commitments in the normal course of business. Up until December 31, 2004
        the
        Company incurred accumulated losses, and had a working capital
        deficiency.
 
 Since
        2005, the Company has been working to develop future profitable operations
        and
        improve the working capital position of the Company. During the year ended
        December 31, 2005, the Company refocused its efforts towards operations and
        profitability. As a result, the Company increased its sales and reduced its
        proportionate costs.  In addition, the Company successfully completed
        three private placements whereby it raised $1,134,500 which will be used
        to
        develop new products and grow our existing business with new and profitable
        product lines.  As a result of these efforts, the Company has now
        reached profitable operations, and has positive working capital.
 
 The
        ability of the Company to continue as a going concern and to realize the
        carrying value of its assets and discharge its liabilities when they become
        due
        is dependent on the success of its operations. Management believes that the
        two
        consecutive years of profitability and the successful financing has mitigated
        the adverse conditions which raised substantial doubt on the Company’s going
        concern.
 
 These
        financial statements do not reflect adjustments that would be necessary if
        the
        Company is unable to continue as a going concern. If the going concern
        assumption is not appropriate for these financial statements, then adjustments
        would be necessary to the carrying value of assets and liabilities, the reported
        net income, and the balance sheet classifications used.
 
 Principles
        of consolidation
 
 The
        accompanying consolidated financial statements include 100% of the accounts
        of
        the Company and its wholly-owned subsidiary SMM.  All significant
        inter-company transactions and accounts have been eliminated.
 
 Cash
        equivalents
 
 The
        Company considers all unrestricted highly liquid investments with an original
        maturity of three months or less to be cash equivalents.
 
 Accounts
        receivable
 
 No
        allowance for uncollectible accounts
        has been provided. Any accounts receivable that are considered doubtful have
        been written off by management as bad debt expense. The amount of bad debt
        expense for the period ended September 30, 2007 and 2006 are $20,551 and
        nil.
        The amounts are included in general and administrative expense in the
        accompanying consolidated financial statements. The Company’s management
        has evaluated the remaining accounts receivable and believe they are all
        collectible.
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 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        1 - Summary of significant accounting policies (continued)**
 
 Inventory
 
 Inventory
        consists primarily of products held for resale and are stated at the lower
        of
        cost (first-in, first-out method) or market. The Company adjusts inventory
        for
        estimated obsolescence when necessary based upon demand and market
        conditions.
 
 Furniture
        and equipment
 
 Equipment
        is carried at cost and depreciation is computed over the estimated useful
        lives
        of the individual assets ranging from 3 to 7 years.  Depreciation is
        computed using the straight-line method. The related cost and accumulated
        depreciation of assets retired or otherwise disposed of are removed from
        the
        accounts and the resultant gain or loss is reflected in
        earnings.  Maintenance and repairs are expensed currently while major
        renewals and betterments are capitalized.
 
 Long-term
        assets are reviewed annually as to whether their carrying value has become
        impaired.  Management considers assets to be impaired if the carrying
        value exceeds the future projected cash flows from related
        operations.  Management also re-evaluates the periods of amortization
        to determine whether subsequent events and circumstances warrant revised
        estimates of useful lives.  As of September 30, 2007, management
        expects these assets to be fully recoverable. Depreciation expense amounted
        to $
        1,589 and $ 2,173 for the three months ended September 30, 2007 and 2006,
        respectively, and $ 4,768 and $ 9,033 for the nine months ended September
        30,
        2007 and 2006, respectively.
 
 Revenue
        recognition
 
 For
        our
        direct response television sales generated by our infomercials, product sales
        revenue is recognized upon shipment of the product to the
        customer.  The Company has a return policy whereby the customer can
        return any product received within 30 days of receipt for a full refund
        excluding shipping and handling.  The Company provides an allowance
        for returns based upon past experience.  All significant returns for
        the years presented have been offset against gross sales. Revenue related
        to
        sales to our wholesale customers is recognized when each of the following
        conditions is met: Persuasive evidence of an arrangement exists, transfer
        of the
        benefit of ownership of the products has occurred, our price to the customer
        is
        fixed and determinable and collectibility
        is reasonably assured. Revenue related to the sale of third party products
        is
        generally recorded at gross amounts with a corresponding charge to cost of
        sales.  Certain third party products are sold under a commission basis
        and only the commission income is recorded for these sales.
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 ***Table
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  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  Shipping
        and handling
  Amounts
        billed to a customer for shipping and handling are included in revenue; shipping
        and handling revenue approximated $ 595,687 and $ 126,700 for the nine months
        ended September 30, 2007 and 2006, respectively. Shipping and handling costs
        are
        included in cost of sales. Shipping and handling costs approximated $ 461,816
        and $ 62,174 for the nine months ended September 30, 2007 and 2006,
        respectively.
  Research
        and development
 
 Research
        and development costs are expensed as incurred and are included in selling
        and
        marketing expense in the accompanying consolidated financial
        statements.  Research and development costs primarily consist of
        efforts to discover and develop new products and the testing and development
        of
        direct-response advertising related to these products.
  Media
        and production costs
 
 Media
        and
        production costs are expensed as incurred and are included in selling and
        marketing expense in the accompanying consolidated financial
        statements.  The Company incurred $ 2,972,829 and $397,584 in such
        costs for the nine months ended September 30, 2007 and 2006,
        respectively.
 
 Income
        taxes
 
 The
        Company uses the asset and liability method of accounting for income taxes,
        which requires the recognition of deferred tax liabilities and assets for
        the
        expected future tax consequences of temporary differences between tax bases
        and
        financial reporting bases of assets and liabilities. A valuation allowance
        is
        recorded for deferred tax assets when it is not more likely than not that
        this
        future tax asset will be realized.
  Stock
        options
 
 The
        Company adopted a stock option plan (“Plan”).  The purpose of this
        Plan is to provide additional incentives to key employees, officers, directors
        and consultants of the Company and its subsidiaries in order to help attract
        and
        retain the best available personnel for positions of responsibility and
        otherwise promoting the success of the business activities.  It is
        intended that options issued under this Plan constitute nonqualified stock
        options.The general
        terms of awards under the option plan are that 20% of the options granted
        will
        vest the month following the grant, and 10% will vest every 6 months thereafter.
        The maximum term of options granted is 10 years and the number of shares
        authorized for grants of options is 3,000,000.
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            9
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            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        1 - Summary of significant accounting policies (continued)**
 
 Stock
        options (continued)
 
 Prior
        to
        March 2006, the Company used Statement of Financial Accounting Standards
        No. 148
        "Accounting for Stock-Based Compensation - Transition and Disclosure" (SFAS
        No.
        148) to account for its stock based compensation arrangements. This statement
        amended the disclosure provision of FASB statement No. 123 to require prominent
        disclosure about the effects on reported net income of an entity's accounting
        policy decisions with respect to stock-based employee compensation. As permitted
        by SFAS No. 123 and amended by SFAS No. 148, the Company continued to apply
        the
        intrinsic value method under Accounting Principles Board ("APB") Opinion
        No. 25,
        "Accounting for Stock Issued to Employees," to account for its stock-based
        employee compensation arrangements.
  In
        December 2004, the Financial Accounting Standards Board issued Statement
        Number 123 (“FAS 123 (R)”), Share-Based Payments, which is effective for the
        reporting period beginning on January 1, 2006. The statement will require
        the
        Company to recognize compensation expense in an amount equal to the fair
        value
        of share-based payments such as stock options granted to employees. The Company
        has the option to either apply FAS 123 (R) on a modified prospective method
        or
        to restate previously issued financial statements, and chose to utilize the
        modified prospective method. Under this method, the Company is required to
        record compensation expense (as previous awards continue to vest) for the
        unvested portion of previously granted awards that remain outstanding at
        the
        date of adoption.
  In
        January 2006, the Company adopted the expense recognition provisions of SFAS
        No.
        123, and for the nine months ended September 30, 2007, recorded approximately
        $
        0 in stock compensation expense. If the Company had expensed stock options
        for
        the nine months ended September 30, 2007, the stock compensation expense
        would
        have been $ 0.
  Page
            10
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        1 - Summary of significant accounting policies (continued)**
 
 Stock
        options (continued)
 
 The
        following is a summary of stock options outstanding under the existing stock
        option plan for the nine months ended September 30, 2007:
 
 Number
                  of Shares
              
              
              WeightedAverageEmployee
              
              
              Non-Employee
              
              
              Totals
              
              
              ExercisePriceBalance,
                  January 1, 2006
              
              
              -
              
              
              
              1,209,000
              
              
              
              1,209,000
              
              
              $
              0.47Granted
                  during 2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              0.00Exercised
                  during the year
              
              
              -
              
              
              
              (8,000
              )
              
              
              (8,000
              )
              
              $
              0.50Cancelled
                  during the year
              
              
              -
              
              
              
              (40,000
              )
              
              
              (40,000
              )
              
              $
              2.00Balance,
                  December 31, 2006
              
              
              -
              
              
              
              1,161,000
              
              
              
              1,161,000
              
              
              $
              0.47Cancelled
                  during the period
              
              
              -
              
              
              
              (4,000
              )
              
              
              (4,000
              )
              
              $
              0.50Exercised
                  during the period
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              0.50Balance,
                  September 30, 2007
              
              
              -
              
              
              
              1,157,000
              
              
              
              1,157,000
              
              
              $
              0.43
 
 During
        the period ended September 30, 2007 and 2006, there were no options
        granted.  Of the stock options currently outstanding, 1,017,000
        options are currently exercisable at a weighted average exercise price of
        $0.43.  These options expire at dates ranging between December 31,
        2007 and September 28, 2011.
  Use
        of
        estimates
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles of the United States of America requires management
        to
        make estimates and assumptions that affect the amounts reported in the
        consolidated financial statements and accompanying notes.  Management
        believes that the estimates utilized in preparing its consolidated financial
        statements are reasonable and prudent.  Actual results could differ
        from these estimates
  Method
        of Presentation
 
 Certain
        amounts in the 2006 financial statements have been reclassified to conform
        to
        the 2007 presentation.
  Page
            11
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        1 - Summary of significant accounting policies (continued)**
  Concentration
        of credit risk
 
 Financial
        instruments, which potentially subject the Company to concentrations of credit
        risk, include cash and trade receivables.  The Company maintains cash
        in bank accounts that, at times, may exceed federally insured
        limits.  As of September 30, 2007, the Company did not exceed the
        federally insured limit  in its  main credit card merchant
        account; however it did exceed the limit by approximately $469,000 in its
        main
        operating account and by $55,000 in its investment savings account. The Company
        has not experienced any losses in such accounts and believes it is not exposed
        to any significant risks on its cash in bank accounts. As of September 30,
        2007
        and September 30, 2006, 45% and 58% of the Company’s accounts receivable were
        due from various individual customers to whom our Dermawand product had been
        sold directly via Direct Response Television; the remaining 55% and 42% of
        the
        Company’s accounts receivable were due from five and seven international
        infomercial operators, respectively.
 
 
 **Note
        2 - License and reconveyance agreements**
 
 Effective
        April 1, 2000, the Company entered into a License and Reconveyance Agreement
        with WSL and RJML.  These agreements are royalty-free.  WSL
        and RJML owned or had rights in certain intellectual properties that were
        transferred or assigned to ICTV during 2003.  Accordingly, WSL and
        RJML granted all production rights, proprietary rights, inventory, development
        rights, hard assets, licenses and any assets or rights to the
        Company.  The Company has the right to further develop and enhance the
        intellectual properties as the Company sees fit.
 
 
 **Note
        3 - Financial instruments**
 
 Statement
        of Financial Accounting Standards No. 107 “Disclosures About Fair Value of
        Financial Instruments” (“SFAS 107”) requires disclosure of the fair value of
        financial instruments held by the Company.  SFAS 107 defines the fair
        value of financial instruments as the amount at which the instrument could
        be
        exchanged in a current transaction between willing parties.  The
        following methods and assumptions were used to estimate fair value:
 
 The
        carrying amount of accounts receivable and payable approximate fair value
        due to
        their short-term nature.  The carrying amount of note payable debt
        represent the fair value of the note payable based on the borrowing rate
        of
        0.0%.
  Page
            12
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
 
 **Note
        4 - Commitments and contingencies**
 
 Cell
        RXTM
  During
        2007 the Company and Info Marketing Group Inc. (“IMG”) entered into a Exclusive
        License Letter Agreement  (“Agreement”) granting an exclusive license to
        ICTV with respect to Cell RX and associated products
        (”Product”).
  IMG
        granted to the Company an exclusive license to manufacture, market and sell
        Cell
        RX and associated products anywhere in the world.  With respect to
        marketing and selling assistance to be provided by IMG, such assistance shall
        include making best efforts to obtain commitments from all of the talent
        who
        have in the past or are presently endorsing Product to continue to do so.
        IMG
        shall assign to ICTV all of its rights with respect to intellectual property,
        tangible property, and agreements related to Product.
  ICTV
        shall pay royalties to IMG, up to a maximum amount of $1,000,000.00, as
        follows.  ICTV shall make payments on a monthly basis in an amount equal to
        2% (two percent) of the gross sales of Product in the preceding month. 
ICTV shall make payments in this manner until it has paid a total of $400,000.00
        in royalties.  Thereafter, ICTV shall make payments on a monthly basis in
        an amount equal to 1.5% (one and one-half percent) of the gross sales of
        Product
        in the preceding month, until it has paid a total of $1,000,000.00 in royalties,
        after which no further royalties shall be due.
  Upon
        the
        Company’s purchase and payment of IMG’s entire inventory of Product, IMG shall
        convey to ICTV ownership of all of the intellectual and tangible property
        related to Product.  Upon conveyance of such property, the Company’s
        exclusive license shall terminate, and thereafter ICTV shall be the sole
        owner
        of Product, with all attendant rights to manufacture, market and sell Product
        anywhere in the world.
  Smart
        StacksTM
 
 On
        May
        18, 1998, RJML entered into a manufacturing, marketing and distribution
        agreement with the inventor of Smart StacksTM.  Smart StacksTM is a
        set of rotating and stacking storage trays.  Pursuant to the
        agreement, the inventor grants to RJML the exclusive right to manufacture,
        advertise, promote, market, sell and distribute Smart StacksTM worldwide
        through
        all means.  In consideration of the grants received, RJML shall pay a
        royalty based on net sales depending on various scenarios as defined in the
        agreement.  The initial term of the agreement is five years starting
        May 18, 1998.  The agreement automatically and continually renews for
        successive additional five-year terms unless RJML is in material default
        and is
        notified in writing at least thirty days prior to the end of the then current
        term that the inventor intends to terminate the agreement.
 
 On
        July
        1, 1998, RJML entered into a production agreement with The Broadcast Arts
        Group,
        Inc. (“BAG”) for the creation of infomercials of Smart StacksTM.  RJML
        pays all necessary expenses for the creation of the infomercials and after
        completion, will retain all rights, title and interest arising under the
        U.S.
        Copyright Act, the U.S. Trademark Act and all other applicable laws, rules
        and
        regulations in and to the entire editorial, visual, audio and graphic content
        of
        the infomercials.  In consideration of services rendered by BAG, RJML
        shall pay a royalty based on RJML’s adjusted gross sales depending on various
        scenarios as defined in the agreement.  This agreement has an
        indefinite term, however, it may be terminated upon thirty days written notice
        under certain conditions as defined in the agreement.
  Page
            13
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
 
 **Note
        4 - Commitments and contingencies (continued)**
 
 Derma
        Wand
 
 On
        August
        17, 1999, WSL entered into a production agreement with BAG for the creation
        of
        infomercials of Derma Wand.  WSL pays all necessary expenses for the
        creation of the infomercials and after completion, will retain all rights,
        title
        and interest arising under the U.S. Copyright Act, the U.S. Trademark Act
        and
        all other applicable laws, rules and regulations in and to the entire editorial,
        visual, audio and graphic content of the infomercials.  In
        consideration of services rendered by BAG, WSL shall pay a royalty based
        on
        adjusted revenues or units sold depending on various scenarios defined in
        the
        agreement.  The initial term of this agreement is until August 31,
        2002.  Upon expiration, this agreement automatically and continually
        renews for successive additional three-year terms unless either party is
        in
        material breach or the other party notifies the breaching party in writing
        at
        least thirty days prior to the end of the then current term. During the quarter
        ended March 31, 2005 the agreement was amended such that royalties payable
        on
        units sold after December 31, 2004 cease.
  On
        October 15, 1999, WSL entered into an endorsement agreement with an individual
        for her appearance in a Derma Wand infomercial.  On July 11, 2001, the
        agreement was amended to include a royalty payment for each unit sold
        internationally, up to a maximum royalty payment for any one calendar
        quarter.  Further, if the infomercial is aired in the United States,
        then the airing fee will revert back to the same flat rate per calendar
        quarter.  The initial term of the agreement was five years starting
        October 15, 1999.  The agreement automatically and continually renews
        for successive additional five-year terms unless RJML is in material default
        and
        is notified in writing at least thirty days prior to the end of the then
        current
        term that the individual intends to terminate the agreement.
 
 The
        Company assumed any and all responsibilities associated with the agreements
        noted above on April 1, 2000, pursuant to the license and reconveyance agreement
        disclosed in Note 2.
 
 On
        January 5, 2001, WSL entered into a marketing and royalty agreement with
        Omega
        5.  WSL shall have worldwide nonexclusive rights to manufacture,
        market and distribute Derma WandTM.  In consideration of these rights,
        WSL shall pay a royalty for each unit sold of Derma Wand depending on various
        scenarios as defined in the agreement.  The agreement is silent as to
        its duration.
 
 During
        2004, the Company entered into two Letter Agreements with Omega 5 wherein
        ICTV
        was appointed as exclusive distributor for the Derma WandTM in an additional
        78
        countries/territories throughout the world, with the exception of the United
        States.  The rights remain exclusive to ICTV provided ICTV purchases a
        minimum quantity each year and pays the royalty described above.  The
        term of the agreements is for three years with automatic three year
        renewals.
 
 SprintR
 
 On
        June
        6, 2002, the Company entered into an exclusive license and marketing agreement
        with Land Surfer Scooter Company Ltd. (“LSSC”).  LSSC has been granted
        by way of a valid agreement, by the manufacturer, the exclusive right to
        market
        a fold-up rocker-powered scooter.  LSSC agrees to allow the Company to
        order the scooters directly from the manufacturer and the Company agrees
        to
        provide LSSC all copies of such orders.  In consideration of the grant
        received, the Company shall pay LSSC a royalty per unit sold depending on
        various scenarios.  The initial term of the agreement is five years
        starting June 6, 2002.  The agreement automatically and continually
        renews for successive additional five years unless the Company is in
        default.
  Page
            14
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        4 - Commitments and contingencies (continued)**
 
 Bondzalot
 
 On
        July
        8, 2002, the Company entered into an exclusive marketing and distribution
        agreement with an individual in connection with a range of specialty adhesive
        products (“Products”).  The individual has granted the exclusive right
        to market through all forms of distribution a product to be known as BondzalotTM
        in all countries throughout the world other than Canada and the United Kingdom,
        and on a non-exclusive basis in Canada and the United Kingdom.  In
        consideration for the right received, the Company shall, at its own expense,
        produce and test broadcast a long-form infomercial (“Program”) and pay a royalty
        on a per unit basis at a price to be determined.  The Company agreed
        to purchase a minimum of $250,000 worth of Products from the individual on
        an
        annual basis, commencing from the date the Program is test broadcasted (December
        15, 2002), to retain the exclusive rights, otherwise the license shall revert
        to
        a non-exclusive license.  The initial term of the agreement is five
        years starting July 8, 2002.  The agreement automatically and
        continually renews for successive additional five-year terms, unless either
        party is in breach of the agreement and the breach is not remedied within
        30
        days of written notice.  The Company produced and tested the
        Program.  As the results were poor, the Company did not purchase the
        minimum commitment to retain exclusive rights.  Management plans to
        edit the Program with the intention of marketing the Products
        internationally.
 
 TwinTechTM
 
 In
        January, 2003, the Company entered into an exclusive agreement with Chevron
        Oronite Company LLC (“COC”) whereby the parties acknowledge that ICTV intends to
        market, sell and distribute various automobile fuel and oil additive products,
        developed by COC, in the United States and elsewhere in the world via various
        means and media, including, without limitation, one or more direct response
        television programs of 30 minutes or less.  The initial term of the
        agreement is three years from the date of first airing of the infomercial
        and
        automatically renews for three years unless the Company is in
        default.
 
 On
        February 20, 2003, the Company entered into a Supply Agreement with Calidad
        Auto
        Tech, Inc. (“CAT”) whereby CAT will sell to the Company and the Company will
        purchase from CAT certain automobile fuel and oil additive products developed
        by
        COC.  The initial term of the agreement is three years from the date
        of first airing of the infomercial and automatically renews for three years
        unless the Company is in default.
 
 On
        April
        28, 2003, the Company entered into a Broadcast Video Production Agreement
        with
        Real to Reel Productions (“Real to Reel”) whereby Real to Reel will render
        various services related to the production of an infomercial designed to
        sell
        the TwinTechTM  Automotive Engine Treatment Additive.  In
        addition to the production fee, the Company shall pay a royalty based on
        gross
        sales generated from the infomercial.  The term of the agreement is
        five years and Real to Reel retains the right of first refusal for subsequent
        new shows to further promote the product.
  Page
            15
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
 
 **Note
        4 - Commitments and contingencies (continued)**
 
 TwinTechTM(continued)
 
 On
        April
        28, 2003, the Company entered into a funding agreement with a shareholder,
        whereby the shareholder agrees to pay Real to Reel’s production fee of
        approximately $196,000, and in return, the Company has agreed to pay a per
        kit
        royalty to the shareholder based on various scenarios, until such time as
        the
        total royalty payments reach $2,000,000. The production fee was accrued and
        expensed as “production costs” and included in selling and marketing expenses
        during the fiscal year ended December 31, 2005.
 
 During
        the period ended March 31, 2005, the Company entered into an agreement with
        COC
        and CAT terminating the January 2003 and February 20, 2003 agreements described
        above.  In consideration for surrendering our rights to advertise,
        promote, market, sell or otherwise distribute TwinTechTM we received $800,000
        from COC.  From these funds, we have agreed to repay Real to Reel’s
        production fee in full settlement of the obligations to a shareholder set
        forth
        in the April 28, 2003 agreement described above.
 
 Other
        matters
 
 For
        the
        period from January 1, 2004 through August 31, 2005, the Company did not
        maintain product liability insurance for all products sold.  For
        certain products, the Company is listed as an additional insured party under
        the
        product manufacturers’ insurance policy. On February 20, 2007, the Company
        purchased additional liability insurance to cover all direct to consumer
        product
        sales in the US; this policy is due to expire on February 20,
        2008.  At present, management is not aware of any claims against the
        Company for any products sold.
 
 On
        December 20, 2005, the Company entered into an operating lease agreement
        for
        office facilities for its international operations from an unrelated party
        for
        approximately $2,400 per month.  The term of the lease is three years
        commencing January 1, 2006 and ending December 31, 2008. Our executive offices
        are located in Bainbridge Island, Washington and are provided to the Company
        at
        a rate of $350 per month by Kelvin Claney, President of the
        Company.
 
 **Note
        5 - Related party transactions**
 
 The
        Company has received short-term advances from a shareholder.  These
        advances amounted to $172,217 as of September 30, 2007.  Interest
        rates charged during this period ranged from 0% to 21.24%.  These
        advances are included in “Due to related parties” on the accompanying
        consolidated balance sheets.
 
 The
        Company has a note payable to a shareholder in the amount of $590,723. This
        loan
        is interest-free and has no specific terms of repayment.
  Page
            16
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        6 - Capital transactions**
 
 During
        the nine months ended September 30, 2007, the Company issued 2,103,599 shares
        of
        common stock. 1,480,999 shares were issued at $0.75 per share, for a total
        of
        $1,110,749 as part of a private placement. Investors will also receive a
        warrant
        to purchase one additional share of the Company’s stock. The exercise price of
        the warrant will be $1.00 per share and is valid and exercisable from the
        date
        of issue and thereon for a 2 year period. 4,000 options were cancelled at
        $0.50
        per share, for a total of $2,000. 475,000 shares were issued at $0.05 per
        share,
        for a total of $23,750 as part of a private placement. 147,600 shares were
        issued as part of the commissions for the private placement on April 13,
        2007 at
        a market value of $2.00 per share.
 
 **Note
        7 - Basic and diluted loss per share**
 
 Statement
        of Financial Accounting Standards No. 128 (SFAS 128), “Earnings Per Share”
requires presentation of basic earnings per share and dilutive earnings per
        share.
  The
        computation of basic earnings per share is computed by dividing earnings
        available to common shareholders by the weighted average number of outstanding
        common shares during the period.  Diluted loss per share gives the
        effect to all dilutive potential common shares outstanding during the
        period.  The computation of diluted loss per share does not assume
        conversion, exercise or contingent exercise of securities that would have
        an
        anti-dilutive effect on losses.
  Page
            17
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        7 - Basic and diluted loss per share (continued)**
 
 The
        computations for basic and fully diluted loss per share are as
        follows:
 
 For
                  the nine months ended September 30, 2007:
              
              Income
                  (Numerator)
              
              
              Shares
                  (Denominator)
              
              
              Per
                  Share AmountBasic
                  earnings per shareIncome
                  available to common shareholders
              
              $
              1,259,171
              
              
              
              11,790,702
              
              
              $
              0.11Diluted
                  earnings per shareIncome
                  available to common shareholders
              
              $
              1,259,171
              
              
              
              12,306,569
              
              
              $
              0.10
 
 For
                  the nine months ended September 30, 2006:
              
              Loss
                  (Numerator)
              
              
              Shares
                  (Denominator)
              
              
              Per
                  Share AmountBasic
                  loss per shareLoss
                  available to common shareholders
              
              $
              (48,543
              )
              
              
              10,693,188
              
              
              $
              (0.00
              )Diluted
                  loss per shareLoss
                  available to common shareholders
              
              $
              (48,543
              )
              
              
              10,975,988
              
              
              $
              (0.00
              )
 
 For
                  the three months ended September 30, 2007:
              
              Income
                  (Numerator)
              
              
              Shares
                  (Denominator)
              
              
              Per
                  Share AmountBasic
                  earnings per shareIncome
                  available to common shareholders
              
              $
              583,525
              
              
              
              12,698,550
              
              
              $
              0.05Diluted
                  earnings per shareIncome
                  available to common shareholders
              
              $
              583,525
              
              
              
              13,328,631
              
              
              $
              0.04
 
 For
                  the three months ended September 30, 2006:
              
              Income
                  (Numerator)
              
              
              Shares
                  (Denominator)
              
              
              Per
                  Share AmountBasic
                  earnings per shareIncome
                  available to common shareholders
              
              $
              190,741
              
              
              
              10,693,188
              
              
              $
              0.02Diluted
                  earnings per shareIncome
                  available to common shareholders
              
              $
              190,741
              
              
              
              10,934,069
              
              
              $
              0.02
  Page
            18
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        8 - Income taxes**
 
 Until
        recently, the Company has experienced operating losses. The Company has
        provided a full valuation allowance on the net deferred tax asset because
        of
        uncertainty regarding its realization.  This asset primarily consists
        of net operating losses and amortization.
 
 The
        Company had net operating income of approximately $1,259,171 related to US
        federal, foreign and state jurisdictions through September 30,
        2007.  Utilization of net operating losses, which begin to expire at
        various times starting in 2021, may be subject to certain
        limitations.
 
 Deferred
        income taxes reflect the net tax effects of temporary differences between
        the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amounts used for income tax purposes.
 
 Significant
        components of the Company’s deferred tax assets are approximately as
        follows:
 
 September
                  30, 2007Net
                  operating loss
              
              $
              (152,700
              )Basis
                  of investments
              
              
              2,327,000Basis
                  of intangibles
              
              
              428,000Basis
                  of stock options
              
              
              103,000Accumulated
                  amortization
              
              
              107,000Accumulated
                  depreciation
              
              
              4,000State
                  taxes
              
              
              (114,000
              )Total
                  deferred tax assets
              
              
              2,702,300Valuation
                  allowance
              
              
              (2,702,300
              )Net
                  deferred tax assets
              
              $
              -
 
 
 **Note
        9 - Segment reporting**
 
 The
        Company operates in one industry segment and is engaged in the selling of
        various consumer products primarily through direct marketing
        infomercials.  The Company evaluates performance and allocates
        resources based on several factors, of which the primary financial measure
        is
        operating loss by geographic area.  Operating expenses are primarily
        prorated based on the relationship between domestic and international
        sales.
  Page
            19
 ***Table
            of Contents***
  INTERNATIONAL
        COMMERCIAL TELEVISION INC.
 
 NOTES
        TO
        THE CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (Unaudited)
  **Note
        9 - Segment reporting (continued)**
 
 Information
        with respect to the Company’s operating income (loss) by geographic area is as
        follows:
 
 For
                  the nine months ended September 30, 2007
              
              
              For
                  the nine months ended September 30, 2006Domestic
              
              
              International
              
              
              Totals
              
              
              Domestic
              
              
              International
              
              
              TotalsNet
                  sales
              
              $
              7,087,412
              
              
              $
              1,013,978
              
              
              $
              8,101,390
              
              
              $
              833,091
              
              
              $
              704,948
              
              
              $
              1,538,039Cost
                  of sales
              
              
              1,919,429
              
              
              
              388,725
              
              
              
              2,308,154
              
              
              
              79,484
              
              
              
              438,534
              
              
              
              518,018Gross
                  profit
              
              
              5,167,983
              
              
              
              625,253
              
              
              
              5,793,236
              
              
              
              753,607
              
              
              
              266,414
              
              
              
              1,020,021Operating
                  expenses:Depreciation
              
              
              4,171
              
              
              
              597
              
              
              
              4,768
              
              
              
              4,893
              
              
              
              4,140
              
              
              
              9,033General
                  and administrative
              
              
              532,858
              
              
              
              70,789
              
              
              
              603,647
              
              
              
              235,978
              
              
              
              215,484
              
              
              
              451,462Selling
                  and marketing
              
              
              3,879,652
              
              
              
              26,976
              
              
              
              3,906,628
              
              
              
              563,824
              
              
              
              25,364
              
              
              
              589,188Rent
              
              
              20,413
              
              
              
              2,921
              
              
              
              23,334
              
              
              
              8,560
              
              
              
              7,241
              
              
              
              15,801Total
                  operating expense
              
              
              4,437,094
              
              
              
              101,283
              
              
              
              4,538,377
              
              
              
              813,255
              
              
              
              252,229
              
              
              
              1,065,484Operating
                  income (loss)
              
              $
              730,889
              
              
              $
              523,970
              
              
              $
              1,254,859
              
              
              $
              (59,648
              )
              
              $
              14,185
              
              
              $
              (45,463
              )
 
 
 For
                  the three months ended September 30, 2007
              
              
              For
                  the three months ended September 30, 2006Domestic
              
              
              International
              
              
              Totals
              
              
              Domestic
              
              
              International
              
              
              TotalsNet
                  sales
              
              $
              2,854,432
              
              
              $
              412,160
              
              
              $
              3,266,592
              
              
              $
              677,046
              
              
              $
              358,420
              
              
              $
              1,035,466Cost
                  of sales
              
              
              868,210
              
              
              
              143,357
              
              
              
              1,011,567
              
              
              
              54,448
              
              
              
              189,626
              
              
              
              244,074Gross
                  profit
              
              
              1,986,222
              
              
              
              268,803
              
              
              
              2,255,025
              
              
              
              622,598
              
              
              
              168,794
              
              
              
              791,392Operating
                  expenses:Depreciation
              
              
              1,388
              
              
              
              201
              
              
              
              1,589
              
              
              
              1,421
              
              
              
              752
              
              
              
              2,173General
                  and administrative
              
              
              201,782
              
              
              
              28,352
              
              
              
              230,134
              
              
              
              93,333
              
              
              
              49,410
              
              
              
              142,743Selling
                  and marketing
              
              
              1,414,271
              
              
              
              19,002
              
              
              
              1,433,273
              
              
              
              429,911
              
              
              
              17,913
              
              
              
              447,824Rent
              
              
              6,643
              
              
              
              963
              
              
              
              7,606
              
              
              
              4,344
              
              
              
              2,299
              
              
              
              6,643Total
                  operating expense
              
              
              1,624,084
              
              
              
              48,518
              
              
              
              1,672,602
              
              
              
              529,009
              
              
              
              70,374
              
              
              
              599,383Operating
                  income (loss)
              
              $
              362,138
              
              
              $
              220,285
              
              
              $
              582,423
              
              
              $
              93,589
              
              
              $
              98,420
              
              
              $
              192,009
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  **ITEM
                  2.**
              **MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**
 
 Except
        for the historical information presented in this document, the matters discussed
        in this Form 10-QSB, and specifically in the "Management's Discussion and
        Analysis or Plan of Operation”, or otherwise incorporated by reference into this
        document contain "forward looking statements" (as such term is defined in
        the
        Private Securities Litigation Reform Act of 1995).  These statements
        can be identified by the use of forward-looking terminology such as "believes",
        "expects", "may", "will", "intends", "should", or "anticipates" or the negative
        thereof or other variations thereon or comparable terminology, or by discussions
        of strategy that involve risks and uncertainties.  The safe harbor
        provisions of Section 21E of the Securities Exchange Act of 1934, as amended,
        and Section 27A of the Securities Act of 1933, as amended, apply to
        forward-looking statements made by the Company.  You should not place
        undue reliance on forward-looking statements.  Forward-looking
        statements involve risks and uncertainties.  The actual results that
        the Company achieves may differ materially from any forward-looking statements
        due to such risks and uncertainties.  These forward-looking statements
        are based on current expectations, and the Company assumes no obligation
        to
        update this information.  Readers are urged to carefully review and
        consider the various disclosures made by the Company in this report on Form
        10-QSB and in the Company's other reports filed with the Securities and Exchange
        Commission that attempt to advise interested parties of the risks and factors
        that may affect the Company's business.
 
 The
        following discussion and analysis of the Company's financial condition and
        results of operations should be read in conjunction with the Financial
        Statements and accompanying notes and the other financial information appearing
        elsewhere in this report.
  **Overview**
 
 ICTV
        was
        incorporated as Moran Dome Exploration, Inc. on June 25, 1998.  We had
        limited operations and assets until April 2000, when we entered into and
        closed
        a Share and Option Purchase Agreement with Kelvin Claney, Robin Jan Claney
        and
        William Ainslie Reece, in their capacity as trustees of The Better Blocks
        Trust.  When the Share and Option Purchase Agreement with The Better
        Blocks Trust closed, we began our operations as an infomercial company selling
        products directly to consumers via long-form and short-form infomercials,
        both
        domestically and internationally.  We market products that we own or
        have the exclusive license to market (which we refer to as “our products” or
“our own products”), and we also act as the international marketing distributor
        for products owned by third parties (which we refer to as “third-party
        products”).  As the international marketing distributor for the
        third-party products, we take previously existing infomercials for third-party
        products, locate international infomercial operators to sell the products
        featured in the infomercials, and we receive either a royalty or the difference
        between the price at which we sell the product to the international infomercial
        operator and the price at which we acquire the product.
  Although
        we currently sell products through infomercials, the goal of our business
        plan
        is to use the brand awareness we create in our infomercials so that we can
        sell
        the products featured in our infomercials, along with related families of
        products, under distinct brand names in traditional retail
        stores.  Our goal is to have these families of products sold in the
        traditional retail environment in shelf-space dedicated to the product
        category.  We are developing the infrastructure to create these brands
        of products so that we can implement our business plan.
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  Fluctuations
        in our revenue are driven by changes in our product mix.  Revenues may
        vary substantially from period to period depending on our product
        line-up.  A product that generates revenue in one quarter may not
        necessarily generate revenues in each quarter of a fiscal year for a variety
        of
        reasons, including, seasonal factors, the product’s stage in its life-cycle, the
        public’s general acceptance of the infomercial and other outside factors, such
        as the general state of the economy.
 
 Just
        as
        fluctuations in our revenues are driven by changes in our product mix, our
        gross
        margins from period-to-period depend on our product mix.  Our gross
        margins vary according to whether the products we are selling are primarily
        our
        own products or third-party products.  As a general rule, the gross
        margins for our own products are considerably higher based on proportionately
        smaller cost of sales.  For third-party products, our general
        experience is that our gross margins are lower, because we record as cost
        of
        sales the proportionately higher cost of acquiring the product from the
        manufacturer.  Within each category (i.e., our own products versus
        third-party products), gross margins still tend to vary based on factors
        such as
        market price sensitivity and cost of production.
 
 Many
        of
        our expenses for our own products are incurred up-front.  Some of our
        up-front expenditures include infomercial production costs and purchases
        of
        media time.  If our infomercials are successful, these up-front
        expenditures produce revenue on the back-end, as consumers purchase the products
        aired on the infomercials.  We do not incur infomercial production
        costs and media time for our third-party products, because we merely act
        as the
        distributor for pre-produced infomercials.  It is the responsibility
        of the international infomercial operators to whom we sell the third-party
        products to take the pre-produced infomercial, adapt it to their local standards
        and pay for media time.
 
 **Results
        of Operations**
 
 Comparison
        of Quarterly Results
 
 The
        following discussion compares our results of operations for the quarter ended
        September 30, 2007, with the quarter ended September 30, 2006.
 
 Revenues
 
 Our
        revenues increased to approximately $3,266,592 for the quarter ended September
        30, 2007, up from approximately $1,035,000 recorded during the comparative
        quarter in 2006, a 216% increase. Our Derma Wand product generated 100% of
        the
        revenues, as was the case during the same period in 2006. In September 2007,
        our
        revenue was generated solely from the sale of our Derma Wand product simply
        because this product has received the highest amount of interest from our
        international and domestic infomercial operators and is also selling very
        well
        in the United States through our direct response television campaign. Our
        Company resources are very limited at this time so we decided to
        concentrate these resources on marketing and selling our most popular product.
        All revenues recorded during the quarter ended September 30, 2007 were generated
        by our own products, as was the case during the comparative period in
        2006.
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  Gross
        Margin
 
 Gross
        margin percentage decreased to approximately 69% for the quarter ended September
        30, 2007, compared to approximately 76% for the quarter ended September 30,
        2006. The decrease in gross margin percentage was primarily due to the returns
        offset against the revenues generated from domestic Derma Wand sales; they
        were
        higher than the same period in 2006.
 
 Operating
        Expenses
 
 Total
        operating expenses increased to approximately $1,670,000 during the quarter
        ended September 30, 2007, from approximately $600,000 during the quarter
        ended
        September 30, 2006, up approximately $1,070,000, or 178%.  This
        increase is attributed primarily to increased domestic sales of the Derma
        Wand
        and all of the associated media, production and fulfillment costs. General
        and
        administrative costs were $230,100 during the quarter ended September 30,
        2007,
        as compared to $142,700 during the quarter ended September 30, 2006 (an increase
        of 61%) and selling and marketing costs were $1,433,000 during the quarter
        ended
        September 30, 2007, as compared to $447,000 during the quarter ended September
        30, 2006 ( an increase of  220%).
 
 Net
        Income
 
 Apart
        from the past two fiscal years ended December 31, 2006 and December 31, 2005,
        we
        have not achieved profitability on a consistent or annualized
        basis.  Our net income of approximately $583,500 for the quarter ended
        September 30, 2007 follows up second quarter 2007 net income of approximately
        $469,000.   Market acceptance of the products we launch is the
        greatest determining factor as to whether we will continue to operate profitably
        or at a loss
 
 **Plan
        of Operation; Liquidity and Capital Resources**
 
 At
        September 30, 2007, we had approximately $733,000 in cash on the books, compared
        to approximately $385,000 at December 31, 2006.  We experienced
        negative cash flow from operations of approximately $609,000 through the
        third quarter of 2007 compared to a negative cash flow from operations of
        approximately $62,000 for the same period in 2006.  The negative cash
        flow from operations was a combination of net income, an increase to accounts
        receivable, an increase in inventories and an increase in payables and accrued
        liabilities
 
 We
        have a
        note payable to The Better Blocks Trust (“BB Trust”) in the amount of
        approximately $591,000. This loan is interest free and has no specific terms
        of
        repayment.
 
 The
        Company has granted 1,175,000 stock options; 900,000 at $0.35, 160,000 at
        $0.36,
        60,000 at $0.50, 35,000 at $1.50 and 20,000 at $2.00.  All option
        grants vest over a five-year period.  To date, a total of 34,000 stock
        options have been exercised at $0.50 for proceeds of $17,000.  If the
        optionees exercise the remainder of these options as they vest, we will receive
        $436,300 in capital. The options granted on September 28, 2001, resulted
        in a
        deferred non-cash compensation expense of approximately $32,000. During 2005,
        $16,000 of this deferred non-cash compensation expense was amortized; the
        remaining $16,000 was amortized during 2006. This assumes an estimated fair
        value of $1.50 per share, based on the price of our offering of $1.50 per
        share
        at the time. No options were granted, but 4,000 options were cancelled during
        the period ended September 30, 2007.
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 ***Table
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  During
        the past two fiscal years ended December 31, 2006 and 2005, as well as the
        first
        three quarters of 2007 we have generated a net income from operations. Although
        we have experienced negative cash flows from operating activities, the Company
        has working capital of approximately $2,440,000. The accumulated
        deficit  from prior periods has been recouped and we now have retained
        earnings of  approximately $317,000 as of September 30,
        2007.  Although we have negative cash flow from operations at this
        time, this is due primarily to the decrease of our outstanding liabilities
        and
        an increase in our accounts receivable. During this period, we have obtained
        additional capital of approximately $1,134,500 through the issuance of common
        stock; since our current operations have reached a profitable level, this
        capitalization will be used to develop new products and expand our business.
        In
        an effort to reach consistent profitability and become less dependent on
        the
        requirement to finance continuing operations, we are working to increase
        revenues and profit margins by continuing the trend of generating revenues
        by
        selling our own products where our margins are much higher than our third-party
        products.
 
 **ITEM
                  3.**
              **CONTROLS
                  AND PROCEDURES**
 
 The
        Company maintains disclosure controls and procedures that are designed to
        ensure
        that information required to be disclosed in the Company's Exchange Act reports
        is recorded, processed, summarized and reported within the time frames specified
        in the SEC's rules and forms, and that such information is accumulated and
        communicated to the Company's management, including its Chief Executive Officer
        and its Chief Financial Officer, to allow timely decisions regarding required
        disclosure based closely on the definition of "disclosure controls and
        procedures" in Rule 13a-15(e) and 15d-15(e).
 
 As
        of
        September 30, 2007, the Company carried out an evaluation, under the supervision
        and within the participation of the Company's management, including the
        Company's Chief Executive Officer and Chief Financial Officer, of the
        effectiveness of the design and operation of the Company's disclosure controls
        and procedures.  Based on the foregoing, the Company's Chief Executive
        Officer and Chief Financial Officer concluded that the Company's disclosure
        controls and procedures were effective.
 
 There
        has
        been no change  in the Company's internal controls over financial
        reporting identified in connection with the evaluation required by paragraph
        (d)
        of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal
        quarter that has materially affected, or is reasonably likely to
        materially     affect our internal control over
        financial reporting.
  Page
            24
 ***Table
            of Contents***
  **PART
        II – OTHER INFORMATION**
 
 
 **ITEM
                  6.**
              **EXHIBITS**
 
 **EXHIBITS**
 
 Exhibit
 Number
              Description
 
 *31.1
              Rule
                  13a-14(a)/15d-14(a) Certification – Chief Executive
                  Officer
 
 *31.2
              Rule
                  13a-14(a)/15d-14(a) Certification – Chief Financial
                  Officer
 
 *32
              Section
                  1350 Certifications
 
 *
        Filed
        herewith
  Page
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 ***Table
            of Contents***
  **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.
 
 INTERNATIONAL
                  COMMERCIAL TELEVISION INC.RegistrantDate:
                  November 14, 2007
              By:
              /s/
                  Kelvin ClaneyName:  Kelvin
                  ClaneyTitle:
                  Chief Executive OfficerDate:
                  November 14, 2007
              By:
              /s/
                  Karl RedekoppName:  Karl
                  RedekoppTitle:
                  Chief Financial Officer
   Page
        26