UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x
              QUARTERLY
      REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended March 31,
2009





o
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACTFor
      the transition period from _____ to
_____





Commission
file number 0-25417





ICC
WORLDWIDE, INC.


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




DELAWARE
              
              11-3571993(State
      or other jurisdiction of incorporation or
                organization)
              
              (I.R.S.
      Employer Identification No.)




3334 E. Coast Hwy #424
Corona del Mar, CA 92625


(Address
of principal executive offices)





949/200-7569


(Issuer's
Telephone Number)





N/A


(Former
Name, Former Address and Former Fiscal Year,


if
Changed Since Last Report)





Indicate
by check mark whether the registrant: (1)has  filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).    Yes  o   No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer
                 ̈
                Accelerated filer
                 ̈Non-accelerated filer
                 ̈  (Do not check if a smaller reporting company)
                Smaller reporting company
                x





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


Yes oNo x





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes o
No o





APPLICABLE
ONLY TO CORPORATE ISSUERS





Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: there were 180,424,045 shares
outstanding as of May 14, 2009.











INDEX





PART
      1 - FINANCIAL INFORMATIONItem
      1: Financial StatementsCondensed
      consolidated balance sheet as of March 31, 2009 (unaudited) and September
      30, 2008
                3Condensed
      consolidated statements of operations for the three months and six months
      ended March 31, 2009 and 2008 (unaudited)
                4Condensed
      consolidated statements of cash flows for the six months ended March 31,
      2009 and 2008 (unaudited)
                5Notes
      to condensed consolidated financial statements (unaudited)
                6Item
      2. Management's Discussion and Analysis or Plan of
    Operation
                15Item
      3. Controls and Procedures
                21PART
      2 - OTHER INFORMATIONItem
      1. Legal Proceedings
                21Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                21Item
      3. Defaults Upon Senior Securities
                22Item
      4. Submission of Matters to a Vote of Security Holders
                22Item
      5. Other Information
                22Item
      6. Exhibits
                22Signatures
                22


2


PART I
- FINANCIAL INFORMATION




ITEM
1. FINANCIAL STATEMENTS




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS





March 31, 2009
                  
                  
                  September 30, 2008(Unaudited)ASSETSCurrent
      assets:Cash
                  
                  $
                  46,525
                  
                  
                  $
                  51,552Accounts
      receivable
                  
                  
                  56,012
                  
                  
                  
                  4,335Note
      receivable
                  
                  
                  58,473
                  
                  
                  
                  -Inventory
                  
                  
                  65,646
                  
                  
                  
                  5,348Deposits
      and other current assets
                  
                  
                  281,189
                  
                  
                  
                  81,139Current
      assets of discontinued operations
                  
                  
                  -
                  
                  
                  
                  84,249Total
      current assets
                  
                  
                  507,845
                  
                  
                  
                  226,623Furniture
      and fixtures
                  
                  
                  13,365
                  
                  
                  
                  22,016Office
      and store equipment
                  
                  
                  340,601
                  
                  
                  
                  251,975Less
      accumulated depreciation
                  
                  
                  (132,182
                  )
                  
                  
                  (86,948
                  )Net
      fixed assets
                  
                  
                  221,784
                  
                  
                  
                  187,043Note
      receivable
                  
                  
                  127,498
                  
                  
                  
                  -Deferred
      financing costs - net
                  
                  
                  91,409
                  
                  
                  
                  94,560Other
      assets
                  
                  
                  2,670
                  
                  
                  
                  2,670Non
      current assets discontinued of discontinued operations
                  
                  
                  -
                  
                  
                  
                  341,777Total
      assets
                  
                  $
                  951,206
                  
                  
                  $
                  852,673LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payable and accrued expenses
                  
                  $
                  584,310
                  
                  
                  $
                  184,211Accrued
      interest
                  
                  
                  237,799
                  
                  
                  
                  85,124Capitalized
      lease obligation - current portion
                  
                  
                  66,146
                  
                  
                  
                  69,701Notes
      payable - current portion
                  
                  
                  112,001
                  
                  
                  
                  112,001Current
      liabilities of discontinued operations
                  
                  
                  28,771
                  
                  
                  
                  344,839Total
      current liabilities
                  
                  
                  1,029,027
                  
                  
                  
                  795,876Capitalized
      lease obligation - long term
                  
                  
                  32,027
                  
                  
                  
                  71,894Notes
      payable - long term
                  
                  
                  3,557,503
                  
                  
                  
                  2,000,000Preferred
      stock, $.0001 par value, 30,000,000 shares authorized, 9,609,044 Series C
      issued and outstanding, includes accretion of $1,527,872 and $1,020,028,
      respectively; mandatory redeption on October 1, 2012 at $.60 per
      share
                  
                  
                  2,210,514
                  
                  
                  
                  1,702,670Total
      liabilities
                  
                  
                  6,829,071
                  
                  
                  
                  4,570,440Stockholders'
      deficit:Common
      stock, $.0001 par value, 450,000,000 shares authorized, 180,424,045 and
      200,120,434 shares outstanding, respectively
                  
                  
                  18,043
                  
                  
                  
                  20,012Additional
      paid-in capital
                  
                  
                  7,333,331
                  
                  
                  
                  7,765,315Accumulated
      deficit
                  
                  
                  (13,229,239
                  )
                  
                  
                  (11,503,094
                  )Total
      stockholders' deficit
                  
                  
                  (5,877,865
                  )
                  
                  
                  (3,717,767
                  )Total
      liabilities and stockholders' deficit
                  
                  $
                  951,206
                  
                  
                  $
                  852,673





See
accompanying notes to unaudited condensed consolidated financial
statements


3


ICC
WORLDWIDE, INC. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)


Three
      months ended March 31,
                              
                              
                              Six
      months ended March 31,2009
                              
                              
                              2008
                              
                              
                              2009
                              
                              
                              2008Revenue
                              
                              $
                              245,576
                              
                              
                              $
                              30,669
                              
                              
                              $
                              425,955
                              
                              
                              $
                              48,405Cost
      of goods sold
                              
                              
                              139,006
                              
                              
                              
                              28,307
                              
                              
                              
                              370,253
                              
                              
                              
                              46,042Gross
      profit
                              
                              
                              106,570
                              
                              
                              
                              2,362
                              
                              
                              
                              55,702
                              
                              
                              
                              2,363General
      and administrative expenses
                              
                              
                              378,632
                              
                              
                              
                              547,580
                              
                              
                              
                              863,447
                              
                              
                              
                              839,438Loss
      from continuing operations beforeother
      expense
                              
                              
                              (272,062
                              )
                              
                              
                              (545,218
                              )
                              
                              
                              (807,745
                              )
                              
                              
                              (837,075
                              )Interest
      expense, net and financing cost
                              
                              
                              (113,160
                              )
                              
                              
                              (31,816
                              )
                              
                              
                              (182,301
                              )
                              
                              
                              (34,420
                              )Accretion
      to preferred stock
                              
                              
                              (253,922
                              )
                              
                              
                              (253,922
                              )
                              
                              
                              (507,844
                              )
                              
                              
                              (507,844
                              )Loss
      from continuing operationsbefore provision for income
      taxes
                              
                              
                              (639,144
                              )
                              
                              
                              (830,956
                              )
                              
                              
                              (1,497,890
                              )
                              
                              
                              (1,379,339
                              )Provision
      for income taxes
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Loss
      from continuing operations
                              
                              
                              (639,144
                              )
                              
                              
                              (830,956
                              )
                              
                              
                              (1,497,890
                              )
                              
                              
                              (1,379,339
                              )Loss
      from discontinued operations
                              
                              
                              (29,686
                              )
                              
                              
                              (477,890
                              )
                              
                              
                              (56,253
                              )
                              
                              
                              (932,615
                              )Net
      loss from disposal of discontinued operations
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (172,230
                              )
                              
                              
                              -Net
      loss
                              
                              $
                              (668,830
                              )
                              
                              $
                              (1,308,846
                              )
                              
                              $
                              (1,726,373
                              )
                              
                              $
                              (2,311,954
                              )Net
      loss per common share, basic and dilutedContinuing
      operations
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.01
                              )
                              
                              $
                              (0.01
                              )Discontinued
      operations
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Loss
      per common share
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.01
                              )
                              
                              $
                              (0.01
                              )
                              
                              $
                              (0.01
                              )Weighted
      average shares outstanding, basic and diluted
                              
                              
                              180,424,045
                              
                              
                              
                              200,120,434
                              
                              
                              
                              190,272,240
                              
                              
                              
                              196,355,530





See
accompanying notes to unaudited condensed consolidated financial
statements.


4




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(UNAUDITED)


Six Months Ended March 31,2009
                  
                  
                  2008Cash
      flows from operating activities:Net
      loss from continuing operations
                  
                  $
                  (1,497,890
                  )
                  
                  $
                  (1,379,339
                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                  
                  
                  42,476
                  
                  
                  
                  41,625Amortization
                  
                  
                  20,077
                  
                  
                  
                  4,930Accretion
      to preferred stock
                  
                  
                  507,844
                  
                  
                  
                  507,844Changes
      in operating assets and liabilities:Increase
      inAccounts
      receivable
                  
                  
                  (51,677
                  )
                  
                  
                  -Inventory
                  
                  
                  (60,298
                  )
                  
                  
                  -Deposits
      and other current assets
                  
                  
                  (200,050
                  )
                  
                  
                  (14,918
                  )Increase
      (decrease) inAccounts
      payable and accrued expenses
                  
                  
                  552,774
                  
                  
                  
                  (13,906
                  )Net
      cash flow from discontinued operations
                  
                  
                  (368,816
                  )
                  
                  
                  (1,409,564
                  )Net
      cash used in operating activities
                  
                  
                  (1,055,560
                  )
                  
                  
                  (2,263,328
                  )Cash
      flows from investing activities:Purchase
      of property and equipment
                  
                  
                  -
                  
                  
                  
                  (8,182
                  )Leased
      equipment upgrades
                  
                  
                  (84,828
                  )Sale
      of property and equipment
                  
                  
                  3,585
                  
                  
                  
                  -Net
      cash flow from discontinued operations
                  
                  
                  60,197
                  
                  
                  
                  (20,722
                  )Net
      cash used in investing activities
                  
                  
                  (21,046
                  )
                  
                  
                  (28,904
                  )Cash
      flows from financing activities:Proceeds
      from issuance of preferred stock
                  
                  
                  -
                  
                  
                  
                  151,968Proceeds
      from issuance of common stock
                  
                  
                  -
                  
                  
                  
                  348,032Proceeds
      from issuance of notes payable
                  
                  
                  1,115,000
                  
                  
                  
                  950,000Payments
      on capitalized lease obligation
                  
                  
                  (43,421
                  )
                  
                  
                  (12,867
                  )Payments
      on demand notes payable
                  
                  
                  -
                  
                  
                  
                  (15,000
                  )Net
      cash provided by financing activities
                  
                  
                  1,071,579
                  
                  
                  
                  1,422,133Effect
      of exchange rate changes on cash
                  
                  
                  -
                  
                  
                  
                  (15,424
                  )Net
      decrease in cash
                  
                  
                  (5,027
                  )
                  
                  
                  (885,523
                  )Cash,
      beginning of period
                  
                  
                  51,552
                  
                  
                  
                  1,029,949Cash,
      end of period
                  
                  $
                  46,525
                  
                  
                  $
                  144,426Non-Cash
      Financial Information:Notes
      payable issued in exchange for common stock
                  
                  $
                  442,503
                  
                  
                  $
                  -Warrants
      issued as part of financing arrangements
                  
                  
                  8,550
                  
                  
                  
                  111,310Supplemental
      disclosuresCash
      paid for interest
                  
                  $
                  -
                  
                  
                  $
                  -Cash
      paid for taxes
                  
                  
                  -
                  
                  
                  
                  -





See
accompanying notes to the consolidated financial statements.


5


ICC
WORLDWIDE, INC. AND SUBSIDIARIES


Notes
to Condensed Consolidated Financial Statements


March
31, 2009


(Unaudited)





GENERAL





The
accompanying unaudited consolidated financial statements and footnotes have been
condensed and therefore do not contain all disclosures required by accounting
principles generally accepted in the United States of America. In the opinion of
management, the information furnished reflects all adjustments, consisting of
normal recurring adjustments, necessary to make the consolidated financial
position, results of operations and cash flows for the interim periods not
misleading. Interim periods are not necessarily indicative of results for a full
year.





These
condensed consolidated financial statements should be read in conjunction with
the audited consolidated financial statements of the Company for the fiscal year
ended September 30, 2008 and the notes thereto contained in the Company’s Annual
Report on Form 10-KSB, as filed with the Securities and Exchange Commission
(“SEC”).





NOTE
1.  ORGANIZATIONAL MATTERS AND NATURE OF THE BUSINESS





ICC
Worldwide, Inc. (“we”, “us”, “the Company”, or “Torbay”) was incorporated on
March 24, 1999 as a Delaware corporation named Acropolis Acquisition
Corporation.  We changed our name to Torbay Holdings, Inc. on July 14,
1999.  We became a reporting company public company under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) on October 26,
1999 as a result of a merger with Torbay Acquisition Corporation
(“TAC”).  On November 27, 2007, our stockholders approved the change
in our name to ICC Worldwide, Inc.





From
inception through June, 2007 the principal business of our Company was the
development and sale of a computer mouse device and related
software.





On June
29, 2007 we changed our business model and sold a controlling interest in our
Company to The Adamas Fund, LLLP (formerly, The Black Diamond Fund, LLLP), a
Minnesota limited liability limited partnership (“Adamas”).  The
purpose of the sale of stock was to raise capital for use in conjunction with an
acquisition strategy which allows us to develop our Company by acquiring assets
with a history of operating revenues in markets that provide room for
growth.





As a
result of our investigations, we focused on a strategy that provided certain
goods and services to the ethnic immigrant worker communities in
Italy.  These goods and services included products in the broad areas
of:  (1) telecommunications, (2) entertainment, (3) ethnic food
products, and (4) financial services.  The goods and services were to
be delivered by our Company on a wholesale basis through a large, well
established network of independently-owned retail stores throughout
Italy.  In addition to the wholesale business activities, the Company
would operate a small number of its own retail stores in Italy which served
customers in this market.





Since
then we have continued to refine this ethnic immigrant community focused
strategy.  In March 2008, we eliminated the ethic food products and
entertainment components of our business in order to focus on telecommunications
aspects of the market.





On
October 31, 2008, we sold the retail store component of the business for
$249,700 to focus exclusively on the wholesale telecommunications aspects of the
market.  Accordingly, the financial statements have been reclassified
to exclude the operating results of the retail stores from continuing operations
and account for them as discontinued operations.





Our
major wholesale products include VoIP (Voice over the Internet Protocol)
services to retail telephone call shop operators (“call shops”), international
calling cards, and cell phone recharge cards (collectively
“cards”).  The common characteristic of the wholesale products is that
they are prepaid by the wholesale account, require little physical inventory
investment, and are deliverable by ICC Italy to the call shops through the
Internet.  This business model is highly scalable and makes possible
the expansion of the business beyond Italy into all of Europe on an extremely
cost effective basis.





The six
months ended March 31, 2009 contains the first five months of operations of our
wholesale only business model as refined and may not be indicative of future
operating results





NOTE
2.  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING
POLICIES





(A) Basis of
Presentation





The
accompanying condensed consolidated financial statements include the accounts of
ICC Worldwide, Inc., and its wholly own subsidiaries, ICC Italy Srl, and
Designer Appliances Ltd. (collectively, the “Company”). All significant
inter-company transactions have been eliminated in
consolidation.  Designer Appliances Limited is an inactive
company.




6





(B) Use of
Estimates





The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.





(C) Revenue
Recognition





The
Company’s retail products and services are sold primarily for
cash.  Revenue is recognized at the time the products or services are
sold and collection is assured.





The
Company wholesale revenue is primarily the sale of international calling cards
and cell phone recharge cards and from commissions on the sale of VoIP (Voice
Over the Internet Protocol) telecommunication services.  Revenue is
recognized when services and cards are sold and collection is
assured.





(D) Accounts
Receivable





Accounts
receivable represents amounts due from resellers who represent a group of
accounts and from individual accounts to which credit has been extended
directly.





For the
six month period ending March 31, 2009, the Company has been collecting the
accounts under contract to a third party and has earned a commission on the
collection. . Any uncollectable account would reduce the margin the Company
would have otherwise earned on the collection transaction.





(E)
Inventory





Inventory
consists of the purchase value of international calling cards and cell phone
recharge PIN numbers which are available to client accounts through the
Company’s online website for resale to the public.   The Company
does not have raw material or work in process inventory.





(F) Foreign Currency
Translation





Assets
and liabilities of our Company’s foreign subsidiary have been re-measured in
accordance with Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 52 “Foreign Currency Translation”(“SFAS 52”).Management has
determined that the US dollar is the Company’s functional currency for purposes
of applying SFAS 52.





The
re-measurement process requires the use of historical exchange rates between the
foreign currency and the US dollar currency in the presentation of the financial
statements of certain non-monetary accounts.  All exchange gains and
losses from re-measurement of the non-monetary assets are included in the income
statement for the appropriate period.





(G) Loss Per
Share





Basic and
diluted loss per common share for all periods presented is computed based on the
weighted average number of common shares outstanding during the periods
presented as defined by SFAS No. 128, "Earnings per
Share".  The assumed exercise of common stock equivalents was
not utilized for the three and six months ended March 31, 2009 and 2008,
respectively, since the effect would be anti-dilutive.





(H) Stock Options and
Warrants





The
Company follows Statement of Financial Accounting Standards No. 123(R), “Accounting for Stock-Based
Compensation”, (“FAS 123R”) to account for compensation costs when the
Company exchanges equity for goods or services.  Under FAS 123R, the
cost of the services received is measured on the grant-date fair value of the
equity award and amortized over the vesting period of the award.




7





(I)
Reclassifications





Certain
prior year amounts have been reclassified as discontinued operations to conform
with the current year’s presentation, none of which had an impact on total
assets, stockholders’ equity (deficit), net loss, or net loss per
share.





(J) Fair Value of Financial
Instruments





The
carrying value of cash, accounts receivable, deferred revenue, accounts payable,
and accrued expenses approximate fair value because of the short maturity of
these items.





(K) Cash and Cash
Equivalents





For
purposes of the statement of cash flows, the Company considers all highly-liquid
instruments purchased with a remaining maturity of three months or less to be
cash equivalents.


8





(L)
Concentrations





The
Company maintains its cash in bank deposit accounts that, at times, may exceed
federally insured limits.  The Company has not experienced any losses
in such accounts. Management believes the Company is not exposed to any
significant credit risk related to cash.





(M) Property and
equipment





Property
and equipment are stated at cost less accumulated
depreciation.  Depreciation is provided for in amounts sufficient to
relate the cost of depreciable assets to operations over their estimated service
lives.  The estimated lives in determining depreciation are recognized
primarily on the straight-line method over estimated useful lives of five years
for equipment and seven years for store and office fixtures
equipment.  For leasehold improvements and buildings, the Company
depreciates the assets over the shorter of their estimate useful lives or
original lease terms plus any renewal periods for which renewal has been
determined to be reasonably assured.





(N) Income
Taxes





The Company adopted Financial
Accounting Standards Board ("FASB") Interpretation 48, Accounting for Uncertainty in Income
Taxes ("FIN 48"), as of October 1, 2007. Under FIN 48, a tax position is
recognized as a benefit only if it is "more likely than not" that the tax
position would be sustained in a tax examination, with a tax examination being
presumed to occur. The amount recognized is the largest amount of tax benefit
that is greater than 50% likely of being realized on examination. For tax
positions not meeting the "more likely than not" test, no tax benefit is
recorded. FIN 48 also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition. The Company believes that its income tax positions and deductions
will be sustained on audit and does not anticipate any adjustments that will
result in a material change to its financial position.





The
Company's policy for recording interest and penalties associated with audits is
to record such items as a component of income before income taxes. Penalties are
recorded in other expense and interest paid or received is recorded in interest
expense or interest income, respectively, in the statement of operations. There
were no amounts accrued for penalties or interest as of or during the three
months and six months ended March 31, 2009 and 2008, respectively. The Company
does not expect its unrecognized tax benefit position to change during the next
twelve months. Management is currently unaware of any issues under review that
could result in significant payments, accruals or material deviations from its
current position.





Net
operating losses ("NOLs") may be utilized under certain conditions as a
deduction against future income to offset against future taxes. Internal Revenue
Code Section 382 rules limit the utilization of NOLs due to ownership changes as
defined by rules enacted with the Tax Reform Act of 1986. If it is determined
that a change in control has taken place, utilization of the Company's NOL's
will be subject to severe limitations in future periods, which would have a
effect of substantially reducing the immediate future tax benefits of the
NOLs.





Income
tax benefits resulting from net losses incurred for the three months-and six
months ended March 31, 2009, and 2008, respectively, were not recognized as the
Company's annual effective tax rate for both periods was estimated to be
0%.





(O) Preferred
Stock





The issuance of the Series C preferred
stock was accounted for as a liability in accordance with SFAS No. 150, “Accounting For Certain Financial
Instruments with Characteristics of both Liabilities and
Equity”.  EITF D-98“Classification and Measurement of
Redeemable Securities” requires that the difference between the carrying
amount of the preferred stock and the mandatory redemption value be accreted
over time in order that the carrying value of the preferred stock equal its
mandatory redemption value at the mandatory redemption date.  For the
three and six months ended March 31, 2009, $253,922 and $507,844, respectively,
was accreted to the carrying value of the preferred stock for this
purpose.




9





We have
not treated the convertible option in the Series C preferred stock as a
derivative within the meaning of SFAS No. 133 “Accounting for Derivative
Instruments and Hedging Activities” as the common shares so converted
could not be readily converted to cash without substantial market disruption and
a heavy discount in price which would render the converted stock virtually
worthless.





(P) Deposits and Other
Current Assets





Deposits
and other current assets are generally advances to telecom carriers for VoIP
traffic which the Company expects to use in the course of its normal
operations.





(Q) Note
Receivable





The note receivable is for the sale of
the retail stores at the end of October, 2008.  The note has an
effective interest rate of 7.3%, is fully amortizing, and requires monthly
payments of interest and principal through December 2012. See Note
4.





Recently
Issued Accounting Pronouncements





The
Company has adopted all accounting pronouncements effective before March 31,
2009, which are applicable to the Company.





In
December 2007, the FASB issued SFAS No. 160, “Non-Controlling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS
160”).  SFAS 160 establishes new accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of
a subsidiary.  SFAS 160 is effective for fiscal years, beginning on or
after December 15, 2008.  Earlier adoption is
prohibited.  The Company does not expect the adoption of SFAS 160 to
have an effect on its financial statements.





In
December 2007, the FASB issued FASB Statement No. 141 (Revised 2007), “Business Combinations”
(“SFAS 141R”).  SFAS 141R will significantly change the accounting for
business combinations. Under SFAS 141R, an acquiring entity will be required to
recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions.  The
statement applies prospectively to business combinations occurring in fiscal
years beginning after December 15, 2008.  Earlier adoption is
prohibited.  The Company does not expect the adoption of SFAS 141R to
have an effect on its financial statements.





In May
2008, the FASB issued SFASB No.162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”).  The pronouncement
mandates the GAAP hierarchy reside in the accounting literature as opposed to
the audit literature.  This has the practical impact of elevating FASB
Statements of Financial Accounting Concepts in the GAAP
hierarchy.  This pronouncement was effective November 15, 2008. The
pronouncement did not impact the Company’s financial statements.





In
September 2008, the FASB issued EITF 07-5, Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to and Entity’s Own Stock (“EITF
07-5”).  The pronouncement provides new guidance for determining
whether equity-linked financial instruments (e.g. warrants and convertible
stock) are indexed to a company’s own stock, and as a result, whether those
instruments should be marked-to-market each period.  In general if
there is a reset feature imbedded in the financial instrument which resets the
strike price of the instrument as a result of the issuance of another financial
instrument with a different stick price, the financial instrument in question is
not considered indexed to the company’s own stock. Therefore, the financial
instrument should be adjusted to fair value each period through the income
statement.  EITF 07-5 is effective for fiscal years beginning after
December 15, 2008.  The Company is studying what impact, if any, EITF
07-5 will have on the Company.




10





NOTE
3.  GOING CONCERN





The
Company’s condensed consolidated financial statements for the six months ended
March 31, 2009 have been prepared on a going concern basis, which contemplates
the realization of assets and the settlement of liabilities and commitments in
the normal course of business.





The
ability of the Company to continue as a going concern is dependent on the
Company's ability to raise additional funds and implement its new business
plan.  The consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.




Management
believes that by rapidly expanding the number of wholesale accounts primarily in
Italy but also in other European countries coupled with the substantially lower
general and administrative costs required in the wholesale business model, the
Company can reach positive operating cash flow in a matter of
months.





NOTE
4.  DISCONTINUED OPERATIONS




On
October 31, 2008, ICC Italy sold the remaining four retail stores for $249,700
in an installment sale to an investor group that included former employees of
the Company.  The terms provide for a payment of $36,100 down with the
balance paid over the following 50 months.  The effective interest
rate on the payments is approximately 7.3%.  The Company recorded a
loss of $172,000 on the sale.




The
Company follows the provisions of SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”, related to the accounting and reporting
for segments of a business to be disposed of. The results of operations for the
retail stores have been classified as discontinued operations in all periods
presented.





Revenues
included in discontinued operations of the retail stores for the three months
ended March 31, 2009 and 2008, respectively, were $27,230 and
$342,798.





Revenues
included in discontinued operations of the retail stores for the six months
ended March 31, 2009 and 2008, respectively, were $164,777 and
$574,246.


11





NOTE
5.  LOANS





Nutmeg
Notes







On
December 31, 2008 the Company entered into an agreement (the “Exchange
Agreement”) whereby The Nutmeg MiniFund, LLLP, The Nutmeg Group, LLC, and the
Nutmeg/Michael Fund, LLP (collectively “Nutmeg”), affiliates of the Company,
returned to the Company for cancellation 19,696,389 shares of the Company’s
common stock in return for the issuance to Nutmeg of an unsecured promissory
notes (the “Nutmeg Notes”) in the total principal amount of $442,500, which is
the amount paid by Nutmeg for all of the common stock of the Company being
returned by Nutmeg less the proceeds from any sales of the common
stock.  The common stock being returned had been issued to Nutmeg in
various transactions.  This common stock of the Company being returned
was all of the Company’s capital stock Nutmeg owned at the time of the
transaction and will be cancelled by the Company.




The
outstanding principal of the Nutmeg Notes bear interest at the rate of 5% per
year.  Payments of interest and principal will be due quarterly on the last
day of each calendar quarter commencing September 30, 2010.





Pursuant
to the Exchange Agreement, Nutmeg also waived the payment to it of $1,150 due
from the Company for past investor relations activities.




In
connection with the Exchange Agreement on December 31, 2008 the Company and
Nutmeg/Mercury, LLLP (“Nutmeg/Mercury”) entered into a first amendment of the
Superseding Note of September 26, 2007 (“Superseding Note”) between the Company
and Nutmeg Mercury and signed in September, 2007 in the principal amount of
$60,000 plus accrued interest. In the first amendment, the Company agreed to
increase the interest rate on the Superseding Note from 12.5% to 13.5% per year
effective January 1, 2009 and Nutmeg/Mercury agreed to (a) extend the maturity
date of the Superseding Note from May 11, 2009 to May 11, 2010, (b) eliminate
the option of the note holder (Nutmeg/Mercury) to convert some or all of the
note’s principal and accrued interest into the Company’s common stock and (c)
return to the Company for cancellation warrants to purchase an aggregate of
7,500,000 shares of the Company’s common stock held by Nutmeg/Mercury. 
After such cancellation Nutmeg/Mercury no longer owns any warrants to purchase
the Company’s capital stock.





Adamas
Notes




On
October 15, 2008, Adamas committed to loan the Company up to $350,000 and the
Company executed and delivered to Adamas a promissory note to evidence all loans
to be made pursuant to such commitment (“October 15, 2008 Note”).




The Note
matures on December 31, 2009, is unsecured, and provides that outstanding
principal balance of such note bears interest at 10% per
year.  Accrued interest is due March 1, 2009 with monthly payments of
interest thereafter.  There is no prepayment penalty on the
Note.




The
Company received advances totaling $265,000 from Adamas under the October 15,
2008 Note.





Stealth Fund and Blaise
Trust Notes





On July
9, 2008, The Stealth Fund, LLLP (the “Stealth Fund”) and The Karyn M. Blaise
Irrevocable Trust (“Blaise Trust”) each committed to loan the Company $300,000
pursuant to a $300,000 Convertible Note issued by the Company to each
lender.  At September 30, 2008, all the funds had been advanced by the
Stealth Fund and $200,000 had been advanced by the Blaise Trust under these
agreements. In October 2008, the Company received the final advance of $100,000
from the Blaise Trust.




12





The
Stealth Fund and Blaise Trust notes each matures on June 30, 2010, are
unsecured, and provide that outstanding principal balance of such note bears
interest at 10% per year.  The first three months of interest is
deferred with the first payment of monthly interest due November 1,
2008.  The Company has the right to prepay the note at any time
without penalty.  Each note is convertible into shares of the
Company’s common stock at a conversion rate of $.007 per share, which rate is
subject to adjustment for share splits and consolidations.  The notes
contain a provision (which may be waived upon 61 days prior written notice) that
the outstanding principal amount of the notes may not be converted into shares
to the extent that such conversion would result in the payee having beneficial
ownership of the Company’s Common Stock of more than 4.99% (such beneficial
ownership and percentage of beneficial ownership being determined in accordance
with SEC Rule 13d-3).  An event of default would occur under each note
if the Company fails to make any payment required by the note within five days
after written notice from the holder of the note, becomes insolvent, bankrupt,
or in general fails to pay its bills on time, or violates a covenant in the note
which remains uncured after 20 days notice.  After the occurrence of
an event of default, the outstanding principal balance and all past due interest
will bear interest at the rate of 18% until paid.




On
December 15, 2008, the Stealth Fund, committed to loan the Company up to an
additional $300,000, and the Company executed and delivered to the Stealth Fund
a promissory note to evidence all loans to be made pursuant to such
commitment.  The Company was advised by Wealth Strategy Partners,
which is the general partner for both Adamas and the Stealth Fund, that the
remaining $85,000, which could have been advanced by Adamas under the October
15, 2008 Note, would be advanced as part of this loan instead.




The Note
matures on January 1, 2012, is unsecured, and provides that outstanding
principal balance of such note bears interest at 10% per year.  The
first six months of interest is accrued and added to the principal of the
note.  Monthly payments of interest on the outstanding principal of
the note begin July 1, 2009.  The Company has the right to prepay the
note at any time without penalty.  The note is convertible into shares
of the Company’s common stock at a conversion rate of $.0015 per share, which
rate is subject to adjustment in the event of subdivisions or combinations of
the Company’s common Stock.





We have
not treated the convertible option in the Note as a derivative within the
meaning of SFAS No. 133 “Accounting for Derivative
Instruments and Hedging Activities” as the common shares so converted
could not be readily converted to cash without substantial market disruption and
a heavy discount in price which would render the converted stock virtually
worthless.




As
further consideration to make the loan to the Company, the Company issued to the
Stealth Fund a warrant to purchase 4,500,000 shares of the Company’s common
stock (the “Stealth Fund Warrant I”) at any time before January 1, 2014 at a
price per share of $.0015, which exercise price is subject to adjustments upon
the occurrence of certain events, including stock splits, stock dividends,
sub-divisions and combinations of the Company’s common stock.





The
Stealth Fund Warrant I was granted on December 12, 2008.  At that
time, the fair value of the warrants was estimated to be $1,350 computed using
the Black-Scholes valuation model with a historical volatility rate of 495%,
zero dividend payment, and a 5 year bond equivalent rate of
1.55%.  The $1,350 fair value of the Stealth Fund Warrant on the date
of grant is being amortized over the life of the underlying note which is 36.5
months.  During the three and six months ended March 31, 2009, we
amortized $18 and $129, respectively, to interest expense in this
regard.




Melanie Altholtz Irrevocable
Trust Note




On
January 27, 2009, the Melanie S Altholtz Irrevocable Trust (“Trust”) loaned the
Company $200,000.




The Note
matures on January 31, 2012, is unsecured, and provides that the outstanding
principal balance of such Note bears interest at 15% per year.  During
the first six months, payments of only interest are due.  Thereafter,
monthly payments of interest and principal totaling $ 8,306 per month are due
until the Note matures.




The
monthly payment of interest and/or interest and principal are to be increased by
50% starting in the third month of the calendar quarter following the calendar
quarter in which the Company first reports positive cash provided by operations
in its Statement of Cash Flows as set forth in the Company’s Quarterly Report on
Form 10-Q or Annual Report on Form 10-K to be filed with the U.S. Securities and
Exchange Commission.




13




As
further consideration for the loan to the Company, on January 27, 2009, the
Company issued to the Trust a warrant to purchase 8,000,000 shares of the
Company’s common stock (the “Altholtz Trust Warrant”) at any time before January
31, 2014 at a price per share of $.0009, which exercise price is subject to
adjustments upon the occurrence of certain events, including stock splits, stock
dividends, subdivisions and combinations of the Company’s Common
Stock.


.


At that
time, the fair value of the Altholtz Trust Warrant was estimated to be $3,200
computed using the Black-Scholes valuation model with a historical volatility
rate of 505%, zero dividend payment, and a 5 year bond equivalent rate of
1.7%.  The $3,200 fair value of the Altholtz Trust Warrant on the date
of grant is being amortized over the life of the underlying note which is 36
months.  During the three months ended March 31, 2009, we amortized
$178 to interest expense in this regard.




The Stealth Fund
Note




On March
26, 2009, the Stealth Fund, LLLP, (“Stealth Fund”) loaned the Company
$250,000.




The Note
matures on April 30, 2013, is unsecured, and provides that the outstanding
principal balance of such Note bears interest at 15% per year.  During
the first six months, payments of only interest are due.  Thereafter,
monthly payments of interest and principal totaling $ 7,687 per month are due
until the Note matures.




The
monthly payment of interest and/or interest and principal will be increased by
50% starting in the third month of the calendar quarter following the calendar
quarter in which the Company first reports positive cash provided by operations
in its Statement of Cash Flows as set forth in the Company’s Quarterly Report on
Form 10-Q or Annual Report on Form 10-K to be filed with the U.S. Securities and
Exchange Commission.




As further consideration for the loan
to the Company, om March 26, 2009, the Company issued to the Stealth Fund a
warrant to purchase 10,000,000 shares of the Company’s common stock (the
“Stealth Fund Warrant II”) at any time before March 31, 2014 at a price per
share of $.0059, which exercise price is subject to adjustments upon the
occurrence of certain events, including stock splits, stock dividends,
subdivisions and combinations of the Company’s common stock.





At that
time, the fair value of the Stealth Fund Warrant II was estimated to be $4,000
computed using the Black-Scholes valuation model with a historical volatility
rate of 515%, zero dividend payment, and a 5 year bond equivalent rate of
1.8%.  The $4,000 fair value of the Stealth Fund Warrant II on the
date of grant is being amortized over the life of the underlying note which is
49 months.  The Company recorded no amortization of the deferred
interest expense during the three months ended March 31, 2009.





NOTE
6.  SUBSEQUENT EVENTS




During
April and May 2009, the Stealth Fund and the Adamas Fund made
additional loans to the company totaling $315,000.  Each loan is
evidenced by a note.  Each loan is unsecured, due April 30, 2011,
bears interest at 10% per annum, and requires only payments of interest until
maturity.





On April
16, 2009, the $300,000 convertible note dated July 8, 2008 due to the Karyn M.
Blaise Irrevocable Trust was amended.  Under the amendment, the
maturity of the note was extended to January 1, 2011, interest was allowed to
accrue until January 1, 2010, and the interest rate was changed effective
November 1, 2008 to 18% per annum. The full principal remains outstanding on
this note.





On April
20, 2009, the $200,000 promissory note dated January 27, 2009 due to the Melanie
S Altholtz Irrevocable Trust was amended.  Under the amendment
interest was allowed to accrue until January 1, 2010, and the interest rate on
the note was changed to 18% from inception. The full principal remains
outstanding on this note.




14





ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION





FORWARD
LOOKING STATEMENTS





This
Quarterly Report on Form 10-Q, including exhibits thereto, contains
forward-looking statements. These forward-looking statements are typically
identified by the words "anticipates", "believes", "expects", "intends",
"forecasts", "plans", "future", "strategy", or words of similar
meaning.  Various factors could cause actual results to differ
materially from those expressed in the forward-looking
statements.  The Company assumes no obligations to update these
forward-looking statements to reflect actual results, changes in assumptions, or
changes in other factors, except as required by law.





OVERVIEW





On June
29, 2007, our Board of Directors determined that the implementation of our
Company's business plan as it then existed was no longer financially feasible
and accepted the offer of Adamas to purchase a controlling interest in our
Company.





The
proceeds of the financing by Adamas were used to pursue an acquisition strategy,
whereby we sought to acquire attractive businesses with a history of operating
revenues in markets that provide room for growth.





As a
result of our investigations, we focused on a strategy which offers certain
goods and services to the ethnic immigrant worker communities in
Italy.  These goods and services include products in the broad areas
of:  (1) telecommunications, (2) entertainment, (3) ethnic food
products, and (4) financial services.  They would be delivered by our
Company on a wholesale basis through a large, well established network of
independently-owned retail stores throughout Italy.  In addition to
the wholesale business activities, the Company also would operate a small number
of its own retail stores in Italy which serve customers in this
market.  In September, 2007, utilizing ICC Italy, Srl, (“ICC Italy”) a
wholly-owned subsidiary incorporated in Italy, we began acquiring assets and
opening stores in several of the provinces in Northern Italy.





We
continued to refine this immigrant community focused strategy throughout the
fiscal year ended September 30, 2008 and beyond.  In March 2008, we
eliminated the ethic food products and entertainment components of our business
in order to focus on telecommunications aspects of the market.





On
October 31, 2008, we sold the retail store component of the business for
$249,700 to focus exclusively on the wholesale telecommunications aspects of the
market with retail telephone call shop operators as the target customer (“call
shops”).





Our major
wholesale products include VoIP (Voice Over the Internet Protocol) services as
well as international calling cards, and cell phone recharge cards
(“cards”).  The common characteristic of these wholesale products is
that they are prepaid by the wholesale account, they require little physical
inventory investment, and they are deliverable by ICC to the call shop accounts
through the Internet.  This business model is highly scalable and
makes possible the expansion of the business beyond Italy into all of Europe on
an extremely cost-effective basis.


15





RESULTS
OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2009.





Critical
Accounting Policies





Our
Company makes estimates and assumptions in the preparation of its consolidated
financial statements in conformity with accounting principles generally accepted
in the United States of America. Actual results could differ significantly from
those estimates under different assumptions and conditions. Our significant
accounting policies are described in Note 2 to the audited consolidated
financial statements included in our Annual Report on Form 10-KSB for the fiscal
year ended September 30, 2008. The accounting policies used in preparing our
interim condensed consolidated financial statements are the same as those
described in the Annual Report.





Exchange
Rate Activity





As our
Company obtains all of its revenue In Italy and Belgium and incurs most of its
expenses in Italy, Belgium, and Romania, the reported performance of our Company
will be heavily influenced by the currency exchange rates.





Markets
Served





Since the
new management group reoriented ICC’s strategy in June, 2007, the focus of the
Company’s efforts has been exclusively on the immigrant worker market in
Italy.  However, in February, 2009, we began selling VoIP services to
immigrant workers in Belgium as well.  By March 31, 2009, the Company was
servicing as many customers in Belgium as in Italy.  In addition, at March
31, 2009, our Company was actively exploring the sale of VoIP services in
Spain.





Change
in Revenue and Cost Profile





VoIP





The
Company has further refined its wholesale account business model.  During
the six month period ended March 31, 2009, the Company began moving its VoIP
services from a retail store based business model to an agency services business
model.  Under the retail store business model, revenue and cost of goods
sold were recognized to obtain gross margin.





Interim Agency
Model





Under the
agency model, only the commission on the sale of VoIP traffic is
recognized.  Using the agency model on an interim basis, the Company
contracted with an independent firm to sell certain services while the Company
continued with collection of funds associated with the sale of VoIP
traffic.  However, under this interim agency model, the Company did
not have financial responsibility to the underlying communications carrier(s)
for the VoIP telecommunications traffic sold.





Commencing
January, 2009, the Company leased its own routing and billing communications
switch in order to better control the quality of the VoIP Internet services
being provided and to be able to expand the amount of VoIP traffic and types of
telecommunications services which the Company could handle at any given
time.





Purchased Capacity
Model





At March
31, 2009, the Company ended the interim agency relationship and began buying
VoIP carrier capacity directly to resell on a wholesale basis to an independent
company specializing in the sale of VoIP services to immigrant call
shops.  In these Purchased Capacity Model transactions, the Company
collects and manages the cash from the sale VoIP services.  Beginning
April 1, 2009, the Company expects to operate using this model for the
foreseeable future.




16





As a
result, for the six months ended March 31, 2009, the Company is reporting as
revenue only the commission earned under the agency arrangement for VoIP
activity during the period.  However, in future financial statements,
the Company will be reporting the sale of VoIP traffic as revenue with the
associated cost of goods being the cost of the underlying carrier
telecommunications traffic purchased for this purpose.  Under this
purchased capacity model, the Company will now be directly responsible for the
acquisition and payment of VoIP carrier capacity.





Under
both the agency model and the purchased capacity model, the Company has no
inventory of carrier VoIP capacity and no obligations to pay for VoIP carrier
capacity not used.





Sale of International
Calling Cards and Mobile Phone Recharge Cards





With the
opening of activities in Belgium, the Company purchases and reports the sale of
international calling card and prepaid mobile phone recharge cards in two
ways.  These are dependent on whether the Company takes physical
delivery of the underlying cards or not.





In Italy,
the Company presently purchases the physical cards from various card vendors and
then resells them to the individual call shops.  The Company stores
the serial or activation number of the purchased card in the Company’s computer
database.  When a call shop purchases a particular card, the Company
electronically transmits the serial number of the card to the call shop or
directly to the end customer’s mobile phone in a text message.  The
advantage to the retail call shop is that the call shop no longer is required to
maintain a physical inventory of the cards; with the attendant working capital
and card security issues.  The margin to the Company for an individual
card is 1% to 2% in gross profit.  However, the turnover of the cards
is very high and, as a result, the sale of cards can be a very profitable
business activity.  The Company believes that the profitability of the
cards at any given call shop will, in time exceed the gross margin  on
the VoIP traffic services sold to the same call shop.





Since at
the present time, the Company takes physical possession of the card in Italy,
the Company must recognize as revenue the amount paid by the call shop to the
Company for the card.  Gross profit is the difference between the
amount paid by the call shop to the Company and the amount paid by the Company
to the card vendor for the card.





In
Belgium, the Company does not always take physical delivery of the
cards.  In these cases the Company interfaces directly with the
various calling card companies to buy the serial numbers without requiring
delivery of the physical card. The Company thus acts as an agent.  As a
result, in these cases the Company does not report the value of the cards sold
as revenue, but reports only the margin or commission on the sale of the card as
revenue.





The Company hopes that over time, it can develop arrangements in Italy similar
to those in Belgium and will therefore no longer have the need to take physical
possession of the cards for inventory purposes.





As a result of the various ways the Company must recognize revenue and cost of
goods sold, the Company believes that gross profit is the best measure of the
progress of the Company over time.





Revenue





Continuing
revenues increased $214,907 or 701% to $245,576 for the three months ended March
31, 2009 from $30,669 for the three months ended March 31, 2008.  This
increase reflects the heightened focus of the Company on card and VoIP services
in the three months ended March 31, 2009 compared to that of the card activity
and the amount of VoIP commissions which were incidental to the retail store
activity in the three months ended March 31, 2008.





Continuing
revenues increased $377,550 or 780% to $425,955 for the six months ended March
31, 2009 from $48,405 for the six months ended March 31, 2008.  This
increase reflects the heightened focus of the Company on card and VoIP services
in the six months ended March 31, 2009 compared to that of the card activity and
the amount of VoIP commissions which were incidental to the retail store
activity in the six months ended March 31, 2008.




17





Cost
of Goods Sold





Cost of
goods sold increased $110,699 or 391% to $139,006 for the three months ended
March 31, 2009 from $28,307 for the three months ended March 31,
2008.  This increase reflects the heightened focus of the Company on
card and VoIP services in the three months ended March 31, 2009 compared to that
of the card activity and amount of VoIP commissions which were incidental to the
retail store activity in the three months ended March 31, 2008.





Cost of
goods sold increased $324,211 or 704% to $370,253 for the six months ended March
31, 2009 from $46,042 for the six months ended March 31, 2009.  This
increase reflects the heightened focus of the Company on card and VoIP services
in the six months ended March 31, 2009 compared to that of the card activity and
amount of VoIP commissions which were incidental to the retail store activity in
the six months ended March 31, 2008.





Gross
Profit





Gross
profit increased $104,208 to $106,570 for the three months ended March 31, 2009
from $2,362 for the three months ended March 31, 2008.  This increase
reflects the heightened focus of the Company on card and VoIP services in the
three months ended March 31, 2009 compared to that of the card activity and
amount of VoIP commissions which were incidental to the retail store activity in
the three months ended March 31, 2008.





Gross
profit increased $53,339 to $55,702 for the six months ended March 31, 2009 from
$2,363 for the six months ended March 31, 2009.  This increase
reflects the heightened focus of the Company on card and VoIP services in the
six months ended March 31, 2009 compared to that of the card activity and amount
of VoIP commissions which were incidental to the retail store activity in the
six months ended March 31, 2008.





General
and Administrative Expenses





Continuing
general and administrative expenses decreased $168,948 or 31% to $378,632 for
the three months ended March 31, 2009 from $547,580 for the three months ended
March 31, 2008.  The decrease reflects the lowered staffing associated
with the continuing wholesale telecommunications activities.





Included
in the general and administrative expenses for the three months ended March 31,
2009 are executive compensation expenses of $137,983, professional fees of
$59,775, payroll and taxes of $34,262, software lease and related charges of
$22,397, auto expenses of $15,206, and non-cash expenses for depreciation of
$21,432 and amortization of the upgrades on leased equipment of
$8,376.





Included
in the general and administrative expenses for the six months ended March 31,
2008 are financial consulting services of $98,388, professional fees of $79,436,
payroll and taxes of $201,431, software lease and related charges of $40,303,
auto expenses of $3,977, and non-cash expenses for depreciation of
$24,259.





Continuing
general and administrative expenses increased $24,009 or 3% to $863,447 for the
six months ended March 31, 2009 from $839,438 for the six months ended March 31,
2008.





Included
in the general and administrative expenses for the six months ended March 31,
2009 are executive compensation expenses of $268,159, professional fees of
$137,330, payroll and taxes of $84,117, software lease and related expenses of
$50,431, auto expenses of $35,410 and non-cash expenses for depreciation of
$42,476 and amortization of the upgrades on leased equipment of
$8,376.





Included
in the general and administrative expenses for the six months ended March 31,
2008 are executive compensation expenses of $172,473, professional fees of
$132,048, payroll and taxes of $260,418, software lease and related expenses of
$40,303, auto expenses of $4,299 and non-cash expenses for depreciation of
$47,725.




18





Interest
Expense and Financing Costs





Interest
expense and financing costs increased $81,344 or 256% to $113,160 for the three
months ended March 31, 2009 from $31,816 for the three months ended March 31,
2008.  The increase was due to the increase in investor loans to the
Company.





The
interest and financing costs for the three months ended March 31, 2009 includes
$5,773 in amortized deferred interest expense associated with the issuance of
warrants in the Company’s financing activities and $2,039 in capitalized lease
interest expense.





The
interest and financing costs for the three months ended March 31, 2008 includes
$4,930 in amortized deferred interest expense associated with the issuance of
warrants in the Company’s financing activities and $3,488 in capitalized lease
interest expense.





Interest
expense and financing costs increased $147,881 or 430% to $182,301 for the six
months ended March 31, 2009 from $34,420 for the six months ended March 31,
2008.  The increase was due to the increase in investor loans to the
Company.





The
interest and financing costs for the six months ended March 31, 2009 includes
$11,701 in amortized deferred interest expense associated with the issuance of
warrants in the Company’s financing activities and $4,352 in capitalized lease
interest expense.





The
interest and financing costs for the six months ended March 31, 2008 includes
$4,930 in amortized deferred interest expense associated with the issuance of
warrants in the Company’s financing activities and $7,414 in capitalized lease
interest expense.





Net
Loss





Our
Company recorded a net loss of $1,726,373 for the six months ended March 31,
2009 of which $228,483 was related to the discontinued retail store operations
and the sale of those assets and $507,844 was related to non-cash accretion
expense to the preferred stock.





A net
loss of $2,311,954 was recorded for the six months ended March 31, 2008 of which
$932,615 was related to the discontinued retail store operations and $507,844
was related to non cash accretion expense to the preferred stock.





Liquidity and Cash
Position





Operating
Activities





For the
six months ended March 31, 2009, our Company used $1,055,561 in cash to fund
operating activities. The loss of $1,497,890 from continuing operations was
partially offset by $570,397 in non-cash charges for depreciation and
amortization. Cash was also provided by a net increase of $240,749 in current
assets and liabilities, which included a net increase of $51,677 in accounts
receivable, an increase of $60,298 in inventory, and an increase of $200,050 in
deposits and prepaid expenses offset by an increase of $552,774 in accounts
payable and accrued liabilities.  During the six months ended March
31, 2009, the Company experienced a negative cash flow of $368,816 associated
with the discontinued retail operations.





For the
six months ended March 31, 2008, our Company used $2,263,328 in cash to fund
operating activities. Cash required for the loss of $1,379,339 from continuing
operations was partially offset by $554,399 in non-cash charges for depreciation
and amortization. Cash for the increase in prepaid expenses of $14,918 was
offset by an increase in accounts payable of $13,906. The Company also used
$1,406,564 in cash associated with the discontinued retail store
operations.




19





Investing
Activities





For the
six months ended March 31, 2009, our Company received $3,585 in cash from the
sale of property and equipment during the relocation of the Company’s Italian
corporate office and invested $84,828 in upgrades for the leased call routing
and billing switch.  The Company also received $60,198 from the sale
of the retail stores in October, 2008.





For the
six months ended March 31, 2008, the Company used $8,182 in cash to purchase
assets used in the continuing operations of the Company but had negative cash
flow of $20,722 associated with the discontinued operations.





Financing
Activities





For the
six months ended March 31, 2009, our Company received net cash of $1,115,000 in
loan proceeds and paid $43,421 on the capitalized lease obligation.





For the
six months ended March 31, 2008, our Company received net cash of $500,000 from
the sale of common and preferred stock, $950,000 in loans from investors, and
paid $12,867 on the capitalized lease obligation and $15,000 on a short term
demand note.





We
anticipate that our capital requirements, including capital needs for further
working capital will continue to be significant. Our future capital requirements
and the adequacy of available funds will depend on many factors, including the
pace of our expansion. We believe that our current liquidity and resources will
not provide sufficient liquidity to fund our operations for at least 12 months
and the Company expects to seek additional future financing to fund our
operations and expansion. The availability of such financing on terms acceptable
to us or at all is not assured.


20


ITEM
3. CONTROLS AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures





Disclosure
controls and procedures are designed to ensure that information required to be
disclosed in the reports filed or submitted under the Securities Exchange Act of
1934 (the “Exchange Act”) is recorded, processed, summarized and reported,
within the time period specified in the rules and forms of the Securities and
Exchange Commission (the “SEC”).  Disclosure controls and procedures
include, without limitation, controls and procedures designed to provide
reasonable assurance  that the information required to be disclosed in
the Company’s reports filed under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms
and to provide reasonable assurance that such information is accumulated and
communicated to management, including our President and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosure.
 Our Chief Executive Officer and Chief Financial Officer, in consultation
with our other members of management and advisors as appropriate, carried out an
evaluation of the effectiveness of our disclosure controls and procedures as of
the end of the period covered by this quarterly report pursuant to Rule
13a-15(b) promulgated under the Exchange Act.  Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective at these reasonable
assurance levels.





Changes
in Internal Control over Financial Reporting





The term
“internal control over financial reporting” is defined as a process designed by,
or under the supervision of, our President and Principal Financial Officer, and
effected by our Board of Directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. There were no changes in our internal
control over financial reporting identified in connection with our evaluation of
these controls as of the end of the period covered by this quarterly report that
could have significantly affected those controls subsequent to the date of the
evaluation referred to in the previous paragraph, including any correction
action with regard to significant deficiencies and material
weakness.





Management
is aware that there is a lack of segregation of duties due to the small number
of employees dealing with general administrative and financial matters since the
sale of the retail stores.  However, management has decided that
considering the employees involved and the control procedures in place, risks
associated with such lack of segregation are insignificant and the potential
benefits of adding employees to clearly segregate duties do not justify the
expenses associated with such increases.





PART
II - OTHER INFORMATION





ITEM
1. LEGAL PROCEEDINGS





None.





ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS






On
January 27, 2009, the Melanie S Altholtz Irrevocable Trust (“Trust”) loaned the
Company $200,000 and the Company executed and delivered to the Trust a
promissory note to evidence all loans to be made pursuant to such
commitment.




As
further consideration for the loan to the Company, the Company issued to the
Trust a warrant to purchase 8,000,000 shares of the Company’s common stock at
any time before January 31, 2014 at a price per share of $.0009, which exercise
price is subject to adjustments upon the occurrence of certain events, including
stock splits, stock dividends, subdivisions and combinations of the Company’s
Common Stock.




21





On
March 26, 2009, the Stealth Fund, LLLP, (“Stealth Fund”) loaned the Company
$250,000 and the Company executed and delivered to the Stealth Fund a promissory
note to evidence all loans to be made pursuant to such commitment.




As
further consideration for the loan to the Company, the Company issued to the
Stealth Fund a warrant to purchase 10,000,000 shares of the Company’s common
stock at any time before March 31, 2014 at a price per share of $.0059, which
exercise price is subject to adjustments upon the occurrence of certain events,
including stock splits, stock dividends, subdivisions and combinations of the
Company’s common stock.





All of
the securities referred to herein were issued in transactions exempt from
registration under the Securities Act of 1933, as amended by virtue of Section
4(2) thereof.





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





None.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM
5. OTHER INFORMATION





None.





ITEM
6. EXHIBITS





31.1
              Certification
      of the Chief Executive Officer of ICC Worldwide, Inc. pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.*31.2
              Certification
      of the Chief Financial Officer of ICC Worldwide, Inc. pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.*32.1
              Certification
      of the Chief Executive Officer and Principal Financial Officer of ICC
      Worldwide, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.*




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.





ICC
      WORLDWIDE, INC.Date:
      May 20, 2009
                      
                      /s/ Scott K Anderson,
    Jr.Scott
      K. Anderson, Jr.Corporate
      Secretary and Chief Financial
Officer


22