**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 Washington,
        D.C. 20549
 
 **FORM
        10-KSB/A**
 (mark
        one)
 
 **o
        ANNUAL REPORT UNDER
        SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF**
 1934
 
 For
        the fiscal year ended December 31, 2006
 
 **o
        TRANSITION REPORT UNDER SECTION 13 OR
        15(D) OF THE SECURITIES AND**
 **EXCHANGE
        ACT OF 1934**
 
 For
        the transition period from ________ to ________________________
 
 *Commission
        file number 000-51260*
 **INNOVATIVE
        CARD TECHNOLOGIES, INC.**
 (Name
        of Small Business Issuer in Its Charter)
  DELAWARE
              
              90-0249676(State
                  or other jurisdiction of
                incorporation
                  or organization)
              
              (I.R.S.
                  Employer
                Identification
                  No.)
  10880
        WILSHIRE BOULEVARD, SUITE 950
 LOS
        ANGELES, CALIFORNIA 90024
 (310)
        312-0700
 (Address
        and telephone number of principal executive
 offices
        and principal place of business)
 
 Securities
        registered under Section 12 (b) of the Exchange Act: Common Stock : $.001
        par
        value
 
 Securities
        registered under Section 12(g) of the Exchange Act: None
 
 Check
        whether the registrant is not required to file reports pursuant to
        Section
 13
        or 15(d) of the Exchange Act. o
 
 Check
        whether the registrant (1) filed all reports required to be filed by Section
        13
        or 15(d) of the Exchange Act during the past 12 months (or for such shorter
        period that the registrant was required to file such reports), and (2) has
        been
        subject to such filing requirements for the past 90 days.
 Yes
        x      No
o
 
 Check
        if there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B contained in this form, and no disclosure will be contained,
        to
        the best of the registrant's knowledge, in definitive proxy or information
        statements incorporated by reference in Part III of this Form 10-KSB or any
        amendment to this Form 10-KSB. x
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes o No x
  
  As
        of April 26, 2007 there were 28,420,616 shares of Common Stock issued and
        outstanding.
  1
  Transitional
        Small Business Disclosure Format : Yes o No x
  
  **INNOVATIVE
        CARD TECHNOLOGIES, INC.**
  TABLE
        OF CONTENTS
  Page
                NumberPART
                  IIIITEM
                  9 - OFFICERS AND DIRECTORS
              
              
              3ITEM
                  10 - EXECUTIVE COMPENSATION
              
              
              8ITEM
                  11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT
              
              
              11ITEM
                  12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
              
              
              12ITEM
                  14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
              
              
              16SIGNATURES
  EXPLANATORY
        NOTE
  The
        disclosures in this Form 10-KSB/A continue to speak as of the date of the
        original report, and do not reflect events occurring after the filing of
        the
        original report filed on April 2, 2007 (the “Original Report”). Accordingly,
        this Form 10-KSB/A should be read in conjunction with our other filings made
        with the Securities and Exchange Commission subsequent to the filing of the
        Original Report, including any amendments to those filings. The filing of
        this
        Form 10-KSB/A shall not be deemed an admission that the Original Report when
        made included any untrue statement of a material fact or omitted to state
        a
        material fact necessary to make a statement not misleading.
 
 **SPECIAL
        NOTE REGARDING FORWARD-LOOKING STATEMENTS**
  This
        report contains forward-looking statements that involve risks and uncertainties.
        Our forward-looking statements relate to future events or our future performance
        and include, but are not limited to, statements concerning our business
        strategy, future commercial revenues, market growth, capital requirements,
        new
        product introductions, expansion plans and our funding requirements. Other
        statements contained in our filings that are not historical facts are also
        forward-looking statements. We have tried, wherever possible, to identify
        forward-looking statements by terminology such as “may,” “will,” “could,”
“should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates” and other comparable terminology.
  Forward-looking
        statements are not guarantees of future performance and are subject to various
        risks, uncertainties and assumptions that are difficult to predict. Therefore,
        actual results may differ materially from those expressed in forward-looking
        statements. They can be affected by many factors, including, those discussed
        under the captions “ *Business—Risk
        Factors* ”
        and “ *Management’s
        Discussion and Analysis of Financial Condition and Plan of
        Operations* ”
        as set forth in the Original Report. Forward-looking statements are based
        on
        information presently available to senior management, and we do not assume
        any
        duty to update our forward-looking statements.
  **WHERE
        YOU CAN FIND MORE INFORMATION**
  2
  As
        a public company, we are required to file annually, quarterly and special
        reports, proxy statements and other information with the SEC. You may read
        and
        copy any of our materials on file with the SEC at the SEC’s Public Reference
        Room at 100 F Street N.E., Washington, DC 20549. Our filings are available
        to
        the public over the Internet at the SEC’s website at http:\\.www.sec.gov. Please
        call the SEC at 1-800-SEC-0330 for further information on the Public Reference
        Room. We also provide copies of our Forms 8-K, 10-KSB, 10-QSB, Proxy and
        Annual
        Report at no charge to investors upon request and make electronic copies
        of our
        most recently filed reports available through our website atwww.incardtech.compromptly after filing such material with the SEC.
 
 As
        used in this Form 10-KSB/A, we refer to Innovative Card Technologies, Inc.
        its
        wholly owned subsidiaries, PSA Co., LensCard US LLC, and LensCard International
        as "InCard," "our company," "we," "us" and "our." In addition, LensCard is
        a
        trademark of InCard. Other service marks, trademarks and trade names referred
        to
        in this Form 10-KSB are the property of their respective owners.
 
 **PART
        III**
 
 **ITEM
        9 - OFFICERS AND DIRECTORS**
 
 The
        following table identifies our current executive officers and directors,
        their
        respective offices and positions, and their respective dates of election
        or
        appointment:
 
 INITIAL
                  ELECTION ORNAME
              AGE
              POSITION
                  HELD
              APPOINTMENT
                  DATEJohn
                  A. Ward, III
              60
              Chief
                  Executive Officer and ChairmanOf
                  the Board of Directors
              November
                  22, 2003Alan
                  Finkelstein
              56
              Director,
                  President, Chief Operating
              November
                  22, 2003Officer
                  and SecretaryBennet
                  P. Tchaikovsky
              37
              Chief
                  Financial Officer
              July
                  6, 2004
 
 INITIAL
                  ELECTION ORNAME
              AGE
              POSITION
                  HELD
              APPOINTMENT
                  DATEDonald
                  Joyce
              54
              Director
              November
                  22, 2003George
                  Hoover
              59
              Director
              November
                  22, 2003Robert
                  Sutcliffe
              55
              Director
              December
                  8, 2006Scott
                  V. Ogilvie
              53
              Director
              December
                  11, 2006Donald
                  W. Killian, III
              53
              Director
              December
                  11, 2006
 
 Messrs.
        Ward, Finkelstein, and Tchaikovsky provide their services as executive officers
        on a full-time permanent basis.
 
 Mr.
        Robert Sutcliffe was a director of the Company but resigned effective April
        26,
        2007.
 
 There
        are no family relationships between any two or more of our directors or
        executive officers. Our executive officers are appointed by our board of
        directors and serve at the board's discretion. There is no arrangement or
        understanding between any of our directors or executive officers and any
        other
        person pursuant to which any director or officer was or is to be selected
        as a
        director or officer, and there is no arrangement, plan or understanding as
        to
        whether non-management stockholders will exercise their voting rights to
        continue to elect the current board of directors. There are also no
        arrangements, agreements or understandings to our knowledge between
        non-management stockholders that may directly or indirectly participate in
        or
        influence the management of our affairs.
  3
  None
        of our directors or executive officers has, during the past five years,
 
 o
        had any bankruptcy petition filed by or against any business of which such
        person was a general partner or executive officer, either at the time of
        the
        bankruptcy or within two years prior to that time,
 
 o
        been convicted in a criminal proceeding and none of our directors or executive
        officers is subject to a pending criminal proceeding,
 
 o
        been subject to any order, judgment, or decree, not subsequently reversed,
        suspended or vacated, of any court of competent jurisdiction, permanently
        or
        temporarily enjoining, barring, suspending or otherwise limiting his involvement
        in any type of business, securities, futures, commodities or banking activities,
        or
 
 o
        been found by a court of competent jurisdiction (in a civil action), the
        Securities and Exchange Commission or the Commodity Futures Trading Commission
        to have violated a federal or state securities or commodities law, and the
        judgment has not been reversed, suspended, or vacated.
 
 **BIOGRAPHICAL
        INFORMATION**
 
 JOHN
        A. WARD, III has served as our Chief Executive Officer and Chairman since
        August 2006 and has served as our director since November 2003. From
        October 2005 through August 2006, Mr. Ward served as our non-executive
        Chairman of the Board. Previously, Mr. Ward served as Chairman and interim
        CEO
        of Doral Financial, a diversified financial services company based in Puerto
        Rico, Chairman and CEO of The American Express Bank and President of the
        Travelers Cheque Group. Prior to joining American Express, Mr. Ward served
        as
        Executive Vice President of the Chase Manhattan Bank, a financial services
        provider, as well as Chief Executive Officer of Chase Bankcard Services.
        Mr.
        Ward serves on the boards of the following public companies: Rewards Network,
        Primus Guaranty, Ltd., and CoActive Marketing Group.
 
 ALAN
        FINKELSTEIN, one of our founders, has served as our President, Secretary,
        and Chief Operating officer since August 2006 and as our director since our
        inception in November 2002. From December 2002 to August 2006, Mr. Finkelstein
        served as our President, Chief Executive Officer and Secretary, and as our
        director and Chairman from our inception until October 2005. Prior to November
        2002, Mr. Finkelstein was a sole proprietor. He invented the LensCard and
        developed it from conceptualization in 1991 through design, patent acquisition,
        the formulation of a marketing strategy and issuance to credit card companies
        commencing in October 1998. Mr. Finkelstein serves as a member on the Joint
        Technical Committee on Information Technology for the International Organization
        of Standardization (ISO). Since 2000, he has served on the International
        Electrotechnical Commission (IEC). He is also a member of the National Committee
        for Information Technology Standards, the U.S. subgroup of the ISO and the
        IEC.
 
 BENNET
        P. TCHAIKOVSKY has served as our Chief Financial Officer since July 2004.
        From
        January 2003 through November 2003, Mr. Tchaikovsky served as the Vice
        President, Finance of TJR Industries, Inc., a company that produces trade
        shows
        for the woodworking industry. From December 2000 through June 2002, Mr.
        Tchaikovsky served as Interim Chief Financial Officer and Chief Financial
        Officer of Digital Lava. From January 2000 to November 2000, Mr. Tchaikovsky
        served as the Chief Financial Officer of Harvest Solutions, Inc., a service
        provider of Internet tracking and reporting software solutions for companies.
        From February 1999 to October 1999, Mr. Tchaikovsky served as Controller
        for
        Rainmaker Digital Pictures, a subsidiary of Rainmaker Entertainment Group,
        a
        post production and visual effects company. From February 1998 through February
        1999, Mr. Tchaikovsky served as Assistant Controller for Digital Domain,
        Inc., a
        provider of visual effects for commercial and film production. During 1996
        and
        1997, Mr. Tchaikovsky worked as an independent forensic accountant and financial
        consultant. Mr. Tchaikovsky previously worked as a senior associate at Coopers
        & Lybrand, LLP and internal auditor for California Federal Bank, Inc. He is
        a licensed Certified Public Accountant and an inactive member of the California
        State Bar. He received a B.A. in Business Economics from the University of
        California at Santa Barbara, and a J.D. from Southwestern University School
        of
        Law.
  4
  DR.
        DONALD JOYCE has served as our director since November 2003. Since April
        2001,
        Dr. Joyce has been Deputy Director of the University of Chicago Argonne National
        Laboratory. From June 6, 2000 to February 2001, Dr. Joyce served as Chief
        Technology Officer for Technology Connect, a technology consulting firm in
        Massachusetts. From May 1999 to June 2000, he served as Senior Vice President
        of
        JDH Technologies, LLC, a software company. Prior to May 1999, Dr. Joyce served
        as President of Muhlbauer Inc., an equipment supplier to the semiconductor,
        circuit board assembly and smart card industries. Dr. Joyce received a Ph.D.
        in
        Physics from the College of William and Mary and a B.A. in Physics from the
        University of Colorado.
 
 GEORGE
        W. HOOVER, II has served as our director since November 2003. Mr. Hoover
        has
        been a partner in the intellectual property law firm of Blakely Sokoloff
        Taylor
& Zafman, LLP since 1992. Prior to entering the legal profession, Mr. Hoover
        was with Hughes Aircraft Company for fifteen years as an engineer and manager
        engaged in the design and development of aerospace electronic systems. Mr.
        Hoover received a B.S. in Engineering-Physics from the University of California
        at Berkeley, an M.B.A. from the University of California at Los Angeles and
        a
        J.D. (magna cum laude) from Loyola Law School (Los Angeles).
 
 SCOTT
        OGILVIE, has served as our director since December 2006. Mr. Ogilvie is the
        Managing Director and Chief Operating Officer of Capital Investment Company
        Group, a privately held international financial services and investment holding
        company. Mr. Ogilvie is a graduate of the University of Denver and obtained
        his
        law degree from the University of California, Hastings College of Law. Prior
        to
        joining the Capital Investment Company Group in September 2000, from 1998
        to
        2000, Mr. Ogilvie was employed by Classic Residence by Hyatt as Managing
        Director of Development- Western Division. From the middle of 1993 to December
        1998, Mr. Ogilvie was a partner in the John Buck Company, a full service
        real
        estate brokerage, development and property management firm.  Since
        February 2000, Mr. Ogilvie has served as a Director of Preferred Voice, Inc
        (PFVI.OB).
 
 DONALD
        W. KILLIAN, III, has served as our director since December 2006. Mr. Killian,
        is
        a consultant and private investor based in Southern California. Mr. Killian
        is a
        graduate of the University of Southern California where he majored in Business
        Administration. In 1978, Mr. Killian served in the underwriting department
        for
        Aetna Casualty & Surety Company. From 1979 to 1997, Mr. Killian held a
        variety of positions at James Econn & Company, including Vice President and
        Account Executive, and from 1990 to 1997 President and Managing Director.
        Mr.
        Killian serves on the board of directors of Monrovia Growers, a privately
        held
        wholesale nursery. Mr. Killian is a member of City of Hope National
        Medical Center, Institutional Review Board.
 
 **The
        Board of Directors and its Committees**
 
 Our
        board of directors currently consists of six members. Our bylaws provide
        that
        our directors will be elected at each annual meeting of the stockholders.
        Their
        term of office will run until the next annual meeting of the stockholders
        and
        until their successors have been elected and qualified or until their earlier
        death, resignation or removal.
 
 Our
        board of directors is responsible for establishing broad corporate policies
        and
        for overseeing the overall management of the Company. In addition to considering
        various matters which require its approval, the board of directors provides
        advice and counsel to, and ultimately monitors the performance of, the Company’s
        senior management.
 
 There
        are three committees of the board of directors — the Audit Committee, the
        Compensation Committee and the Nomination and Corporate Governance Committee.
        Committee assignments will be re-evaluated annually and approved during the
        board meeting which follows the annual meeting of shareholders. The board
        of
        directors has determined that, in its judgment as of the date of this Report,
        each of the Company’s directors, other than John A. Ward, III, Alan Finkelstein,
        and George Hoover, are independent directors within the meaning of Rule 4200
        of
        the National Association of Securities Dealers, Inc. (the “NASD”). Accordingly,
        all of the members of the Audit, Compensation and Nominating and Corporate
        Governance Committees are independent within the meaning of NASD Rule 4200.
  5
  On
        December 7, 2006, the board created the Audit Committee, the Compensation
        Committee and the Nomination and Corporate Governance Committee. The board
        of
        directors and each committee has adopted charters for all of such Committees.
        Copies of these charters can be found on the Company’s website at
        http://www.incardtech.com.
 
 During
        the fiscal year ended December 31, 2006, the board of directors held ten
        meetings. Each director attended at least 75% of the total number of meetings
        of
        the board and the board committees of which he was a member in 2006.
 
 The
        Company’s policy regarding attendance by members of the board of directors is as
        follows:
 
 Attendance
        of Directors at Meetings
 
 The
        board of directors currently holds regularly scheduled meetings and calls
        for
        special meetings as necessary. Meetings of the board may be held telephonically.
        Directors are expected to attend all board meetings and meetings of the
        Committees of the board on which they serve and to spend the time needed
        and
        meet as frequently as necessary to properly discharge their duties.
 
 Directors
        are also expected to attend the annual meeting of shareholders. The board
        believes that director attendance at shareholder meetings is appropriate
        and can
        assist directors in carrying out their duties. When directors attend shareholder
        meetings, they are able to hear directly shareholder concerns regarding the
        Company. It is understood that special circumstances may occasionally prevent
        a
        director from attending a meeting.
 
 Audit
        Committee
 
 The
        Audit Committee will meet at least quarterly with the Company’s management and
        independent accountants to, among other things, review the results of the
        annual
        audit and quarterly reviews and discuss the financial statements, select
        and
        engage the independent accountants, assess the adequacy of the Company’s staff,
        management performance and procedures in connection with financial controls
        and
        receive and consider the accountants’ comments on the Company’s internal
        controls. The current members of the Audit Committee are Scott V. Ogilvie
        (Chairman) and Donald W. Killian, III. The Audit Committee did not meet during
        2006. The board has determined that Mr. Ogilvie is an “audit committee financial
        expert” within the meaning of Item 407(d)(5) of SEC Regulation S-B.
 
 Compensation
        Committee
 
 The
        Compensation Committee makes determinations concerning salaries and incentive
        compensation and otherwise determines compensation levels for the Company’s
        executive officers, directors and other key employees and performs such other
        functions regarding compensation as the board may delegate. The current members
        of the Compensation Committee are Donald W. Killian, III and Donald Joyce.
        Currently, the Committee does not have a chairman following Mr. Sutcliffe’s
        resignation. The Compensation Committee did not meet during 2006.
 
 Nomination
        and Corporate Governance Committee
 
 The
        Nomination and Corporate Governance Committee reviews and evaluates the
        effectiveness of the Company’s executive development and succession planning
        processes, as well as providing active leadership and oversight of these
        processes, and oversight of the Company’s corporate governance policies. The
        Nomination and Corporate Governance Committee also evaluates and recommends
        nominees for membership on the Company’s board of directors and its committees.
  6
  The
        current members of the Nomination and Corporate Governance Committee are
        Donald
        Joyce (Chairman) and Scott V. Ogilvie. The Committee did not meet during
        2006.
 
 SECTION
        16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
 Section
        16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires
        our
        directors and executive officers, and persons who beneficially own more than
        ten
        percent of a registered class of our equity securities, to file with the
        Securities and Exchange Commission (the "Commission") initial reports of
        beneficial ownership and reports of changes in beneficial ownership of our
        common stock. The rules promulgated by the Commission under Section 16(a)
        of the
        Exchange Act require those persons to furnish us with copies of all reports
        filed with the Commission pursuant to Section 16(a). Based solely upon a
        review
        of Forms 3, Forms 4, and Forms 5 received by us, we believe that during the
        2006
        fiscal year our directors, executive officers and persons who own more than
        10%
        of our common stock complied with all Section 16(a) filing requirements.
 
 **CODE
        OF ETHICS**
 
 We
        have adopted a code of ethics that applies to all directors, officers and
        employees, including our Chief Executive Officer and Chief Financial Officer,
        and members of the board of directors. Our code of ethics is posted on our
        website at http://www.incardtech.com.
 
 **PROCEDURES
        FOR NOMINATING DIRECTORS**
 
 The
        nomination and corporate governance committee determines the required selection
        criteria and qualifications of director nominees based upon our needs at
        the
        time nominees are considered. In general, directors should possess the highest
        personal and professional ethics, integrity and values, and be committed
        to
        representing the long-term interests of our stockholders. Moreover, the
        nomination and corporate governance committee will strive to ensure that
        at
        least one director meets the criteria for an “audit committee financial expert”
as defined by SEC rules and that the majority of the directors comprising
        the
        board meet the definition of “independent director” under NASDAQ rules.
 
 In
        addition to the above considerations, the nomination and corporate governance
        committee will consider criteria such as strength of character and leadership
        skills; general business acumen and experience; broad knowledge of the industry;
        age; number of other board seats; and willingness to commit the necessary
        time
        to ensure an active board whose members work well together and possess the
        collective knowledge and expertise required by the board. The nomination
        and
        corporate governance committee will consider these same criteria for candidates
        regardless of whether the candidate was identified by the nomination and
        corporate governance committee, by stockholders, or any other source.
 
 The
        nomination and corporate governance committee will consider qualified candidates
        for possible nomination that are submitted by our stockholders. Stockholders
        wishing to make such a submission may do so by sending the following information
        to the nomination and corporate governance committee c/o Chief Financial
        Officer
        at the address indicated on the Notice of Annual Meeting of Stockholders.
        Any
        recommendations submitted to the Chief Financial Officer should be in writing
        and should include whatever supporting material the stockholder considers
        appropriate in support of that recommendation, but must include the information
        that would be required under the rules of the SEC in a proxy statement
        soliciting proxies for the election of such candidate and a signed consent
        of
        the candidate to serve as a director of the Company, if elected.
 
 Under
        our bylaws, and as permitted by SEC rules, stockholders who wish to submit
        a
        proposal or nominate a person as a candidate for election to our board of
        directors at an annual meeting must follow certain procedures. These procedures
        require that timely, written notice of such proposal or nomination be received
        by our Chief Financial Officer at our principal executive offices not less
        than
        60 days nor more than 90 days prior to the first anniversary of the preceding
        year’s annual meeting.
  7
  The
        nomination and corporate governance committee conducts a process of making
        a
        preliminary assessment of each proposed nominee based upon the resume and
        biographical information provided, an indication of the candidate’s willingness
        to serve and other background information, business experience, and leadership
        skills, all to the extent available and deemed relevant by the nomination
        and
        corporate governance committee. This information is evaluated against the
        criteria set forth above and our specific needs at that time. Based upon
        a
        preliminary assessment of the candidate(s), those who appear best suited
        to meet
        our needs may be invited to participate in a series of interviews, which
        are
        used as a further means of evaluating potential candidates. On the basis
        of
        information learned during this process, the nomination and corporate governance
        committee determines which candidate(s) to recommend to the board to submit
        for
        election at the next stockholder meeting. The nomination and corporate
        governance committee uses the same process for evaluating all candidates,
        regardless of the original source of the nomination.
 
 Our
        goal is to seek to achieve a balance of knowledge and experience on our board.
        To this end, we seek nominees with the highest professional and personal
        ethics
        and values, an understanding of our business and industry, diversity of business
        experience and expertise, a high level of education, broad-based business
        acumen, and the ability to think strategically. Although we use the criteria
        listed above as well as other criteria to evaluate potential nominees, we
        do not
        have a stated minimum criteria for nominees. The board does not use different
        standards to evaluate nominees depending on whether they are proposed by
        our
        directors and management or by our stockholders. To date, we have not paid
        any
        third parties to assist us in finding director nominees.
  **ITEM
        10 - EXECUTIVE COMPENSATION**
 
 **SUMMARY
        OF COMPENSATION**
 
 The
        following executive compensation disclosure reflects all compensation awarded
        to, earned by or paid to the executive officers below for the fiscal year
        ended
        December 31, 2006. The following table summarizes all compensation for fiscal
        year 2006 received by our Chief Executive Officer, and the Company’s two most
        highly compensated executive officers who earned more than $100,000 in
        fiscal year 2006.
  **SUMMARY
                  COMPENSATION TABLE**Name
                  and principal position
              
              Year
              
              Salary
                  ($)
              
              
              Compensation
                  Expense
                Recognized
                Under
                  FAS 123R
              
              Bonus
                  ($)
              
              Stock
                  Awards
                ($)
              
              Option
                  Awards
                ($)
              
              Non-Equity
                  Incentive Plan Compen-sation
                ($)
              
              Nonquali-fied
                  Deferred Compen-sation Earnings
                ($)
              
              All
                  Other Compen-sation
                ($)
              
              Total
                  ($)John
                  A. Ward, III, CEO & Chairman
              
              
              2006
              
              
              0
              
              $
              100,000
              (1)
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              $
              100,000Alan
                  Finkelstein, President & COO
              
              
              2006
              
              $
              200,000
              
              $
              70,000
              (1)
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              $
              270,000Bennet
                  P. Tchaikovsky, CFO
              
              
              2006
              
              $
              130,000
              
              $
              30,000
              (1)
              
              0
              
              
              0
              
              
              0
              )
              
              0
              
              
              0
              
              
              0
              
              $
              160,000
 
 (1)
        The compensation expense recognized under FAS123R during 2006 relates to
        option
        grants made to the executive prior to January 1, 2006. No option grants were
        given to this officer during 2006.
  8
  **EMPLOYMENT
        AGREEMENTS**
 
 In
        January 1998, our predecessor entity, LensCard US, LLC, entered into an
        employment agreement with Alan Finkelstein that provided for a starting monthly
        salary of $8,334. Mr. Finkelstein's current monthly salary is $16,667. Mr.
        Finkelstein’s agreement renews annually for a one year term if not terminated
        prior to its anniversary date. In the event the Company terminates Mr.
        Finkelstein employment without cause, the Company would have to pay Mr.
        Finkelstein's salary for the remaining term of the contract.
 
 John
        A. Ward, III, our Chairman and CEO did not receive any salary during 2006.
        Mr.
        Ward only receives reimbursement for any out of pocket expenses that he incurs
        as a result of his position and receives reimbursement for medical insurance
        premiums similar to our other employees. We have no written employment agreement
        with Mr. Ward.
 
 There
        are no other employment agreements or arrangements with any of our named
        executive officers. Except for the options issued to our named executives
        officers granted under the 2004 Stock Incentive Plan, we do not have a long
        term
        incentive plan or arrangement of compensation with any individual in the
        group
        of officers and directors.
  **EQUITY
        AWARDS**
  The
        following table sets forth certain information concerning unexercised options,
        stock that has not vested, and equity incentive plan awards for each of our
        named executive officers outstanding as of December 31, 2006.
  **OUTSTANDING
                  EQUITY AWARDS AT FISCAL YEAR-END****OPTION
                  AWARDS**
              
              **STOCK
                  AWARDS**Name
              
              Number
                  of securities underlying unexercised options (#)
                  Exercisable
              
              Number
                  of securities underlying unexercised options (#)
                Unexercis-able
              
              Equity
                  Incentive Plan Awards: Number of Securities underlying unexercised
                  unearned options (#)
              
              Option
                  exercise price ($)
              
              Option
                  expiration date
              
              Number
                  of shares or units of stock that have not vested (#)
              
              Market
                  value of shares or units of stock that have not vested ($)
              
              Equity
                  incentive plan awards: number of unearned shares, units or other
                  rights
                  that have not vested (#)
              
              Equity
                  incentive plan awards: Market or payout value of unearned shares,
                  units or
                  other rights that have not vested ($)John
                  A. Ward, III (1)
              
              
              150,000
              
              
              100,000
              
              
              0
              
              $
              1.00
              
              
              11/22/13
              
              
              0
              
              
              0
              
              
              0
              
              
              0John
                  A. Ward, III (2)
              
              
              50,000
              
              
              200,000
              
              
              0
              
              $
              1.00
              
              
              10/16/15
              
              
              0
              
              
              0
              
              
              0
              
              
              0Alan
                  Finkelstein (3)
              
              
              150,000
              
              
              100,000
              
              
              0
              
              $
              1.00
              
              
              11/22/13
              
              
              0
              
              
              0
              
              
              0
              
              
              0Alan
                  Finkelstein (4)
              
              
              20,000
              
              
              80,000
              
              
              0
              
              $
              1.00
              
              
              10/16/15
              
              
              0
              
              
              0
              
              
              0
              
              
              0Bennet
                  P. Tchaikovsky (5)
              
              
              60,000
              
              
              90,000
              
              
              0
              
              $
              1.00
              
              
              7/5/14
              
              
              0
              
              
              0
              
              
              0
              
              
              0
  9
 (1)  50,000
          shares vest annually for five years beginning 11/22/04.
 (2)  50,000
          shares vest annually for five years beginning 10/16/06.
 (3)  50,000
          shares vest annually for five years beginning 11/22/04.
 (4)  20,000
          shares vest annually for five years beginning 10/16/06.
 (5)  30,000
          shares vest annually for five years beginning 07/05/05.
  **OPTION
        GRANTS TO EXECUTIVE OFFICERS IN 2006**
 
 No
        options were granted to our Chief Executive Officer, President and Chief
        Operating Officer, or to our Chief Financial Officer in fiscal year 2006.
 
 **DIRECTOR
        COMPENSATION**
 
 The
        following director compensation disclosure reflects all compensation awarded
        to,
        earned by or paid to the directors below for the fiscal year ended December
        31,
        2006.
 
 **DIRECTOR
                  COMPENSATION**Name
              
              Fees
                  Earned or Paid in Cash ($)
              
              Stock
                  Awards
                ($)
              
              Option
                  Awards
                ($)
                  (6)
              
              Non-Equity
                  Incentive Plan Compen-sation
                ($)
              
              Change
                  in Pension Value and Nonqualified Deferred Compensation
                  Earnings
                ($)
              
              All
                  Other Compen-sation
                ($)
              
              Total
                  ($)George
                  Hoover (1)
              
              
              0
              
              
              0
              
              $
              3,543
              
              
              0
              
              
              0
              
              
              0
              
              $
              3,543Donald
                  Joyce (2)
              
              
              0
              
              
              0
              
              $
              3,942
              
              
              0
              
              
              0
              
              
              0
              
              $
              3,942Scott
                  Ogilvie (3)
              
              
              0
              
              
              0
              
              $
              6,113
              
              
              0
              
              
              0
              
              
              0
              
              $
              6,113Donald
                  Killian, III (4)
              
              
              0
              
              
              0
              
              $
              5,315
              
              
              0
              
              
              0
              
              
              0
              
              $
              5,315Robert
                  Sutcliffe (5)
              
              
              0
              
              
              0
              
              $
              6,558
              
              
              0
              
              
              0
              
              
              0
              
              $
              6,558
 
 (1)
              The
                  aggregate number of stock awards and option awards issued and outstanding
                  as of December 31, 2006 are 0 and 90,000, respectively.(2)
              The
                  aggregate number of stock awards and option awards issued and outstanding
                  as of December 31, 2006 are 0 and 91,500,
                  respectively.
 (3)
              The
                  aggregate number of stock awards and option awards issued and outstanding
                  as of December 31, 2006 are 0 and 63,000, respectively.(4)
              The
                  aggregate number of stock awards and option awards issued and outstanding
                  as of December 31, 2006 are 0 and 60,000,
                  respectively.
 (5)
              The
                  aggregate number of stock awards and option awards issued and outstanding
                  as of December 31, 2006 are 0 and 61,500, respectively. Mr. Sutcliffe
                  resigned from the Board of Directors effective April 26,
                  2007.(6)
              The
                  value of the option award was computed in accordance with FAS 123R.
 
 **LONG-TERM
        INCENTIVE PLAN AWARDS**
 
 We
        do not have a long term incentive plan or arrangement of compensation with
        any
        individual in the group of officers and directors.
 
 Presently,
        we compensate our directors through stock options. Our directors receive
        20,000
        stock options per year. If a director serves as a Committee Chairman, the
        director would receive additional options that would vest over a period of
        one
        year. For serving as Chairman of the Audit Committee, Scott Ogilvie received
        3,000 stock options that vest over a period of one year. For serving as Chairman
        of the Compensation Committee, Mr. Sutcliffe received 1,500 stock options
        that
        vest over a period of one year. For serving as the Chairman of the nominating
        and Corporate Governance Committee, Mr. Joyce received 1,500 stock options
        that
        vest over a period of one year. We do not pay any cash to our directors for
        attending any meetings or for any other services. We reimburse our directors
        for
        any travel costs they incur as a director.
  10
  **ITEM
        11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**
 
 The
        following tables set forth certain information regarding beneficial ownership
        of
        our common stock as of April 10, 2007 by (i) each person who is known by
        us to
        own beneficially more than five percent (5%) of the outstanding shares of
        common
        stock , (ii) each of our directors and executive officers, and (iii) all
        of our
        directors and executive officers as a group. Unless otherwise stated, their
        address is c/o Innovative Card Technologies, Inc., 10880 Wilshire Boulevard,
        Suite 950, Los Angeles, California 90024.
 
 We
        have determined beneficial ownership in accordance with the rules of the
        Securities and Exchange Commission. Except as otherwise indicated, we believe
        that the beneficial owners listed below, based on the information furnished
        by
        these owners, have sole investment and voting power with respect to the
        securities indicated as beneficially owned by them, subject to applicable
        community property laws. As of April 10, 2007, there were 28,420,616 shares
        of
        common stock issued and outstanding. With respect to the table below, we
        have
        based our calculation of the percentage of beneficial ownership of 28,410,616
        shares of common stock outstanding.
 
 In
        computing the number of shares of common stock beneficially owned by a person
        and the percent ownership of that person, we deemed outstanding shares of
        common
        stock subject to warrants or options held by that person that are currently
        exercisable or exercisable within 60 days of April 27, 2007. We did not deem
        these shares outstanding for purposes of computing the percent ownership
        of any
        other person.
 
 COMMON
                  STOCKNUMBER
                  OF SHARES OF
              PERCENTAGE
                  OFNAME
                  OF DIRECTOR, OFFICER AND BENEFICIAL
              COMMON
                  STOCK
              OUTSTANDING
                  SHARES OFOWNER
              BENEFICIALLY
                  OWNED
              COMMON
                  STOCKNamed
                  Executive Officers and Directors:John
                  A. Ward, III(1)
              220,000
              *Alan
                  Finkelstein(2)
              2,927,947
              10.2%Bennet
                  P. Tchaikovsky (3)
              112,500
              *Donald
                  Joyce(4)
              30,000
              *George
                  Hoover(4)
              80,000
              *Robert
                  Sutcliffe (10)
              --
              *Scott
                  V. Ogilvie
              --
              *Donald
                  W. Killian, III
              39,000
              *Five
                  Percent Stockholders of Common Stock:JMG
                  Capital Partners, Ltd.(5)
              1,228,850
              4.32%JMG
                  Triton Offshore Fund, Ltd. (6)
              1,228,850
              4.32%nCryptone,
                  S.A. (7)
              4,500,000
              15.8%Bradley
                  Ross(8)
              1,736,022
              6.1%All
                  Officers and Directors as a Group (6 persons)(9)
              3,409,447
              11.7%
  *
        Less than one percent beneficially owned.
  11
  (1)
        Includes options to purchase 200,000 shares vested and exercisable within
        60
        days of April 10, 2007.
 
 (2)
        Includes options to purchase 170,000 shares vested and exercisable within
        60
        days of April 10, 2007.
 
 (3)
        Includes options to purchase 60,000 shares vested and exercisable within
        60 days
        of April 10, 2007.
 
 (4)
        Includes options to purchase 30,000 shares vested and exercisable within
        60 days
        of April 10, 2007.
 
 (5)
        Mr. Jonathan Glaser is the natural person with voting and investment decision
        power of this entity. The business address for Jonathan Glaser is 11601 Wilshire
        Blvd. Suite 2180, Los Angeles, CA 90025.
 
 (6)
        Mr. Jonathan Glaser is the natural person with voting and investment decision
        power of this entity. The business address for Jonathan Glaser is 11601 Wilshire
        Blvd. Suite 2180, Los Angeles, CA 90025.
 
 (7)
        nCryptone SA is a wholly owned subsidiary of Prosodie SA. The shares were
        issued
        to nCryptone, S.A. in the acquisition of selected assets relating to the
        DisplayCard on June 28, 2006.
 
 (8)
        Includes 10,000 shares held by Mr. Ross's daughter, Raquel Ross, of which
        Mr.
        Ross disclaims beneficial ownership. Mr. Ross's business address is c/o Bemel
        & Ross, 11601 Wilshire Blvd., #2160, Los Angeles, California 90025.
 
 (9)
        Includes options to purchase 490,000 shares vested and exercisable within
        60
        days of April 10, 2007.
  (10)
        Mr. Sutcliffe resigned from our Board of Directors effective April 26,
        2007.
 
 CHANGE
        IN CONTROL
  To
        the knowledge of management, there are no present arrangements or pledges
        of
        securities of our company that may result in a change of control of the
        company.
  EQUITY
        COMPENSAITON PLAN INFORMATION
 
 See
        Item 5, Market for Common Equity and Related Stockholder Matters in the Original
        Report for additional information regarding our equity compensation
        plan.
 
 ITEM
        12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
 Described
        below are certain transactions or series of transactions during the last
        two
        years between us and our executive officers, directors and the beneficial
        owners
        of 5% or more of our common stock, and certain persons affiliated with or
        related to these persons, including family members, in which they had or
        will
        have a direct or indirect material interest in an amount that exceeds $63,915,
        which represents one percent of the average of our total assets at year-end
        for
        the last three completed fiscal years, other than compensation arrangements
        that are otherwise required to be described under "Executive Compensation."
  PRIVATE
        PLACEMENTS OF SECURITIES
 
 From
        January 1, 2005 through April 10, 2007, we issued the following securities
        in
        private placements to various investors, including the related parties detailed
        in the table below:
 
 o
        7,071,066 units, whereby each unit consisted of one share of common stock
        and a
        warrant to purchase .5 shares of common stock at an exercise price of $1.25
        per
        share for an aggregate purchase price of $7,071,066 which includes $571,066
        of
        indebtedness that was converted into 571,066 units on October 19,
        2005.
  12
  o
        3,785,500 shares of common stock at a per share price of $3.00 per share
        for an
        aggregate purchase price of $11,356,500 and warrants to purchase 113,565
        shares
        of common stock at a per share exercise price of $3.30 on May 30,
        2006.
 
 o
        4,500,000 shares of common stock valued at a per share price of $4.387 for
        an
        aggregate purchase price of $19,741,500 to nCryptone, S.A in exchange for
        rights
        to the DisplayCard relating to the acquisition that closed on June 28,
        2006.
 
 Since
        January 1, 2005, the following executive officers, directors and beneficial
        holders of more than five percent of our voting securities and their immediate
        family members purchased securities in the two above offerings in the amounts
        set forth below.
 
 Name(1)
              
              Common
              
              Common
                  WarrantsAlan
                  Finkelstein(2)
              
              
              101,250
              
              
              50,625George
                  Hoover(3)
              
              50,000
              
              
              25,000Bennet
                  P Tchaikovsky (4)
              
              52,500
              
              
              26,250Bradley
                  Ross(5)
              
              600,000
              
              
              300,000Donald
                  W. Killian, III (6)
              
              33,000
              
              
              --JMG
                  Capital Partners, Ltd. (7)
              
              1,317,000
              
              
              450,000JMG
                  Triton Offshore Fund, Ltd. (8)
              
              1,317,000
              
              
              450,000
  (1)
        See "Security Ownership of Certain Beneficial Owners and Management" for
        more
        detail on shares held by these purchasers.
 
 (2)
        Alan Finkelstein converted $101,250 of indebtedness owed to him as of October
        19, 2005 into units whereby Mr. Finkelstein received 101,250 shares of common
        stock and a warrant to purchase 50,625 shares of common stock at $1.25 per
        share.
 
 (3)
        George Hoover, our director, personally assumed $50,000 of indebtedness the
        company owed to Blakely Sokoloff Taylor & Zafman, a firm where Mr. Hoover is
        a partner in, as of October 19, 2005 and converted the indebtedness into
        units
        whereby Mr. Hoover received 50,000 shares of common stock and 25,000 warrants
        to
        purchase common shares at $1.25.
 
 (4)
        Bennet P. Tchaikvosky, our Chief Financial Officer, converted $52,500 of
        indebtedness the company owed to him as deferred compensation into units
        on
        October 19, 2005 whereby Mr. Tchaikovsky received 52,500 shares of common
        stock
        and 26,250 warrants to purchase common shares at $1.25.
 
 (5)
        On October 19, 2005, Bradley Ross paid $600,000 and received 600,000 shares
        of
        common stock and 300,000 warrants to purchase common stock at
        $1.25.
 
 (6)
        On May 30, 2006, Donald W. Killian, III paid $99,000 and received 33,000
        shares
        of common stock.
 
 (7)
        Jonathan Glaser is the natural person with voting and investment control
        over
        securities held by JMG Capital Partners, Ltd. which, on October 19, 2005,
        paid
        $900,000 and received 900,000 shares of common stock and 450,000 warrants
        to
        purchase common stock at $1.25. On May 30, 2006, JMG Capital Partners, Ltd.,
        paid $1,251,000 and received 417,000 shares of common stock.
 
 (8)
        Jonathan Glaser is the natural person with voting and investment control
        over
        securities held by JMG Triton Offshore Fund, Ltd. which on October 19, 2005,
        paid $900,000 and received 900,000 shares of common stock and 450,000 warrants
        to purchase common stock at $1.25. On May 30, 2006, JMG Triton Offshore Fund,
        Ltd., paid $1,251,000 and received 417,000 shares of common stock.
  13
  UNITS
        EXCHANGED FOR DEFERRED SALARIES
 
 We
        deferred salaries for two of our executive officers, Alan Finkelstein and
        Bennet
        P. Tchaikovsky, and two of our other employees from January 1, 2005 through
        September 30, 2005. On October 19, 2005 Alan Finkelstein elected to convert
        the
        entire gross amount of deferred salary owed to him of $37,500, resulting,
        after
        payroll taxes, in $26,250 that was converted to units that consisted of 26,250
        shares of common stock and 13,125 warrants to purchase common stock at $1.25
        per
        share. On October 19, 2005 Bennet P. Tchaikovsky elected to convert the entire
        amount of gross deferred salary owed to him of $52,500, resulting, after
        payroll
        taxes, in $35,000 that was converted to units that consisted of 35,000 shares
        of
        common stock and 17,500 warrants to purchase common stock at $1.25.
        Simultaneously, Bennet P. Tchaikovsky paid the Company an additional
        $17,500 and received 17,500 units that consisted of 17,500 shares of common
        stock and 8,750 warrants to purchase common stock at $1.25. Two other employees
        collectively were owed $28,500 in aggregate deferred salary. Of this $28,500
        aggregate deferred salary amount, $14,000 was converted, resulting, after
        payroll taxes in $9,500 that was converted to units that consisted of 9,500
        shares of common stock and 4,750 warrants to purchase common stock at
        $1.25.
 
 UNITS
        EXCHANGED FOR ACCOUNTS PAYABLE
 
 On
        October 19, 2005, Alan Finkelstein exchanged $75,000 of indebtedness owed
        to him
        into units whereby Alan Finkelstein received 75,000 shares of common stock
        and
        37,500 warrants to purchase common stock at a rate of $1.25 per share. On
        October 19, 2005, George Hoover personally assumed $50,000 of indebtedness
        the
        company owed to Blakely Sokoloff Taylor & Zafman, a firm where George Hoover
        is a partner in, and converted the $50,000 of indebtedness into units whereby
        George Hoover received 50,000 shares of common stock and 25,000 warrants
        to
        purchase common stock at $1.25. On October 19, 2005, Auriemma Consulting
        Group,
        Inc., converted $10,000 of indebtedness owed into units whereby Auriemma
        Consulting Group, Inc. received 10,000 shares of common stock and 5,000 warrants
        to purchase common stock at $1.25. Auriemma Consulting Group, Inc. subsequently
        transferred the shares of common stock and warrants to three individuals,
        none
        of which are affiliated with us.
 
 GUARANTEES
  In
        June 2005, Bradley Ross provided a personal guarantee for any bank overdraft
        in
        our account with City National Bank. The guarantee was lifted when the company
        completed interim bridge financing by issuing secured demand promissory notes
        on
        August 31, 2005.
 
 CONSULTING
        SERVICES
 
 We
        paid Forest Finkelstein $213,333 in 2005 and $85,000 in 2006 for services
        rendered to us. Forest Finkelstein is the son of Alan Finkelstein. Forest
        has
        provided and continues to provide client relations services, market research
        and
        website development services for us. Through June 30, 2004, Forest's
        compensation was $8,333 per month. Commencing in July 2004, we agreed to
        pay
        Forest $2,500 per month. On August 30, 2005, the board of directors elected
        to
        give Forest an additional payment for services in the amount of $32,083 as
        well
        as authorizing his monthly consulting fee to be increased to $7,083 per month
        beginning August 1, 2005. On October 19, 2005, Forest directed the company
        to
        pay $187,000 of the amount owed to him to purchase 187,000 shares of common
        stock and 93,500 warrants pursuant to the financing that was completed on
        October 19, 2005. See "Executive Compensation" for more detail on services
        provided by Alan Finkelstein.
  LEGAL
        SERVICES
 
 Since
        our inception, the law firm of Blakely Sokoloff Taylor & Zafman, LLP (BSTZ)
        acted as our outside legal counsel on intellectual property matters. George
        Hoover, a director of InCard, serves as a partner of BSTZ. Aggregate fees
        billed
        to us by BSTZ for legal services rendered during fiscal years 2006 and 2005
        were
        $259,182 and $175,822, respectively. As of December 31, 2006 we owed BSTZ
        $61,173 for services rendered to us. This amount is included in our Accounts
        Payable related parties on December 31, 2006. The balance payable to BSTZ
        is
        non-interest bearing and is payable on demand. On October 19, 2005, George
        Hoover personally assumed $50,000 of indebtedness the company owed to BSTZ
        and
        converted the $50,000 of indebtedness into units whereby Mr. Hoover received
        50,000 shares of common stock and 25,000 warrants to purchase common shares
        at
        $1.25.
  14
  LOANS
        FROM PRINCIPAL STOCKHOLDERS
 
 In
        March 2005, we obtained loans totaling $500,000 in the form of secured demand
        promissory notes from two principal stockholders. One of the lenders was
        Union
        Finance International, Corp. a company where Karim Souki is a director. Karim
        Souki is the brother of Charif Souki, who, at the time of the transaction,
        was
        our Director. Union Finance International Corp. loaned us $333,000 on March
        31,
        2005 while Bristol Investment Fund, Ltd. loaned us $167,000 on March 30,
        2005
        for the combined total of $500,000. Each note bears interest at an 8% annual
        rate. On October 11, 2005, Union Finance International Corp. transferred
        the
        secured demand promissory note to BSR Investments, Ltd. On October 19, 2005,
        BSR
        Investments, Ltd. converted the entire amount of principal and interest due
        of
        $347,816 into 347,816 shares of common stock and 173,908 warrants to purchase
        common shares at $1.25 per share. On October 20, 2005, we repaid the entire
        principal and interest amount due of $174,504 to Bristol Investment Fund,
        Ltd.
 
 On
        August 31, 2005, we obtained loans totaling $200,000 in the form of secured
        demand promissory notes from a significant stockholder and another stockholder
        totaling $200,000. One of the lenders was Bradley Ross, a significant
        stockholder of InCard, loaned us $150,000 and Rodger Bemel, another stockholder
        of InCard, loaned us $50,000 for a combined total of $200,000. Each note
        bears
        interest at an 8% annual rate. On October 19, 2005 we repaid the principal
        amounts owed to Mr. Bemel & Mr. Ross.
 
 OPTION
        AGREEMENT TO PURCHASE A 51% OWNERSHIP INTEREST IN A SIGNIFICANT SUPPLIER
        OF THE
        COMPANY
 
 Subsequent
        to year end, we entered into an option agreement with Forest Finkelstein,
        the
        adult son of Alan Finkelstein, our Chief Operating Officer, President and
        director. Under the terms of the option agreement we have the option to,
        but are
        not obligated to, purchase a 51% ownership interest (“Interest”) in one of our
        significant suppliers, which Interest is presently owned by Forrest Finkelstein.
        We are not obligated to exercise the option or complete the acquisition and
        have
        made no decision as to whether we will do so. We are, however, actively involved
        in our due diligence review and investigation of the supplier. The ultimate
        proposed economic terms of this transaction are uncertain. In the event
        we exercise the option to purchase Mr. Forest Finkelstein’s Interest, Mr.
        Forest Finkelstein will be reimbursed for his costs but he will not earn
        a
        profit.
  OPTIONS
        GRANTS TO DIRECTORS AND EXECUTIVE OFFICERS
 
 We
        have granted options to purchase common stock to our directors and officers.
        Please see "Management--Director Compensation" and "Executive
        Compensation"--"Option Grants to Executive Officers in 2006."
 
 EMPLOYMENT
        AGREEMENTS
 
 See
        "Executive Compensation--Employment Arrangements."
 
 INDEMNIFICATION
 
 Our
        amended and restated certificate of incorporation and our bylaws provide
        that we
        will indemnify each of our directors and officers to the fullest extent
        permitted by the Delaware General Corporation Law. On March 19, 2007, our
        board
        of directors approved a form of indemnification agreement to be entered into
        with each of our directors and executive officers. The Indemnification Agreement
        provides, among other things, that, subject to the procedures set forth in
        the
        Indemnification Agreement: (i) we will indemnify the Indemnitee (as defined
        in
        the Indemnification Agreement) to the fullest extent permitted by law in
        the
        event Indemnitee was, is or becomes a party to or witness or other participant
        in, or is threatened to be made a party to or witness or other participant
        in, a
        Claim (as defined in the Indemnification Agreement) by reason of (or arising
        in
        part out of) an Indemnifiable Event (as defined in the Indemnification
        Agreement); (ii) if requested by Indemnitee, and subject to certain exceptions,
        we will advance Expenses (as defined in the Indemnification Agreement) to
        the
        Indemnitee; (iii) if there is a Change of Control (as defined in the
        Indemnification Agreement), we will seek the advice of independent legal
        counsel
        with respect to all matters thereafter arising concerning the rights of
        Indemnitee to indemnity payments and advances under the Indemnification
        Agreement or any provision of our charter or bylaws; (iv) the rights of the
        Indemnitee under the Indemnification Agreement are in addition to any other
        rights the Indemnitee may have underour charter or bylaws or the Delaware
        General Corporation Law or otherwise; and (v) to the extent we maintain an
        insurance policy or policies providing directors' and officers' liability
        insurance, the Indemnitee will be covered to the maximum extent of the coverage
        available for our directors or officers. In addition, the Indemnification
        Agreement establishes guidelines as to the defense and settlement of claims
        by
        the parties, the relevant burden of proof, reliance as a safe harbor, the
        period
        of limitations and security.
  15
  **ITEM
        14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES**
 
 The
        following table sets forth fees billed to us by our auditors, Singer Lewak
        Greenbaum and Goldstein, LLP ("SLGG"), during the fiscal years ended December
        31, 2006 and December 31, 2005 for: (i) services rendered for the audit of
        our
        annual financial statements and the review of our quarterly financial
        statements, (ii) services by our auditor that are reasonably related to the
        performance of the audit or review of our financial statements and that are
        not
        reported as Audit Fees, (iii) services rendered in connection with tax
        compliance, tax advice and tax planning, and (iv) all other fees for services
        rendered.
 
 ACCOUNTING
        FEES
 Fiscal Years2006
              
              2005Audit
                  Fees(1)
              
              $
              89,239
              
              $
              53,621Audit
                  Related Fees(2)
              
              
              96,003
              
              
              24,574Tax
                  Fees(3)
              
              
              6,213
              
              
              -All
                  Other Fees(4)
              
              
              7,141
              
              
              2,951Total
              
              $
              198,596
              
              $
              81,146
 
 (1)
        These are fees for professional services performed by SLGG for the audits
        of our
        annual financial statements, included in our annual report on Form 10-KSB,
        review of financial statements included in our quarterly reports on Form
        10-QSB,
        and services that are normally provided in connection with statutory and
        regulatory filings or engagements.
 
 (2)
        These are fees for professional services performed by SLGG for the review
        of our
        SB-2 registration statements.
 
 (3)
        Consists of professional services performed by SLGG with respect to tax
        compliance.
 
 (4)
        Consists of incidental expenses relating to (1) through (3) above.
 
 The
        company’s Audit Committee must pre-approve all engagements of the independent
        auditor by the company, and fees to be charged for such services, as required
        by
        the Audit Committee’s charter (and the rules of the Securities and Exchange
        Commission), subject to the de-minimis exception for expenditures for non-audit
        services. The
        pre-approval requirement is waived with respect to the provision of non-audit
        services if (i) the aggregate amount of all such non-audit services constitutes
        not more than 5% of the total fees paid by the company to its auditors during
        the fiscal year, (ii) such services were not recognized by the company at
        the
        time of engagement to be non-audit services and (iii) such services are promptly
        brought to the attention of the Audit Committee and approved prior to completion
        of the audit by the Audit Committee or by one or more members of the Audit
        Committee who has been authorized by the Audit Committee to grant such
        approvals. In reviewing non-audit services, the Audit Committee will consider
        whether the provision of non-audit services, if any, by the independent auditors
        is compatible with maintaining the independent auditors independence. The
        Audit
        Committee will not approve any of the Prohibited Services listed on Appendix
        A
        to the charter, and in making a business judgment about particular non-audit
        services, the Audit Committee will consider the guidelines contained in Appendix
        A to the charter. The Audit Committee may delegate to one or more of its
        members
        the authority to grant any required pre-approvals of audit or non-audit
        services. The granting of such approval by the designated member(s) shall
        be
        reported to the full Audit Committee at its next regularly scheduled meeting.
        A
        copy of Appendix A and the full Audit Committee charter can be found at the
        company’s website.
  16
  The
        Audit Committee Charter was not adopted until December 2006 and therefore
        did
        not convene with regards to the accounting fees detailed above for the year
        ended December 31, 2006.
 
 **SIGNATURES**
 
 In
        accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
        the
        registrant caused this report to be signed on its behalf by the undersigned,
        thereunto duly authorized.
  **INNOVATIVE
                  CARD TECHNOLOGIES, INC.***By:*
              */s/
                  Bennet P. Tchaikovsky**Bennet
                  P. Tchaikovsky*
                *Chief
                  Financial Officer**Dated:
                  April 30, 2007*
 
 **EXHIBIT
        INDEX**
 
 31.1
              
              
              Certification
                  of Chief Executive Officer, as required by Rule 13a-14(a) of the
                  Securities Exchange Act of 193431.2
              
              
              Certification
                  of Chief Financial Officer, as required by Rule 13a-14(a) of the
                  Securities Exchange Act of 1934
  17