**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C.  20549





**Form
      10-QSB**





(Mark
      One)




x QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
      the
      quarter ended March 31, 2007




o TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
      the
      transition period from ________ to __________




**Commission
      File Number: 000-30872**





**Trycera
      Financial, Inc.**


(Exact
      name of Registrant as specified in charter)





**Nevada**
                  
                  **33-0910363**State
                      or other jurisdiction of incorporation or organization
                  
                  I.R.S.
                      Employer I.D. No.





**18023
                        East Sky Park Circle, Suite G, Irvine, CA**
                    
                    **92614******Address
                        of principal executive offices
                    
                    Zip
                        Code








Issuer’s
                        telephone number, including area code:
                      **(949)
                          273-4300**


****








Check
      whether the Issuer (1) has 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.  (1)  Yes x   No o       (2)  Yes  x    No  o





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





State
      the
      number of shares outstanding of each of the Issuer’s classes of common equity as
      of the latest practicable date:  At May 14, 2007, there were 7,927,302
      shares of the Registrant’s Common Stock outstanding.





Transitional
      Small Business Disclosure Format (check one):  Yes o   No 
x











**Table
                        of Contents**PAGE**PARTI.**
                    2ITEM1.
                    FINANCIAL
                      STATEMENTS
                    2ITEM2.
                    MANAGEMENT'S
                      DICUSSION AND ANALYSIS OR PLAN OF OPERATION
                    9ITEM3.
                    CONTROLS
                      AND PROCEDURES
                    16**PARTII.**
                    17ITEM1.
                    LEGAL
                      PROCEEDINGS
                    17ITEM6.
                    EXHIBITS
                    17SIGNATURES
                    18








2


**PARTI**





***ITEM1.  FINANCIAL
      STATEMENTS***




**Trycera
                                Financial, Inc.**Consolidated
                                Balance SheetsMarch
                            
                            
                            December31,
                                2007
                            
                            
                            
                            31,
                                2006(Unaudited)**Assets**Current
                                AssetsCash
                            
                            
                            $
                            406,295
                            
                            
                            $
                            87,193Accounts
                                Receivable, net of allowance of $11,457 and $11,457
                            
                            
                            110,154
                            
                            
                            
                            86,628Prepaid
                                Expenses and other current assets
                            
                            
                            15,552
                            
                            
                            
                            12,429Client
                                ACH Reserves
                            
                            
                            
                            5,000
                            
                            
                            
                            5,000Total
                                Current Assets
                            
                            
                            
                            537,001
                            
                            
                            
                            191,250Property
                                & Equipment, net
                            
                            
                            
                            12,264
                            
                            
                            
                            18,395Other
                                AssetsDeposits
                            
                            
                            
                            12,507
                            
                            
                            
                            12,507Definite
                                Life Intangible Assets, net
                            
                            
                            7,901
                            
                            
                            
                            38,542Total
                                Other Assets
                            
                            
                            
                            20,408
                            
                            
                            
                            51,049Total
                                Assets
                            
                            
                            $
                            569,673
                            
                            
                            $
                            260,694**Liabilities
                                & Stockholders’ Equity**Current
                                LiabilitiesAccounts
                                Payable
                            
                            
                            $
                            53,363
                            
                            
                            $
                            71,452Portfolio
                                reserves
                            
                            
                            
                            32,699
                            
                            
                            
                            25,425Accrued
                                Expenses
                            
                            
                            
                            159,558
                            
                            
                            
                            78,542Line
                                of Credit
                            
                            
                            
                            27,508
                            
                            
                            
                            -Deferred
                                Revenue, net
                            
                            
                            
                            7,500
                            
                            
                            
                            -Total
                                Current Liabilities
                            
                            
                            
                            280,628
                            
                            
                            
                            175,419Commitments
                            
                            
                            
                            -
                            
                            
                            
                            -Stockholders’
                                EquityPreferred
                                Stock, 20,000,000 Shares Authorized,$.001
                                Par Value; None Issued and Outstanding
                            
                            
                            -
                            
                            
                            
                            -Common
                                Stock, 100,000,000 Shares Authorized at$.001
                                Par Value; 7,912,302 and 7,582,302 SharesIssued
                                and Outstanding, Respectively
                            
                            
                            7,932
                            
                            
                            
                            7,582Additional
                                Paid In Capital
                            
                            
                            
                            4,266,678
                            
                            
                            
                            3,886,852Accumulated
                                Deficit
                            
                            
                            
                            (3,985,564
                            )
                            
                            
                            (3,809,159
                            )Total
                                Stockholders’ Equity
                            
                            
                            
                            289,045
                            
                            
                            
                            85,275Total
                                Liabilities & Stockholders’ Equity
                            
                            $
                            569,673
                            
                            
                            $
                            260,694




3




**Trycera
                              Financial, Inc.**Consolidated
                              Statements of OperationsFor
                              the Three Months EndedMarch
                          
                          
                          March31,
                              2007
                          
                          
                          
                          31,
                              2006(Unaudited)
                          
                          
                          (Unaudited)RevenuesStored
                              Value
                          
                          
                          1,246,643
                          
                          
                          
                          302,8651,246,643
                          
                          
                          
                          302,865Cost
                              of Sales
                          
                          
                          1,104,593
                          
                          
                          
                          205,468Gross
                              Profit
                          
                          
                          142,050
                          
                          
                          
                          97,397ExpensesDepreciation
                              and Amortization
                          
                          
                          3,338
                          
                          
                          
                          874Salaries
                              and Wages
                          
                          
                          109,664
                          
                          
                          
                          138,933Stock
                              Based Compensation
                          
                          
                          19,926
                          
                          
                          
                          104,750Professional
                              Fees
                          
                          
                          75,300
                          
                          
                          
                          34,201General
                              & Administrative
                          
                          
                          89,034
                          
                          
                          
                          45,474Total
                              Expenses
                          
                          
                          297,262
                          
                          
                          
                          324,232Loss
                              from Operations
                          
                          
                          (155,212
                          )
                          
                          
                          (226,835
                          )Other
                              Income (Expenses)Interest,
                              income
                          
                          
                          150
                          
                          
                          
                          560Interest,
                              expense
                          
                          
                          (534
                          )
                          
                          
                          -Total
                              Other Income (Expenses)
                          
                          
                          (384
                          )
                          
                          
                          560Loss
                              from Continuing Operations before taxes
                          
                          $
                          (155,596
                          )
                          
                          $
                          (226,275
                          )Income
                              Taxes
                          
                          
                          -
                          
                          
                          
                          -Loss
                              from Continuing Operations
                          
                          $
                          (155,596
                          )
                          
                          $
                          (226,275
                          )Discontinued
                              OperationsGain
                              (Loss) on disposal of discontinued Operations, net
                          
                          
                          (27,852
                          )
                          
                          
                          -Gain
                              (Loss) from discontinued Operations, net
                          
                          
                          7,043
                          
                          
                          
                          (7,580
                          )Total
                              Gain (Loss) from discontinued Operations, net
                          
                          
                          (20,809
                          )
                          
                          
                          (7,580
                          )Net
                              Loss
                          
                          $
                          (176,405
                          )
                          
                          $
                          (233,855
                          )Basic
                              and dilutive earnings per share:Loss
                              per share from Continuing Operations
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.03
                          )Loss
                              per share from Discontinued Operations
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.03
                          )Weighted
                              average shares
                          
                          
                          7,721,303
                          
                          
                          
                          6,946,524






4




**Trycera
                              Financial, Inc.**Consolidated
                              Statements of Cash FlowsFor
                              the Three Months EndedMarch
                          
                          
                          March31,
                              2007
                          
                          
                          
                          31,
                              2006(Unaudited)
                          
                          
                          (Unaudited)Cash
                              Flows from Operating ActivitiesNet
                              Loss
                          
                          $
                          (176,405
                          )
                          
                          $
                          (233,855
                          )Adjustments
                              to Reconcile Net Loss to Net Cash(Used)
                              by Operations;Depreciation
                              and amortization
                          
                          
                          3,338
                          
                          
                          
                          873Depreciation
                              and amortization on discontinued Operations
                          
                          
                          581Loss
                              on disposal of discontinued operations
                          
                          
                          27,852
                          
                          
                          
                          -Stock
                              issued for services
                          
                          
                          45,250
                          
                          
                          
                          -Stock
                              options and warrants
                          
                          
                          19,926
                          
                          
                          
                          104,750(Increase)
                              decrease in accounts receivable
                          
                          
                          (23,526
                          )
                          
                          
                          45,161(Increase)
                              decrease in prepaid and other current assets
                          
                          
                          (3,123
                          )
                          
                          
                          25,251Increase
                              (decrease) in accounts payable
                          
                          
                          (18,089
                          )
                          
                          
                          (34,346
                          )Increase
                              (decrease) in portfolio reserves
                          
                          
                          7,274
                          
                          
                          
                          -Increase
                              (decrease) in accrued expenses
                          
                          
                          81,016
                          
                          
                          
                          (269
                          )Increase
                              (decrease) in deferred revenue
                          
                          
                          7,500
                          
                          
                          
                          9,173Net
                              Cash (Used) by Operating Activities
                          
                          
                          (28,406
                          )
                          
                          
                          (83,262
                          )Cash
                              Flows from Investing ActivitiesAcquisition
                              of intangible assets and other
                          
                          
                          -
                          
                          
                          
                          (1,196
                          )Proceeds
                              from disposal of discontinued operations
                          
                          
                          5,000
                          
                          
                          
                          -Net
                              Cash Provided (Used) by Investing Activities
                          
                          
                          5,000
                          
                          
                          
                          (1,196
                          )Cash
                              Flows from Financing ActivitiesProceeds
                              from issuance of common stock
                          
                          
                          315,000
                          
                          
                          
                          125,000Proceeds
                              from line of credit
                          
                          
                          27,508
                          
                          
                          
                          (2,060
                          )Net
                              Cash Provided by Financing Activities
                          
                          
                          342,508
                          
                          
                          
                          122,940Net
                              Increase (Decrease) in Cash and Cash Equivalents
                          
                          
                          319,103
                          
                          
                          
                          38,482Cash
                              and Cash Equivalents at Beginning of Period
                          
                          
                          87,193
                          
                          
                          
                          211,523Cash
                              and Cash Equivalents at End of Period
                          
                          $
                          406,295
                          
                          
                          $
                          250,005-Cash
                              Paid for:Interest
                          
                          $
                          534
                          
                          
                          $
                          -Income
                              Taxes
                          
                          $
                          -
                          
                          
                          $
                          -Non-cash
                              financing activities:Common
                              stock issued for services
                          
                          $
                          45,250
                          
                          
                          $
                          -







5


**Trycera
      Financial, Inc.**


Notes
      to the Financial Statements


March
      31, 2007




NOTE
      1
– SIGNIFICANT ACCOUNTING POLICIES





A.
            General





The
                accompanying condensed financial statements of the Company have been
                prepared by the Company, without audit, pursuant to the rules and
                regulations of the Securities and Exchange Commission.  Certain
                information and disclosures normally included in financial statements
                prepared in accordance with accounting principles generally accepted
                in
                the United States have been condensed or omitted pursuant to such
                rules
                and regulations.  These condensed financial statements reflect
                all adjustments (consisting only of normal recurring adjustments)
                that, in
                the opinion of management, are necessary to present fairly the results
                of
                operations of the Company for the periods presented.  These
                condensed financial statements should be read in conjunction with
                the
                financial statements and the notes thereto included in the Company’s Form
                10-KSB for the year ended December 31, 2006.  The results of
                operations for the three months ended March 31, 2007, are not
                necessarily indicative of the results that may be expected for the
                fiscal
                year ending December 31, 2007.





B.
            Earnings
                (Loss) Per Share of Common
                Stock





The
                computation of earnings (loss) per share of common stock is based
                on the
                weighted average number of shares outstanding at the date of the
                financial
                statements.  Fully diluted earnings per share, which account for
                outstanding employee stock options and warrants have not been shown
                because the effect would have been anti-dilutive for the periods
                presented.






For
                              the three months endedMarch
                              31,
                          
                          
                          March
                              31,2007
                          
                          
                          2006(unaudited)
                          
                          
                          (unaudited)Basic
                            and dilutive Earnings per share:Income
                              (Loss) (numerator)
                          
                          $
                          (176,405
                          )
                          
                          $
                          (233,855
                          )Shares
                              (denominator)
                          
                          
                          7,721,303
                          
                          
                          
                          6,946,524Per
                              Share Amount
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.03
                          )







6


**Trycera
        Financial, Inc.**
 Notes
        to the Financial Statements
 March
        31, 2007




NO TE
      2 –STOCK OPTION PLAN





On
      May 4, 2004, the Company approved
      and adopted the 2004 Stock Option/Stock Issuance Plan, which allows for the
      Company to issue stock or grant options to purchase or receive shares of the
      Company’s common stock.  The maximum number of shares that may be
      optioned and sold under the plan is 10,000,000.  The plan became
      effective with its adoption and remains in effect for ten years, with options
      expiring ten years from grant, unless terminated earlier.  Options
      granted under the plan vest according to terms imposed by the Plan
      Administrator.  The Administrator may not impose a vesting schedule
      upon any option grant which is more restrictive than twenty percent (20%) per
      year vesting with the initial vesting to occur not later than one (1) year
      after
      the option grant date.  The following schedule summarizes the activity
      during the period ending March 31, 2007:




2004
                                          Stock PlanAmount
                                          of
                                        Shares
                                      
                                      
                                      Weighted
                                          Average
                                        Exercise PriceOutstanding
                                        at January 1, 2007
                                      
                                      
                                      2,874,750
                                      
                                      
                                      $
                                      .63Options
                                          Granted
                                      
                                      
                                      150,000
                                      
                                      
                                      
                                      1.01Options
                                          Exercised
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Options
                                          Canceled
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Options
                                          Outstanding at March 31, 2007
                                      
                                      
                                      3,024,750
                                      
                                      
                                      $
                                      .65Options
                                          Exercisable at March 31, 2007
                                      
                                      
                                      2,715,683
                                      
                                      
                                      $
                                      .60





Options
      granted under the plan vest according to terms imposed by the Plan
      Administrator.  The following schedule summarizes the activity during
      the period ending March 31, 2006:







2004
                                    Stock PlanAmount
                                    of
                                  Shares
                                
                                
                                Weighted
                                  Average
                                  Exercise
                                    PriceOutstanding
                                  at January 1, 2006
                                
                                
                                3,070,250
                                
                                
                                $
                                .62Options
                                    Granted
                                
                                
                                -
                                
                                
                                $
                                -Options
                                    Exercised
                                
                                
                                -
                                
                                
                                
                                -Options
                                    Canceled
                                
                                
                                -
                                
                                
                                
                                -Options
                                    Outstanding at March 31, 2006
                                
                                
                                3,070,250
                                
                                
                                $
                                .62Options
                                    Exercisable at March 31, 2006
                                
                                
                                1,912,500
                                
                                
                                $
                                .45




The
      Company,
      in accordance with Statement of Financial Accounting Standards No. 123R,
*“Accounting for Stock-Based Compensation,”* recognized $19,926 and
      $104,750, respectively for the three ended March 31, 2007 and 2006,
      respectively.  The fair value of the option grant was established at
      the date of grant using the Black-Scholes option pricing model with the
      following assumptions:




March
                        31, 2007Dividend
                      Yield
                    
                    
                    4.56
                    %Volatility
                    
                    
                    0
                    %Average
                      Expected Term (Years to Exercise)
                    
                    
                    62
                    %5





Management
      would like to confirm an intention to use an appropriate volatility in the
      future, which is likely to be higher than the historical basis.





Employee
      stock options outstanding and exercisable under this plan as of March 31, 2007
      are:






Range
                      of
                    Exercise
                      Price
                  
                  
                  Number
                      of Options Granted
                  
                  
                  Weighted
                       Average Exercise Price
                  
                  
                  Average
                      Remaining
                    Contractual
                      Life (Years)
                  
                  
                  Weighted Number
                      of Options Vested
                  
                  
                  Average
                    Exercise
                    Price$
                  .001
                    - $.99
                  
                  
                  
                  2,431,250
                  
                  
                  $
                  .55
                  
                  
                  
                  3.0
                  
                  
                  
                  2,485,517
                  
                  
                  $
                  .55$
                  1.00
                    - $2.00
                  
                  
                  
                  592,500
                  
                  
                  $
                  1.04
                  
                  
                  
                  4.5
                  
                  
                  
                  230,166
                  
                  
                  $
                  1.05




Employee
      stock options outstanding and exercisable under this plan as of December 31,
      2006 are:






Range
                      of
                    Exercise
                      Price
                  
                  
                  Number
                      of
                    Options
                      Granted
                  
                  
                  Weighted
                      Average
                    Exercise
                      Price
                  
                  
                  Average
                      Remaining Contractual Life (Years)
                  
                  
                  Weighted
                      Number of
                    Options
                      Vested
                  
                  
                  Average
                    Exercise
                    Price$
                  .001
                    - $.99
                  
                  
                  
                  2,431,250
                  
                  
                  $
                  .55
                  
                  
                  
                  3.5
                  
                  
                  
                  2,478,642
                  
                  
                  $
                  .55$
                  1.00
                    - $2.00
                  
                  
                  
                  443,500
                  
                  
                  $
                  1.00
                  
                  
                  
                  4.5
                  
                  
                  
                  177,333
                  
                  
                  $
                  1.03








7


**Trycera
          Financial, Inc.**
 Notes
          to the Financial Statements
 March
          31, 2007




NOTE
      3
– DISCONTINUED OPERATIONS





In
      March,
      2007, the Company completed the sale of its IsleCore subsidiary. In accordance
      with Statement of Financial Accounting Standards (“SFAS”) 144, “*Accounting
      for the Impairment or Disposal of Long-Lived Assets”*, the financial results
      of the Company’s IsleCore operations are reported as discontinued operations for
      all periods presented.




The
      financial
      results included in discontinued operations are:






March
                                31,
                              2007
                            
                            
                            March
                                31,
                              2006(unaudited)
                            
                            
                            (unaudited)Gain
                              (Loss) on disposal of discontinued Operations, net
                            
                            $
                            (27,582
                            )
                            
                            $
                            -Gain
                              (Loss) from discontinued Operations, net
                            
                            $
                            7,043
                            
                            
                            $
                            (7,580
                            )




NOTE
      4
– RESTATEMENT AND RECLASSIFICATION





We
      have
      reclassified our Statement of Operations for the three months ended March 31,
      2006, to reflect the sale of our IsleCore subsidiary. Our management and our
      board of directors have concluded this reclassification is necessary to reflect
      the changes described above in Note 3.






8





***ITEM2.  MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN
      OF OPERATION***





The
      following discussion should be read in conjunction with our financial statements
      and related notes thereto as filed with the Securities and Exchange
      Commission.





Prior
      to
      May 2004, we had no operating history.  Based in Irvine, California,
      we are currently in the business of developing and marketing a suite of stored
      value and financial products and services.  Stored value products are
      broadly defined as financial instruments where the value on the card has been
      prepaid, and where subsequent transactions decrease the value against the
      balance originally loaded onto the instrument.  Our core operating
      business is centered upon developing and marketing a broad array of stored
      value
      products and services for persons without banking relationships and persons
      who
      are underserved by existing banking facilities.





***Recent
      Developments***




During
      the
      quarter ended March 31, 2007, we continued to foster momentum with our
      semi-custom OEM program offering.  We worked closely with a key
      business partner, Integrity Marketing Group (IMG), to develop market and grow
      distribution of their four semi-custom card solutions, the Plan First Prepaid
      MasterCard® card, the Integrity Trust Prepaid MasterCard® card, the InControl
      Prepaid MasterCard® card and the Valor Prepaid MasterCard® card.  The
      collective programs under the IMG umbrella represent a focus on the debt
      management space and all card offerings are related to actively helping
      individuals manage personal debt and create a financial tool that allows the
      prepaid card to streamline bill payments and managed debt
      solutions.  The development of the IMG programs has allowed us to
      introduce a multi-purse card where there is a general purpose spending purse,
      a
      debt management purse and a savings purse.  The multi-purse aspect of
      the card allows program card marketers the opportunity to create offerings
      that
      can segregate funds loaded onto prepaid cards and further enhance program
      specific functions to facilitate spending and savings on one card.




During
      the
      quarter, we also continued to introduce new program opportunities to our
      recently new bank partner, New Millennium Bank.  By working with New
      Millennium Bank, we are able to offer a simple per card pricing solution that
      provides our program partners the flexibility of working with a progressive
      state bank.




In
      the first
      quarter we also continued to focus on the sale of our semi-customized OEM
      platform offering.  Developed initially in the middle of 2006, this
      turnkey stored value solution continues to evolve and showcase our ability
      to
      deliver a feature-rich turnkey prepaid card program in a timeframe (90 days
      or
      less) that creates a competitive advantage for us.  This card platform
      provides card marketers and our customers with the ability to rapidly create,
      launch, and manage semi-customized stored value programs while not bearing
      long
      term costs and related resource requirements associated with direct processor,
      issuer, and association relationships.  Current programs are running under
      this platform and have been developed to support various target markets and
      channels across the United States.  Similar to our branded in-house
      products (Trycera, Mi Dinero and Finium), the OEM platform offers a set of
      card
      features and functionalities that include: bill payment, wireless spending
      alerts, live customer service support, and web-based card management
      tools.  With continued development and programming, management
      believes the OEM platform will evolve as a hybrid model and serve as the basis
      for our cost effective stored value and prepaid card
      solutions.  Currently there are six sales opportunities focused on the
      OEM platform.  Each of these programs represents a different target
      market and business channel.






9




During
      the
      first quarter we also finalized the re-development of our alternative credit
      reporting product and service branded under the name My Full
      Credit.  This complementary service program will allow participants to
      report non-traditional payments to over 200 national credit reporting
      agencies.  A majority of the payments and transactions provided to the
      national credit reporting agencies under this program would include rent, gas
      and electric, cable TV, phone/wireless and utilities (water, sewer and
      trash).  By providing such non-traditional payment information, My
      Full Credit will allow credit reporting agencies may better understand an
      individual’s consumer credit behavior and in turn offer an ability to report
      alternative scores that may or may not help facilitate credit granting decisions
      by prospective credit lenders.  In the first quarter the My Full
      Credit development incurred expenses in excess of $25,000, much of which is
      planned to be recouped when initial revenue streams are realized in the second
      quarter of 2007.




In
      the first
      quarter of 2007 we also made changes to our non-core businesses.  From
      November 2004 until February 2007, we owned, distributed, and serviced a catalog
      shopping card portfolio under the brand name Tru Platinum®.  Due to
      the focus of growing the core stored value card business, management elected
      to
      eliminate the offering in its entirety.




In
      addition
      to our core operations, we continue to expand our search for small card
      marketers and card portfolio companies and financial services-related companies
      for acquisition. In 2006 we evaluated two separate opportunities but did not
      pursue either opportunity beyond the initial due diligence stage.




Separately,
      at the end of the first quarter, our wholly owned subsidiary, isleCORE Systems,
      located in Honolulu, Hawaii, was disposed.  The sale was completed in
      March 2007 and effective immediately at the close of the first
      quarter.  In conjunction with the sale we terminated the lease with
      our landlord, Corporate Office Centers.  There were no required
      termination expenses associated with the lease and based on our interpretation
      the collective transaction was not material.  IsleCORE has been
      treated as a discontinued operation for the purposes of this discussion and
      the
      Consolidated Statements of Operations reflect such treatment.





***Employees***




At
      April 1,
      2007, we had four full-time employees, namely our CEO and President, Matt
      Kerper, our CFO, Bryan Kenyon, and two other team members whose roles
      include:  Director of Product Development and Director of
      Operations.  Individual headcount for full time roles remained
      consistent once we factored in the disposal of isleCORE and the corresponding
      reduction in headcount.  While we continue to develop our products and
      services, our headcount will be aligned to focus on operational contributions
      and account/customer support.  It is anticipated that in the coming
      months we will add two additional employees, both in the core financial services
      business.







10


***Key
      Accounting Policies***




Key
      accounting policies are defined as those that are reflective of significant
      judgments and uncertainties, and potentially result in materially different
      results under different assumptions and conditions.  There were no
      changes to our key accounting policies for the quarter ended March 31,
      2007.





***Results
      of Operations***




In
      the first
      quarter of 2007 we grew revenue 100% over the prior first quarter 2006
      comparable period.  The growth of revenue was attributed to continuing
      core stored value growth and by continuing to develop, deploy and market
      semi-custom and customized branded prepaid and stored value card
      solutions.  In efforts to boost per card revenues and further add new
      revenue sources to offset costs, which were flat on a comparable basis from
      2005
      to 2006, we deployed resources throughout the first quarter in 2007 to identify,
      promote and deliver complementary financial products and service offerings,
      notably an alternative credit reporting platform and an identification
      verification solution.





**Revenue**




Revenue
      from
      continuing operations was $1,246,643 and $302,865 for the quarters ended March
      31, 2007 and 2006, respectively, representing an increase of $943,778 or 312%.
      Our 2007 product launches coupled with marketing efforts resulted in improved
      revenues through the addition of new customers for our customized and
      semi-customized program solutions and increased sales of our branded card
      products and services.  Included in the sales numbers is the resale of
      bill payment management services of $962, 982 which commenced in January, 2007.
      We have also contracted with additional third party distributors and online
      marketers which have the potential to generate additional revenue in the future
      quarters.





**Cost
      of Sales and Gross Profit**




Cost
      of sales
      was $1,104,593 and $205,468 for the quarters ended March 31, 2007 and 2006,
      respectively, representing an increase of $899,125 or 437%.  The
      increase was attributed to the growth of the card production, distribution
      costs, bill payment management and transaction processing costs.




The
      resulting
      gross profit was $42,050 and $97,397 for the quarters ended March 31, 2007
      and
      2006, respectively.  Management expects gross profit margin to improve
      as it achieves economies of scale in the cost of processing accompanied by
      the
      increased margin in the customized and semi-customized program solutions and
      increased sales of our branded card products and services.







11


**Operating
      expenses**




Operating
      expenses were $297,262 and $324,232 for the quarters ended March 31, 2007 and
      2006, respectively, representing a decrease of $26,970 or 8%.  The
      major components of our first quarter 2007 operating expense are salaries and
      wages (37%), general and administrative (30%), professional fees (25%), and
      stock based compensation (7%).




Salaries
      and
      wages expense were $109,664 and $138,933 for the quarters ended March 31,
      2007 and 2006, respectively, representing a decrease of $29,269 or
      21%.  The decrease resulted from the departure of the inhouse
      financial controller during 2006, whereas these services are now being
      outsourced at a more favorable cost.




General
      and
      administrative expenses were $89,034 and $45,474 for the quarters ended March
      31, 2007 and 2006, respectively, representing an increase of $43,560 or
      96%.  The increase resulted from increased customer service costs
      (paid to independent contractors) coupled with the issue of approximately
      $22,000 in stock grants to retain key personnel.




Professional
      fees and expenses were $75,300 and $34,201 for the quarters ended March 31,
      2006 and 2005, respectively, representing an increase of $41,099 or
      120%.  The increase results from the inclusion of accounting resources
      associated with a third party service provider in addition to the retention
      of a
      sales and marketing specialist.




Stock
      based
      compensation was $19,926 and $109,664 for the quarters ended March 31, 2007
      and
      2006, respectively, representing a decrease of $84,824 or 81%.  The
      net decrease is a result of a fewer options vesting in 2007 as compared to
      2006.





**Discontinued
      Operations**





*Loss
      on sale of IsleCORE subsidiary; Discontinued Operations*





As
      previously
      stated, and more fully described above, we disposed of out IsleCORE subsidiary.
      Proceeds from the sale were $5,000 in cash, plus the net amount realized from
      the settlement of the accounts receivable and prepaids, less the accounts
      payable and accrued expenses   On this basis we have realized a
      loss of $27,852 on the transaction.  We have the ability to recoup
      $18,000 of this loss dependent on the results of the purchaser, but management
      considers the likelihood of this occurrence to be less likely and has not
      accrued the contingent revenue.





*Results
      of discontinued operations*





The
      results
      of the IsleCORE subsidiary have been shown as a discontinued operation for
      the
      purposes of our financial statements.  Net income was $7,043 for the
      three months ended March 31, 2007, compared to a loss of $7,580 for the
      comparative period.  The reason for the net income this period was
      that we had cut most funding and IsleCORE was operating with the least resources
      possible.






12





**Net
      loss from Continuing Operations**





We
      incurred net losses of $155,596 and $226,275 for the quarters ended March 31,
      2007 and 2006, respectively, representing a decrease in net loss of $70,679
      or
      31%.  Through the addition of new custom programs and the increasing
      sales of our branded products and services, we expect to increase gross profit
      margins and to reduce net losses in 2007 as compared to 2006.





***Liquidity
      and Capital Resources***




A
      primary
      source of operating capital for the three months ended March 31, 2007, was
      $315,000 from the sale of stock.  The sale of stock was related to the
      offering opened on December 11, 2006, which closed on March 12,
      2007.  In the offering we offered up to 500,000 shares of our common
      stock at $1.00 per share to investors with a 50% additional warrant coverage
      offer, for maximum gross proceeds of $500,000 on the common stock and up to
      a
      maximum gross proceeds of $250,000 related to exercised warrants.  We
      raised a total of $340,000 from the offering, of which $25,000 was received
      in
      fourth quarter 2006 and $315,000 was received in first quarter
      2007.  We issued a total of 340,000 common shares and 170,000 warrants
      in the offering.




As
      of March
      31, 2007, cash totaled $406,295 as compared with $87,193 of cash at December
      31,
      2006, resulting in an increase of $319,103 in cash and cash
      equivalents.  The increase in cash and cash equivalents was attributed
      to funding the operational expenses and cost of goods sold with cash proceeds
      of
      the private common stock offering.  In the three months ended March
      31, 2007 we used $28,406 of cash in operations.  For the comparable
      period in the prior year we used $83,262 of cash in operations.




Working
      capital was $256,373 at March 31, 2007, as compared with working capital of
      $15,831 at December 31, 2006.  This increase in working capital was a
      result of using existing funds for operations and related expenses through
      cash
      proceeds from previous capital provided by the private offering proceeds to
      support the business during its startup and growth phase. Moreover, as new
      developments continue with a key customer, IMG, our working capital can be
      expected to be adversely impacted if IMG is unable to make payments on their
      outstanding accounts receivable balances.






13




Proceeds
      from
      the private stock offerings have continued to fund operations through the first
      quarter of 2007 to support the growth of the business.  Management
      believes that with funds accumulated from the December 11, 2006 offering,
      together with revenues generated from operations and cash collected from
      outstanding receivables, we will have sufficient cash to satisfy existing
      operating cash needs and working capital requirements during and through the
      second quarter of 2007.  Our monthly cash requirements are currently
      approximately $30,000 - $60,000 (depending on the timing of payments from our
      marketing partners) as we continue to expand headcount and
      operations.  Management estimates that future monthly cash
      requirements will rise with headcount and expanded cost of goods associated
      with
      new program implementations to approximately $80,500.  Any additional
      funds from operations and new private placement offerings would likely extend
      this estimated period.  With the closing of the December 11, 2006
      private placement offering, and in conjunction with key card program rollouts
      in
      the late second quarter we may now need additional funding from new
      investors.  Program delays and a key program suspension in the second
      quarter may require us to seek additional funding from investors and delay
      expected cash flow neutrality into late this year or early next
      year.




Concurrently,
      and while the timing is unknown to management, our key banking partners may
      in
      the future require security deposits for all cardholder funds or a portion
      thereof.  While the cardholder funds are not our property, revised
      bank policies may necessitate such a collateralization.  Should a bank
      or banks require such a security deposit, we may be forced to raise further
      capital or reduce available cash on hand, which would have a material impact
      on
      our immediate and short-term capital resources.  We have engaged the
      banks on this specific collateral requirement and at this time, we have
      determined that until a program is launched with our new bank partner, New
      Millennium Bank, we will not require more than $15,000 in aggregate deposit
      amounts.




Furthermore,
      our key processing partner, Galileo Processing, continues to impact our primary
      prepaid card business model.  Program delays coupled with integration
      timing and scalability constraints have contributed to a key program suspension
      and continue to affect program launches and project lead times.  While
      we work closely with our processing partner, we may be forced to raise further
      capital to build middle ware that enables a more turnkey solution and allows
      the
      company flexibility to rely on less processing resources.




Additionally,
      we may elect to compensate employees with equity incentives where possible
      and
      continue to utilize equity instruments to compensate all associates in efforts
      to minimize cash outlays.  Management believes this strategy provides
      the ability to increase stockholder value as well as utilize cash resources
      more
      effectively.







14


During
      future quarters we may seek
      additional funding to finance future acquisitions and growth.  The
      amount and timing of such capital transactions is not yet known and will depend
      largely on our operating needs and the cost to acquire financial services and
      products companies.  Our ability to secure this additional funding
      given present market conditions is uncertain, as is the financial effect any
      such funding may have on our capital structure or operating
      results.





***Off-Balance
      Sheet Arrangements***





During
      the quarter ended March 31,
      2007, we did not engage in any off-balance sheet arrangements.





***Stock-Based
      Compensation***




In
      March
      2004, the FASB issued Statement of Financial Accounting Standards (SFAS) No.123
      (Revised), Shared-Based Payment.  This standard revises SFAS No. 123,
      APB Opinion No. 25 and related accounting interpretations and eliminates the
      use
      of the intrinsic value method for employee stock-based
      compensation.  SFAS No. 123R requires compensation costs related to
      share based payment transactions to be recognized in the financial statements
      over the period that an employee provides service in exchange for
      award.  Currently, the Company uses the revised fair value method of
      SFAS No. 123R to value share-based options granted to employees and board
      members.  This standard requires the expensing of all share-based
      compensation including options, using the fair value based method.





***Subsequent
      Events***




The
      following
      material events occurred subsequent to the quarter ended March 31,
      2007:




On
      May 3,
      2007 we responded to two letters received from a law firm representing Meridian
      Enterprises Corporation (“Meridian”), the owner of U.S. Patent No. 5,025,372
      (the “372” Patent”).  The letter claims that we may be infringing on
      the 372 Patent which applies to card-based incentive programs.  The
      letter also demands that we cease and desist from infringement of the 372 Patent
      and account for past damages to Meridian.  Management has not reached
      a conclusion of the merits of this claim and continues to evaluate the
      applicability of the claim to our business.




On
      April 30,
      2007, we sent Integrity Marketing Group (IMG) a letter that outlined a Notice
      of
      Breach of Agreement and Intent to Terminate; Demand for Payment; Offset; and
      a
      Suspension of Services due to an inability to settle large amounts of accounts
      receivable.  It is unknown whether an accord can be reached with IMG,
      but this is developing into a material adverse change to the underlying revenues
      and nonpayment will result in an unfavorable affect to the current working
      capital and capital resources as well as significantly reducing revenue over
      prior levels.







15


***Forward-Looking
      Statements***




This
      report
      contains certain forward-looking statements and information that are based
      on
      assumptions made by management and on information currently
      available.  When used in this report, the words “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “plan,” and similar expressions, as
      they relate to our company or its management, are intended to identify
      forward-looking statements.  These statements reflect management’s
      current view of the company concerning future events and are subject to certain
      risks, uncertainties and assumptions, including among many others the
      following:  changes in federal, state or municipal laws governing the
      distribution and performance of financial services; a general economic downturn;
      our startup phase of operations; reliance on third party processors and product
      suppliers; the inability to locate suitable acquisition targets; and other
      risks
      and uncertainties.  Should any of these risks or uncertainties
      materialize, or should underlying assumptions prove incorrect, actual results
      may vary materially from those described in this report as anticipated,
      estimated or expected.





***ITEM3.  CONTROLS
      AND
      PROCEDURES***





***Evaluation
      of disclosure and controls and procedure***




With
      the
      participation of management, our chief executive officer and chief financial
      officer have evaluated the effectiveness of the design and operation of our
      disclosure controls and procedures (as defined in Rules 13a-15(e) under the
      Securities Exchange Act of 1934, as amended) as of the end of the period covered
      by this quarterly report.  Based on that evaluation the chief
      executive officer and chief financial officer have concluded that our disclosure
      controls and procedures are (1) effective to ensure that material
      information required to be disclosed by us in reports filed or submitted by
      us
      under the Exchange Act is recorded, processed, summarized, and reported within
      the time periods specified in the  rules and forms of the Securities
      and Exchange Commission, and (2) effective to ensure that information required
      to be disclosed by us in such reports filed or submitted by the Company under
      the Exchange Act is accumulated and communicated to management of the Company,
      including the principal executive officer, to allow timely decisions regarding
      required disclosure.





***Changes
      in internal controls***




There
      were no
      changes in our internal control over financial reporting (as defined in Rule
      13a-15(f) under the Exchange Act) that occurred during our most recent quarter
      ended March 31, 2007, that has materially affected, or is reasonably likely
      to
      materially affect, our internal control over financial reporting.  It
      should be noted that any system of controls, however well designed and operated,
      can provide only reasonable and not absolute assurance that the objectives
      of
      the system will be met.  In addition, the design of any control system
      is based in part upon certain assumptions about the likelihood of future
      events.  Because of these and other inherent limitations of control
      systems, there is only reasonable assurance that our controls will succeed
      in
      achieving their stated goals under all potential future conditions.







16




Under
      current
      SEC guidelines, the requirements of Section 404 of the Sarbanes-Oxley Act of
      2002 (the “Act”) , as provided in Rule 308T of Regulation S-B, will be effective
      for the Company’s year ending March 31, 2007.  In order to comply with
      the Act, the Company will undertake a comprehensive effort, which includes
      documentation and testing of the design and operation of its internal control
      using the guidelines established by *Internal Control - Integrated
      Framework* issued by the Committee of Sponsoring Organizations of the
      Treadway Commission.  During the course of these activities, the
      Company may identify certain internal control matters that management believes
      should be improved.  These improvements, if necessary, will likely
      include further formalization of existing policies and procedures, improved
      segregation of duties, additional information technology systems controls and
      additional monitoring controls.  Because management has not presently
      determined whether these matters will result in material weaknesses being
      identified in the Company’s internal control as defined by the Public Company
      Accounting Oversight Board (United States), no assurances can be given regarding
      the outcome of these efforts at the present time.





**PARTII**





***ITEM1.  LEGAL
      PROCEDINGS***




In
      our annual
      report on Form 10-KSB for the year ended December 31, 2006, we disclosed the
      receipt of a letter from a law firm representing Meridian Enterprises
      Corporation (“Meridian”), the owner of U.S. Patent No. 5,025,372 (the “372”
Patent”).  The letter claimed that we may be infringing on the 372
      Patent which applies to card-based incentive programs.  The letter
      also demanded that we cease and desist from infringement of the 372 Patent
      and
      account for past damages to Meridian.  On *, 2007, we received a
      second demand letter and on May 3, 2007 we responded to both
      letters.  Management has not reached a conclusion of the merits of
      this claim and continues to evaluate the applicability of the claim to our
      business.





***ITEM6.  EXHIBITS***





The
      following exhibits are included as
      part of this report:




31.1
              Rule
                13a-14 (a) Certification by Principal Executive
                Officer31.2
              Rule
                13a-14 (a) Certification by Chief Financial Officer32.1
              Section
                1350 Certification of Principal Executive Officer32.2
              Section
                1350 Certification of Chief Financial
                Officer








17


**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned hereunto duly authorized.






**Trycera
                Financial, Inc.**Date:  May
              14, 2007
            
            
            Date:  May
              14, 2007/s/
                Matthew S.
                Kerper
            
            
            /s/
                Bryan
                KenyonMatthew
                S.
                Kerper
            
            
            Bryan
                KenyonPresident,
                (Principal Executive Officer)
            
            
            Chief
                Financial Officer (Principal Financial Officer)