**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 June 30, 2007




oTRANSITION
      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
      [    ]       (2)  Yes  [X]    No  [   ]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange
      Act).Yes  [    ]   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 August 6, 2007, there were
      8,143,302 shares of the Registrant’s Common Stock outstanding.





Transitional
      Small Business Disclosure Format (check one):  Yes
      [   ]    No [ X ]


1









**Table
                of Contents**Page**PARTI**
            
            3ITEM1.  FINANCIAL
                STATEMENTS
            
            3ITEM2.  MANAGEMENT’S
                DISCUSSION AND ANALYSIS
                OR PLAN OF OPERATION
            
            10ITEM3.  CONTROLS
                AND
                PROCEDURES
            
            20**PARTII**
            
            21ITEM2.  UNREGISTERED
                SALES OF EQUITY
                SECURITIES
            
            21ITEM4.  SUBMISSION
              OF MATTERS TO A VOTE OF
              SECURITY HOLDERS
            
            21ITEM6.  EXHIBITS
            
            21**SIGNATURES**
            
            22






The
          accompanying notes are an integral part of these financial
          statements
 2


**PARTI**





***ITEM1.  FINANCIAL
      STATEMENTS***




**Trycera
                Financial, Inc.**Consolidated
                Balance SheetsJune
            
            
            December30,
                2007
            
            
            
            31,
                2006(Unaudited)**Assets**Current
                AssetsCash
            
            
            $
            64,015
            
            
            $
            87,193Accounts
                Receivable, net
            
            
            
            88,357
            
            
            
            86,628Prepaid
                Expenses and other current assets
            
            
            12,109
            
            
            
            12,429Deferred
                Compensation
            
            
            
            101,000
            
            
            
            -Client
                ACH Reserves
            
            
            
            5,000
            
            
            
            5,000Total
                Current Assets
            
            
            
            270,481
            
            
            
            191,250Property
                & Equipment, net
            
            
            
            10,612
            
            
            
            18,395Other
                AssetsDeposits
            
            
            
            8,308
            
            
            
            12,507Definite
                Life Intangible Assets, net
            
            
            6,215
            
            
            
            38,542Total
                Other Assets
            
            
            
            14,523
            
            
            
            51,049Total
                Assets
            
            
            $
            295,616
            
            
            $
            260,694**Liabilities
                & Stockholders’ Equity**Current
                LiabilitiesAccounts
                Payable
            
            
            $
            101,691
            
            
            $
            71,452Portfolio
                reserves
            
            
            
            34,174
            
            
            
            25,425Accrued
                Expenses
            
            
            
            38,058
            
            
            
            78,542Line
                of Credit
            
            
            
            20,000
            
            
            
            -Total
                Current Liabilities
            
            
            
            193,923
            
            
            
            175,419Total
                Liabilities
            
            
            
            193,923
            
            
            
            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; 8,068,302 and 7,582,302 Shares
              Issued and Outstanding, Respectively
            
            
            8,068
            
            
            
            7,582Additional
                Paid In Capital
            
            
            
            4,424,417
            
            
            
            3,886,852Accumulated
                Deficit
            
            
            
            (4,330,792
            )
            
            
            (3,809,159
            )Total
                Stockholders’ Equity
            
            
            101,693
            
            
            
            85,275Total
                Liabilities & Stockholders’ Equity
            
            $
            295,616
            
            
            $
            260,694











The
            accompanying notes are an integral part of these financial
            statements
 3





**Trycera
                Financial, Inc.**Consolidated
                Statements of OperationsFor
                the Three Months Ended
            
            
            For
                the Six Months EndedJune
            
            
            June
            
            
            June
            
            
            June30,
                2007
            
            
            
            30,
                2006
            
            
            
            30,
                2007
            
            
            
            30,
                2006(Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)RevenuesStored
                Value
            
            
            710,809
            
            
            
            80,767
            
            
            
            1,957,452
            
            
            
            383,632710,809
            
            
            
            80,767
            
            
            
            1,957,452
            
            
            
            383,632Cost
                of Sales
            
            
            541,620
            
            
            
            285,908
            
            
            
            1,646,213
            
            
            
            491,376Gross
                Profit
            
            
            169,189
            
            
            
            (205,141
            )
            
            
            311,239
            
            
            
            (107,744
            )ExpensesDepreciation
                and Amortization
            
            
            3,339
            
            
            
            9,609
            
            
            
            6,677
            
            
            
            9,609Salaries
                and Wages
            
            
            104,216
            
            
            
            97,828
            
            
            
            213,880
            
            
            
            236,761Stock
                Based Compensation
            
            
            25,555
            
            
            
            3,423
            
            
            
            45,481
            
            
            
            108,173Professional
                Fees
            
            
            154,798
            
            
            
            90,125
            
            
            
            230,098
            
            
            
            124,326Bad
                debt expense
            
            
            209,160
            
            
            
            -
            
            
            
            209,160
            
            
            
            -General
                & Administrative
            
            
            17,195
            
            
            
            53,310
            
            
            
            106,229
            
            
            
            99,658Total
                Expenses
            
            
            514,263
            
            
            
            254,295
            
            
            
            811,525
            
            
            
            578,527Loss
                from Operations
            
            
            (345,074
            )
            
            
            (459,436
            )
            
            
            (500,286
            )
            
            
            (686,271
            )Other
                Income (Expenses)Interest,
                income
            
            
            150
            
            
            
            -
            
            
            
            300
            
            
            
            329Interest,
                expense
            
            
            (304
            )
            
            
            (231
            )
            
            
            (838
            )
            
            
            -Total
                other Income (expense)
            
            
            (154
            )
            
            
            (231
            )
            
            
            (538
            )
            
            
            329Loss
                from Continuing Operations before tax
            
            
            (345,228
            )
            
            
            (459,667
            )
            
            
            (500,824
            )
            
            
            (685,942
            )Income
                tax
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Loss
                from Continuing Operations
            
            
            (345,228
            )
            
            
            (459,667
            )
            
            
            (500,824
            )
            
            
            (685,942
            )Discontinued
                OperationsLoss
                on disposal of Discontinued Operations
            
            
            -
            
            
            
            -
            
            
            
            (27,852
            )
            
            
            -Gain
                (Loss) from Discontinued Operations
            
            
            -
            
            
            
            56
            
            
            
            7,043
            
            
            
            (7,524
            )Total
                gain (loss) from Discountinued Operations
            
            
            -
            
            
            
            56
            
            
            
            (20,809
            )
            
            
            (7,524
            )Net
                Loss
            
            $
            (345,228
            )
            
            $
            (459,611
            )
            
            $
            (521,633
            )
            
            $
            (693,466
            )Basic
                earnings per share:Loss
                per share Continuing operations
            
            
            (0
            )
            
            
            (0
            )
            
            
            (0
            )
            
            
            (0
            )Loss per share Discontinued operations
            
            $
            (0.04
            )
            
            $
            (0.06
            )
            
            $
            (0.07
            )
            
            $
            (0.10
            )Weighted
                average shares
            
            
            7,970,124
            
            
            
            7,289,501
            
            
            
            7,846,322
            
            
            
            7,144,471




The
            accompanying notes are an integral part of these financial
            statements
 4


**Trycera
                  Financial, Inc.**Consolidated
                  Statements of Cash FlowsFor
                  the Six Months EndedJune
              
              
              June30,
                  2007
              
              
              
              30,
                  2006(Unaudited)
              
              
              (Unaudited)Cash
                  Flows from Operating ActivitiesNet
                  Loss
              
              $
              (521,633
              )
              
              $
              (693,466
              )Adjustments
                  to Reconcile Net Loss to Net CashUsed
                  by Operations;Depreciation
                  and amortization
              
              
              6,676
              
              
              
              11,357Depreciation
                  and amortization on discontinued operation
              
              
              581
              
              
              
              -Loss
                  on sale of assets
              
              
              27,852
              
              
              
              -Stock
                  issued for services
              
              
              76,570
              
              
              
              35,000Stock
                  options and warrants
              
              
              45,481
              
              
              
              108,173(Increase)
                  decrease in accounts receivable
              
              
              (1,729
              )
              
              
              46,223(Increase)
                  decrease in prepaid and other current assets
              
              
              320
              
              
              
              32,052(Increase)
                  decrease in deposits
              
              
              4,199
              
              
              
              -Increase
                  (decrease) in accounts payable
              
              
              30,240
              
              
              
              1,743Increase
                  (decrease) in portfolio reserves
              
              
              8,749
              
              
              
              85,291Increase
                  (decrease) in accrued expenses
              
              
              (40,484
              )
              
              
              (1,523
              )Increase
                  (decrease) in unearned revenue
              
              
              -
              
              
              
              72,809Net
                  Cash Used by Operating Activities
              
              
              (363,178
              )
              
              
              (302,341
              )Cash
                  Flows from Investing ActivitiesAcquisition
                  of intangible assets and other
              
              
              -
              
              
              
              (1,197
              )Proceeds
                  from disposal of discontinued operations
              
              
              5,000
              
              
              
              -Net
                  Cash Provided (Used) by Investing Activities
              
              
              5,000
              
              
              
              (1,197
              )Cash
                  Flows from Financing ActivitiesProceeds
                  from issuance of common stock
              
              
              315,000
              
              
              
              457,068Proceeds
                  from line of credit
              
              
              20,000
              
              
              
              (5,390
              )Net
                  Cash Provided by Financing Activities
              
              
              335,000
              
              
              
              451,678Net
                  Increase (Decrease) in Cash and Cash Equivalents
              
              
              (23,178
              )
              
              
              148,140Cash
                  and Cash Equivalents at Beginning of Period
              
              
              87,193
              
              
              
              211,523Cash
                  and Cash Equivalents at End of Period
              
              $
              64,015
              
              
              $
              359,663Cash
                  Paid for:Interest
              
              $
              534
              
              
              $
              992Income
                  Taxes
              
              $
              -
              
              
              $
              -Non-cash
                  financing activities:Common
                  stock issued for services
              
              $
              76,570
              
              
              $
              35,000





The
          accompanying notes are an integral part of these financial
          statements
 5
 Trycera
            Financial, Inc.
 Notes
            to
            the Financial Statements
 June
            30,
            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 and six months ended June 30, 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 endedJune
                    30,
                2007
              
              
              June
                    30,
                2006(Unaudited)
              
              
              (Unaudited)Basic
                  and dilutive Earnings per share:Income
                  (Loss) (numerator)
              
              $
              (345,228
              )
              
              $
              (459,611
              )Shares
                  (denominator)
              
              
              7,970,124
              
              
              
              7,289,501Per
                  Share Amount
              
              $
              (.04
              )
              
              $
              (.06
              )
  6
   For
                  the six months endedJune
                  30,
                2007
              
              
              June
                  30,
                2006(Unaudited)
              
              
              (Unaudited)Basic
                  and dilutive Earnings per share:Income
                  (Loss) (numerator)
              
              $
              (521,633
              )
              
              $
              (693,466
              )Shares
                  (denominator)
              
              
              7,846,322
              
              
              
              7,144,471Per
                  Share Amount
              
              $
              (.07
              )
              
              $
              (.10
              )





NOTE
      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 June 30, 2007:




2004
                  Stock PlanAmount
                of 
                  Shares
              
              
              Weighted
                  Average
                Exercise
                  PriceOutstanding
                  at January 1, 2007
              
              
              2,874,750
              
              
              $
              .63Options
                  Granted
              
              
              470,000
              
              
              $
              1.01Options
                  Exercised
              
              
              -
              
              
              
              -Options
                  Canceled
              
              
              23,50023,500
              
              
              
              1.00Options
                  Outstanding at June 30, 2007
              
              
              3,321,250
              
              
              $
              .68Options
                  Exercisable at June 30, 2007
              
              
              2,661,873
              
              
              $
              .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 June 30, 2006:




2004
                  Stock PlanAmount
                of 
                  Shares
              
              
              Weighted
                  Average
                Exercise
                  PriceOutstanding
                  at January 1, 2006
              
              
              3,070,250
              
              
              $
              .62Options
                  Granted
              
              
              120,000
              
              
              $
              .36Options
                  Exercised
              
              
              -
              
              
              
              -Options
                  Canceled
              
              
              (252,750
              )
              
              
              .59Options
                  Outstanding at June 30, 2006
              
              
              2,836,250
              
              
              
              .61Options
                  Exercisable at June 30, 2006
              
              
              2,076,667
              
              
              $
              .56




The
      Company, in accordance with Statement of Financial Accounting Standards No.
      123R, *“Accounting for Stock-Based Compensation,”* recognized $25,555 and
      $3,423, for the three months ended June 30, 2007 and 2006, respectively. The
      Company recognized $45,481 and $108,173, respectively for the six months ended
      June 30, 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:




June
                30, 2007Five
                Year Risk Free Interest Rate
            5.10%Dividend
                Yield
            0%Volatility
            230%Average
                Expected Term (Years to Exercise)
            5





7


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 June 30,
        2007
        are:




Range
                of
              Exercise
                Price
            
            
            Number
                of
              Options
                Granted
            
            
            Weighted
                Average
              Exercise
                Price
            
            
            Average
                Remaining Contractual
              Life
                (Years)
            
            
            Weighted
              Numberof
              Options
                Vested
            
            
            Average
              Exercise
              Price$
            .001-
                $.99
            
            
            
            2,431,250
            
            
            $
            .55
            
            
            
            2.75
            
            
            
            2,485,517
            
            
            $
            .55$
            1.00-
                $2.00
            
            
            
            593,500
            
            
            $
            1.04
            
            
            
            4.25
            
            
            
            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 OptionsGranted
              
              
              Weighted
                  Average Exercise Price
              
              
              Average
                  Remaining Contractual Life (Years
              
              
              Weighted
                  Number of Options of Options
              
              
              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
  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:




For
                three three months ended
              
              June
                  30,
                2007
              
              
              June
                  30,
                2006(Unaudited)
              
              
              (Unaudited)Gain
                  from discontinued Operations, net
              
              $
              -
              
              
              $
              56




8


The
      financial results included in discontinued operations are:




For
                  the six months ended
              
              June
                  30,
                2007
              
              
              June
                  30,
                2006(Unaudited)
              
              
              (Unaudited)Loss
                  on disposal of discontinued Operations, net
              
              $
              (27,582
              )
              
              $
              -Gain
                  (Loss) from discontinued Operations, net
              
              $
              7,043
              
              
              $
              (7,524
              )






NOTE
      4
– RESTATEMENT AND RECLASSIFICATION





We
      have
      reclassified our Statement of Operations for the three months ended June 30,
      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.


9





***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***





On
      June
      11, 2007, Matthew S. Kerper tendered his resignation as the President and Chief
      Executive Officer of Trycera Financial. The resignation was effective June
      30,
      2007. Mr. Kerper had served as President and Chief Executive Officer since
      May
      10, 2004. Mr. Kerper also voluntarily cancelled his employment agreement with
      Trycera Financial effective June 30, 2007. Mr. Kerper still maintains his board
      position with Trycera. Effective June 30, 2007, Bryan Kenyon, in his capacity
      as
      Chief Operating Officer of the company, will serve as the company's principal
      executive officer. The company issued a press release dated June 14, 2007,
      in
      connection with Mr. Kerper's resignation.





During
      the quarter ended June 30, 2007, we continued to focus on card and portfolio
      aggregation while managing through a key program suspension.  While
      working closely with a key program card marketer, IMG, we lost our first quarter
      revenue growth momentum by having to suspend services for the flagship IMG
      program, the Plan First Financial Solutions (PFFS) product.  IMG
      markets four cards under their card marketer stewardship and the PFFS product
      is
      the largest.  The collective programs under the IMG umbrella represent
      a focus on the debt management space and their 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 proactively manage
      alternative financial solutions.  While 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
      non-payment for services as adversely impacted the operations of the
      company.  A significant resource allocation was committed in the
      second quarter to resolve the ongoing issue of non-payment with IMG and we
      continue to pursue actions to recover the outstanding receivables
      due.  At the end of the second quarter there was limited progress on
      arriving at a solution and further legal actions may be required.





10


As
      a collateral benefit of working with
      IMG, the company has developed and deployed a multi-purse card that will allow
      future 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 second quarter, we continued
      to develop programs with our most recent bank partner, New Millennium
      Bank.  There are two programs in development that will be issued
      through Mew Millennium Bank, a money share program and a payroll
      program.  Unlike traditional transaction models, by working closely
      with New Millennium Bank, we are able to offer a simple fixed cost pricing
      solution that provides our program partners the flexibility of working with
      wide
      reaching prepaid programs and align cardholders with a progressive state
      bank.





In
      the second quarter we also continued
      to focus on the sale of our semi-customized OEM platform offering.  In
      order to recover expanding program implementation costs, we increased the base
      pricing of the OEM program to $50,000 minimum, up from the previous $30,000
      floor. Developed 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.  As of the close of the second quarter there
      are two new sales opportunities focused on the OEM platform.  Each of
      these programs represents a unique target market and business
      channel.





During
      the second quarter we also began
      selling our alternative credit reporting product and service branded under
      the
      name My Full Credit.  The product and service is sold primarily as a
      bundled offer, where a company prepaid card is provided to support the payments
      that are reported by the My Full Credit alternative credit reporting
      product.  This complementary product and service program allows
      participants to report non-traditional payments to over 140 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 allows credit reporting agencies to potentially
      better understand and evaluate 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 second quarter the My Full Credit development
      incurred expenses in excess of $15,000, much of which is planned to be recouped
      when initial revenue streams are realized in the third quarter of
      2007.





11


In
      the
      second quarter of 2007 we also realized impacts 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 which
      resulted in a non material write down of outstanding receivables and no
      additional income in the second quarter.





In
      addition to our core operations, we
      continue to expand our search for small card marketers, card portfolio companies
      and complementary and financial services-related companies for acquisition.
      Through the second quarter of 2007 we evaluated two separate opportunities
      and
      we continue to pursue each opportunity through a secondary due diligence phase
      that is currently underway with each targeted opportunity.





Separately,
      our wholly owned
      subsidiary, isleCORE Systems, located in Honolulu, Hawaii, was disposed and
      thus
      provided no new incremental revenues in the second quarter.  The sale
      was completed in March 2007 but we did continue to collect accounts receivable
      throughout the second quarter.  We are carrying accounts receivable
      into the third quarter and expect the payments to be resolved or written off
      at
      the end of the third quarter.  IsleCORE has been treated as a
      discontinued operation and the Consolidated Statements of Operations reflect
      such treatment.





As
      we approached the end of the second
      quarter, we entered into a renewable six month agreement with an investor
      relations and public relations group named TMS Capital, LLC.  Based in
      New York, TMS Capital has been hired to help the company distribute relevant
      news and information about the company’s performance, customer wins and losses
      and other information that may be useful for shareholders and prospective
      investors to understand.





***Employees***





At
      August 3, 2007, we had three
      full-time equivalents, namely our principal executive officer, COO and CFO,
      Bryan Kenyon, and two other team members whose roles
      include:  Director of Product Development and a key IT
      resource.  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.





12


***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 June 30, 2007.





***Results
      of Operations***





***For
      the three months ended June 30, 2007***





**Revenue**





Revenue
      from continuing operations was $710,809 and $80,767 for the three months ended
      June 30, 2007 and 2006, respectively, representing an increase of $630,042
      or
      780%. 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. Revenue was unfavorably offset by the cessation of
      reselling bill payment management services as a result of the ongoing payment
      dispute with our customer IMG. Of the increase in revenue for the three months
      ended June 30, 2007, approximately $381,465 resulted from the sale of bill
      payment management services.  We have also contracted with additional
      third party distributors and online marketers which have the potential to
      generate additional revenue in the future quarters.





In
      efforts to boost per card revenues and further add new revenue sources to offset
      costs, we deployed resources throughout the second 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.





**Cost
      of Sales and Gross Profit**





Cost
      of
      sales was $541,620 and $285,908 for the three months ended June 30, 2007 and
      2006, respectively, representing an increase of $255,712 or 89%.  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 $169,189 and gross operating loss was $205,141 for
      the three months ended June 30, 2007 and 2006, respectively. The comparative
      three month period was unfavorably impacted by a change in bank policy resulting
      in the immediate write-off of negative card balances in the amount of $329,586.
      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.





13


**Operating
      expenses**





Operating
      expenses were $514,263 and $254,295 for the three months ended June 30, 2007
      and
      2006, respectively, representing an increase of $259,968 or 102%.  The
      major components of our operating expense for the three months ended June 30,
      2007 are bad debt expense (41%), salaries and wages (20%) and professional
      fees
      (30%).





Bad
      debt
      expense was $209,160 and $0 for the three months ended June 30, 2007 and 2006,
      respectively, representing an increase of $209,160.  The increase
      resulted largely from our ongoing payment dispute with our customer
      IMG.





Salaries
      and wages expenses were $104,216 and $97,828 for the three months ended
      June 30, 2007 and 2006, respectively, representing an increase of $6,388 or
      7%.  The increase resulted largely from increased compensation to the
      same employees. Initially, Trycera will save approximately $10,000 per month,
      commencing July 1, 2007, due to the departure of Mr. Kerper, the former
      President and CEO, as it evaluates the options with regard to its ongoing
      staffing requirements.





Professional
      fees and expenses were $154,798 and $90,125 for the three months ended
      June 30, 2007 and 2006, respectively, representing an increase of $64,673
      or 72%. The increase results from the non cash expense of a higher number of
      shares paid in respect of accounting resources associated with a third party
      service provider in addition to increased legal fees related to a shareholder
      meeting, and increased contract activity related to new customers and the
      current payment disputes.





**Discontinued
      Operations**





*Results
      of discontinued operations*





Having
      disposed of the IsleCORE in the first quarter, the results of the subsidiary
      have been shown as a discontinued operation for the purposes of our financial
      statements.  Net income was $0 for the three months ended
      June 30, 2007, compared to income of $56 for the comparative
      period.





**Net
      loss from Continuing Operations**





We
      incurred net losses of $345,228 and $459,667 for the three months ended June
      30,
      2007 and 2006, respectively, representing a decrease in net loss of $114,383
      or
      25%.  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.





14


***For
      the six months ended June 30, 2007***





**Revenue**





Revenue
      from continuing operations was $1,957,452 and $383,632 for the six months ended
      June 30, 2007 and 2006, respectively, representing an increase of $1,573,820
      or
      410%. 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. Revenue was unfavorably offset by the cessation of
      reselling bill payment management services as a result of the ongoing payment
      dispute with our customer IMG. Of the increase in revenue for the six months
      ended June 30, 2007, approximately $1,344,447 resulted from the sale of bill
      payment management services.  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 $1,646,213 and $491,376 for the six months ended June 30, 2007 and
      2006, respectively, representing an increase of $1,154,837 or
      235%.  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 $311,239 and gross operating loss was $107,744 for
      the six months ended June 30, 2007 and 2006, respectively. The comparative
      six
      month period was unfavorably impacted by a change in bank policy resulting
      in
      the immediate write-off of negative card balances in the amount of $329,586.
      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.





**Operating
      expenses**





Operating
      expenses were $811,525 and $578,527 for the six months ended June 30, 2007
      and
      2006, respectively, representing an increase of $232,998 or 40%.  The
      major components of our operating expense for the six months ended June 30,
      2007
      are bad debt expense (26%), salaries and wages (26%) and professional fees
      (28%).





Bed
      debt
      expense was $209,160 and $0 for the six months ended June 30, 2007 and 2006,
      respectively, representing an increase of $209,160.  The increase
      resulted largely from our ongoing payment dispute with our customer
      IMG.





Salaries
      and wages expenses were $213,880 and $236,761 for the six months ended
      June 30, 2007 and 2006, respectively, representing a decrease of $22,881 or
      10%.  The decrease resulted from the departure of the inhouse
      financial controller during 2006, whereas these services are now being
      outsourced. Initially, Trycera will save approximately $10,000 per month,
      commencing July 1, 2007, due to the departure of Mr. Kerper, the former
      President and CEO, as it evaluates the options with regard to its ongoing
      staffing requirements.





15


Professional
      fees and expenses were $230,098 and $124,326 for the six months ended
      June 30, 2007 and 2006, respectively, representing an increase of $105,772
      or 85%. The increase results from the non cash expense of higher shares paid
      in
      respect of accounting resources associated with a third party service provider,
      (this work was handled inhouse during the first three months of 2006), in
      addition to increased legal fees related to a shareholder meeting and increased
      contract activity related to new customers and the current payment
      disputes.





**Discontinued
      Operations**





*Loss
      on sale of IsleCORE subsidiary; Discontinued Operations*





As
      previously stated, and more fully described above, we disposed of out IsleCORE
      subsidiary. The sale was completed in the first quarter. 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
      six months ended June 30, 2007, compared to a loss of $7,524 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.





**Net
      loss from Continuing Operations**





We
      incurred net losses from Continuing Operations of $500,824 and $685,942 for
      the
      six months ended June 30, 2007 and 2006, respectively, representing a decrease
      in net loss of $185,118 or 27%.  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.





16


***Liquidity
      and Capital Resources***





A
      primary source of operating capital
      for the six months ended June 30, 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 June 30, 2007, cash totaled
      $64,015 as compared with $87,193 of cash at December 31, 2006, resulting in
      a
      decrease of $23,177 in cash and cash equivalents.  The decrease 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 six months ended June 30, 2007 we used $363,178 of
      cash in operations.  For the comparable period in the prior year we
      used $302,341 of cash in operations.





Working
      capital was $76,558 at June 30,
      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.





Proceeds
      from the private stock
      offerings have continued to fund operations through the second quarter of 2007
      to support the growth of the business.  Management believes that with
      funds accumulated from a new June 15, 2007 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 end of the year in
      2007.  We are dependent on additional funding to satisfy our existing
      operating cash needs and working capital requirements.  Our monthly
      cash requirements are currently approximately $40,000 - $80,000 (depending
      on
      the timing of payments from our marketing partners) as we continue to evaluate
      the business and expand headcount and operations.  Management
      estimates that future monthly cash requirements will stabilize as headcount
      and
      cost of goods grow, with approximate monthly cash requirements nearing $80,000
      per month.  Any additional funds from operations and new private
      placement offerings would likely extend this estimated period.  With
      the issuance of the June 15, 2007 private placement offering, and in conjunction
      with key card program delays from the late second quarter we need additional
      funding from new investors.  Program delays and the key program
      suspension in the second quarter require us to seek additional funding from
      investors and delay expected cash flow neutrality into late this year or early
      next year.





17


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.





As
      reported in the first quarter, our
      key processing partner, Galileo Processing, continues to adversely impact our
      primary prepaid card business model.  Program launches are behind
      schedule as a direct function of delivery delays related to processing platform
      features and functionalities, including dual card functionality and overdraft
      protection.  Integration timing and scalability constraints have also
      contributed in part to a key program suspension and continue to affect program
      launches and projected implementation lead times.  While we work
      closely with our processing partner, we may be forced to raise further capital
      to build an infrastructure and middle ware that enables more control for the
      company and provides a more turnkey solution that will allow 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.





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 June 30, 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.





18


***Subsequent
      Events***





The
      following material events occurred
      subsequent to the quarter ended June 30, 2007:





On
      July
      20, 2007, we signed a letter of intent (LOI) with Ecount, a wholly owned
      subsidiary of Citibank N.A. to acquire a small general purpose reloadable card
      portfolio.  The LOI is expected to lead to a definitive agreement
      within 3 weeks of the execution of the LOI.





On
      July
      18, 2007, we sent Integrity Marketing Group (IMG) a letter that outlined a
      cancellation of their Plan First Financial Solutions (PFFS)
      program.  The cancellation stems from non-payment for services related
      to the PFFS program and subsequent card issuance.  As a direct result
      of the PFFS cancellation, all card stock, card collateral materials and
      marketing materials are scheduled to be destroyed.  This cancellation
      does not affect existing cardholders as they will continue to be serviced as
      valued cardholders.  It remains unknown whether an accord can be
      reached with IMG, but this has developed into a material adverse change to
      the
      underlying revenues and the resulting nonpayment has had an unfavorable impact
      to the second quarter and future quarters of working capital and capital
      resources as well as significantly reducing revenue over prior
      levels.





***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.





19


***ITEM3.  CONTROLS
      AND
      PROCEDURES***





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





With
      the participation of management,
      Bryan W. Kenyon, our principal executive officer and principal financial officer
      has 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 he has 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 June 30, 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.





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 December 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.





20


**PARTII**





***ITEM1.  LEGAL
      PROCEEDINGS***





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 June 13, 2007, our intellectual property counsel
      responded to their claims by requesting patent claim charts and as of August
      6,
      2007 we have not received a further response.  Management and counsel
      have not reached a conclusion of the merits of this claim and continue to
      evaluate the applicability of the claim to our business.





On
      April 30, 2007, our counsel 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 has contributed to a material adverse change to the underlying financials
      and continued nonpayment of receivables exceeding $110,000 is having an
      unfavorable affect to the current working capital and capital resources. 
It is likely that the Company will be forced to pursue legal action in the
      coming quarter to recover all receivables or portions thereof




***ITEM4.  SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY
        HOLDERS.***
 
 We
        held our 2007 annual meeting of
        shareholders on May 16, 2007.  At the meeting the shareholders
        re-elected each of the following existing directors to serve for a term of
        one
        year and until his successor is elected and qualified:  Matthew S.
        Kerper; Alan S. Knitowski; Luan Dang; Randy Cherkas; and Robert M.
        Lang.  The shareholders also ratified the appointment of Chisholm,
        Bierwolf & Nilson, LLC, Certified Public Accountants, as our independent
        registered public accountant for the fiscal year ending December 31,
        2007.  Further, the shareholders approved the amendment to the seventh
        article of our articles of incorporation to limit the monetary liability
        of our
        directors and officers under both Nevada and California law.  In
        connection with each of these items, 4,069,644 votes, representing approximately
        51.43% of the outstanding voting shares, were cast for each of the nominees
        and
        for each proposal.  No votes were withheld from voting for the
        directors and no votes were cast against any proposal or abstained from voting
        for such proposal.  There were no abstentions or broker
        non-votes.
 ***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 Principal Financial Officer32.1
            
            Section
                1350 Certification of Principal Executive Officer and Principal Financial
                Officer











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**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:
            August
              14, 2007By:
            /s/
              Bryan
              KenyonBryan
              KenyonChief Financial
                Officer and Chief Operating Officer
              (Principal
                Executive Officer and Principal Financial Officer)















22