UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549


                                    FORM 10-K


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934


                  For the Fiscal Year Ended: December 31, 2008


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


                     FOR THE TRANSITION PERIOD FROM __ TO __


                          COMMISSION FILE NO. 000-33129


                     INTERNATIONAL CARD ESTABLISHMENT, INC.
        _________________________________________________________________
        (Exact Name of Small Business Issuer as Specified in its Charter)


           Delaware                                              95-4581903
_______________________________                              ___________________
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


        555 Airport Way, Suite A
         Camarillo, California                                          93010
________________________________________                              __________
(Address of principal executive offices)                              (Zip code)


                    Issuer's telephone number: (866) 423-2491


         Securities registered under Section 12(b) of the Exchange Act:

                                      None


         Securities registered under Section 12(g) of the Exchange Act:

                    common stock, par value $.0005 per share


     Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

     Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

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

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

     Large Accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ]
Smaller reporting company [X]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K [ ]


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

     Based on the closing price of December 31, 2008, the aggregate market value
of common stock held by non-affiliates of the registrant was $987,579.

     The number of common shares outstanding of the registrant was 35,873,703 as
of March 19, 2009.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE.

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

























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                                TABLE OF CONTENTS



                                     PART I

ITEM 1.  Description of Business...............................................4
ITEM 1A. Risk Factors.........................................................10
ITEM 2.  Properties...........................................................15
ITEM 3.  Legal Proceedings....................................................15
ITEM 4.  Submission of Matter to Vote of Security Holders.....................15

                                  PART II

ITEM 5.  Market For Registrant's Common Equity, Related Stockholder
         Matters and Issuer Purchases of Equity Securities....................15
ITEM 6.  Selected Financial Data..............................................17
ITEM 7.  Management's Discussion and Analysis.................................18
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk...........21
ITEM 8.  Financial Statements and Supplementary Data..........................22
ITEM 9.  Changes In and Disagreements with Accountants on Accounting
         and Financial Disclosure.............................................39
ITEM 9A. Controls and Procedures..............................................39
ITEM 9B. Other Information....................................................40
ITEM 10. Directors, Executive Officers and Corporate Governance...............40

                                    PART III

ITEM 11. Executive Compensation...............................................41
ITEM 13. Certain Relationships and Related Transactions, and
         Director Independence................................................44
ITEM 14. Principal Accountant Fees and Services...............................44

                                     PART IV

ITEM 15. Exhibits and Financial Statement Schedules...........................45
         Signatures...........................................................45



































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                 STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

In this annual report, references to "International Card Establishment, Inc.,"
"ICE", "the Company," "we," "us," and "our" refer to International Card
Establishment, Inc. and its subsidiaries.

Except for the historical information contained herein, some of the statements
in this Report contain forward-looking statements that involve risks and
uncertainties. These statements are found in the sections entitled "Business,"
"Management's Discussion and Analysis or Plan Operation," and "Risk Factors."
They include statements concerning: our business strategy; expectations of
market and customer response; liquidity and capital expenditures; future sources
of revenues; expansion of our proposed product line; and trends in industry
activity generally. In some cases, you can identify forward-looking statements
by words such as "may," "will," "should," "expect," "plan," "could,"
"anticipate," "intend," "believe," "estimate," "predict," "potential," "goal,"
or "continue" or similar terminology. These statements are only predictions and
involve known and unknown risks, uncertainties and other factors, including, but
not limited to, the risks outlined under "Risk Factors," that may cause our or
our industry's actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by such forward-looking
statements. For example, assumptions that could cause actual results to vary
materially from future results include, but are not limited to: our ability to
successfully develop and market our products to customers; our ability to
generate customer demand for our products in our target markets; the development
of our target markets and market opportunities; our ability to manufacture
suitable products at competitive cost; market pricing for our products and for
competing products; the extent of increasing competition; technological
developments in our target markets and the development of alternate, competing
technologies in them; and sales of shares by existing shareholders. Although we
believe that the expectations reflected in the forward looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Unless we are required to do so under US federal securities
laws or other applicable laws, we do not intend to update or revise any
forward-looking statements.

                                     PART I

ITEM 1.       DESCRIPTION OF BUSINESS

HISTORY

International Card Establishment, Inc. (formerly Summit World Ventures, Inc.)
was incorporated on December 18, 1986, under the laws of the State of Delaware
to engage in any lawful corporate activity, including, but not limited to,
selected mergers and acquisitions. Prior to July 28, 2000, we were in the
developmental stage, whose sole purpose was to locate and consummate a merger or
acquisition with a private entity, and we did not have any operations. On July
28, 2000, we acquired iNetEvents, Inc., a Nevada corporation and commenced
operations. iNetEvents, Inc., a Nevada corporation, was incorporated on February
3, 1999, and provided Internet support and supply software for real time
event/convention information management.

On January 16, 2003, we entered into a Plan and Agreement of Reorganization with
International Card Establishment, Inc., a Nevada corporation, and its
shareholders. International Card Establishment, Inc., a Nevada corporation, was
incorporated on July 26, 2002. As part of the acquisition, a reorganization in
the form of a reverse merger, International Card Establishment, Inc. became our
wholly-owned subsidiary, and there was a change of our control. Following the
International Card Establishment, Inc. acquisition we changed our corporate name
from iNetEvents, Inc. to International Card Establishment, Inc. and reverse
split our outstanding shares of common stock on a one for two share basis.

On December 15, 2003, we entered into a Plan and Agreement of Reorganization
with GlobalTech Leasing, Inc., a California corporation, and its shareholders.
On December 29, 2003, GlobalTech Leasing, Inc. became our wholly owned
subsidiary. In May of 2006 we sold our GlobalTech Leasing, Inc. subsidiary which
comprised our entire equipment leasing segment.

Effective September 8, 2004, we entered into a Plan and Agreement of
Reorganization with Neos Merchant Solutions, Inc., a Nevada corporation, and its
shareholders. Effective September 8, 2004, Neos Merchant Solutions, Inc. became
our wholly owned subsidiary.

In May 2008 we started LIFT Network, new sales division focused on marketing for
small to medium sized businesses. LIFT Network is based in our corporate offices
in Camarillo, California with a small office in Tampa, Florida.


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INDUSTRY OVERVIEW

The use of card-based forms of payment, such as credit and debit cards, by
consumers in the United States has steadily increased over the past ten years.
The proliferation of credit and debit cards has made the acceptance of
card-based payment a necessity for businesses, both large and small, in order to
remain competitive. In its 2008 publication on transaction processing, leading
equity research firm Raymond James Financial reported that overall credit card
transactions will grow domestically from an estimated 26.6 billion transactions
in 2006 to 36.2 billion by 2010. Raymond James reported that total credit card
purchase volume will grow from $1.8 trillion in 2006 to $2.6 trillion by 2010,
with average tickets increasing from $70.10 per transaction to $71.50 over the
same period.

We believe that the card-based payment processing industry will continue to
benefit from the following trends:

FAVORABLE DEMOGRAPHICS. As consumers age, we expect that they will continue to
use the payment technology to which they have grown accustomed. Consumers are
beginning to use card-based and other electronic payment methods for purchases
at an earlier age. As these consumers who have witnessed the wide adoption of
card products, technology and the Internet comprise a greater percentage of the
population and increasingly enter the work force, we expect that purchases using
card-based payment methods will comprise an increasing percentage of total
consumer spending.

INCREASED CARD ACCEPTANCE BY SMALL BUSINESSES. The proliferation of credit and
debit cards has made the acceptance of card-based payment a necessity for
businesses, both large and small, in order to remain competitive. As a result,
many of these small to medium-sized businesses are seeking, and we expect many
new small to medium-sized businesses to continue to seek, to provide customers
with the ability to pay for merchandise and services using credit or debit
cards, including those in industries that have historically accepted cash and
checks as the only forms of payment for their merchandise and services.
Historically, larger acquiring banks have marketed credit card processing
services to national and regional merchants and have not focused on small to
medium-sized merchants, as small to medium-sized merchants are often perceived
as too difficult to identify and expensive to service. International Card
Establishment, Inc. ("ICE") targets these small to medium-size merchants as its
primary customer base. These merchants generally have a lower volume of credit
card transactions, are difficult to identify and have traditionally been
underserved by credit card processors.

GROWTH IN CARD-NOT-PRESENT TRANSACTIONS. Market researchers expect dramatic
growth in card-not-present transactions due to the rapid growth of the Internet.
US online retail reached $175 billion in 2007 in the USA and is projected to
grow to $335 billion by 2012, as forecasted by Forrester Research, Inc. This
growth is based on two primary factors:

     o    continued shift of sales away from stores and to online and catalog
          purchases, and

     o    online shoppers appear to be effected less by the current economic
          client.

THE BUSINESS OF OUR SUBSIDIARY ICE

BUSINESS SUMMARY

International Card Establishment, Inc. ("ICE") targets small to medium-size
merchants as its primary customer base. These merchants generally have a lower
volume of credit card transactions, are difficult to identify and have
traditionally been underserved by credit card processors. Management of ICE
estimates that there are approximately 5.7 million merchant locations in the
United States currently accepting Visa and MasterCard credit cards in the small
merchant market segment and that approximately 4.2 million of such small
merchant locations utilize electronic processing for credit card transactions.
Management believes the small and medium-sized merchant market offers ICE
significant growth opportunities for the "first time" installation and
subsequent servicing of credit card authorization and payment systems because
this market has traditionally not been targeted by larger credit card companies.

ICE utilizes contractual relationships with agents to reach merchants that would
otherwise be difficult to identify and locate using customary marketing
practices. Pursuant to these relationships, agents endorse the processing
systems marketed and serviced by ICE and participate in originating new
customers for ICE. Through the use of independent outside agents, management
believes ICE's cost structures will continue to be competitive with the cost
structures of its competitors.


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ICE provides comprehensive customer service and support to its merchants
requiring consultative problem solving and account management. ICE also provides
value added products such as Gift & Loyalty, through our NEOS Merchant Solutions
subsidiary, that distinguish ICE from its competitors. Management believes that
providing cost-effective, reliable and responsive service and value added
services and products is an effective long-term strategy to retain its merchant
base. Through agent based acquisitions of merchant accounts, merchant retention
and the increasing use and acceptance of credit cards, management believes ICE
will develop a stable and growing recurring base of revenues.

MARKET OUTLOOK

Historically, larger acquiring banks have marketed credit card processing
services to national and regional merchants, not emphasizing small to
medium-sized merchants, as small merchants are often difficult to identify and
expensive to service. This created an opportunity for non-banks, including
independent sales organizations ("ISO") such as ICE, which recognized the
business potential of providing electronic processing to these small merchants.
Management estimates that there are approximately 5.7 million small merchant
locations nationwide accepting Visa and MasterCard credit cards. The transaction
processing industry has undergone rapid consolidation over the last several
years with the controlling over 50% of the market share (First Data - 49.51%, BA
Merchant Services - 13.09% and Nova/Key - 8.41%) according to the March 2008
Nilson Report. Merchant requirements for improved customer service and the
demands for additional customer applications have made it difficult for some
community and regional banks and ISO's to remain competitive. Many of these
providers are unwilling or unable to invest the capital required to meet those
evolving demands, and are leaving the transaction processing business or
otherwise seeking partners to provide transaction processing for their
customers. Despite this ongoing consolidation, the industry remains fragmented
with respect to the number of entities providing merchant services. Management
believes that these factors will result in continuing industry consolidation
over the next several years.

OPERATING STRATEGY

FOCUS ON SMALL TO MEDIUM-SIZED MERCHANTS. ICE has focused its marketing efforts
on small to medium-sized merchants, which have traditionally been underserved by
processing banks. Management believes it understands the unique characteristics
of this market segment and has tailored its marketing and servicing efforts
accordingly. ICE believes it is able to provide credit and debit card processing
at rates that are generally competitive with those available from other
processors, as well as value added products such as Gift & Loyalty.

INCREASE AGENT BASE. ICE utilizes contractual relationships with agents to reach
merchants that would otherwise be difficult to identify and locate using
customary marketing practices. Pursuant to these relationships, agents endorse
the processing systems marketed and serviced by ICE and participate in
originating new customers for ICE. Using the leads generated by its agents
provides ICE with a cost-effective means of contacting small merchants that
traditionally have been difficult to reach. ICE actively recruits new agents and
is focused on expansion of its agent base as a means of increasing overall
revenues.

DELIVER CUSTOMER SERVICE SUPPORT AND VALUE ADDED PRODUCTS SERVICES. Management
believes providing cost-effective, reliable and responsive service and value
added products and services is an effective long-term strategy to retain its
merchant base. The size of ICE's merchant base enables it to support a customer
service program designed to provide consultative problem solving and account
management. ICE also distinguishes itself from many competitors by offering
value added products such as Gift & Loyalty and will continue to broaden its
product and service offerings which management believes will appeal to small to
medium size merchants.

INCREASE OPERATING EFFICIENCIES. Currently, ICE outsources many aspects of its
processing services to third-parties which have excess capacity and the
expertise to handle ICE's needs.

Management believes because its merchant base generates significant transaction
volume in the aggregate, ICE has been able to negotiate competitive pricing from
its processing providers at favorable rates. Management believes that it will
achieve significant reductions in certain operating expenses through operational
efficiencies, economies of scale and improved labor productivity as overall
revenues increase. ICE intends to continue to outsource certain components of
its processing services as long as it is economically more attractive than to
develop and support these services within ICE, allowing management to focus on
its core business of sales, marketing and customer service.


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MAINTAIN A STABLE AND GROWING RECURRING REVENUE BASE

Through merchant retention, increased credit card use, and increased direct
marketing efforts ICE has developed a stable and recurring base of revenues. In
addition to its high customer service level, ICE's endorsements from agents
provide an additional link to its merchants that tend to reduce attrition.

Furthermore, management believes that the relative smaller size of the merchants
it services make the merchants less likely to change providers because of the
up-front costs associated with a transfer.

GROWTH STRATEGY

ICE's growth strategy is twofold:

1.   to pursue external growth by constantly expanding its independent agent
     base, and

2.   to utilize its proprietary Gift & Loyalty platform to reach an even greater
     number of merchants through value-added products.

Through the use of its agent relationships, ICE obtains new merchant accounts by
offering merchants technologically advanced products, such as our proprietary
Gift & Loyalty program, and programs with better levels of service than those
obtainable from other sources.

MARKETING

ICE's marketing strategy is to solicit prospective merchants primarily through
independent outside agents. Our independent outside agents use a variety of
self-directed marketing methods to reach potential merchants. Under these
arrangements, ICE often obtains the exclusive endorsement of the outside agents.

PROCESSING RELATIONSHIPS

ICE markets credit and debit card based payment processing services pursuant to
a contractual relationship (the "Processing Agreement") with First Data Merchant
Services Corporation ("FDMS"), Financial Transactions Services, LLC and
BancorpSouth Bank, a processing bank and member of Visa and MasterCard. The
Processing Agreement provides that BancorpSouth Bank will process merchant
credit card transactions as an Acquiring bank and that FDMS is responsible for
all other processing and accounting functions relating to the clearing and
settlement of credit card transactions, including merchant processing and
settlement; merchant credit research; merchant activation and approval; merchant
security and recovery; merchant customer services; merchant chargeback and
retrieval services; and other related back office services. The Processing
Agreement provides ICE is paid its aggregate merchant's net processing revenue
and ancillary fees, on a monthly basis, for as long as the merchants utilize ICE
for bank card processing.

Under the Processing Agreement ICE bears full liability for any unfulfilled
chargebacks or merchant fraud. The Processing Agreement may be terminated by any
of the parties in the event of default of obligations, insolvency or
receivership, or failure to make payments when due or to abide by the rules and
regulations of Visa and MasterCard. ICE solicits merchants to process
transactions under the Processing Agreement.

The Processing Agreement contains aspects of both marketing and service. The
marketing portions of the agreements permit ICE and its authorized agents to
originate new merchants, which then enter into contractual agreements with
BancorpSouth Bank and ICE for processing of credit card transactions. The
service portion of the agreements permits ICE to provide appropriate service
(including terminal programming and shipping, employee training, equipment
supply and repair and operational support) to the merchants solicited to process
under the Processing Agreement. Although the marketing portion of the Processing
Agreement is limited as to time, the service portion is not. Accordingly, ICE
has a right to continue to receive revenues under the Processing Agreement, so
long as ICE remains in compliance with the provisions of the Processing
Agreement.

MERCHANT CLIENTS

ICE serves a diverse portfolio of small to medium-sized merchant clients,
primarily in general retail industries. Currently, no one customer accounts for
more than 10% of ICE's charge volume. This client diversification has
contributed to ICE's growth despite the varying economic conditions of the
regions in which its merchants are located.

Merchant attrition is an expected aspect of the credit card processing business.
Historically, ICE's attrition has related to merchants going out of business,
merchants returning to local processing banks or merchants transferring to
competitors for rates ICE was unwilling to match.


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Merchant fraud is another expected aspect of the credit card processing
business. ICE is responsible for any unfulfilled chargebacks or merchant fraud
services pursuant to the Processing Agreement. Examples of merchant fraud
include inputting false sales transactions or false credits. The parties to the
Processing Agreement monitor merchant charge volume, average charge and number
of transactions, as well as check for unusual patterns in the charges, returns
and chargebacks processed. As part of its fraud avoidance policies, ICE
generally will not process for certain types of businesses which provide future
services wherein incidents of fraud have been common.

ICE also engages the services of and receives residual income from other
processing companies such as Card Service International RBS Lynk Systems, and
Network One Financial. These processing companies maintain 100% of the risk,
including liabilities arising from merchant chargeback or cardholder fraud. No
obligations have been incurred significant or otherwise by ICE in these revenue
sharing programs.

ICE's independent agents solicit merchants to utilize our processing services.
The agents must abide by Visa, MasterCard and NACHA regulations for acceptable
merchants, the prevention of fraud, and must perform up to an agreed upon
standard and abide by general obligations such as Confidentiality,
Indemnification, Disclaimer of all Warranties, and Limitation of Liability. ICE
bills an agent for equipment shipped (classified as merchant service revenue and
cost of sale). Commissions are expensed and paid upon the acceptance and
installation of equipment. Residual payments are recorded in the month the
liabilities are incurred and paid within 60 days.

MERCHANT SERVICES

Management believes providing cost-effective, reliable and responsible service
is an effective method of retaining merchant clients. ICE maintains personnel
and systems necessary for providing such services directly to merchants and has
developed a comprehensive program involving consultative problem solving and
account management. ICE maintains a help desk to respond to inquiries from
merchants regarding terminal, communication and training issues. Service
personnel provide terminal application consultation by telephone and regularly
reprogram terminals via telephone lines to accommodate particular merchant needs
regarding program enhancements, terminal malfunctions and Visa and MasterCard
regulations. In addition, merchants may obtain direct, personal assistance in
reconciling network and communications problems, including problems with network
outages and local phone company services. ICE continually reviews its customer
service program to further enhance the customer service it provides and to
accommodate future growth of ICE's merchant base. ICE's terminals are
"downloadable," meaning additional services, such as authorization or payment
services for additional credit cards, can be installed in the terminal
electronically from ICE's offices without the necessity of replacement equipment
or an on-site installation visit. Additionally, peripheral equipment such as pin
pads and printers can easily be forwarded to the merchants upon request. ICE
also loans, tests and ships POS equipment directly to merchant locations, and
provides complete repair-or-replacement services for malfunctioning terminals.
Generally, ICE can arrange for delivery of replacement terminals by overnight
courier.

COMPETITION

The market for providing electronic bank card authorization and payment systems
to retail merchants is highly competitive. ICE competes in this market primarily
on the basis of price, technological capability, customer service and breadth of
product and services. Many small and large companies compete with us in
providing payment processing services and related services for card-not-present
and card-present transactions to a wide range of merchants. There are a number
of large transaction processors, including First Data Merchant Services
Corporation, National Processing, Inc., Global Payments, Inc. and Elavon, Inc.
(a subsidiary of U.S. Bancorp), that serve a broad market spectrum from large to
small merchants and provide banking, ATM and other payment-related services and
systems in addition to card-based payment processing. There are also a large
number of smaller transaction processors that provide various services to small
and medium sized merchants. Many of our competitors have substantially greater
capital resources than ICE and operate as subsidiaries of financial institutions
or bank holding companies, which may allow them on a consolidated basis to own
and conduct depository and other banking activities that we do not have the
regulatory authority to own or conduct. We believe that our specific focus on
small to medium size merchants and our breadth of products and services, such as
Gift & Loyalty, in addition to our understanding of the needs and risks
associated with providing payment processing services to these merchants, gives
ICE a competitive advantage over larger competitors, which have a broader market
perspective and often are not able to accommodate the demands of small to medium
size merchants.


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THE BUSINESS OF OUR SUBSIDIARY NEOS

On September 9, 2004, the Company completed an Agreement and Plan of Merger with
NEOS Merchant Solutions, Inc. ("NEOS"), a Nevada corporation. With, NEOS
becoming our wholly-owned subsidiary, we provide turnkey "Smart Card"-based as
well as traditional "Magnetic Stripe Card"-based solutions for merchants wishing
to offer automated gift and loyalty services. These programs provide small
merchants additional value through integrated loyalty programs which drive
repeat business and through other optional integrated products offering
merchants automated data capture and storage of personal information on the
merchant's customer base. The merchant is provided customized merchant branded
proprietary gift and loyalty cards. NEOS incorporates a merchant's existing logo
and artwork, or designs custom artwork for an additional fee, for use on the
gift and loyalty cards.

NEOS is an information and financial transaction application service provider
specializing in "Gift and Loyalty" products and point of sale (POS) financial
transaction services to small and medium retail merchants. NEOS integrates its
proprietary "Gift and Loyalty" software with existing point of sale payment
processing (i.e. traditional credit, debit, check verification, I.D.
verification), thereby consolidating its retail merchant revenue enhancing
solutions with commodity driven payment processing services. NEOS' primary
product is a unique full function, turnkey front and back-end gift and loyalty
solution, primarily utilizing the fast emerging smart card technology as well as
magnetic stripe, today's prominent medium for transaction processing. NEOS
controls the entire environment for this product by utilizing a closed loop
software platform consisting of transaction based terminal software and hardware
and integrated POS solutions at the point of sales that process all activity
through the NEOS host called "MATRIXX" for all smart and magnetic stripe card
related gift and loyalty card activity. The system split dials or re-directs
electronic payment processing related transactions to the appropriate processing
entity for credit, debit, check and other commodity transaction elements.

PRODUCTS

PAYMENT PROCESSING SOFTWARE - credit, debit, and check verification are
integrated into the POS terminal to consolidate merchant level functionality,
system and support requirements. Terminals presently support Vital, Lynk,
Concord EFS, and First Data. All terminals have the capability to split dial
e-commerce related requests to the appropriate processor. NEOS' Software "Gift
and Loyalty" products are as follows:

     o    MATRIXX - the NEOS proprietary host manages the processing functions
          to include transaction posting, reporting, inquiry and statement
          issuance of all gift and loyalty related transactions. The host system
          resides at an external third party hosting facility with a redundant
          backup at the corporate offices in Camarillo, California.

     o    POS TERMINAL APPLICATION SOFTWARE - proprietary software allows up to
          eight standard variations of gift and loyalty to facilitate various
          key market criteria and I.D. verification capable of reading line
          three of a magnetic-stripe card.

     o    CHIP LEVEL (SMART CARD) OPERATING SYSTEM - an application that mirrors
          ongoing transaction data and stores customer specific or merchant
          specific information to assist I.D., buying trends, demographics, etc.

     o    VIRTUAL MERCHANT DATABASE - at minimum, merchants can retrieve
          real-time information about customer purchases, sales patterns,
          contribution amounts, gift and loyalty activity, balances, etc. Also
          known as Loyalty Management Database and/or Merchant Data Center.

NEOS' Hardware "Gift and Loyalty" products are:

     o    POS TERMINALS - VeriFone 3750, VeriFone VX570, VeriFone and
          Schlumberger pin pads, and Schlumberger/AxaltoMagiC 6000 and 6100.

     o    PRIVATE LABEL SMART/MAGNETIC-STRIPE CARDS - Smart and magnetic-strip
          cards are customized with the merchant's logo, picture, or other
          identifying information, or can be created for a non-profit
          organization to use in a preferred merchant program. From art-work
          selections to final delivery, the entire creation process takes only a
          few days, even for the minimum 300-card order. This entire process is
          done internally for orders of less than 5,000 cards.

MARKET OUTLOOK

Statistics show "Gift and Loyalty" products enhance retention of existing
customers and increase new customers resulting in additional revenue to the
retail business. We believe "Gift and Loyalty" is more than a valuable method of


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payment, but a preferred method of payment. The TowerGroup, a subsidiary of
MasterCard, estimated that total 2006 gift card sales topped $80 billion, a 20
percent increase over 2005. The National Retail Federation estimates that gift
card sales in the 2008 holiday season will total $24.9 billion, a 5 percent
decrease from the $26.3 billion in 2007 holiday sales. This decline is
attributed to the tighter economy with many consumers choosing to buy deeply
discounted merchandise as opposed to gift cards as reported in a Chicago Tribune
article on December 27, 2008. As for gift cards, never before has a product
enabled a retailer to have his own "currency". Once value is placed on a gift
card, it can only be redeemed at that merchant's location. This money goes
directly into the retailers account prior to investing in inventory or any other
business expense. Retail returns have historically meant cash back, and the
money usually walks out the front door and is spent on another retailer's goods
or services. With this program the retailer's policy places the return value on
the gift card requiring the consumer to spend those dollars in their
establishment. This policy has become the standard rather than the exception in
many retailers across the country.

In addition, most major retail gift and return programs are magnetic stripe
based, requiring each transaction to dial to a host just as a credit card
authorization or debit transaction. Each transaction creates a communication or
access fee, a "per transaction fee". The cost associated with this "per
transaction fee" is the primary reason that loyalty programs have experienced
limited use. The NEOS solution performs the entire gift and loyalty transaction
at the terminal level and posts the transaction data on the terminal for
once-a-day batch processing to the host and posts to the smart card as well,
eliminating fraud. NEOS, in most instances, charges a fixed monthly fee for
unlimited transactions. The magnetic stripe solution averages $.15 to $.25 per
transaction. For instance, loyalty in one location, a coffee shop (example:
Starbucks) could perform 300 loyalty transactions a day or approximately 9,000
transactions a month for a monthly transaction cost of between $1,350 and
$2,250. This is the first technology that brings gift and loyalty to one card
and makes it affordable for small, medium and large tier retailers. Gift and
loyalty product is considered a value-added lead product and possesses a high
retention characteristic in the small to medium enterprise ("SME") segment over
traditional payment processing solutions. Payment processing has become a
commodity, which has eroded profitability and made retention of customers an
increasingly difficult task. Recognizing the merchant retention benefits of
"Gift and Loyalty" and the merchant benefit of integrating other electronic
payment transactions options onto one platform gives NEOS a significant
strategic and competitive advantage at the point of sale. Leveraging these
electronic payment transactions options provide the merchant real value
enhancement from a consolidation of system and support. We believe our future
value will be based on four primary variables: our proprietary technology, "Gift
and Loyalty" revenue, payment processing revenue and the combined "Gift and
Loyalty" and credit card merchant portfolios.

OPERATING STRATEGY

NEOS focuses on small to medium size merchants for its Gift and Loyalty product
offering. We believe that the ability to offer these merchants custom branded
Gift and Loyalty cards as well as a robust loyalty program will significantly
increase the merchants business and distinguish it from its competitors. NEOS
solicits prospective merchants through the ICE network of outside independent
agents and through its LIFT Network division.

SOFTWARE DEVELOPMENT

All components of the NEOS MATRIXX host and terminal application system have
been thoroughly tested and have been installed live in over 5,000 locations.

GROWTH STRATEGY AND COMPETITORS

Due to our proprietary technology and the retail market demand for "Gift and
Loyalty", NEOS is positioned to be a significant provider in this market. NEOS
"Gift and Loyalty" solutions are designed to help merchants increase their sales
and to retain loyal customers. NEOS' believes it has an opportunity to
aggressively penetrate the SME segment of the merchant market place for Gift and
Loyalty solutions. NEOS believes there is a tremendous need for differentiating


                                       10


<PAGE>


products and services in this sector of the industry. The Company plans to
generate continuous growth through strategies involving and leveraging its Gift
and Loyalty platform through the ICE independent outside sales force and through
strategic relationships with other businesses that market products to the SME
merchant segment.

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR
LABOR CONTRACTS, INCLUDING DURATION

As of December 31, 2008, we have no patents, trademarks, franchises,
concessions, royalty agreements or labor contracts.

EMPLOYEES

As of December 31, 2008, we had 23 full-time employees. Management believes that
its relationship with its employees is excellent. None of our employees are
members of a collective bargaining unit.

ITEM 1A.      RISK FACTORS

In addition to the risks and other considerations discussed elsewhere in this
annual report, set forth below is a discussion of certain risk factors relating
to our business and operations. These risk factors are drafted in "Plain
English" format in accordance with Rule 421 of the Securities Act. Accordingly,
references to "we" and "our" refer to ICE and its subsidiaries.

                         RISKS RELATING TO OUR BUSINESS

WE HAVE A HISTORY OF OPERATING LOSSES AND WILL NEED TO GENERATE SIGNIFICANT
REVENUES TO ACHIEVE OR MAINTAIN OUR PROFITABILITY.

Since inception, we have been engaged in activities relating to the
establishment of our payment processing business and developing a portfolio of
merchant accounts to grow our business, both of which require substantial
capital and other expenditures. As a result, we have not sustained
profitability, and may continue to incur losses in the future. We had a net
income of $64,323 and a net loss of $3,955,299 for the years ended December 31,
2008 and 2007, respectively. We expect our cash needs to increase significantly
for the next several years as we:

     o    continue to expand our outside agent sales force;

     o    increase awareness of our services; to expand our customer support and
          service operations;

     o    hire additional marketing, customer support and administrative
          personnel; and

     o    implement new and upgraded operational and financial systems,
          procedures and controls.

As a result of these continuing expenses, we need to generate significant
revenues to achieve and maintain profitability. If we do not continue to
increase our revenues, our business, results of operations and financial
condition could be materially and adversely affected.

WE RELY ON BANK SPONSORS, WHICH HAVE SUBSTANTIAL DISCRETION WITH RESPECT TO
CERTAIN ELEMENTS OF OUR BUSINESS PRACTICES, IN ORDER TO PROCESS BANKCARD
TRANSACTIONS; IF THESE SPONSORSHIPS ARE TERMINATED AND WE ARE NOT ABLE TO SECURE
OR SUCCESSFULLY MIGRATE MERCHANT PORTFOLIOS TO NEW BANK SPONSORS, WE WILL NOT BE
ABLE TO CONDUCT OUR BUSINESS.

Because we are not a bank, we are unable to belong to and directly access the
Visa and MasterCard bankcard associations. Visa and MasterCard operating
regulations require us to be sponsored by a bank in order to process bankcard
transactions. We are currently registered with Visa and MasterCard through the
sponsorship of BancorpSouth Bank and Wells Fargo Bank which are members of the
card associations. If these sponsorships are terminated and we are unable to
secure a bank sponsor, we will not be able to process bankcard transactions.
Furthermore, our agreements with our sponsoring banks give the sponsoring banks
substantial discretion in approving certain elements of our business practices,
including our solicitation, application and qualification procedures for
merchants, the terms of our agreements with merchants, the processing fees that
we charge, our customer service levels and our use of independent sales
organizations. We cannot guarantee that our sponsoring banks' actions under
these agreements will not be detrimental to us.

WE ASSUME THE RISK OF UNFULFILLED MERCHANT CHARGEBACK AND FRAUD PURSUANT TO THE
PROCESSING AGREEMENT AND IF WE ARE NOT ABLE TO SUCCESSFULLY MITIGATE MERCHANT
PORTFOLIO CHARGEBACK AND FRAUD RISKS, WE WILL NOT BE ABLE TO CONDUCT OUR
BUSINESS.


                                       11


<PAGE>


ICE markets credit and debit card based payment processing services pursuant to
the Processing Agreement with FTS and BancorpSouth Bank. The Processing
Agreement provides that ICE bears full liability for any unfulfilled chargebacks
or merchant fraud. ICE began boarding merchants under the Processing Agreement
in late March of 2005. In line with industry standards, we will continue to
maintain a reserve of .0005 of aggregate Visa/MasterCard sales volume of
processing merchant accounts and analyze on a monthly basis, the need to adjust
such reserve to appropriately properly mitigate merchant chargebacks and/or
fraud.

IF WE OR OUR BANK SPONSOR FAILS TO ADHERE TO THE STANDARDS OF THE VISA AND
MASTERCARD CREDIT CARD ASSOCIATIONS, OUR REGISTRATIONS WITH THESE ASSOCIATIONS
COULD BE TERMINATED AND WE COULD BE REQUIRED TO STOP PROVIDING PAYMENT
PROCESSING SERVICES FOR VISA AND MASTERCARD.

Substantially all of the transactions we process involve Visa or MasterCard. If
we or our bank sponsor fails to comply with the applicable requirements of the
Visa and MasterCard credit card associations, Visa or MasterCard could suspend
or terminate our registration. The termination of our registration or any
changes in the Visa or MasterCard rules that would impair our registration could
require us to stop providing payment processing services.

WE RELY ON OTHER CARD PAYMENT PROCESSORS AND SERVICE PROVIDERS; IF THEY FAIL OR
NO LONGER AGREE TO PROVIDE THEIR SERVICES, OUR MERCHANT RELATIONSHIPS COULD BE
ADVERSELY AFFECTED AND WE COULD LOSE BUSINESS.

We rely on agreements with other large payment processing organizations,
primarily First Data Merchant Services Corporation, to enable us to provide card
authorization, data capture, settlement and merchant accounting services and
access to various reporting tools for the merchants we serve. Many of these
organizations and service providers are our competitors and we do not have
long-term contracts with any of them. Typically, our contracts with these third
parties are for one-year terms and are subject to cancellation upon limited
notice by either party.

The termination by our service providers of their arrangements with us or their
failure to perform their services efficiently and effectively may adversely
affect our relationships with the merchants whose accounts we serve and may
cause those merchants to terminate their processing agreements with us.

TO ACQUIRE AND RETAIN MERCHANT ACCOUNTS, WE DEPEND ON INDEPENDENT OUTSIDE
AGENTS.

We rely primarily on the efforts of independent outside agents to market our
services to merchants seeking to establish an account with a payment processor.
These agents are individuals and companies that seek to introduce both newly
established and existing small merchants, including retailers, restaurants and
service providers, such as physicians, to providers of transaction payment
processing services. In certain instances agents that refer merchants to us are
not exclusive to us and have the right to refer merchants to other service
providers. Our failure to maintain our relationships with our existing agents
and those serving other service providers that we may acquire, and to recruit
and establish new relationships with other agents could adversely affect our
revenues and internal growth and increase our merchant attrition.

ON OCCASION, WE EXPERIENCE INCREASES IN INTERCHANGE AND SPONSORSHIP FEES; IF WE
CANNOT PASS THESE INCREASES ALONG TO OUR MERCHANTS, OUR PROFIT MARGINS WILL BE
REDUCED.

We pay interchange fees or assessments to card associations for each transaction
we process using their credit and debit cards. From time to time, the card
associations increase the interchange fees that they charge processors and the
sponsoring banks. In its sole discretion, our sponsoring bank has the right to
pass any increases in interchange fees on to us. In addition, our sponsoring
bank may seek to increase its Visa and MasterCard sponsorship fees to us, all of
which are based upon the dollar amount of the payment transactions we process.
If we are not able to pass these fee increases along to merchants through
corresponding increases in our processing fees, our profit margins will be
reduced.

THE LOSS OF KEY PERSONNEL OR DAMAGE TO THEIR REPUTATIONS COULD ADVERSELY AFFECT
OUR RELATIONSHIPS WITH AGENTS, CARD ASSOCIATIONS, BANK SPONSORS AND OUR OTHER
SERVICE PROVIDERS, WHICH WOULD ADVERSELY AFFECT OUR BUSINESS.

Our success depends upon the continued services of our senior management and
other key employees, many of whom have substantial experience in the payment
processing industry and the small merchant markets in which we offer our
services. In addition, our success depends in large part upon the reputation and
influence within the industry of our senior managers, who over their years in
the industry, developed long standing and highly favorable relationships with


                                       12


<PAGE>


agents, ISOs, card associations, bank sponsors and other payment processing and
service providers. We would expect that the loss of the services of one or more
of our key employees would have an adverse effect on our operations. We would
also expect that any damage to the reputation of our senior managers, would
adversely affect our business. We do not maintain any "key person" life
insurance on any of our employees.

THE PAYMENT PROCESSING INDUSTRY IS HIGHLY COMPETITIVE AND SUCH COMPETITION IS
LIKELY TO INCREASE, WHICH MAY FURTHER ADVERSELY INFLUENCE OUR PRICES TO
MERCHANTS, AND AS A RESULT, OUR PROFIT MARGINS.

The market for card processing services is highly competitive. The level of
competition has increased in recent years, and other providers of processing
services have established a sizable market share in the small merchant
processing sector. Some of our competitors are financial institutions,
subsidiaries of financial institutions or well-established payment processing
companies that have substantially greater capital and technological, management
and marketing resources than we have. There are also a large number of small
providers of processing services that provide various ranges of services to
small and medium sized merchants. This competition may influence the prices we
can charge and requires us to control costs aggressively in order to maintain
acceptable profit margins. In addition, our competitors continue to consolidate
as large banks merge and combine their networks. This consolidation may also
require that we increase the consideration we pay for future acquisitions and
could adversely affect the number of attractive acquisition opportunities
presented to us.

INCREASED ATTRITION IN MERCHANT CHARGE VOLUME DUE TO AN INCREASE IN CLOSED
MERCHANT ACCOUNTS THAT WE CANNOT ANTICIPATE OR OFFSET WITH NEW ACCOUNTS MAY
REDUCE OUR REVENUES.

We experience attrition in merchant charge volume in the ordinary course of
business resulting from several factors, including business closures, transfers
of merchants' accounts to our competitors and account "closures" that are
initiated due to heightened credit risks relating to, and contract breaches by,
a merchant. In addition, substantially all of our processing contracts with
merchants may be terminated by either party on relatively short notice, allowing
merchants to move their processing accounts to other providers with minimal
financial liability and cost. Increased attrition in merchant charge volume may
have a material adverse effect on our financial condition and results of
operations. We cannot predict the level of attrition in the future, particularly
in connection with our acquisitions of portfolios of merchant accounts. If we
are unable to increase our transaction volume and establish accounts with new
merchants in order to counter the effect of this attrition, or, if we experience
a higher level of attrition in merchant charge volume than we anticipate, our
revenues will decrease.

WE FACE UNCERTAINTY ABOUT ADDITIONAL FINANCING FOR OUR FUTURE CAPITAL NEEDS,
WHICH MAY PREVENT US FROM GROWING OUR BUSINESS.

To achieve our business objectives we may require significant additional
financing for working capital and capital expenditures that we may raise through
public or private sales of our debt and equity securities, joint ventures and
strategic partnerships. No assurance can be given that such additional funds
will be available to us on acceptable terms, if at all. When we raise additional
funds by issuing equity securities, dilution to our existing stockholders will
result. If adequate additional funds are not available to us, we may be required
to significantly curtail the development of one or more of our projects and our
projections and results of operations would be materially and adversely
affected.

WE CURRENTLY RELY SOLELY ON COMMON LAW TO PROTECT OUR INTELLECTUAL PROPERTY;
SHOULD WE SEEK ADDITIONAL PROTECTION IN THE FUTURE, WE MAY FAIL TO SUCCESSFULLY
REGISTER OUR TRADEMARKS, CAUSING US TO POTENTIALLY LOSE OUR RIGHTS TO USE THESE
MARKS.

Currently, we do not have any patents, copyrights or registered marks. We rely
on common law rights to protect our marks and logos. We do not rely heavily on
the recognition of our marks to obtain and maintain business. We may apply for
trademark registration for certain of our marks in the future. However, we
cannot assure you that any such applications will be approved. Even if they are
approved, these trademarks may be successfully challenged by others or
invalidated. If our trademark registrations are not approved because third
parties own these trademarks, our use of these trademarks will be restricted or
completely prohibited unless we enter into agreements with these parties which
may not be available on commercially reasonable terms, or at all.

NEW AND POTENTIAL GOVERNMENTAL REGULATIONS DESIGNED TO PROTECT OR LIMIT ACCESS
TO CONSUMER INFORMATION COULD ADVERSELY AFFECT OUR ABILITY TO PROVIDE THE
SERVICES WE PROVIDE OUR MERCHANTS.


                                       13


<PAGE>


Due to the increasing public concern over consumer privacy rights, governmental
bodies in the United States and abroad have adopted, and are considering
adopting additional laws and regulations restricting the purchase, sale and
sharing of personal information about customers. For example, the
Gramm-Leach-Bliley Act requires non-affiliated third party service providers to
financial institutions to take certain steps to ensure the privacy and security
of consumer financial information. We believe our present activities fall under
exceptions to the consumer notice and opt-out requirements contained in this law
for third party service providers to financial institutions. The law, however,
is new and there have been very few rulings on its interpretation. We believe
that current legislation permits us to access and use this information as we do
now. The laws governing privacy generally remain unsettled, however, even in
areas where there has been some legislative action, such as the
Gramm-Leach-Bliley Act and other consumer statutes, it is difficult to determine
whether and how existing and proposed privacy laws will apply to our business.
Limitations on our ability to access and use customer information could
adversely affect our ability to provide the services we offer to our merchants
or could impair the value of these services.

Several states have proposed legislation that would limit the uses of personal
information gathered using the Internet. Some proposals would require
proprietary online service providers and website owners to establish privacy
policies. Congress has also considered privacy legislation that could further
regulate use of consumer information obtained over the Internet or in other
ways. The Federal Trade Commission has also recently settled a proceeding with
one on-line service regarding the manner in which personal information is
collected from users and provided to third parties. Our compliance with these
privacy laws and related regulations could materially affect our operations.

Changes to existing laws or the passage of new laws could, among other things:

     o    create uncertainty in the marketplace that could reduce demand for our
          services;

     o    limit our ability to collect and to use merchant and cardholder data;

     o    increase the cost of doing business as a result of litigation costs or
          increased operating costs; or

     o    in some other manner have a material adverse effect on our business,
          results of operations and financial condition.

                         RISKS RELATING TO ACQUISITIONS

We may acquire other providers of payment processing services and portfolios of
merchant processing accounts. These acquisitions entail risks in addition to
that incidental to the normal conduct of our business.

REVENUES GENERATED BY ACQUIRED BUSINESSES OR ACCOUNT PORTFOLIOS MAY BE LESS THAN
ANTICIPATED, RESULTING IN LOSSES OR A DECLINE IN PROFITS, AS WELL AS POTENTIAL
IMPAIRMENT CHARGES.

In evaluating and determining the purchase price for a prospective acquisition,
we estimate the future revenues from that acquisition based on the historical
transaction volume of the acquired provider of payment processing services or
portfolio of merchant accounts. Following an acquisition, it is customary to
experience some attrition in the number of merchants serviced by an acquired
provider of payment processing services or included in an acquired portfolio of
merchant accounts. Should the rate of post-acquisition merchant attrition exceed
the rate we have forecasted, the revenues generated by the acquired providers of
payment processing services or portfolio of accounts may be less than we
estimated, which could result in losses or a decline in profits, as well as
potential impairment charges.

WE MAY FAIL TO UNCOVER ALL LIABILITIES OF ACQUISITION TARGETS THROUGH THE DUE
DILIGENCE PROCESS PRIOR TO AN ACQUISITION, EXPOSING US TO POTENTIALLY LARGE,
UNANTICIPATED COSTS.

Prior to the consummation of any acquisition, we perform a due diligence review
of the provider of payment processing services or portfolio of merchant accounts
that we propose to acquire. Our due diligence review, however, may not
adequately uncover all of the contingent or undisclosed liabilities we may incur
as a consequence of the proposed acquisition.

WE MAY ENCOUNTER DELAYS AND OPERATIONAL DIFFICULTIES IN COMPLETING THE NECESSARY
TRANSFER OF DATA PROCESSING FUNCTIONS AND CONNECTING SYSTEMS LINKS REQUIRED BY
AN ACQUISITION, RESULTING IN INCREASED COSTS FOR, AND A DELAY IN THE REALIZATION
OF REVENUES FROM, THAT ACQUISITION.

The acquisition of a provider of payment processing services, as well as a
portfolio of merchant processing accounts, requires the transfer of various data


                                       14


<PAGE>


processing functions and connecting links to our systems and those of our own
third party service providers. If the transfer of these functions and links does
not occur rapidly and smoothly, payment processing delays and errors may occur,
resulting in a loss of revenues, increased merchant attrition and increased
expenditures to correct the transitional problems, which could preclude our
attainment of, or reduce, our profits.

SPECIAL NON-RECURRING AND INTEGRATION COSTS ASSOCIATED WITH ACQUISITIONS COULD
ADVERSELY AFFECT OUR OPERATING RESULTS IN THE PERIODS FOLLOWING THESE
ACQUISITIONS.

In connection with some acquisitions, we may incur non-recurring severance
expenses, restructuring charges and change of control payments. These expenses,
charges and payments, as well as the initial costs of integrating the personnel
and facilities of an acquired business with those of our existing operations,
may adversely affect our operating results during the initial financial periods
following an acquisition. In addition, the integration of newly acquired
companies may lead to diversion of management attention from other ongoing
business concerns.

OUR FACILITIES, PERSONNEL AND FINANCIAL AND MANAGEMENT SYSTEMS MAY NOT BE
ADEQUATE TO EFFECTIVELY MANAGE THE FUTURE EXPANSION WE BELIEVE NECESSARY TO
INCREASE OUR REVENUES AND REMAIN COMPETITIVE.

We anticipate that future expansion will be necessary in order to increase our
revenues. In order to effectively manage our expansion, we may need to attract
and hire additional sales, administrative, operations and management personnel.
We cannot assure you that our facilities, personnel and financial and management
systems and controls will be adequate to support the expansion of our
operations, and provide adequate levels of service to our merchants, agents and
ISOs. If we fail to effectively manage our growth, our business could be harmed.

                       RISKS RELATING TO OUR COMMON STOCK

THE POSSIBLE RULE 144 SALES BY EXISTING SHAREHOLDERS MAY HAVE AN ADVERSE EFFECT
ON THE MARKET VALUE OF THE COMPANY AND THE PRICE OF THE STOCK.

Of our presently outstanding 35,873,703 shares of common stock 3,565,000 are
"restricted securities" for purposes of the federal securities laws, and in the
future they may be sold in compliance with Rule 144 adopted under the Act. Rule
144 provides in part that a person who is not an affiliate and who holds
restricted securities for a period of one year may sell all or part of such
securities. In addition, since we will be filing certain informational reports
with the Securities and Exchange Commission, and if certain other conditions are
satisfied, Rule 144 will allow a person (including an affiliate) holding
restricted securities for a period of six months to sell each three months,
provided he or she is not part of a control group acting in concert to sell, an
amount equal to the greater of the average weekly reported trading volume of the
stock during the four calendar weeks preceding the sale, or one percent of the
our outstanding common stock. We cannot predict the effect, if any, that any
such sales of common stock, or the availability of such common stock for sale,
may have on the market value of the common stock prevailing from time to time.
Sales of substantial amounts of common stock by shareholders, particularly if
they are affiliates, could have a material adverse effect upon the market value
of the common stock.

THERE MAY BE A VOLATILITY OF OUR STOCK PRICE.

Since our common stock is publicly traded, the market price of the common stock
may fluctuate over a wide range and may continue to do so in the future. The
market price of the common stock could be subject to significant fluctuations in
response to various factors and events, including, among other things, the depth
and liquidity of the trading market of the common stock, quarterly variations in
actual or anticipated operating results, growth rates, changes in estimates by
analysts, market conditions in the industry (including demand for Internet
access), announcements by competitors, regulatory actions and general economic
conditions. In addition, the stock market from time to time experiences
significant price and volume fluctuations, which have particularly affected the
market prices of the stocks of high technology companies, and which may be
unrelated to the operating performance of particular companies. As a result of
the foregoing, our operating results and prospects from time to time may be
below the expectations of public market analysts and investors. Any such event
would likely result in a material adverse effect on the price of the common
stock.

WE DO NOT INTEND TO PAY CASH DIVIDENDS ON OUR COMMON STOCK IN THE FORESEEABLE
FUTURE.

We currently anticipate that we will retain all future earnings, if any, to
finance the growth and development of our business and do not anticipate paying
cash dividends on our common stock in the foreseeable future. Any payment of


                                       15


<PAGE>


cash dividends will depend upon our financial condition, capital requirements,
earnings and other factors deemed relevant by our board of directors.

OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE
TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the definition of a "penny stock," for the purposes relevant to us, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require:

     o    that a broker or dealer approve a person's account for transactions in
          penny stocks; and

     o    the broker or dealer receive from the investor a written agreement to
          the transaction, setting forth the identity and quantity of the penny
          stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:

     o    obtain financial information and investment experience objectives of
          the person; and

     o    make a reasonable determination that the transactions in penny stocks
          are suitable for that person and the person has sufficient knowledge
          and experience in financial matters to be capable of evaluating the
          risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:

     o    sets forth the basis on which the broker or dealer made the
          suitability determination; and

     o    that the broker or dealer received a signed, written agreement from
          the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities
subject to the "penny stock" rules. This may make it more difficult for
investors to dispose of our common stock and cause a decline in the market value
of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.

ITEM 2.       PROPERTIES

Our principal executive offices are located in approximately 3,950 square feet
of leased office space at 555 Airport Way, Suite A, Camarillo, CA 93010. The
offices of our technical personnel are located in approximately 1,000 square
feet at 23631 Crown Valley Parkway, Mission Viejo, CA 92691. The offices of our
LIFT Network division are located in approximately 150 square feet at 5010 W.
Carmen St., Tampa, FL 33609. We believe that these facilities are adequate for
our current operations and, if necessary, can be replaced with little disruption
to our company.

ITEM 3.       LEGAL PROCEEDINGS

There are no material legal proceedings pending or, to our knowledge, threatened
against us or any of our subsidiaries.

ITEM 4.       SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS

During our fiscal year ended December 31, 2008, there were no matters submitted
to the Company's security holders.


                                       16


<PAGE>


                                     PART II

ITEM 5.       MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
              AND ISSUER PURCHASES OF EQUITY SECURITIES

(a)  Market Information.

The Company's common stock is currently traded on the Over-the-Counter ("OTC")
Bulletin Board System under the symbol "ICRD." The following table sets forth
the trading history of the common stock on the OTC Bulletin Board for each
quarter of fiscal years ended December 31, 2008 and 2007, as reported by
Stockhouse.com.

                                      HIGH        LOW
     2008
                First Quarter        0.15        0.07
                Second Quarter       0.105       0.055
                Third Quarter        0.07        0.031
                Fourth Quarter       0.05        0.021

     2007
                First Quarter        0.24        0.182
                Second Quarter       0.26        0.15
                Third Quarter        0.175       0.09
                Fourth Quarter       0.17        0.06

(b)  Holders.

As of December 31, 2008, there are 84 shareholders of record of the Company's
common stock.

CAPITAL STOCK

We are authorized to issue 100,000,000 shares of common stock $0.0005 par value
and 10,000,000 shares of preferred stock at $0.01 par value. As of December 31,
2008, there were 35,873,703 common shares and 54,000 preferred shares issued and
outstanding. All shares of common stock outstanding are validly issued, fully
paid and non-assessable.

VOTING RIGHTS

Each share of common stock entitles the holder to one vote, either in person or
by proxy, at meetings of shareholders. The holders are not permitted to vote
their shares cumulatively. Accordingly, the holders of common stock holding, in
the aggregate, more than fifty percent of the total voting rights can elect all
of our directors and, in such event, the holders of the remaining minority
shares will not be able to elect any of such directors. The vote of the holders
of a majority of the issued and outstanding shares of common stock entitled to
vote thereon is sufficient to authorize, affirm, ratify or consent to such act
or action, except as otherwise provided by law.

QUASI-CALIFORNIA CORPORATION

Section 2115 of the California General Corporation law provides that a
corporation incorporated under the laws of a jurisdiction other than California,
but which has more than one-half of its "outstanding voting securities" and
which has a majority of its property, payroll and sales in California, based on
the factors used in determining its income allocable to California on its
franchise tax returns, may be required to provide cumulative voting until such
time as the Company has its shares listed on certain national securities
exchanges, or designated as a national market security on NASDAQ (subject to
certain limitations). Accordingly, holders of the our common stock may be
entitled to one vote for each share of common stock held and may have cumulative
voting rights in the election of directors. This means that holders are entitled
to one vote for each share of common stock held, multiplied by the number of
directors to be elected, and the holder may cast all such votes for a single
director, or may distribute them among any number of all of the directors to be
elected.

Our existing directors who are also shareholders, acting in harmony, may be able
to elect a majority of the members of our board of directors even if Section
2115 is applicable.

DIVIDEND POLICY

All shares of common stock are entitled to participate proportionally in
dividends if our board of directors declares them out of the funds legally
available and subordinate to the rights, if any, of the holders of outstanding
shares of preferred stock. These dividends may be paid in cash, property or
additional shares of common stock. We have not paid any dividends since our
inception and presently anticipate that all earnings, if any, will be retained


                                       17


<PAGE>


for development of our business. Any future dividends will be at the discretion
of our board of directors and will depend upon, among other things, our future
earnings, operating and financial condition, capital requirements, and other
factors. Therefore, there can be no assurance that any dividends on the common
stock will be paid in the future.

MISCELLANEOUS RIGHTS AND PROVISIONS

Holders of common stock have no preemptive or other subscription rights,
conversion rights, redemption or sinking fund provisions. In the event of our
dissolution, whether voluntary or involuntary, each share of common stock is
entitled to share proportionally in any assets available for distribution to
holders of our equity after satisfaction of all liabilities and payment of the
applicable liquidation preference of any outstanding shares of preferred stock.

RIGHTS OF THE PREFERRED STOCK

Collectively, the Series A Convertible Preferred Stock contain the following
features:

     o    Dividends: Each share of Series A Preferred Stock pays a mandatory
          monthly dividend, at an annual rate equal to the product of
          multiplying (i) $100.00 per share, by (ii) six and one-half percent
          (6.5%). Dividends are payable monthly in arrears on the last day of
          each month, in cash, and prorated for any partial month periods. From
          and after the Effective Date of the Registration Statement, dated July
          17, 2006, no further MANDATORY DIVIDENDS shall be payable on the
          Series A Preferred Stock.

     o    Liquidation Preferences: Series A Preferred Stock is entitled to be
          paid first out of the assets of the Corporation available for
          distribution to shareholders, whether such assets are capital, surplus
          or earnings, an amount equal to the Series A Purchase Price per share
          of Series A Preferred Stock held (as adjusted for any stock splits,
          stock dividends or recapitalizations of the Series A Preferred Stock)
          and any declared but unpaid dividends on such share, before any
          payment is made to the holders of the common stock, or any other stock
          of the Corporation ranking junior to the Series A Preferred Stock with
          regard to any distribution of assets upon liquidation, dissolution or
          winding up of the Corporation.

     o    Voting Rights: None

     o    Conversion Rights: Series A Preferred Stock may, at the option of the
          holder, be converted at any time or from time to time into fully paid
          and non-assessable shares of common stock at the conversion rate in
          effect at the time of conversion, provided, that a holder of Series A
          Preferred Stock at any given time convert only up to that number of
          shares of Series A Preferred Stock so that, upon conversion, the
          aggregate beneficial ownership of the Corporation's common stock is
          not more than 9.99% of the Corporation's common stock then
          outstanding. The "Conversion Price" per share for the Series A
          Preferred Stock shall be equal to Eighty-Five percent (85%) of the
          Market Price, rounded to the nearest penny; in no event shall the
          Conversion Price be less than $0.375 per share (the "Floor Price") or
          exceed $0.47 (the "Ceiling Price").

     o    Reservation of Stock Issuable Upon Conversion: The Corporation shall
          at all times reserve and keep available out of its authorized but
          unissued shares of common stock, solely for the purpose of effecting
          the conversion of the shares of the Series A Preferred Stock
          15,000,000 shares of common stock.

RECENT SALES OF UNREGISTERED SECURITIES

None.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

ICE has adopted its 2003 Stock Option Plan, an equity incentive program for its
employees, directors and advisors that was approved by its stockholders pursuant
to which options, rights or warrants may be granted.


                                       18


<PAGE>

<TABLE>
<CAPTION>

                                                                                     NUMBER OF SECURITIES REMAINING
                            NUMBER OF SECURITIES TO         WEIGHTED-AVERAGE           AVAILABLE FOR FUTURE ISSUANCE
                            BE ISSUED UPON EXERCISE         EXERCISE PRICE OF         UNDER EQUITY COMPENSATION PLANS
                            OF OUTSTANDING OPTIONS,       OUTSTANDING OPTIONS,        (EXCLUDING SECURITIES REFLECTED
PLAN CATEGORY                 WARRANTS AND RIGHTS          WARRANTS AND RIGHTS                IN COLUMN (A))
                                      {A}                          {B}                              {C}
<S>                                <C>                            <C>                             <C>

Equity compensation                4,428,000                      $0.22                           572,000
plans approved by
security holders

Equity compensation                3,074,000                      $0.15                             -0-
plans not approved by
security holders

Total                              7,502,000                      $0.19                           572,000

</TABLE>

ITEM 6.       SELECTED FINANCIAL DATA

Not Applicable.

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes included elsewhere in this report. References in
this section to "International Card Establishment, Inc.," the "Company," "we,"
"us," and "our" refer to International Card Establishment, Inc. and our direct
and indirect subsidiaries on a consolidated basis unless the context indicates
otherwise.

This annual report contains forward looking statements relating to our Company's
future economic performance, plans and objectives of management for future
operations, projections of revenue mix and other financial items that are based
on the beliefs of, as well as assumptions made by and information currently
known to, our management. The words "expects, intends, believes, anticipates,
may, could, should" and similar expressions and variations thereof are intended
to identify forward-looking statements. The cautionary statements set forth in
this section are intended to emphasize that actual results may differ materially
from those contained in any forward looking statement.

Our Management, Discussion and Analysis ("MD&A") is provided as a supplement to
our audited financial statements to help provide an understanding of our
financial condition, changes in financial condition and results of operations.
The MD&A section is organized as follows:

     o    OVERVIEW. This sections provide a general description of the Company's
          business, as well as recent developments that we believe are important
          in understanding our results of operations as well as anticipating
          future trends in our operations.

     o    CRITICAL ACCOUNTING POLICIES. This section provides an analysis of the
          significant estimates and judgments that affect the reported amounts
          of assets, liabilities, revenues, expenses, and the related disclosure
          of contingent assets and liabilities.

     o    RESULTS OF OPERATIONS. This section provides an analysis of our
          results of operations for the year ended December 31, 2008 ("Fiscal
          2008") compared to the year ended December 31, 2007 ("Fiscal 2007"). A
          brief description of certain aspects, transactions and events is
          provided, including related-party transactions that impact the
          comparability of the results being analyzed.

     o    LIQUIDITY AND CAPITAL RESOURCES. This section provides an analysis of
          our financial condition and cash flows as of and for the year ended
          December 31, 2008.

OVERVIEW

We are in the business of providing merchant payment processing services and
custom branded gift and loyalty card products to the SME segment of the merchant
marketplace. As of December 31, 2008, we provided our services to thousands of
merchants located across the United States. Our payment processing services
enable merchants to process traditional card-present, or swipe transactions, as


                                       19


<PAGE>


well as card-not-present transactions. A traditional card-present transaction
occurs whenever a cardholder physically presents a credit or debit card to a
merchant at the point-of-sale. Card-not-present transactions occur whenever the
customer does not physically present a payment card at the point-of-sale and may
occur over the Internet or by mail, fax or telephone. Our proprietary Gift and
Loyalty product allows merchants to issue custom branded gift and loyalty cards.

Most of our SME merchants are traditional physical "brick-and-mortar"
businesses. Our merchants represent a diverse range of industries including
restaurants, spas and salons, automotive repair and service, golf courses, home
decor, sporting goods, car washes, gas stations, clothing stores and general
retail.

In May 2008 we formed our LIFT Network division to focus on expanding our
proprietary gift and loyalty product offerings. The LIFT Network division
emphasizes the promotion and marketing capabilities of our gift and loyalty
products. In August 2008 we completed the development of our virtual terminal
application which allows merchants to offer our gift and loyalty solution using
an internet protocol without the need for a physical terminal.

Management believes that a majority of the Company's new sales will come from
the gift and loyalty segment of our business.

CRITICAL ACCOUNTING POLICIES

The methods, estimates and judgments we use in applying our accounting policies
have a significant impact on the results we report in our financial statements,
which we discuss under the heading "Results of Operations" following this
section of our MD&A. Some of our accounting policies require us to make
difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. Our most critical accounting
estimates include the assessment of recoverability of long-lived assets and
intangible assets, which impacts operating expenses when we impair assets or
accelerate their amortization or depreciation.

We believe the following critical accounting policies reflect our more
significant estimates and assumptions used in the preparation of our
consolidated financial statements:

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company estimates its accounts receivable risks and provides allowances for
doubtful accounts accordingly. The Company believes that its credit risk for
accounts receivable is limited because of its large number of customers and the
relatively small account balances for most of its customers. Also, the Company's
customers are dispersed across different business and geographic areas. The
Company evaluates the adequacy of the allowance for doubtful accounts on a
periodic basis. The evaluation includes historical loss experience, length of
time receivables are past due, adverse situations that may affect a customer's
ability to repay and prevailing economic conditions. The Company makes
adjustments to its allowance if the evaluation of allowance requirements differs
from the actual aggregate reserve. This evaluation is inherently subjective and
estimates may be revised as more information becomes available.

REVENUE AND COST RECOGNITION

Substantially all of our revenues are generated from fees charged to merchants
for card-based payment processing services and monthly gift and loyalty program
fees. We typically charge these merchants a bundled rate, primarily based upon
the merchant's monthly charge volume and risk profile. Our fees principally
consist of discount fees, which are a percentage of the dollar amount of each
credit or debit transaction. We charge all merchants higher discount rates for
card-not-present transactions than for card-present transactions in order to
compensate ourselves for the higher risk of underwriting these transactions. We
derive the balance of our revenues from a variety of fixed transaction or
service fees, including fees for monthly minimum charge volume requirements,
statement fees, annual fees and fees for other miscellaneous services, such as
handling chargebacks. We recognize discounts and other fees related to payment
transactions at the time the merchants' transactions are processed. We recognize
revenues derived from service fees at the time the service is performed. Related
interchange and assessment costs are also recognized at that time.

We follow the requirements of EITF 99-19, "Reporting Revenue Gross as a
Principal Versus Net as an Agent", in determining our revenue reporting.
Generally, where we have merchant portability, credit risk and ultimate
responsibility for the merchant, revenues are reported at the time of sale on a
gross basis equal to the full amount of the discount charged to the merchant.
This amount includes interchange paid to card issuing banks and assessments paid


                                       20


<PAGE>


to credit card associations pursuant to which such parties receive payments
based primarily on processing volume for particular groups of merchants.
Interchange fees are set by Visa and MasterCard and are based on transaction
processing volume and are recognized at the time transactions are processed.

GOODWILL AND INTANGIBLES

Since 2005, we capitalize intangible assets such as the purchase of merchant and
gift loyalty accounts from portfolio acquisitions (i.e., the right to receive
future cash flows related to transactions of these applicable merchants) and, at
least quarterly, amortize accounts at the time of attrition. Additionally, under
the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets", at least
annually, the Company performs a census of merchant accounts received in such
acquisitions, analyzing the expected cash flows, and adjusts the intangible
asset accordingly to the lower of cost or market.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2008 COMPARED WITH THE
YEAR ENDED DECEMBER 31, 2007

Results of operations consist of the following:

<TABLE>
<CAPTION>

                                 December 31, 2008     December 31, 2007           Difference      Difference
                                                                                        $               %
                                 ____________________________________________________________________________
<S>                                 <C>                  <C>                      <C>                  <C>

Net Revenues                        $ 7,599,558          $  9,222,659             $ (1,623,101)        (18)
Cost of Revenues                      4,722,399             6,014,944               (1,292,545)        (21)
                                 ____________________________________________________________________________
Gross Profit                          2,877,159             3,207,715                 (330,556)        (10)
Operating, General,
  and Administrative Costs            2,743,514             6,972,565               (4,229,051)        (61)
                                 ____________________________________________________________________________
Net Operating Gain/(Loss)           $   133,645          $ (3,764,850)            $  3,898,495        (104)
                                 ============================================================================

</TABLE>

Net revenues decreased by $1,623,101 or 18% from $9,222,659 to $7,599,558 due
mainly to the poor economy as well as continued attrition of merchant accounts
and tighter credit policies. Residuals decreased by approximately $1.2 million.
This decrease was due in part to the attrition of merchant accounts but the
primary factor was the faltering economy which effected us in two ways. First,
reduced merchant sales led directly to reduced residuals. Secondly, many small
businesses closed shop last year due to the lagging economy. A number of
merchants simply closed their doors and bank accounts, precluding us from even
collecting their early termination fees. Sales dropped by approximately $440,000
the major portion of this drop being equipment sales which decreased
approximately $300,000. Again, this decline was due primarily to the economy.
Merchants were unwilling to sign three and four year contracts in such a drastic
economic climate. In 2009, we will be working on new marketing models to counter
this reluctance on the part of merchants. Merchant attrition, caused by better
offers from competitors as well as closing businesses, is a common aspect of our
industry. However, we believe our new marketing models will help stop attrition
to some extent. The decrease in cost of revenues of $1,292,545 or 21% from
$6,014,944 to $4,722,399 is directly related to a comparable decrease in
revenues.

Operating, general and administrative costs decreased by approximately
$4,229,000 or 61% from $6,972,565 to $2,743,514 while incurring the startup
expense of a new marketing and sales division with additional staff and office
facilities totaling $113,035. The larger portion of this is payroll expense for
the head of the division which amounted to approximately $77,000. This reduction
was mainly due to lowered amortization expense of our portfolio (down $3.33
million) and depreciation in full of our fixed assets as of the end of 2007. The
amortization expense was reduced at December 31, 2007, by adjustment of our
portfolio to lower of cost or market. We do not expect future write-downs of our
merchant portfolio. An additional factor was the reduction of bad debt expense
due to the tightening of credit policies.

The change in position of cash, accounts payable and accrued expenses, and
accounts receivable consist of the following:

<TABLE>
<CAPTION>

                             December 31, 2008     December 31, 2007     Difference     Difference
                                                                              $              %
                             _____________________________________________________________________
<S>                              <C>                   <C>               <C>               <C>

Cash                             $  91,404             $ 126,149         $ (34,745)        (28)
Accounts Payable and
     Accrued Expenses            $ 616,229             $ 619,375         $  (3,146)         (1)
Accounts Receivable, net         $  22,572             $  27,060         $  (4,488)        (17)

</TABLE>

                                       21


<PAGE>


Cash decreased by approximately $34,745 or 28% from $126,149 to $91,404 due to
the paying down of outstanding debt obligations and accounts payable. An
additional contributing factor to lower cash was reduced residual income.

Accounts Payable and Accrued Expenses decreased by approximately $3,146 or 1%
from $619,375 to $616,229. This came about primarily due to the payoff of
outstanding debts and a decrease in accrued interest due to the pay down of the
related party note payable This decrease was offset by an increase in customer
deposits which fluctuate based on timing of cash receipts and shipment of orders
and accrued expenses due to higher accruals for audit fees.

Accounts Receivable fell by approximately $4,488 or 17% from $27,060 to $22,572
due primarily to tighter credit policies and adherence to a cash collection
policy of cash received prior to shipping. This is also accounted for by
standard fluctuation of outstanding lease invoices where we have been guaranteed
payment by the lease company upon installation at the merchant's location.

Management believes that it is moving toward sustained profitability. We plan to
sustain profitability and meet cash flow needs going forward as follows:

     o    Management believes that the increase in income we have experienced
          will continue as a result of the operations of its subsidiaries ICE
          and NEOS. We feel this is possible by pursuing external growth by
          constantly expanding our independent agent base and utilizing our
          proprietary Gift & Loyalty platform to reach an even greater number of
          merchants through value-added products.

     o    Continued cost control through tight credit policies.

LIQUIDITY AND CAPITAL RESOURCES

We are currently seeking to expand our merchant services offerings in gift and
loyalty. In addition, we are investigating additional business opportunities and
potential acquisitions of either additional portfolios or businesses;
accordingly we will require additional capital to complete the expansion and to
undertake any additional business opportunities. We are currently investigating
potential sources of financing.

We have financed our operations during the year primarily through the receipt of
proceeds of $650,000 from our line of credit with a related party and use of
cash on hand. In 2008 we paid down all outstanding debt and the related party
note payable. At this time our only outstanding debt consists of our related
party line of credit and we have no capital purchases planned at this time. We
believe that we will be able to meet all cash needs with the use of cash on hand
during 2009.

We had $91,404 cash on hand as of December 31, 2008 compared to $126,149 cash on
hand as of December 31, 2007. We will continue to need additional cash during
the following twelve months and these needs will coincide with the cash demands
resulting from our general operations and planned expansion. There is no
assurance that we will be able to obtain additional capital as required, or
obtain the capital on acceptable terms and conditions.

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.
























                                       22


<PAGE>


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2008
                                DECEMBER 31, 2007

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

                                    CONTENTS


REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON THE CONSOLIDATED FINANCIAL STATEMENT                                       23

________________________________________________________________________________


CONSOLIDATED FINANCIAL STATEMENTS

     Consolidated Balance Sheets..............................................24

     Consolidated Statements of Operations....................................25

     Consolidated Statements of Stockholders' Equity..........................26

     Consolidated Statements of Cash Flows....................................27

     Notes to Consolidated Financial Statements...............................29

________________________________________________________________________________














































                                       23


<PAGE>


           REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders'
of International Card Establishment, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of International
Card Establishment, Inc. (a Delaware corporation) as of December 31, 2008 and
2007, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of International Card
Establishment, Inc. as of December 31, 2008 and 2007, and the results of its
operations and its cash flows for each of the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

MENDOZA BERGER & COMPANY, LLP




Irvine, California
March 31, 2009
















                                       24


<PAGE>

<TABLE>
<CAPTION>

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                                     December 31,        December 31,
                                                                                         2008                2007
                                                                                    _____________       _____________
<S>                                                                                 <C>                 <C>
                                          ASSETS

CURRENT ASSETS
   Cash                                                                             $      91,404       $     126,149

   Accounts receivable, net of allowance of $50,178 and $225,425 at December
     31, 2008 and 2007, respectively                                                       22,572              27,059
                                                                                    _____________       _____________
   Note receivable, net of allowance of $50,000 at December 31, 2008 and 2007,
     respectively                                                                              88               6,428

   Inventory                                                                               76,394             109,628
   Other receivables                                                                      255,631             268,779
   Prepaid assets                                                                          25,003                   -
                                                                                    _____________       _____________
        Total current assets                                                              471,092             538,043
                                                                                    _____________       _____________

FIXED ASSETS, net of accumulated depreciation of $2,983,007 and $2,283,007 at
   December 31, 2008 and 2007, respectively                                                     -               6,320
INTANGIBLE ASSETS                                                                       1,579,378           1,820,300
GOODWILL                                                                                   87,979              87,978
                                                                                    _____________       _____________
OTHER NON-CURRENT ASSETS                                                                  116,685             117,700
                                                                                    _____________       _____________
        Total assets                                                                $   2,255,134       $   2,570,341
                                                                                    =============       =============

                           LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                                                 $      22,915       $     106,394
   Accrued expenses                                                                       593,312             512,981
   Notes payable, current                                                                       -              42,613
   Notes payable, current related party                                                         -             400,000
   Line of credit, related party                                                          658,536             606,582
                                                                                    _____________       _____________
        Total current liabilities                                                       1,274,763           1,668,570
                                                                                    _____________       _____________
        Total liabilities                                                               1,274,763           1,668,570

COMMITMENTS & CONTINGENCIES                                                                     -                   -
STOCKHOLDERS' EQUITY
   Preferred stock; $0.01 par value; 10,000,000 shares authorized, 54,000
     shares issued and outstanding at December 31, 2008 and 2007,
     respectively                                                                             540                 540
   Common stock; $0.0005 par value; 100,000,000 shares authorized, 35,873,703
     and 35,286,449 shares issued and outstanding at December 31, 2008 and 2007,
     respectively                                                                          17,937              17,643
   Common stock subscribed                                                                 30,000             100,064
   Additional paid-in capital                                                          19,628,401          19,544,354
   Accumulated deficit                                                                (18,696,507)        (18,760,830)
                                                                                    _____________       _____________
        Total stockholders' equity                                                        980,371             901,771
                                                                                    _____________       _____________
        Total liabilities and stockholders' equity                                  $   2,255,134       $   2,570,341
                                                                                    =============       =============

          See Accompanying Notes to Consolidated Financial Statements.

</TABLE>
                                       25


<PAGE>

<TABLE>
<CAPTION>

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF INCOME (OPERATIONS)

                                                                                        Years ended
                                                                              _______________________________
                                                                              December 31,       December 31,
                                                                                  2008               2007
                                                                              ____________       ____________
<S>                                                                           <C>                <C>

Revenues:
   Merchant services revenues                                                 $  6,985,598       $  8,304,759
   Equipment sales                                                                 645,085            954,761
   Less: sales returns and allowances                                              (31,126)           (36,861)
                                                                              ____________       ____________
      Net revenue                                                                7,599,557          9,222,659

Cost of revenues:
   Commissions                                                                     731,923          1,005,914
   Cost of sales                                                                 3,845,668          4,720,855
   Cost of sales - equipment                                                       144,807            288,175
                                                                              ____________       ____________
      Cost of revenue                                                            4,722,398          6,014,944
                                                                              ____________       ____________
         Gross profit                                                            2,877,159          3,207,715

Operating, general and administrative expenses:
   General, administrative and selling expenses                                  2,743,513          2,540,923
   Depreciation                                                                          0            781,931
   Impairment of merchant portfolio                                                      0          3,649,711
                                                                              ____________       ____________
      Total operating, general and administrative expenses                       2,743,513          6,972,565
                                                                              ____________       ____________
         Net operating income (loss)
                                                                                   133,646         (3,764,850)
                                                                              ____________       ____________
Non-operating income (expense):
   Interest income                                                                      94                559
   Interest (expense)                                                              (69,417)          (130,858)
   Legal settlement                                                                      -             (8,451)
   Loss on lease settlement                                                              -            (51,699)
                                                                              ____________       ____________
                                                                                   (69,323)          (190,449)
                                                                              ____________       ____________
Net income (loss) before provision for income taxes                                 64,551           (190,449)

Income tax benefit (provision)                                                           -                  -
                                                                              ____________       ____________
Net income (loss)                                                             $     64,323       $ (3,955,299)
                                                                              ============       ============
Earnings per share - basic                                                    $       0.00       $      (0.11)
                                                                              ============       ============
Earnings per share - diluted                                                  $       0.00       $      (0.11)
                                                                              ============       ============
Weighted average number of shares of common stock outstanding - basic           35,499,850         34,748,752
                                                                              ============       ============
Weighted average number of shares of common stock outstanding - diluted         35,764,556         34,748,752
                                                                              ============       ============


          See Accompanying Notes to Consolidated Financial Statements.

</TABLE>

                                       26


<PAGE>

<TABLE>
<CAPTION>


             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


                              Preferred Stock         Common Stock
                             ________________    ______________________
                                                                            Additional      Common
                                                                             Paid-In        Stock        Accumulated
                             Shares    Amount      Shares       Amount       Capital       Subscribed      Deficit         Total
                             _______________________________________________________________________________________________________
<S>                          <C>       <C>       <C>           <C>         <C>             <C>           <C>             <C>

Balance, December 31, 2006   58,500    $  585    33,951,698    $ 16,976    $ 19,281,810    $ 100,064     $(14,805,531)   $4,593,904
                             _______________________________________________________________________________________________________

Stock based compensation                                                        240,124                                     240,124

Conversion of preferred
shares to common shares      (4,500)      (45)    1,200,000         600            (555)                                          -

Anti-dilution clause of
2003 common stock financing                         134,751          67          22,975                                      23,042

Net loss, December 31, 2007                                                                                (3,955,299)   (3,955,299)
                             _______________________________________________________________________________________________________

Balance, December 31, 2007   54,000    $  540    35,286,449    $ 17,643    $ 19,544,354    $ 100,064     $(18,760,830)   $  901,771
                             _______________________________________________________________________________________________________

Stock based compensation                                                         14,027                                      14,027

Stock for services                                  250,000         125             125                                         250

Common stock subscribed
released                                            337,254         169          69,895      (70,064)                             -

Net income, December
31, 2008                                                                                                       64,323        64,323
                             _______________________________________________________________________________________________________
Balance, December 31, 2008   54,000    $  540    35,873,703    $ 17,937    $ 19,628,401    $  30,000     $(18,696,507)   $  980,371
                             ======================================================================================================


          See Accompanying Notes to Consolidated Financial Statements.

</TABLE>









                                       27


<PAGE>

<TABLE>
<CAPTION>

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                     Years Ended
                                                                                       _______________________________________
                                                                                       December 31, 2008     December 31, 2007
                                                                                                                (Restated)
                                                                                       _________________     _________________
<S>                                                                                      <C>                   <C>

Cash Flows from Operating Activities:
   Net income(loss)                                                                      $     64,323          $ (3,955,299)
   Depreciation                                                                                     -               781,931
   Loss on lease settlement                                                                         -                51,699
   Write off of cancelled merchant accounts                                                   327,250             3,649,711
   Allowance for doubtful accounts, other receivables and accrued interest income,
      net of bad debt recoveries                                                              (26,015)               (5,169)
   Stock issued for antidilution clause                                                             -                23,042
   Compensation for stock awards                                                               14,027               240,124
   Write off of software consulting originally capitalized as fixed asset                       6,320                     -
   Adjustments to reconcile net income (loss) to cash provided by operating
      activities:
   Changes in assets and liabilities
      Decrease in accounts receivable                                                          30,503               115,816
      Decrease in inventories                                                                 394,820               663,012
      Decrease in other receivables                                                            13,148               104,215
      (Increase) decrease in prepaid expenses                                                 (25,003)                    -
      (Increase) decrease in other non-current assets                                           1,012                  (435)
      (Decrease) in accounts payable                                                          (83,480)             (214,536)
      Increase (decrease) in accrued expenses                                                  80,333               (95,449)
                                                                                         ____________          ____________
         Net cash provided by operating activities                                            797,238             1,358,662
                                                                                         ____________          ____________
Cash Flows from Investing Activities:
   Acquisitions, net of attrition                                                             (86,328)             (199,871)
   Issuance of notes receivable                                                                     -               (50,000)
   Payments received toward notes receivable                                                    6,340                 9,281
                                                                                         ____________          ____________
         Net cash (used in) investing activities                                              (79,988)             (240,590)
                                                                                         ____________          ____________
Cash Flows from Financing Activities:
   Payment on notes payable                                                                   (42,613)             (174,473)
   Proceeds from notes payable                                                                      -                70,000
   Noncash advances from line of credit, related party                                        101,024                83,653
   Payment on line of credit, related party                                                (1,060,656)           (1,314,631)
   Proceeds from line of credit, related party                                                650,000               626,000
   Payment on notes payable, related party                                                   (400,000)             (440,000)
   Proceeds from sale of common stock                                                             250                     -
                                                                                         ____________          ____________
         Net cash (used in) financing activities                                             (751,995)           (1,149,451)
                                                                                         ____________          ____________
         Net decrease in cash                                                                 (34,745)              (31,379)
                                                                                         ____________          ____________
Cash, beginning of period                                                                     126,149               157,528
                                                                                         ____________          ____________
Cash, end of period                                                                      $     91,404          $    126,149
                                                                                         ============          ============


          See Accompanying Notes to Consolidated Financial Statements.

</TABLE>

                                       28


<PAGE>

<TABLE>
<CAPTION>

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)

                                                                                                     Years Ended
                                                                                       _______________________________________
                                                                                       December 31, 2008     December 31, 2007
                                                                                                                (Restated)
                                                                                       _________________     _________________
<S>                                                                                      <C>                   <C>

SUPPLEMENT DISCLOSURE OF CASH
   FLOW INFORMATION
      Cash paid for interest                                                             $     65,307          $     91,936
      Cash paid for income taxes                                                         $          -          $          -

NON-CASH INVESTING AND FINANCING
   TRANSACTIONS
      Inventory purchased from line of credit, related party                             $    361,587          $    481,799
      Common stock subscribed                                                            $     70,064          $          -
      Recovery of bad debt                                                               $    149,232          $          -















          See Accompanying Notes to Consolidated Financial Statements.

</TABLE>


                                       29


<PAGE>


             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.       BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND ORGANIZATION

International Card Establishment, Inc. (the "Company"), a Nevada corporation, is
a provider of diversified products and services to the electronic transaction
processing industry, offering merchant accounts for the acceptance and
processing of credit and debit cards, as well as a proprietary "smart card"
based gift and loyalty program. The Company's Merchant Card Services division
establishes "merchant accounts" for businesses that enable those businesses to
accept credit cards, debit cards, and other forms of electronic payments from
their customers; supplies the necessary card readers and other point-of-sale
transaction systems; facilitates processing for the accounts; and, provides
e-commerce solutions. Through its NEOS Subsidiary the Company also markets a
proprietary "Smart Card"-based system that enables merchants to economically
offer private label gift and loyalty cards - one of the fastest growing product
categories in the industry.

As used in these Notes to the Consolidated Financial Statements, the terms the
"Company", "we", "us", "our" and similar terms refer to International Card
Establishment, Inc. and, unless the context indicates otherwise its consolidated
subsidiaries. The Companies subsidiaries include NEOS Merchant Services
("NEOS"), a Nevada corporation, which provides smart card loyalty programs in an
integrated vertical system for its customers, as well as other electronic
payment services (merchant services); International Card Establishment ("ICE"),
which provides electronic payment services (merchant services); and INetEvents,
Inc. ("INET"), a Delaware Corporation, which has been dormant since 2005.

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany transactions and accounts have
been eliminated in consolidation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

ESTIMATES

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

CASH

For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of December 31, 2008 and 2007, respectively.

CONCENTRATIONS

The Company maintains cash balances at several financial institutions in
California. Accounts at each institution are insured by the Federal Deposit
Insurance Corporation ("FDIC") up to $250,000. At December 31, 2008 and 2007 the
Company had no accounts in excess of the $250,000 insured amount.

Due to the number of customers that we process credit card transactions for we
are not dependant on a limited number of customers for the generation of
revenues.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company estimates its accounts receivable risks and provides allowances for
doubtful accounts accordingly. The Company believes that its credit risk for
accounts receivable is limited because of its large number of customers and the
relatively small account balances for most of its customers. Also, the Company's
customers are dispersed across different business and geographic areas. The
Company evaluates the adequacy of the allowance for doubtful accounts on a
periodic basis. The evaluation includes historical loss experience, length of
time receivables are past due, adverse situations that may affect a customer's
ability to repay and prevailing economic conditions. The Company makes
adjustments to its allowance if the evaluation of allowance requirements differs
from the actual aggregate reserve. This evaluation is inherently subjective and
estimates may be revised as more information becomes available.


                                       30


<PAGE>


INVENTORY

Inventories are stated at the lower of cost or market. Cost is determined using
the first in, first out (FIFO) method. The Company's inventories consist
primarily of electronic merchant processing machines.



FIXED ASSETS

Furniture, fixtures and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are provided for in
amounts sufficient to relate the cost of depreciable assets to operations over
their estimated service lives, principally on a straight-line basis. Leased
assets qualifying for capital lease treatment have been included in the Fixed
Assets and related Accumulated Depreciation amounts in these financial
statements. Leased assets consist of laptops, which are amortized in accordance
with the Company's other fixed assets.

Estimated service lives of property and equipment are as follows:

              Furniture and fixtures                        3 years
              Equipment and machinery                   3 - 5 years
              Software                                      5 years

INCOME TAXES

Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "Accounting for Income Taxes," and clarified by FIN
48, "Accounting for Uncertainty in Income Taxes--an interpretation of FASB
Statement No. 109." A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting. Temporary differences
are the differences between the reported amounts of assets and liabilities and
their tax basis. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effect of changes in tax laws and rates on the
date of enactment.

FAIR VALUE

The carrying amounts reflected in the consolidated balance sheets for cash,
accounts receivables, net, accounts payable, and accrued expenses approximate
the respective fair values due to the short maturities of these items. The
Company does not hold any investments that are available-for-sale.

GOODWILL AND INTANGIBLES

Goodwill represents the excess of purchase price over tangible and other
intangible assets acquired less liabilities assumed arising from business
acquisitions. In 2008 and 2007, the Company's annual goodwill impairment test
did not identify an impairment.

The Company capitalizes intangible assets such as the purchase of merchant and
gift loyalty accounts from portfolio acquisitions (i.e., the right to receive
future cash flows related to transactions of these applicable merchants) (See
Note 4). At least annually, the Company performs a census of merchant accounts
received in such acquisitions, analyzing the expected cash flows, and adjusts
the intangible asset accordingly to the lower of cost or market. In 2008 and
2007, the Company purchased no merchant or gift card portfolios. At December 31,
2008, the Company recognized direct write offs of $327,250. At December 31,
2007, the Company recognized an impairment of $3,649,711 in merchant and gift
card portfolios by writing them down to the lower of cost or market.

DERIVATIVES

The Company occasionally issues financial instruments that contain an embedded
instrument. At inception, the Company assesses whether the economic
characteristics of the embedded derivative instrument are clearly and closely
related to the economic characteristics of the financial instrument (host
contract), whether the financial instrument that embodies both the embedded
derivative instrument and the host contract is currently measured at fair value
with changes in fair value reported in earnings, and whether a separate
instrument with the same terms as the embedded instrument would meet the
definition of a derivative instrument.

If the embedded derivative instrument is determined not to be clearly and
closely related to the host contract, is not currently measured at fair value
with changes in fair value reported in earnings, and the embedded derivative
instrument would qualify as a derivative instrument, the embedded derivative
instrument is recorded apart from the host contract and carried at fair value


                                       31


<PAGE>


with changes recorded in current-period earnings. As of December 31, 2008 and
2007, we determined that none of our embedded financial instruments qualified
for this treatment and that the embedded instruments qualified for the
derivative accounting exemption as they are both indexed to our stock and
classified in the stockholders' equity section of our consolidated balance
sheets. We have accounted for any calculated beneficial conversion feature as
either interest expense or dividends paid, based on the nature of the host
contract.

REVENUES

The Company provides merchant services and customer support for merchants and
other Merchant Services providers, and sells merchant point-of-sale and credit
card processing equipment. Revenues are recognized as customer services are
provided.

The Company provides merchant services to customers for acceptance and
processing of electronic payments. Credit card processing fees are recognized as
incurred. Sales and cost of sales of equipment are recognized when the equipment
is provided and the customer accepts responsibility for the payment of the
equipment.

Substantially all of our revenues are generated from fees charged to merchants
for card-based payment processing services and monthly gift and loyalty program
fees. We typically charge these merchants a bundled rate, primarily based upon
the merchant's monthly charge volume and risk profile. Our fees principally
consist of discount fees, which are a percentage of the dollar amount of each
credit or debit transaction. We charge all merchants higher discount rates for
card-not-present transactions than for card-present transactions in order to
compensate ourselves for the higher risk of underwriting these transactions. We
derive the balance of our revenues from a variety of fixed transaction or
service fees, including fees for monthly minimum charge volume requirements,
statement fees, annual fees and fees for other miscellaneous services, such as
handling chargebacks. We recognize discounts and other fees related to payment
transactions at the time the merchants' transactions are processed. We recognize
revenues derived from service fees at the time the service is performed. Related
interchange and assessment costs are also recognized at that time.

We follow the requirements of EITF 99-19, "Reporting Revenue Gross as a
Principal Versus Net as an Agent", in determining our revenue reporting.
Generally, where we have merchant portability, credit risk and ultimate
responsibility for the merchant, revenues are reported at the time of sale on a
gross basis equal to the full amount of the discount charged to the merchant.
This amount includes interchange paid to card issuing banks and assessments paid
to credit card associations pursuant to which such parties receive payments
based primarily on processing volume for particular groups of merchants.
Interchange fees are set by Visa and MasterCard and are based on transaction
processing volume and are recognized at the time transactions are processed.

ADVERTISING

Advertising costs are charged to operations as incurred. Advertising costs for
the years ended December 31, 2008 and 2007 were $47,545 and $58,187,
respectively.

RECLASSIFICATION

Certain reclassifications, which have no effect on net loss, have been made in
the prior period financial statements to conform to the current presentation.
Based on a comment letter from the SEC we have restated our numbers in the 2007
Statement of Cash Flows. We will be filing an amendment to our 2007 10-K in the
near future.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 2008, the Financial Accounting Standards Board ("FASB") issued FASB
Statement No 161, "Disclosures about Derivative Instruments and Hedging
Activities", an amendment of SFAS No. 133 ("SFAS 161"). SFAS 161 applies to all
derivative instruments and non-derivative instruments that are designated and
qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS 133 and
related hedged items accounted for under SFAS 133. SFAS 161 requires entities to
provide greater transparency through additional disclosures about how and why an
entity uses derivative instruments, how derivative instruments and related
hedged items are accounted for under SFAS 133 and its related interpretations,
and how derivative instruments and related hedged items affect an entity's
financial position, results of operations, and cash flows. SFAS 161 is effective
as of the beginning of an entity's first fiscal year that begins after November
15, 2008. We do not expect that the adoption of SFAS 161 will have a material
impact on our financial condition or results of operations.

In May 2008, the FASB issued Statement of Financial Accounting Standards No.
162, "The Hierarchy of Generally Accepted Accounting Principles," ("SFAS 162").
SFAS 162 identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of


                                       32


<PAGE>


non-governmental entities that are presented in conformity with generally
accepted accounting principles in the United States of America. SFAS 162 will be
effective 60 days after the Security and Exchange Commission approves the Public
Company Accounting Oversight Board's amendments to AU Section 411. The Company
does not anticipate the adoption of SFAS 162 will have an impact on its
financial statements.

In May 2008, the FASB issued SFAS No. 163, "Accounting for Financial Guarantee
Insurance Contracts - an interpretation of FASB Statement No. 60" ("SFAS 163").
SFAS 163 requires that an insurance enterprise recognize a claim liability prior
to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement

also clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities. Those clarifications will increase
comparability in financial reporting of financial guarantee insurance contracts
by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008. The
Company does not expect the adoption of SFAS 163 will have a material impact on
its financial condition or results of operation.

In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities," ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses
whether instruments granted in share-based payment transactions are
participating securities prior to vesting, and therefore need to be included in
the computation of earnings per share under the two-class method as described in
FASB Statement of Financial Accounting Standards No. 128, "Earnings per Share."
FSP EITF 03-6-1 is effective for financial statements issued for fiscal years
beginning on or after December 15, 2008 and earlier adoption is prohibited. The
Company is required to adopt FSP EITF 03-6-1 in the first quarter of 2009 and is
currently evaluating the impact that FSP EITF 03-6-1 will have on its financial
statements.

NOTE 2.       NOTE RECEIVABLE

In the April 2007, we issued a note receivable for $50,000 to an independent
third party. This receivable bears no interest and is convertible to a maximum
of 10% of the third party's outstanding common stock in the event of default.
Repayment was expected to begin in October of 2007; however, in September 2007,
we have fully allowed for the entire balance of this note as uncollectable. As
of December 31, 2008, we have not collected any cash from this loan nor
converted the debt to common stock. However, the holder of the note acknowledges
the debt as a line item in its SEC filings as recently as September 30, 2008.

NOTE 3.       FIXED ASSETS

Fixed assets and accumulated depreciation consists of the following:

                                                Years ended
                                      ________________________________
                                       December 31,       December 31,
                                           2008               2007
                                      ____________        ___________

       Furniture and fixtures         $     14,750        $    14,750
       Equipment and machinery             138,257            138,257
       Software                          2,830,000          2,836,320
                                      ____________        ___________
                Subtotal                 2,983,007          2,989,327
       Accumulated Depreciation         (2,983,007)        (2,983,007)
                                      ____________        ___________
                                      $          -        $     6,320
                                      ============        ===========

In the second quarter of 2006, the Company entered into a lease agreement for a
new accounting system for $93,000. The lease commenced in February 2006 and was
terminated March 31, 2007. We had successfully negotiated a settlement to cancel
this lease. The settlement agreement calls for payments of $10,000 over 7 months
beginning May 31, 2007; all scheduled payments were made as of December 31,
2007.


                                       33


<PAGE>


In the third quarter of 2005, the Company engaged an outside company to
customize a software package. This consulting fee was misclassed as a software
license and carried with the fixed assets. In the first quarter of 2008, this
misclassification was identified and the fee was adjusted to consulting fees
representing an increase in consulting fees of $6,320.

NOTE 4.       GOODWILL AND INTANGIBLE ASSETS

Goodwill and Intangible assets were purchased with the acquisition NEOS Merchant
Solutions, Inc. The purchase price allocation at fair market values included
values assigned to intangible assets and a portion allocated to goodwill. The
Company has determined that the intangibles purchased have an indefinite useful
life except as noted below. The provisions of SFAS No. 142, "Goodwill and Other
Intangible Assets", require the completion of an annual impairment test with any
impairment recognized in current earnings.

The Company hired an outside appraisal to assist in the determination of any
impairment in intangibles or goodwill for both 2008 and 2007. We have determined
that at present the NEOS tradename has an indefinite live, which have been
included in the Company's annual impairment analysis. In 2008 and 2007, the
Company completed impairment analysis that resulted in no impairment of
goodwill. In 2007, we have recognized an impairment of $3,649,711 in our
merchant and gift card portfolios by writing them down to the lower of cost or
market.

The Company's intangible assets consisted of the following:

                                         December 31,
                                 _____________________________
                                    2008              2007
                                 ___________       ___________

       Merchant portfolios       $ 1,144,378       $ 1,385,300
       Tradename                     435,000           435,000
                                 ___________       ___________
                                 $ 1,579,378       $ 1,820,300
                                 ===========       ===========
       Goodwill                  $    87,979       $    87,978
                                 ===========       ===========

NOTE 5.       ACCRUED EXPENSES

Accrued expenses consist of the following:

                                         December 31,
                                 _____________________________
                                    2008              2007
                                 ___________       ___________

       Wages payable             $   284,311       $   298,528
       Customer deposits             103,745            40,589
       Accrued expenses, other       166,280           125,189
       Accrued interest                4,109             7,977
       Sales tax payable               2,129             2,110
       Reserve for chargebacks        32,738            38,588
                                 ___________       ___________
                                 $   593,312       $   512,981
                                 ===========       ===========

NOTE 6.       NOTES AND LEASES PAYABLE

Notes and leases payable consist of the following:

                                         December 31,
                                 _____________________________
                                    2008              2007
                                 ___________       ___________

       Notes payable, at 6%
       interest, due May 2008    $         -       $    42,613
                                 ___________       ___________

       Current notes and leases
       payable                   $         -       $    42,613
                                 ===========       ===========

NOTE 7.       STOCKHOLDERS' EQUITY

The authorized common stock of the Company consists of 100,000,000 shares of
common shares with par value of $0.0005 and 10,000,000 shares of serial
preferred stock with a par value of $0.01.


                                       34


<PAGE>


NOTE 7.       STOCKHOLDERS' EQUITY - CONTINUED


In 2007, the Company has the following common stock transactions:

     o    Issued 1,200,000 shares for the conversion of 4,500 preferred shares.
     o    Issued 134,751 shares per a 2003 antidilution clause for a value of
          $23,042.

As of December 31, 2007, we have instructed our SEC counsel to finalize all
necessary paperwork for the issuance of shares comprising the remaining $100,064
in our common stock subscription.

In 2008, the company has the following common stock transactions:

     o    We had 183,000 stock options vest in 2008. We had no unvested stock
          options as of December 31, 2008.
     o    Issued 250,000 shares for services valued at $250, or $0.01 per
          share.
     o    Issued $70,064 of common stock subscriptions.

PREFERRED STOCK

Collectively, the Series A Convertible Preferred Stock contain the following
features:

     o    Dividends: Each share of Series A Preferred Stock pays a mandatory
          monthly dividend, at an annual rate equal to the product of
          multiplying (i) $100.00 per share, by (ii) six and one-half percent
          (6.5%). Dividends are payable monthly in arrears on the last day of
          each month, in cash, and prorated for any partial month periods. From
          and after the Effective Date of the Registration Statement, dated July
          17, 2006, no further MANDATORY DIVIDENDS shall be payable on the
          Series A Preferred Stock.

     o    Liquidation Preferences: Series A Preferred Stock is entitled to be
          paid first out of the assets of the Corporation available for
          distribution to shareholders, whether such assets are capital, surplus
          or earnings, an amount equal to the Series A Purchase Price per share
          of Series A Preferred Stock held (as adjusted for any stock splits,
          stock dividends or recapitalizations of the Series A Preferred Stock)
          and any declared but unpaid dividends on such share, before any
          payment is made to the holders of the common stock, or any other stock
          of the Corporation ranking junior to the Series A Preferred Stock with
          regard to any distribution of assets upon liquidation, dissolution or
          winding up of the Corporation.

     o    Voting Rights: None

     o    Conversion Rights: Series A Preferred Stock may, at the option of the
          holder, be converted at any time or from time to time into fully paid
          and non-assessable shares of common stock at the conversion rate in
          effect at the time of conversion, provided, that a holder of Series A
          Preferred Stock at any given time convert only up to that number of
          shares of Series A Preferred Stock so that, upon conversion, the
          aggregate beneficial ownership of the Corporation's common stock is
          not more than 9.99% of the Corporation's common stock then
          outstanding. The "Conversion Price" per share for the Series A
          Preferred Stock shall be equal to Eighty-Five percent (85%) of the
          Market Price, rounded to the nearest penny; in no event shall the
          Conversion Price be less than $0.375 per share (the "Floor Price") or
          exceed $0.47 (the "Ceiling Price").

     o    Reservation of Stock Issuable Upon Conversion: The Corporation shall
          at all times reserve and keep available out of its authorized but
          unissued shares of common stock, solely for the purpose of effecting
          the conversion of the shares of the Series A Preferred Stock
          15,000,000 shares of common stock.

The Company has converted 0 and 4,500 shares of preferred stock to 0 and
1,200,000 shares of common stock in 2008 and 2007, respectively.


                                       35


<PAGE>


NOTE 7.       STOCKHOLDERS' EQUITY - CONTINUED

NET INCOME (LOSS) PER COMMON SHARE

Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per
Share". The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Potentially dilutive common shares consist of
employee stock options, warrants, and restricted stock, and are excluded from
the diluted earnings per share computation in periods where the Company has
incurred a net loss.

<TABLE>
<CAPTION>
                                                      For the Year Ended December 31, 2008
                                                 _______________________________________________
                                                   Income             Shares           Per-Share
                                                 (Numerator)       (Denominator)        Amount
                                                 _______________________________________________
<S>                                               <C>               <C>                 <C>

Net income
Basic EPS:                                        $ 64,323
   Income available to common stockholders        $ 64,323          35,499,850          $ 0.00
                                                                                        ======

Options                                                  -                   -
Preferred shares                                         -             264,706
                                                  ____________________________

Diluted EPS:
   Income available to common stockholders
      plus assumed conversions                    $ 64,323          35,764,556          $ 0.00
                                                  ============================================

</TABLE>

At December 31, 2007, the Company had a net loss, which resulted in no dilution
of any common stock equivalents, such as options or preferred shares

NOTE 8.       STOCK OPTION PLAN

The Company's 2003 Stock Option Plan (as amended) for Directors, Executive
Officers, and Employees of and Key Consultants to the Company (the "Plan"),
which is shareholder approved, permits the grant of share options and shares to
its employees for up to 10,000,000 shares of common stock. The Company believes
that such awards better align the interests of its employees and key consultants
with those of its shareholders. Option awards are generally granted with an
exercise price equal to market price of the Company stock at the date of grant,
unless otherwise defined in the option agreement with the grantee.

The fair value of each option award is estimated on the date of grant using the
Black-Scholes option valuation model that uses the assumptions noted in the
following table. Expected volatilities are based on volatilities from the
Company's traded common stock since the acquisition of INetEvents, Inc. in July
2003. The expected term of options granted is estimated at half of the
contractual term as noted in the individual option agreements and represents the
period of time that options granted are expected to be outstanding. The
risk-free rate for the periods within the contractual life of the option is
based on the U.S. Treasury bond rate in effect at the time of grant for bonds
with maturity dates at the estimated term of the options.

                                        2008          2007
                                       ____________________

     Expected volatility               212.88%       212.88%
     Weighted-average volatility        70.96%        70.96%
     Expected dividends                     0             0
     Expected term (in years)               4             4
     Risk-free rate                     4.013%        4.013%


                                       36


<PAGE>


NOTE 8.       STOCK OPTION PLAN - CONTINUED

A summary of option activity under the Plan as of December 31, 2008 and 2007,
respectively, and changes during the periods then ended are presented below:

<TABLE>
<CAPTION>

                                                                        Weighted-Average
                                                                           Remaining          Aggregate
                                                   Weighted-Average       Contractual         Intrinsic
Options                               Shares        Exercise Price            Term              Value
________________________________________________________________________________________________________
<S>                                  <C>                <C>                   <C>            <C>

Outstanding at December 31, 2006     4,245,000          $ 0.22                2.2            $   835,684
Granted                              3,185,000          $ 0.15
Exercised                                    -               -
Forfeited or expired                         -               -
                                     ___________________________________________________________________
Outstanding at December 31, 2007     7,430,000          $ 0.19                3.5            $ 1,079,811
                                     ===================================================================
Exercisable at December 31, 2007     7,245,000          $ 0.19                3.5            $ 1,065,631
                                     ===================================================================
Outstanding at December 31, 2007     7,430,000          $ 0.19                3.5            $ 1,079,811
Granted                                 74,000          $ 0.15
Exercised                                    -               -
Forfeited or expired                    (2,000)         $ 0.15                                      (153)
Outstanding at December 31, 2008     7,502,000          $ 0.19                3.5            $ 1,079,658

                                     ===================================================================
Exercisable at December 31, 2008     7,502,000          $ 0.19                3.5            $ 1,079,658
                                     ===================================================================
</TABLE>

A summary of the status of the Company's nonvested shares as of December 31,
2008 and 2007, respectively, and changes during the periods then ended are
presented below:

                                                     Weighted-Average
                                                        Grant-Date
Nonvested Shares                        Shares          Fair Value
______________________________________________________________________

Nonvested at December 31, 2006            85,000        $   11,448
Granted                                3,100,000           244,127
Vested                                (3,000,000)         (241,395)
Forfeited                                      -                 -
                                      ________________________________
Non-vested at December 31, 2007          185,000        $   14,180

                                      ================================
Granted                                        -        $        -
Vested                                  (183,000)                -
Forfeited                                 (2,000)                -
                                      ________________________________
Non-vested at December 31, 2008                -        $    (0.00)
                                      ================================

NOTE 9.       INCOME TAXES

The consolidated provision for federal and state income taxes for the years
ended December 31, 2008 and 2007 are as follows:

                                              2008             2007
                                           ___________________________

       Current - State                     $    2,400       $    1,000
       Current - Federal                            -                -
       Deferred - State                       (48,500)        (121,000)
       Deferred - Federal                    (192,000)        (539,000)
       Valuation allowance                    238,100          659,000
                                           ___________________________
       Income tax provision (benefit)      $        -       $        -
                                           ===========================

NOTE 9.       INCOME TAXES - CONTINUED

There were no amounts paid for federal income taxes during the years ended
December 31, 2008 and 2007.

The income tax provision differs from the expense that would result from
applying statutory tax rates to income before taxes because of certain expenses
that are not deductible for tax purposes and the effect of the valuation
allowance.

As of December 31, 2008, the Company had federal net operating loss carry
forwards of approximately $12,267,000 that can be deducted against future
taxable income. These tax carryforward amounts expire in 2008.


                                       37


<PAGE>


However, such carry forwards are not available to offset federal alternative
taxable income. Internal Revenue Code Section 382 imposes limitations on our
ability to utilize net operating losses if we experience an ownership change and
for the NOL's acquired in the acquisitions of subsidiaries. An ownership change
may result from transactions increasing the ownership of certain stockholders in
the stock of the corporation by more than 50 percentage points over a three-year
period. The value of the stock at the time of an ownership change is multiplied
by the applicable long-term tax exempt interest rate to calculate the annual
limitation. Any unused annual limitation may be carried over to later years.

The state operating losses will expire between 2012 and 2017 if not utilized.

The Company accounts for income taxes in accordance with Statement of SFAS No.
109 - Accounting for Income Tax and FASB Interpretation No. 48 - Accounting for
Uncertainty in Income Taxes an interpretation of FASB Statement No.109, whereby
deferred taxes are provided on temporary differences arising from assets and
liabilities whose bases are different for financial reporting and income tax
purposes. Deferred taxes are attributable to the effects of the following items:

     o   Differences in calculating depreciation on property, plant and
         equipment, differences in calculating amortization and/or impairments
         on intangible assets, allowance for bad debt, and tax loss carry
         forwards.

The Company's total deferred tax assets and deferred tax liabilities at December
31, 2008 and 2007 are as follows:

                                                       2008           2007
                                                    ___________________________

     Deferred tax asset - current                   $         -     $         -

     Deferred tax asset - non current                 5,397,000       5,156,000
                                                    ___________________________
         Total deferred tax asset                     5,397,000       5,156,000
                                                    ___________________________

     Deferred tax liability - current                         -               -
     Deferred tax liability - non current              (241,000)       (262,000)
                                                    ___________________________
         Total deferred tax liability                  (241,000)       (262,000)
                                                    ___________________________

     Current deferred tax asset (liability)                   -               -
     Non current deferred tax asset (liability)       5,156,000       4,894,000
                                                    ___________________________

         Net deferred tax asset (liability)           5,156,000     $ 4,894,000
                                                    ___________________________
     Valuation allowance                             (5,156,000)     (4,894,000)
                                                    ___________________________
     Net deferred tax asset (liability)             $         -     $         -
                                                    ===========================


                                       38


<PAGE>


NOTE 9.       INCOME TAXES - CONTINUED

SFAS No. 109 - Accounting for Income Tax and FASB Interpretation ("FIN") No. 48
- Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement
No.109, specify that deferred tax assets are to be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred
tax asset will not be realized. The valuation allowance increased $65,668 and
$660,000 during the years ended December 31, 2008 and 2007 respectively, based
upon management's expectation of future taxable income. The Company will
continue to assess the valuation allowance and to the extent it is determined
that such allowance is no longer required, the tax benefit of the net deferred
tax asset will be recognized in the future.

                                               December 31,      December 31,
                                                   2008              2007
                                               ____________      ____________

      Statutory federal tax (benefit) rate       (35.00)%          (35.00)%
      Statutory state tax (benefit) rate          (8.84)%           (8.84)%
                                               ____________      ____________
          Effective income tax rate (Net)        (43.84)%          (43.84)%
                                               ____________      ____________

      Valuation allowance                         43.84 %           43.84 %
                                               ____________      ____________
      Effective income tax rate                    0.00 %            0.00 %
                                               ____________      ____________

FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with SFAS No. 109, FIN 48
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. The Company has not accrued any additional interest
or penalties as a result of the adoption of FIN 48.

The Company files income tax returns in the United States federal jurisdiction.
With a few exceptions, the Company is no longer subject to U.S. federal, state
or non-U.S. income tax examination by tax authorities on tax returns filed
before December 31, 2002. The Company will file its U.S. federal return for the
year ended December 31, 2008 upon the issuance of this filing. These U.S.
federal returns are considered open tax years as of the date of these
consolidated financial statements. No tax returns are currently under
examination by any tax authorities

NOTE 10.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On September 30, 2006, the Company entered into an agreement for a revolving
line of credit worth $1,000,000 with Worldwide Business Services Group to be
used primarily for working capital. The balance due on the line was $658,536 and
$606,582 as of December 31, 2008 and 2007, respectively. In the third quarter of
2006, the CEO of Worldwide Business Services Group became the Company's General
Manager. Due to this, we have reflected the outstanding line of credit as
related party.

Our Line of Credit with Worldwide Business Services Group matured on June 30,
2008. The Line of Credit was renewed for one year during the third quarter of
2008 and now matures on June 30, 2009.

Related party bonuses paid during the years ended December 31, 2008 and 2007
totaled $0 and $6,800, respectively.

During the year ended December 31, 2006, the Company also purchased merchant
portfolios from a related party for $1,040,000. Payments of $40,000 are required
for 26 months. This note contains interest of 6% per annum. This is our Notes
Payable, Related Party on our accompanying balance sheet and was $0 and $400,000
as of December 31, 2008 and 2007, respectively. No portfolios were purchased in
2008 or 2007 from the related party.

NOTE 11.      COMMITMENTS AND CONTINGENCIES

The Company's existing $500,000 line of credit, entered into in December 2005,
was extinguished in July 2006. In July 2006, the Company entered into another
line of credit agreement with the same vendor for $2,000,000. At the time of
extinguishment the Company had not drawn down on the line of credit and no
balance was outstanding. As of December 31, 2008, the Company has not drawn on
the line of credit.


                                       39


<PAGE>


The Company is engaged in various non-cancelable operating leases for office
facilities and equipment. Under the related lease agreements, the Company is
obligated to make monthly payments ranging from $159 to $3,725 with expiration
dates through January 2011.


Minimum future lease obligations for the five years immediately following the
balance sheet date are as follows:

       2009                                         $ 59,090
       2010                                           11,239
       2011                                              248
       Thereafter                                          -
                                                    ________
       Total future minimum lease commitments       $ 70,577
                                                    ========

In 2005, the Company was engaged in a operating lease for a sales office. Under
the term of the lease agreement, the Company is obligated to make minimum
monthly payments of $2,579 with an expiration date through August 2009. This
lease was terminated in 2006.

The company leases its facilities for a total of $5,877 per month. Our current
offices are located in Camarillo and Mission Viejo, California and Tampa,
Florida. Total lease costs for the years ended December 31, 2008 and 2007 were
$74,037 and $86,494, respectively.

In 2007, ICE was served a subpoena by the receiver for a company seized by the
FTC. The receiver's counsel felt that ICE was not acting quickly enough on the
subpoena so they filed a motion to hold ICE in contempt. The payment of $8,451
is to pay the attorneys' fees that the receiver incurred in filing that motion.
There are no other fees or costs the receiver is alleging is owed. There are no
material legal proceedings pending or, to our knowledge, threatened against us
or any of our subsidiaries.

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

None.

ITEM 9A.      CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain "disclosure controls and procedures," as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified
in Securities and Exchange Commission rules and forms, and that such information
is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. In designing and evaluating our disclosure
controls and procedures, management recognized that disclosure controls and
procedure, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the disclosure
controls and procedures are met. Additionally, in designing disclosure controls
and procedures, our management was required to apply its judgment in evaluating
the cost-benefit relationship of possible disclosure controls and procedures.
The design of any disclosure controls and procedures also is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions.

As of December 31, 2008, we carried out an evaluation, under the supervision and
with the participation of our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures were effective to ensure that information required to be disclosed by
us in our periodic reports is recorded, processed, summarized and reported,
within the time periods specified for each report and that such information is
accumulated and communicated to our management, including our principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.


                                       40


<PAGE>


MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of International Card Establishment, Inc. is responsible for
establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule 13a-15(f) or
15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process
designed by, or under the supervision of, the company's principal executive and
principal financial officers and effected by the company's board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with accounting principles generally
accepted in the United States of America and includes those policies and
procedures that:

     o   Pertain to the maintenance of records that in reasonable detail
         accurately and fairly reflect the transactions and dispositions of the
         assets of the company;

     o   Provide reasonable assurance that transactions are recorded as
         necessary to permit preparation of financial statements in accordance
         with accounting principles generally accepted in the United States of
         America and that receipts and expenditures of the company are being
         made only in accordance with authorizations of management and directors
         of the company; and

     o   Provide reasonable assurance regarding prevention or timely detection
         of unauthorized acquisition, use or disposition of the company's assets
         that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.

Management assessed the effectiveness of the Company's internal control over
financial reporting as of December 31, 2008. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated
Framework.

Based on its assessment, management concluded that, as of December 31, 2008, the
Company's internal control over financial reporting is effective based on those
criteria.

This annual report does not include an attestation report of the Company's
registered accounting firm regarding internal control over financial reporting.
The management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No changes in the Company's internal control over financial reporting have come
to management's attention during the Company's last fiscal quarter that have
materially affected, or are likely to materially affect, the Company's internal
control over financial reporting.

ITEM 9B.      OTHER INFORMATION

None.


                                       41


<PAGE>


                                    PART III

ITEM 10.      DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The members of our board of directors serve until the next annual meeting of the
stockholders, or until their successors have been elected. The officers serve at
the pleasure of the board of directors. Information as to our directors and
executive officers is as follows:

             Name             Age                      Position
       ___________________________________________________________________

       William Lopshire       46        Chief Executive Officer, Secretary
                                        and Director

       Candace Mills          53        Chief Financial Officer

The principal occupation and business experience during the last five years for
each of our directors and executive officers are as follows: WILLIAM J.
LOPSHIRE, Chief Executive Officer, Secretary, and a director. Mr. Lopshire
co-founded International Card Establishment, Inc. with another individual in
2002, bringing 15 years of diversified experience in the fields of law,
strategic planning, finance, securities, and technology. He was appointed to his
present positions in January 2003. In 1989, Mr. Lopshire founded the law firm of
Lopshire & Barkan (Woodland Hills, CA), specializing in corporate and securities
law. Mr. Lopshire subsequently accepted a partnership in the law firm of
Manning, Marder, Kass, Ellrod & Rameriz (Los Angeles, CA), where he specialized
in corporate finance, securities law, mergers and acquisitions, and
international business transactions. In 1999, Mr. Lopshire became a principal in
a private equity group that invested in, and provided managerial support to,
several developing companies in the U.S. and abroad with diverse interests
ranging from automotive parts to software development. Mr. Lopshire graduated
from Michigan State University in 1985, with a Bachelor of Arts degree in
Business Administration/ Accounting; and earned his Juris Doctor degree from
Pepperdine University School of Law in 1988. He is admitted to practice law in
California and before the United States Tax Court.

CANDACE MILLS, Chief Financial Officer. Ms. Mills has over ten years of
accounting and bookkeeping experience. Prior to joining the Company Ms. Mills
has been employed in various accounting and managerial positions with small to
medium size companies including Learning Group International, Price Waterhouse,
Bugle Boy Industries, Inc. all based in Southern California. Ms. Mills owned and
operated The Bookkeeper, a business that offered clients bookkeeping and
accounting services, from March 2000 until being appointed as Chief Financial
Officer of the Company. Ms. Mills holds an Associate of Arts in Business
Management from the University of Akron where she graduated in 1982.

The officers and directors may be deemed parents and promoters of the Company as
the Securities Act of 1933 defines those terms, as amended. All directors hold
office until the next annual stockholders' meeting or until their death,
resignation, retirement, removal, disqualification, or until their successors
have been elected and qualified. Officers of the Company serve at the will of
the board of directors.

There are no agreements or understandings for any of our officers or directors
to resign at the request of another person and none of the officers or directors
are acting on behalf of or will act at the direction of any other person.

COMMITTEES OF THE BOARD OF DIRECTORS

Currently, the Company's Board of Directors acts as the audit committee. The
Company's sole director, Mr. Lopshire, is not an "audit committee financial
expert" within the applicable definition of the Securities and Exchange
Commission. The Company will not have an "audit committee financial expert"
until the Board is expanded and additional directors are added.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers and persons who beneficially own more than ten percent of a
registered class of our equity securities to file with the SEC initial reports
of ownership and reports of change in ownership of common stock and other equity
securities of our Company. Officers, directors and greater than ten percent
stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. Based solely upon our review of copies of Forms
3, 4 and 5, and any subsequent amendments thereto, furnished to the Company by
our directors, officers and beneficial owners of more than ten percent of our
common stock, we are not aware of any Forms 3, 4 and/or 5 which certain of our
directors, officers or beneficial owners of more than ten percent of our common
stock that, during our fiscal year ended December 31, 2008, failed to file on a
timely basis reports required by Section 16(a) of the Securities Exchange Act of
1934.


                                       42


<PAGE>


CODE OF ETHICS

The Company adopted a Code of Ethics that applies to all of our directors,
officers and employees, including our principal executive officer, principal
financial officer and principal accounting officer.

COMPENSATION OF DIRECTORS

We do not currently pay our directors for attending meetings of our Board of
Directors. We also have no standard arrangement pursuant to which our directors
are compensated for any services provided as a director or for committee
participation or special assignments.


<PAGE>


ITEM 11.      EXECUTIVE COMPENSATION

The following tables set forth for the fiscal year indicated the compensation
paid by our company to our Chief Executive Officer and other executive officers
with annual compensation exceeding $100,000:

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                               ANNUAL COMPENSATION

_______________________________________________________________________________________________________________________

                           SUMMARY COMPENSATION TABLE
_______________________________________________________________________________________________________________________
                                                                                  Nonqualified
                                                                   Non-Equity       Deferred
Name and                                      Stock    Option    Incentive Plan   Compensation    All Other
principal                  Salary    Bonus    Awards   Awards     Compensation      Earnings     Compensation    Total
position           Year     ($)       ($)      ($)      ($)           ($)             ($)            ($)          ($)
_______________________________________________________________________________________________________________________
<S>                <C>    <C>        <C>         <C>         <C>       <C>             <C>            <C>       <C>

William Lopshire   2008   122,308    57,476      0           0         0               0              0         179,784

Chief Executive    2007   116,769    93,320      0      76,649         0               0              0         286,738
Officer, Director
_______________________________________________________________________________________________________________________
Candace Mills

Chief Financial    2008    61,870    12,000      0           0         0               0              0          73,870
Officer            2007    43,195     6,000      0           0         0               0              0          49,145
_______________________________________________________________________________________________________________________
Kjell Nesen        2008   122,308    57,476      0           0         0               0              0         179,784

VP of Operations   2007   116,195    93,320      0      76,649         0               0              0         286,164
_______________________________________________________________________________________________________________________
Dana Marlin        2008   122,308    57,476      0           0         0               0              0         179,784

General Manager    2007   116,769    93,320      0      76,649         0               0              0         286,738
_______________________________________________________________________________________________________________________

</TABLE>

<TABLE>
<CAPTION>

                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
_________________________________________________________________________________________________________________________________

                                                                                                                         Equity
                                                                                                                       Incentive
                                                                                                Market     Equity         Plan
                                                                                                Value     Incentive     Awards:
                                                                                      Number      of        Plan       Market or
                                                Equity                                  of      Shares     Awards:       Payout
                                            Incentive Plan                            Shares      or      Number of     Value of
                                                Awards:                              or Units   Units     Unearned      Unearned
              Number of     Number of         Number of                                 of        of       Shares,      Shares,
              Securities    Securities        Securities                              Stock     Stock     Units or      Units or
              Underlying    Underlying        Underlying                               That      That       Other        Other
              Unexercised   Unexercised      Unexercised      Option                   Have      Have    Rights That     Rights
              Options       Options            Unearned      Exercise     Option       Not       Not      Have Not     That Have
              (#)           (#)                Options        Price     Expiration    Vested    Vested     Vested      Not Vested
Name          Exercisable   Unexercisable        (#)           ($)         Date        (#)       ($)         (#)          (#)
_________________________________________________________________________________________________________________________________
<S>            <C>                  <C>           <C>          <C>       <C>            <C>       <C>         <C>           <C>

William        1,000,000            0             0            0.21      6-30-2015      0         0           0             0
Lopshire       1,000,000                                       0.15      9-28-2012
_________________________________________________________________________________________________________________________________
Candace                0       10,000             0            0.15      9-28-2012      0         0           0             0
Mills
_________________________________________________________________________________________________________________________________
Kjell Nesen    1,000,000            0             0            0.21      6-30-2015      0         0           0             0
               1,000,000                                       0.15      9-28-2012
_________________________________________________________________________________________________________________________________
Dana Marlin    1,000,000            0             0            0.21      6-30-2015      0         0           0             0
               1,000,000                                       0.15      9-28-2012
_________________________________________________________________________________________________________________________________

</TABLE>


                                       43


<PAGE>


OPTION GRANTS IN LAST FISCAL YEAR

Officers, directors, and employees received option grants as follows:

<TABLE>
<CAPTION>

                                                                 Weighted-
                                                   Weighted-     Average
                                                   Average       Remaining        Aggregate
                                                   Exercise      Contractual      Intrinsic
Options                              Shares        Price         Term             Value
____________________________________________________________________________________________
<S>                                  <C>            <C>              <C>         <C>

Outstanding at December 31, 2006     4,245,000      $ 0.22           2.2         $   835,684

Granted                              3,185,000      $ 0.15

Exercised                                    -           -

Forfeited or expired                         -           -
                                     _______________________________________________________

Outstanding at December 31, 2007     7,430,000      $ 0.19           3.5         $ 1,079,811
                                     =======================================================
Exercisable at December 31, 2007     7,245,000      $ 0.19           3.5         $ 1,065,631
                                     =======================================================
Outstanding at December 31, 2007     7,430,000      $ 0.19           3.5         $ 1,079,811

Granted                                 74,000      $ 0.15

Exercised                                    -           -

Forfeited or expired                    (2,000)     $ 0.15                              (153)
                                     _______________________________________________________

Outstanding at December 31, 2008     7,502,000      $ 0.19           3.5         $ 1,079,658
                                     =======================================================
Exercisable at December 31, 2008     7,502,000      $ 0.19           3.5         $ 1,079,658
                                     =======================================================

</TABLE>

During the year of 2004, the Company adopted a 401(k) plan for its employees.
The Company does not provide matching on the employees contributions to the
plan.

Other than the Company's 2003 Stock Option Plan and its 401(k) plan, no pension,
profit sharing, stock option or other similar programs have been adopted by the
Company for the benefit of its employees.

OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

None.


ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
              RELATED STOCKHOLDER MATTERS

(a) Security Ownership of Certain Beneficial Owners.

The following table sets forth the security and beneficial ownership for each
class of our equity securities for any person who is known to be the beneficial
owner of more than five percent of the Company as of March 19, 2009:

<TABLE>
<CAPTION>

Title of Class     Name and Address of          Amount and Nature of     Percent
                   Beneficial Owner             Beneficial Owner         of Class
_________________________________________________________________________________
<S>                                                  <C>                  <C>

    Common         Charles Salyer                    2,250,000            6.38%
                   555 Airport Way, Suite A
                   Camarillo, CA 93010

    Common         Randy Simoneaux                   2,224,793            6.30%
                   555 Airport Way, Suite A
                   Camarillo, CA 93010

</TABLE>

The total of our outstanding Common Shares as of March 19, 2009 are held by 84
shareholders of record.


                                       44


<PAGE>


(b) Security Ownership of Management.

The following table sets forth the ownership for each class of our equity
securities owned beneficially and of record by all directors and officers of the
Company as of March 19, 2009:

<TABLE>
<CAPTION>

Title of Class     Name and Address of          Amount and Nature of     Percent
                   Beneficial Owner             Beneficial Owner         of Class
_________________________________________________________________________________
<S>                                                  <C>                  <C>

    Common         William Lopshire                  1,600,000            4.53%
                   555 Airport Way, Suite A
                   Camarillo, CA 93010

    Common         Candace Mills                         0                 0%
                   555 Airport Way, Suite A
                   Camarillo, CA 93010

    Common         All Officers and Directors as     1,600,000            4.53%
                   a Group (Two (2) individuals)

</TABLE>

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
              INDEPENDENCE

On September 30, 2006, the Company entered into an agreement for a revolving
line of credit worth $1,000,000 with Worldwide Business Services Group to be
used primarily for working capital. The balance due on the line was $658,536 and
$606,582 as of December 31, 2008 and 2007, respectively. In the third quarter of
2006, the CEO of Worldwide Business Services Group became the Company's General
Manager. Due to this, we have reflected the outstanding line of credit as
related party.

Our Line of Credit with Worldwide Business Services Group matured on June 30,
2008. The Line of Credit was renewed for one year during the third quarter of
2008 and now matures on June 30, 2009.

Related party bonuses paid during the years ended December 31, 2008 and 2007
totaled $0 and $6,800, respectively.

During the year ended December 31, 2006, the Company also purchased merchant
portfolios from a related party for $1,040,000. Payments of $40,000 are required
for 26 months. This note contains interest of 6% per annum. This is our Notes
Payable, Related Party on our accompanying balance sheet and was $0 and $400,000
as of December 31, 2008 and 2007, respectively. No portfolios were purchased in
2008 or 2007 from the related party.

ITEM 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

The aggregate fees billed for professional services rendered by our principal
accountants for the audit of our financial statements, for the reviews of the
financial statements included in our annual report on Form 10-K, and for other
services normally provided in connection with statutory filings were $56,168 and
$$44,991, respectively, for the years ended December 31, 2008 and 2007.

AUDIT RELATED FEES

The Company did not incur any audited related fees and services not included
Audit Fees above for the years ended December 31, 2007 or 2008.

ALL OTHER FEES

There were tax preparation fees of $11,805 billed for the fiscal years ended
December 31, 2008 and 2007, respectively.


                                       45


<PAGE>


                                     PART IV

ITEM 15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits required by Item 601 of Regulation S-B:

3.1   Amended and Restated Certificate of Incorporation of International Card
      Establishment, Inc. (incorporated by reference to the Registrant's
      Schedule 14C Definitive Information Statement filed with the Commission on
      October 1, 2003).

4.1   Certificate of Designation and Rights of Series A Convertible Preferred
      Stock of ICRD dated as of September 16, 2004 (incorporated by reference to
      our Form 8-K filed on December 10, 2004).

4.2   Amendment to the Certificate of Designation and Rights of Series A
      Convertible Preferred Stock of ICRD dated as of December 6, 2004
      (incorporated by reference to our Form 8-K filed on December 10, 2004).

31.1  Certification by Chief Executive Officer pursuant to Sarbanes Oxley
      Section 302.

31.2  Certification by Chief Financial Officer pursuant to Sarbanes Oxley
      Section 302.

32.1  Certification by Chief Executive Officer pursuant to 18 U.S. C.
      Section 1350.

32.2  Certification by Chief Financial Officer pursuant to 18 U.S. C.
      Section 1350.


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

DATE: March 31, 2009

                          INTERNATIONAL CARD ESTABLISHMENT, INC.



                          By: /s/ WILLIAM LOPSHIRE
                              __________________________________
                                  William Lopshire
                                  Chief Executive Officer
                                  (Principal Executive Officer),
                                  Secretary and Director



                          By: /s/ CANDACE MILLS
                              __________________________________
                                  Candace Mills
                                  Chief Financial Officer
                                  (Principal Accounting Officer)












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<PAGE>


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

SIGNATURE                  TITLE                          DATE



/s/ WILLAIM LOPSHIRE       CHIEF EXECUTIVE OFFICER,       MARCH 31, 2009
    ________________       SECRETARY AND DIRECTOR
    WILLAIM LOPSHIRE



/s/ CANDACE MILLS          CHIEF FINANCIAL OFFICER        MARCH 31, 2009
    ________________
    CANDACE MILLS





















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