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


                                  FORM 10-KSB/A
                                (Amendment No. 1)


  /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934


                  For the Fiscal Year Ended: December 31, 2007


     / / 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


Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the preceding 12 months (or
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 [ ]

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
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 II of this Form 10-KSB or any amendments to this Form 10-KSB.
[ ]

State the registrant's revenues for its most recent fiscal year: $9,259,520 as
of December 31, 2007.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. $2,358,051 as of March 09, 2008.

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

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of March 20, 2008, there were
35,286,449 shares of the registrant's common stock, $.0005 par value,
outstanding.


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<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE.

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

                                EXPLANATORY NOTE

         We are filing this Amendment No. 1 on Form 10-KSB/A to our Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2007, as originally
filed with the Securities and Exchange Commission (the "Commission") on March
31, 2008 (the "Original Filing"), for the purpose of including information
regarding our revenue required by Item 6, Management's Discussion and Analysis
and information required by Items 307 and 308 (c) of Regulation S-B in Item 8A,
Controls and Procedures.

         This Amendment No. 1 does not change any of the information contained
in the Original Filing. This Amendment No. 1 continues to speak as of the date
of the Original Filing and we have not updated or amended the disclosures
contained therein to reflect events that have occurred since the date of the
Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction
with our filings made with the Commission subsequent to the date of the Original
Filing.


                                TABLE OF CONTENTS

                                                                            Page

                                     PART I

Item 1.   Description of Business. . . . . . . . . . . . . . . . . . . . . .  3

Item 2.   Description of Property. . . . . . . . . . . . . . . . . . . . . . 15

Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 16

Item 4.   Submission of Matter to a Vote of
          Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . 16

                                     PART II

Item 5.   Market for Common Equity and Related Stockholder
          Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Item 6.   Management's Discussion and Analysis . . . . . . . . . . . . . . . 19

Item 7.   Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 23

Item 8.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . 43

Item 8A.  Controls and Procedures  . . . . . . . . . . . . . . . . . . . . . 43

Item 8B.  Other Information . . . . . . . . . . . . . . . . . . . . . . . .  43

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act  . . . . . . . . 44

Item 10.  Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 45

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters . . . . . . . . . . . . . . . . .  47

Item 12.  Certain Relationships and Related Transactions . . . . . . . . . . 48

Item 13.  Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Item 14.  Principal Accountant Fees and Services . . . . . . . . . . . . . . 50

          Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51


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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.


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<PAGE>

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.
According to The Nilson Report purchases by U.S. consumers using credit will
grow from $1.89 trillion in 2003 to $2.81 trillion in 2008 (8% CAGR) and Credit
cards will comprise 47.7% of all transactions by 2009, up from 38.8% in
2004..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 most recent 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, the 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.

GROWTH IN CARD-NOT-PRESENT TRANSACTIONS. Market researchers expect dramatic
growth in card-not-present transactions due to the rapid growth of the Internet.
$259 billion of online sales including travel are expected in 2007 in USA, an
18% increase from the previous year, as forecasted by the State of Retailing
Online 2007 report from the National Retail Federation (NRF) and Shop.

THE BUSINESS OF OUR SUBSIDIARY ICE

BUSINESS SUMMARY

International Card Establishment, Inc. ("ICE") targets small 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 3.2 million merchant locations in the United States currently
accepting Visa and MasterCard credit cards in the small merchant market segment
and that approximately 2.0 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.

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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<PAGE>

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, purchases of
merchant account portfolios, retention of merchants 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, the 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 3.2 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 three largest acquirers controlling over 50% of the market share.
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 out sources many aspects of its
processing services from 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.


                                       5
<PAGE>

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 to pursue external growth by constantly expanding its
independent agent base and to utilize its proprietary Gift & Loyalty platform to
reach an even greater number of merchants than bank card alone. Through the use
of its agent relationships, ICE obtains new merchant accounts by offering
merchants technologically advanced products and services 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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<PAGE>

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, also classified as "commissions",
are recorded in the month the liabilities are incurred, and paid within 30 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
"down-loadable," 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 NOVA
Information Systems, 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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<PAGE>

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. As of September 9,
2004, NEOS became our wholly-owned subsidiary. Through our NEOS 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 design 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 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 the corporate offices in Camarillo, California with a
          redundant backup at an external third party hosting facility.

     o    POS TERMINAL APPLICATION SOFTWARE - proprietary software allows up to
          six 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 7000MPD, Modular Payment
          Device, VeriFone and Schlumberger pin pads, Schlumberger/AxaltoMagiC
          6000 and 6100, and Schlumberger Modular Payment Device

     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.


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<PAGE>

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
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 2007 holiday season will total $26.3 billion, a 6 percent
increase over the $24.8 billion in 2006 holiday sales. 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, major retail gift and return programs are magnetic stripe based,
requiring each transaction 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 one-time monthly transaction fee averaging $50. 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, mid 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 mid
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 primarily through the ICE network of outside
independent agents.

SOFTWARE DEVELOPMENT

All components of the NEOS "Matrixx" host and terminal application system have
been thoroughly tested and have been installed live in over 3,000 locations.

GROWTH STRATEGY AND COMPETITORS

Due to our technology and the retail market demand for "Gift and Loyalty", NEOS
is positioned to be a significant provider in this market. Worldwide credit card
use has produced transaction volumes of nearly $2 trillion dollars, and no slow
down is in sight. Merchants are excellent targets for new terminal sales as
Visa, MasterCard and American Express begin to deploy millions of "smart cards"
(chip cards). As these merchants graduate from magnetic stripe and manual data
transfer to this new technology, they will need to have devices to read these
cards. Despite this increase in demand for non-cash transaction capabilities,
merchants are slow to adopt the latest technologies without demonstrable returns
on investment. Business terminations reached an all-time high of 564,900 in
2006, per the Small Business Administration, and merchants are wary of making
investments in unproven technologies that could tip the scales towards closing
the doors. With the ultimate objective of keeping merchants not only in business
but continuing to grow profitably, the proliferation of many integrated
technologies involving smart cards provides a market opportunity for NEOS
services and products that is ever expanding.


                                       9
<PAGE>

NEOS' believes it has an opportunity to aggressively penetrate the small and
medium enterprise SME segment of the merchant market place. NEOS believes there
is a tremendous need for differentiating products and services in this sector of
the industry in order to solidify merchant loyalty in the SME market. The
Company plans to generate continuous organic 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, 2007, we have no patents, trademarks, franchises,
concessions, royalty agreements or labor contracts.

EMPLOYEES

As of December 31, 2007, 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.

                                  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 loss
before discontinued operations of $3,969,075 for the year ended December 31,
2007 and a net loss before discontinued operations of $3,038,238 for the year
ended December 31, 2006. 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 is a member of the
card associations. If this sponsorship is 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 bank gives the sponsoring bank
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.


                                       10
<PAGE>

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.

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.


                                       11
<PAGE>

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
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 will 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.


                                       12
<PAGE>


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.

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 intend to 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.


                                       13
<PAGE>

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
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 35,286,449 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


                                       14
<PAGE>

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
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. DESCRIPTION OF PROPERTY.

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. We believe that
these facilities are adequate for our current operations and, if necessary, can
be replaced with little disruption to our company.


                                       15
<PAGE>

ITEM 3. LEGAL PROCEEDINGS.

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 4. SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS.

During our fiscal year ended December 31, 2007, there were no matters submitted
to the Company's security holders.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(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, 2007 and 2006, as reported by
Smallcapcenter.com.

                                                    High           Low
                                                    ____           ___
     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
     2006
             First Quarter                          0.33          0.10
             Second Quarter                         0.33          0.15
             Third Quarter                          0.30          0.14
             Fourth Quarter                         0.31          0.14


(b) Holders.

As of March 20, 2008, there are 100 shareholders of record of the Company's
common stock.

CAPITAL STOCK.

We are authorized to issue 100,000,000 shares of common stock $.0005 par value
and 10,000,000 shares of preferred stock at $.01 par value. As of March 20,
2008, there were 35,286,449 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


                                       16
<PAGE>

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
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, 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.

As disclosed above in Note 6, the Company accrued for Preferred Stock Dividends
$ 0 as of December 31, 2007 and 2006, respectively. In the second quarter of
2006, the Company amended the preferred share agreements above with the
shareholders to remove the dividend reference. Consideration for all dividends
accrued as of June 22, 2006 were paid via issued of 1,450,973 in the Company's
common stock. Total dividends accrued and paid (cash and stock issuance),
inclusive of the beneficial conversion accounted for as preferred dividends,
totaled $0 and $199,844 as of December 31, 2007 and 2006, respectively.


                                       17
<PAGE>

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.

<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             4,356,000                     $0.22                         644,000
plans approved by
security holders

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

Total                           7,430,000                     $0.19                         644,000

</TABLE>





                                       18
<PAGE>

ITEM 6. 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    EXECUTIVE SUMMARY, OVERVIEW AND DEVELOPMENT OF OUR BUSINESS. These 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, 2007 ("Fiscal 2007") compared to
     the year ended December 31, 2006 ("Fiscal 2006"). 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, 2007.

EXECUTIVE SUMMARY

Our strategy is to grow profitably by increasing our penetration of the
expanding small merchant marketplace for payment and Gift & Loyalty card based
products. We find these merchants through our ISO and agent channels of
distribution and intend to make additional acquisitions on an opportunistic
basis in this fragmented segment of the industry.

OVERVIEW

We are a rapidly growing provider of credit and debit card-based payment
processing services and Gift & Loyalty products to small merchants. As of
December 31, 2007, we provided our services to numerous ISOs and thousands of
merchants located across the United States. Our payment processing services
enable our merchants to process traditional card-present, or swipe transactions,
as 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.


                                       19
<PAGE>

DEVELOPMENT OF OUR BUSINESS

International Card Establishment, Inc. (the "Company") (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 and could be defined as a "shell" company, 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 18, 2003, 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.

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.

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 store-branded 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.

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.


                                       20
<PAGE>

REVENUE AND COST RECOGNITION

Substantially all of our revenues are generated from fees charged to merchants
for card-based payment processing services. 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.

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
amortize accounts at the time of attrition. 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.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2007 COMPARED WITH THE
YEAR ENDED DECEMBER 31, 2006

Results of operations consist of the following:

<TABLE>
<CAPTION>

                                   December 31, 2007     December 31, 2006      Difference       %
                                   _________________________________________________________________
<S>                                   <C>                   <C>                <C>              <C>

Net Revenues                          $ 9,222,659           $10,765,826        $(1,543,167)     (14)
Cost of Revenues                        6,014,944             7,157,403         (1,142,459)     (16)
                                   _________________________________________________________________
Gross Profit                            3,207,715             3,608,423           (400,708)     (11)
Operating, General,
  and Administrative Costs              6,972,565             6,515,470            457,095        7
                                   _________________________________________________________________
Net Operating Loss                    $(3,764,850)          $(2,907,047)       $  (857,803)     (30)
                                   =================================================================
</TABLE>

Net revenues decreased by $1,543,167 or 14% from $10,765,826 to $9,222,659
mainly due to the tightening of credit policies. Risky accounts were not signed
and questionable accounts were written off. Residuals decreased by approximately
$220,000 because of the write-off of high risk accounts. Sales dropped by
approximately $500,000 because fewer merchants were signed as a result tighter
credit policies; furthermore, equipment sales fell by approximately $210,000 as
a result of more restrictive credit screening policies. The decrease in cost of
revenues of $1,142,459 or 16% from $7,157,408 to $6,014,944 is directly related
to a comparable decrease in revenues.

Operating, general and administrative costs increased by approximately $460,000
or 7% from $6,515,470 to $6,972,565 mainly due to the recognition of impairment
on our merchant portfolios of approximately $3,650,000. Without this
nonrecurring impairment charge, our overall expenses would ahve decreased by
nearly 50% due to the closing of two offices, the corresponding reduction of
staff, and 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, 2007     December 31, 2006      Difference       %
                                   _________________________________________________________________
<S>                                   <C>                   <C>                <C>              <C>

Cash                                  $   126,149           $   157,528        $   (31,379)     (20)
Accounts Payable and
  Accrued Expenses                    $   619,375           $   865,336        $  (245,961)     (28)
Accounts Receivable                   $    27,059           $    87,706        $   (60,646)     (69)

</TABLE>

Cash decreased by approximately $31,000 or 20% from $157,528 to $126,149 due to
the paying down of outstanding debt obligations and accounts payable.

Accounts Payable and Accrued Expenses fell by approximately $245,000 or 28% from
$865,336 to $619,375 because of a reduction in the reserve for merchant
chargebacks due to the scrubbing of high risk accounts and the paying down
outstanding payables.

Accounts Receivable fell by approximately $60,000 or 69% from $87,706 to $27,059
because of the tightening credit extension policies and the write-off of
uncollectible or high-risk accounts.

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

     1.   Management believes that the increase in revenue we have experienced
          will continue as a result of the operations of its subsidiaries ICE
          and NEOS.

     2.   We are actively seeking additional financing to implement measures
          that Management believes will increase our operating margins and for
          additional acquisitions that will increase our overall revenue base.
          There is no assurance that we will be able to obtain additional
          capital as required, or obtain the capital on acceptable terms and
          conditions.

     3.   We are seeking to control overall operating expenses while increasing
          our gross revenue base through the integration of existing
          acquisitions and future acquisitions.


                                       21
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

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

We have financed our operations during the year primarily through the receipt of
proceeds of $754,396 from our line of credit with a related party sales of
common stock subscriptions and use of cash on hand.

We had $126,149 cash on hand as of December 31, 2007 compared to $157,528 cash
on hand as of December 31, 2006. 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.





















                                       22
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2007
                                DECEMBER 31, 2006

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

                                    CONTENTS



REPORT OF THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ON THE
CONSOLIDATED FINANCIAL STATEMENTS                                            24
________________________________________________________________________________



CONSOLIDATED FINANCIAL STATEMENTS

   Consolidated Balance Sheets                                               25

   Consolidated Statements of Operations                                     26

   Consolidated Statements of Stockholders' Equity                           28

   Consolidated Statements of Cash Flows                                     29

   Notes to Consolidated Financial Statements                                31

________________________________________________________________________________























                                       23

<PAGE>

             REPORT OF 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, 2007 and
2006, 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 audit.

We conducted our audit 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, 2007 and 2006, 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 24, 2008







                                       24

<PAGE>

<TABLE>
<CAPTION>

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                                  December 31,     December 31,
                                                                                          2007             2006
                                                                                  ____________     ____________
<S>                                                                               <C>              <C>
                                     ASSETS
CURRENT ASSETS
     Cash                                                                         $    126,149     $    157,528
     Accounts receivable, trade, net of allowance of $225,425 and $280,595
        as of December 31, 2007 and 2006, respectively                                  27,059           87,705
     Inventory                                                                         109,628           71,709
     Other receivables                                                                 268,779          372,995
     Notes receivable, net of allowance of $50,000 and $0 as
of
        December 31, 2007 and 2006, respectively                                         6,428           15,154
                                                                                  ____________     ____________
            Total current assets                                                       538,043          705,091
                                                                                  ____________     ____________

FIXED ASSETS, net of accumulated depreciation of $2,983,007 and $2,222,776
     as of December 31, 2007 and 2006, respectively                                      6,320          859,551
INTANGIBLE ASSETS                                                                    1,820,300        5,270,141
GOODWILL                                                                                87,978           87,978
OTHER NON-CURRENT ASSETS                                                               117,700          117,818
                                                                                  ____________     ____________

                   Total assets                                                   $  2,570,341     $  7,040,579
                                                                                  ============     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                             $    106,394     $    256,908
     Accrued expenses                                                                  512,981          608,428
     Current portion of notes payable                                                   42,613          104,473
     Current portion of notes payable, related parties                                 400,000          480,000
     Line of credit, related parties                                                   606,582          510,629
     Current portion of capital lease                                                        -           19,775
                                                                                  ____________     ____________

            Total current liabilities                                                1,668,570        1,980,213

NOTES PAYABLE, RELATED PARTY                                                                 -          360,000
NOTES PAYABLE, LONG TERM                                                                     -           42,613
LONG-TERM PORTION OF CAPITAL LEASE                                                           -           63,849
                                                                                  ____________     ____________

                   Total liabilities                                                 1,668,570        2,446,675

COMMITMENTS & CONTINGENCIES                                                                  -                -
STOCKHOLDERS' EQUITY
     Preferred stock: $.01 par value; authorized 10,000,000 shares;
        issued and outstanding: 54,000 and 58,500 shares at
        December 31, 2007 and 2006, respectively                                           540              585
     Common stock: $.0005 par value; authorized 100,000,000 shares;
        issued and outstanding: 35,286,449 and 33,951,698 shares
        at December 31, 2007 and 2006, respectively                                     17,643           16,976
     Common stock subscribed                                                           100,064          100,064
     Additional paid-in capital                                                     19,544,354       19,281,810
     Accumulated deficit                                                           (18,760,830)     (14,805,531)
                                                                                  ____________     ____________
            Total stockholders' equity                                                 901,771        4,593,904
                                                                                  ____________     ____________
                   Total liabilities and
                   stockholders' equity                                           $ 2 ,570,341     $  7,040,579
                                                                                  ============     ============


See Accompanying Notes to Consolidated Financial Statements.

</TABLE>


                                       25
<PAGE>

<TABLE>
<CAPTION>

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

                                                                  Years ended
                                                         December 31,     December 31,
                                                                 2007             2006
                                                         ____________     ____________
<S>                                                      <C>              <C>

Revenues:
         Merchant services revenues                      $  8,304,759     $  9,760,028
         Equipment sales                                      954,761        1,162,582
         Less:  sales returns and allowances                  (36,861)        (156,784)
                                                         ____________     ____________
   Net revenue                                              9,222,659       10,765,826

Cost of revenue:
   Commissions                                              1,005,914        1,245,800
   Cost of sales                                            4,720,855        5,346,343
   Cost of sales - equipment                                  288,175          565,260
                                                         ____________     ____________

        Cost of revenue                                     6,014,944        7,157,403
                                                         ____________     ____________

           Gross profit                                     3,207,715        3,608,423
                                                         ____________     ____________

Operating, general, and administrative expenses:
   General, administrative and selling expenses             2,540,923        5,286,889
   Restructuring charges                                            -          207,335
   Depreciation                                               781,931        1,021,246
   Impairment of merchant portfolios                        3,649,711                -
                                                         ____________     ____________
           Total operating, general, and
           administrative expenses                          6,972,565        6,515,470
                                                         ____________     ____________


           Net operating loss                              (3,764,850)      (2,907,047)

Non-operating income (expense):
   Interest income                                                559              644
   Interest expense                                          (130,858)        (131,855)
   Legal settlement                                            (8,451)               -
   Loss on lease settlement                                   (51,699)               -
                                                         ____________     ____________

           Total non-operating(loss)                         (190,449)        (131,191)
                                                         ____________     ____________

   Net loss before discontinued operations                 (3,955,299)      (3,038,238)

Discontinued operations:
   Loss from operations of discontinued segment
    (including loss on disposal of $543,069)                        -         (516,993)
                                                         ____________     ____________

   Net loss before preferred dividends                     (3,955,299)      (3,555,231)

   Dividends paid on preferred shares                               -          199,844
                                                         ____________     ____________

   Net loss allocable to common shareholders             $ (3,955,299)    $ (3,755,075)
                                                         ============     ============


                                       26
<PAGE>

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


                                                                  Years ended
                                                         December 31,     December 31,
                                                                 2007             2006
                                                         ____________     ____________

   Earnings per share from continuing operations         $      (0.11)    $      (0.10)
                                                         ============     ============
   Earnings per share from discontinued operations       $          -     $      (0.02)
                                                         ============     ============
   Earnings per share                                    $      (0.11)    $      (0.12)
                                                         ============     ============
   Average number of shares
   of common stock outstanding-Basic and Diluted           34,748,752       30,916,668
                                                         ============     ============

   Dividends Per Share                                   $          -     $       3.42
                                                         ============     ============

See Accompanying Notes to Consolidated Financial Statements.

</TABLE>













                                       27
<PAGE>

<TABLE>
<CAPTION>


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


                                                                                      Common or
                                Preferred Stock       Common Stock       Additional   Preferred
                                _______________   ____________________     Paid-In      Stock        Accumulated
                                Shares   Amount     Shares     Amount     Capital     Subscribed        Deficit       Total
                                ______   ______   __________   _______   ___________  __________    ____________   ___________
<S>                             <C>      <C>      <C>          <C>       <C>          <C>           <C>            <C>

Balance, December 31,
   2005                         62,000   $  620   29,337,392   $14,669   $17,987,902  $        -    $(11,050,456)  $ 6,952,735

Common stock subscribed                                                                  100,064                       100,064
Preferred stock dividend                                                                                (199,844)     (199,844)
Preferred stock dividend
   paid via common stock                           1,450,973       725       233,347                                   234,072
Legal settlement                                      80,000        40        21,560                                    21,600
Common stock sold at
   $0.10 per share                                 2,150,000     1,075       213,925                                   215,000
Stock based compensation                                                     825,508                                   825,508
Conversion of preferred
   shares to common shares      (3,500)     (35)     933,333       467          (432)                                        -
Net loss, December 31, 2006                                                                           (3,555,231)   (3,555,231)
                                ______   ______   __________   _______   ___________  __________    ____________   ___________
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
                                ======   ======   ==========   =======   ===========  ==========     ===========   ===========


See Accompanying Notes to Consolidated Financial Statements.

</TABLE>





                                       28

<PAGE>

<TABLE>
<CAPTION>

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

                                                                 Years ended
                                                        December 31,     December 31,
                                                                2007             2006
                                                        ____________     ____________
<S>                                                      <C>              <C>

Cash Flows From
Operating Activities:

    Net loss                                             $(3,955,299)     $(3,555,231)
    Loss on disposal                                               -          543,069
    Restructuring charges                                          -          207,335
    Loss on lease settlement                                  51,699                -
    Depreciation                                             781,931        1,021,246
    Allowance for doubtful accounts                           (5,169)         248,864
    Common stock subscribed for salaries                           -           43,064
    Stock issued for consulting fees                               -           21,600
    Stock issued for anti-dilution clause                     23,042                -
    Stock award compensation                                 240,124          825,508
    Non-cash advancements from line of
       credit, related party                                 739,565          533,221
    Impairment of merchant portfolios                      3,649,711                -
    Other non-cash items, net                                      -           30,269
    Non-cash items due to
       discontinued operations                                     -           26,623
    Adjustments to reconcile net loss to cash
         used in operating activities:
    Changes in assets and liabilities
      Decrease in accounts receivable                        115,816          158,500
      Increase in inventory                                  (37,919)         (21,025)
      Increase in other receivables                          104,215         (259,348)
      Decrease in prepaid expenses                                 -          343,848
      (Increase)decrease in other non-current assets            (435)           5,810
      Decrease in accounts payable                          (214,536)        (120,378)
      Decrease in accrued expenses                           (95,449)         (66,793)
                                                         ___________      ___________

        Net cash provided by (used in)
          operating activities                             1,397,296          (13,818)
                                                         ___________      ___________

Cash Flows From Investing Activities:
    Acquisitions, net of attrition                          (199,871)        (483,089)
    Purchase of equipment                                          -          (35,310)
    Proceeds from the sale of discontinued segment                 -          701,443
    Issuance of notes receivable                             (50,000)         (15,000)
    Payments received toward notes receivable                  9,281                -
                                                         ___________      ___________

        Net cash (used in) provided
          by investing activities                           (240,590)         168,044
                                                         ___________      ___________


                                       29
<PAGE>

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

                                                                 Years ended
                                                        December 31,     December 31,
                                                                2007             2006
                                                        ____________     ____________
Cash Flows From Financing Activities:
    Related party notes payable, net                               -          (76,333)
    Proceeds from notes payable                               70,000                -
    Proceeds from line of credit, related party              754,396          447,600
    Payments on capital lease                                      -           (9,376)
    Payments on notes payable, related party                (440,000)        (200,000)
    Payments on notes payable                               (174,473)        (651,436)
    Payments on line of credit, related party             (1,398,008)        (470,192)
    Proceeds from sale of common stock                             -          215,000
                                                         ___________      ___________

         Net cash (used in) provided by
            financing activities                          (1,188,085)        (744,737)
                                                         ___________      ___________

         Net decrease in cash                                (31,379)        (590,511)

Cash, beginning of period                                    157,528          748,040
                                                         ___________      ___________

Cash, end of period                                      $   126,149      $   157,528
                                                         ===========      ===========

Supplemental Cash Flow Disclosures:
 Cash paid for interest                                  $    91,936      $   113,526

 Cash paid for income taxes                              $         -      $         -

 Non-cash financing and investing activities:

     Notes payable reclassified from accounts payable    $         -      $   291,589

  Capital lease, accounting software                     $         -      $    93,000

  Merchant portfolios purchased through common
   stock subscription                                    $         -      $    57,000

  Merchant portfolios purchased through related-
   party notes payable                                   $         -      $ 1,040,000

  Payment of accrued preferred stock dividend with
    common stock; accrual December 2005 -
    June 2006                                            $         -      $   234,073

  Abandonment of fixtures due to relocation              $         -      $     5,131

  Preferred share dividends paid via common stock        $         -      $   199,844

  Preferred share conversions to common stock -
    see Shareholder's Equity                             $         -      $         -

</TABLE>


                                       30
<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 store-branded 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 Company's 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 Company's subsidiary, GlobalTech Leasing ("GLT"), a California corporation,
which provides lease funding for equipment supplied by the Company to its
customers, as well as numerous other unrelated merchant service providers, was
sold in 2006. GTL comprised the Company's entire Leasing Services segment of the
Company.

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, 2007 and 2006.

CONCENTRATIONS
The Company maintains cash balances at several highly-rated financial
institutions in California. Accounts at each institution are insured by the
Federal Deposit Insurance Corporation ("FDIC") up to $100,000. At December 31,
2007 and 2006 the Company had one account in excess of the $100,000 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 for doubtful accounts 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.


                                       31
<PAGE>

INVENTORY
Inventories are stated at the lower of cost or market. Cost is determined using
the first in, first out method. The Company's inventories consist primarily of
electronic merchant processing machines, gift and loyalty cards, and their
corresponding printing supplies.

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 Fixed Assets
and related Accumulated Depreciation accounts in these financial statements.
Leased assets consist of laptops, which are depreciated in accordance with the
Company's policy.

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.

During the year ended December 31, 2007, the Company adopted Financial
Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes" (FIN 48), which supplements SFAS No. 109,
"Accounting for Income Taxes," by defining the confidence level that a tax
position must meet in order to be recognized in the financial statements. The
Interpretation requires that the tax effects of a position be recognized only if
it is "more-likely-than-not" to be sustained based solely on its technical
merits as of the reporting date. The more-likely-than-not threshold represents a
positive assertion by management that a company is entitled to the economic
benefits of a tax position, If a tax position is not considered
more-likely-than-not to be sustained based solely on its technical merits. No
benefits of the tax position are to be recognized. Moreover, the
more-likely-than-not threshold must continue to be met in each reporting period
to support continued recognition of a benefit. With the adoption of FIN 48,
companies are required to adjust their financial statements to reflect only
those tax positions that are more-likely-than-not to be sustained. Any necessary
adjustment would be recorded directly to retained earnings and reported as a
change in accounting principle.

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 2007 and 2006, the Company's annual goodwill impairment test
did not identify an impairment of goodwill.

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 5). 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. In 2006, the Company purchased merchant and
gift card portfolios in the amount of $1,825,177 and $25,720 respectively, that
were not related to a business combination or acquisition; at December 31, 2006
the Company recognized direct write offs of $229,228. At December 31, 2007, the
Company recognized an impairment of $3,649,711 in merchant and gift card
portfolios by writing them down to their appraised value.

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


                                       32
<PAGE>

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
with changes recorded in current-period earnings. As of December 31, 2007 and
2006 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, customer support for merchants and other
Merchant Services providers, and sells merchant point-of-sale and credit card
processing equipment. Revenue is recognized as customer services are provided.

The Company provides merchant services to customers for the 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.

ADVERTISING
Advertising costs are charged to operations as incurred. Advertising costs for
the years ended December 31, 2007 and 2006 were $58,187 and $551, 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.

NEW ACCOUNTING PRONOUNCEMENTS
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157). SFAS 157 provides guidance for using fair value to measure assets and
liabilities. SFAS 157 addresses the requests from investors for expanded
disclosure about the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value, and does
not expand the use of fair value in any new circumstances. SFAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007 and will be adopted by the Company in the first quarter of fiscal year
2008. We do not expect that the adoption of SFAS 157 will have a material impact
on our financial condition or results of operations.

In December 2007, the FASB issued SFAS No. 160, "NONCONTROLLING INTERESTS IN
CONSOLIDATED FINANCIAL STATEMENTS--AN AMENDMENT OF ARB NO. 51" ("SFAS No. 160").
SFAS 160 requires companies with noncontrolling interests to disclose such
interests clearly as a portion of equity but separate from the parent's equity.
The noncontrolling interest's portion of net income must also be clearly
presented on the Income Statement. SFAS 160 is effective for financial
statements issued for fiscals years beginning after December 15, 2008 and will
be adopted by the Company in the first quarter of fiscal year 2009. We do not
expect that the adoption of SFAS 160 will have a material impact on our
financial condition or results of operation.

In December 2007, the FASB issued SFAS No. 141 (R), "BUSINESS COMBINATIONS
(REVISED 2007)" ("SFAS No. 141 (R)"). SFAS 141 (R) applies the acquisition
method of accounting for business combinations established in SFAS 141 to all
acquisitions where the acquirer gains a controlling interest, regardless of
whether consideration was exchanged. Consistent with SFAS 141, SFAS 141 (R)
requires the acquirer to fair value the assets and liabilities of the acquiree
and record goodwill on bargain purchases, with main difference the application
to all acquisitions where control is achieved. SFAS 141 (R) is effective for
financial statements issued for fiscal years beginning after December 15, 2008
and will be adopted by the Company in the first quarter of fiscal year 2009. We
do not expect that the adoption of SFAS 141 (R) will have a material impact on
our financial condition or results of operation.

NOTE 2. NOTE RECEIVABLE

In 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, we have fully
allowed for the entire balance of this note. As of December 31, 2007, we do not
expect to collect any cash from this loan or to convert the debt to common stock
because of the dissolution of all business arrangements with the holder of the
note.


                                       33
<PAGE>

NOTE 3.  DISCONTINUED OPERATIONS

On May 10, 2006, the Company entered in an Agreement and Plan of Merger to sell
its subsidiary GlobalTech Leasing, Inc. ("GTL") to an independent third party
for $2,500,000 consisting of $808,943 in cash and $1,691,057 of debt assumption.
The assets sold consisted primarily of cash, property and equipment. Subsequent
to the disposition of GTL, management determined that approximately $158,000 of
the $2,500,000 was not recoverable from the acquirer, resulting in a total
$701,443 received in cash and $1,640,625 in debt assumption. We have increased
our loss from discontinued operations by this amount in 2006.

GTL comprised the Company's entire Leasing Services segment of the Company.
Leasing income subsequent to the sale totaled $256,384 through December 31,
2006.

The Loss on Discontinued Operations includes $26,076 of earnings in 2006 through
the date of disposal. GTL's sales through May 9, 2006. Loss on the disposal
totaled $543,069.

The resulting income from operations of this discontinued segment, adjusted for
the total loss on the disposal, are pre-tax as the Company has reoccurring net
losses and determined that there would not be a tax effect.

NOTE 4. FIXED ASSETS

Fixed assets and accumulated depreciation consists of the following:

                                                      Years ended
                                             December 31,     December 31,
                                                     2007             2006
                                             ____________    _____________

Furniture and fixtures                       $     14,750    $      14,750
Equipment and machinery                           138,257          231,257
Software                                        2,836,320        2,836,320
                                             ____________    _____________
         Subtotal                               2,989,327        3,082,327
Accumulated Depreciation                       (2,983,007)      (2,222,776)
                                             ____________    _____________
                                             $      6,320    $     859,551
                                             ============    =============

In the second quarter of 2006, the Company entered into a lease agreement for a
new accounting system for $93,000. The lease commenced 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 have been made as of December 31,
2007. We have recorded the event as of March 31, 2007 including the resulting
loss of $51,699, representing the carrying value of the asset.




                                       34

<PAGE>

NOTE 5. 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 commissioned an outside appraisal to determine if any impairment in
intangibles or goodwill for both 2007 and 2006 exists. We have determined that
at present the NEOS tradename has an indefinite life, which has been included in
the Company's annual impairment analysis. In 2007 and 2006, the Company
completed an impairment analysis that resulted in no impairment of goodwill. We
have recognized an impairment of $3,649,711 in our merchant and gift card
portfolios by writing them down to their appraised value.

The Company's intangible assets consisted of the following:

                                         December 31,
                                _____________________________
                                   2007              2006
                                ___________       ___________

Merchant portfolios             $ 1,385,300       $ 4,809,421
Tradename                           435,000           435,000
Gift card portfolios                      -            25,720
                                ___________       ___________
                                $ 1,820,300       $ 5,270,141
                                ===========       ===========

Goodwill                        $    87,978       $    87,978
                                ===========       ===========

Acquisitions, net of attrition, were $199,870 and $483,089, respectively.



                                       35

<PAGE>

NOTE 6. ACCRUED EXPENSES

Accrued expenses consist of the following:

                                         December 31,     December 31,
                                                 2007             2006
                                         ____________     ____________

Accrued payroll                             $ 298,528        $ 249,688
Customer deposits                              40,589           43,215
Accrued expenses, other                       125,189           51,823
Accrued interest                                7,977           18,328
Sales taxes payable                             2,110           23,454
Reserve for chargebacks                        38,588          221,920
                                            _________        _________
                                            $ 512,981        $ 608,428
                                            =========        =========


NOTE 7. NOTES AND LEASES PAYABLE

Notes and leases payable consist of the following:

                                                   December 31,     December 31,
                                                           2007             2006
                                                   ____________     ____________
Notes payable, capital lease obligation
    to acquire computer equipment                  $          -     $      2,202
Notes payable, at 6% interest, due May 2008              42,613          102,271
Lease payable, capital lease obligation
    to acquire accounting system                              -           19,775
                                                   ____________     ____________

Current portion of notes and leases payable        $     42,613     $    124,248
                                                   ============     ============

Notes payable, at 6% interest, due May 2008        $          -     $     42,613
Lease payable, capital lease obligation
    to acquire accounting system                                          63,849
                                                   ____________     ____________

Noncurrent portion of notes and leases payable     $          -     $    106,462
                                                   ============     ============

As previously disclosed, in the second quarter of 2006, the Company entered into
a lease agreement for a new accounting system for $93,000. The lease commenced
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 have
been made as of December 31, 2007. We have recorded the event as of March 31,
2007 including the resulting loss of $51,699, representing the carrying value of
the asset.

The Company is required to make the following principal payments on its total
debt (including related party debt see Note 12):

     Year Ended December 31,           Principal Payments
                                       __________________

     2008                                    1,047,890
     2009                                            -
     2010                                            -
     2011                                            -
     Thereafter                                      -
                                          ____________
     Total                                $  1,047,890
                                          ============


                                       36
<PAGE>

NOTE 8. RESTRUCTURING CHARGES

Due to the Company's continued losses, we critically reviewed all locations and
closed non-profitable locations where appropriate in 2006. Due to this we have
reported a Restructuring Charge in our in Statement of Operations of $207,335
for the year ending December 31, 2006.

The Company consolidated locations and moved the majority of operations to its
Camarillo location, which was completed in the third quarter of 2006.

All items identifiable for this restructuring at December 31, 2006 have been
expensed and consist of:

Payroll and benefits                                 $  80,031
Office closure and early lease termination              85,156
Transitional staff housing and other                    42,148
                                                     _________
Total                                                $ 207,335
                                                     =========

NOTE 9. 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 preferred stock
with a par value of $0.01.

In 2006, the Company has the following common stock transactions:

     o    Issued $100,064 of common stock subscriptions, $43,064 were for
          accrued salaries.

     o    Issued 1,450,973 of common stock for preferred share dividends
          amounting to $234,072.

     o    Issued 80,000 of common stock relating to a legal settlement amounting
          to $21,600.

     o    Issued 2,150,000 of common stock for a cash offering; shares sold at
          $0.10 a share for a total of $215,000.

We did not issue or authorize for issuance any shares in the first quarter of
2007. The only activity in our equity section relates to the expensing of stock
options granted as of December 31, 2006, amounting to $240,124.

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 agreement's 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.

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, no further MANDATORY DIVIDENDS shall be payable on
     the Series A Preferred Stock. There have been no preferred stock dividends
     declared or paid since that date.

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").


                                       37

<PAGE>

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.

As disclosed above in Note 6, the Company accrued for Preferred Stock Dividends
$ 0 as of December 31, 2007 and 2006, respectively. In the second quarter of
2006, the Company amended the preferred share agreements above with the
shareholders to remove the dividend reference. Consideration for all dividends
accrued as of June 22, 2006 were paid via issued of 1,450,973 in the Company's
common stock. Total dividends accrued and paid (cash and stock issuance),
inclusive of the beneficial conversion accounted for as preferred dividends,
totaled $0 and $199,844 as of December 31, 2007 and 2006, respectively.

The Company has converted 4,500 and 3,500 shares of preferred stock to 1,200,000
and 933,333 shares of common stock in 2007 and 2006, respectively.

NET 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.

NOTE 10. SHARE 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 5,000,000 shares of common stock. In addition, in 2007
Company has issued 3,074,000 options under a non-statutory stock option plan.
The Company believes that such awards better align the interests of its
employees and key consultants with those of its shareholders. All 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 all option awards 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.

                                           2007            2006

Expected volatility                       212.88%     183.39%-189.44%

Weighted-average volatility                70.96%              45.92%
Expected dividends                             0                   0

Expected term (in years)                       4               2-4.5
Risk-free rate                             4.013%       4.625%-4.875%







                                       38

<PAGE>

A summary of option activity as of December 31, 2007 and 2006, respectively, and
changes during the periods then ended is presented below:

<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, 2005             -       $   -

Granted                              4,370,000       $0.22

Exercised                                    -       $   -

Forfeited or expired                  (125,000)      $0.20)
                                     ______________________________________________________
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
                                    =======================================================
</TABLE>

A summary of the status of the Company's nonvested shares as of December 31,
2007 and 2006, and changes during the periods ended December 31, 2007 and 2006,
is presented below:
                                                   Weighted-Average
                                                      Grant-Date
Nonvested Shares                      Shares          Fair Value
___________________________________________________________________

Nonvested at December 31, 2005               -                -
Granted                                 85,000         $ 11,448
Vested                                       -                -
Forfeited                                    -                -
Nonvested at December 31, 2006          85,000           11,448
Granted                              3,100,000          244,127
Vested                              (3,085,000)        (241,395)
Forfeited                                    -                -

Non-vested at December 31, 2007        185,000         $ 14,180
                                    ==========         ========





                                       39

<PAGE>

NOTE 11. INCOME TAXES

The consolidated provision for federal and state income taxes for the years
ended December 31, 2007 and 2006 are as follows:

                                               2007            2006
                                             _________      __________

         Current - State                     $   1,000      $    1,000
         Current - Federal                           -               -
         Deferred - State                     (121,000)       (171,000)
         Deferred - Federal                   (539,000)       (978,000)
         Increase in valuation allowance       659,000       1,148,000

                                             _________      __________
         Income tax expense (benefit)        $       -      $        -
                                             =========      ==========

There were no amounts paid for federal income taxes during the years ended
December 31, 2007 and 2006.

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, 2007, the Company had federal net operating loss
carryforwards of $11,763,000 that can be deducted against future taxable income.
These tax carryforward amounts expire as follows:

         December 31, 2022                   $    16,000
         December 31, 2023                       631,000
         December 31, 2024                     3,400,000
         December 31, 2025                     3,926,000
         December 31, 2026                     2,962,000
         December 31, 2027                       828,000
                                             ___________
              Total                          $11,763,000
                                             ===========

However, such carryforwards 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 5% or greater
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

     o    Differences in calculating amortization and/or impairments on
          intangible assets

     o    Allowance for bad debt

     o    Tax loss carryforwards


                                       40

<PAGE>

The Company's total deferred tax assets and deferred tax liabilities at December
31, 2007 and 2006 are as follows:

                                                       2007            2006
                                                    ___________     ___________

     Deferred tax asset - current                   $         -     $         -
     Deferred tax asset - non current                 5,156,000       4,618,000
                                                    ___________     ___________
          Total deferred tax asset                    5,156,000       4,618,000
                                                    ___________     ___________

     Deferred tax liability - current                         -               -
     Deferred tax liability - non current              (262,000)       (384,000)
                                                    ___________     ___________
          Total deferred tax liability                 (262,000)       (384,000)
                                                    ___________     ___________

     Current deferred tax asset (liability)                   -               -
     Non current deferred tax asset (liability)       4,894,000       4,234,000
                                                    ___________     ___________
     Net deferred tax asset (liability)             $ 4,894,000     $ 4,234,000
                                                    ___________     ___________

     Valuation allowance                             (4,894,000)     (4,234,000)
                                                    ___________     ___________

          Net deferred tax asset (liability)        $         -     $         -
                                                    ===========     ===========

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, 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 $660,000 and
$1,148,000 during the years ended December 31, 2007 and 2006, 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.

Upon adoption of FIN 48 as of January 1, 2007, the Company had no gross
unrecognized tax benefits that, if recognized, would favorably affect the
effective income tax rate in future periods. The Company files income tax
returns in the United States federal jurisdiction and California state
jurisdiction. As of December 31, 2007 the Company has not filed federal or state
of California tax returns, and is working with their tax accountant to rectify
that situation as fast as practical. These U. S. federal and state income tax
returns are considered open tax years as of the date of these consolidated
financial statements. The Company has filed an extension for its 2007 corporate
tax return.

NOTE 12. RELATED PARTY 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 $606,582 and
$510,629 as of December 31, 2007 and 2006, 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 July 30,
2007. The Line of Credit was renewed for one year during the third quarter of
2007 and now matures on July 30, 2008.

Related party bonuses paid during the years ended December 31, 2007 and 2006
totaled $6,800 and $179,275, respectively, and are included in general and
administrative expenses.

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 $400,000 and
$480,000 as of December 31, 2007 and 2006, respectively. No portfolios from this
source were purchased in 2007.

NOTE 13. 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, 2007 the Company has not drawn on
the line of credit.

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.


                                       41

<PAGE>


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



     2008                                           $ 71,242
     2009                                             57,746
     2010                                             11,239
     2011                                              7,210
     Thereafter                                            -
                                                    ________

     Total future minimum lease commitments         $147,438
                                                    ========

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. Total lease
costs for the years ended December 31, 2007 and 2006 were $86,494 and $70,524,
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. A payment of $8,451 was
made in 2007 in full settlement of the claims. This amount represents 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.





                                       42


<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

None.

ITEM 8A. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         Pursuant to Rule 13a-15(b) under the Securities Exchange Act ("Exchange
Act") of 1934, the Company carried out an evaluation with the participation of
the Company's management, including William Lopshire, the Company's Chief
Executive Officer ("CEO") and Candace Mills, the Company's Chief Financial
Officer ("CFO"), of the effectiveness of the Company's disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the
year ended December 31, 2007. Based upon that evaluation, the Company's CEO and
CFO concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
the reports that the Company files or submits under the Exchange Act, is
recorded, processed, summarized and reported, within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to the Company's management, including the Company's CEO and CFO,
as appropriate, to allow timely decisions regarding required disclosure.

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:

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

    -   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

    -   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, 2007. 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, 2007, 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 8B. OTHER INFORMATION

None.


                                       43

<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT.

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     44     Chief Executive Officer, Secretary and
                                   Director

       Candace Mills        52     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


                                       44

<PAGE>

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, 2007, failed to file on a
timely basis reports required by Section 16(a) of the Securities Exchange Act of
1934

CODE OF ETHICS.

The Company has not 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.

ITEM 10. 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
Name and                                                           Non-Equity       Deferred
principal                                     Stock    Option    Incentive Plan   Compensation    All Other
position                   Salary    Bonus    Awards   Awards     Compensation      Earnings     Compensation    Total
                   Year     ($)       ($)      ($)      ($)           ($)             ($)            ($)          ($)
_______________________________________________________________________________________________________________________
<S>                <C>    <C>        <C>         <C>    <C>            <C>             <C>            <C>       <C>

William Lopshire   2007   116,769    93,320      0      76,649         0               0              0         286,738

Chief Executive    2006    92,770   113,475      0     200,204         0               0              0         406,448
Officer, Director
_______________________________________________________________________________________________________________________
Candace Mills

Chief Financial    2007    43,195     6,000      0           0         0               0              0          49,145
Officer            2006         0         0      0           0         0               0              0               0
_______________________________________________________________________________________________________________________
Kjell Nesen        2007   116,195    93,320      0      76,649         0               0              0         286,164

VP of Operations   2006    16,615    38,475      0     200,204         0               0              0         255,295
_______________________________________________________________________________________________________________________
Dana Marlin        2007   116,769    93,320      0      76,649         0               0              0         286,738

General Manager    2006    55,090         0      0           0         0               0              0          55,090
_______________________________________________________________________________________________________________________

</TABLE>



                                       45

<PAGE>

<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>

OPTION GRANTS IN LAST FISCAL YEAR

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

<TABLE>
<CAPTION>

                                                                       Weighted-
                                                                        Average
                                                     Weighted-         Remaining      Aggregate
                                                      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
                                     ===========================================================
</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.


                                       46
<PAGE>

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

None.

ITEM 11. 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 20, 2008.


              Name and             Amount and
             Address of            Nature of
  Title of   Beneficial            Beneficial   Percent
   Class       Owner                 Owner      of Class
________________________________________________________

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



The total of our outstanding Common Shares as of March 20, 2008 are held by 100
shareholders of record.

(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 20, 2008.

              Name and             Amount and
             Address of            Nature of
  Title of   Beneficial            Beneficial   Percent
   Class       Owner                 Owner      of Class
________________________________________________________

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

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

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


* Less than 1%


                                       47

<PAGE>

ITEM 12. 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 $606,582 and
$510,629 as of December 31, 2007 and 2006, 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 July 30,
2007. The Line of Credit was renewed for one year during the third quarter of
2007 and now matures on July 30, 2008.

Related party bonuses paid during the years ended December 31, 2007 and 2006
totaled $6,800 and $179,275, 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 $400,000 and
$480,000 as of December 31, 2007 and 2006, respectively. No portfolios were
purchased in 2007.


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<PAGE>

ITEM 13. EXHIBITS.

(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).

                               MATERIAL CONTRACTS


10.1        Subscription Agreement dated as of May 28, 2004 by and among ICRD
            and the investors identified on the signature pages thereto
            (incorporated by reference to our Form 8-K filed on June 10, 2004)

10.2        Registration Rights Agreement dated as of May 28, 2004
            by and among ICRD and certain initial investors
            identified on the signature pages thereto. (incorporated
            by reference to our Form 8-K filed on June 10, 2004)

10.3        Form of Class A common stock Purchase Warrant dated as of May 28,
            2004 (incorporated by reference to our Form 8-K filed on June 10,
            2004)

10.4        Form of Class B common stock Purchase Warrant dated as of May 28,
            2004 (incorporated by reference to our Form 8-K filed on June 10,
            2004)

10.5        Form of Placement Agent common stock Purchase Warrant dated as of
            May 28, 2004 (incorporated by reference to our Form 8-K filed on
            June 10, 2004)

10.6        Form of Finder common stock Purchase Warrant dated as of May 28,
            2004 (incorporated by reference to our Form 8-K filed on June 10,
            2004)

10.7        Escrow Agreement dated as of May 28, 2004 (incorporated by reference
            to our Form 8-K filed on June 10, 2004)

10.8        International Card Establishment, Inc. 2003 Stock Option
            Plan (incorporated by reference to the Registrant's Schedule 14C
            Definitive Information Statement filed with the Commission on
            October 1, 2003).

10.9        Subscription Agreement dated as of September 13, 2004 by and among
            ICRD and the investors identified on the signature pages thereto
            (incorporated by reference to our Form 8-K filed on September 16,
            2004).


                                       49
<PAGE>


10.10       Registration Rights Agreement dated as of September 13, 2004 by and
            among ICRD and the investors identified on the signature pages
            thereto (incorporated by reference to our Form 8-K filed on
            September 16, 2004).

10.11       Form of Warrant dated as of September 13, 2004 issued to the
            investors identified therein (incorporated by reference to our Form
            8-K filed on September 16, 2004).

10.12       Subscription Agreement dated as of December 6, 2004 by and among
            ICRD and the investors identified on the signature pages thereto
            (incorporated by reference to our Form 8-K filed on December 10,
            2004).

10.13       Amendment to the Registration Rights Agreement dated as of December
            6, 2004 by and among ICRD and the investors identified on the
            signature pages thereto (incorporated by reference to our Form 8-K
            filed on December 10, 2004).

10.14       Form of Warrant dated as of December 6, 2004 issued to the investors
            identified therein (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.

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-KSB, and for other
services normally provided in connection with statutory filings were $44,991 and
$53,887, respectively, for the years ended December 31, 2007 and 2006.

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 2006.

ALL OTHER FEES

There were no tax preparation fees billed for the fiscal year ended December 31,
2007 or 2006.


                                       50
<PAGE>

                                   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: MAY 7, 2008

                                   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)



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,            MAY 7, 2008
_____________________     SECRETARY AND DIRECTOR
    WILLAIM LOPSHIRE



/s/ CANDACE MILLS         CHIEF FINANCIAL OFFICER             MAY 7, 2008
_____________________
    CANDACE MILLS



                                       51