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


                                   FORM 10-KSB


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


                  For the Fiscal Year Ended: December 31, 2006


     / / 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: (805) 383-7047


      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: $10,765,826 as
of December 31, 2006.

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. $7,079,235 as of March 29, 2007.

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 29, 2007, there were
33,951,698 shares of the registrant's Common Stock, $.0005 par value,
outstanding.


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                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE.

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




                                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 and Small Business Issuers Purchase of Equity Securities. .16

Item 6.   Management's Discussion and Analysis
          or Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . 18

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

Item 8.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . 24

Item 8A.  Controls and Procedures  . . . . . . . . . . . . . . . . . . . . . 24

Item 8B.  Other Information . . . . . . . . . . . . . . . . . . . . . . . .  24

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act  . . . . . . . . 24

Item 10.  Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 26

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters . . . . . . . . . . . . . . . . .  27

Item 12.  Certain Relationships and Related Transactions . . . . . . . . . . 27

Item 13.  Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Item 14.  Principal Accountant Fees and Services . . . . . . . . . . . . . . 29

          Signatures and Certifications. . . . . . . . . . . . . . . . . . . 30


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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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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, total expenditures for transactions by U.S.
consumers using card-based systems grew from $0.5 trillion in 1992 to $1.9
trillion in 2002. 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. Consumer expenditures using card-based
payment methods are expected to grow to $4.6 trillion by 2012, or 50% of all
U.S. payments, representing a compound annual growth rate of 9% from 2002
levels, according to The Nilson Report.

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

o    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. According to Nellie Mae, the
     number of college students who have credit cards grew from 67% in 1998 to
     82% in 2002. 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.

o    INCREASED CARD ACCEPTANCE BY SMALL BUSINESSES. Small businesses are a vital
     component of the U.S. economy and are expected to contribute to the
     increased use of card-based payment methods. In 1997, the U.S. Census
     Bureau estimated that approximately 20 million businesses which average
     less than $1.0 million in annual sales in the United States or which had no
     payroll, generated an aggregate of $1.7 trillion in annual sales. We
     believe that the lower costs associated with card-based payment methods are
     making these services more affordable to a larger segment of the small
     business market. In addition, we believe these businesses are experiencing
     increased pressure to accept card-based payment methods in order to remain
     competitive and to meet consumer expectations. As a result, many of these
     small businesses are seeking, and we expect many new small businesses 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.

o    GROWTH IN CARD-NOT-PRESENT TRANSACTIONS. Market researchers expect dramatic
     growth in card-not-present transactions due to the rapid growth of the
     Internet. According to Jupiter Media Corporation, 94% of the dollar value
     of all merchandise and services ordered online by consumers in 2002 was
     purchased using card-based systems. In total, IDC, an independent market
     intelligence firm, expects U.S. consumer electronic commerce to grow from
     $70 billion in 2002 to $200 billion in 2007, representing a compound annual
     growth rate of 23%. In addition, IDC estimates that approximately
     two-thirds of all small businesses have online capabilities. The prevalence
     of the Internet makes having an online presence a basic consideration for
     those forming a new business today.

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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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.


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

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

GROWTH STRATEGY

ICE's growth strategy is 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 10.0% of ICE's charge volume. This client diversification has
contributed to ICE's growth despite the varying economic conditions of the
regions in which its merchants are located.

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


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

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

ICE's independent agents solicit merchants to utilize our processing services.
The agents must abide by Visa, MasterCard and NACHA regulations for acceptable
merchants, the prevention of fraud, and must perform up to an agreed upon
standard and abide by general obligations such as Confidentiality,
Indemnification, Disclaimer of all Warranties, and Limitation of Liability. ICE
bills an agent for equipment shipped (classified as merchant service revenue and
cost of sale). Commissions are expensed and paid upon the acceptance and
installation of equipment. Residual payments, 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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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
will incorporate a merchant's existing logo and artwork, or design custom
artwork for an additional fee, for use on the gift and loyalty cards.

Neos Merchant Solutions, Inc. ("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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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 statistic that 85% of American
consumers received or bought a gift card in 2002 was up from 25% in 2001 would
indicate that gift has traction and loyalty is waiting for an economical and
efficient technology like NEOS. 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 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 9000 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 possess 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 on to 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 550,000 in
2000, 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, 2006, we have no patents, trademarks, franchises,
concessions, royalty agreements or labor contracts.

EMPLOYEES

As of December 31, 2006, we had 25 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 start-up 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 income taxes of $(3,555,078) for the year ended December 31, 2006 and a
net loss before income taxes of $(5,403,971) for the year ended December 31,
2005. 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. We incurred $83,500 in merchant chargebacks in the Fourth
Quarter of 2006, and have accrued an additional $221,920 in Accrued Expenses for
the calendar year 2006. In line with industry standards, we will continue to
maintain a reserve of .001 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 intend to apply


                                       12
<PAGE>


for trademark registration for certain of our marks. However, we cannot assure
you that any such applications will be approved. Even if they are approved,
these trademarks may be successfully challenged by others or invalidated. If our
trademark registrations are not approved because third parties own these
trademarks, our use of these trademarks will be restricted or completely
prohibited unless we enter into agreements with these parties which may not be
available on commercially reasonable terms, or at all.

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

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.

15,872,480 of our presently outstanding 33,951,698 shares of Common Stock 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 two years 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 one year 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


                                       14


<PAGE>


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 experienced
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 11 Orchard, Suite 109, Lake Forest, CA 92630. 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.

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, 2006, 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 OTC Bulletin Board System
under the symbol "ICRD." The following table sets forth, for the periods
indicated, the high and low closing bid prices for the common stock of the
Company as reported on said system (or as may have been previously reported on
the Over the Counter Bulletin Board System). The bid prices reflect inter-dealer
quotations, do not include retail mark-ups, mark-downs or commissions, and do
not necessarily reflect actual transactions.

                                                    High           Low
                                                    ----           ----
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
2005
        First Quarter                               0.55           0.25
        Second Quarter                              0.42           0.20
        Third Quarter                               0.37           0.24
        Fourth Quarter                              0.31           0.15


The Securities and Exchange Commission adopted Rule 15g-9, which established the
definition of a "penny stock," for purposes relevant to the Company, 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: (i)
that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) 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 (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that 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 prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stock in both public offering and in secondary trading, and about
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.

(b) Holders.

As of March 29, 2007, there are 100 shareholders of record of the Company's
Common Stock.

As of the date of this Form 10-KSB, a majority of the issued and outstanding
shares of the Company's Common Stock held by non-affiliates are eligible for
sale under Rule 144 promulgated under the Securities Act of 1933, as amended,
subject to certain limitations included in said Rule. As of March 29, 2007,
15,872,480 of our presently outstanding 33,951,698 shares are deemed to be
"restricted securities". In general, under Rule 144, a person (or persons whose
shares are aggregated), has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which


                                       16


<PAGE>


does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.

In summary, Rule 144 applies to affiliates (that is, control persons) and
nonaffiliates when they resell restricted securities (those purchased from the
issuer or an affiliate of the issuer in nonpublic transactions). Nonaffiliates
reselling restricted securities, as well as affiliates selling restricted or
nonrestricted securities, are not considered to be engaged in a distribution
and, therefore, are not deemed to be underwriters as defined in Section 2(11),
if six conditions are met:

(1)  Current public information must be available about the issuer unless sales
     are limited to those made by nonaffiliates after two years.

(2)  When restricted securities are sold, generally there must be a one-year
     holding period.

(3)  When either restricted or nonrestricted securities are sold by an affiliate
     after one year, there are limitations on the amount of securities that may
     be sold; when restricted securities are sold by non-affiliates between the
     first and second years, there are identical limitations; after two years,
     there are no volume limitations for resales by non-affiliates.

(4)  Except for sales of restricted securities made by nonaffiliates after two
     years, all sales must be made in brokers' transactions as defined in
     Section 4(4) of the Securities Act of 1933, as amended, or a transaction
     directly with a "market maker" as that term is defined in Section 3(a)(38)
     of the 1934 Act.

(5)  Except for sales of restricted securities made by nonaffiliates after two
     years, a notice of proposed sale must be filed for all sales in excess of
     500 shares or with an aggregate sales price in excess of $10,000.

(6)  There must be a bona fide intention to sell within a reasonable time after
     the filing of the notice referred to in (5) above.

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 29,
2007, there were 33,951,698 common shares and 58,500 preferred shares issued and
outstanding. All shares of Common Stock outstanding are validly issued, fully
paid and non-assessable.

VOTING RIGHTS.

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

QUASI-CALIFORNIA CORPORATION.

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


                                       17


<PAGE>


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.

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. As of December 31, 2006
there were 4 million options to purchase Common Stock issued and outstanding
under the 2003 Stock Option Plan.

<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           4,245,000                       $0.22                       755,000
plans approved by
security holders

Equity compensation                 -0-                       -0-                         -0-
plans not approved by
security holders

Total                         4,245,000                       $0.22                        755,000

</TABLE>


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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.


                                       18


<PAGE>


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, 2006 ("Fiscal 2006") compared to
     the year ended December 31, 2005 ("Fiscal 2005"). 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, 2006.

EXECUTIVE SUMMARY

Our strategy is to grow profitably by increasing our penetration of the
expanding small merchant marketplace for payment processing services and Gift &
Loyalty products. We find these merchants primarily through our independent
outside agent channel of distribution.

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, 2006, we provided our services to 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. Our Gift & Loyalty products
enable our merchants to offer customized merchant branded gift and loyalty cards
and programs.

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.


                                       19


<PAGE>


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; and facilitates payment processing for the accounts.
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 was dormant in 2006 and 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.

REVENUES
The Company provides merchant services and customer support for merchants and
other Merchant Services providers. Revenues are recognized as customer services
are provided.

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

NEW ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment." SFAS No. 123R replaced SFAS No. 123 and superseded Accounting
Principles Board Opinion No. 25. SFAS No. 123R requires compensation costs
related to share-based payment transactions to be recognized in the financial
statements. The effective date of SFAS No. 123R is the first reporting period
beginning after December 15, 2005, for small business issues. The Company
adopted SFAS 123R in the first quarter 2006. The adoption of SFAS No. 123
(revised 2004) had a significant impact on the Company's financial position and
results of operations as the Company had share-based payments in 2006.


                                       20


<PAGE>


In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 155, "Accounting for Certain Hybrid Financial Instruments--an Amendment of
FASB Statements No. 133 and 140" ("SFAS No. 155"). SFAS No. 155 allows financial
instruments that contain an embedded derivative and that otherwise would require
bifurcation to be accounted for as a whole on a fair value basis, at the
holders' election. SFAS No. 155 also clarifies and amends certain other
provisions of SFAS No. 133 and SFAS No. 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. We do not expect that the adoption of SFAS No. 155 will have
a material impact on our financial condition or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets--an Amendment of FASB Statement No. 140" ("SFAS No. 156"). SFAS
No. 156 provides guidance on the accounting for servicing assets and liabilities
when an entity undertakes an obligation to service a financial asset by entering
into a servicing contract. This statement is effective for all transactions in
fiscal years beginning after September 15, 2006. We do not expect that the
adoption of SFAS No. 156 will have a material impact on our financial condition
or results of operations.

In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes--an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies
the recognition threshold and measurement of a tax position taken on a tax
return. FIN 48 is effective for fiscal years beginning after December 15, 2006.
FIN 48 also requires expanded disclosure with respect to the uncertainty in
income taxes. We are currently evaluating the requirements of FIN 48 and the
impact this interpretation may have on our financial statements.

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.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2006 COMPARED WITH THE
YEAR ENDED DECEMBER 31, 2005

Results of operations consist of the following (note - 2005 has been adjusted
for the sale of Global Tech Leasing):

<TABLE>
<CAPTION>

                            December 31, 2006     December 31, 2005    Difference    %

<S>                             <C>                   <C>               <C>         <C>
Net Revenues                    10,765,826            5,644,079         5,121,747   91
Cost of Revenues                7,157,403             3,784,241         3,373,162   89
Gross Profit                    3,608,423             1,859,837         1,748,586   94

Operating, General and
   Administrative Costs         6,515,470             4,981,449        1,534,021    31
Net Operating Loss             (2,907,047)           (3,121,611,)        214,564    (7)

</TABLE>


Net revenues increased by 91% from 2005 to 2006 mainly due to the increased
number of merchants utilizing our payment processing and gift and loyalty
services.

The 89% increase in cost of revenues is directly related to the increase in
merchant accounts and the recording of interchange expense which increases with
the overall dollar volume of credit card transactions processed on behalf of our
merchants.

Operating, general and administrative costs increased by $1,326,686, or 27%,
mainly due to the costs incurred to support a 91% increase in Net Revenues,
which were offset by approximately $223,000 savings in rent, insurance,
telephone and utilities.


                                       21


<PAGE>


The change in position of cash, accounts payable and accrued expenses, and
accounts receivable consist of the following (note - 2005 has been adjusted for
the sale of Global Tech Leasing) :

<TABLE>
<CAPTION>

                         December 31, 2006     December 31, 2005     Difference      %
<S>                          <C>                   <C>               <C>           <C>

Cash                         $157,528              $  748,040        $ (590,512)   (78.9)

Accounts Payable and
   Accrued Expenses          $865,336              $1,099,866        $ (234,529)   (4.21)

Accounts Receivable          $ 87,706              $  518,230        $   15,545      3.1

</TABLE>


Cash decreased 78.9% due to the acquisition costs incurred for the purchase of
portfolios plus payments for accounts payable.

Approximately $230,000 of outstanding accounts payable and accrued expenses were
paid off and an additional $156,000 of accounts payable were converted to a note
payable.

Management believes that it is moving toward sustained profitability. We had a
net loss of $(3,813,309 ) for the six month period ending June 30, 2006. This
loss included $207,000 in restructuring costs which were part of a plan to
reduce overhead and increase overall margins. As part of the plan we
consolidated operations in our Camarillo, California facility; downsized our
Irvine, California facility; reduced overall headcount; and adjusted pricing for
our payment processing and gift and loyalty services. The foregoing actions were
positive and we recorded our first profitable quarter in history with net income
of $29,278 for the three month period ending September 30, 2006. This trend
continued into the fourth quarter in which we recorded net income of $28,957 for
the three month period ending December 31, 2006. In order to achieve sustained
profitability we believe that we must continue to grow our independent outside
agent base and find strategic alliances which will enable us to reach more small
to medium sized merchants. In the fourth quarter of 2006 we initiated a
recruiting and training program designed to increase our independent outside
agent base and are actively pursuing strategic alliances to reach our target
merchants. These initiatives will increase our overall expenses in the short
term, but should result in greater growth in long term revenue. Our plan to
attain sustained profitability and meet cash flow needs going forward is 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 overall revenue and operating
     margins. 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 through the expansion of our independent outside agent base
     and strategic alliances designed to reach more of our target merchants.

LIQUIDITY AND CAPITAL RESOURCES

We are currently seeking to expand our merchant services offerings in bankcard
and gift and loyalty. In addition, we are actively recruiting and training
additional independent outside agents and investigating strategic alliance
business opportunities; accordingly we will require additional capital to
complete these undertakings and to pursue additional business opportunities.

We have financed our operations during the year primarily through the receipt of
proceeds from the sale of Global Tech Leasing subsidiary, the draw of $510,000
on our line of credit, sales of common stock and use of cash on hand.

We had $157,528 cash on hand as of December 31, 2006 compared to $748,000 cash
on hand as of December 31, 2005. 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, 2006
                                DECEMBER 31, 2005

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

                                    CONTENTS



REPORT OF THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ON THE
CONSOLIDATED FINANCIAL STATEMENTS                                            F-1
________________________________________________________________________________



CONSOLIDATED FINANCIAL STATEMENTS

   Consolidated Balance Sheets                                               F-2

   Consolidated Statements of Operations                                     F-3

   Consolidated Statements of Stockholders' Equity                           F-5

   Consolidated Statements of Cash Flows                                     F-6

   Notes to Consolidated Financial Statements                             F-8-18
________________________________________________________________________________


                                       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) and Subsidiaries as of
December 31, 2006 and 2005, and the related consolidated statement of
operations, stockholders' equity, and cash flows for 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 consolidated
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 financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide 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. and Subsidiaries as of December 31, 2006 and 2005, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.


MENDOZA BERGER & COMPANY, LLP



Irvine, California
March 29, 2007



                                       F-1



<PAGE>

<TABLE>
<CAPTION>


             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                                        December 31,     December 31,
                                                                                                2006             2005
                                                                                       _____________     ____________
<S>                                                                                    <C>               <C>
                                     ASSETS

CURRENT ASSETS
     Cash                                                                              $     157,528     $    748,040
     Accounts receivable, trade, net of allowance of $280,595 and $31,731
        as of December 31, 2006 and 2005, respectively                                        87,705          495,069
     Assets held for sale, net of related liabilities of $165,470                                  -        2,690,354
     Inventory                                                                                71,709           50,684
     Other receivables                                                                       372,995          113,647
     Prepaid assets                                                                                -          350,469
                                                                                       _____________     ____________
            Total current assets                                                             689,937        4,448,263
                                                                                       _____________     ____________

NOTE RECEIVABLE                                                                               15,154                -
FIXED ASSETS, net of accumulated depreciation of $2,222,776 and $1,235,109
     as of December 31, 2006 and 2005, respectively                                          859,551        1,837,897
INTANGIBLE ASSETS                                                                          5,270,141        3,690,052
GOODWILL                                                                                      87,978           87,978
OTHER NON-CURRENT ASSETS                                                                     117,818          136,327
                                                                                       _____________     ____________

                   Total assets                                                        $   7,040,579     $ 10,200,517
                                                                                       =============     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                                  $     256,908     $    651,560
     Accrued expenses                                                                        608,428          448,306
     Current portion of notes payable                                                        104,473          506,933
     Current portion of notes payable, related parties                                       480,000                -
     Line of credit, related parties                                                         510,629        1,564,650
     Current portion of capital lease                                                         19,775                -
     Due to related party                                                                          -           76,333
                                                                                       _____________     ____________

            Total current liabilities                                                      1,980,213        3,247,782

NOTES PAYABLE, RELATED PARTY, net of current portion                                         360,000                -
NOTES PAYABLE, LONG TERM                                                                      42,613                -
LONG-TERM PORTION OF CAPITAL LEASE                                                            63,849                -
                                                                                       _____________     ____________

                   Total liabilities                                                       2,446,675        3,247,782

COMMITMENTS & CONTINGENCIES                                                                        -                -

STOCKHOLDERS' EQUITY
     Preferred stock: $.01 par value; authorized 10,000,000 shares;
        issued and outstanding: 58,500 and 62,000 shares at
        December 31, 2006 and 2005, respectively                                                 585              620
     Common stock: $.0005 par value; authorized 100,000,000 shares;
        issued and outstanding: 33,951,698 and 29,337,392 shares
        at December 31, 2006 and 2005, respectively                                           16,976           14,669
     Common stock subscribed                                                                 100,064                -
     Additional paid-in capital                                                           19,281,810       17,987,902
     Accumulated deficit                                                                 (14,805,531)     (11,050,456)
                                                                                       _____________     ____________
            Total stockholders' equity                                                     4,593,904        6,952,735
                                                                                       _____________     ____________

                   Total liabilities and
                   stockholders' equity                                                $  7 ,040,579     $ 10,200,517
                                                                                       =============     ============

See Accompanying Notes to Consolidated Financial Statements.

</TABLE>


                                       F-2


<PAGE>

<TABLE>
<CAPTION>


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


                                                               Years ended
                                                       December 31,     December 31,
                                                               2006             2005
                                                      _____________    _____________
<S>                                                   <C>              <C>

Revenues:
Merchant services revenues                            $  10,922,610    $   5,688,096
Less:  sales returns and allowances                        (156,784)         (44,018)
                                                      _____________    _____________
   Net revenue                                           10,765,826        5,644,078

Cost of revenue:
   Commissions                                            1,245,800        1,465,681
   Cost of sales                                          5,911,603        2,318,560
                                                      _____________    _____________

        Cost of revenue                                   7,157,403        3,784,241
                                                      _____________    _____________

           Gross profit                                   3,608,423        1,859,837
                                                      _____________    _____________


Operating, general, and administrative expenses:
   General, administrative and selling expenses           5,286,889        3,984,771
   Restructuring charges                                    207,335                -
   Depreciation                                           1,021,246          996,678
                                                      _____________    _____________
           Total operating, general, and
           administrative expenses                        6,515,470        4,981,449
                                                      _____________    _____________


           Net operating loss                            (2,907,047)      (3,121,612)

Non-operating income (expense):
   Interest income                                              664           14,630
   Interest expense                                        (131,855)        (107,480)
                                                      _____________    _____________

           Total non-operating(loss)                       (131,191)         (92,850)
                                                      _____________    _____________

   Net loss before discontinued operations               (3,038,238)      (3,214,462)

Discontinued operations:
   Loss from operations of discontinued segment
    (including loss on disposal of $543,069)               (516,993)      (1,110,683)
                                                      _____________    _____________

   Net loss before preferred dividends                   (3,555,231)      (4,325,145)

   Dividends paid on preferred shares                       199,844        1,078,827
                                                      _____________    _____________

   Net loss allocable to common shareholders          $  (3,755,075)    $ (5,403,972)
                                                      =============     ============


                                      F-3


<PAGE>


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


                                                               Years ended
                                                       December 31,     December 31,
                                                               2006             2005
                                                      _____________    _____________

   Earnings per share from continuing operations      $       (0.10)    $      (0.11)
                                                      =============     ============
   Earnings per share from discontinued operations    $       (0.02)    $      (0.04)
                                                      =============     ============
   Earnings per share                                 $       (0.12)    $      (0.18)
                                                      =============     ============
   Average number of shares
   of common stock outstanding                           30,916,668       29,273,746
                                                      =============     ============

   Dividends Per Share                                $        3.42      $     17.40
                                                      =============     ============

See Accompanying Notes to Consolidated Financial Statements.

</TABLE>


                                       F-4



<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,
   2004                           62,000  $ 620   28,408,150  $14,204   $17,347,352   $(1,780,920)   $(5,646,484)   $9,934,772
                              ==========  =====   ==========  =======   ===========   ===========    ===========    ==========

Preferred stock
   Subscription receiv-
   able, net of professional
   fees                                                                                 1,780,920                    1,780,920
Shares issued to reset
   funding of 2004 Private
   Placement                                         929,242      465          (465)                                         -
Professional fees                                                           (55,459)                                   (55,459)
Beneficial Conversion
   Feature on Sept 2004
   Financing                                                                304,016                     (304,016)            -
Beneficial Conversion
   Feature on Dec 2004
   Financing                                                                392,458                     (392,458)            -
Preferred stock
   dividend                                                                                             (382,353)     (382,353)
Net loss, December 31,
   2005                                                                                               (4,325,145)   (4,325,145)
                              _________________   ___________________   ___________   ___________    ___________   ___________

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
                              =================   ===================   ===========   ===========   ============    ==========


See Accompanying Notes to Consolidated Financial Statements.

</TABLE>


                                       F-5


<PAGE>

<TABLE>
<CAPTION>


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


                                                                 Years ended
                                                        December 31,     December 31,
                                                                2006             2005
                                                        ____________     ____________
<S>                                                      <C>              <C>

Cash Flows From
Operating Activities:

    Net loss                                             $(3,555,231)     $(4,325,145)
    Loss from discontinued operations                        543,069                -
    Restructuring charges                                    207,335                -
    Early termination of lease costs                               -       (1,914,435)
    Impairment charges related to goodwill and
       intangible assets                                           -        1,206,402
    Depreciation                                           1,021,246        1,000,016
    Allowance for doubtful accounts                          248,864           12,925
    Accumulated depreciation of sold asset                         -          (15,799)
    Common stock subscribed for salaries                      43,064                -
    Stock issued for consulting fees                          21,600                -
    Compensation for stock awards                            825,508                -
    Non-cash advancements from line of
       credit, related party                                 533,221                -
    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(increase) in accounts receivable              158,500          (78,288)
      Decrease in finance lease receivable                         -           49,818
      Decrease(increase) in inventory                        (21,025)         112,488
      Decrease(increase) in other receivables               (259,348)         335,300
      Decrease(increase) in prepaid expenses                 343,848         (333,683)
      Decrease(increase) in other non-current assets           5,810         (104,982)
      (Decrease) increase in accounts payable               (120,378)         184,946
      (Decrease) increase in accrued expenses                (66,793)        (250,897)
                                                        ____________     ____________

         Net cash (used in) operating activities             (13,818)      (4,121,334)
                                                        ____________     ____________

Cash Flows From Investing Activities:
    Acquisitions, net of attrition                          (483,089)        (467,567)
    Purchase of equipment                                    (35,310)         (86,254)
    Proceeds from the sale of discontinued segment           701,443                -
    Issuance of notes receivable                             (15,000)               -
    Proceeds from leases sold                                      -       10,757,697
    Cost of leases purchased                                       -       (8,843,262)
                                                        ____________     ____________

         Net cash provided by investing activities           168,044        1,360,614
                                                        ____________     ____________


                                       F-6


<PAGE>

              INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (CONTINUED)
                                                                 Years ended
                                                        December 31,     December 31,
                                                                2006             2005
                                                        ____________     ____________
Cash Flows From Financing Activities:
    Related party payables, net                              (76,333)          79,705
    Proceeds from notes payable                                    -          500,000
    Proceeds from line of credit, related party              447,600                -
    Payments on capital lease                                 (9,376)               -
    Payments on notes payable, related party                (200,000)        (556,860)
    Payments on notes payable                               (651,436)          (6,911)
    Payments on line of credit, related party               (470,192)               -
    Preferred dividends paid                                       -         (348,126)
    Proceeds from sale of preferred stock                          -        1,725,461
    Proceeds from sale of common stock                       215,000                -
                                                        ____________     ____________

         Net cash (used in) provided by
            financing activities                            (744,737)       1,393,269
                                                        ____________     ____________

         Net decrease in cash                               (590,511)      (1,367,451)

Cash, beginning of period                                    748,040        2,115,491
                                                        ____________     ____________

Cash, end of period                                      $   157,528     $    748,040
                                                        ============     ============
Supplemental Cash Flow Disclosures:
 Cash paid for interest                                  $   113,526     $     70,186
                                                        ============     ============

 Cash paid for income taxes                              $         -     $          -
                                                        ============     ============


Supplemental Schedule of Non-cash Investing and Financing Activities:
 Calculated beneficial conversion feature associated
    with September 2004 financing issuance in 2005       $         -     $    304,106

 Calculated beneficial conversion feature associated
    with December 2004 financing issuance in 2005        $         -     $    392,458

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

 Capital lease, accounting software                      $    93,000     $          -

 Merchant portfolio's purchased through
   common stock subscription                             $    57,000     $          -

 Merchant portfolio's 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     $          -


See Accompanying Notes to Consolidated Financial Statements.

</TABLE>


                                       F-7


<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 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 was dormant in 2006 and 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
disposed of 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, 2006 and 2005, respectively.

CONCENTRATIONS
The Company maintains cash balances at several financial institutions in
California. Accounts at each institution are insured by the Federal Deposit
Insurance Corporation ("FDIC") up to $100,000. At December 31, 2006 and 2005 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 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.


                                      F-8


<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.

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

Estimated service lives of property and equipment are as follows:

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

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

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

GOODWILL AND INTANGIBLES
Goodwill represents the excess of purchase price over tangible and other
intangible assets acquired less liabilities assumed arising from business
combinations. In 2006, the Company's annual goodwill impairment test did not
identify an impairment. In 2005, the Company's annual goodwill impairment test
identified an impairment to goodwill amounting to $245,832.

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). 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 of approximately $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. In 2005, the Company purchased
merchant portfolios totally $485,570 that were not related to a business
combination or acquisition; at December 31, 2005, the Company recognized direct
write offs of $18,003. All direct write offs were based on census performed at
period end.

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

If the embedded derivative instrument is determined not to be clearly and
closely related to the host contract, is not currently measured at fair value
with changes in fair value reported in earnings, and the embedded derivative
instrument would qualify as a derivative instrument, the embedded derivative
instrument is recorded apart from the host contract and carried at fair value
with changes recorded in current-period earnings. As of December 31, 2006 and
2005 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.


                                      F-9


<PAGE>


REVENUES
The Company provides merchant services and customer support for merchants and
other Merchant Services providers. Revenues are recognized as customer services
are provided.

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

ADVERTISING
Advertising costs are charged to operations as incurred. Advertising costs for
the years ended December 31, 2006 and 2005 were $551 and $129,404, respectively.

RECLASSIFICATION
Certain reclassifications, which have no effect on net income (loss), have been
made in the prior period financial statements to conform to the current
presentation. Specifically in the prior period, the assets, liabilities and
incomes of GTL have been reclassified in the prior period as Asset Held for
Sale, net and Discontinued Operations.

NEW ACCOUNTING PRONOUNCEMENTS In December 2004, the FASB issued SFAS No. 123
(revised 2004), "Share-Based Payment." SFAS No. 123R replaced SFAS No. 123 and
superseded Accounting Principles Board Opinion No. 25. SFAS No. 123R requires
compensation costs related to share-based payment transactions to be recognized
in the financial statements. The effective date of SFAS No. 123R is the first
reporting period beginning after December 15, 2005, for small business issues.
The Company adopted SFAS 123R in the first quarter 2006. The adoption of SFAS
No. 123 (revised 2004) had a significant impact on the Company's financial
position and results of operations as the Company had share-based payments in
2006.

In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47 "Accounting
for Conditional Asset Retirement Obligations--an Interpretation of FASB
Statement No. 143" ("FIN No. 47"). FIN No. 47 clarifies the timing of liability
recognition for legal obligations associated with the retirement of a tangible
long-lived asset when the timing and/or method of settlement are conditional on
a future event. FIN No. 47 is effective for us no later than December 31, 2005.
We do not expect that the adoption of FIN No. 47 will have a material impact on
our financial condition or results of operations.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB No. 20 and FASB Statement No. 3" ("SFAS No.
154"). SFAS No. 154 requires retrospective application to prior periods'
financial statements of a voluntary change in accounting principle unless it is
impracticable. APB Opinion No. 20 "Accounting Changes," previously required that
most voluntary changes in accounting principle be recognized by including in net
income of the period of the change the cumulative effect of changing to the new
accounting principle. This statement is effective for our Company as of January
1, 2006.

In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 155, "Accounting for Certain Hybrid Financial Instruments--an Amendment of
FASB Statements No. 133 and 140" ("SFAS No. 155"). SFAS No. 155 allows financial
instruments that contain an embedded derivative and that otherwise would require
bifurcation to be accounted for as a whole on a fair value basis, at the
holders' election. SFAS No. 155 also clarifies and amends certain other
provisions of SFAS No. 133 and SFAS No. 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. We do not expect that the adoption of SFAS No. 155 will have
a material impact on our financial condition or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets--an Amendment of FASB Statement No. 140" ("SFAS No. 156"). SFAS
No. 156 provides guidance on the accounting for servicing assets and liabilities
when an entity undertakes an obligation to service a financial asset by entering
into a servicing contract. This statement is effective for all transactions in
fiscal years beginning after September 15, 2006. We do not expect that the
adoption of SFAS No. 156 will have a material impact on our financial condition
or results of operations.

In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes--an interpretation of FASB Statement No. 109" ("FIN 48"). "). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with SFAS No. 109, Accounting
for Income Taxes. FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. FIN 48 is effective for fiscal years
beginning after December 15, 2006. Upon adoption, FIN 48 requires an adjustment
to retained earnings for the initial cumulative effect of the interpretation. We
are continuing to review and evaluate the impact of FIN 48 on our retained
earnings.


                                      F-10


<PAGE>


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.


NOTE 2. NOTE RECEIVABLE

The Company issued $15,000 as a note receivable between September and October
2006. This receivable bears interest to the Company at 4% per annum compounded
monthly. As of December 31, 2006, the Company has accrued $154 in interest
income. Repayments of this note receivable begin February 2007. Repayments take
the form of retention of merchant portfolio's and crediting 50% of the residuals
due to the debtor.


NOTE 3.  ASSETS HELD FOR SALE AND 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.

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, and for the year ended
December 31, 2005 were $301,894 and $1,194,435 respectively. 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 an effective tax result.

 The following is a summary of the net assets at December 31, 2005.

                                   DECEMBER 31, 2005

Finance Lease Receivable              $    23,162
Prepaid Expenses                            6,621
                                      ___________
        Total Current Assets               29,783
Property and Equipment (net)                3,959
Intangible assets                       1,330,000
Goodwill                                1,492,352
                                      ___________
Total Assets                          $ 2,856,094
                                      ===========
Total Liabilities                     $   165,740
                                      ===========
Asset held for sale                   $ 2,690,354
                                      ===========


                                      F-11



<PAGE>


NOTE 4. FIXED ASSETS

Fixed assets and accumulated depreciation consists of the following:

                                                        Years ended
                                             December 31,     December 31,
                                                     2006             2005**
                                             ____________     ____________

Furniture and fixtures                       $     14,750     $     60,713
Equipment and machinery                           231,257          175,973
Software                                        2,836,320        2,836,320
                                             ____________     ____________
         Subtotal                               3,082,327        3,073,006
Accumulated Depreciation                       (2,222,776)      (1,235,109)
                                             ____________     ____________
                                             $    859,551     $  1,837,897
                                             ============     ============

**Adjusted for discontinued GLT business segment.


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 hired an outside appraisal to assist in the determination of any
impairment in intangibles or goodwill for both 2006 and 2005. We have determined
that at present the NEOS tradename has an indefinite live, which have been
included in the Company's annual impairment analysis. The Company determined
that an impairment to the assigned value had occurred at December 31, 2005 as
previously disclosed. In 2006, the Company completed impairment analysis that
resulted in no impairment.

The Company's intangible assets consisted of the following:

                                        December 31,
                                   2006               2005**
                              _____________      _____________

Merchant portfolios           $   4,809,421      $   3,255,052
Tradename                           435,000            435,000
Gift card portfolios                 25,720                  -
                              _____________      _____________
                              $   5,270,141      $   3,690,052
                              =============      =============

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

**Adjusted for discontinued GLT business segment.


                                      F-12


<PAGE>


NOTE 6. ACCRUED EXPENSES

Accrued expenses consist of the following:

                                                    Years ended
                                         December 31,     December 31,
                                                 2006             2005**
                                        _____________     ____________

Wages payable                           $     249,688    $     161,912
Customer deposits                              43,215          131,644
Accrued expenses, other                        51,823           28,199
Accrued interest                               18,328           34,493
Preferred stock dividends payable                   -           34,227
Sales taxes payable                            23,454           57,831
Reserve for chargebacks                       221,920                -
                                        _____________     ____________
                                        $     608,428     $    448,306
                                        =============     ============

**Adjusted for discontinued GLT business segment.


NOTE 7. NOTES AND LEASES PAYABLE

Notes and leases payable consist of the following:

<TABLE>
<CAPTION>
                                                                          Years ended
                                                               December 31,     December 31,
                                                                       2006             2005
                                                               ____________     ____________
<S>                                                            <C>              <C>

Note payable, at 8.5% for International Card Establishment,
    for use in working capital, due on June 30, 2006           $         -      $    125,000
Note payable, at 8.5% for International Card Establishment,
    for use in working capital, due on June 30, 2006                     -           375,000
Notes payable, capital lease obligation
    to acquire computer equipment                                     2,202            6,933
Notes payable, at 6% interest, due May 2008                         102,271                -
Lease payable, capital lease obligation
    to acquire accounting system, at 12%
    due January 2011                                                 19,775                -
                                                               ____________     ____________

Current notes and leases payable                               $    124,248     $    506,933
                                                               ============     ============

Note payable, at 8% interest, in acquisition of NEOS
    Merchant Solutions, Inc., due on January 1, 2006           $          -     $    300,000
Note payable, at 8% interest, in acquisition of NEOS
    Merchant Solutions, Inc., due on June 30, 2006                        -        1,264,650
Notes payable, at 6% interest, due May 2008                          42,613                -
Lease payable, capital lease obligation
    to acquire accounting system, at 12%
    due January 2011                                                 63,849                -
                                                               ____________     ____________

Noncurrent notes and leases payable                            $    106,462     $  1,564,650
                                                               ============     ============

</TABLE>


                                      F-13


<PAGE>


The Company entered into a lease agreement for a new accounting system for
$93,000. The lease commenced February 2006 and extends through January 2011.

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

     Year Ended December 31,           Principal Payments
                                       __________________
     2007                              $          604,247
     2008                                         420,754
     2009                                          20,494
     2010                                          23,154
     2011                                           2,061
     Thereafter                                         -
                                       __________________
     Total                             $        1,070,710
                                       ==================

NOTE 8. RESTRUCTURING CHARGES

Due to the Company's continued losses, we critically reviewed all locations and
closed non-profitable locations where appropriate. Due to this we have reported
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 its operations to
its Camarillo location. This process 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 serial
preferred stock with a par value of $0.01.

In April 2004, the Company approved a private placement of Common Stock to raise
up to $3,000,000. The Company issued 4,415,076 shares of stock at $0.63 per
share. Each share of common stock included warrants, "A Warrants" and "B
Warrants", respectively. One (1) A Warrant was issued for each two (2) shares of
common stock issued. The per A Warrant Share exercise price to acquire a Warrant
share is $0.51, retroactively adjusted due to additional equity financing in
2004 in accordance with the private placement agreement. A Warrants were
exercisable until a registration statement has been effective for approximately
180 days. One (1) B Warrant was issued for each one (1) share of common stock
issued. The per B Warrant Share exercise price to acquire a Warrant share is
$0.75, retroactively adjusted due to additional equity financing in 2004 in
accordance with the private placement agreement. B Warrants are exercisable for
five years from the Closing Date of the subscription agreement. As of December
31, 2004 the Company issued 2,207,541 A Warrants and 4,415,076 B Warrants in
connection with this private placement. As of December 31, 2005, 2,207,541 of A
Warrants have expired unexercised.

In accordance with EITF 00-27, "Application of Issue No. 98-5 to Certain
Convertible Instrument", the total proceeds of $2,781,500 were allocated between
common shares and warrants based on a relative fair value basis. The Company
used the Black Scholes model to calculate the fair value of the warrants with
the grant date the date of issue or commitment date, as appropriate, and the
volatility at 50% of the life of the Warrant. Volatility was calculated from the
date of the iNetEvents acquisition of July 13, 2004 forward. The calculation
resulted in an allocation to Additional Paid-in Capital of $1,522,929 for common
shares and $1,256,363 for the warrants.


                                      F-14


<PAGE>


As a result of additional subsequent equity financing in 2004, the Company
issued 929,242 additional common shares and warrants to purchase an aggregate of
1,350,000 common shares at $0.47 per share with varying expiration dates through
2009 per the terms of the April 2004 private placement. Of the 1,350,000
warrants issued, 1,100,000 warrants were issued in 2004; 250,000 warrants and
the additional common shares were issued in 2005.

Consistent with the guidance in EITF 96-18, "Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services", fees for the issuance of the shares was $290,663
and offset the Additional Paid-in Capital recorded in the transaction. Also
included as compensation for the equity financing, the Company issued 662,262
Placement Agent "A" Warrants and 441,508 Finder's "A" Warrants; there were no
Placement Agent "B" Warrants or Finder's "B" Warrants issued. Further details on
this equity transaction can be found in the Company's 8-k filing with the
Securities and Exchange Commission on June 6, 2004. The warrants associated with
the Placement Agent and Finder's Fees expire 5 years from the date of issue. The
accounting for the Placement Agent and Finders Fees were consistent for cash
paid fees with a net effect of zero to Additional Paid-in Capital valued at the
fair value using the Black Scholes model as previously described.

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.

o    Issued 80,000 of common stock relating to a legal settlement.

o    Issued 2,150,000 of common stock for a cash offering.

PREFERRED STOCK
On September 13, 2004, the Company completed an agreement to sell 30,000 shares
of Series A Convertible Preferred Stock at $100 per share for $3,000,000. The
Preferred Stock is convertible into shares of the Company's common stock at a
conversion price equal to 85% of the market price, subject to a $.375 per share
floor and $.47 ceiling price. In addition, the Investors received an aggregate
of 3,754,692 warrants to purchase shares of the Company's common stock at an
exercise price of $0.47 for 50% of the warrants and $0.75 for the remaining 50%
of the warrants. Of the 3,754,692 warrants, 2,478,098 were issued in 2004 and
1,276,594 were issued in 2005. Both sets of warrants expire on September 13,
2007.

In accordance with EITF 00-27, the total proceeds of $3,000,000 were allocated
between preferred shares and warrants based on a relative fair value basis. The
Company used the Black Scholes model to calculate the fair value of the warrants
with the grant date the date of issue or commitment date, as appropriate, and
the volatility at 50% of the life of the warrant. Volatility was calculated from
the date of the iNetEvents acquisition of July 13, 2003 forward. The calculation
resulted in an allocation to Additional Paid-in Capital of $2,105,821 for
preferred shares and $894,164 for the warrants.

Additionally, in accordance with EITF 98-5, "Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios", and EITF 00-27, the Company determined that a beneficial
conversion feature existed at the commitment date. As disclosed in the preferred
shares Certificate of Designation (as filed with the SEC), the shareholder does
not have a mandatory hold period and that the conversion is at the option of the
shareholder. As such the Company charged the full amount of the calculated
beneficial conversion feature to Dividends Paid as a return of capital. This
amounted to $304,016 in December 31, 2005.

Consistent with the guidance in EITF 96-18, fees for the issuance of the shares
was $462,000 and offset the Additional Paid-in Capital recorded in the
transaction. The Company received $1,671,000, representing 66% of the purchase
price, net of offering expenses. A receivable of $867,000 was recorded in equity
as Preferred Stock Subscription Receivable as the Preferred Shares were fully
issued prior to full receipt of the proceeds. The remaining proceeds were
received in February 2005.

On December 3, 2004, the Company completed an agreement to sell 32,000 shares of
Series A Convertible Preferred Stock at $100 shares for $3,200,000. The
Preferred Stock is convertible into shares of the Company's common stock equal
to 85% of the market price, subject to a $.375 per share floor and $.47 ceiling
price. In addition, the Investors received an aggregate of 8,010,012 warrants to
purchase shares of the Company's common stock at an exercise price of $0.47 for
50% of the warrants and $0.75 for the remaining 50% of the warrants. Of the
8,010,012 warrants, 5,286,608 were issued in 2004 and 2,723,404 were issued in
2005. Both sets of warrants expire on December 3, 2007.


                                      F-15


<PAGE>


In accordance with EITF 00-27, the total proceeds of $3,200,000 were allocated
between preferred shares and warrants based on a relative fair value basis. The
Company used the Black Scholes model to calculate the fair value of the warrants
with the grant date the date of issue or commitment date, as appropriate, and
the volatility at 50% of the life of the Warrant. Volatility was calculated from
the date of the iNetEvents acquisition of July 13, 2003 forward. The calculation
resulted in an allocation to Additional Paid-in Capital of $2,045,697 for
preferred shares and $1,154,287 for the warrants.

Additionally, in accordance with EITF 98-5 and EITF 00-27, the Company
determined that a beneficial conversion feature existed at the commitment date.
As disclosed in the preferred shares Certificate of Designation (as filed with
the SEC), the shareholder does not have a mandatory hold period and that the
conversion is at the option of the shareholder. As such the Company has charged
the full amount of the calculated beneficial conversion feature to Dividends
Paid as a return of capital. This amounted to $392,458 as of December 31, 2005.

Consistent with the guidance in EITF 96-18, fees for the issuance of the shares
was $524,000 and offset the Additional Paid-in Capital recorded in the
transaction. The Company received $1,762,080, representing 66% of the purchase
price, net of offering expenses. A receivable of $913,920 is recorded in equity
as Preferred Stock Subscription Receivable as the Preferred Shares were fully
issued prior to full receipt of the proceeds. The remaining proceeds were
received in February 2005.

In February 2005, the Company received the remaining proceeds in association
with the 2004 preferred shares transactions amounting to $1,725,461, net of
$55,459 in financing fees.

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 and $34,227 as of December 31, 2006 and 2005, respectively. In the second
quarter of 2006, the Company amended the preferred share agreements above with
the shareholders to remove the dividend preference. Consideration for all
dividends accrued as of June 22, 2006 were paid via issuance of 1,450,973 shares
of 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 $199,844 and $1,078,827 as of December 31, 2006 and 2005,
respectively.


                                      F-16


<PAGE>


As of December 31, 2006, 3500 shares of preferred stock have been converted to
933,333 shares of common stock.

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 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. The Company believes that
such awards better align the interests of its employees and key consultants with
those of its shareholders. Option awards are generally granted with an exercise
price equal to market price of the Company stock at the date of grant, unless
otherwise defined in the option agreement with the grantee.

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

                                                2006
                                         _______________

     Expected volatility                 183.39%-189.44%

     Weighted-average volatility                  45.92%

     Expected dividends                  $             -

     Expected term (in years)                      2-4.5

     Risk-free rate                        4.625%-4.875%

A summary of option activity under the Plan as of December 31, 2006, and changes
during the period 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
                                          =========      =======      ==========      =========

Exercisable at December 31, 2006          4,160,000      $  0.22          2.2         $ 817,876
                                          =========      =======      ==========      =========

</TABLE>

                                      F-17


<PAGE>


A summary of the status of the Company's nonvested shares as of December 31,
2006, and changes during the period ended December 31, 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
                                     ======

NOTE 11. INCOME TAXES

The consolidated provision for federal and state income taxes for the years
ended December 31, 2006 and 2005 are as follows:

                                            2006             2005
                                         __________       ___________

     Current - State                     $    1,000       $     1,000
     Current - Federal                            -                 -
     Deferred - State                      (171,000)         (174,000)
     Deferred - Federal                    (978,000)       (1,108,000)
     Increase in valuation allowance      1,148,000         1,281,000
                                         __________       ___________
     Income tax expense (benefit)        $        -       $         -
                                         ==========       ===========

There were no amounts paid for federal income taxes during the years ended
December 31, 2006 and 2005.

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, 2006, the Company had federal net operating loss
carryforwards of $10,935,000 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
                               ___________
              Total            $10,935,000
                               ===========

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 certain stockholders in
the stock of the corporation by more than 50 percentage points over a three-year
period. The value of the stock at the time of an ownership change is multiplied
by the applicable long-term tax exempt interest rate to calculate the annual
limitation. Any unused annual limitation may be carried over to later years.

The state operating losses will expire between 2012 and 2016 if not utilized.

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards 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


                                      F-18


<PAGE>


The Company's total deferred tax assets and deferred tax liabilities at December
31, 2006 and 2005 are as follows:

                                                      2006             2005
                                                   ___________      ___________

     Deferred tax asset - current                  $         -      $         -
     Deferred tax asset - non current                4,618,000        3,433,000
                                                   ___________      ___________
          Total deferred tax asset                   4,618,000        3,433,000
                                                   ___________      ___________

     Deferred tax liability - current                        -                -
     Deferred tax liability - non current             (384,000)        (348,000)
                                                   ___________      ___________
          Total deferred tax liability                (384,000)        (348,000)
                                                   ___________      ___________

     Current deferred tax asset (liability)                  -                -
     Non current deferred tax asset (liability)      4,234,000        3,085,000
                                                   ___________      ___________
          Net deferred tax asset (liability)       $ 4,234,000      $ 3,085,000
                                                   ___________      ___________

     Valuation allowance                            (4,234,000)      (3,085,000)
                                                   ___________      ___________

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

SFAS No. 109 specifies 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 $ 1,148,000
and $1,673,000 during the years ended December 31, 2006 and 2005, 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. Reconciliation of the differences
between the statutory tax rate and the effective income tax rate is as follows:

                                                   DECEMBER 31,     DECEMBER 31,
                                                       2006             2005
                                                   ____________     ____________

     Statutory federal tax (benefit) rate            (35.00)%         (34.00)%
     Statutory state tax (benefit) rate               (5.83)%          (5.83)%
                                                     ______           ______
     Effective income tax rate                       (40.83)%         (39.83)%
                                                     ______           ______

     Valuation allowance                              43.84%           39.83%
                                                     ______           ______
     Effective income tax rate                         0.00%            0.00%
                                                     ______           ______

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. As of December 31, 2006 the balance due on
the line was $510,629. In the third quarter, 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.

Related party bonuses paid during the year ending December 31, 2006 totaled
$179,275.

Amounts due to and from related parties are interest free and paid in the normal
course of business.

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.


                                      F-19


<PAGE>


NOTE 13. COMMITMENTS AND CONTINGENCIES

On October 1, 2002, the Company entered into a five-year software license
agreement for software pertaining to the gift and loyalty program. License fees
are $400 per month for the first two years, with the final three years to be
renegotiated in 2004. This agreement was terminated in February 2005. There were
no minimum monthly licensing payments in 2006 compared to the $400 for licensing
fees in December 31, 2005.

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, 2006 the Company has not drawn on
the line of credit.

The Company issued 80,000 shares of its Common Stock to Aries Equity Corporation
pursuant to a Settlement Agreement and Mutual Release to resolve a dispute
between the parties relating to a 2004 Agreement.

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 $3,646, with expiration
dates through January 2011.

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

     2007                                          $  72,071
     2008                                             14,002
     2009                                             10,060
     2010                                              8,253
     2011                                              6,961
                                                   _________

     Total future minimum lease commitments        $ 111,347
                                                   =========

In 2005, the Company was engaged in an 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 Lake Forest and, Camarillo, California. In 2005, the
company had a lease and sublease agreement in Cincinnati, Ohio for a net of $914
per month. Total lease costs for the year ended December 31, 2005 was $273,168.
In 2006, the Ohio lease was terminated.


                                      F-20


<PAGE>


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

None.

ITEM 8A. CONTROLS AND PROCEDURES.

(a)  Evaluation of Disclosure Controls and Procedures. As of the end of the
     period covered by this report, we conducted an evaluation, under the
     supervision and with the participation of our chief executive officer and
     chief financial officer of our disclosure controls and procedures (as
     defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based
     upon this evaluation, our chief executive officer and chief financial
     officer concluded that our disclosure controls and procedures are effective
     to ensure that information required to be disclosed by us in the reports
     that we file or submit under the Exchange Act is recorded, processed,
     summarized and reported, within the time periods specified in the
     Commission's rules and forms.

(b)  Changes in internal controls. There was no change in our internal controls
     or in other factors that could affect these controls during our last fiscal
     quarter that has materially affected, or is reasonably likely to materially
     affect, our internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

None.

                                    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     43     Chief Executive Officer, Secretary and
                                 Director

     Jeff Cox             43     Director

     Cecille Clayvielle   56     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:



                                       24
<PAGE>


WILLIAM J. LOPSHIRE, Chief Executive Officer, Secretary, and a director, also
serves as Chief Executive Officer of the Company's International Card
Establishment, Inc. subsidiary. Mr. Lopshire co-founded International Card
Establishment, Inc. with Mr. Severn 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 was 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.

JEFF COX, Director. Mr Cox is the owner of Vanguard Printing in Oxnard
California, a full service commercial printer, and currently serves as its
President and Chief Executive Officer. Mr. Cox graduated in 1987 from Westmont
College with a degree in Religious Education and graduated from Denver Seminary
in Christian Education with a Masters of Divinity degree in 1990.

CECILLE CLAYVIELLE, Chief Financial Officer. Ms. Clayvielle has over ten years
of public accounting experience specializing in small businesses as well as
eight years in the private sector. Prior to joining the Company, Ms. Clayvielle
has been employed in various accounting and managerial positions at small to
medium sized companies including Powerboat Magazine, Data Exchange Corporation
and iQstor Networks, Inc. all based in the Ventura County. Ms. Clayvielle served
as the Accounting Manager for iQstor Networks, Inc. from May 2006 to September
2006 and was employed by Data Exchange Corporation from December 2000 to April
2006. Ms. Clayvielle holds a Bachelor of Science in Commerce with a
concentration in accounting from Notre Dame University, Philippines, where she
graduated with honors in March 1977. In 1978, Ms. Clayvielle obtained her CPA
certificate from the Philippines and is currently a member of the Institute of
Management Accountants.

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 does not have any standing audit,
nominating or compensation committees, or committees performing similar
functions.

AUDIT COMMITTEE FINANCIAL EXPERT.

The Company does not currently have an Audit Committee or Financial Expert
thereon.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers and persons who beneficially own more than ten percent of a
registered class of our equity securities to file with the SEC initial reports
of ownership and reports of change in ownership of common stock and other equity
securities of our Company. Officers, directors and greater than ten percent
stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. Based solely upon our review of copies of Forms
3, 4 and 5, and any subsequent amendments thereto, furnished to the Company by
our directors, officers and beneficial owners of more than ten percent of our
common stock, we are not aware of any Forms 3, 4 and/or 5 which certain of our
directors, officers or beneficial owners of more than ten percent of our common
stock that, during our fiscal year ended December 31, 2006, 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.



                                       25
<PAGE>


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:
                           SUMMARY COMPENSATION TABLE

                               ANNUAL COMPENSATION

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

_________________________________________________________________________________________________________________________
<S>                   <C>    <C>      <C>         <C>    <C>             <C>             <C>            <C>       <C>

William Lopshire      2006   92,770   113,475     0      200,204         0               0              0         406,448
Chief Executive       2005  180,000         0     0            0         0               0              0         180,000
Officer, Director
_________________________________________________________________________________________________________________________
Hugh Wain Swapp
Chief Financial       2006  113,538   113,475     0      200,204         0               0              0         427,218
Officer, Director     2005  180,000         0     0            0         0               0              0         180,000
_________________________________________________________________________________________________________________________
Kjell Nesen           2006   16,615    38,475     0      200,204         0               0              0         255,295
VP of Operations      2005        0         0     0            0         0               0              0               0
_________________________________________________________________________________________________________________________


____________________________________________________________________________________________________________________________________
                                                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
____________________________________________________________________________________________________________________________________
                                                                                                                        Equity
                                                                                                           Equity       Incentive
                                                                                                           Incentive    Plan Awards:
                                                                                                Market     Plan         Market or
                                                                                                Value of   Awards:      Payout Value
                                            Equity                                   Number of  Shares     Number of    of Unearned
                                            Incentive Plan                           Shares     or Units   Unearned     Shares,
                                            Awards:                                  or Units   of Stock   Shares,      Units or
                                            Number of                                of         That       Units or     Other Rights
              Number of     Number of       Securities                               Stock      Have Not   Other        That Have
              Securities    Securities      Underlying                               That Have  Vested     Rights       Not Vested
              Underlying    Underlying      Unexercised                              Not        ($)        That Have    (#)
              Unexercised   Unexercised     Unearned         Option                  Vested                Not Vested
              Options       Options         Options          Exercise   Option       (#)                   (#)
              (#)           (#)             (#)              Price      Expiration
Name          Exercisable   Unexercisable                    ($)        Date

____________________________________________________________________________________________________________________________________
William         1,000,000           0            0              0.21    6-30-2015       0          0          0             0
Lopshire
____________________________________________________________________________________________________________________________________
Hugh Wian       1,000,000           0            0              0.21    6-30-2015       0          0          0             0
Swapp
____________________________________________________________________________________________________________________________________
Kjell Nesen     1,000,000           0            0              0.21    6-30-2015       0          0          0             0
____________________________________________________________________________________________________________________________________


_______________________________________________________________________________________________________________________
                                                             DIRECTOR COMPENSATION
_______________________________________________________________________________________________________________________
           Fees                                       Non-Equity     Non-Equity Deferred
           Earned or                                  Incentive      Compensation Earnings   All
           Paid in     Stock Awards   Option Awards   Plan           ($)                     Other Compensation
           Cash        ($)            ($)             Compensation                           ($)                  Total
Name       ($)                                        ($)                                                         ($)

_______________________________________________________________________________________________________________________
Jeff Cox      0             0               0               0                 0                      0              0
_______________________________________________________________________________________________________________________
</TABLE>

                                       26
<PAGE>


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 29, 2007.


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

     Common     Charles Salyer        2,250,000      6.63%
                555 Airport Way
                Suite A
                Camarillo, CA 93010

     Common     Randy Simoneaux       2,224,793      6.55%
                555 Airport Way
                Suite A
                Camarillo, CA 93010


The total of our outstanding Common Shares as of March 29, 2007 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 29, 2007.


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

     Common     William Lopshire           1,600,000       4.71%
                555 Airport Way
                Suite A
                Camarillo, CA 93010

     Common     Jeff Cox                     143,358         *
                555 Airport Way
                Suite A
                Camarillo, CA 93010

     Common     Cecille Clayvielle               -0-         *
                555 Airport Way
                Suite A
                Camarillo, CA 93010

     Common     All Officers and           1,743,358      5.13%
                Directors as a Group
                (Three [3] individuals)

* Less than 1%

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None.


                                       27
<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).

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).



                                       28
<PAGE>


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 $53,887 and
$22,635, respectively, for the years ended December 31, 2006 and December 31,
2005.

AUDIT RELATED FEES

The Company did not incur any audited related fees and services not included
Audit Fees above for the fiscal year ended December 31, 2006 or 2005.

ALL OTHER FEES

There was no tax preparation fees billed for the fiscal year ended December 31,
2006 or 2005.



                                       29
<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: APRIL 16, 2007



                     INTERNATIONAL CARD ESTABLISHMENT, INC.


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


By: /s/ CECILLE CLAYVIELLE
    _________________________________________
        Cecille Clayvielle
        Chief Financial Officer (Principal
             Accounting Officer) and Director


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,            April 16, 2007
______________________    Secretary and Director
    Willaim Lopshire


/s/ CECILLE CLAYVIELLE    Chief Financial Officer             April 16, 2007
______________________
    Cecille Clayvielle


/s/ JEFF COX              Director                            April 16, 2007
______________________
    Jeff Cox


                                       30