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

                                  FORM 10-KSB/A

                                  Amendment #2


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

                  For the Fiscal Year Ended: December 31, 2004

     / / 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: $14,993,171 as
of December 31, 2004.

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. $6,633,737 as of April 15, 2005.

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

<PAGE>


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of April 15, 2005, there were
29,307,392 shares of the registrant's Common Stock, $.0005 par value,
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE.

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


                                EXPLANATORY NOTE

This Amended Annual Report on Form 10-KSB/A is being filed to include an
intangible asset write down in the amount of $600,000 in the Consolidated
Statements of Cash Flows for the year ended December 31, 2004 which was
inadvertently not reported in the previously Amended Annual Report on Form
10-KSB/A filed by the Company on October 25, 2005. In addition, the Company has
revised the Consolidated Statements of Operations to disclose (i) a net
operating loss of $(3,641,591) for the year ended December 31, 2004, which was
previously reported as $(3,461,591), and (ii) a net loss before income tax
benefit of $(3,648,184) for the year ended December 31, 2004, which was
previously reported as $(3,468,184).




                      TABLE OF CONTENTS [UPDATE PAGE NOS.]

                                                                            Page

                                     PART I
Item 1.   Description of Business. . . . . . . . . . . . . . . . . . . . . . 3

Item 2.   Description of Property. . . . . . . . . . . . . . . . . . . . . .18

Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . .18

Item 4.   Submission of Matter to Vote of
          Security Holders . . . . . . . . . . . . . . . . . . . . . . . . .18

                                     PART II
Item 5.   Market for Common Equity and Related Stockholder
          Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Item 6.   Management's Discussion and Analysis
          or Plan of Operation . . . . . . . . . . . . . . . . . . . . . . .21

Item 7.   Financial Statements . . . . . . . . . . . . . . . . . . . . . . .24

Item 8.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure . . . . . . . . . . . . . . . . . . . . .25

Item 8A.  Controls and Procedures  . . . . . . . . . . . . . . . . . . . . .25

Item 8B.  Other Information . . . . . . . . . . . . . . . . . . . . . . . . 25

                                    PART III
Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act  . . . . . . . .25

Item 10.  Executive Compensation . . . . . . . . . . . . . . . . . . . . . .27

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters . . . . . . . . . . . . . . . . . 28

Item 12.  Certain Relationships and Related Transactions . . . . . . . . . .29

Item 13.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .29

Item 14.  Principal Accountant Fees and Services . . . . . . . . . . . . . .31

          Signatures and Certifications. . . . . . . . . . . . . . . . . . .32



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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.

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.

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.

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

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 and POS equipment financing 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
internally generated sales 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.

INCREASE AGENT BASE AND DIRECT SALES FORCE. ICE utilizes contractual
relationships with agents and a direct sales force to reach merchants that would

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otherwise be difficult to identify and locate using customary marketing
practices. Pursuant to these relationships, agents and salespersons endorse the
processing systems marketed and serviced by ICE and participate in originating
new customers for ICE. Using the leads generated by its agents and direct sales
force provides ICE with a cost-effective means of contacting small merchants
that traditionally have been difficult to reach. ICE actively recruits new
agents and salespersons and is focused on expansion of its agent and salesperson
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 POS equipment financing 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.

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 and direct salespersons
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 internal growth through its internal and
independent marketing venues and to acquire complementary merchant portfolios.
Through the use of its agent and direct sales 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.
In addition to increasing its penetration of the small merchant segment
internally, management intends to continue ICE's growth through select
acquisitions of existing ISO's and agents and by the purchase of merchant
portfolios from banks, processors and other independent sales organizations,
assuming adequate financing and acceptable transaction terms are achieved.

MARKETING

ICE's marketing strategy is to solicit prospective merchants primarily through
independent outside agents and through our internal sales force. Our internal
sales force relies primarily on direct contact with prospective merchants. 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.

ACQUISITIONS

ICE expects to acquire selected ISO's, agents and merchant portfolios that
complement ICE's existing customer base of small to medium-sized merchants. ICE
will perform an extensive review of the cash flow characteristics of each
portfolio held, the types of business conducted therein, the credit status of
the merchants in the portfolio, ICE's ability to control attrition of the
portfolio and the opportunities the portfolio provides for revenue enhancement
and cost reduction. ICE will then determine a valuation for each acquisition
opportunity based on a combination of these factors.

Management believes the consolidation activity in the transaction processing
industry offers ICE several opportunities for complimentary acquisitions and
portfolio purchases. ICE's past management experience, established
infrastructure, coupled with operating efficiencies, should enhance ICE's
ability to successfully integrate select acquisitions and related merchant
portfolios on a cost-effective basis.

Smaller ISO's and agents are ICE's primary source of anticipated acquisitions
and portfolio acquisitions. It is not uncommon for the smaller ISO and agent to
have built merchant portfolios to the limits of their servicing capabilities,
are facing increasing competitive pressures from larger, lower cost providers
and/or are seeking additional liquidity. Another source of portfolio
acquisitions are commercial banks which, in an effort to lower their internal
overhead, often sell or outsource their credit card servicing operations,
creating the opportunity for buyers to acquire the existing merchant portfolio.
Often, the small-merchant portion of these portfolios is viewed as being
unattractive by acquiring banks or third-party processors and can be acquired at
favorable terms. Management believes that select ISO and agent acquisitions, as
well as portfolio acquisitions, will continue to be an important source of our
overall revenue growth in the immediate future.

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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") and Fleet National Bank, a processing bank and
member of Visa and MasterCard. The Processing Agreement provides that Fleet
National 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 on an exclusive basis, which then enter into contractual
agreements with Fleet National 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.

Merchant fraud is another expected aspect of the credit card processing
business. ICE is not responsible for fraudulent credit card transactions of its
merchants. Examples of merchant fraud include inputting false sales transactions
or false credits. ICE engages the services of processing companies such as Card
Service International and RBS Lynk Systems. 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. 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's agents and Independent Sales Organizations ("ISO") enter into their own
customer arrangements. They initiate contact, set up their own agreements and
collect payments. ICE bills an ISO for equipment shipped (classified as merchant
service revenue and cost of sale). Commissions or residual payments are
classified as "commissions" in the month the liabilities are incurred, and paid
within 30 days. The most significant terms of the agreements is to follow the
underwriting guidelines as set forth by the processor, Card Service
International or RBS Lynk Systems, such as no signing of merchants on restricted
lists as set forth in the agreements.

ICE engages the services of processing companies such as Card Service
International and RBS Lynk Systems. Even though merchant fraud is an expected
aspect of the credit card processing business, ICE is not responsible for
fraudulent credit card transactions of its merchants. These processing companies
maintain 100% of the risk, including liabilities arising from merchant
chargeback or cardholder fraud. As such, no obligations have been incurred
significant or otherwise by ICE in these revenue sharing programs.

ICE's agents and Independent Sales Organizations ("ISO") enter into their own
customer arrangements. They initiate contact, set up their own agreements and
collect payments. The ISO's 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 ISO 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 routinely sells or leases
POS equipment to its merchant customers. 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

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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, in addition to our understanding of
the needs and risks associated with providing payment processing services to
these merchants and ISOs, 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.

THE BUSINESS OF OUR SUBSIDIARY GTL

BUSINESS SUMMARY

GlobalTech Leasing, Inc. ("GTL") is a rapidly growing commercial finance company
that leases and rents POS equipment to small and medium sized merchants. The POS
equipment is utilized by merchants in their daily operations to process credit
and debit card transactions. The cost of POS equipment financed by GTL ranges in
amount from $400 to $5,000, with an average amount financed of approximately
$1,600 and an average lease term of 48 months. GTL does not market its services
directly to merchants, but sources leasing transactions through a nationwide
network of over 650 ISOs. GTL uses an industry standard risk-adjusted pricing
model for credit approval and underwriting. All of the leases originated by GTL
are currently for POS equipment which authorize card-based payment transactions.
POS equipment includes a POS terminal capable of reading a cardholder's account
information from the card's magnetic stripe or computer chip and combining this
information with the amount of sale entered via a POS terminal keypad, or POS
software used on a personal computer to process a sale. The terminal
electronically transmits the sale and cardholder information over a
communications network to a data center and then displays the returned
authorization or verification response on the POS terminal. GTL accepts lease
applications via the internet, facsimile, e-mail and direct mail.

GTL originates leases for POS equipment that typically has limited distribution
channels and high selling costs. GTL facilitates the sale of POS equipment by
ISOs by making the equipment available to the ISO's customers for a small
monthly lease payment rather than a high initial purchase price. GTL primarily
leases and rents low-priced POS equipment to small to medium sized merchants.
GTL originates leases in all 50 states of the United States. As of December 31,
2004 and 2003, leases in California, Texas, Florida, Washington and Colorado
accounted for approximately 51% of the Company's business. Only California and
Texas accounted for more than 10% of the total business as of December 31, 2004
and 2003 at approximately 28%. None of the remaining states accounted for more
than 10% of such total.

TERMS OF EQUIPMENT LEASES

Substantially all equipment leases originated or acquired by GTL are
non-cancelable. In a typical lease transaction, GTL originates leases for
merchants referred to it by ISOs and buys the underlying POS equipment from the
referring ISO upon the funding of an approved application. Leases are structured
with limited recourse to the referring ISO, with risk of loss in the event of
default by the merchant-lessee residing with GTL in most cases. GTL sells a
majority of its leases on a discounted cash flow basis and retains a small
portfolio. GTL performs processing, billing and collection functions for leases
held and not resold.

GTL leases are originated with a schedule of payments that are sufficient in
aggregate to cover the borrowing costs and the costs of the underlying
equipment, and to provide an appropriate margin to GTL or its assignee.
Throughout the term of the lease, GTL or its assignee is able to charge late
fees, prepayment penalties, loss and damage waiver fees and other service fees,
when applicable. Initial terms of the leases in GTL's portfolio and those sold
generally range from 12 to 48 months, with an average initial term of 46 months
as of December 31, 2004. GTL offers 12, 24, 36, and 48 month "fair market value"
lease products, with an option at the end of the lease for the merchant to, (a)
purchase the equipment for its then "fair market value," (b) return the
equipment, or (c) continue to rent the equipment on a month-to-month basis.
GTL's principal product is a 48 month lease that provides a $1,900 POS equipment
terminal, for which a merchant pays an average of $52 per month. The average
residual value of the POS equipment is $250-$350.

The terms and conditions of all GTL leases are substantially similar. In most
cases, the agreements require merchant-lessees to: (i) maintain, service and
operate the equipment in accordance with the manufacturer's and
government-mandated procedures; (ii) insure the equipment against property and
casualty loss; (iii) pay all taxes associated with the equipment; and (iv) make
all scheduled contract payments regardless of the performance of the equipment.
GTL's standard lease forms provide that in the event of a default by the
merchant-lessee, GTL can require payment of liquidated damages and can seize and
remove the equipment for subsequent sale, refinancing or other disposal at its
discretion. Any additions, modifications or upgrades to the equipment,
regardless of the source of payment, are automatically incorporated into, and
deemed a part of, the equipment financed.

GTL seeks to protect itself from certain credit exposure by entering into
limited recourse agreements with its referring ISOs, under which the ISO agrees
to reimburse GTL for payment of defaulted amounts under certain circumstances,
primarily merchant-lessee defaults within the first month following lease
origination, and upon evidence of ISO error or misrepresentation in connection
with the origination of a merchant-lease or contract.

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MARKET OUTLOOK

In many respects, the market for microticket POS equipment leasing closely
parallels that of the merchant acquiring business. In other words, the same
agents and ISOs that solicit merchant account applications are the primary
conduit for new lease applications. Consistent with the exponential growth of
card-based payment methods, the deployment of POS equipment is expected to
undergo similar growth. According to the Nilson Report, the number of POS
terminals installed worldwide is projected to grow from approximately 35 million
currently to 60 million by the end of the decade. Furthermore, as a result of
technological advances in communications, the industry is believed to be on the
verge of certain replacement of significant numbers of existing POS terminals.
Internet protocol-based technologies, in particular, dramatically reduce the
time it takes to process a card payment versus traditional dial-up POS
terminals. Consumer demand for faster transactions is expected to drive
merchants to broadly adopt the technologies.

MARKETING

Management believes that GTL has developed a strong reputation in the industry
for offering lease programs, customer service, and training that are well suited
to the needs of small to mid-size ISOs. GTL does not market its services
directly to merchants, but sources leasing transactions through a nationwide
network of over 650 ISOs. These ISOs originated approximately 6,400 GTL leases
in 2004. One ISO accounted for approximately 36% and 19% of all originations
during the years ended December 31, 2003, and 2004, respectively. Another ISO
accounted for approximately 26% of all originations during the year ended
December 31, 2004. No other ISO accounted for more than 10% of the Company's
origination volume during the years ended December 31, 2003, or 2004.

GTL does not sign exclusive agreements with its referring ISOs. These ISOs
interact with merchants directly and typically market not only POS equipment,
but also lease financing through GTL and merchant processing services.

A majority of GTL's referring ISOs are obtained through word-of-mouth and direct
contact by either the ISO or GTL. Typically, an interested ISO contacts GTL to
inquire about the rates and other specifics of GTL's various leasing programs.
In addition, GTL actively solicits the leasing business of many ISOs through
direct contact by management. GTL actively promotes its name and reputation
within the industry by utilizing a combination of print advertising and
attendance at major industry trade shows.

USE OF TECHNOLOGY

GTL's business is operationally intensive, due in part to the small average
dollar amount financed per lease transaction. Accordingly, technology is
critical in keeping servicing costs to a minimum while providing quality
customer service.

GTL has developed Lease Manager(TM), an application processing, credit approval
and Report Writing tool. Using Lease Manager (TM), information can be tracked on
individual transactions from credit entry stage through funding at multiple
levels. While maintaining the ability to use software to automatically score
credits, GTL prefers to have each transactions reviewed by credit personnel. GTL
also offers FAXLEASE, a program that allows an ISO to submit applications by
telecopy or e-mail to a GTL representative, receive approval, and complete a
lease financing from a merchant-lessee's location. By assisting its ISOs in
providing timely, convenient and competitive financing for their POS equipment
and offering ISOs a variety of value-added services, GTL simultaneously promotes
POS equipment leases and the utilization of GTL as the preferred finance
provider, thus differentiating GTL from its competitors.

GTL has used its proprietary software that uses our credit scoring model to
generate generic and individual program pricing of its leases commensurate with
the risk assumed. The software determines the price at which the lease can be
underwritten and corresponding anticipated margins. GTL uses credit scoring in
most of all leases underwritten.

UNDERWRITING

The nature of GTL's business requires two levels of review in connection with
the underwriting of a POS equipment lease: the first focuses on the merchant
that will be leasing the POS equipment and the second focuses on the referring
ISO. The approval process begins with the submission by telephone, facsimile or
electronic transmission of a credit application by the ISO. Upon submission, GTL
conducts its own independent credit investigation of the potential
merchant-lessee through recognized commercial credit reporting agencies such as
Experian, Equifax and TransUnion. GTL's scoring system and staff evaluate this
information plus that supplied on the credit application. Following the scoring
of the credit, GTL's credit department analyzes both the quality and amount of
credit history that was presented to determine a final score. GTL uses this
information to underwrite a broad range of credit risks and provide leasing in
situations where traditional credit sources may be unable or unwilling to
provide such financing. The credit scoring model has been used by some of the
largest lessors in the micro-ticket sector for the last 12 years. In situations
where the amount financed is over $4,500, GTL requires additional information in
the form of financial statements and references from the potential
merchant-lessee. In certain instances, GTL will require the merchant-lessee to
provide verification of its businesses credentials, size and history.

The second aspect of the credit decision involves an assessment of the
originating ISO. GTL referring ISOs undergo both an initial screening process
and ongoing evaluation, including an examination of ISO portfolio credit quality
and performance, lessee complaints, cases of fraud or misrepresentation, aging
studies, number of applications and conversion rates for applications. This
ongoing assessment enables GTL to manage its ISO relationships, including ending
relationships with poorly performing ISOs.

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Upon credit approval, GTL requires receipt of signed lease documentation on
GTL's standard lease form before funding. Once the POS equipment is shipped and
installed, the ISO invoices GTL, and thereafter, GTL verifies that the
merchant-lessee has received and accepted the equipment. Upon the
merchant-lessee authorizing payment to the ISO, the lease is forwarded to the

GTL's funding and documentation department for funding, transaction accounting,
and potential resale.

SERVICING AND COLLECTIONS

GTL performs all servicing functions on its leases which are not resold.
Servicing responsibilities generally include billing, processing payments,
remitting payments to ISOs, paying taxes and insurance and performing collection
and liquidation functions.

GTL uses Lease Manager (TM) to handle application tracking, invoicing, and
payment processing, and report writing for all leases. GTL also uses an
internally developed software program for ACH debiting and collections on its
internal lease portfolio. The system is linked with bank accounts for payment
processing and provides for direct withdrawal of lease payments. GTL monitors
delinquent accounts on internal portfolios as well as those held in sold
portfolios. GTL works closely with its funding sources to enhance its customer
service and collection efforts. GTL uses outside collection agencies and
attorneys to collect funds due from ISOs based on defaults, fraud and
misrepresentation.

COMPETITION

The microticket leasing and financing industry is competitive and fragmented.
GTL competes for customers with a small number of major national finance
companies, including Lease Finance Group, a subsidiary if CIT Financial, Inc.
Northern Leasing Systems, Inc. and its subsidiary Golden Eagle Leasing, Inc. and
a large number of small finance companies. GTL's competitors also include POS
equipment manufacturers that lease or finance the sale of their own products.
While the market for microticket financing has traditionally been fragmented,
GTL could also be faced with competition from small- or large-ticket leasing
companies that could use their expertise in those markets to enter and compete
in the microticket financing market. GTL's competitors include larger, more
established companies, some of which possess substantially greater financial,
marketing and operational resources than GTL, including a lower cost of funds
and access to capital markets and to other funding sources which may be
unavailable to GTL.

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 solutions for merchants wishing to offer
automated gift and prepaid 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 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.

Through their prior experience in and enthusiasm over the explosive gift and
loyalty market, the NEOS founders embarked upon a strategy to build a second
generation "Gift and Loyalty" product and distribution model. With a carefully
crafted road map of past successes and challenges, the team effectively executed
its phase one research and development plan. In its first year of operation, the
infrastructure is sound and distribution of product commenced in the fourth
quarter of 2002, and continues to drive measurable revenue, establishing key
account presence, initiating its reseller strategy and moving the company toward
profitability.

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 and Lynk.
Concord EFS and First Data development under review. 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 Irvine, CA.

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 mag-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.

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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. A.K.A, Loyalty Management Database

NEOS' Hardware "Gift and Loyalty" products are:

o POS TERMINALS - VeriFone 3750, VeriFone 7000MPD, Modular Payment Device,
VeriFone and Schlumberger pin pads, Schlumberger 6000, Schlumberger Modular
Payment Device

o PRIVATE LABEL SMART/MAG-STRIPE CARDS - Smart and mag-strips 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 100-card order. This entire process is
done internally for orders of less than 5,000 cards.

MARKET OUTLOOK

Statistics show "Gift and Loyalty" products enhance retention of existing
customers and increase new customers resulting in additional revenue to the
retail business. It is our contention and the retail market has overwhelmingly
confirmed "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 of almost every major
retailer in the country this past Christmas season.

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 charges
a one-time monthly transaction fee of $15 to $25. 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 $1350 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 onto one platform gives NEOS a
significant strategic and competitive advantage at the point of sale. Leveraging
these electronic payment transactions options provide the merchant real value
enhancement from a consolidation of system and support. Our future value will be
based on these variables: our proprietary technology, "Gift and Loyalty"
revenue, payment processing revenue and the combined "Gift and Loyalty" and
credit card portfolios.

OPERATING STRATEGY

NEOS was formed in May 2002 and was funded by management during its efforts to
obtain outside investment. In 2002, management negotiated service agreements
with key vendors, leasing companies, and service providers. Once outside funding
was secured in October 2002 with a $600,000 Series A Preferred Stock investment,
management was able to accelerate executive sales growth. The expectation
established for this funding was to take the business model to a level of
execution that would prove out the business model and position the company for a
Series B investment with defined and targeted objects based on history. This
included complete delivery and installation of its host and terminal software,
beta phase testing followed by actual account set up simultaneously with
initiation of complete internal operations and support, the direct sales
channel, a consistent and upward revenue trend and a presence in the key account
sector. NEOS has accomplished all of these objectives and firmly believes it can
now present a business plan based on these accomplishments that suggest the
business is in a position to benefit from a series B funding to accelerate its
revenue and market share position.

INFRASTRUCTURE AND POSITIONING

Our original infrastructure and technology goals have been satisfied. Our
product has been successfully installed in over 3,000 locations, consisting of
both small tier and mid tier retailers. A portion of those installations include
multi-location retail chains that have expanded NEOS products throughout their
other locations.

SOFTWARE DEVELOPMENT

All components of the NEOS "Matrixx" host and terminal application system have
been thoroughly tested and have been installed live in over 2,000 locations.

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DIRECT SALES

The direct sales channel has performed exceptionally well despite early stage
terminal application software development issues and a decision to share sales
resource with key account opportunities. Our three active direct sales offices
are consistently producing and are showing sustained positive trends in both
deals and revenues.

GROWTH STRATEGY AND COMPETITORS

Due to our technology and the retail market demand for "Gift and Loyalty", NEOS
has positioned itself to be a significant shareholder of this market. The
original investment has secured our technology and operating infrastructure,
initiated and defined our sales strategy. NEOS has attracted industry recognized
strategic and distribution partners and most importantly moved the company from
research and development status to an operating company generating revenue and
building value. Our decision to expand our company more rapidly was basically to
enable NEOS to aggressively stake claim to what will become the next major
method of retail payment. Our challenge is to create a significant and
recognizable brand, attract the attention of industry leaders, while generating
measurable revenue and profits.

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.

NEOS' recent market studies suggest it has an opportunity to aggressively
penetrate the small and medium enterprise ("SME") segment, with potential
revenues projected of well over $90 million by 2004. 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 substantial assets through direct sales offices and VARs. The
Company will grow via basic strategies that management has proven to be
successful, both within NEOS to date, as well as in other entities they have
individually owned or managed prior to joining NEOS. The Company will continue
to grow sales with its core commission-only sales force, corporate account and
selected reseller channels. In an effort to gain market share, the Company is
focused on developing selected relationships with VARs or independent sales
agents across the country that will market NEOS' customized products and
services on top of their own processing products and services. Managements past
experience has produced many relationships among this channel and understands
which resellers fit the profile and the value based sales strategy necessary to
fit our corporate culture and distribution model. Many smaller VARs and
community banks are one-dimensional when it comes to merchant services, offering
only the most basic of services - credit card processing - and focus
significantly on the new business start-up market. Smaller VARs or agents of
VARs lack the ability to create significant advantages with their existing
product offerings, and the market for merchant loyalty is highly competitive. In
an effort to manage the overall scale of these relationships, NEOS has
established a strategic relationship with Network 1 Financial, Inc.
(www.eftnet.com), a national payment processing provider. Network 1 Financial,
Inc. currently supports an independent sales infrastructure and directly
controls all the managing elements of VAR's within the SME Market. Network 1
Financial is owned by Verus, a provider of payment processing services from
third party payment processors, including credit card authorization and payment,
electronic funds transfer, electronic check conversion and Internet gateway
services.

While the established industry players, predominantly transaction processors
(First Data Corp., Concord EFS, etc.) in this space have concentrated and built
operations to support large tier merchants. They have struggled to secure a
position in the small and mid tier market. The opportunity to penetrate the
remaining 90% of the retail market will never be greater and the large
processors have historically acquired their positions into the small to mid tier
niche markets. Our strategy would include positioning ourselves as an
acquisition target of one of these key processors.

MARKETING

The NEOS sales distribution strategy is composed of various direct and in-direct
channels. In recognizing that all channels play a key role and deliver
significant value to our revenue and market share objectives, NEOS has
structured our direct sales and the reseller channel to balance our approach to
market.

NEOS DIRECT SALES CHANNEL

The first channel is the NEOS direct sales force, which has proven successful in
management's prior experience. This force delivers the highest margin sale
because it encompasses all revenue categories; equipment, fees, card and
e-commerce revenue and NEOS controls every element of the sales. The direct
sales force benefits from the hands on NEOS sales management and direction on a
daily basis. As a primarily commission based group, we are able to minimize cost
of sales and maintain focus on our primary product. This channel has presence in
Los Angeles, Irvine, Tampa, Chicago, Charlotte and Dallas.

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CORPORATE SALES CHANNEL

Due to a significant ground swell from key accounts, NEOS quickly decided it was
in our best interest long term to focus resource to manage this sector.
Currently, Neos Direct Sales manages the efforts within this segment of our
sales strategy. Ultimately, this will deliver significant market share,
visibility and location count to our portfolio. In addition, corporate accounts
tend to have longer sales cycles and a need for increased sales support. Neos
plans to formulate a specialized group consisting initially of 3 regionally
based corporate account sales persons integrated over the next 4-6 months.
Numerous prospects and agreements have begun to mature as the traction and
opportunities are exceeding original expectations. Test installations already
exist in corporate accounts. Should NEOS successfully close 3-4 of these
accounts, it could conceivably exceed our present support levels and require a
faster shift to an outsourced customer support partner.

NEOS EXCLUSIVE RESELLER CHANNEL (NRC)

This channel is exclusive to NEOS products. The NEOS exclusive reseller channel
(NRC) are independently funded, owned and managed operations that focus solely
on NEOS products, thereby concentrating 100% of the sales to NEOS products. The
first NCR has been trained and is in its first month of actively selling
product. They have in excess of 300 locations under consideration and have sold
three customers. A successful reseller in this channel would be a natural roll
up in an acquisition or leverage strategy.

THE INDEPENDENT SALES ORGANIZATIONS (ISO)

The Independent Sales Organizations (ISO) represents the credit card reseller
channel and has proven to be productive distribution agents for gift and
loyalty. The NEOS product resides commonly resides on a transaction or credit
card terminal. This channel also possesses merchant portfolios, which can be
upgraded to gift and loyalty. Since NEOS management has many relationships in
this segment and knows the culture of the various organizations, the company is
critiquing the many opportunities and selecting those that are willing to work
within the NEOS structure and requirements.

BUSINESS RELATIONSHIPS

A pipeline of key account customers and prospects justify our investment in
resources to this market. The key account strategy has resulted in installed
customers such as Discount Tire and Chevron (Franchise Stores) testing our
product with anticipated rollouts which started in the first quarter of 2003.
Our first key account initiative, Marriott Corporation, has recently contracted
with NEOS to roll out our co-developed smart card lead management and marketing
program, company wide, on the VeriFone 3750 platform. An additional list of key
accounts have verbally indicated NEOS is their product of choice and have a
strong desire to have "Gift and Loyalty" systems in place by year end. With the
pipeline in place, a 10% closing ratio would guarantee our indirect forecasts
for 2004.

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

As of December 31, 2004, we have no patents, trademarks, franchises,
concessions, royalty agreements or labor contracts.

EMPLOYEES

As of December 31, 2004, we had 68 full-time employees and 14 part-time
employees. Management believes that its relationship with its employees is
excellent. None of our employees are members of a collective bargaining unit.

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                                  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 $(3,648,184) for the year ended December 31, 2004 and a
net loss before income taxes of $(546,896) for the year ended December 31, 2003.
We expect our cash needs to increase significantly for the next several years as
we:

o acquire additional payment processing businesses and portfolios of merchant
accounts; o increase awareness of our services; o 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 Fleet National 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.

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

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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 AGENTS AND ISOS THAT DO
NOT SERVE US EXCLUSIVELY.

We rely primarily on the efforts of agents and ISOs to market our services to
merchants seeking to establish an account with a payment processor. ISOs are
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 ISOs 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 ISOs and those serving other service
providers that we may acquire, and to recruit and establish new relationships
with other agents and ISOs, 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. For example, Visa last increased its interchange fees for
retail transactions by an average of 2.8% in October 2002. In its sole
discretion, our sponsoring bank has the right to pass any increases in
interchange fees on to us. In addition, our sponsoring bank may seek to increase
its Visa and MasterCard sponsorship fees to us, all of which are based upon the
dollar amount of the payment transactions we process. If we are not able to pass
these fee increases along to merchants through corresponding increases in our
processing fees, our profit margins will be reduced.

THE LOSS OF KEY PERSONNEL OR DAMAGE TO THEIR REPUTATIONS COULD ADVERSELY AFFECT
OUR RELATIONSHIPS WITH AGENTS, ISOS, 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.

                                       14

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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
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.

GLOBALTECH LEASING IS ENGAGED IN MICROTICKET LEASING OF POINT-OF-SALE RELATED
APPLIANCES. BY NATURE, THIS ACTIVITY CARRIES A HIGH RATE OF LEASE DEFAULT THAT,
IF EXCESSIVE, CAN RESULT IN A SUBSTANTIAL WRITE-OFF OF OUR LEASE PORTFOLIO AND
FURTHER IMPAIR PROFITABILITY.

GlobalTech Leasing, Inc., our equipment leasing subsidiary, is focused on
providing microticket leasing (generally less than $5,000) through nation-wide
vendors of equipment in defined niche markets that are not served by traditional
lessors. GlobalTech Leasing's primary market is that of point-of-sale equipment,
the leases for which currently account for nearly its entire portfolio.
GlobalTech leasing originates its leases directly with the equipment end-user,
which for point-of-sale equipment is most often a merchant. GlobalTech Leasing's
microticket leasing business is characterized by high incidences of
delinquencies, which in turn can lead to significant levels of loan losses.
Revenues and results of operations could be substantially impaired if existing
lease loss reserves prove inadequate or leases originated in the future
experience a default rate greater than that for which reserves are established
at the time of inception.

                                       15

<PAGE>


THE LOSS OF ONE OR MORE OF OUR KEY GLOBALTECH LEASING CUSTOMERS COULD
SIGNIFICANTLY REDUCE OUR REVENUES AND ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.

GlobalTech Leasing has derived, a significant portion of its revenues from a
limited number of large customers. For the fiscal years ended December 31, 2004
and 2003, respectively GlobalTech Leasing's largest customer accounted for 26%
and 36% of its net revenue.

GLOBALTECH LEASING'S INABILITY TO ACQUIRE SUFFICIENT CREDIT LINES COULD
ADVERSELY AFFECT FUTURE REVENUE GROWTH.

GlobalTech Leasing currently sells a majority of its leases on a daily basis to
an outside financial institution. Our projections and future growth rely to a
significant extent on obtaining lines of credit that will allow us to hold
leases originated by us to and beyond the original term, resulting in a greater
yield to us. In the event we are unable to secure sufficient credit lines or if
we were unable to sell our leases to an outside financial institution our
results of operations and financial condition could be materially and adversely
affected.

                         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 those incidental to the normal conduct of our business.

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

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

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

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

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

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

                                       16

<PAGE>


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.

21,456,173 of our presently outstanding 29,307,392 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
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.

                                       17

<PAGE>


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
executive offices of our wholly owned subsidiary NEOS are located in
approximately 6,800 square feet of leased office space at 9371 Irvine Boulevard,
2nd Floor, Irvine, California 92618. We believe that these facilities are
adequate for our current operations and, if necessary, can be replaced with
little disruption to our company.

ITEM 3. LEGAL PROCEEDINGS.

As of December 31, 2004, 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, 2004, 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. The high and low closing bid prices
prior to October 3, 2003 have been adjusted to reflect the Company's one (1)
share for each two (2) shares outstanding reverse stock split on such date.



                                                    High           Low
                                                    ----           ----
2004
        First Quarter                               1.39           0.80
        Second Quarter                              1.32           1.05
        Third Quarter                               1.09           0.62
        Fourth Quarter                              0.75           0.45

2003
        First Quarter                               0.64           0.24
        Second Quarter                              0.80           0.44
        Third Quarter                               0.94           0.58
        Fourth Quarter                              0.98           0.76



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.

For the initial listing in the NASDAQ SmallCap market, a company must have net
tangible assets of $4 million or market capitalization of $50 million or a net

                                       18

<PAGE>


income (in the latest fiscal year or two of the last fiscal years) of $750,000,
a public float of 1,000,000 shares with a market value of $5 million. The
minimum bid price must be $4.00 and there must be 3 market makers. In addition,
there must be 300 shareholders holding 100 shares or more, and the company must
have an operating history of at least one year or a market capitalization of $50
million.

For continued listing in the NASDAQ SmallCap market, a company must have net
tangible assets of $2 million or market capitalization of $35 million or a net
income (in the latest fiscal year or two of the last fiscal years) of $500,000,
a public float of 500,000 shares with a market value of $1 million. The minimum
bid price must be $1.00 and there must be 2 market makers. In addition, there
must be 300 shareholders holding 100 shares or more.

(b) Holders.

As of April 15, 2005, there are ninety-three (93) shareholders of record of the
Company's Common Stock, including Cede & Co.

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 April 15, 2005,
21,456,173 of our presently outstanding 29,307,392 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
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 serial preferred stock at $.0005 par value. As of April
15, 2005, there were 29,307,392 common shares and 62,000 serial 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

                                       19

<PAGE>


certain limitations). Accordingly, holders of the our common stock may be
entitled to one vote for each share of common stock held and may have cumulative
voting rights in the election of directors. This means that holders are entitled
to one vote for each share of common stock held, multiplied by the number of
directors to be elected, and the holder may cast all such votes for a single
director, or may distribute them among any number of all of the directors to be
elected.

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

DIVIDEND POLICY.

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

During our fiscal years ended December 31, 2004 and 2003, we have issued the
following securities that were not registered under the Securities Act. Each of
the transactions described below was conducted in reliance upon the exemptions
from registration provided in 4(2) of the Securities Act and Regulation D and
the other rules and regulations promulgated thereunder. These sales were made
without general solicitation or advertising and without the use of an
underwriter. Each purchaser was an "accredited investor" or a sophisticated
investor with access to all relevant information necessary to evaluate the
investment. Each purchaser represented to the Registrant that the shares were
being acquired for investment. The certificates and other documentation
evidencing the securities issued in connection with these transactions bear a
restrictive legend permitting transfer of the securities only upon registration
under the Securities Act or pursuant to an exemption from registration.

On May 28, 2004, International Card Establishment, Inc. and several accredited
institutional investors entered into a Subscription Agreement whereby the
investors agreed to purchase an aggregate of 4,415,076 shares of common stock at
$0.63 per share for an aggregate purchase price of $2,781,500. In addition, the
Investors received (i) one Class A Warrant exercisable at $0.69 per share for
each two shares purchased; and (ii) one Class B Warrant exercisable at $1.00 per
share for each share purchased. In addition, ICRD paid J.P. Turner & Company,
L.L.C., as placement agent, a cash fee of 5% of the purchase price and issued 15
placement agent warrants for each 100 shares issued. The placement agent
warrants are exercisable at $0.63 per share and expire in five years. ICRD also
paid AKW Consultants a cash finder's fee of 5% of the purchase price and issued
1 finder's warrant for each 10 shares issued. The finder's warrants are
exercisable at $0.63 per shares and expire in five years. This prospectus covers
the resale by the investors of the above-referenced common stock and common
stock underlying the warrants. The issuance of the shares and the warrants was
exempt from registration requirements of the Securities Act of 1933 pursuant to
Section 4(2) of such Securities Act and Regulation D promulgated thereunder
based upon the representations of each of the Investors that it was an
"accredited investor" (as defined under Rule 501 of Regulation D) and that it
was purchasing such securities without a present view toward a distribution of
the securities. In addition, there was no general advertisement conducted in
connection with the sale of the securities.

Effective September 8, 2004, our company, ICE Sub, Inc., our wholly owned
subsidiary and NEOS Merchant Solutions, Inc. finalized an Agreement and Plan of
Merger pursuant to which NEOS merged with and into our subsidiary. As a result
of the merger, each share of NEOS capital stock outstanding was converted into
the right to receive our common shares.

$500,000 in cash was received at closing; $500,000 promissory note due and
payable on January 1, 2005; $1,500,000 promissory note due and payable on
January 1, 2006; 5,000,000 shares of our common stock; and $1,000,000 assumption
of liabilities.

The above-referenced promissory notes bear 8% interest and are convertible at
the option of the holder into shares of common stock of ICRD at a 25% discount
of the average closing price for the 20 days prior to conversion. The
above-referenced promissory note that is due in 2006 will be off-set to the
extent the NEOS liabilities are greater than $1,000,000.

On September 13, 2004, we entered into a Subscription Agreement with Mercator
Advisory Group LLC and Monarch Pointe Fund Ltd. And on December 6, 2004 we
entered into a Subscription Agreement with Mercator Momentum Fund, L.P.,
Mercator Momentum Fund III, L.P., Robinson Reed, Inc. and Mercator Advisory
Group, LLC wherein we sold and issued to the investors an aggregate of (i)
62,000 shares of our Series A Convertible Preferred Stock and (ii) Warrants to
purchase an aggregate of 13,743,427 shares of our common stock.

                                       20

<PAGE>


On January 16, 2003, pursuant to the exemption from registration provided in
Section 4(2) of the Securities Act of 1933 we entered into a Plan and Agreement
of Reorganization to acquire all of the issued and outstanding common stock of
International Card Establishment, Inc., a Nevada Corporation. In connection with
our acquisition of International Card Establishment, Inc., we issued 14,000,000
shares of our common stock to the former stockholders of International Card
Establishment, Inc.

On December 15, 2003, pursuant to the exemption from registration provided in
Section 4(2) of the Securities Act of 1933 we entered into a Plan and Agreement
of Reorganization to acquire all of the issued and outstanding common stock of
GlobalTech Leasing, Inc., a California corporation. In connection with our
acquisition of GlobalTech Leasing, Inc., we issued 5,000,000 shares of our
common stock to the former stockholders of GlobalTech Leasing, Inc.

Between January 1, 2003, and December 31, 2003, pursuant to the exemption from
registration provided in Section 4(2) and 4(6) under the Securities Act of 1933,
we sold 375,857 shares of our common stock to subscribers of our private
placement at $0.70 per share for total consideration of $263,100.

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, 2004
there were no securities issued or 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                 -0-                       -0-                         5,000,000
plans approved by
security holders

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

Total                               -0-                       -0-                         5,000,000

</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.

EXECUTIVE SUMMARY

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

OVERVIEW

We are a rapidly growing provider of credit and debit card-based payment
processing services, Gift & Loyalty products and micro ticket leasing services
to small merchants. As of December 31, 2004, we provided our services to over
500 ISOs and thousands of merchants located across the United States. Our
payment processing services enable our merchants to process traditional
card-present, or swipe transactions, as well as card-not-present transactions. A

                                       21

<PAGE>


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 microticket leasing services allow small
merchants to finance the cost of POS equipment capable of reading a cardholder's
account information from the card's magnetic stripe or computer chip and sending
that information electronically for authorization and processing.

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 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.

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.

Our business operations are now conducted primarily through three wholly-owned
subsidiaries: International Card Establishment, Inc., a Nevada corporation
("ICE"), GlobalTech Leasing, Inc., a California corporation ("GTL"), and NEOS
Merchant Solutions, Inc, a Nevada corporation ("NEOS"). iNetEvents, Inc., a
Nevada corporation ("iNet"), will also be maintained as a separate subsidiary to
service and maintain existing, historic iNet business. ICE is a provider of
credit and debit card-based payment processing services for small merchants,
that enable those merchants 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 authorization systems ("POS equipment"), which are often
financed by GTL; and, provides merchant e-commerce solutions. GTL is a growing
provider of lease financing services for POS equipment in amounts generally
ranging from $400 to $5,000, with an average amount financed of approximately
$1,600 and an average lease term of 48 months. NEOS offers merchants a "Smart
Card" (a card that stores data digitally on an embedded chip and not on an
analog magnetic stripe) based system that enables merchants to provide its
proprietary gift cards and incentive-purchase cards that are custom merchant
branded.

CRITICAL ACCOUNTING POLICIES

The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States,
which require that management make numerous estimates and assumptions. Actual
results could differ from those estimates and assumptions, impacting our
reported results of operations and financial position. Our significant
accounting policies are more fully described in Note 1 to our consolidated
financial statements included in Item 7. The critical accounting policies
described here are those that are most important to the depiction of our
financial condition and results of operations and their application requires
management's most subjective judgment in making estimates about the effect of
matters that are inherently uncertain.

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.

ACCOUNTING FOR GOODWILL AND INTANGIBLE ASSETS. In July 2001, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
"SFAS" No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 141 requires business combinations initiated after
June 30, 2001 to be accounted for using the purchase method of accounting, and
broadens the criteria for recording intangible assets separate from goodwill.
Recorded goodwill and intangibles will be evaluated against these new criteria
and may result in certain intangibles being subsumed into goodwill, or
alternatively, amounts initially recorded as goodwill may be separately
identified and recognized apart from goodwill. SFAS No. 142 requires intangibles
be evaluated for useful lives, and allows intangibles to have indefinite lives.
Intangibles with useful lives are amortized over the life period; intangibles
not amortized are reviewed for impairment. Any write down is charged to results
of operations only in the periods in which the recorded value of goodwill and
certain intangibles is more than its fair value. The Company recorded intangible
assets in the amount of $7,502,485 and goodwill in the amount of $2,685,213 in
the acquisition of GlobalTech Leasing, Inc and Neos Merchant Solutions, Inc..
Goodwill is the excess of the acquisition costs of the acquired entity over the
fair value of the identifiable net assets acquired. The Company is required to
test goodwill and intangible assets that are determined to have an indefinite
life for impairment at least annually. The provisions of SFAS No. 142 require
the completion of an annual impairment test with any impairments recognized in
current earnings. The acquisition of GlobalTech Leasing, Inc. and Neos Merchant
Solutions, Inc. closed on December 29, 2003 and September 8, 2004 respectively,
and it was determined that a portion of the 2003 intangible assets purchased
were impaired.

                                       22

<PAGE>


In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
Under that interpretation, certain entities known as "Variable Interest
Entities" ("VIE") must be consolidated by the "primary beneficiary" of the
entity. The primary beneficiary is generally defined as having the majority of
the risks and rewards arising from the VIE. For VIE's in which a significant
(but not majority) variable interest is held, certain disclosures are required.
FIN 46 requires disclosure of Variable Interest Entities in financial statements
issued after January 31, 2003, if it is reasonably possible that as of the
transition date: (1) the Company will be the primary beneficiary of an existing
VIE that will require consolidation or, (2) the Company will hold a significant
variable interest in, or have significant involvement with, an existing VIE. Any
VIEs created after January 31, 2003, are immediately subject to the
consolidation guidance in FIN 46. The measurement principles of this
interpretation will be effective for the Company's 2003 financial statements.
The Company does not have any entities that require disclosure or new
consolidation as a result of adopting the provisions of FIN 46.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 amends SFAS 133 to
provide clarification on the financial accounting and reporting for derivative
instruments and hedging activities and requires similar accounting treatment for
contracts with comparable characteristics. We do not believe the adoption of
SFAS 149, effective primarily for contracts entered into or modified after
September 30, 2003 and for hedging relationships designated after September 30,
2003, will have a material effect on our financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS 150
addresses financial accounting and reporting for certain financial instruments
with characteristics of both liabilities and equity. This statement requires
that an issuer classify a financial instrument that is within its scope as a
liability (or an asset in some circumstances) because that financial instrument
embodies an obligation of the issuer. As required by SFAS 150, we will adopt
this new accounting standard effective July 1, 2003. We do not believe the
adoption of SFAS 150 will have a material impact on our financial statements.

In November 2003, the Emerging Issues Task Force ("EITF") reached a consensus on
Issue 03-01, "The Meaning of Other-Than-Temporary Impairment and its Application
to Certain Investments" ("EITF 03-01"). EITF 03-01 establishes additional
disclosure requirements for each category of SFAS 115 investments in a loss
position. Effective for years ending after December 15, 2003, companies must
disclose the aggregate amount of unrealized losses, and the aggregate related
fair value of their investments with unrealized losses. Those investments are
required to be segregated by those in a loss position for less than 12 months
and those in a loss position for greater than 12 months. Additionally, certain
qualitative disclosures should be made to clarify a circumstance whereby an
investment's fair value that is below cost is not considered
other-than-temporary. The provisions of this consensus do not have a significant
effect on our financial position or operating results.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment." SFAS No. 123R replaced SFAS No. 123 and superceded Accounting
Principles Board Opinion No. 25. SFAS No. 123R will require compensation costs
related to share-based payment transactions to be recognized in the financial
statements. The adoption of SFAS No. 123 (revised 2004) should not have a
significant impact on the Company's financial position or results of operations
until such time the Company has share-based payments. The Company will adopt the
provisions of SFAS No. 123R at that time.

We recognize revenue when customer services are provided and maintain allowances
for doubtful accounts for estimated losses resulting from the inability of our
customers to make required payments. If the financial condition of our customers
were to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances may be required which would result in an
additional general and administrative expense in the period such determination
was made.

We do not have any of the following:

o Off-balance sheet arrangements.

o Certain trading activities that include non-exchange traded contracts
accounted for at fair value.

o Relationships and transactions with persons or entities that derive benefits
from any non-independent relationships other than related party transactions
discussed herein.

RESULTS OF OPERATIONS 2004 COMPARED WITH 2003

For the year ended December 31, 2004, the company generated net revenues of
$14,754,003 as compared to net revenues of $1,192,582 for the year ended
December 31, 2003. The company's cost of revenues aggregated $12,332,488 as
compared to $409,830 for the year ended December 31, 2003 and yielded a gross
profit of $2,421,515 as compared to $782,752 for the year ended December 31,
2003. The company's operating, general and administrative costs aggregated
approximately $6,063,106 for the year ended December 31, 2004 as compared to
$1,323,996 for the year ended December 31, 2003 resulting in a net operating
loss of $(3,641,591) for the year ended December 31, 2004 as compared to a net
operating loss of $(541,244) for the year ended December 31, 2003.

The Company increased its cash position to $2,115,491 at December 31, 2004 from
a balance of $12,408 as of December 31, 2003. The company continued to be funded
in part from an increase in accounts payable and accrued expenses, which
increased in the aggregate to $1,297,330 as of December 31, 2004, from $753,446

                                       23

<PAGE>


as of December 31, 2003. Accounts receivable increased from $160,914 as of
December 31, 2003 to $502,685 as of December 31, 2004. The Company received
$6,660,003 in proceeds from the sale of its common stock in 2004. Management
believes that it will be able to fund the company through its present cash
position and the continuation of revenue producing activities by its
subsidiaries ICE, GTL, and NEOS. We will need to seek further capital through
the sale of our capital stock and/or the issuance of debt in order to continue
to grow the Company.

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

We have financed our development during the current year primarily through the
sale of common stock and short-term and long-term debts. As of December 31,
2004, we had $2,121,510 in notes payable to related parties outstanding and
total current liabilities of $1,635,459.

We had $2,115,491 cash on hand as of December 31, 2004.

We will continue to need additional cash during the following twelve months and
these needs will coincide with the cash demands resulting from our general
operations and planned expansion. There is no assurance that we will be able to
obtain additional capital as required, or obtain the capital on acceptable terms
and conditions.

ITEM 7. FINANCIAL STATEMENTS.

             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2004
                                DECEMBER 31, 2003

             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-4

   Consolidated Statements of Cash Flows                                     F-5

   Notes to Consolidated Financial Statements                             F-7-24
--------------------------------------------------------------------------------



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
International Card Establishment, Inc. and Subsidiaries Oxnard, California

I have audited the accompanying consolidated balance sheets of International
Card Establishment, Inc. and Subsidiaries as of December 31, 2004 and 2003, and
the related consolidated statements of income, stockholders' equity, and cash
flows for the years ended December 31, 2004 and 2003. These consolidated
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these consolidated financial
statements based on my audit.

I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. 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. I believe that my audit provides a reasonable
basis for my opinion.

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
International Card Establishment, Inc. and Subsidiaries as of December 31, 2004
and 2003 and the results of its consolidated operations and cash flows for the
year ended December 31, 2004 and 2003, in conformity with generally accepted
accounting principles.

KYLE L. TINGLE, CPA, LLC

May 5, 2005
Las Vegas, Nevada

EXCEPT FOR NOTE 7, NOTE 9 AND NOTE 12, IN WHICH THE DATE IS SEPTEMBER 22, 2005.

                                       F-1


<PAGE>

<TABLE>
<CAPTION>



             INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                                        December 31,     December 31,
                                                                                                2004             2003
                                                                                       -------------     ------------

                                     ASSETS

<S>                                                                                    <C>               <C>
CURRENT ASSETS
     Cash                                                                              $   2,115,491     $     12,408
     Accounts receivable, trade, net of allowance                                            502,685          160,914
     Inventory                                                                               163,172           12,832
     Other receivables                                                                       448,947          233,016
        Prepaid assets                                                                        23,407            8,347
                                                                                       -------------     ------------
            Total current assets                                                           3,253,702          427,517
                                                                                       -------------     ------------

OFFICER RECEIVABLE                                                                             3,372           44,967
FIXED ASSETS, Net                                                                            145,652           18,095
INTANGIBLE ASSETS                                                                          7,160,194        2,050,000
GOODWILL                                                                                   2,773,192        2,685,213
DEPOSITS                                                                                      31,344                -
DEFERRED INCOME TAXES                                                                                         114,000
                                                                                       -------------     ------------

                   Total assets                                                        $  13,367,456     $  5,339,792
                                                                                       =============     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Outstanding checks in excess of bank balance                                      $           -     $    132,596
     Accounts payable                                                                        471,509          256,224
     Accrued expenses                                                                        825,821          497,222
     Current portion of notes payable                                                         13,844                -
     Current portion of notes payable, related parties                                       324,285           78,650
     Due to related party                                                                          -           70,000
                                                                                       -------------     ------------

            Total current liabilities                                                  $   1,635,459     $  1,034,692

LONG-TERM DEBT, RELATED PARTY                                                          $   1,797,225     $          -
                                                                                       -------------     ------------

                   Total liabilities                                                   $   3,432,684     $  1,034,692

STOCKHOLDERS' EQUITY
     Preferred stock:  $.0005 par value; authorized 5,000,000 shares;
        issued and outstanding:  62,000 and no shares at
        December 31, 2004 and 2003, respectively                                       $          31     $          -
     Common stock: $.0005 par value; authorized 100,000,000 shares;
        issued and outstanding: 28,408,150 and 12,630,250 shares
        at December 31, 2004 and 2003, respectively                                    $      14,204     $      6,315
     Common stock subscribed, 0 and 375,857 shares
        at December 31, 2004 and 2003, respectively                                                -          263,100
     Common stock to be issued in acquisition of GlobalTech
        Leasing, Inc., 5,000,000 shares at December 31, 2003                                       -        4,520,000
     Preferred stock subscription receivable                                              (1,780,920)               -
     Additional paid-in capital                                                            17,347,941                -
     Accumulated deficit                                                                  (5,646,484)        (484,315)
                                                                                       -------------     ------------
            Total stockholders' equity                                                 $   9,934,772     $  4,305,100
                                                                                       -------------     ------------

                   Total liabilities and
                   stockholders' equity                                                $  13,367,456     $  5,339,792
                                                                                       =============     ============

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.



                                       F-2

<PAGE>
<TABLE>
<CAPTION>


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


                                                                Years ended
                                                       December 31,     December 31,
                                                               2004             2003
                                                      -------------     ------------

<S>                                                   <C>               <C>
Sales of leases                                       $  11,329,287     $          -
Merchant services revenues                                3,663,884        1,283,210
Less:  sales returns and allowances                        (239,168)         (90,628)
                                                      -------------     ------------
   Net revenue                                        $  14,754,003     $  1,192,582


Cost of revenue
   Cost of leases                                     $  10,133,728     $          -
   Commissions                                              914,677          146,865
   Cost of sales                                          1,204,067          252,628
   Other                                                     80,016           10,337
                                                      -------------     ------------
           Cost of revenue                               12,332,488          409,830

           Gross profit                               $   2,421,515     $    782,752
                                                      -------------     ------------


Operating, general, and administrative expenses
   General, administrative and selling expenses       $   5,704,018     $  1,322,783
   Depreciation and amortization                            359,088            1,213
                                                      -------------     ------------
           Total operating, general, and
           administrative expenses                    $   6,063,106     $  1,323,996
                                                      -------------     ------------


           Net operating loss                         $  (3,641,591)    $   (541,244)

Non-operating income (expense)
   Interest income                                            5,148                -
   Interest expense                                         (11,741)          (5,652)
                                                      -------------     ------------

           Total nonoperating income (loss)           $      (6,593)    $     (5,652)
                                                      -------------     ------------

   Net loss before income tax benefit                 $  (3,648,184)    $   (546,896)

   Income tax expense (benefit)                             114,000         (114,000)
                                                      -------------     ------------

   Net loss                                           $  (3,762,184)    $   (432,896)

   Dividends paid on preferred shares                     1,399,985                -
                                                      -------------     ------------

   Net loss allocable to common shareholders          $  (5,162,169)    $   (432,896)
                                                      =============     =============

   Net loss allocable to common shareholders
   per share, basic and diluted                       $       (0.22)    $      (0.04)
                                                      =============     ============

   Average number of shares
   of common stock outstanding                           23,018,879        9,716,250
                                                      =============     ============

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.



                                       F-3

<PAGE>

<TABLE>
<CAPTION>

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


                                                                                Common or
                           Preferred Stock      Common Stock      Additional    Preferred      Common
                         _________________  ___________________    Paid-In        Stock       Stock for   Accumulated
                           Shares   Amount    Shares    Amount     Capital     Subscribed    Acquisition    Deficit        Total
                         -----------------  ----------  -------   ----------   -----------   -----------  -----------   -----------

<S>                          <C>     <C>     <C>        <C>       <C>          <C>           <C>          <C>           <C>
Balance, December 31,
    2002                          -  $  -    7,000,000  $ 3,500   $    16,500  $         -   $         -  $   (17,416)  $     2,584
Contribution of Capital
    by Shareholders                                                    60,000                                                60,000
Recapitalization of
    common stock in
    connection  with
    merger,iNetEvents,
    Inc.                                     5,630,250    9,130       (82,815)                                (34,003)     (107,688)
July 30, 2003 reverse
    stock split 1:2
    shares                                               (6,315)        6,315
Common stock subscribed
    through private
    placement                                                                      263,100                                  263,100
Acquisition of GlobalTech
    Leasing, Inc.                                                                              4,520,000                  4,520,000
Net loss, December 31,
    2003                                                                                                     (432,896)     (432,896)
                         ----------   ----   ----------  -------   -----------  -----------   -----------  -----------  -----------

Balance, December 31,
    2003                          -  $  -   12,630,250  $ 6,315   $         -  $   263,100   $ 4,520,000  $  (484,315)  $ 4,305,100
                         ==========  ====   ==========  =======   ===========  ===========   ===========  ===========   ===========

Issued common stock
   subscribed from
   2003                                        375,857      188       262,912     (263,100)                                       -
Issued stock in acqui-
    sition of Global-
    Tech Leasing, Inc.                       5,000,000    2,500     4,517,500                 (4,520,000)                         -
Issued stock through
    private placement                          885,141      442       604,144                                               604,586
Issued stock for
   services and payment
   of debt                                     120,000       60       131,440                                               131,500
Issued stock through
    private placement                        4,415,076    2,208     2,488,630                                             2,490,838
Issuance of stock in
    acquisition of NEOS
    Merchant Solutions                       4,981,826    2,491     2,777,368                                             2,779,859
Issuance of preferred
   shares                    30,000    15                           3,128,133                                             3,128,133
Issuance of preferred
   shares                    32,000    16                           3,437,814                                             3,437,814
Preferred stock
   subscription recei-
   vable                                                                        (1,780,920)                              (1,780,920)
Preferred stock
   dividend                                                                                                (1,399,985)   (1,399,985)
Net loss, December 31,
   2004                                                                                                    (3,762,184)   (3,762,184)
                         ----------   ----   ----------  -------   -----------  -----------   -----------  -----------   -----------

Balance, December 31,
   2004                      62,000  $ 31   28,408,150  $14,204   $17,347,941  $(1,780,920)  $         -  $(5,646,484)  $ 9,934,772
                         ==========  ====   ==========  =======   ===========  ===========   ===========  ===========   ===========

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.



                                       F-4


<PAGE>
<TABLE>
<CAPTION>


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


                                                                 Years ended
                                                        December 31,     December 31,
                                                                2004             2003
                                                        ------------     ------------

<S>                                                      <C>              <C>
Cash Flows From
Operating Activities

    Net loss                                             $(3,762,184)     $  (432,896)

    Adjustments to reconcile net loss to cash
          used in operating activities:
    Depreciation and amortization                            359,088            1,213
    Income tax expense (benefit)                             114,000        (114,000)
    Allowance for doubtful accounts                           16,860           (5,555)
    Intangible asset write down                              600,000
Changes in assets and liabilities
    (Increase) in accounts receivable                       (249,179)         (51,696)
    (Increase) in inventory                                  (42,943)         (12,832)
    (Increase) in other receivables                         (120,918)        (233,016)
    (Increase) decrease in prepaid expenses                   (9,878)             196
    (Increase) in deposits                                   (31,344)               -
    Increase (decrease) in bank overdraft                   (132,596)         112,013
    Increase (decrease) in accounts payable                 (148,496)         189,037
    Increase in accrued expenses                              97,688          475,370
                                                         -----------      -----------

         Net cash (used in) operating activities         $(3,309,902)     $   (72,166)
                                                         -----------      -----------

Cash Flows From Investing Activities
    Acquisitions, net of cash related assets             $  (433,246)     $  (298,217)
    Purchase of equipment                                    (82,907)          (5,309)
                                                         -----------      -----------

         Net cash (used in) investing activities         $  (516,153)     $  (303,526)
                                                         -----------      -----------

Cash Flows From Financing Activities
    Related party receivables, net                       $  (135,166)     $    65,000
    Contribution of capital                                        -           60,000
    Notes payable, net                                        10,249                -
    Payments on related party notes payable                 (578,650)               -
    Dividends paid                                           (27,298)               -
    Proceeds from preferred and common stock               6,660,003          263,100
                                                         -----------      -----------

         Net cash provided by financing activities       $ 5,929,138      $   388,100
                                                         -----------      -----------

         Net increase in cash                            $ 2,103,083      $    12,408

Cash, beginning of period                                $    12,408      $         -
                                                         -----------      -----------

Cash, end of period                                      $ 2,115,491      $    12,408
                                                         ===========      ===========

Supplemental Cash Flow Disclosures:

Cash paid for interest                                   $     8,771      $     5,652

Cash paid for income taxes                               $         -      $         -

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.



                                       F-5


<PAGE>
<TABLE>
<CAPTION>


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


                                                                 Years ended
                                                        December 31,     December 31,
                                                                2004             2003
                                                        ------------     ------------

<S>                                                      <C>              <C>
Supplemental Schedule of Non-cash Investing and
Financing Activities

Acquisition of iNetEvents, Inc. by issuance
    of 5,630,250 shares of common stock                  $         -      $   107,688

Acquisition of GlobalTech Leasing, Inc. by issuance
    of 5,000,000 shares of common stock                  $         -      $ 4,520,000

Notes payable issued in acquisition of NEOS Merchant
    Solutions, Inc.                                      $ 2,000,000      $         -

Acquisition of NEOS Merchant Solutions, Inc. by          $ 2,779,859      $         -
    issuance of 4,981,826 shares of common stock

Preferred stock subscription receivable                  $ 1,780,920      $         -

Calculated beneficial conversion feature associated
    with September 2004 financing                        $   590,148      $         -

Calculated beneficial conversion feature associated
    with December 2004 financing                         $   761,830      $         -


</TABLE>


See Accompanying Notes to Consolidated Financial Statements.



                                       F-6

<PAGE>


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

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION
The consolidated financial statements have been prepared by International Card
Establishment, Inc. pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in the opinion of management, include all
adjustments necessary for a fair statement of the consolidated results of
operations, financial position and cash flows for each period presented.

NATURE OF BUSINESS
International Card Establishment, Inc. ("Company") was organized July 26, 2002
under the laws of the State of Nevada. Operations of the Company began in
October 2002.

As further discussed in Note 8, the Company agreed to reorganization with
iNetEvents ("INET"), a Delaware corporation. The Company exchanged all issued
and outstanding stock for 14,000,000 shares of stock of INET. The Company closed
the transaction with INET on July 18, 2003. The transaction is accounted for as
a reverse acquisition with International Card Establishment, Inc. the surviving
registrant. As a result, International Card Establishment's former stockholders
exercised control over INET. The transaction is a capital transaction where INET
is treated as a non-business entity. Therefore, the accounting for the merger is
identical to that resulting from a reverse merger, except no goodwill or other
intangible assets are recorded. For accounting purposes, International Card
Establishment has been treated as the accounting acquirer and, accordingly, is
presented as the continuing entity. The historical financial statements are
those of International Card Establishment. INetEvents, Inc. changed its name to
International Card Establishment, which is the legal entity going forward and is
referred to hereafter as the "Company."

In order for International Card Establishment to properly account for the issued
and outstanding shares of common stock, International Card Establishment
effectively received a 1 for 2 reverse split contemporaneously with the merger.
Accordingly, the accompanying consolidated financial statements have been
retroactively restated to reflect the 1 for 2 reverse stock split as if it
occurred as of International Card Establishment's date of inception.

On January 15, 2003, the Company entered into a binding letter of intent with
GlobalTech Leasing ("GTL"), a California corporation. GTL provides lease funding
for equipment supplied by the Company to its customers, as well as numerous
other unrelated merchant service providers. On December 15, 2003, the Company
entered into a "Plan and Agreement of Reorganization" with GTL and closed the
transaction on December 29, 2003. The Company issued 5,000,000 shares of common
stock in exchange of 100% of the shares of GTL, with the shares issued in April
2004. It is the intention of the Company and GTL that the transaction
constitutes a tax-free "reorganization" as defined in the Internal Revenue Code
of 1986, as amended.

On September 8, 2004, the Company completed an Agreement and Plan of Merger with
NEOS Merchant Solutions, Inc. ("NEOS"), a Nevada corporation. NEOS provides
smart card loyalty programs in an integrated vertical system for its customers,
as well as other electronic payment services. The Company issued 4,981,826
shares of common stock, $500,000 in cash and $2,000,000 in notes payable,
adjusted by $202,775 for excess liabilities paid on behalf of NEOS, in exchange
for 100% of the shares of NEOS. It is the intention of the Company and NEOS that
the transaction constitutes a tax-free "reorganization" as defined in the
Internal Revenue Code of 1986, as amended.

                                       F-7

<PAGE>

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

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Upon the completion of the above transactions, International Card Establishment,
Inc. a Nevada Corporation, INET, NEOS and GTL are wholly owned subsidiaries of
the Company. Accordingly, the accompanying financial statements include the
results of International Card Establishment for all periods presented and the
results of INET, NEOS and GTL from the date of the acquisitions.

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

BUSINESS OPERATIONS
The Company 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 and WorldWide Gift & Loyalty
division, 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. GTL is an
equipment leasing firm that specializes in financing point-of-sale transaction
systems.

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, 2004 and 2003, respectively.

CONCENTRATIONS OF CREDIT RISK ARISING FROM DEPOSITS IN EXCESS OF INSURED LIMITS
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, 2004 the Company
had one account in excess of the $100,000 insured amount and none at December
31, 2003.

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. Estimated
service lives of property and equipment are as follows:



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



                                       F-8

<PAGE>


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

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, accrued expenses and current
portion of notes payable 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 LONG-LIVED ASSETS
In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 141 requires business combinations initiated after September
30, 2001 to be accounted for using the purchase method of accounting, and
broadens the criteria for recording intangible assets separate from goodwill.
Recorded goodwill and intangibles will be evaluated against these new criteria
and may result in certain intangibles being subsumed into goodwill, or
alternatively, amounts initially recorded as goodwill may be separately
identified and recognized apart from goodwill. SFAS No. 142 requires intangibles
be evaluated for useful lives, and allows intangibles to have indefinite lives.
Intangibles with useful lives are amortized over the life period; intangibles
not amortized are reviewed for impairment. Any write down is charged to results
of operations only in the periods in which the recorded value of goodwill and
certain intangibles is more than its fair value.

The Company recorded intangible assets and goodwill in the acquisition of both
GlobalTech Leasing, Inc. and NEOS Merchant Solutions, Inc. Goodwill is the
excess of the acquisition costs of the acquired entity over the fair value of
the identifiable net assets acquired. The Company is required to test goodwill
and intangible assets that are determined to have an indefinite life for
impairment at least annually. The provisions of SFAS No. 142 require the
completion of an annual impairment test with any impairment recognized in
current earnings.

The FASB also recently issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," that is applicable for financial statements
issued for fiscal years beginning after December 15, 2001. The FASB's new rules
on asset impairment supersede SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and portions of
Accounting Principles Bulletin Opinion No. 30, "Reporting the Results of
Operations." This Standard provides a single accounting model for long-lived
assets to be disposed of and significantly changes the criteria that would have
to be met to classify an asset as held-for-sale. Classification as held-for-sale
is an important distinction since such assets are not depreciated and are stated
at the lower of fair value and carrying amount. This Standard also requires
expected future operating losses from discontinued operations to be displayed in
the period(s) in which the losses are incurred, rather than as of the
measurement date as presently required. The provisions of this Standard are not
expected to have a significant effect on the Company's financial position or
operating results.

                                       F-9

<PAGE>


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

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, and the sales and leasing of related
equipment used for the 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. Lease income is recognized on a
monthly basis as incurred. For leasing of merchant processing equipment, an
allowance of 25% of the current month's leases is recorded. Each month, the
allowance is reconciled against collections, recording actual losses to sales
allowances.

The Company, through the acquisition of GTL acquires leases from Independent
Sales Organizations (ISO) that sells merchant services to customers. GTL
packages and resells the leases to financing institutions for administration of
the leases. Revenue is recognized upon approval of the sales agreement and
shipment of equipment by the ISO. Leases not accepted by the financing
institutions are recovered from the ISO, or may be processed in house. These
leases are not a material source of revenue for the Company.

ADVERTISING
Advertising costs are charged to operations as incurred. Advertising costs years
ended December 31, 2004 and 2003 were $184,809 and $44,176, respectively.

RECLASSIFICATION
Certain reclassifications, which have no effect on net income, have been made in
the prior period financial statements to conform to the current presentation.

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 will require 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 June 15, 2005. The adoption of SFAS No. 123 (revised 2004)
should not have a significant impact on the Company's financial position or
results of operations until such time the Company has share-based payments. The
Company will adopt the provisions of SFAS No. 123R at that time.

                                      F-10

<PAGE>


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

NOTE 2. ACCOUNTS RECEIVABLE

Accounts receivable and allowance for doubtful accounts consist of the
following:



                                                        Years ended
                                             December 31,     December 31,
                                                     2004             2003
                                            -------------    -------------

Accounts Receivable                         $     521,490    $     162,859
Less: allowance for doubtful accounts             (18,805)          (1,945)
                                            -------------    -------------
                                            $     502,685    $     160,914
                                            =============    =============



NOTE 3. FIXED ASSETS

Fixed assets and accumulated depreciation consist of the following:



                                                        Years ended
                                             December 31,     December 31,
                                                     2004             2003
                                            -------------    -------------

Furniture and fixtures                      $      15,650    $      19,308
Equipment and machinery                           148,012                -
                                            -------------    -------------
         Subtotal                                 163,662           19,308
Accumulated Depreciation                          (18,010)          (1,213)
                                            -------------    -------------
                                            $     145,652    $      18,095
                                            =============    =============



As described in Note 8, fixed assets were purchased with the acquisition of NEOS
Merchant Solutions, Inc.

NOTE 4. GOODWILL AND INTANGIBLE ASSETS

As described in Note 1, goodwill and intangible assets were purchased with the
acquisitions of GlobalTech Leasing, Inc. and 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 did determine that a portion of the
intangibles purchased in 2003 were not going to be realizable and as such have
written them off. Also, upon further analysis management determined that
intangibles purchased in 2003 did have a finite life. These items have been
accounted for as a change in estimate in 2004. The Intangibles acquired in the
NEOS acquisition were amortized for 3 months in 2004. The Company's intangible
assets and accumulated amortization consisted of the following:


<TABLE>
<CAPTION>



                                             December 31, 2004            December 31, 2003
                              --------------------------------   -------------------------------
                                                  Accumulated                        Accumulated
                                    Gross        Amortization      Gross            Amortization
                              -------------      ------------    -------------     -------------

<S>                           <C>                <C>             <C>               <C>
Merchant portfolio            $     900,000      $    (60,000)   $   1,500,000     $           -
Merchant portfolio (15 years)     2,787,485           (46,458)               -                 -
Software and technology (3years)  2,830,000          (235,833)                -                 -
Tradename                           935,000                 -          500,000                 -
Internet domain                      50,000                 -           50,000                 -
                              -------------      ------------    -------------     -------------
                              $   7,502,485      $   (342,291)   $   2,050,000     $           -
                              =============      ============    =============     =============

Goodwill                      $   2,773,192      $          -    $   2,685,213     $           -
                              =============      ============    =============     =============

</TABLE>


                                      F-11

<PAGE>


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

NOTE 4. GOODWILL AND INTANGIBLE ASSETS (CONTINUED)

CUSTOMER LIST $900,000.
This Customer List consisted of $600,000 value for Merchant List and $900,000
value for Vendor List, for a total of $1,500,000. The total portfolio was
acquired with the acquisition of GlobalTech Leasing in December 2003. The value
was determined based on market value and actual offers for the detailed contact
information.

At December 31, 2004, the value was tested for impairment and the entire value
for the Merchant List of $600,000 was written off. It was determined that the
remaining balance comprising of the Vendor List would be amortized over 15 years
and tested once a year for impairment. The estimated life of 15 years was deemed
to be conservative as the list comprised of personal information of executives
including full name, address, social security numbers and other vital
information that would not change.

MERCHANT PORTFOLIO $ 2,787,485. This portfolio is comprised of credit card, and
gift and loyalty processing merchants purchased in the acquisition of NEOS in
September 2004. The value was determined by computing the net present value of
the revenue stream discounted at 10%. The estimated useful life was assigned at
December 31, 2004, and determined to be 15 years based on industry average with
a test of impairment at the end of every year. There was no other change to the
original estimation at December 31, 2004.

SOFTWARE & TECHNOLOGY $2,830,000. The intangible is a collection of software
packages designed and developed by NEOS and acquired in September 2004 with the
acquisition of the company. The value was based on the market price of the
software packages (mostly gift & loyalty programs) sold to previous customers.
The software although constantly enhanced and modified was determined to
generate revenues without need for modification for a period of three years.
There was no other change to estimation at December 31, 2004.

TRADE NAME $935,000.
The trade name is comprised of $500,000 for GlobalTech Leasing, Inc. and
$435,000 for NEOS Merchant Solutions, Inc. acquired in December 2003 and
September 2004 respectively. The company has determined that the useful life is
indefinite as long as advertising and use in the industry remains constant or
increases. There was no change to estimation at December 31, 2004.

INTERNET DOMAIN $50,000
The Internet Domain is an intangible value for GlobalTech Leasing, Inc. that was
recorded during the acquisition in December 2003. The website
(http://www.globaltechleasing.com/) is publicized in many trade publications,
advertisements, and trade shows. New and existing customers refer to the website
for current information. The Company determined that the domain name has an
indefinite life, and there was no change to estimation on December 31, 2004.

The Company's trade name and internet domain name will continue to contribute
future cash flows due to its prominence in the market place. There is no legal,
contractual, economic or other factors limiting the useful life of these
intangibles and in accordance with SFAS 142 management has determined that these
intangibles have an infinite life.

                                      F-12

<PAGE>


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

NOTE 5. ACCRUED EXPENSES

Accrued expenses consist of the following:



                                                    Years ended
                                         December 31,     December 31,
                                                 2004             2003
                                        -------------    -------------

Wages payable                           $     377,573    $     275,375
Lease funding accrual                         175,131           85,182
Accrued expenses, other                       194,042           97,829
Preferred stock dividends payable              20,709                -
Taxes payable                                  58,366           38,836
                                        -------------    -------------
                                        $     825,821    $     497,222
                                        =============    =============



NOTE 6. NOTES PAYABLES

Notes payable consist of the following:

<TABLE>
<CAPTION>



                                                                          Years ended
                                                               December 31,     December 31,
                                                                       2004             2003
                                                              -------------    -------------

<S>                                                           <C>              <C>
Notes payable, to acquire computer equipment                  $      13,844    $           -
                                                              =============    =============

Notes payable, at 10% interest, to related parties in
    iNetEvents, Inc., due on demand                           $           -    $      78,650
Notes payable, at 1.23% interest, to related
    parties in NEOS acquisition, payable in $25,000
   installments                                                     174,285                -
Note payable, at 8% interest, to related party,
   due on December 31, 2004                                         150,000                -
                                                              -------------    -------------

Current notes payable, related parties                        $     324,285    $      78,650
                                                              =============    =============


Note payable, at 8% interest, in acquisition of
    NEOS Merchant Solutions, Inc., due on
    January 1, 2006                                           $     500,000    $          -
Note payable, at 8% interest, in acquisition of
    NEOS Merchant Solutions, Inc., due on
    June 30, 2006                                                 1,297,225               -
                                                              -------------    -------------

Long-term notes payable, related parties                      $   1,797,225    $           -
                                                              =============    =============

</TABLE>


Note payables entered into by NEOS prior to the acquisition has no stated
interest rate. The short term applicable federal funds rate of 1.23%, which is
below that of other debt enterd into by the Company, was imputed by the Company.
The Company considered the dollar amount to be immaterial to record a premium as
required by Accounting Principles Board Opinion No. 21, "Interest on Receivables
and Payables" and has recorded the interest expense as incurred.

                                      F-13

<PAGE>

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

NOTE 6. NOTES PAYABLES (CONTINUED)

The two long-term notes payable are convertible at the option of the holder into
shares of common stock of the Company at a 25% discount of the average closing
price for the 20 days prior to conversion. In accordance with EITF 00-27,
"Application of Issue No. 98-5 to Certain Convertible Instrument", the Company
determined that no beneficial conversion feature existed at the date of issuing
the convertible debt.

The Company is required to make the following principal payments on its total
debt, including the accreted value at maturity of the Notes:



Year Ended December 31,           Principal Payments
                                  ------------------
2005                              $          538,129
2006                                       1,597,225
2007                                               -
2008                                               -
Thereafter                                         -
                                  ------------------
Total                             $        2,135,354
                                  ==================



NOTE 7. STOCKHOLDERS' EQUITY

The authorized common stock of the Company consists of 100,000,000 shares of
common shares with par value of $0.0005 and 5,000,000 shares of serial preferred
stock with a par value of $0.0005.

COMMON STOCK
On January 16, 2003, a "Plan and Agreement of Reorganization" was entered into
between International Card Establishment, Inc. ("ICE Nevada"), a Nevada
corporation and iNetEvents, Inc, a Delaware company (INET Delaware). The Company
issued 14,000,000 shares of common stock in exchange of 100% of the shares of
ICE Nevada. The 14,000,000 shares represent 54.0% of the outstanding stock of
the Company, establishing a change in control of the Company. It is the
intention of the Company and ICE Nevada that the transaction constitutes a
tax-free "reorganization" as defined in the Internal Revenue Code of 1986, as
amended. The Company closed the transaction on July 18, 2003. The transaction is
accounted for as a reverse acquisition with International Card Establishment,
Inc. the surviving registrant. For accounting purposes, International Card
Establishment has been treated as the accounting acquirer and, accordingly, is
presented as the continuing entity. The historical financial statements are
those of International Card Establishment. INetEvents, Inc. changed its name to
International Card Establishment, which is the legal entity going forward. The
trading symbol has been changed from IEVT to ICRD.

On July 30, 2003, the Company's shareholders approved a reverse split of its
common stock at 1 for 2 shares of the existing stock. The number of common stock
shares outstanding decreased from 25,520,500 to 12,630,250. Prior period
information has been restated to reflect the stock split.

On January 15, 2003, the Company entered into a binding letter of intent with
GlobalTech Leasing ("GTL"), a California corporation. GTL provides lease funding
for equipment supplied by the Company to its customers, as well as numerous
other unrelated merchant service providers. On December 15, 2003, the Company
entered into a "Plan and Agreement of Reorganization" with GTL and closed the
transaction on December 29, 2003. The Company issued 5,000,000 shares of common
stock in exchange of 100% of the shares of GTL, with the shares issued in April
2004. It is the intention of the Company and GTL that the transaction
constitutes a tax-free "reorganization" as defined in the Internal Revenue Code
of 1986, as amended.

                                      F-14

<PAGE>


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

NOTE 7. STOCKHOLDERS' EQUITY (CONTINUED)

COMMON STOCK (continued)
On October 15, 2003, the Company approved a private placement of Common Stock in
accordance with Delaware General Corporation Law. The placement was to sell
through a purchase agreement up to 2,857,143 shares at $0.70 per share along
with warrants to purchase shares at $0.50 per share. As of September 30, 2004
(the closing date) and December 31, 2003, subscriptions for 1,260,998 and
375,857 shares were sold for $867,686 and $263,100. The shares were issued in
January and April 2004. Warrants are for one (1) common share of stock for each
two (2) shares purchased pursuant to the subscription agreement, exercisable
through December 31, 2004.

In 2004, the Company agreed to issue stock for services rendered under
consulting agreements. The Company issued 100,000 shares of common stock in
compensation of $111,500 of consulting services. The Company also agreed to
satisfy debt of $20,000 by the issuance of 20,000 shares.

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 will be
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.

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 forward (see Note 1 above). 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.

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.

                                      F-15

<PAGE>


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

NOTE 7. STOCKHOLDERS' EQUITY (CONTINUED)

COMMON STOCK (continued)
On September 8, 2004, the Company completed an Agreement and Plan of Merger with
NEOS Merchant Solutions, Inc. ("NEOS"), a Nevada corporation. NEOS provides
smart card loyalty programs in an integrated vertical system for its customers,
as well as other electronic payment services. The Company issued 4,981,826
shares of common stock, $500,000 in cash and $2,000,000 in notes payable,
adjusted by $202,775 for excess liabilities paid on behalf of NEOS, in exchange
for 100% of the shares of NEOS. It is the intention of the Company and NEOS that
the transaction constitutes a tax-free "reorganization" as defined in the
Internal Revenue Code of 1986, as amended.

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 $.20 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 forward (see Note 1 above). 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 has charged the full amount of the calculated
beneficial conversion feature of $590,148 to Dividends Paid as a return of
capital.

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 $.20 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.

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 (see Note 1 above) 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 of $761,830 to
Dividends Paid as a return of capital.

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.

Collectively, the Series A Convertible Preferred Stock contains 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.

                                      F-16

<PAGE>


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

NOTE 7. STOCKHOLDERS' EQUITY (CONTINUED)

PREFERRED STOCK (continued)
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 $0.20 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 5, the Company accrued for Preferred Stock Dividends
$20,709 and $0 as of December 31, 2004 and 2003, respectively. Total dividends
accrued and paid totaled $1,399,984 and $0 as of December 31, 2004 and 2003.

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.

                                      F-17

<PAGE>


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

NOTE 8. BUSINESS COMBINATIONS

Acquisition of iNetEvents. "Pursuant to a "Plan and Agreement of Reorganization"
with iNetEvents, a Delaware corporation, the Company exchanged all issued and
outstanding stock for 14,000,000 shares of stock of iNetEvents ("INET"). The
14,000,000 shares represent 54.0% of the outstanding stock of INET, establishing
a change in control of the INET. It is the intention of the Company and INET
that the transaction constitutes a tax-free "reorganization" as defined in the
Internal Revenue Code of 1986, as amended. The Company closed the transaction
with INET on July 18, 2003. The transaction is accounted for as a reverse
acquisition with International Card Establishment, Inc. the surviving
registrant. As a result, International Card Establishment's former stockholders
exercised control over INET. The accounting for the merger is identical to that
resulting from a reverse merger, except no goodwill or other intangible assets
are recorded. For accounting purposes, International Card Establishment has been
treated as the accounting acquirer and, accordingly, is presented as the
continuing entity. The historical financial statements are those of
International Card Establishment. INetEvents, Inc. changed its name to
International Card Establishment, Inc., which is the legal entity going forward
and is referred to hereafter as the "Company."

Acquisition of GlobalTech Leasing, Inc. On January 15, 2003, the Company entered
into a binding letter of intent with GlobalTech Leasing, a California
corporation, which was announced on July 21, 2003. GTL provides lease funding
for equipment supplied by the Company to its customers, as well as numerous
other unrelated merchant service providers. On December 15, 2003, the Company
entered into a "Plan and Agreement of Reorganization" with GTL and closed the
transaction on December 29, 2003. The Company issued 5,000,000 shares of common
stock in exchange of 100% of the shares of GTL, with the shares issued in April
2004. It is the intention of the Company and GTL that the transaction
constitutes a tax-free "reorganization" as defined in the Internal Revenue Code
of 1986, as amended. After careful consideration of EITF 99-12, "Determination
of the Measurement Date for the Market Price of Acquirer Securities Issued in a
Purchase Business Combination", and in review of the agreements between the
Company and GTL, it was determined that the measurement date for the transaction
was July 21, 2003, the date the transaction was announced.

Under the terms of the acquisition agreement, the Company acquired GTL for
$4,520,000 in consideration, comprising of 5,000,000 shares of common stock
having a fair value of $4,520,000. The shares issued were valued based on a
price per share of $0.904 that reflects the weighted-average closing price of
the Company during a five day period two days prior to, the day of, and the two
days following the July 21, 2003 measurement date.

Purchase price allocation. The allocation of purchase accounting under SFAS No.
141, "Business Combinations", requires that the total purchase price be
allocated to the fair value of the assets acquired and liabilities assumed based
on their fair values at the acquisition date. The amounts assigned to each major
asset and liability category as of December 29, 2003 is as follows:



Current assets                       $     116,740
Fixed assets                                 7,000
Intangible assets                        2,050,000
Goodwill                                 2,685,213
Related party receivables, net              39,966
Liabilities                               (378,919)
                                     -------------

Net assets acquired                  $   4,520,000
                                     =============



                                      F-18

<PAGE>


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

NOTE 8. BUSINESS COMBINATIONS (CONTINUED)

Acquisition of NEOS Merchant Solutions, Inc. On September 8, 2004, the Company
completed an "Agreement and Plan of Merger" with NEOS Merchant Solutions, Inc.
("NEOS"), a Nevada corporation. NEOS provides smart card loyalty programs in an
integrated vertical system for its customers, as well as other electronic
payment services. The Company issued 4,981,826 shares of common stock, $500,000
in cash and $2,000,000 in notes payable, adjusted by $202,775 for excess
liabilities paid on behalf of NEOS, in exchange for 100% of the shares of NEOS.
It is the intention of the Company and NEOS that the transaction constitutes a
tax-free "reorganization" as defined in the Internal Revenue Code of 1986, as
amended.

Under the terms of the acquisition agreement, the Company acquired NEOS for
$5,077,084 in consideration comprising of 4,981,826 shares of common stock
having a fair value of $2,779,859, $500,000 in cash and $2,000,000 in notes
payable, adjusted by $202,775 for excess liabilities paid on behalf of NEOS,
accumulating to $2,297,225. The shares issued were valued based on a price per
share of $0.558 that reflects the weighted-average closing price of the Company
during a five day period two days prior to, the day of, and the two days
following the September 8, 2004 measurement date.

Purchase price allocation. The allocation of purchase accounting under SFAS No.
141 requires that the total purchase price be allocated to the fair value of the
assets acquired and liabilities assumed based on their fair values at the
acquisition date. The amounts assigned to each major asset and liability
category as of September 8, 2004 is as follows:



Current assets                       $     388,799
Fixed assets                               149,424
Other assets                                17,551
Intangible assets                        6,052,485
Related party notes payable               (953,596)
Liabilities                               (577,579)
                                     -------------

Net assets acquired                  $   5,077,084
                                     =============



                                      F-19

<PAGE>


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

NOTE 8. BUSINESS COMBINATIONS (CONTINUED)

UNAUDITED PRO FORMA OPERATING RESULTS

The accompanying unaudited pro forma operating results are prepared as if the
acquisitions had occurred at the beginning of the respective periods. The
results have been adjusted for the elimination of intercompany transactions

The pro forma operating results may not be indicative of the actual results of
operations that would have occurred had the acquisition been consummated on the
dates indicated and there can be no assurance that the foregoing results will be
obtained. In particular, the pro forma condensed combined financial statements
are based on management's current estimates of the exchange agreement. The
actual results may differ.

<TABLE>
<CAPTION>


                                                         2004              2003
                                                     ------------       -----------

<S>                                                  <C>                <C>
Revenues                                             $ 17,480,413       $ 3,694,208
Less:  sales returns and allowances                      (246,514)         (111,709)
                                                     ------------       -----------

Net revenue                                          $ 17,233,899       $ 3,582,499

Cost of revenues                                     $ 13,827,864       $ 1,881,813
                                                     ------------       -----------

Gross margin                                         $  3,406,035       $ 1,700,686

Operating, general and administrative expenses       $  7,249,144       $ 3,168,010
Depreciation                                              140,838            52,027
                                                     ------------       -----------

Net operating loss                                   $ (3,983,947)      $(1,519,351)

Non-operating expenses                                    (73,968)          (39,626)
                                                     ------------       -----------

Net loss, before taxes                               $ (4,057,915)      $(1,558,977)
Income tax benefit                                     (1,520,000)         (325,056)
                                                     ------------       -----------

Net loss, before taxes                               $ (2,537,915)      $(1,233,921)
                                                     ============       ===========

Net loss per share, basic and diluted                $      (0.11)      $     (0.13)
                                                     ============       ===========
Weighted average number of shares                      22,820,663         9,716,250
                                                     ============       ===========

</TABLE>


                                      F-20

<PAGE>


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

NOTE 9. INCOME TAXES

The provision for income taxes is composed of the following:



                                                   Years ended
                                          December 31,     December 31,
                                              2004             2003
                                          ------------     ------------
Income tax benefit at statutory rates
    Federal income tax (35%)              $(2,443,000)       $(220,000)
    State income tax, net of federal
       benefit (5.74%)                       (401,000)         (36,000)
    Change in valuation allowance           2,958,000          142,000
                                          -----------        ---------
Income tax expense (benefit)              $   114,000        $(114,000)
                                          ===========        =========



For U.S. federal income tax return purposes, the Company has a net operating
loss carry forwards ("NOLs") of $7,626,500 which will expire between 2022 and
2024. However, such carry forwards are not available to offset federal
alternative taxable income. Internal Revenue Code Section 382 imposes
limitations on our ability to utilize net operating losses if we experience an
ownership change and for the NOLs 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 of California net operating losses were suspended from 2002 through
December 31, 2003. The time to utilize the losses from those years were extended
to expire with the 2004 losses. The State operating losses will expire between
2010 and 2014 if not utilized.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. As of December 31, the
significant components of the Company's deferred tax assets and liabilities are
a result of the temporary differences related to the items described as follows:



                                          December 31,     December 31,
                                                  2004             2003
                                          ------------     ------------
Deferred tax assets
  Net operating loss, federal             $(2,322,000)     $  (231,000)
  Net operating loss, state                  (387,000)         (38,000)
  Permanent differences                      (489,000)           6,000
  Property plant and equipment                 (7,000)               -
  Amortization and impairment
     of intangible assets                     (43,000)               -
                                          ------------     -----------
       Total deferred tax assets          $(3,248,000)     $  (263,000)
  Valuation allowance                       3,108,000          149,000
                                          ------------     -----------
                                          $  (140,000)     $  (114,000)
Deferred income tax liabilities
  Amortization and impairment of
     intangible assets                    $   140,000      $         -
                                          ------------     -----------
       Total deferred tax liabilities     $   140,000      $         -
                                          ------------     -----------

 Net deferred tax (asset) liability       $         -      $  (114,000)
                                          ============     ===========



A valuation allowance has been established to reserve the net deferred tax asset
since management does not believe it is more likely than not that they will be
realized.

                                      F-21

<PAGE>


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

NOTE 10. 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. Minimum
licensing payments due are:



2005                        $        400
2006                                   -
                            ------------
                            $        400



Through NEOS, 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 $55 to $7,800, with
expiration dates through February 2008.

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



2005                                       $    163,189
2006                                             97,934
2007                                             95,416
2008                                             15,578
                                           ------------

Total future minimum lease commitments     $    372,117
                                           ============



The Company is engaged in a non-cancelable 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.

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



2005                                       $     30,944
2006                                             31,926
2007                                             34,873
2008                                             36,837
2009                                             24,558
                                           ------------

Total future minimum lease commitments     $    159,138
                                           ============



In addition, the Company leases a furnished office space on a month-to-month
basis for $21,411 per month. GTL leases office space on a month-to-month basis
for $2,817 per month. The Company also leases office equipment on a monthly
basis at nominal amounts. Total lease costs for the years ended December 31,
2004 and 2003 were $362,796 and $121,537, respectively.

                                      F-22

<PAGE>


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

NOTE 10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

In November 2003, the Company entered into a Binding Letter of Intent with
Worldwide Business Services, Inc., dba Cardservice Worldwide ("WBSI") to acquire
the stock of WBSI. As part of the agreement, ICE agreed to pay certain expenses
of WBSI necessary to close the transaction. In May 2004, WBSI vacated the
transaction without repaying the Company for the expenses paid. The Company has
filed a lawsuit against WBSI and other entities to protect trade secrets and to
collect the monies paid for the expenses of WBSI. The Company also claims breach
of contract, fraud and deceit, violation of the Uniform Trade Secrets Act,
tortuous interference with prospective business advantage and other related
causes of action. Initial pleadings were filed, and WBSI has not yet responded.
No trial date has been set.

As of December 31, 2004, the Company has paid $312,678 for the expenses of WBSI
and has recorded this as an Other Receivable. The Company feels confident in the
collection of this receivable and does not have allowance against the
receivable.

NOTE 11. RELATED PARTY TRANSACTIONS

The former President of the Company is the controlling shareholder of
Cardservice Tri-County ("CST") and Worldwide Gift and Loyalty, Inc. ("WGL"),
which licenses gift and loyalty software used by the Company in its gift and
loyalty program. During 2003, the Company's former President was also a
controlling shareholder of GlobalTech Leasing ("GTL") prior to the acquisition
in December 2003. Transactions and balances related to CST, WGL and GTL (for
2003 only) are the following:



                                            Years ended
                                 December 31,     December 31,
 Account                            2004              2003
                                -------------    -------------

Revenues                        $     257,504    $     321,611
Cost of sales                   $     490,848    $     220,122
Other expenses                  $     165,943    $      46,006
Accounts receivable             $      79,314    $      32,252
Allowance for doubtful          $           -    $         757
    accounts
Accounts payable                $      17,409    $      61,769



The Company recorded an Officer Receivable of $3,372 and $44,967 as of December
31, 2004 and 2003, respectively. These balances were reimbursed to the Company
by the end of first quarter 2005.

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

                                      F-23

<PAGE>


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

NOTE 12. SUBSEQUENT EVENTS

The Company issued common stock and warrants to various entities in 2005:


<TABLE>
<CAPTION>



                             Common Shares Warrants
                                    Shares             Price              Shares       Exercise Price

<S>                                 <C>                   <C>        <C>               <C>
Relating to Equity Financing
  Commenced May 24, 2004            929,242               -             250,000        $     0.47
Relating to Equity Financing
  Commenced September 13, 2004            -               -             638,297        $     0.47
Relating to Equity Financing
  Commenced September 13, 2004            -               -             638,297        $     0.75
Relating to Equity Financing
  Commenced December 3, 2004              -               -           1,361,702        $     0.47
Relating to Equity Financing
  Commenced December 3, 2004              -               -           1,361,702        $     0.75
Relating to Equity Financing
  Commenced September 13, 2004
  and December 3, 2004
  for Placement Fees                      -               -           1,978,723        $     0.47

</TABLE>

In accordance with EITF 98-5, "Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratios",
and EITF 00-27, "Application of Issue No. 98-5 to Certain Convertible
Instrument" the Company determined that a beneficial conversion feature existed
at the commitment date for the subsequent issuances of convertible warrants. As
disclosed in the preferred shares Certificate of Designation (as filed with the
SEC) for both preferred shares equity financing in 2004, 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 of $304,016 for the September 2004 issuance and
$392,458 for the December 2004 issuance. The beneficial conversion features were
charged to Dividends Paid as a return of capital in February 2005 when the
additional warrants were issued.

In addition to the beneficial conversion features above, the Company paid
dividends in accordance with the provision of the Series A Preferred Stock in
the amount of $78,723 for the first quarter of 2005. This resulted in a total
Dividends Paid for the first quarter of 2005 of $775,197.

Due to the September and December 2004 preferred shares issuance, the Placement
Agent and Finder of the May 2004 common share issuance was entitled to further
compensation which was paid in the form of additional warrants issued in the
first quarter of 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", 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 Note 7.

In the first quarter of 2005, the Company successfully renegotiated its notes
payables associated with the NEOS acquisition to extend the terms to January 1,
2006 and June 30, 2006 as disclosed above in Note 6. As part of this
renegotiation, the Company paid $200,000 toward the note due January 1, 2006.

                                      F-24

<PAGE>


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

There have been no changes in, and no disagreements with, our company's public
accountants.

ITEM 8A. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures . An evaluation was conducted
under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures as of
December 31, 2004. Based on that evaluation, our principal executive officer and
principal financial officer have concluded that our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act")) were effective as of
such date to ensure that information required to be disclosed by us in reports
that we file or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in Securities and Exchange
Commission rules and forms.

Changes in internal control over financial reporting . There was no change in
our internal control over financial reporting during our fourth 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
------------------------------------------------------------------------

Jonathan Severn      33     Former Chairman of the Board, President and

                            Chief Financial Officer

William Lopshire     41     Chief Executive Officer, Secretary and
                            Director

Charles Salyer       51     Director and President of GlobalTech Leasing
                            subsidiary

Michael Fisher       40     Director

Hugh Wain Swapp      42     Chief Financial Officer and Director



The principal occupation and business experience during the last five years for
each of our directors and executive officers are as follows:

JONATHAN R. SEVERN, our former Chairman of the Board, President and Chief
Financial Officer. Mr. Severn resigned as an officer and director of the Company
effective March 14, 2005. Mr. Severn is a founder of both International Card
Establishment, Inc. and GlobalTech Leasing, Inc. In 1991, he formed Cardservice
Tri-Counties (Oxnard, CA), a credit card merchant acquiring business that he
built into one of the largest agent offices in the U.S. serving Cardservice
International Inc., a large privately held acquirer of Visa and MasterCard
merchant accounts in the country at that time. Cardservice International was
acquired by First Data Corporation in 2001. Mr. Severn was directly responsible
for Cardservice Tri-Counties' growth from start-up to approximately 20,000
merchant accounts and monthly processing revenues in excess of $10 million. In
1996, he founded Lease Technologies International to provide merchants with
lease financing for point-of-sale equipment. Lease Technologies International
was incorporated and its name changed to GlobalTech Leasing, Inc. in 2001.

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

                                       25

<PAGE>

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.

CHARLES W. SALYER, Director, also serves as President of the Company's
GlobalTech Leasing, Inc. subsidiary. Mr. Salyer joined GlobalTech Leasing, Inc.
in 2001, bringing over 27 years of management experience in the equipment
leasing industry; most recently as Vice President, Sales & Strategic Initiatives
for CIT Financial's Lease Finance Group, the largest leasing company in the
point-of-sale equipment market. Mr. Salyer began his management career in 1982
at Digital Equipment Corporation (Maynard, MA), where he rose to the position of
Director of Operations for that company's Customer Finance division. From 1990
to 1993, he served as a Director at Philip Morris Capital Corporation (White
Plains, NY), where he managed a customer and supplier finance division. He left
to accept a position as Vice President, Division Manager for Steelcase
Corporation (Grand Rapids, MI), where he launched a new customer finance
operation. In early 1998, Mr. Salyer became President and Chief Operating
Officer of Global Finance & Leasing, Inc. (Grandville, MI), a micro-ticket
point-of-sale leasing company. Although that company was losing market share at
the time, he restructured the operation and built sales from $8 million to
approximately $24 million in under two years. Global Finance & Leasing was
acquired in 2000 by CIT Financial, and Mr. Salyer accepted the above noted
position with their Lease Finance Group subsidiary. Mr. Salyer was graduated
from Northern Arizona University with a Bachelor of Science degree in 1975, and
earned a Master of Science degree in Public Administration from Northern Arizona
University in 1976.

MICHAEL S. FISHER, Director. Mr. Fisher has over 15 years of sales and
management experience in the electronic payment processing industry, including
involvement in a variety of technology development initiatives and international
sales programs. Mr. Fisher began working in the industry in 1987 as a Sales
Manager for Peripheral Resources, Inc. (Los Angeles, CA), a distributor of
point-of-sale equipment; and, rose to the position of President before leaving
in 1995. From 1995 to 1998, he was a Regional Sales Manager for Cardservice
International, Inc. (Moorpark, CA). While at Cardservice International he was
responsible for management and sales training of more than 30 ISOs and more than
doubled sales in a one-year period by establishing in excess of 18,000 new
merchant accounts. In 1998, Mr. Fisher joined E-Commerce Exchange, Inc. (Irvine,
CA), a provider of credit card processing services and e-commerce websites,
where he rose to the position of Executive Vice President. While at E-Commerce
Exchange sales increased from $8.8 million to $29.9 million in 18 months. Since
2001, he has been a General Partner at Acquiring Solutions (San Marino, CA), a
credit card processing services and credit card risk management and compliance
consulting company; and, since January 2002, Mr. Fisher was formally President
of WorldWide Gift & Loyalty, Inc. (Oxnard, CA), the company that he co-founded
that developed the smart-card based gift/incentive purchase card system licensed
by International Card Establishment, Inc. Mr. Fisher was graduated from Harvard
College in 1984 with a Bachelor of Arts degree; and, is fluent in Mandarin
Chinese. He is a member of several industry organizations, including the
Electronic Transaction Association (ETA), and the International Association of
Financial Crimes Investigators (IAFCI).

HUGH WAIN SWAPP, Chief Financial Officer, Director and President of NEOS
Merchant Solutions, Inc. Mr. Swapp became a director of our company upon the
closing of our acquisition of NEOS Merchant Solutions, Inc., effective as of
September 8, 2004. Mr. Swapp is the CEO and founder of Neos Merchant Solutions,
Inc. From 2002 to the present, he is primarily responsible for the day-to-day
operations of NEOS, and its sales distribution channels. From 1999 to 2002, Mr.
Swapp was the President of E-Commerce Processing (ECP), a leader in the private
label smart card industry. From 1993 to 1999, he was the National Vice President
of Sales for three years at Lynk Systems, where he opened 37 offices and built a
portfolio of more than 70,000 merchants generating $3.5 billion in sales volume.
From 1992 to 1993, he was the National Director of Sales at Deluxe Data. From
1991 to 1992, he developed and implemented a regional sales program for PMT
Services, and spent four years as a Regional Manager with Nabanco, from 1988 to
1991, where he was instrumental in taking that division from start-up to more
than a $3.0 billion portfolio over that period.

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

                                       26

<PAGE>


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. To our knowledge, the following persons have
failed to file, on a timely basis, the identified reports required by Section
16(a) of the Exchange Act during the most recent fiscal year:

o Form 3 filed by Charles Salyer on April 30, 2004; o Form 3 filed by Jonathan
Severn on April 30, 2004; o Form 3 filed by William Lopshire on April 30, 2004;
and o Form 4 filed by Jonathan Severn on April 30, 2004.

CODE OF ETHICS.

The Company has not currently adopted a Code of Ethics.

COMPENSATION OF DIRECTORS

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

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth compensation paid or awarded to all officers and
directors.



Name and
Principal Position               Year        Salary
--------------------------       ----       --------

William Lopshire,                2002       $  -0-
Chief Executive Officer,         2003        180,000
Secretary and Director(1)        2004        180,000

Jonathan Severn, Chairman        2002       $ 48,000
of the Board, President,         2003         48,000
Chief Financial Officer(2)       2004        180,000

Charles Salyer, Director,        2002       $136,500
President of GlobalTech          2003        130,000
Leasing, Inc.(3)                 2004        180,000

Hugh Wain Swapp, Director,       2002       $ 37,500
Chief Financial Officer          2003        150,000
President of NEOS Merchant       2004        160,000
Solutions, Inc.(4)
--------------------------



(1) During 2003 Mr. Lopshire accrued $120,000 of his stated salary.

(2) During fiscal years ended December 31, 2002 and December 31, 2003, Mr.
Severn accrued an aggregate of $96,000 of his salary as an officer of GlobalTech
Leasing, Inc.; Mr. Severn also received a car allowance from GlobalTech Leasing,
Inc. in the aggregate amount of $21,023 for the fiscal year ended December 31,
2004.

(3) During the fiscal year ended December 31, 2004 Mr. Salyer received: (i) a
car allowance in the amount of $9,750; and (ii) life insurance premiums in the
amount of $3,249. Mr Salyer also received a re-location allowance of $34,299.59
for the fiscal years ended December 31, 2002.

(4) During 2003 and 2004, Mr. Swapp deferred $63,000 and $10,000 of his stated
salaries respectively.

No officer or director received any compensation, options or other securities
under the Company's 2003 Stock Option Plan for the periods indicated.

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

                                       27

<PAGE>


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

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 April 15, 2005.



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

Common     Jonathan Severn           6,501,450       22.18%
           555 Airport Way
           Suite A
           Camarillo, CA 93010

Common     William Lopshire          1,600,000        5.46%
           555 Airport Way
           Suite A
           Camarillo, CA 93010

Common     Charles Salyer            2,250,000        7.68%
           555 Airport Way
           Suite A
           Camarillo, CA 93010

Common     Randy Simoneaux           2,224,793        7.59%
           555 Airport Way
           Suite A
           Camarillo, CA 93010



The total of our outstanding Common Shares as of April 15, 2005 are held by 93
shareholders of record (including Cede & Co. - "street" held securities).

(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 April 15, 2005.



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

Common     Jonathan Severn            6,501,450      22.18%
           555 Airport Way
           Suite A
           Camarillo, CA 93010

Common     Charles Salyer             2,250,000       7.68%
           555 Airport Way
           Suite A
           Camarillo, CA 93010



                                       28

<PAGE>


Common     William Lopshire           1,600,000       5.46%
           555 Airport Way
           Suite A
           Camarillo, CA 93010

Common     Michael Fisher               200,000         *
           555 Airport Way
           Suite A
           Camarillo, CA 93010

Common     Hugh Wain Swapp              826,922       2.82%
           555 Airport Way
           Suite A
           Camarillo, CA 93010

Common     All Officers and          11,378,372      38.82%
           Directors as a Group
           (Five [5] individuals)



* Less than 1%

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On October 1, 2002 International Card Establishment, Inc. entered into a
Merchant Sales Agreement with Cardservice Tri-Counties which is wholly owned by
Jonathan Severn, our former Chairman of the Board, President and Chief Financial
Officer. Pursuant to this Merchant Sales Agreement, we recognized approximately
$240,000 and $95,000 in revenues for merchant processing services for the fiscal
years ended December 31, 2003 and December 31, 2004, respectively.

Prior to our acquisition of GlobalTech Leasing, Inc. on December 29, 2003, we
utilized GlobalTech Leasing, Inc. for micro ticket POS equipment financing.
GlobalTech Leasing, Inc., during this period, was controlled by Jonathan Severn,
our former Chairman of the Board, President and Chief Financial Officer and we
recognized approximately $ $81,611 in revenues for POS equipment sales for the
fiscal years ended December 31, 2003. Pursuant to a Plan and Agreement of
Reorganization dated December 15, 2003 we acquired GlobalTech Leasing in
exchange for 5,000,000 shares of our Common Stock. Mr. Severn received 2,505,000
of these shares as a shareholder of GlobalTech Leasing, Inc.

Except as stated above, there have been no related party transactions, or any
other transactions or relationships required to be disclosed pursuant to Item
404 of Regulation S-B.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(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).

           OPINION REGARDING LEGALITY

5.1        Sichenzia Ross Friedman Ference LLP Opinion and Consent
           (filed herewith).



                                       29

<PAGE>


                               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).

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).

23.1        Consent of Independent Auditor

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



                                       30

<PAGE>


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.



(b) Reports on Form 8-K

The Company filed six (6) reports on form 8-K during the year ended December 31,
2004. The following reports, with exhibits, on Form 8-K are incorporated herein
by reference:

1. Form 8-K/A filed on February 4, 2004 relating to the acquisition of
GlobalTech Leasing, Inc., pursuant to a Plan and Agreement of Reorganization
dated December 15, 2003.

2. Form 8-K filed on June 10, 2004 relating to the Subscription Agreement the
Company entered into pursuant to which it sold an aggregate of 4,415,076 shares
of common stock at $0.63 per share for an aggregate purchase price of
$2,781,500.

3. Form 8-K filed on September 14, 2004 relating to the acquisition of NEOS
Merchant Solutions, Inc., pursuant to a Plan and Agreement of Reorganization
effective as of September 8, 2004.

4. Form 8-K filed on September 17, 2004 relating to the Subscription Agreement
the Company entered into pursuant to which it sold an aggregate of (i) 30,000
shares of its Series A Convertible Preferred Stock and (ii) Warrants to acquire
not to exceed 1,877,346 shares of common stock.

5. Form 8-K/A filed on October 29, 2004 relating to the acquisition of NEOS
Merchant Solutions, Inc., pursuant to a Plan and Agreement of Reorganization
effective as of September 8, 2004.

6. Form 8-K filed on December 10, 2004 relating to the Subscription Agreement
the Company entered into pursuant to which it sold an aggregate of (i) 32,000
shares of the Company's Series A Convertible Preferred Stock and (ii) 8,010,012
warrants to purchase shares of the Company's common stock.

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 $0 and
$25,000, respectively, for the years ended December 31, 2004 and December 31,
2003.

AUDIT RELATED FEES


The Company incurred an aggregate of $18,000 for audited related fees and
services for the fiscal year ended December 31, 2004.


ALL OTHER FEES

There was no tax preparation fees billed for the fiscal year ended December 31,
2004.

                                       31

<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: NOVEMBER 22, 2005     INTERNATIONAL CARD ESTABLISHMENT, INC.


                           BY: /S/ WILLIAM LOPSHIRE
                               ---------------------------
                                   WILLIAM LOPSHIRE
                                   CHIEF EXECUTIVE OFFICER


                           BY: /S/ HUGH WAIN SWAPP
                               ---------------------------
                                   HUGH WAIN SWAPP
                                   CHIEF FINANCIAL OFFICER



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





     SIGNATURE                        TITLE                       DATE



/S/ CHARLES SALYER        DIRECTOR                            NOVEMBER 22, 2005
---------------------
    CHARLES SALYER


/S/ MICHAEL FISHER        DIRECTOR                            NOVEMBER 22, 2005
---------------------
    MICHAEL FISHER



                                       32