UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-KSB





x
            
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
      For the fiscal year ended
      September 30, 2008.





o
            
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934.





Commission
file number: 000-25417




ICC
Worldwide, Inc.


(Exact
name of small business issuer as specified in its charter)





Delaware
              
              11-3571993(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Identification No.)





3334 E. Coast
      Hwy #424, Corona Del Mar, CA
              
              92625(Address
      of principal executive offices)
              
              (Zip
      Code)





(949)
200-7569


(Issuer’s
telephone number, including area code)





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


Common
Stock, par value $0.0001 per share


(Title of
Class)





Indicate
by check market if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act Yes x No  ̈.





Check
whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes xNo  ̈





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB x.





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





State
issuer’s revenue for its most recent fiscal year: $255,600.





The
aggregate market value of the Company’s shares of voting and non-voting stock
held by non-affiliates of the Company at January 9, 2009 was $210,800. Such
value was computed by reference to the price of the Company’s shares of common
stock of $0.0015 per share on that date. The Company’s shares of common stock
are quoted in the Pink Sheets under the symbol “ICCW.” No active trading market
for the Company’s common stock has developed and management believes that the
bid and asked prices of the shares may not accurately reflect the value of the
Company. For purposes of the computation we consider all directors and holders
of 10% or more of our common stock to be affiliates. Therefore, the number of
shares of our common stock held by non-affiliates as of January 9, 2009 was
140,502,778.




The
number of shares outstanding of the issuer’s common equity as of January 8, 2009
was 180,424,045.





Documents
incorporated by reference:


None





Transitional
Small Business Disclosure Format:        ̈ Yes x No









TABLE
OF CONTENTS




PagePART
      IITEM
      1.
              
              Description
      Of Business
              
              4ITEM
      2.
              
              Description
      Of Properties
              
              12ITEM
      3.
              
              Legal
      Proceedings
              
              12ITEM
      4.
              
              Submission
      Of Matters To A Vote Of Security Holders
              
              12PART
      IIITEM
      5.
              
              Market
      For Common Equity And Related Stockholder Matters
              
              13ITEM
      6.
              
              Management’s
      Discussion And Analysis And Results Of Operations
              
              15ITEM
      7.
              
              Financial
      Statements
              
              20ITEM
      8.
              
              Changes
      In And Disagreements With Accountants On Accounting And Financial
      Disclosure
              
              22ITEM 8A(T).
              
              Controls
      And Procedures
              
              22ITEM 8B.
              
              Other
      Information
              
              23PART
      IIIITEM
      9.
              
              Directors,
      Executive Officers, Promoters, Control Person And Corporate Governance;
      Compliance With Section 16(A) Of The Exchange Act
              
              24ITEM
      10.
              
              Executive
      Compensation
              
              26ITEM
      11.
              
              Security
      Ownership Of Certain Beneficial Owners And Management And Related
      Stockholder Matters
              
              281TEM
      12.
              
              Certain
      Relationships And Related Transactions, And Director
      Independence
              
              30ITEM
      13.
              
              Exhibits
              
              30ITEM
      14.
              
              Principal
      Accountant Fees And Services
              
              33Signatures
              
              35Financial
      Statements
              
              F-1





- 2
-




SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS





The
following discussion should be read in conjunction with the financial statements
and related notes contained elsewhere in this form 10-KSB. Certain statements
made in this discussion are "forward-looking
statements"  Forward-looking statements can be identified by
terminology such as "may", "will", "should", "expects", "intends",
"anticipates", "believes", "estimates", "predicts", or "continue" or the
negative of these terms or other comparable terminology and include, without
limitation, statements below regarding: the Company's intended business plans;
expectations as to continuing in business; and belief as to the sufficiency of
cash reserves. Because forward-looking statements involve risks and
uncertainties, there are important factors that could cause actual results to
differ materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to, the Company's
inability to continue operations; the Company's inability to obtain necessary
financing; the effect of a going concern statement by the Company's auditors;
the competitive environment generally and in the Company's specific market
areas; changes in technology; the availability of and the terms of financing;
inflation; changes in costs and availability of goods and services; economic
conditions in general and in the Company's specific market areas; demographic
changes; changes in federal, state, provincial, and/or local government law and
regulations affecting the technology; changes in operating strategy or
development plans; and the ability to attract and retain qualified personnel
experienced in retail operations. Although the Company believes that
expectations reflected in the forward-looking statements are reasonable, it
cannot guarantee future results, performance or achievements. Moreover, neither
the Company nor any other person assumes responsibility for the accuracy and
completeness of these forward-looking statements. The Company is under no duty
to update any forward-looking statements after the date of this report to
conform such statements to actual results.





ADDITIONAL
INFORMATION





We are
subject to the information and periodic reporting requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and in accordance with the
Exchange Act, we file annual, quarterly and special reports, and other
information with the Securities and Exchange Commission (the “SEC”). These
periodic reports and other information are available for inspection and copying
at the regional offices, public reference facilities and website of the SEC
referred to above. The SEC maintains a web site that contains reports, proxy and
information statements, and other information regarding registrants that file
electronically with the SEC at www.sec.gov.  These
reports are also accessible at the Company’s web site www.iccww.com.





Unless
the context otherwise requires, the terms, “Company,” “we,” “us,” and “our” as
used throughout this Annual Report refer to ICC Worldwide, Inc., a Delaware
corporation, and our wholly-owned subsidiary, ICC Italy, Srl., our Italian
company.





- 3
-





PART
I





ITEM
1.  DESCRIPTION OF BUSINESS





History





ICC
Worldwide, Inc. (“we”, “us”, “the Company”, or “ICC”) was incorporated on March
24, 1999 as a Delaware corporation named Acropolis Acquisition Corporation. We
changed our name to Torbay Holdings, Inc. on July 14, 1999. On October 26, 1999,
Torbay Acquisition Corporation (“TAC”), a reporting company under the Exchange
Act, merged into us. In the merger we issued our common stock to the former
stockholders of TAC and our common stock automatically became registered under
the Exchange Act as a result of such transaction.  In November 2007,
we changed our name to ICC Worldwide, Inc. to better reflect our new business
model.





Through
June 2007, the principal business of our Company was the development and sale of
a computer mouse device and related software. On June 29, 2007, we transferred
to Mr. Thomas Large (a former officer and director of our Company), 100% of the
capital stock of Designer Appliances, Inc. and all other assets and liabilities
of our Company relating to our Company’s former computer mouse and software
business, including all intellectual property and physical materials, all
hardware and software and all rights pertaining thereto.  The transfer
was done in consideration of:  (1) the payment to our Company in
perpetuity of a 1% royalty on sales by Designer Appliances, Inc., (2) the return
by Mr. Large to our Company of 1,000,000 shares of our common stock and, (3) the
grant to our Company of a 5% interest in the disposal value of Designer
Appliances, Inc. The results of operations of the computer mouse and software
business have been presented as discontinued operations in these financial
statements.





On June
29, 2007, we sold 7,500,000 shares of a newly designated Series B preferred
stock and 35,000,000 shares of our common stock to The Adamas Fund, LLLP
(formerly The Black Diamond Fund, LLLP), a Minnesota Limited Liability Limited
Partnership (“Adamas”), for $1,778,000. The purpose of the sale of stock was to
raise capital for use in conjunction with an acquisition strategy which allows
us to develop our Company by acquiring businesses with a history of operating
revenues in markets that provide room for growth.





As a
result of our investigations, we have focused on a strategy which offers certain
goods and services to the ethnic immigrant worker communities in
Italy.  These goods and services include products in the broad areas
of:  (1) telecommunications, (2) entertainment, (3) ethnic food
products, and (4) financial services.  They are delivered by our
Company on a wholesale basis through a large, well established network of
independently-owned retail stores throughout Italy.  In addition to
the wholesale business activities, the Company also operates a small number of
its own retail stores in Italy which serve customers in this
market.  In September, 2007, utilizing ICC Italy, Srl., (“ICC Italy”)
a wholly-owned subsidiary incorporated in Italy, we began acquiring assets and
opening stores in several of the provinces in Northern Italy.





We
continued to refine this immigrant community focused strategy throughout the
fiscal year ended September 30, 2008 and beyond.  In March 2008, we
eliminated the ethic food products and entertainment components of our business
in order to focus on telecommunications aspects of the market.





On
October 31, 2008, we sold the retail store component of the business for
$249,700 to focus exclusively on the wholesale telecommunications aspects of the
market.





Our major
wholesale products include VoIP (Voice over the Internet Protocol) services to
retail telephone call shop operators, international calling cards, and cell
phone recharge cards.  The common characteristic of the wholesale
products is that they are prepaid by the wholesale account, require little
physical inventory investment, and are deliverable by ICC Italy to the call
shops through the Internet.  This business model is highly scalable
and makes possible the expansion of the business beyond Italy into all of Europe
on an extremely cost effective basis.




- 4
-




Business
Rational





Of
Italy’s 60 million inhabitants, the immigrant worker population is 3.5
million.  Throughout Western Europe, native populations are rapidly
aging and new births are declining.  Italy’s native population growth
rate is now zero and will soon turn negative.  By contrast, the
population of immigrant foreign workers in Italy is growing
rapidly.  And unlike the U.S., most Italian immigrant workers are
legal residents in the country and possess measurable disposable income which is
available to spend on ICC’s products & services.  This labor force
has become critical to the health of Italy’s economy.





The
initial plan for ICC Italy’s distribution was to develop a small network of
company-owned “anchor” stores.  In franchise-like fashion, each anchor
store was owned by ICC Italy, but operated and managed by a local
ethnic-community businessman, already well established in his respective
community.





As we
gained experience with the local operations we found that the telecommunications
aspect of the ethnic-community was both broad and underserved.  We
thus refined our business model to focus solely on that niche.  By
delivering our services through the Internet, we found we did not need the
company owned retail store component. Therefore, as stated above, we sold the
retail stores.





The focus
of ICC Italy’s operations in Italy is to build a wholesale telecommunication
business serving ethnic call centers and other local ethnic telecommunication
communications needs including international calling cards and cell phone
recharge services.





Ethnic
Worker Demographics





The
Italian immigrant worker population is 3.5 million and growing
rapidly.  These workers are principally from the countries of: India,
Pakistan, Morocco, Romania, Nigeria, Senegal, Philippines, Albania, Moldova, and
the Ukraine.  They live and work in ethnically-clustered areas in many
of the cities and towns of Italy.  The housing is (by U.S. standards)
high density with smaller multi-story apartment buildings in most cities and
villages.





The
immigrant population is 70% male, virtually all of which are active in the
workforce.  Of the females (30%), roughly one half are employed as
well.  Most of the immigrant workers send 20-30 percent of their
earnings home.  And in contrast to the U.S. immigrant worker
population, the majority of Italian immigrant workers have legal status, pay
taxes, and are long term, essentially permanent residents.





Immigrant
Worker Earnings





Individual
monthly earnings typically range in the $1,800-$3,000 after
taxes.  The mandated Italian minimum wage is approximately $1,800 per
month after taxes.





For the
typical immigrant worker this sum provides considerable discretionary
income.  Many of the individuals live together in clustered housing
(3-4 men in a small apartment).  In some cases room and board is
provided by the employer.  Per-person rent and food necessities
generally aggregate to less than $750 per month.  Healthcare is
provided by the Italian government.  And these groups live and work in
close knit communities where they can share automobiles and other
necessities.  Consequently, their living costs are nominal and they
have reasonable amounts of disposable income. They also tend to operate on a
cash basis with very little use of regular bank accounts or credit
cards.





A
material portion of this income is sent home.  However, the balance is
available to spend on communication with families, entertainment, clothing,
liquor and other discretionary incidentals.




- 5
-




Italian
Stores





In Italy,
there are few large chain retail stores.  Retail shops are typically
owned and operated by families.  Italian labor laws and local
ordinances tend to perpetuate this model.  Consequently, very few U.S.
style “big box” stores (i.e. Wal-Mart, Costco, etc.) exist in
Italy.  Normal retail business practices such as advertising,
inventory control, in-store merchandising techniques, cash management, and sales
analysis are limited.  The owner/operator and one or two members of
his family are the business’ “employees.”





The
ethnic workers shop in small neighborhood stores which are operated by other
immigrants.  Not surprisingly, Indians shop at local stores operated
by Indians; Pakistanis, Moroccans (and others) do the same.  In the
immigrant areas it is therefore not unusual to see several phone center stores
(each serving a separate ethnic group) on a single block.  In addition
to communication services and products, these local stores sell an offering of
ethnic-oriented clothes, books/magazines, CDs (music and video), beer &
liquor, and certain types of ethnic food.





Few
immigrants have telephones in their residences.  Many utilize prepaid
mobile telephones; but these are expensive and traditionally have not been
suitable for international calls.  A well established Italian network
of roughly 2,500 local telephone center stores serve the communication needs of
this immigrant community





Typically,
a telephone center store will have 4-8 phone booth-type “cabinets” and cater to
the individual neighborhood’s ethnic population of immigrant
workers.  Nearly all the telephone stores use a simple system which
monitors/displays the number called, the duration of the call, and the
charges.  These systems also employ a least-cost routing
scheme.  However, they are typically conventional analog-based
telephones and not the cheaper to operate and more flexible digital based
telephone systems.





Competition





The
wholesale segment of the VoIP industry remains highly fragmented with almost no
companies with any brand loyalty or significant national presence. Individual
client stores may be sold directly but it is also common that individual client
stores in a local community will aggregate under a reseller who represents all
the stores to a particular wholesaler.  To be successful, we must be
able to offer on-going quality telecommunication services with a margin that
will be more attractive to the client stores and resellers than the current
arrangement with the local telephone company or other service
providers.





Government
Regulation





We
believe that we are in compliance in all material respects with all such laws
and regulations and have obtained all material licenses that are required for
the operation of our business. We are not aware of any environmental regulations
that have or that we believe will have a material adverse effect on our
operations.





Intellectual
Property





There is
little intellectual property involved in the operation of our
business.  Although some of our operations will be branded under the
ICC logo, it is not clear that this will have a material impact on our business
as our products and services are sold on the wholesale level for the most part
and often rely on the extensive branding efforts of the principal suppliers such
as Telecom Italia, Vodafone, or WIND.





Employees





As of
September 30, 2008 our Company had two officers in the U.S. plus one officer and
10 full-time and one part-time employee in our retail operations in
Italy.  None of our employees were represented by a labor union and
our relations with our employees were good.





As of
November 1, 2008, following the sale of the retail stores in October, 2008, we
have two officers in the U.S. and one officer, one fulltime, and three part-time
employees in the wholesale operation in Italy.




- 6
-




RISK
FACTORS





Any
investment in our common stock involves a high degree of risk. Investors should
carefully consider the risks described below and all of the information
contained in this report before deciding whether to purchase our common stock.
Our business, financial condition or results of operations could be materially
adversely affected by these risks if any of them actually occur. Some of these
factors have affected our financial condition and operating results in the past
or are currently affecting us. This report also contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including the risks faced by us described below and
elsewhere in this report.





RISKS
RELATED TO OUR OPERATIONS





The
Company does not have an installed base of telecommunications users on which to
base the wholesale operation





The
success of the wholesale operation depends directly on the number of stores
using ICC Italy’s services.  Each prospective client store must be
contacted individually to install a router for the VoIP services.





We
will target our operations toward ethnic immigrant communities





We are
seeking to attract minorities in specific areas.  This involves hiring
employees and subcontractors who are sensitive toward various ethnic preferences
as to calling destination and pricing preferences.





Because
our Italian operations account for all our net revenue, we are susceptible to
adverse trends, economic, and ethnic cultural conditions in Italy.





Italy has
only been a democratic republic since 1946.  The current constitution
was promulgated in 1948.  A series of referendums in 1993
substantially modified the executive and legislative braches of the
government.  Nonetheless, corruption is said to be still widespread
and the Italian administration is often perceived as inefficient and
expensive.  Personal relationships are important for successful
business negotiations, but generally can take a long time to
develop.  In Italian business culture, there exists a great respect
for authority, power, and age which is compounded by great loyalty to family and
ethnic background.





Our
growth through wholesaling may not occur as rapidly as we currently anticipate
and may be subject to additional risks related to our lack of control over the
quality and timing of our customers’ support.





Acceptance
by our customers may take longer than expected and, even then, may not reach the
levels envisioned in our business plans.





Our
products and services are not proprietary, so competitors may be able to
duplicate them, which could harm our competitive position.





None of
our products or services is proprietary or protected by trademarks or patents.
Therefore, it may be difficult for us to prevent competitors from copying our
business model.





We
will likely need to raise significant additional capital in order to continue to
grow our business, which subjects us to the risks that we may be unable to
maintain or grow our business as planned or that our shareholders may be subject
to substantial additional dilution.





We will
likely need to raise additional capital in the future to fund the continued
growth and expansion of our business. We may also require additional capital to
respond to competitive pressures, and to acquire necessary technologies. We do
not know if we will be able to raise additional financing or financing on terms
favorable to us. If adequate funds are not available or are not available on
acceptable terms, our ability to fund our operations, develop and expand our
business or otherwise respond to competitive pressures would be significantly
impaired. In such a case, our stock price would likely be materially and
adversely impacted.




- 7
-




In
addition, if we raise additional funds through the issuance of equity or
convertible or exchangeable securities, the percentage ownership of our existing
shareholders will be reduced. These newly issued securities may have rights,
preferences and privileges senior to those of existing
shareholders.





Future
growth may make it difficult to effectively allocate our resources and manage
our business.





As we
continue to develop, we will need to allocate our resources effectively. Our
growth has and will continue to increase our operating complexity and the level
of responsibility for new and existing management. Our anticipated growth could
place a strain on our management, financial and other resources. We cannot
assure you that we will be able to manage any future growth effectively. Any
failure to manage our growth effectively could have an adverse effect on our
business, financial condition and results of operations. Our ability to compete
effectively and to manage our recent and future growth effectively will depend
on our ability to implement and improve financial and management information
systems on a timely basis and to effect changes in our business, such as
implementing internal controls to handle the increased size of our operations
and hiring, training, developing and managing an increasing number of
experienced management-level and other employees. Unexpected difficulties during
expansion, the failure to attract and retain qualified employees or our
inability to respond effectively to recent growth or plan for future growth
could adversely affect our ability to implement our business strategy or our
results of operations.





We
depend on key members of our management and will need to add and retain
additional management and other personnel in order to effectively compete in our
industry.





The
success of our business to date has been, and our continuing success will
depend, to a large degree on the continued services of our executive officers,
especially our Chief Executive Officer, Richard Lauer, and Paul Gheorghiu,
President of European Operations, and other key personnel, particularly in
Italy. If we lose the services of any of these integral personnel and fail to
manage a smooth transition to new personnel, our business would suffer. We do
not carry key person life insurance on our executive officers at this
point.





The
success of our business also depends on our ability to attract and retain highly
motivated, well-qualified management and other personnel in Italy, including
technical personnel and retail employees. We face significant competition in the
recruitment of qualified employees and there can be no assurance that we will be
able to retain our existing personnel or attract additional qualified employees.
The loss of key personnel or the inability to hire and retain additional
qualified management and other personnel in the future could have a material
adverse effect on our business, financial condition and results of
operation.





RISKS
RELATED TO OUR INDUSTRY





We
face the risk of fluctuations in the cost, availability and quality of the
underlying Internet service providers all of which could have an adverse effect
on our profitability.





As a
technology based firm, we are directly subject to technical issues and the
problems of the Internet and telecommunications industry including upstream and
downstream equipment failures, local and national government regulations and
restrictions, and changing and emerging technology issues.  Our
services are also predicated on the widespread availability of high speed, high
capacity broadband Internet services.





RISKS
RELATED TO OUR CAPITAL STRUCTURE





There
is no assurance of an established public trading market, the lack of which would
adversely affect the ability of investors to sell their securities in the public
market.





Our
common stock was quoted on the Over-the Counter Bulletin Board (“OTCBB”) through
November 20, 2007.  At that time, trading on the stock was changed to
the Pink Sheets.  The change in trading exchange was pursuant to NASD
Rule 6530(e) as our Company had been delinquent in its reporting obligations
under the Securities Exchange Act of 1934 three times during the past 24
months.  As a result, the Company was no longer eligible for trading
on the Over-the-Counter Bulletin Board (the “OTCBB”) for a period of 12 months
beginning November 29, 2007.




- 8
-




We were
late filing our 10-QSB for the period ended September 30,
2007.  During the past 24 months our Company has previously been
delinquent in making timely filings with the Securities and Exchange Commission
(the “SEC”) for the Company’s Annual Reports on Form 10-KSB for the years ended
December 31, 2006 and 2005, respectively.





The
Company has timely filed all its reports and intends to apply for listing on the
OTCBB for relisting in early 2009.





Although
our common stock is quoted on the Pink Sheets, a regular trading market for the
securities may not be sustained in the future. Quotes for stocks listed on the
Pink Sheets are not listed in the financial sections of newspapers and
newspapers generally have very little coverage of stocks listed solely on the
Pink Sheets. Accordingly, prices for and coverage of securities traded solely on
the Pink Sheets may be difficult to obtain. In addition, stock traded solely on
the Pink Sheets tend to have a limited number of market makers and a larger
spread between the bid and ask prices than those listed on the NYSE, AMEX or
NASDAQ exchanges, or the OTCBB. All of these factors may cause holders of our
common stock to be unable to resell their securities at or near their original
offering price or at any price.





Market
prices for our common stock will be influenced by a number of factors,
including:





·
            changes
      in interest rates;·
            competitive
      developments,·
            variations
      in quarterly operating results;·
            changes
      in financial estimates by securities analysts if any;·
            the
      depth and liquidity of the market for our common stock;·
            general
      economic and other US, Italian, and international
    conditions.





Our
principal shareholders have significant influence over our company and their
interests may differ from the interests of our other stockholders.





Adamas
possesses significant influence over the election of the Board of Directors and
to the approval of significant corporate transactions. Such share ownership and
control may also have the effect of delaying or preventing a future change in
control, impeding a merger, consolidation, takeover or other business
combination or discouraging a potential acquirer from making a tender offer or
otherwise attempting to obtain control of our company. The interests of these
principal shareholders may differ from the interests of our other
shareholders.





We
have failed to maintain effective internal controls over financial reporting,
the price of our common stock may be adversely affected.





Our
internal controls over financial reporting have weaknesses and conditions that
need to be addressed, the disclosure of which may have an adverse impact on the
price of our common stock. We are required to establish and maintain appropriate
internal controls over financial reporting. Failure to establish those controls,
or any failure of those controls once established, could adversely impact our
public disclosures regarding our business, financial condition or results of
operations. In addition, management’s assessment of internal controls over
financial reporting identified weaknesses and conditions that need to be
addressed in our internal controls over financial reporting or other matters
that may raise concerns for investors. Any actual or perceived weaknesses and
conditions that need to be addressed in our internal control over financial
reporting, disclosure of management’s assessment of our internal controls over
financial reporting or disclosure of our public accounting firm’s attestation to
or report on management’s assessment of our internal controls over financial
reporting may have an adverse impact on the price of our common
stock.




- 9
-




Compliance
with changing regulation of corporate governance and public disclosure will
result in additional expenses.





Changing
laws, regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC
regulations, have created uncertainty for public companies and significantly
increased the costs and risks associated with accessing the United States public
markets and related public reporting obligations. Our management team will need
to invest significant management time and financial resources to comply with
both existing and evolving standards for public companies, which will lead to
increased general and administrative expenses and a diversion of management time
and attention from revenue generating activities to compliance
activities.





Standards
for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 are uncertain,
and if we fail to comply in a timely manner, our business could be harmed and
our stock price could decline.





Rules
adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002
require annual assessment of our internal control over financial reporting, and
attestation of this assessment by our independent registered public accountants.
The SEC extended the compliance dates for non-accelerated filers, as defined by
the SEC.  Accordingly, we believe that the management assessment
requirement will first apply to this annual report for our fiscal year ending
September 30, 2008 and the attestation requirement by our independent registered
public accountants will first apply to our fiscal year ending September 30,
2009. The standards that must be met for management to assess the internal
control over financial reporting as effective are new and complex, and require
significant documentation, testing and possible remediation to meet the detailed
standards. We may encounter problems or delays in completing activities
necessary to make an assessment of our internal control over financial
reporting. In addition, the attestation process by our independent registered
public accountants is new and we may encounter problems or delays in completing
the implementation of any requested improvements and receiving an attestation of
our assessment by our independent registered public accountants. If we cannot
assess our internal control over financial reporting as effective, or our
independent registered public accountants are unable to provide an unqualified
attestation report on such assessment, investor confidence and share value may
be negatively impacted.





Our
common stock is considered a “penny stock,” and is thereby subject to additional
sale and trading regulations that may make it more difficult to
sell.





Our
common stock is considered to be a “penny stock” because it does not qualify for
one of the exemptions from the definition of “penny stock” under Section 3a51-1
of the Exchange Act. Our common stock may be a “penny stock” if it meets one or
more of the following conditions (i) the stock trades at a price less than $5.00
per share; (ii) it is NOT traded on a “recognized” national exchange; (iii) it
is not quoted on the NASDAQ Capital Market, or even if so, has a price less than
$5.00 per share; or (iv) is issued by a company that has been in business less
than three years with net tangible assets less than $5.0 million.





The
principal result or effect of being designated a “penny stock” is that
securities broker-dealers participating in sales of our common stock will be
subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9
promulgated under the Exchange Act. For example, Rule 15g-2 requires
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document at least two business days before
effecting any transaction in a penny stock for the investor’s account. Moreover,
Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any
investor for transactions in such stocks before selling any penny stock to that
investor. This procedure requires the broker-dealer to (i) obtain from the
investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on that
information, that transactions in penny stocks are suitable for the investor and
that the investor has sufficient knowledge and experience as to be reasonably
capable of evaluating the risks of penny stock transactions; (iii) provide the
investor with a written statement setting forth the basis on which the
broker-dealer made the determination in (ii) above; and (iv) receive a signed
and dated copy of such statement from the investor, confirming that it
accurately reflects the investor’s financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult and time consuming for holders of our common stock to resell their
shares to third parties or to otherwise dispose of them in the market or
otherwise.




- 10
-




We
do not foresee paying cash dividends in the foreseeable future.





We
currently intend to retain any future earnings for funding growth. We do not
anticipate paying any dividends in the foreseeable future. As a result, you
should not rely on an investment in our securities if you require dividend
income. Capital appreciation, if any, of our shares may be your sole source of
gain for the foreseeable future. Moreover, you may not be able to resell your
shares in our company at or above the price you paid for them.





Shares
eligible for future sale may adversely affect the market price of our common
stock, as the future sale of a substantial amount of outstanding stock in the
public marketplace could reduce the price of our common stock.





The table
in Item 11 of this report shows the amount of stock owned by Adamas and others
all of which may be eligible to sell all or some of our shares of common stock
by means of ordinary brokerage transactions in the open market pursuant to Rule
144, promulgated under the Securities Act (“Rule 144”), subject to certain
limitations.





In
general, pursuant to Rule 144, a stockholder who is not an affiliate of the
Company and has satisfied a six month holding period may sell all of such stock
without limitations. Stockholders who are affiliates of our Company , under
certain circumstances, may sell within any three-month period a number of shares
of common stock which does not exceed the greater of 1% of the then outstanding
shares of common stock or the average weekly trading volume of the class during
the four calendar weeks prior to such sale.  Any substantial sale of
common stock pursuant to any resale prospectus or Rule 144 may have an adverse
effect on the market price of our common stock by creating an excessive
supply.





Due
to put redemption options related to the Series C preferred stock, we may not be
able to reinvest a significant portion of our cash in our business.





As part
of the various amendments to the original June 29, 2007 stock purchase agreement
under which Adamas purchased a total of 39,921,267 shares of common stock and a
total of 8,554,552 shares of Series C preferred stock, the Company is required
to set aside to redeem the outstanding shares of Series C preferred stock at $1
per preferred stock share, 10% of its positive net income before income taxes
above $50,000 in the third and fourth calendar quarters of 2008 and the first
and second calendar quarters of 2009. The percentage of positive net income
before income taxes above $50,000 that is required to be set aside increases to
20%, 25%, and 30% for the third and fourth calendar quarters of 2009 and the
first and second calendar quarters of 2010; the third and fourth calendar
quarters of 2010 and the first and second calendar quarters of 2011; and the
third and fourth calendar quarters of 2011 and the first and second calendar
quarters of 2012, respectively.  Adamas must notify the Company during
each quarter if it elects to exercise its option for that quarter
only.  Payments are due to Adamas within 10 days following the filing
of the Company’s 10-QSB or 10-KSB.





As part
of the various amendments to the original December 3, 2007 stock purchase
agreement under which the Company sold 4,921,267 shares of its common stock and
1,054,552 shares of its Series C preferred stock to The Melanie S. Altholtz
Irrevocable Trust (the “Trust”), the Company gave  Adamas the option
to require the Company to purchase the Series C preferred stock on a quarterly
basis starting in the third calendar quarter of 2008 using 3% of the Company’s
positive net income before tax exceeding $50,000 as reported in the Company’s
quarterly and annual SEC filings. The Trust must notify the Company during each
quarter if it elects to exercise its option for that quarter
only.  Payments are due to the trust within 10 days following the
filing of the Company’s 10-QSB or 10-KSB.




- 11
-




ITEM
2.  DESCRIPTION OF PROPERTIES





As of
September 30, 2008, we had four retail stores and a corporate office for ICC
Italy.  The store’s ranged in size from 461 to 1,536 square feet with
rents ranging from $2,025 to $2,100 per month.  The leases were to
expire in 2010 to 2013.  All leases have a 6 year renewal option. Our
2,765 square foot headquarters in Mantova, Italy, rents for approximately $5,500
per month.





On
October 31, 2008 following the end of the fiscal year on September 30, 2008, the
Company sold all its retail stores and relocated the corporate office in Mantova
to a 819 square foot office apartment, which rents for $1,125 per month on a
month to month basis.





Our U.S.
facilities are currently provided at no charge by the President of the
Company.





ITEM
3.  LEGAL PROCEEDINGS





We are
not aware of any pending or threatened legal proceedings involving our Company
or our assets.





ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.




- 12
-




PART
II





ITEM
5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES





Our
common stock was authorized to trade on December 23, 2000 on the
over-the-counter market with quotations available on the OTCBB under the symbol
"TRBY."  Trading began on January 3, 2001.  On November 29,
2007, trading in our stock was transferred from the OTCBB to the Pink Sheets by
virtue of the Company’s being late on its filings with the SEC three times in
the most recent 24 months. Our stock symbol was changed to “ICCW” on January 4,
2008 reflecting our new name.





The
following table sets forth the range of high and low bid quotations of our
common stock for the periods indicated. The prices represent inter-dealer
quotations, which do not include retail markups, markdowns or commissions, and
may not represent actual transactions.





Year
ended September 30, 2008:





Low
                  
                  
                  HighFirst
      Quarter
                  
                  $
                  0.001
                  
                  
                  $
                  0.016Second
      Quarter
                  
                  $
                  0.001
                  
                  
                  $
                  0.008Third
      Quarter
                  
                  $
                  0.001
                  
                  
                  $
                  0.010Fourth
      Quarter
                  
                  $
                  0.002
                  
                  
                  $
                  0.007





Nine
months ended September 30, 2007:





Low
                  
                  
                  HighFirst
      Quarter
                  
                  $
                  0.007
                  
                  
                  $
                  0.010Second
      Quarter
                  
                  $
                  0.006
                  
                  
                  $
                  0.020Third
      Quarter
                  
                  $
                  0.008
                  
                  
                  $
                  0.018





Security
Holders





At
September 30, 2008, there were 200,120,434 shares of our common stock
outstanding, which were held of record by 407 stockholders not including persons
or entities that hold the stock in nominee or "street" name through various
brokerage firms.





Dividends





The payment of dividends, if any, is
within the discretion of the Company’s Board of Directors. The Company presently
intends to retain all earnings, if any, for use in its business operations and
accordingly, the Board of Directors does not anticipate declaring any dividends
in the near future.  Dividends, if any, will be contingent upon the
Company’s revenues and earnings, capital requirements and financial
condition.




- 13
-




Equity Compensation Plan
Information





The following table sets forth the
Equity Compensation Plans of the Company.





(a)
                  
                  
                  (b)
                  
                  
                  (c)Plan category
                  
                  Number of
                    securities to be
                    issued upon exercise
                    of outstanding
                    options, warrants,
                    and rights
                  
                  
                  Weighted-average exercise
                    price of
                    outstanding
                    options,
                    warrants, and
                    rights
                  
                  
                  Number of securities
                    remaining available for
                    future issuance under equity
                    compensation plans
                    (excluding securities
                    reflected in column (a)Equity
      compensation plans approved by security holders
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Equity
      compensation plans not approved by security holders
                  
                  
                  11,000,000
                  
                  
                  $
                  .006
                  
                  
                  
                  -Total
                  
                  
                  11,000,000
                  
                  
                  $
                  .006
                  
                  
                  
                  -





Transfer
Agent





StockTrans,
Inc., with offices at 44 West Lancaster Avenue, Ardmore, Pennsylvania 19003, is
the registrar and transfer agent for the Company’s common stock.





Penny Stock
Regulations





The SEC
has adopted regulations which generally define “penny stock” to be an equity
security that has a market price of less than $5.00 per share.  The
Company’s common stock falls within the definition of penny stock and is subject
to rules that impose additional sales practice requirements on broker-dealers
who sell such securities to persons other than established customers and
accredited investors (generally those with assets in excess of $1,000,000, or
annual incomes exceeding $200,000 or $300,000, together with their
spouse).





For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received
the purchaser’s prior written consent to the transaction. Additionally, for any
transaction, other than exempt transactions, involving a penny stock, the rules
require the delivery, prior to the transaction, of a risk disclosure document
mandated by the SEC relating to the penny stock market. The broker-dealer also
must disclose the commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer’s presumed control over the market. Finally, monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny
stocks.  Consequently, the “penny stock” rules may restrict the
ability of broker-dealers to sell the Company’s common stock and may affect the
ability of investors to sell our common stock in the secondary
market.





Recent
Sales of Unregistered Securities





Not
applicable.





- 14
-





ITEM
6.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS





FORWARD
LOOKING STATEMENTS





This
report on Form 10-KSB, including exhibits thereto, contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended.  These forward-looking statements are typically identified by
the words "anticipates", "believes", "expects", "intends", "forecasts", "plans",
"future", "strategy", or words of similar meaning.  Various factors
could cause actual results to differ materially from those expressed in the
forward-looking statements.  The Company assumes no obligations to
update these forward-looking statements to reflect actual results, changes in
assumptions, or changes in other factors, except as required by
law.





OVERVIEW





On June
29, 2007, our Board of Directors determined that the implementation of our
Company's business plan as it then existed was no longer financially feasible
and accepted the offer of Adamas to purchase 7,500,000 shares of a new series of
our preferred stock to be designated as Series B preferred stock, and 35,000,000
shares of our common stock for $1,778,000. The Series B preferred stock was
subsequently exchanged for the Series C preferred stock as part of a negotiation
to restructure the option held by Adamas.





The
proceeds of the financing by Adamas were used to pursue an acquisition strategy,
whereby we sought to acquire attractive businesses with a history of operating
revenues in markets that provide room for growth.  To this end, the
Company began exploring the development of a business strategy where the Company
could provide telecommunications, entertainment, food products, financial, and
certain other products and services to the ethnic emigrant worker communities in
Italy.





As a
result of our investigations, we focused on a strategy which offers certain
goods and services to the ethnic immigrant worker communities in
Italy.  These goods and services include products in the broad areas
of:  (1) telecommunications, (2) entertainment, (3) ethnic food
products, and (4) financial services.  They would be delivered by our
Company on a wholesale basis through a large, well established network of
independently-owned retail stores throughout Italy.  In addition to
the wholesale business activities, the Company also would operate a small number
of its own retail stores in Italy which serve customers in this
market.  In September, 2007, utilizing ICC Italy, Srl., (“ICC Italy”)
a wholly-owned subsidiary incorporated in Italy, we began acquiring assets and
opening stores in several of the provinces in Northern Italy.





We
continued to refine this immigrant community focused strategy throughout the
fiscal year ended September 30, 2008 and beyond.  In March 2008, we
eliminated the ethic food products and entertainment components of our business
in order to focus on telecommunications aspects of the market.





On
October 31, 2008, we sold the retail store component of the business for
$249,700 to focus exclusively on the wholesale telecommunications aspects of the
market.





Our major
wholesale products include VoIP (Voice over the Internet Protocol) services to
retail telephone call shop operators, international calling cards, and cell
phone recharge cards.  The common characteristic of these wholesale
products is that they are prepaid by the wholesale account, they require little
physical inventory investment, and they are deliverable by ICC to the call shops
through the Internet.  This business model is highly scalable and
makes possible the expansion of the business beyond Italy into all of Europe on
an extremely cost-effective basis.





- 15
-





RESULTS
OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2008 AND NINE MONTHS ENDED
SEPTEMBER 30, 2007





Comparing the results of operations for
the year ended September 30, 2008 and the nine months ended September 30, 2007
may not be meaningful as our Company has changed its business model
substantially.  Through June 29, 2007, the business model of our
Company was the sale of a uniquely designed computer mouse and related
software.  The results of operations of our computer mouse and
software business have been presented as discontinued operations in the
financial statements in this Form 10-KSB for the nine months ended September 30,
2007.





On June
29, 2007, Adamas purchased controlling voting interest in our Company and
started the search for a new business model which was centered around building a
distribution network focused on stores providing telecommunications,
entertainment, basic foods, financial services, and certain other products and
services to ethnic immigrant worker communities in Italy.





Revenues
in Italy began in late September, 2007 with the opening of three stores in
Trescore, Calcinate, and Ravenna, Italy, respectively.





In
November 2007, the Company changed its fiscal year from December 31st to
September 30th with fiscal year 2007 ending on September 30, 2007.  As
a result, the financial results presented in this Form 10-KSB are for the year
ended September 30, 2008 and are compared to the nine months ended September 30,
2007.





We
continued to refine this immigrant community focused strategy through the fiscal
year ending September 30, 2008.  In March 2008, we eliminated the
ethic food products and entertainment components of our business in order to
focus on telecommunications aspects of the market.





In
October 2008, following the end of the fiscal year, we eliminated the retail
store component of the business to focus exclusively on the wholesale
telecommunications aspects of the market. Accordingly, the financial statements
have been reclassified to exclude the operating results from the retail stores
from the continuing operations and account for them as discontinued
operations.  As a result, the comments regarding the results of
operations for the year ended September 30, 2008 and nine months ended September
30, 2007 refer to the Company’s continuing operations, unless otherwise
noted.





Due to
the dramatic change in the business plan of the Company over the last year, the
revenue, costs of goods sold, and gross profit from continuing operations for
the year ended September 30, 2008 may not be indicative of future
results.





We are
currently building our wholesale business throughout Italy. Our principal
products include VoIP services to call shop operators, international calling
cards, and cell phone recharge cards.  The common characteristic of
the wholesale products is that they are prepaid by the wholesale account, they
require little physical inventory investment, and they are deliverable through
the Internet which makes possible the expansion of the business beyond Italy
throughout all of Europe.





The
current world economic situation is expected to have limited impact on the
Company’s wholesale only business model.  The VoIP telecommunications
business model actually lowers the fixed and variable costs of telephone call
service compared to standard fixed line telephone rates so our call shop
wholesale customers obtain a positive benefit in using the Company’s
services.  In addition, the immigrant call shops cater more to
international calls home to family and friends which would generally not be
considered discretionary in a personal budget.





Critical Accounting Policies
and Estimates





The
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with generally accepted accounting principles in the United
States.  The preparation of these consolidated financial statements
requires us to make estimates and judgments that affect the amounts reported in
the consolidated financial statements and the accompanying notes.




- 16
-




On an
on-going basis, we evaluate our estimates, including those related to intangible
assets, equity based compensation and litigation.  We base our
estimates on experience and on various assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources.  Actual results may differ
from these estimates under different assumptions or conditions.




Revenue,
Cost of Goods Sold, and Gross Profit





The
Company had $255,588 in continuing revenue from its telecommunications wholesale
operations for the year ended September 30, 2008 and $1,149,163 in discontinued
revenue for the same period from the operations of the retail stores which were
sold on October 31, 2008 following the end of the fiscal year.





During
the nine months ended September 30, 2007, the Company opened its first retail
stores and transferred the Designer Appliances business to Mr.
Large.  Both operations are part of discontinued operations for the
nine months ended September 30, 2007.  As a result, the Company had no
continuing revenue, cost of goods sold or gross profit from continuing
operations for the nine months ended September 30, 2007





The
Company had $51,536 in continuing cost of goods sold for the year ended
September 30, 2008.  There were no costs of goods sold from continuing
operations for the nine month period ended September 30, 2007 as all operations
for that period were by then or since then discontinued.





The
Company had $204,052 in gross profit from continuing operations for the year
ended September 30, 2008.  There was no gross profit from continuing
operations for the nine month period ended September 30, 2007 as all related
operations for that period were by then or since then discontinued.





General
and Administrative Expenses





General
and administrative expenses from continuing operations for the year ended
September 30, 2008 were $1,759,801 consisting principally of consulting expenses
of $92,250, executive compensation of $249,460, professional fees of $248,688,
$420,997 in payroll, and $203,802 in the write off of the abandoned San Marino
acquisition.





General
and administrative expenses from continuing operations for the nine month period
ended September 30, 2007 were $414,522 consisting principally of professional
fees of $87,396, stock based compensation expense of $65,406, executive
compensation of $59,088 and $50,074 in consulting services.





Stock
Based Compensation





During
the year ended September 30, 2008, there were no stock based compensation
awards.





During
the nine months ended September 30, 2007, we recognized $65,406 in stock based
compensation expense as part of the general and administrative costs of our
Company.




- 17
-





Interest
Expense and Financing Costs





Interest
expense and financing costs increased $70,805 to $138,683 for the year ended
September 30, 2008 from $67,878 for the nine months ended September 30, 2007.
The interest and financing costs for the year ended September 30, 2008
represents $16,750 in amortized interest expense associated with the issuance of
15,000,000 warrants to Adamas as part of the consideration for loan obtained
from Adamas on January 15, 2008, $19,305 in interest on the capitalized lease
and paid and accrued interest of $104,074 on the notes payable all offset by
interest income of $1,446.





The
Company also recorded a non cash financing expense of $1,020,028 for accretion
to the preferred stock for the period.





For the
nine months ended September 30, 2007, we incurred $67,878 in net interest
expense and financing costs comprised primarily of non-cash expenses of $60,000
related to the short term financing activity prior to the investment by Adamas
on June 29, 2007.





Net
Loss





Our
Company incurred a total net loss of $4,691,601 for the year ended September 30,
2008 including $1,977,141 in losses from the discontinued retail store
operations.





Our
Company incurred a net loss of $559,352 for the nine month period ended
September 30, 2007 including $76,952 in losses from the discontinued retail
operations in Italy and the mouse and related computer software
business.





Liquidity and Cash
Position





Operating
Activities





For the
year ended September 30, 2008 our Company used $3,272,918 in cash to fund its
operations. The loss from continuing operations of $2,714,460 was partially
offset by $1,120,319 in non-cash expenses but increased by net continuing
operating assets and liabilities of $12,064.  The loss from
discontinued operations of $1,977,141 during the same period was partially
offset by a net decrease in discontinued operating assets and liabilities of
$310,428.





For the
nine month period ended September 30, 2007 our Company used $433.157 in cash to
fund its operations.  The loss from continuing operations of $482,400
was partially offset by $128,813 in non-cash expenses but increased by net
continuing operating liabilities of $187,907.  The loss from
discontinued operations of $76,952 during the same period was increased by
$190,543 in discontinued operating assets and liabilities.





Investing
Activities





For the
year ended September 30, 2008, our Company invested $21,768 in new property and
equipment and for its continuing operations while investing $106,581 in
discontinued operations.





For the
nine month period ended September 30, 2007, our Company invested $49,465 in new
property and equipment for its continuing operations while investing $309,268 in
discontinued operations.





Financing
Activities





For the
year ended September 30, 2008, our Company realized cash of $500,000 in
connection with the sale of common and preferred stock to Adamas and the Trust,
received loans of $2,000,000 from Adamas and various investment groups
affiliated with Adamas all of which was offset by principal payments of $62,130
on the capitalized lease and payment on a demand note of $15,000.




- 18
-




For the
nine month period ended September 30, 2007, our Company realized cash of
$1,806,000 in connection with the sale of common and preferred stock to Adamas
and the loan from Nutmeg and made $5,001 in advances and stockholder’s
loans.





Our
capital requirements including further asset acquisition and an increase in
inventory levels will continue to be significant.  Our future capital
requirements and the adequacy of available funds will depend on many factors
including the pace of our expansion.  We believe that our current
liquidity and resources will not provide sufficient liquidity to fund our
operations for at least 12 months and the Company expects to seek additional
future financing.  We do not know if we will be able to raise
additional financing or financing on terms favorable to us that gives rise, in
part, to doubt about whether the Company can continue as a going
concern.  See footnote 2 to the financial statements.





Off-Balance
Sheet Arrangements





None.




- 19
-




ITEM
7.  FINANCIAL STATEMENTS





The
information required by this Item 7 is incorporated by reference to the Index to
Consolidated Financial Statements beginning at page F-1 of this Annual
Report.





New
Accounting Pronouncements





The
Company has adopted all accounting pronouncements effective before September 30,
2008, which are applicable to the Company.





In July
2006, the Financial Accounting Standards Board (“FASB”) issued FAS
Interpretation No.48, Accounting for Uncertainty in Income
Taxes—An Interpretation of FASB Statement No.109 (“FIN No.48”), which
became effective for the Company on January 1, 2007. This interpretation
clarifies the accounting for income tax benefits that are uncertain in nature.
Under FIN No.48, a company will recognize a tax benefit in the financial
statements for an uncertain tax position only if management’s assessment is that
its position is “more likely than not” (i.e., a greater than 50 percent
likelihood) to be upheld on audit based only on the technical merits of the tax
position. This accounting interpretation also provides guidance on measurement
methodology, de-recognition thresholds, financial statement classification and
disclosures, interest and penalties recognition, and accounting for the
cumulative-effect adjustment. The new interpretation is intended to provide
better financial statement comparability among companies. FIN No.48 is effective
for fiscal years beginning on or after December 15, 2006. The adoption of FIN
No.48 has not had a material effect on the financial statements of our
Company.





In
September 2006, the FASB issued SFAS No.157, “Fair Value Measurements.”
This statement clarifies the definition of fair value, establishes a framework
for measuring fair value and expands the disclosures on fair value measurements.
SFAS No.157 is effective for fiscal years beginning after November 15, 2007. The
adoption of SFAS 157 is not expect to have a material effect on the financial
statements of our Company.





On
February 15, 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities,” (“SFAS 159”). The fair value option
established by SFAS 159 permits, but does not require, all entities to choose to
measure eligible items at fair value at specified election dates. An entity
would report unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting date. SFAS
159 is effective for our 2009 fiscal year. The Company does not expect the
adoption of SFAS 159 to have an effect on its financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Non-Controlling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS
160”). SFAS 160 establishes new accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of a
non-controlling minority interest as equity in the consolidated financial
statements and separate from the parent's equity. The net income amount
attributable to the non-controlling interest is included in consolidated net
income on the face of the income statement. SFAS 160 clarifies that changes in a
parent's ownership interest in a subsidiary that do not result in
deconsolidation are equity transactions if the parent retains its controlling
financial interest. In addition, this statement requires that a parent recognize
a gain or loss in net income when a subsidiary is deconsolidated. Such gain or
loss will be measured using the fair value of the non-controlling equity
investment on the deconsolidation date. SFAS 160 also includes expanded
disclosure requirements regarding the interests of the parent and its
non-controlling interest. SFAS 160 is effective for fiscal years, and for
interim periods within those fiscal years, beginning on or after December 15,
2008. Earlier adoption is prohibited. The Company does not expect the adoption
of SFAS 160 to have an effect on its financial statements.




- 20
-




In
December 2007, the FASB issued FASB Statement No. 141 (Revised 2007), “Business Combinations”
(“SFAS 141R”). SFAS 141R will significantly change the accounting for business
combinations. Under SFAS 141R, an acquiring entity will be required to recognize
all the assets acquired and liabilities assumed in a transaction at the
acquisition-date fair value with limited exceptions.  SFAS 141R will
change the accounting treatment for certain specific items, including: (i)
Acquisition costs will be generally expensed as incurred; (ii) Non-controlling
interests (formerly known as "minority interests") will be valued at fair value
at the acquisition date; (iii) Acquired contingent liabilities will be recorded
at fair value at the acquisition date and subsequently measured at either the
higher of such amount determined under existing guidance for non-acquired
contingencies; (iv) In process research and development will be recorded at fair
value as an indefinite-lived intangible asset at the acquisition date; (v)
Restructuring costs associated with a business combination generally will be
expensed subsequent to the acquisition date; and (vi) Charges in deferred tax
asset valuation allowances and income tax uncertainties after the acquisition
date generally will affect income tax expense.  SFAS 141R also
includes a substantial number of new disclosure requirements.  The
statement applies prospectively to business combinations occurring in fiscal
years beginning after December 15, 2008. Earlier adoption is prohibited. The
Company does not expect the adoption of SFAS 141R to have an effect on its
financial statements.





In May
2008, the FASB issued SFASB No.162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”).  The pronouncement
mandates the GAAP hierarchy reside in the accounting literature as opposed to
the audit literature.  This has the practical impact of elevating FASB
Statements of Financial Accounting Concepts in the GAAP
hierarchy.  This pronouncement will become effective 60 days following
SEC approval.  The Company does not believe this pronouncement will
impact its financial statements.





In
September 2008, the FASB issued EITF 07-5, Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity’s Own Stock (“EITF
07-5”).  The pronouncement provides new guidance for determining
whether equity-linked financial instruments (e.g. warrants and convertible
stock) are indexed to a company’s own stock, and as a result, whether those
instruments should be marked-to-market each period.  In general if
there is a reset feature imbedded in the financial instrument which resets the
strike price of the instrument as a result of the issuance of another financial
instrument with a different stick price, the financial instrument in question is
not considered indexed to the company’s own stock. Therefore, the financial
instrument should be adjusted to fair value each period through the income
statement.  EITF 07-5 is effective for fiscal years beginning after
December 15, 2008.  The Company is studying what impact, if any, EITF
07-5 will have on the Company.





Seasonality





We do not
have sufficient historical information to determine if there is a seasonality
component to the Company’s revenues.





- 21
-





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





None





ITEM
8A(T).  CONTROLS AND PROCEDURES





Disclosure
Controls and Procedures





Our Chief
Executive Officer and Chief Financial Officer (“Certifying Officers”) are
responsible for establishing and maintaining adequate disclosure controls and
procedures for the Company.  The Certifying Officers have established
disclosure controls and other procedures to ensure that material information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the SEC’s rules and forms.  Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the issuer’s management, including its principal executive and
principal financial officers, as appropriate to allow timely discussions
regarding required disclosure is made known to them, particularly during the
period in which this report was prepared.





Our
Certifying Officers carried out an evaluation of the effectiveness of the design
and operation of our Company’s disclosure controls and procedures and based on
this evaluation they concluded that our disclosure controls and procedures were
not effective as of September 30, 2008 because of identified material weaknesses
in our internal control over financial reporting as detailed below under
Management’s report on Internal Control Over Financial Reporting





Management’s
      Report on Internal Control Over Financial
  Reporting





Our
Certifying Officers are responsible for establishing and maintaining adequate
internal control over financial reporting.  Our Certifying Officers
are aware that with the limited level of operations, limited financial resources
and limited availability of personnel inside the Company, material weaknesses
exist in the Company’s internal controls and procedures, most specifically in
the lack of separation of duties and lack of an independent audit
committee.  Therefore, our Certifying Officers have concluded that our
Company’s internal control over financial reporting is not
effective.  Specific weakness in internal control over financial
reporting exists because of the following:





1. With
the sale of all of the Company’s retail store operations on October 31, 2008,
following the end of the fiscal year on September 30, 2008, the Company reduced
the number of employees in the Company significantly.  There are two
officers of the Company in Corona del Mar, CA, one of whom is the Chief
Financial Officer/Corporate Secretary of the Company.  There is one
officer at ICC Italy in Mantova, Italy, and three part time
employees.  All of these employees are operationally
oriented.  The internal financial statements for ICC Italy are
prepared for the most part by an outside accounting firm.  As a
result, there are insufficient independent staff or management members in
financial management with responsibilities to provide third party oversight in
the review of our financial transactions on an ongoing basis in either
location.





2. The
Company’s Board of Directors consist of three members of which two have a
related party relationship with the controlling stockholder of the Company. The
third Board member is also the chief executive officer of the Company. This may
be seen as providing inadequate independent oversight of the management
function, as well as not having members to staff board of director committees,
in particular an audit committee.  The Company lacks a designated
financial expert for the audit committee of the Board, and has no method of
creating an effective whistleblower program.





Our
Chief Executive Officer/Director is actively engaged in actions to resolve these
deficiencies by pursuing corporate growth strategies that would allow the
Company to increase its level of staffing, which would allow the Company to meet
the requirements of the Sarbanes Oxley Act of 2002 by the time its annual report
for the fiscal year ending September 30, 2009 is filed.




- 22
-




The
electronically recorded and related physical records are maintained at the
Corona del Mar, CA and Mantova, Italy offices of the Company.





This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management’s report in this annual
report





ITEM
8B.  OTHER INFORMATION





Not
applicable.




- 23
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PART
III





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





The
following sets forth certain information as of September 30, 2008 with respect
to the individuals who constitute our Board of Directors and executive
management.





Name
            
            Age
            
            PositionsDr.
      Harvey Altholtz
            
            62
            
            Chairman
      of the Board of DirectorsGeorge
      Q Stevens
            
            63
            
            DirectorRichard
      K. Lauer
            
            63
            
            Director;
      President, and Chief Executive OfficerScott
      K Anderson, Jr.
            
            63
            
            Executive
      Vice President, Finance and Corporate
Secretary





The
following is a brief summary of the background of each director and
officer:





Mr. George Stevens joined the
Board on June 29, 2007 upon the investment of Adamas to which Mr. Stevens is an
advisor.  For thirty-five years, George Stevens has been involved in
mergers & acquisitions, start-up companies and the restoration of troubled
businesses.  In 1986, he formed Stevens Information Systems, a firm
which specialized in information technology.  Stevens Information
Systems was sold to its employees in 2003 and Mr. Stevens remained as Chairman
until early 2005.  In January 2006, Mr. Stevens started the Stevens
Resource Group which specializes in investment assessments, due diligence and
business consulting for the investment banking and private placement
fields.  Mr. Stevens was educated at Seattle University, majoring in
Commerce and Finance.





Dr. Harvey Altholtz, DMD,
Wealth Strategy Partners, LLP. Since 2000 Dr. Altholtz has been actively
involved in tax, insurance, and investment planning for high net worth
individuals as part of Wealth Strategy Partners, LLP which is the general
partner of Adamas.  Dr. Altholtz obtained his undergraduate and
graduate education at the University of Pittsburgh.





Mr. Richard K. Lauer was
appointed President and Chief Executive Officer of the Company in June of 2007.
For the past five years, Mr. Lauer has served as President and Chief Executive
Officer of several early stage computer technology related businesses. Mr. Lauer
most recently served as President of Access Key IP, Inc., a company engaged in
the business of providing unique IPTV (Internet Protocol TV) solutions for
retail, home and MDU (Multiple Dwelling Unit) markets as well as USB security
solutions for personal computers. George Stevens is CEO and Chairman of the
Board of Access Key IP, Inc. Mr. Lauer holds a BA in Marketing from California
State University at Fullerton as well as an MBA from Pepperdine University in
Malibu, California.





Scott K. Anderson, Jr has
served as a financial and administrative consultant to the Company since June
2007, and was appointed Executive Vice President, Finance, and Corporate
Secretary of the Company on July 3, 2008.  Mr. Anderson will also
serve as the Company’s Chief Financial Officer and Chief Accounting
Officer.  Mr. Anderson is a certified public accountant. For the past
five years, Mr. Anderson has served as a tax, financial planning, investment
management, and accounting consultant to individuals and business
clients.  Mr. Anderson holds a BS in chemical engineering from the
University of Pennsylvania with holds an MBA from Stanford
University.





Family
Relationships





The
Company is not aware of any family relationships among the Directors and
Officers or other key personnel.





Committees
of the Board of Directors





Mr.
Stevens is the sole member of the Compensation Committee which can act without
the concurrence of the rest of the Board of Directors.




- 24
-




Our Board
of Directors does not maintain separate audit, nominating, or corporate
governance committees.  Functions customarily performed by such
committees are performed by our Board of Directors as a whole.





Director
Compensation





All
directors hold office until the next annual meeting of the stockholders or until
their successors are duly elected qualified and elected.





Directors
do not receive cash compensation for their services as directors but are
reimbursed for expenses actually incurred in connection with attending meetings
of the Board of Directors and certain special projects under taken on behalf of
the Company.





Section
16(a) Beneficial Ownership Reporting Compliance





Our
securities are currently registered under Section 12 of the Securities Exchange
Act of 1934, as amended. As a result, and pursuant to Rule 16a-2, our directors
and officers and holders of 10% or more of our common stock are currently
required to file statements of beneficial ownership with regards to their
ownership of equity securities under Sections 13 or 16 of the Exchange
Act.  Our current officers, directors and beneficial holders of 10% or
more of our equity securities became subject to such requirement and to date,
based solely upon a review of Forms 3, 4 and 5 and any amendments thereto
furnished to us during our most recent fiscal year, none of our officers or
directors has failed to file on a timely basis, as disclosed in the above forms,
reports required by Section 16(a) of the Exchange Act during the most recent
fiscal year.





Code
of Ethics





The
Company has adopted a Code of Ethics applying to its executive officers which
was filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2005.




- 25
-




ITEM
10.  EXECUTIVE COMPENSATION





Summary
Compensation Table





The
following Summary Compensation Table sets forth summary information as to
compensation received by the Company's Chief Executive Officer and Chairman for
their services to the Company during the year ended September 30, 2008 and the
nine months ended September 30, 2007.





Name and
                                                    Principal
                                                    Position
                                                  
                                                  Period
                                                    Ended
                                                  
                                                  Salary
                                                    ($)
                                                  
                                                  Bonus
                                                    ($)
                                                  
                                                  Stock
                                                    Awards
                                                    ($)
                                                  
                                                  Non-Equity
                                                    Incentive Plan
                                                    Compensation
                                                    ($)
                                                  
                                                  Non-
                                                    Qualified
                                                    Deferred
                                                    Compensation
                                                    Earnings ($)
                                                  
                                                  All Other
                                                    Compensation
                                                    ($)
                                                  
                                                  Total ($)George
      Q Stevens
                                                  
                                                  9/30/2008
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  28,500
                                                  
                                                  
                                                  28,500Director
      Board (1)
                                                  
                                                  9/30/2007
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  26,785
                                                  
                                                  
                                                  26.785Richard
      K Lauer
                                                  
                                                  9/30/2008
                                                  
                                                  
                                                  155,875
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  155,875President,
      CEO (2)
                                                  
                                                  9/30/2007
                                                  
                                                  
                                                  4,000
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  23,785
                                                  
                                                  
                                                  27,785Scott
      K Anderson, Jr. CFO and Corporate Secretary (3)
                                                  
                                                  9/30/2008
                                                  
                                                  
                                                  69,863
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  69,863





(1)
George Q. Stevens joined the Company upon his election as Chairman of the Board
on June 29, 2007.  Mr. Stevens resigned as Chairman of the Board on
July 3, 2008, but remains as a Director of the Company.  During the
year ended September 30, 2008 and the nine months ended September 30, 2007, Mr.
Stevens received consulting fees to assist the Company in obtaining additional
investment capital.  Mr. Stevens was awarded 4,000,000 fully vested
non-statutory stock options on September 10, 2007.  See Outstanding
Equity Awards at Fiscal Year End later in this item.





(2)
Richard K. Lauer joined the Company upon his election as President and Chief
Executive Officer on June 29, 2007 and was elected a director on July 3,
2008.  Mr. Lauer was awarded 4,000,000 fully vested non-statutory
stock options on September 10, 2007.  See Outstanding Equity Awards at
Fiscal Year End later in this item





(3) Scott
K Anderson, Jr. joined the Company in April, 2008 and was elected Executive Vice
President, Finance and Corporate Secretary on July 3, 2008.  Mr.
Anderson was awarded 3,000,000 fully vested non-statutory stock options on
September 10, 2007 while serving as a consultant to the Company.  See
Outstanding Equity Awards at Fiscal Year End later in this item





Compensation
of Directors





During
the year ended September 30, 2008, no officer or director received any
compensation from our Company for serving as a director.





No
arrangements are presently in place regarding compensation to directors for
their services as directors or for committee participation.




- 26
-




The
following Summary Compensation Table sets forth summary information as to
compensation received by the Directors who were not named executive officers of
the Company during the year ended September 30, 2008.  There was no
such compensation paid to any director who was not a named executive officer of
the Company during the nine months ended September 30, 2007.





Director
                        Name
                      
                      Fees
                        Earned or
                        Paid in
                        Cash
                      
                      
                      Stock
                        Awards
                        ($)
                      
                      
                      Non-Equity
                        Incentive Plan
                        Compensation
                        ($)
                      
                      
                      Non-
                        Qualified
                        Deferred
                        Compensation
                        Earnings ($)
                      
                      
                      All Other
                        Compensation
                        ($)
                      
                      
                      Total ($)Carmine
      Castellano (1)
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      6,000
                      
                      
                      
                      6,000





(1)
Carmine Castellano joined the Company upon the investment of Adamas in June,
2007 and was a principal in ICC Italy which was acquired by the Company in
August, 2007.  Mr. Castellano received advances for expenses incurred
consulting with ICC Italy during the initial months of ICC Italy’s store
acquisition program.  Mr. Castellano resigned as a director effective
July 3, 2008.





Employment
Agreements





We have
not entered into any employment agreements with our executive officers or other
employees to date. We may enter into employment agreements with them in the
future.




Outstanding
Equity Awards at Fiscal Year-End





As of the
year ended September 30, 2008, the following named executive officers had the
following unexercised options, stock that has not vested, and equity incentive
plan awards:





Name and Principal Position
                  
                  Number of Securities
                    Underlying Unexercised
                    Options Exercisable
                  
                  
                  Number of Securities
                    Underlying Unexercised
                    Options Unexercisable
                  
                  
                  Option Exercise
                    Price
                  
                  Option
                    Expiration
                    DateGeorge
      Stevens
                    Director
                  
                  
                  4,000,000
                  
                  
                  
                  -
                  
                  
                  $
                  .006
                  
                  9/10/2017Richard
      K. Lauer
                    President
      and Chief Executive Officer
                  
                  
                  4,000,000
                  
                  
                  
                  -
                  
                  
                  $
                  .006
                  
                  9/10/2017Scott
      K Anderson, Jr.
                    Executive
      Vice President, Finance and Corporate Secretary (1)
                  
                  
                  3,000,000
                  
                  
                  
                  -
                  
                  
                  $
                  .006
                  
                  9/10/2017





(1) The
award to Mr. Anderson was made in September, 2007 while he was serving as a
consultant to the Company and is reported here as he became a named executive
officer of the Company in July, 2008.




- 27
-




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





Beneficial
ownership is determined in accordance with the rules of the SEC.  In
computing the number of shares beneficially owned by a person and the percentage
of ownership of that person, shares of common stock subject to options and
warrants held by that person that are currently exercisable or become
exercisable within 60 days of the date hereof are deemed outstanding even if
they have not actually been exercised.  Those shares, however, are not
deemed outstanding for the purpose of computing the percentage ownership of any
other person.





The
following table contains certain information regarding beneficial ownership of
the voting securities as of September 30, 2008 by (i) persons known to us to be
the beneficial owner of more than 5% of the Company’s voting securities, (ii)
each of the current Directors, (iii) each executive officer, and (iv) all
Directors and executive officers as a group.




- 28
-




Security
Ownership of Capital Stock by Certain Beneficial Owners at September 30,
2008




Class
      of Stock
                                                
                                                Name
      of Beneficial Owner
                                                
                                                Amount and
                                                  Nature of
                                                  Beneficial
                                                  Owner
                                                
                                                Percent of
                                                  Class
                                                  (1)
                                                
                                                Percent of
                                                  Class
                                                  (2)Common
      Stock
                                                
                                                The
      Adamas Fund, LLLP
                                                  1800
      Second St Ste #758
                                                  Sarasota,
      FL 34236
                                                
                                                54,921,267
                                                (3) (4)
                                                25.5
                                                %The
      Melanie S. Altholtz Irrevocable Trust
                                                  1800
      Second St Ste #758
                                                  Sarasota,
      FL 34236
                                                
                                                4,921,267
                                                (5)
                                                2.5
                                                %Nutmeg
      Group, LLC
                                                  155
      Revere Dr Ste #10
                                                  Northbrook,
      IL 60062
                                                
                                                64,780,439
                                                (6)
                                                26.4
                                                %Financial
      Alchemy, LLC
                                                  155
      Revere Dr Ste #10
                                                  Northbrook,
      IL 60062
                                                
                                                11,538,461
                                                
                                                5.8
                                                %Directors
      and OfficersCommon
      Stock
                                                
                                                George
      Q. Stevens
                                                  3334
      E. Coast Hwy #424
                                                  Corona
      Del Mar, CA 92625
                                                
                                                4,000,000
                                                (3)
                                                2.0
                                                %Dr.
      Harvey Altholtz
                                                  1800
      Second St, Ste 758
                                                  Sarasota,
      FL 34236
                                                
                                                0
                                                (7)
                                                0
                                                %Richard
      K. Lauer
                                                  3334
      E. Coast Hwy #424
                                                  Corona
      Del Mar, CA 92625
                                                
                                                4,000,000
                                                (8)
                                                2.0
                                                %Scott
      K. Anderson, Jr.
                                                  3334
      E. Coast Hwy #424
                                                  Corona
      Del Mar, CA 92625
                                                
                                                3,000,000
                                                (9)
                                                1.5
                                                %All
      Directors and Officers as a group (4 people)
                                                
                                                11,000,000
                                                
                                                5.2
                                                %Series
      C
                                                  Preferred
      Stock
                                                  (10)
                                                
                                                The Adamas
      Fund, LLLP
                                                  1800
      Second St #758
                                                  Sarasota,
      FL 34236
                                                
                                                8,554,552
                                                
                                                
                                                
                                                89.0
                                                %The Melanie S. Altholtz
      Irrevocable Trust,
                                                  1800
      Second St #758
                                                  Sarasota,
      FL 34236
                                                
                                                1,054,552
                                                
                                                
                                                
                                                11.0
                                                %




- 29
-




(1)
            Computed
      based on a total of 200,120,434 shares of common stock outstanding as of
      September 30, 2008.(2)
            Computed
      based on a total of 9,609,104 shares of Series C preferred stock
      outstanding on September 30, 2008.(3)
            George
      Stevens is a director of our Company and is an investment advisor to
      Adamas and The Stealth Fund, LLLP (“Stealth Fund”). Mr. Stevens was
      elected Chairman of the Board of the Company on June 29, 2007 and resigned
      as Chairman on July 3, 2008 but remains as Director.  Mr.
      Stevens holds fully vested, non-qualified stock options to purchase
      4,000,000 shares of the Company’s common stock.  Such shares are
      not included in the shares reported as beneficially owned by the various
      funds with which Mr. Stevens is associated.(4)
            Includes
      warrants to purchase 15,000,000 shares of common stock which are currently
      exercisable.(5)
            Adam
      Altholtz is the general partner of Wealth Strategy Partners which is the
      general partner of Adamas and is the trustee of the Trust.  The
      Trust is also a limited partner and investor in Adamas.  Adam
      Altholtz is the son of Dr. Harvey Altholtz who is Chairman of our Board of
      Directors.(6)
            Includes
      warrants to purchase 7,500,000 shares of common stock which are currently
      exercisable and 37,584,050 shares currently issuable upon conversion of a
      note receivable from the Company, including accrued interest through
      September 30, 2008.  On December 31, 2008, Nutmeg exchanged its
      shares and cancelled its conversion option and warrants for a
      note.  See Note 14 to the financial
  statements.(7)
            Dr.
      Harvey Altholtz was elected to the Board of Directors on September 26,
      2007 and as Chairman of the Board on July 3, 2008.  Dr. Altholtz
      is a financial advisor with Wealth Strategy Partners LLP which is the
      general partner of Adamas.(8)
            Richard
      K Lauer is President and Chief Executive Officer as well as a Director of
      the Company. Mr. Lauer holds fully vested, non-qualified stock options to
      purchase 4,000,000 shares of common stock.(9)
            Scott
      K Anderson, Jr. is Executive Vice President, Finance and Corporate
      Secretary.  Mr. Anderson holds fully vested, non-qualified stock
      options to purchase 3,000,000 shares of common stock.(10)
            The
      Series C preferred stock entitles the holder to vote 60 votes per
      preferred share and votes as a single class with the common stock on all
      matters on which a vote of the stockholders is
  taken.





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





Adam
Altholtz is the general partner of Wealth Strategy Partners which is the general
partner of Adamas and the Stealth Fund. Adam Altholtz is also the trustee of The
Melanie S. Altholtz Irrevocable Trust, and The Karyn M. Blaise Irrevocable
Trust.  The Melanie S. Altholtz Irrevocable Trust is also a limited
partner and investor in Adamas.  Adam Altholtz is the son of Harvey
Altholtz, a member of our Board of Directors.





George
Stevens who is also a director of our Company, is an investment advisor to
Adamas and the Stealth Fund.





ITEM
13.  EXHIBITS





The
following exhibits are either filed as part of this report or are incorporated
herein by reference:





2.1
Agreement and Plan of Merger between Torbay Acquisition Corporation and the
Company. Incorporated by reference to Exhibit 2.1 the Company’s Report on Form
8-K, filed with the SEC on November 12, 1999 (the "1999 8-K").





3.1
Certificate of Incorporation of the Company and Certificate of Amendment thereto
filed in June 1999. Incorporated by reference to Exhibit 3.1 to the 1999
8-K.





3.2
Certificate of Amendment to the Certificate of Incorporation of the Company
filed on October 18, 2005. Incorporated by reference to Exhibit 3.2 to the
Company’s Annual Report on Form 10-KSB, filed with the SEC on April 28, 2006
(the “2005 10-KSB”).





3.2
Certificate of Amendment to the Certificate of Incorporation of the Company
dated November 27, 2007 filed with the Delaware Secretary of State. Incorporated
by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-KSB for
the period ended September 30, 2007 (the “2007 10-KSB”)




- 30
-




3.3
By-Laws of the Company as amended and restated November 27,
2007.  Incorporated by reference to Exhibit 5.03.1 to the Company’s
Current Report on Form 8-K filed on December 3, 2007 with the SEC.





4.1
Certificate of Designation with respect to Series 1 Convertible Preferred Stock
of the Company.  Incorporated herein by reference to Exhibit 3.4 to
the 1999 8-K.





4.1.1
Certificate of Designation with respect to Series B Convertible Preferred Stock
of the Company filed with the Delaware Secretary of
State.  Incorporated herein by reference to Exhibit 4.1.1 to the 2007
10-KSB.





4.1.2
Certificate of Designation with respect to Series C Convertible Preferred Stock
of the Company filed with the Delaware Secretary of
State.  Incorporated by reference to Exhibit 4.1.2 to the 2007
10-KSB.





4.1.3
Certificate of Designation with respect to increasing the Series C Convertible
Preferred Stock of the Company.  Incorporated by reference to Exhibit
4.1 to the Company’s Current Report on Form 8-K filed on January 17, 2008 with
the SEC (the “January 17, 2008 8-K”).





4.1.4
Secured Note Payable to Adamas dated January 15, 2008.  Incorporated
herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K
filed on January 23, 2008 with the SEC (the “January 23, 2008
8-K”).





4.1.5
Unsecured Note Payable to the Stealth Fund dated July 9,
2008.  Incorporated herein by reference to Exhibit 4.1 to the
Company’s Current Report on Form 8-K filed on July 15, 2008 with the SEC (the
“July 15, 2008 8-K”).





4.1.6
Unsecured Note Payable to The Karyn M. Blaise Irrevocable Trust dated July 9,
2008.  Incorporated herein by reference to Exhibit 4.2 to the July 15,
2008 8-K.





4.1.7
Addendum to Note Payable to Adamas dated January 15,
2008.  Incorporated herein by reference to Exhibit 4.3 to the July 15,
2008 8-K.





4.1.8
Unsecured Note Payable to Adamas dated October 15, 2008. Incorporated herein by
reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on
October 23, 2008 with the SEC.





4.1.9
Unsecured Note Payable to the Stealth Fund dated December 15, 2008. Incorporated
herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K
filed on December 22, 2008 with the SEC.





4.1.10
Unsecured Note Payable to The Nutmeg Group, LLC dated December 31, 2008.
Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report
on Form 8-K filed on January 6, 2009 with the SEC.





4.1.11
First Amendment, dated as of December 31, 2008, to the Superseding Note of
September 26, 2007 between the Company and Nutmeg/Mercury. Incorporated herein
by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on
January 6, 2009 with the SEC.





4.2 Form
of Common Stock Certificate. Incorporated by reference to Exhibit 4.2 to the
Registration Statement on Form SB-2 (Registration No. 333-93847), filed with the
SEC on December 30, 1999.





4.3
Warrant to Purchase 500,000 Shares of Common Stock, dated August 24,
2004.  Incorporated herein by reference to Exhibit 4.4 to the
Registration Statement on Form SB-2 (Registration No. 333-122773), filed with
the SEC on February 11, 2005 (the “2005 SB-2”).





4.3.1
Warrant to Purchase 2,500,000 Shares of Common Stock dated December 16,
2004.  Incorporated herein by reference to Exhibit 4.6 to the 2005
SB-2.





4.3.2
Warrant to Purchase 2,000,000 Shares of Common Stock dated December 16,
2004.  Incorporated herein by reference to Exhibit 4.6 to the 2005
SB-2.




- 31
-




4.3.3
Warrant to Purchase 2,000,000 Shares of Common Stock dated December 16,
2004.  Incorporated herein by reference to Exhibit 4.6 to the 2005
SB-2.





4.3.4
Warrant to Purchase 15,000,000 Shares of Common Stock dated January 15,
2008.  Incorporated herein by reference to Exhibit 4.2 to the
Company’s Current Report on Form 8-K filed on January 23, 2008 with the
SEC.





4.3.5
Warrant to Purchase 4,500,000 Shares of Common Stock dated December 15,
2008.  Incorporated herein by reference to Exhibit 4.2 to the
Company’s Current Report on Form 8-K filed on December 22, 2008 with the
SEC.





10.1
Designer Appliances, Inc. Asset Assignment and Royalty Disposal Value Agreement,
dated as of June 29, 2007 between the Company and William Thomas
Large.  Incorporated herein by reference to Exhibit 10.1 of the
Company’s Report on Form 8-K filed with the SEC on July 6, 2007.





10.2
Intellectual Property Assignment Agreement, dated as of June 29, 2007 between
the Company and William Thomas Large.  Incorporated herein by
reference to Exhibit 10.2 of the Company’s Report on Form 8-K filed with the SEC
on July 6, 2007.





10.3.
Share Purchase Agreement, dated June 29, 2007 between the Company and
Adamas.  Incorporated herein by reference to Exhibit 10.1 of the
Company’s Report on Form 8-K filed with the SEC on July 26, 2007.





10.4
First Amendment dated as of July 23, 2007 to the Share Purchase Agreement signed
June 29, 2007.  Incorporated herein by reference to Exhibit 10.2 of
the Company’s Report on Form 8-K filed with the SEC on July 26,
2007.





10.5
Share Exchange Agreement dated August 20, 2007 between the Company and Carmine
Castellano and Alfred Settino.  Incorporated herein by reference to
Exhibit 10.1 of the Company’s Report on Form 8-K filed with the SEC on August
27, 2007.





10.6
First Amendment to Share Exchange Agreement dated August 21, 2007 between the
Company and Carmine Castellano and Alfred Settino.  Incorporated
herein by reference to Exhibit 10.2 of the Company’s Report on Form 8-K filed
with the SEC on August 27, 2007.





10.7
September 2007 Note issued by the Company to Nutmeg/Mercury Funding
LLLP.  Incorporated herein by reference to Exhibit 10.1 of the
Company’s Report on Form 8-K filed with the SEC on October 3, 2007.





10.8
Second Amendment, dated September 28, 2007 to the Share Purchase Agreement,
dated June 29, 2007 between the Company and Adamas.  Incorporated
herein by reference to Exhibit 10.1 of the Company’s Report on Form 8-K filed
with the SEC on October 4, 2007.





10.9
Stock Purchase Agreement between The Melanie S. Altholtz Irrevocable Trust and
the Company dated December 3, 2007.  Incorporated by reference to
Exhibit 10.1 to the January 17, 2008 8-K.





10.10
Third Amendment to the Share Purchase Agreement between Adamas and the Company
dated December 17, 2007.  Incorporated herein by reference to Exhibit
10.2 to the Company’s Report on Form 8-K filed with the SEC on January 17,
2008.





10.11Fourth Amendment to the
Share Purchase Agreement of June 29, 2007 dated January 15 2008 between Adamas
and the Company.  Incorporated by reference to Exhibit 10.1 to the
Company’s Report on Form 8-K filed with the SEC on January 23,
2008.





10.12Fifth Amendment to the
Share Purchase Agreement of June 29, 2007 dated July 9, 2008 between Adamas and
the Company.  Incorporated by reference to Exhibit 10.1 to the
Company’s Report on Form 8-K filed with the SEC on July 15, 2008.




- 32
-




10.13First Amendment to the
Share Purchase Agreement of December 3, 2008 between the Altholtz Trust and the
Company dated July 9, 2008.  Incorporated by reference to Exhibit 10.2
to the Company’s Report on Form 8-K filed with the SEC on July 15, 2008to the
July 15, 2008.




10.14.
Preliminary Contract of Transfer of Company Branch between ICC Italy Srl and
Mondobello SAS dated October 21, 2008.  Incorporated herein by
reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with
the SEC on December 2, 2008.




10.15.
Agreement, dated as of December 31, 2008 between the Company and The Nutmeg
Group, LLC Incorporated herein by reference to Exhibit 10.1 of the Company’s
Current Report on Form 8-K filed with the SEC on January 6, 2009.




14.1 Code
of Ethics Incorporated by reference to Exhibit 14.1 to 2005 10-KSB.





21.1 List
of subsidiaries*





23.1
Consent of Holtz Rubenstein Reminick LLP.*





31.1
Certification of Chief Executive Officer and Principal Financial
Officer.*





32.1
Certification of Chief Executive Officer and Principal Financial
Officer.*







*Filed
herewith.





ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES





Independent
Auditor Fees





The
following is a summary of the fees billed to us by Holtz Rubenstein Reminick LLP
for professional services rendered for the year ended September 30, 2008 and the
nine months ended September 30, 2007:





Fee Category
                  
                  Year Ended
                    September 30, 2008
                  
                  
                  Nine Months Ended
                    September 30, 2007Audit
      fees
                  
                  $
                  135,850
                  
                  
                  $
                  51,100Tax
      fees
                  
                  
                  -
                  
                  
                  
                  -Other
      fees
                  
                  
                  -
                  
                  
                  
                  -Total
      fees
                  
                  $
                  135,850
                  
                  
                  $
                  51,100





Audit Fees: consists of
aggregate fees billed for professional services rendered for the audit of our
consolidated financial statements for the year ended September 30, 2008 and the
nine months ended September 30, 2007 as well as review of the interim
consolidated financial statements included in quarterly reports for the quarters
ended September 30, 2007, December 31, 2007, March 31, 2008, and June 30, 2008
and services that are normally provided by our auditors in connection with
statutory and regulatory filings or engagements.





Tax Fees: consists of
aggregate fees billed for professional services for tax compliance, tax advice
and tax planning.  These services include assistance regarding federal
and state tax compliance.





Other Fees: consists of fees
for products and services other than the services reported
above.  There were no management consulting services provided in the
year ended September 30, 2008 or during the nine months ended September 30,
2007.




- 33
-




Our Audit
Committee includes the entire Board of Directors.  The Board of
Directors considers whether the provision of these services is compatible with
maintaining the auditor's independence and has determined such services for the
year ended September 30, 2008 and the nine month period ended September 30, 2007
were compatible.





Board
of Directors Policy On Pre-Approval Of Services Of Independent
Auditors





The Board
of Directors’ policy is to pre-approve all audit and permissible non-audit
services provided by the independent auditors on a case-by-case basis. These
services may include audit services, audit-related services, tax services and
other services.




- 34
-




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, in Corona del Mar, State of
California, on January 12, 2009.




ICC
      WORLDWIDE, INC./s/ Scott K Anderson,
    Jr.Corporate
      Secretary





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.





SIGNATURE
            
            TITLE
            
            DATE/s/
      Dr. Harvey Altholtz
            
            Chairman
      of the Board
            
            January
      12, 2009/s/
      George Q. Stevens
            
            Director
            
            January
      12, 2009/s/
      Richard K Lauer
            
            Director,
      President (Chief Executive Officer
              and
      Chief Operating Officer)
            
            January
      12, 2009/s/Scott K. Anderson, Jr.
            
            Executive
      Vice President Finance and
              Corporate
      Secretary (Chief Accounting
              Officer
      and Chief Financial Officer)
            
            January
      12, 2009




- 35
-




INDEX
TO FINANCIAL STATEMENTS




PageReport
      of Independent Registered Public Accounting Firm
              F-2CONSOLIDATED
      FINANCIAL STATEMENTSConsolidated
      Balance Sheet as of September 30, 2008
              F-3Consolidated
      Statements of Operations and Comprehensive (Loss) Income for the year
      ended September 30, 2008 and nine months ended September 30,
      2007
              F-4Consolidated
      Statements of Stockholders' (Deficit) Equity and Comprehensive (Loss)
      Income for the year ended September 30, 2008 and nine months ended
      September 30, 2007.
              F-5Consolidated
      Statements of Cash Flows for the year ended September 30, 2008 and nine
      months ended September 30, 2007
              F-6Notes
      to Consolidated Financial Statements
              F-7





F-
1





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Stockholders of


ICC
Worldwide, Inc. and Subsidiaries:





We have
audited the accompanying consolidated balance sheet of ICC Worldwide, Inc and
Subsidiaries (the "Company") as of September 30, 2008 and the related
consolidated statements of operations and comprehensive (loss) income and
stockholders’ (deficiency) equity, and cash flows for the year ended September
30, 2008 and nine months ended September 30, 2007,
respectively.  These consolidated financial statements are the
responsibility of the Company’s management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of September
30, 2008 and the results of their operations and their cash flows for
the year ended September 30, 2008 and nine months ended September 30, 2007, in
conformity with accounting principles generally accepted in the United States of
America.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 2
to the consolidated financial statements, the Company’s losses of $4,691,601 and
$559,352 for the year ended September 30, 2008 and for the nine months ended
September 30, 2007, respectively, and negative cash flow used in operations of
$3,272,918 and $433,157 for the year ended September 30, 2008 and for the nine
months ended September 30, 2007, respectively, raise substantial doubt about the
Company’s ability to continue as a going concern.  The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.





/s/ Holtz
Rubenstein Reminick LLP





Holtz
Rubenstein Reminick LLP





Melville,
New York


December
23, 2008





F-
2




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEET


SEPTEMBER
30, 2008





ASSETSCurrent
      assets:Cash
                      
                      $
                      51,552Accounts
      receivable
                      
                      
                      4,335Inventory
                      
                      
                      5,348Deposits
      and other current assets
                      
                      
                      81,139Current
      assets of discontinued operations
                      
                      
                      84,249Total
      current assets
                      
                      
                      226,623Furniture
      and fixtures
                      
                      
                      22,016Office
      equipment
                      
                      
                      251,975Less
      accumulated depreciation
                      
                      
                      (86,948
                      )Net
      fixed assets
                      
                      
                      187,043Deferred
      financing costs - net
                      
                      
                      94,560Other
      assets
                      
                      
                      2,670Non
      current assets of discontinued operations
                      
                      
                      342,003Total
      assets
                      
                      $
                      852,899LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCurrent
      liabilities:Accounts
      payable and accrued expenses
                      
                      $
                      184,211Accrued
      interest
                      
                      
                      85,124Capitalized
      lease obligation - current portion
                      
                      
                      69,701Notes
      payable
                      
                      
                      112,001Current
      liabilities of discontinued operations
                      
                      
                      344,839Total
      current liabilities
                      
                      
                      795,876Capitalized
      lease obligation - long term
                      
                      
                      71,894Preferred
      stock, $.0001 par value, 30,000,000 shares authorized,9,609,044
      Series C issued and outstanding, includes accretion of
      $1,020,028,mandatory
      redemption on October 1, 2012 at $.60 per share
                      
                      
                      1,702,670Notes
      payable
                      
                      
                      2,000,000Total
      liabilities
                      
                      
                      4,570,440Stockholders'
      deficiency:Common
      stock, $.0001 par value, 450,000,000 shares authorized,200,120,434
      shares issued and outstanding
                      
                      
                      20,012Additional
      paid-in capital
                      
                      
                      7,765,315Accumulated
      deficit
                      
                      
                      (11,502,868
                      )Total
      stockholders' deficiency
                      
                      
                      (3,717,541
                      )Total
      liabilities and stockholders' deficiency
                      
                      $
                      852,899





See
accompanying notes to consolidated financial statements





F-
3




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE LOSS





Year Ended
                        
                        
                        Nine MonthsEndedSeptember 30,2008
                        
                        
                        September 30,2007Revenue
                        
                        $
                        255,588
                        
                        
                        $
                        -Cost
      of goods sold
                        
                        
                        51,536
                        
                        
                        
                        -Gross
      profit
                        
                        
                        204,052
                        
                        
                        
                        -General
      and administrative expenses
                        
                        
                        1,759,801
                        
                        
                        
                        414,522Loss
      from continuing operations beforeother
      expense
                        
                        
                        (1,555,749
                        )
                        
                        
                        (414,522
                        )Accretion
      to preferred stock
                        
                        
                        (1,020,028
                        )Interest
      expense, net and financing cost
                        
                        
                        (138,683
                        )
                        
                        
                        (67,878
                        )Loss
      from continuing operationsbefore
      provision for income taxes
                        
                        
                        (2,714,460
                        )
                        
                        
                        (482,400
                        )Provision
      for income taxes
                        
                        
                        -
                        
                        
                        
                        -Loss
      from continuing operations
                        
                        
                        (2,714,460
                        )
                        
                        
                        (482,400
                        )Loss
      from discontinued operations
                        
                        
                        (1,977,141
                        )
                        
                        
                        (76,952
                        )Net
      loss
                        
                        $
                        (4,691,601
                        )
                        
                        $
                        (559,352
                        )Loss
      per common share, basic and dilutedContinuing
      operations
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.00
                        )Discontinued
      operations
                        
                        
                        (0.01
                        )
                        
                        
                        (0.00
                        )Loss
      per common share
                        
                        $
                        (0.02
                        )
                        
                        $
                        (0.00
                        )Weighted
      average shares outstanding, basic and diluted
                        
                        
                        198,237,982
                        
                        
                        
                        160,054,896Comprehensive
      loss:Net
      loss
                        
                        $
                        (4,691,601
                        )
                        
                        $
                        (559,352
                        )Foreign
      currency translation gain (loss)
                        
                        
                        -
                        
                        
                        
                        41,204Comprehensive
      loss
                        
                        $
                        (4,691,601
                        )
                        
                        $
                        (518,148
                        )





See
accompanying notes to consolidated financial statements.





F-
4





ICC
WORLDWIDE, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENT OF


STOCKHOLDERS'
(DEFICIENCY) EQUITY


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


THE
NINE MONTHS ENDED SEPTEMBER 30, 2007





Comon StockCommon Stock
                
                
                To Be Issued
                
                
                Treasury
                
                
                Additional
                
                
                Accumulated
                
                
                ComprehensiveShares
                
                
                Treasury
                
                
                Par
                
                
                Shares
                
                
                Par
                
                
                Stock
                
                
                Paid in Capital
                
                
                Deficit
                
                
                Income (Loss)
                
                
                TotalBalance,
      December 31, 2006
                
                
                152,837,900
                
                
                
                -
                
                
                $
                15,284
                
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                5,986,508
                
                
                $
                (6,261,177
                )
                
                $
                (31,942
                )
                
                $
                (291,327
                )Preferred
      conversion
                
                
                420,000
                
                
                
                -
                
                
                
                42
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                42Shares
      subscribed
                
                
                -
                
                
                
                -
                
                
                
                
                
                
                
                35,000,000
                
                
                
                3,500
                
                
                
                -
                
                
                
                1,234,100
                
                
                
                -
                
                
                
                -
                
                
                
                1,237,6000Additional
      shares for preferred stock conversion
                
                
                20,000
                
                
                
                -
                
                
                
                2
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                398
                
                
                
                -
                
                
                
                -
                
                
                
                400Warrant
      repricing
                
                
                -
                
                
                
                -
                
                
                
                
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                18
                
                
                
                -
                
                
                
                -
                
                
                
                18Shares
      to replace financing shares
                
                
                3,000,000
                
                
                
                -
                
                
                
                300
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                59,700
                
                
                
                -
                
                
                
                -
                
                
                
                60,000Treasury
      stock acquired in disposition of assets
                
                
                -
                
                
                
                1,000,000
                
                
                
                
                
                
                
                -
                
                
                
                -
                
                
                
                (17,000
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (17,000
                )Sales
      of shares for cash
                
                
                35,000,000
                
                
                
                -
                
                
                
                3,500
                
                
                
                (35,000,000
                )
                
                
                (3,500
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Financing
      costs
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (22,274
                )
                
                
                -
                
                
                
                -
                
                
                
                (22,274
                )Shares
      cancelled
                
                
                (1,000,000
                )
                
                
                (1,000,000
                )
                
                
                (100
                )
                
                
                -
                
                
                
                -
                
                
                
                17,000
                
                
                
                (16,900
                )
                
                
                -
                
                
                
                -
                
                
                
                -Preferred
      stock accretion
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (4,340
                )
                
                
                -
                
                
                
                -
                
                
                
                (4,340
                )Stock
      based compensation expense
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                65,406
                
                
                
                -
                
                
                
                -
                
                
                
                65,406Foreign
      currency translation gain
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                41,204
                
                
                
                41,204Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (559,352
                )
                
                
                -
                
                
                
                (559,352
                )Balance,
      September 30, 2007
                
                
                190,277,900
                
                
                
                -
                
                
                
                19,028
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                7,302,616
                
                
                
                (6,820,529
                )
                
                
                9,262
                
                
                $
                510,377Sale
      of stock for cash
                
                
                9,842,534
                
                
                
                -
                
                
                
                984
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                347,049
                
                
                
                -
                
                
                
                -
                
                
                
                348,033Loan
      financing costs
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                111,310
                
                
                
                -
                
                
                
                -
                
                
                
                111,310Adjustment
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,340
                
                
                
                
                
                
                
                
                
                
                
                4,340Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (4,682,339
                )
                
                
                (9,262
                )
                
                
                (4,691,601
                )Balance,
      September 30, 2008
                
                
                200,120,434
                
                
                
                -
                
                
                $
                20,012
                
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                7,765,315
                
                
                $
                (11,502,868
                )
                
                $
                -
                
                
                $
                (3,717,541
                )





See
accompanying notes to unaudited condensed consolidated financial
statements.





F-
5





ICC
WORLDWIDE, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


THE
NINE MONTHS ENDED SEPTEMBER 30, 2007





Nine MonthsYear Ended
                      
                      
                      EndedSeptember 30,
                      
                      
                      September 30,2008
                      
                      
                      2007Cash
      flows from operating activities:Net
      loss from continuing activities
                      
                      $
                      (2,714,460
                      )
                      
                      $
                      (482,400
                      )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Depreciation
                      
                      
                      83,541
                      
                      
                      
                      3,407Amortization
      of deferred interest expense
                      
                      
                      16,750
                      
                      
                      
                      -Accretion
      to preferred stock
                      
                      
                      1,020,028
                      
                      
                      
                      -Stock
      compensation expense
                      
                      
                      -
                      
                      
                      
                      65,406Stock
      and warrants issued for financing
                      
                      
                      -
                      
                      
                      
                      60,000Repricing
      of warrants
                      
                      
                      
                      
                      
                      
                      18Changes
      in operating assets and liabilities:(Increase)
      decrease inAccounts
      receivable
                      
                      
                      (4,335
                      )
                      
                      
                      -Inventory
                      
                      
                      (5,348
                      )
                      
                      
                      -Prepaid
      expenses
                      
                      
                      (81,139
                      )
                      
                      
                      -Deposits
      and other current assets
                      
                      
                      (2,670
                      )
                      
                      
                      -Increase
      (decrease) inAccounts
      payable and accrued expenses
                      
                      
                      81,428
                      
                      
                      
                      187,907Net
      cash flow from discontinued operations
                      
                      
                      (1,666,713
                      )
                      
                      
                      (267,495
                      )Net
      cash (used in) provided by operating activities
                      
                      
                      (3,272,918
                      )
                      
                      
                      (433,157
                      )Cash
      flows from investing activities:Net
      cash flow from discontinued operations
                      
                      
                      (106,581
                      )
                      
                      
                      (309,268
                      )Purchase
      of property and equipment
                      
                      
                      (21,768
                      )
                      
                      
                      (49,465
                      )Net
      cash (used in) provided by investing activities
                      
                      
                      (128,349
                      )
                      
                      
                      (358,733
                      )Cash
      flows from financing activities:Proceeds
      from issuance of preferred stock
                      
                      
                      151,968
                      
                      
                      
                      1,215,326Proceeds
      from issuance of common stock
                      
                      
                      348,032
                      
                      
                      
                      530,674Proceeds
      from issuance of notes payable
                      
                      
                      2,000,000
                      
                      
                      
                      60,000Payments
      on capitalized lease obligation
                      
                      
                      (62,130
                      )
                      
                      
                      -Net
      repayments of advances and stockholder's loans
                      
                      
                      (15,000
                      )
                      
                      
                      (4,999
                      )Net
      cash provided by financing activities
                      
                      
                      2,422,870
                      
                      
                      
                      1,801,001Effect
      of exchange rate changes on cash
                      
                      
                      -
                      
                      
                      
                      6,158Net
      (decrease) increase in cash
                      
                      
                      (978,397
                      )
                      
                      
                      1,015,269Cash,
      beginning of period
                      
                      
                      1,029,949
                      
                      
                      
                      14,680Cash,
      end of period
                      
                      $
                      51,552
                      
                      
                      $
                      1,029,949Non-Cash
      Financial Information:Treasury
      stock acquired in exchange for assets and liabilitiesof
      discontinued operations
                      
                      $
                      -
                      
                      
                      $
                      17,000Net
      liabilities of discontinued operations
                      
                      
                      -
                      
                      
                      
                      93,369Conversion
      of 420,000 shares of Series 1 preferred stock toto
      440,000 shares of common stock
                      
                      
                      -
                      
                      
                      
                      44Warrants
      issued as part of financing arrangements
                      
                      
                      111,310
                      
                      
                      
                      -Assets
      acquired through capitalized lease
                      
                      
                      -
                      
                      
                      
                      203,714Supplemental
      disclosuresCash
      paid for interest
                      
                      $
                      50,090
                      
                      
                      $
                      -Cash
      paid for taxes
                      
                      
                      -
                      
                      
                      
                      -





See
accompanying notes to the consolidated financial statements.




F-
6




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





NOTE
1.  ORGANIZATIONAL
MATTERS AND NATURE OF THE BUSINESS





ICC
Worldwide, Inc. (“we”, “us”, “the Company”, or “Torbay”) was incorporated on
March 24, 1999 as a Delaware corporation named Acropolis Acquisition
Corporation.  We changed our name to Torbay Holdings, Inc. on July 14,
1999.  We became a reporting company public company under the
Securities Exchange Act of 1934, as amended (the “Exchange Act” on October 26,
1999 as a result of a merger with Torbay Acquisition Corporation
(“TAC”).  On November 27, 2007, our stockholders approved the change
in our name to ICC Worldwide, Inc.





From
inception through June, 2007 the principal business of our Company was the
development and sale of a computer mouse device and related
software.  On June 29, 2007, we transferred to Mr. Thomas Large (a
former officer and director of our Company), 100% of the capital stock of
Designer Appliances, Inc. and all other assets and liabilities of our Company
relating to our Company’s former computer mouse and software business, including
all intellectual property and physical materials, all hardware and software and
all rights pertaining thereto.  The results of operations of the
computer mouse and software business have been presented as discontinued
operations in these financial statements.





On June
29, 2007 we changed our business model and sold a controlling interest in our
Company to The Adamas Fund, LLLP (formerly, The Black Diamond Fund, LLLP), a
Minnesota limited liability limited partnership (“Adamas”).  The
purpose of the sale of stock was to raise capital for use in conjunction with an
acquisition strategy which allows us to develop our Company by acquiring assets
with a history of operating revenues in markets that provide room for
growth.





As a
result of our investigations, we focused on a strategy that provided certain
goods and services to the ethnic immigrant worker communities in
Italy.  These goods and services included products in the broad areas
of:  (1) telecommunications, (2) entertainment, (3) ethnic food
products, and (4) financial services.  They were delivered by our
Company on a wholesale basis through a large, well established network of
independently-owned retail stores throughout Italy.  In addition to
the wholesale business activities, the Company operated a small number of its
own retail stores in Italy which serve customers in this market.





Since
then we have continued to refine this ethnic immigrant community focused
strategy.  In March 2008, we eliminated the ethic food products and
entertainment components of our business in order to focus on telecommunications
aspects of the market.





On
October 31, 2008, we sold the retail store component of the business for
$249,700 to focus exclusively on the wholesale telecommunications aspects of the
market.  Accordingly, the financial statements have been reclassified
to exclude the operating results of the retail stores from continuing operations
and account for them as discontinued operations.





The year
ended September 30, 2008 is the first full year of operations of our business
model as refined and may not be indicative of future operating
results.




F-
7




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





NOTE
2.  BASIS OF
PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES





(A) Basis of
Presentation





The
accompanying consolidated financial statements include the accounts of ICC
Worldwide, Inc., and its wholly own subsidiaries, ICC Italy Srl, and Designer
Appliances Ltd.  (collectively, the “Company”). All significant
inter-company transactions have been eliminated in
consolidation.  Designer Appliances Limited is an inactive
company.





The
Company changed its fiscal year from December 31st to September
30th.  The first fiscal year under this change was the fiscal year
ended September 30, 2007 which consisted of only nine months.





(B) Use of
Estimates





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





(C) Revenue
Recognition





The
Company’s retail products and services are sold primarily for
cash.  Revenue is recognized at the time the products or services are
sold.





The
Company wholesale revenue is primarily commissions on the sale of VoIP (Voice
Over the Internet Protocol) telecommunication services and the sale of
international calling cards and cell phone recharge cards.  Revenue is
recognized when no right of return exists.





(D) Accounts
Receivable





Accounts
receivable are generally for line traffic and promotion incentives from
telephone wholesale suppliers and are based on the amount of line traffic and
promotional sales activity during the specific period.





(E)
Inventory





Inventory
consists of finished goods ready for sale and is stated at the lower of cost or
market.  The Company does not have raw material or work in process
inventory.





(F) Foreign Currency
Translation





Assets
and liabilities of our Company’s foreign subsidiary have been re-measured in
accordance with Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 52 “Foreign Currency Translation”(“SFAS 52”).Management has
determined that the US dollar is the Company’s functional currency for purposes
of applying SFAS 52.





The
re-measurement process requires the use of historical exchange rates between the
foreign currency and the US dollar currency in the presentation of the financial
statements of certain non-monetary accounts.  All exchange gains and
losses from re-measurement of the non-monetary assets are included in the income
statement for the appropriate period.




F-
8




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





(G) Loss Per
Share





Basic and
diluted loss per common share for all periods presented is computed based on the
weighted average number of common shares outstanding during the periods
presented as defined by SFAS No. 128, "Earnings per
Share".  The assumed exercise of common stock equivalents was
not utilized for the year ended September 30, 2008 or the nine months ended
September 30, 2007, since the effect would be anti-dilutive.





(H) Stock Options and
Warrants





The
company follows Statement of Financial Accounting Standards No. 123(R), “Accounting for Stock-Based
Compensation”, (“FAS 123R”) to account for compensation costs when the
Company exchanges equity for goods or services.  Under FAS 123R the
cost of the services received is measured on the grant-date fair value of the
equity award and amortized over the vesting period of the award.





(I)
Reclassifications





Certain
prior year amounts have been reclassified as discontinued operations to conform
with the current year’s presentation, none of which had an impact on total
assets, stockholders’ equity (deficit), net loss, or net loss per
share.





(J) Fair Value of Financial
Instruments





The
carrying value of cash, accounts receivable, deferred revenue, accounts payable,
and accrued expenses approximate fair value because of the short maturity of
these items.





(K) Cash and Cash
Equivalents





For
purposes of the statement of cash flows, the Company considers all highly-liquid
instruments purchased with a remaining maturity of three months or less to be
cash equivalents.





(L)
Concentrations





The
Company maintains its cash in bank deposit accounts that, at times, may exceed
federally insured limits.  The Company has not experienced any losses
in such accounts. Management believes the Company is not exposed to any
significant credit risk related to cash.





(M) Property and
equipment





Property
and equipment are stated at cost less accumulated
depreciation.  Depreciation is provided for in amounts sufficient to
relate the cost of depreciable assets to operations over their estimated service
lives.  The estimated lives in determining depreciation are recognized
primarily on the straight-line method over estimated useful lives of seven years
for store and office fixtures equipment.  For leasehold improvements
and buildings, the Company depreciates the assets over the shorter of their
estimate useful lives or original lease terms plus any renewal periods for which
renewal has been determined to be reasonably assured.





(N) Income
Taxes





The
Company accounts for income taxes in accordance with SFAS 109, Accounting for Income
Taxes.  The Company records deferred income tax assets and
liabilities based up the difference between the financial statement and income
tax bases of assets and liabilities using enacted income tax rates. Valuation
allowances are established when necessary to reduce deferred income tax assets
to the amount expected to be realized.  Income tax expense is the
taxes paid and payable for the period and the change during the period in the
net deferred income tax assets and liabilities.





F-
9




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





(O) Goodwill and Other
Intangible Assets




The
Company accounts for goodwill and other intangible assets in accordance with
Statement of Financial Accounting Standards No. 142 (SFAS 142), Goodwill and Other Intangible
Assets.  Goodwill represents the purchase consideration given
in excess of the net assets acquired in a business
combination.  Goodwill and other intangible assets with indefinite
lives must be tested for impairment on an annual basis.  The Company
performs this annual impairment test at fiscal year end for
goodwill.





Intangible
assets, excluding goodwill, are stated on the basis of cost and are amortized on
a straight-line basis over the estimated life.  Intangible assets with
indefinite lives are not amortized but are evaluated for impairment annually
unless circumstances dictate otherwise.





Recently
Issued Accounting Pronouncements





The
Company has adopted all accounting pronouncements effective before September 30,
2008, which are applicable to the Company.





In July
2006, the Financial Accounting Standards Board (“FASB”) issued FAS
Interpretation No.48, Accounting for Uncertainty in Income
Taxes—An Interpretation of FASB Statement No.109 (“FIN No.48”), which
became effective for the Company on January 1, 2007. This interpretation
clarifies the accounting for income tax benefits that are uncertain in
nature.  Under FIN No.48, a company will recognize a tax benefit in
the financial statements for an uncertain tax position only if management’s
assessment is that its position is “more likely than not” (i.e., a greater than
50 percent likelihood) to be upheld on audit based only on the technical merits
of the tax position.  This accounting interpretation also provides
guidance on measurement methodology, de-recognition thresholds, financial
statement classification and disclosures, interest and penalties recognition,
and accounting for the cumulative-effect adjustment.  The new
interpretation is intended to provide better financial statement comparability
among companies.  FIN No.48 is effective for fiscal years beginning on
or after December 15, 2006. The adoption of FIN No.48 has not had a material
effect on the financial statements of our Company.





In
September 2006, the FASB issued SFAS No.157, “Fair Value
Measurements.”  This statement clarifies the definition of fair
value, establishes a framework for measuring fair value and expands the
disclosures on fair value measurements.  SFAS No.157 is effective for
fiscal years beginning after November 15, 2007.  The Company does not
expect the adoption of SFAS 157 to have an effect on its financial
statements.





On
February 15, 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities,” (“SFAS 159”).  The fair
value option established by SFAS 159 permits, but does not require, all entities
to choose to measure eligible items at fair value at specified election dates.
An entity would report unrealized gains and losses on items for which the fair
value option has been elected in earnings at each subsequent
reporting date. SFAS 159 is effective for our 2009 fiscal
year.  The Company does not expect the adoption of SFAS 159 to have an
effect on its financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Non-Controlling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS
160”).  SFAS 160 establishes new accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of
a subsidiary.  Specifically, this statement requires the recognition
of a non-controlling minority interest as equity in the consolidated financial
statements and separate from the parent's equity.  The net income
amount attributable to the non-controlling interest is included in consolidated
net income on the face of the income statement. SFAS 160 clarifies that changes
in a parent's ownership interest in a subsidiary that do not result in
deconsolidation are equity transactions if the parent retains its controlling
financial interest.  In addition, this statement requires that a
parent recognize a gain or loss in net income when a subsidiary is
deconsolidated.  Such gain or loss will be measured using the fair
value of the non-controlling equity investment on the deconsolidation date. SFAS
160 also includes expanded disclosure requirements regarding the interests of
the parent and its non-controlling interest.  SFAS 160 is effective
for fiscal years, and for interim periods within those fiscal years, beginning
on or after December 15, 2008.  Earlier adoption is
prohibited.  The Company does not expect the adoption of SFAS 160 to
have an effect on its financial statements.




F-
10




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





In
December 2007, the FASB issued FASB Statement No. 141 (Revised 2007), “Business Combinations”
(“SFAS 141R”).  SFAS 141R will significantly change the accounting for
business combinations. Under SFAS 141R, an acquiring entity will be required to
recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS 141R will change
the accounting treatment for certain specific items, including: (i) Acquisition
costs will be generally expensed as incurred; (ii) Non-controlling interests
(formerly known as "minority interests") will be valued at fair value at the
acquisition date; (iii) Acquired contingent liabilities will be recorded at fair
value at the acquisition date and subsequently measured at either the higher of
such amount determined under existing guidance for non-acquired contingencies;
(iv) In process research and development will be recorded at fair value as an
indefinite-lived intangible asset at the acquisition date; (v) Restructuring
costs associated with a business combination generally will be expensed
subsequent to the acquisition date; and (vi) Charges in deferred tax asset
valuation allowances and income tax uncertainties after the acquisition date
generally will affect income tax expense.  SFAS 141R also includes a
substantial number of new disclosure requirements.  The statement
applies prospectively to business combinations occurring in fiscal years
beginning after December 15, 2008.  Earlier adoption is
prohibited.  The Company does not expect the adoption of SFAS 141R to
have an effect on its financial statements.





In May
2008, the FASB issued SFASB No.162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”).  The pronouncement
mandates the GAAP hierarchy reside in the accounting literature as opposed to
the audit literature.  This has the practical impact of elevating FASB
Statements of Financial Accounting Concepts in the GAAP
hierarchy.  This pronouncement will become effective 60 days following
SEC approval. The Company does not believe this pronouncement will impact its
financial statements.





In
September 2008, the FASB issued EITF 07-5, Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to and Entity’s Own Stock (“EITF
07-5”).  The pronouncement provides new guidance for determining
whether equity-linked financial instruments (e.g. warrants and convertible
stock) are indexed to a company’s own stock, and as a result, whether those
instruments should be marked-to-market each period.  In general if
there is a reset feature imbedded in the financial instrument which resets the
strike price of the instrument as a result of the issuance of another financial
instrument with a different stick price, the financial instrument in question is
not considered indexed to the company’s own stock. Therefore, the financial
instrument should be adjusted to fair value each period through the income
statement.  EITF 07-5 is effective for fiscal years beginning after
December 15, 2008.  The Company is studying what impact, if any, EITF
07-5 will have on the Company.




NOTE 3. GOING
CONCERN





The
Company’s consolidated financial statements for the year ended September 30,
2008 and the nine months ended September 30, 2007 have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business.




F-
11




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





The
ability of the Company to continue as a going concern is dependent on the
Company's ability to raise additional funds and implement its new business
plan.  The consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.





Management
believes that by rapidly expanding the number of wholesale accounts primarily in
Italy but also in other European countries coupled with the substantially lower
general and administrative costs required in the wholesale business model, the
Company can reach positive operating cash flow in a matter of
months.




NOTE
4.  LOSS PER
SHARE





In
accordance with SFAS No. 128, “Earnings Per Share,” the basic loss
per common share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares
outstanding.  Diluted loss per common share is computed similar to
basic loss per common share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive.





There
were 167,175,090 and 51,657,162 common stock equivalents at September 30, 2008
and 2007, respectively as follows:





September 30, 2008
                  
                  
                  September 30, 2007Warrants
      outstanding
                  
                  
                  22,500,000
                  
                  
                  
                  7,500,000Fully
      vested non qualified stock options
                  
                  
                  11,000,000
                  
                  
                  
                  11,000,000Conversion
      of notes payable
                  
                  
                  37,584,050
                  
                  
                  
                  33,157,162Conversion
      of Series C preferred stock
                  
                  
                  96,091,040
                  
                  
                  
                  -Total
                  
                  
                  167,175,090
                  
                  
                  
                  51,657,162





Due to
the net loss, none of the potentially dilutive securities were included in the
calculation of diluted earnings per share since their effect would be
anti-dilutive.





NOTE
5.   PROPERTY AND
EQUIPMENT





As
further described in Notes 10 and 14, on October 31, 2008, we sold the remaining
four retail stores thus eliminating the retail portion of the business. The
property and equipment used in the continuing operations is located at the
headquarters office of ICC Italy and includes the capital lease (See Note
12).





Depreciation
expense for continuing assets for the year ended September 30, 2008 and for the
nine months ended September 30, 2007 were $83,541 and $3,407,
respectively.




F-
12




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





NOTE
6. INTANGIBLE
ASSETS





A) Acquired Intangible
Assets




All the
intangible assets of the Company were related to the acquisition of the related
retail stores in September, 2007.




As
further described in Notes 10 and 14, on October 31, 2008, we sold the remaining
four retail stores thus eliminating the retail portion of the
business.




As a
result, our Company no longer has any intangible assets in its financial
statements.




B) Aggregate Amortization
Expense





For the
year ended September 30, 2008, the amortization expense for intangible assets
totaled $459,784 all of which will have been for operations discontinued as a
result of the sale of the retail stores.




No
amortization expense associated with the intangible assets acquired by ICC Italy
in September, 2007 was recognized in the nine months ended September 30,
2007.




C) Estimated Amortization
Expenses




As a
result of the sale of the retail stores, our company will has no future
estimated amortization expenses.




NOTE
7.  NOTES AND CONVERTIBLE NOTES
PAYABLE





On
September 26, 2007, we renegotiated the promissory note we issued on May 11,
2007 (the “May 11, 2007 Note”) to evidence the $60,000 which we borrowed from
The Nutmeg/Mercury Fund LLLP (“Nutmeg”).  The principal and interest
on the May 11, 2007 Note were due at maturity and were convertible into common
shares of our Company at the rate of the lower of $.002 per share or two other
valuation formulas.





The May
11, 2007 Note was superseded by a new promissory note (the “September 26, 2007
Note”) which bears a 12.5% interest rate with principal and accrued interest due
at maturity on May 11, 2009.  The principal and accrued interest may
be converted at any time into the common stock of the Company at $.002 per
share.





As
further described in Note 14, on December 31, 2008 following the end of the
fiscal year, Nutmeg and the Company amended the September 26, 2007 Note to
increase the interest rate to 13.5% effective January 1, 2009, to change the
maturity date to May 11, 2010, and to eliminate the conversion
feature.





On
January 17, 2008, Adamas funded the first of several tranches of a total fully
secured loan of $1,500,000 for use as working capital by the
Company.  The loan bears interest of 10% per annum.  The
loan requires monthly payments of interest only for the first 24 months then
monthly payments of interest and principal based on a 20 year amortization for
the next 36 months.  Principal and interest are all due in payable on
or before the 60th month
anniversary of this secured loan.  By June 30, 2008, Adamas had
advanced all the funds under this secured loan.





On July
9, 2008 The Stealth Fund, LLLP (the “Stealth Fund”) and The Karyn M. Blaise
Irrevocable Trust (“Blaise Trust”) each committed to loan the Company $300,000
pursuant to a $300,000 Convertible Note issued by the Company to each
lender.  At September 30, 2008, all the funds had been advanced by the
Stealth Fund and $200,000 had been advanced by the Blaise Trust under these
agreements.




F-
13




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





Each note
matures on June 30, 2010, is unsecured, and provides that outstanding principal
balance of such note bears interest at 10% per year.  The first three
months of interest is deferred with the first payment of monthly interest due
November 1, 2008.  The Company has the right to prepay the note at any
time without penalty.  Each note is convertible into shares of the
Company’s common stock at a conversion rate of $.007 per share, which rate is
subject to adjustment for share splits and consolidations.  The notes
contain a provision (which may be waived upon 61 days prior written notice) that
the outstanding principal amount of the notes may not be converted into shares
to the extent that such conversion would result in the payee having beneficial
ownership of the Company’s Common Stock of more than 4.99% (such beneficial
ownership and percentage of beneficial ownership being determined in accordance
with SEC Rule 13d-3).  An event of default would occur under each note
if the Company fails to make any payment required by the note within five days
after written notice from the holder of the note, becomes insolvent, bankrupt,
or in general fails to pay its bills on time, or violates a covenant in the note
which remains uncured after 20 days notice.  After the occurrence of
an event of default, the outstanding principal balance and all past due interest
will bear interest at the rate of 18% until paid.





On July
9, 2008 Adamas signed the first addendum (“First Addendum”) to the Company’s
Promissory Note dated January 15, 2008 to Adamas (the “Adamas Note”). which
evidences a $1,500,000 loan to the Company made on such date.  The
First Addendum allows the Company to defer the interest otherwise due each month
through the interest only period without penalty starting with the interest due
in June, 2008.





The
common stock of our Company is very thinly traded and our preferred stock is not
registered for trading.  There are frequent trading days when the
common stock is not traded.  Should the holders of the above
convertible notes payable elect to convert their notes to common stock and
decide to sell shares, the market for the Company’s common stock would likely
not be able to absorb the total volume of the shares so
converted.  Consequently, we have not treated the convertible options
in above notes payable as a derivative within the meaning of SFAS No. 133 “Accounting for Derivative
Instruments and Hedging Activities” as the shares so converted could not
be readily converted to cash without substantial market disruption and a heavy
discount in price which would render the converted stock virtually
worthless.




NOTE
8.  PREFERRED
STOCK





On June
29, 2007, we sold 7,500,000 shares of a newly designated Series B preferred
stock to Adamas.  The purpose of the sale of stock was to raise
capital with which we could pursue an acquisition strategy whereby we can seek
to acquire business assets with a history of operating revenues in markets that
provide room for growth.  The purchase agreement required us to buy
back shares of the Series B preferred stock at the option of the holder through
a series of monthly cash payments.





On
September 28, 2007, the June 29, 2007 purchase agreement was amended to reduce
the potential impact of Adamas’ right to require our Company to begin
repurchasing the Series B preferred stock in August, 2008.  In the
Amended Purchase Agreement Adamas agreed to exchange the Series B preferred
stock for a new Series C preferred stock.  The Series C preferred
stock provided for a) a liquidation price for the preferred shares of $.60 per
share, b) the option to convert the Series C shares to common shares at the rate
of 10 shares of common stock for each share of Series C preferred stock, and c)
the mandatory redemption of any outstanding Series C preferred stock on October
1, 2012 at the liquidation price.  In return, Adamas agreed to change
the formula for the calculation of the cash to fund the Series C preferred stock
buyback option.  Under the new formula, the Company is obligated to
offer to purchase Series C preferred shares at $1 per share from Adamas using
20% of the positive quarterly pre-tax net income as reported in our Form 10-KSB
and 10-QSB filings starting with the calendar quarter ending September 30,
2008.  Adamas must notify the Company during each quarter if it elects
to exercise its option for that quarter only.  Payments are due to
Adamas within 10 days following the filing of the Company’s 10-QSB or
10-KSB.




F-
14




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





Both the
Series B and Series C preferred stock may cast 60 votes per share whereas a
share of common stock has one vote per share on all matters requiring a vote of
the shareholders.  To illustrate the impact of this preference, at the
annual stockholders meeting held on November 27, 2007, this preference allowed
Adamas, as the then holder of all outstanding shares of Series C preferred
stock, to have approximately 76% of the voting power on all matters on which a
shareholder vote was taken.





On
December 3, 2007, we sold 1,054,552 shares of our Series C preferred stock for
$75,984 directly to The Melanie S. Altholtz Irrevocable Trust (“Altholtz Trust”)
which is an investor in Adamas. The transaction mirrors the June 29, 2007 sale
of stock to Adamas and includes the option for the buyer to require our Company
to buy back the shares of the Series C Preferred stock at $1 per share starting
in the third calendar quarter of 2008.  The Company could be required
to use 3% of the Company’s quarterly pre-tax net income as reported in the
Company’s SEC filings for that purchase.





On
December 17, 2007, we sold an additional 1,054,552 shares of our Series C
preferred stock for $75,984 to Adamas.  The transaction was structured
as an amendment to the June 29, 2007 sale of stock to Adamas and includes the
option for Adamas to require our Company to buy back the shares of the Series C
preferred stock at $1 per share starting in the third calendar quarter of
2008.  Under the December 17, 2007 amendment, the Company could be
required to use 23% of the Company’s quarterly pre-tax net income as reported in
the Company’s SEC filings for that purchase, which is an increase from 20% of
the Company’s quarterly pre-tax net income set forth in the September 28, 2007
amendment to the purchase agreement.





The
mandatory redemption feature provides that the Company will buy back any and all
outstanding Series C preferred stock on October 1, 2012 at the liquidation price
of $.60 per share.  Should all the 9,609,044 shares of the Series C
preferred stock be outstanding at October 1, 2012, our Company would have to pay
$5,765,426 on that date to redeem all of the Series C preferred
stock.





The
issuance of the Series C preferred stock was accounted for as a liability in
accordance with SFAS No. 150, “Accounting For Certain Financial
Instruments with Characteristics of both Liabilities and
Equity”.  EITF D-98“Classification and Measurement of
Redeemable Securities” requires that the difference between the carrying
amount of the preferred stock and the mandatory redemption value be accreted
over time in order that the carrying value of the preferred stock equal its
mandatory redemption value at the mandatory redemption date.  For the
year ended September 30, 2008, $1,020,028 was accreted to the carrying value of
the preferred stock for this purpose.





We have
not treated the convertible option in the Series C preferred stock as a
derivative within the meaning of SFAS No. 133 “Accounting for Derivative
Instruments and Hedging Activities” as the common shares so converted
could not be readily converted to cash without substantial market disruption and
a heavy discount in price which would render the converted stock virtually
worthless.





On
January 15, 2008 the Company and Adamas amended the original stock purchase
agreement for a fourth time (“Fourth Amendment”) to further reduce and extend
the amount of positive net income before tax that our Company may be required to
use to purchase the Series C preferred stock beginning in the third calendar
quarter of 2008.  This reduction is based on a sliding scale which
begins with 10% in 2008 and increases to 20%, 25%, and 30% in subsequent years.
In return for this adjustment, the Company issued to Adamas 15,000,000 warrants
to purchase the Company’s common stock at $.01 per share.  The
warrants have a life of 5 years.




F-
15




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





On July
9, 2008 the Company and Adamas amended for the fifth time (“Fifth Amendment”),
the original share purchase agreement dated June 29, 2007 under which Adamas has
purchased a total of 39,921,267 shares of common stock and a total of 8,554,552
shares of Series C preferred stock.  The Fifth Amendment changes the
minimum requirement for net income before income taxes above which Adamas can
cause the Company to repurchase shares of Series C stock from Adamas per quarter
at $1 per share from any positive net income before tax to $50,000 in net income
before tax.  The Fifth Amendment also gives the Company the right to
call up to 50% of the number of shares of Series C preferred stock held by
Adamas on July 9, 2008 at any time and from time to time for the designated
liquidation price of the preferred stock which is $.60 per share.





On July
9, 2008 the Company and The Melanie S. Altholtz Irrevocable Trust (“Altholtz
Trust”) amended the original stock purchase agreement of December 3, 2007 under
which the Altholtz Trust purchased 4,921,267 shares of common stock and
1,054,522 shares of Series C preferred stock.  This amendment changes
the minimum requirement for net income before income taxes above which the
Altholtz Trust can cause the Company to repurchase shares of Series C stock from
the Altholtz Trust per quarter at $1 per share from any positive net income
before tax to $50,000 in net income before tax.  The amendment also
gives the Company the right to call up to 50% of the number of shares of Series
C preferred stock held by the Altholtz Trust on July 9, 2008 at any time and
from time to time for the designated liquidation price of the preferred stock
which is $.60 per share.




F-
16




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





NOTE
9.  STOCKHOLDERS’
EQUITY





A) Super-Voting Rights of
Preferred Stock





On
September 28, 2007, the Purchase Agreement was amended and Adamas agreed to
exchange the Series B preferred stock for a new Series C preferred
stock.  (See Note 7).  The holders of Series B and Series C
preferred stock may each cast 60 votes per share whereas a share of common stock
has one vote per share on all matters requiring a vote of the
shareholders.  To illustrate the impact of this preference, at the
annual stockholders meeting held on November 27, 2007, this preference allowed
Adamas, as the holder of all outstanding shares of Series C preferred stock, to
cast approximately 76% of the votes on all matters on which a shareholder vote
was taken.





B) Warrants
Outstanding





The
following table summarizes the changes in our warrants outstanding and the
related prices for the shares of our common stock.





Number
                                      
                                      Weighted
                                        Average
                                        Exercise
                                        Price Per
                                        ShareOutstanding
      at December 31, 2006
                                      
                                      7,500,000
                                      
                                      $
                                      0.050Granted
                                      
                                      -
                                      
                                      
                                      -Cancelled
                                      
                                      -
                                      
                                      
                                      -Exercised
                                      
                                      -
                                      
                                      
                                      -Exercisable
      September 30, 2007
                                      
                                      7,500,000
                                      
                                      $
                                      0.050Granted
                                      
                                      15,000,000
                                      
                                      $
                                      0.010Cancelled
                                      
                                      -
                                      
                                      
                                      -Exercised
                                      
                                      -
                                      
                                      
                                      -Exercisable
      September 30, 2008
                                      
                                      22,500,000
                                      
                                      $
                                      0.023Weighted
      average remaining life
                                      
                                      3.3
      years





For the
warrants granted on January 15, 2008, the fair value of the warrants on the date
of grant was $111,310 computed using the Black-Scholes valuation model with a
historical volatility rate of 162%, zero dividend payment, and a 5 year bond
equivalent rate of 3.0% on the date of issue.  The $111,310 fair value
of the warrants on the date of grant is being amortized over the life of the
underlying preferred stock which has a mandatory redemption date of October 1,
2012.  During the year ended September 30, 2008, we amortized $16,750
respectively, to interest expense in this regard.




F-
17




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





C) Options
Outstanding





The
following table summarizes the changes in non statutory compensatory stock
options issued to officers and consultants of our Company and the related prices
for the shares of our common stock.  There were no options granted
during the year ended September 30, 2008.




Number
                  
                  
                  Weighted
                    Average
                    Exercise Price
                    Per ShareOutstanding
      December 31, 2006
                  
                  
                  -
                  
                  
                  
                  -Granted
                  
                  
                  11,000,000
                  
                  
                  $
                  0.006Cancelled
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Exercisable
      September 30, 2007
                  
                  
                  11,000,000
                  
                  
                  $
                  0.006Granted
                  
                  
                  -
                  
                  
                  
                  -Cancelled
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Exercisable
      September 30, 2008
                  
                  
                  11,000,000
                  
                  
                  $
                  0.006Weighted
      average remaining life
                  
                  8.9
      years




NOTE
10.  DISCONTINUED
OPERATIONS





As more
fully discussed in Note 14, on October 31, 2008 following the fiscal year end on
September 30, 2008, our Company sold the remaining four retail stores of ICC
Italy in order to focus completely on the wholesale telecom
business.  Almost all the remaining fixed assets and all the facility
leases of the Company are part of the sale.


The Company follows the provisions of
SFAS No. 144, “Accounting for
the Impairment or Disposal of Long-Lived Assets”, related to the
accounting and reporting for segments of a business to be disposed of. The
results of operations for the retail stores have been classified as discontinued
operations in all periods presented.





Revenue
included in discontinued operations of the retail stores for the year ended
September 30, 2008 and for the nine months ended September 30, 2007 were
$1,149,164 and $21,540, respectively.




The sale
of the retail stores impairs the intangible assets associated with the
acquisition of the stores in 2007. As a result we recognized an impairment
charge of $99,628 for the complete impairment of the remaining intangible assets
related to the acquisition of retail stores.





On June
29, 2007 we transferred to Mr. Thomas Large (a former officer and director of
our Company) 100% of the capital stock of Designer Appliances, Inc. and all
other assets and liabilities of our Company relating to our Company’s computer
mouse and software business, including intellectual property and physical
materials, including hardware and software and all rights pertaining
thereto.




F-
18




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





The
results of operations of our computer mouse and software business were presented
as discontinued operations in these financial statements as well. Revenue
included in discontinued operations for the computer mouse and software business
for the nine months ended September 30, 2007 was $144,849.





NOTE 11.LEASE
COMMITMENTS





The
Company currently has one capital lease with a 36-month term and a $1.00 buyout
option after the final payment under the lease.





Capital
lease obligations consist of the following:





September 30, 2008Lease
      for accounting hardware and software system expiring 2010
                
                $
                141,596Less
      current portion
                
                
                (69,701
                )Total
                
                $
                71,894





As
further described in Notes 10 and 14, on October 31, 2008, we sold the remaining
four retail stores.  The sale of the stores ended our Company’s leases
on the stores.  In addition, in October, 2008, we were released from
our lease on the Mantua office facility and sublet a small office apartment on a
month to month basis to house our Italian operations headquarters while we are
building the wholesale operations.





Our U.S.
facilities are currently provided at no charge by the President of the
Company.





Future
minimum lease payments are as follows for the fiscal year:





Capital
                    
                    
                    Operating
                    
                    
                    Total2009
                    
                    $
                    77,943
                    
                    
                    $
                    -
                    
                    
                    
                    77,9432010
                    
                    
                    74,744
                    
                    
                    
                    -
                    
                    
                    
                    74,7442011
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Thereafter
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    $
                    152,717
                    
                    
                    $
                    -
                    
                    
                    $
                    152,717Less
      amounts representing interest
                    
                    
                    (11,121
                    )
                    
                    
                    -
                    
                    
                    
                    (11,121
                    )Present
      value of minimum lease payments
                    
                    
                    141,596
                    
                    
                    
                    -
                    
                    
                    
                    141,596Less current portion
                    
                    
                    (69,701
                    )
                    
                    
                    -
                    
                    
                    
                    (69,701
                    )Total, net of current portion
                    
                    $
                    71,894
                    
                    
                    $
                    -
                    
                    
                    $
                    71,894
  For
      the year ended September 30, 2008 and the nine months ended September 30,
      2007, depreciation for assets on the capitalized lease was $78,230 and
      $3,260, respectively.





NOTE 12INCOME
TAXES





The
United States parent company, its Italian subsidiary, and its inactive United
Kingdom subsidiaries each file a separate income tax return.  There
was no income tax expense for the year ended September 30, 2008 and for the nine
months ending September 30, 2007.  The nine months ended September 30,
2007 was a short tax year reflecting the change in our fiscal year from December
31st to September 30th.




F-
19




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007





The
effective tax expense differs from the expected tax expense for the tax years
ended September 30, 2008 and 2007, respectively.  The expected tax
expense was computed by applying U.S. federal corporate tax rate of 34 percent
to the US income before taxes and the Italian corporate tax rate of 31.5 percent
to ICC Italy’s income before taxes, as follows:





Tax Year Ended
                        September 30, 2008
                      
                      
                      Tax Year Ended
                        September 30, 2007Computed
      expected tax expense (benefit)
                      
                      $
                      (1,237,204
                      )
                      
                      $
                      (117,288
                      )Change
      in valuation allowance
                      
                      
                      1,237,204
                      
                      
                      
                      117,288Effective
      tax expense
                      
                      $
                      -
                      
                      
                      $
                      -




The tax
effects of temporary differences that give rise to significant portions of
deferred tax assets at September 30, 2008 and 2007, respectively, are as
follows:





Tax Year Ended
                        September 30, 2008
                      
                      
                      Tax Year Ended
                        September 30, 2007Deferred
      tax assets:Net
      operating loss carry forwards
                      
                      $
                      2,584,217
                      
                      
                      $
                      1.308,946Less
      valuation allowances
                      
                      
                      (2,584,217
                      )
                      
                      
                      (1,308,946
                      )Net
      deferred tax assets
                      
                      $
                      -
                      
                      
                      $
                      -





As of
September 30, 2008, the United States parent company had net operating loss
carry forwards of approximately $4,916,000 for US income tax
purposes.  The net operating loss carry forwards are available to
offset future taxable income expiring on various dates through
2028.





Internal
Revenue Code Section 382 places a limitation on the utilization of Federal net
operating loss and other credit carryforwards when an ownership change, as
defined by the tax law, occurs.  Generally this limitation arises when
a greater than 50 percentage point change in ownership
occurs.  Accordingly, the actual utilization of the net operating loss
and carryforwards for tax purposes may be limited to a percentage (approximately
6%) of the fair market value of the Company at the time of any such ownership
change.





As of
September 30, 2008, ICC Italy had net operating loss carry forwards of
approximately $2,897,000 for Italian income tax purposes.  As the net
operating loss carry forwards were incurred within three fiscal years of the
formation of the ICC Italy, they may be carried forward without
limit.





Based on
the uncertainty of whether either the US and Italian tax loss carry forwards may
ultimately be utilized prior to their expirations, valuations of $2,584,217 and
$1,308,946 were recorded during the tax years ended September 30, 2008 and 2007,
respectively.





The net
change in the valuation allowance during the year ended September 30, 2008 was
an increase of $1,275,271.




F-
20




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007




NOTE
13. COMMITMENTS AND
CONTIGENCIES





Preferred Stock Optional
Re-Purchase Requirement





As part
of the various amendments to the original June 29, 2007 stock purchase agreement
under which Adamas purchased a total of 39,921,267 shares of common stock and a
total of 8,554,552 shares of Series C preferred stock, the Company is required
to set aside to redeem the outstanding shares of Series C preferred stock at $1
per preferred stock share, 10% of its positive net income before income taxes
above $50,000 in the third and fourth calendar quarters of 2008 and the first
and second calendar quarters of 2009.  The percentage of positive net
income before income taxes above $50,000 that is required to be set aside
increases to 20%, 25%, and 30% for the third and fourth calendar quarters of
2009 and the first and second calendar quarters of 2010; the third and fourth
calendar quarters of 20010 and the first and second calendar quarters of 2011;
and the third and fourth calendar quarters of 2011 and the first and second
calendar quarters of 2012, respectively.  Adams must notify the
Company during each quarter if it elects to exercise its option for that quarter
only.  Payments are due to the Trust within 10 days following the
filing of the Company’s 10-QSB or 10-KSB.





As part
of the various amendments to the original December 3, 2007 stock purchase
agreement under which the Company sold 4,921,267 shares of its common stock and
1,054,552 shares of its Series C preferred stock to The Melanie S. Altholtz
Irrevocable Trust (the “Trust”), the Company gave the Trust the option to
require the Company to purchase the Series C preferred stock on a quarterly
basis starting in the third calendar quarter of 2008 using 3% of the Company’s
positive net income before tax exceeding $50,000 as reported in the Company’s
quarterly and annual SEC filings. The Trust must notify the Company during each
quarter if it elects to exercise its option for that quarter
only.  Payments are due to the trust within 10 days following the
filing of the Company’s 10-QSB or 10-KSB.




NOTE
14.  SUBSEQUENT
EVENTS





On
October 3, 2008, we received the final advance of $100,000 from the Blaise
Trust.




On
October 15, 2008, Adamas committed to loan the Company up to $350,000 and the
Company executed and delivered to Adamas a promissory note to evidence all loans
to be made pursuant to such commitment (“October 15, 2008 Note”).




The Note
matures on December 31, 2009, is unsecured, and provides that outstanding
principal balance of such note bears interest at 10% per year.  All
interest is accrued through February 2009, and all accrued interest is due March
1, 2009 with monthly payments of interest thereafter.  There is no
prepayment penalty on the Note.




On
October 17, 2008 the Company received an advance of $149,000 from Adamas under
the October 15, 2008 Note.




On
October 31, 2008, ICC Italy sold the remaining four retail stores for $249,700
in an installment sale to an investor group that included former employees of
the Company.  The terms provide for a payment of $36,100 down with the
balance paid over the following 50 months.  The effective interest
rate on the payments is approximately 7.3%.  The Company recorded a
loss of $170,000 on the sale.




On
November 25, 2008, the Company received an advance of $116,000 from Adamas under
the October 15, 2008 Note.




F-
21




ICC
WORLDWIDE, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEAR ENDED SEPTEMBER 30, 2008 AND


NINE
MONTHS ENDED SEPTEMBER 30, 2007




On
December 15, 2008, the Stealth Fund, committed to loan the Company up to
$300,000, and the Company executed and delivered to the Stealth Fund a
promissory note to evidence all loans to be made pursuant to such
commitment.  The Company was advised by Wealth Strategy Partners,
which is the general partner for both Adamas and the Stealth Fund that the
remaining $85,000, which could have been advanced by Adamas under the October
15, 2008 Note would be advanced as part of this loan instead.




The Note
matures on January 1, 2012, is unsecured, and provides that outstanding
principal balance of such note bears interest at 10% per year.  The
first six months of interest is accrued and added to the principal of the
note.  Monthly payments of interest on the outstanding principal of
the note begin July 1, 2009.  The Company has the right to prepay the
note at any time without penalty.  The note is convertible into shares
of the Company’s common stock at a conversion rate of $.0015 per share, which
rate is subject to adjustment in the event of subdivisions or combinations of
the Company’s common Stock.




As
further consideration to make the loan to the Company, the Company issued to the
Stealth Fund a warrant to purchase 4,500,000 shares of the Company’s common
stock (the “Warrant”) at any time before January 1, 2014 at a price per share of
$.0015, which exercise price is subject to adjustments upon the occurrence of
certain events, including stock splits, stock dividends, sub-divisions and
combinations of the Company’s common stock.




On
December 12 and December 22, 2008 and on January 5, 2009, the Company received
$115,000, $85,000, and $50,000 in advances, respectively, under this
Note.




On
December 31, 2008 the Company entered into an agreement (the “Exchange
Agreement”) whereby The Nutmeg MiniFund, LLLP (“Nutmeg”) an affiliate of the
Company, returned to the Company for cancellation 19,696,389 shares of the
Company’s common stock in return for the issuance to Nutmeg of an unsecured
promissory note (the “Note”) in the principal amount of $442,502.75 which is the
amount paid by Nutmeg for all of the common stock of the Company being returned
by Nutmeg less the proceeds from any sales of the common stock.  The
common stock being returned had been issued to Nutmeg in various
transactions.  This common stock of the Company being returned was all
of the Company’s capital stock Nutmeg owned at the time of the
transaction.




The
outstanding principal of the Note bears interest at the rate of 5% per
year.  Payments of interest and principal will be due quarterly on the last
day of each calendar quarter commencing September 30, 2009.  Principal
payments will be $25,000 per quarter for four quarters with the first payment of
principal due on December 31, 2010. Thereafter, the Company shall be required to
make consecutive quarterly payments of principal in the amount of $27,500 each
for the next four quarters, $30,000 each for the next four quarters and
thereafter, $32,500 per quarter until all principal on the Note has been
paid.





Pursuant
to the Exchange Agreement Nutmeg also waived the payment to it of $1,150 due
from the Company for past investor relations activities.




In
connection with the Exchange Agreement on December 31, 2008 the Company and
Nutmeg/Mercury, LLLP (“Nutmeg/Mercury”) entered into a first amendment of the
Superseding Note of September 26, 2007 (“Superseding Note”) between the Company
and Nutmeg Mercury and signed in September, 2007 in the principal amount of
$60,000 plus accrued interest. In the first amendment, the Company agreed to
increase the interest rate on the Superseding Note from 12.5% to 13.5% per year
effective January 1, 2009 and Nutmeg/Mercury agreed to (a) extend the maturity
date of the Superseding Note from May 11, 2009 to May 11, 2010, (b) eliminate
the option of the note holder (Nutmeg/Mercury) to convert some or all of the
note’s principal and accrued interest into the Company’s common stock and (c)
return to the Company for cancellation warrants to purchase an aggregate of
7,500,000 shares of the Company’s common stock held by Nutmeg/Mercury. 
After such cancellation Nutmeg/Mercury no longer owns any warrants to purchase
the Company’s capital stock.





At
December 31, 2008, the Nutmeg/Mercury note had accrued $17,574 in
interest.  The principal and accrued interest on the Nutmeg/Mercury
note was convertible into approximately 38,786,847 shares of common stock of the
Company.




F-
22