ICRD International Card Establishment Inc (CE)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009.

OR

/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

FOR THE TRANSITION FROM _______ TO ________.

COMMISSION FILE NUMBER 000-33129

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


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


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

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

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

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] Smaller reporting company [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]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Reguulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes / / No / /

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of May 19, 2009, there were 35,873,703 outstanding shares of the Registrant's Common Stock, $.0005 par value.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements 4
Item 2. Management's Discussion and Analysis or Plan of Operation 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Item 4. Controls and Procedures 14

PART II - OTHER INFORMATION

Item 1. Legal Proceedings 14
Item 1A. Risk Factors 14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 15
Item 6. Exhibits 15

SIGNATURES 15

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTERNATIONAL CARD ESTABLISHMENT, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

March 31, 2009

 INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS

 MARCH 31, 2009 DECEMBER 31,
 2008
 ________________ _________________
 (UNAUDITED) (AUDITED)
 ________________ _________________
 ASSETS

CURRENT ASSETS
 Cash $ 72,070 $ 91,404
 Accounts receivable, net of allowance of $51,780 and $50,178 at March 31,
 2009 and December 31, 2008, respectively 15,236 22,572
 Note receivable, net of allowance of $50,000 at December 31, 2008 and 2007,
 respectively 88 88
 Inventory 81,769 76,394
 Other receivables 106,681 255,631
 Prepaid assets 12,507 25,003
 ________________ _________________
 Total current assets 288,351 471,092
 ________________ _________________

FIXED ASSETS, net of accumulated depreciation of $2,983,651 and $2,983,007 at
 March 31, 2009 and December 31, 2008, respectively 8,088 -
INTANGIBLE ASSETS 1,501,612 1,579,378
GOODWILL 87,979 87,979
OTHER NON-CURRENT ASSETS 116,685 116,685
 ________________ _________________
 Total assets $ 2,002,715 $ 2,255,134
 ================ =================

 LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable $ 40,966 $ 22,915
 Accrued expenses 488,519 593,312
 Line of credit, related party 560,395 658,536
 ________________ _________________
 Total current liabilities 1,089,880 1,274,763

COMMITMENTS & CONTINGENCIES - -
STOCKHOLDERS' EQUITY
 Preferred stock; $0.01 par value; 10,000,000 shares authorized, 54,000
 shares issued and outstanding at March 31, 2009 and December 31, 2008,
 respectively 540 540
 Common stock; $0.0005 par value; 100,000,000 shares authorized, 35,873,703
 and 35,873,703 shares issued and outstanding at March 31, 2009, and
 December 31, 2008, respectively 17,937 17,937
 Common stock subscribed 30,000 30,000
 Additional paid-in capital 19,628,401 19,628,401
 Accumulated deficit (18,764,043) (18,696,507)
 ________________ _________________
 Total stockholders' equity 912,835 980,371
 ________________ _________________

 Total liabilities and stockholders' equity $ 2,002,715 $ 2,255,134
 ================ =================

See Accompanying Notes to Consolidated Financial Statements.

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

 THREE MONTHS ENDED ENDED
 ____________________________________________
 MARCH31, MARCH 31,
 2009 2008
 ________________ __________________

Revenue:
 Merchant services revenues $ 1,427,381 $ 1,797,120
 Equipment sales 99,065 162,194
 Less: sales returns and allowances (8,732) (18,635)
 ________________ __________________
 Net revenue 1,517,714 1,940,679

Cost of revenues:
 Commissions 140,305 182,002
 Cost of sales 734,411 1,015,162
 Cost of sales - equipment 25,465 37,921
 ________________ __________________
 Cost of revenue 900,181 1,235,085
 ________________ __________________
 Gross profit
 617,533 705,594

Operating, general and administrative expenses:
 General, administrative and selling expenses 578,634 606,408
 Depreciation 645
 Merchant portfolio attrition expense 95,550 82,600
 ________________ __________________
 Total operating, general and administrative expenses 674,829 689,008

 Net operating income (loss) (57,296) 16,586
 ________________ __________________
Non-operating income (expense):
 Interest income - 51
 Interest (expense) (10,240) (22,182)
 ________________ __________________

 Total non-operating income (expense) (10,240) (22,131)
 ________________ __________________
Net income (loss) before provision for income taxes (67,536) (5,545)
 ________________ __________________

Provision for income taxes - -

Net income (loss) $ (67,536) $ (5,545)
 ================ ==================

Earnings per share - basic and diluted $ (0.00) $ (0.00)
 ================ ==================

Weighted average number of shares of common stock outstanding - basic and diluted 35,873,703 35,286,449
 ================ ==================

See Accompanying Notes to Consolidated Financial Statements.

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

 THREE MONTHS ENDED
 _________________________________________________
 MARCH 31, 2009 MARCH 31, 2008
 (RESTATED)
 _____________________ _______________________

Cash Flows from Operating Activities:
 Net income(loss) $ (67,536) $ (5,545)
 Depreciation 645 -
 Write off of cancelled merchant accounts 95,550 82,600
 Allowance for doubtful accounts, other receivables and accrued interest
 income, net of bad debt recoveries 1,603 (14,210)

 Write off of software consulting originally capitalized as fixed asset - 6,320
 Adjustments to reconcile net income (loss) to cash provided by operating
 activities:
 Changes in assets and liabilities
 Decrease in accounts receivable 5,733 33,291
 Decrease in inventories 100,945 89,380
 Decrease in other receivables 148,949 155,705
 Decrease (increase) in prepaid expenses 12,498 (16,667)
 Increase (decrease) in accounts payable 18,052 (11,465)
 (Decrease) in accrued expenses (104,795) (27,039)
 _____________________ _______________________

 Net cash provided by operating activities 211,644 292,370
 _____________________ _______________________

Cash Flows from Investing Activities:
 Acquisition of merchant accounts, net of attrition (17,784) (24,463)
 Purchase of property and equipment (8,733) -
 Payments received toward notes receivable - 2,718
 _____________________ _______________________

 Net cash (used in) investing activities (26,517) (21,745)
 _____________________ _______________________
Cash Flows from Financing Activities:
 Payment on notes payable - (25,568)
 Noncash advances from line of credit, related party 1,048 44,860
 Payment on line of credit, related party (410,509) (338,060)
 Proceeds from line of credit, related party 205,000 155,000
 Payment on notes payable, related party - (160,000)
 _____________________ _______________________

 Net cash (used in) financing activities (204,461) (323,768)
 _____________________ _______________________

 Net decrease in cash (19,334) (53,143)
 _____________________ _______________________

Cash, beginning of period 91,404 126,149
 _____________________ _______________________

Cash, end of period $ 72,070 $ 73,006
 ===================== =======================

See Accompanying Notes to Consolidated Financial Statements.

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

 THREE MONTHS ENDED
 MARCH 31, 200 MARCH 31, 2008
 (RESTATED)

 _____________________ _______________________

SUPPLEMENT DISCLOSURE OF CASH
 FLOW INFORMATION
 Cash paid for interest $ 65,307 $ 15,379
 Cash paid for income taxes $ - $ -

NON-CASH INVESTING AND FINANCING TRANSACTIONS
 Inventory purchased from line of credit, related party $ 106,320 $ 57,385

See Accompanying Notes to Consolidated Financial Statements.

INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION AND ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND ORGANIZATION

The accompanying Condensed Consolidated Financial Statements of International Card Establishment, Inc. (the "Company") should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2008. Significant accounting policies disclosed therein have not changed except as noted below.

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

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

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, these interim condensed consolidated financial statements should be read in conjunction with the Company's most recent audited financial statements and notes thereto included in its December 31, 2008 Annual Report on Form 10-K. Operating results for the period ended March 31, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.

RECLASSIFICATION

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

NOTE 2. OTHER RECEIVABLES

At March 31, 2009, and December 31, 2008, other receivables consisted of the following:

 MARCH 31, 2009 DECEMBER 31, 2008

Merchant residuals receivable $ 96,113 $ 226,717
Other receivables 10,568 28,914
 ______________ _____________
 Total $ 106,681 $ 255,631
 ============== =============

Other receivables consist primarily of residuals due from commissions earned from merchant account transactions. These receivables decreased approximately $14,500 due to reduced sales by merchants caused by the recession. Tighter credit policies have reduced the number of new accounts that we acquire thereby increasing the quality of earnings by taking the most conservative forecast of the collectability of residuals. Additionally, merchants are charged an annual fee in December accounting for approximately $116,100 of the December 2008 residuals receivable.

NOTE 3. SUBSCRIPTIONS

As of March 31, 2009, we have instructed our SEC counsel to finalize all necessary paperwork for the issuance of shares comprising the remaining $30,000 in our common stock subscription.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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

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

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

o EXECUTIVE SUMMARY, OVERVIEW AND DEVELOPMENT OF OUR BUSINESS. These sections provide a general description of the Company's business, as well as recent developments that we believe are important in understanding our results of operations as well as anticipating future trends in our operations.

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

o RESULTS OF OPERATIONS. This section provides an analysis of our results of operations for the three months ended March 31, 2009 compared to the three months ended March 31, 2008. A brief description of certain aspects, transactions and events is provided, including related-party transactions that impact the comparability of the results being analyzed.

o LIQUIDITY AND CAPITAL RESOURCES. This section provides an analysis of our financial condition and cash flows as of March 31, 2009 and December 31, 2008.

EXECUTIVE SUMMARY

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

OVERVIEW

We are a rapidly growing provider of credit and debit card-based payment processing services and Gift & Loyalty products to small merchants. As of March 31, 2009, we provided our services to numerous ISOs and thousands of merchants located across the United States. Our payment processing services enable our merchants to process traditional card-present, or swipe transactions, as well as card-not-present transactions. A traditional card-present transaction occurs whenever a cardholder physically presents a credit or debit card to a merchant at the point-of-sale. Card-not-present transactions occur whenever the customer does not physically present a payment card at the point-of-sale and may occur over the Internet or by mail, fax or telephone.

DEVELOPMENT OF OUR BUSINESS

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

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

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

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

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

In January 2009 we began a new month-to-month "rental" ("Liftmysales") program. The first sales under this program were booked in February 2009. Under this program, there is no long-term contract and the merchant pays an all inclusive fee for the loan of a terminal and monthly fees for all services. These services have been expanded to include assistance to the merchant in marketing their company including on-line "coupon" and sales tools. This program is being marketed under the LIFT name. A video detailing the program is available at WWW.LIFTMYSALES.COM. Under this program, the merchant is provided a "loaner" terminal.

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

CRITICAL ACCOUNTING POLICIES

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

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

ALLOWANCE FOR DOUBTFUL ACCOUNTS

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

REVENUE AND COST RECOGNITION

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

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

GOODWILL AND INTANGIBLES

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

FAIR VALUE ACCOUNTING

In September 2006, the FASB issued FASB Statement No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of FAS 157 were adopted January 1, 2008. In February 2008, the FASB staff issued Staff Position No. 157-2 "Effective Date of FASB Statement No. 157" ("FSP SFAS 157-2"). FSP SFAS 157-2 delayed the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The provisions of FSP SFAS 157-2 are effective for the Company's fiscal year beginning January 1, 2009.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2009 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2008

Results of operations consist of the following:

 March 31, 2009 March 31, 2008 Difference Difference
 $ %
 ______________________________________________________________________________________________

Net Revenues $ 1,517,714 $ 1,940,679 $ (422,965) (22)
Cost of Revenues 900,181 1,235,085 334,904 27
 ______________________________________________________________________________________________
Gross Profit 617,533 705,594 (88,061) (12)
Operating, General,
 and Administrative Costs 674,829 689,008 14,179 2
 ______________________________________________________________________________________________
Net Operating Gain/(Loss) $ (57,296) $ 16,586 $ (73,882) (445)
 ==============================================================================================

Net revenues decreased by $422,965 from $1,940,679 for the three months ended March 31, 2008 to $1,517,714 for the three months ended March 31, 2009, due mainly to the poor economy as well as continued attrition of merchant accounts and tighter credit policies. Residuals decreased by approximately $309,000. This decrease was due in part to the attrition of merchant accounts but the primary factor was the faltering economy which effected us in two ways. First, reduced merchant sales led directly to reduced residuals. Secondly, many small businesses closed shop last year due to the lagging economy. A number of merchants simply closed their doors and bank accounts, precluding us from even collecting their early termination fees. Sales dropped by approximately $113,964 the major portion of this drop being equipment sales which decreased approximately $63,000. Again, this decline was due primarily to the economy. Merchants were unwilling to sign three and four year contracts in such a drastic economic climate. In January 2009 we introduced a new marketing model to counter this reluctance on the part of merchants. Merchant attrition, caused by better offers from competitors as well as closing businesses, is a common aspect of our industry. However, we believe our new marketing models will help stop attrition to some extent.

The costs associated with the merchant account services decreased by approximately 27% or $334,904 primarily due to decreased costs associated with residual income as well as decreased commissions and equipment costs due to lower sales. Again, both residuals and sales were lower than in prior periods due to the sluggish economy.

General and administrative costs decreased by approximately 2% or $14,179 from $689,008 for the three months ended March 31, 2008 to $674,829 for the three months ended March 31, 2009. While there was cumulative decrease of approximately $61,500 for insurance, professional, office and bonus expenses these were offset by a $56,000 combined increase in advertising, amortization, salaries and office rent. The $15,800 increase in advertising reflects costs associated with the startup of the new LiftMySales program.

LIQUIDITY AND CAPITAL RESOURCES

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

 March 31, 2009 December 31, 2008 Difference Difference
 $ %
 ________________________________________________________________________

Cash $ 72,070 $ 91,404 $ (19,334) (21)
Accounts Payable and
 Accrued Expenses $ 529,485 $ 616,227 $ (86,742) (14)
Accounts Receivable, net $ 15,236 $ 22,572 $ (7,336) (33)

We have financed our operations during the first quarter primarily through sales, the collection of accounts receivable, the use of our line of credit, and the use of cash on hand. As of March 31, 2009, we had total current liabilities of $1,089,880 compared to $1,274,763 as of December 31, 2008. The decrease in current liabilities is primarily due to a decrease in Accrued Expenses and paying down of the related party line of credit.

Cash decreased 21% from $91,404 at December 31, 2008 to $72,070 at March 31, 2009 due to the paying down of the related party line of credit and increased advertising, amortization, salaries and office rent expeses.

As of March 31, 2009, our accounts receivable, net decreased to $15,236 compared to $22,572 at December 31, 2008. The relating allowance for doubtful accounts increased $1,600 from $50,178 at December 31, 2008 to $51,780 as of March 31, 2009 because of continued strong controls on cash collections.

We had no equity issuances in the first quarter of 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

N/A.

ITEM 4T. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission'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 officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company's management, including William Lopshire, the Company's Chief Executive Officer ("CEO") and Candace Mills, the Company's Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the three months ended March 31, 2009. Based upon that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROLS

Our management, with the participation our Chief Executive Officer and Chief Financial Officer, performed an evaluation as to whether any change in our internal controls over financial reporting occurred during the 2009 Quarter ended March 31, 2009. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the 2009 Quarter ended March 31, 2009 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

N/A.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

(1) Committees and financial reviews.

The board of directors has not established an audit committee. In addition, we do not have any other compensation or executive or similar committees. We will not, in all likelihood, establish an audit committee until such time as we increase our revenues, of which there can be no assurance. We recognize that an audit committee, when established, will play a critical role in our financial reporting system by overseeing and monitoring management's and the independent auditor's participation in the financial reporting process.

Until such time as an audit committee has been established, the board of directors will undertake those tasks normally associated with an audit committee to include, but not by way of limitation, the (i) review and discussion of the audited financial statements with management, and (ii) discussions with the independent auditors with respect to the matters required to be discussed by the Statement On Auditing Standards No. 61, "Communications with Audit Committees", as may be modified or supplemented.

ITEM 6. EXHIBITS.

(a) The following exhibits are filed with this report.

(b)

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

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

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

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 20, 2009

INTERNATIONAL CARD ESTABLISHMENT, INC.

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


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

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