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 SEPTEMBER 30, 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.)

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 regulation 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 November 16, 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.................................11
Item 3. Quantitative and Qualitative Disclosures About Market Risk...........15
Item 4. Controls and Procedures..............................................15

PART II - OTHER INFORMATION

Item 1. Legal Proceedings....................................................17
Item 1A. Risk Factors.........................................................17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..........17
Item 3. Defaults Upon Senior Securities......................................17
Item 4. Submission of Matters to a Vote of Security Holders..................17
Item 5. Other Information....................................................17
Item 6. Exhibits.............................................................17

SIGNATURES....................................................................18

 PART I
 FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 INTERNATIONAL CARD ESTABLISHMENT, INC.
 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 September 30, 2009
 INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS

 SEPTEMBER 30, DECEMBER 31,
 2009 2008
 (UNAUDITED) (AUDITED)
 ____________ ____________

 ASSETS

CURRENT ASSETS
 Cash $ 109,863 $ 91,404
 Accounts receivable, net of allowance of $28,009
 and $50,178 at September 30, 2009 and December 31,
 2008, respectively 15,891 22,572
 Note receivable, net of allowance of $50,000 at
 September 30, 2009 and December 31, 2008, respectively 88 88
 Inventory 73,027 76,394
 Other receivables 93,915 255,631
 Prepaid assets 37,500 25,003
 ____________ ____________

 Total current assets 330,284 471,092
 ____________ ____________

FIXED ASSETS, net of accumulated depreciation of $2,992,251
 and $2,983,007 at September 30, 2009 and December 31, 2008,
 respectively 27,215 -
INTANGIBLE ASSETS 1,419,971 1,579,378
GOODWILL 87,979 87,979
OTHER NON-CURRENT ASSETS 117,576 116,685
 ____________ ____________

 Total assets $ 1,983,025 $ 2,255,134
 ============ ============


 LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable $ 26,427 $ 22,915
 Accrued expenses 494,540 593,312
 Due to FTS - Underpayment 83,545 -
 Line of credit, related party 684,399 658,536
 ____________ ____________

 Total current liabilities 1,288,911 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
 September 30, 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 September 30, 2009, and December 31, 2008,
 respectively 17,937 17,937
 Common stock subscribed 30,000 30,000
 Additional paid-in capital 19,628,400 19,628,401
 Accumulated deficit (18,982,763) (18,696,507)
 ____________ ____________

 Total stockholders' equity 694,114 980,371
 ____________ ____________

 Total liabilities and stockholders' equity $ 1,983,025 $ 2,255,134
 ============ ============


 See Accompanying Notes to Condensed Consolidated Financial Statements.

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

 THREE MONTHS ENDED NINE MONTHS ENDED
 _______________________________ _______________________________
 SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
 2009 2008 2009 2008
 _______________________________ _______________________________

Revenue:
 Merchant services revenues $ 1,268,424 $ 1,688,444 $ 3,986,257 $ 5,266,420
 Equipment sales 132,241 173,889 355,827 503,889
 Less: sales returns and allowances (6,504) (7,052) (21,634) (28,114)
 _______________________________ _______________________________
 Net revenue 1,394,161 1,855,281 4,320,450 5,742,195

Cost of revenue:
 Commissions 157,251 208,873 476,786 560,349
 Cost of sales 677,962 947,154 2,155,290 3,002,590
 Cost of sales - equipment 13,279 34,224 68,946 115,189
 _______________________________ _______________________________
 Cost of revenue 848,492 1,190,251 2,701,022 3,678,128
 _______________________________ _______________________________
 Gross profit 545,669 665,030 1,619,428 2,064,067

Operating, general and administrative expenses:
 General, administrative and selling expenses 490,562 581,450 1,604,466 1,732,532
 Depreciation 5,950 - 9,244 -
 Merchant portfolio attrition expense 60,550 84,700 222,250 242,550
 _______________________________ _______________________________
 Total operating, general and administrative
 expenses 557,062 666,150 1,835,960 1,975,082

 Net operating gain (loss) (11,393) (1,120) (216,532) 88,985
 _______________________________ _______________________________

Non-operating income (expense):
 Interest income - 14 1 94
 Interest (expense) (11,183) (16,331) (31,088) (56,800)
 Other Expense - FTS - - (38,636) -
 _______________________________ _______________________________
 Total non-operating income (expense) (11,183) (16,317) (69,723) (56,706)
 _______________________________ _______________________________
Net (loss) before provision for income taxes (22,576) (17,437) (286,255) 32,279
 _______________________________ _______________________________

Provision for income taxes - - - -

Net income (loss) $ (22,576) $ (17,437) $ (286,255) $ 32,279
 =============================== ===============================

Earnings per share - basic $ (0.00) $ 0.00 $ (0.01) $ 0.00

Earnings per share - dilutive $ (0.00) $ 0.00 $ (0.01) $ 0.00

Weighted average shares outstanding - basic 35,873,703 35,548,160 35,873,703 35,374,323

Weighted average shares outstanding - dilutive 35,873,703 35,548,160 35,873,703 36,077,572


 See Accompanying Notes to Condensed Consolidated Financial Statements.

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

 NINE MONTHS ENDED
 _________________________________
 SEPTEMBER 30, SEPTEMBER 30,
 2009 2008
 _____________ _____________

Cash Flows from Operating Activities:
 Net (loss) income $ (286,255) $ 32,279
 Depreciation 9,244 -
 Write off of cancelled merchant accounts 222,250 242,550
 Allowance for doubtful accounts, other receivables and accrued interest
 income, net of bad debt recoveries (22,168) (30,388)
 Compensation for stock awards - 14,027
 Write off of software consulting originally capitalized as fixed asset - 6,320
 Adjustments to reconcile net (loss) income to cash provided by operating
 activities:
 Changes in assets and liabilities
 Decrease in accounts receivable 28,849 35,523
 Decrease in inventories 301,842 266,919
 Decrease in other receivables 161,716 136,103
 (Increase) in prepaid expenses (12,497) (37,501)
 (Increase) decrease in other non-current assets (891) -
 Increase in accounts payable 3,513 1,012
 (Decrease) in accrued expenses (98,774) (83,496)
 Increase in Due to FTS - Underpayment 83,543 8,776
 _____________ _____________
 Net cash provided by operating activities 390,372 592,124
 _____________ _____________

Cash Flows from Investing Activities:
 Acquisitions of merchant accounts, net of attrition (62,842) (72,487)
 Purchase of property and equipment (36,459) -
 Payments received toward notes receivable - 6,340
 _____________ _____________
 Net cash (used in) investing activities (99,301) (66,147)
 _____________ _____________

Cash Flows from Financing Activities:
 Payment on notes payable - (42,613)
 Noncash advances from line of credit, related party 53,137 120,246
 Payment on line of credit, related party (945,749) (858,264)
 Proceeds from line of credit, related party 620,000 620,000
 Payment on notes payable, related party - (400,000)
 Proceeds from common stock subscribed - 250
 _____________ _____________
 Net cash (used in) financing activities (272,612) (560,381)
 _____________ _____________
 Net increase in cash 18,459 (34,404)
 _____________ _____________
Cash, beginning of period 91,404 126,149
 _____________ _____________
Cash, end of period $ 109,863 $ 91,745
 ============= =============


 See Accompanying Notes to Condensed Consolidated Financial Statements.



 6

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


 NINE MONTHS ENDED
 _________________________________
 SEPTEMBER 30, SEPTEMBER 30,
 2009 2008
 _____________ _____________

SUPPLEMENT DISCLOSURE OF CASH
 FLOW INFORMATION
 Cash paid for interest $ 23,809 $ 51,338
 Cash paid for income taxes $ - $ -


NON-CASH INVESTING AND FINANCING TRANSACTIONS
 Inventory purchased from line of credit, related party $ 298,475 $ 253,406

 See Accompanying Notes to Condensed 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 September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.

ACCOUNTING POLICIES

FAIR VALUE ACCOUNTING

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1 Unadjusted quoted prices in active markets that are accessible at
 the measurement date for identical, unrestricted assets or
 liabilities;

Level 2 Quoted prices in markets that are not active, or inputs that are
 observable, either directly or indirectly, for substantially the
 full term of the asset or liability;

Level 3 Prices or valuation techniques that require inputs that are both
 significant to the fair value measurement and unobservable
 (supported by little or no market activity).

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.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING GUIDANCE

ADOPTED

On September 30, 2009, the Company adopted changes issued by the Financial Accounting Standards Board ("FASB") to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards CodificationTM ("Codification") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The

FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Financial Statements.

In April 2009, the FASB issued authoritative guidance for "Interim Disclosures about Fair Value of Financial Instruments," which requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This guidance also requires those disclosures to be in summarized financial information at interim reporting periods. This guidance is effective for interim reporting periods ending after June 15, 2009. The Company adopted this guidance in the second quarter of 2009 and it did not have a material impact on the financial statements.

In April 2009, the FASB issued authoritative guidance for the "Recognition and Presentation of Other-Than-Temporary Impairments" in order to make existing guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The Company adopted this guidance in the second quarter of 2009 and it did not have a material impact on the financial statements.

In April 2009, the FASB issued authoritative guidance for "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly." This guidance provides additional direction for estimating fair value in accordance with established guidance for "Fair Value Measurements," when the volume and level of activity for the asset or liability have significantly decreased. This guidance also includes direction on identifying circumstances that indicate a transaction is not orderly. This guidance is effective for interim and annual reporting periods ending after June 15, 2009. The Company adopted this guidance in the second quarter of 2009 and it did not have a material impact on the financial statements.

In June 2009, the FASB issued authoritative guidance which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance applies to both interim financial statements and annual financial statements and is effective for interim or annual financial periods ending after June 15, 2009. This guidance does not have a material impact on our financial statements.

ISSUED

In June 2009, the FASB issued authoritative guidance for "Accounting for Transfers of Financial Assets," which eliminates the concept of a "qualifying special-purpose entity," changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets, including securitization transactions, and an entity's continuing involvement in and exposure to the risks related to transferred financial assets. This guidance is effective for fiscal years beginning after November 15, 2009. The Company will adopt this guidance in fiscal 2010 and does not expect that the adoption will have a material impact on the consolidated financial statements.

In June 2009, the FASB issued authoritative guidance amending existing guidance. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. This guidance is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company will adopt this guidance in fiscal 2010. The Company does not expect that the adoption will have a material impact on the consolidated financial statements.

NOTE 2. OTHER RECEIVABLES

At September 30, 2009, and December 31, 2008, other receivables consisted of the following:

 SEPTEMBER 30, DECEMBER 31,
 2009 2008
 _____________ ____________

Merchant residuals receivable $ 76,180 $ 226,717
Other receivables 17,735 28,914
 _____________ ____________
 Total $ 93,915 $ 255,631
 ============= ============

Other receivables are split between residuals due from commissions earned from merchant account transactions and employee advances with a $15,000 advance having been made to our top sales rep. The commission receivables decreased approximately $150,537 due to reduced sales by merchants caused by the recession. Our merchants experienced approximately a 16% decrease in sales between July 1 and September 30, 2009. 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.

NOTE 3. DUE TO FTS - UNDERPAYMENT

In June 2009, one of our residual sources notified us that between November 2008 and April 2009 they had undercharged us by $111,393. An agreement was reached whereby the vendor would deduct an additional $9,283 per month in fees over the next 12 months. The $111,393 was split with $72,757 being offset against the

second quarter residual income and $38,636 (representing the November and December 2008 portion) was treated as Other Expense. At September 30, 2009 the outstanding balance payable was $83,545.

NOTE 4. SUBSCRIPTIONS

As of September 30, 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.

NOTE 5. FAIR VALUE ACCOUNTING

In accordance with authoritative guidance, the table below sets forth the Company's financial assets and liabilities measured at fair value by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 FAIR VALUE AT SEPTEMBER 30, 2009
 _______________________________________________

 TOTAL LEVEL 1 LEVEL 2 LEVEL 3
 _______________________________________________
Assets:
 Intangibles -
 Merchant Portfolios $ 984,971 $ - $ 984,971 $ -
 _______________________________________________

 $ 984,971 $ - $ 984,971 $ -
 ===============================================
Liabilities:
 Line of Credit,
 related party $ 684,399 $ - $ 684,399 $ -
 _______________________________________________

 $ 684,399 $ - $ 684,399 $ -
 ===============================================

NOTE 6. RELATED PARTY LINE OF CREDIT

The related party line of credit was renewed for an additional year at June 30, 2009, at a fee of $50,000.

NOTE 7. SUBSEQUENT EVENTS

Management evaluated all activity of the Company through November 16, 2009 (the issue date of the Financial Statements) and concluded that no subsequent events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

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

This 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 September 30, 2009 compared to the three months ended September 30, 2008 and the nine months ended September 30, 2009 compared to the nine months ended September 30, 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 September 30, 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 September 30, 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, 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, a 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 charge backs. 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.

In determining our revenue reporting we analyze the sales transaction for gross versus net revenue recognition as required by the Revenue Recognition Topic of the FASB ASC. 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 fees 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, as required by the Intangibles - Goodwill and Other Topic of the FASB ASC on the valuation of Goodwill and Intangibles, we also hire an outside firm to complete an annual valuation to determine any impairment recognized in current earnings.

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE ACCOUNTING

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, Fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1 Unadjusted quoted prices in active markets that are accessible at
 the measurement date for identical, unrestricted assets or
 liabilities;

Level 2 Quoted prices in markets that are not active, or inputs that are
 observable, either directly or indirectly, for substantially the
 full term of the asset or liability;

Level 3 Prices or valuation techniques that require inputs that are both
 significant to the fair value measurement and unobservable
 (supported by little or no market activity).

In accordance with authoritative guidance, the table below sets forth the Company's financial assets and liabilities measured at fair value by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 FAIR VALUE AT SEPTEMBER 30, 2009
 _______________________________________________

 TOTAL LEVEL 1 LEVEL 2 LEVEL 3
 _______________________________________________
Assets:
 Intangibles -
 Merchant Portfolios $ 984,971 $ - $ 984,971 $ -
 _______________________________________________

 $ 984,971 $ - $ 984,971 $ -
 ===============================================
Liabilities:
 Line of Credit,
 related party $ 684,399 $ - $ 684,399 $ -
 _______________________________________________

 $ 684,399 $ - $ 684,399 $ -
 ===============================================

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2008

Results of operations consist of the following:

 September 30, September 30, Difference Difference
 2009 2008 $ %
 ________________________________________________________

Net Revenues $ 1,394,161 $ 1,855,281 $(461,120) (25)
Cost of Revenues 848,492 1,190,251 (341,759) (29)
 ________________________________________________________
Gross Profit 545,669 665,030 (119,361) (18)
Operating, General,
 and Administrative
 Costs 557,062 666,150 (109,088) (16)
 ________________________________________________________

Net Operating Gain/
 (Loss) $ (11,393) $ (1,120) $ (10,273) (916)
 =======================================================

Net revenues decreased by $461 from $1,855,281for the three months ended September 30, 2008, to $1,394,161 for the three months ended September 30, 2009, due mainly to the poor economy as well as continued attrition of merchant accounts and tighter credit policies. Residuals decreased by approximately $419,000. This decrease was due in part to the attrition of merchant accounts but the primary factor was the faltering economy which affected 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. Equipment sales dropped by $95,500 but were offset by $53,400 in monthly fees collected through our new marketing model, introduced in January 2009, wherein merchants receive a "loaner" terminal as part of a total package for which they pay a flat monthly fee. 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. In the third quarter we saw a significant decline in attrition of merchant accounts, roughly 22% less than we had seen over the previous year.

The costs associated with the merchant account services decreased by approximately 29% or $341,759 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 16% or $109,088 from $666,150 for the three months ended September 30, 2008, to $557,062 for the three months ended September 30, 2009. While there was cumulative decrease of approximately $133,450 for amortization, interest, office, payroll and bonus expenses, these were offset by a $22,900 combined increase in advertising, depreciation, insurance, interest and office expenses. An increase of $10,400 in advertising reflects expenses associated with the startup of the new LiftMySales program.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2008

Results of operations consist of the following:

 September 30, September 30, Difference Difference
 2009 2008 $ %
 ________________________________________________________

Net Revenues $ 4,320,450 $ 5,742,195 $(1,421,745) (25)
Cost of Revenues 2,701,022 3,678,128 (977,106) (27)
 ________________________________________________________
Gross Profit 1,619,428 2,064,067 (444,639) (22)
Operating, General,
 and Administrative
 Costs 1,835,960 1,975,082 (139,122) (7)
 ________________________________________________________
Net Operating Gain/
 (Loss) $ (216,532) $ 88,985 $ (305,517) (343)
 ========================================================

Net revenues decreased by $1,421,745 from $5,742,195 for the nine months ended September 30, 2008 to $4,320,450 for the nine months ended September 30, 2009, due mainly to the poor economy as well as continued attrition of merchant accounts and tighter credit policies. Residuals decreased by approximately $1,281,500. This decrease was due primarily to the faltering economy, with merchant sales dropping approximately $2.26 million since January 2009. Equipment sales dropped by $222,900, due to the continued recession. This drop was offset by an increase of $76,500 in fees collected under our new marketing model, introduced in January 2009, wherein merchants receive a "loaner" terminal

as part of a total package for which they pay a flat monthly fee. 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 model has helped slow attrition to some extent. This is reflected by the fact that we boarded more new accounts in both July and September than were cancelled.

The costs associated with the merchant account services decreased by approximately 27% or $977,106 due primarily to $897,700 in decreased costs associated with residual income as well as $54,860 in decreased commissions and $24,543 in 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 7% or $139,122 from $1,975,082 for the nine months ended September 30, 2008, to $1,835,960 for the nine months ended September 30, 2009. While there was cumulative decrease of approximately $222,034 for amortization, auto, consulting, interest, insurance, legal & professional fees, office and payroll expenses, these were offset by a $44,252 combined increase in advertising, depreciation, salaries, office rent and state taxes and the additional $38,600 of undercharged residual fees for November and December 2008. An increase of $53,324 in advertising reflects expenses 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.

 September 30, September 30, Difference Difference
 2009 2008 $ %
 ________________________________________________________

Cash $ 109,863 $ 91,404 $ 18,459 20
Accounts Payable and
 Accrued Expenses $ 520,967 $ 616,229 $ (95,262) (15)
Accounts Receivable,
 net $ 15,891 $ 22,572 $ (6,681) (30)
Proceeds from sale
 of common stock $ - $ 250 $ (250) (100)%

We have financed our operations during the third 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 September 30, 2009, we had total current liabilities of $1,288,911compared to $1,274,765 as of December 31, 2008. The increase in current liabilities is primarily due to the FTS fee underpayment.

Cash increased 20% from $91,404 at December 31, 2008, to $109,863 at September 30, 2009, due to decreased interest and salaries expenses.

As of September 30, 2009, our accounts receivable, net decreased to $15,891 compared to $22,572 at December 31, 2008. The relating allowance for doubtful accounts decreased $22,169 from $50,178 at December 31, 2008, to $28,009 as of September 30, 2009, because of continued strong controls on cash collections and collection of several past due accounts.

We had no equity issuances in the first, second or third quarters 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 nine months ended September 30, 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 requiring disclosure 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 to determine whether any change in our internal controls over financial reporting occurred during the nine month period ended September 30, 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 nine months ended September 30, 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.

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: November 16, 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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