INTERNATIONAL CARD ESTABLISHMENT INC - FORM 10-Q

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EX-32.1 - CERTIFICATION - INTERNATIONAL CARD ESTABLISHMENT INC	ice_ex321.htm
EX-31.2 - CERTIFICATION - INTERNATIONAL CARD ESTABLISHMENT INC	ice_ex312.htm
EX-32.2 - CERTIFICATION - INTERNATIONAL CARD ESTABLISHMENT INC	ice_ex322.htm
EX-31.1 - CERTIFICATION - INTERNATIONAL CARD ESTABLISHMENT INC	ice_ex311.htm
EXCEL - IDEA: XBRL DOCUMENT - INTERNATIONAL CARD ESTABLISHMENT INC	Financial_Report.xls

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 June 30, 2012.

o 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

INTERNATIONAL CARD ESTABLISHMENT, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		95-4581903
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer 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 o

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 (§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 x No o

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	o	Accelerated filer	o

Non-accelerated filer	o	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 o No x

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 o No o

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 August 14, 2012, 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	3
Item 2.	Management's Discussion and Analysis	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	14
Item1A.	Risk Factors	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Mine Safety Disclosures	14
Item 5.	Other Information	14
Item 6.	Exhibits	14
		15
SIGNATURES		16

PART I

ITEM 1. FINANCIAL STATEMENTS

INTERNATIONAL CARD ESTABLISHMENT, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

June 30, 2012

INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30, 2012			December 31, 2011
	(Unaudited)

ASSETS

CURRENT ASSETS
Cash	$	19,644		$	18,848
Accounts receivable, net of allowance of $25,450 and $21,258 at June 30, 2012 and December 31, 2011, respectively		17,272			12,957
Note receivable, net of allowance of $50,000 at June 30, 2012 and December 31, 2011, respectively		21,908			32,797
Inventory		19,493			41,213
Other receivables		21,619			41,365
Prepaid finance charges		100,000			50,000

Total current assets		199,936			197,180

FIXED ASSETS, net of accumulated depreciation of $3,103,704 and $3,082,069 at June 30, 2012 and December 31, 2011, respectively		63,822			66,191
INTANGIBLE ASSETS		839,541			872,035
GOODWILL		87,979			87,979
OTHER NON-CURRENT ASSETS		114,606			114,606

Total assets	$	1,305,884		$	1,337,991

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	719,992		$	633,267
Line of credit, related party		482,731			434,971

Total current liabilities		1,202,723			1,068,238

CONTINGENCIES & COMMITMENTS		-			-

STOCKHOLDERS' EQUITY
Preferred stock; $0.01 par value; 10,000,000 shares authorized, 54,000 shares issued and outstanding at June 30, 2012, and December 31, 2011, respectively		540			540
Common stock; $0.0005 par value; 100,000,000 shares authorized, 35,873,703 shares issued and outstanding at June 30, 2012, and December 31, 2011, respectively		17,937			17,937
Common stock subscribed		30,000			30,000
Additional paid-in capital		19,628,401			19,628,401
Accumulated deficit		(19,573,717	)		(19,407,125	)

Total stockholders' equity		103,161			269,753

Total liabilities and stockholders' equity	$	1,305,884		$	1,337,991

See Accompanying Notes to Condensed Consolidated Financial Statements.

INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended						Six Months Ended
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011

Revenue:
Merchant services revenues	$	481,673		$	530,037		$	956,559		$	1,101,131
Equipment sales		212,771			154,332			381,780			310,274
Less: sales returns and allowances		(1,695	)		-			(5,143	)		(7,748	)
Net revenue		692,749			684,369			1,333,196			1,403,657

Cost of revenue:
Commissions		150,098			125,830			259,525			254,731
Cost of sales		194,091			232,246			378,604			469,269
Cost of sales – depreciation		9,543			8,379			18,993			18,511
Cost of sales – equipment		12,021			6,424			20,839			14,672
Cost of revenue		365,753			372,879			677,961			757,183

Gross profit		326,996			311,490			655,235			646,474

Operating, general and administrative expenses:
General, administrative and selling expenses		360,758			366,710			728,799			761,265
Depreciation		1,376			654			2,642			650
Merchant portfolio attrition expense		32,200			46,650			79,554			95,533
Total operating, general and administrative expenses		394,334			414,014			810,995			857,448

Net operating loss		(67,338	)		(102,524	)		(155,760	)		(210,974	)

Non-operating income (expense):
Interest income		535			-			1,205			-
Interest (expense)		(6,293	)		(5,538	)		(12,932	)		(10,449	)
Gain on sale of fixed assets		-			-			895			-

Total non-operating expense		(5,758	)		(5,538	)		(10,832	)		(10,449	)

Net loss before provision for income taxes		(73,096	)		(108,062	)		(166,592	)		(221,423	)

Provision for income taxes		-			-			-			-

Net loss	$	(73,096	)	$	(108,062	)	$	(166,592	)	$	(221,423	)

Earnings per share – basic & dilutive	$	0.00		$	0.00		$	(0.01	)	$	(0.01	)

Weighted average shares outstanding - basic		35,873,703			35,873,703			35,873,703			35,873,703

Weighted average shares outstanding - dilutive		35,873,703			35,873,703			35,873,703			35,873,703

See Accompanying Notes to Condensed Consolidated Financial Statements.

INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30, 2012			June 30, 2011

Cash Flows from Operating Activities:
Net Loss	$	(166,592	)	$	(221,423	)

Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation		21,635			19,161
Gain on sale of fixed assets		(895	)		-
Write off of cancelled merchant accounts		32,200			48,883
Allowance for doubtful accounts, other receivables and accrued interest income, net of bad debt recoveries		4,192			(614	)
Changes in assets and liabilities
Decrease (increase) in accounts receivable		(8,508	)		34,889
Decrease in inventories		215,659			214,220
Decrease in other receivables		19,746			8,988
Increase in prepaid expenses		(50,000	)		(50,000	)
Decrease in other non-current assets		-			1,760
Increase in accounts payable		16,823			7,575
Increase in accrued expenses		110,100			43,969

Net cash provided by operating activities		194,360			107,408

Cash Flows from Investing Activities:
Acquisitions, net of attrition		295			14,680
Purchase of property and equipment		(19,265	)		(37,247	)
Proceeds from sale of fixed assets		895			-
Payments received toward notes receivable		10,889			-

Net cash used in investing activities		(7,186	)		(22,567	)

Cash Flows from Financing Activities:
Payment on line of credit, related party		(736,515	)		(350,132	)
Proceeds from line of credit, related party		550,137			246,000

Net cash used in financing activities		(186,378	)		(104,132	)

Net increase (decrease) in cash		796			(19,291	)

Cash, beginning of period		18,848			31,762

Cash, end of period	$	19,644		$	12,471

See Accompanying Notes to Condensed Consolidated Financial Statements.

INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(CONTINUED)

	Six Months Ended
	June 30, 2012		June 30, 2011

SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	15,083	$	3,165

NON-CASH INVESTING AND FINANCING TRANSACTIONS
Noncash advances from line of credit, related party	$	637	$	1,981
Legal and Professional Fees paid from line of credit, related party	$	40,199	$	38,104
Inventory purchased from line of credit, related party	$	193,938	$	224,123
Inventory reclassified to fixed assets	$	15,450	$	13,714

See Accompanying Notes to Condensed Consolidated Financial Statements.

INTERNATIONAL CARD ESTABLISHMENT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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, 2011. 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 Company’s 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”) , a Nevada corporation, 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Operating results for the period ended June 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Reclassifications

Certain reclassifications, which have no effect on net loss or change in equity, have been made in the prior period financial statements to conform to the current presentation.

Note 2. Other Receivables

At June 30, 2012, and December 31, 2011, other receivables consisted of the following:

	June 30, 2012		December 31, 2011

Merchant residuals receivable	$	20,683	$	14,315
Other receivables		936		27,050
Total	$	21,619	$	41,365

December 31, 2011, merchant residuals of $14,315 were collected in January 2012. Other receivables were split between $22,050 in a funds pool flow through repayment and $5,000 in employee advances. The balance of the employee advances was collected in first quarter of 2012.

At June 30, 2012, other receivables consisted of $200 in a funds pool flow through repayment and $736 in employee advances. The employee advances have been collected at the time of this filing.

Note 3. Subscriptions

As of June 30, 2012, we anticipated issuing 30,000 shares of the Company’s common stock in connection with the sale of such securities pursuant to a subscription agreement dated as of April 2004 between the Company and an investor in the aggregate amount of $21,000. As of the date of filing this has not been completed.

Note 4. Subsequent Events

The Company has evaluated subsequent events for recognition or disclosure in the financial statements filed on Form 10-Q with the SEC and no other events, other than those described in these notes, have occurred that require disclosure.

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:

Ÿ 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.

Ÿ Results Of Operations. This section provides an analysis of our results of operations for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011. A brief description of certain aspects, transactions and events is provided, including related-party transactions that impact the comparability of the results being analyzed.

Ÿ Liquidity and Capital Resources. This section provides an analysis of our financial condition and cash flows as of June 30, 2012, and December 31, 2011.

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 provider of credit and debit card-based payment processing services and Gift & Loyalty products to small merchants. As of June 30, 2012, we provided our services to thousands of merchants located across the United States. Our payment processing services enable 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 such transactions may occur over the Internet or by mail, fax or telephone. Our proprietary Gift and Loyalty product allows merchants to issue custom branded gift and loyalty cards.

SIGNIFICANT ACCOUNTING POLICIES

We did not adopt any new accounting standards during the quarter ended June 30, 2012, nor were there any new accounting pronouncements during the period that would have an impact on our financial position or results of operation.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2012 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2011

Results of operations consist of the following:

	June 30, 2012			June 30, 2011			Difference $			Difference %

Net Revenues	$	692,749		$	684,369		$	8,380			1
Cost of Revenues		365,753			372,879			(7,126	)		(2	)

Gross Profit		326,996			311,490			15,506			5
Operating, General, and Administrative Costs		394,334			414,014			(19,680	)		(5	)

Net Operating Loss	$	(67,338	)	$	(102,524	)	$	35,186			(34	)

Net revenues increased by $8,380 or 1% from $684,369 for the three months ended June 30, 2011, to $692,749 for the three months ended June 30, 2012. This increase was due mainly to the new White Label Licensing program and increased sales under the Month-to-Month (M2M) program. This increase was offset by decreased residual and DRIVE revenues.

The costs associated with the merchant account services decreased by approximately 2% or $7,126 primarily due to a the decrease in depreciation expense for M2M equipment. This decrease was due to depreciation in full of approximately three quarters of the M2M equipment

General and administrative costs decreased by approximately 5% or $19,680 from $414,014 for the three months ended June 30, 2011, to $394,334 for the three months ended June 30, 2012. Starting in 2012, a portion of payroll, overhead and depreciation was allocated to Cost of Revenues. This accounted for a decrease in G&A expenses of $46,379. The closing of the Colorado office responsible for the DRIVE program provided additional reductions of $6,805 in overhead and $11,394 in payroll. A reduction of $14,450 in amortization was achieved due to a slow down of cancellations and the fact that no amortization is allocated to LIFT M2M accounts as they are expensed at the time of activation. Additional cumulative reductions in advertising, auto expenses, bank fees, consulting fees, employee benefits, postage, recruiting and training, taxes and telephone expenses accounted for $13,733. These reductions were offset by increased spending of approximately $26,702 for bad debt, insurance, licenses, dues and subscriptions, and office expense.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2012 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2011

Results of operations consist of the following:

	June 30, 2012			June 30, 2011			Difference $			Difference %

Net Revenues	$	1,333,196		$	1,403,657		$	(70,461	)		(5	)
Cost of Revenues		677,961			757,183			(79,222	)		(10	)

Gross Profit		655,235			646,474			8,761			1
Operating, General, and Administrative Costs		810,995			857,448			(46,453	)		(5	)

Net Operating Loss	$	(155,760	)	$	(210,974	)	$	55,214			(26	)

Net revenues decreased by $70,461 or 5% from $1,403,657 for the six months ended June 30, 2011, to $1,333,196 for the six months ended June 30, 2012, due mainly to a decrease in credit card residuals and sales of the DRIVE card program. This decrease was offset by increased revenues under the Month To Month program and the new White Label Licensing program begun in late 2011.

The costs associated with the merchant account services decreased $79,222. There was an overall increase of $34,552allocated as $18,346 for commissions, a $5,274 increase in equipment expense, $4,030 for merchant marketing, $6,381 for processing expense and $521 for overhead. This was offset by decreased costs of $113,775 associated with $9,537 for payroll, $13,554 for credit card commissions, $4,240 for costs associated with M2M marketing, $53,983 for credit card residual expenses, $1,057 for freight and $31,404 for chargebacks due to recovery of significant sums for the six months ended June 30, 2012.

General and administrative costs decreased by approximately 5% or $46,453 from $857,448 for the six months ended June 30, 2011, to $810,995 for the six months ended June 30, 2012. Decreases were allocated as $15,979 for amortization, $3,820 for auto expenses, $9,434 for bad debt expense, $5,811 for employee benefits, $6,494 for payroll, $3,256 for postage, $12,435 for rent and a combined $17,304 for advertising, bank fees, consulting fees, penalties & fines, equipment rental, recruiting, taxes, telephone and travel expenses. These reductions were offset by increased spending of approximately $28,080 for insurance, legal fees, licenses and dues, meals and entertainment, office expense, repair and maintenance and tax expenses for the six months ended June 30, 2012.

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 may require additional capital to complete the expansion and to undertake any additional business opportunities.

	June 30, 2012		December 31, 2011		Difference $		Difference %

Cash	$	19,644	$	18,848	$	796		4
Accounts Receivable, net	$	17,272	$	12,957	$	4,315		33
Accounts Payable and Accrued Expenses	$	719,992	$	633,267	$	86,725		14

We have financed our operations during the second quarter of 2012 primarily through sales, the collection of accounts receivable, the use of our line of credit, and the use of cash on hand. As of June 30, 2012, we had total current liabilities of $1,202,723 compared to $1,068,238 as of December 31, 2011. The $134,485 increase in current liabilities is due to total increases of $146,215, allocated as $16,824 in accounts payable, $346 to the Merchant chargeback reserve, $69,949 in payroll expenses, $11,337 in customer deposits and $47,759 to the Line of Credit. The increase in payroll is due to three members of upper management receiving only a portion of their pay since November 2010 and accrual of the balance owed to them. These increases were offset by total decreases of $11,730, allocated as $8,387 to accrued expenses, $1,192 in accrued taxes and $2,151 in accrued interest.

Cash increased 4% from $18,848 at December 31, 2011, to $19,644 at June 30, 2012 due to timing of payments and receipt of income.

As of June 30, 2012, net our accounts receivable increased to $17,272 compared to $12,957 at December 31, 2011. The related allowance for doubtful accounts increased $4,192 from $21,258 at December 31, 2011, to $25,450 as of June 30, 2012, due primarily to timing on collections in the second quarter.

We had no equity issuances in the second quarter of 2012.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

N/A.

ITEM 4. 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 June 30, 2012. 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 CEO and CFO, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the three month period ended June 30, 2012. Based on that evaluation, our CEO and our CFOconcluded that no change occurred in the Company's internal controls over financial reporting during the three months ended June 30, 2012, 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. MINE SAFETY DISCLOSURES

N/A

ITEM 5. OTHER INFORMATION

None

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.

101**		The following materials from International Card Establishment, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Cash Flow, (iii) the Consolidated Balance Sheets, and (iv) Notes to Consolidated Financial Statements tagged as blocks of text.

In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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.

	INTERNATIONAL CARD ESTABLISHMENT, INC.

Date: August 14, 2012	BY:	/s/ WILLIAM LOPSHIRE
		WILLIAM LOPSHIRE
		CHIEF EXECUTIVE OFFICER
		SECRETARY AND DIRECTOR
		(PRINCIPAL EXECUTIVE OFFICER),

Date: August 14, 2012	BY:	/s/ CANDACE MILLS
		CANDACE MILLS
		CHIEF FINANCIAL OFFICER
		(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)

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INTERNATIONAL CARD ESTABLISHMENT INC Reports