10KSB 1 v105209_10ksb.htm
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB
(Mark One)
 
x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Fiscal Year Ended: December 31, 2007

OR

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

For the transition period from __________________ to __________________ 
 
Commission file number 333-123092

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

Nevada
  
20-1719023
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S. Employer
Identification No.)
     
10 Warren Avenue, Spring Lake, NJ
  
07023
(Address of principal executive offices)
  
(Zip Code)
 
(703) 622-6210
(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: None    
Name of each Exchange on Which Registered: None      
Securities registered under Section 12(g) of the Exchange Act: None    
 
 
Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. x
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
 
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of issuer’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  x
 
Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes x No o
 
State issuer’s revenues for its most recent fiscal year. None
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity as of a specified date within the past 60 days.
 
As of February 5, 2008 there were 940,625 issued and outstanding shares of our common stock, $.001 par value, held by non-affiliates. The aggregate value of the securities held by non-affiliates on February 5, 2008 was approximately $479,718 based on the closing bid price of our common stock on February 5, 2008, which was $.51 per share.
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 3,150,000 shares of common stock, $0.001 par value, as of February 5, 2008.
 
Transitional Small Business Disclosure Format (check one): Yes o No x
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Not Applicable


TABLE OF CONTENTS
Item Number and Caption
  
Page
     
Forward Looking Statements  
  
3
     
PART 1
    
Item 1. Description of Business  
  
3
Item 2. Description of Property  
  
4
Item 3. Legal Proceedings  
  
4
Item 4. Submission of Matters to Vote of Security Holders  
  
4
     
PART II
    
     
Item 5. Market for Common Equity and Related Stockholders  
  
4
Item 6. Plan of Operation  
  
6
Item 7. Financial Statements  
  
7
Item 8. Changes in and Disagreements with Accountants on Accountingand Financial Disclosure  
  
17
Item 8A. Controls and Procedure  
  
17
Item 8B. Other Information  
  
18
     
PART III
    
     
Item 9. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act  
  
18
Item 10. Executive Compensation  
  
19
Item 11. Security Ownership of Certain Beneficial Owners and Management  
  
21
Item 12. Certain Relationships and Related Transactions , and Director Independence 
  
22
Item 13. Exhibits  
  
22
Item 14. Principal Accountant Fees and Services  
  
23

2
 

FORWARD-LOOKING STATEMENTS
 
Except for historical information, this report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the sections “Plan of Operation” and “Business”. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances taking place after the date of this document.

PART I
 
ITEM 1.  DESCRIPTION OF BUSINESS
 
Business Development
 
We were incorporated in the State of Nevada on October 6, 2004. We were formed to import and distribute a range of cellular accessories to wholesalers and retailers throughout Canada and the United States. We conducted minimal operations in this line of business and in April 2006 decided to discontinue operations in this area. We are presently inactive, but are looking at ventures of merit for corporate participation as a means of enhancing shareholder value. This may involve sales of our equity or debt securities in merger or acquisition transactions.
 
Patents, Trademarks and Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts
 
We presently utilize no patents, licenses, franchises, concessions, royalty agreements or labor contracts in connection with our business.
 
Research and Development
 
During the fiscal years ended December 31, 2007 and December 31, 2006 we made no expenditures on research and development.
 
Employees
 
As of February 5, 2008 our only employee is our sole executive officer.
 
Loans
 
In consideration of May 10, 2006 loans from five persons in the aggregate amount of $65,000 we issued five promissory notes (the “Notes”) each dated May 10, 2006 to five persons. Each of the Notes has a three year term, pays interest at the rate of 5% per annum, compounded annually, and is convertible into shares of our common stock at a price of $1.00 per share, at the option of the holder, at any time after May 10, 2007.
 
3
 

In consideration of May 24, 2007 loans from five persons in the aggregate amount of $35,000, we issued five promissory notes (the “Notes”) each dated May 24,2007, to five persons. Each Note has a three year term, pays interest at the rate of 5% per annum, compounded annually, and is convertible into shares of our common stock at a conversion price of $1.00 per share, at the option of the holder, at any time commencing May 24, 2008.
 
ITEM 2.  DESCRIPTION OF PROPERTY
 
We utilize space at 10 Warren Avenue, Spring Lake, NJ 07762 provided to us on a rent free basis by our sole executive officer as our executive offices. We do not own any property.
 
ITEM 3.  LEGAL PROCEEDINGS
 
No legal proceedings are presently pending or threatened.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders.
 
 
PART II
 
ITEM 5.  MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
 
Market Information.
 
Our common stock has been quoted on the OTC Bulletin Board of the National Association of Securities Dealers, Inc. (the “NASD”) under the symbol “ICLA” since August 29, 2005. The following table sets forth, for the fiscal quarters indicated, the high and low closing bid prices per share of our common stock, as derived from quotations provided by Pink Sheets, LLC. Such quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

4
 

Quarter Ended
  
High Bid
  
Low Bid
  
               
September 30, 2005
    
None
    
None
  
December 31, 2005
  
$
1.01
  
$
0.25
  
March 31, 2006
  
$
1.01
  
$
0.10
  
June 30, 2006
  
$
0.30
  
$
0.30
  
September 30, 2006
  
$
0.51
  
$
0.30
  
December 31, 2006
  
$
0.51
  
$
0.51
  
March 31, 2007
  
$
0.51
  
$
0.51
  
June 30, 2007
  
$
0.51
  
$
0.51
  
September 30, 2007
  
$
0.51
  
$
0.51
  
December 31, 2007
  
$
0.51
  
$
0.51
  

Holders
 
As of February 5, 2008, there were approximately 6 record holders of our common stock.
 
Dividends
 
We have never declared any cash dividends with respect to our common stock. Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our common stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our common stock.
 
Recent Sales of Unregistered Securities
 
We sold no equity securities during the fiscal year ended December 31, 2007.

Securities Authorized For Issuance Under Equity Compensation Plans
 
We do not presently maintain any equity compensation plans and have not maintained any such plans since our inception.

5
 

ITEM 6.  PLAN OF OPERATION

We were formed to import and distribute a range of cellular accessories to wholesalers and retailers throughout Canada and the United States. We conducted minimal operations in this line of business and in April 2006 decided to discontinue operations in this area. We are presently inactive, but we are looking at ventures of merit for corporate participation as means of enhancing shareholder value. This may involve sales of our equity or debt securities in merger or acquisition transactions.

We have minimal operating costs and expenses at the present time due to our limited business activities. Accordingly, absent changed circumstances, we will not be required to raise additional capital over the next twelve months, although we may do so in connection with or in anticipation of possible acquisition transactions. We do not currently engage in any product research and development and have no plans to do so in the foreseeable future. We have no present plans to purchase or sell any plant or significant equipment. We also have no present plans to add employees although we may do so in the future if we engage in any merger or acquisition transactions.

6
 
 
ITEM 7.  FINANCIAL STATEMENTS
 
Index to Financial Statements

 
Page
   
Report of Independent Registered Public Accounting Firm.
8
   
Balance Sheets as of December 31, 2007 and December 31, 2006
9
   
Statements of Operations for the years ended December 31, 2007 and December 31, 2006 and for the period from October 6, 2004 (inception) through December 31, 2007
10
   
Statement of Stockholders’ Deficit
11
   
Statements of Cash Flows for the years ended December 31, 2007 and December 31, 2006 and for the period from October 6, 2004 (inception) through December 31, 2007
12
   
Notes to Financial Statements
13

7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders International Cellular Accessories, Inc.
(A Development Stage Company)
Las Vegas, Nevada

We have audited the accompanying balance sheet of International Cellular Accessories (A Development Stage Company) as of December 31, 2007 and 2006, and the related statements of operations, stockholders' deficit, and cash flows for the year then ended and from October 6, 2004 (inception) through December 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the financial position of International Cellular Accessories as of December 31, 2007 and 2006, and the results of its operations and cash flows for the years ended December 31, 2007 and 2006 and from October 6, 2004 (inception) through December 31, 2007 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered losses from operations and current liabilities exceed current assets, all of which raise substantial doubt about its ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ De Joya Griffith & Company, LLC
Henderson, Nevada
January 30, 2008

8

INTERNATIONAL CELLULAR ACCESSORIES
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS

   
As of
  
As of
  
   
December 31, 2007
  
December 31, 2006
  
   
(Audited)
  
(Audited)
  
ASSETS
         
           
Current assets
          
Cash
          
Total current assets
  
$
19,023
  
$
13,408
  
   
$
19,023
  
$
13,408
  
Total assets
  
$
19,023
  
$
13,408
  
               
LIABILITIES AND STOCKHOLDERS' DEFICIT
             
               
Current liabilities
              
Accrued interest payable
  
$
6,503
  
$
2,089
  
Total current liabilities
    
6,503
    
2,089
  
               
Long Term Liabilities
              
Convertible Debt
    
100,000
    
65,000
  
Total long term liabilities
    
100,000
    
65,000
  
               
Total liabilities
    
106,503
    
67,089
  
               
Stockholders' deficit
              
               
Common stock; $.001 par value; 75,000,000 shares authorized, 3,150,000 shares issued and outstanding as of December 31, 2007 and 2006
    
3,150
    
3,150
  
Additional paid-in capital
    
74,850
    
74,850
  
Deficit Accumulated during the development stage
    
(170,754
)
  
(136,955
)
Accumulated Other comprehensive income
   
-
    
5,274
  
Foreign currency translation adjustment
   
5,274
    
-
  
Total stockholders' deficit
    
(87,480
)
  
(53,681
)
               
Total liabilities and stockholders' deficit
  
$
19,023
  
$
13,408
  

See Accompanying Notes to Financial Statements
 
9
 

INTERNATIONAL CELLULAR ACCESSORIES
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
 
           
Period from
  
           
October 6, 2004
  
   
January 1, 2007
  
January 1, 2006
  
(Date of inception)
  
   
through
  
through
  
through
  
   
December 31, 2007
  
December 31, 2006
  
December 31, 2007
  
   
(Audited)
  
(Audited)
  
(Audited)
  
               
Revenue
  
$
-
  
$
-
  
$
7,684
  
Cost of goods sold
    
-
    
-
    
3,812
  
Gross profit
    
-
    
-
    
3,872
  
                     
Operating expenses
                    
Professional fees
    
28,149
    
98,817
    
132,977
  
Stock based services
    
-
    
23,000
    
23,000
  
General and administrative
    
1,581
    
3,095
    
13,414
  
                     
Total operating expenses
    
29,730
    
124,912
    
169,391
  
                     
Loss from operations
    
(29,730
)
  
(124,912
)
  
(165,519
)
                     
Other income (expense):
                    
Interest expense
    
(4,414
)
  
(2,089
)
  
(6,503
)
Interest income
    
346
    
923
    
1,269
  
Total other (expense)
    
(4,068
)
  
(1,166
)
  
(5,234
)
                     
                     
Net loss
  
$
(33,799
)
$
(126,078
)
$
(170,754
)
                     
Other comprehensive income, net of tax:
                    
Foreign currency translation adjustment
    
-
    
1,966
    
5,274
  
                     
Comprehensive loss
  
$
(33,799
)
$
(126,078
)
$
(170,754
)
                     
                     
Basic loss per common share
  
$
(0.01
)
$
(0.04
)
$
(0.07
)
                     
Basic weighted average common shares outstanding
    
3,150,000
    
3,150,000
    
2,476,923
  

See Accompanying Notes to Financial Statements

10
 
 
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
(Audited)

           
Accumulated
     
       
 
          
Deficit
      
       
 
  
Additional
 
Other
 
During the
 
Total
 
   
Common Stock
 
Paid-in
 
Comprehensive
 
Development
 
Stockholders'
 
   
Shares
 
Amount
 
Capital
  
Income (Loss)
  
Stage
 
Deficit
  
Balance at October 6, 2004 (Date of inception)
    
-
 
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
                                       
Common Stock Issued for Cash
    
1,000,000
   
1,000
   
4,000
   
-
   
-
   
5,000
 
                                       
Other comprehensive income
                                      
Foreign currency translation adjustment
    
-
   
-
   
-
   
(176
)
  
-
   
(176
)
                                       
Net loss
    
-
   
-
   
-
   
-
   
(181
)
  
(181
)
                                       
Balance, December 31, 2004
    
1,000,000
   
1,000
   
4,000
   
(176
)
  
(181
)
  
4,643
 
                                       
Common Stock Issued for Cash
    
1,000,000
   
1,000
   
49,000
   
-
   
-
   
50,000
 
                                       
Other comprehensive income
    
-
   
-
   
-
   
3,484
   
-
   
3,484
 
Foreign currency translation adjustment
                            
-
   
-
 
                                       
Net loss
    
-
   
-
   
-
   
-
   
(10,696
)
  
(10,696
)
                                       
Balance, December 31, 2005
    
2,000,000
   
2,000
   
53,000
   
3,308
   
(10,877
)
  
47,431
 
                                       
Common Stock Issued for Services
    
1,150,000
   
1,150
   
21,850
   
-
   
-
   
23,000
 
                                       
Other comprehensive income
                                      
Foreign currency translation adjustment
    
-
   
-
   
-
   
1,966
   
-
   
1,966
 
                                       
Net loss
    
-
   
-
   
-
   
-
   
(126,078
)
  
(126,078
)
                                       
Balance, December 31, 2006
    
3,150,000
   
3,150
   
74,850
   
5,274
   
(136,955
)
  
(53,681
)
                                       
Net loss
    
-
   
-
   
-
   
-
   
(33,799
)
  
(33,799
)
                                       
Balance, December 31, 2007
    
3,150,000
 
$
3,150
  
$
74,850
  
$
5,274
  
$
(170,754
)
$
(87,480
)

See Accompanying Notes to Financial Statements
 
11
 

(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS

           
Period from
  
           
October 6, 2004
  
   
January 1, 2007
  
January 1, 2006
  
(Date of inception)
  
   
through
  
through
  
through
  
   
December 31, 2007
  
December 31, 2006
  
December 31, 2007
  
   
(Audited)
  
(Audited)
  
(Audited)
  
Cash flows from operating activities:
              
Net loss
  
$
(33,799
)
$
(126,078
)
$
(170,754
)
Adjustments to reconcile net loss to net cash used by operating activities:
                    
Stock based services
    
-
    
23,000
    
23,000
  
Changes in operating assets and liabilities:
                    
Increase in accrued interest payable
    
4,414
    
1,867
    
6,503
  
Net cash used by operating activities
    
(29,385
)
  
(101,211
)
  
(141,251
)
                     
Cash flows from financing activities:
                    
Proceeds from issuance of common stock
    
-
    
-
    
55,000
  
Proceeds from issuance of convertible debt
    
35,000
    
65,000
    
100,000
  
Net cash provided by financing activities
   
35,000
    
65,000
    
155,000
  
                     
Effect of foreign currency translation
  
$
-
  
$
1,966
  
$
5,274
  
                     
Net increase (decrease) in cash
    
5,615
    
(34,245
)
  
19,023
  
                     
Cash, beginning of period
    
13,408
    
47,652
    
—
  
                     
Cash, end of period
  
$
19,023
  
$
13,408
  
$
19,023
  
 
                
 
Supplementary cash flow information:
                    
Cash payments for income taxes
  
$
-
  
$
-
  
$
-
  
Cash payments for interest
  
$
-
  
$
-
  
$
-
  

See Accompanying Notes to Financial Statements
12
INTERNATIONAL CELLULAR ACCESSORIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
 
1.   DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES

Description of business and history - International Cellular Accessories, Nevada corporation, (hereinafter referred to as the “Company” or “International Cellular”) was incorporated in the State of Nevada on October 6, 2004 with plans to be in the business of importing new cellular accessories for resale to both wholesalers and retailers across Canada firstly and, later on, to the rest of North America. In April 2006, the Company decided to discontinue operations in this area. We are presently inactive, but are looking at ventures of merit for corporate participation as a means of enhancing shareholder value. The Company operations have been limited to general administrative operations and is considered a development stage company in accordance with Statement of Financial Accounting Standards No. 7.

Management of Company - The company filed its articles of incorporation with the Nevada Secretary of State on October 6, 2004, indicating Rachel Cecile Wosk and William Wosk as the incorporators.

Effective April 1, 2006, Rachel Wosk and Leah Wosk resigned their positions as officers and directors and appointed Clifford W. Chapman to serve as our sole officer and director immediately following the effectiveness of such resignations.

Going concern - The Company incurred net losses of approximately $170,750 and accumulated other comprehensive income gains of $5,270 from the period of October 6, 2004 (inception) through December 31, 2007. The Company is still in the development stages, raising substantial doubt about the Company’s ability to continue as a going concern. The Company may seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.

The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Year end - The Company’s year end is December 31.

Use of estimates - The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
13
 
INTERNATIONAL CELLULAR ACCESSORIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1.   DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)

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

Income taxes - The Company accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Management feels the Company will have a net operating loss carryover to be used for future years. Such losses may not be fully deductible due to the significant amounts of non-cash service costs. The Company has established a valuation allowance for the full tax benefit of the operating loss carryovers due to the uncertainty regarding realization.

Net loss per common share - The Company computes net loss per share in accordance with SFAS No. 128, Earnings per Share (SFAS 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB 98, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is antidilutive. For the period from October 6, 2004 (inception) through December 31, 2007, no common stock equivalents were included in the computation of diluted earnings per share because their effect would be antidilutive.

Foreign Currency Translation  - The Company’s functional currency prior to June 30, 2006 was in Canadian dollars as substantially all of the Company’s operations were in Canada.  The Company used the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission (“SEC”) and in accordance with SFAS No. 52 - “Foreign Currency Translation”. Assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the period end and capital accounts are translated at historical rates.  Income statement accounts are translated at the average rates of exchange prevailing during the period.  Translation adjustments from the use of different exchange rates from period to period are included in the comprehensive income account in stockholder’s equity, if applicable. As of June 30, 2006 all of the Company’s operations were in the United States and the functional currency is the United States dollar.

14
 
INTERNATIONAL CELLULAR ACCESSORIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
 
1.   DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)

Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date.  Any exchange gains and losses are included in other items on the statement of operations.

New accounting pronouncements -

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 which applies to all entities that prepare consolidated financial statements, except not-for-profit organizations, but will affect only those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. The statement is effective for annual periods beginning after December 15, 2008.

2.   STOCKHOLDER’S EQUITY

The Company has 75,000,000 shares authorized and 3,150,000 issued and outstanding as of December 31, 2007. The issued and outstanding shares were issued as follows:

500,000 common shares were issued to Leah Wosk on October 29, 2004 for the sum of $2,500 in cash.

500,000 common shares were issued to Rachel Cecile Wosk on October 29, 2004 for the sum of $2,500 in cash.

1,000,000 common shares were issued to 30 investors in the Company’s SB-2 offering for the aggregate sum of $50,000 in cash. The Regulation SB-2 offering was declared effective by the Securities and Exchange Commission on May 27, 2005 and completed in June 2005.

1,150,000 common shares were issued to Clifford W. Chapman on April 3, 2006 in consideration of his serving as the Company’s sole officer and director at $0.02 per share. The Board of Directors deemed this to be a reasonable value.

3.   CONVERTIBLE NOTE PAYABLE

On May 10, 2006, the Company issued an aggregate of $65,000 of convertible notes. The convertible notes accrue interest at 5% per annum, compounded annually, payable at the maturity date of May 9, 2009. The note holder has the option to convert any unpaid note principal and accrued interest to the Company’s common stock at a rate of $1.00 per share starting May 10, 2007. Clifford Chapman, our sole officer and director, was one of the five persons that purchased these notes and was issued a note in the principal amount o $3,859.

15
 
INTERNATIONAL CELLULAR ACCESSORIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
 
3.   CONVERTIBLE NOTE PAYABLE (cont.)
 
On May 24, 2007, the Company issued an aggregate of $35,000 of convertible notes. The convertible notes accrue interest at 5% per annum, compounded annually, payable at the maturity date of May 24, 2010. The note holder has the option to convert any unpaid note principal and accrued interest to the Company’s common stock at a rate of $1.00 per share starting May 24, 2008. Clifford Chapman, our sole officer and director, was one of the five persons that purchased these notes and was issued a note in the principal amount o $2,078.

The Company has determined that none of the convertible notes have a beneficial conversion feature since the price of the stock at issuance of the share notes was less than the conversion price of $1.00 per share.
 
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ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
 
Not applicable.
 
ITEM 8A. CONTROLS AND PROCEDURES

(a) Management’s Annual Report on Internal Control Over Financial Reporting. The management of International Cellular Accessories is responsible for establishing and maintaining an adequate system of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). Under the supervision and with the participation of our senior management, consisting of Clifford Chapman, our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded, as of the Evaluation Date, that our disclosure controls and procedures are effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
 
    Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
 
(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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ITEM 8B. OTHER INFORMATION
 
Not applicable.
 
PART III
 
ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF
THE EXCHANGE ACT
 
Executive Officers and Directors
 
The following table sets forth certain information, as of February 5, 2008, with respect to our directors and executive officers.
 
Directors serve until the next annual meeting of the stockholders; until their successors are elected or appointed and qualified, or until their prior resignation or removal. Officers serve for such terms as determined by our board of directors. Each officer holds office until such officer’s successor is elected or appointed and qualified or until such officer’s earlier resignation or removal. No family relationships exist between any of our present directors and officers.
 
Name
  
Positions Held
  
Age
  
Date of Election
or Appointment
as Director
Clifford Chapman
  
President, Secretary, Treasurer, CEO, CFO, and Director
  
39
  
April 1, 2006

The following is a brief account of the business experience during the past five years or more of each of our directors and executive officers.
 
Clifford Chapman has served as our sole officer and director since April 1, 2006. He has more than 15 years of varied business experience primarily in senior management positions. He has served as head of Investment Banking at Broadband Capital Management LLC (“Broadband”) since September 2005 where he is responsible for the banking, structuring, and due diligence for all of Broadband’s transactions. Since January 2001, Mr. Chapman has been the managing director of Early Stage Associates LLC, a consulting company focused on helping businesses in capital formation and executive management. From January 2001 to the present he has also served as the managing director of ChapRoc Capital LLC, a company which invests in technology and business services companies. From June 2002 until March 2004 he served as CEO for Mindshift Technologies Inc., a managed services provider focused on IT outsourcing for small and medium enterprises. From September 2007 until October 31, 2007 he served as a member of the Board of Directors of Catuity, Inc. (NASDAQ: CTTY). Mr. Chapman received a Masters of Business Administration with Honors from Columbia Business School and a Bachelors Degree in Computer Engineering from Lehigh University.
 
18
 
Board of Directors
 
None of our directors receive any remuneration for acting as such. Directors may however be reimbursed their expenses, if any, for attendance at meetings of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees. No such committees have been appointed to date, due in part to the fact that we presently have only one director. Accordingly, we do not have an audit committee or an audit committee financial expert. We are presently not required to have an audit committee financial expert and do not believe we otherwise need one at this time due to our lack of material business operations. Similarly we do not have a nominating committee or a committee performing similar functions. Our sole director, Clifford Chapman, serves the functions of an audit committee and a nominating committee. We have not implemented procedures by which our security holders may recommend board nominees to us but expect to do so in the future, when and if we engage in material business operations.
 
Compliance with Section 16(a) of the Exchange Act
 
Our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, our officers, directors and principal shareholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.
 
Code of Ethics
 
On March 1, 2007 we adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of our Code of Ethics will be provided to any person requesting same without charge. To request a copy of our Code of Ethics please make written request to our President /co International Cellular Accessories at 10 Warren Avenue, Spring Lake, NJ 07023.
ITEM 10.  EXECUTIVE COMPENSATION
 
The following table sets forth information concerning the total compensation paid or accrued by us during the two fiscal years ended December 31, 2007 to (i) all individuals that served as our chief executive officer or acted in a similar capacity for us at any time during the fiscal year ended December 31, 2007 and (ii) all individuals that served as executive officers of ours at any time during the fiscal year ended December 31, 2007 that received annual compensation during the fiscal year ended December 31, 2007 in excess of $100,000.
 
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Summary Compensation Table

Name and
Principal Position
  
Year
  
Salary ($)
  
Bonus ($)
  
Stock
Awards
($)
  
Option Awards
($)
  
Non-Equity Incentive Plan Compen-sation ($)
  
Change
in
Pension
Value
and Non-qualified
Deferred Compen-sation Earnings ($)
  
All Other Compensation ($)
  
Total ($)
  
(a)
  
(b)
  
(c)
  
(d)
  
(e)
  
(f)
  
(g)
  
(h)
  
(i)
  
(j)
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Clifford Chapman,
   
2007
    
0
    
0
    
0
    
0
    
0
    
0
    
0
    
0
  
Chief Executive Officer    
2006
    
0
    
0
    
23,000
(1)
  
0
    
0
    
0
    
0
    
0
  

(1)
Clifford Chapman received 1,150,000 shares of our common stock, valued at $23,000 in April 2006 in consideration of his serving as our sole officer and director. We do not have an employment agreement with Mr. Chapman and Mr. Chapman has not been paid any compensation other than the April 2006 stock compensation.

We have not issued any stock options or maintained any stock option or other incentive plans since our inception. We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans. Similarly, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers or any other persons following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of us or a change in a named executive officer’s responsibilities following a change in control.

Compensation of Directors
 
None of our directors receive any compensation for serving as such, for serving on committees of the board of directors or for special assignments. During the fiscal years ended December 31, 2007 and 2006 there were no other arrangements between us and our directors that resulted in our making payments to any of our directors for any services provided to us by them as directors.
 
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ITEM 11.  SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth information with respect to the beneficial ownership of our common stock known by us as of February 5, 2008 by
 
 
·
each person or entity known by us to be the beneficial owner of more than 5% of our common stock,
 
 
·
each of our directors,
 
 
·
each of our executive officers, and
 
 
·
all of our directors and executive officers as a group.
 
The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on such date and all shares of our common stock issuable to such holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by such person at said date which are exercisable within 60 days of such date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent such power may be shared with a spouse.
 
Name and Address
of Beneficial Owner
  
Title of Class
  
Amount and Nature
of
Beneficial Ownership
  
Percent of Class (1)
             
Clifford Chapman
10 Warren Avenue
Spring Lake, NJ 07023
  
Common Stock;
par value $0.001
  
2,213,234 (2)
shares (Direct)
  
70.2%
             
All directors and executive officers as a group (1 person)
      
2,213,234 shares(2)
  
70.2%
 
(1)
Based upon 3,150,000 shares issued and outstanding as at February 5, 2008.
 
(2)
Includes 3,859 shares issuable within the next 60 days in the event of conversion of a convertible promissory note.
 
Changes in Control
 
Not Applicable.
 
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Securities Authorized for Issuance Under Equity Compensation Plans
 
We do not presently maintain any equity compensation plans and have not maintained any such plans since our inception.
 
ITEM 12.  CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
 
In May 2007 in consideration of a May 24, 2007 $2,078 loan made to us by Clifford Chapman, we issued to Mr. Chapman a convertible 5% promissory note in the principal amount of $2,078.
 
In April 2006 we issued 1,150,000 shares of our common stock to Clifford Chapman in consideration of his serving as our sole director.
 
In May 2006 in consideration of a May 10, 2006 $3,859 loan made to us by Clifford Chapman, we issued to Mr. Chapman a convertible 5% promissory note in the principal amount of $3,859.
 
Effective May 1, 2006 we entered into a six month Consulting Agreement with Rachel Wosk, a former executive officer and director of ours. Pursuant to the Consulting Agreement Ms. Wosk assisted us and advised us with our SEC filings as such pertained to matters that took place prior to April 1, 2006 and assisted us with the dissolution of our Canadian subsidiary, International Cellular Accessories, Inc. which was effected on June 12, 2006. In May 2006 we paid Ms. Wosk compensation under the Consulting Agreement in the amount of CDN$48,703.
 
On March 28, 2006 Rachel Wosk and Leah Wosk, our principal shareholders, each sold 500,000 shares of their common stock owned by them to Clifford W. Chapman.
 
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ITEM 13.  EXHIBITS
Exhibits
 
The following Exhibits are being filed with this Annual Report on Form 10-KSB:
 
Exhibit
No.
  
SEC Report
Reference Number
  
Description
3.1
 
  
3.1
 
  
Articles of Incorporation of Registrant as filed with the Nevada Secretary of State on October 6, 2004 (1)
 
3.2
 
  
3.2
 
  
By-Laws of Registrant (1)
 
10.1
 
  
10.1
 
  
Consulting Agreement between Registrant and Rachel Wosk dated as of May 1, 2006 (2)
 
14
 
  
14
 
  
Code of Ethics (3)
 
21
 
  
*
  
List of Subsidiaries
 
31.1/31.2
  
*
 
Rule 13(a) - 14(a)/15(d) - 14(a) Certification of Principal Executive and Financial Officer
32.1/32.2
  
*
  
Rule 1350 Certification of Chief Executive and Financial Officer
 
* Filed herewith.
 
(1)
Filed with the Securities and Exchange Commission on March 2, 2005 as an exhibit, numbered as indicated above, to the Registrant’s registration statement (SEC File No. 333-123092) on Form SB-2, which exhibit is incorporated herein by reference.
 
(2)
Filed with the Securities and Exchange Commission on August 17, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2006, which exhibit is incorporated herein by reference.
 
(3)
Filed with the Securities and Exchange Commission on April 2, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Annual Report on Form 10-QKB for the year ended December 31, 2006, which exhibit is incorporated herein by reference.
 
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 
Audit Fees.
 
The aggregate fees billed to us by our principal accountant for services rendered during the fiscal years ended December 31, 2007 and 2006 are set forth in the table below:

Fee Category
  
Fiscal year ended December 31, 2007
  
Fiscal year ended December 31, 2006
  
Audit fees (1)
  
$
14,500
  
$
15,250
  
Audit-related fees (2)
    
0
    
0
  
Tax fees (3)
    
0
    
0
  
All other fees (4)
    
0
    
0
  
Total fees
    
14,500
    
15,250
  
 
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(1)
Audit fees consists of fees incurred for professional services rendered for the audit of consolidated financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-QSB and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2)
Audit-related fees consists of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”

(3)
Tax fees consists of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4)
All other fees consists of fees billed for all other services.

Audit Committee’s Pre-Approval Practice.

Insomuch as we do not have an audit committee, our board of directors performs the functions of an audit committee. Section 10A(i) of the Securities Exchange Act of 1934 prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the board of directors (in lieu of the audit committee) or unless the services meet certain de minimis standards.
 
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SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date: February 28, 2008
 
 
INTERNATIONAL CELLULAR ACCESSORIES
   
 
By:
/s/ Clifford Chapman
   
Clifford Chapman,
   
President and Chief Executive Officer

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

 
SIGNATURE
 
TITLE
 
DATE
     
/s/ Clifford Chapman
Clifford Chapman
President, Treasurer Chief Executive Officer, Chief Financial and Accounting Officer
February 28, 2008
     
Board of Directors
    
     
/s/ Clifford Chapman
Clifford Chapman
Director
February 28, 2008
 
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