SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2008

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

Commission File Number 000-30013

CARDTREND INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

Nevada	98-0204780
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
800 5thAvenue, Suite 4100, Seattle, WA (Address of principal executive offices)	98014  (Zip Code)

(206) 447-1379

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: NONE

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

Title of each class:	Name of each exchange on which registered:
Common Stock, $.001 par value	Over-the-Counter Bulletin Board

Indicate by check mark if a registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  o   No  x

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

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    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. (Check one):

Large Accelerated Filer  o	Accelerated Filer  o
Non-accelerated Filer   o (Do not check if a smaller reporting company)	Smaller Reporting Company  x

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

As of March 31, 2009, 124,103,862 shares of the registrant’s common stock were held by non-affiliates. The aggregate market value as of that date, based on the $0.005 closing stock price as of March 31, 2009, was $620,519.

As of March 31, 2009, the registrant had 155,818,136 shares of Common Stock outstanding

DOCUMENTS INCORPORATED BY REFERENCE

Location in Form 10-K	Incorporated Document
Item 15. Exhibits And Financial Statements Schedules	See Exhibit Index

CARDTREND INTERNATIONAL INC.

Table of Contents

PART I
ITEM 1.  BUSINESS	3
ITEM 1A.  RISK FACTORS	7
ITEM 1B.  UNRESOLVED STAFF COMMENTS	9
ITEM 2.  DESCRIPTION OF PROPERTY	9
ITEM 3.  LEGAL PROCEEDINGS	9
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	9
PART II
ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES	10
ITEM 6.  SELECTED FINANCIAL DATA	11
ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 0F OPERATIONS	11
ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	17
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	17
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	44
ITEM 9A.  CONTROLS AND PROCEDURES	44
ITEM 9B.  OTHER INFORMATION	44
PART III
ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT	45
ITEM 11.   EXECUTIVE COMPENSATION	47
ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	51
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	52
ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES	53
PART IV
ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	53
SIGNATURES	56
EXHIBITS	57

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FORWARD LOOKING INFORMATION

Our disclosure contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate”, “expect”, “potential”, “continue”, “intend,” “plan”, “may”, “will”, “should”, “we believe”, “our company believes”, “management believes” or other similar expressions or language. Our forward-looking statements are subject to risks and uncertainties. You should note that many factors, some of which are described in this Part I or discussed elsewhere in this document, could affect our company in the future and could cause our results to differ materially from those expressed in our forward-looking statements, including those matters discussed under the heading “Risk Factors” below. Our actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume no obligation to update or revise them, whether as a result of new information, future events or otherwise. In addition, our historical financial performance is not necessarily indicative of the results that may be expected in the future and we believe that such comparisons cannot be relied upon as indicators of future performance.

As used in this Annual Report on form 10-K, “Company,” “us,” “we,” “our” or any similar term means Cardtrend International Inc. a Nevada corporation.

PART I

ITEM 1.  BUSINESS

Overview     

Cardtrend International Inc. (“Cardtrend”), formerly known as Asia Payment Systems, Inc., is a provider of products and services in the payments and loyalty rewards industries in Asia , Pacific, Australia and Middle East Regions, with special focus in China. It was incorporated in the State of Nevada on October 2, 1998, and maintains its principal office at 800 5th Avenue, Suite 4100, Seattle, WA 98104. After the acquisition of Cardtrend Systems Sdn. Bhd. and Interpay International Group Ltd. in December 2006, we grouped our businesses under three synergistic business units: Processing Business Unit, Cards Business Unit and Prepaid Business Unit. We develop and own a range of card management software (“CMS”) which, in addition to being licensed to operators and acceptors of payment cards (credit cards, debit cards and prepaid cards of international brands such as MasterCard and Visa Cards or proprietary brands) and loyalty cards (cross industries, multiple stores or single location outlet) or distributors of prepaid products, is being used to provide data processing services to such operators and acceptors. We make use of our card operational and technical know-how to provide technical services and management services to operators of payment cards and loyalty cards and distributors of prepaid products/services. We form joint-venture companies in Asia countries to operate payment cards business, loyalty cards business or prepaid products cards business. In almost all instances, we also provide CMS to our joint-venture companies.

Our History

In August 1999, we, then known as Asia Alliance Ventures, Inc., entered into a joint venture agreement with Shandong Hengtong Chemical Industrial Company, Ltd. (“Shandong Industrial”), a large, established company in Linyi City, partially owned by the People’s Republic of China (“China” or “PRC”) and located in the southeast of Shandong Province. Together with Shandong Industrial, we formed Shandong Hengtong Development Chemical Co. Ltd (“Shandong Development”) as our joint venture enterprise. The purpose of the joint venture was to acquire and run the nitrogen fertilizer plant of Shandong Industrial, to expand the fertilizer operations by adding power generation plants and to acquire other fertilizer plants. From 1999 to mid 2003, our former management attempted unsuccessfully to raise $13 million, which was to be our contribution to the joint venture.

In August 2003, we terminated the joint venture with Shandong Industrial and sought to acquire a new business. We acquired WelWay Development Limited, a corporation organized under the laws of Hong Kong SAR, China, in consideration of 6,500,000 restricted shares of our common stock. WelWay was developing a business to provide credit card clearing services for merchants in China and throughout Asia, as well as providing third party credit card clearing services to financial institutions and oil companies in China.

In November 2003, we changed our name to Asia Payment Systems, Inc. In February 2004, we completed the acquisition of WelWay. The management and assets of WelWay were transferred to us, and we ceased to use the name WelWay Development. Subsequently, our common stock began trading on the Over-The-Counter Bulletin Board under the symbol “APYM.OB” in March 2004.

In September 2004, we completed the development of our credit card transaction processing systems (“ApayCard”) integrating with Triversity retail POS system. In December 2004, we commenced providing our third party credit card transaction processing services to a duty free retailer in Okinawa, Japan, DFS Okinawa KK, using ApayCard system, generating our maiden revenue. This marked the beginning of our business in the payments industry in Asia.

In October 2005, we established a wholly owned subsidiary in Shanghai, China, known as Asia Payment Systems (China) Co. Ltd. (“APS China”), to facilitate the development of our intended business in China.

In October 2006, we acquired, in consideration of 25 million restricted shares of our common stock, Cardtrend Systems Sdn. Bhd. (“Cardtrend Systems”), a company incorporated in Malaysia which has developed card processing systems selling to operators of credit cards, prepaid cards, debit cards, loyalty cards and airtime reloads. Its customers are multinational companies in Asia like Shell and other national and regional oil companies, banks and telecommunication services companies. It has been awarded the Multimedia Super Corridor (MSC) status by the Government of Malaysia and enjoys tax-free benefit.

In December 2006, we acquired, in consideration of 17.5 million restricted shares of our common stock, Interpay International Group Ltd. (“IIG”), a holding company of various companies in Asia involving in the payment cards (credit cards and prepaid cards) and loyalty cards (discount cards, bonus reward cards and rebate cards) industries. It has a joint venture credit card company, a loyalty card company and a prepaid card distribution company in Malaysia.

In July 2007, in order to reflect the expanded business scope of the Company, we changed our name to Cardtrend International Inc., and our stock is now traded under the symbol “CDTR.”.

In November 2007, through our wholly owned subsidiary in Shanghai, China, we acquired, in consideration of CNY 1,500,000 (approximately $198,176, at the then exchange rate) the operating assets of Global Uplink Communications Ltd., a business process outsourcing company in Guangzhou, Guangdong Province, China. At the same time we recruited four executives and about 110 staff and began to generate revenues in China. At about the same time, we acquired Global Uplink Ltd., the marketing company in Hong Kong associated with Global Uplink Communication Ltd. for a cash consideration of HK$500,000 (approximately $64,610 at the then exchange rate).

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Our Strategy

From November 2006 onwards and throughout the fiscal year ended December 31, 2008, we implemented our new strategic direction (“New Strategy”) developed in the summer of 2006. The New Strategy, which calls for a clear definition of our business in order to move forward, is as follows:

* We will grow by forming strategic alliances with and/or merging with and/or acquiring existing payments business related companies in Asia by cash and/or share exchanges considerations and we will concentrate in providing business processes out-sourcing to financial institutions and multinational corporations as well as data processing services to small- and mid-size operators and acceptors of payment cards and loyalty cards throughout Asia while continuing a primary focus on China, and expand our scope of business to include the issuance of payment cards and loyalty cards and the sale/distribution of prepaid products and services to Asian consumers at large.

The New Strategy has yielded the following results since being implemented:

*	The grouping of our businesses into three distinct business units which complement one another: Processing Business Unit, Cards Business Unit and Prepaid Business Unit.
*	The merger with Cardtrend Systems Sdn. Bhd. (“Cardtrend Systems”), a Malaysia based IT company that provides system solutions for operators of payment cards and loyalty cards, on October 31, 2006;
*	The strategic alliance with and an option to acquire SMS Biz Sdn. Bhd.(“SMSBIZ”), a Malaysia based company that issues telecommunications prepaid cards, on November 8, 2006;
*	The acquisition of Interpay International Group Ltd. (“IIG”), a BVI based holding company of a group of subsidiaries and associate companies which are operators of payment cards and loyalty cards, on December 7, 2006;
*		The acquisition of Global Uplink Ltd. (“GULHK”), a Hong Kong based company that markets BPO services, on October 31, 2007;
*		The acquisition of business assets of Global Uplink Communications Ltd. in Guangzhou, China and the outsourcing of its business processes to APS China’s branch in Guangzhou , on November 1, 2007; and
*		Increase in our revenue for the fiscal years ended December 31, 2007 and 2008 over that of 2006 and 2005.

Our Products and Services

Our products and services being offered to corporations and consumers in Asia, including China, are:

1.	Processing Business - Provision of business processes out-sourcing (“BPO”), data processing outsourcing (“DPO”) and data processing in-sourcing (“DPI”) services to operators and acceptors of payments cards (credit cards, debit cards and prepaid cards) and loyalty cards and distributors of prepaid products/services;
2.	Cards Business - Issuance of payments cards (credit cards, debit cards and prepaid cards) and loyalty cards to corporations and individuals; and acquiring payment cards’ and loyalty cards’ transactions from participating merchants; and
3.	Prepaid Business - Distribution and sale of prepaid products and services to corporations and individuals.

1.   Processing Business

We commenced offering credit card transaction processing in-sourcing services to DFS Okinawa, a duty free retailer in Japan in late 2004. The merger in late October 2006 with Cardtrend Systems which has developed card management and processing systems resulted in the Company now able to provide DPO and DPI services beyond credit card transaction processing. Prior to the mergers, Cardtrend Systems had provided its systems, on licensing basis to use its software, to operators of payment cards, loyalty cards and telecommunications prepaid services in Asian countries (Malaysia, Thailand, Philippines, Brunei, Indonesia, Hong Kong, Macau and New Zealand). Such operators comprise petrol companies, financial institutions and prepaid products sales companies which, on a combined basis, have millions of customers making payments to them and/or obtaining loyalty bonus points from them. Cardtrend continues to receive system maintenance fees from majority of these customers. After the merger, Cardtrend, which will continue the licensing of its card software, has begun to provide DPO and DPI services to customers. It bills the DPO and DPI customers a one-time set-up fee plus a monthly fee based on the number of transactions processed or a share on the customers’ revenues.

With the acquisition of business assets from Global Uplink Communications Ltd. in Guangzhou, China, APS China now offers BPO services, including telephone call handling and telemarketing sales of credit cards and loyalty cards, as well as the distribution of such cards on-behalf of our customers.

2.   Cards Business

With the capabilities we have acquired through the merger with Cardtrend Systems and the acquisition of IIG, we are in a position to form joint venture companies to issue payments cards to corporations and individuals in Asian countries. The payments cards issued or to be issued through our subsidiaries and associated companies are multi-purpose prepaid cards, charge cards and credit cards using international brands such as MasterCard and/or Visa, as well as proprietary brands for nation-wide use or single purpose use such as gift cards. For the issuance of credit cards, our subsidiaries and associated companies will align with financial institutions to provide revolving credit facilities to their cardholders. Revenues are earned from card fees, interchange fees, merchant discount fees, cash advance fees and interest income.

We are also in a position to form joint venture companies to issue loyalty cards to consumers in Asian countries. The loyalty cards issued or to be issued by us through our subsidiaries and associated companies are multi-purpose point-based cards which are honored by merchants of different industries. Revenues are earned from card fees and merchant commissions.

3.   Prepaid Business

We distribute and sell prepaid products and services such as cell-phone prepaid airtime and long distance IDD call airtime. The prepaid products and services are supplied by third parties such as telecommunication companies.

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Our Prepaid Businesses are conducted through our subsidiaries and associated companies which distribute our products physically to retailers or through electronic means to a network of retailers called “E-Top Dealers” which are equipped with electronic data capture terminals and/or cell-phones and/or personal computers to order and obtain stocks on a real-time-on-line basis. Revenues are derived from the sales of prepaid products. The E-Top Dealers are recruited by a network of agents called “E-Top Agents” appointed by our subsidiaries and associated companies. The E-Top Dealers earn a discount on the face value (retail price) of the prepaid products and services ranging from 3% to 28%.The E-Top Agents are paid commissions based on the amount of purchases made by the E-Top Dealers.

The Market and Competition

Since early 2007, we divided Asia into four markets: Emerging Asia Market, Affluent Asia Market and Outer Asia Market (collectively referred to as “Other Asia Markets”) and China Market. Emerging Asia Market consists of Malaysia, Indonesia, Philippines, Thailand, Vietnam and India. Affluent Asia Market consists of Hong Kong, Taiwan, Korea, Japan, Singapore, Australia and New Zealand. Outer Asia Market consists of Mongolia, Pakistan, Bangladesh, other South-east Asia countries and Middle-eastern countries. China Market, where the Company’s special focus is, consists of no other country except China. For reference purpose, China, Hong Kong, Macao and Taiwan are collectively referred to as “Greater China”.

1.   China Market

China Market remains our prime market for our products and services. With a population of 1.3 billion, China is in the early stage of growth in the payments and loyalty related products and services, including the prepaid products and services (e.g. cell phone prepaid airtime, gift cards, prepaid transportation and entertainment tickets, etc).The China’s middle class (which is expected to rise to 250 million) is the engine that propels the economic growth in China. The number of credit cards per capita is still below 0.1, a number way below a mature market like the US which has about 5 cards per capita. As consumer spending is growing exponentially in the China Market, all types of corporations, including banks, will create loyalty related programs to attract and retain their customers.

As banks, financial institutions and major corporations expand their consumer businesses, demands for outsourcing their business processes to third parties increase in tandem. Our subsidiary in China continues to gear up to meet some of these demands in Processing Business. However, the current global financial crisis will slow down this previously expected growth somewhat in the near to mid-term.

For the data processing services , we believe that the capabilities in providing IT solutions and infrastructures for the payments and loyalty industries in China still remains low to support the anticipated robust growth. We continue our aggressive pursuit of this opportunity by seeking the small- and mid-size potential operators of payments cards and loyalty cards. Unlike large banks, such operators, which are city and regional banks, co-op banks, retail chains and service establishments, operators of food and entertainment outlets, will, we believe, be very reluctant to spend millions of dollars or for that matter, hundreds of thousands of dollars, in procuring a system and/or professional services to set-up and operate their payments cards (credit cards, charge cards, prepaid cards and/or debit cards) and/or loyalty cards (bonus points-based and cash-back cards). We believe our competitors (First Data, EDS and China Union Pay) in the data processing outsourcing services sector will not pay sufficient attention to this segment of the market, and we also believe that there exists no significant competitor in this service sector. We continue to believe that there exists an opportunity for us to use our technology, know-how and experience gained in other countries (like Malaysia, New Zealand and Oman) in the prepaid top-up solution to rapidly penetrate the prepaid airtime reload market in China which has over 500 million cell phone users who prepay for the airtime, either as a distributor (using the Etop brand). Although there are a few operators of prepaid airtime reload utilizing similar electronic distribution method, major competition still comes from the operators who distribute the physical prepaid cards. As for the card issuance side of our Card Business, we are not permitted to issue payment cards (credit cards and prepaid cards) as yet due to the current regulations relating to such business. We continue to hold discussions with some second-tier banks for a joint-issuance program. After observing some positive results in the pilot test of our point-based loyalty card issued through Global Uplink Communications Ltd. in Guangzhou, we strongly believe that there exists an opportunity for us to launch a nation-wide loyalty card in China. However, the current lack of funds has delayed our plan to launch the loyalty card business in China.

2.   Emerging Asia Market

For the past years, the fast growing economies of the rest of the emerging markets in Asia, referred to as the Emerging Asia Market (Malaysia, Vietnam, Thailand, Philippines, Thailand, Indonesia, and India), having a total population of over 1 billion, were experiencing urbanization, rapid growth of middle class, readily available consumer credit, high usage of prepaid cell-phone airtime, and increasing consumer spending. These markets provide us with opportunities to offer our products and services in each market over the next decade, especially when our competitors are still focusing in the large customers in the China Market. We are pursuing these opportunities through joint-venture initiatives as well as identifying potential targets for acquisitions. However, current global financial crisis coupled with the political instability in some of the countries is hindering our efforts in growing our businesses in this market.

3.  Affluent Asia Market

The competition in the payments and loyalty industries is intense and keen in the high-income markets of Asia Pacific region, referred to as Affluent Asia Market (Hong Kong, Taiwan, Japan, Korea, Singapore, New Zealand and Australia), where the average number of credit cards per capita is among the highest in Asia, with Taiwan leading at 2.0, Hong Kong trailing at 1.0, Singapore at 0.7 and Australia at 0.6. However, all these markets are still well below that of the US in terms of credit card penetration and opportunities exist for us in the medium-and small-size operators segments. Similarly, with a mature and high spending consumer base, in each of the countries in this Affluent Asia Market, loyalty cards, prepaid cards and gift cards are becoming more acceptable to the consumers as well as the merchants who compete rather intensely to gain and retain their customers. There are opportunities for us to provide our card processing solutions and services to these merchants. We continue to pursue these opportunities through strategic alliances or joint-venture initiatives and identifying potential targets for acquisitions.

4.  Outer Asia Market

Being under-developed in both consumer financial and retail services sectors, the rest of the markets in Asia, referred to as Outer Asia Market (Mongolia, Bangladesh, Sri Lanka, Pakistan, Kampuchea, South Pacific and some of the Middle Eastern countries) opportunities exist for financial institutions to offer payments cards to their more affluent customers. Demands for such services are growing and financial institutions are eager to seek technological and operational assistance with affordable costs. Since we possess both the technology and operational know-how, we are well positioned to meet their needs.

Developments

1.   Resignations of Directors

On January 23, 2008, Mr. Robert Clarkeresigned as a Director and Chairman of the Board of directors.On March 7, 2008, Mr. Michael Oliver resigned as director of the Company. On March 7, 2008, Mr. Charlie Rodriguez resigned as director and Secretary and Treasurer of the Company. These three ex-directors have no dispute or disagreement with any director or the Company. The current members of the Board were of the opinion that the replacement for these resigned directors would be carried out at the appropriate time.

2.  Appointment of Mr. Jee Sam Choo as Chairman of the Board of Directors

On January 25, 2008, Mr. Jee Sam Choo who has been a Director of the Company since September 2006, was appointed as the Chairman of the Board of Director.

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3.   Appointment of Ms. Katherine YL Tung as Secretary and Treasurer

On April 15, 2008, Ms. Katherine YL Tung was appointed as the Secretary and Treasurer of the Company for a term of one year and for a stock option granted under the 2007 Non-qualified Stock Option Plan to purchase 100,000 shares of the Company’s common stock at an exercised price of $0.05 per share which was subsequently modified to $0.02 per share on September 22, 2008.

4.   Engagement and Termination of Various Consultants

On January 1, 2008, we engaged Mr. Steve Chaussy to provide consulting services in the financial reporting related matters for a quarterly fee of $3,000. We terminated such engagement on April 15, 2008 as the Board of Directors was of the opinion that Mr. Chaussy’s services would no longer be required.

On January 1, 2008, we engaged Mr. Wong Yee Tat and Mr. Wan Mu Chun to provide consultancy services in the area of business development and marketing in China to support our business and growth for a term of one year and for a stock option each granted under the 2007 Non-qualified Stock Option Plan to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.08 per share. The contracts expired on December 31, 2008.

On January 30, 2008, we retained Willow Cove Investment Group Inc., a company based in San Diego, USA, as a consultant of Company on matters pertaining to the business of development efforts of Company for a period of one year and thereafter on a month-to-month basis until terminated by either party. The fees are payable on a contingency basis based on success of introduction of businesses, joint ventures and other services as may be assigned to the consultant.

On March 10, 2008, we retain Mr. Lim Han Seng, a Malaysian, as a consultant of Company on matters pertaining to the business of development efforts of Company for a period of one year and thereafter on a month-to-month basis until terminated by either party. The fees are payable on a contingency basis based on success of introduction of businesses, joint ventures and other services as may be assigned to the consultant.

On April 7, 2008, we engaged KateLin Enterprise Inc., a company based in Los Angeles, USA and related to Katherine YL Tung, our Secretary and Treasurer, to provide administrative services for a term of one year for a monthly fee of $2,000 per month. The contract expired on April 6, 2009.

On April 21, 2008, we engaged Adrian Yeo & Co., an accounting firm based in Malaysia, to provide consultancy services on matters pertaining to the accounting and financial related areas for a term of one year at a total fee of $17,000.

On May 20, 2008 we terminated the consulting service contract with a consultant who had breached the fundamental undertakings and terms of a two-year agreement dated November 15, 2007 in providing strategic and financial planning services to the Company. On the same date, we also terminated the consulting service contract with another consultant who had breached the fundamental undertakings and terms of a two-year agreement dated November 15, 2007 in providing investor and public relations services to the Company. We rescinded 562,500 of the 750,000 restricted shares of our common stock, as well as 500,000 warrants at an exercise price of $0.40, issued to the latter consultant who had also forfeited the accrued fees of $2,500 per month since November 15, 2007.

On September 12, 2008, we retained Mr. Kim Kok Hai, a Malaysian, as a consultant of the Company on matters pertaining to the developments in the payment transaction processing systems using various technology, including the mobile phone SMS technology and EMV Compliances, for a term of six months and for a stock option granted under the 2007 Non-qualified Stock Option Plan to purchase 2,100,000 shares of the Company’s common stock at an exercise price of $0.001 per share. The contract ended March 11, 2009.

5.  Acquisition of SMS Biz Sdn. Bhd. (“SMSBIZ”) in Malaysia

On January 21, 2008, the Company entered into a share exchange agreement (“SMSBIZ SEA”) with SMSBIZ, YAP and CHUA to acquire the entire shareholdings of YAP and CHUA in SMSBIZ for the issuance by the Company for a total of 7 million shares of the Company’s common stock (“Shares”) upon closing of the SMSBIZ SEA (“Closing”). Upon SMSBIZ, YAP and CHUA fulfilling certain conditions as stipulated in the SMSBIZ SEA on September 8, 2008, the Company issued 7 million Shares (valued at $105,000) to YAP, CHUA and their designees but withheld 4/7 of the issued Shares which would be released on a quarterly basis at a rate of 10 Shares for every US$1.00 of pre-tax profit that SMSBIZ may earn from the date of Closing until all the 4 million Shares are fully released or until the end of 20 quarters from the date of Closing (“End Date”), whichever is the sooner, and should there remain any unreleased Shares as at the End Date, the Company should be entitled to buy, and YAP and CHUA should sell, all the unreleased Shares at US$0.001 per Share. (See Note 4 of the “Notes To Consolidated Financial Statements” for the purchase price allocation and the proforma results of operations for the years ended December 31, 2008 and 2007 assume that the acquisition of SMS BIZ occurred on January 1, 2008 and 2007, respectively.)

6.  Capitalization of Asia Payment Systems (China) Co. Ltd. (“APS China”) in China

On February 1, 2008, the directors of the Company approved the proposed increase of the paid up capital of APS China from US$600,000 to US$800,000. As of December 31, 2008, the full amount of the incremental $200,000 was paid into APS (China) by the Company. The authorized capital of APS China was further increased to $1,000,000 on July 1, 2008. As of December 31, 2008, $86,000 of the latest incremental $200,000 was paid up. The Company has been sourcing, and will continue to source, for such required fund. The Company can not guarantee that it would be successful in sourcing for such fund in the current global financial turmoil.

7.  Joint Venture Agreement to Form a Card Company in Mongolia

On May 2, 2007, Asia Payment Systems (HK) Ltd.(“APS HK”), the Company’s wholly owned subsidiary incorporated in Hong Kong, signed a joint venture agreement with two Mongolian individuals to form a payment card company in Mongolia, called Interpay Co. Ltd. APS HK would purchase the Card Management System (“CMS”) software from Cardtrend Systems Sdn. Bhd., our wholly owned subsidiary in Malaysia, for $250,000 and then sell the CMS to Interpay Co. Ltd. for $250,000 and install it in the office of Interpay Co. Ltd. which is located in Ulaan Baatar, the capital city of Mongolia. Instead of paying APS HK $250,000 for the CMS installed, Interpay Co. Ltd. would issue a certificate evidencing APS HK’s 50% interest in Interpay Co. Ltd. which would have a paid up capital of $500,000. The issuance of the share certificate has been delayed due to the delay in obtaining the user’s acceptance of the CMS installed. Meanwhile, Interpay Co. Ltd. test launched Interpay Credit Card with Anod Bank in Mongolia in February 2008. However, due to the recent failure of Anod Bank which is now placed under the management of the Central Bank of Mongolia, all activities of Anod Bank Interpay credit Cards have ceased. Given the current situation, the Board of Directors of the Company has, on April 1, 2009, authorized the termination of the joint venture agreement

8.  Disposal of SMS Biz Sdn. Bhd.

On November 24, 2008, the Company entered into an agreement to sell back its entire interest in SMS Biz to the previous shareholders for the return by the said shareholders all the 7 million shares of the Company’s common stock previously issued to them. The Board of Directors approved the sell-back after due considerations given to the sharp drop in sale due to the adverse impact of the global economic crisis and the confession by the said shareholders that they would not be in a position to subscribe for the additional capital within the next 24 months as called for prior to the closing of the SMSBIZ SEA. The Company recorded a loss in disposing SMSBIZ in the amount of $85,629.

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9.  Joint Venture Agreement to Form a Processing Company to Conduct Business in EMENA Region

On October 1, 2008, Cardtrend Systems entered into a joint venture agreement with 3 individuals to form a company in a country in Europe to conduct card related services businesses in Europe, Middle East and North Africa (“EMENA”) region with a registered capital of $499,200, upon incorporating the contemplated joint venture company, Cardtrend Systems shall own 50.08% of the joint venture company by contributing four units of software with a total fair value of $250,000. As at the date of this Report, the contemplated joint venture company is being incorporated.

10.  Corporate Restructuring

On October 1, 2008, the Board of Directors of the Company approved the re-structuring of the Company’s subsidiaries into two business groups – Card Services Group and Outsourcing Services Group, and each group shall be operating under a separate wholly owned subsidiary to be incorporated in Nevada under the name of Cardtrend Inc. and Global Uplink Inc., respectively. The corporate re-structuring was expected to be completed by the end of December 31, 2008 and the estimated re-structuring cost is approximately $20,000. As at the date of this Report, the Board had revisited the approved plan in view of the current global economic crisis and rescinded its earlier decision and decided that the corporate restructuring be deferred to a later date with possible changes from the earlier plan. Hence, the Segment Reporting for the year ending December 31, 2008 continues to be reported as the existing three groups.

11.  Incorporation of Two New Companies in Nevada

On October 14, 2008, the Company incorporated a wholly owned subsidiary in Nevada, known as Cardtrend Inc., with an authorized capital of 250,000,000 shares of common stock with a par value of $0.001each, and 15,000,000 shares of preferred stock at a par value of $0.001 each. Cardtrend Inc. shall be made the holding company for all the Company’s subsidiaries which are under the Card Services Group.

On October 21, 2008, the Company incorporated another wholly owned subsidiary in Nevada, known as Global Uplink Inc., with an authorized capital of 250,000,000 shares of common stock with a par value of $0.001each, and 15,000,000 shares of preferred stock at a par value of $0.001 each. Global Uplink Inc. shall be made the holding company for the Company’s subsidiaries which are under the Outsourcing Services Group.

Our Employees

As at December 31, 2007, the total staff strength was 144. As at December 31, 2008, the total staff strength was 135. None of our employees are represented by a labor union and we believe that our employee relations are good. All employees are contracted on full-time basis.

Our Facilities

During 2008, Cardtrend continued to rent the corporate service center located at 800 5th Avenue, Suite 4100, Seattle, WA. APS China is located in a commercial office in Shanghai, China which it rented since October 2006. On December 31, 2008, APS China terminated the lease agreement at the Science City and relocated our Data Processing Centre to our operating centre in Guangzhou City which it rents since November 1, 2007. During 2008, Interpay Asia rented a premise in Petaling Jaya, Malaysia to house all the Finance staff and the staff of Etop Services (Malaysia). Cardtrend Systems rented an office at Cyberjaya, Malaysia as its technology research centre (which was terminated in September 2008) while having a commercial office in a rented premise located in Petaling Jaya, Malaysia. Except for one lease in the Guangzhou operating center, all the leases are for terms of no more than two years.

ITEM 1A.  RISK FACTORS

Risks Related To Our Business:

1.We require additional financing to be able to meet our China subsidiary’s working capital.

In our Annual Report for the fiscal year ended December 31, 2007 filed in a Form 10K dated April 10, 2008, we stated that APS China would require additional investment of another $400,000 (making the total investment of $1 million) to fund the working capital of the Operating Centre and Data Processing Centre in Guangzhou for the first two quarters of 2008. We managed to obtain $275,000 of the needed fund through convertible loans during 2008. We curtailed certain planned expenses for the growth of the BPOS business as well as the launch of our loyalty card business in Guangzhou. This has slowed down the revenue growth of APS China for the year 2008 and would continue to slow down the growth of revenue in 2009.

2.   Our results of operations are subject to significant foreign economic and political risks.

Our operations are currently established in Malaysia, Hong Kong, and the People’s Republic of China (“PRC”) and are being established in other Asian countries. Our revenues are derived from the provision of BPOS to financial institutions and major corporations in China as well as card management software and solutions to operators of payment cards and loyalty cards as well as prepaid products in the Asia Pacific region. Accordingly, our business, financial condition and results of operations may be influenced by the political, economic and legal environments in PRC and other Asian countries, and by the general state of the economy in those countries. Our operations in the PRC are subject to special considerations and significant risks not typically associated with companies in the North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. Our results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

3.   We have short history of operations in China to predict the level of market acceptance we can expect for our services.

Our success and growth will depend upon our ability to market our products and services in China. As we are not a well-known enterprise, we will be facing with the issue of the potential customers’ acceptance and comparison with other well-known enterprises. We intend to overcome this issue with Cardtrend’s successes in the South-east Asian and Pacific regions as well as the skills of our senior management team and executives, but there is no guarantee that such credentials will be able to substantially overcome such risk as our competitors (both the Chinese and multi-national corporations) have substantially greater financial and marketing resources than us.

4.   Our subsidiary in Malaysia, Payment Business Solutions Sdn. Bhd., lost its only reseller and the inability to replace such reseller may result in the subsidiary departing from the business of distributing prepaid IDD cards.

In our Annual Report for year ended December 31, 2007 filed in a Form 10KSB dated April 10, 2008, we stated that Payment Business Solutions Sdn. Bhd. (“PBS”,) a wholly owned subsidiary of IIG in Malaysia, which was appointed as a major distributor of SMS Biz Sdn Bhd., a licensed provider of long distance IDD call services , was facing the risk of loss of revenue if it lost its only reseller or a significant orders from this reseller or the inability of this reseller to meet its financial obligations in a timely manner. In November 2008, we ceased to supply the prepaid cards to this reseller due to its inability to pay certain outstanding amount in accordance to the normal credit terms, resulting in a substantial loss of revenue in our prepaid card distribution business. However, such loss of revenue did not have a material adverse impact in our consolidated gross profit due to its low sale margin of about 1%. Should we not able to recruit one or more resellers in the near future, we may decide to depart from the prepaid card distribution business even though it would not have material impact to the financial condition of the Company.

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5.   Our two subsidiaries, Asia Payment Systems (China) Co. Ltd. in China and Cardtrend Systems Sdn. Bhd. in Malaysia may be subject to product and/or service failure liability claims from the use of our products and/or our services that could result in costs or damages payable by us adversely affecting our business, financial condition, and results of operations.

We could be subject to product and/or service failure liability claims in the event our products or products under development fail to perform as intended or we fail to deliver our services to the agreed level as provided for in the service agreements. Even unsuccessful claims could result in the expenditure of funds in litigation and the diversion of management time and resources and could damage our reputation and impair the marketability of our products and/or services. While we limit our liabilities to a certain amount as provided for in our licensing and service contracts (hence, we do not deem necessary to take up any product/service failure liabilities insurance in order to save our cost of doing business), it is possible that a successful claim could be made against us, that the amount of fees received would not be adequate to cover the costs of defending against or paying such a claim, or that damages payable by us would have a material adverse effect on profitability and cash flows.

6.   We are subject to government regulations and any action on the part of regulators could have a material adverse effect on our business.

As our subsidiaries and associated companies are involved in the payments and loyalty related businesses, we may be subjected to the approvals of the monetary authorities of most of the countries we are operating or intend to operate in, as well as compliance with such government authorities’ requirements from time to time. Such approvals in certain countries we may intend to operate in may be subject to significant delays. Any such actions by regulatory agencies could materially adversely affect our growth objectives.

7.   Our intellectual property rights or patent rights might not provide protection and might be invalid or unenforceable.

Our ability to commercialize any of our products under development will depend, in part, on our ability to obtain patents, enforce those patents, preserve trade secrets, and operate without infringing on the proprietary rights of third parties. The patent applications licensed to or owned by us may not result in issued patents, patent protection may not be secured for any particular technology, any patents that have been or may be issued to us may not be valid or enforceable and patents issued to us may not provide meaningful protection.

8.   Our subsidiary in Malaysia, Etop Services (Malaysia) Sdn. Bhd., which distributes prepaid cards rely on third parties to supply the products, making us vulnerable to supply disruption which could delay our product delivery to our customers.

Our Prepaid Business subsidiaries rely on third parties to supply most of their prepaid products. Their arrangements with these third party suppliers are not contractual and there shall be no claims against them should there be any interruption of supplies. If such interruptions arise regularly, our subsidiaries may face the risk of the customers losing confidence with them and may discontinue the business relationship with them, thereby adversely affecting their revenue and profitability.

9.   We are substantially dependent upon the continued service of our senior management staff and key technical and managerial personnel.

Our success has been and will continue to be dependent on the services of our current senior management staff and key technical and managerial personnel who are in great demand in the payments and loyalty industries in Asia. Although we have implemented a long-term employee option plan and have entered into 5-year contracts with the senior management staff and 3-year or 5-year contracts with the technical and middle management staff, we are, however, still facing with the risk that we may not be able to fully compensate them with cash–based salaries and thereby not able to retain such employees, and our failure to do so could adversely affect our business.

10.  We may be required to indemnify our officers and directors for liability to shareholders or the public.

Our articles of incorporation and bylaws provide that we will indemnify any director, officer, agent and/or employee for liabilities on the terms and conditions permitted by the corporate laws of the State of Nevada. We may purchase and maintain insurance on behalf of any such persons whether or not we would have the power to indemnify such person against the liability insured. This could result in substantial expenditures by us and prevent our recovery from such officers, directors, agents and employees for losses incurred by us as a result of their actions. We have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.

11.  We may be subjected to the Investment Company Regulation.

We do not intend to become classified as an "investment company" under the Investment Company Act of 1940 (the "Investment Act"). We believe that we will not become subject to regulation under the Investment Act because (i) we will not be engaged in the business of investing or trading in securities, and (ii) most of the joint ventures undertaken or to be undertaken by us and/or our wholly owned subsidiaries will result in us owning a majority or substantial minorities interest. Should there be a requirement to register as an investment company, it would cause significant registration and compliance costs. Any violation of the Investment Act will subject us to materially adverse consequences. Should the SEC find that we are subject to the Investment Act, and order registration under the Investment Act, we would resist such finding and take steps to avoid such registration. Irrespective of whether the SEC or we were to prevail in such dispute about whether or not we are an investment company, however, the damages and delays would be costly.

12.  We may be subjected to Other Regulations.

Any acquisition made by us may be of a business that is subject to regulation or licensing by federal, state, or local authorities. Foreign companies may also be considered, and be subject to similar business regulations as are applicable in the United States and also may be subject to limitations on ownership by foreign persons and entities. Compliance with such regulations and licensing can be expected to be a time-consuming, expensive process and may limit our other expansion opportunities. We are pursuing and intend to continue to pursue potential business opportunities in foreign countries, including China, and as such, such opportunities will be subject to foreign country laws and regulations affecting foreign investment, business operations, currency exchange, repatriation of profits, and taxation, which will increase the risk of your investment.

Risks Related To Our Common Stock:

1.  We do not plan to pay dividends and shareholders may not receive any return on their investment.

We do not plan to pay dividends, cash or otherwise, on our common stock in the foreseeable future. Future dividends will depend on earnings, if any, our financial requirements and other factors beyond our control.

2.   The market price for shares of our common stock could be volatile and you may be unable to resell your shares in the market.

The market price for the shares of our common stock may fluctuate in response to a number of factors, many of which are beyond our control. Such factors may include, without limitation, the general economic and monetary environment and the open-market trading of our shares in particular. Such market trading may include speculative short-selling by speculators. Investors may be unable to resell their shares in the market due to variations in trading volume or other market conditions.

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3.   Existing shareholders may experience some dilution upon the exercise of outstanding warrants and options and conversion of shares of preferred stock.

The holders of some of our warrants have up to four years from their issuance date to exercise their warrants with exercise prices ranging from $0.08 to $1.75 per share. On February 26, 2007, the employees, officers and directors have been granted over 11 million of options at strike price of $0.10 and subsequently modified to $0.02 per share on September 5, 2008. Holders of Series A and Series B preferred stock had converted to 42.5 million restricted shares of common stock in January 2008. Exercise of these warrants and options may cause dilution in the interests of other shareholders as a result of the additional shares of common stock that would be issued upon exercise. In addition, sales of the shares of our common stock issuable upon exercise of the warrants and options as well as sale of the restricted shares under Rule 144 (see #4 below) could have a depressive effect on the price of our stock, particularly if there is not a coinciding increase in demand by purchasers of our common stock. Further, the terms on which we may obtain additional financing during the period that any of the warrants remain outstanding may be adversely affected by the existence of these warrants.

Moreover, we will need to raise additional funds in the future to finance our existing operations. If we raise additional funds through the issuance of new equity or equity-linked securities, other than on a pro rata basis to our existing shareholders, the percentage equity ownership of the existing shareholders will be reduced. Existing shareholders may experience subsequent dilution, and such newly issued securities may have rights, preferences and privileges senior to those of the existing shareholders

4.   Possible Rule 144 Sales.

Although most of our issued and outstanding shares of our common stock as at March 31, 2009 (totaling 155,818,136) are "restricted securities" within the meaning under the Securities Act 1933, as amended (the "Act"), most of these shares shall have piggy-back registration rights or the restriction period has lapsed. These stockholders may be able to sell their shares pursuant to an effective registration statement. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registrations of our shares, may have a depressive effect upon the price of our shares in any market that may develop.

5.   We have effected or entered into (and will likely continue to effect or enter into) capital raising transactions, acquisitions, debt settlements and contracts for services that involve the issuance of shares of our common stock (or securities convertible into or exchangeable for such shares) and, as a result, the value of our common stock may be further diluted.

We have effected and entered into (and will likely continue to effect and enter into) capital raising transactions, acquisitions, debt settlements and contracts for services that involve the issuance of shares of our common stock or securities convertible into or exchangeable for such shares. These share issuances may dilute the value of our common stock and may result in a decrease in the market price of our common stock.

6.   Our stock price has reflected a great deal of volatility, including a significant decrease over the past 24 months. The volatility may mean that, at times, our shareholders may be unable to resell their shares at or above the price at which they acquired them.

During 2007, the price range was $0.150 and $0.021. During 2008, the price range was $0.075 and $0.001. During the first quarter of 2009, our share price range was $0.0005 to $0.0070 and the price of our common stock has been, and may continue to be, highly volatile and subject to wide fluctuations. The market value of our common stock has declined in the past, in part, due to our operating financial performance and the current global financial crisis. In the future, broad market and industry factors may decrease the market price of our common stock, regardless of our actual operating performance. Declines in the market price of our common stock could affect our access to capital, which may, in the future, impact our ability to continue as a going concern. In addition, declines in the price of our common stock may harm employee morale and retention, curtail business expansion opportunities presented to us, and negatively impact other aspects of our business. As a result of any such declines, shareholders may be unable to resell their shares at or above the prices at which they acquired them.

7.  We have the right to issue additional common stock and preferred stock without the consent of our stockholders. This would have the effect of diluting their ownership and could decrease the value of their investment in our company.

We have additional authorized, but unissued shares of our common stock totaling 344,181,864 as at March 31, 2009 that may be issued later by us for any purpose without the consent or vote of our shareholders that would dilute their percentage ownership of our company. In addition, we have additional authorized but unissued shares of preferred stock totaling 10 million as at March 31, 2009. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.

ITEM 1B.   UNRESOLVED STAFF COMMENT

None.

ITEM 2.    DESCRIPTION OF PROPERTY

We do not own any real estate. Except for the lease of our operating center in Guangzhou, all our office premises are leased for terms of no more than two (2) years. Our business operating assets, comprising personal computers, telephone equipment, fixture, furniture and computer equipment are located in APS China’s Guangzhou Branch office in Guangzhou City (China), DFS data center in Okinawa (Japan), Etop Services (Malaysia)’s office in Petaling Jaya (Malaysia); and Cardtrend Systems’ office in Petaling Jaya (Malaysia), have a total book value of $393,314 as at December 31, 2008. In addition, upon the closing of the merger with Cardtrend Systems on October 31, 2007, we had engaged the service of an independent valuation firm which had valued the suite of card management software (“CMS”) developed and owned by Cardtrend Systems at $500,000. The book value of CMS as at December 31, 2008 was $283,333. The CMS is located at the office of Cardtrend Systems in Malaysia. The source codes of all the CMS software are only accessible by authorized personnel only.

ITEM 3.   LEGAL PROCEEDINGS

We are not a party to any legal proceedings and we are not aware of any threatened legal proceedings that could cause a material adverse impact on our business, assets or results of operations.

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

There was no submission of matters to a vote of security holders during 2008.

On January 15, 2009, the Company obtained the votes of a majority of the shareholders of all classes of the Company’s common stock in favor to increase the authorized number of shares of its common stock from 250,000,000 to 500,000,000. The change was effective January 30, 2009.

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PART II

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

Securities

Effective July 24, 2007, the Company was authorized to issue 250,000,000 shares of common stock with a par value of $0.001 per share. As of December 31, 2007 and December 31, 2008, the Company had issued and outstanding 82,408,276 and 155,818,136 shares of common stock, respectively. On January 30, 2009, the Company was effectively authorized to issue 500,000,000 shares of common stock. As of March 31, 2009, the Company had issued and outstanding 155,818,136 shares of common stock.

The Company is also authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share. As of December 31, 2007, the Company had issued and outstanding 3,500,000 shares of Series A preferred stock and 2,500,000 shares of Series B preferred stock. As of January 22, 2008, none of the shares of preferred stock was outstanding due to the conversion of all these shares of preferred stock to 42,500,000 shares of common stock on that date pursuant to the shares exchange agreements for the acquisition of IIG and the merger of Cardtrend Systems. As at the date of this Report, no share of preferred stock was issued.

Our securities commenced trading in February 2004 on the OTC Bulletin Board under the symbol “APYM”. On August 16, 2007, due to the change of our name from Asia Payment Systems, Inc. to Cardtrend International Inc., the symbol was changed to “CDTR”.

The following table sets forth the closing high and low bid prices of the common stock for each quarter within the last two years, from January 2007 through December 2008. The quotations reflect inter-dealer prices and do not represent retail mark-ups, markdowns, commissions, and may not reflect actual transactions.

	2008				2007
	High		Low			High	Low
Quarter ended
31-March	$	0.075	$	0.040	$	0.11	$	0.06
30-June	$	0.045	$	0.015	$	0.09	$	0.02
30-September	$	0.004	$	0.005	$	0.15	$	0.02
31-December	$	0.014	$	0.001	$	0.10	$	0.04

Emerging companies and the stock market generally have experienced significant price and volume fluctuations. Similarly, the market price of our common shares may fluctuate related to a number of events and reasons, often not related to or consistent with operating performance.

Shareholders

On December 31, 2007, we had 101 shareholders of common stock (excluding beneficial owners in the street names) and 16 shareholder of preferred stock on record. On December 31, 2008, we had approximately 105 shareholders of common stock (excluding beneficial owners in street names) and no shareholders of preferred stock.

Dividends

We have not declared any cash dividends, nor do we intend to do so in the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

The following table contains certain information relating to outstanding stock options to purchase our common stock granted pursuant to compensation arrangements as of December 31, 2008:

	Number of	Weighted		Number of Securities
	Securities To	Average		Remaining Available For
	Be Issued	Exercise		Future Issuance Under
	Upon Exercise	Price		Equity Compensation
	Of	Of		Plans [Excluding
	Outstanding	Outstanding		Securities Reflected
Plan Category	Options	Options		In Column (a)]
	(a)	(b)		(c)
2004 Option Plan (1)	-	$	-	-
2005 Option Plan (1)	-		-	-
2006 Unregistered Option Plan (2)	10,550,000	$	0.020	No limit set
2007 Option Plan (1)	6,050,000	$	0.021	78,148
Total	16,600,000	$	0.020	78,148

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(1)	On various dates during the four years between 2004 and 2007, we filed with the SEC a Registration Statement on Form S-8 to register 5,000,000, 5,000,000 and 25,000,000 shares of our common stock issuable under each of the 2004 Stock Option Plan, 2005 Stock Option Plan and 2007 Stock Option Plan, respectively
(2)	In May 2006, the Board of directors approved a stock option plan without Registration Statement being filed (referred to as “Unregistered Plan”). There is no limit established for the Unregistered Plan and shares to be issued pursuant to the exercised of the options granted under this Unregister Plan will be restricted under Rule 144.

Unregistered sales of securities

On January 2, 2008, the Company cancelled 82,912 shares of common stock valued at $6,000 due to clerical error resulting in overpayment of debt owed to Management Services of Arizona, Inc.

On January 14, 2008, the Company issued a total of 3,023,119 shares of the Company’s common stock valued at $151,155 for the settlement of debts (salaries and advances owed to employees and officers). These shares were issued through the options granted to and exercised immediately by these employees at an exercise price equaled to the market price of our common stock at the time of grant. The fair values of these options, determined using the Black-Scholes option pricing model, totaling $151,152 were fully expensed at the time the options were granted.

On January 22, 2008 and February 1, 2008, an aggregate of 11 convertible loans with a total value of $722,112 were converted into equity for 17,133,263 shares of commons stock of the Company upon their maturities (See Note 14 to the Notes to Consolidated Financial Statements).

On May 20, 2008, 562,500 shares of common stock valued at $33,751 were cancelled due to termination of a contract with a consulting services firm.

On August 31, 2008, the Company issued 1,931,900 shares of free trading common stock value at $38,638 for the compensation of three months salaries for an early termination of an employee (See Note 13 to the Notes to Consolidated Financial Statements).

On September 8, 2008, the Company issued 7,000,000 shares of restricted common stock valued at $105,000 for the exchange of all issued and fully paid up shares of SMS BIZ. Subsequent on November 24, 2008, the Company cancelled 7,000,000 shares of common stock valued at $21,000 for the sale of SMS BIZ back to the original shareholders (See Note 4 to the Notes to Consolidated Financial Statements).

On September 12, 2008, the Company issued 2,100,000 shares of restricted common stock at a market fair value of $0.01 per share for the consulting services rendered (See Note 13 to the Notes to Consolidated Financial Statements).

On September 19, 2008, the Company issued 3,696,938 shares of restricted common stock valued at $18,485 for the compensation of early termination to an employee (See Note 13 to the Notes to Consolidated Financial Statements).

On September 22, 2008, the Company issued 3,701,943 shares of restricted common stock valued at $18,510 for a partial compensation of early termination to an employee (See Note 13 to the Notes to Consolidated Financial Statements).

On September 23, 2008, the Company cancelled 31,891 shares of common stock valued at $2,328 due to a clerical error from the overpayment of salary to a former employee.

ITEM 6.   SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Currently, the Company does not have sufficient capital to implement the Company’s entire plan of operations. The information contained herein also reflects a prospective plan of future operation. There are no assurances as to when, if ever, the Company will have the funds to implement this plan of operations. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes included in this annual report.

Business Review

1.   Processing Business Unit

Since the merger with Cardtrend Systems, we now provide Processing Business to include data processing outsourcing (“DPO”) and data processing in-sourcing (“DPI”) services to operators of payments cards and loyalty cards, as well as distributors of prepaid products. In addition, our sources of revenues for the Processing Business are derived from Japan, China, Hong Kong, Malaysia, Thailand, Brunei, Indonesia, Oman, Australia and New Zealand. Cardtrend Systems has recurring income from the maintenance services pursuant to the licenses granted to its clients (which include Shell Oil (Asia Region), iNet of Thailand, Petron of Philippines, and Islamic Bank of Brunei) which are using its Cards Management Software (“CMS”) to process their credit cards, loyalty cards and prepaid products. Cardtrend Systems income is based on one-time licensing fee plus annual maintenance fees as well as on the number of transactions and/or cards processed through its CMS via an in-sourced or out-sourced arrangement.

Cardtrend Systems now conducts the Processing Business in the Emerging Asia Market, Affluent Asia Market and Outer Asia Market while Asia Payment Systems (China) Co. Ltd. (”APS China”) is responsible to conduct the Processing Business in the China Market. As the Technology Centre of Cardtrend International group of companies, Cardtrend Systems continues to enhance its existing systems and develops new ones. For reporting purposes, the revenues earned by Cardtrend Systems, APS HK, and APS China are grouped under the Processing Business Unit.

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(i) In China Market

In April 2006, the Company entered into a strategic alliance agreement with a business processes out-sourcing (“BPO”) company (Global Uplink), located in Guangzhou, China. This agreement has subsequently led to an agreement for the purchase by Asia Payment Systems (China) Co. Ltd. (“APS China”), the Company’s wholly owned subsidiary in Shanghai, China, of the assets in the operating centre of Global Uplink Communications Ltd. (“Global Uplink”), the appointment of APS China as the exclusive provider of BPO and CRM related services. The operating centre is equipped to provide BPO services, which include telephone call services, data capturing and management services, and document management and distribution services. In December 2007, APS China set up a branch in Guangzhou to operate the Operating Centre as well as the Data Processing Centre that the Company set up in March 2007 for the provision of data processing out-sourcing (“DPO”) services to operators of payment cards and loyalty cards in China, including Global Uplink. APS China produced the Company’s maiden revenue in China Market in November 2007 and continued to produce revenue throughout 2008. However, due to relative high expenses in developing the business in China, APS China suffered losses in 2008. In anticipation of the negative effects of the global financial crisis, we began to curtail our operating and development expenses in China since the beginning of fourth quarter of 2008.

(ii) In Other Asia Markets (Affluent Asia, Emerging Asia and Outer Asia)

Since the beginning of 2007, we continued to provide credit card transaction processing services to our customer, DFS, in Okinawa, Japan through a new agreement it signed with Cardtrend Systems. In addition, our sources of revenues for the Processing Business in Other Asia Markets have now expanded from Japan to include Malaysia, Thailand, Brunei, Indonesia, Oman, Australia and New Zealand. Cardtrend Systems are also soliciting potential clients in Vietnam and Middle East countries amid the current economic downturn.

2.   Cards Business Unit

With the acquisition of IIG, Cardtrend has expanded its scope of businesses to include the issuance of payments cards and loyalty cards (“Cards Business”). Our strategy is to form joint-venture companies with local parties to conduct payment cards (using our proprietary brand, Interpay Card, and international brands such as MasterCard and Visa) or loyalty cards (using our proprietary brand). The payment cards companies normally will have to partner with banks which provide revolving line of credit facilities to the company’s cardholders. The payment cards companies earn their revenues in several streams, namely, annual fees, merchant discounts, interchange fees, cash advance fees, interest income and other charges or fees. The loyalty cards companies earn their revenues from the commission paid by the merchants who participate in the loyalty program and from the annual fees that may be charged to the card members. As the Company operates the Cards Business through joint venture companies which may not be controlled by us, revenues earned by such entities may not be consolidated in the Company’s financial statements. Should that be the case, the Company will account for any dividends received from such entities as the Company’s income. Hence, the Cards Business Unit is expected to be the smallest contributor to the Company’s consolidated revenues for the next few years.

(i) In China Market

Under the current Chinese Government regulations, no foreign enterprise is permitted to conduct payment cards business in China unless with an approval from the relevant authority. Several multinational financial institutions have ‘conducted’ MasterCard/ Visa/ China Union Pay credit cards issued in their names but legally under their respective bank partners’ in which they own a ‘strategic stake’. Such bank partners are large Chinese banks who would otherwise have out-sourced their card processing needs to large and well known third party DPO service providers, including China Union Pay, the Chinese card association owned by the Chinese banks. The Company does not have the financial strength and banking reputation to adopt such entry strategy. However, the Company is pursuing with a strategy that involves the offering of management services including administration of business processes and in-sourcing of data processing services to medium- and small-size Chinese banks on a revenue sharing basis.

To the best of the Company’s knowledge, there exists no regulation in China on the business of issuing loyalty cards. However, the Company has decided that for commercial reasons, the issuance of loyalty cards will be best undertaken by Chinese companies (like Global Uplink) or joint venture companies with Chinese parties under a franchise license from us (through APS China) which will involve the use of the brand known as “BP Card” and the provision of all the related data processing requirements on a revenue sharing basis. Such revenues are recorded in APS China under the Processing Business Unit. APS China has begun in December 2007 discussions with several Chinese parties in several major cities in China to form joint-venture companies to conduct the BP Card business. The revenues of or dividends from these joint venture companies (if any) will be recorded in APS China under the Cards Business Unit. The efforts spent in 2008 did not produce any joint venture. The Company shall continue to search for a potential partner in 2009.

(ii) In Other Asia Markets (Emerging Asia, Affluent Asia and Outer Asia)

The Company has grouped the entities conducting the Cards Businesses in Other Asia Markets under Interpay International Resources Ltd, (“IIR”), a BVI incorporated wholly owned subsidiary of IIG, which has a 20%-owned loyalty cards company and a 20%-owned payment cards company in Malaysia. In 2006, IIR has entered into 2 joint venture agreements to conduct payments cards business, one in Mongolia (for which the Company would own 50%) and the other in Qatar (for which the Company would own 40%). As at the date of this report, the Qatar joint venture has not yet been implemented due to the non-availability of a bank partner. The Mongolia joint venture has taken off but the issuance of shares of the joint venture company has not been completed as the subscription of shares has not been completed as of the date of this report. The Company continues to source for, as well as negotiating with, local parties in other Asian and Middle Eastern countries for similar joint ventures to set up payment cards and/or loyalty cards companies. The joint venture payment cards companies will be using MasterCard or Visa, as well as proprietary brands. The Company’s contributions for the paid-up capital of the joint venture card companies are derived from supplying the Company’s Card Management Software (“CMS”) and technical services to the joint venture companies where the values of such software and services are established and agreed upon by the joint venture partners. Towards the end of 2008, the bank that was working with the company in Mongolia in operating a domestic proprietary credit card was taken over by the Central Bank of Mongolia which has stopped all lending activities of the bank including the revolving line of credit for the proprietary credit cards. We will be terminating the joint venture agreement in Mongolia by the end of second quarter 2009. Meanwhile, although our joint venture card company in Malaysia has launched their MasterCard Credit Cards with a bank in Malaysia providing the revolving line of credit to their cardholders, the issuance of such credit cards has so far been disappointing.

3.   Prepaid Business Unit

The acquisition of IIG has also resulted in us having the Prepaid Business Unit which consists of entities involving in the buying and selling of prepaid products such as prepaid cell-phone airtime, prepaid Internet airtime, prepaid long distance IDD calls, entertainment and transportation prepaid tickets, prepaid virtual games and prepaid gift cards. The Prepaid Business companies earn their revenue from sale of prepaid products to consumers through resellers who obtain a discount on the fixed retail price. The prepaid business companies purchase prepaid products from the suppliers at a higher discount than that given by them to the resellers, thereby making a net profit margin. Similar to the Cards Business Unit, the Company may operate the Prepaid Business in certain countries through associated joint venture companies which may not be controlled by us. Hence revenues earned by such associated companies may not be consolidated by us. Instead, the Company will account for the dividends (if any) received from such entities as its income. Prior to the global financial crisis, the Company expected the Prepaid Business Unit in Other Asia Markets to be a significant contributor of the Company’s consolidated revenues. However, the expectation has now changed due to difficulty in sourcing for funds for the expansion of such business in the near future.

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(i) In China Market

The Company has been, and still is, planning to form joint venture with Chinese parties to conduct the prepaid business in China along the same model adopted in Malaysia. The Company will adopt an entry strategy similar to that of the Cards Business discussed above, i.e. APS (China) to provide business processes and data processing to operators of the Prepaid Business in China on a revenue sharing arrangement, and such revenues, if generated, shall be recorded by APS China under the Processing Business Unit in China Market. In addition, APS China will also consolidate the revenues of or dividends from such joint venture companies, if available, under the Prepaid Business Unit in the China Market.

(ii) In Other Asia Markets (Emerging Asia, Affluent Asia and Outer Asia)

Through a Singapore incorporated wholly owned subsidiary of IIG, Interpay International Airtime Pte. Ltd., the Company has a 60% owned subsidiary in Malaysia, Etop Services (Malaysia) Sdn. Bhd. (“Etop Malaysia”), which launched its Prepaid Business in Malaysia in late February 2007. To expand the Prepaid Business in Malaysia and other Asian countries, in November 2006 the Company entered into a strategic alliance agreement with a provider of a long distance telecommunication services in Malaysia, SMS Biz Sdn. Bhd., to appoint another subsidiary of IIG, Payment Business Solutions Sdn. Bhd. (“PBS”), to distribute its prepaid IDD airtime to wholesalers and corporations in Malaysia. In search of a quicker solution to expand the prepaid business in Malaysia, the Company acquired SMS Biz in September 2008 but quickly sold back the company to its original shareholders because of a sudden decline in its sales due to the change of economic conditions in Malaysia arising from the global financial crisis. The Company’s prepaid business in Malaysia has also been adversely affected because of this and has stopped such business since the end of 2008.

Management Initiatives and Plans

During 2008, the Company continued to implement the following strategies which were devised in late 2006 to achieve the Company’s new vision: which is to be an internationally recognized and profitable provider of payments and loyalty-rewards related products and services to financial institutions, corporations and consumers at large in Asia, with a substantial operation in China:

(a)	Focus on three lines of payments and loyalty-rewards related businesses: Processing Business, Cards Business and Prepaid Business (see Item 1 of Part I of the Form 10K)
(b)	Rapidly growing revenues of the 3 Business Units in the China Market, Emerging Asia Market, Affluent Asia Market and the Outer Asia Market through joint ventures, acquisitions and/or mergers.
(c)	Expand the Management Team to effectively drive the three Business Units.
(d)	Establish a Technology Centre to further develop and enhance existing systems to support the growth objectives of the 3 Business Units.

The Company intends to adopt the strategy of expense curtailing while growing the businesses through joint ventures, mergers and acquisitions.

The Company has established the following plans for each of the Business Units in China market and Other Asia Markets for 2009:

1.   Processing Business Unit:

(i)	China Market
	(a)	To search for joint venture partners to expand BPO business.
	(b)	To curtail business development related and administrative expenses.

(ii)	Other Asia Markets
	(a)	To form one joint venture company or acquire a company to expand our Processing Business in Other Asia Markets.
	(b)	To increase sales efforts for DPO services in South East Asia countries.

2.   Cards Business Unit:

(i)	China Market
	(a)	To source for and negotiate with Chinese parties with a view to form a joint venture loyalty card company.

(ii)	Other Asia Markets
	(a)	To source for and negotiate with local parties in Other Asia Markets with a view to form a joint venture payments cards company.

3.   Prepaid Business Unit:

(i)	China Market
	(a)	To source for and negotiate with local parties in China Market with a view to form a joint venture company to conduct Prepaid Business.

(ii)	Other Asia Markets
	(a)	To source for companies involving in the Prepaid Business for acquisitions.

Company’s Outlook

The demands for payments and loyalty related products and services by both the consumers and corporations still remain strong and growing in Asia, particularly in China Market. The Company’s management team, comprising the CEO, COO, CFO, and Chief Officer – Greater China, have during 2008, been implementing the New Strategy with a set of new action plans to achieve the vision and objectives of the Company. The organizational structure has been solidified with increased staff strength. In view of the current global financial crisis, the Company expects that it will be difficult for it to raise further funds needed for the management to continue implementing the New Strategy and plans to continue its momentum in increasing its revenues from all its 3 Business Units in 2009. Therefore, the Company will restructure its subsidiaries and curtail its expenses in all areas to avoid the need of external funds.

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Critical Accounting Policies

In preparing the Company’s financial statements, we make estimates, assumptions and judgments that can have a significant effect on the Company’s revenues, income or loss from operations, and net income or net loss, as well as on the value of certain assets on the Company’s balance sheet. We believe that there are several accounting policies that are critical to an understanding of the Company’s historical and future performance as these policies affect the reported amounts of revenues, expenses, and significant estimates and judgments applied by management. While there are a number of accounting policies, methods and estimates affecting the Company’s financial statements, the following policies are considered critical. In addition, you should refer to the Notes to the accompanying consolidated financial statements for further discussion of the Company’s accounting policies.

1.	Business Combinations
2.	Stock-based Compensation
3.	Revenue Recognition
4.	Goodwill and Purchased Intangible

1.   Business Combinations

The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, which established accounting and reporting standards for business combinations and requires that all business combinations be accounted for by the purchase method. Under the purchase method of accounting, the cost, including transaction costs, is allocated to the underlying net assets, based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

The judgments made in determining the estimated fair values and expected useful lives assigned to each class of assets and liabilities acquired can significantly impact net income. For example, different classes of assets will have useful lives that differ. Consequently, to the extent a longer-lived asset is ascribed greater value under the purchase method than a shorter-lived asset, there may be less amortization recorded in a given period.

Determining the fair value of certain assets and liabilities acquired is subjective in nature and often involves the use of significant estimates and assumptions. We use a one-year period following the consummation of acquisitions to finalize estimates of the fair values of assets and liabilities acquired. Two areas, in particular, that require significant judgment are estimating the fair values and related useful lives of identifiable intangible assets. While there are a number of different methods used in estimating the value of acquired intangibles, there are two approaches primarily used: the discounted cash flow and market comparison approaches. Some of the more significant estimates and assumptions inherent in the two approaches include: projected future cash flows (including timing); discount rate reflecting the risk inherent in the future cash flows; perpetual growth rate; determination of appropriate market comparables; and the determination of whether a premium or a discount should be applied to comparables. Most of the foregoing assumptions are made based on available historical information.

2.   Stock-based Compensation

We adopt SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS No. 123R") using the fair value method. Under SFAS No. 123R, stock-based compensation expense is measured at the grant date based on the fair value of the award or using the Black-Scholes pricing model and is recognized as expense over the appropriate service period.

3.   Revenue Recognition

For our Processing Business, our products are integrated with software that is essential to the functionality of the Company’s equipment. Additionally, we provide unspecified upgrades and enhancements related to the Company’s integrated software through the Company’s maintenance contracts for most of its products. Accordingly, we accounts for revenue in accordance with Statement of Position No. 97-2, Software Revenue Recognition, and all related interpretations. We recognize revenue when persuasive evidence of an arrangement exists, delivery or performance has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. Evidence of an arrangement generally consists of customer purchase orders and, in certain instances, sales contracts or agreements. Shipping terms and related documents, or written evidence of customer acceptance, when applicable, are used to verify delivery or performance. We assess whether the sales price is fixed or determinable based on payment terms and whether the sales price is subject to refund or adjustment. We assess collectibility based on the creditworthiness of the customer as determined by credit checks and the customer’s payment history to us.

For arrangements with multiple elements, we allocate revenue to each element using the residual method based on vendor specific objective evidence of fair value of the undelivered items. Vendor specific objective evidence of fair value is based on the price charged when the element is sold separately. The Company then recognizes revenue on each deliverable in accordance with the Company’s policies for product and service revenue recognition. The Company’s ability to recognize revenue in the future may be affected if actual selling prices are significantly less than fair value. In addition, the Company’s ability to recognize revenue in the future could be impacted by conditions imposed by the Company’s customers.

We record reductions to revenue for estimated product returns and pricing adjustments, such as rebates and price protection, in the same period that the related revenue is recorded. The amount of these reductions is based on historical sales returns and price protection credits, specific criteria included in rebate agreements, and other factors known at the time. Additional reductions to revenue would result if actual product returns or pricing adjustments exceed the Company’s estimates.

For our Cards Business, if the entity conducting the payment card business is our subsidiary, we recognize revenues for fees earned from merchants, cardholders, interchange fee from card transactions acquirers, and from the sharing of interest income earned by partner financial institutions which extend revolving line of credit to our credit card cardholders. If the entity conducting the loyalty card business is our subsidiary, we recognize revenues for fees earned from merchants and the breakage of bonus points (or expired bonus points) granted to the cardholders. If the entity conducting the cards business is not a subsidiary but an associate in which we own less than fifty percent in equity, we recognize revenue from the dividends actually declared and distributed by the entity.

For our Prepaid Business, if the entity conducting the business is our subsidiary, we recognize revenues from sales of the prepaid products after the discounts accorded to our dealers/distributors. We record reductions to revenue for product returns (due to invalid usage or defects) on an actual basis. If the entity is not our subsidiary but an associate in which we own less than fifty percent in equity, we recognize revenue from the dividends actually declared and distributed by the entity.

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4.   Goodwill and Purchased Intangible Assets

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. The amounts and useful lives assigned to other intangible assets impact the amount and timing of future amortization, and the amount assigned to in-process research and development is expensed immediately. The value of the Company’s intangible assets, including goodwill, could be impacted by future adverse changes such as: (i) future declines in the Company’s operating results, (ii) a decline in the valuation of technology company stocks, including the valuation of the Company’s common stock, (iii) significant slowdown in the worldwide economy or the payments and loyalty rewards industries or (iv) failure to meet the performance projections included in the Company’s forecasts of future operating results. We evaluate these assets on an annual basis as of in the fourth quarter of each fiscal year or more frequently if we believe indicators of impairment exist. In the process of the Company’s annual impairment review, we use the market approach as well as the income approach methodology of valuation that includes the discounted cash flow method to determine the fair value of the Company’s intangible assets. Significant management judgment is required in the forecasts of future operating results that are used in the discounted cash flow method of valuation. The estimates we have used are consistent with the plans and estimates that we use to manage the Company’s business. It is possible, however, that the plans and estimates used may be incorrect. If the Company’s actual results, or the plans and estimates used in future impairment analyses, are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges.

For the year end December 31, 2008, we have determined that the goodwill for (i) the IIG group of companies acquired in December 2006 amounting to $3,272,258 was totally impaired; (ii) the goodwill for Cardtrend Systems Sdn. Bhd. acquired in October 2006 was impaired by $2,472,262, leaving an amount of $153,212 as at December 31, 2008; and (iii) the goodwill for Global Uplink Ltd. acquired in October 2007 amounting to $64,601 was totally impaired.

Results of Operations

Full Year Ended December 31, 2008 Compared to Full Year Ended December 31, 2007

1.   Revenue and Operating Expenses

Net revenue for the Company’s Processing Business Unit totaled $1,061,550 for the year ended December 31, 2008 as compared to $748,465 for the year ended December 31, 2007, an increase of $313,085 or 42%. The increase was primarily resulted from net revenue of $528,835 generated by the Company’s subsidiary in China, APS China. The corresponding cost of sales was $419,751 for the year ended December 31, 2008 and $344,239 for the same corresponding period in 2007. Gross margin for the year ended December 31, 2008 was approximately 60%, while gross margin for the same corresponding period in 2007 was approximately 54%. The gross margin was higher because the effect of inclusion of higher gross margin revenue from CTS Malaysia which is within the expectation of the Company.

Net revenue for the Company’s Prepaid Business Unit totaled $666,772 for the year ended December 31, 2008 as compared to $978,927 for the year ended December 31, 2007, a decrease of 32% due to lower than expected sales of our IDD prepaid cards. This revenue was generated from the Company’s two subsidiaries in Malaysia. The corresponding costs of sales and discounts given to the Company’s dealers totaled $657,138 for the year ended December 31, 2008 as compared to $963,342 for the year ended December 31, 2007. Gross profit for the year ended December 31, 2008 was $9,634 as compared to $15,585 for the year ended December 31, 2007, giving rise to a gross margin of about 1.44% and 1.59%, respectively.

The Company did not record any revenue or income from the Cards Business Division for the year ended December 31, 2008 and year ended December 31, 2007 as there were no dividends received from the Company’s associated companies in Malaysia, in each of which the Company owns 20% equity interest of these associated companies.

On a consolidated basis, the Company’s net revenue for the Company for the year ended December 31, 2008 totaled $1,728,322, as compared to $1,727,392 for the year ended December 31, 2007, an increase of about 0.05%. The corresponding total costs of sales were $1,076,889 for the year ended December 31, 2008 as compared to $1,307,581 for the same corresponding period in 2007, a decrease of about 18%. The total gross profit recorded by the Company was $651,433 for the year ended December 31, 2008 as compared to $419,811 for the year the year ended December 31, 2007, an increase of about 55%.

The Company incurred total operating expenses of approximately $9,240,920 in 2008, as compared to $3,116,086 in 2007. The increase of operating expenses in the amount of $6,124,834 (or approximately 197%) was primarily contributed by the decrease in the stock based compensation expenses of $267,774, which is off-set by an increase in impairment loss on goodwill of $5,809,130, Depreciation and amortization, allowance for doubtful accounts, consulting and management service fee and selling, general and administrative expenses amounting to $301,885, $30,194, $44,262 and $2,191,289 respectively.

Financing expense for the full year ended December 31, 2008 was approximately $937,677, as compared to $666,003 for the same corresponding period in 2007, a increase of 41%. This increase was due to the interest and intrinsic values of the convertible loans obtained in 2008 in the amount of $457,625, as compared to a total of $805,000 convertible loans obtained in 2007. The interest amount for the convertible loans totaled $57,055 in 2008 as compared to $39,621 in 2007, an increase of 44%, whereas the expensed intrinsic values of the conversion features of all the convertible loans obtained in 2008 totaled $879,263 as compared to $628,476 for those loans obtained in 2007, an increase of 40%.

For year ended December 31, 2008, we incurred a goodwill impairment charge of $3,272,258, $,2,472,262 and $64,610 for our investments made in IIG group of companies, Cardtrend Systems and GUL HK, respectively, as compared to no goodwill impairment charge for the year 2007 except for a loss from equity investment of $105,263 (equivalent to RM400,000) in Synergy Cards Sdn. Bhd., a company in Malaysia which we have a 20% equity stake as at December 31, 2007 and 2008. Synergy Cards has incurred losses since inception however our losses are limited to our investment Synergy Cards. Although Synergy Cards has launched its MasterCard credit cards in late 2008, the sales of its credit cards have been very low. Hence, we do not expect to receive any dividends from this investment of ours for the foreseeable future.

Net loss for the year ended December 31, 2008 was $9,628,304 as compared to $3,098,535 for the year ended December 31, 2007, an increase in net loss of $6,529,769 (or approximately 211%). This increase was mainly due to the goodwill impairment charges.

2.   Liquidity and Capital Reserve

As of December 31, 2008, the Company had cash of $14,919, as compared to the ending cash balance at of December 31, 2007 in the amount of $211,603, a decrease of $196,684 (or approximately 93%).

Net cash used in operating activities was $979,976 for the year ended December 31, 2008, compared to $970,660 for the same corresponding period cash used in 2007. The increase in net cash used in operations reflects increase of administrative expenses in China due to expansion of its operations..

Net cash provided by financing activities was $745,288 for the year ended December 31, 2008, compared to $1,213,679 for the year ended December 31, 2007. All the proceeds was financed by the convertible loans and loans from directors.

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As of December 31, 2008, total current liabilities exceeded total current assets by $1,847,819 compared to $757,791 at December 31, 2007. Shareholders, directors and related party advances comprise $519,964 of the current liabilities, compared to $228,293 at December 31, 2007. Current liabilities include $100,000 owing to the Company’s former JV partner, Shandong Hengtong Chemical Industrial Company Ltd., $157,727 owing to Kok Keng Low, the Company’s director and Chief Operating Officer, $63,975 owing to Jee Sam Choo, the Company’s director and Chairman of the Board, $143,763 owing to King K. Ng, the Company’s director and Chief Executive Officer, $77,233 owing to Yu Hua Chen, the Company’s director and Chief Officer – China, $49,158 owing to Thomas Wong, Chief Financial Officer and $17,578 owing to a company controlled by Katherine YL Tung, and $10,530 to Katherine YL Yung, the Company’s secretary and Treasurer.

3.   Financial Condition

As of December 31, 2008, the Company’s consolidated cash and cash equivalents totaled $14,919. Cardtrend International Inc. had a cash balance of $5,365 while Cardtrend Systems, Interpay International Group of companies, Asia Payment Systems (HK) Group, Asia Payment Systems (Singapore), Global Uplink Ltd. Asia Payment Systems (Singapore) and Asia Payment Systems (China) had a cash balance of $381, $838, $1,335, $3,687, $100 and $3,213, respectively, which are available to use by the respective subsidiaries to meet their commitments and on-going requirements. The Company believes that with the exception of Cardtrend Systems, the Company and its other subsidiaries have insufficient funds to operate their existing business. The Company’s goal is for all its active subsidiaries to curtail their expenses and be self sufficient for their respective operations. The Company’s capital requirements depend on a variety of factors, including but not limited to, the rate of increase or decrease in the Company’s existing business base, the success, timing, and amount of investment required to launch new businesses, revenue growth or decline, and potential acquisitions. Failure to generate positive cash flow from operations will have a material adverse effect on the Company’s business, financial condition and results of operations. The Company’s ability to achieve the planned revenue targets and/or generate positive cash flows from operations in the future is predicated upon numerous factors with varying levels of importance as follows:

*	First, the Company’s Business Units will attempt to successfully implement their business plans, manage expenditures according to their budgets, and generate positive cash flow from their operations;
*	Second, the Company’s Business Units will attempt to each develop an effective marketing and sales strategy in order to grow the Company’s businesses and compete successfully in the Company’s markets;
*	Third, the Company will attempt to increase positive cash flow with respect to the Company’s Processing Business undertaken by Cardtrend Systems in order to provide the Company with cash flow.

The Company has established a management plan to guide the Company and its subsidiaries in curtailing their expenses and generate cash flows from operations during 2009. The major components of the plan are discussed on the subsection of Item 6 Part II entitled “Management Initiatives & Plans” of this Annual Report. No assurance can be given that the Company will be successful in implementing the plan. The Company’s revenues and cash flows from operations depend on many factors including the success of the Company’s marketing programs, the maintenance and reduction of expenses and the Company’s ability to successfully forming joint venture companies and acquiring companies.

The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern which assumes the realization of assets and settlement of liabilities in the normal course of business. In 2008, the Company incurred a net loss of $9,628,304 (as compared to $3,098,535 in 2007), and a negative cash flow from operations of $979,976 (as compared to $970,660 in 2007). As of December 31, 2008, the Company had a working capital deficit of $1,847,821 (as compared to $757,791 as at December 31, 2007) and an accumulated deficit of $24,141,441 (as compared to $14,513,137 as at December 31, 2007). The independent auditor's report on the Company's December 31, 2008 financial statements included in this Annual Report states that the Company is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations, which raises substantial doubt about its ability to continue as a going concern. Continuation of the Company's existence is dependent upon its ability to obtain additional capital and sustain profitable operations. The uncertainty related to these conditions also raises doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Although the Company has funded and will continue to fund the acquisitions and mergers by the issuance of the Company’s common shares, the Company requires additional cash to meet on-going operating expenses. To date, the Company’s primary source of funds has been equity investments, debt financing and shareholder and director advances, and this trend is expected to continue over the next twelve months and beyond. The Company does not currently have any agreements with investors or the Company’s shareholders or directors for future equity investment. The Company expects to raise such additional capital through additional private financings, as well as borrowings and other resources. The Company may also raise additional funds in a public offering or from the exercise of currently outstanding options and warrants. To the extent that additional capital is raised through the sale of equity or equity-related securities or the exercise of currently outstanding options and warrants, the issuance of such securities could result in further dilution of the Company’s stockholders. There can be no assurance that additional funding will be available on favorable terms, if at all. If adequate funds are not available when required, the Company will be required to curtail or suspend operations or to seek funding through arrangements with collaborative partners or others that may require the Company to relinquish rights that the Company would not otherwise relinquish. Since much of the information contained in this report herein reflects a prospective plan of future operation, there is no assurance that the plan will be implemented as described.

4.   Contractual Obligations

The Company’s contractual obligations as required to be disclosed by Item 303(a)(5) of Regulation S_K are tabulated as follows:

Contractual obligations	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations	$	-	$	-	$	-	$	-	$	-
Capital Lease Obligations	$	4,780	$	4,780	$	-	$	-	$	-
Operating Lease Obligations	$	172,560	$	99,914	$	72,646	$	-	$	-
Purchase Obligations	$	-	$	-	$	-	$	-	$	-
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP	$	-	$	-	$	-	$	-	$	-
Total	$	177,340	$	104,694	$	72,646	$	-	$	-

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The following summarizes the Company’s significant short-term contractual obligations as of December 31, 2008, and the effect such obligations were expected to have on the Company’s liquidity and cash flows in future periods:

*	The conversion of $200,000 Convertible Loan on May 6, 2009 into shares of common stock of the company, which the Company believed, would not have any impact on the Company’s liquidity and cash flow in the future periods;
*	The redemption during 2009 of any or all other convertible loans totaling $589,041 instead of converting to shares of common stock of the Company, which the Company believed would have great impact on the Company’s liquidity and cash flow in the future periods.

The expected timing or payment of obligations discussed above was estimated based on information known to the Company as at December 31, 2008. Timing of payments and actual amounts paid may be different depending on changes to agreed-upon amounts for some obligations and the options on the part of the lenders to demand for repayment of loans (plus interests) in cash or converting such loans to shares of the Company’s common stock.

5.   Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

6.   Inflation

The effect of inflation on the Company's revenue and operating results was not significant.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 8.   FINANCIAL STATEMENTS 

Cardtrend International Inc.
Index to Consolidated Financial Statements
	Page
Report of Independent Registered Public Accounting Firm, ZYCPA Company Limited (formerly Zhong Yi (Hong Kong) C.P.A. Company Limited)	F-2
Report of Independent Registered Public Accounting Firm, RBSM LLP	F-3
Consolidated Balance Sheets	F-4
Consolidated Statements of Operations and Comprehensive Loss	F-5
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity	F-6 – F-7
Consolidated Statements of Cash Flows	F-8 – F-9
Notes to the Consolidated Financial Statements	F-10 – F-27

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and stockholders of

Cardtrend International Inc.

We have audited the accompanying consolidated balance sheet of Cardtrend International Inc. and its subsidiaries (“the Company”) as of December 31, 2008 and the related consolidated statements of operations and comprehensive loss, cash flows and stockholders’ equity for the year ended December 31, 2008. The consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit 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 consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2008 and the results of their income and their cash flows for the year ended December 31, 2008 and in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred substantial losses and capital deficit, all of which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

ZYCPA COMPANY LIMITED

ZYCPA Company Limited

(Formerly Zhong Yi (Hong Kong) C.P.A. Company Limited)

Certified Public Accountants

Hong Kong, China

April 15, 2009

F-2

-18-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Cardtrend International Inc. and Subsidiaries

Seattle, WA

We have audited the accompanying consolidated balance sheets of Cardtrend International Inc. and Subsidiaries (the “Company”), as of December 31, 2007, and the related statements of operations, stockholder’s equity and cash flows for the year then ended December 31, 2007.  These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We have conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cardtrend International Inc. and Subsidiaries at December 31, 2007 and the results of their operations and their cash flows for the year then ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company had suffered recurring losses from operations and has an accumulated deficit as of December 31, 2007. These conditions raise substantial doubt about Company’s ability to continue as a going concern. Managements' plans in regard to these matters are also described in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

           RBSM LLP

New York, New York

April 12, 2008

F-3

-19-

CARDTREND INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2008 AND 2007
(Currency expressed in United States Dollars (“US$”), except for number of shares)
		As of December 31,
		2008			2007
ASSETS
Current assets:
Cash and cash equivalents	$	14,919		$	211,603
Accounts receivable, net of allowance for doubtful accounts of $36,986 and $6,381
as of December 31, 2008 and 2007, respectively		223,933			521,625
Inventories		2,693			2,716
Other receivables and prepayments		67,428			15,473
Total current assets		308,973			765,417
Plant and equipment, net		393,314			555,489
Goodwill		153,212			5,961,793
Intellectual property, net of accumulated amortization of $216,667 and $116,667 as of
December 31, 2008 and 2007, respectively		283,333			383,333
Other assets and deposits		-			38,701
TOTAL ASSETS	$	1,138,832		$	7,690,733
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	26		$	526,919
Deferred revenue		80,541			7,488
Accrued liabilities and other payables		1,085,369			637,829
Due to related parties		519,964			228,293
Loan payable		104,671			108,679
Convertible promissory note, net of unamortized discount $0 as of December 31, 2008		366,223			-
Total current liabilities		2,156,794			1,509,208
Derivative liability
Convertible promissory note, net of unamortized discount of $576,986 as of December 31, 2007		-			223,014
Total liabilities		2,156,794			1,732,222
Commitments and contingencies
Minority interest		-			-
Stockholders’ (deficit) equity:
Preferred stock
10,000,000 authorized preferred shares of $0.001 par value, 0 and 6,000,000 shares issued and
outstanding as of December 31, 2008 and 2007, respectively		-			6,000
Common stock
250,000,000 authorized common shares of $0.001 par value, 155,818,136 and
82,408,276 shares issued and outstanding as of December 31, 2008 and 2007, respectively		155,818			82,408
Additional paid-in capital		23,504,772			21,269,252
Deferred stock based compensation		(666,666	)		(977,563	)
Accumulated deficits		(24,141,441	)		(14,513,137	)
Accumulated other comprehensive income		129,555			91,551
Total stockholders’ (deficit) equity		(1,017,962	)		5,958,511
Total liabilities and stockholders’ (deficit) equity	$	1,138,832		$	7,690,733
See accompanying notes to consolidated financial statements
F-4

-20-

CARDTREND INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
(Currency expressed in United States Dollars (“US$”), except for number of shares)
		As of December 31,
		2008			2007
REVENUE, NET
Sales	$	1,059,902		$	1,727,392
Sales, related party		668,420			-
Total revenue, net		1,728,322			1,727,392
COST OF REVENUE(exclusive of depreciation and amortization)		(1,076,889	)		(1,307,581	)
GROSS PROFIT		651,433			419,811
OPERATING EXPENSES:
Depreciation and amortization		301,885			213,053
Allowance for doubtful accounts		30,194			-
Stock based compensation		864,160			1,131,934
Consulting and management service fee, related party		44,262			-
Impairment loss on goodwill		5,809,130			-
Selling, general and administrative expenses		2,191,289			1,771,099
Total operating expenses		9,240,920			3,116,086
LOSS FROM OPERATIONS		(8,589,487	)		(2,696,275	)
OTHER INCOME (EXPENSES):
Net change in fair value of derivative liability		-			348,402
Amortization of debt discount		(879,263	)		(666,003	)
Interest income		9,691			-
Interest expense		(1,359	)		-
Interest expense – convertible promissory note		(57,055	)		-
Loss from equity investment		-			(105,263	)
Loss on disposal of subsidiaries		(85,629	)		-
Write-off on other assets and deposits		(25,202	)		-
LOSS BEFORE INCOME TAXES AND MINORITY INTEREST		(9,628,304	)		(3,119,139	)
Minority interest		-			21,892
Income taxes		-			(1,288	)
NET LOSS	$	(9,628,304	)	$	(3,098,535	)
Other comprehensive income:
Foreign currency translation gain		38,004			48,838
COMPREHENSIVE LOSS	$	(9,590,300	)	$	(3,049,697	)
Net loss per share - basic and diluted	$	(0.07	)	$	(0.06	)
Weighted average shares outstanding- basic and diluted		144,715,542			55,682,478
See accompanying notes to consolidated financial statements.
F-5

-21-

CARDTREND INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
(Currency expressed in United States Dollars (“US$”), except for number of shares)
																	Accumulated
											Deferred						other
	Common stock			Preferred stock				Additional			stock based			Accumulated			comprehensive
	No. of shares		Amount	No. of shares		Amount		paid -in capital			Compensation			deficits			income		Total
Balance as of January 1,
2007	48,057,836	$	48,058	6,000,000	$	6,000	$	17,285,905		$	(771,608	)	$	(11,414,602	)	$	42,713	$	5,196,466
Common stock issued
for consulting services	1,250,000		1,250	-		-		44,250			-			-			-		45,500
Common stock issued
in exchange of debt	9,494,374		9,494	-		-		751,266			-			-			-		760,760
Common stock issued
for convertible promissory l
notes	13,606,066		13,606	-		-		408,182			-			-			-		421,788
Common stock issued
in lieu of sign-on bonus	10,000,000		10,000	-		-		790,000			-			-			-		800,000
Stock based compensation	-		-	-		-		9,800			(845,500	)		-			-		(835,700	)
Amortization of
deferred compensation	-		-	-		-		472,785			669,045			-			-		1,141,830
Adjustment to re-class
warrant liability to equity	-		-	-		-		291,799			-			-			-		291,799
Beneficial conversion
feature				-		-		1,205,461			-			-			-		1,205,461
Reversal of stock
based compensation	-		-	-		-		9,804			(29,500	)		-			-		(19,696	)
Foreign currency translation
Adjustment	-		-	-		-		-			-			-			48,838		48,838
Net loss for the year	-		-	-		-					-			(3,098,535	)		-		(3,098,535	)
Balance as of
December 31, 2007	82,408,276		82,408	6,000,000		6,000		21,269,252			(977,563	)		(14,513,137	)		91,551		5,958,511
Conversion of Series A
preferred stock into
common stock at 1:5	17,500,000		17,500	(3,500,000	)	(3,500	)	(14,000	)		-			-			-		-
Conversion of Series B
preferred stock into
common stock at 1:10	25,000,000		25,000	(2,500,000	)	(2,500	)	(22,500	)		-			-			-		-
Cancellation of shares
payment of debts	(677,303)		(678)	-		-		(41,401	)		33,751			-			-		(8,328	)
Common stock issued in
exchange of debts	3,023,119		3,023	-		-		148,132			-			-			-		151,155
F-6

-22-

																Accumulate
										Deferred						other
	Common stock			Preferred stock				Additional		stock based			Accumulate			comprehensive
	No. of shares		Amount	No. of shares		Amount		Paid -in		Compensation			Deficits			income		Total
Common stock issued for
convertible promissory
Note	17,133,263		17,134	-		-		704,978		-			-			-		722,112
Common stock issued for
compensation on early
Termination	9,330,781		9,331	-		-		66,302		-			-			-		75,633
Common stock issued for
consulting services	2,100,000		2,100	-		-		18,900		-			-			-		21,000
Disposal of an investment in
a subsidiary	-		-	-		-		84,000		-			-			-		84,000
Stock based compensation	-		-	-		-		567,212		-			-			-		567,212
Amortization of deferred
stock based compensation	-		-	-		-		-		277,146			-			-		277,146
Beneficial conversion feature	-		-	-		-		723,897		-			-			-		723,897
Net loss for the year	-		-	-		-		-		-			(9,628,304	)		-		(9,628,304	)
Foreign currency
translation adjustment	-		-	-		-		-		-			-			38,004		38,004
Balance as of
December 31, 2008	155,818,136	$	155,818	-	$	-	$	23,504,772	$	(666,666	)	$	(24,141,441	)	$	129,555	$	(1,017,962	)
See accompanying notes to consolidated financial statements.
F-7

-23-

CARDTREND INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
(Currency expressed in United States Dollars (“US$”))
			As of December 31,
			2008					2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(9,628,304	)		$		(3,098,535	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			301,885					213,053
Impairment loss on goodwill			5,809,130					-
Loss on disposal of subsidiaries			85,629					-
Amortization of debt discount			879,263					628,475
Stock based compensation			864,160					1,131,934
Stock issued for settlement of interest			-					16,788
Stock issued for settlement of accrued liabilities			-					760,760
Change in derivative liability			-					(348,402	)
Minority interest			-					(21,892	)
Loss from equity investment			-					105,263
Change in discount on convertible promissory loan			(725,095	)				-
Allowance for doubtful debts			30,194					6,381
Write-off on other assets and deposits			25,202					-
Changes in operating assets and liabilities:
Accounts receivable			267,498					(218,227	)
Other receivables			(20,192	)				4,469
Inventories			23					(15,580	)
Accounts payable			(526,893	)				-
Accrued liabilities and other payables			1,584,471					(40,681	)
Deferred revenue			73,053					(94,466	)
Net cash used in operating activities			(979,976	)				(970,660	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment			-					(359,453	)
Prepayment of acquisition			-					(64,062	)
Net cash used in investing activities			-					(423,515	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan payable			-				8,679
Repayment of loan payable			(4,008	)			-
Advances from related parties			291,671				-
Proceeds from convertible promissory note			457,625				1,205,000
Net cash provided by financing activities			745,288				1,213,679
Effect of exchange rate changes on cash and cash equivalents			38,004				48,837
NET CHANGE IN CASH AND CASH EQUIVALENTS			(196,684	)			(131,659		)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR			211,603				343,262
CASH AND CASH EQUIVALENTS, END OF YEAR		$	14,919		$		211,603
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income taxes	$		-		$		-
Cash paid for interest expenses	$		683		$		-
F-8

-24-

SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for settlement of accrued interest and debt	393,816	421,788
Discount on convertible promissory notes	136,054	(1,205,462	)
Stock issued for services	21,000	1,131,934
Stock issued for settlement of accrued expenses	-	760,760
Stock issued for convertible promissory notes	722,111	-
Stock issued for acquisition	21,000	-
Stock rescinded	63,078	-
Extinguishment of derivative liability	-	291,799
Amortization of stock based compensation	988,027	-
See accompanying notes to consolidated financial statements.
F-9

-25-

CARDTREND INTERNATIONAL INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007

(Currency expressed in United States Dollars (“US$”))

1.  ORGANIZATION AND BUSINESS BACKGROUND

Cardtrend International Inc. ("CDTR") was incorporated under the laws of the State of Nevada in 1998 to engage in international business as Asian Alliance Ventures Inc. In November 2003, the name was changed to Asia Payment Systems Inc. On July 24, 2007, the Company further changed its current company name to Cardtrend International Inc.

On September 8, 2008, the Company completed the acquisition of SMS Biz Sdn. Bhd. (“SMS BIZ”), including its wholly owned subsidiary, KB Reload Sdn. Bhd. (“KB Reload”), pursuant to the Share Exchange Agreement (the “SEA”) entered into with the shareholders of SMS BIZ, Yap Kit Chuan (“YAP”) and Chua Tong Ling (“CHUA”) and issued 7,000,000 shares restricted common stocks in exchange for all issued and fully paid up shares of SMS BIZ. SMS BIZ is engaged in the issuance of prepaid and postpaid IDD call cards in Malaysia.

On October 9, 2008, the Company incorporated a new wholly owned subsidiaries namely Cardtrend Inc. with 250,000,000 shares of authorized common stock with a par value of $0.001 per share and 15,000,000.shares of preferred stock with a par value of $0.001 per share. As of December 31, 2008, 200,000 shares of common stock with a par value of $0.001 per share were issued and outstanding. The principal activity of Cardtrend Inc. is to engage in the provision of provision of payment and loyalty cards related services.

On October 21, 2008, the Company incorporated another new wholly owned subsidiaries namely Global Uplink Inc. with 250,000,000 shares of authorized common stock with a par value of $0.001 per share and 15,000,000.shares of preferred stock with a par value of $0.001 per share. As of December 31, 2008, 200,000 shares of common stock with a par value of $0.001 per share were issued and outstanding. The principal activity of Cardtrend Inc. is to engage in the provision of data and business processes outsourcing services.

On November 24, 2008, the Company entered into a share repurchase agreement with the previous shareholders of SMSBIZ, YAP and CHUA, to dispose all the shares of common stock of SMSBIZ in consideration for the return of 7,000,000 shares restricted common stock of the Company previously issued to them pursuant to the SEA completed on September 8, 2008.

Details of the Company’s subsidiaries are described below:

	Place of incorporation	Principal activities	Particulars of issued/	Effective
Name	and kind oflegal entity	And place of operation	registered share capital	interestheld
Asia Payment Systems (HK) Limited	Hong Kong, a limited	Provision of data and business	100 issued shares of	100%
(“APSHK”)	liability company	processes outsourcing services	Common stock of HK$1 each
Asia Payment Systems	PRC, a limited	Provision of data & business	US$1,000,000	100%
(China) Company Limited	liability company	processes outsourcing services and
(“APS china”)		issuance of payment/loyalty cards
Global Uplink Limited	Hong Kong, a limited	Marketing of business processes	10,000 issued shares of	100%
(“GUL HK”)	liability company	outsourcing services in Hong Kong	common stock of HK$1 each
Asia Payment Systems Pte. Ltd.	Singapore, a limited	Dormant	20 issued shares of	100%
(“APS Singapore”)	liability company		common stock S$1 each
Welway Development Limited	Hong Kong, a limited	Dormant	100,000 issued shares of	100%
(“WDL”)	liability company		common stock of HK$1 each
Cardtrend Systems Sdn. Bhd.	Malaysia, a limited	Provision of IT solution for payment	700,000 issued shares of	100%
(“Cardtrend Systems”)	liability company	Cards and loyalty cards in Asia and	common stock of
		Middle East regions	MYR 1 each
Interpay International Group Ltd.	British Virgin Islands,	Holding company of Interpay’s group	100 issued shares of	100%
(“IIG”)	a limited liability company	of  companies in Asia	common stock US$1 each
Interpay International Franchising Ltd.	British Virgin Islands,	Franchising/licensing of payment card	100 issued shares of	100%
(“IIF”)	a limited liability company	and loyalty card products	common stock of US$1 each
F-10

-26-

	Place of incorporation	Principal activities	Particulars of issued/	Effective
Name	and kind of legal entity	And place of operation	registered share capital	interest held
Interpay International Associates Ltd.	British Virgin Islands,	Provision of management and technical	100 issued shares of	100%
(“IIA”)	a limited liability company	services for payment and loyalty cards	common stock US$1 each
Interpay International Resources Ltd.	British Virgin Islands,	Holding company of joint venture	100 issued shares of	100%
(“IIR”)	a limited liability company	payment and loyalty cards companies	common stock US$1 each
Interpay Asia Sdn. Bhd.	Malaysia, a limited	Provision of general and financial	2 issued shares of	100%
(“IA”)	liability company	management services for	common stock of MYR 1 each
		Cardtrend International group
Interpay International M-Commerce Pte. Ltd.	Singapore, a limited	Dormant	2 issued shares of	100%
(“IIM”)	liability company		common stock of SGD$1 each
Etop International Pte. Ltd. (Formerly	Singapore, a limited	Holding company of joint venture	2 issued shares of	100%
Interpay International Airtime Pte. Ltd.) (“EI”)	limited liability company	Prepaid companies in Asia	common stock of SGD$1 each
Etop Services (Malaysia) Sdn. Bhd.	Malaysia, a limited	Distribution of third parties’ prepaid	200,000 issued shares of	60%
(“Etop Malaysia”)	liability company	products and services electronically	common stock of MRY 1 each
		in Malaysia	and 1,020,000 issued shares
			of preferred stock of MRY 1 each
Payment Business Solutions Sdn. Bhd.	Malaysia, a limited	Distribution of prepaid IDD call cards	2 issued shares of  common	100%
(“PBS”)	liability company	in Malaysia	stock of MYR 1 each
Cardtrend Inc.	USA, a limited	Provision of payment and	200,000 issued shares of	100%
	liability company	loyalty cards related services	common stock of $0.001 each
Global Uplink Inc.	USA, a limited	Provision of data and business	200,000 issued shares of
	liability company	processes outsourcing services	common stock of $0.001 each	100%

2.   GOING CONCERN UNCERTAINTIES

The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern which assumes the realization of assets and settlement of liabilities in the normal course of business. For the year ended December 31, 2008, the Company incurred a net loss of $9,628,304 and generated a negative cash flow of $979,977 from operating activities. At December 31, 2008, the Company had a working capital deficiency of $1,847,819 and the accumulated deficits of $24,141,441. The Company is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations, which raises substantial doubt about its ability to continue as a going concern. The continuation of the Company is dependent upon management's ability to develop profitable operations and resolve its liquidity problems. Management anticipates the Company will attain profitable status and improve its liquidity through the continued developing, marketing and selling of its products and additional equity investment in the Company. The accompanying financial statements do not include any adjustments that might result from the outcome of the Company’s ability to continue as a going concern.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

Use of estimates

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.

Principles of consolidation

The consolidated financial statements include the financial statements of CDTR and its subsidiaries.

All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

F-11

-27-

Business combinations

The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards ("SFAS") No. 141, “Business Combinations”, which established accounting and reporting standards for business combinations and requires that all business combinations be accounted for by the purchase method. Under the purchase method of accounting, the cost, including transaction costs, is allocated to the underlying net assets, based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

The judgments made in determining the estimated fair values and expected useful lives assigned to each class of assets and liabilities acquired can significantly impact net income. For example, different classes of assets will have useful lives that differ. Consequently, to the extent a longer-lived asset is ascribed greater value under the purchase method than a shorter-lived asset, there may be less amortization recorded in a given period.

Determining the fair value of certain assets and liabilities acquired is subjective in nature and often involves the use of significant estimates and assumptions. The Company uses a one-year period following the consummation of acquisitions to finalize estimates of the fair values of assets and liabilities acquired. Two areas, in particular, that require significant judgment are estimating the fair values and related useful lives of identifiable intangible assets. While there are a number of different methods used in estimating the value of acquired intangibles, there are two approaches primarily used: the discounted cash flow and market comparison approaches. Some of the more significant estimates and assumptions inherent in the two approaches include: projected future cash flows (including timing); discount rate reflecting the risk inherent in the future cash flows; perpetual growth rate; determination of appropriate market comparables; and the determination of whether a premium or a discount should be applied to comparables. Most of the foregoing assumptions are made based on available historical information.

Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment.

Inventories

Inventories consisted of computer hardware and parts and they are recorded at the lower of cost or market value using the first-in-first-out method. As of December 31, 2008 and 2007, inventories were $2,693 and $2,716, respectively.

Plant and equipment, net

Plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the expected useful lives from the date on which they become fully operational, generally ranging from 8 to 10 years. Expenditure for maintenance and repairs is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

Goodwill

Goodwill represents the excess of the purchase consideration payable in acquisitions of subsidiaries over the fair value of the net assets acquired at the time of acquisition. Goodwill on consolidation is stated at cost when it arises. As part of an ongoing review of the valuation of goodwill, management assesses the carrying value of the goodwill to determine if changes in facts and circumstances suggest that it may be impaired. If this review indicates that the goodwill is not recoverable, the carrying value of the goodwill would be reduced to its estimated fair market value.

For the year ended December 31, 2008, the Company tested for impairment in accordance with the SFAS No. 142 and an impairment loss of $5,809,130 was charged to the statement of operations.

Intellectual property

Intellectual property represented internal developed card system software with a historical cost of $500,000. Amortization is calculated on the straight-line basis over the expected useful life of 5 years.

For the years ended December 31, 2008 and 2007, the amortization expense was $100,000 and $100,000, respectively.

Impairment of long-lived assets

Long-lived assets primarily include plant and equipment and intellectual property. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment as of December 31, 2008 or 2007.

Revenue recognition

The Company recognizes revenue in accordance with SEC’s Staff Accounting Bulletin No. 104 “Revenue Recognition in Financial Statement”(“SAB 104”). Revenue is recognized when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectibility is reasonably assured. The Company further recognizes revenue from the licensing of ‘Cardtrend Systems’ software in accordance with Statement of Position (“SOP”) 97-2,“Software Revenue Recognition”, as amended by SOP 98-9, “Modification of SOP 97-2, and Software Revenue Recognition with Respect to Certain Transactions”. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue.

(a)         Processing business

Revenue from Processing Business operations is recognized at the time services are rendered to the Company’s clients progressively and/or periodically as agreed in a service contract. Revenue for the licensing of software is recognized when the criteria in the preceding paragraph have been met and delivery has occurred. If, as is usually the case, the delivery of the software is part of an arrangement that includes the installation of the software, revenue is recognized when the installation is complete and customer acceptance has occurred. Contracts for the maintenance and support of the software are priced separately for one year period and revenue is recognized ratably over service period.

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(b)         Prepaid business

Revenue from Prepaid Business operations is recognized at the time services are rendered to its dealers for goods delivered. The Company records the goods sold as gross revenue and less discounts given to the dealers to obtain net revenue, and then less costs of goods sold (i.e. face value of the goods less discounts received from the Company’s suppliers) to arrive at the Company’s gross profits before operating expenses.

(c)         Interest income

Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.

Cost of revenue

Cost of revenue included cost of computer hardware and parts, prepaid phone cards and labor costs.

Deferred revenue

Revenue from processing business received in advance from rendering of service is recorded as deferred revenue and are amortized into revenue ratably over the related contract period.

Advertising expense

Advertising costs are expensed as incurred under SOP 93-7, “Reporting for Advertising Costs”. The Company incurred no such cost for the years ended December 31, 2008 and 2007.

Income taxes

The Company accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”, which requires the asset and liability approach for financial accounting and reporting for income taxes. Under this approach, deferred income taxes are provided for the estimated future tax effects attributable to temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from loss carry-forwards and provisions, if any. Deferred tax assets and liabilities are measured using the enacted tax rates expected in the years of recovery or reversal and the effect from a change in tax rates is recognized in the statements of operations and comprehensive income in the period of enactment. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

The Company also adopts Financial Accounting Standards Board ("FASB") Interpretation No. (FIN) 48, "Accounting for Uncertainty in Income Taxes" and FSP FIN 48-1, which amended certain provisions of FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

In connection with the adoption of FIN 48, the Company analyzed the filing positions in all of the federal, state and foreign jurisdictions where the Company and its subsidiaries are required to file income tax returns, as well as all open tax years in these jurisdictions. The Company adopted the policy of recognizing interest and penalties, if any, related to unrecognized tax positions as income tax expense. The Company did not have any unrecognized tax positions or benefits and there was no effect on the financial condition or results of operations for the years ended December 31, 2008 and 2007.

The Company conducts its major businesses in the PRC, Hong Kong and Malaysia and is subject to tax in these jurisdictions. As a result of its business activities, the Company files tax returns that are subject to examination by the local and foreign tax authority.

Net loss per share

The Company calculates net loss per share in accordance with SFAS No. 128, “Earnings per Share”. Basic loss per share is computed by dividing the net (loss) income by the weighted-average number of common shares outstanding during the period. Diluted (loss) income per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

Comprehensive (loss) income

SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during the period from non-owner sources. Accumulated comprehensive income consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statement of operations.

The reporting currency of the Company is United States dollar ("US$"). The functional currency of the Company's subsidiaries operating in Hong Kong is Hong Kong dollars ("HKD") and its financial records are maintained and its statutory financial statements are prepared in HKD. The functional currency of the Company's subsidiaries established in the PRC is Renminbi Yuan ("RMB") and its financial records are maintained and its financial statements are prepared in RMB. The functional currency of the Company's subsidiaries established in Singapore is Singapore dollars ("SGD") and its financial records are maintained and its financial statements are prepared in SGD. The functional currency of the Company's subsidiaries established in Malaysia is Malaysian Ringgit ("MYR") and its financial records are maintained and its financial statements are prepared in MYR.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with SFAS No 52. “Foreign Currency Translation”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

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Translation of amounts from the local currency of the Company’s subsidiaries into US$1 has been made at the following exchange rates for the respective year:

	2008	2007
Year end HKD : US$1 exchange rate	7.7507	7.8049
Average period HKD : US$1 exchange rate	7.7874	7.80255
Year end Renminbi: US$1 exchange rate	6.8542	7.3141
Average period Renminbi: US$1 exchange rate	6.9623	7.6172
Year end RM: US$1 exchange rate	3.4872	3.3151
Average period RM: US$1 exchange rate	3.3391	3.44714
Year end SGD: US$1 exchange rate	1.4426	1.4467
Average period SGD: US$1 exchange rate	1.4156	1.5072

Debt issuance costs

The Company records debt discount for beneficial conversion features and warrants, on a relative fair value basis and amortizes debt discount over the life of the debt instrument. Beneficial conversion features are recorded pursuant to EITF Issue No. 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios”, and EITF Issue No. 00-27, “Application of EITF Issue No. 98-5 to Certain Convertible Instruments”. The amounts allocated to warrants and beneficial conversion rights are recorded as unamortized debt discount and additional paid-in-capital to be amortized over the life of the convertible debts. The amounts recorded are based on valuation models. The volatility of the Company’s stock price and other factors affecting the Company’s stock price are important determinants of the values determined.

Stock based compensation

The Company adopts SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS No. 123R") using the fair value method. Under SFAS No. 123R, stock-based compensation expense is measured at the grant date based on the fair value of the award or using the Black-Scholes pricing model and is recognized as expense over the appropriate service period.

Retirement plan costs

Contributions to retirement schemes (which are defined contribution plans) are charged to general and administrative expenses in the consolidated statements of operation and comprehensive income as and when the related employee service is provided.

Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Segment reporting

SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in the financial statements. The Company operates three reportable segments in processing business, prepaid business, and cards business, respectively.

Fair value of financial instruments

The Company values its financial instruments as required by SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”. The estimated fair value amounts have been determined by the Company, using available market information and appropriate valuation methodologies. The estimates presented herein are not necessarily indicative of amounts that the Company could realize in a current market exchange.

The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, other receivables and prepayments, accounts payable, loan payable, accrued liabilities and other payables and due to related parties.

As of the balance sheet date, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short term maturities of these instruments and that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective year ends.

Economic and political risks

The Company's operations are conducted in Asia. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in Asia, particularly in China where the Company has increased its activities substantially, as well as in Malaysia where majority of the Company’s operations is now located resulting from the acquisition of IIG and the merger of Cardtrend Systems, and by the general state of the Asian economy.

The Company's operations in Asia, particularly for those planned in China, are subject to special considerations and significant risks not typically associated with companies in the North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in Asia, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

Recently accounting pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

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In September 2006, the FASB issued Statement of Financial Accounting Standard (“SFAS“) No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measures required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. In February 2008, the FASB deferred SFAS No. 157's effective date for all non-financial assets and liabilities, except those items recognized or disclosed at fair value on an annual or more frequently recurring basis, until years beginning after November 15, 2008. The Company believes that SFAS No. 157 should not have a material impact on the consolidated financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS No. 159"). SFAS No. 159 permits entities to choose to measure, on an item-by-item basis, specified financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected are required to be reported in earnings at each reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007, the provisions of which are required to be applied prospectively. The Company believes that SFAS No. 159 should not have a material impact on the consolidated financial position or results of operations.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS No. 161"). SFAS No. 161 requires companies with derivative instruments to disclose information that should enable financial-statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”(“SFAS No. 162”). This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in the United States. This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The Company does not expect the adoption of SFAS No. 162 to have a material effect on the financial condition or results of operations of the Company.

In May 2008, the FASB issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts--an interpretation of FASB Statement No. 60" ("SFAS No. 163"). SFAS No. 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS No. 163 on its financial statements but does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

Also in May 2008, the FASB issued FSP APB 14-1, "Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 applies to convertible debt securities that, upon conversion, may be settled by the issuer fully or partially in cash. FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years after December 15, 2008, and must be applied on a retrospective basis. Early adoption is not permitted. The Company does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

In June 2008, the FASB issued FASB Staff Position ("FSP") EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and all prior-period earnings per share data presented shall be adjusted retrospectively. Early application is not permitted. The Company does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

Also in June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an Instrument (or an Embedded Feature) is Indexed to an Entity's Own Stock" ("EITF 07-5"). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Early application is not permitted. The Company is assessing the potential impact of this EITF 07-5 on the financial condition and results of operations and does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

In September 2008, the FASB issued FSP 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161”(“FSP FAS 133-1” and “FIN 45-4”). FSP FAS 133-1 and FIN 45-4 amends disclosure requirements for sellers of credit derivatives and financial guarantees. It also clarifies the disclosure requirements of SFAS No. 161 and is effective for quarterly periods beginning after November 15, 2008, and fiscal years that include those periods. The adoption of FSP FAS 133-1 and FIN 45-4 did not have a material impact on the Company’s current consolidated financial position, results of operation or cash flows.

In October 2008, the FASB issued Staff Position (“FSP”) No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active” (“FSP FAS 157-3.”) FSP FAS 157-3 clarifies the application of SFAS No. 157 in an inactive market. It illustrated how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. The adoption of FSP FAS 157-3 did not have a material impact on the Company’s current consolidated financial position, results of operations or cash flows.

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4. ACQUISITION AND DISPOSAL OF SMS BIZ SDN. BHD.

On September 8, 2008, the Company completed the acquisition of SMS Biz Sdn. Bhd. (“SMS BIZ”), including its wholly owned subsidiary, KB Reload Sdn. Bhd. (“KB Reload”), pursuant to the Share Exchange Agreement (the “SEA”) entered into with the shareholders of SMS BIZ, Yap Kit Chuan (“YAP”) and Chua Tong Ling (“CHUA”) and issued 7,000,000 shares restricted common stocks in exchange for all issued and fully paid up shares of SMS BIZ. SMS BIZ is engaged in the issuance of prepaid and postpaid IDD call cards in Malaysia.

The acquired assets and assumed liabilities of SMS BIZ were recorded at their carrying value of $230,247 and $447,369, respectively at the date upon SMS BIZ, YAP and CHUA delivered all the required deliveries as stated in the SEA to the Company (the “Closing Date”). The accounting date of the acquisition was August 31, 2008 and was accounted for under the purchase method. The fair value of $105,000 of the restricted common stocks issued to YAP and CHUA was based on the average quoted market price of the common stock on the Closing Date plus the three trading days before and after the Closing Date. Goodwill of $322,122 was resulted as the purchase consideration exceeded the carrying value of the net liabilities acquired. Prior to the signing of the SEA, the Company performed a purchase price determination using a combination of discounted cash flow method and price-earning method.  It was determined that the fair value of SMS BIZ exceeded the purchase price of 100% of the interest of SMS BIZ based on the Company's expectation of a net present value based on a discount of 18% per annum and a price earning of 8 for the type of industry SMS BIZ is in.

The purchase price as of the acquisition date of August 24, 2008 was allocated as follows: 

Current assets	$	230,247
Goodwill		322,122
Less: liabilities acquired		(447,369	)
Purchase price	$	105,000

The following unaudited pro forma results of operations for the year ended December 31, 2008 and 2007 assume that the acquisition of SMS Biz occurred on January 1, 2008 and 2007, respectively. These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have been achieved nor are they necessarily indicative of future results of operations.

		For the years ended December 31,
		2008			2007
Net revenue	$	245,313		$	47,971
Net loss		(2,460,042	)		(4,094,571	)
Loss per share	$	(0.02	)	$	(0.12	)

On November 24, 2008, the Company entered into an agreement to sell back its entire interest in SMS BIZ to the previous shareholders for the return by the said shareholders all the 7 million shares of the Company’s common stock previously issued to them. The Board of Directors approved the sell-back after due considerations given to the sharp drop in sale due to the adverse impact of the global economic crisis and the confession by the said shareholders that they would not be in a position to subscribe for the additional capital within the next 24 months as called for prior to the closing of the SMS BIZ SEA. The Company recorded a loss on disposal of SMS BIZ of $85,629.

5.   ACCOUNTS RECEIVABLE, NET

The majority of the Company’s sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. As of December 31, 2008, the Company has total account receivables amounted to $223,933 as compared to $521,625 as at December 31, 2007. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. For the years ended December 31, 2008 and 2007, the Company made the allowance for doubtful accounts of $30,605 and $6,381, respectively.

6.     OTHER RECEIVABLES AND PREPAYMENTS

Other receivables and prepayments consisted of the followings:

	As of December 31,
	2008		2007
Prepayments	$	17,659	$	9,773
Utility and rental deposits		18,620		-
Other taxes recoverable		10,291		-
Other receivables		20,858		5,700
	$	67,428	$	15,473

7.   PLANT AND EQUIPMENT, NET

As of December 31, 2008 and 2007, plant and equipment consisted of office equipment and renovation totally an aggregate cost of $757,676 and $698,505, respectively with their accumulated depreciation of $64,362 and $143,016. Depreciation expense for the years ended December 31, 2008 and 2007 were $201,885 and $113,053 respectively.

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8.   GOODWILL

Goodwill represented the difference between the aggregate consideration paid for the acquisition and the fair value of the net tangible and intangible assets of SMS BIZ in September 2008, GUL HK during 2007 and Cardtrend Systems and IIG group of companies during 2006.

On September 8, 2008, the Company acquired all the shares of SMS BIZ in exchange for the issuance of 7,000,000 shares restricted common stock of the Company and a goodwill of $322,122 was recorded. Subsequent on November 24, 2008, the Company cancelled 7,000,000 shares of common stock valued at $21,000 pursuant to the return of the shares by the previous shareholders of SMS BIZ in consideration for the purchase of SMS BIZ. The goodwill of $322,122 was fully reversed for the disposal (see Note 4).

On October 31, 2007, the Company’s subsidiary in Hong Kong, APS HK, completed its acquisition of GUL HK. APS HK paid a total cash consideration of approximately $64,610 (equivalent to HK$500,000) for the acquisition. The total cash consideration is attributed to goodwill as there was no net asset value in GUL HK as of the date of completion. GUL HK is engaged in the provision of marketing of data and business processes outsourcing services and issuance of payment cards and loyalty cards in the mainland China. For the year ended December 31, 2008, GUL HK did not perform to the management’s expectation due to lack of business development fund. As the current adverse global economic crisis, the management of the Company determined that no further capital will be contributed to GUL HK and therefore a positive business growth will not be expected in GUL HK.

On September 28, 2006, the Company merged with Cardtrend Systems in exchange for the issuance of 2,500,000 shares of the Company’s Series B Preferred Stock which are convertible to 25,000,000 shares of the Company’s common stock. The 2,500,000 shares of Series B Preferred Stock had a fair value of $3,464,286 at September 28, 2006, as estimated by an independent valuation firm, of which $2,625,474 is attributable to goodwill and $500,000 to the fair value of the software developed and owned by Cardtrend Systems as estimated by an independent valuation. Cardtrend Systems is a provider of software solutions to operators of payment cards and loyalty cards. On January 2, 2008, the Company approved the conversion of 2,500,000 shares of Series B Preferred Stock at a conversion ratio of 1:10 into 25,000,000 shares of restricted common stock with a par value of $0.001 per share (see Note 11). Cardtrend System is engaged in the provision of IT solution for payment cards and loyalty cards in Asia and Middle East regions. For the year ended December 31, 2008, most of the prospective clients that Cardtrend Systems had approached and solicited during the year were all tightened their expenditure budget, except for a petroleum company in Malaysia which has entered a sales contract with Cardtrend Systems of approximately $570,000 (equivalent to MYR 2,000,000) with a yearly maintenance fee of approximately $28,500 (equivalent to MYR 100,000) subsequently in February 2009. Therefore, the management of the Company is of the opinion that Cardtrend System would experience a negative growth in the next few years.

On May 18, 2006, the Company acquired all the shares of IIG group of companies in exchange for the issuance of 3,500,000 shares of Series A Preferred Stock which were convertible to 17,500,000 shares common stock of the Company. The 3,500,000 shares of Series A Preferred Stock had a fair value of $3,975,000 at May 18, 2006, as estimated by an independent valuation firm, of which, $3,272,258 is attributable to goodwill. IIG group is an operator of payment cards and loyalty cards. On January 2, 2008, the Company approved the conversion of 3,500,000 shares of Series A Preferred Stock at a conversion ratio of 1:5 into 17,500,000 shares of restricted common stock with a par value of $0.001 per share (see Note 11). The two income generating subsidiaries under the IIG group are mainly engaged in the distribution of third parties prepaid IDD call cards, prepaid mobile phone cards and services electronically in Malaysia. For the year ended December 31, 2008, the management of the Company is of the opinion that the Company will depart away from the prepaid business as a substantial reduction of demand for the prepaid cards is foreseen due to the change of Malaysian government policy in reducing numbers of foreign workers during the last quarter of 2008.

For the year ended December 31, 2008, the management of the Company evaluated the recoverability of the goodwill using a combination of discounted cash flow method and price-earning method to determine the fair value of IIG group, Cardtrend Systems and GULHK. The tests resulted that the fair value of each of IIG group, Cardtrend Systems, and GULHK is less than the carrying value of goodwill and therefore the Company recognized the impairment charge for the aggregate amount of $5,808,581, consisting of (i) the goodwill on IIG group amounting to $3,272,258 was totally impaired; (ii) the goodwill on Cardtrend Systems was impaired by $2,472,262, leaving an amount of $153,212 and (iii) the goodwill on GULHK amounting to $64,610 was totally impaired. For the year ended December 31, 2007, there was no impairment loss recognized.

9.   ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables are comprised of the following: 

	As of December 31,
	2008		2007
Accrued expenses	$	468,340	$	205,577
Other tax payables		-		1,064
Salaries and expenses owed to employees		271,704		62,486
Other payables		345,325		368,702
Total	$	1,085,369	$	637,829

Other payables consisted of temporary advances from independent third parties with no interest bearing, unsecured and have no fixed terms of repayment.

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10.  INCOME TAX

For the year ended December 31, 2008, the local (“United States”) and foreign components of loss from operations before income taxes and minority interest were comprised of the following:

Tax jurisdictions from:
- local	$	(8,890,992	)
- foreign		(736,763	)
Loss before income taxes and minority interest	$	(9,627,755	)

For the year ended December 31, 2008, no provision for income tax has been made as the Company did not have any assessable profits for the year.

For the year ended December 31, 2007, the provision for income tax of $1,288 related to foreign income tax incurred from the PRC tax agent.

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various locations: the United States of America, Hong Kong, the PRC, Singapore, Malaysia and British Virgin Islands that are subject to tax in the jurisdictions in which they operate, as follows:

United States of America

The Company is registered in the State of Nevada and is subjected to the United States of America tax law.

As of December 31, 2008, the U.S. operation had $8,890,992 net operating losses available for federal tax purposes, which are available to offset future taxable income. The net operating loss carry forwards begin to expire in 2019. The Company has provided for a full valuation allowance of $3,022,937 for future tax benefits from net operating loss carry forwards as the management believes it is more likely than not that these assets will not be realized in the future.

Hong Kong

As of December 31, 2008, the Hong Kong profits tax rate was 16.5%. For the year ended December 31, 2008, no Hong Kong profits tax has been provided for as the Company’s subsidiaries operating in Hong Kong incurred an operating loss of $92,149.

The PRC

The Company’s subsidiary operating in PRC is subject to the Corporate Income Tax governed by the Income Tax Law of the PRC. Effective from January 1, 2008, the Corporate Income Tax Law of the PRC (the “New CIT Law”) is followed. Under the New CIT Law, an unified income tax rate of 25% is imposed for both domestic and foreign invested enterprises. APS China, is considered a foreign invested enterprise and enjoys the unexpired tax holidays from a full exemption of income tax for the first two profit making years with a 50% exemption of income tax for the next three years. The ultimate applicable effective tax rate in 2008 and beyond will be subject to a transitional policy under the Corporate Income Tax Law, whether APS China can continue to enjoy the unexpired tax holidays.

For the year ended December 31, 2008, no provision for corporate income tax has been made as APS China incurred an operating loss of $527,986.

Singapore

Pursuant to the Singapore Income Tax Laws, the Corporate Income Tax is at a statutory rate of 20%. Unutilized tax losses and capital allowances may be carried forward indefinitely to offset future taxable income provided that the beneficial ownership of the company remains substantially (at least 50%) the same as at certain relevant dates. For capital allowances, there is an additional requirement that the same trade or business in respect of which these capital allowances were made continues to be carried on. Carrybacks or transfers to other companies are not permitted. No provision for Singapore Corporate Income Tax has been made as the subsidiaries operating in Singapore incurred an operating loss of $2,087 for the year ended December 31, 2008.

Malaysia

Pursuant to the Malaysia Income Tax Laws, the Corporate Income Tax is at a statutory rate of 26%. Unutilized tax losses and capital allowances may be carried forward indefinitely to offset future taxable income. For capital allowances, there is an additional requirement that the same trade or business in respect of which these capital allowances were made continues to be carried on. No provision for Malaysia Corporate Income Tax has been made as the subsidiaries operating in Malaysia incurred a total operating loss of $111,801 for the year ended December 31, 2008, net of an operating income of $31,880 from Cardtrend Systems for the year ended December 31, 2008. As Cardtrend System has been awarded a Multimedia Super Corridor (MSC) certificate by the government of Malaysia in July 2004, the annual operating income generated is fully tax exempted for a period of up to 10 years.

The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2008 is as follows:

Loss before income taxes from operation	$	(101,113)
Statutory income tax rate		26%
Income tax expense at statutory rate		(26,289)
Effect from tax holiday		(12,744)
Tax effect on non-deductible expenses		25,183
Tax effect on tax allowances		(2,722)
Net operating losses carryforward		16,572
Income tax expense	$	-

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British Virgin Islands

Under the current BVI law, those BVI subsidiaries are not subject to tax on income. For the year ended December 31, 2008, the Company’s subsidiaries incurred a loss from operations of $2,740.

The following table sets forth the significant components of the aggregate net deferred tax assets of the Company as of December 31, 2008:

Deferred tax assets:
Net operating loss carryforward
- United States	$	3,022,937
- Hong Kong		15,205
- China		131,996
- Malaysia		29,068
- Singapore		417
Less: valuation allowance		(3,199,623)
Net deferred tax assets	$	-

Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided for a full valuation allowance against its deferred tax assets of $3,199,623 and $1,053,502 as of December 31, 2008 and 2007, respectively. During 2008, the valuation allowance increased by $2,146,121, primarily relating to net operating loss carryforwards from the local and foreign tax regimes.

11.  CAPITAL STOCK

Preferred Stock

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share.

On January 2, 2008, the Company approved the conversion of 3,500,000 shares of Series A Preferred Stock at a conversion ratio of 1:5 into 17,500,000 shares of restricted common stock with a par value of $0.001 per share to satisfy with the purchase consideration (see Note 8). Upon the conversion of the 3,500,000 shares of Series A Preferred Stock, the par value of common stock totaling $17,500 is recognized as common stock issued and outstanding. The excess of $14,000 is recognized as a reduction to the additional paid-in capital.

At the same date on January 2, 2008, the Company approved the conversion of 2,500,000 shares of Series B Preferred Stock at a conversion ratio of 1:10 into 25,000,000 shares of restricted common stock with a par value of $0.001 per share to satisfy with the purchase consideration (see Note 8). Upon the conversion of the 2,500,000 shares of Series B Preferred Stock, the par value of common stock totaling $25,000 is recognized as common stock issued and outstanding. The excess of $22,500 is recognized as a reduction to the additional paid-in capital.

As of December 31, 2008 and 2007, there was 0 and 6,000,000 shares issued and outstanding preferred stock, respectively.

Common Stock

The Company is authorized to issue 250,000,000 shares of common stocked with a par value of $0.001 per share.

On January 2, 2008, the Company cancelled 82,912 shares of common stock valued at $6,000 due to clerical error resulting in overpayment of debt owed to Management Services of Arizona, Inc.

On January 14, 2008, the Company issued a total of 3,023,119 shares of the Company’s common stock valued at $151,155 for the settlement of debts (salaries and advances owed to employees and officers). These shares were issued through the options granted to and exercised immediately by these employees at an exercise price equaled to the market price of our common stock at the time of grant. The fair values of these options, determined using the Black-Scholes option pricing model, totaling $151,152 were fully expensed at the time the options were granted.

On January 22, 2008 and February 1, 2008, an aggregate of 11 convertible promissory notes with a total value of $722,112 were converted into equity for 17,133,263 shares of commons stock of the Company upon their maturities (See Note 14).

On May 20, 2008, 562,500 shares of common stock valued at $33,751 were cancelled due to termination of a contract with a consulting services firm.

On August 31, 2008, the Company issued 1,931,900 shares of free trading common stock value at $38,638 for the compensation of three months salaries for an early termination of an employee (See Note 12).

On September 8, 2008, the Company issued 7,000,000 shares of restricted common stock valued at $105,000 for the exchange of all issued and fully paid up shares of SMS BIZ. Subsequently on November 24, 2008, the Company cancelled 7,000,000 shares of common stock valued at $21,000 pursuant to the return of the shares by the original shareholders of SMS BIZ in consideration for the purchase of SMS BIZ (See Note 4).

On September 12, 2008, the Company issued 2,100,000 shares of restricted common stock at a market fair value of $0.01 per share for the consulting services rendered (See Note 13).

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On September 19, 2008, the Company issued 3,696,938 shares of restricted common stock valued at $18,485 for the compensation of early termination to an employee (See Note 13).

On September 22, 2008, the Company issued 3,701,943 shares of restricted common stock valued at $18,510 for a partial compensation of early termination to an employee (See Note 13).

On September 23, 2008, the Company cancelled 31,891 shares of common stock valued at $2,328 due to a clerical error from the overpayment of salary to a former employee.

As of December 31, 2008 and 2007, the Company had 155,818,136 and 82,408,276 shares of common stock issued and outstanding.

12. NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share for the years indicated:

	For the years ended December 31,
	2008		2007
Basic and diluted net loss per share calculation
Numerator:
Net loss in computing basic net loss per share	$	9,628,304	$	3,098,535
Denominator:
Weighted average ordinary shares outstanding		144,715,542		55,682,478
Basic and diluted net loss per share	$	0.07	$	0.06

Since the Company reported a net loss for the years ended December 31, 2008 and 2007, all potential common shares have been excluded from the computation of the dilutive net loss per share for all periods presented because the effect would have been anti-dilutive.

13.   STOCK BASED COMPENSATION

Options

In 2004, 2005 and 2007, the Company approved non-qualified incentive stock option plans (the "2004 Plan", the “2005 Plan” and the “2007 Plan”, or collectively, the “Registered Option Plans”) for the benefit of employees or other persons associated with the Company. In accordance with the 2004 Plan, 2005 Plan, and 2007 Plan, the Company is authorized to grant stock options for the purchase of 5,000,000, 5,000,000 and 25,000,000 unrestricted shares of common stock, respectively. The Company decided to enact an unregistered stock option plan in 2006 to accommodate stock options granted outside of the Registered Option Plans for the benefit of employees and persons associated with the Company to purchase restricted shares of common stock (“2006 Unregistered Plan”).

On January 1, 2008, the Company granted options to two new employees to each purchase 250,000 shares of the Company’s common stock under the 2007 Plan at an exercise price of $0.08 per share. The fair values of these option were computed using a Black-Scholes model with the following assumptions: (1) dividend yield of 0%; (2) expected volatility between 208%; (3) risks free interest rates between 3.34%; (4) expected lives of 1 year; and (5) at a market price $0.04. The fair value will be amortized and expensed over five year, the contract period for the employment of the two employees.

On January 1, 2008, the Board of Directors approved the granting of options to 2 consultants to each purchase 50,000 shares of the Company’s common stock under the 2007 Plan at an exercise price of $0.08 per share. The fair values of these options were computed using a Black-Scholes model with the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 208%; (3) risks free interest rates of 3.34%; (4) expected lives of 1 year; and (5) at a market price $0.04. The fair values were amortized and expensed over one year, the contract period for the provision of business development and advisory services in China.

On January 14, 2008, the Company granted options to 7 employees and 3 officers to purchase a total of 3,023,139 shares of the Company’s common stock (105,020 under the 2004 Plan, 919,000 under the 2005 Plan and 1,999,119 under the 2007 Plan) at an exercise price of $0.05 per share with immediate vesting to settle salaries owing to them as at December 31, 2007 and advances made by them for the Company’s expenses totaling $151,156. The fair values of these options were computed using a Black- Scholes model with the following assumptions: (1) dividend yield of 0%; (2) expected volatility 212%; (3) risks free interest rates between 3.20%; (4) expected lives of 1 day; and (5) at a market price $0.05. The fair values were expensed off at the time of granting the options.

On April 7, 2008, Ms. Katherine YL Tung, Secretary & Treasurer of the Company was granted an option under the 2007 Plan to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.05 per share, with a vesting provision of 25,000 shares at the end of every three months commencing from April 1, 2008 for a one year term. The fair value of these options amounting to $2,100 were computed using a Black-Scholes model with the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 234%; (3) risks free interest rates of 1.72%; (4) expected lives of 1 year; and (5) at a market price $0.03. The fair value will be amortized and expensed over one year, the contract period for the provision of the said administrative services.

On August 5, 2008, the Company granted an option under the Unregistered Plan to four employees and four directors each to purchase 300,000 restricted shares of the Company’s common stock at an exercise price of $0.02 per share, with a vesting provision of 25,000 shares and 75,000 shares for employees and directors, respectively at the end of every three months commencing from September 30, 2008 for a one year term. The fair value of these options amounting to $40,800 were computed using a Black-Scholes model with the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 236%; (3) risks free interest rates of 2.26% to 2.83%; (4) expected lives of 3 years; and (5) at a market price $0.02.

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On August 31, 2008, the Company granted options under the 2004 Plan, 2005 Plan and 2007 Plan to a former employee to purchase 683,000 shares, 250,000 shares and 998,900 shares, respectively of the Company’s common stock at an exercise price of $0.02 per share to compensate the early termination. The former employee immediately exercised all the options on the same day (See Note 11).

On September 5, 2008, a group of officers and directors of the Company voluntarily cancelled an aggregate amount of options of 8,150,000 shares (including those shares which were vested and unexercised) under 2007 Plan which the Company granted at an exercise price ranging from $0.08 to $0.10 per share on February 26, 2007. On the same day, the Company granted those officers and directors an option each under the Unregistered Plan to purchase an aggregate of 8,150,000 shares restricted common stock of the Company at an exercise price of $0.02 per share.

On September 5, 2008, the Company adjusted the exercise price of an aggregate amount of options of 5,850,000 shares under the 2007 Plan which granted to 12 middle management employees of the Company on February 26, 2007 from ranging $0.08 to $0.10 per share to $0.02 per share. The Company recorded and expensed $18,800 as additional fair value due to modification of exercise price.

On September 12, 2008, the Company granted options under the 2007 Plan to a consultant to purchase 2,100,000 shares restricted common stock of the Company at an exercise price of $0.001 per share for the six months consulting services to be rendered commencing from September 12, 2008. The consultant immediately exercised all the options on the same day (See Note 11).

On September 19, 2008, the Company granted options under the 2007 Plan to a former employee to purchase 3,696,938 shares of the Company’s common stock at an exercise price of $0.005 per share to compensate the early termination. The former employee immediately exercised all the options on the same day (See Note 11).

On September 22, 2008, the Company granted options under the 2007 Plan to a former employee to purchase 3,701,943 shares of the Company’s common stock at an exercise price of $0.005 per share to partially settle the compensation of four months salaries for an early termination. The former employee immediately exercised all the options on the same day (See Note 11).

On September 22, 2008, the Company adjusted the exercise price of options of 100,000 shares granted under the 2007 Plan to the Secretary and Treasurer of the Company on April 7, 2008 from $0.05 per share to $0.02 per share. The Company recorded and expensed $100 as additional fair value due to modification of exercise price.

A summary of the changes in the Company's common stock purchase options granted to directors, officers & employees (“Employees”) and consultants (“Consultants”) in the fiscal years 2008 and 2007 is presented below:

					Unregistered							Average
	2004 Plan		2005 Plan		Plan		2007 Plan		Total			Exercise Price
Balance as of January 1, 2007	583,000		1,030,000		11,350,000		-		12,963,000		$	0.200
Granted	-		-		750,000		22,806,863		23,556,863		$	0.088
Forfeited and cancelled	(100,000	)	(580,000	)	(12,100,000	)	(600,000	)	(13,380,000	)	$	0.193
Exercised	-		-		-		(6,406,863	)	(6,406,863	)	$	0.069
Balance as of December. 31, 2007	483,000		450,000		-		15,800,000		16,733,000		$	0.103
Granted	788,020		1,169,000		10,550,000		13,196,900		25,703,920		$	0.019
Forfeited & cancelled	(483,000	)	(450,000	)	-		(10,481,911	)	(11,414,911	)	$	0.107
Exercised	(788,020	)	(1,169,000	)	-		(12,464,989	)	(14,422,009	)	$	0.016
Balance as of December. 31, 2008	-		-		10,550,000		6,050,000		16,600,000		$	0.020

A summary of the changes in the Company’s stock options granted to Employees in fiscal years 2008 and 2007 is presented below:

					Unregistered							Average
	2004 Plan		2005 Plan		Plan		2007 Plan		Total			Exercise Price
Balance as of January 1, 2007	43,000		-		11,350,000		-		11,393,000		$	0.180
Granted	-		-		750,000		22,306,863		23,056,863		$	0.090
Forfeited & cancelled	-		-		(12,100,000	)	(600,000	)	(12,700,000	)	$	0.173
Exercised	-		-		-		(5,906,863	)	(5,906,863	)	$	0.075
Balance as of December. 31, 2007	43,000		-		-		15,800,000		15,843,000		$	0.095
Granted	788,020		1,169,000		10,550,000		10,996,900		23,503,920		$	0.019
Forfeited & cancelled	(43,000	)	-		-		(10,481,911	)	(10,524,911	)	$	0.096
Exercised	(788,020	)	(1,169,000	)	-		(10,364,989	)	(12,322,009	)	$	0.018
Balance as of December 31, 2008	-		-		10,550,000		5,950,000		16,500,000		$	0.020

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A summary of the changes in the Company’s stock options granted to Consultants in fiscal years 2008 and 2007 is presented below:

					Unregistered						Average
	2004 Plan		2005 Plan		Plan	2007Plan		Total			Exercise Price
Balance as of January 1, 2007	540,000		1,030,000		-	-		1,570,000		$	0.370
Granted	-		-		-	500,000		500,000		$	0.088
Forfeited & cancelled	(100,000	)	(580,000	)	-	-		(680,000	)	$	0.551
Exercised	-		-		-	(500,000	)	(500,000	)	$	0.055
Balance as of December 31, 2007	440,000		450,000		-	-		890,000		$	0.234
Granted	-		-		-	2,200,000		2,200,000		$	0.005
Forfeited & cancelled	(440,000	)	(450,000	)	-	-		(890,000	)	$	0.236
Exercised	-		-		-	(2,100,000	)	(2,100,000	)	$	0.001
Balance as of December 31, 2008	-		-		-	100,000		100,000		$	0.080

Additional information regarding total options outstanding (for Employees and Consultants) at December 31, 2008 is as follows:

		Outstanding				Exercisable
			Weighted						Weighted
			average	Weighted			Weighted		average
		Number	remaining	average		Number	average		remaining
Exercise		of	contractual	exercise		of	exercise		Contractual
price		options	life (years)	price		options	price		life (years)
$	0.08	100,000	1.08	$	100,000	100,000	$	0.080	1.08
$	0.02	16,500,000	8.13	$	6,391,867	6,391,867	$	0.020	8.11
Total		16,600,000	8.08	$	0.020	6,492,867	$	0.021	8.00

Additional information regarding total options outstanding (for Employees only) at December 31, 2008 is as follows: 

		Outstanding				Exercisable
			Weighted						Weighted
			average	Weighted			Weighted		average
		Number	remaining	average		Number	average		Remaining
Exercise		of	contractual	exercise		of	exercise		contractual
price		options	life (years)	price		options	price		life (years)
$	0.02	16,500,000	8.13	$	0.020	6,391,867	$	0.020	8.11

Additional information regarding total options outstanding (for Consultants only) at December 31, 2008 is as follows:

		Outstanding				Exercisable
			Weighted						Weighted
			average	Weighted			Weighted		average
		Number	remaining	average		Number	average		Remaining
Exercise		of	contractual	exercise		of	exercise		contractual
price		options	life (years)	price		options	price		life (years)
$	0.08	100,000	1.08	$	0.080	100,000	$	0.080	1.08

The fair value for the options granted was estimated at the date of grant using the Black-Scholes Option Pricing model with the following assumptions:

	Year ended December 31, 2008
Risk-free interest rate (per annum)	0.76% - 4.55%
Expected life (in years)	1 - 5 years
Expected volatility	199% - 294%
Expected dividend yield	0%

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The Company recognized $864,160 and $1,131,934 of stock-based compensation to operations for the years ended December 31, 2008 and 2007 by applying the fair value method in accordance with SFAS No. 123(R). As of December 31, 2008 and 2007, $277,148 and $1,121,638 was recorded as a reduction in deferred compensation and $587,012 and $80,704 was recorded as an increase and a decrease in additional paid-in capital, respectively. As of December 31, 2008, the amount of stock based compensation that will be recognized in future periods as a result of additional vesting of option shares is $997,607.

Warrants

On January 22, 2008 and February 1, 2008, the Company granted 17,133,263 warrants to 5 individuals upon the conversion of convertible promissory notes held by them with the principal and accrued interest totaling $722,112 (See Note 14).

On May 20, 2008, 500,000 warrants at an exercise price of $0.40 per share granted to a consultant were cancelled due to the termination of the service contract with the consultant

Transaction involving warrants issued to investors and consultants in fiscal years 2008 and 2007 are summarized as follows (Warrants were not issued to employees):

	Share issuable
	Upon		Average
	exercise of		price per
	Warrants		Share
Outstanding as of January 1, 2007	12,428,287		$	0.45
Granted	14,106,066		$	0.07
Exercised	-		$	-
Canceled	(3,607,166	)	$	0.36
Outstanding as of December 31, 2007	22,927,187		$	0.23
Granted	17,133,263		$	0.084
Exercised	-		$	-
Cancelled	(500,000	)	$	0.40
Outstanding as of December 31, 2008	39,560,450		$	0.168

Additional information regarding warrants outstanding as of December 31, 2008 is as follows (Note: No warrants were issued to employees.)

		Outstanding				Exercisable
			Weighted						Weighted
			average	Weighted			Weighted		average
		Number	remaining	average		Number	average		remaining
Exercise		of	contractual	exercise		of	exercise		contractual
price		warrants	life (years)	price		warrants	price		life (years)
$	0.062	23,665,206	1.93	$	0.062	23,665,206	$	0.062	1.93
$	0.112	5,504,464	2.17	$	0.112	5,504,464	$	0.112	2.17
$	0.130	1,569,659	2.17	$	0.130	1,569,659	$	0.130	2.17
$	0.159	645,644	0.75	$	0.159	645,644	$	0.159	0.75
$	0.200	4,638,333	1.00	$	0.200	4,638,333	$	0.200	1.00
$	0.300	1,448,985	0.75	$	0.300	1,448,985	$	0.300	0.75
$	0.713	1,000,000	1.67	$	0.713	1,000,000	$	0.713	1.67
$	2.000	1,088,159	1.67	$	2.000	1,088,159	$	2.000	1.67
Total		39,560,450	1.79	$	0.168	39,560,450	$	0.168	1.79

14. CONVERTIBLE PROMISSORY NOTE PAYABLE

The Company recorded the intrinsic value (i.e. the difference between the conversion price and the fair market value of the common stock on the date of issuance) attributable to the beneficial conversion feature as a discount to be amortized over the life of each of the convertible promissory notes obtained during the years ended December 31, 2007and 2008 as interest expense in accordance with Emerging Issues Task Force ("EITF") No. 00-27 and APB No. 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants.

For the year ended December 31, 2007, the Company recognized a total discount of $1,205,462 which was charged to additional paid in capital during the year. The Company has charged $628,476 to operation as amortization of debt discount as interest expense.

During the year ended December 31, 2008, the Company had the following transactions relating to the convertible promissory notes:

F-23

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(a) 2007 Convertible notes

On January 22, 2008 and February 1, 2008, the Company issued 17,133,263 shares of common stock of the Company to 5 individuals upon the conversion of convertible notes held by them with the principal and accrued interest totaling $722,112 at a conversion price ranging from $0.031 to $0.065, which were agreed in the Convertible Promissory Notes.

On August 7, 2008, a convertible note of $100,000 was matured with a full repayment of $110,194 including principal and accrued interest.

On February 20, 2008 and August 8, 2008, the Company issued a one-year, callable on demand convertible note (“Notes”) of $35,000 and $110,194 to the same individual (“Note Holder”), respectively. The Notes had a term of 1 year from their effective dates, carried an interest rate of 10% per annum, principal and accrued interest payable anytime during the term of the Note at the option of the Note Holder, in either cash or shares. The Note and accrued interest may be convertible into shares of common stock of the Company at a conversion price of $0.048 and $0.02 per share, respectively at the option of the Note Holders at its maturity date or earlier. Upon the conversion of these Notes, the Company will be required to issue the equivalent number of common stock purchase warrants to the Note Holder, with an exercise price of $0.096 and $0.04 per share, respectively in a warrant life of three (3) years from the date of issuance.

On September 19, 2008, the Note Holder called for redemption and on the same day the Company issued a new Note to the same Note Holder with the same aggregated amount of principal and accrued interest redeemed in terms of  (1) principal and accrued interest will become payable by cash after the expiration of six (6) months from its effective date, or at its maturity date, whichever is earlier, (2) upon the conversion, the Notes will be convertible into shares of the Company’s common stock at a conversion price of $0.005 per share or the average closing bid price of the Company’s common stock 5 days preceding the date of conversion, whichever is lower; (3) no warrants will be issued upon the conversion of the Notes.

(b) 2008 Convertible notes

During the year ended December 31, 2008 the Company issued a numbers of callable, on-demand convertible notes (“Notes”) to certain individuals and directors of the Company (“Notes Holders”) for an aggregate amount of $508,942. The Notes had a term of 1 year from its effective drawdown date, carried an interest rate of 10% per annum, principal and accrued interest payable anytime during the term of the Note at the option of the Note Holder, in either cash or shares. The Notes and accrued interest may be convertible into shares of common stock of the Company at a conversion price ranging from $0.02 to $0.05 per share at the option of the Notes Holders at its maturity date or earlier.

Upon the conversion of these Notes, the Company will be required to issue the equivalent number of common stock purchase warrants to the Notes Holders, with an exercise price ranging from $0.04 to $0.10 per share in a warrant life of three (3) years from the date of issuance.

Particulars of the issued convertible promissory notes during the year ended December 31, 2008 which were all redeemed as of December 31, 2008 are as follow:

	Number of	Convertible
Date of convertible	convertible	promissory		Conversion		Exercise price		Intrinsic
promissory noteagreement	loans	noteamount		Price		of warrant		value
February 18, 2008	1	$	50,000	$	0.048	$	0.096	$	23,333
February 20, 2008	2		65,000		0.048		0.096		30,896
March 13, 2008	1		50,000		0.040		0.080		36,726
March 26, 2008	3		81,000		0.050		0.100		39,463
April 16, 2008	1		86,317		0.048		0.096		41,670
May 5, 2008	3		36,000		0.048		0.096		17,939
May 12, 2008	3		39,000		0.040		0.080		18,200
June 10, 2008	3		30,000		0.030		0.060		14,667
July 10, 2008	2		14,000		0.020		0.040		5,310
July 25, 2008	3		35,625		0.020		0.040		13,513
August 18, 2008	1		22,000		0.020		0.040		8,067
Total		$	508,942					$	249,784

On September 19, 2008, all the Note Holders called for redemption with an aggregated principal and interest amounted to $589,041 and on the same day the Company issued six new Notes to the same group of Note Holders with the same aggregate amount for a term of 12 months from its effective date, carried an interest rate of 10% per annum, and at the option of the Note Holders, principal and accrued interest may be  redeemable in cash at anytime after 6 months from the effective date of the Note or convertible into shares of common stock of the Company at a conversion price of $0.005 per share or the average closing bid price of the Company’s common stock 5 days preceding the date of conversion, whichever is lower, and no warrants will be issued upon the conversion of the Notes.

The Company recorded the intrinsic value (i.e. the difference between the conversion price and the fair market value of the common stock on the date of issuance) attributable to the beneficial conversion feature as a discount to be amortized over the life of each of the above convertible promissory note as interest expense in accordance with EITF No. 00-27 Application of EITF 98-5 “ Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios ” and APB No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants” . For the year ended December 31, 2008, the Company recognized a total discount of $725,095 which was charged to additional paid in capital. The Company has charged $879,263 to the statement of operation as amortization of debt discount.

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(c) Convertible promissory note to service provider

On May 5, 2008, the Company issued a convertible promissory note of $200,000 to RBSM LLP, the predecessor auditor of the Company for a term of 6 months, bearing interest at a rate of 7% per annum and payable at its maturity date, due November 4, 2008. The convertible promissory note is unsecured and upon the maturity date, the Company may, at its election, pay cash to RBSM LLP for the principal balance plus accrued interest or convert such amount into shares of common stock of the Company, in whole or in part, at a conversion price equal to the average closing bid price of the Company’s common stock 5 days preceding the date of maturity. On October 30, 2008, the Company and RBSM LLP signed an agreement to extend the maturity of the convertible promissory noted to May 4, 2009 for a consideration of $5,000 paid by the Company

15. RELATED PARTY TRANSACTIONS

The Company had the following transactions for the years ended December 31, 2008 and 2007, with related parties:

Incurred $44,262 and $0 for the years ended December 31, 2008 and 2007, respectively, for administrative, management services and consulting services provided by companies in which certain officers and/or shareholders have a controlling interest. Incurred net $668,420 and $0 for the years ended December 31, 2008 and 2007, respectively, for sales transaction at a fair value in a normal course of business to a company, in which a director has a controlling interest.

The following balances, which represent temporary advances from directors, officers and companies controlled by certain officers and/or directors, carry no interest charges with no fixed terms of repayment, were outstanding as of:

	December 31, 2008		December 31, 2007
Salaries payable	$	358,500	$	78,758
Loan from directors		161,464		148,055
Expenses claims		-		1,480
Due to related parties	$	519,964	$	228,293

16 SEGMENT INFORMATION

(a) Segment Information

For the years ended December 31, 2008 and 2007, the Company’s business units have been aggregated in three reportable segments: business processing (“Processing Business Unit”), prepaid communications products (“Prepaid Business Unit”) and payment and loyalty cards (“Card Business Unit”), as defined by SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” ("SFAS No. 131"). The Company's management makes financial decisions and allocates resources based on the information it receives from its internal management system on each of its lines of business. Certain other expenses associated with the public company status of Cardtrend are reported at the Cardtrend parent company level, not within the subsidiaries. These expenses are reported separately in this footnote. The Company's management relies on the internal management system to provide sales, cost and asset information by line of business.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables for the years ended December 31, 2008 and 2007:

		For the year ended December 31, 2008
		Processing			Prepaid			Card
		Business			Business			Business			Corporate		Total
Operating revenues, net	$	1,061,550		$	666,772		$	-		$	-	$	1,728,322
Cost of revenues		(419,751	)		(657,138	)		-			-		(1,076,889	)
Gross profit		641,799			9,634			-			-		651,433
Depreciation and amortization		226,777			71,365			3,743			-		301,885
Net loss		(6,173,036	)		(3,419,192	)		(36,076	)		-		(9,628,304	)
Total assets		949,757			163,855			25,220			-		1,138,832
Expenditure for long-lived assets	$	-		$	-		$	-		$	-	$	-

		For the year ended December 31, 2007
		Processing			Prepaid			Card
		Business			Business			Business			Corporate			Total
Operating revenues, net	$	748,465		$	978,927		$	-		$	-		$	1,727,392
Cost of revenues		(344,239	)		(963,342	)		-			-			(1,307,581	)
Gross profit		404,226			15,585			-			-			419,811
Depreciation and amortization		147,652			62,853			2,139			409			213,053
Net loss		(2,362,097	)		(134,711	)		(70,864	)		(530,862	)		(3,098,535	)
Total assets		3,886,123			2,149,632			1,654,978			-			7,690,733
Expenditure for long-lived assets	$	351,470		$	967		$	17,976		$	-		$	370,413

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(b) Geographical Information

The Company’s operations are located in three main geographical areas. The Company’s sales by geographical market are analyzed as follows:

		For the year ended December 31,
		2008		2007
Revenue, net:
PRC	$	1,178,374	$	127,578
Hong Kong		21,113		-
Malaysia		528,835		1,599,814
	$	1,728,322	$	1,727,392

		For the year ended December 31,
		2008		2007
Gross profit/(loss):
PRC	$	348,015	$	(52,703)
Hong Kong		4,865		-
Malaysia		298,553		472,514
	$	651,433	$	419,811

For the year ended December 31, 2008, 47% and 53% of the Company’s long-lived assets were located in the PRC and Malaysia, respectively.

For the year ended December 31, 2007, 50% and 50% of the Company’s long-lived assets were located in the PRC and Malaysia, respectively.

17. PENSION PLAN

Malaysia

The Company’s subsidiaries operating in Malaysia participate in a defined contribution pension scheme under the Employee Provident Fund “EPF” operated by the local government for all its eligible employees in Malaysia.

The EPF is available to all employees aged 18 to 65 with a term of service in the employment in Malaysia. The Company’s subsidiaries are required to contribute a specified percentage of the participants’ relevant income based on their ages and wages level. The participants are entitled to 100% of the Company’s contributions together with accrued returns irrespective of their length of service with the Company’s subsidiaries. The total contributions made for EPF were $39,248 and $44,160 for the years ended December 31, 2008 and 2007, respectively.

The PRC

Under the PRC Law, full-time employees of the Company’s PRC subsidiaries are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Company’s PRC subsidiaries are required to accrue for these benefits based on certain percentages of the employees’ salaries. The total contributions made for such employee benefits were $70,068 and $3,641 for the years ended December 31, 2008 and 2007.

18  CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a) Major Customers

For the year ended December 31, 2008, the customers who accounts for 10% or more of revenue of the Company are presented as follows:

	For the year ended December 31, 2008
	Revenue		Percentage of revenue	Accounts receivable
Customer A	$	458,388	27%	$	-
Customer B		504,908	29%		-
Total:	$	963,296	56%	$	-

During the year ended December 31, 2007, approximately $1,181,036 or 68% of total revenues were derived from 3 customers.

(b) Major Vendors

For the years ended December 31, 2008 and 2007, 1 vendor represented more than 10% of the Company’s purchases with the amount of $488,363 or 45% and $900,247 or 69%, respectively.

(c) Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, but does not require collateral to support such receivables.

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(d) Interest Rate Risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

The Company’s interest-rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest-rate risk. Borrowings issued at fixed rates expose the Company to fair value interest-rate risk. Company policy is to maintain approximately all of its borrowings in fixed rate instruments. As of December 31, 2008, all of borrowings were at fixed rates.

(e) Exchange Rate Risk

The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in RMB and MYR and a significant portion of the assets and liabilities are denominated in RMB, MYR and SGD. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$, RMB, MYR and SGD. If RMB, MYR and SGD depreciate against US$, the value of RMB, MYR and SGD revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.

19.   COMMITMENTS AND CONTINGENCIES

(a) Operating Lease Commitment

The subsidiaries operating in Malaysia and the PRC were committed under various non-cancelable operating leases with a term ranging from one to four years with fixed monthly rentals. The monthly aggregate lease payment for the year ended December 31, 2008 was approximately $9,252. None of the leases included contingent rentals.

As of December 31, 2008, the committed annual operating lease payments are as follows:

Years ending December 31,
2009	$	99,914
2010		46,601
2011		24,219
2012		1,826
Total	$	172,560

(b) Consulting services contracts commitment

As of December 31, 2008, the Company had 1 consulting service contract expiring within 4 months with a cash payment of $2,000 per month, 1 consulting service contract expiring within 4 months with a cash payment of averagely $4,250 per quarter, 1 consulting service contract expiring within 3 months with a stock based compensation valued at $21,000, 2 consulting service contracts expired, each with an option to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.08 per share within 12 months, and 2 consulting service contracts expiring within 18 months with a commission based compensation scheme.

20. COMPARATIVE FIGURES

The financial statements in the current period are presented to conform to those presented in prior periods.

21.  SUBSEQUENT EVENTS

On March 21, 2009, the Company accepted an offer each from two individuals, of callable, on-demand convertible loans of $10,000 each, bearing no interest. The lenders will have the option to convert any money advanced and/or interest in arrears into shares of the Company’s common stock priced at $0.002 per share, if the said loans are converted within 6 months from the effective date of the loans. The Company recorded an intrinsic value of the beneficial conversion feature of the loans at $8,000.

On April 1, 2009, the Board of Director approved the termination of the joint venture agreement entered into with two Mongolians. The Company intends to send the termination notice to the Mongolians before the end of April 2009.

On April 6, 2009, the Company received the notices from the six Note Holders as described in Note 14(b) to convert the entire principal in an aggregated amount of $589,041 and accrued interests in an aggregated amount of $32,725 as of April 6, 2009, to 163,622,600 shares of common stock of the Company at $0.0038 per share. The directors of the Company have approved and proceeded the conversion on April 7, 2009.

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ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE

On April 22, 2008, we terminated RBSM LLP at 5 West 37th Street, 9th Floor, New York, NY, as our independent registered public accounting firm. Except as noted that there was substantial doubt as to our ability to continue as a going concern as we had suffered negative working capital, had experienced negative cash flows from continuing operating activities and also due to uncertainty with respect to our ability to meet short-term cash requirements, the reports of RBSM LLP’s consolidated financial statements for the years ended December 31, 2007 and 2006 and for the period January 1, 2006 through December 31, 2007 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle. During the years ended December 31, 2007 and 2006 and for the period January 1, 2006 through December 31, 2007, and through April 22, 2008 we have not had any disagreements with RBSM LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to RBSM LLP’s satisfaction, would have caused it to make reference to the subject matter of the disagreements in its reports on our consolidated financial statements for such years or in connection with its reports in any subsequent interim period through the date of dismissal. During the years ended December 31, 2007 and 2006, and through April 22, 2008, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.

On April 23, 2008, we engaged ZYCPA Company Limited (formerly Zhong Yi (Hong Kong) C.P.A. Company Limited) (“ZYCPA”), at 9/F Chinachem Hollywood Centre, 1-13 Hollywood Road, Central, Hong Kong, an independent registered public accounting firm, as our principal independent accountant with the approval of our board of directors. We have not consulted with ZYCPA on any accounting issues prior to engaging them as our new auditors. During the two most recent fiscal years and through the date of engagement, we have not consulted with ZYCPA regarding either: 1. The application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us nor oral advice was provided that ZYCPA concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or 2. Any matter that was either subject of disagreement or event, as defined in Item 304(a)(1)(iv)(A) of Regulation S-K and the related instruction to Item 304 of Regulation S-K, or a reportable event, as that term is explained in Item 304(a)(1)(iv)(A) of Regulation S-K.

In connection with the audit for fiscal year ended December 31, 2008 and in connection with ZYCPA’s review of the interim periods ended March 31, 2008 through September 30, 2008, there have been no disagreements between the Company and ZYCPA on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of ZYCPA, would have caused ZYCPA to make reference thereto in its report on the Company’s consolidated financial statements for the current fiscal year.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, management concluded that our disclosure controls and procedures are effective as of December 31, 2008 to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Evaluation of and Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting of the Company. Management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2008 based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that, as of December 31, 2008, our internal control over financial reporting is not effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

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

Changes in Internal Control over Financial Reporting

There were no changes in internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.   OTHER INFORMATION

None.

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PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Executive Officers and Directors

     Our directors and principal executive officers during 2008 and as at the date of this report are as specified on the following table:

				Term
Name		Age	Position	(years)	Period Served in Office
King K. Ng	(1)	58	Director, Chief Executive Officer and President	5	From May 22, 2006 to present.
Kok Keng Low	(2)	50	Director and Chief Operating Officer	5	From September 28, 2006 to present.
Jee Sam Choo	(3)	65	Director and Chairman	1	From June 19, 2006 to present (appointed Chairman on January 25, 2008
Yu Hua Chen	(4)	41	Director, Chief Officer – Greater China	5	From November 8, 2007 to present
Michael J. Oliver	(5)	60	Director (Resigned)	1	From July 20, 2005 to March 7, 2008.
Charlie Rodriguez	(6)	64	Director, Secretary and Treasurer (Resigned)	1	From September 21, 2000 to March 7, 2008.
Robert Clarke	(7)	64	Director and Chairman (Resigned)	1	From October 22, 1998 to January 23, 2008.
Thomas CL Wong	(8)	48	Chief Financial Officer	4.5	From January 1, 2007 to present.
Katherine YL Tung	(9)	54	Secretary and Treasurer	1	From April 7, 2008 to present.

(1)	King K. Ng has been a member of the Board of Directors since June 1, 2006. He was appointed President & Chief Executive Officer on May 22, 2006. Mr. Ng founded Interpay International Group Ltd. (“IIG”) in 1995 and has been its Chief Executive Officer since. Prior to founding IIG, Mr. Ng was the President of Cards & Payment Services of MBf Group, a conglomerate based in Malaysia. Under the leadership of Mr. Ng and during his tenure with MBf Group, MBf became the largest issuer of MasterCard cards in South-east Asia and expanded into several countries in Asia, including China. Mr. Ng began to build MBf’s payments and loyalty-rewards cards businesses for MBf Group in 1986 after leaving American Express as its Division Vice President of Business Development for the Travel Related Services Group in Asia Pacific & Australia Division based in Hong Kong. Mr. Ng was the Vive President & General Manager of American Express’ Travel Related Services Group for Malaysia and Brunei from 1978 to 1985. During his tenure in American Express Malaysia, Mr. Ng built and led it to become the largest issuer of credit/charge cards in Malaysia prior to his departure for his posting in Hong Kong. Between 1991 and 1995, Mr. Ng served as a Director of Maestro International and an Alternate Director of the MasterCard International’s Asia Pacific Board of Directors. He was an independent consultant of MasterCard Advisors between 2003 and 2005.Mr. Ng received his tertiary education in England and possesses a B.Sc. (Engineering) Degree from University of London, London and a M.Sc. (Administrative Sciences) Degree from the City University Graduate Business School, London. He is fluent in English and Chinese, including a few Chinese dialects.
(2)	Kok Keng Lowhas been a member of the Board of Directors since September 28, 2006. Mr. Low was appointed as the Chief Technology Officer and Head of Processing Business on the same day. He was promoted to the position of Chief Operating Officer in August 2007. Mr. Low began his career in 1984 with British Steel PLC in Scotland. He then worked as General Manager of MBf Group Technology Division of Malaysia where he was responsible for supporting ICT needs of the Group’s finance, insurance and card businesses in Asia Pacific. He then joined Magnate Computers Sdn. Bhd., a Malaysian based IT company providing payment solutions to operators of card business. From 1999 to 2002, Mr. Low served as Asia Pacific Regional Director of Business Development for a New Zealand based company providing card and payment solutions. In 2002, he founded Cardtrend Systems Sdn. Bhd., which developed its own payments, loyalty-rewards and other related systems. Cardtrend is a MSC status company as designated by the Government of Malaysia under its Multimedia Super Corridor Program. In September 2006, Cardtrend Systems successfully merged with Asia Payment Systems, Inc. on October 31, 2007. Mr. Low possesses a B.Sc. (East London University, UK) and a M.Sc. (Lancaster & Strathclyde University, UK) in Operational Research. He speaks fluent English and has a working knowledge of Chinese (Mandarin and other Chinese dialects).
(3)	Jee Sam Choohas been a member of the Board of Directors since June 28, 2006. Mr. Choo is a seasoned Malaysian businessman, who speaks fluent Mandarin, and is currently a director of several private companies in Malaysia. He was a director and the Chairman of the audit committee of a publicly listed company, Seni Jaya Corporation Bhd., which is a leading outdoor advertising media specialist in Malaysia. He also has his own investment holding company, JS Choo Holdings Pte Ltd, concentrating on property investments. Mr. Choo’s career includes senior management appointments with several international companies including Diner’s Club and Bata Shoes. He also served in the 1990’s as the Senior Vice President/General Manager of MBf Card Services, the largest MasterCard issuer in South East Asia at the time. Mr. Choo holds a degree in Bachelor of Arts (Honours) from the University of Malaya and a Master in Business Administration (Distinction) from The Asian Institute of Management, the Philippines. He has also been active in the Rotary International for the past 22 years and has made a strong contribution to the development of social and charitable services in Malaysia, including fund raising for four dialysis centers to serve low income patients. Mr. Choo was appointed as the Chairman of the Board on February 1, 2008.
(4)	Yu Hua Chenhas been a member of the Board of Directors since November 8, 2007, replacing Ms. Rosaline Tam. Mr. Chen was appointed as the Chief Officer for our Greater China region on November 1, 2007. Mr. Chen was a senior executive of China Southern Post & Telecommunication prior to his resignation in 2002 to form a business process out-sourcing services company in Guangzhou which provides services to financial institutions and multinational companies in China. Mr. Chen holds a degree in Business Management from the University of Jinam, Guangzhou, China.

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(5)	Michael J. Oliver had been a member of the Board of Directors since July 20, 2005. Mr. Oliver resigned as director of the Company on March 7, 2008.
(6)	Charlie Rodriguezhad been a member of the Board of Directors since September 21, 2000. He was appointed Secretary/Treasurer on December 17, 2004. From 1995 to current, he is the President of Management Services of Arizona, a personally owned business consulting company which provided consultancy services to the Company until Mr. Rodriguez’s resignation as director of the Company on March 7, 2008.
(7)	Robert G. Clarke had been a member of the Board of Directors since its inception on October 2, 1998 and until December 17, 2004 he was also our Chairman. He was re-appointed Chairman on October 5, 2005. On October 15, 2005, he became Chief Executive Officer until May 22, 2006. Mr. Clarke resigned as director and chairman of the Board on January 23, 2008.
(8)	Thomas CL Wonghas been the Chief Financial Officer of the Company since January 1, 2007, replacing Mr. Bernard Chan who resigned on December 31, 2006. Mr Wong joined the Company from Interpay International Group Ltd. on July 1, 2006 as Head of Accounting and Finance. Mr. Wong started his career in accounting and finance with American Express Malaysia office in 1980. He was Manager – Finance with MBf Card Services in Malaysia looking after accounting and financial control in MBf’s card businesses in the Asia Pacific region. He left MBf in 1996 and became the Senior Manager- Finance of iSynergy, the joint venture card company of Interpay International Group Ltd. which is a licensee of MasterCard in Malaysia. In order to gain further experience in the financial matters relating to credit card business in a commercial bank, Mr.. Wong left iSynergy in January 2002 and joined AmBank, a commercial bank in Malaysia, which issues MasterCard and Visa credit cards. Mr. Wong was appointed as the chief financial officer of Interpay International Group Ltd. in 2005.
(9)	Katherine YL Tungwas appointed as Secretary and Treasurer, replacing Mr. Rodriguez, on April 7, 2008. Ms. Tung is an US citizen and possesses business experiences in the Asian region as well as in the US. Ms. Tung worked for American Express Card Division in Singapore between 1977 to 1982 holding positions in secretarial and administrative functions with the last being Supervisor – Customer Services prior to her departure to set up trading companies of her own in Singapore and Malaysia. She worked in various companies (including BankCard Solutions, Inc. where she was the Administrative Assistant & Office Manager from January 2004 to April 2007) in the US where she has been since 1986. She is the principal officer of Katelin Enterprises, Inc., a California based company which provides administrative and consultancy services to the Company for a term of one year from April 7, 2008.

Audit Committee and Charter

Our audit committee consists of our entire board of directors. Our audit committee, established in 2004, during the year 2008 and as at the date of this Annul Report, comprises all of our directors – Robert Clarke (resigned on January 25, 2008), Charlie Rodriguez (resigned on March 7, 2008), Michael Oliver (resigned on March 7, 2008), Jee Sam Choo (Chairman), King K. Ng (Chief Executive Officer), Kok Keng Low (Chief Operating Officer) and Yu Hua Chen (Chief Officer – Greater China). Our audit committee is responsible for:

*	Selection and oversight of our independent accountant;
*	Establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters;
*	Establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters;
*	engaging outside advisors; and
*	Sourcing for funds for fee payments to the outside auditor and any outside advisors engaged by the Company.

A copy of our audit committee charter was filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2004.

Audit Committee Financial Expert

We do not have a financial expert in our Audit Committee. We believe the cost related to retaining a financial expert at this time is prohibitive. On January 1, 2008 and April 21, 2009, we retained a consultant and a financial consulting services company, respectively, to provide the Company with advices on accounting and financial matters. As at the time of this Annual Report, the service of the consultant has been terminated while the service of the consulting services company will be expiring on April 20, 2008.

Compliance with Section 16(a) of the Exchange Act

The following individual failed to file on a timely basis, as disclosed in the above Forms, reports required by Section 16(a) during the most recent fiscal year:

		Number of
		Transactions	Known Failures
	Number of	Not Reported on	To File A
Name	Late Reports	A Timely Basis	Form
Jee Sam Choo (1)	1	1	-

(1) The transaction was for shares of common stock issued for the conversion of loans. 

Code of Ethics

We have adopted a corporate code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code of ethics was filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2004.

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ITEM 11.   EXECUTIVE COMPENSATION

Compensation of Officers.

Option award compensation is the fair value for stock options vested during the fiscal years ended December 31, 2006, 2007 and 2008, a notional amount estimated at the date of the grant using the Black-Scholes option-pricing model. The actual value received by the executives may differ materially and adversely from that estimated. A summary of cash and other compensation paid in accordance with management consulting contracts for our Principal Executive Officers and other executives for the most recent two years is as follows:

						Non-equity	Nonqualified
Name and						Incentive	Deferred	Other
Principal				Stock	Option	Plan	compensation	Compensation
Position	Year	Salary ($)	Bonus ($)	awards ($)	awards ($)	compensation ($)	earnings ($)	($)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)
King K. Ng	2006	96,538	-	-	49,575	-	-	-	146,113
President, CEO, and	2007	153,796	-	-	126,125	-	-	-	279,921
Director (1)(11)	2008	147,582	-	-	104,439	-	-	-	252,021
Kok Keng Low	2006	28,961	-	-	13,013	-	-	-	41,974
Executive Vice President, COO, and	2007	131,762	-	-	55,272	-	-	-	187,034
Director (2)(11)	2008	126,557	-	-	39,410	-	-	-	165,967
Yu Hua Chen	2006	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Chief Officer – Greater China , and	2007	16,661	-	16,000	-	-	-	-	32,661
Director (3)(11)	2008	100,175	-	96,000	25,650	-	-	-	221,825
Thomas Chee Leong Wong	2006	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
CFO (4)	2007	76,172	-	-	28,701	-	-	-	104,873
	2008	72,231	-	-	29,770	-	-	-	102,001
Katherine YL Tung	2006	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Secretary & Treasurer (5)	2007	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
	2008	17,578	-	-	1,100	-	-	-	18,678
Charlie Rodriguez	2006	72,000	-	-	121,763	-	-	-	193,763
Ex- Secretary & Treasurer, and	2007	72,000	-	-	20,994	-	-	-	92,994
Ex-Director (6)(11)	2008	12,000	-	-	-	-	-	-	12,000
Robert Clark	2006	-	-	-	187,688	-	-	-	187,688
Ex-CEO and Ex-Director	2007	-	-	-	20,994	-	-	-	20,994
& Ex-Chairman (7)(11)	2008	-	-	-	-	-	-	-	-
Benny Lee Shing Bun	2006	39,000	-	-	268,575	-	-	-	307,575
Ex-President and	2007	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Ex-Director (8)	2008	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Edith Ho	2006	51,667	-	-	241,800	-	-	-	293,467
Ex- CFO (9)	2007	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
	2008	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Bernard Kwong-Chung Chan	2006	-	-	-	13,500	-	-	-	13,500
Ex-CFO (10)	2007	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
	2008	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

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(1)	King K. Ng became President, CEO and a Director on May 22, 2006.
(2)	Kok Keng Low became a CTO and Director on September 28, 2006 and COO on August 1, 2007.
(3)	Yu Hua Chen became the Chief Officer – Greater China on November 1, 2007 and Director on November 8, 2007.
(4)	Thomas Chee Leong Wong became the CFO on January 1, 2007.
(5)	Katherine YL Tung became Secretary and Treasurer from April 7, 2008. She was not associated with the company prior to that date.
(6)	Charlie Rodriguez was Director and Secretary & Treasurer during 2006 and 2007, and he resigned from these positions on March 7, 2008.
(7)	Robert Clarke was the Chairman and Director during 2006 and 2007, and was the CEO between Jan. 15, 2006 to May 22, 2006. Mr. Clarke resigned as Director and Chairman on January 23, 2008.
(8)	Benny Lee resigned as President effective May 2006, and as a Director on September 26, 2006.
(9)	Edith Ho resigned as CFO on June 15, 2006.
(10)	Bernard Kwong-Chung Chan was the CFO from July 1, 2006 to December 31, 2006
(11)	Inclusive of options awarded as Director's Compensation. (See “Directors’ Compensation” below)

Narrative Disclosure To Summary Compensation Table

(1)   King K. Ng, President and Chief Executive Officer and a Director, has a 5-year employment contract with the Company commencing from May 22, 2006. For the fiscal years ended December 31, 2008 and 2007, Mr. Ng received a total salary of HK$1,200,000 (approximately $147,582) and HK$1,200,000 (approximately $153,796), respectively, from the Company. For the fiscal years ended December 31, 2008 and 2007, the Company expensed $104,439 and $126,125, respectively, of the total fair values of the options granted to Mr. Ng in 2006, 2007 and 2008 , amounting to $442,210, which are vesting over 1 year to 5 years from the date of grant of the various options. Unvested options will be cancelled should early termination of Mr. Ng’s employment occur. Mr. Ng did not receive any other compensation in 2008 and 2007.

(2)   Kok Keng Low, Executive Vice President and Chief Operating Officer and a Director, has a 5-year employment contract with the Company commencing from September 28, 2006. For the fiscal years ended December 31, 2008 and 2007, Mr. Low received a total salary of HK$950,000 (approximately $126,557) and HK$950,000 (approximately $131,762), respectively, from the Company and a subsidiary of the Company. For the fiscal years ended December 31, 2008 and 2007, the Company expensed $39,410 and $55,272, respectively, of the total fair values of the options granted to Mr. Low in 2006, 2007 and 2008, amounting to $180,921, which are vesting over 1 to 5 years from the date of grant of the various options. Unvested options will be cancelled should early termination of Mr. Low’s employment occur. Mr. Low did not receive any other compensation in 2008 and 2007.

(3)   Yu Hua Chen was appointed as the Chief Officer – Greater China on November 1, 2007. Mr. Chen has a five-year employment contract with the Company commencing from November 1, 2007. For the fiscal years ended December 31, 2008 and 2007, Mr. Chen received a total salary of HK$780,000 (approximately $100,175) and HK$130,000 (approximately $16,661), respectively, from the Company and a subsidiary of the Company. For the fiscal years ended December 31, 2008 and 2007, the Company expensed $96,000 and $16,000, respectively, of the fair value of the 6,000,000 restricted shares, amounting to $480,000, granted to Mr. Chen as the sign-on fee for his 5-year employment contract with the Company. (The sign-on fee amount will be amortized over 5 years commencing from November 1, 2007). For the fiscal years ended December 31, 2008 and2007, the Company expensed $25,650 and $0, respectively, of the total fair value of the options granted to Mr. Chen in 2007 and 2008, amounting to $148,800,. Unvested options will be cancelled should early termination of Mr. Chen’s employment occur. Mr. Chen did not receive any other compensation in 2008 and 2007.

(4)   Thomas CL Wong was appointed Chief Operating Officer on January 1, 2007, replacing Mr. Bernard Chan. Mr. Wong has a 5-year employment contract with the Company commencing from August 1, 2006. Mr. Wong was not an Officer of the Company in 2006. For the fiscal years ended December 31, 2008 and 2007, Mr. Wong received a total salary of HK$576,000 (approximately $72,231) and HK$576,000 (approximately $76,172), respectively, from the Company and a subsidiary of the Company. For the fiscal years ended December 31, 2008 and 2007, the Company expensed $29,770 and $28,701, respectively, of the total fair values of the options granted to Mr. Wong in 2006, 2007 and 2008, amounting to $84,070, which are vesting over 3 to 5 years from the date of grant of the various options. Unvested options will be cancelled should early termination of Mr. Wong’s employment occur. Mr. Wong did not receive any other compensation in 2008 and 2007.

(5)   Katherine YL Tung was not associated with the Company until her appointment as Secretary and Treasurer on April 7, 2008. She provides her service through a company which she controls and which has entered into an administrative services agreement with the Company on April 7, 2008 for a fee of $2,000 per month for a period of 1 year. Ms. Tung did not receive any salary and was not granted any option in 2007. For the fiscal year ended December 2008, the Company expensed $17,578 as management service fees payable to Ms. Tung’s company, and expensed $1,100 of the total fair value of the options granted to Ms. Tung’s company in 2008, amounting to $2,200. Unvested options will be cancelled should early termination of the service agreement occur. Ms. Tung did not receive any other compensation in 2008 and 2007.

(6)   Charlie Rodriguez was not paid any salary as Secretary and Treasurer of the Company but a company related to him was paid $12,000 in 2008 and $72,000 in 2007 from the Company for providing the secretarial and treasury services through Mr. Rodriguez. Mr. Rodriguez did not have an employment contract. Mr. Rodriguez served as a Director during 2007 and from January 1, 2008 to March 7, 2008, the date of his resignation. For the fiscal years ended December 31, 2008 and 2007, the Company expensed $0 and $20,994, respectively, of the total fair value of the options granted to Mr. Rodriguez in 2005 and 2006, and 2007 amounting to nil, Mr. Rodriguez did not have any unvested options at the time of his resignation on March 7, 2008, otherwise, any unvested option would have been cancelled upon his resignation. Mr. Rodriguez did not receive any other compensation in 2008 and 2007.

(7)   Robert Clarke was not paid any salary when he was Chief Executive Officer between August 2005 to May 2006. He was also not paid any salary as the non-executive Chairman during 2006 and 2007. The Company expensed $187,688 and $20,994 for the options granted to him as a director of the Company for the fiscal years ended December 31, 2006 and December 31, 2007, respectively, which were vested over a year for each option granted., the period of serving as director for the year. Mr. Clarke did not have any unvested options at the time of his resignation on January 23, 2008, otherwise, any unvested option would have been canceled upon his resignation. Mr. Clarke did not receive any other compensation in 2006 and 2007.

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(8)   Benny Lee, who severed as President prior to his resignation on July 31, 2006, did not have an employment contract and was paid a salary of $39,000 for his services from January 1, 2006 to July 31, 2006. For the fiscal year ended December 31, 2006, the Company expensed $268,575 of the total fair value of all the options and warrants granted to Mr. Lee in 2005 and 2006, amounting to $783,100. Mr. Lee did not receive any other compensation in 2006. Mr. Lee was serving as a Director until his resignation on September 28, 2006 and forfeited all rights to his options and warrants 30 days thereafter.

(9)   Edith Ho served as the Chief Financial Officer until June 15, 2006. Mrs. Ho was paid a salary of $51,667 from January 1, 2006 to June 15, 2006 before she resigned. She did not have an employment contract with the Company. For the fiscal year ended December 31, 2006, the Company expensed $241,800 of the total fair values of the options and warrants granted to Mrs. Ho in 2005 and 2006, amounting to $707,100. Mrs. Ho did not receive any other compensation in 2006 and she resigned as the CFO on June 15, 2006 and her stock options and warrants were forfeited 30 days after her resignation.

(10)  Bernard Kwong-Chung Chan served as Executive Vice President - Chief Financial Officer between July1, 2006 to December 31, 2006. He did not receive any cash compensation but was granted an unregistered option to purchase 750,000 shares of the Company at $0.23 per share. For the fiscal year ended December 31, 2006, the Company expensed $13,500 of the total fair value of the option amounting to $81,000. Mr. Chan did not receive any other compensation and he resigned as CFO on December 31, 2006 and forfeited all rights to his options.

(11)  During the two most recent fiscal years, none of the Officers were granted any stock options other than those applicable to the specific employment contract and as director’s compensation and for the settlement of salaries owed to them.

Executive Compensation Agreements

Principal Executive Officer
On May 22, 2006, the Company entered into an employment contract with King K. Ng as the Principal Executive Officer on the following terms:
	*	Mr. Ng will serve as the Company’s President and Chief Executive Officer for a period of five years effective immediately, and renewable for a further term of five years subject to a notice of negotiation for renewal terms to be given by either party 180 days prior to the expiration of the initial term.
	*	Mr. Ng to be appointed as a director of the Company.
	*	Mr. Ng will receive an initial base salary of HK$100,000 per month or its equivalent in US Dollars.
	*	Mr. Ng shall be entitled to an annual profit share payable by us in the amount of two percent (2%) of our annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) and before stock based compensation.
	*	Mr. Ng will be granted an option to purchase an aggregate of 2,500,000 shares of our common stock at an exercise price of $0.25 per share on the following vesting schedule: 100,000 shares at the end of every quarter during the five year term of his employment contract, with an additional 500,000 shares at the end of the fifth year.
	*	Mr. Ng will receive, upon the termination of his employment, a total payment of HKD 1,200,000 or its equivalent in US Dollars in two (2) equal installments, one upon the termination of his employment and the other at the end of one (1) year after the termination of his employment, for his agreement not to compete with the Company for a period of one (1) year after the termination of his employment.
Chief Operating Officer
On September 28, 2006, the Company entered into a five-year employment contract with Kok Keng Low as the Executive Vice President with the following terms:
	*	Mr. Low will serve as our Chief Operating Officer (Changed from Chief Technology Officer on August 1, 2007) and for a period of five (5) years effective immediately and renewable for a further term of five years subject to a notice of negotiation for renewal terms to be given by either party 180 days prior to the expiration of the initial term.
	*	Mr. Low to be appointed as a Director of the Company.
	*	Mr. Low will be granted an option to purchase an aggregate of 1,850,000 shares of our common stock at an exercise price of US$ 0.13 per share on the following vesting schedule: 75,000 shares every quarter during the five-year term of his employment contract with an additional 350,000 shares at the end of the fifth year.
	*	Mr. Low will receive an initial base salary of HK$75,000 per month or its equivalent in US Dollars.
	*	Mr. Low will receive a profit sharing incentive payment of one and a half percent (1.5%) of the Company's annual earnings before interest, tax, depreciation and amortization (EBITDA) and stock based compensation.
	*	Mr. Low will receive, upon the termination of his employment, a total payment of HK$ 900,000 payable in two (2) equal installments, one upon the termination of his employment and the other at the end of one year after the termination of his employment, in return for his agreement not to compete with the Company for a period of one year after the termination of his employment.
Chief Financial Officer
On July 1, 2006, the Company’s subsidiary, Asia Payment Systems (HK) Ltd, entered into an employment contract with Thomas Chee Leong Wong to serve as the Senior Vice President – Accounting & Finance for a period of three years. On January 1, 2007, the employment contract was amended for Mr. Wong to serve as Executive Vice President - Chief Financial Officer of the Company with the following terms:
	*	The period of service has been extended to five years and Mr. Wong will serve as the Chief Financial Officer of the Company from January 1, 2007 to June 30, 2011.
	*	In addition to the 450,000 shares of the Company’s common stock that Mr. Wong is entitled to purchase under an unregistered option at an exercise price of $0.20 per share which the Company had granted to Mr. Wong on July 1, 2006, such shares vesting at the rate of 37,500 shares at the end of every three months from July 1, 2006, Mr. Wong will receive another option to purchase 750,000 shares of the Company’s common stock at an exercise price of $0.10 per share, vesting 62,500 shares at the end of every three months from January 1, 2007.
	*	Mr. Wong’s initial base salary shall be HK$48,000 per month effective from January 1, 2007.

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Chief Officer –Greater China
On November 1, 2007, the Company entered into an employment contract with Yu Hua Chen to serve as the Chief Officer – Greater China with the following terms:
	*	Mr. Chen will serve as our Chief Officer-Greater China for a period of five (5) years effective immediately subject to a notice of negotiation for renewal terms to be given by either party 180 days prior to the expiration of the initial term.
	*	Mr. Chen to be appointed as a Director of the Company
	*	Mr. Chen will be granted an option to purchase an aggregate of 1,850,000 shares of the Company’s common stock at an exercise price of US$ 0.08 per share on the following vesting schedule: 75,000 shares at the end of every quarter during the 5-year term of his employment contract with an additional 350,000 shares at the end of the fifth year.
	*	Mr. Chen will be granted 6,000,000 restricted shares of the Company’s common stock as sign-on fee on the commencement of his employment with the Company.
	*	Mr. Chen will receive an initial base salary of HK$ 65,000 per month or its equivalent in US Dollars.
	*	Mr. Chen shall be entitled to participate in any performance incentive plan that the Company may implement from time to time.
Other Executive Officers
During 2007 and 2008, other than those disclosed above, no other employment contracts have been executed by the Company for any other Executive Officer. Ms. Katherine YL Tung, Secretary & Treasurer, does not have an employment contract but a company related to her has entered into an administrative contract with the Company on April 7, 2008. Ms. Tung was awarded an option to purchase 50,000 shares of the Company’s common stock vesting at the end of every three months from April 7, 2008.

Outstanding Equity Awards at Fiscal Year End for Named Executives

							Market		Market or
						Number	Value of	Number of	Payout Value
	Equity Incentive Plan Awards					Of Shares	Shares or	Unearned	of Unearned
	Number of	Number of	Number of			Or Units	Units of	Shares, Units	Shares, Units
	Securities	Securities	Securities			Of Stock	Stock	or Other	or Other
	Underlying	Underlying	Unexercised	Option	Option	That	That	Rights That	Rights That
	Unexercised	Unexercised	Unearned	Exercise	Expiration	Have Not	Have Not	Have Not	Have Not
Name	Options	Options	Options	Price	Date	Vested	Vested	Vested	Vested
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)
	Exercisable	Unexercisable
King K. Ng					Maximum one
President, CEO	920,000	-	1,580,000	0.02	year from	-	-	-		-
and Director (1)	450,000	-	150,000	0.02	Disassociation
Kok Keng Low					Maximum one
EVP, COO	620,000	-	1,230,000	0.02	year from	-	-	-		-
and Director (1)	400,000		150,000	0.02	Disassociation
Yu Hua Chen					Maximum one
Chief Officer – Greater	300,000	-	1,550,000	0.02	year from	-	-	-		-
China, and Director (2)	150,000	-	150,000	0.02	Disassociation
Thomas CL Wong	560,000	-	640,000	0.02	Maximum one	-	-	-		-
CFO					year from
					Disassociation
Katherine YL Tung	50,000	-	50,000	0.02	Maximum one	-	-	-		-
Secretary and Treasurer					year from
					Disassociation
Charlie Rodriguez (3)	250,000	-	-	0.10	March 6, 2009
Ex-Secretary & Treasurer
and Ex-Director
Robert Clark (3)	250,000	-	-	0.10	January 22, 2009
Ex-CEO and Ex-Director
& Ex-Chairman

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(1)   Options granted in 2006 and 2008 for serving as a director of the Company.

(2)   Options granted in 2008 for serving as a director of the Company

(3)   Options granted in 2006 for serving as a director of the Company..

Retirement, Resignation or Termination Plans

Other than as provided for in the employment contracts for liquidating damages due to early termination of employment contracts without cause (for all employment contracts) and for one year restraining period for non-competitive activities (for Mr. King K Ng, our CEO, and Mr. Kok Keng Low, our COO and Mr. Yu Hua Chen, our Chief officer – Greater China), we sponsor no plan, whether written or verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement, resignation, or termination as a result of a change in control of our Company or as a result of a change in the responsibilities of an executive following a change in control of our Company.

Directors’ Compensation

We compensate each director by granting them stock options. The exercise price is equal to the closing price of our common stock on the date of the grant with the options vesting over a one year period in equal quarterly amounts. On September 28, 2006, in consideration of their service as directors of the Company for the period of one year from such date, we awarded the directors options under the Unregistered Plan to purchase a total of 1,650,000 restricted shares of our common stock at an exercise price of $0.13 per shares, vesting a quarter of the number of shares at the end of every three months. On February 26, 2007, the directors voluntarily cancelled all these unregistered options and we granted them options under the 2007 Plan to purchase the same amount of shares as the cancelled options at an exercise price of $0.10, vesting a quarter of the number of shares on March 1, 2007, May 1, 2007, July 1, 2007 and September 1, 2007. On August 5, 2008, we granted the 4 existing directors an option each under the Unregistered Plan to purchase 300,000 restricted shares of our common stock at an exercise price of $0.02 per share, vesting 75,000 shares on September 30, 2008 and 75,000 shares at the end of every three months thereafter. On September 5, 2008, 3 of the 4 existing directors voluntarily cancelled all their fully vested options granted to them under the 2007 Plan totaling 750,000 shares and the Company granted to each of them option under the Unregister Plan to purchase the same amount of restricted shares at an exercise price of $0.02 per share, vesting fully at the date of grant.

Indemnification

Pursuant to the articles of incorporation and bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in its best interest. In certain cases, we may advance expenses incurred in defending any such proceeding. To the extent that the officer or director is successful on the merits in any such proceeding as to which such person is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Regarding indemnification for liabilities arising under the Securities Act of 1933 which may be permitted for directors or officers pursuant to the foregoing provisions, we are informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, as expressed in the Act and is therefore unenforceable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 31, 2008 by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common and/or preferred stock.

Where the Number of Shares Beneficially Owned includes shares which presently exercisable options may be purchased upon the exercise of outstanding stock options which are or within sixty days will become exercisable (“presently exercisable options”) the percentage of class reported in this column has been calculated assuming the exercise of such. The percentages below are calculated based on the sum of 155,818,136 shares of our common stock issued and outstanding as of March 31, 2008 plus presently exercisable options directly owned by the officers and affiliates totaling 4,545,000 plus 7,040,611 presently exercisable warrants directly owned by the officers and affiliates, which is equal to 167,403,747.

Name and address of	Amount and nature of	Percent
Beneficial Owner	Beneficial Ownership	of Class
Officers and Directors:(1)
Ng King Kau (2)	7,372,736	4.70	%
Low Kok Keng (3)	16,040,927	9.58	%
Katherine YL ung  (4)	75,000	0.04	%
Choo Jee Sam (5)	14,506,222	8.67	%
Wong Chee Leong (6)	705,000	0.42	%
Chen Yu Hua (7)	4,600,000	2.75	%
All Officers and Directors as a Group (7 Persons)	43,299,885	25.87	%

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(1)		The address for each of the Company's directors and executive officers is the Company's principal offices, Cardtrend International, Inc. 800 5th Avenue, Suite 4100, Seattle, WA 98104.
(2)		Comprises 5,807,736 directly owned shares of common stock and 1,565,000 shares of common stock if exercised under presently exercisable options.
(3)		Comprises 14,865,927 shares of common stock (10,865,927 directly owned shares and 4,000,000 shares owned by spouse) and 1,175,000 shares of common stock if exercised under presently exercisable options.
(4)		75,000 shares of common stock if exercised under presently exercisable option.
(5)		Comprises 7,040,611 directly owned shares of common stock, 7,040,611 shares of common stock if exercised under presently exercisable warrants, and 425,000 shares of common stock if exercised under presently exercisable options.
(6)		705,000 shares of common stock if exercised under presently exercisable options.
(7)	Comprises 4,000,000 directly owned shares of common stock and 600,000 shares of common stock if exercised under presently exercisable options.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

As of December 31, 2008, our subsidiary, Cardtrend Systems Sdn. Bhd., owed RM291,322 (approximately $83,540) and the Company owed $74,187 to Mr. Kok Keng Low, one of our directors and Chief Operating officer, arising from balances of advances and loans extended by Mr. Low to the subsidiary and the Company in 2006, 2007 and 2008.

As of December 31, 2008, our subsidiary, Interpay Asia Sdn. Bhd., owed RM143,442 (approximately $41,134) and the Company owed $102,629 to Mr. King K. Ng, one of our directors and Chief Executive Officer, arising from balances of advances and loans extended by Mr. Ng in 2006, 2007 and 2008.

As of December 31, 2008, our subsidiary, Interpay Asia Sdn. Bhd. owed RM4,000 (approximately $1,147) and the Company owed $62,828 to Mr. Jee Sam choo, one of our directors and Chairman of the Board, arising from the balances of loans extended by Mr. Choo in 2007 and 2008.

As of December 31, 2008, our subsidiary, Asia Payment Systems (China) Co. Ltd., owed RMB8,775 (approximately $1,280) and the Company owed $75,935 to Mr. Yu Hua Chen, one of our directors and Chief Officer – China, arising from balances of advances extended by Mr. Chen in 2008.

As of December 31, 2008, the Company owed $10,530 to Ms. Katherine YL Tung, our Secretary and Treasurer, arising from balances of loans extended by Ms. Tung in 2008.

For the fiscal year ended December 31, 2008 and 2007, the Company paid a total service fee of $12,000 and $72,000, respectively, to Management Services of Arizona, a company related to Mr. Charlie Rodriguez, one of our ex-directors and ex-Secretary and Treasurer. As at December 31, 2007, we owed a balance of unpaid management fees of $6,000 to Management Services of Arizona. As at December 31, 2008, there was no owing to Management Services of Arizona.

As at December 31, 2008, the Company owed $17,578 to KateLin Enterprises Ltd., a company related to Ms. Tung, arising from the administrative and management services rendered to the Company for the period April 7, 2007 to December 31, 2008, totaling $17,578.

Interpay Asia Sdn. Bhd., a wholly owned subsidiary of IIG, continued during 2007, after IIG being acquired by the Company, to share the rental payable for the office premises by Safeway Assists Sdn. Bhd., a Malaysia incorporated company substantially owned by Mr. Jee Sam Choo, a Director of the Company. For the fiscal year ended December 31, 2007, Interpay Asia’s share of the rental amount was RM1,500 (approximately $452). As at December 31, 2008, Interpay Asia owed a total of RM8,620 (approximately $2,472) to Safeway Assist Sdn. Bhd.

Cardtrend Systems continued during 2007,after being acquired by the Company, to rent the office premises from Optimara Sdn. Bhd., a company owned by Mr. Kok Keng Low, our EVP - COO and a Director of the Company, and his wife, for a monthly rental of RM2,700 (approximately $814). For the fiscal year ended December 31, 2008 and 2007, a total rental amount of RM32,400 (approximately $9,650) and RM18,900 (approximately $5,701), respectively, was charged by Optima Sdn. Bhd. to Cardtrend Systems. As at December 31, 2008 and 2007, Cardtrend Systems owed RM2,700 (approximately $774) and nil respectively.

On August 8, 2007 the Company accepted an offer from Mr. Jee Sam Choo, a director of the Company, and an offer from the spouse of Mr. Choo, of a callable, on-demand convertible loan of $100,000 and $200,000, respectively (See Note 12 of Form 10KSB for the year ended December 31, 2007 previously filed). On October 3, 2007, the Company accepted another offer each from Mr. Choo and his wife, of a callable, on-demand convertible loan of $200,000 and $100,000, respectively (See Note 12 of Form 10KSB for the year ended December 31, 2007 previously filed). All the said loans were converted to shares of common stock on January 15, 2008 (See Note 11 of this Report).

On March 26, 2008, the Company accepted an offer each from 3 of its directors, Mr. Jee Sam Choo, Mr. Kok Keng Low and Mr. King K. Ng, of a callable, on-demand convertible loan of $27,000, totaling $81,000. On April 30, 2008, the Company accepted from each of the same said directors of a callable, on demand convertible loan of $12,000, totaling $36,000. On May 12, 2008, Company accepted from each of the same said directors of a callable, on demand convertible loan of $13,000, totaling $39,000. On June 10, 2008, Company accepted from each of the same said directors of a callable, on demand convertible loan of $10,000, totaling $30,000. On July 10, 2008, the Company accepted from Mr. Choo, Mr. Low and Mr. Ng of a callable, on demand convertible loan each of $5,000, $4,500 and $4,500, respectively, totaling $14,000. On July 25, 2008, the Company accepted from Mr. Choo and Mr. Ng of a callable, on demand loan each of $16,250 and $19,375, respectively, totaling $35,625. All the said convertible loans were redeemed by the said directors on September 19, 2008 (See Note 11 of this Report).

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On September 19, 2008, the Company accepted from Mr. Choo, Mr. Low and Mr. Ng of a convertible loan each, which is callable for repayment in cash after 6 months from the date of the loan, of $138,637.29, $69,036.39 and $88,718.16, respectively. As at December 31, 2008, the said convertible loans have neither been redeemed nor converted to shares of common stock of the Company (See Note 11 of this report.)

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth fees billed to the Company by (i) Weinberg & Company, CPA. and RBSM LLP during the year ended December 31, 2007, and (ii) RBSM LLP and ZYCPA Company Limited (formerly Zhong Yi (Hong Kong) CPA Company Limited) during the year ended December 31, 2008 for: (i) services rendered for the audits of the Company’s annual financial statements and the reviews of the Company’s quarterly financial statements, (ii) services that are reasonably related to the performance of the audits or reviews of the Company’s financial statements and that are not reported as Audit Fees, (iii) services rendered in connection with tax compliance, tax advice and tax planning, and (iv) all other fees for services rendered.

RBSM LLP replaced Weinberg & Company, CPA in June 2007 as the Company’s independent registered public accounting firm to audit the Company’s December 31, 2006 financial statements, as well as to review the re-statement of the financial statements for the quarter ended September 30, 2006 and the financial statements for the quarterly periods in 2007.  RBSM LLP also conducted the audit of the Company’s financial statements for the year ended December 31, 2007 which was filed on a Form 10KSB on April 15, 2008. ZYCPA Company Limited replaced RBSM LLP in April 2008 as the Company’s independent registered public accounting firm to review the financial statements for the quarterly period in 2008 and conducted the audit for the year ended December 31, 2008 which is now filed on a Form 10K. The following table shows the amounts of fees charged by Weinberg & Company, CPA and RBSM LLP, respectively, during the year ended December 31, 2007, and by RBSM LLP and ZYCPA Company Limited, respectively, during the year ended December 31, 2008, in connection with audits and other services rendered in 2008 and 2007.

		Year Ended December 31, 2008				Year Ended December 31, 2007
				ZYCPA				Weinberg & Co.,
		RBSM LLP		Company Limited		RBSM LLP		CPA
(i)    Audit Fees	$	221,135	$	62,000	$	325,200	$	35,341
(ii)   Audit Related Fees	$	-	$	-	$	-	$	-
(iii)  Tax Fees	$	-	$	-	$	-	$	-
(iv) All Other Fees	$	-	$	-	$	7,200	$	2,623
Total fees	$	221,135	$	62,000	$	332,400	$	37,964

Audit Fees

“Audit Fees” consists of fees billed for professional services rendered for the audits of the Company’s consolidated financial statements and reviews of the interim consolidated financial statements included in quarterly reports and services that are normally provided by the Company’s registered public accounting firms in connection with statutory and regulatory filings or engagements.

Audit-Related Fees

“Audit-Related Fees” consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under "Audit Fees" There were no Audit-Related services provided in fiscal years ended December 31, 2008 and 2007.

Tax Fees

“Tax Fees” consists of fees billed for professional services for tax compliance, tax advice and tax planning. There were no tax services provided in the years ended December 31, 2008 and 2007.

All Other Fees

“All Other Fees” consist of fees for products and services other than the services reported above. There were advisory services rendered during 2007 by RBSM LLP and Weinberg & Co., CPA, for acquisition and stock option plan. There were no similar services rendered during 2008.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

The Audit Committee which comprises all the members of the Board of Directors is to pre-approve all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Company’s Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following documents are filed as part of the Annual Report on form 10-K:

1. All Financial Statements: The consolidated financial statements are filed as part of this report under Item 8 - “Financial Statements and Supplementary Data”. All other schedules are omitted as the required information is inapplicable or the information is presented in the Consolidated Financial statements and notes thereto in Item 8 above.

2. Exhibits: The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC. Cardtrend International Inc. shall furnish copies of exhibits for a reasonable fee (covering the expense of furnishing copies) upon request.

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Exhibit Index:

Exhibit
Number		Description
3.1(a)		The Registrant’s Certificate of Incorporation, which appears as Exhibit 2 to the Registrant’s Form 10SB-12G filed on March 20, 2000 (SEC file #000-30013) which is incorporated herein by reference.
3.1(b)		The Registrant’s Certificate of Amendment to the Certificate of Incorporation dated November 2003, which appears as Exhibit 3.1to the Registrant’s Form 8K filed on December 19, 2003 (SEC file #000-30013) which is incorporated herein by reference.
3.1(c)		The Registrant’s Certificate of Amendment of Amended Certificate of Incorporation dated July 24, 2007, which appears as Exhibit 3.1 to the Registrant’s Form 10KSB/A for the year ended December 31, 2006 filed on August 23, 2007(SEC#000-30013) which is incorporated herein by reference.
3.1(d)	+	The Registrant’s Certificate of Amendment of Amended Certificate of Incorporation dated January 30, 2009.
3.2		The Registrant’s By-Laws, which appears as Exhibit 3 to the Registrant’s Form 10-12G filed on March 20, 2000 (SEC File #000-30013) which is incorporated herein by reference.
3.3		The Registrant’s Corporate Charter, which appears as the second Exhibit 1 to the Registrant’s Form 10SB-12G filed on March 20, 2000 (SEC file #000-30013) which is incorporated herein by reference
10.1*		The Registrant’s 2004 Non-qualified Stock Option Plan which appears as Exhibit 10.1 to the Registrant’s Form S-8 filed on May 20, 2004 (SEC File #333-115697)) which is incorporated herein by reference.
10.2*		The Registrant’s 2005 Stock Award Plan, which appears as Exhibit 99.1 to the Registrant’s Form S-8 filed June 20, 2005 (SEC File # 333-125969) which is incorporated herein by reference.
10.3*		The Registrant’s 2007 Non-qualified Stock Option Plan which appears as Exhibit 10.1 to the Registrant’s Form S-8 filed on February 2, 2007 which is incorporated herein by reference.
10.4*		Employment Contract of King K. Ng, Chief Executive Officer, dated May 22, 2006, which appears as Exhibit 99.2 to the Registrant’s Form 8K filed on June 1, 2007 (SEC File # 000-30013) which is incorporated herein by reference.
10.5*		Employment Contract of Kok Keng Low, Chief Operating Officer, dated September 28, 2006, which appears as Exhibit 10.2 to the Registrant’s Form 10QSB for the quarter ended September 30, 2006 filed on November 17, 2006 (SEC File # 000-30013) which is incorporated herein by reference.
10.6*		Employment Contract dated July 1, 2006 and addendum/amendment to the contract dated January 1, 2007 of Thomas CL Wong, CFO, which appears as Exhibit 10.8 to the Registrant’s Form 10KSB for the year ended December 31, 2006 filed May 21, 2007 (SEC File # 000-30013) which is incorporated herein by reference.
10.7*		Employment Contract of Yu Hua Chen, Chief Officer – Greater China, dated November 1, 2007,  which appears as Exhibit 10.1 to the Registrant’s Form 10KSB for the year ended December 31, 2007 filed on April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.8		Consulting Services Agreement between the Registrant and Scott Mac Caughern dated November 15, 2007, which appears as Exhibit 10.2 to the Registrant’s Form 10KSB for the year ended December 31, 2007 filed April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.9		Consulting Services Agreement between the Registrant and BullMarketMadness.Com LLC dated November 15, 2007, which appears as Exhibit 10.3 to thr Registrant’s Form 10KSB for the year ended December 31, 2007 filed April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.10		Consulting Services Agreement between the Registrant and Wan Mu Chun dated January 1, 2007, which appears as Exhibit 10.4 to the Registrant’s Form 10KSB for the year ended December 31, 2007 filed April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.11		Consulting Services Agreement between the Registrant and Wong Yee Tat dated January 1, 2008, which appears as Exhibit 10.5 to the Registrant’s Form 10KSB for the year ended December 31, 2007 filed April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.12		Business Development Agreement between the Registrant and Willow Cove Investment Group Inc.,` dated January 30, 2008,  which appears as Exhibit 10.6 to the Registrant’s Form 10KSB for the year ended December 31, 2007 filed April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.13		Business Development Agreement between the Registrant and Lim Han Seng dated March 10, 2008, which appears as Exhibit 10.7 to the Registrant’s Form 10KSB for the year ended December 31, 2007 filed April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.14		Administrative Services Contract between the Registrant and KateLin Enterprise Ltd. dated April 7, which appears as Exhibit 10.8 to the Registrant’s Form 10KSB for the year ended December 31, 2007 filed April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.15		Consulting Services Agreement between the Registrant and Adrian Yeo & Co. dated April 21, 2008, which appears as Exhibit 10.1 to the Registrant’s Form 10Q for the quarter ended September 30, 2008 filed November 14, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
10.16		Consulting Services Agreement between the Registrant and Kim Kok Hai dated September 12, 2008, which appears as Exhibit 10.2 to the Registrant’s Form 10Q for the quarter ended September 30, 2008 filed November 14, 2008 (SEC File # 000-30013) which is incorporated herein by reference.

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10.17	+	Convertible Promissory Note to RBSM LLP to the amount of $200,000 dated May 5, 2008.
10.18	+	Amendment to the Convertible Promissory Note to RBSM LLP to the amount of $200,000 dated October 30, 2008.
10.19	+	Convertible Promissory Note to Ng King Kau to the amount of $88,718.16 dated September 19, 2008.
10.20	+	Convertible Promissory Note to Low Kok Keng to the amount of $69,036.39 dated September 19, 2008.
10.21	+	Convertible Promissory Note to Choo Jee Sam to the amount of $138,637.29 dated September 19, 2008.
10.22	+	Convertible Promissory Note to Ho Yoon Fah to the amount of $31,758.33 dated September 19, 2008.
10.23	+	Convertible Promissory Note to Low Chin Hong to the amount of $148,590.15 dated September 19, 2008.
10.24	+	Convertible Promissory Note to Lim Yew Seng to the amount of $112,301.04 dated September 19, 2008.
11.1		Share Exchange Agreement with Ng King Kau and others for the acquisition of Interpay International Group Ltd. dated May 19, 2006, which appears as Exhibit 99.1 to the Registrant’s Form 8K filed on June 1, 2006 (SEC File # 000-30013) which is incorporated herein by reference.
11.2		Share Exchange Agreement with Kok Keng Low and others for the acquisition of Cardtrend Systems Sdn. Bhd. dated September 28, 2006, which appears as Exhibit 10.1 to the Registrant’s Form 10QSB for the quarter ended September 30, 2006 filed on November 17, 2006 (SEC File # 000-30013) which is incorporated herein by reference.
11.3		Sales and Purchase Agreement for the acquisition by Asia Payment Systems (HK) Ltd. of Global Uplink Ltd. in Hong Kong dated December 8, 2006, which appears as Exhibit 11.4 to the Registrant’s Form 10KSB for the year ended December 31, 2006 filed on May 21, 2007 (SEC File # 000-30013) which is incorporated herein by reference.
11.4		Business Alliance Agreement with SMS Biz Sdn. Bhd. dated November 28, 2006, which appears as Exhibit 11.1 to the Registrant’s Form 10KSB for the year ended December 31, 2006 filed on May 21, 2007 (SEC File # 000-30013) which is incorporated herein by reference.
11.5		Assignment of SMS Biz Distributorship Agreement with Etone Network Sdn. Bhd. to Payment Business Solutions Sdn. Bhd. dated December 1, 2006, which appears as Exhibit 11.2 to the Registrant’s Form 10KSB for the year ended December 31, 2006 filed on May 21, 2007 (SEC File # 000-30013) which is incorporated herein by reference.
11.6		Sales and Purchase `Agreement for the assets in the operating center of Global Uplink Communications Ltd. entered into between Asia Payment Systems (China) Co. Ltd. and Global Uplink Communications Ltd. on December 8, 2006 which appears as Exhibit 11.3 to the Registrant’s Form 10KSB for the year ended December 31, 2006 filed on May 21, 2007 (SEC File # 000-30013) which is incorporated herein by reference.
11.7		Exclusive Service Agreement between Asia Payment Systems (China) Co. Ltd. and Global Uplink Communications Ltd. dated October 24, 2007, which appears as Exhibit 10.5 to the Registrant’s Form 10Q for the quarter ended September 30, 2007 filed November 15, 2007 (SEC File # 000-30013) which is incorporated herein.
11.8		Share Exchange Agreement with Yap Kit Chuan and others for the acquisition of SMS Biz Sdn. Bhd. dated January 18, 2009, which appears as Exhibit 11.1 to the Registrant’s Form 10KSB filed on April 15, 2008 (SEC File # 000-30013) which is incorporated herein by reference
14.1		Registrant’s Code of Ethics, which appears as Exhibit 14.1 to the Registrant’s Form 10KSB for the year ended December 31, 2003 filed on April 20, 2004 (SEC File # 000-30013) which is incorporated herein by reference.
16.1		Letter from RBSM LLP to the Securities and Exchange Commission regarding change in certifying accountant, which appears as Exhibit 16.1 to the Registrant’s Form 8-K dated April 23, 2008 (SEC File # 000-30013) which is incorporated herein by reference.
16.2		Letter from Weinberg & Co., CPA to the Securities and Exchange Commission regarding change in certifying accountant, which appears as Exhibit 16.1 to the Registrant’s Form 8-K dated June 8, 2007(SEC File # 000-30013) which is incorporated herein by reference.
21	+	Subsidiaries and Associated Companies of the Registrant as of March 31, 2009.
31.1	+	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by King K. Ng, the Registrant’s Chief Executive Officer.
31.2	+	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Thomas CL Wong,, the Registrant’s Chief Financial Officer.
32.1	+	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by King K. Ng, the Registrant’s Chief Executive Officer.
32.2	+	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Thomas CL Wong, the Registrant’s Chief Financial Officer.

*		Indicates that exhibit is a management contract or compensatory plan or arrangement.
	+	Indicates that exhibit is filed herewith in this Annual Report.

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 SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 15th day of April, 2009.

CARDTREND INTERNATIONAL INC.
A Nevada corporation
By:	KING K. NG
	King K. Ng
	Chief (Principal) Executive Officer
By:	THOMAS CL WONG
	Thomas CL Wong
	Chief (Principal) Financial Officer

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

Signatures	Title	Date
KING K. NG	Director , President and Chief (Principal) Executive Officer	April 15, 2009
King K. Ng
KOK KENG LOW	Director, Executive Vice President and Chief Operating Officer	April 15, 2009
Kok Keng Low
JEE SAM CHOO	Director, Chairman	April 15, 2009
Jee Sam Choo
YU HUA CHEN	Director, Chief Officer – Greater China	April 15, 2009
Yu Hua Chen

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EXHIBITS

Exhibit
Number	Description
3.1(d)	The Registrant’s Certificate of Amendment of Amended Certificate of Incorporation dated January 30, 2009.
10.17	Convertible Promissory Note to RBSM LLP to the amount of $200,000 dated May 5, 2008.
10.18	Amendment to the Convertible Promissory Note to RBSM LLP to the amount of $200,000 dated October 30, 2008.
10.19	Convertible Promissory Note to Ng King Kau to the amount of $88,718.16 dated September 19, 2008.
10.20	Convertible Promissory Note to Low Kok Keng to the amount of $69,036.39 dated September 19, 2008.
10.21	Convertible Promissory Note to Choo Jee Sam to the amount of $138,637.29 dated September 19, 2008.
10.22	Convertible Promissory Note to Ho Yoon Fah to the amount of $31,758.33 dated September 19, 2008.
10.23	Convertible Promissory Note to Low Chin Hong to the amount of $148,590.15 dated September 19, 2008.
10.24	Convertible Promissory Note to Lim Yew Seng to the amount of $112,301.04 dated September 19, 2008.
21	Subsidiaries and Associated Companies of the Registrant as of March 31, 2009.
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by King K. Ng, the Registrant’s Chief Executive Officer.
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Thomas CL Wong, the Registrant’s Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by King K. Ng, the Registrant’s Chief Executive Officer.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Thomas CL Wong, the Registrant’s Chief Financial Officer.

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