Ibsg International 10QSB 2007 Q2 Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2007

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

Commission file number 000-29587

IBSG INTERNATIONAL, INC.

(Name of small business issuer in its charter)

Florida	65-0705328
(State or other jurisdiction of incorporation )	(I.R.S. Employer identification No.)

1132 Celebration Blvd., Celebration, FL 34747

(Address and Zip Code of Principal Executive Offices)

Registrant’s Telephone Number: (321) 939-6321

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value per share

(Title of Class)

Check whether the issuer: (i) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes |_| No |X|

As of July 25, 2007, there were 9,436,637 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: none

Transitional Small Business Disclosure Format Yes |_| No |X|

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IBSG INTERNATIONAL, INC.

Part I. Financial Information

Item 1. Condensed Consolidated Financial Statements and Notes to Consolidated Financial Statements

(a)	Consolidated Balance Sheets as of June 30, 2007 (unaudited)

(b)	Consolidated Statements of Operations for the Three Months ended June 30, 2007 and 2006 (unaudited)

(c)	Consolidated Statement of Cash Flow for the Three Months Ended June 30, 2007 and 2006 (unaudited)

(d)	Notes to Consolidated Financial Statements (unaudited)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of

Operations

Item 3. Controls and Procedures

Part II. Other Information

Item 1. Legal Proceedings

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 3. Defaults upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits

Signatures

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PART I FINANCIAL INFORMATION

General

The accompanying reviewed financial statements have been prepared in accordance with the instructions to Form 10-QSB. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flow, and stockholders’ equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the company’s annual report on Form 10-KSB for the year ended December 31, 2006. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the quarter ended June 30, 2007 are not necessarily indicative of the results that can be expected for the year ended December 31, 2007.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2007

(Unaudited)

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Balance Sheet

(Unaudited)

ASSETS

CURRENT ASSETS		June 30, 2007

Cash	$	3,122,319
Accounts receivable net of allowance for bad debt		19,941,267
Prepaid expenses		380,840

Total Current Assets		23,444,426

FURNITURE, FIXTURES AND SOFTWARE, NET		881,732

OTHER ASSETS
Account receivable - long term		1,769,379
Deposits		4,164
Other assets		425,700
Deferred consulting services		2,945,705

Total Other Assets		5,144,948

TOTAL ASSETS	$	29,471,106

The accompanying notes are an integral part of these consolidated financial statements.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Balance Sheet (Continued)

(Unaudited)

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES		June 30, 2007

Accounts payable and accrued expenses	$	887,555
Accrued tax provision		3,302,981
Deferred revenue		2,733,196
Capital leases payable		1,782

Total Current Liabilities		6,925,514


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY

Common stock authorized 100,000,000 shares at $0.001
par value; 9,071,430 shares issued and outstanding		9,071
Additional paid-in capital		18,367,997
Retained Earnings		4,168,524

Total Stockholders’ Equity		22,545,592

TOTAL LIABILTIES AND STOCKHOLDERS’ EQUITY	$	29,471,106

The accompanying notes are an integral part of these consolidated financial statements.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)


	Three months ended June 30,					Six months ended June 30,
		2007		2006			2007		2006


Sales	$	3,058,544	$	3,000,772		$	6,089,260	$	4,699,584

Cost of Sales		89,093		68,042			178,186		136,085

Gross Profit		2,969,451		2,932,730			5,911,074		4,563,499

Operating Expenses
Amortization and Depreciation		6,915		9,425			14,819		19,819
Stock based compensation		412,477		301,332			710,142		647,921
Bonus		-		-			-		25,000
Bad debt expense		110,000		-			286,000		-
General and Administrative		430,007		897,332			1,053,988		1,365,991
Total Operating Expenses		959,399		1,208,089			2,064,949		2,058,731

Income from Operations		2,010,052		1,724,641			3,846,125		2,504,768

Other Income (Expense)
Loss on debt settlement and warrants		-		-			-		(470,897)
Change in Fair Value of embedded options		-		-			-		(18,683)
Change in Fair Value of warrants		-		-			-		(61,181)
Liquidated damages expense		-		-			-		-
Interest Income		32,947					65,893
Tax Provision		(160,988)		(677,556	)		(965,741)		(689,744)
							-		-
Total Other Income (Expense), net		(128,041)		(677,556	)		(899,848)		(1,240,505)

Net Income	$	1,882,011	$	1,047,085		$	2,946,277	$	1,264,263

Net Income Per Share - Basic/Diluted	$	0.26	$	0.15		$	0.42	$	0.19


Weighted average number of shares outstanding during the period – Basic/Diluted		7,234,173		6,827,154			7,072,895		6,720,714

The accompanying notes are an integral part of these consolidated financial statements.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

		For the Six Months Ended
		June 30,
		2007		2006

CASH FLOW FROM OPERATING ACTIVITIES:

Net Income	$	2,946,277	$	1,264,263
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Recognition of deferred consulting fee		595,331		587,334
Bad debt expense		286,000		-
Amortization and depreciation expense		193,004		155,906
Amortization of deferred interest		(65,892)		-
Loss on settlement of debt		-		470,897
Stock issued for services		4,342		20,000
Changes in operating assets and liabilities:
Accounts receivable		(4,440,483)		1,745,879
Prepaids		73,913		88,238
Decrease (increase) in other assets		(216,896)		(3,004,164)
Increase (decrease) in accounts payable and accrued expenses		(76,981)		(270,616)
Accrued interest payable		-		(55,425)
Accrued liquidated damages		-		11,613
Accrued tax provision		1,181,341		689,744
Deferred revenue		(466,265)		(806,314)

Net Cash Provided by Operating Activities		13,691		897,355

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of fixed assets		(12,570)		(17,824)

Net Cash (Used) by Investing Activities		(12,570)		(17,824)

CASH FLOWS FROM FINANCING ACTIVITIES:

Capital Contribution		25,000		-
Repurchase of stock from shareholders		-		(979,406)
Payment of investor		-		(125,000)
Payments on Note Payable		-		(250,000)
Payments on capital leases		(2,249)		(7,368)
Proceeds from stock subscription payable		-		353,270
Stock offering costs		-		(1,300)
Common stock issued for cash		2,134,801		19,833

Net Cash Provided (Used) by Financing Activities		2,157,552		(989,971)

NET INCREASE (DECREASE) IN CASH		2,158,673		(110,440)

CASH AT BEGINNING OF PERIOD		963,646		1,297,448

CASH AT END OF PERIOD	$	3,122,319	$	1,187,008

The accompanying notes are an integral part of these consolidated financial statements.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

(Unaudited)

		For the Six Months Ended
		June 30,
		2007		2006

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest paid	$	-	$	-
Income taxes paid	$	-	$	-

SCHEDULE OF NON-CASH FINANCING ACTIVITIES
Common stock issued for services	$	4,360	$	-

The accompanying notes are an integral part of these consolidated financial statements.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2007

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company’s most recent 8-K filings and audited financial statements and notes thereto included in its December 31, 2006 Annual Report on Form 10-KSB. Operating results for the six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Method

The consolidated financial statements are prepared using the accrual method of accounting. The Company has elected a calendar year end

b. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

c. Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

d. Revenue Recognition

Revenue Recognition

We derive our revenue from the sale of products and services that we classify into the following sources: (1) licenses, (2) post-contract customer support, (3) professional services.

Background

We sell our services and license our products thru master licensee arrangements with state operated Small Business Development Centers (“SBDC”), Fortune 1000 Corporations, Business Associations, Banking Institutions and International Economic Development Projects. These organizations represent our current customer base, and focus on servicing or supporting small and medium sized enterprises (SME). Our target market is comprised of emerging enterprises in need of a suite of Business-to-Business products or Web enabled capabilities, but lack the resources required for internal development or are focusing their resources on growth by outsourcing these capabilities. Master license arrangements currently produce the majority of our revenue. We utilize written contracts in the form of master license arrangements as the means to establish the terms and conditions upon which our products and services are sold.

Master License Customer Characteristics

As discussed above, Master Licensee’s represent our current customer base and generate the majority of our current revenue. Master licenses arrangements are characterized by the following;


o		Master License arrangements typically represent larger value “multiple element” arrangements where a multi-year term license is delivered bundled with the first year of post contract support and certain professional services. Professional services are accounted for separately and are not considered essential to the functionality of the software. Master license holders can accept delivery either by electronic download to their system or by accessing their software residing on our system through the Internet. Only minimal installation and training are required. Revenue is recognized on master license or similar arrangements in accordance with the policies discussed below;

o	the license element is recognized when the license becomes accessible,
o	the post-contract customer support element is recognized ratably over the support period,

o	professional services are recognized as services are delivered.

General

We recognize revenue in accordance with the American Institute of Certified Public Accountants Statement of Position (“SOP”) 97-2, ��Software Revenue Recognition,” as modified by SOP 98-9 “Modifications of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions,” and interpreted by the Securities and Exchange Commission Staff Accounting Bulletin (“SAB”) No. 104 - Revenue Recognition. The Company adopted Emerging Issues Task Force (“EITF”) Issue No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables.

As described below, significant management judgments and estimates are made and used to determine the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if our management made different judgments or utilized different estimates.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2007

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

We recognize revenue on software related transactions on single element arrangements and on each element of a multiple element arrangement, when all of the following criteria are met:


1.	Persuasive evidence of an arrangement exists, which consists of a written, non-cancelable contract signed by both the customer and us.


2.	The fee is fixed or determinable when we have a signed contract that states the agreed upon fee for our products and/or services, which specifies the related payment terms and conditions of the arrangement and it is not subject to refund or adjustment. We have standard payment terms, typically net 60 days, included in our contracts.


3.	Delivery occurs,


a.		For licenses - due to the Web nature of our software, when access to the software is made available to our customer through the Internet or the software is delivered electronically. Our arrangements are typically not contingent upon the customer providing the hardware, staff for training or scheduling conflicts in general nor do our arrangements contain acceptance clauses. If they did, delivery occurs after the customer has accepted the software.


b.	For post-contract customer support - ratably over the annual service period.


c.	For professional services - as the services are performed for time and materials contracts or upon achievement of milestones on fixed price contracts.

4.	Collection is probable as determined by a credit evaluation, the customer’s payment history (either with other vendors or with us in the case of follow-on sales and renewals) and financial position.

For “multiple-element” arrangements we recognize revenue using the residual method in accordance with SOP 98-9. Under the residual method, a portion of the arrangement fee is allocated to the undelivered elements based on vendor specific objective evidence (“VSOE”) of the fair value of such undelivered elements, deferred and recognized over the initial service period, typically one year. The remaining portion of the arrangement fee is allocated to the delivered elements and recognized as revenue, provided all other revenue recognition criteria have been met. The undelivered elements in these arrangements typically consist of Post-contract Customer Support services and Professional Services. The VSOE for Post-contract Customer Support is based on the stated renewal rate in the license arrangements. The VSOE for Professional Services is based on the published rates for time and materials associated with such projects.

License Revenue

License revenues are primarily generated from the sale of master license agreements to SBDC’s and other potential master licensees. License arrangements are typically sold with the first year of Post-contract Customer Support included. As such, the combination of these products and services represent a “multiple-element” arrangement for revenue recognition purposes.

Our revenue recognition policy for multiple-element arrangements, as described above, generally results in 65% of the first year arrangement fee being allocated to license revenue, the delivered element. Recognition of license revenue occurs in the first month, once all the recognition criteria discussed above are met. License revenue is intended to cover the initial development cost and testing of the software and the System.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2007

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

d. Revenue Recognition (Continued)

Post-contract Customer Support (“PCS”) Revenue

Post-contract customer support includes technical support, maintenance, enhancements, upgrades and in some cases system access. License arrangements are typically sold with the first year of PCS included. The customers can also purchase annual PCS renewals over their arrangement term, which is typically 5 years. Enhancements and upgrades are made available on a “when and if” basis and are rarely if ever based on specifically identified enhancements.

Our revenue recognition policy for multiple-element arrangements, as described above, generally results in 35% of the initial arrangement fee being allocated to PCS, the undelivered element at the time the license arrangement is entered into. The customers can also acquire additional annual PCS renewal contracts. The PCS renewal rate utilized in subsequent years is consistent with the 35% allocation to PCS in the initial year. Recognition of PCS revenue occurs ratably over the PCS service period, once all the recognition criteria discussed above are met.

Professional Services Revenue

Professional services include training and installation services. Training and installation are separately described and priced in the license arrangement and can be delivered at any time after the license has been conveyed.

Because of the Web nature of product delivery, little installation support is required. The System also includes extensive on-line training capabilities (Virtual Trainer) at the time the license is conveyed and is available for every page in the System. No additional formal training on System use is required or provided. Supplemental training, if required, is generally restricted to System administration training. Training revenues are recognized as the services are performed.

Professional services are not considered essential to the functionality of the other elements of the arrangement and are accounted for as a separate element. Professional services are recognized as the services are performed for time and materials contracts or upon achievement of milestones on fixed price contracts. A provision for estimated losses on fixed-price professional services contracts is recognized in the period in which the loss becomes known. No losses have been recorded to date.

Factors for Government or Quasi-Government Agency Customers

Most of our current customers are government or quasi-government agencies and are considered a low collection risk. However, due to the “slow pay” nature of these entities, payments could take as long as 12 months to be brought current, although management expects to reduce that time to no more than 9 months. As more fully discussed in SOP 97-2, the fees are determined to be fixed and determinable because;

·	our software is not subject to obsolescence, any more than is typical for comparable software and we have not made concessions to effect collections,
·	our software is integral to the fundamental mission of our master license customers,

·	our contracts are long term, generally greater then 12 months and collections on invoices are expected to be less than 12 months,
·	our contracts provide for normal collection terms which are substantially less than the term of our agreements and further permit the assessment of late fees and interest on delinquent balances,

·	our contracts are with government entities, and by law, these entities are precluded from not disbursing funds that have been approved and allocated for the license agreement,
·	our contracts do not include any Fiscal Funding Clauses,

·	our contracts do not include any Rights of Return or Cancellation Clauses, and
·	payment is not dependant on the number of SME’s engaged.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2007

d. Revenue Recognition (Continued)

Deferred Revenue

Deferred revenue result from fees billed to customers for which revenue has not yet been recognized. Deferred revenue generally represents PCS and training services not yet rendered and deferred until all requirements under SOP 97-2 are met. Deferred revenue is recognized upon delivery of our products, as services are rendered, or as other requirements requiring deferral under SOP 97-2 are satisfied.

Allowance for Doubtful Accounts and Sales Returns

A considerable amount of judgment is required when we assessed the realization of accounts receivables, including assessing the probability of collection and the current credit-worthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional provision for doubtful accounts might be required. A provision for doubtful accounts would initially be recorded based on our historical experience, and then adjusted at the end of each reporting period based on a detailed assessment of our accounts receivable and allowance for doubtful accounts. In estimating the provision for doubtful accounts, we consider (i) the type of entity (government, commercial, retail) and the aging of the accounts receivable; (ii) trends within and ratios involving the age of the accounts receivable; (iii) the customer mix in each of the aging categories and the nature of the receivable, such as whether it derives from license, professional services or maintenance revenue; (iv) our historical provision for doubtful accounts; (v) the credit worthiness of the customer; and (vi) the economic conditions of the customers industry, whether the entity is a national government, as well as general economic conditions, among other factors. National governments accounts are characterized as fully collectible but slow payers. The bulk of our historic client base is primarily composed of national governments; our periodic valuations do not indicate that an allowance for doubtful accounts was necessary at this time.

In the first quarter of 2007, the Company has expanded its customer base outside of national governmental account. Due to this expansion, management has currently reevaluated its policies for establishing an allowance for doubtful accounts and sales return allowance specific to this new customer. This new customer base includes state sponsored economic development councils and other quasi-governmental agencies along with corporate based SBDC’s and SME’s. The addition of these new customer types generally represents a higher level of business risk than do national government customers. Management is changing its estimates specific to this new customer base to use a percentage of sales revenue as the basis for its allowance. Management believes that this change better addresses the diverse nature of its future customer base. This allowance is not established for any particular customer but will be applied to the new customer types. The percentage will be applied consistently among all contracts generated from new customer types. Management has determined that 5% of sales should provide an adequate allowance. For the six months ending June 30, 2007 the amount was $286,000.

In summary, estimates for establishing an allowance for doubtful accounts and sales returns applicable to national government account will be based on our existing method referred to above. Estimates for allowance for doubtful accounts and sales returns applicable to the new customer types will be based on the percentage of sales method.

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2007

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Should any of these factors change, the estimates that we make may also change, which could impact our future provision for doubtful accounts. For example, if the financial condition of our customers were to deteriorate, affecting their ability to make payments, an additional provision for doubtful accounts could be required.

Listed below, separately, are receivables above $3,000,000. This does not reflect sub-licenses of our customers. Our accounts receivable are as follows at June 30, 2007:

Current – Account Receivable
State of California	$	3,153,620
Drako Oil		3,500,000
Department of Trade and Industry		6,006,430
Kenya		4,050,000
	$	16,710,050
Other Receivables		3,517,217
Less Allowance for Bad Debts		(286,000)
Total Current Account Receivable	$	19,941,267

Accounts Receivable - Long term
Galaxy Five (net of discount)	$	1,769,379
Total Long term receivable	$	1,769,379

We recognized revenue of the following amounts for the three months ended June 30, 2007:

Revenue
State of California	$	152,644
Drako Oil		408,333
Kenya		331,589
Department of Trade and Industry		2,165,977
Total Recognized Revenue	$	3,058,544

Deferred revenue consisted of the following at June 30, 2007:

State of California	$	328,478
Kenya		335,234
Drako Oil		412,820
Department of Trade and Industry		2,006,664
Total Deferred Revenue	$	2,733,196

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IBSG INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2007

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

e. Equity Transactions

Equity transactions for consideration other than cash are valued at the closing trading price of the Company’s common stock on the date of authorization.

f. Depreciation and Amortization

The Company is depreciating its furniture on a straight-line basis over 5 years and equipment on a straight-line basis over a three-year period. The software acquired is being amortized on a straight line over a five-year period.

NOTE 3 - EQUITY ISSUANCES

In February 2007, the Company retired 17,864 shares of common stock valued at $0.18.

In May 2007 the Company issued 32,500 shares of common stock for cash valued at $1.02.

In May 2007 the Company issued 2,000 shares of common stock for service valued at $2.18.

In May 2007 the Company issued 1,562,500 shares of common stock for cash investment valued at $1.10.

In June 2007 the Company issued 46,285 shares of common stock valued at $1.10.

In June 2007 the Company issed 357,143 shares of common stock for cash investment valued at $1.00.

NOTE 4 – SUBSEQUENT EVENTS

In July 2007 the Company issued 384,111 shares of stock for the members of the board of directors and officers valued at $ 1.80.

In the third quarter, the Company expects to close an offer to raise $2,500,000 in investments. The raised funds will go into operation.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis contains various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-QSB, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company adopted at management’s discretion, the most conservative recognition of revenue based on the most astringent guidelines of the SEC in terms of recognition of software licenses and recurring revenue. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.

Management’s Discussion and Analysis of Consolidated Results of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the consolidated financial statements included herein. Further, this quarterly report on Form 10-QSB should be read in conjunction with the Company’s Consolidated Financial Statements and Notes to Consolidated Financial Statements included in its 2005 Annual Report on Form 10-KSB. In addition, you are urged to read this report in conjunction with the risk factors described herein.

Overview

IBSG International, Inc. is a holding company for four software subsidiaries: Intelligent Business Systems Group, Inc. (IBSG), a provider of turn-key digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider, and Intelligent Business Systems Development (IBSD), a software development, maintenance and data storage company and; IBSGI UK, LTD (formally A-Division IT), a consultant company focused on development of IT projects for multi-national corporations.

IBSGI UK, LTD. (IBSGI UK), a United Kingdom based subsidiary, provides business development support in IBSG International’s (IBSGI) South African project. IBSGI UK maintains relationships with several international corporations’ offset programs and provides IT projects for these corporations. IBSGI UK is engaged in international business development and consultancy in the Technology sector. IBSGI UK’s participation in e-commerce platform (BizWorld Pro, copyrighted and trade mark protected) projects for Small-Midsized Enterprises [SMEs] internationally in countries beyond South Africa. IBSGI’s relationship with IBSGI UK has already brought the South African project and opportunities with similar projects in Africa and Europe (EU and UK) and India.

IBSGroup offers BizWorld Pro as a solution to enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g., Chambers of Commerce) and Fortune 1000 corporations through the licensing its unique turnkey digital service center software, which provides a broad range of digital budgetary, administrative and commercial services (B2B, e-commerce, government to business and enterprise business services) on a single platform.

Secure Blue, Inc. provides, in management’s opinion, an economical Sarbanes-Oxley (SOX) compliance and security software suite, Secure Blue Pro. This product is targeted to small and mid cap public companies as well as private companies that work with public companies and must be in compliance with SOX as a result of working with a public company.

IBSD, Inc. will provide ongoing support of International's other subsidiaries, IBS Group, Secure Blue, and A-Division IT. The company provides development, system support and secure data storage, and maintains offices in the US and India, where its current offshore development and support team is located.

As software providers, system integrators and Application Service Providers, IBSG, Inc. and Secure Blue, Inc. generate revenue from license sales, system modifications, systems support, and a percentage of monthly customer fees. The typical IBSG/Secure Blue license agreement has a five-year term, but, being updated on an annual basis, has historically been renewed upon expiration (to date the company has had only one licensee not renew, due to the expiration of the licensee's contract with their client).

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Critical Accounting Policies and Estimates

The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. A critical accounting policy is one that is both very important to the portrayal of our financial condition and results, and requires management’s most difficult, subjective or complex judgments. Typically, the circumstances that make these judgments difficult, subjective and/or complex have to do with the need to make estimates about the effect of matters that are inherently uncertain. We believe the accounting policies below represent our critical accounting policies:

• Revenue recognition;

• Estimating sales returns and the allowance for doubtful accounts;

• Value of long lived assets including purchased software;

• Valuation of services paid for with common stock.

We derive our revenue from the sale of products and services that we classify into the following sources: (1) licenses, (2) post-contract customer support, (3) professional services.

Background

Master License Customer Characteristics

As discussed above, Master Licensee’s represent our current customer base and generate the majority of current revenue. Master license arrangements are characterized by the following;


o		Master License arrangements typically represent larger value “multiple element” arrangements where a multi-year term license is delivered bundled with the first year of post contract support and certain professional services. Professional services are accounted for separately and are not considered essential to the functionality of the software. Master license holders can accept delivery either by electronic download to their system or by accessing their software residing on our system through the Internet. Only minimal installation and training are required. Revenue is recognized on master license or similar arrangements in accordance with the policies discussed below;

o	the license element is recognized when the license becomes accessible,
o	the post-contract customer support element is recognized ratably over the support period,

o		professional services are recognized as services are delivered.

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General

We recognize revenue in accordance with the American Institute of Certified Public Accountants Statement of Position (“SOP”) 97-2, “Software Revenue Recognition,” as modified by SOP 98-9 “Modifications of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions,” and interpreted by the Securities and Exchange Commission Staff Accounting Bulletin (“SAB”) No. 104 - Revenue Recognition. The Company adopted Emerging Issues Task Force (“EITF”) Issue No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables.

We recognize revenue on software related transactions on single element arrangements and on each element of a multiple element arrangement, when all of the following criteria are met:


5.	Persuasive evidence of an arrangement exists, which consists of a written, non-cancelable contract signed by both the customer and us.


6.	The fee is fixed or determinable when we have a signed contract that states the agreed upon fee for our products and/or services, which specifies the related payment terms and conditions of the arrangement and it is not subject to refund or adjustment. We have standard payment terms, typically net 60 days, included in our contracts.


7.	Delivery occurs,


a.		For licenses - due to the Web nature of our software, when access to the software is made available to our customer through the Internet or the software is delivered electronically. Our arrangements are typically not contingent upon the customer providing the hardware, staff for training or scheduling conflicts in general nor do our arrangements contain acceptance clauses. If they did, delivery occurs after the customer has accepted the software.


b.	For post-contract customer support - ratably over the annual service period.


c.	For professional services - as the services are performed for time and materials contracts or upon achievement of milestones on fixed price contracts.

8.	Collection is probable as determined by a credit evaluation, the customer’s payment history (either with other vendors or with us in the case of follow-on sales and renewals) and financial position.

License Revenue

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Post-contract Customer Support (“PCS”) Revenue

Professional Services Revenue

Factors for Government or Quasi-Government Agency Customers

·	our software is not subject to obsolescence, any more than is typical for comparable software and we have not made concessions to effect collections,
·	our software is integral to the fundamental mission of our master license customers,

·	our contracts are long term, generally greater then 12 months and collections on invoices are expected to be less than 12 months,
·	our contracts provide for normal collection terms which are substantially less than the term of our agreements and further permit the assessment of late fees and interest on delinquent balances,

·	our contracts are with government entities, and by law, these entities are precluded from not disbursing funds that have been approved and allocated for the license agreement,
·	our contracts do not include any Fiscal Funding Clauses,

·	our contracts do not include any Rights of Return or Cancellation Clauses, and
·	payment is not dependant on the number of SME’s engaged.

Deferred Revenue

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Market for our products

The potential market for the BizWorld Data System includes any entity that has a customer, vendor or membership base comprised of small to mid size business enterprises. The potential markets for Secure Blue are public companies required to establish internal control systems or companies that require tracking of sensitive files. All current and projected revenues for the Company are associated with the digital commerce platform, BizWorld Pro and the recurring revenues projected from both license revenues and on going monthly subscription fees from small to mid sized enterprises. The projected market size for BizWorld Pro is greater than $15 billion annually. No assurances can be made that such market shall be realized or result in profitability.

The market for the BizWorld Data System includes state operated Small Business Development Centers, business organizations such as chambers of commerce, large corporations, and other entities which seek to help small and medium size businesses succeed. When Intelligent Business Systems Group, Inc. sells a master “host” license to a state Small Business Development Center or business associations (i.e. chambers of commerce), that entity can sell “sub-licenses' to the other vertical markets in their respective states or markets, from which Intelligent Business Systems Group, Inc. may receive incremental revenue. This market represents a projected $2.5-$3.5 billion NOT including international application. No assurances can be made that such market shall be realized or result in profitability.

Small Business Development Centers (SBDCS):

Many states operate Small Business Development Centers funded by a combination of US Small Business Administration and state resources. The purpose of these centers is to provide a range of assistance and training to the small and mid-size business sector. We currently have a license agreement with California's small business development center system which has fifty regional offices, and an agreement with the state of Connecticut to install such a system for their 12 regional offices.

Fortune 1000 Corporations:

Intelligent Business Systems Group, Inc. suggests that Small Business Development Centers seek to sell Corporate Sponsor subscription licenses to Fortune 1000 corporations for an average of $75,000/year. This license would provide the sponsor with unlimited access to the constituent pool of the Small business development centers small-mid size businesses of which a significant percentage are minority owned in order to facilitate the large corporation's recruitment of small and minority owned businesses as vendors. The System platform permits end users to interact not only with these large corporations, but also among each other. Intelligent Business Systems Group, Inc. anticipates receiving 60% of all such licenses sold. To date no such sponsorship licenses have been sold.

Business Associations:

Other business associations such as local chambers of commerce have membership or offer services to small and medium size businesses. We seek to license the BizWorld Data System to these organizations as a way of providing additional services and generate additional revenues.

Banking Institutions

Many major banking institutions maintain divisions specializing in providing banking services to small-to-medium sized businesses. These banks can add BizWorld access to their customers to encourage their use of the internet to grow their businesses, add another revenue stream to their own business services offerings, and create an excellent new communication tool whereby the bank can pursue enhanced revenue relationships for their existing service offerings.

Economic Development Projects

These markets reflect a combination of the above market needs. The BizWorld Data System can provide them with similar benefits and the ability to create multiple associations with the other markets in a similar fashion as previously described.

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Foreign Markets

In 2004 we signed a license agreement with an agency of the country of Nigeria. We are positioning the product as a national solution for the support and development of the small to mid size business community (SMEs) and provide access to the same by larger corporations and government entities. By providing the ability to manage developing businesses on the internet while creating a robust internet presence, small to mid size businesses will be enabled for domestic and international business. In 2005, we signed the Republic of South Africa and a SME development and support platform in conjunction with international corporations’ offset programs. Additional business development efforts through IBSGI UK under this program and directly with various foreign governments are currently occurring in multiple other nations. No assurances can be given that any new business will materialize from these efforts.

Secure Blue Markets

Secure Blue will be targeting small to mid size cap public companies. Because of the broad encompassing nature of the SOX legislation, any private company doing business with a public company, both in the US and abroad, must be SOX compliant for those records dealing with that business. This market represents a projected value of $3-$4 billion. Currently in the US there are an estimated 10,000 small cap companies and over 10,000 private companies doing business with public companies. No assurances can be made that such market shall be realized or result in profitability.

International Markets

Many aspects of the Sarbanes-Oxley Act are to be incorporated into new European legislation later in 2005 and this will lead to rapid growth and a huge global market for SOX solutions well in excess of the US projection. Additionally, foreign companies doing business with US public companies will be required to be SOX compliant as well. It is our objective to establish Secure Blue in the US before expanding into European and Asian markets.

Sales & Market Strategy

Intelligent Business Systems Group, Inc. current marketing effort primarily consists of “word of mouth” referrals from existing or potential customers, targeted prospect awareness campaigns, various conventions and trade shows and cold calling entities with resources and marketing research. The most effective and powerful marketing tool is the demonstration of the system and its comprehensive features. Demonstrations and contract negotiations are handled on a personal basis.

To achieve our growth plans Intelligent Business Systems Group, Inc. needs to employ more business developers, present a more visible presence at conventions and accelerate contract implementation. We also anticipate the need to provide enhanced training and marketing services to its customers, which can best be achieved by acquiring existing service companies with expertise in that field. The addition of more technical staff will accelerate contract implementation and add-on work (system modifications) as the customer base is extended. There can be no assurance that we will be able to meet our growth plans or have sufficient financial resources to provide the enhanced services.

Secure Blue was launched in mid-April of 2005 and in May 2005 we began a series of online, live demos to potential channel partners (i.e. accounting and law firms, brokerage firms and potential end users). Our distribution strategy is to develop third-party channels through professional advisors to publicly traded companies. These include investor relations firms, law firms, accountancy firms, banks, compliance consultancies, corporate finance advisors, venture capital companies and other strategically important organizations. We are approaching these potential channel partners individually and demonstrating SOX Pro live online to create a dialogue leading to long-term business partnerships. We will continue to focus our sales activity on third-party channels until we are satisfied we can achieve significant traction in the market place. Our third-party channels will attack the end-user market through their existing client base.

In addition we will continue to promote and demonstrate SOX Pro to potential end-users where appropriate. In the longer term we will build a specialist direct sales team focused on specific target sectors within the small/mid cap market selling direct or providing qualified leads to our channel partners. There can be no assurance that Secure Blue will be able to establish satisfactory channels of distribution for its product or that the product will generate success in the marketplace.

Marketing, Sales and Support

We market our products primarily through direct contact of potential customers, referrals from existing customers or potential customers and conferences that are market specific. The key to the marketing of the various products is the ability under the BizWorld product to enable customers to act as channel partners through the ability to sell sub-licenses of the system and provide revenue generating digital service center to their customers. This makes us dependent on the efforts of our customers since we have no direct way to communicate with those parties which may be potential ultimate users of the BizWorld product.

Secure Blue has direct market application focusing primarily on the small cap public companies. Secure Blue is currently seeking to establish channel partner arrangements with Investor Relation firms that primarily target the small cap market. Secure Blue will also seek to expand its marketing efforts to include telemarketing and direct target contact through telemarketing firms that specializes in software sales. There can be no assurance that Secure Blue will be able to establish satisfactory channels of distribution for its product or that the product will generate success in the marketplace.Secure Blue will also seek to expand its marketing efforts to include marketing support for both channel partners and direct sales using PR, advertising, and direct marketing techniques, once the basic distribution infrastructure is in place. Our aims are to make SOX Pro the preferred SOX solution within the small/mid cap market, to prepare the marketplace for our channel partners and to generate good quality, qualified leads for the sales teams

IBSD will employ several consultant services to secure independent programming contracts. The company will also employ a small force of business developers to develop direct business for the company. Most of IBSD's revenue will be derived from sub contracting opportunities in the areas of maintenance, hosting and support for IBIN's other subsidiaries.

Customer Support

Our management believes that strong customer support is crucial to both the initial marketing of its products and maintenance of customer satisfaction, which in turn will enhance our reputation and generate repeat orders. In addition, we believe that customer interaction and feedback involved in our ongoing support functions provide us with information on market trends and customer requirements that is critical to future product development efforts. Intelligent Business Systems Group, Inc. provides toll free and web site support. However, the first line of support is built into the systems through a self diagnostic feature which is enhanced by the system being capable of providing instructions to navigate a user error or auto report a potential system “bug” which is directed to the technical center’s program team which can correct the anomaly on-line and auto down load the correction to all systems.

Secure Blue believes that effective and speedy customer support is crucial to the long-term success of SOX Pro. As a mission-critical application, SOX Pro must be totally reliable and the support available must be of the highest order. We will be including 24/7 support as an integral part of the SOX Pro package with an ongoing annual fee of 35% of the first years license cost. Our team based in Florida will provide technical support for end users and channel partners

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Research and Development

We believe that our success will depend in large part on our ability to maintain and enhance our current product lines, develop new products, maintain technological competitiveness and meet an expanding range of customer requirements. Our management constantly requests and receives comments on desired functionality or system changes from not only the company's customers but the customer's, customer. Our management also intends to hold focus groups taking a sample population of customers and discussing in an open forum the potential revisions of the various systems.

Competition

Our management believes that we are the leading provider of digital commerce and management systems for small and medium businesses provided over the internet. However our products compete against a variety of individual software programs designed to provide similar functions for small and medium sized business users. Additionally, many digital commerce solutions are available to small businesses through established internet portals such as Yahoo. Many internet hosting providers help their customers set up e-commerce sites and provide software for such sites. A wide variety of consultants market e-commerce solutions to small businesses and offer a more personalized service than are available through small business development centers.

The marketplace is full of so-called point products offering solutions to various elements of Sarbanes-Oxley compliance. Virtually all of these solutions are heavily biased in price and complexity toward the larger corporation. Secure Blue has a major cost advantage over the competition and is a more comprehensive SOX solution. We have built the solution on a comprehensive and proven security software solution and added sophisticated enhancements such as the PDA access for compliant and sub compliant officers to have access to data on activity of sensitive information. This provides our customer with the required base criteria of SOX which is a secure network with sophisticated functionality of SOX specific monitoring. The majority of the competition has established distribution infrastructures built on a range of existing and complementary products. We are confident that we can leverage the success of the other subsidiary, IBS Group, and their network. Once our third-party channel network is established we will focus on attempting take a significant share of the small-mid cap company market.

Results of Operations for the Three and Six Months ended June 30, 2007 and 2006

The Company reflected an increase in sales revenues for the three months ended June 30, 2007 to $3,058,544 compared to sales revenues for the three months ended June 30, 2006 of $3,000,772, an increase of $57,772. The company also recorded higher sales revenues for the six months ended June 30, 2007 of $6,089,260 compared to June 30, 2006 sales revenues of $4,699,584. The contract values were higher in 2007. The Company had deferred revenues for the six months ended June 30, 2007 of $2,733,196 (deferred pending recognition based on revenue recognition policies previously stated; See Note 2 of the Financial Statements).

Operating Expenses for the Three and Six Months ended June 30, 2007 and 2006

The Company had operating expenses of $959,399 for the three months ended June 30, 2007 compared to operating expenses of $1,208,089 for the three months ended June 30, 2006, a decrease of $248,690. This decrese is a reflection of lower professional services for the first six months of 2007. This reflects an operating profit for the three months ended June 30, 2007 of $2,010,052 as compared to $1,724,641 for the three months ending June 30, 2006. Operating profits for the six months ended June 30, 2007 was $3,846,125 as compared to operating profits of $2,504,768 for the six months ended June 30, 2006. This increase of $1,341,357 was due primary from the additional sales for 2007.

Other Expense for the Three and Six Months ended June 30, 2007 and 2006

The company had other expenses for the three months ended June 30, 2007 of $128,041 compared to other expenses of $677,556 for the three months ended June 30, 2006. The decrease in other expenses for 2007 was the accrual of taxes of 160,988 compared to an accrual of $677,556 in 2006. The Net Income reported for the three months ending June 30, 2007 was $1,882,011 as compared to net income of $1,047,085 for the three months ending June 30, 2006. The company Net Income for the six months ended June 30, 2007 was $2,946,277 as compared to $1,264,263 for June 30, 2006.

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Liquidity and Capital Resources

We believe the proceeds from the receivables and the reserves will generate sufficient cash in assisting with the operating needs of the company. The company is continuing to inquire into new investments to provide for further research and development capital and assisting further acquisitions over the next twelve months.

Our current accounts receivable are as follows at June 30, 2007:

Other receivables	$	3,517,217
State of California		3,153,620
Drako Oil		3,500,000
Kenya		4,050,000
Department of Trade and Industry		6,006,430
	$	20,227,267

Allowance for bad debt		(286,000)
Current Accounts Receivable, net of bad debt	$	19,941,267

Long Term Accounts Receivable
Galaxy 5 (net of discount)	$	1,769,379

Management expects to close an offering of $2,500,000 securities in which the Company shall use the proceeds to fund its business plan. All funds raised will go into operation.

FACTORS THAT COULD AFFECT FUTURE RESULTS

Because of the following factors, as well as other variables affecting our operating results, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. We have no arrangements or sources of additional capital and may have to curtail our operations if additional capital is needed but is not available.

Our customers who are generally state government agencies or quasi government business associations can be exceedingly tardy in paying their obligations to us. We may have to curtail our operations if we do not have sufficient funds to pay for the expenses of operating our business. The Company will use additional commercial market opportunities to offset the slow pay nature of the lucrative government contract market. The Company’s current and projected acquisitions will expand the Company’s retail and private sector markets which should create a blend of payment cycles between the secured government markets and the commercial markets.

We acquired our enterprise software and began servicing licensees of such software in 2004. Prior financial information reflects a profitable operation. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in relatively new and rapidly evolving markets. These risks may include:

	·	Uncertain commercial acceptance of our products;
	·	Technological obsolescence; and
	·	Competition

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We cannot assure you that we will succeed in addressing these risks. If we fail to do so, our revenue and operating results could be materially harmed.

Our software products are subject to rapid technological change and to compete, we must offer products that achieve market acceptance.

The software industry is characterized by rapid technological change. To remain competitive, we must continue to improve our existing products to meet the needs of our customers. We cannot assure you that new products offered by our competitors may not prove attractive to our clients and potential clients and adversely affect our future revenues. Our failure to adequately protect our proprietary rights could adversely affect our ability to compete effectively. We rely on a combination of contracts, copyrights, continued evolution of our core product (s) and other security measures in order to establish and protect our proprietary rights. We can offer no assurance that the measures we have taken or may take in the future will prevent misappropriation of our technology or that others will not independently develop similar products, design around our proprietary technology or duplicate our products.

A considerable amount of judgment is required when we assessed the realization of accounts receivables, including assessing the probability of collection and the current credit-worthiness of each customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional provision for doubtful accounts might be required. A provision for doubtful accounts would initially be recorded based on our historical experience, and then adjusted at the end of each reporting period based on a detailed assessment of our accounts receivable and allowance for doubtful accounts. In estimating the provision for doubtful accounts, we consider (i) the type of entity (government, commercial, retail) and the aging of the accounts receivable; (ii) trends within and ratios involving the age of the accounts receivable; (iii) the customer mix in each of the aging categories and the nature of the receivable, such as whether it derives from license, professional services or maintenance revenue; (iv) our historical provision for doubtful accounts; (v) the credit worthiness of the customer; and (vi) the economic conditions of the customers industry, whether the entity is a national government, as well as general economic conditions, among other factors. National governments accounts are characterized as fully collectible but slow payers. The bulk of our historic client base is primarily composed of national governments, our periodic valuations do not indicate that an allowance for doubtful accounts was necessary at this time.

ITEM 3. CONTROLS AND PROCEDURES

a)	Evaluation of Disclosure Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Disclosure controls and procedures are the controls and other procedures that we designed to ensure that we record, process, summarize and report in a timely manner the information we must disclose in reports that we file with or submit to the Securities and Exchange Commission under the Exchange Act. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

b)	Changes in Internal Control over Financial Reporting

During the Quarter ended June 30, 2007, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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.PART II OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

Item 3. Defaults upon Senior Securities

Not applicable

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

Not applicable

Item 6. Exhibits

A. Exhibits:

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
31.2	Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2	Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Celebration, Florida, on August 13, 2007.


	IBSG INTERNATIONAL, INC.

Date: August 14, 2007	By:	/s/ Michael Rivers
		Michael Rivers
		President, Chief Executive Officer


	IBSG INTERNATIONAL, INC.

Date: August 14, 2007	By:	/s/ Geoffrey Birch
		Geoffrey Birch
		Principal Accounting Officer

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Ibsg International Inactive 10QSB2007 Q2 Quarterly report (small business)