Legends Business Group Inc - Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For The Transition Period From April 1, 2008 To June 30, 2008

LEGENDS BUSINESS GROUP, INC.

(Name of small business issuer in its charter)

Nevada	33-140666	20-4465282
(State or Jurisdiction of	Commission File Number	(I.R.S. Employer
Incorporation or organization		Identification No.)

1375 Semoran Boulevard

Casselberry, Florida 32707

407-263-4029

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (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 Exchange Act).

Yes x No o

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by

reference to the price at which the common equity was last sold, as of July 9, 2008 was $16,307,500.

32,615,000 shares of common stock were outstanding as of June 30, 2008.

LEGENDS BUSINESS GROUP

FORM 10-Q

INDEX

PART I: FINANCIAL INFORMATION		PAGE

Item 1. Financial Statements.		2

Balance Sheet as of June 30, 2008		2

Statement of Operations and Comprehensive Income for the three months and six months ended June 30, 2008 and 2007		3

Statement of Cash Flows for the six months ended June 30, 2008 and 2007		4

Notes to Financial Statements		5

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		12

Item 3. Quantitative and Qualitative Disclosures About Market Risk		16

Item 4. Controls and Procedures		16

PART II: OTHER INFORMATION

Item 1. Legal Proceedings		16

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		16

Item 3. Defaults Upon Senior Securities		16

Item 4. Submission of Matters to a Vote of Security Holders		17

Item 5. Other Information		17

Item 6. Exhibits		17

SIGNATURES		18

ITEM 1. FINANCIAL STATEMENTS

LEGENDS BUSINESS GROUP, INC.

(A Development Stage Company)

BALANCE SHEET

JUNE 30, 2008

(Unaudited)

ASSETS
Current assets:
Cash	$	108,284
Total current assets		108,284

Equipment, net of accumulated depreciation		4,291

Total assets	$	112,575
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
Notes payable - Line of Credit	$	100,000
Advances from shareholder		2,671
Accrued salary		21,667
Total current liabilities		124,338

Stockholders' deficiency:
Preferred stock, $.0001 par value, authorized 100,000
shares; 45,000 issued and outstanding
as of June 30, 2008		5

Common stock, $.001 par value, authorized 500,000,000
shares; 32,615,000 issued and outstanding
as of June 30, 2008		32,615

Additional paid-in capital		7,728,880

Accumulated deficit during development stage		(7,773,263	)
Total stockholders' deficiency		(11,763	)
Total liabilities and stockholders' deficiency	$	112,575

The accompanying notes are an integral of the financial statements.

LEGENDS BUSINESS GROUP, INC.

(A Development Stage Company)

STATEMENT OF OPERATIONS

(Unaudited)

													For the Period March 2, 2006
	Three Months Ended						Six Months Ended			Six Months Ended			(Inception) to
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007			June 30, 2008

Revenue:
Consulting and brokerage fees	$	158,070		$	-		$	158,070		$	-		$	158,070
Agent agreement fees		6,898			-			7,535			-			7,535
Revenue from related party		2,000			6,000			8,000			12,000			48,000
		166,968			6,000			173,605			12,000			213,605

Cost of services:
Client marketing		150,414			-			150,414			-			150,414

Gross profit		16,554			6,000			23,191			12,000			63,191

Expenses:
General and administrative		38,032			5,665			41,225			14,519			7,820,271
Subcontractor		-			-			-			-			3,000
Depreciation		687			687			1,374			1,374			6,183
Consulting fee - officer		-			-			-			-			7,000

Total expenses		38,719			6,352			42,599			15,893			7,836,454
Net loss	$	(22,165	)	$	(352	)	$	(19,408	)	$	(3,893	)	$	(7,773,263	)

Weighted average number of common
shares outstanding, basic and fully diluted		32,615,000			77,615,000			32,615,000			77,615,000			75,278,682

Net loss per weighted share
basic and fully diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.10	)


The accompanying notes are an integral of the financial statements.
 
 
 
3

LEGENDS BUSINESS GROUP, INC.
(A Development Stage Company)

STATEMENT OF CASH FLOWS

(Unaudited)

							For the Period March 2, 2006
	Six Months Ended			Six Months Ended			(Inception) to
	June 30, 2008			June 30, 2007			June 30, 2008

Cash flows from operations
Net loss	$	(19,408	)	$	(3,893	)	$	(7,773,263	)

Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation		1,374			1,374			6,183
Accrued salary		21,667			-			21,667
Stock based compensation		-			-			7,750,000
Net cash provided by (used in) operating activities		3,633			(2,519	)		4,587

Cash flows from investing activities

Purchase of equipment		-			-			(10,474	)
Proceeds from sale of equipment		-			-			-
Net cash used in investing activities		-			-			(10,474	)

Cash flows from financing activities

Issuance of common stock		-			-			11,500
Proceeds from notes payable - line of credit		100,000						100,000
Advances from shareholder		-			1,671			2,671
Net cash provided by financing activities		100,000			1,671			114,171

Net increase in cash		103,633			(848	)		108,284
Cash, beginning of period		4,651			1,372			-

Cash, end of period	$	108,284		$	524		$	108,284


Supplemental disclosures of non-cash investing
and financing activities:

Issuance of 32,500,000 shares of common stock for
consulting services	$	-		$	-		$	3,250,000

Issuance of 45,000,000 shares of common stock for
compensation to founding shareholder (On May 29, 2008,
these 45,000,000 shares of common stock were exchanged
for 45,000 shares of preferred stock)	$	-		$	-		$	4,500,000

The accompanying notes are an integral of the financial statements.

Note 1 – Organization and summary of significant accounting principles

Organization

Legends Business Group, Inc. (“the Company”) was organized March 2, 2006 (Date of Inception) under the laws of the State of Nevada. The Company has not commenced significant operations and, in accordance with Statement of Financial Accounting Standards No. 7 Accounting and Reporting by Development Stage Enterprises (“SFAS No. 7”), the Company is considered a development stage Company.

The Company will provide consulting services to companies that may offer any or all of the following services: provide ISP (internet service provider), long distance provider, VOIP (Voice Over Internet Protocol) provider, and digital content providers, and such client companies will make their services available to small and medium size companies. These clients will use an independent billing house to bill their monthly fees directly to their customers’ telephone bill. The Company currently focuses on three stages of consulting with client businesses: billing, customer service and scripting. The Company has added new clients, whose businesses sell their products through Internet marketing, and bill through third party billing houses. These businesses offer services that include email and identity theft protection.

Interim Reporting

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of American and the rules of the SEC, and should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2008. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Accounting period

The Company has adopted an annual accounting period of January through December.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents.

Revenue recognition

The Company provides consulting services (marketing, billing and script writing) to companies that perform services to largest telecommunications companies. The Company enters into contracts for one year payable monthly. Revenue is recognized as monthly billings are completed.

Furniture and equipment

Furniture and equipment are stated at cost less accumulated depreciation. It is the policy of the Company to capitalize items greater than or equal to $1,000 and provide depreciation based on the estimated useful life of individual assets, calculated using the straight line method.

Estimated useful lives range as follows:

	Years

Furniture and equipment		3 - 5

Computer hardware		3

Vehicles		5

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2008. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts payable and notes payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Earnings per share

The Company has adopted Statement of Financial Accounting Standards No. 128. Earnings Per Share ("SFAS No. 128"). Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti- dilutive they are not considered in the computation.

Income taxes

The Company has adopted Statement of Financial Accounting Standard No. 109, Accounting for Income Taxes ("SFAS No. 109") for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes because of differences in amounts deductible for tax purposes. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Recent pronouncements

In February 2006, the FASB issued SFAS 155, “Accounting for Certain Hybrid Financial Instruments." This Statement amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement resolves issues addressed in Statement 133 Implementation Issue No. Dl, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.” This Statement:

Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation.

Clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133.

Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation.

Clarifies that concentrations of’ credit risk in the form of subordination are not embedded derivatives.

Amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.

The fair value election provided for in paragraph 4(e) of this Statement may also be applied upon adoption of this Statement for hybrid financial instruments that had been bifurcated under paragraph 12 of Statement 133 prior to the adoption of this Statement. Earlier adoption is permitted as of the beginning of our fiscal year, provided we have not yet issued financial statements, including financial statements for any interim period, for that fiscal year. Provisions of this Statement may be applied to instruments that we hold at the date of adoption on an instrument-by-instrument basis.

Adoption of this Statement is required as of the beginning of the first fiscal year that begins after September 15, 2005. The adoption of this statement is not expected to have a material impact on the Company’s financial statements.

In March 2006, The FASB issued SEAS 156 , “Accounting for Servicing of Financial Assets.” This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement:

Requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations.

Requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable.

Permits an entity to choose either the amortization method or the fair value measurement method for each class of separately recognized servicing assets and servicing liabilities.

At its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under Statement 115, provided that the available-for-sale securities are identified in some manner as offsetting the entity’s exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value.

Requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities.

Adoption of this Statement is required as of the beginning of the first fiscal year that begins after September 15, 2006. The adoption of this statement is not expected to have a material impact on the Company’s financial statements.

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements.” This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurement. The implementation of this guidance is not expected to have any impact on the Company’s financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of PASS Statements No. 87, 106, and 132(R)” (“SFAS No. 158”). SFAS No. 158 requires companies to recognize a net liability or asset and an offsetting adjustment to accumulated other comprehensive income to report the funded status of defined benefit pension and other postretirement benefit plans. SFAS No. 158 requires prospective application, recognition and disclosure requirements effective for the Company’s fiscal year ending December 31, 2007. Additionally, SFAS No. 158 requires companies to measure plan assets and obligations at their year-end balance sheet date. This requirement is effective for the Company’s fiscal year ending December 31, 2009. The Company is currently evaluating the impact of the adoption of SFAS No. 258 and does not expect that it will have a material impact on its financial statements.

In September 2006, the United States Securities and Exchange Commission (“SEC”), adopted SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” This SAB provides guidance on the consideration of the effects to prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 establishes an approach that requires quantification of financial statement errors based on the effects of each of the Company’s balance sheet and statement of operations financial statements and the related financial statement disclosures. The SAB permits existing public companies to record the cumulative effect of initially applying this approach in the first year ending after November 15, 2006 by recording the necessary correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustment recorded to the opening balance of retained earnings. Additionally, the use of the cumulative effect transition method requires detailed disclosure of the nature and amount of each individual error being corrected through the cumulative adjustment and how and when it arose. The Company is currently evaluating the impact, if any, that SAB 108 may have on the Company’s results of operations or financial position.

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109.” This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Interpretation No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Interpretation No. 48 is effective for fiscal years beginning after December 15, 2006 and the Company is currently evaluating the impact, if any, that FASB Interpretation No. 48 may have on its results of operations or financial position.

Note 2 – Going concern

As shown in the accompanying financial statements, as is typical of companies going through the development stage, the Company incurred an accumulated net loss through the period ended June 30, 2008. The Company is currently in the development stage and there is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support current operations and generate anticipated sales. This raises substantial doubt about the Company’s ability to continue as a going concern. Management believes that the Company’s future capital requirements will depend on many factors, including the success of the Company’s consulting and marketing services. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Note 3 – Furniture and Equipment

Furniture and equipment consists of the following categories at June 30, 2008:

Computers	$	3,000
Software		7,474
		10,474
Less accumulated depreciation		6,183
Total	$	4,291

Depreciation expense for the six months ended June 30, 2008 totaled $1,374.

Note 4 – Income taxes

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:

Income tax provision at the
federal statutory rate	34	%
Effect of operating losses	-34	%
	0	%

Net deferred tax assets consist of the following:

	For the six months ended
	June 30,
	2008
Gross deferred tax asset	$	3,000,000
Gross deferred tax liability		-
Valuation allowance		(3,000,000	)
Net deferred tax asset	$	-

The Company did not pay any income taxes during the six months ended June 30, 2008.

Note 5 – Stockholders’ equity

In March 2006, the Company issued 45,000,000 shares of its $0.001 par value common stock as founder's shares. In connection with the issuance of these 45,000,000 shares, the Company recorded compensation expense in the amount of $4,500,000. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering."

In May 2006, the Company issued 115,000 shares of its $0.001 par value common stock for $11,500 cash. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering."

In May 2006, the Company issued 32,500,000 shares of its $0.001 par value common stock for consulting services. In connection with the issuance of these 32,500,000 shares, the Company recorded compensation expense in the amount of $3,250,000. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering."

In May 2008, the Company amended the articles to authorize 100,000 shares of Preferred Shares at $0.0001 par value. Contemporaneously, the Company issued 45,000 shares of Preferred Stock to the President and CEO in exchange for 45,000,000 shares of Common Stock. This reduced the Common shares outstanding from 77,615,000 to 32,615,000.

There have been no other issuances of common stock.

Note 6 – Warrants and options

There are no warrants or options outstanding to acquire any additional shares of common stock.

Note 7 – Related party transactions

The Company’s Chief Executive Officer has advanced the Company a total of $2,671 through June 30, 2008, primarily to fund startup expenses. These non-interest bearing advances are due on demand.

On March 31, 2006, the Company entered into a two year contract to provide consulting services for K&L International, a Company solely owned by our Chairman, CEO, and President. The contract, with a value of approximately $48,000, provides that the Company will receive $2,000 per month, which commenced April 2006. Through June 30, 2008, the Company has received $48,000 under the terms of the consulting contract. The contract ended in April 2008 and was not renewed. For the six month period ended June 30, 2008, the Company recorded $2,000 in revenue u nder the terms of this consulting contract.

In May 2008, the Company entered into an employment agreement with its President and CEO, which provides for an annual salary of $130,000. Through June 30, 2008, the Company has accrued a total of $21,667 for unpaid wages due under the terms of the employment agreement.

The Company is using space rent free that is owned by the founding shareholder.

Note 8 – Commitments and contingent liabilities

Legal matters - The Company is occasionally party to litigation or threat of litigation arising in the normal course of business. Management, after consultation with legal counsel, does not believe that the resolution of any such matters will have a material effect on the Company’s financial position or results of operations.

Note 9 – Agent agreements

On August 3, 2007 the Company signed an agreement with ILD Telecommunications, Inc., a provider of billings services, to locate and contract with customers to provide services.

On November 1, 2007 the Company signed an agreement with Billing Concepts, Inc., a provider of billings services, to locate and contract with customers to provide services.

On February 5, 2008 the Company signed an agreement with Payment one, Inc., a provider of billings services, to locate and contract with customers to provide services.

Note 10 – Consultant and Broker Agreements

In April 2008, the Company signed five consulting agreements to provide billing and customer services. In May 2008 they signed one additional Consulting agreement.

Also, in April 2008, the Company signed five broker agreements to provide marketing services; and, in May 2008, the Company signed one additional broker agreement.

Note 11 – Revolving Line of Credit

On April 17, 2008, the Company entered into a $500,000 Revolving Line of Credit (“Line of Credit”) with the Company’s Chairman, Chief Executive Officer, and principal shareholder (“Lender”). The note is payable within 12-months from the date of receipt of a demand for payment notice from the Lender. The Line of Credit bears interest at the rate of 12% per annum, computed on a monthly basis. At June 30, 2008, the balance due under the terms of the Line of Credit was $100,000. On July 2008, the Company borrowed an additional $50,000 under the terms of the Line of Credit.

Note 12 – Employee Leasing

In June 2008, the Company entered into an agreement with Oasis Outsourcing to lease employees. The initial agreement is for thirty days and renews automatically every thirty days until terminated by either party.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect,” “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

•

our ability to successfully compete in the professional services industry;

•

difficulties developing a new line of business in the professional services industry;

•

failure to identify, develop or profitably manage additional businesses;

•

failure to obtain new customers or retain existing customers;

•

inability to efficiently manage our operations;

•

inability to achieve future operating results;

•

inability to obtain capital for future growth;

•

loss of key executives; and

•

general economic and business conditions.

RISK FACTORS

Our ability to continue as a going concern is in doubt.

Our auditor has raised a concern regarding our ability to continue as a going concern. LGBS is in the development stage and we have generated limited revenues since our inception. We continue to incur operating expenses, legal and accounting expenses, consulting fees and operating expenses. These factors raise substantial doubt about our ability to continue as a going concern.

We have recently commenced our consulting business and have no significant operating history. Therefore, our business and future prospects are difficult to evaluate. You should consider the challenges, risks and uncertainties frequently encountered by early-stage companies using new and unproven business models in rapidly evolving markets. These include significant start-up expenses, obtaining and performing contracts with clients, hiring and retaining qualified personnel, and establishing a reputation in the industry. There is no assurance we will be able to enter into substantial arrangements with clients for our consulting business or that we can develop contracts on terms that will be favorable to us or at all. Moreover, even if we enter into any such arrangements, there is no assurance that such arrangements with clients will be profitable.

Mr. Larry Powalisz, our Chairman, CEO and President is the majority shareholder of LGBS stock.

Mr. Larry Powalisz, as our Chairman, CEO and President makes decisions for LGBS at his discretion and not as a result of compromise or vote by members of the board. Mr. Powalisz exerts control over the marketing, development and direction that the business will take.

Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions. These marketability restrictions may prevent you from liquidating your stock, thus causing a loss of your investment.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

•

Deliver to the customer, and obtain a written receipt for, a disclosure document;

•

Disclose certain price information about the stock;

•

Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

•

Send monthly statements to customers with market and price information about the penny stock; and

•

In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

BUSINESS OVERVIEW

We are a development stage company in the process of implementing our business plan. Our plan of operation for the next twelve months continues to be focused on growing revenues and expanding our client base. We will continue marketing our consulting services to small and medium sized businesses that are ISP (Internet Service Providers), Long Distance Providers, VOIP (Voice over Internet Protocol) Providers, and Digital Content Providers that rely on the services of third party billing clearinghouses; and to companies that make their sales through direct mailings and direct website sales. We are actively expanding our client base and marketing to additional businesses that we intend to offer our consulting services to. We have added new clients, which consist of businesses that sell their products through internet marketing, and bill through third party billing houses. These businesses offer services that include email and identity theft protection.

Our revenues are growing in conjunction with the expansion of our client base. We have expanded the suite of client services we offer to include customer specific growth marketing strategies directed at a strategically targeted select market demographic. We are currently in negotiations with two national and one international credit card payment service provider, to secure agent agreements, which would expand client payment offerings to include credit card and debit card billing methods in addition to LEC (Local Exchange Carrier) billing. If and when negotiations are completed we anticipate an increase in new customers that will offer credit card billing in addition to local exchange carrier billing.

We experienced growth throughout the first half of 2008, due to the implementation of our business plan. Revenues for the six months ended June 30, 2008 increased by approximately $161,000 to approximately $167,000. The increase revenues are due to the company’s offering of its consulting services and its service support platforms. Due to the expenses involved with growing our business, our net losses for the six months ended June 30, 2007 increased from approximately $350 to approximately $22,200 for the six months ended June 30, 2008.

As we continue to implement our business plan, we have anticipated a need to raise additional funds to enhance operations and transition the company through an expected period of growth. At this time we do not anticipate obtaining outside financing to fund operations, or to fund operations through common stock offerings, or to augment our working capital through stock offerings.

RECENT DEVELOPMENTS

We continue to utilize a secured revolving line of credit in the amount of $500,000 to augment our working capital, enhance operations and transition the company through the expected period of growth. Larry Powalisz, CEO of Legends Business Group, Inc. has made these funds available as part of a related party transaction. These loans, when utilized, are repayable 12 months from the date of demand for payment at the accrued interest rate of 12% annually. In April 2008, and July 2008 the company requested $100,000 and $50,000 respectively, from the revolving line of credit, to fund expansion. Demand for repayment has not yet been made.

On May 15, 2008, the company entered into an Employment Agreement with Larry Powalisz, Chief Executive Officer and President of the Company. The Agreement evidences that Mr. Powalisz has accepted the title and duties that accompany the position of President and Chief Executive Officer of the Company. The Agreement shall be in effect for a period of three years, commencing May 1, 2008 and expiring on May 1, 2011. During the term of the Agreement, Mr. Powalisz shall be paid at the annual rate of $130,000. Mr. Powalisz will participate in all general employee benefit plans and programs as they are made available.

On May 29, 2008 the company filed a Certificate of Amendment with the State of Nevada, which reflected that the Corporation shall be authorized to issue 100,000 (one hundred thousand) shares of $0.0001 par value Preferred Stock. On May 29, 2008, the company also filed a Certificate of Designation with the State of Nevada. The Certificate evidenced that Legends has authorized the establishment of Class A Preferred Stock in the amount of 100,000 (one hundred thousand) shares. The Class A Preferred shares shall be convertible to Common Stock at a ratio of 1/1,000 (one to one thousand) shares of Common Stock.

Contemporaneously with the authorization of the 100,000 (one hundred thousand) shares of Preferred Stock, 45,000,000 (forty five million) shares of common stock that were held by Larry Powalisz, President and CEO, were returned to the treasury of Legends Business Group, Inc. In exchange for the return of the 45,000,000 (forty five million) shares of Common Stock, the Corporation issued 45,000 (forty five thousand) shares of Preferred Stock. This transaction reduced the common stock shares outstanding from 77,615,000 (seventy seven million six hundred fifteen thousand) shares to 32,615,000 (thirty two million six hundred fifteen thousand) shares.

LIQUIDITY AND CAPITAL RESOURCES

Our cash balance at June 30, 2008 was approximately $108,300, as compared to approximately $500 at June 30, 2007. Our general and administrative expenses were approximately $39,000, compared to approximately $6,500 for the same period ending June 30, 2007. We expect our general and administrative expenses to increase as we continue to execute our business plan over the next 12 months.

We anticipate that our operational expenses will grow proportionately to increases in our customer base over the next 12 months. The expected increases in operational expenses will be directly attributed to marketing expenses associated with the development of new client companies, and the implementation of our business plan. We do not anticipate the purchase or sales of any significant equipment. If and when the anticipated growth occurs, we will hire additional employees. We do anticipate changes in our number of employees, as our business grows.

At this time we have not entered into any agreements with a sale and marketing entity to undertake marketing for us; however we are in negotiations to enter into a sale and marketing agreement. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any expenditure may vary significantly depending upon our progress with the execution of our business plan.

In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from the sale of our consulting and marketing services to cover our operating expenses.

In light of the business environment in which we operate today, we do anticipate incurring operating losses for the short term. However, business environments and market conditions can be adversely affected by a multitude of economic indicators which remain out of our control.

RESULTS OF OPERATIONS

For the quarter ended June 30, 2008, we generated revenues of approximately $167,000 and incurred a net loss of approximately $22,000.

The following table provides selected financial data about our company for the quarter ended June 30, 2008.

Balance Sheet Data	June 30, 2008
Cash	$	108,284
Total assets	$	112,575
Total liabilities	$	124,338
Shareholders’ deficiency	$	(11,763	)

For the complete financial information, please see the enclosed financial statements and the accompanying notes.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined by Rule 229,10(f)(1), Legends Business Group, Inc. is not required to provide Quantitative and Qualitative disclosures about market risk.

ITEM 4 . CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES OVER FINANCIAL REPORTING

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, Mr. Larry Powalisz, our Chief Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, Mr. Powalisz, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting him to material information required to be included in our periodic SEC filings. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

It should be noted, however, that no matter how well designed and operated, a control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems (including faulty judgments in decision making or breakdowns resulting from simple errors or mistakes), there can be no assurance that any design will succeed in achieving its stated goals under all potential conditions. Additionally, controls can be circumvented by individual acts, collusion or by management override of the controls in place.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no sales of unregistered securities during the period covered by this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the period covered by this report.

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

There were no matters submitted to a vote of security holders during the period covered by this report.

ITEM 5. OTHER INFORMATION

There was no information required to be disclosed on Form 8-K during the period covered by this report.

ITEM 6. EXHIBITS

The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our original Form SB-2 Registration Statement, filed under SEC File Number 333-145876, at the SEC website at www.sec.gov.

EXHIBITS SCHEDULES

(a)

Exhibits

Incorporated by Reference

Exhibit Number

Exhibit

Description

Filed

Herewith

Form

Period

Ending

Exhibit

Number

Date Filed

3(i)*

Articles of Incorporation dated March 3, 2006

SB 2/A

3(i )

6/25/2007

3(ii)*

Bylaws

SB 2/A

3(ii )

6/25/2007

Specimen Stock Certificate

SB 2/A

6/25/2007

10*

Consulting Agreement Contract

SB 2/A

6/25/2007

10*

Non-Exclusive Agent Agreement

W/10QSB

9/30/2007

10(i )

11/13/2007

10*

Employment Agreement

5/20/2008

3(i)

Amendment to Articles of Incorporation dated 5/28/2008

3(i )

5/29/2008

Certification of Larry Powalisz Pursuant to Section 302 of Sarbanes Oxley Act

3/26/2008

Certification of Larry Powalisz Pursuant to Section 906 of Sarbanes Oxley Act

3/26/2008

Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on July 21, 2008.

LEGENDS BUSINESS GROUP, INC.

REGISTRANT

By: /s/Larry Powalisz

Larry Powalisz

Chief Executive Officer and

Principal Accounting Officer