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. 12 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. BUSINESS Since the inception of Legends Business Group, Inc. (hereinafter LGSB), we have established our corporate existence and completed the required steps to become a publicly held corporation and our stock is now being traded on the over the counter bulletin board. While we have not had significant revenues, we have actively begun to expand 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 of small and medium sized businesses. We are a development stage company. Our plan of operation for the next twelve months will be to expand and grow our client base. We intend to market our consulting services to small and medium size businesses that are ISP (Internet Service Providers), long distance providers, VOIP (Voice Over Internet Protocol) providers, and digital content providers that charge their services to their clients through third party billing clearinghouses, and to companies that make their sales though direct mailings and though direct website sales. We are actively expanding our client base of small to medium sized businesses to which we will offer our services. 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 additional financing to fund operations through common stock offerings, or to obtain additional financing to the extent necessary to augment our working capital through stock offerings. We have secured a revolving line of credit in the amount of ( $500,000 ) five hundred thousand dollars 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. is making these funds available, in a related party agreement. These loans, when they will be utilized, will be repayable 12 (twelve) months from the date of demand for payment at the accrued interest rate of 12% annually. On April 17, 2008 , the company requested ( $100,000 ) one hundred thousand dollars from the revolving line of credit, to fund expansion of LGBS. 13 We are currently pursuing avenues of client development and marketing strategies through the use of a Client Conference . We plan to utilize the conference to present updates on LGBS's business products and services as well as insights into potential market acceptance and feasibility for the benefit of both current and potential new clients. If successful, we plan to make the conference an annual event. LGBS does intend to continue to use income from clients to continue to meet our operating expenses. We do not have need for the purchase of any property or equipment at this time. During the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations: LIQUIDITY AND CAPITAL RESOURCES Our cash balance at March 31, 2008 was $6,004 . For the quarter ended March 31, 2008 , we incurred general and administrative expenses of approximately $3,284 . We do not expect our quarterly general and administrative expenses to increase significantly over the next 12 (twelve) months. We anticipate that our operational expenses will grow proportionately to increases to our customer base over the next 12 (twelve) months. The expected increases in operational expenses will be directly attributed to marketing expenses associated with the development of new client companies. We do not anticipate the purchase or sale of any significant equipment. If and when the anticipated growth occurs, we will need to add additional employees. We do not anticipate significant changes in our number of employees, until our growth warrants a change in the number of employees. At this time we have not entered into any agreements or negotiations with a sales and marketing entity to undertake marketing for us. 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 we be unable to proceed with the development of our business plan, 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 not anticipate incurring operating losses in the foreseeable future. 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 Since inception, ( March 2, 2006 ) through March 31, 2008 , we have generated revenues and incurred expenses of approximately $46,637 and $3,971 , respectively. 14 The following table provides selected financial data about our company for the quarter ended March 31, 2008 . Balance Sheet Data: March 31, 2008 Cash $ 6004 Total assets $ 12,983 Total Liabilities $ 2,671 Stockholders' equity $ 10,312 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. Our source of funds has been the sale of our common stock and limited revenue generated from sales of our services to a related party company, K&L International Enterprises Inc. (hereinafter K&L). The owner of K&L is Larry Powalisz , the Chairman, CEO and President of Legends Business Group . We continue to incur operating expenses, legal and accounting expenses, consulting fees and promotional expenses. These factors raise substantial doubt about our ability to continue as a going concern. We have only 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. Powalisz , our Chairman, CEO and President is the majority shareholder of LGBS stock. Mr. 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. 15 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.
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