UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 10-QSB



[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2007



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



Commission file number 000-49679



| |                                                                   | 
| | ----------------------------------------------------------------- | 
| | LITFUNDING CORP.                                                  | 
| | (Exact name of small business issuer as specified in its charter) | 





|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 93-1221399                          
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification Number)





| |                                                       | 
| | ----------------------------------------------------- | 
| | 6375 S. Pecos Road, Suite 217
Las Vegas, Nevada 89120 | 
| | (Address of principal executive offices)              | 





| |                             | 
| | --------------------------- | 
| | (702) 898-8388              | 
| | (Issuers telephone number) | 





Copies of Communications to:

Dennis H. Johnston, Esq.

A Professional Law Corporation

9422 Canfield

La Habra, California  90631

(310) 666-2133



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) 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



Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes X     No ______



The number of shares of Common Stock, $0.001 par value, outstanding on May 20, 2006, was 79,386,902 shares.



Transitional Small Business Disclosure Format (check one): Yes    No X



1



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PART I  FINANCIAL INFORMATION



Item 1. Financial Statements.



|                                                                                                  |                                                                                                  
|------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------
|Lawrence, Scharfman, & Co., CPA P.A.
Certified Public Accountants                                
|18 E. Sunrise Highway #203
Freeport, Ny 11520
Telephone: (516) 771-5900
Facsimile: (516) 771-2598 | 9608 HoneyBell Circle
Boynton Beach, Fl 33437
Telephone: (561) 733-0296
Facsimile: (561) 740-0613





INDEPENDENT ACCOUNTANTS REVIEW REPORT



The Board of Directors and Stockholders

LITFUNDING CORP

3700 MCLEOD STE 100

LAS VEGAS, NEVADA 89121



We have reviewed the comparative Balance Sheets as of 3/31/07 and 12/31/06 for Litfunding Corp. and the statements of income (losses) and cash flows for the three months ended 3/31/07 and 3/31/06 in accordance with statements on standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Litfunding Corp.



A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.



Based upon our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements in order for them to be in conformity with generally accepted accounting principles.



|                       |                          
|---------------------- | -------------------------
|Boynton Beach, Florida | /s/ Lawrence Scharfman   
|May 21, 2007           | Lawrence Scharfman CPA PA







2



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LitFunding Corp.

Consolidated Balance Sheet



|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|------------------------------------- | -------------------------------------------------- | --------------------------------------------------- | ------ | ------------ | --------- | --------- | --------- | ------------ | - | ---------
|                                      |                                                    |                                                     |        |              |           | March 31, |           | December 31,
|                                      |                                                    |                                                     |        |              |           | 2007      |           | 2006        
|                                      |                                                    |                                                     |        | (unaudited)  |           |           | (audited)
|Assets                                |                                                    |                                                     |        |              |           |           |          
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|Current assets:                       |                                                    |                                                     |        |              |           |          
|                                      | Cash and cash equivalents                          |                                                     | $      | (1,504)      |           | $         | 1,618    
|                                      | Accounts receivable, net                           |                                                     |        | 121,438      |           |           | 30,760   
|                                      | Due from employees                                 |                                                     |        |              |           |           |          
|                                      | Contingent advances less reserves for unsuccessful |                                                     |        |              |           |           |          
|                                      | resolution of lawsuits                             |                                                     |        | 398,025      |           |           | 398,025  
|                                      | Note receivable                                    |                                                     |        | 424,000      |           |           | 174,000  
|                                      |                                                    | Total current assets                                |        |              | 941,959   |           |           | 604,403     
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|Fixed assets, net                     |                                                    |                                                     | 31,402 |              |           | 44,237   
|                                      |                                                    | Total fixed assets                                  |        |              | 31,402    |           |           | 44,237      
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|Other assets                          |                                                    |                                                     |        |              |           |          
|                                      | Books, TV and Movie Rights                         |                                                     |        | 287,325      |           |           | 360,332  
|                                      | Prepaid Spin-off Fee                               |                                                     |        | 200,000      |           |           |          
|                                      | Security Deposits                                  |                                                     |        | 14,331       |           |           |          
|                                      | Other assets                                       |                                                     |        | 4,716        |           |           | 360,332  
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|                                      |                                                    | Total other assets                                  |        |              | 506,372   |           |           | 360,332     
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|                                      |                                                    |                                                     |        | Total assets |           | $         | 1,479,733 |              | $ | 1,008,972
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|Liabilities and Stockholders' Equity  |                                                    |                                                     |        |              |           |          
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|Liabilities not subject to compromise |                                                    |                                                     |        |              |           |          
|                                      | Accounts payable                                   |                                                     | $      | 748,412      |           | $         | 832,071  
|                                      | Accrued expenses                                   |                                                     |        | 149,428      |           |           | 385,586  
|                                      | Deferred revenue                                   |                                                     |        | 210,423      |           |           | 216,672  
|                                      | Notes payable                                      |                                                     |        | 1,173,446    |           |           | 1,171,806
|                                      | Investor participation obligations                 |                                                     |        | 724,500      |           |           | 724,500  
|                                      |                                                    |                                                     |        |              |           |           |          
|                                      |                                                    | Total current liabilities not subject to compromise |        |              | 3,006,209 |           |           | 3,330,635   
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|Liabilities subject to compromise     |                                                    |                                                     |        |              |           |          
|                                      | Trade and miscellaneous claims                     |                                                     |        |              |           |           |          
|                                      | Debentures                                         |                                                     |        | 190,000      |           |           | 190,000  
|                                      |                                                    | Total  liabilities subject to compromise            |        |              | 190,000   |           |           | 190,000     
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          
|                                      |                                                    | Total liabilities                                   |        |              | 3,196,209 |           |           | 3,520,635   
|                                      |                                                    |                                                     |        |              |           |           |           |              |   |          





3



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LitFunding Corp.

Consolidated Balance Sheet

(Continued)



|                      |                                                                    |                                                        |  |             |     |   |              |     |   |          
|--------------------- | ------------------------------------------------------------------ | ------------------------------------------------------ |  | ----------- | --- | - | ------------ | --- | - | ---------
|Stockholders' equity: |                                                                    |                                                        |  |             |     |  
|                      | Series A Convertible preferred Stock, par value $0.001,            |                                                        |  |             |     |   |             
|                      |                                                                    | 2,000,000 shares authorized, 800,000 shares issued and |  |             |     |   |              |    
|                      |                                                                    | and outstanding                                        |  |             | 400 |   |              | 400
|                      | Series B Convertible preferred stock, par value $0.001,            |                                                        |  |             |     |   |             
|                      | 1,500,000 shares authorized, 1,500,000 shares issued and           |                                                        |  |             |     |   |             
|                      | outstanding                                                        |                                                        |  | 1,500       |     |   | 1,500       
|                      | Common stock, $0.001 par value, 100,000,000 shares                 |                                                        |  |             |     |   |             
|                      | authorized, 79,386,902 and 28,988,902 shares issued and            |                                                        |  |             |     |   |             
|                      | outstanding at  March 31, 2007 and December 31, 2006, respectively |                                                        |  | 79,386      |     |   | 28,988      
|                      | Shares authorized & unissued                                       |                                                        |  | 12,000      |     |   | 12,000      
|                      | Subscription Payable                                               |                                                        |  | 5,000       |     |   | 5,000       
|                      | Subscription Recievable                                            |                                                        |  | 43,500      |     |   | 43,500      
|                      | Additional paid-in capital                                         |                                                        |  | 9,324,703   |     |   | 8,655,403   
|                      | Additional paid-in capital Preferred A                             |                                                        |  | 99,600      |     |   | 99,600      
|                      | Accumulated (deficit)                                              |                                                        |  | (11,282,565 |     |   | (11,225,266)
|                      |                                                                    |                                                        |  | (1,716,476) |     |   | (2,511,673) 
|                      |                                                                    |                                                        |  |             |     | $ | 1,479,733    |     | $ | 1,008,962



See notes to consolidated financial statements



4



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LitFunding Corp.

Consolidated Statement of Operations

Unaudited



|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|---------------------------------------------- | --------------------------------------------------- | ----------------------------- | -------- | ---------- | -------- | -------------------------- | ---------- | -------- | - | ---------
|                                               |                                                     |                               |          |            |          | For the three months ended
|                                               |                                                     |                               |          |            |          | March, 31                 
|                                               |                                                     |                               |          |            |          | 2007                       |            | 2006    
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Net Revenue                                    |                                                     | $                             | 94,862   |            | $        | 191,539                   
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Expenses:                                      |                                                     |                               |          |            |          |                           
|                                               | Reserve for unsuccessful resolution of lawsuits     |                               | $        |            |          | $                          |           
|                                               | General and administrative expenses                 |                               |          | 108,887    |          |                            | 803,460   
|                                               | Financing expense                                   |                               |          |            |          |                            | 3,947     
|                                               | Depreciation & Amortization                         |                               |          | 6,221      |          |                            | 6,579     
|                                               | Preferred stock dividend                            |                               |          |            |          |                            |           
|                                               |                                                     | Total operating expenses      |          |            | 115,108  |                            |            | 565,690 
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Net operating (loss)                           |                                                     |                               | (20,246) |            |          | (374,151)                 
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Other income (expenses):                       |                                                     |                               |          |            |          |                           
|                                               | Other income                                        |                               |          |            |          |                            |           
|                                               | Interest (expense) net of interest income           |                               |          | (37,053)   |          |                            | (14,090)  
|                                               | Rental Income                                       |                               |          |            |          |                            |           
|                                               | Amortization of debt discount                       |                               |          |            |          |                            |           
|                                               |                                                     | Total other income (expenses) |          |            | (37,053) |                            |            | (14,090)
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Income (Loss) before Income taxes              |                                                     |                               | (57,299) |            |          | (845,756)                 
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Income tax (benefit) provision                 |                                                     |                               |          |            |          |                           
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|                                               | Net Income (loss)                                   |                               |          |            |          |                            |           
|                                               |                                                     |                               |          |            |          | $                          | (57,299)   |          | $ | (388,242)
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Weighted average number of                     |                                                     |                               |          |            |          |                           
|                                               | common shares outstanding - basic and fully diluted |                               |          | 26,670,441 |          |                            | 17,342,801
|                                               |                                                     |                               |          |            |          |                            |            |          |   |          
|Net (loss) per share - basic and fully diluted |                                                     | $                             | (0.002)  |            | $        | (0.02)                    



See notes to consolidated financial statements



5



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LitFunding Corp.

Consolidated Statement of Cash Flows

Unaudited



|                                                             |  |   |           |  |   |                            |  |      |  | 
|------------------------------------------------------------ |  | - | --------- |  | - | -------------------------- |  | ---- |  | 
|                                                             |  |   |           |  |   | For the three months ended
|                                                             |  |   |           |  |   | March 31,                 
|                                                             |  |   |           |  |   | 2007                       |  | 2006
|                                                             |  |   |           |  |   |                            |  |      |  | 
|Cash flows from operating activities                         |  |   |           |  |   |                           
|Net income (loss)                                            |  | $ | (57,299)  |  | $ | ( 388,242)                
|Adjustments to reconcile net income to net cash              |  |   |           |  |   |                           
|provided by (used in operating activities)                   |  |   |           |  |   |                           
|Depreciation and amortization                                |  |   | 6,221     |  |   | 6,579                     
|Reserve for unsuccessful resolution of lawsuits              |  |   |           |  |   |                           
|Share-based compensation                                     |  |   | 469,000   |  |   | 271,426                   
|Changes in assets and liabilities:                           |  |   |           |  |   |                           
|Increase (decrease) in account receivables                   |  |   | (90,678)  |  |   | (11,790)                  
|Increase (decrease) in other assets                          |  |   | (146,040) |  |   | (19,956)                  
|Increase (decrease) in contingent advances                   |  |   |           |  |   | 259,200                   
|Notes receivable                                             |  |   | (250,000) |  |   | 101,660                   
|Debt discount                                                |  |   |           |  |   |                           
|Deferred stock compensation                                  |  |   |           |  |   |                           
|Increase (decrease) in accounts payable and accrued expenses |  |   | (326,210) |  |   | (28,583)                  
|Trade and other claims subject to compromise                 |  |   |           |  |   |                           
|Increase (decrease) in deferred revenue                      |  |   | 6,244     |  |   | (106,249)                 
|Net cash (used in) operating activities                      |  | $ | (438,762) |  |   | 84,045                    
|                                                             |  |   |           |  |   |                           
|                                                             |  |   |           |  |   |                           
|Cash flows from investing activities:                        |  |   |           |  |   |                           
|Purchase of property and equipment                           |  |   |           |  |   |                           
|Net cash (used in) investing activities                      |  |   |           |  |   |                           
|                                                             |  |   |           |  |   |                           
|Cash flows from financing activities:                        |  |   |           |  |   |                           
|Cash from issuance of common stock                           |  |   | 434,000   |  |   | 50,000                    
|Cash from exercise of options & warrants                     |  |   |           |  |   | 4,250                     
|Common stock cancellation                                    |  |   |           |  |   | (7,000)                   
|Proceeds from notes payable                                  |  |   | 1640      |  |   | 31,000                    
|Repayments of notes payable                                  |  |   |           |  |   | (170,000)                 
|Proceeds from investor participation borrowings              |  |   |           |  |   |                           
|Principal repayments on capital lease obligations            |  |   |           |  |   |                           
|Value of Warrants issued                                     |  |   |           |  |   | 3,947                     
|Net cash provided by financing activities                    |  | $ | 435,640   |  |   | (87,803)                  
|                                                             |  |   |           |  |   |                           
|Increase  (decrease) in cash                                 |  |   |           |  |   | (3,758)                   
|Cash - beginning of period                                   |  |   | 1,618     |  |   | 7,121                     
|Cash - ending of period                                      |  | $ | (1,504)   |  | $ | 3,363                     
|                                                             |  |   |           |  |   |                           
|Supplemental disclosures:                                    |  |   |           |  |   |                           
|Interest paid                                                |  |   |           |  |   | 14,090                    
|Income taxes paid                                            |  | $ |           |  | $ |                           
|                                                             |  |   |           |  |   |                           
|Shares issued for services                                   |  | $ | 469,000   |  | $ | 271,426                   



See notes to consolidated financial statements



6



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LitFunding Corp.

Notes To Consolidated Financial Statements



Note 1 - Basis of Presentation

The condensed interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, 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 generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein. It is suggested that these condensed interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2006 and notes thereto included in the Company's Form 10-KSB annual report. The Company follows the same accounting policies in the preparation of interim reports.

Results of operation for the interim period are not indicative of annual results.

Note 2 - Bankruptcy Petition and Reorganization



On April 2, 2003, certain creditors filed an involuntary bankruptcy petition under Chapter 7 of the United States Bankruptcy Code against LitFunding Corp., a Nevada corporation. In the Petition, the Petitioning Creditors alleged that LitFunding Corp. was generally not paying its debts as they became due. The debtors disputed this allegation. For approximately eleven months the debtors and the petitioning creditors engaged in litigation regarding the merits of the involuntary petition, and the Petitioning Creditors rights under disputed contracts.



As a result of the foregoing litigation, LitFunding Corp. was placed into a protective Chapter 11 proceeding effective November 19, 2003. The costs of litigating the merits of the involuntary petition, and the financial impact of the pending involuntary, so materially damaged both the LitFunding Corp. and California LitFunding that it ultimately became necessary for both companies to enter into Chapter 11. Accordingly, California LitFunding entered into a Chapter 11 proceeding on January 26, 2004.



In February of 2004, this litigation was settled. The settlement reached by and among the Company and the petitioning creditors has been incorporated into a reorganization plan confirmed by the United States Bankruptcy Courts on June 17, 2004.



During 2004 and 2003, California LitFunding, as the operating entity, held title to substantially all of the assets of the Company. The core assets within California LitFunding, and those with most of the value, were the Settlement Agreements, which were the primary subject of the litigation indicated with the filing of the involuntary bankruptcy petition on April 2, 2003. A total of approximately $18.6 million dollars was invested through those Settlement Agreements.



Pursuant to the plan of reorganization, LitFunding Corp. and California LitFunding had the option to voluntarily transfer the control and the collection of the settlement agreements (the Contract Pool") to an IEP distribution agent (the Contract Agent) for the benefit of the IEP claimants who comprise class 6 under the terms of the reorganization plan.



LitFunding Corp., California LitFunding and the IEP claimants stipulated and agreed to do this in December 2004. In that stipulation, the Contract Agent would assume full control and administration over the Contract Pool and have full authority over the enforcement of the obligations set forth in the settlement agreements that comprise the Contract Pool.





7



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Per the agreement signed on November 30, 2004, LitFunding Corp. and California LitFunding transferred all of the original records and files to the Contract Agent on December 16, 2004, and sent written notice to all parties subject to the settlement agreement notifying them of the transfer of control of the Contract Pool and settlement agreements to the Contract Agent including the assignment of LitFunding Corp. and California LitFunding's legal rights and that all payments are now payable to the Contract Agent.



As a result of the transfer, the Company was effectively relieved of the obligation due to the IEP claimants of the IEP Note of approximately $26,662,000 including related accrued interest. The carrying value of receivables and advances at the time of the transfer was approximately $12,331,000 resulting in a gain on the transfer of $14,131,000 for the year ended December 31, 2004. The original value of the IEP Note was determined based on the stipulations within the bankruptcy plan. In the transfer, the Company transferred all of its rights to the contingent advances and any potential earnings thereon. Because payments on the IEP Note were only to come from collections and earnings on the contingent advances, the Company is no longer responsible for that obligation.



In consideration for the cooperation and support provided by LitFunding Corp. and California LitFunding making the transition seamless and effective, the IEP claimants waived and released LitFunding Corp. and California LitFunding from all liability arising under the "Contingent Recourse Note" of approximately $1,560,000, which would have become effective in 2005.



Moreover, by effecting this transfer of the Contract Pool, the two other classes of creditors (Class 4 and 5) affected by this transition will continue to receive the benefit of the unsecured creditors' allocation as defined in the plan of reorganization. The contingency administrative charge allowed by the plan of reorganization to be paid to LitFunding Corp. and California LitFunding has ceased as a result of this transfer.



As a result of the transfer of the contract pool to the IEP claimants effective in December 2004, the Company recorded an extraordinary gain for the removal the associated obligation and assets.



The Company's primary liabilities are summarized in the following paragraphs:



A. Administrative and Priority Claims. The claims within this class total approximately $287,000 through December 31, 2005. Most of this amount represents the fees and costs payable to the Debtors general insolvency counsel, Winthrop Couchot, P.C. who accepted 200,000 shares of common stock from the company in April 2005 and an additional 100,000 shares in 2005 in part or full payment for the amount. The balance represents sums owed of approximately $9,300 in priority wages owed to two officers of the Debtors. These amounts are not subject to compromise and are included in accounts payable and accrued expenses in the accompanying balance sheet at  March 31 ,2006;



B. Gap Claims. During the period between the filing of the involuntary petition and the date on which LitFunding Nevada's stipulated to the entry of an order for relief, certain claims accrued. Substantially all of these claims accrued in favor of two law firms that were defending LitFunding Nevada against the involuntary filing. The Debtors reached an agreement with these claimants to pay $314,000 over twelve months.  During the three months ended March 31, 2006 the debtor elected to convert $3,676 to 26,250 shares oh the Companys $.001 par value common stock and $36,881 to a promissory note bearing interest at 8% per annum with a maturity date of August 1, 2006.



C. Debenture Claims. In calendar years 2002 and 2003 California LitFunding issued debentures to seven individuals, creating approximately two hundred thousand dollars ($200,000) in debt obligations. Included is a $10,000 debenture payable to a related party. These claims are unsecured and they are undisputed.



D. Unsecured Claims Other Than Debenture Claims and IEP Claims. During the months ended March 31, 2006, the debtors elected to convert $244,169 to 1,454,108 shares of the Companys $.001 par value common stock and $64,684 to notes payable with a maturity date of June 15, 2006.  At March 31, 2006 the Company had issued 281,132 and the remaining 1,172,976 shares were issued on April 18, 2006 the Company recorded a subscription payable of $ 190,687 at March 31, 2006.



8



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E. IEP Claims. Pursuant to the Settlement Agreement entered into by and between The Company and the IEP petitioning creditors, each and every claim held by the IEP petitioning creditors has been fixed in them Plan. The totality of all claims held by the IEP petitioning creditors has been incorporated into the non-recourse Plan Note. The Plan Note had an opening balance of $26,111,763. This obligation was relieved in connection with the transfer of the Contract Pool to the IEP Creditors in December 31, 2004;



F. The Plan presented for confirmation incorporates both a business plan, and a legal framework for the payment of claims. The business plan sets forth how The Company intends to generate the funds necessary to meet the monetary obligations fixed in the Plan. The legal framework details what each class of creditors will receive under the terms of the Plan



G. The business plan incorporated into the Plan is designed to accomplish two core objectives. The first core objective is to maximize the funds collected to be collected. The second core objective is to essentially restart The Company's business model by raising and investing additional capital in new lawsuits;



H. Interest Holders. Interest holders are the parties who hold ownership interest (i.e., equity interest) in The Company. The Plan creates two classes of interests. Class 7, which is comprised of LitFunding Nevada, as the holder of all of the common stock of California LitFunding, and Class 8, which is comprised of all of the holders of common stock interests in LitFunding Nevada. These classes are not impaired under the terms of the Plan.



The remaining bankruptcy liabilities at March 31, 2007 are summarized as follows:



|                              |                   
|----------------------------- | ------------------
|Gap Claims                    | $                -
|Unsecured Creditors and Other | -                 
|Subtotal                      | -                 
|Debentures                    | 190,000           
|                              | $    190,000      





Note 3  Notes Receivable



On October 16, 2006, the Company issued a demand promissory note in the amount of $174,000 bearing interest at 6% per annum to Global Universal Film Group Inc.. The principal and interest are due 180 days after the Spin-off transaction described in the Merger Agreement, if the Spin-off does not occur on or before June 30, 2007 no payment shall be due.



On March 5, 2007, we entered into a binding Letter Agreement with Rochester Capital Partners, LP., a Nevada limited partnership (RCP) and agreed to issue a total of forty (40) million shares of treasury stock in exchange for $250,000, payable by a promissory note due and payable in full within sixty days.





Note 4 - Contingent Advances



Contingent advances occur when the Company enters into agreements with lawyers and law firms whereby the Company advances funds for litigation costs on selected cases. Generally, the Company will be repaid those amounts plus negotiated fees when and if a case is settled. These agreements are non-recourse but are secured by a lien against any awards in the case. Fees are generally based on the length of time the advances are outstanding. If the fee is less than the award or settlement, the fees are reduced to the amount of the recovery.



Management estimates the net realizable value of contingent advances by periodically reviewing the progress of the cases with the attorneys trying them and past experience with similar cases. Management believes that the Company has historically achieved a success rate of approximately 85% on cases that it has funded. Post reorganization procedures and policies have been implemented and management believes that it will achieve a success rate of no



9



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less than 90% on new fundings. Management monitors all cases and provides an allowance if it believes that any advances have been impaired. At March 31, 2007 there were contingent advances outstanding of $398,025 and a corresponding impairment allowance of $39,802.



Note 5 - Participation Agreements



Prior to the filing of the involuntary petition on April 2, 2003, the Company raised capital to enable it to engage in the practice of funding the contingent advances by entering into so called IEP agreements. These are considered to be investment/equity participation agreements the nature of which has been redefined and fixed as part of plan of reorganization and the totality of all claims held by the IEP petitioning creditors has been incorporated into the non-recourse Plan Note. The non-recourse Plan Note had an opening balance of $26,111,763 as of May 1, 2004 and as of May 1, 2004 included an approximate $2,000,000 from the cancelled sale of stock and a predetermined retroactive return. The Contract Pool was transferred on December 16, 2004, to the Contract Manager designated by the IEP Claimants. Accordingly, this non-recourse plan note was removed from the balance sheet at December 31, 2004, to reflect the economic reality of that transaction.  As of March 31, 2006, the Company had participation obligations of $992,000.



Note 6 - Debentures



During the years ended December 31, 2002, the Company issued 5-year 9% convertible debentures amounting to $200,000, due January 1, 2007. Included is one debenture due to a related party for $10,000. Interest is due semi-annually on the first day of June and December of each year, commencing June 1, 2003 until fully paid. As part of the plan of reorganization, these debentures have an amended maturity to 2008. At March 31, 2007, the Company had accrued interest totaling $13,537. The Company has not made the December 15, 2006 interest payment of $9,450. On or about November 20, 2006, the Company obtained a judgment against Alan Schuchman, Mr. Schuchman has abandoned his $10,000 debenture to LitFunding Corp. The outstanding debenture balance at March 31, 2007 is $190,000.





The registered holders of the debentures have the right, after one year prior to maturity, to convert the principal at the original conversion price of $10 for one Common share or at the adjusted conversion price. If and whenever on or after the date of this debenture, the Company issues or sells any share of common stock for a consideration per share less than the initial conversion rate, then upon such issue or sale, the initial conversion rate shall be reduced to the lowest net price per share at which such share of common stock have been issued. The debentures are subordinated to all the senior indebtedness, including debts under equity participation agreements.





10



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Note 7- Debt



Notes payable at March 31, 2007 is comprised of the following:



|                                                                                                                                                                                                                                              |                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------
|                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                              |                
|Note payable to entity, original balance of $19,181
Principal and interest due June 15, 2006. The Note is unsecured. Verbally extended.                                                                                                       | $9,591         
|Note payable to entity, original balance of $15,000 due in three monthly installments of $5,000 beginning April 15, 2006. The Note is unsecured. Verbally extended.                                                                           | 10,000         
|Note payable to entity, original balance of $30,502 due in two monthly installments of $15,251 beginning April 15, 2006. The Note is unsecured Verbally extended.                                                                             | 15,251         
|Notes payable with no specified due dates.  Face amount of $19,500 and $15,000, interest at 10% per annum, the note is unsecured.                                                                                                             | 34,500         
|Notes payable with specified due dates.  Face amount $6,000, interest at 6% due March 15, 2006
Notes payable with varying due dates that have been verbally extended. Interest at 6% and 12%, face amounts totaling $62,500. Notes unsecured. | 6,000



62,500
|Notes payable with specified due dates.  Face amount $6,000, interest at 12% due April 1, 2006. Note payable face amount $100,000, at 2% per month due May 13, 2007. Note unsecured.                                                          | 25,000

100,000
|Notes payable with no specified due dates.   Notes unsecured                                                                                                                                                                                  | 910,604        
|Total                                                                                                                                                                                                                                         | $1,173,446     



Note 8  Stockholders Equity



Common Stock

On March 7, 2006 the Company issued 40,000,000 shares of its $.001 par value common stock to Rochester Capital Partners LP $0.00625 per share for a note receivable totaling $250,000.



In March 2007, the Company issued 9,700,000 shares of its $.001 par value common stock for services valued at $469,000 the fair value of the underlying shares.



Series A Preferred Stock



Series A 12 % Convertible Preferred Stock



Priority.Shares of the Series A 12% Convertible Preferred Stock shall rank prior to the Companys Common Stock, with respect to the payment of dividends and upon liquidation.  Other classes of preferred stock shall be subordinated to and shall rank junior to the Series A Convertible Preferred Stock with respect thereto; provided, however, that holders of Series A Convertible Preferred Stock, by vote or written consent to the holder of sixty-six  and two-thirds percent (66 2/3%) or more of the then outstanding Series A Convertible Preferred Stock, may elect from time to time allow other series or classes of preferred stock to rank senior to the Series A Convertible Preferred Stock with respect to dividends, assets or liquidation.







11



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Dividends.  Dividend rates on the shares of Series A Convertible Preferred Stock shall be at an annual rate of twelve percent (12%) annually.  Dividends shall be cumulative (but not compounded) and accrue annually from the date of original issue of the Series A Convertible Preferred Stock and shall be payable, if, when, and as declared by the Board of Directors of the Company.



Voting Rights.  The holders of Series A Convertible Preferred Stock shall not have any voting powers, either general or special.



Conversion.  At any time after six (6) months from the date of purchase, either the Corporation or any holder of Series A Convertible Preferred Stock may convert all or any of the shares of Series A Convertible Preferred Stock held by such holder into full paid and non-assessable shares of Common Stock at the rate of two (2) shares of the Companys Common stock for every one (1) share of Series A Convertible Preferred Stock.  All accrued but unpaid dividends shall be converted to cash or additional common stock in the Companys sole and absolute discretion.  The fair market value shall be determined by taking the average of the low ask and high bid prices of the common stock so quoted on the trading day immediately prior to the dividend payment date.



On August 16, 2005 and August 23, 2005, we sold 200,000 shares of our Series A 12% Convertible Preferred Stock (for a total of 400,000 shares of series A) at $0.25 per share to Imperial Capital Holdings, LLC, all of which was paid in cash.  The 400,000 shares of series A are convertible into 800,000 shares of our common stock.  The 800,000 shares of common stock are being registered in this registration statement.



On August 31, 2005, we sold 400,000 shares of our Series A 12% Convertible Preferred Stock to Apex Investment Fund, Ltd. for a price of $0.25 per share, all of which was paid in cash.  Apex converted its 400,000 shares of Series A into 800,000 shares of common stock.  The 800,000 shares of common stock were issued on March 7, 2006 and are being registered in a registration statement.





Series B Convertible Preferred Stock



Dividend Provisions.  The holders of the Series B Convertible Preferred Stock will not be entitled to any dividends on the Preferred Stock.



Liquidation Preference.  In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, subject to the rights of series of preferred stock that may from time to time come into existence, the holders of Series B Convertible Preferred Stock shall be entitled to receive, prior to and in preference to any distribution of any of the assets of the Company to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the sum of (i) $0.001 for each outstanding share of Series B Preferred Stock (Original Series B Issue Price) and (ii) an amount equal to the Original Series B Issue Price for each twelve (12) months that has passed since the date of issuance of any Series B Preferred Stock.



Spin-off Rights.  At the election of a majority in interest of the Series B Preferred Stock, Global Universal Film Group shall be spun off to the holders of the Series B Preferred Stock, with 90% of such shares in Global Universal Film Group being issued, pro rata to the holders of the Series B Preferred Stock, and 10% being issued and distributed to the shareholders of the Company Common Stock on a pro-rata basis.



Conversion.  Each share of Series B Convertible Preferred Stock shall be convertible, at the election of the holder, into one (1) share of the Companys common stock on such date as the majority shareholders of all Series B have elected to effect the Spin-Off transaction; however, the Series B Convertible Preferred Stock shall automatically convert into shares of Common Stock of the Company after twelve (12) months from the date of LitFundings acquisition of Global Universal Film Group, regardless of whether or not an election has been made to spin-off Global Universal Film Group.



Voting Rights.  The shares of the Series B Preferred Stock shall not have any voting rights.



Pursuant to the reverse tri-party merger with Global Universal Film Group, Inc., we issued a total of 1,500,000 shares of Series B Convertible Preferred Stock to the stockholders of Global.  The 1,500,000 shares are convertible into 1,500,000 shares of common stock.



12



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Note 9  Contingencies



The Company is a defendant in several matters in litigation, many of which are in the normal course of business, including litigation for refunds of funds invested. The company believes these suits are without merit and intends to defend these litigations in courts of law.



Note 10  Warrants and Options

During the three months ended March 31, 2007, no options or warrants were issued by the Company.



Options and Warrants Exercised

During the three months ended March 31, 2007, no warrants were exercised.  There were no options exercised during the period.



The summary of activity for the Company's stock options/warrants is presented below:



|                                                                 |  |                             |                                 |      
|---------------------------------------------------------------- |  | --------------------------- | ------------------------------- | -----
|                                                                 |  | Three months March 31, 2007 | Weighted Average
Exercise Price
|                                                                 |  |                             |                                 |      
|Options/warrants outstanding at December 31, 2006                |  | 6,010,750                   |                                 | $0.42
|Granted                                                          |  |                             |                                 |      
|Exercised                                                        |  |                             |                                 |      
|Terminated/Expired                                               |  |                             |                                 |      
|Options/warrants outstanding at end of period                    |  | 6,010,750                   |                                 | $0.42
|Options/warrants exercisable at end of period                    |  | 6,010,750                   |                                 | $0.42
|                                                                 |  |                             |                                 |      
|Price per share of options outstanding                           |  | $0.01-$7.00                 |                                 |      
|                                                                 |  |                             |                                 |      
|Weighted average remaining contractual lives                     |  | 2.08 years                  |                                 |      
|                                                                 |  |                             |                                 |      
|Weighted average fair value of options granted during the period |  | $0.49                       |                                 |      





Note 11  Related Party Transactions



In March, 2007, we issued 8,000,000 shares to Morton Reed, our Chief Executive Officer, in exchange for $350,000 in back salary. Pursuant to the terms of the Letter Agreement with RCP, Dr. Reed immediately sold these shares to RCP.



RCP has agreed to purchase up to 11 million shares from Morton Reed, our Chief Executive Officer, The Transaction was unanimously approved by our Board of Directors at a meeting held on February 22, 2007.





Note 12 - Subsequent Events



On May 3, 2007 an Administrative Stop was placed on certificate 992 representing 21,000,000 shares of common stock issued to Lehars Handlels Ges M.b.H.(lehara) on March 7, 2007. The Administrative Stop is issued for breach of the agreement for payment by virtue of the failure to pay for the shares. We will seek legal redress in the Nevada courts.





13



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On May 7, 2007 Board of Directors gave unanimous written consent to an increase in the number of authorized shares of capital stock. The Corporation is currently authorized to issue one hundred ten million shares of its capital stock, of witch one hundred million shares are designated as Common Stock and ten million shares are designated as Preferred Stock. The Directors believe that an increase in the number of authorized shares of capital stock will enable the Corporation to effect a proposed acquisition of Hometrend International that will bring needed capital surplus into the corporation. The authorized increase of capital stock of the Corporation to two hundred fifty million, of which two hundred thirty million are designated as Common Stock and twenty million shares are designated as Preferred Stock.





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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 or 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 or 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:



o

increased competitive pressures from existing competitors and new entrants;

o

increases in interest rates or our cost of borrowing or a default under any material debt agreements;

o

deterioration in general or regional economic conditions;

o

adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

o

loss of customers or sales weakness;

o

inability to achieve future sales levels or other operating results;

o

the unavailability of funds for capital expenditures and/or general working capital; and

o

operational inefficiencies in distribution or other systems.



For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Factors That May Affect Our Plan of Operation in this document and in our Annual Report on Form 10-KSB for the year ended December 31, 2006.



15



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



Throughout this Quarterly Report references to we, our, us, LitFunding, the Company, and similar terms refer to LitFunding Corp.



OVERVIEW AND OUTLOOK



On March 5, 2007, we agreed to issue 40 million shares to Rochester Capital Partners, LP. (RCP), a Nevada limited partnership. Gary Rasmussen is the General Partner of this partnership and exercised dispositive control of all shares owned by it.  Upon execution of the agreement with RCP, PCP assigned its interest in 21 million shares to Lehars Handels Ges., M.b.h., leaving RCP with 19 million shares.



In March, 2007, we issued 8,000,000 shares to Morton Reed, our Chief Executive Officer, in exchange for $350,000 in back salary. Pursuant to the terms of the Letter Agreement with RCP, Dr. Reed immediately sold these shares to RCP.



We believe that the issuance and sale of the restricted shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D promulgated thereunder.  The shares issued were directly from us and did not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports.  We reasonably believed that the recipients, immediately prior to issuing the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment.  The recipients had the opportunity to speak with our management on several occasions prior to their investment decision



On March 5, 2007, we entered into a binding Letter Agreement with Rochester Capital Partners, LP., a Nevada limited partnership (RCP) and agreed to issue a total of forty (40) million shares of treasury stock in exchange for $250,000, payable by a promissory note due and payable in full within sixty days. As of the date of this prospectus, RCP has advanced approximately $50,000. In addition to the $250,000, the RCP has agreed to purchase up to 11 million shares from Morton Reed, our Chief Executive Officer, and to provide additional funding of up to $180,000, for which it may acquire up to an additional 5 million shares of common stock. The Transaction was unanimously approved by our Board of Directors at a meeting held on February 22, 2007.



At closing, RCP immediately assigned its interest in 21 million shares to Lehars Handels Ges., M.b.H. (Lehars), for consideration of $300,000 to be received within 30 days. Lehars has failed to remit payment and, if the default continues, the shares will revert to RCP.  RCP currently owns approximately 30 million shares of our common stock, or about 39%. However, if the 21 million shares revert back to RCP, it will own approximately 51 million shares of our outstanding common stock, or about 65%.



RCP is a limited partnership controlled by Gary Rasmussen as its General Partner. The limited partners of RCP are family members of Mr. Rasmussen. Gary Rasmussen is a consultant to the Registrant and will continue as such after the Transaction.



All references to said Letter Agreement herein are qualified in their entirety by reference to the actual Letter Agreement, a copy of which was filed as Exhibit 10.1 to a Form 8-K filed by LitFunding on March 7, 2007.



We recently acquired two wholly owned subsidiaries, Global Universal Film Group, Inc. (Global Universal), an early stage developer, producer and distributor of niche films, related books, and music rights and Easy Money Express, an internet-based, loan company. Both of these entities are at a nascent stage in their development and have not yet produced any revenues. It is managements plan to develop Easy Money Express as our core business, and to spin-off Global Universal as a separately traded corporation, for which we have earned $26,000 of a total $200,000 management fee and will receive 10% of their shares of common stock upon completing the spin-off transaction. In the even the spin-off transaction is not completed by June 3, 2007, the balance of the management fee (i.e., $174,000) will be waived and we will be entitled to receive only 5% of their shares at spin-off, rather than 10%.





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We are in the business of investing in litigation recoveries. Business is conducted through our subsidiary, LitFunding USA and its wholly owned limited liability companies.  LitFunding USA resumed the business of California LitFunding (our subsidiary who has been in the business since 2000) subsequent to June 17, 2004, after the United States Bankruptcy Court entered an order confirming our and California LitFundings joint plans of reorganization.  We raise and advance capital to various law firms pursuant to Settlement Agreements.  These Settlement Agreements provide that the funds advanced shall be repaid to us, plus a fee, when the lawsuits referenced in the agreement ultimately settle.  The amount of the fee payable on the funds advanced depends upon the length of the time the funds are outstanding, up to a fixed limit.  Pursuant to the terms of the Settlement Agreements, the Companys contractual right to payment is limited to the funds ultimately paid to the law firm from the specified lawsuit, or lawsuits, in which the funds are invested or expended.



At March 31, 2007, we estimate that the principle and fee expected on the open and unresolved cases is approximately $1.1 million.



Results of Operations



The following overview provides a summary of key information concerning our financial results for the first quarter of 2007 and 2006.



Revenues



|            |  |                              |  |                     |  |           |  |        
|----------- |  | ---------------------------- |  | ------------------- |  | --------- |  | -------
|            |  | Three Months Ended
March 31, |  | Increase (Decrease)
|            |  | 2007                         |  | 2006                |  | $         |  | %      
|            |  |                              |  |                     |  |           |  |        
|Net Revenue |  | $     94,862                 |  | $   191,539         |  | $(96,677) |  | (50.4)%



Revenue: Total revenue was $94,862 and $191,539 for the three months ended March 31, 2007 and 2006, respectively. Our decrease in revenue of $96,677 is due to several previously funded cases not settling during the quarter. Our operating cycle is typically longer than one year for funded cases to generate revenue. We cannot guarantee with certainty when we will generate revenue sufficient to fund ongoing operations. Our future revenues will be reliant on the ability to fund future cases which require shorter periods of funding and strong collection efforts on funded cases as they are resolved.



Operating expenses



|                                                |  |                              |  |                     |  |            |  |      
|----------------------------------------------- |  | ---------------------------- |  | ------------------- |  | ---------- |  | -----
|                                                |  | Three Months Ended March 31, |  | Increase (Decrease)
|                                                |  | 2007                         |  | 2006                |  | $          |  | %    
|                                                |  |                              |  |                     |  |            |  |      
|Reserve for
unsuccessful resolution
of lawsuits |  | $
-                          |  | $                   |  | $          |  | -    
|General and
administrative expenses             |  | 108,887                      |  | 555,164             |  | (446,277)  |  | (80)%
|Financing expense                               |  |                              |  | 3,947               |  | (3,947)    |  | -    
|Depreciation and
amortization                   |  | 6,221                        |  | 6,579               |  | (358)      |  | (5)% 
|Preferred stock dividend                        |  | -                            |  | -                   |  | -          |  | -    
|                                                |  |                              |  |                     |  |            |  |      
|Total operating expenses                        |  | $115,108                     |  | $565,690            |  | $(450,582) |  | (80)%



Total operating expenses for the three month period ended March 31, 2007 decreased by $450,582 over the three month period ended March 31, 2006 because of our efforts to reduce payroll costs and all expenses in the General and Administrative expenses.





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Other income (expense)



|                              |  |                              |  |                     |  |         |  |        
|----------------------------- |  | ---------------------------- |  | ------------------- |  | ------- |  | -------
|                              |  | Three Months Ended
March 31, |  | Increase (Decrease)
|                              |  | 2007                         |  | 2006                |  | $       |  | %      
|                              |  |                              |  |                     |  |         |  |        
|Other income                  |  | $                            |  |                     |  | $       |  | -      
|Interest (expense)            |  | (37,053)                     |  | (14,090)            |  | 22,963  |  | 162.97%
|Rental income                 |  |                              |  |                     |  |         |  |        
|Amortization of debt
discount |  |                              |  |                     |  |         |  |        
|                              |  |                              |  |                     |  |         |  |        
|Total other income (expense)  |  | $(37,053)                    |  | $(14,090)           |  | $22,963 |  | 162.97%



Our interest expense was $22,963 higher in the three month period ended March 31, 2007 than the three month period ended March 31, 2006 because we increased short term interest bearing debt.



Net (loss)



|           |  |                              |  |                     |  |            |  |      
|---------- |  | ---------------------------- |  | ------------------- |  | ---------- |  | -----
|           |  | Three Months Ended
March 31, |  | Increase (Decrease)
|           |  | 2007                         |  | 2006                |  | $          |  | %    
|           |  |                              |  |                     |  |            |  |      
|Net (loss) |  | $ (57,299)                   |  | $  (388,242)        |  | $(330,943) |  | (85)%



Our net loss was $330,943 lower in the three month period ended March 31, 2007 as compared to the three months ended March 31, 2006 because our cost cutting efforts took effect as reflected by General and Administrative expenses being substantially reduce.  Until we can increase sales we will continue to have net losses.



Operation Plan



During the next twelve months we plan to effectuate our business plan and have restarted the marketing of our products and increased our product offerings. Demand for financing continues to remain strong and we have a backlog of requests for advances that we look forward to begin satisfying as soon as we have secured new capital or financing.  Additionally, we still intend to start marketing of a new full recourse loan product during 2006. We believe that full recourse loans, which we anticipate will eventually become approximately 10% of our core business, will limit our exposure to losses, allow for earlier recognition of revenue and at the same time answer the demand in the legal community for more traditional borrowing facilities that carry a lower interest rate compared to the fees we currently charge for our non recourse advance product. We intend to expand our geographic market penetration and will explore opportunities to acquire assets or other companies in this industry.



We have cash of approximately $(1,504) as of March 31, 2007. In the opinion of management, available funds will not satisfy our working capital requirements for the next twelve months. Nevertheless, our reorganization plan does provide for sufficient revenue to sustain operations.



We will also need to raise funds to continue to implement our business plan. We plan to raise these funds through private and institution or other equity offerings including interest bearing debentures. We may attempt to secure other loans from lending institutions or other sources. We will also consider establishing relationships with selected business partners whose contributions include necessary cash. There is no guarantee that we will be able to raise additional funds through offerings or other sources. If we are unable to raise funds, our ability to continue with operations will be materially hindered.





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Liquidity and Capital Resources



Liquidity is a measure of a companys ability to meet potential cash requirements.  We have historically met our capital requirements through the issuance of stock and by borrowings.  In the future we believe we will be able to provide the necessary liquidity we need by the revenues generated from our operations.



On March 5, 2007, we agreed to issue 40 million shares to Rochester Capital Partners, LP. (RCP), a Nevada limited partnership. Gary Rasmussen is the General Partner of this partnership and exercised dispositive control of all shares owned by it.  Upon execution of the agreement with RCP, PCP assigned its interest in 21 million shares to Lehars Handels Ges., M.b.h., leaving RCP with 19 million shares.



In March, 2007, we issued 8,000,000 shares to Morton Reed, our Chief Executive Officer, in exchange for $350,000 in back salary. Pursuant to the terms of the Letter Agreement with RCP, Dr. Reed immediately sold these shares to RCP.



We believe that the issuance and sale of the restricted shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) and Regulation D promulgated thereunder.  The shares issued were directly from us and did not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and 34 Act reports.  We reasonably believed that the recipients, immediately prior to issuing the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment.  The recipients had the opportunity to speak with our management on several occasions prior to their investment decision.



On March 5, 2007, we entered into a binding Letter Agreement with Rochester Capital Partners, LP., a Nevada limited partnership (RCP) and agreed to issue a total of forty (40) million shares of treasury stock in exchange for $250,000, payable by a promissory note due and payable in full within sixty days. As of the date of this prospectus, RCP has advanced approximately $50,000. In addition to the $250,000, the RCP has agreed to purchase up to 11 million shares from Morton Reed, our Chief Executive Officer, and to provide additional funding of up to $180,000, for which it may acquire up to an additional 5 million shares of common stock. The Transaction was unanimously approved by our Board of Directors at a meeting held on February 22, 2007.



At closing, RCP immediately assigned its interest in 21 million shares to Lehars Handels Ges., M.b.H. (Lehars), for consideration of $300,000 to be received within 30 days. Lehars has failed to remit payment and, if the default continues, the shares will revert to RCP.  RCP currently owns approximately 30 million shares of our common stock, or about 39%. However, if the 21 million shares revert back to RCP, it will own approximately 51 million shares of our outstanding common stock, or about 65%.



RCP is a limited partnership controlled by Gary Rasmussen as its General Partner. The limited partners of RCP are family members of Mr. Rasmussen. Gary Rasmussen is a consultant to the Registrant and will continue as such after the Transaction.



All references to said Letter Agreement herein are qualified in their entirety by reference to the actual Letter Agreement, a copy of which was filed as Exhibit 10.1 to a Form 8-K filed by LitFunding on March 7, 2007.



We recently acquired two wholly owned subsidiaries, Global Universal Film Group, Inc. (Global Universal), an early stage developer, producer and distributor of niche films, related books, and music rights and Easy Money Express, an internet-based, loan company. Both of these entities are at a nascent stage in their development and have not yet produced any revenues. It is managements plan to develop Easy Money Express as our core business, and to spin-off Global Universal as a separately traded corporation, for which we have earned $26,000 of a total $200,000 management fee and will receive 10% of their shares of common stock upon completing the spin-off transaction. In the even the spin-off transaction is not completed by June 3, 2007, the balance of the management fee (i.e., $174,000) will be waived and we will be entitled to receive only 5% of their shares at spin-off, rather than 10%.





19



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We are in the business of investing in litigation recoveries. Business is conducted through our subsidiary, LitFunding USA and its wholly owned limited liability companies.  LitFunding USA resumed the business of California LitFunding (our subsidiary who has been in the business since 2000) subsequent to June 17, 2004, after the United States Bankruptcy Court entered an order confirming our and California LitFundings joint plans of reorganization.  We raise and advance capital to various law firms pursuant to Settlement Agreements.  These Settlement Agreements provide that the funds advanced shall be repaid to us, plus a fee, when the lawsuits referenced in the agreement ultimately settle.  The amount of the fee payable on the funds advanced depends upon the length of the time the funds are outstanding, up to a fixed limit.  Pursuant to the terms of the Settlement Agreements, the Companys contractual right to payment is limited to the funds ultimately paid to the law firm from the specified lawsuit, or lawsuits, in which the funds are invested or expended.



Investment Agreement with Imperial Capital Holdings



On January 16, 2006, we entered into an Investment Agreement with Imperial Capital Holdings (Imperial).  Under the terms of the agreement, we agreed to issue and sell to Imperial, and Imperial agreed to purchase from us up to that number of shares of common stock having an aggregate purchase price of $3,000,000.  We will be able to require Imperial to purchase up to the $3,000,000 of its common stock over a two-year period commencing on the date a registration statement is declared effective by the SEC covering shares of our common stock underlying the Investment Agreement. These funds will be able to be drawn at our discretion by delivering a written notice (Put Notice) stating the amount of funds we wish to draw (Put Amount).  The Put Amount shall be equal to 93% of the market price of our common stock, as calculated in accordance with the terms of the Investment Agreement, provided that in no event will the Put Amount be greater than $250,000.  We shall not be entitled to submit a Put Notice until after the previous closing has been completed.  If any closing best bid price during the applicable Pricing Period (the period beginning on the Put Notice date and ending on and including the date that is 5 trading days after such Put Notice date) with respect to any particular Put Notice is less than 75% of any closing best bid price of the common stock for the 10 trading days prior to the Put Notice date, the Put Notice will terminate at our request.



Registration Rights.  Pursuant to the terms of the Registration Rights Agreement dated January 16, 2006 with Imperial, we are obligated to file a registration statement registering 8,000,000 shares of our common stock issuable on the date proceeding the filing of the Registration Statement based on the closing bid price of our common stock on such date and the amount reasonably calculated that represents common stock issuable to other parties as set forth in the Investment Agreement except to the extent that the SEC requires the share amount to be reduced as a condition of effectiveness.  We shall use commercially reasonable efforts to have the Registration Statement declared effective by the SEC within 180 calendar days after the filing of the Registration Statement.



Placement Agent.  In connection with the Investment Agreement, on January 16, 2006 we entered into a Placement Agent Agreement with Brewer Financial Services, LLC., a NASD registered broker-dealer.  The Placement Agent will render consulting services to us with respect to the Investment Agreement and will be available for consultation in connection with the advances to be requested by us pursuant to the Investment Agreement.  We agreed to pay to the Placement Agent 1% of the gross proceeds from each draw for all services in connection with the Placement Agent Agreement.



Satisfaction of our cash obligations for the next 12 months.



As of March 31, 2007, our cash balance was $(1,504).  Over the next twelve months we believe that existing capital and anticipated funds from operations will not be sufficient to sustain operations and planned expansion.  Our plan for satisfying our cash requirements for the next twelve months is through additional equity, third party financing, and/or traditional bank financing.  We intend to make appropriate plans to insure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities. No assurance can be made that such financing would be available, and if available it may take either the form of debt or equity.  In either case, the financing could have a negative impact on our financial condition and our Stockholders.



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We anticipate incurring operating losses over the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving technology markets. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, implement and successfully execute our business and marketing strategy, continue to develop and upgrade technology and products, respond to competitive developments, and continue to attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.



Going Concern



The ability of the Company to continue as a going concern remains dependent upon successful operation under the bankruptcy plan, obtaining additional capital and financing, and generating positive cash flow from operations. The Company intends to seek additional capital either through debt or equity offerings and believes that increased volume and reduction in its lead time to finance and collect on funded cases will ultimately lead to profitability and positive cash flows. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.



Summary of product and research and development that we will perform for the term of our plan.



We do not anticipate performing any significant product research and development under our plan of operation until such time as we complete a merger or acquisition.



Expected Purchase or sale of plant and significant equipment.



We do not anticipate the purchase or sale of any plant or significant equipment, as such items are not required by us at this time or anticipated to be needed in the next twelve months.



Significant changes in the number of employees.



We currently employ 3 full time employees.  Because of the legal proceedings previously discussed in prior filings, we experienced a deleterious and damaging loss of key personnel that will have to be replaced.  In the event that we generate significant revenues and expand our operations, then we may need to hire additional employees or independent contractors.



Consultants



Andrew Baum.  On December 1, 2005, we entered into a consulting agreement with Andrew Baum, wherein Mr. Baum agreed to provide us with services related to market analysis, financial planning, contacts with the realization of value for the Companys stock and strategic transactions and relationships.  The term of the agreement was for three months expiring on March 1, 2006.  We agreed to compensate Mr. Baum a fixed, one-time fee in the amount of $18,000.  In lieu of said cash fee, Mr. Baum agreed to accept 300,000 shares of our common stock.  The 300,000 shares were issued on March 2, 2006.  The shares were unrestricted pursuant to the S-8 Registration filed with the SEC on February 28, 2006.







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Gary A. Rasmussen.  On December 13, 2005, we entered into a consulting agreement with Mr. Rasmussen, wherein Mr. Rasmussen agreed to provide us with advice and general consultation in the areas of management, marketing and financing, and for such other consulting services as we may mutually agree upon.  We agreed to compensate Mr. Rasmussen a fixed, monthly retainer fee in the amount of $4,000, of which the first payment shall be due and owing upon the execution of the agreement, and subsequent payments shall be due on each monthly anniversary date thereafter.  Additionally, we agreed to pay Mr. Rasmussen a fee equal to 1% of the gross dollar amount of any equity line of credit commitment received from Mr. Rasmssens sources.  The term of the agreement is for 36 months from the date of execution and will continue on a month-to-month basis until either party elects to terminate the agreement.  Mr. Rasmussen was introduced to us by Queststar, which has a fee agreement in force with us dated September 21, 2004.  Mr. Rasmussen and Queststar have agreed to share equally in any fees received by Queststar from us.



IR Partners, LLC.  On January 10, 2006, we entered into an agreement with IR Partners, LLC, wherein IR Partners agreed to provide us with investor relations services during the period February 1, 2006 through May 31, 2006.  As consideration for the performance of the services we agreed to pay IR Partners $5,000 and issue 250,000 shares of our restricted common stock (issued on February 1, 2006).



CLX & Associates, Inc.  On March 1, 2006, we entered into a consulting agreement with CLX & Associates, Inc., wherein CLX agreed to provide us with consulting services in connection with (i) short and long term strategic planning; (ii) short term crisis management; (iii) short and long term marketing; (iv) meeting with/selecting qualified companies for joint business ventures; (v) contracting and interviewing qualified accounting firms and legal counsel; (vi) recruitment selection of key executives and staff; (vii) internet and website design; and (viii) recommending and identifying of board members.  We agreed to compensate CLX for the services a total of $100,000 in cash, or 1,000,000 shares of our common stock.  CLX will commence providing services for the Company on such date as it has received the agreed compensation (effective date).  The term of the agreement is for three months from the effective date.  On June 23, 2006, the 1,000,000 shares were issued to CLX. In November 2006 the shares were cancelled for non- performance of the contracted services.



Alliance Marketing.  On March 1, 2006, we entered into a sales consultant agreement with Alliance Marketing, wherein we agreed to retain the services of Alliance Marketing to act as an outside, independent marketing consultant and sales representative for sales to new clients, acquiring new investor money to the LLC program and conducting all marketing and sales programs.  We agreed to issue 50,000 shares of our common stock to Alliance Marketing as a sign-on bonus (issued on April 18, 2006 to Anthony Longo, principal of Alliance Marketing).  We also agreed to issue to Alliance Marketing 50,000 options to purchase shares of our common stock at $0.15 per share for one year.



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 or operations, liquidity, capital expenditures or capital resources that is material to investors.





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Critical Accounting Policies and Estimates



Our Management's Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources, primarily allowance for doubtful accounts receivables, accruals for other costs, and the classification of net operating loss and tax credit carry forwards between current and long-term assets. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in this report.



FACTORS THAT MAY AFFECT OUR RESULTS OF OPERATION



Our cash flow depends on a lengthy collection cycle and factors beyond our control that may require us to obtain interim financing.



Our procedures and underwriting process have been changed to try and lessen our risk and to shorten our collection cycle.  Nevertheless, our collection cycle on advances made will remain lengthy compared to other similar industries.  We believe that cases we advance funds to attorneys on may take between 18 months and 36 months to reach resolution.  Larger cases may take longer to reach resolution.  Once we advance the money, the collection cycle is out of our control and this may force us to seek other sources of capital to fund our overhead expenses.  There can be no assurance that in such an event we could find such financing or that, if we could, the financing would be available on satisfactory terms.



We have a limited operating history and lack of profitability.



We still have limited operating history having begun business in 2000 and spent almost a full year in litigation defending ourselves from a petition for involuntary bankruptcy.  During that time, we have incurred losses in every quarter since inception except for the extraordinary gain realized in December 2004 and we remain subject to the risks and uncertainties usually encountered by early stage companies.



In the past, we attracted large well known firms of attorneys as clients.  We believe that it will be possible to once again attract large firms of this caliber even after the enormously negative and unwarranted reputation achieved during the bankruptcy litigation.  We have met with some successes in this regard.  We have not yet experienced an intolerable inability to attract the talent that we need.  However risks remain that we will not attract, train or integrate into the business organization qualified personnel.  Additionally, it is fair to expect that fluctuations in operating results may be significant as we develop and test new business practices.  There is also the risk that we will fail to properly manage growth and expansion, if and when it occurs.



Our business of funding plaintiffs and plaintiff attorneys may be in potential conflict with champerty laws.



Champerty, as defined by Blacks Law Dictionary, is a bargain to divide the proceeds of litigation between the owner of the liquidated claim and a party supporting or enforcing the litigation.  Different states impose rules on the champerty process.  We research state champerty laws prior to advancing capital to plaintiffs and plaintiff attorneys, however, if we were to be found in violation of states champerty laws it could have a material adverse effect on us and our results of operations.



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We have historically had losses from operations and losses may continue in the future, which may cause us to curtail operations.



Since our inception we have not been profitable and have lost money on both a cash and non-cash basis.  For the three months ended March 31, 2007, we incurred net losses of $57,299. Our accumulated deficit at the end of March 31, 2007 was $11,282,565. Future losses are likely to occur, as we are dependent on spending money to pay for our operations. No assurances can be given that we will be successful in reaching or maintaining profitable operations.  Accordingly, we may experience liquidity and cash flow problems.  If our losses continue, our ability to operate may be severely impacted or alternatively we may be forced to terminate our operations.



We are subject to a working capital deficit, which means that our current assets on March 31, 2007 were not sufficient to satisfy our current liabilities and, therefore, our ability to continue operations is at risk.



We had a working capital deficit for the three months ended March 31, 2007 which means that our current liabilities exceeded our current assets on March 31, 2007 by $2,064,250.  Current assets are assets that are expected to be converted to cash within one year and, therefore, may be used to pay current liabilities as they become due. Our working capital deficit means that our current assets on March 31, 2007 were not sufficient to satisfy all of our current liabilities on March 31, 2007.  If our ongoing operations do not begin to provide sufficient profitability to offset the working capital deficit, we may have to raise capital or debt to fund the deficit or curtail future operations.



Our common stock is listed on the Over-the-Counter (OTC) Bulletin Board which may make it more difficult for stockholders to sell their shares and may cause the market price of our common stock to decrease.



Our common stock is listed on the OTC Bulletin Board.  Factors that may affect potential liquidity include limited coverage by security analysts and the news media.  This may negatively affect the prices for our shares of common stock.  The filings of the involuntary bankruptcy petition against us on April 2, 2003 and subsequent litigation and filings of voluntary chapter 11s for both ourselves and our then operating subsidiary, California LitFunding did have a materially negative effect on the price of our stock and for all intents and purposes that stock had no value for all of 2003 and most of 2004.  We believe that the successful resolution of the litigation has given us an opportunity to rebuild value in the stock.



Our stock price may be volatile and an investment in such common stock could suffer a decline in value.



The market price of our common stock may fluctuate significantly and violently in response to a number of factors, some of which are beyond our control.  These factors include:



·

Government regulatory action affecting our services or competitors services;

·

Actual or anticipated fluctuations in operating results;

·

The loss of key management or other personnel;

·

The loss of major customers;

·

The outcome of any future litigation;

·

Broad market fluctuations; and economic conditions in the United States or abroad.



We could fail to attract or retain key personnel, which could be detrimental to our operations.



Effective February 22, 2007, Dennis H. Johnston was appointed as a member of the Board of Directors of the Company.



Our success largely depends on the efforts and abilities of our Officers and Directors.  The loss of their services could materially harm our business because of the cost and time necessary to find successors.  Such a loss would also divert management attention away from operational issues. We do not have other key employees who manage our operations.  To the extent that we are smaller than our competitors and have fewer resources, we may not be able to attract a sufficient number and quality of staff, when required.





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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.



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.





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PART II  OTHER INFORMATION



Item 1. Legal Proceedings.



We are a defendant in several matters in litigation, many of which are in the normal course of business, including litigation for refunds of funds invested. We believe these suits are without merit and intends to defend these litigations in courts of law.



On or about October 31, 2006, the Company obtained a judgment against Joel Gatlin in the principal amount of $52,856.32 with interest to continue to accrue at 5% per month pursuant to the terms of an earlier lending agreement entered into between the parties.



On or about November 20, 2006, the Company obtained a judgment against Alan Schuchman in the principal amount of $40,000 with interest to continue to accrue at 10% per year on the unpaid balance. Mr. Schuchman has abandoned the $10,000 debenture to LitFunding Corp.



On or about January 26, 2007, the Company obtained a judgment against Anthony Casamassimi in the principal amount of $88,500 with interest to continue to accrue at 10% per month pursuant to the terms of an earlier lending agreement entered into between the parties.

.



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



On March 7, 2007 we issued 40,000,000 shares of our restricted common stock to Rochester Capital Partners LP   pursuant to its agreement with the Company dated March 5, 2007, for a $250,000 note payable as consideration. Of the 40 million shares, 21 million shares was assigned by Rochester Capital Partners LP to Lehars Ges., M.b.H., an Austrian corporation located in Graz, Austria (Lelars), pursuant to a agreement between Rochester Capital partners LP and Lehars. The Balance of 19 million shares were issued directly to Rochester Capital Partners LP.



The foregoing description of the transaction between the Company and RCP is qualified in its entirety by reference to the Companys current report on Form 8-K filed on March 7, 2007.



We believe that the issuance of the above shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2).



On March 8, 2007, we issued 400,000 shares of our commons stock to Stanley Weiner for services rendered to the Company as a Board Member. The shares were unrestricted pursuant to the S-8 Registration filed on September 29, 2006.



On March 8, 2007, we issued 400,000 shares of our commons stock to Donald Hejmanowski for services rendered to the Company as a Board Member. The shares were unrestricted pursuant to the S-8 Registration filed on September 29, 2006.



On March 8, 2007, we issued 400,000 shares of our commons stock to Morton Reed for services rendered to the Company as a Board Member. The shares were unrestricted pursuant to the S-8 Registration filed on September 29, 2006.



On March 30, 2007, we issued 500,000 shares of our commons stock to Marc Winthrop for services rendered to the Company. The shares were unrestricted pursuant to the S-8 Registration filed on September 29, 2006.



On March 30, 2007, we issued 8,000,000 shares of our restricted commons stock to Morton Reed for accrued salary of $350,000. Mr. Reed transferred the shares to Rochester Capital partners LP for a note receivable in the amount of $35,000.



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Item 3. Defaults Upon Senior Securities.



None.



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



None.



Item 5. Other Information.



On February 20,2007 we terminated the CardMart  USA, Inc. Letter Agreement as CardMart was unable to meet the terms and conditions set forth in the Letter Agreement.





Item 6. Exhibits and Reports on Form 8-K.



Exhibits



|               |                                                                                                                                                                                                                    
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number | Description                                                                                                                                                                                                        
|2.1            | Plan and agreement of merger between RP Entertainment Inc., RP Acquisition Corp. and LitFunding Corp. dated February 21, 2003 (Incorporated by reference to the exhibits to Form 8-K filed on March 11, 2003)      
|2.2            | U.S. Bankruptcy Court Stipulation between LitFunding Corporation and Petitioning Creditors dated November 14, 2003 (Incorporated by reference to the exhibits to Form 8-K filed on December 4, 2003)               
|2.3            | U. S. Bankruptcy Court Notice of Entry of Judgement (Incorporated by reference to the exhibits to Form 8-K filed on December 4, 2003)                                                                              
|2.4            | U.S. Bankruptcy Court Chapter 11 Plan of Reorganization dated April 7, 2004 (Incorporated by reference to the exhibits to Form 8-K filed on July 6, 2004)                                                          
|2.5            | Agreement and Plan of Merger between LitFunding Inc., LFDG Subsidiary Corp. and Easy Money Express Inc. dated February 7th, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 13, 2006)
|3(i).1         | Articles of Incorporation dated July 2, 1996 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                       
|3(i).2         | Certificate of Amendment to Articles of Incorporation dated September 4, 1996 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                      
|3(ii).1        | By-Laws dated September 2, 1996 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                                    
|3(ii).2        | Amendment of By-laws dated March 5, 1997 (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                           
|4.1            | Common Stock Certificate Form (Incorporated by reference to the exhibits to Form SB-2 filed on June 19, 2001)                                                                                                      
|10.1           | Agreement between RP Entertainment Inc. and Brutus Productions dated May 1, 1999 (Incorporated by reference to the exhibits to Form SB-2A filed on August 3, 2001)                                                 
|10.2           | Amended 2002 Employee Stock Compensation Plan Prospectus dated September 2, 2003 (Incorporated by reference to the exhibits to Form S-8 filed on September 10, 2003)                                               
|10.3           | Amended 2002 Employee Stock Compensation Plan Certification of Plan Adoption dated September 2, 2003 (Incorporated by reference to the exhibits to Form S-8 filed on September 10, 2003)                           
|10.4           | 2004 Stock Option Plan dated March 9, 2004 (Incorporated by reference to the exhibits to Form DEF 14A filed on July 13, 2004)                                                                                      
|10.5           | Employment Agreement between LitFunding USA and Stephen D. King dated October 2004 (Incorporated by reference to the exhibits to Form S-8 filed on October 28, 2004)                                               





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|      |                                                                                                                                                                                                                      
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6  | Investment Agreement between LitFunding Corp. and Dutchess Private Equities Fund, L.P. dated January 14, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 21, 2005)                      
|10.7  | Registration Rights Agreement between LitFunding Corp. and Dutchess Private Equities Fund, L.P. dated January 14, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 21, 2005)             
|10.8  | Option Agreement between Silver Dollar Productions Inc. and Morton Reed dated January 31, 2005 (Incorporated by reference to the exhibits to Form PRE 14C filed on March 21, 2005)                                   
|10.9  | Certificate of Designation dated July 25, 2005 (Incorporated by reference to the exhibits to Form S-8 filed on July 28, 2005)                                                                                        
|10.10 | Binding letter of intent of merger between LitFunding Corp. and Cashwize Inc. dated September 15, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on September 19, 2005)                           
|10.11 | Letter of intent of merger between LitFunding Corp. and Easy Money Express Inc. dated December 14, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 3, 2006)                             
|10.12 | Binding Letter of Intent between Silver Dollar Productions, Inc. and Global Universal Film, Group Ent. Inc. dated December 21, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on January 12, 2006)
|10.13 | Investment Agreement with Imperial Capital Holdings, dated January 16, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 1, 2006)                                                        
|10.14 | Registration Rights Agreement with Imperial Capital Holdings, dated January 19, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 1, 2006)                                               
|10.15 | Placement Agent Agreement with Brewer Financial Services, LLC., dated January 16, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 1, 2006)                                             
|10.16 | 2006 Non-QualifiedStock Compensation Plan (Incorporated by reference to the exhibits to Form S-8 filed on February 28, 2006)                                                                                         
|      |                                                                                                                                                                                                                      
|10.19 | Share Exchange Agreement with Easy Money Express, Inc., dated March 31, 2006 (Incorporated by reference to the exhibits to Form 10-KSB file on May 19, 2006)                                                         
|10.20 | Termination dated February 20,2007 of CardMart USA, Inc.Letter Agreement dated November 17,2006(Incorporated by reference to the exhibits to Form S-8 filed on February 23, 2007)                                    
|20    | Letter to Shareholders dated March 11, 2003 (Incorporated by reference to the exhibits to Form 8-K filed on March 11, 2003)                                                                                          
|21    | List of Subsidiaries : California LitFunding, E.Evolution Expeditions and LitFunding USA (Incorporated by reference to the exhibits to Form 10-KSB filed on March 21, 2005)                                          
|31.1* | Certification of Morton Reed pursuant to Section 302 of the Sarbanes-Oxley Act                                                                                                                                       
|31.2* | Certification of Terry Gabby pursuant to Section 302 of the Sarbanes-Oxley Act                                                                                                                                       
|32.1* | Certification of Morton Reed pursuant to Section 906 of the Sarbanes-Oxley Act                                                                                                                                       
|32.2* | Certification of Terry Gabby pursuant to Section 906 of the Sarbanes-Oxley Act                                                                                                                                       

* Filed herewith.





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Reports on Form 8-K

Form 8-K filed on March 7, 2007.

Form 8-K filed on February 23, 2007.

Form 8-K filed on February 26, 2007.

Form 8-K filed on November 21, 2006.

Form 8-K filed on September 1, 2006

Form 8-K filed on August 4, 2006

Form 8-K filed on September 1, 2006.

Form 8-K filed on August 4, 2006; Investment Agreement with Imperial, dated 7/28/06.

Form 8-K filed on July 20, 2006; Press Release.

Form 8-K filed on June 21, 2006; Press Releases.

Form 8-K/A filed on May 26, 2006; Change of auditor.



Form 8-K/A filed on May 15, 2006; Change of auditor.

Form 8-K/A filed May 5, 2006; Change of auditor.

Form 8-K filed May 4, 2006; Change of auditor.

Form 8-K filed February 13, 2006; Easy Money merger.

Form 8-K filed February 1, 2006; Imperial Capital Investment Agreement.

Form 8-K filed January 12, 2006; Global Letter of Intent.

Form 8-K filed January 3, 2006; Easy Money Letter of Intent.





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SIGNATURES





Pursuant to the requirements 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.





|                   |              |                                                                                           
|------------------ | ------------ | ------------------------------------------------------------------------------------------
|                   | (Registrant) | LITFUNDING CORP.                                                                          
|                   |              |                                                                                           
|Date: May 20, 2007 | By:          | /s/Terry Gabby                                                                            
|                   |              | Terry Gabby                                                                               
|                   |              | Chief Financial Officer 
(On behalf of the registrant and as principal accounting officer)





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