**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-K**





**ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934**





**FOR
      THE FISCAL YEAR ENDED DECEMBER 31, 2007**




**LEGENDS
                  BUSINESS GROUP, INC.**(Name
                  of small business issuer in its
                  charter)




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




1375
      Semoran Boulevard


Casselberry,
      Florida 32707


407-263-4029


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


**COMMON
      STOCK, $0.001 PAR VALUE PER SHARE**


(Title
      of
      Class)




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





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





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the
      Securities Exchange Act of 1934 during the preceding 12 months (or for such
      shorter period that the registrant


was
      required to file such reports) and (2) has been subject to such filing
      requirements for the past 90 days. Yes **x** No o





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein,
      and will not be contained, to the best of the registrant's knowledge, in
      definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. o





Indicate
      by check mark whether registrant is a large accelerated filer, an accelerated
      filer, a non-accelerated filer or a smaller
      reporting company in Rule 12b-2 of the Exchange Act. Large
      accelerated filer o Accelerated
      filer o Non-accelerated filer o
      Smaller reporting company **x**





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





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference
      to the price at which the common equity was last sold, as of June 30, 2007
      was
      $4,892,250.





77,615,000
      shares of common stock were outstanding as of March 27, 2008.








**FORM
      10-K CROSS REFERENCE INDEX**





**PART
                I**
            
            
            **PAGE**Item
                1.
            Business
            4Item
                1A.
            Risk
                Factors
            5Item
                1B.
            Unresolved
                Staff Comments
            9Item
                2.
            Properties
            9Item
                3.
            Legal
                Proceedings
            9Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            9**PART
                II**Item
                5.
            Market
                for Registrant's Common Equity, Related Stockholder Matters and Issuer
                Purchases of Equity Securities
            10Item
                6.
            Selected
                Financial Data
            11Item
                7.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            11Item
                7A.
            Quantitative
                and Qualitative Disclosures about Market Risk
            12Item
                8.
            Financial
                Statements and Supplementary Data
            13Item
                9.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            13Item
                9A.
            Controls
                and Procedures
            13Item
                9B.
            Other
                Information
            13**PART
                III**Item
                10.
            Directors,
                Executive Officers and Corporate Governance
            13Item
                11.
            Executive
                Compensation
            17Item
                12.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            19Item
                13.
            Certain
                Relationships, Related Transactions and Director
                Independence
            19Item
                14.
            Principal
                Accounting Fees and Services
            20**PART
                IV**Item
                15.
            Exhibits
                and Financial Statement Schedules
            21




2




**FORWARD-LOOKING
      STATEMENTS**





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




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




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





**•**
            our
                ability to successfully compete in the professional services
                industry;




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





**•**
            failure
                to identify, develop or profitably manage additional
                businesses;





**•**
            failure
                to obtain new customers or retain existing
                customers;





**•**
            inability
                to efficiently manage our
                operations;





**•**
            inability
                to achieve future operating
                results;





**•**
            inability
                to obtain capital for future
                growth;





**•**
            loss
                of key executives; and





**•**
            general
                economic and business conditions.





**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 Results of Operation” in this
      document and in our Prospectus and SB-2 filing SEC on February 13, 2007, as
      amended June 25, 2007, available at our website at** **www.LGSB.net** **or at the SEC’s website at www.sec.gov.**




3





**PART
      I**





**ITEM
      1.**  **** **BUSINESS**





**Business
      Overview**





Legends
      Business Group (hereinafter LGBS) is a development stage company incorporated
      in
      the State of Nevada in 2006. We were formed as a consulting firm. LGBS provides
      consulting services to small and medium size business that are ISP (Internet
      Service Providers), long distance providers, VOIP (Voice Over Internet Protocol)
      providers and digital content providers. The client companies we consult market
      their products mainly through the use of direct mail, websites and
      telemarketers. Our clients use an independent billing house to bill their
      monthly fees directly to their customer’s telephone bill. Legends Business Group
      currently focuses on three stages of this business:





1.
            Billing:
                Before a business client can use a telephone company to bill their
                services to their customer company, the FCC and FTC may require approval
                of the billing arrangement. We will assist business clients in obtaining
                and maintaining billing agreements between the appropriate agencies
                and
                related companies. Monthly sales will be submitted to each business
                client
                advising of new client company customers obtained. Monthly reports
                will
                provide all details regarding customer retention and
                cancellations.





2.
            Customer
                Service: It is vital that the client companies understand that the
                third
                party services provided will be billed with the assistance of a third
                party billing house through their local telephone bill, thus simplifying
                their recordkeeping requirements. Each client company must maintain
                a
                center that will handle all aspects of customer service regarding
                the
                billing accounts. A customer service training manual will be customized
                for each client company, providing , in detail, the language and
                processes
                to be used that will maintain a high level of client satisfaction
                with the
                services billed. The customer service representatives will be trained
                to
                provide world class customer service, allowing for high client company
                retention and low levels of service cancellations.





3.
            Scripting:
                Each client company must be aware of the constraints under which
                they
                operate. The FCC and FTC provide the guidelines and standards that
                must be
                met for client companies to operate in compliance at all times. The
                FCC
                requires that all client companies must establish a third party
                verification company to ensure that sales are properly verified and
                processed. The client companies must use appropriate and detailed
                descriptions of the products they are selling and /or the services
                they
                will be providing and billing through the client companies monthly
                telephone bills. We will assist client companies with obtaining all
                necessary approvals and maintaining those approvals by scripting
                approved
                language that will assure continued compliance with all rules and
                regulations in place.





We
      generate revenues from our consulting services, which come from a related party
      company K & L International Enterprises, Inc. (hereinafter “K & L”),
      which is owned by our President and CEO, Larry Powalisz. LGBS provides all
      of
      the services listed above to K & L. We currently charge a flat rate fee for
      our consulting services on a monthly basis. The rate charged for our services
      will be dependent upon the level of consulting services the client company
      is
      interested in utilizing and the complexity of the client company business.
      LGBS
      consulting fees are negotiated and established based upon client need and the
      complexity of their business.




***Our
      Philosophy***





Our
      philosophy is to provide our client companies with the means to succeed in
      our
      competitive business environment. The processes we use will allow client
      companies to successfully navigate the requirements of local exchange carriers
      and ultimately the FTC and FCC. We will assist our clients in choosing billing
      houses that will best serve their needs based upon the products they are
      selling, whether they are an ISP
      (Internet Service Provider), long distance provider, VOIP (Voice Over Internet
      Protocol) provider, or digital content provider. Our clients may make their
      sales using telemarketers, direct mail or through the use of their websites.
      LGBS will assist our clients to allow them to train their customer service
      teams
      and assure they are in compliance with all applicable regulations.


4




***Regulatory
      and Compliance Matters***




We
      devote
      significant effort to assuring our clients comply with regulations governing
      the
      various programs they offer. One common program is a free to pay program, which
      allows a customer to try the services offered for a period time at no charge.
      If
      the customer is not satisfied with the services, they may cancel the service
      at
      no cost during a specified period of time. If the customer continues to receive
      the services, then they are charged, though their local telephone bill.





In
      order
      to maintain their ability to serve customers and collect revenue, we have taken
      a proactive approach to resolving regulatory complaints or inquiries. We advise
      our client companies to assume initial responsibility for inquiries and, if
      necessary, they may seek our compliance advice. Most often, a resolution is
      achieved. Most of the regulatory and compliance issues revolve around
      allegations of unauthorized LEC billing arising from violations of the free
      to
      pay conversion rules, called “cramming.” State Public Service Commissions, State
      Attorney General Offices, and the FTC attempt to prevent "cramming,” or the
      addition of a specific charge or charges to a customer's local telephone bill
      without the proper authorization. We are the front line to our consulting
      clients to prevent this practice and avoid end user complaints. We do not
      approve, or participate in, cramming and advise our client companies to avoid
      this practice. Our procedures reflect an absolute prohibition and zero tolerance
      for cramming. Through our billing agreements we have agreed to adhere to the
      highest disclosure standards. Our compliance policy includes the requirement
      that the telemarketer, among other things, uses an approved sales script and
      follows a prescribed verification procedure. We require our clients record
      each
      customer authorization and store the digital file for retrieval if needed to
      show compliance with the law. We believe we have taken extraordinary steps
      to
      ensure that we do not violate regulations relating to cramming. First we seek
      to
      avoid all sales in situations that a prospective customer may not realize a
      charge will be placed on the customer's phone bill after the trial period.
      We
      advise a client to do so by:





1.
      Making
      certain that the required script provided by us is adhered to by using spot
      checks by personnel at the site and by our ability to review recorded
      calls.





2.
      Making
      certain that the verification process has been adhered to by reviewing all
      verification recording by client personnel and by independent third
      parties.





3.
      Rejecting any orders where we are not satisfied that our strict compliance
      procedures have been adhered to.





4.
      Advising clients to remind the customers by mail prior to the end of the free
      trial period that the customer has the right to cancel prior to
      billing.





Sales
      not
      properly authorized are rejected for billing. For sales that are properly
      authorized we advise our clients to take steps to make certain that the
      customer, during the free trial period, is aware that they will be billed at
      the
      end of the free period. Clients do this by including a warning in their welcome
      package. This is followed by an e-mail and a pre-billing notice to the customer
      with the same information sent ten days prior to the billing date.





We
      are
      required to deliver annual reports to stockholders. We are subject to the
      informational and periodic reporting requirements of the Securities Exchange
      Act
      of 1934, as amended, and in accordance with the requirements of the Exchange
      Act, we will continue to file periodic reports and other required information
      with the SEC. All of our reports can be reviewed through the SEC’s Electronic
      Data Gathering Analysis and Retrieval System which is publicly available through
      the SEC’s website (http://www.sec.gov).





**ITEM
      1A.**  **** **RISK
      FACTORS**





**The
      risks and uncertainties described below are not the only ones that we face,
      but
      are those that we have identified as being the most significant factors that
      make investment in our stock speculative or risky or that have special
      application to us. Additional risks and uncertainties that we do not know about,
      or that we deem less significant than those identified below, may also make
      investment in our stock speculative or risky. If any of the adverse events
      associated with the risks described below occurs, our business, financial
      condition or results of operations could be materially adversely affected.
      In
      such a case, the trading price of our stock could
      decline.**


5




**Risks
      Relating to an Investment in Legends Business Group**




***We
      are a development stage company organized in March 2006 and have no operating
      history, which makes an evaluation of us extremely difficult. At this stage
      of
      our business operations, even with our good faith efforts, potential investors
      have a high probability of losing their investment.***




We
      were
      incorporated in March of 2006 as a Nevada corporation. As a result of our recent
      start up, we have generated limited revenues from operations and have been
      focused on organizational, start-up, and market analysis activities since we
      incorporated. Our operating activities during this period consisted primarily
      of
      developing contacts for our consulting services. There is nothing at this time
      on which to base an assumption that our business operations will prove to be
      successful or that we will ever be able to operate profitably. Our future
      operating results will depend on many factors, including our ability to raise
      adequate working capital, demand for our services, the level of our competition
      and our ability to attract and maintain key management and
      employees.




Our
      prospects are subject to the risks and expenses encountered by start-up
      companies, such as ours, which are establishing a business as consulting firm.
      Our limited operating history makes it difficult or impossible to predict future
      results of our operations. We may not establish a client base that will make
      us
      profitable, which might result in the loss of some or all of your investment
      in
      our common stock.




You
      should consider our prospects in light of the risks and difficulties frequently
      encountered by early stage companies in the rapidly evolving consulting market.
      These risks include, but are not limited to, an unpredictable business
      environment, the difficulty of managing growth and the use of our business
      model. To address these risks, we must, among other things:





·
            expand
                our customer base;


·
            enhance
                our name recognition;


·
            expand
                our product and service offerings;


·
            successfully
                implement our business and marketing
                strategy;


·
            provide
                superior customer service;


·
            respond
                effectively to competitive and technological developments;
                and


·
            attract
                and retain qualified personnel.





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




Our
      auditor has raised a concern regarding our ability to continue as a going
      concern. LGBS is in the development stage and we have generated limited revenues
      since our inception. Our source of funds has been the sale of our common stock
      and limited revenue generated from sales of our services to a related party
      company, K&L International Enterprises Inc. (hereinafter K&L). The
      President and owner of K&L is Larry Powalisz, the Chairman, CEO and
      President of Legends Business Group. We continue to incur operating expenses,
      legal and accounting expenses, consulting fees and promotional expenses. These
      factors raise substantial doubt about our ability to continue as a going
      concern.




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


6




***We
      will require additional financing in order to implement our marketing plan.
      In
      the event we are unable to acquire additional financing, we may not be able
      to
      implement our market plan resulting in a loss of revenues and ultimately the
      loss of your investment.***




Due
      to
      our start-up nature, we will have to incur the costs of developing professional
      marketing materials, hiring new employees and commencing marketing activities.
      To fully implement our business plan we will require substantial additional
      funding. We anticipate that our current cash on hand and the revenue we receive
      will enable us to maintain minimum operations and working capital requirements
      for at least twelve months.




To
      fully
      implement our plan we will need to raise additional funds through private
      placements, registered offerings, debt financing or other sources to maintain
      and expand our operations. Adequate funds for this purpose on terms favorable
      to
      us may not be available, and if available, on terms significantly more adverse
      to us than are manageable. Without new funding, we may be only partially
      successful or completely unsuccessful in implementing our business plan, and
      our
      stockholders may lose part or all of their investment.





***The
      issuance of additional shares of stock to obtain additional financing may dilute
      the holdings of our existing stockholders or reduce the market price of our
      stock.***





Additional
      equity offerings by us may dilute the holdings of our existing stockholders
      or
      reduce the market price of our common stock, or both. Any decision to issue
      securities in any future offering will depend on market conditions and other
      factors beyond our control. LGBS cannot predict or estimate the amount, timing
      or nature of our future offerings. Thus, our stockholders bear the risk of
      our
      future offerings reducing the market price of our common stock or diluting
      their
      stock holdings in us.





***We
      currently have no arrangements to provide for additional
      financing.***





We
      will
      need to raise additional funds to expand our operations. We do not have plans
      in
      place to provide for this additional financing.





***Our
      revenues are currently generated from a related
      party.***





LGBS
      has
      only generated revenue through a consulting contract with a related company.
      Our
      revenue has been generated from a contract we have with a related party company,
      K&L International Enterprises Inc. (hereinafter K&L). The President and
      owner of K&L International is Larry Powalisz, the Chairman, CEO and
      President of Legends Business Group. LGBS has not generated any non related
      party revenue at this point in operations, and may be unable to obtain
      non-related sources of revenue.




***Our
      operations could suffer from telecommunications or technology downtime,
      disruptions or increased costs.***





We
      are
      highly dependent on our computer and telecommunications equipment and software
      systems. In the normal course of our business, we must record and process
      significant amounts of data quickly and accurately to access, maintain and
      expand the databases we use for our services. We are also dependent on
      continuous availability of voice and electronic communication with customers.
      If
      we experience interruptions of our telecommunications network with our clients,
      we may experience data loss or a reduction in revenues. These disruptions could
      be the result of errors by our vendors, clients or third parties, electronic
      or
      physical attacks by persons seeking to disrupt our operations, or the operations
      of our vendors, clients or others. Any failure of a vendor to perform services
      could result in business disruptions and impede our ability to provide services
      to our clients. A significant interruption of service could have a negative
      impact on our reputation and could lead our present and potential clients not
      to
      use our services. The temporary or permanent loss of equipment or systems
      through casualty or operating malfunction could reduce our revenues and harm
      our
      business.


7




***We
      could cause disruptions to our clients business from inadequate service. Our
      insurance coverage may be inadequate.***





Failures
      to meet service requirements of a client could disrupt the clients business
      and
      result in a reduction in revenues or an increase in charges or a claim for
      substantial damages against us. For example, some of our agreements may have
      standards for service that, if not met by us, may result in lower payments
      to
      us. In addition, because many of our projects are business-critical projects
      for
      our clients, a failure or inability to meet a client's expectations could
      seriously damage our reputation and affect our ability to attract new business.
      To the extent that our contracts contain limitations on liability, such
      contracts may be unenforceable or otherwise may not protect us from liability
      for damages. While we maintain general liability insurance coverage, including
      coverage for errors and omissions, this coverage may be inadequate to cover
      one
      or more large claims, and our insurer may deny coverage.





***Our
      clients may adopt technologies that decrease the demand for our services, which
      could reduce our revenues and seriously harm our
      business.***





We
      target
      clients with a high need for our consulting services. However, our potential
      clients may adopt new technologies that decrease the need for such services.
      The
      adoption of changing technologies could reduce the demand for our services,
      pressure our pricing, cause a reduction in our revenues and harm our
      business.





***Unauthorized
      disclosure of sensitive or confidential client and customer data, whether
      through breach of our computer systems or otherwise, could expose us to
      protracted and costly litigation and cause us to lose
      clients.***





We
      may be
      required to collect and store sensitive data in connection with our consulting
      services, including names, addresses, social security numbers, credit card
      account numbers, checking and savings account numbers and payment history
      records, such as account closures and returned checks. If any person, including
      any of our employees, penetrates our network security or otherwise
      misappropriates sensitive data, we could be subject to liability for breaching
      contractual confidentiality provisions or privacy laws. Penetration of the
      network security of our data centers could have a negative impact on our
      reputation and could lead our present and potential clients to choose other
      service providers.





***We
      are significantly dependent on Larry Powalisz, our Chairman, CEO and President,
      who has limited experience in running a business such as ours. The loss or
      unavailability to Legends Business Group of Mr. Powalisz’s services would have
      an adverse effect on our business, operations and prospects which could result
      in a loss of your investment in us.***




The
      implementation of our business plan is significantly dependent upon the
      abilities and continued participation of Larry Powalisz, our Chairman, CEO,
      and
      President. Mr. Powalisz is not irreplaceable; however, it would be difficult
      to
      replace Mr. Powalisz at such an early stage of our development. The loss of,
      or
      unavailability to LGBS of Mr. Powalisz’s services would have an adverse effect
      on our business, operations and prospects. There can be no assurance that we
      would be able to locate or employ personnel to replace Mr. Powalisz, should
      his
      services be unavailable or discontinued. In the event that we are unable to
      locate or employ personnel to replace Mr. Powalisz, we would be required to
      cease pursuing our business opportunities, which could result in a loss of
      your
      investment.





***Mr.
      Powalisz is currently involved with other businesses and there can be no
      assurance that he will continue to provide services to us. We do not have an
      employment agreement with Mr. Powalisz. Mr. Powalisz’s limited time devotion to
      Legends Business Group could have an adverse effect on our
      operations.***




We
      do not
      have the depth of managerial or technical personnel as may be available to
      other
      publicly traded companies. Mr. Powalisz is involved with other businesses and
      there can be no assurance that he will continue to provide services to us.
      Mr.
      Powalisz does not have an employment agreement with LGBS, and he is under no
      obligation to provide services to us. Mr. Powalisz will continue to devote
      only
      a portion of his time to our activities. Mr. Powalisz currently devotes
      approximately 10 hours of his time per week to LGBS, and may or may not devote
      more time to the company as he deems necessary.




8




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




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




***We
      have incurred losses and may continue to incur losses for the foreseeable
      future. Continued losses could result in the loss of your
      investment.***





Legends
      Business Group has incurred losses since inception. Unexpected expenses or
      changes in the business environment may result in operating losses in the
      future.




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




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




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


**•**
            Disclose
                certain price information about the
                stock;


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


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


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




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




**ITEM
              1B.**
            **UNRESOLVED
                STAFF COMMENTS**





Legends
      Business Group is not a party to unresolved Staff Comments.





**ITEM
              2.**
            **PROPERTIES**





Our
      offices are currently located at 1375 Semoran Boulevard, Casselberry, Florida,
      the offices of Mr. Larry Powalisz, our Chairman, CEO, and President. Mr.
      Powalisz does not receive any remuneration for the use of his offices. We do
      not
      believe that we will need to obtain additional office space at any time in
      the
      foreseeable future, approximately 12 months, and will evaluate our property
      as
      our business plan is more fully implemented.




**ITEM
              3.**
            **LEGAL
                PROCEEDINGS**





Legends
      Business Group is not a party to any legal proceedings.





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





There
      were no matters submitted to a vote of security holders during the fourth
      quarter of 2007.


9




**PART
      II**





**ITEM
              5.**
            **MARKET
                FOR REGISTRANT'S COMMON EQUITY, RELATED****STOCKHOLDER
                MATTERS AND ISSUER PURCHASES OF EQUITY****SECURITIES**





***Market
      Information***





Our
      shares are quoted on the OTC Electronic Bulletin Board (OTCBB) under the symbol
      LGBS. The OTCBB is a regulated quotation service that displays real-time quotes,
      last sale prices and volume information in over-the-counter (OTC) securities.
      The OTCBB is not an issuer listing service, market or exchange. Although the
      OTCBB does not have any listing requirements per se, to be eligible for
      quotation on the OTCBB, issuers must remain current in their filings with the
      SEC or applicable regulatory authority. Market Makers are not permitted to
      begin
      quotation of a security whose issuer does not meet this filing requirement.
      Securities already quoted on the OTCBB that become delinquent in their required
      filings will be removed following a 30 or 60 day grace period if they do not
      make their required filing during that time. We cannot guarantee that our
      application will be accepted or approved and our stock listed and quoted for
      sale. As of the date of this filing, there have been no discussions or
      understandings between Legends Business Group, nor, anyone acting on our behalf
      with any market maker regarding participation in a future trading market for
      our
      securities.





**HIGH**
            
            **LOW****QUARTER
                ENDED:**December
                31, 2007
            
            $
            0.00
            
            $
            0.00As
                          of March
                          27, 2008
            
            $
            1.00
            
            $
            0.00





LGBS's
      stock price closed at $0.00 on December 31, 2007.





***Holders
      of Record***





As
      of
      March 27, 2008, we had approximately 46 stockholders of record for LGBS's common
      stock.





***Dividends***





The
      Board
      of Directors has not declared any dividends due to the following
      reasons:




1.
            The
                Company has not yet adopted a policy regarding payment of
                dividends;2.
            The
                Company does not have any money to pay dividends at this
                time;3.
            The
                declaration of a cash dividend would result in an impairment of future
                working capital; and4.
            The
                Board of Directors will not approve the issuance of a stock dividend.




10




***Equity
                Compensation Plan
                Information***




**Plan**
              **category**
            
            **Number
                of**
              **securities
                to**
              **be
                issued**
              **upon**
              **exercise
                of**
              **outstanding**
              **options,**
              **warrants**
              **and
                rights**
              **(a)**
            
            **Weighted-**
              **Average**
              **Exercise**
              **price
                of**
              **outstanding**
              **options,**
              **warrants**
              **and
                rights**
              **(b)**
            
            **Number
                of securities remaining available for**
              **future****issuance under equity compensation plans**
              **(excluding
                securities reflected in column(a))**
              **(
                c )**Equity
                compensation plans approved by security holders
            
            0
            
            0
            
            0Equity
                compensation plans not approved by security holders
            
            0
            
            0
            
            0**Total**
            
            **0**
            
            **0**
            
            **0**





**ITEM
              6.**
            **SELECTED
                FINANCIAL DATA**





As
      a
      smaller reporting company, as defined by Rule 229.10(f)(1), LGBS is not required
      to provide a summary of selected consolidated financial data.





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





**Plan
      of Operation**





Since
      the
      inception of Legends Business Group, Inc. (hereinafter LGSB), we have not been
      engaged in significant operation, nor have we had significant revenues, as
      we
      are a development stage company. Our plan of operation for the next twelve
      months will be to expand our client base. We intend to market our consulting
      services to small and medium size businesses that are ISP (Internet Service
      Providers), long distance providers, VOIP (Voice Over Internet Protocol)
      providers, and digital content providers that rely on the services of third
      party billing clearinghouses, and to companies that make their sales though
      direct mailings and though direct website sales.


11




As
      we
      continue to implement our business plan, we will need to raise additional funds.
      We anticipate obtaining additional financing to fund operations through common
      stock offerings, to the extent available, or to obtain additional financing
      to
      the extent necessary to augment our working capital.





Our
      current related party contract is providing sufficient revenue to continue
      current operations, and will provide sufficient revenue to meet our needs over
      the next twelve months.





In
      addition to our related party contract, on August 3, 2007 we entered into a
      contract with ILD Telecommunications, Inc. (hereinafter “ILD”). Under the terms
      of the agreement Legends Business Group will act as a non-exclusive agent for
      ILD, allowing LGBS to act as agent for ILD and to earn a commission from any
      contracts placed with ILD.





On
      November 1, 2007 we entered into a Sales Referral Agreement with Billing
      Concepts, Inc. Under the terms of the agreement, LGBS will be paid a commission
      by Billing Concepts, Inc. for each customer referral that LGBS makes to billing
      concepts those results in a successful contract.





We
      are
      not currently performing any product research or development, and do not have
      plans to do so for the next twelve month period.





LGSB
      does
      intend to continue to use the income from our current client to continue to
      meet
      our operating expenses.





We
      do not
      have need for the purchase of any property or equipment at this time.





LGBS
      will
      not have any significant changes in the current number of employees.





**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.





**Going
      Concern**




The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States, which
      contemplates continuation of the Company as a going concern. The Company’s
      operations generated limited income during the current period
      ended.




The
      future success of the Company is likely dependent on its ability to obtain
      additional capital to develop its proposed consulting offerings and ultimately,
      upon its ability to attain future profitable operations. There can be no
      assurance that the Company will be successful in obtaining such financing,
      or
      that it will attain positive cash flow from operations.





**Risk
      Factors**





See
      Part
      I, Item 1A for additional Risk Factors associated with an investment in LGBS.




**ITEM
              7A.**
            **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT****MARKET
                RISK**





As
      a
      smaller reporting company, as defined by Rule 229.10(f)(1), LGBS is not required
      to provide quantitative and qualitative disclosures about market
      risk.


12







**ITEM
              8.**
            **FINANCIAL
                STATEMENTS AND SUPPLEMENTARY
                DATA**





See
      the
      Financial Statements and accompanying footnotes for our full financial
      information and disclosures.





As
      a
      smaller reporting company as defined by Rule 229.10, LGBS is not required to
      provide the supplementary financial date as required by this item.





**ITEM
              9.**
            **CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON****ACCOUNTING
                AND FINANCIAL
                DISCLOSURE**





LGBS
      has
      had no changes in and no disagreements with accountants on accounting and
      financial disclosures.





**ITEM
              9A.**
            **CONTROLS
                AND PROCEDURES**





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





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





**ITEM
              9B.**
            **OTHER
                INFORMATION**





LGBS
      has
      no “Other Information” disclosure.





**PART
      III**





**ITEM
              10.**
            **DIRECTORS,
                EXECUTIVE OFFICERS AND CORPORATE****GOVERNANCE**





The
      members of our board of directors serve for one year terms and are elected
      at
      the next annual meeting of stockholders, or until their successors have been
      elected. The officers serve at the pleasure of the board of directors.
      Information as to our current director and executive officer is as
      follows:


**Name**
              
              **Age**
              
              **Title**
              
              **First Elected**
              
              **Term Expires**Larry
                  Powalisz
                Mark
                  Powalisz
              
              44
                22
              
              Chairman,
                  CEO, President
                Secretary,
                  Director
              
              3/2006
                3/2006
              
              3/2008
                3/2008


13


**Duties,
      Responsibilities and Experience**




*Larry
      Powalisz* Mr.
      Powalisz has been the Chairman, CEO, and President since the founding of Legends
      Business Group in March 2006. Mr. Powalisz currently devotes his time to running
      several operations, including LMI Mortgage which has been in operation since
      2005. LMI Mortgage originates and processes residential and commercial
      mortgages. In addition, Mr. Powalisz has operated YP Values since 2005. YP
      Values is an Internet Service Provider operation that provides internet service,
      internet directory listings and web hosting to small and medium sized businesses
      throughout the United States. YP Values is owned by K & L International
      Enterprises, Inc., which Mr. Powalisz has owned and operated since July 2002.
      K
& L International Enterprises was created as a marketing company,
      specializing in telemarketing. K&L is an internet service provider, and
      provides telemarketing for small and medium size local and long distance
      providers.




Mr.
      Powalisz has utilized the experience he has gained in establishing and running
      the profitable companies he has established in the past to provide consulting
      services to other companies. Mr. Powalisz consulted with Small Business
      Organization (SBO), which is an internet service provider and website host,
      from
      2003 through 2004. He provided services to SBO as a consultant with scripting
      and sales. He assisted SBO with their marketing campaign, and establishing
      their
      telemarketing centers. In 2005 Mr. Powalisz consulted with Accexx Communication,
      which is an internet service provider and website host. Mr. Powalisz provided
      customer service and scripting services consulting. From 2005 through the
      present, Mr. Powalisz has been providing consulting services for Better Business
      Organization (BBO), which is an internet service provider and website host.
      He
      has established the scripting for all sales and established their relationship
      with their third party clearing house.





Mr.
      Powalisz was a licensed real estate agent in the State of Florida from 1998
      through 2000, prior to becoming a licensed mortgage broker in June of 2004.





In
      1992,
      Mr. Powalisz founded an automobile repair shop that, due to its success,
      expanded to include four locations. In February of 2006, Mr. Powalisz sold
      his
      ownership.





*Mark
      Powalisz* Mr. Mark
      Powalisz is the son of Mr. Larry Powalisz and has been the Secretary and a
      Director since the founding of Legends Business Group in March 2006. Mr.
      Powalisz has worked in all phases of the telemarketing field since 2001 and
      is
      currently a telemarketing manager. Mr. Powalisz is also furthering his formal
      education to better serve LBGS.




***Election
      of Directors and Officers***




Directors
      are elected to serve until the next annual meeting of stockholders and until
      their successors have been elected and qualified. Officers are appointed to
      serve until the meeting of the Board of Directors following the next annual
      meeting of stockholders and until their successors have been elected and
      qualified.




No
      executive officer or director of the corporation has been the subject of any
      order, judgment, or decree of any court of competent jurisdiction, or any
      regulatory agency permanently or temporarily enjoining, barring suspending
      or
      otherwise limiting him from acting as an investment advisor, underwriter, broker
      or dealer in the securities industry, or as an affiliated person, director
      or
      employee of an investment company, bank, savings and loan association, or
      insurance company or from engaging in or continuing any conduct or practice
      in
      connection with any such activity or in connection with the purchase or sale
      of
      any securities.




No
      executive officer or director of the corporation has been convicted in any
      criminal proceeding (excluding traffic violations) or is the subject of a
      criminal proceeding, which is currently pending.




No
      executive officer or director of the corporation is the subject of any pending
      legal proceedings.


14


***Audit
      Committee and Financial Expert***




We
      do not
      have an Audit Committee, Larry Powalisz, our President and CEO, performs some
      of
      the same functions of an Audit Committee, such as: recommending a firm of
      independent certified public accountants to audit the annual financial
      statements; reviewing the independent auditors independence, the financial
      statements and their audit report; and reviewing management's administration
      of
      the system of internal accounting controls. The Company does not currently
      have
      a written audit committee charter or similar document.




We
      have
      no financial expert. We believe the cost related to retaining a financial expert
      at this time is prohibitive. Further, because of our start-up operations, we
      believe the services of a financial expert are not warranted.




***Code
      of Ethics***




A
      code of
      ethics relates to written standards that are reasonably designed to deter
      wrongdoing and to promote:




(1)
            Honest
                and ethical conduct, including the ethical handling of actual or
                apparent
                conflicts of interest between personal and professional
                relationships;


(2)
            Full,
                fair, accurate, timely and understandable disclosure in reports and
                documents that are filed with, or submitted to, the Commission and
                in
                other public communications made by an
                issuer;


(3)
            Compliance
                with applicable governmental laws, rules and
                regulations;


(4)
            The
                prompt internal reporting of violations of the code to an appropriate
                person or persons identified in the code;
                and


(5)
            Accountability
                for adherence to the code.




We
      have
      not adopted a corporate code of ethics that applies to our principal executive
      officer, principal financial officer, principal accounting officer or
      controller, or persons performing similar functions in that our sole officer
      and
      director serves in all the above capacities.




Our
      decision to not adopt such a code of ethics results from our having only one
      officer and director operating as the sole management for the Company. We
      believe that as a result of the limited interaction, which occurs having a
      sole
      officer/director for the Company eliminates the current need for such a code,
      in
      that violations of such a code would be reported to the party generating the
      violation.




***Corporate
      Governance***




Nominating
      Committee




We
      do not
      have a Nominating Committee or Nominating Committee Charter. Larry Powalisz,
      our
      President and CEO, performs some of the functions associated with a Nominating
      Committee. We have elected not to have a Nominating Committee in that we are
      a
      development stage company with limited operations and resources.




Director
      Nomination Procedures




Generally,
      nominees for Directors are identified and suggested by the members of the Board
      or management using their business networks. The Board has not retained any
      executive search firms or other third parties to identify or evaluate director
      candidates in the past and does not intend to in the near future. In selecting
      a
      nominee for director, the Board or management considers the following criteria:




1.
            whether
                the nominee has the personal attributes for successful service on
                the
                Board, such as demonstrated character and integrity; experience at
                a
                strategy/policy setting level; managerial experience dealing with
                complex
                problems; an ability to work effectively with others; and sufficient
                time
                to devote to the affairs of Legends Business Group,
                Inc.;


15





2.
            whether
                the nominee has been the chief executive officer or senior executive
                of a
                public company or a leader of a similar organization, including industry
                groups, universities or governmental
                organizations;


3.
            whether
                the nominee, by virtue of particular experience, technical expertise
                or
                specialized skills or contacts relevant to LGBS’s current or future
                business, will add specific value as a Board member;
                and


4.
            whether
                there are any other factors related to the ability and willingness
                of a
                new nominee to serve, or an existing Board member to continue his
                service.




The
      Board
      or management has not established any specific minimum qualifications that
      a
      candidate for director must meet in order to be recommended for Board
      membership. Rather the Board or management will evaluate the mix of skills
      and
      experience that the candidate offers, consider how a given candidate meets
      the
      Board’s current expectations with respect to each such criterion and make a
      determination regarding whether a candidate should be recommended to the
      stockholders for election as a director. During 2007, LGBS received no
      recommendation for Directors from its stockholders.




Legends
      Business Group, Inc. will consider for inclusion in its nominations of new
      Board
      of Director nominees proposed by stockholders who have held at least 1% of
      the
      outstanding voting securities of LGBS for at least one year. Board candidates
      referred by such stockholders will be considered on the same basis as Board
      candidates referred from other sources. Any stockholder who wishes to recommend
      for LGBS’s consideration a prospective nominee to serve on the Board of
      Directors may do so by giving the candidate’s name and qualifications in writing
      to LGBS’s Secretary at the following address: 1375 Semoran Blvd., Casselberry,
      Florida 32707.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
      requires our executive officers and directors, and persons who beneficially
      own
      more than ten percent of our common stock, to file initial reports of ownership
      and reports of changes in ownership with the SEC. Executive officers, directors
      and greater than ten percent beneficial owners are required by SEC regulations
      to furnish us with copies of all Section 16(a) forms they file. Based upon
      a
      review of the copies of such forms furnished to us and written representations
      from our executive officers and directors, we believe that during the year
      ended
      2007, Larry Powalisz was current in his filings.


16


**ITEM
              11.**
            **EXECUTIVE
                COMPENSATION**





**OPTIONS/SARS
      GRANTS in LAST FISCAL YEAR**




Individual Grants
            
            
            
            Potential
              Realizable
              Value at
              Assumed
              Annual Rates of
              Stock Price
              Appreciation
              for Option
              Term
            
            Alternative
              to (f) and
              (g): Grant
              value(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)
            
            (f)
            
            (g)
            
            (h)Name
            
            Number of
              Securities
              Underlying
              Options/SARs
              Granted
              (#)
            
            Percentage of
              Total
              Options/SARs
              Granted to
              Employees in
              Fiscal Year
            
            Exercise
              of Base
              Price
              (#/SH)
            
            Expiration
              date
            
            5%($)
            
            10%($)
            
            Grant Date
              Present
              Value ($)Larry Powalisz
              President
                & CEO
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0
            
            
            0Mark
                Powaliz
              Secretary
                & Director
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            0
            
            
            0
            
            
            0





**Aggregated
      Option/SAR Exercise in Last Fiscal Year and FY-End Option/SAR
      Values**




(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)Name
            
            Shares
              Acquired
              on
              Exercise
              ($)
            
            Value
              Realized ($)
            
            Number of
              Securities
              Underlying
              Unexercised
              Options/SARs
              at FY-End
              (%)
              Exercisable/
              Unexercisable
            
            Value of Unexercisable In-the-Money
              Options/SARs at FY-End ($)
              Exercisable/ UnexercisableLarry
                Powalisz
              President
                & CEO
            
            
            0
            
            
            0
            
            
            0
            
            
            N/AMark
                Powaliz
              Secretary
                & Director
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A


17




**Long-Term
      Incentive Plans - Awards in Last Fiscal Year**




Estimated Future Payouts Under Non-Stock Price-Based
              Plans(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)
            
            (f)Name
            
            Number
              of Shares,
              Units or
              Other
              Rights
              (%)
            
            Performance
              or Other
              period Until
              Maturation or
              Payout
            
            Threshold
              ($ or %)
            
            Target
              ($ or %)
            
            Maximum ($ or %)Larry Powalisz
              President
                & CEO
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/AMark
                Powaliz
              Secretary
                & Director
            
            
            0
            
            
            0
            
            
            0
            
            
            N/A
            
            
            N/A





**Summary
      Compensation Table**





Name
              and
              Principal
              Position
              (a)
            
            Year
              (b)
            
            Salary
              (c)
            
            Bonus
              (d)
            
            Stock
              Awards (e)
            
            Option
              Awards
              (f)
            
            Non-Equity
              Incentive Plan
              Compensation
              (g)
            
            Nonqualified
              Deferred
              Compensation
              Earnings
              (h)
            
            All
              Other
              Compensation
              (i)
            
            Total
              (j)Larry Powalisz,
                Chairman, CEO and President
            
            
            2007
            
            $
            0
            
            $
            0
            
            $
            4,500,000
            (2)
            $
            0
            
            $
            0
            
            $
            0
            
            $
            7,000
            (1)
            $
            4,507,000Mark
                Powalisz, Secretary and Director
            
            
            2007
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            0





**Employment
      Contracts and Termination of Employment and Change-in-Control
      Arrangements:**





There
      are
      no employment contracts existing between the registrant and any executive
      officers.





**Report
      On Repricing Of Options/SARS:**





At
      no
      time during the last completed fiscal year, did the LGBS offer Options/SARs,
      whether through amendment, cancellation or replacement grants, or any other
      means (“repriced”) to its directors.


18


Larry
      Powalisz our President and CEO performs function equivalent to a “Compensation
      Committee”and as such, has at no time during the last completed fiscal year,
      offer Options/SARs, whether through amendment, cancellation or replacement
      grants, or any other means (“repriced”) to LGBS directors.





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





The
      following table presents information, to the best of our knowledge, about the
      beneficial ownership of our common stock on December 31, 2007, held by those
      persons known to beneficially own more than 5% of our capital stock and by
      our
      directors and executive officers.




The
      percentage of beneficial ownership for the following table is based on
      77,615,000 shares of common stock outstanding as of December 31,
      2007.




Beneficial
      ownership is determined in accordance with the rules of the Securities and
      Exchange Commission and does not necessarily indicate beneficial ownership
      for
      any other purpose. Under these rules, beneficial ownership includes those shares
      of common stock over which the stockholder has sole or shared voting or
      investment power. It also includes (unless footnoted) shares of common stock
      that the stockholder has a right to acquire within 60 days after December 31,
      2007 through the exercise of any option, warrant or other right. The percentage
      ownership of the outstanding common stock, however, is based on the assumption,
      expressly required by the rules of the Securities and Exchange Commission,
      that
      only the person or entity whose ownership is being reported has converted
      options or warrants into shares of our common stock.





***Security
      Ownership of Management***




Name of Beneficial Owner (1)
            
            Number
              Of Shares
            
            Percent
              Of OwnershipLarry
                Powalisz, Chairman, CEO & President
            
            
            45,000,000
            
            
            58
            %Mark
                Powalisz, Secretary & Director
            
            
            0
            
            
            0




(1)
            As
                used in this table, “beneficial ownership” means the sole or shared power
                to vote, or to direct the voting of, a security, or the sole or shared
                investment power with respect to a security (i.e., the power to dispose
                of, or to direct the disposition of, a security). The address of
                each
                person is care of LBGS.


(2)
            Figures
                are rounded to the nearest percent.





**ITEM
              13.**
            **CERTAIN
                RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR****INDEPENDENCE**





**Larry
      Powalisz**




Office
      services are provided without charge by our Chairman, CEO, and President. Such
      costs are immaterial to the financial statements and, accordingly, have not
      been
      reflected therein.





**Revenue**





Our
      revenue has been generated from a contract we have with a related party company,
      K&L International Enterprises Inc. (hereinafter K&L). The President and
      owner of K&L International is Larry Powalisz, the Chairman, CEO and
      President of Legends Business Group.


19


There
      is
      a two year contract in place between K & L and Legends Business Group. Under
      the terms of the Consulting agreement, LBGS provides marketing and customer
      service consulting services to K & L International. The scope of the
      consulting includes assistance with billing, customer service and scripting
      for
      compliance with state and federal requirements. The contract provides that
      K
& L pay $2,000 per month for consulting services for a term of 24 months,
      which commenced April 2006. Legends Business Group has received $30,000 under
      this agreement as of December 2007.




**ITEM
              14.**
            **PRINCIPAL
                ACCOUNTING FEES AND
                SERVICES**





***Audit
      Fees***





The
      total
      fees charged to the company for audit services were $7,900 for the year ended
      December 31, 2007. For the year ended December 31, 2006, the total fees charged
      for audit services were $0.





***Audit
      Related Fees***





The
      total
      fees charged to the company for audit related fees were $0 for the year ended
      December 31, 2007. For the year ended December 31, 2006, the total fees charged
      for audit related fees were $0.





***Tax
      Fees***





The
      total
      fees charged to the company for tax fees were $600 for the year ended December
      31, 2007. For the year ended December 31, 2006, the total fees charged for
      tax
      fees were $600.





***All
      other Fees***





The
      total
      fees charged to the company for all other fees were $0 for the year ended
      December 31, 2007. For the year ended December 31, 2006, the total fees charged
      for all other fees were $0.


20


**PART
      IV**




**ITEM
              15.**
            **EXHIBITS
                AND FINANCIAL STATEMENT
                SCHEDULES**





**EXHIBITS
      SCHEDULES**




(a)
              Exhibits




**Incorporated
                by Reference****Exhibit**
              **Number**
            
            **Exhibit Description**
            
            **Filed**
              **Herewith**
            
            **Form**
            
            **Period**
              **Ending**
            
            **Exhibit**
              **Number**
            
            **Date Filed**3(i)
            
            Articles
                of Incorporation dated March 3, 2006
            
            
            
            SB
                2/A
            
            
            
            3(i)
            
            6/25/20073(ii)
            
            Bylaws
            
            
            
            SB
                2/A
            
            
            
            3(ii)
            
            6/25/20074
            
            Specimen
                Stock Certificate
            
            
            
            SB
                2/A
            
            
            
            4
            
            6/25/200710
            
            Consulting
                Agreement Contract
            
            
            
            SB
                2/A
            
            
            
            10
            
            6/25/200710
            
            Non-Exclusive
                Agent Agreement
            
            
            
            W/10QSB
            
            9/30/2007
            
            10(i)
            
            11/13/200731
            
            Certification
                of Larry Powalisz Pursuant to Section 302 of Sarbanes Oxley
                Act
            
            X
            
            
            
            
            
            31
            
            3/26/200832
            
            Certification
                of Larry Powalisz Pursuant to Section 906 of Sarbanes Oxley
                Act
            
            X
            
            
            
            
            
            32
            
            3/26/2008


21


**FINANCIAL
      STATEMENTS SCHEDULE**




INDEX**Document**
            
            **Page**
              **Number****Report
                of Independent Registered Public Accounting Firm**
            
            F-1**Balance
                Sheet**
            
            F-2**Statement
                of Operations**
            
            F-3**Statement
                of Changes in Stockholders' Equity**
            
            F-4**Statement
                of Cash Flow**
            
            F-5**Notes
                to Financial Statements For Year Ended 2007**
            
            F-6
                to F-13




**SIGNATURES**





Pursuant
      to the requirements of Section 13 or Section 15(d) of the Securities Exchange
      Act of 1934,
      the
      Registrant has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly
      authorized, on March 27, 2008.





**LEGENDS
                BUSINESS GROUP, INC.**
              **REGISTRANT**By:
                /s/Larry PowaliszLarry
                PowaliszChief
                Executive Officer andPrincipal
                Accounting Officer


22




**Patrick
      Rodgers, CPA, PA**


309
      E.
      Citrus Street


Altamonte
      Springs, FL 32701




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**




To
      the
      Stockholders and Board of Directors


Legends
      Business Group, Inc.





I
      have
      audited the accompanying balance sheet of Legends Business Group, Inc. (a
      development stage company) as December 31, 2007 and the statements of
      operations, stockholders’ equity, and cash flows for the year ended December 31,
      2007 and for the period March 2, 2006 (date of inception) through December
      31,
      2006. These financial statements are the responsibility of the Company’s
      management. My responsibility is to express an opinion on these financial
      statements based on my audit.





I
      conducted my audit in accordance with standards of the Public Company Accounting
      Oversight Board (United States). Those standards require that I plan and perform
      the audit to obtain reasonable assurance about whether the financial statements
      are free of material misstatement. An audit includes examining, on a test basis,
      evidence supporting the amounts and disclosures in the financial statements.
      An
      audit also includes assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. I believe that my audit provides a reasonable basis
      for
      my opinion.





In
      my
      opinion, these financial statements present fairly, in all material respects,
      the financial position of Legends Business Group, Inc. as of December 31, 2007
      and the results of its operations and its cash flows for the year ended December
      31, 2007 and for the period March 2, 2006 (date of inception) to December 31,
      2006 in conformity with accounting principles generally accepted in the United
      States.





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern. As discussed in Note 2 to the financial statements,
      the Company is in development stage and has experienced losses from operations
      since inception. These factors raise substantial doubt about the Company’s
      ability to continue as a going concern. Management’s plans in this regard are
      described in Note 2. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.




/s/
        Patrick Rodgers, CPA, PA


Altamonte
      Springs, Florida


March
      26,
      2008




F-1


**LEGENDS
      BUSINESS GROUP, INC.**


**(A
      Development Stage Company)**





**BALANCE
      SHEET**





**December
                31,****2007****ASSETS**Current
                assets:Cash
            
            $
            4,651Total
                current assets
            
            
            4,651Equipment,
                net of accumulated depreciation
            
            
            5,665Total
                Assets
            
            $
            10,316**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                Liabilities:Loan
                from shareholder
            
            $
            2,671Total
                current liabilities
            
            
            2,671Stockholders'
                equity:Common
                stock, $.001 par value, authorized 500,000,000 shares; 77,615,000
                issued
                and outstanding as of December 31, 2007
            
            
            77,615Additional
                paid-in capital
            
            
            7,683,885Accumulated
                deficit during development stage
            
            
            (7,753,855
            )Total
                stockholders' equity
            
            
            7,645Total
                liabilities and stockholders' equity
            
            $
            10,316





The
      accompanying notes are an integral of the financial statements.


F-2





**LEGENDS
      BUSINESS GROUP, INC.**


**(A
      Development Stage Company)**





**STATEMENT
      OF OPERATIONS**





**For the year ended**
              **December 31,**
              **2007**
            
            ******For
                the Period**
              **March
                2, 2006**
              **(Inception)
                to**
              **December 31, 2006**
            
            ******For
                the Period**
              **March
                2, 2006**
              **(Inception)
                to**
              **December 31, 2007**Revenue
                from related party
            
            $
            24,000
            
            $
            16,000
            
            $
            40,000Expenses:General
                and administrative
            
            
            22,392
            
            
            7,756,654
            
            
            7,779,046Subcontractor
            
            
            -
            
            
            3,000
            
            
            3,000Depreciation
            
            
            2,748
            
            
            2,061
            
            
            4,809Consulting
                fee - officer
            
            
            -
            
            
            7,000
            
            
            7,000Total
                expenses
            
            
            25,140
            
            
            7,768,715
            
            
            7,793,855Net
                loss
            
            $
            (1,140
            )
            $
            (7,752,715
            )
            $
            (7,753,855
            )Weighted
                    average number of common shares outstanding, basic and fully
                    diluted
            
            
            77,615,000
            
            
            71,113,317
            
            
            74,644,040Net
                    loss per weighted share basic and fully
                    diluted
            
            $
            (0.00
            )
            $
            (0.11
            )
            $
            (0.10
            )





The
      accompanying notes are an integral of the financial statements.


F-3





**LEGENDS
      BUSINESS GROUP, INC.**


**(A
      Development Stage Company)**





**STATEMENT
      OF CHANGES IN STOCKHOLDERS' EQUITY**





**Accumulated****Deficit During**
            
            **Total****Common
                Stock**
            
            **Additional Paid-**
            
            **Developmental**
            
            **Stockholder's****Shares**
            
            **Amount**
            
            **in
                Capital**
            
            **Stage**
            
            **Equity**Balance
                March 2, 2006
            
            
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Shares
                issued for cash
            
            
            115,000
            
            
            115
            
            
            11,385
            
            
            -
            
            
            11,500Shares
                issued for consulting
            
            
            32,500,000
            
            
            32,500
            
            
            3,217,500
            
            
            -
            
            
            3,250,000Founders
                shares issued
            
            
            45,000,000
            
            
            45,000
            
            
            4,455,000
            
            
            -
            
            
            4,500,000Net
                income March 2, 2006 (Inception) to December 31,
                2006
            
            
            -
            
            
            -
            
            
            -
            
            
            (7,752,715
            )
            
            (7,752,715
            )Balance
                December 31, 2006
            
            
            77,615,000
            
            
            77,615
            
            
            7,683,885
            
            
            (7,752,715
            )
            
            8,785Net
                income year end December 31, 2007
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,140
            )
            
            (1,140
            )Balance
                December 31, 2007
            
            
            77,615,000
            
            $
            77,615
            
            $
            7,683,885
            
            $
            (7,753,855
            )
            $
            7,645





The
      accompanying notes are an integral of the financial statements.


F-4





**LEGENDS
      BUSINESS GROUP, INC.**


**(A
      Development Stage Company)**





**STATEMENT
      OF CASH FLOWS**





**For the Period**
            
            **For the Period****March 2,**
            
            **March 2,****For the year ended**
            
            **(Inception) to**
            
            **(Inception) to****December 31,**
            
            **December 31,**
            
            **December 31,****2007**
            
            **2006**
            
            **2007****CASH
                FLOWS FROM OPERATIONS**Net
                loss
            
            $
            (1,140
            )
            $
            (7,752,715
            )
            $
            (7,753,855
            )Adjustments
                  to reconcile net loss to net cashDepreciation
            
            
            2,748
            
            
            2,061
            
            
            4,809Stock
                based compensation
            
            
            -
            
            
            7,750,000
            
            
            7,750,000**NET
                CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES**
            
            
            1,608
            
            
            (654
            )
            
            954**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchase
                of equipment
            
            
            -
            
            
            (10,474
            )
            
            (10,474
            )Proceeds
                from sale of equipment
            
            
            -
            
            
            -
            
            
            -**NET
                CASH USED IN INVESTING ACTIVITIES**
            
            
            -
            
            
            (10,474
            )
            
            (10,474
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Issuance
                of common stock
            
            
            -
            
            
            11,500
            
            
            11,500Proceeds
                from shareholder loan
            
            
            1,671
            
            
            1,000
            
            
            2,671**NET
                CASH PROVIDED BY FINANCING ACTIVITIES**
            
            
            1,671
            
            
            12,500
            
            
            14,171Net
                increase in cash
            
            
            3,279
            
            
            1,372
            
            
            4,651Cash,
                beginning of period
            
            
            1,372
            
            
            -
            
            
            -Cash,
                end of period
            
            $
            4,651
            
            $
            1,372
            
            $
            4,651**SUPPLEMENTAL
                    DISCLOSURES OF NON-CASH INVESTING AND FINANCING
                    ACTIVITIES:**Issuance
                  of 32,500,000 shares of common stock forconsulting
                  services
            
            $
            -
            
            $
            3,250,000
            
            $
            3,250,000Issuance
                  of 45,000,000 shares of common stock forcompensation to founding
                  shareholder
            
            $
            -
            
            $
            4,500,000
            
            $
            4,500,000





The
      accompanying notes are an integral of the financial statements.





F-5




**LEGENDS
      BUSINESS GROUP, INC.**


**(A
      DEVELOPMENTAL STAGE COMPANY)**


**NOTES
      TO THE FINANCIAL STATEMENTS**


**FOR
      THE YEAR ENDED DECEMBER 31, 2007**




**Note
      1 – Organization and summary of significant accounting principles**




Organization




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




The
      company will provide consulting services to companies
      that may offer any or all of the following services: provide ISP
      (internet service provider), long distance provider, VOIP (Voice Over Internet
      Protocol) provider, and digital content providers, and such client companies
      will make their services available to small and medium size companies. 
These clients will use an independent billing house to bill their
      monthly fees directly to their customers’ telephone bill.  The company
      currently focuses on three stages of consulting with client businesses: billing,
      customer service and scripting.




Accounting
      period




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




Use
      of
      estimates




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




Cash
      and cash equivalents




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




Revenue
      recognition




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




Furniture
      and equipment




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




F-6




**LEGENDS
        BUSINESS GROUP, INC**
 **(A
        DEVELOPMENTAL STAGE COMPANY)**
 **NOTES
        TO THE FINANCIAL STATEMENTS**
 **(continued)**




Estimated
      useful lives range as follows:




**Years**Furniture
                and equipment
            
            
            3
                – 5Computer
                hardware
            
            
            3Vehicles
            
            
            5




Fair
      value of financial instruments




Fair
      value estimates discussed herein are based upon certain market assumptions
      and
      pertinent information available to management as of December 31, 2006. The
      respective carrying value of certain on-balance-sheet financial instruments
      approximated their fair values. These financial instruments include cash,
      accounts payable and notes payable. Fair values were assumed to approximate
      carrying values for cash and payables because they are short term in nature
      and
      their carrying amounts approximate fair values or they are payable on
      demand.




Earnings
      per share




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




Income
      taxes




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




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




F-7


**LEGENDS
          BUSINESS GROUP, INC**
 **(A
          DEVELOPMENTAL STAGE COMPANY)**
 **NOTES
          TO THE FINANCIAL STATEMENTS**
 **(continued)**


Recent
      pronouncements




In
      June
      2003, the Securities and Exchange Commission (“SEC”) adopted final rules under
      Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Commencing with
      our annual report for the year ended December 31, 2009, we will be required
      to
      include a report of management on our internal control ever financial reporting.
      The internal control report must include a statement,




•
            of
                management’s responsibility for establishing and maintaining adequate
                internal control over our financial
                reporting;




•
            of
                management’s assessment of the effectiveness of our internal control over
                financial reporting as of year end;




•
            of
                the framework used by management to evaluate the effectiveness of
                our
                internal control over financial reporting;
                and




•
            that
                our independent accounting firm has issued an attestation report
                on
                management’s assessment of our internal control over financial reporting,
                which report is also required to be
                filed.




In
      December 2005 the SEC’s advisory committee on small business recommended that
      the SEC allow most companies with market values of less than $700 million to
      avoid having their internal controls certified by auditors. The advisory
      committee recommended that most companies with market capitalizations under
      $100
      million be exempted totally. It further recommended that companies with market
      capitalizations of $100 million to $700 million not face audits of internal
      controls. Some Companies with large revenues but low market values would still
      be required to comply with the act. There can be no assurances that these
      proposals or similar proposals will be adopted.




In
      September 2006, the FASB issued Statement No. 157, “Fair Value Measurements.”
This Statement defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles and expands disclosure about
      fair value measurement. The implementation of this guidance is not expected
      to
      have any impact on the company’s financial statements. For financial statements
      issued for fiscal years beginning after November 15, 2007 and interim periods
      within those fiscal years.




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




F-8


**LEGENDS
          BUSINESS GROUP, INC**
 **(A
          DEVELOPMENTAL STAGE COMPANY)**
 **NOTES
          TO THE FINANCIAL STATEMENTS**
 **(continued)**


In
      February 2008, the FASB issued Statement of Financial Accounting Standards
      No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities”,
      including an amendment to FASB Statements 115 (SFAS No. 159). SFAS 159 permits
      entities to chose to measure many financial instruments and certain other items
      at fair value. The objective is to improve financial reporting by providing
      entities with the opportunity to mitigate volatility. In reported earnings
      caused by measuring related assets and liabilities differently without having
      to
      apply complex hedge accounting provisions. This Statements is expected to expand
      the use of fair value measurement, which is consistent with the Board’s
      long-term measurement objectives for accounting for financial instruments.
      Effective for reporting periods beginning after November 15, 2007.




In
      December 2007, the FASB issued Statement of Financial Accounting Standards
      No.
      141(R), “Business Combinations”. SFAS No. 141(R) improves the relevance,
      representational faithfulness and comparability of the information that a
      reporting entity provides in its financial reports about a business combination
      and its effects. To accomplish that, this Statements establishes principles
      and
      requirements for how the acquirer:




a.
            Recognizes
                and measures in its financial statements the identifiable assets
                acquires,
                the liabilities assumed and any noncontrolling interest in the
                acquire




b.
            Recognizes
                and measures the goodwill acquired in the business combination or
                a gain
                from a bargain purchase




c.
            Determines
                what information to disclose th enable users of the financial statements
                to evaluate the nature and financial effects of the business
                combination.




This
      Statement applies prospectively to business combinations for which the
      acquisition date is on or after the beginning of the first annual reporting
      period beginning on or after December 15, 2008.




In
      December 2007, the FASB issued Statements of Financial Accounting Standards
      No.
      160 “Noncontrolling Interests in Consolidated Financial Statements” an amendment
      of ARB No 51 (SFAS No. 160). A noncontrolling interest, sometimes called a
      minority interest, is the portion of the equity in a subsidiary not
      attributable, directly or indirectly, to a parent. The objective of this
      Statement is to improve the relevance, comparability and transparency of the
      financial information that a reporting entity provides in its consolidated
      financial statements by establishing accounting and reporting standards that
      require:




a.
            The
                ownership interests in subsidiaries held by parties other than the
                parent
                be clearly identified, labeled and presented in consolidated statement
                of
                financial position within equity, but separate from the parent’s
                equity.




b.
            The
                amount of consolidated net income attributable to the parent and
                to the
                noncontrolling interest be clearly identified and presented on the
                face of
                the consolidated statement of
                income.




c.
            Changes
                in a parent’s ownership interest while the parent retains its controlling
                financial interest in its subsidiary be accounted for consistently.
                A
                parent’s ownership interest in a subsidiary changes if the parent
                purchases additional ownership interests in its subsidiary or if
                the
                parent sells some of its ownership interests in its subsidiary. It
                also
                changes it the subsidiary reacquires some of its ownership interests
                or
                the subsidiary issues additional ownership interests. All of those
                transactions are economically similar and this Statement requires
                that
                they be accounted for similarly, as equity
                transactions.




F-9


**LEGENDS
          BUSINESS GROUP, INC**
 **(A
          DEVELOPMENTAL STAGE COMPANY)**
 **NOTES
          TO THE FINANCIAL STATEMENTS**
 **(continued)**


d.
            When
                a subsidiary is deconsolidated, any retained noncontrolling equity
                investment in the former subsidiary be initially measured at fair
                value.
                The gain or loss on the deconsolidation of the subsidiary is measured
                using the fair value of any noncontrolling equity investment rather
                than
                the carrying amount of that retained
                investment.




e.
            Entities
                provide sufficient disclosures that clearly identify and distinguish
                between the interests of the parent and the interests of the
                noncontrolling owners.




This
      Statement is effective e for fiscal years, and interim periods within the fiscal
      years, beginning on or after December 15, 2008.




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




**Note
      2 – Going concern**




The
      accompanying financial statements have been prepared assuming that the company
      will continue as a going concern, which contemplates the recoverability of
      assets and the satisfaction of liabilities in the normal course of business.
      As
      noted above, the company is in the development stage and, accordingly, has
      not
      yet generated significant revenues from operations. Since its inception, the
      company has generated small amounts of revenues through a consulting contract
      with a related company; however, there is a need for the consulting services
      provided by the company within the industry. The company, as consultants, will
      provide assistance to established companies with their billing, customer service
      and scripting, allowing client companies to continue billing their services
      through Local Exchange Carriers. As stated the company is a development stage
      company and generated revenues totaling $40,000 and incurred accumulated net
      losses from March 2, 2006 (inception) through the period ended December 31,
      2007
      of approximately $7,754,000.




The
      ability of the company to continue as a going concern is dependent upon its
      ability to raise additional capital from the sale of common stock and,
      ultimately, the achievement of significant operating revenues. The accompanying
      financial statements do not include any adjustments that might be required
      should the company be unable to recover the value of its assets or satisfy
      its
      liabilities.




F-10


**LEGENDS
          BUSINESS GROUP, INC**
 **(A
          DEVELOPMENTAL STAGE COMPANY)**
 **NOTES
          TO THE FINANCIAL STATEMENTS**
 **(continued)**


**Note
      3 – Furniture and Equipment**




Furniture
      and equipment consists of the following categories at December 31,
      2007:


Computers
              
              $
              3,000Software
              
              
              7,47410,474Less
                  accumulated depreciation
              
              
              4,809Total
              
              $
              5,665




Depreciation
      expense for the year ended December 31, 2007 and for the ten months ended
      December 31, 2006 totaled $2,748 and $2,061, respectively.




**Note
      4 – Income taxes**




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




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


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




Net
      deferred tax assets consist of the following:


For the year endedDecember
                  31,2007Gross
                  deferred tax asset
              
              $
              127,000Gross
                  deferred tax liability
              
              
              -Valuation
                  allowance
              
              
              (127,000
              )Net
                  deferred tax asset
              
              $
              -




The
      company did not pay any income taxes during the year ended December 31, 2007
      or
      the ten months ended December 31, 2006.




F-11


**LEGENDS
          BUSINESS GROUP, INC**
 **(A
          DEVELOPMENTAL STAGE COMPANY)**
 **NOTES
          TO THE FINANCIAL STATEMENTS**
 **(continued)**


**Note
      5 – Stockholders’ equity**




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




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




In
      May
      2006, the Company issued 32,500,000 shares of its $0.001 par value common stock
      for consulting services. In connection with the issuance of these 32,500,00
      shares, the company recorded compensation expense in the amount of $3,250,000.
      The shares were deemed to have been issued pursuant to an exemption provided
      by
      Section 4(2) of the Act, which exempts from registration "transactions by an
      issuer not involving any public offering."




There
      have been no other issuances of common stock.




**Note
      6 – Warrants and options**




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




**Note
      7 – Related party transactions**




Amounts
      due to the company’s chief executive officer totaled approximately $2,671 at
      December 31, 2007. These amounts primarily represent loans to pay company
      startup expenses.




On
      March
      31, 2006, the Company entered into a two year contract to provide consulting
      services for K&L International, a company solely owned by our Chairman, CEO,
      and President. The contract, with a value of approximately $48,000, provides
      that the Company will receive $2,000 per month, which commenced April 2006.
      Through December 2007, the Company has received $40,000 under the terms of
      the
      consulting contract.




The
      $40,000 revenue reported for the year ended December 31, 2007 represents revenue
      from consulting services provided based on the above two year
      contract.




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




**Note
      8 – Commitments and contingent liabilities**




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




F-12


**LEGENDS
          BUSINESS GROUP, INC**
 **(A
          DEVELOPMENTAL STAGE COMPANY)**
 **NOTES
          TO THE FINANCIAL STATEMENTS**
 **(continued)**


**Note
      9 – Agent agreement**




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




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




F-13