UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q




(Mark One)

[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

              For the quarterly period ended September 30, 2008 or

[ ]  Transition  report  pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

      For the transition period from ________________ to ________________


Commission file number: 0-24805


                             LITTLEFIELD CORPORATION
             (Exact name of registrant as specified in its charter)


        Delaware                                                74-2723809
-------------------------------                          -----------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                           Identification Number)


        2501 N Lamar Blvd
          Austin, Texas                                            78705
----------------------------------------                         ----------
(address of principal executive offices)                         (zip code)


       Registrant's telephone number, including area code: (512) 476-5141


                                -----------------


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 [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer [ ]                    Accelerated filer         [ ]
Non-accelerated filer   [ ]                    Smaller Reporting Company [X]



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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


          Class                                  Outstanding at November 3, 2008
Common Stock - $0.001 par value                           16,754,901

<PAGE>

                             Littlefield Corporation

                                    FORM 10-Q

                    For the quarter ended September 30, 2008

                                      INDEX
<TABLE>
<CAPTION>
<S>                         <C> <C>                                                        <C>
Part I.   FINANCIAL INFORMATION

       Item 1  Financial Statements

           a)  Consolidated Balance Sheets as of September 30, 2008 (unaudited)
               and December 31, 2007 ..............................................        2

           b)  Consolidated Statements of Operations (unaudited) for the Three
               Months Ended September 30, 2008 and 2007............................        3

           c)  Consolidated Statements of Operations (unaudited) for the Nine
               Months Ended September 30, 2008 and 2007............................        5

           c)  Consolidated Statements of Cash Flows (unaudited) for the Nine
               Months Ended September 30, 2008 and 2007............................        7

           d)  Notes to Consolidated Financial Statements                                  9

       Item 2  Management's Discussion and Analysis of Financial Condition
               And Results of Operations...........................................        19

       Item 3  Quantitative and Qualitative Disclosures about Market Risk                  23

       Item 4  Controls and Procedures                                                     23


Part II.  OTHER INFORMATION

       Item 1  Legal Proceedings ..................................................        24

       Item 6  Exhibits ...........................................................        24

               Signatures and Certifications ......................................        24
</TABLE>

                                       1
<PAGE>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                             Littlefield Corporation
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
ASSETS
------
                                                     September 30,        December 31,
                                                              2008                2007
                                                  ----------------    ----------------
                                                       (unaudited)
Current Assets:
    Cash and cash equivalents                     $     5,233,848     $     1,965,624
    Accounts receivable, net of allowance for
     doubtful accounts of $68,373 and $148,734            427,525             519,845
    Other current assets                                  299,098             554,297
                                                  ----------------    ----------------
    Total Current Assets                                5,960,471           3,039,766
                                                  ----------------    ----------------

Property and Equipment - at cost, net of
 accumulated depreciation and amortization              8,098,026           6,926,559

Other Assets:
    Goodwill                                            6,501,361           4,905,111
    Intangible assets, net                                912,324             699,196
    Other non-current assets                              213,424             217,615
                                                  ----------------    ----------------
    Total Other Assets                                  7,627,109           5,821,922
                                                  ----------------    ----------------

TOTAL ASSETS                                      $    21,685,606     $    15,788,247
                                                  ================    ================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current Liabilities:
    Long term debt, current portion               $       725,505     $       195,517
    Long term debt, legal settlements, current
     portion                                              253,762             231,272
    Trade accounts payable                                221,395             232,339
    Accrued expenses                                      753,329           1,063,053
                                                  ----------------    ----------------
    Total Current Liabilities                           1,953,991           1,722,181
                                                  ----------------    ----------------

Long-term Liabilities:
    Long term debt, net of current portion              3,260,088           3,442,932
    Long term debt, legal settlements, net of
     current portion                                      189,896             362,964
    Other liabilities, related party                       66,000              48,000
                                                  ----------------    ----------------
    Total Long-term Liabilities                         3,515,984           3,853,896
                                                  ----------------    ----------------
Total Liabilities                                       5,469,975           5,576,077
                                                  ----------------    ----------------

Stockholders' Equity:
    Common stock, $0.001 par value, (authorized
     40,000,000 shares, issued 17,534,707 shares,
     outstanding 16,754,901 shares)                        17,535              12,344
    Additional paid-in-capital                         30,668,943          23,710,845
    Treasury stock - 779,806 shares, at cost             (993,891)         (1,146,638)
    Accumulated deficit                               (13,476,956)        (12,364,381)
                                                  ----------------    ----------------
    Total Stockholders' Equity                         16,215,631          10,212,170
                                                  ----------------    ----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $    21,685,606     $    15,788,247
                                                  ================    ================
</TABLE>
           See notes to unaudited consolidated financial statements.


                                       2
<PAGE>
                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
                                                    Three Months Ended September 30,
                                                             2008                2007
                                                  ----------------    ----------------
REVENUES:
   Entertainment                                  $     2,078,799     $     2,130,630
   Hospitality                                            430,592             868,102
   Other                                                   24,422              14,534
                                                  ----------------    ----------------
TOTAL REVENUES                                          2,533,813           3,013,266
                                                  ----------------    ----------------

DIRECT COSTS AND EXPENSES:
    Direct salaries and other compensation                511,809             703,030
    Rent and utilities                                    823,484             667,788
    Other direct operating costs                          961,189             823,092
    Depreciation and amortization                         235,939             168,058
    License expense                                        14,437              34,660
                                                  ----------------    ----------------
TOTAL COSTS AND EXPENSES                                2,546,858           2,396,628

                                                  ----------------    ----------------
GROSS MARGIN (LOSS)                                       (13,045)            616,638

GENERAL AND ADMINISTRATIVE EXPENSES:
    Salaries and other compensation                       376,830             301,799
    Legal and accounting fees                              97,743             182,957
    Depreciation and amortization                          31,217              29,079
    Share-based compensation expense                       12,964              14,311
    Other general and administrative                      156,363             167,927
                                                  ----------------    ----------------
    TOTAL GENERAL AND ADMINISTRATIVE EXPENSES             675,117             696,073

GAIN ON DISPOSAL OF ASSETS                                    ---              11,002

OPERATING INCOME (LOSS)                                  (688,162)            (68,433)

OTHER INCOME AND EXPENSES:
    Interest and investment income                         42,290              24,324
    Interest expense ($0 and $1,688 respectively
     to related parties)                                  (90,299)            (93,105)
                                                  ----------------    ----------------
TOTAL OTHER INCOME AND EXPENSES                           (48,009)            (68,781)

                                                  ----------------    ----------------
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME
 TAXES                                                   (736,171)           (137,214)

PROVISION FOR INCOME TAXES                                 22,911               4,132
                                                  ----------------    ----------------

NET INCOME (LOSS)                                        (759,082)           (141,346)

  OTHER COMPREHENSIVE INCOME                                  ---                 ---
                                                  ----------------    ----------------

NET COMPREHENSIVE INCOME (LOSS)                         ($759,082)          ($141,346)
                                                  ================    ================
</TABLE>
           See notes to unaudited consolidated financial statements.


                                       3
<PAGE>

                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
                                                    Three Months Ended September 30,
                                                             2008                2007
                                                  ----------------    ----------------
EARNINGS (LOSS) PER SHARE:
    Basic earnings (loss) per share                      ($ 0.045)           ($ 0.012)
                                                  ================    ================

    Diluted earnings (loss) per share                    ($ 0.045)           ($ 0.012)
                                                  ================    ================

Weighted average shares outstanding - basic            16,754,901          11,325,469
                                                  ================    ================

Weighted average shares outstanding - diluted          16,754,901          11,325,469
                                                  ================    ================
</TABLE>
           See notes to unaudited consolidated financial statements.


                                       4
<PAGE>
                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
                                                     Nine Months Ended September 30,
                                                             2008                2007
                                                  ----------------    ----------------
REVENUES:
   Entertainment                                  $     6,392,907     $     6,646,077
   Hospitality                                          2,073,476           3,486,253
   Other                                                   71,692              38,226
                                                  ----------------    ----------------
TOTAL REVENUES                                          8,538,075          10,170,556
                                                  ----------------    ----------------

DIRECT COSTS AND EXPENSES:
    Direct salaries and other compensation              1,866,017           2,277,071
    Rent and utilities                                  2,137,556           1,927,928
    Other direct operating costs                        2,932,098           2,546,373
    Depreciation and amortization                         667,213             482,593
    License expense                                        74,650              95,336
                                                  ----------------    ----------------
TOTAL COSTS AND EXPENSES                                7,677,534           7,329,301

                                                  ----------------    ----------------
GROSS MARGIN                                              860,541           2,841,255

GENERAL AND ADMINISTRATIVE EXPENSES:
    Salaries and other compensation                     1,006,167             855,346
    Legal and accounting fees                             504,651             404,830
    Depreciation and amortization                          95,314              86,208
    Share-based compensation expense                       39,170              42,933
    Other general and administrative                      555,133             528,475
                                                  ----------------    ----------------
    TOTAL GENERAL AND ADMINISTRATIVE EXPENSES           2,200,435           1,917,792

GAIN ON DISPOSAL OF FIXED ASSETS                          474,387              23,100

OPERATING INCOME (LOSS)                                  (865,507)            946,563

OTHER INCOME AND EXPENSES:
    Interest and investment income                         88,700              56,357
    Interest expense ($0 and $11,813 respectively
     to related parties)                                 (268,513)           (345,275)
    Other expense                                             ---              (4,398)
                                                  ----------------    ----------------
TOTAL OTHER INCOME AND EXPENSES                          (179,813)           (293,316)

                                                  ----------------    ----------------
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME
 TAXES                                                 (1,045,320)            653,247

PROVISION FOR INCOME TAXES                                 67,255              54,335
                                                  ----------------    ----------------

NET INCOME (LOSS)                                      (1,112,575)            598,912

OTHER COMPREHENSIVE INCOME                                    ---               4,713
                                                  ----------------    ----------------

NET COMPREHENSIVE INCOME (LOSS)                       ($1,112,575)    $       603,625
                                                  ================    ================
</TABLE>
           See notes to unaudited consolidated financial statements.


                                       5
<PAGE>
                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
                                                     Nine Months Ended September 30,
                                                             2008                2007
                                                  ----------------    ----------------
EARNINGS (LOSS) PER SHARE:
    Basic earnings (loss) per share                      ($ 0.074)    $         0.054
                                                  ================    ===============

    Diluted earnings (loss) per share                    ($ 0.074)    $         0.053
                                                  ================    ===============

Weighted average shares outstanding - basic            15,083,201          11,187,178
                                                  ================    ===============

Weighted average shares outstanding - diluted          15,083,201          11,345,558
                                                  ================    ===============
</TABLE>
           See notes to unaudited consolidated financial statements.


                                       6
<PAGE>
                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
                                                           Nine Months Ended
                                                             September 30,
                                                  ------------------------------------
                                                        2008                2007
                                                  ----------------    ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                              $    (1,112,575)    $       598,912
   Adjustments to reconcile net income (loss) to
    net cash (used in) provided by operating
    activities:
   Depreciation and amortization                          762,527             568,801
   Gain on sale of fixed assets                          (474,387)            (23,100)
   Bad debt allowance                                     (57,936)                ---
   Stock-based compensation expense                        39,170              42,933
   Increase (decrease) in cash flows as a result
    of changes in asset and liability account
    balances:
        Accounts receivable                               120,024             413,449
        Other assets                                      252,292             362,311
        Trade accounts payable                            (10,944)             20,031
        Accrued expenses and other current
         liabilities                                     (249,173)           (203,737)
                                                  ----------------    ----------------
NET CASH (USED IN) PROVIDED BY OPERATING
 ACTIVITIES                                              (731,002)          1,779,600
                                                  ----------------    ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                  (1,991,615)         (1,336,673)
   Purchase of goodwill and intangibles                (1,374,704)                ---
   Proceeds from the sale of property and
    equipment                                             250,000              29,252
   Proceeds from the sale of investments                      ---               3,741
   Proceeds from the collection of notes
    receivable                                            384,662               1,603
                                                  ----------------    ----------------
NET CASH (USED IN) PROVIDED BY INVESTING
 ACTIVITIES                                            (2,731,657)         (1,302,077)
                                                  ----------------    ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on notes payable, legal settlements
    and capital leases                                   (303,433)         (1,223,066)
   Proceeds from sale of common stock                   7,000,000             476,560
   Proceeds from note payable                                 ---             401,958
   Proceeds from options exercised                         34,316              15,250
                                                  ----------------    ----------------
NET CASH (USED IN) PROVIDED BY FINANCING
 ACTIVITIES                                             6,730,883            (329,298)
                                                  ----------------    ----------------

NET INCREASE (DECREASE) IN CASH AND CASH
 EQUIVALENTS                                            3,268,224             148,225

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        1,965,624           2,549,566
                                                  ----------------    ----------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD        $     5,233,848     $     2,697,791
                                                  ================    ================
</TABLE>
            See notes to unaudited consolidated financial statements.


                                       7
<PAGE>
                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
                                                           Nine Months Ended
                                                             September 30,
                                                  ------------------------------------
                                                        2008                2007
                                                  ----------------    ----------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash payments:

    Interest                                      $       268,513     $       331,460
                                                  ===============     ===============


    Income taxes                                  $        92,551     $        65,087
                                                  ===============     ===============


Non-cash transactions:


    Issuance of treasury stock under deferred
     compensation plan                            $        25,817     $        15,250
                                                  ===============     ===============

    Issuance of treasury stock under employee
     stock purchase plan                          $        16,734     $        31,256
                                                  ===============     ===============

    Purchase of acquisition assets in exchange for
     note payable                                 $       500,000     $           ---
                                                  ===============     ===============
</TABLE>
            See notes to unaudited consolidated financial statements.


                                       8
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 1 - PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION.
--------------------------------------------------------------------------------

The  unaudited   consolidated  financial  statements  include  the  accounts  of
Littlefield  Corporation and its wholly owned subsidiaries (the "Company").  The
financial  statements  contained  herein are  unaudited  and,  in the opinion of
management,  contain  all  adjustments  necessary  for a  fair  presentation  of
financial  position,  results  of  operations  and cash  flows  for the  periods
presented.   The  preparation  of  the  consolidated   financial  statements  in
conformity  with  U.S.  generally  accepted   accounting   principles   requires
management to make estimates and assumptions  that affect the reported amount of
assets and liabilities,  disclosure of contingent assets and liabilities and the
reported  amount of revenue and  expenses  during the  reported  period.  Actual
results could differ from these estimates.  Where appropriate,  items within the
consolidated financial statements have been reclassified to maintain consistency
and comparability for all periods presented.

The operating  results for the nine month period ended  September 30, 2008,  are
not  necessarily  indicative  of the results that may be expected for the fiscal
year ending  December  31, 2008.  Except for  historical  information  contained
herein,  certain matters set forth in this report are forward looking statements
that are subject to substantial risks and uncertainties, including the impact of
government   regulation   and  taxation,   customer   attendance  and  spending,
competition,  and general  economic  conditions,  among others.  This  Quarterly
Report  on Form  10-Q  contains  "forward-looking"  statements  as such  term is
defined in the Private Securities  Litigation Reform Act of 1995 and information
relating to the Company  and its  subsidiaries  that are based on the beliefs of
the  Company's  management.  When used in this report,  the words  "anticipate,"
"believe,"  "estimate,"  "expect,"  and "intend" and words or phrases of similar
import, as they relate to the Company or its subsidiaries or Company management,
are intended to identify forward-looking statements. Such statements reflect the
current  risks,   uncertainties  and  assumptions  related  to  certain  factors
including,   without   limitations,   competitive   factors,   general  economic
conditions,  customer relations,  relationships with vendors,  the interest rate
environment,  governmental regulation and supervision, seasonality, distribution
networks, product introductions and acceptance, technological change, changes in
industry  practices,  onetime events and other factors  described  herein and in
other filings made by the company with the Securities  and Exchange  Commission,
based  upon  changing  conditions,  should  any one or more of  these  risks  or
uncertainties materialize, or should any underlying assumptions prove incorrect,
actual results may vary materially  from those described  herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.

--------------------------------------------------------------------------------
NOTE 2 - PROPERTY AND EQUIPMENT.
--------------------------------------------------------------------------------
Property and equipment at September 30, 2008 and December 31, 2007,  consists of
the following:
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>
                                                     September 30,        December 31,
                                                              2008                2007

       Land                                       $       740,467     $       740,467
       Buildings                                        3,395,498           3,404,348
       Leasehold improvements                           5,763,284           4,756,267
       Rental inventory and bingo equipment             2,093,596           1,989,605
       Equipment, furniture and fixtures                3,171,476           2,604,406
       Automobiles                                        385,144             468,626
                                                  ----------------    ----------------
                                                       15,549,465          13,963,719

       Less: Accumulated depreciation and
        amortization                                   (7,451,439)         (7,037,160)
                                                  ----------------    ----------------

       Property and equipment, net                $     8,098,026     $     6,926,559
                                                  ================    ================
</TABLE>

Total depreciation  expense, for owned and leased assets,  charged to operations
for the nine  months  ended  September  30,  2008 and  2007,  was  approximately
$739,000 and $546,700, respectively.


                                       9
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 3 - GOODWILL & OTHER INTANGIBLE ASSETS.
--------------------------------------------------------------------------------

Goodwill at September 30, 2008 is as follows:
<TABLE>
<CAPTION>
<S>                      <C> <C>        <C>                 <C>                 <C>
                                             Gross
                                            Carrying          Accumulated
                                             Amount           Amortization           Total
                                        ----------------    ----------------    ----------------
    Goodwill at December 31, 2007       $     6,704,375     $    (1,799,264)    $     4,905,111
    Goodwill acquired during period           1,638,618                 ---           1,638,618
    Goodwill disposed of during period          (42,368)                ---             (42,368)
                                        ----------------    ----------------    ----------------
    Goodwill at September 30, 2008      $     8,300,625     $    (1,799,264)    $     6,501,361
                                        ================    ================    ================

                                         Entertainment        Hospitality            Total
                                        ----------------    ----------------    ----------------
    Balance at December 31, 2007        $     4,533,727     $       371,384     $     4,905,111
    Goodwill acquired during the year         1,638,618                 ---           1,638,618
    Goodwill disposed of during period              ---             (42,368)            (42,368)
                                        ----------------    ----------------    ----------------
    Balance at September 30, 2008       $     6,172,345     $       329,016     $     6,501,361
                                        ================    ================    ================


Intangible assets at September 30, 2008 consists of the following:

                                            Gross
                                           Carrying           Accumulated
                                            Amount            Amortization           Total
                                        ---------------     ----------------    ---------------
    Intangible Assets with Indefinite
     Lives:
    Bingo licenses at December 31, 2007 $       694,719             (51,974)    $       642,745
    Licenses acquired during the period         186,620                                 186,620
                                        ---------------     ----------------    ---------------
    Bingo licenses at September 30, 2008$       881,339             (51,974)    $       829,365

    Intangible Assets with Finite Lives:
    Covenants not to compete at December
     31, 2007                           $       297,500            (241,039)    $        56,461
    Change in covenants not to compete           50,000             (23,502)             26,498
                                        ---------------     ----------------    ---------------
    Covenants not to compete at
     September 30, 2008                 $       347,500            (264,541)             82,959
    Intangible Assets, Net of
     Accumulated Amortization                                                   $       912,324
                                                                                ===============
</TABLE>

Amortization  expense  charged to operations for the nine months ended September
30, 2008 and 2007, was approximately $23,500 and $22,100, respectively.

--------------------------------------------------------------------------------
NOTE 4 - SHAREHOLDERS' EQUITY.
--------------------------------------------------------------------------------

At September 30, 2008 the Company holds  779,806  treasury  shares at an average
purchase cost of $1.27.  In March 2008, the Company sold, at a ten percent (10%)
premium,  5,190,568 shares of its common stock to an institutional  investor for
$7,000,000.


                                       10
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 5 - SHARE BASED PAYMENTS.
--------------------------------------------------------------------------------

Effective  January 1, 2006,  the Company  adopted  FASB  Statement  of Financial
Accounting  Standards  No.  123R  (Revised  2004),  Share-Based  Payment,  which
requires that the compensation cost relating to share-based payment transactions
be recognized in financial statements based on the provisions of SFAS 123 issued
in 1995. We have adopted this statement using the modified prospective method of
implementation,  whereby the prospective method records the compensation expense
from the implementation date forward, but leaves prior periods unchanged.

The Company recorded  approximately  $39,200 and $42,900 in compensation expense
in the nine month  periods  ended  September  30,  2008 and 2007,  respectively,
related to options issued under its stock-based  incentive  compensation  plans.
This  includes  expense  related to options  issued in prior years for which the
requisite  service period for those options  includes the current year. The fair
value of these options was calculated  using the  Black-Scholes  options pricing
model.  There were no options  issued in the nine month periods ended  September
30, 2008 and 2007.

--------------------------------------------------------------------------------
NOTE 6 - EARNINGS PER SHARE.
--------------------------------------------------------------------------------

A reconciliation of basic to diluted earnings per share is as follows:
<TABLE>
<CAPTION>
<S>                           <C>                 <C>                 <C>                 <C>
Nine months ended September 30,     2008                2008                2007                2007
------------------------------     Basic              Diluted              Basic              Diluted
                              ----------------    ----------------    ---------------     ---------------
Numerator:
----------
    Net income (loss)         $    (1,112,575)    $    (1,112,575)    $       598,912     $       598,912
                              ================    ================    ===============     ===============
Denominator:
------------
    Weighted average shares
     outstanding                   15,083,201          15,083,201          11,187,178          11,187,178
    Effect of dilutive
     securities:
    Stock options and warrants            ---                 ---                 ---             158,380
                              ----------------    ----------------    ---------------     ---------------
    Weighted average shares
     outstanding                   15,083,201          15,083,201          11,187,178          11,345,558
                              ================    ================    ===============     ===============
Earnings (loss) per share     $        (0.074)    $        (0.074)    $         0.054     $         0.053
                              ================    ================    ===============     ===============
</TABLE>

Stock  options to acquire  217,136 and 168,683  shares for the nine months ended
September 30, 2008 and 2007,  respectively  were excluded in the computations of
diluted EPS because the effect of including  the stock  options  would have been
anti-dilutive.


                                       11
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 7 - ACCOUNTING FOR STOCK BASED COMPENSATION
--------------------------------------------------------------------------------

The Company  applies FASB Statement of Financial  Accounting  Standards No. 123R
(Revised 2004),  Share Based Payment,  using the modified  prospective method of
implementation,  whereby the prospective method records the compensation expense
from the implementation  date forward,  however leaves prior periods recorded in
accordance  with APB Opinion No. 25,  Accounting  for Stock  Issued to Employees
("APB 25") in  accounting  for its stock  options.  At September  30, 2008,  the
Company has  implemented  five  shareholder  approved stock option plans.  These
plans are intended to comply with  Section 422 of the  Internal  Revenue Code of
1986,  as amended.  The plans  collectively  provide  for the total  issuance of
3,600,000  common shares,  as adjusted for the 20% stock dividend in 2006,  over
ten years from the date of each plan's  approval.  In addition,  the plans allow
for additional increases of 15% of the then outstanding shares each year through
2008.

Transactions under the stock option plans are summarized below. At September 30,
2008, a total of 445,410 options were outstanding under these plans.

                                     Employee Stock Plans
                              -----------------------------------
                                                   Weighted
                                                    Average
                                  Options       Exercise Price
                              -----------------------------------
Outstanding at 12/31/07               617,910      $         0.74
Granted                                   ---                 ---
Exercised                             (67,500)               0.51
Forfeited                            (105,000)               1.78
                              ---------------      --------------
Outstanding at 09/30/08               445,410      $         0.53
                              ===============      ==============

No options were issued during 2008.

Aggregate  intrinsic value  represents the value of the Company's  closing stock
price on the last  trading  day of the  period in excess of the  exercise  price
multiplied  by the  number of  options  outstanding  or  exercisable.  The total
intrinsic value of options exercised during 2008 was $43,835. Total unrecognized
stock-based  compensation  expense  related  to  non-vested  stock  options  was
approximately  $18,100 as of September 30, 2008, related to approximately 73,500
shares with a per share weighted average fair value of $0.48. We anticipate this
expense to be recognized over a weighted  average period of  approximately  0.25
years.

The  following  table  summarizes   information  about  options  outstanding  at
September  30, 2008 under the stock  option  plans  adjusted  for the 2006 stock
dividend:
<TABLE>
<CAPTION>
<S>       <C>     <C>             <C>      <C>              <C>                <C>        <C>
                                      Options Outstanding                  Options Exercisable
                         ---------------------------------------------------------------------------
                                         Weighted Avg.
                                           Remaining
            Range of         Number      Contractual    Weighted Avg.     Number      Weighted Avg.
         Exercise Prices   Outstanding        Life     Exercise Price   Exercisable  Exercise Price
        --------------------------------------------------------------------------------------------
   2008:  $1.26 - $1.87           16,500   7.6 years        $1.32              16,500     $1.32
          $0.00 - $1.25          428,910   6.0 years        $0.50             355,410     $0.50
                         ---------------                              ---------------
                                 445,410   6.1 years        $0.53             371,910     $0.54
           Aggregate
        intrinsic value         $172,716                                     $144,051
</TABLE>

The weighted average  remaining  contractual  life of options  exercisable as of
September 30, 2008 was 6.0 years.


                                       12
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 8 - COMPREHENSIVE INCOME.
--------------------------------------------------------------------------------

The Company has adopted Financial  Accounting Standards Board Statement No. 130,
Reporting Comprehensive Income.  Statement No. 130 establishes new rules for the
reporting and display of comprehensive  income and its components;  however, the
adoption of this Statement has no impact on net income or shareholders'  equity.
Statement  No. 130 requires  unrealized  gains or losses to be included in other
comprehensive income.

The components of comprehensive income for the nine months ended September 30,
2008 and 2007 are as follows:

                                                  2008                 2007
                                             ---------------     ---------------
    Net income (loss)                        $   (1,112,575)     $       598,912

    Other comprehensive income

      Reclassification adjustment
      for loss included in net income
                                                        ---                4,713
                                             ---------------     ---------------
                                                        ---                4,713
                                             ---------------     ---------------

    Total comprehensive income (loss)        $   (1,112,575)     $       603,625
                                             ===============     ===============


--------------------------------------------------------------------------------
NOTE 9 - INCOME TAXES.
--------------------------------------------------------------------------------

The Company  recorded  approximately  $67,300  and  $54,300 of state  income tax
expense,  respectively,  for the nine months ended  September 30, 2008 and 2007.
The Company does not expect to incur  material  federal income tax charges until
the depletion of its accumulated federal income tax loss  carry-forwards,  which
totaled approximately $6,700,000 at December 31, 2007, and begin expiring in the
year 2015.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes - an  interpretation  of FASB Statement No. 109 (FIN
48) on January 1, 2007.  FIN 48 clarifies  the  accounting  for  uncertainty  in
income taxes  recognized in an enterprise's  financial  statements in accordance
with FASB  Statement  No. 109,  Accounting  for Income Taxes,  by  prescribing a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return.  If a tax  position is more  likely  than not to be  sustained  upon
examination,  then an enterprise would be required to recognize in its financial
statements  the  largest  amount of benefit  that is greater  than 50% likely of
being realized upon ultimate  settlement.  As a result of our  implementation of
FIN 48 at the time of adoption and as of December 31, 2007,  the Company did not
recognize  a  liability  for  uncertain  tax  positions.  We do not  expect  our
unrecognized tax benefits to change  significantly  over the next twelve months.
The tax years  2003  through  2007  remain  open to  examination  by the  taxing
jurisdictions in which we file income tax returns.


                                       13
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 10 - RELATED PARTY TRANSACTIONS.
--------------------------------------------------------------------------------

In 2002, the President was awarded a $300,000  bonus.  In August 2007, the Board
of  Directors  approved  and payment was made to the  President  and CEO for the
accrued  bonus and accrued  interest  thereon.  The Company  accrued  $11,813 in
interest in 2007 on this liability.

During 2006, the Company renewed the employment agreement with its President and
CEO; in accordance with this agreement,  the Company accrued $18,000 and $18,000
of deferred  compensation  in the nine months ended September 30, 2008 and 2007,
respectively.

--------------------------------------------------------------------------------
NOTE 11 - COMMITMENTS AND CONTINGENCIES.
--------------------------------------------------------------------------------

Generally speaking,  the Securities and Exchange Commission guidelines require a
company to report any pending legal and/or regulatory  proceedings that involves
a claim for damages in excess of ten percent  (10%) of its current  assets.  The
litigation  and  proceedings  discussed  below  do  not  necessarily  meet  this
threshold, but are included in the interest of full disclosure.  In general, the
Company will  vigorously  defend itself against all claims to the fullest extent
possible.

The Company is  obligated to make  payments  over  approximately  the next three
years in  settlement  of  litigation  that was  concluded in prior  periods.  At
September 30, 2008, the carrying value of these  obligations  was $443,658.  The
Company is current in all its settlement payment obligations.

Littlefield Corporation f/k/a/ American Bingo and Gaming v. Philip Furtney, Case
No.:  2001 CA 4000,  Circuit  Court of the Twelfth  Judicial  Circuit in and for
Manatee County, Florida.

In  this  case,  Littlefield  initially  sought  recovery  from  Philip  Furtney
["Furtney"]  for fraud,  negligent  misrepresentations,  and breach of guaranty.
This litigation  arises from the 1995 acquisition of three Florida bingo centers
by a predecessor,  American Bingo & Gaming  Corporation,  from two  corporations
controlled  by  Furtney - Pondella  Hall for Hire,  Inc.,  and  800438  Ontario.
Several months after the acquisition of the three centers,  the Florida Attorney
General  obtained an indictment  for alleged  racketeering  against two American
Bingo  subsidiaries  that  operated  two of the  centers  and  brought  a  civil
proceeding for racketeering against the same two subsidiaries and American Bingo
based upon the same  allegations.  The indictment and civil  litigation were the
result of an investigation  that had been ongoing for over one year prior to the
acquisition  of the  centers.  Furtney  was aware of the  investigation  and its
serious  nature,  but did not disclose the  investigation  to American Bingo. In
fact, the agreements  related to the sales  specifically and falsely stated that
there were not any ongoing governmental  investigations.  American Bingo settled
the  litigation  brought by the  Florida  Attorney  General and sold its Florida
centers as a condition of the  settlement.  The  resolution of this long pending
matter was substantially delayed when Furtney, a citizen of Canada and part time
resident of Mexico,  avoided  service of the  Complaint and would not permit his
United  States  attorney to accept  service of the  Complaint.  Littlefield  was
successful in finally  serving Furtney when he was in the United States in 2005,
to attend related litigation.

Furtney passed away in September 2007, several months before the scheduled trial
date. In the event a defendant  dies following the  commencement  of litigation,
the Florida Rules of Civil  Procedure  provides that a plaintiff may  substitute
the  defendant's  estate as the  defendant  and  continue to pursue the claim to
judgment.  Furtney's  estate  has now  been  substituted  as the  defendant  and
Littlefield  intends to vigorously  pursue the claim for all damages  related to
the purchase of the Florida  centers from Furtney's  estate,  including all sums
paid in the acquisition,  all costs incurred by American Bingo in the litigation
with the state of Florida,  and  judgments  Littlefield  was  required to pay to
Pondella and 800438  Ontario as a result of related  litigation.  Littlefield is
now  awaiting a trial date which has been  delayed by the  Estate's  decision to
change trial counsel. The Estate's new counsel has now entered an appearance and
we expect that the Court will schedule a Case Management  Conference in the near
future, at which time a new trial date will be set.


                                       14
<PAGE>

Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 11 - COMMITMENTS AND CONTINGENCIES.
--------------------------------------------------------------------------------

In South Carolina  Department of Revenue v.  Littlefield  Corporation,  Midlands
Promotions,  Inc., Low Country Promotions,  Inc., and Gamecock Promotions, Inc.,
05-ALJ-17-0413-CC,

The  South  Carolina  Department  of  Revenue  issued  an  administrative  bingo
violation against the above referenced  parties alleging that the Company has an
unlawful number of bingo promoter  licenses.  The Department of Revenue seeks to
revoke  all  bingo  promoter  licenses  held  by the  Company's  South  Carolina
subsidiaries and seeks a $5,000 penalty. The Department of Revenue is seeking to
pierce the  corporate  veil of the  Company to thereby  attribute  the  promoter
licenses to the Company.  The  Department of Revenue's  theory is that the three
South Carolina  subsidiaries are sham corporations and that, as a matter of law,
the Company  should be deemed the holder of the 12  promoter  licenses at issue.
South  Carolina  law  provides  that a promoter  may only have 5  licenses.  The
Company  moved  for  summary  judgment  and  it  was  denied.  However,  certain
originally named charities were dismissed from the lawsuit.  The case was stayed
until  co-counsel  returned from active military duty, which occurred at the end
of June 2008.

Additionally,  in Littlefield  Corporation,  Gamecock  Promotions Inc., Palmetto
Upstate  Promotions  Inc.,  and  Midlands  Promotions  Inc.  v.  South  Carolina
Department  of  Revenue,  07-ALJ-17-623-CC,  the  Company  and its  subsidiaries
protested  the South  Carolina  Department  of Revenue's  initial  denial of six
additional  promoters licenses that the Department of Revenue denied on the same
theories  upon  which  they seek to  revoke  the  other  subsidiaries'  promoter
licenses,  as  described  above.  Although  both  parties'  Motions  for Summary
Judgment were denied in this proceeding,  in June 2008, the  administrative  law
judge in this protest proceeding ordered that the six licenses be issued pending
trial and  resolution of the  proceedings  between the Department of Revenue and
the Company.

The  Company and its  subsidiaries  will seek to  consolidate  both of the above
proceedings for discovery and trial,  because both proceedings  involve the same
legal and  factual  issues.  The  Company and its  subsidiaries  are  vigorously
defending  the  revocation  proceeding  and the  right  to hold  the  additional
licenses  for  which  the  subsidiaries  applied  and  assert  that  Littlefield
Corporation  is not the holder of these promoter  licenses,  but rather that its
lawfully formed  subsidiaries are separate  corporations that each hold a lawful
number of the promoter licenses.

Cause No. 8285-D;  West Texas Bingo,  Inc v. Rodger Hiatt, in the 350th Judicial
District Court of Taylor County, Texas.

In this case,  the  Company is  plaintiff.  The Company  filed suit  against the
Defendant alleging the Defendant  interfered with the Company's bingo operations
and/or business  operations at Super Bingo, which is located in Abilene,  Texas.
The  Defendant  asserted  counterclaims  against the Company  alleging  that the
Company's  claims were  harassing  and  constituted  intentional  infliction  of
emotional  distress.  Defendant's claims were dismissed by the Court via summary
judgment in June 2008,  and there are currently no pending claims being asserted
by Defendant  against West Texas Bingo,  Inc. or  Littlefield  Corporation.  The
lawsuit is ongoing and the  parties  are  currently  engaged in  discovery.  The
matter has not been set for trial,  nor have the  parties  scheduled a pre-trial
mediation.

Cause No.24,  182-B; West Texas Bingo, Inc. v. Janie Wall, in the 104th Judicial
District Court of Taylor County, Texas.

In this case,  the  Company is  plaintiff.  The Company  filed suit  against the
Defendant alleging the Defendant  interfered with the Company's bingo operations
and/or business  operations at Super Bingo, which is located in Abilene,  Texas.
The  Defendant  asserted  counterclaims  against the Company  alleging  that the
Company's  claims were  harassing  and  constituted  intentional  infliction  of
emotional  distress.  Defendant's claims were dismissed by the Court via summary
judgment in June 2008,  and there are currently no pending claims being asserted
by Defendant against West Texas Bingo, Inc. or Littlefield Corporation. Although
there are pending claims being asserted by Defendant,  Defendant  recently moved
the Court for leave to assert additional claims against Littlefield  Corporation
and its CEO; the Court has not yet ruled upon Defendant's  request.  The lawsuit
is ongoing and the parties are currently  engaged in  discovery.  The matter has
not been set for trial, nor have the parties scheduled a pre-trial mediation.


                                       15
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 12 - SALE AND ACQUISITION OF BUSINESSES.
--------------------------------------------------------------------------------

On April 15, 2008, the Company sold the assets of its custom  catering  business
unit reflecting the Company's  focus on its charitable  bingo business in Texas,
South Carolina,  Alabama and Florida.  The asset sale resulted in a gain on sale
of $474,387  resulting  from a $650,000  sales  price less  $175,613 of disposed
assets, at net book value.

The assets of the catering  business  unit were sold for  $650,000  with payment
consisting  of $250,000 in cash and a three year  $400,000  note  receivable  at
seven percent (7%).  During the third quarter of 2008, the note was paid in full
less a discount of $22,000 granted for the early payoff of the note.

The amounts of sales,  gross  profit and gross profit on a basic per share basis
of the catering  business  unit included in the third quarter and nine months to
date of 2008 compared to the comparable prior year periods are as follows:
<TABLE>
<CAPTION>
<S>                      <C>            <C>            <C>            <C>                 <C>                 <C>
                                                                            2008                2007
                                                                      Nine months year    Nine months year
                            Q308            Q307         Change            to date             to date           Change
                         ----------     ------------   -----------    ----------------    ----------------    ------------
Revenue                  $      ---     $   396,745    $ (396,745)    $       497,039     $     1,673,549     $(1,176,510)
Gross profit             $      ---       ($106,918)   $ (106,918)    $       (33,263)    $       (56,983)    $    23,720
Gross profit per share   $     0.00     $    ( 0.01)                  $        ( 0.00)    $        ( 0.01)
</TABLE>

On July 14, 2008, the Company, through a wholly-owned South Carolina subsidiary,
Columbia One Corp. entered into an asset purchase agreement with Kokomos Inc., a
South Carolina corporation,  and its sole owner,  acquiring all of the assets of
six (6) bingo halls located in Greer (2), Columbia (3) and Goose Creek (1) South
Carolina. The assets were purchased for $1.8 million,  consisting of $750,000 in
cash paid at closing and a promissory note for $1,050,000, secured by the assets
being  purchased.  The original  agreement  allowed for the purchase price to be
reduced by  $300,000 to $1.5  million if a single,  lump sum payment of $750,000
was made on or before September 30, 2008, in full satisfaction of the promissory
note. On September 26, 2008 the Company paid an additional  $250,000 on the note
and amended the agreement to allow for the  reduction in purchase  price to $1.5
million if $500,000 is paid on the note by January 6, 2009. The promissory  note
bears  interest  of 6% per  annum,  matures  October  1, 2013 and is  payable in
quarterly installments commencing on January 1, 2009.


                                       16
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 13 - SEGMENTS.
--------------------------------------------------------------------------------

The Company's  Chief Operating  Decision Maker ("CODM"),  the President and CEO,
evaluates  performance  and  allocates  resources  based on a measure of segment
profit  or loss from  operations.  The  accounting  policies  of the  reportable
segments  are  the  same  as  those  described  in the  summary  of  significant
accounting  policies except that  depreciation and amortization are allocated to
each  segment from  functional  department  totals based on certain  assumptions
which include, among other things,  revenues.  Also, the Company's CODM does not
view  segment  results  below  gross  profit  (loss),  therefore,   general  and
administrative  expenses,  net interest income,  other income, and the provision
for income taxes are not broken out by segment below.

The entertainment segment encompasses charitable bingo hall operations in Texas,
Alabama,  South Carolina and Florida.  The hospitality  segment  includes income
from party and tent rentals,  separating the catering  business unit sold at the
beginning of the second quarter. The entertainment and hospitality segments were
identified  based  on the  different  nature  of the  services  and  legislative
monitoring and, in general, the type of customers for those services.

A summary of the segment financial information, separating the catering business
unit sold at the beginning of the second  quarter,  reported to the CODM for the
nine months ended September 30, 2008 and 2007, is as follows:
<TABLE>
<CAPTION>
<S>                                        <C>            <C>             <C>             <C>          <C>
September 30, 2008
------------------
                                        Entertainment    Hospitality      Catering     Adjustment    Consolidated
                                        -------------    -----------    ----------   ------------   -------------
Revenue                                    $6,393,000     $1,576,000      $497,000        $72,000      $8,538,000
Depreciation and Amortization                 476,000        180,000        12,000         95,000         763,000
Segment profit (loss)                       1,164,000      (342,000)      (33,000)    (1,902,000)     (1,113,000)
Segment Assets                             33,014,000        919,000                 (12,247,000)      21,686,000

September 30, 2007
------------------
                                        Entertainment    Hospitality      Catering     Adjustment    Consolidated
                                        -------------    -----------    ----------   ------------   -------------
Revenue                                    $6,646,000     $1,813,000    $1,673,000        $39,000     $10,171,000
Depreciation and Amortization                 305,000        147,000        31,000         86,000         569,000
Segment profit (loss)                       3,118,000      (257,000)      (57,000)    (2,206,000)         598,000
Segment Assets                             27,552,000      1,487,000                 (12,856,000)      16,183,000
</TABLE>

The Adjustments generally represent other corporate expenses and revenue,  other
income,  depreciation and amortization  related to corporate  assets,  corporate
gains and  losses on  disposition  of  assets,  inter-company  eliminations  and
corporate  capital  expenditures to reconcile  segment  balances to consolidated
balances.

A summary of items included in the "Adjustment" follows:

                                            2008            2007
                                        ------------    ------------
  Gross profit - other revenue          $     72,000    $     37,000
  General and administrative expense      (2,201,000)     (1,919,000)
  Gain on disposal of assets                 474,000          23,000
  Other income and expenses                 (180,000)       (293,000)
  Provision for income taxes                 (67,000)        (54,000)
                                        ------------    ------------
  Total "Adjustment"                    $ (1,902,000)   $ (2,206,000)
                                        ============    ============


                                       17
<PAGE>
Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
September 30, 2008

--------------------------------------------------------------------------------
NOTE 14 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS.
--------------------------------------------------------------------------------

Recent Issued Accounting Pronouncements

In  September  2006,  the FASB issued SFAS 157,  Fair Value  Measurements.  This
standard defines fair value, establishes a framework for measuring fair value in
accounting  principles  generally accepted in the United States of America,  and
expands disclosure about fair value  measurements.  This  pronouncement  applies
under other accounting standards that require or permit fair value measurements.
Accordingly,  this  statement  does not require any new fair value  measurement.
This statement is effective for fiscal years  beginning after November 15, 2007,
and interim periods within those fiscal years.  However,  SFAS 157 is amended by
Financial  Statement  Position ("FSP") FAS 157-1,  Application of FASB Statement
157 to FASB Statement 13 and Other Accounting  Pronouncements  That Address Fair
Value  Measurements for Purposes of Lease  Classification  or Measurement  under
Statement  13,  which  excludes  from the scope of this  provision  arrangements
accounted for under SFAS 13, Accounting for Leases.  SFAS 157 is also amended by
FSP FAS 157-2,  Effective  Date of FASB  Statement  No.  157,  which  delays the
effective  date  of  SFAS  157  for all  nonfinancial  assets  and  nonfinancial
liabilities,  except those that are recognized or disclosed at fair value in the
financial  statements  on a  recurring  basis  (at  least  annually).  This  FSP
partially  defers the effective date of Statement 157 to fiscal years  beginning
after November 15, 2008, and interim periods within those fiscal years for items
within the scope of this FSP. We adopted SFAS 157 on January 1, 2008,  except as
it applies to those nonfinancial assets and nonfinancial liabilities as noted in
FSP FAS 157-2.  The partial  adoption of SFAS 157 did not have a material impact
on our consolidated financial position or results of operations.

In February  2007, the FASB issued SFAS 159, The Fair Value Option for Financial
Assets and Financial Liabilities - including an amendment of FASB Statement 115.
This  standard  permits  an entity to measure  many  financial  instruments  and
certain    other    assets    and    liabilities    at   fair    value   on   an
instrument-by-instrument  basis.  This  statement is effective  for fiscal years
beginning  after  November 15, 2007.  We adopted SFAS 159 on January 1, 2008, as
required.  The  adoption  of SFAS 159 did not have a  significant  impact on our
financial position or results of operations.

In  December  2007,  the  FASB  issued  SFAS  141(R),  Business  Combinations--a
replacement  of  FASB  Statement  No.  141,  which  significantly   changes  the
principles and  requirements  for how the acquirer of a business  recognizes and
measures in its financial  statements  the  identifiable  assets  acquired,  the
liabilities  assumed,  and any  noncontrolling  interest  in the  acquiree.  The
statement  also  provides  guidance for  recognizing  and measuring the goodwill
acquired in the business combination and determines what information to disclose
to enable users of the financial statements to evaluate the nature and financial
effects of the business combination.  This statement is effective prospectively,
except for certain  retrospective  adjustments  to deferred  tax  balances,  for
fiscal years beginning after December 15, 2008. We are currently  evaluating the
requirements  of SFAS  141(R)  and have not yet  determined  the  impact  on our
consolidated financial statements.

In  March  2008,  the  FASB  issued  SFAS  161,   Disclosures  about  Derivative
Instruments  and Hedging  Activities.  This  Statement  changes  the  disclosure
requirements  for derivative  instruments and hedging  activities.  Entities are
required to provide  enhanced  disclosures  about (a) how and why an entity uses
derivative instruments,  (b) how derivative instruments and related hedged items
are accounted for under Statement 133 and its related  interpretations,  and (c)
how derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. This statement is effective for
fiscal years and interim  periods  beginning  after  November  15,  2008.  Early
application is encouraged.  We are currently evaluating the requirements of SFAS
161 and  have  not yet  determined  the  impact  on our  consolidated  financial
statements.

In April 2008,  the FASB issued FSP No. FAS 142-3,  Determination  of the Useful
Life of Intangible  Assets.  FSP No. FAS 142-3 amends the factors that should be
considered in developing renewal or extension  assumptions used to determine the
useful life of a recognized  intangible  asset under SFAS No. 142,  Goodwill and
Other  Intangible  Assets.  The  intent  of  the  position  is  to  improve  the
consistency between the useful life of a recognized  intangible asset under SFAS
No. 142 and the period of expected  cash flows used to measure the fair value of
the asset under SFAS No.  141R,  and other U.S.  generally  accepted  accounting
principles.  The  provisions of FSP No. FAS 142-3 are effective for fiscal years
beginning  after  December 15,  2008,  and interim  periods  within those fiscal
years.   Early  adoption  is  prohibited.   We  are  currently   evaluating  the
requirements  of FSP No. FAS 142-3 and have not yet determined the impact on our
consolidated financial statements.


                                       18
<PAGE>

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

The Company reported nine months  year-to-date 2008 adjusted revenue declined 5%
from the comparable  prior year period.  Adjusted  revenue removes  year-to-date
revenue  related to the Company's  catering  business  which was sold during the
second quarter of 2008.  During the third  quarter,  revenue was affected by two
hurricanes and the national  economic crisis which lowered  attendance levels at
halls  particularly  in South Carolina and offset the  contribution of new halls
acquired  in  January  and July of this  year.  The  Company  operated  at above
breakeven   excluding  the  significant   unfavorable   impact  on  earnings  of
renovations,  re-openings  and the  start-up  of new halls in Texas and  ongoing
legal  expenses.  The halls we acquired in July and their  historical  financial
performance are described in greater detail in the Reports on Form 8-K and 8-K/A
filed with the SEC on July 14, 2008 and September 26, 2008.

Results in the first nine  months of 2008  include  the effect of  approximately
$1,504,000  of  notable  items:  $1,426,000  from the  effects  of  renovations,
re-openings  and start-ups of new halls at several  halls in Texas,  $493,000 of
legal and  acquisition  related  expenses and $39,000 for non cash  expenses for
compensation  expense related to stock options which were partially  offset by a
$454,000  net  gain  on sale of  catering  business  unit  assets  after  direct
expenses.  The Company has underway a broad program of renovations,  re-openings
and  start-ups  of new halls  affecting  nine  locations  within  the  Company's
portfolio of 41 bingo  centers  including  Pensacola,  Florida,  and San Angelo,
Abilene,  Odessa,  El Paso,  McAllen  and Corpus  Christi,  Texas.  The  Company
announced plans to open additional halls in McAllen and El Paso, Texas, later in
the year.  The San Angelo bingo hall opened  during the first  quarter while the
Corpus Christi bingo hall opened in May of the second quarter of 2008. The legal
expenses  were mainly  related to our  expansion  plans and  operations in South
Carolina,   Texas  legal  items,  our  completed  Florida  acquisition  and  our
litigation with Furtney seeking recovery of prior settlements and other damages.

Results in the first nine  months of 2007  included  approximately  $329,000  of
notable items: $313,000 from legal expenses related to South Carolina, Texas and
our attempt to expand into  Arkansas,  and  $43,000  for non cash  expenses  for
compensation  expense  related to stock  options  offset by  $27,000  related to
start-up activities.

The Company has also increased the level of capital spending associated with the
implementation  of its  entertainment  destination  strategy  which  encompasses
bettering the infrastructure,  interior environment, amenities and activities of
the bingo centers in the Company's portfolio.

Revenues

The following  table sets forth the  Company's  revenues by segment for the nine
months ended September 30, 2008 and 2007,  adjusted for the sale of the catering
business unit at the beginning of the second quarter:

                          2008         2007       $ Change     % Change
                       ----------  ------------  -----------   --------
Total Revenues         $8,538,000  $ 10,171,000  $(1,633,000)    (16%)
Less: Catering            497,000     1,673,000   (1,176,000)    (61%)
Adjusted revenue        8,041,000     8,498,000     (457,000)     (5%)
Entertainment           6,393,000     6,647,000     (254,000)     (4%)
   Texas                3,858,000     4,112,000     (254,000)     (6%)
   South Carolina       1,232,000     1,415,000     (183,000)    (13%)
   Alabama / Florida    1,303,000     1,120,000      183,000      16%
Hospitality             1,576,000     1,813,000     (237,000)    (13%)
Other                    $ 72,000  $     38,000  $    34,000      NM

During the first nine months of 2008,  total  adjusted  revenues for the Company
decreased  5%  from  2007  with  both  Entertainment  and  Hospitality  segments
contributing to the decline in revenue.  Entertainment revenue decreased 4% with
Texas being the most significant contributor mainly as a result of the effect on
revenue  of hall  renovations  and  re-openings  totaling  $364,000.  Absent the
effects of the strategic  investments  to strengthen  its long-term  position in
certain markets by renovating then reopening and merging certain halls in Texas,
the underlying  performance of the Texas portfolio was up  approximately 4% from
the prior year. The  Entertainment  segment  accounted for 79% of total adjusted
revenues  compared  with 78% of total  adjusted  revenues  in  2007.  By  state,
Entertainment revenues for Texas, South Carolina and Alabama / Florida were 60%,
19% and 21% of total Entertainment revenue respectively compared to 62%, 21% and
17% in 2007. The increase in Alabama / Florida mainly  represented  the purchase
of a new Florida hall in January 2008.  Hospitality  revenue  decreased 13% from
the prior year reflecting lower event activity. Hospitality accounted for 20% of
total adjusted  revenues in 2008,  compared to 21% of total adjusted revenues in
2007. Other revenue includes other ancillary services and miscellaneous  revenue
not reported as segment revenue.


                                       19
<PAGE>
Gross profit and Costs and Expenses
-----------------------------------

The table below  summarizes  the Company's  gross profit by segment for the nine
months ended September 30, 2008 and 2007,  adjusted for the sale of the catering
business unit at the beginning of the second quarter:

                          2008         2007       $ Change     % Change
                       ----------  ------------  -----------   --------
Total Gross Profit     $  861,000  $  2,841,000  $(1,980,000)    (70%)
Less: Catering gross
profit (loss)             (33,000)      (57,000)      24,000      NM
Adjusted gross profit     894,000     2,898,000   (2,004,000)    (69%)
Entertainment           1,164,000     3,118,000   (1,954,000)    (63%)
Hospitality              (342,000)     (257,000)     (85,000)    (33%)
Other                  $   72,000  $     37,000  $    35,000      NM

The decrease in adjusted  gross profit was mainly  attributed to the effects of:
(1)  renovations  and  openings  at  several  halls in Texas  in the  amount  of
$1,426,000,  (2) higher Texas  administrative  expenses  added to manage the new
bingo  centers and  renovation  activity of $184,000,  (3)  increased  legal and
acquisition matters of $180,000 and (4) lower hospitality revenue.

The nine  month  year-to-date  direct  costs  and  expenses  for 2008 and  2007,
adjusted for the sale of the catering  business,  are set forth in the following
table:

                          2008         2007
                       Nine months  Nine months
                      year to date year to date   $ Change     % Change
                       ----------  ------------  -----------   --------

Adjusted Revenue       $8,041,000  $  8,498,000  $  (457,000)     (5%)

Adjusted direct costs
 and expenses
Direct salaries and
 other compensation     1,565,000     1,394,000      171,000      12%
Rent and utilities      2,101,000     1,846,000      255,000      14%
Other direct operating
 costs                  2,752,000     1,823,000      929,000      51%
Depreciation and
 amortization             655,000       452,000      203,000      45%
License expense            74,000        85,000      (11,000)      5%
                       ----------  ------------  -----------   --------
Total adjusted costs
 and expenses           7,147,000     5,600,000    1,547,000      28%

Adjusted Gross profit  $  894,000  $  2,898,000  $(2,004,000)    (69%)


Adjusted cost of services  increased 28% over the  comparable  nine-month  prior
year  period  mainly  as a result  of the  costs  associated  with  renovations,
re-openings and start-ups of new bingo centers.  This, in conjunction with lower
revenues,  resulted  in a decline of gross  profit  percent  (gross  profit as a
percent of sales) to 11% from 34% in 2007.

Direct  salaries  and other  compensation  were 12% above  the prior  year.  The
increase  mainly  represented  increased  staffing,  travel  and other  expenses
related to the renovations and start-ups of bingo centers.

Rent and utilities in 2008 were up  approximately  14% over 2007,  which largely
reflected  the  addition of our new halls in Florida  and Corpus  Christi and El
Paso  Texas.  In  2008  and  2007,  we  did  not  recognize  lease  costs  on  a
straight-line  basis as provided in SFAS 13, paragraph 15 and FTB 85-3. Instead,
lease costs were recognized based on payments made or accrued during each month.
If the Company had recognized lease expense on a straight-line basis in 2008 and
2007,  total  lease  costs  would  not have  materially  changed  the  Company's
financial  results.  In  general,  the  Company  enters  into long  term  leases
underlying its operations.  At the same time, the Company  generally enters into
agreements  which are renewed  annually  with its  customers.  This  permits the
Company to adjust its customer agreements in response to general price increases
and limits the effect of lease  escalation  clauses.  Generally,  the  Company's
leases require payments of rent and a pro-rata share of real estate maintenance,
taxes and insurance.


                                       20
<PAGE>

Other direct operating costs in 2008 were up 51% over the prior year, mainly due
to costs such as  advertising,  promotions and  development  expenses of the new
halls and  re-opening  after  major  renovations.  The  provision  for  doubtful
accounts  was reduced as a result of the payment of a  settlement  reached  with
certain customers.

Depreciation and amortization expense totaled  approximately  $750,000 ($655,000
Cost of Services  plus $95,000  G&A) in 2008 versus  $538,000 in the prior year.
The increase was mainly attributed to capital spending on new halls, renovations
and implementation of the Company's entertainment destination strategy.

General and administrative expenses, excluding related depreciation expense, the
noted legal fees and stock-based  compensation totaled approximately  $1,553,000
in 2008,  compared to  approximately  $1,476,000  in 2007,  an increase of about
$77,000.  The increase mainly related to planned staff,  compensation and travel
related increases.

Other income and expense was a net expense of  approximately  $180,000 for 2008,
compared to  approximately  $293,000 in 2007. The  difference  mainly stems from
lower interest  expense from the  refinancing of legal  settlements  and certain
notes payable during 2007 and higher  interest income on higher average cash and
cash equivalent balances.

Our income tax expense for 2008 was approximately $67,000 compared to $54,000 in
2007,  all of which is  related  to the  expected  effective  tax rate for state
income  taxes.  As of December 31, 2007,  the Company had a net  operating  loss
available for carryover on its federal income taxes of approximately $6,700,000.

Net Income (Loss)
-----------------

During the first nine months of 2008,  we  realized a net loss of  approximately
$1,113,000;  $(0.07) per basic share and $(0.07) per fully  diluted  share.  Net
income for the first nine months of 2007 was approximately  $599,000;  $0.05 per
basic share and $0.05 per fully diluted  share.  The weighted  average number of
basic Common Stock shares  outstanding  totaled  15,083,201  in 2008 compared to
11,187,178 in 2007.  The increase in shares  outstanding  mainly  represents the
sale of 5,190,568 shares of common stock on March 27, 2008.

Adjusted  for the noted items above,  the  adjusted net income  during the first
nine months of 2008 was approximately $392,000 and basic earnings per share were
$0.03 per share in 2008  versus an  adjusted  net income of  $932,000  and basic
earnings per share of $0.08 last year.

Liquidity and Capital Resources
-------------------------------

Cash  and  cash  equivalents  at  September  30,  2008,  totaled   approximately
$5,234,000 and  represented  24% of total assets of  approximately  $21,686,000.
Current assets totaled  approximately  $5,960,000.  Current  liabilities totaled
approximately  $1,954,000  and  include  amounts  expected  to be paid for early
payoff of the South Carolina  acquisition note during the first quarter of 2009.
Working  capital was  approximately  $4,006,000 with a current ratio of 3.1 to 1
compared to approximately 1.8 to 1 in December 2007.

Cash used by operating  activities for the nine months ended  September 30, 2008
totaled  approximately  $731,000  compared to cash provided of $1,780,000 during
2007. Cash flows from operating  activities in 2008 were decreased by a net loss
of  approximately  $1,113,000,  the  gain on sale of the  catering  business  of
approximately   $474,000  and  provided  by  non-cash  depreciation  expense  of
approximately $763,000, stock based compensation of approximately $39,000 and by
other net changes in asset and liability accounts of approximately $54,000.

Net cash used in  investing  activities  totaled  approximately  $2,732,000  for
capital expenditures mainly for bingo hall renovations,  leasehold improvements,
the  acquisition of halls in Florida and South Carolina and additional  licenses
during the nine months ended  September 30, 2008. This compared to net cash used
in  investing  activities  of  approximately  $1,302,000  in 2007 mainly for the
purchase of capital assets.

Cash provided by financing activities in 2008 totaled approximately  $6,731,000,
compared  to net cash  used in  financing  activities  in 2007 of  approximately
$329,000. During the first nine months of 2008, approximately $7,000,000 of cash
proceeds were obtained through the sale of common stock,  approximately  $34,000
was provided by exercised options and $303,000 was used for the payment of notes
payable and legal settlement  obligations.  In 2007,  approximately  $477,000 of
financing was obtained from the sale of common stock,  exercise of stock options
of $15,000  and  $402,000  from notes  payable and  $1,223,000  was used for the
payment of notes payable and legal settlements.


                                       21
<PAGE>

At September 30, 2008,  we had  approximately  $21,686,000  in total assets with
total liabilities of approximately  $5,470,000 and approximately  $16,216,000 of
shareholders'  equity.  Total assets include  approximately  $5,234,000 in cash,
$428,000  of  net  accounts  receivable,   other  current  assets  of  $298,000,
$8,098,000 of net property and  equipment,  $7,414,000 of intangible  assets and
$214,000  of other  assets.  Total  liabilities  primarily  consist of  accounts
payable of approximately $221,000 and notes payable obligations of approximately
$3,986,000,  legal settlement obligations of $444,000 and accrued liabilities of
$753,000 and related-party liabilities of $66,000.

In 2008, we plan to continue to use our cash generated  from  operations to make
leasehold improvements and renovations in our bingo operations.  We also plan to
use  advantageous  combinations of bank financing,  seller  financing,  treasury
stock,  and cash on new bingo  hall  acquisitions  when  favorable  terms can be
obtained.

Financial Risk Management

Off-Balance Sheet Arrangements. We have no off-balance sheet debt.

Market Risk. In the normal course of business, we employ established  procedures
to manage our exposure to changes in the market value of our investments.  There
were no significant  investments in marketable  securities at September 30, 2008
or 2007.  The  Company  holds  its  funds in cash and  certificates  of  deposit
generally insured by the FDIC with uninsured amounts setting off loans payable.

Recently Issued Accounting Pronouncements

In  September  2006,  the FASB issued SFAS 157,  Fair Value  Measurements.  This
standard defines fair value, establishes a framework for measuring fair value in
accounting  principles  generally accepted in the United States of America,  and
expands disclosure about fair value  measurements.  This  pronouncement  applies
under other accounting standards that require or permit fair value measurements.
Accordingly,  this  statement  does not require any new fair value  measurement.
This statement is effective for fiscal years  beginning after November 15, 2007,
and interim periods within those fiscal years.  However,  SFAS 157 is amended by
Financial  Statement  Position ("FSP") FAS 157-1,  Application of FASB Statement
157 to FASB Statement 13 and Other Accounting  Pronouncements  That Address Fair
Value  Measurements for Purposes of Lease  Classification  or Measurement  under
Statement  13 , which  excludes  from the scope of this  provision  arrangements
accounted for under SFAS 13, Accounting for Leases.  SFAS 157 is also amended by
FSP FAS 157-2,  Effective  Date of FASB  Statement  No.  157,  which  delays the
effective  date  of  SFAS  157  for all  nonfinancial  assets  and  nonfinancial
liabilities,  except those that are recognized or disclosed at fair value in the
financial  statements  on a  recurring  basis  (at  least  annually).  This  FSP
partially  defers the effective date of Statement 157 to fiscal years  beginning
after November 15, 2008, and interim periods within those fiscal years for items
within the scope of this FSP. We adopted SFAS 157 on January 1, 2008,  except as
it applies to those nonfinancial assets and nonfinancial liabilities as noted in
FSP FAS 157-2.  The partial  adoption of SFAS 157 did not have a material impact
on our consolidated financial position or results of operations.

In February  2007, the FASB issued SFAS 159, The Fair Value Option for Financial
Assets and Financial Liabilities - including an amendment of FASB Statement 115.
This  standard  permits  an entity to measure  many  financial  instruments  and
certain    other    assets    and    liabilities    at   fair    value   on   an
instrument-by-instrument  basis.  This  statement is effective  for fiscal years
beginning  after  November 15, 2007.  We adopted SFAS 159 on January 1, 2008, as
required.  The  adoption  of SFAS 159 did not have a  significant  impact on our
financial position or results of operations.

In  December  2007,  the  FASB  issued  SFAS  141(R),  Business  Combinations--a
replacement  of  FASB  Statement  No.  141,  which  significantly   changes  the
principles and  requirements  for how the acquirer of a business  recognizes and
measures in its financial  statements  the  identifiable  assets  acquired,  the
liabilities  assumed,  and any  noncontrolling  interest  in the  acquiree.  The
statement  also  provides  guidance for  recognizing  and measuring the goodwill
acquired in the business combination and determines what information to disclose
to enable users of the financial statements to evaluate the nature and financial
effects of the business combination.  This statement is effective prospectively,
except for certain  retrospective  adjustments  to deferred  tax  balances,  for
fiscal years beginning after December 15, 2008. We are currently  evaluating the
requirements  of SFAS  141(R)  and have not yet  determined  the  impact  on our
consolidated financial statements.

In  March  2008,  the  FASB  issued  SFAS  161,   Disclosures  about  Derivative
Instruments  and Hedging  Activities.  This  Statement  changes  the  disclosure
requirements  for derivative  instruments and hedging  activities.  Entities are
required to provide  enhanced  disclosures  about (a) how and why an entity uses
derivative instruments,  (b) how derivative instruments and related hedged items
are accounted for under Statement 133 and its related  interpretations,  and (c)
how derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. This statement is effective for
fiscal years and interim  periods  beginning  after  November  15,  2008.  Early
application is encouraged.  We are currently evaluating the requirements of SFAS
161 and  have  not yet  determined  the  impact  on our  consolidated  financial
statements.


                                       22
<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Response  to this item is  included  in "Item 2 -  Management's  Discussion  and
Analysis of Financial Conditions and Results of Operations - Market Risk" above.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls

The  Company's  management  evaluated,  with  the  participation  of  the  Chief
Executive  Officer  and  Chief  Financial  Officer,  the  effectiveness  of  the
Company's disclosure controls and procedures as of the end of the period covered
by this  report.  Disclosure  controls  and  procedures  are  designed  with the
objective  of ensuring  that (i)  information  required to be  disclosed  in the
Company's  reports filed under the Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms and (ii) the information is accumulated  and  communicated
to management, including the principal executive officer and principal financial
officer,   as  appropriate  to  allow  timely   decisions   regarding   required
disclosures.

Based  upon their  evaluation,  our  management  including  the Chief  Executive
Officer and Chief Financial Officer have concluded that our disclosure  controls
and  procedures  (as  defined  in  Rule  13a-15(e)  or 15 d -  15(e)  under  the
Securities  Exchange Act) are effective,  as of the end of the period covered by
this report on Form 10-Q, to ensure that information required to be disclosed by
us in the reports  that we file or submit under the  Securities  Exchange Act of
1934 is recorded,  processed,  summarized  and reported  within the time periods
specified in the SEC rules and forms.

There have been no changes in our  internal  control  over  financial  reporting
during the quarter ended September 30, 2008,  that have  materially  affected or
are reasonably likely to materially  affect, our internal control over financial
reporting.

Limitations on the Effectiveness of Controls

Our  management,  including our CEO and CFO, does not expect that our disclosure
controls or our internal  controls  over  financial  reporting  will prevent all
error  and all  fraud.  A  control  system,  no matter  how well  conceived  and
operated,  can provide only  reasonable,  but not absolute,  assurance  that the
objectives of a control system are met.  Further,  any control  system  reflects
limitations  on  resources,  and  the  benefits  of a  control  system  must  be
considered  relative to its costs.  Because of the inherent  limitations  in all
control systems,  no evaluation of controls can provide absolute  assurance that
all  control  issues  and  instances  of  fraud,  if  any,  within   Littlefield
Corporation have been detected. These inherent limitations include the realities
that judgments in  decision-making  can be faulty and that  breakdowns can occur
because of simple error or mistake.  Additionally,  controls can be circumvented
by the individual acts of some persons,  by collusion of two or more people,  or
by management  override of a control. A design of a control system is also based
upon certain assumptions about potential future conditions;  over time, controls
may  become  inadequate  because  of  changes  in  conditions,  or the degree of
compliance  with the  policies or  procedures  may  deteriorate.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or fraud may occur and may not be detected.


                                       23
<PAGE>
PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For a  discussion  of material  pending  legal  proceedings,  see Note 11 to the
unaudited  Consolidated  Financial  Statements included in Part I hereof,  which
Note 11 is incorporated herein by reference.

Item 6. Exhibits



Exhibit    Description

 31.1      Rule 31a-14(a) / 15d-14(a) Certifications

 32.1      Section 1350 Certifications







                                   SIGNATURES

In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                        Littlefield Corporation

                                        November 14, 2008

                                        By:

                                        /s/  JEFFREY L MINCH
                                        --------------------
                                        Jeffrey L. Minch
                                        President and Chief Executive Officer


                                        /s/ RICHARD S. CHILINSKI
                                        ------------------------
                                        Richard S. Chilinski
                                        Chief Financial Officer



                                       24