SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                 FORM 10-QSB / A
                               AMENDMENT NO. 1 TO
               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
             Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

For the fiscal quarter ended March 31, 2006          Commission file No. 0-24805
                                                                         -------

                             Littlefield Corporation
                             -----------------------
        (Exact name of small business issuer as specified in its charter)

          Delaware                                        74-2723809
          --------                                        ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                     2501 North Lamar Blvd., Austin TX 78705
                     ---------------------------------------
                    (Address of principal executive offices)


                                 (512) 476-5141
                                 --------------
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
YES [ X ]    NO  [  ]

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

As of March 31, 2006, the Issuer had 10,633,334  shares of its Common Stock, par
value $.001 per share outstanding.

Transitional Small Business Disclosure Format: YES [  ]    NO [ X ]

<PAGE>


                             Littlefield Corporation

                                  FORM 10-QSB/A

                      For the quarter ended March 31, 2006

                                      INDEX



Part I.  Financial Information

     Item 1. Financial Statements

          a)   Consolidated Statements of Operations for the Three
               Months Ended March 31, 2006 and 2005.........................  2

          b)   Consolidated Balance Sheet as of March 31, 2006..............  4

          c)   Consolidated Statements of Cash Flows for the Three
               Months Ended March 31, 2006 and 2005.........................  5

          d)   Notes to Consolidated Financial Statements                     7

     Item 2. Management's Discussion and Analysis of Financial Condition
             And Results of Operations...................................... 16

     Item 3. Controls and Procedures                                         18

Part II. Other Information

             Item 1. Legal Proceedings...................................... 18

             Item 6. Exhibits............................................... 18

Signatures                                                                   19


Amendment No. 1 Overview

This amendment to Littlefield  Corporation's  Form 10-QSB restates the Company's
financial statements to correct errors that we identified in previously reported
stock option expenses. We announced in a press release dated July 21, 2006, that
we intended to restate our first quarter financial  statements in light of these
errors.

The information contained in this Amendment , including the financial statements
and the notes hereto,  amends only Item 1 (including Notes, 2, 5, 6, 7, 8, 9 and
13 to the Unaudited Financial  Statements),  Item 2 and Item 3 of our originally
filed  Quarterly  Report Form 10-QSB for the period  ending March 31,  2006.  No
other items in our originally filed 10-QSB are amended hereby.

                                       1
<PAGE>


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended March 31,                            2006            2005
                                                     (Restated)      (Restated)
                                                    ------------    ------------

REVENUES:
   Entertainment                                    $ 2,172,319     $ 1,799,697
   Hospitality                                          700,848         637,315
   Other                                                 46,070          52,705
                                                    ------------    ------------
TOTAL REVENUES                                        2,919,237       2,489,717
                                                    ------------    ------------

DIRECT COSTS AND EXPENSES:
   Direct salaries and other compensation               568,518         529,250
   Rent and utilities ($0 and $5,307, respectively
    to related parties)                                 613,819         534,317
   Other direct operating costs                         658,442         563,106
   Depreciation and amortization                        163,617         212,465
   License expense                                       40,226          10,415
                                                    ------------    ------------
TOTAL COSTS AND EXPENSES                              2,044,622       1,849,553

                                                    ------------    ------------
GROSS MARGIN                                            874,615         640,164

GENERAL AND ADMINISTRATIVE EXPENSES
   Salaries and other compensation                      147,854         143,783
   Legal and accounting fees                             15,379         117,466
   Depreciation and amortization                         24,396          23,698
   Compensation expense related to options               24,958          19,750
   Other general and administrative                     111,203         175,148
                                                    ------------    ------------
   TOTAL GENERAL AND ADMINISTRATIVE EXPENSES            323,790         479,845

                                                    ------------    ------------
OPERATING INCOME                                        550,825         160,319

OTHER INCOME AND EXPENSES:
   Interest and investment income                        32,452             989
   Interest expense ($1,783 and $13,500
    respectively to related parties)                    (56,859)        (57,971)
   Gain (loss) on fixed asset sales                         346               0
   Other income and (expense)                            37,402          19,500
                                                    ------------    ------------
TOTAL OTHER INCOME AND EXPENSES                          13,341         (37,482)

                                                    ------------    ------------
NET INCOME BEFORE PROVISION FOR INCOME TAXES            564,166         122,837

PROVISION FOR INCOME TAXES                               15,000          15,000
                                                    ------------    ------------

NET INCOME                                              549,166         107,837

OTHER COMPREHENSIVE INCOME                                    0             645
                                                    ------------    ------------

NET COMPREHENSIVE INCOME                            $   549,166     $   108,482
                                                    ============    ============


                 See notes to consolidated financial statements.

                                       2
<PAGE>


                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended March 31,                            2006            2005
                                                        ----            ----
                                                     (Restated)      (Restated)
                                                    ------------    ------------

EARNINGS (LOSS) PER SHARE:
   Basic earnings (loss) per share                        $.052           $.011
                                                    ------------    ------------

                                                    ------------    ------------
   Diluted earnings (loss) per share                      $.052           $.010
                                                    ============    ============

Weighted average shares outstanding - basic          10,494,921      10,193,698

Weighted average shares outstanding - diluted        10,637,927      10,292,611


                 See notes to consolidated financial statements.

                                       3
<PAGE>


Littlefield Corporation
CONSOLIDATED BALANCE SHEET (Unaudited)

                                     ASSETS
                                     ------

Current Assets:                                                       March 31,
                                                                        2006
                                                                     (Restated)
                                                                   -------------
    Cash and cash equivalents                                      $  2,070,342
    Accounts receivable, net of allowance for doubtful accounts of
     $79,455                                                            932,606
    Equity Securities, available for sale                                 3,130
    Restricted Cash                                                     918,290
    Other prepaid expenses and current assets                           223,907
                                                                   -------------
    Total Current Assets                                              4,148,275
                                                                   -------------

Property and Equipment - at cost, net of accumulated depreciation
 and amortization                                                     6,250,611

Other Assets:
    Goodwill                                                          4,905,111
    Intangible assets, net                                              646,286
    Other non-current assets                                            210,337
                                                                   -------------
    Total Other Assets                                                5,761,734
                                                                   -------------

TOTAL ASSETS                                                       $ 16,160,620
                                                                   =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Current Liabilities:
    Obligations under capital lease                                $     47,131
    Long term debt, current portion                                     318,417
    Trade accounts payable                                              134,816
    Legal Settlements - current portion                                 120,000
    Reserve for settlements                                           3,200,000
    Other current liabilities - related party                           450,699
    Accrued expenses                                                    425,014
                                                                   -------------
    Total Current Liabilities                                         4,696,077
                                                                   -------------

Long-term Liabilities:
    Legal Settlements - net of current portion                          100,000
    Long term debt, net of current portion                            2,393,850
    Long term debt-related party                                        105,650
                                                                   -------------
    Total Long-term Liabilities                                       2,599,500
                                                                   -------------
Total Liabilities                                                     7,295,577
                                                                   -------------

Stockholders' Equity:
    Common stock, $.001 par value, (authorized 20,000,000 shares,
     issued 11,959,532 shares, outstanding 10,633,334 shares)            11,960
    Additional paid-in-capital                                       23,444,142
    Treasury stock - 1,326,198 shares, at cost                       (1,687,809)
    Accumulated Comprehensive Income                                     (2,100)
    Accumulated deficit                                             (12,901,150)
                                                                   -------------
    Total Stockholders' Equity                                        8,865,043
                                                                   -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 16,160,620
                                                                   =============


                 See notes to consolidated financial statements.

                                       4
<PAGE>


Littlefield Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


Three months Ended March 31,                             2006            2005
                                                       (Restated)     (Restated)
                                                      ------------    ----------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                         $   549,166     $ 107,837
   Adjustments to reconcile net income to net cash
    provided by operating activities:
   Depreciation and amortization                          188,012       236,055
   Stock based compensation expense                        24,958        19,750
   Gain on Exercise of Deferred Compensation                    0       (19,500)
   Increase (decrease) in cash flows as a result of
    changes in asset and liability account balances:
       Accounts receivable                                259,416        66,436
       Other assets and licenses                          (27,801)      (75,112)
       Trade accounts payable                            (290,849)       22,921
       Accrued expenses and other current liabilities    (297,588)      (25,859)
                                                      ------------    ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                 405,314       332,528
                                                      ------------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Property and equipment expenditures                    (85,400)      (77,284)
   Proceeds from collection of Note Receivable          1,184,214             0
                                                      ------------    ----------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES        1,098,814       (77,284)
                                                      ------------    ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on capital lease obligations                  (18,537)      (17,021)
   Payments on notes payable                             (146,221)     (219,711)
   Proceeds from options exercised                         66,000             0
   Collection of Subscriptions                             46,000        31,500
                                                      ------------    ----------
NET CASH (USED) IN FINANCING ACTIVITIES                   (52,758)     (205,232)
                                                      ------------    ----------

NET INCREASE IN CASH                                    1,451,370        50,012

CASH AT BEGINNING OF PERIOD                               618,972       527,103
                                                      ------------    ----------

CASH AT END OF PERIOD                                 $ 2,070,342     $ 577,115
                                                      ============    ==========


                 See notes to consolidated financial statements.

                                       5
<PAGE>


Littlefield Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)


Three months Ended March 31,                                2006
                                                         (Restated)       2005
                                                         ----------    ---------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash payments:

    Interest                                             $  50,736     $ 64,355
                                                         ==========    =========

    Income taxes                                         $       0     $      0
                                                         ==========    =========


Non-cash transactions:

    Acquisition of property, equipment and intangibles
     in exchange for notes payable                       $       0     $      0
                                                         ==========    =========

    Equipment purchased under capital lease              $       0     $      0
                                                         ==========    =========

    Issuance of treasury stock for deferred compensation
     and 401K plan                                       $  24,403     $      0
                                                         ==========    =========

                 See notes to consolidated financial statements.

                                       6
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006


--------------------------------------------------------------------------------
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 condensed 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  condensed financial  statements have been reclassified to maintain
consistency and comparability for all periods presented.

The operating  results for the  three-month  period ended March 31, 2006 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending December 31, 2006.  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-QSB/A  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 - RESTATEMENT.
--------------------------------------------------------------------------------

In July 2006, we identified certain errors that had resulted in misstatements of
previously reported stock option expenses. In July 2006 management and the Audit
Committee of the Board of Directors concluded that we would amend our previously
filed Form 10-Q for the quarter  ended  March 31,  2006 to correct our  reported
stock option expenses.  In August 2006 management and the Audit Committee of the
Board of Directors  concluded that we would also amend our previously filed 2005
Form 10-KSB to correct our reported  stock options  expenses.  Accordingly,  our
financial  statements  for 2005 and the first  quarter  of 2006 in our  original
filings  should no longer be relied  upon.  Management  and the  Chairman of the
Audit  Committee also discussed  these matters with our  independent  registered
public accountants.

The following table sets forth the effects of  restatements  made to correct the
error in our  reported  Q1 2006 stock  option  expenses  for a  modification  to
certain stock option agreements in 2005.

                                       7
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006

--------------------------------------------------------------------------------
NOTE 2 - RESTATEMENT (Continued).
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>     <C>                           <C>             <C>             <C>             <C>
                                                      FOR THE QUARTER ENDED MARCH 31,
Consolidated Statement of Operations       2006            2006            2005            2005
                                         Restated       Previously       Restated       Previously
                                                         Reported                        Reported
Compensation Expense                        $24,958        $365,888         $19,750              $0
Total General and Administrative            323,790         664,720         479,845         460,095
Operating Income                            550,825         209,895         160,319         180,069
Net Income Before Taxes                     564,166         223,236         122,837         142,587
Net Income                                  549,166         208,236         107,837         127,587
Net Comprehensive Income                   $549,166        $208,236        $108,482        $128,232
Basic Earnings Per Share                     $0.052          $0.020          $0.011          $0.013
Diluted Earnings Per Share                   $0.052          $0.020          $0.010          $0.012
Wtd Avg Shares Outstanding - Basic       10,494,921      10,415,131      10,193,698      10,093,268
Wtd Avg Shares Outstanding - Diluted     10,637,927      10,654,580      10,292,611      10,332,874

Consolidated Balance Sheet            March 31, 2006  March 31, 2006  March 31, 2005  March 31, 2005
                                         Restated       Previously       Restated       Previously
                                                         Reported                        Reported
Trade Accounts Payable                     $134,816        $118,316        $314,828        $314,828
Total Current Liabilities                 4,696,077       4,679,577       4,978,549       4,978,549
Total Liabilities                         7,295,577       7,279,077       8,044,079       8,044,079
Additional Paid in Capital               23,444,142      23,698,504      23,627,545      23,607,795
Accumulated Deficit                     (12,901,150)    (13,175,329)    (14,379,178)    (14,359,428)
Total Stockholder's Equity                8,865,043      $8,881,543      $7,134,011      $7,134,011
</TABLE>

--------------------------------------------------------------------------------
NOTE 3 - PROPERTY AND EQUIPMENT.
--------------------------------------------------------------------------------

    Property and equipment at March 31, 2006 consists of the following:

    Land                                             $    764,053
    Buildings                                           3,207,889
    Leasehold improvements                              3,868,166
    Rental Inventory and bingo equipment                1,773,298
    Equipment, furniture and fixtures                   2,356,114
    Automobiles                                           384,924
                                                     -------------
                                                       12,354,444

    Less: Accumulated depreciation and amortization    (6,103,833)
                                                     -------------

    Property and equipment, net                      $  6,250,611
                                                     =============


                                       8
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006
--------------------------------------------------------------------------------
NOTE 3 - PROPERTY AND EQUIPMENT (Continued).
--------------------------------------------------------------------------------
Total depreciation  expense, for owned and leased assets,  charged to operations
for the three  months ended March 31, 2006 and 2005 was  approximately  $182,000
and $223,000 respectively.
--------------------------------------------------------------------------------
NOTE 4 - GOODWILL & OTHER INTANGIBLE ASSETS.
--------------------------------------------------------------------------------

Goodwill at March 31, 2006 consists of the following:

                                          Gross
                                         Carrying     Accumulated
                                          Amount      Amortization      Total
                                       ------------  -------------  ------------
  Goodwill                             $ 6,704,375   $ (1,799,264)  $ 4,905,111
                                       ============  =============  ============

                                      Entertainment   Hospitality
                                      -------------  -------------
  Balance at December 31, 2005         $ 4,533,727   $    371,384   $ 4,905,111
  Goodwill acquired in the Quarter             -0-            -0-           -0-
  Impairment losses                            -0-            -0-           -0-
                                       ------------  -------------  ------------
  Balance at March 31, 2006            $ 4,533,727   $    371,384   $ 4,905,111
                                       ============  =============  ============

Intangible assets at March 31, 2006 consists of the following:

                                          Gross
                                         Carrying     Accumulated
                                          Amount      Amortization      Total
                                       ------------  -------------  ------------
  Intangible Assets with Indefinite
   Lives:
  Bingo licenses                       $   589,720   $    (51,974)  $   537,746

  Intangible Assets with Finite Lives:
  Covenants not to compete             $   297,500   $   (188,960)  $   108,540
                                                                    ------------
  Intangible Assets, Net of Accumulated
  Amortization                                                      $   646,286
                                                                    ============

Amortization  expense charged to operations for the three months ended March 31,
2006 and 2005 was approximately $6,400 and $13,000 respectively.

--------------------------------------------------------------------------------
NOTE 5 - SHAREHOLDERS' EQUITY.
--------------------------------------------------------------------------------

At March 31,  2006 the Company  holds  1,326,198  treasury  shares at an average
purchase cost of $1.27.

--------------------------------------------------------------------------------
NOTE 6 - SHARE BASE 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

                                       9
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006

--------------------------------------------------------------------------------
NOTE 6 - SHARE BASED PAYMENTS (Continued).
--------------------------------------------------------------------------------

date forward, but leaves prior periods unchanged.

The Company recorded  $24,958 in compensation  expense in the period ended March
31, 2006 related to options issued under its stock-based incentive  compensation
plans.  This includes expense related to both options issued in the current year
and 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. Information related to
the assumptions  used in this model is set forth in the Company's  Annual Report
on Form 10-K for the fiscal year ended  December 31, 2005. For options issued in
2006,  the following  assumptions  were used:  dividend  yield of 10%,  expected
volatility of 68%,  risk free  interest  rates of 5.0% and an expected life of 7
years.

--------------------------------------------------------------------------------
NOTE 7 - PRO FORMA INFORMATION UNDER SFAS 123 FOR PERIODS PRIOR TO 2006.
--------------------------------------------------------------------------------

The following  table  represents the effect on net income and earnings per share
as if the Company had applied the fair-value  recognition provisions of SFAS 123
to all of its share-based  compensation  awards for the quarter ending March 31,
2005:

                                                                     Quarter
                                                                      Ended
                                                                  March 31, 2005
                                                                    (Restated)
                                                                  --------------
Net Income - as reported                                              $ 107,837
Stock-based compensation included in reported net income, net of
 related tax effects                                                     19,750
Total stock-based compensation expense determined under fair value
 method for all awards, net of related tax effects                      (66,484)
                                                                  --------------
Net Income - pro forma                                                $  61,103
Earnings Per Share:
Basic  - as reported                                                  $   0.011
Basic - pro forma                                                     $   0.006
Diluted - as reported                                                 $   0.010
Diluted - pro forma                                                   $   0.006

                                       10
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006

--------------------------------------------------------------------------------
NOTE 8 - EARNINGS (LOSS) PER SHARE.
--------------------------------------------------------------------------------

A reconciliation of basic to diluted earnings per share is as follows:
<TABLE>
<CAPTION>
<S>     <C>                               <C>          <C>          <C>         <C>
Three months ended March 31,                  2006         2006         2005         2005
----------------------------                  ----         ----         ----         ----
                                           (Restated)   (Restated)   (Restated)   (Restated)
                                          ------------ ------------ ------------ ------------
                                              Basic       Diluted       Basic       Diluted
                                          ------------------------- ------------ ------------
Numerator:
----------
    Net income (loss)                     $   549,166  $   549,166  $   107,837  $   107,837
                                          ============ ============ ============ ============
Denominator:
------------
    Weighted average shares outstanding    10,494,921   10,494,921   10,193,698   10,193,698
    Effect of dilutive securities:
    Preferred stock                               ---          ---          ---          ---
    Stock options and warrants                    ---      143,006          ---       98,913
                                          ------------ ------------ ------------ ------------
    Weighted average shares outstanding    10,494,921   10,637,927   10,193,698   10,292,611
                                          ============ ============ ============ ============

                                          ------------ ------------ ------------ ------------
Earnings (loss) per share                 $      .052  $      .052  $      .011  $      .010
                                          ============ ============ ============ ============
</TABLE>
--------------------------------------------------------------------------------
NOTE 9 - 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 quarters ended March 31, 2006 and
2005, are as follows:

                                                       2006         2005
                                                    (Restated)   (Restated)
                                                    ----------   ----------
      Net income                                    $ 549,166    $ 107,837

      Other comprehensive income
          Net unrealized gain                       $       0    $     645
                                                    ----------   ----------

      Total comprehensive income                    $ 549,166    $ 108,482
                                                    ==========   ==========

--------------------------------------------------------------------------------
NOTE 10 - INCOME TAXES.
--------------------------------------------------------------------------------

The Company  recorded  approximately  $15,000  and  $15,000 of state  income tax
expense,  respectively,  for the three months ended March 31, 2006 and 2005. 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 $6,800,000 at December 31, 2005.

                                       11
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006

--------------------------------------------------------------------------------
NOTE 11 - RELATED PARTY TRANSACTIONS.
--------------------------------------------------------------------------------

In  August  2001,  the  Company  acquired  Word of  Mouth  Custom  Catering.  In
conjunction with this purchase,  the Company issued two promissory notes payable
in the amount of $200,000 each to the two sellers (related parties),  as partial
consideration  for  this  purchase,   and  entered  into  three-year  employment
agreements with the sellers.  In November 2003, the relationship with one of the
sellers  changed  from that of an employee  to an  independent  contractor  on a
consulting basis, in August of 2004 the agreement  terminated with the remaining
employee as per the original  agreement.  The terms of the notes did not change.
These  notes  payable at an annual  rate of 8.0% and a  maturity  date of August
2005.  These  obligations were paid in full in August 2005. For the three months
ended  March  31,  2006  and  2005,  the  Company   recognized  $0  and  $1,250,
respectively, of interest expense related to these obligations.

The President  and CEO of the Company had  personally  guaranteed  $300,000 of a
note payable to a third party lender,  in the original total amount of $540,000.
The note was paid in full in May 2005 .

The Company accrued a total of $61,275 in loan guaranty fees to its President in
2002.  This  amount  has been added to his bonus  amount  accrued in 2002 in the
amount of $300,000,  plus accrued interest and is presented on the balance sheet
as a long term liability - related  party.  For the three months ended March 31,
2006 and 2005,  the  Company  recognized  $6,094  and  $6,094  respectively,  of
interest expense related to these obligations.

The Company purchased the President's  office furniture and antiques for a total
price of $105,650 in July 2002.  This amount was set up on a note  payable  with
interest  only  payments for 4 years at 6.75% with the  principal  amount due in
July 2006 as a balloon payment. In 2006, the note was revised with interest only
payments  for 5 years  at 6.75%  with the  principal  amount  due in July  2010.
Interest  paid on this note for the three  months  ended March 31, 2006 and 2005
was $1,782 and $1,782 respectively.

--------------------------------------------------------------------------------
NOTE 12 - 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:

Pondella Hall for Hire,  Inc., d/b/a Eight Hundred v. American Bingo and Gaming,
Case No.:  97-2750,  Circuit  Court of the Twelfth  Judicial  Circuit in and for
Manatee County, Florida.

800438 Ontario Ltd v. American Bingo and Gaming Corporation,  Case No.: 99-1161,
Circuit  Court  of the  Twelfth  Judicial  Circuit  in and for  Manatee  County,
Florida.

These two related cases arise from a transaction  carried out by a  predecessor,
American  Bingo & Gaming  Corporation  ("American  Bingo"),  in July 1995,  when
American Bingo bought three Florida bingo centers from two corporations owed and
controlled by Phillip Furtney.  More specifically,  American Bingo purchased the
assets of Pondella  Hall for Hire and  Fountains  Bingo from  Pondella  Hall for
Hire, Inc., and the stock of Bingo Trail from 800438 Ontario Ltd. American Bingo
paid the Furtney  controlled  entities over $450,000 at the time of purchase and
agreed to pay additional  compensation  of $450,000 over a period of twenty-four
months and  transfer  stock in American  Bingo  having a value of an  additional
$450,000.  Several months after the acquisition of the three halls,  the Florida
Attorney  General's office obtained an indictment and brought a civil proceeding
related to two of the three halls for alleged  gambling related  offenses.  This
investigation  had been ongoing at, and for some time prior to, the  acquisition
of the halls, but had not been disclosed to American Bingo by the sellers.  As a
result of these legal proceedings,  and the very real threat of additional legal
proceedings  against the American Bingo and its officers,  the halls were closed
and sold to third parties.  Additionally,  American Bingo settled the litigation
brought by the Florida  Attorney  General by pleading to  misdemeanor  sales tax
violations,  paying  substantial  fines,  and agreeing to terms which  precluded
American  Bingo from  business in the state of Florida.  (This  prohibition  has
since  been  lifted  as a result  of  further  negotiations  with  the  State of
Florida.)

                                       12
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006

--------------------------------------------------------------------------------
NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued).
--------------------------------------------------------------------------------

American Bingo did not pay the remaining amounts under the acquisition contracts
since they believed the sellers  breached the  contracts and committed  fraud by
failing to disclose the ongoing  investigation by the Florida Attorney General's
office.  Pondella  filed a two count  Complaint  against  American  Bingo in the
Circuit  Court for Manatee  County,  alleging  breach of contract and common law
conversion.  At the same time,  800438  Ontario  also filed a similar  Complaint
against American Bingo for breach of contract.

American  Bingo answered both  Complaints by denying the essential  allegations.
Additionally,  American Bingo brought  Counterclaims against Pondella and 800438
for  fraud,  negligent  misrepresentation,  breach  of  warranties,  contractual
indemnity,  breach of  guaranty,  deceptive  and  unfair  trade  practices,  and
violation of Chapter 517 of the Florida  Statutes.  American  Bingo also brought
claims against Furtney for his role.  However,  Furtney,  a Canadian citizen and
resident of Canada and  Mexico,  would not accept  service of  American  Bingo's
Complaints  and American Bingo was unable to obtain service of its Complaints on
Furtney.  The Complaints against Furtney were dismissed before trial due to lack
of service.

A jury trial on all claims,  except American Bingo's claims against Furtney, was
conducted in January 2005. The Jury found for Pondella and 800438 Ontario on all
their claims and against  American  Bingo on their claims  against  Pondella and
800438 Ontario. Following trial, the Judge granted American Bingo's motion for a
directed  verdict on Pondella's  claim for conversion.  The principal  amount of
Pondella's  judgment is $410,000 and with  interest and  attorney's  fees totals
$802,039. The principal amount of 800438 Ontario's judgment is $450,000 and with
interest and  attorney's  fees totals  $808,996.  The Company has appealed these
judgments  to the  Florida  Second  District  Court of  Appeal  and  intends  to
vigorously pursue its rights on appeal. Additionally, the Company has bonded off
both judgments,  which precludes any efforts to collect on the judgments  during
the appeal.  The range of potential  loss on these two cases is between zero and
the amount of the judgments,  plus accrued interest. The company accrued a total
of $1,610,000 on its financial  statements related to these matters,  $1,500,000
on the 2004 financial statements and $110,000 on its 2005 financial statements.

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.

As set forth in the previous  section,  the Company also brought  claims against
Philip  Furtney  related  to  his  failure  to  disclose  the  existence  of the
investigation of the Florida Attorney General regarding the bingo halls acquired
by  American  Bingo from the  Furtney  controlled  entities.  These  claims were
dismissed  from the original  litigation  based upon the Company's  inability to
serve  the  Complaints  on  Furtney,  a foreign  resident,  when he  refused  to
voluntarily  accept service of the Complaints.  This dismissal did not decide or
relate to the merits of the claims  against  Furtney.  The  Company  refiled the
Complaints against Furtney in separate  litigation and was finally successful in
serving  Furtney  when he appeared  in Florida for trial of the  Pondella/800438
Ontario cases in January  2005.  The Company  intends to  vigorously  pursue its
claims against Furtney. The case against Furtney is in discovery and the Company
has a trial date of December 11, 2006.

Lenrich  Associates  LLC v.  Littlefield  Corporation,  et al;  Civil Action No.
00-CP-10-4742,  South  Carolina  Court of Common  Pleas,  County of  Charleston.
Lenrich Associates brought this action against the Company based on a commercial
lease  guaranty  that was  signed by the  Company.  The  tenant on the lease was
Concessions Corp., a subsidiary of the Company and had been used as the location
of the "Lucky II" facility, which was closed in early 2000. The lease expired in
February 2003. Because rental payments under the lease were in arrears,  Lenrich
Associates  sought to enforce the guaranty  against the Company.  The  Company's
liability  under the guaranty was capped at the lesser of two years of fixed and
additional rent or the amount of fixed and additional rent  corresponding to the
time period  mandated by South  Carolina  law. A settlement  agreement  had been
reached for  $147,500,  which has been  accrued for by the Company in June 2002.
However,  the  plaintiff  withdrew  their  support of the  settlement  agreement
shortly  thereafter.  Effective January 1, 2006 a settlement was reached between
the two parties in which  Littlefield  will pay a sum of  $500,000.  The Company
accrued  for  the  remaining  balance  of  approximately  $353,000  in the  2005
financial statements.  A payment was made in one lump sum payment of $250,000 on
January 3, 2006 and additional payment have been made in the amount of $10,000 a
month and will  continue for the next 25 months final payment to be made January
5, 2008.

                                       13
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006

--------------------------------------------------------------------------------
NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued).
--------------------------------------------------------------------------------

Littlefield Corp. v. Dye, Civil Action No. 2002-cp-08-478.  The Company filed an
action on March 6, 2002, in Berkeley County,  South Carolina for collection on a
note signed by Danny C. Dye. The note,  which was executed on December 10, 1998,
was in the amount of $80,000.  The Company  alleges  that Dye still owes $58,481
toward the principle balance,  plus $19,257 in accrued interest through December
31,  2002.  On  January  14,  2003,   Mr.  Dye  amended  his  answer  to  assert
counterclaims  against  the  Company  for  fraudulent  breach  of  contract  and
violation of the South Carolina  Payment of Wages Act based on allegations  that
the Company failed to pay Dye amounts due under an employment contract.  Mr. Dye
has alleged that the Company  owes him $375,000 in unpaid  salary and is seeking
treble  damages  under the Payment of Wages Act for a total amount of $1,250,000
in damages.  The Company believes that the  counterclaims  are without merit and
the Company plans to contest them vigorously.

Collins Entertainment Corp. v. Coats and Coats Rental Amusement, d/b/a Ponderosa
Bingo and Shipwatch  Bingo,  Wayne Coats,  individually,  and American Bingo and
Gaming  Corp.;  American  Bingo and  Gaming  Corp.  v.  Coats  and Coats  Rental
Amusement, d/b/a Ponderosa Bingo and Shipwatch Bingo, Wayne Coats, individually,
Civil Action No. 97-CP-10-4685, South Carolina Court of Common Pleas, Charleston
County.  On  October  9,  1997,  Collins  Entertainment,  Inc.,  filed a lawsuit
alleging  the  Defendants  had  engaged  in  civil   conspiracy  and  tortiously
interfered  with the Plaintiff's  contract,  violating the South Carolina Unfair
Trade  Practices Act. The Plaintiff  sought actual damages in excess of $350,000
and an unspecified amount of punitive damages. The Company believed this lawsuit
was  completely  without merit;  however,  a judgment was issued on February 12,
2001 in favor of the plaintiff.  Damages of $157,000 were awarded in addition to
punitive  damages of  $1,570,000.  The Company  appealed  this decision with the
South  Carolina  appellate  court,  and the judgment was  affirmed.  The Company
applied  for a  re-hearing  with the  appellate  court,  which  threw  out their
original opinion.  However,  their new opinion also reaffirmed the judgment. The
Company filed an appeal with the South Carolina  Supreme  Court.  The appeal has
been  heard  and in  April  2006,  the  judgment  was  returned  in favor of the
plaintiff.  The Company has filed a petition with the Supreme  Court  requesting
reconsideration  of the  court's  decision.  The  decision  on the  petition  is
pending.  The potential outcomes in this matter fall within a range of $0 in the
event of a full and final  reversal of the judgment to the full judgment  amount
plus accrued simple  interest of 12% from the date of judgment plus court costs.
The company has accrued  $1,570,000 on its financial  statements related to this
matter. The actual damages of $157,000 were paid in 2001.

--------------------------------------------------------------------------------
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 Company has identified two operating  segments based on the different nature
of the  services  and  legislative  monitoring  and,  in  general,  the  type of
customers for those  services in the current year and two in the prior year. The
entertainment  segment  encompasses bingo center services provided to charitable
organizations in South Carolina,  Texas and Alabama.  The Hospitality segment is
the tent  rental  business  (acquired  November  2000) and the party  rental and
catering businesses in Austin,  Texas, which were acquired in July and August of
2001.

                                       14
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
March 31, 2006

--------------------------------------------------------------------------------
NOTE 13 - SEGMENTS (Continued).
--------------------------------------------------------------------------------

A  summary  of the  segment  financial  information  reported  to the CODM is as
follows:
<TABLE>
<CAPTION>
<S>     <C>                          <C>           <C>          <C>          <C>
      March 31, 2006
      --------------
      (Restated)
      ----------                      Entertainment Hospitality   Adjustment  Consolidated
                                      ------------- ------------ ------------ ------------
      Revenue                          $ 2,172,000  $   701,000  $    46,000  $  2,919,000
      Depreciation and Amortization        102,000       61,000       25,000       188,000
      Segment profit (loss)              1,108,000     (247,000)    (312,000)      549,000
      Segment Assets                    23,626,000    1,296,000   (8,761,000)   16,161,000

      March 31, 2005
      (Restated)
                                     Entertainment  Hospitality   Adjustment  Consolidated
                                      ------------- ------------ ------------ ------------
      Revenue                          $ 1,800,000  $   637,000  $    53,000  $  2,490,000
      Depreciation and Amortization        153,000       79,000       24,000       236,000
      Segment profit (loss)                709,000     (242,000)    (359,000)      108,000
      Segment Assets                    22,483,000    1,281,000   (8,586,000)   15,178,000
</TABLE>
The adjustments represent other income, depreciation and amortization related to
corporate  assets,  corporate  losses,  corporate  assets and corporate  capital
expenditures to reconcile segment balances to consolidated balances.

--------------------------------------------------------------------------------
NOTE 14 -- SUBSEQUENT EVENTS.
--------------------------------------------------------------------------------

In a split decision,  the South Carolina  Supreme Court affirmed the decision of
the Court of Appeals on April 10,  2006.  The Company has filed a petition  with
the  Supreme  Court  requesting  reconsideration  of the court's  decision.  The
decision  on the  petition  is pending.  The  Company  continues  to explore all
options in case of an adverse decision on the petition.

In April 2006, the Company  announced a 20% stock dividend with a record date of
April 5, 2006 and a payment  date of May 10,  2006.  The  Company  retroactively
included  the  stock  dividend  in its  average  outstanding  shares,  as if the
dividend had occurred on March 31, 2006 and 2005.

                                       15
<PAGE>


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

Our  Company  was formed in 1994 as a Delaware  corporation  to  consummate  the
acquisition  of  charitable  bingo  centers  and video  gaming  operations,  and
completed the initial public offering in December of 1994. We operate  primarily
through wholly owned subsidiaries in Texas, Alabama and South Carolina.

The statements in this Quarterly  Report on Form 10-QSB relating to matters that
are not historical facts, including, but not limited to statements found in this
"Management  Discussion  and  Analysis  of  Financial  Condition  and Results of
Operations",  are forward-looking  statements that involve a number of risks and
uncertainties.  Factors  that  could  cause  actual  future  results  to  differ
materially from those expressed in such forward-looking  statements include, but
are not limited to the impact of government  regulation  and taxation,  customer
attendance,  spending, competition, general economic conditions, and other risks
and  uncertainties  as  discussed in this  Quarterly  Report and the 2005 Annual
report on Form 10-KSB.

On July 21, 2006, we announced  that we would  restate our  unaudited  financial
statements  for the first quarter of 2006 to correct an error in accounting  for
share based  compensation  in that  quarter.  The amended Form  10-QSB/A for the
quarter  ended March 31, 2006, is being filed on the same day as the Form 10-QSB
for the quarter ended June 30, 2006.

On August 14, 2006, we announced that we would restate our financial  statements
for the year ended December 31, 2005. This 2005  restatement also relates to the
proper recording of expenses related to share based compensation.  References in
this  10-QSB/A to our  operations,  assets,  liabilities  and cash flows for the
first  quarter of 2005 and the full year 2005  include  revisions  to  financial
information  for the  period  ended  December  31,  2005.  We expect to file the
amended Form 10-KSB/A  containing  restated  financial  statements  for the year
ended December 31, 2005, within the next ten days.

We intend to grow our business  through  acquisitions and the selective start up
of  charitable  bingo halls in markets in which we  currently  operate and other
attractive markets.

Results of Operations
---------------------

We incurred a net profit of approximately $549,000 for the first three months of
2006,  which equated to a basic and fully  diluted  earnings per share of $0.052
and $0.052  respectively,  which  represented an  improvement  of  approximately
$441,000  over our net profit of $108,000  for the first  three  months of 2005,
which was $0.011 per basic and $0.010 fully diluted share.  The weighted average
number of basic Common Stock shares outstanding  totaled 10,494,921 in the first
three  months of 2006 as compared  to  10,193,698  in the first three  months of
2005.

Revenues
--------
                            2006           2005         Change     % Change
                            ----           ----         ------     --------
                                        (Restated)
 Total Revenues         $ 2,919,000    $ 2,490,000    $ 429,000       17%
 Entertainment            2,172,000      1,800,000      372,000       21%
   Texas                  1,171,000        951,000      220,000       23%
   South Carolina           486,000        413,000       73,000       18%
   Alabama                  515,000        436,000       79,000       18%
 Hospitality            $   701,000    $   637,000    $  64,000       10%

Revenues  for the Company  increased  17% over the same period in 2005 with both
the  Entertainment  and the Hospitality  divisions  contributing.  Entertainment
accounted for 74% of total revenues compared with 72% of total revenues in 2005.
By state Entertainment revenues break down for Texas, South Carolina and Alabama
as 54%,  22%,  and 24%  respectively  compared to 53%,  23% and 24% in the first
quarter of 2005.  Hospitality  accounted for 24% of total revenues for the first
quarter, compared to 26% of total revenues in 2005.

Net Income
----------                  2006           2005         Change
                            ----           ----         ------
                         (Restated)     (Restated)
                        ------------   ------------
 Total Net Income       $   549,000    $   108,000    $ 441,000
 Entertainment            1,108,000        709,000      399,000
 Hospitality            $  (247,000)   $  (242,000)   $  (5,000)

                                       16
<PAGE>


The  Company  realized  net  income in the  first  quarter  of 2006 of  $549,000
compared  to a net  profits  of  $108,000  for the  same  period  in  2005.  The
Entertainment  division improved by 56% while the Hospitality division increased
their loss by 2%. These  increases can be  attributed  to improved  revenues and
management's   concentration  on  cost  savings   throughout  the  organization.
Generally this is a slow quarter for the Hospitality division.


Costs and Expenses
------------------

Rent and utilities were up approximately  $79,500 or 15% in the first quarter of
2006 as compared to the same period in 2005.  Of this  increase  59% is directly
related to a larger  number of  facilities in 2006 than were present in the same
period of 2005.  The  remainder  of the rent  increase is a result of the annual
increases in rent and higher utility costs. Other direct operating costs were up
17% in the first quarter of 2006 as compared to the same period in 2005. This is
related to higher costs of goods sold, higher property taxes, and higher repairs
and  maintenance at our  facilities  than occurred in the first quarter of 2005.
License  expense was up 286%,  a result of the timing of the payment on licenses
and a change from  accruing  license  expense into a prepaid  asset  account and
simply expensing when it is submitted.

Depreciation and amortization expense totaled  approximately  $188,000 ($163,000
Direct  plus  $25,000  G&A) in the first  quarter of 2006,  a decrease  of about
$48,000 from the first quarter of 2005.  The decrease is largely a result of the
disposition of assets in late 2005.

General and administrative  expenses,  excluding related  depreciation  expense,
totaled  approximately  $299,000  in the  first  quarter  of 2006,  compared  to
approximately  $456,000 in 2005, a decrease of about $157,000.  This decrease is
due largely to a reduction in legal expenses of approximately $102,000.

Other income and expense was a net income of approximately $13,000 for the first
quarter of 2006,  compared  to other  expense of  approximately  $37,000 for the
first  quarter  of 2005.  The  improvement  from the prior  year  resulted  from
interest  income on a note  receivable.  The  remaining  expenses  were interest
expenses.  Interest expense was down approximately  $1,000 compared to the first
quarter in 2005. This was a result of lower debt in the first quarter of 2006.

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

Cash and cash equivalents at March 31, 2006,  totaled  approximately  $2,070,000
and represented approximately 13% of total assets of approximately  $16,161,000.
Cash provided  from  operating  activities  for the three months ended March 31,
2006,  totaled  approximately  $405,000  compared  to cash  provided of $333,000
during the same period of 2005, an increase of approximately $44,000. Cash flows
provided  by  operating  activities  in the  first  three  months  of 2006  were
increased  by the net  income of  approximately  $549,000  an  increased  by the
non-cash depreciation expense of approximately  $188,000, and increased by stock
based  compensation  of  $25,000  and  offset by  results of change in asset and
liability accounts of approximately $357,000.

Net cash provided in investing activities totaled  approximately  $1,099,000 for
the  three  months  ended  March  31,  2006,   compared  to  net  cash  used  of
approximately  $77,000 in the three months ended March 31, 2005.  In the current
quarter,  cash was used in the amount of approximately  $85,000 for the purchase
of capital  assets  and offset by the  collection  of a note  receivable  in the
amount of  approximately  $1,184,000.  In the same quarter of 2005 cash was used
for the purchase of capital assets of about $77,000.

Cash used by  financing  activities  in the first three  months of 2006  totaled
approximately  $53,000, as compared to net cash used in financing  activities in
the first three months of 2005 of  approximately  $205,000.  In the three months
ended March 31,  2006,  approximately  $165,000 of cash was used to pay down the
normal principle payments on both capital leases and notes payable and increased
by $46,000 from stock subscription note receivable collections and approximately
$66,000 from the exercising of stock options.

Current assets totaled  approximately  $4,148,000 at March 31, 2006, leaving the
Company with negative  working capital of  approximately  $548,000 and a current
ratio of .88 to 1. However, legal reserves totaling $3,320,000 ($3,200,000 legal
reserves + $120,000 legal settlements) are included in current  liabilities,  of
which $1,610,000,  related to the Pondella Hall case discussed in Note 11 to the
unaudited financial  statements,  is not expected to be paid, if at all, for one
to two years. The remaining reserved amount of $1,570,000 relates to the Collins
Entertainment   judgment  discussed  in  Note  12  to  the  unaudited  financial
statements  and  $20,000 of accrued for other.  The  $120,000  legal  settlement
represents the current portion of the Lenrich settlement discussed in Note 11 of
the unaudited financial statements.

At March 31, 2006, we had  approximately  $16,161,000 in total assets with total
liabilities  of  approximately   $7,296,000  and  approximately   $8,865,000  of
shareholders  equity.  Total assets  include  approximately  $2,070,000 in cash,
$1,160,000 of other current assets and net account  receivables  and $918,000 of
restricted cash, $6,251,000 of property and equipment,  $5,551,000 of intangible
assets,  and $210,000 of other assets.  Total  liabilities  primarily consist of
accounts payable of approximately $135,000,  notes and capital lease obligations
of approximately $2,865,000 and accrued liabilities,  other current liabilities-
related party and legal settlements and reserves of $4,296,000.

                                       17
<PAGE>


Item 3. Controls and Procedures

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

After the close of the second fiscal quarter, the Company's management and board
of directors  determined that it was necessary to restate the financial  results
for the first  quarter of 2006 because of errors in  accounting  for share based
compensation  in the  first  quarter,  which  occurred  in  connection  with the
Company's  accounting  for stock  option  expense  under  Statement of Financial
Accounting  Standards No. 123R,  "Share Based  Compensation,"  which the Company
adopted in the first quarter of 2006.  Because of the required  amendment to our
financial  statements  made after the close of the second  fiscal  quarter,  our
Chief Executive  Officer and Chief Financial  Officer concluded that, as of June
30, 3006, our disclosure  controls and procedures  were not effective due to the
fact that we had  failed to  correctly  account  for  share  based  compensation
expense.

The restated  financial  statements  for the first quarter are contained in this
Amendment  No. 1 to the  Company's  report on Form 10-QSB/A for the period ended
March 31, 2006, which has been filed with the SEC, August 21, 2006, the same day
as the filing of the Form 10-QSB for the period ended June 30, 2006.  Net Income
in Q1 2006 was increased by  approximately  $341,000 as a result of a correction
in the accounting for stock options.  The Company had originally booked expenses
of approximately $365,000 related to the stock options and upon discovery of the
error,  management  and the Board of Directors  made the decision to restate the
10-QSB for the first quarter of 2006.

We have taken steps to improve our  internal  control over  financial  reporting
during  and after the second  fiscal  quarter  of 2006,  including  hiring of an
outside  consultant  to advise  management  on the proper  accounting  for stock
options,  strengthening  the formal  process of  documenting  changes to options
issued, and requiring two officers to verify the documentation of the changes or
exercising of stock options. Other than the changes described in this paragraph,
there  have  been no  other  changes  in our  internal  control  over  financial
reporting  during the fiscal quarter ended June 30, 2006,  that have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.

Our  management,  including  the Chief  Executive  Officer  and Chief  Financial
Officer,  believe that, with the changes  described in the preceding  paragraph,
our disclosure  controls and procedures are effective,  as of the date of filing
this quarterly report on Form 10-QSB, 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.


PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For a  discussion  of material  pending  legal  proceedings,  see Note 12 to the
unaudited  Consolidated  Financial  Statements included in Part I hereof,  which
Note 12 is incorporated herein by reference.

Item 6. Exhibits

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

          32.1 Section 1350 Certifications

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<PAGE>


                                   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

                                           August 21, 2006

                                           By:

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


                                           /s/  TROY D. ZINN
                                           -----------------
                                           Troy D. Zinn
                                           Secretary and Treasurer
                                           (Chief Financial Officer)

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