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 June 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 July 25, 2008
     Common Stock - $0.001 par value                      16,754,901



<PAGE>


                             Littlefield Corporation

                                    FORM 10-Q

                       For the quarter ended June 30, 2008

                                      INDEX



Part I. FINANCIAL INFORMATION

   Item 1  Financial Statements

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

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

       c)  Consolidated Statements of Operations (unaudited) for the Six
           Months Ended June 30, 2008 and 2007                               5

       c)  Consolidated Statements of Cash Flows (unaudited) for the Six
           Months Ended June 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 4   Submission of Matters to a Vote of Security Holders               24

  Item 6   Exhibits                                                          25


           Signatures and Certifications                                     25


                                       1
<PAGE>


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>
<CAPTION>
<S>                                              <C>                <C>
ASSETS
------
                                                  June 30, 2008    December 31, 2007
                                                ------------------ -----------------
                                                    (unaudited)
Current Assets:
    Cash and cash equivalents                    $      7,016,358   $     1,965,624
    Accounts receivable, net of allowance for
     doubtful accounts of $66,557 and $126,309            463,030           519,845
    Other current assets                                  307,942           554,297
                                                ------------------ -----------------
    Total Current Assets                                7,787,330         3,039,766
                                                ------------------ -----------------

Property and Equipment - at cost, net of
 accumulated depreciation and amortization              7,772,864         6,926,559

Other Assets:
    Goodwill                                            5,096,256         4,905,111
    Intangible assets, net                                861,726           699,196
    Note receivable - net                                 382,475               ---
    Other non-current assets                              205,139           217,615
                                                ------------------ -----------------
    Total Other Assets                                  6,545,596         5,821,922
                                                ------------------ -----------------

TOTAL ASSETS                                     $     22,105,790   $    15,788,247
                                                ================== =================

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

Current Liabilities:
    Long term debt, current portion              $        221,907   $       195,517
    Long term debt, legal settlements, current
     portion                                              245,083           231,272
    Trade accounts payable                                350,986           232,339
    Accrued expenses                                      691,729         1,063,053
                                                ------------------ -----------------
    Total Current Liabilities                           1,509,705         1,722,181
                                                ------------------ -----------------

Long-term Liabilities:
    Long term debt, net of current portion              3,317,651         3,442,932
    Long term debt, legal settlements, net of
     current portion                                      256,685           362,964
    Other liabilities, related party                       60,000            48,000
                                                ------------------ -----------------
    Total Long-term Liabilities                         3,634,336         3,853,896
                                                ------------------ -----------------
Total Liabilities                                       5,144,041         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                         30,655,979        23,710,845
    Treasury stock - 779,806 shares, at cost             (993,891)       (1,146,638)
    Accumulated deficit                               (12,717,874)      (12,364,381)
                                                ------------------ -----------------
    Total Stockholders' Equity                         16,961,749        10,212,170
                                                ------------------ -----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $     22,105,790   $    15,788,247
                                                ================== =================
</TABLE>

                      See notes to consolidated financial statements.


                                       2
<PAGE>



                             Littlefield Corporation
                     CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>
<S>                                                  <C>              <C>
                                                      Three Months Ended June 30,

                                                          2008            2007
                                                    ---------------- --------------
REVENUES:
   Entertainment                                     $    2,064,121   $  2,181,346
   Hospitality                                              788,882      1,474,755
   Other                                                     27,328         12,069
                                                    ---------------- --------------
TOTAL REVENUES                                            2,880,331      3,668,170
                                                    ---------------- --------------

DIRECT COSTS AND EXPENSES:
    Direct salaries and other compensation                  605,061        805,418
    Rent and utilities                                      657,732        642,939
    Other direct operating costs                            963,392        921,528
    Depreciation and amortization                           229,902        158,474
    License expense                                          32,729         29,847
                                                    ---------------- --------------
TOTAL COSTS AND EXPENSES                                  2,488,816      2,558,206

                                                    ---------------- --------------
GROSS MARGIN                                                391,515      1,109,964

GENERAL AND ADMINISTRATIVE EXPENSES:
    Salaries and other compensation                         310,182        280,517
    Legal and accounting fees                               238,048        111,485
    Depreciation and amortization                            32,116         28,529
    Share-based compensation expense                         11,895         14,311
    Other general and administrative                        197,586        165,310
                                                    ---------------- --------------
    TOTAL GENERAL AND ADMINISTRATIVE EXPENSES               789,827        600,152

GAIN ON DISPOSAL OF ASSETS                                  474,387         12,098

OPERATING INCOME (LOSS)                                      76,075        521,910

OTHER INCOME AND EXPENSES:
    Interest and investment income                           33,757         17,091
    Interest expense ($0 and $5,062 respectively to
     related parties)                                       (99,496)      (122,282)
    Other expense                                               ---         (4,398)
                                                    ---------------- --------------
TOTAL OTHER INCOME AND EXPENSES                             (65,739)      (109,589)

                                                    ---------------- --------------
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES          10,336        412,321

PROVISION FOR INCOME TAXES                                   22,334         30,203
                                                    ---------------- --------------

NET INCOME (LOSS)                                           (11,998)       382,118

OTHER COMPREHENSIVE INCOME                                      ---          4,680
                                                    ---------------- --------------

NET COMPREHENSIVE INCOME (LOSS)                            ($11,998)  $    386,798
                                                    ================ ==============
</TABLE>

                      See notes to consolidated financial statements.


                                       3
<PAGE>



                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


                                                Three Months Ended June 30,

                                                     2008            2007
                                                --------------- --------------
EARNINGS (LOSS) PER SHARE:
    Basic earnings per share                           ($ 0.00)  $        0.03
                                                =============== ==============

    Diluted earnings per share                         ($ 0.00)  $        0.03
                                                =============== ==============

Weighted average shares outstanding - basic         16,737,669      11,276,282
                                                =============== ==============

Weighted average shares outstanding - diluted       16,737,669      11,528,617
                                                =============== ==============

                      See notes to consolidated financial statements.


                                       4
<PAGE>



                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>
<S>                                                  <C>                <C>
                                                          Six Months Ended June 30,

                                                           2008               2007
                                                    ------------------ ------------------
REVENUES:
   Entertainment                                     $      4,314,108   $      4,515,447
   Hospitality                                              1,642,884          2,618,151
   Other                                                       47,270             23,692
                                                    ------------------ ------------------
TOTAL REVENUES                                              6,004,262          7,157,290
                                                    ------------------ ------------------

DIRECT COSTS AND EXPENSES:
    Direct salaries and other compensation                  1,354,208          1,574,041
    Rent and utilities                                      1,314,072          1,260,140
    Other direct operating costs                            1,970,909          1,723,281
    Depreciation and amortization                             431,274            314,535
    License expense                                            60,213             60,676
                                                    ------------------ ------------------
TOTAL COSTS AND EXPENSES                                    5,130,676          4,932,673

                                                    ------------------ ------------------
GROSS MARGIN                                                  873,586          2,224,617

GENERAL AND ADMINISTRATIVE EXPENSES:
    Salaries and other compensation                           629,337            553,547
    Legal and accounting fees                                 406,908            221,873
    Depreciation and amortization                              64,097             57,129
    Share-based compensation expense                           26,206             28,622
    Other general and administrative                          398,770            360,548
                                                    ------------------ ------------------
    TOTAL GENERAL AND ADMINISTRATIVE EXPENSES               1,525,318          1,221,719

GAIN ON DISPOSAL OF FIXED ASSETS                              474,387             12,098

OPERATING INCOME (LOSS)                                      (177,345)         1,014,996

OTHER INCOME AND EXPENSES:
    Interest and investment income                             46,410             32,033
    Interest expense ($0 and $10,125 respectively to
     related parties)                                        (178,214)          (252,170)
    Other expense                                                 ---             (4,398)
                                                    ------------------ ------------------
TOTAL OTHER INCOME AND EXPENSES                              (131,804)          (224,535)

                                                    ------------------ ------------------
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES          (309,149)           790,461

PROVISION FOR INCOME TAXES                                     44,344             50,203
                                                    ------------------ ------------------

NET INCOME (LOSS)                                            (353,493)           740,258

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

NET COMPREHENSIVE INCOME (LOSS)                             ($353,493)  $        744,971
                                                    ================== ==================
</TABLE>

                 See notes to consolidated financial statements.


                                       5
<PAGE>



                             Littlefield Corporation
                     CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

                                                 Six Months Ended June 30,

                                                   2008            2007
                                              --------------- ---------------
EARNINGS (LOSS) PER SHARE:
    Basic earnings per share                        ($ 0.025)  $        0.067
                                              =============== ===============

    Diluted earnings per share                      ($ 0.025)  $        0.065
                                              =============== ===============

Weighted average shares outstanding - basic       14,238,166       11,116,886
                                              =============== ===============

Weighted average shares outstanding - diluted     14,238,166       11,354,456
                                              =============== ===============


                                       6
<PAGE>


                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>
<S>                                                                       <C>             <C>
                                                                            Six Months Ended June 30,
                                                                         --------------------------------

                                                                              2008             2007
                                                                         --------------- ----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                      $    (353,493)  $      740,258
   Adjustments to reconcile net income (loss) to net cash (used in)
    provided by operating activities:
   Depreciation and amortization                                                495,371          371,664
   Gain on sale of fixed assets                                                (474,387)         (12,098)
   Bad debt allowance                                                           (59,752)             ---
   Stock-based compensation expense                                              26,206           28,622
   Increase (decrease) in cash flows as a result of changes in asset and
    liability account balances:
        Accounts receivable                                                      86,335          329,417
        Other assets                                                            252,235          314,309
        Trade accounts payable                                                  118,646         (139,655)
        Accrued expenses and other current liabilities                         (316,773)           3,136
                                                                         --------------- ----------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                            (225,612)       1,635,653
                                                                         --------------- ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                        (1,407,505)        (509,512)
   Purchase of goodwill and intangibles                                        (410,792)              --
   Proceeds from the sale of property and equipment                             250,000           18,250
   Proceeds from the sale of investments                                            ---            3,741
   Proceeds from the collection of notes receivable                               1,687            1,103
                                                                         --------------- ----------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                          (1,566,610)        (486,418)
                                                                         --------------- ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on notes payable, legal settlements and capital leases             (191,360)      (1,093,307)
   Proceeds from sale of common stock                                         7,000,000          476,560
   Proceeds from note payable                                                       ---          401,958
   Proceeds from options exercised                                               34,316              ---
                                                                         --------------- ----------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                           6,842,956         (214,789)
                                                                         --------------- ----------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                          5,050,734          934,446

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

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                $   7,016,358   $    3,484,012
                                                                         =============== ================
</TABLE>

                 See notes to consolidated financial statements.


                                       7
<PAGE>



                             Littlefield Corporation
                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

<TABLE>
<CAPTION>
<S>                                                     <C>            <C>
                                                         Six Months Ended June 30,
                                                       -----------------------------

                                                            2008           2007
                                                       --------------  -------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash payments:

    Interest                                            $     178,214  $     239,509
                                                       ==============  =============


    Income taxes                                        $      65,789  $         ---
                                                       ==============  =============


Non-cash transactions:


    Issuance of treasury stock under deferred
     compensation plan                                  $      25,817  $      23,656
                                                       ==============  =============

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

    Sale of property and equipment in exchange for note
     receivable                                         $     400,000  $         ---
                                                       ==============  =============
</TABLE>

                 See notes to consolidated financial statements.


                                       8
<PAGE>



Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
June 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 six month  period  ended June 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 June 30, 2008 and December 31, 2007 consists of the
following:

<TABLE>
<CAPTION>
<S>                                                <C>                     <C>
                                                June 30, 2008       December 31, 2007
Land                                  $              740,467   $             740,467
Buildings                                          3,395,498               3,404,348
Leasehold improvements                             5,328,195               4,756,267
Rental inventory and bingo equipment               2,050,112               1,989,605
Equipment, furniture and fixtures                  3,065,939               2,604,406
Automobiles                                          385,144                 468,626
                                     ------------------------ -----------------------
                                                  14,965,355              13,963,719

Less: Accumulated depreciation and
 amortization                                     (7,192,491)             (7,037,160)
                                     ------------------------ -----------------------

Property and equipment, net           $            7,772,864   $           6,926,559
                                     ======================== =======================
</TABLE>

Total depreciation expense, for owned and leased assets, charged to operations
for the six months ended June 30, 2008 and 2007 was approximately $480,600 and
$356,900 respectively.


                                       9
<PAGE>


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

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


Goodwill at June 30, 2008 is as follows:

<TABLE>
<CAPTION>
<S>                                      <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                 233,513              ---       233,513
Goodwill disposed of during period              (42,368)             ---       (42,368)
                                        ---------------- ---------------- -------------
Goodwill at June 30, 2008                $    6,895,520   $   (1,799,264)  $ 5,096,256
                                        ================ ================ =============
                                         Entertainment     Hospitality        Total
                                        ---------------- ---------------- -------------
Balance at December 31, 2007             $    4,533,727   $      371,384   $ 4,905,111
Goodwill acquired during the year               233,513              ---       233,513
Goodwill disposed of during period                  ---          (42,368)      (42,368)
                                        ---------------- ---------------- -------------
Balance at June 30, 2008                 $    4,767,240   $      329,016   $ 5,096,256
                                        ================ ================ =============
</TABLE>


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

<TABLE>
<CAPTION>
<S>                                        <C>           <C>            <C>
                                              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             177,814                       177,814
                                         -------------- --------------- -------------
Bingo licenses at June 30, 2008           $     872,533        (51,974)  $    820,559

Intangible Assets with Finite Lives:
Covenants not to compete                  $     297,500       (256,333)  $     41,167
                                                                        -------------
Intangible Assets, Net of Accumulated
 Amortization                                                            $    861,726
                                                                        =============
</TABLE>



Amortization expense charged to operations for the six months ended June 30,
2008 and 2007 was approximately $14,800 and $14,800 respectively.

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

At June 30, 2008 the Company holds 779,086 treasury shares at an average
purchase cost of $1.27.


                                       10
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
June 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  $26,200 and $28,600 in compensation expense
in the six month  periods  ended June 30, 2008 and June 30, 2007,  respectively,
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. There were no options
issued in the six month periods ended June 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>
Six months ended June 30,                   2008          2008          2007          2007
-------------------------                   Basic        Diluted        Basic        Diluted
                                        ------------- ------------- ------------- -------------
Numerator:
----------
    Net income (loss)                    $  (353,493)  $  (353,493)  $    740,258  $    740,258
                                        ============= ============= ============= =============
Denominator:
------------
    Weighted average shares outstanding   14,238,166    14,238,166     11,116,886    11,116,886
    Effect of dilutive securities:
    Stock options and warrants                   ---           ---            ---       237,570
                                        ------------- ------------- ------------- -------------
    Weighted average shares outstanding   14,238,166    14,238,166     11,116,886    11,354,456
                                        ============= ============= ============= =============

Earnings (loss) per share                $    (0.025)  $    (0.025)  $      0.067  $      0.065
                                        ============= ============= ============= =============
</TABLE>

Stock options to acquire 225,974 and 85,500 shares for the six months ended June
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)
June 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 June 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 June 30,
2008, a total of 445,410 options were outstanding under these plans.

                            Employee Stock Plans
                          ------------------------
                                         Weighted
                                         Average
                                         Exercise
                            Options       Price
                          ----------    ----------
Outstanding at
 12/31/07                   617,910     $    0.74
Granted                         ---           ---
Exercised                   (67,500)         0.51
Forfeited                  (105,000)         1.78
                          ----------    ----------
Outstanding at
 06/30/08                   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  $31,070  as of June 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  0.50
years.

The following table summarizes information about options outstanding at June 30,
2008 under the Employee Stock Plan adjusted for the 2006 stock dividend:

<TABLE>
<CAPTION>
<S>       <C>      <C>         <C>      <C>           <C>                  <C>     <C>
                                    Options Outstanding                 Options Exercisable
                         ------------------------------------------ ---------------------------
            Range of        Number    Weighted Avg.  Weighted Avg.     Number     Weighted Avg.
        Exercise Prices  Outstanding    Remaining    Exercise Price  Exercisable    Exercise
                                       Contractual                                    Price
                                           Life
        ---------------- ------------ -------------- -------------- ------------- -------------
   2008:  $ 1.26 - $1.87       16,500   7.9 years     $        1.32        16,500  $       1.32
          $ 0.00 - $1.25      428,910   6.2 years     $        0.50       355,410  $       0.50
                              445,410   6.3 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
June 30, 2008 was 6.1 years.


                                       12
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
June 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 six months ended June 30, 2008
and 2007 are as follows:

                                   2008          2007
                               ------------- -------------
Net income (loss)               $  (353,493)  $    740,258

Other comprehensive income

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

Total comprehensive income
 (loss)                         $  (353,493)  $    744,971
                               ============= =============

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

The Company  recorded  approximately  $44,000  and  $50,000 of state  income tax
expense,  respectively,  for the six months  ended June 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)
June 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  $10,125 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 $12,000 and $12,000
of  deferred  compensation  in the six  months  ended  June 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 June
30, 2008, the carrying value of these  obligations was $501,768.  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, the Company is plaintiff.  The Company  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 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 sale  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 would not permit his United States  attorney to accept  service of the
Complaint.  The Company 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 the
Company  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 the Company was required to pay to Pondella
and 800438 Ontario as a result of related litigation.  The Company is awaiting a
trial date.


                                       14
<PAGE>


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

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


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.  In August,  counsel  for the  parties  plan to meet
regarding  a  proposed  scheduling  order  that will  govern  discovery  in both
proceedings and a proposed date for a trial.

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.  The counter-claims were dismissed by the court. 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.  The counter-claims were dismissed by the court. 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
June 30, 2008

--------------------------------------------------------------------------------
NOTE 12 - SALE OF BUSINESS.
--------------------------------------------------------------------------------

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 first year, only interest is due and payable on a
quarterly  basis.  Thereafter,  payments are to be made monthly at $4,644 with a
final balloon payment of $342,638.  The principal  amount of the note is subject
to certain proration adjustments which are expected to be finalized in the third
quarter,  2008.  The note is secured by a security  interest in the business and
the personal guarantee of the purchaser.

The amounts of sales,  gross  profit and gross profit on a basic per share basis
of the catering  business unit included in the second  quarter and six 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
                                                                             Six months year  Six months year
                               Q208             Q207             Change           to date         to date        Change
                          --------------- ----------------- ---------------- ---------------- --------------- ------------
Revenue                    $       71,621  $        668,291  $     (596,670)  $      497,039   $    1,276,804  $ (779,765)
Gross profit               $       12,373  $         29,558  $      (17,185)  $      (33,263)  $       49,935  $  (83,198)
Gross profit per share     $         0.00  $           0.00                   $       ( 0.00)  $         0.00
</TABLE>




--------------------------------------------------------------------------------
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.


                                       16
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008


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
six months ended June 30, 2008 and 2007 is as follows:

<TABLE>
<CAPTION>
<S>                      <C>             <C>          <C>          <C>            <C>
June 30, 2008
------------------------
                         Entertainment  Hospitality    Catering     Adjustment    Consolidated
                        --------------- ------------ ------------ -------------- ---------------
Revenue                  $    4,314,000  $1,146,000   $  497,000   $     47,000   $   6,004,000
Depreciation and
 Amortization                   297,000     122,000       12,000         64,000         495,000
Segment profit (loss)         1,040,000    (180,000)     (33,000)    (1,180,000)       (353,000)
Segment Assets               29,573,000   1,324,000                  (8,791,000)     22,106,000

June 30, 2007
------------------------
                          Entertainment  Hospitality     Catering     Adjustment    Consolidated
                        --------------- ------------ ------------ -------------- ---------------
Revenue                  $    4,515,000  $1,341,000   $1,277,000   $     24,000   $   7,157,000
Depreciation and
 Amortization                   198,000      96,000       20,000         58,000         372,000
Segment profit (loss)         2,262,000    (111,000)      50,000     (1,461,000)        740,000
Segment Assets               26,123,000   1,428,000                 (11,075,000)     16,476,000
</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               $      47,000   $     24,000
General and administrative expense            (1,525,000)    (1,222,000)
Gain on disposal of assets                       474,000         12,000
Other income and expenses                       (132,000)      (225,000)
Provision for income taxes                       (44,000)       (50,000)
                                          --------------- --------------
Total "Adjustment"                         $  (1,180,000)  $ (1,461,000)
                                          =============== ==============


                                       17
<PAGE>


Littlefield Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 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.


                                       18
<PAGE>


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

Results of the first six months of 2008 were  impacted  by a gain on sale of the
assets of the catering  business unit,  continuing legal matters and the effects
of a broad  program  of  renovations,  re-openings  and  start-ups  of new halls
affecting  eight  locations  within the Company's  portfolio of 38 bingo centers
including Pensacola,  Florida; San Angelo,  Abilene,  Odessa and Corpus Christi,
Texas.  The Company also 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 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.

Results in the first six  months of 2008  include  the  effect of  approximately
$925,000 of notable items: $999,000 from the effects of renovations, re-openings
and start-ups of new halls at several halls in Texas, $354,000 of legal expenses
and $26,000 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 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.

Earnings  in the first six months of 2007  included  approximately  $187,000  of
notable items: $158,000 from legal expenses related to South Carolina, Texas and
our  attempts to expand into  Arkansas,  and $29,000 for non cash  expenses  for
compensation expense related to stock options.

Revenues

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

<TABLE>
<CAPTION>
<S>                      <C>              <C>               <C>                        <C>
                               2008             2007            $Change         % Change
                        ---------------- ----------------- ---------------- ----------------
Total Revenues           $     6,004,000  $      7,157,000  $   (1,153,000)            (16%)
Less: Catering                   497,000         1,277,000        (780,000)            (61%)
Adjusted revenue               5,507,000         5,880,000        (373,000)             (6%)
Entertainment                  4,314,000         4,515,000        (201,000)             (4%)
   Texas                       2,534,000         2,751,000        (217,000)             (8%)
   South Carolina                878,000           978,000        (100,000)            (10%)
   Alabama / Florida             902,000           786,000         116,000              15%
Hospitality                    1,146,000         1,341,000        (195,000)            (15%)
Other                    $        47,000  $         24,000  $       23,000              NM
</TABLE>

During the first six months of 2008,  total  adjusted  revenues  for the Company
decreased  6%  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  $260,000.  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 2% from
the prior year. The  Entertainment  segment  accounted for 78% of total adjusted
revenues  compared  with 77% of total  adjusted  revenues  in  2007.  By  state,
Entertainment revenues for Texas, South Carolina and Alabama / Florida were 59%,
20% and 21% of total Entertainment revenue respectively compared to 61%, 22% and
17% in 2007. The increase in Alabama / Florida mainly  represented  the purchase
of a new Florida hall in January 2008.  Hospitality  revenue  decreased 15% from
the prior year reflecting lower event activity. Hospitality accounted for 21% of
total adjusted  revenues in 2008,  compared to 23% 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 six
months  ended  June 30,  2008 and 2007,  adjusted  for the sale of the  catering
business unit at the beginning of the second quarter:

<TABLE>
<CAPTION>
<S>                   <C>            <C>             <C>                     <C>
                               2008           2007         $Change   % Change
                     -------------- -------------- --------------- ---------------
Total Gross Profit    $    874,000   $  2,225,000    $ (1,351,000)           (61%)
Less: Catering gross
 profit (loss)             (33,000)        50,000         (83,000)            NM
Adjusted gross profit      907,000      2,175,000      (1,268,000)           (58%)
Entertainment            1,040,000      2,262,000      (1,222,000)           (54%)
Hospitality               (180,000)      (111,000)        (69,000)            NM
Other                 $     47,000   $     24,000    $     23,000             NM
</TABLE>

The decrease in adjusted gross profit was mainly attributed to the effects of
renovations and openings at several halls in Texas in the amount of $999,000,
higher Texas administrative expenses added to manage the new bingo centers and
renovation activity of $124,000 and lower hospitality revenue.

The six 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:

<TABLE>
<CAPTION>
<S>                        <C>           <C>            <C>                    <C>
                             2008           2007
                           Six months    Six months
                           year to date  year to date    $ Change    % Change
                          ------------- -------------- ------------- --------------
Adjusted Revenue           $  5,507,000  $   5,880,000  $  (373,000)           (6%)

Adjusted direct costs
 and expenses
Direct salaries and
 other compensation           1,045,000        939,000      106,000            11%
Rent and utilities            1,281,000      1,206,000       75,000             6%
Other direct operating
 costs                        1,795,000      1,208,000      587,000            49%
Depreciation and
 amortization                   419,000        295,000      124,000            42%
License expense                  60,000         57,000        3,000             5%
                          ------------- -------------- ------------- --------------
Total adjusted costs and
 expenses                     4,600,000      3,705,000      895,000            24%

Adjusted Gross profit      $    907,000      2,175,000  $(1,268,000)          (58%)
</TABLE>


Adjusted cost of services increased 24% over the comparable six-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 16.5% from 37.0% in 2007.

Direct  salaries  and other  compensation  were 11% 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  6% over 2007 which  largely
reflected the addition of our new hall in Florida.  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 49% over the prior year, mainly due
to costs such as  advertizing,  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  $495,000 ($431,000
Cost of Services  plus $64,000  G&A) in 2008 versus  $372,000 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  $1,061,000
in 2008,  compared  to  approximately  $977,000  in 2007,  an  increase of about
$84,000.  The increase mainly related to planned staff,  compensation and travel
related increases.

Other income and expense was a net expense of  approximately  $132,000 for 2008,
compared to  approximately  $225,000 in 2007. The  difference  mainly stems from
lower interest  expense from the  refinancing of legal  settlements  and certain
notes payable during 2007.

Our income tax expense for 2008 was approximately $44,000 compared to $50,000 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
----------

During the first six months of 2008, we realized a net loss of $353,000; $(0.02)
per basic share and $(0.02) per fully  diluted  share.  Net income for the first
six  months of 2007 was  $740,000;  $0.07  per  basic  share and $0.07 per fully
diluted  share.  The  weighted  average  number  of basic  Common  Stock  shares
outstanding  totaled  14,238,166 in 2008  compared to  11,116,886  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 six
months of 2008 was $604,000 and basic earnings per share were $0.04 per share in
2008 versus an adjusted net income of $878,000  and basic  earnings per share of
$0.08 last year.


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

Cash and cash equivalents at June 30, 2008, totaled approximately $7,016,000 and
represented  32% of total assets of  approximately  $22,106,000.  Current assets
totaled  approximately  $7,787,000.   Current  liabilities  totaled  $1,510,000.
Working  capital was  approximately  $6,277,000 with a current ratio of 5.2 to 1
compared to approximately 1.8 to 1 in December 2007.

Cash used by operating activities for the six months ended June 30, 2008 totaled
approximately $226,000 compared to cash provided of $1,636,000 during 2007. Cash
flows  from  operating  activities  in  2008  were  decreased  by a net  loss of
approximately  $353,000, the sale of the catering business $474,000 and provided
by  non-cash  depreciation  expense  of  approximately  $495,000,   stock  based
compensation  of  approximately  $26,000  and by other net  changes in asset and
liability accounts of $80,000.

Net cash used in  investing  activities  totaled  approximately  $1,567,000  for
capital expenditures mainly for bingo hall renovations,  leasehold improvements,
the  acquisition  of the Florida  hall and  additional  licenses  during the six
months  ended  June  30,  2008.  This  compared  to net cash  used in  investing
activities of approximately  $486,000 in 2007 mainly for the purchase of capital
assets.

Cash provided by financing activities in 2008 totaled approximately  $6,843,000,
compared  to net cash  used in  financing  activities  in 2007 of  approximately
$215,000.  During the first six 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 $191,000 was used for the payment of notes
payable and legal settlement  obligations.  In 2007,  approximately  $476,000 of
financing  was obtained  from the sale of common  stock and $402,000  from notes
payable  and  $1,093,000  was used for the  payment of notes  payable  and legal
settlements.

At June 30, 2008, we had  approximately  $22,106,000  in total assets with total
liabilities  of  approximately  $5,144,000  and  approximately   $16,962,000  of
shareholders'  equity.  Total assets include  approximately  $7,016,000 in cash,
$463,000  of  net  accounts  receivable,   other  current  assets  of  $308,000,
$7,774,000  of net property and  equipment,  $5,958,000  of  intangible  assets,
$382,000 of notes  receivable  and $205,000 of other assets.  Total  liabilities
primarily  consist of  accounts  payable  of  approximately  $351,000  and notes
payable obligations of approximately $3,539,000, legal settlement obligations of
$502,000 and accrued  liabilities of $692,000 and  related-party  liabilities of
$60,000.


                                       21
<PAGE>


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 June 30, 2008 or
2007.

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

On May 21, 2008, the Company held its Annual Meeting of Stockholders to elect
members to its Board of Directors, to ratify the appointment of Padgett,
Stratemann & Co. LLP as independent auditor and to approve an increase in
authorized shares of common stock to 40,000,000 shares. An advisory vote was
also obtained regarding the compensation of the President and CEO and Directors.

(a) Our annual meeting of stockholders was held on May 21, 2008.

(b) The following directors were elected at the meeting to serve a term of one
year:


            Jeffrey L. Minch
            Carlton R. Williams
            Alfred T. Stanley
            Michael L. Wilfley
            Lanny R. Chiu
            Charles M. Gillman




(c)  The  matters  voted upon at the  meeting  and  results  of the voting  with
     respect to those matters were as follows:

(1)   Election of Directors:                         For          Withheld
                                                     ---          --------
                    Jeffrey L. Minch           9,307,632         1,057,502
                    Carlton R. Williams        9,305,512         1,059,622
                    Alfred T. Stanley          9,199,432         1,165,702
                    Michael L. Wilfley         9,199,552         1,165,582
                    Lanny R. Chiu              9,197,470         1,167,664
                    Charles M. Gillman         9,249,300         1,115,834




(2) Ratify Independent Auditors:             For        Against      Abstain
                                             ---        -------      -------
                                      10,061,962        291,160       12,012

(3) Increase in Common Stock:                For        Against      Abstain
                                             ---        -------      -------
                                       8,604,404      1,708,431       52,298

(4) Advisory vote - CEO compensation:        For        Against      Abstain
                                             ---        -------      -------
                                       6,608,064        178,243       38,341

(5) Advisory vote - Director
compensation:                                For        Against      Abstain
                                             ---        -------      -------
                                       6,631,305        179,803       13,540


                                       24
<PAGE>


Item 6.  Exhibits


Exhibit  Description

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

  32.1   Section 1350 Certifications

   *     Denotes a management contract or compensatory plan or arrangement.






                                   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 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


                                       25