**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549







**FORM
      10-QSB**










x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
      1934:





**For
      the Quarterly Period ended September 30, 2007**





 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE
      ACT





For
      the
      transition period from __________________ to __________________





*Commission
      File number* *0-14613*







**LEGACY
      HOLDING, INC.**





(Exact
      name of registrant as specified in its charter)





Delaware
            
            13-2614435(State
                or other jurisdiction of
            
            (I.R.S.
                Employer ID No.)incorporation
                or organization)




4160
      Technology Drive Suite B


Fremont,
      CA 94538


(Address
      of principal executive offices)





(510)
      651-2312


(Issuer's
      telephone number)







Check
      whether the Issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the 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  ̈ No x





Indicate
      by check mark whether the registrant is a shell company Yes  ̈ No x (As of
      June 1, 2008)





As
      of
      September 30, 2007, 17,592,739 shares of the registrants Common Stock were
      outstanding.





As
      of the
      end of the period covered by this Report, registrant had 17,592,739 common
      shares outstanding.





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





**Documents
      Incorporated by Reference.** Registrant hereby incorporates by reference, its previous filings under the
      Securities Exchange Act of 1934.





**TABLE
      OF CONTENTS**





Page**Part
                I Financial Informaton**Item
                1.
            Financial
                StatementsBalance
                Sheet as of September 30, 2007 (Unaudited)
            1Statements
                of Operations for the three and nine months ended September 30, 2007
                and
                2006 (Unaudited)
            2Statements
                of Stockholders Equity for the year ended December 31, 2006 and the
                nine
                months ended September 30, 2007 (unaudited)
            3Statements
                of Cash Flows for the three and nine months Ended September 30, 2007
                and
                2006 (Unaudited)
            4Notes
                To Financial Statements (Unaudited)
            5Item
                2.
            Management's
                Discussion and Analysis of Financial Condition and results of
                Operations
            11Item
                3.
            Controls
                and Procedures
            15**Part
                II - Other Information**Item
                1.
            Legal
                Proceedings
            16Item
                2.
            Unregistered
                Sales of Securities and Use of Proceeds
            16Item
                3.
            Defaults
                Upon Senior Securities
            16Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            16Item
                5.
            Other
                Information
            16Item
                6.
            Exhibits
                and Reports on Form 8-K
            16Signatures
            16





**Item
      1.  Financial Statements**





**LEGACY
      HOLDINGS, INC.**


CONSOLIDATED
      BALANCE SHEET (Unaudited)


As
      of
      September 30, 2007





ASSETSCurrent
                assets:Cash
            
            $
            6,502Deferred
                product cost
            
            
            372,267Inventory
            
            
            150,702Total
                current assets
            
            
            529,471Property
                and equipment, net
            
            
            2,698Total
                assets
            
            $
            532,169LIABILITIES
                AND STOCKHOLDERS' DEFICITCurrent
                liabilities:Accounts
                payable
            
            
            76,789Deferred
                revenue
            
            
            836,181Note
                payable
            
            
            120,000Accrued
                wages and taxes
            
            
            118,371Stockholder
                loans payable
            
            
            167,338Total
                current liabilities
            
            
            1,318,679Stockholders'
                Deficit:Common
                stock, par value $0.01; 100,000,000 authorized; issued and outstanding
                17,592,739 at September 30, 2007
            
            
            17,593Treasury
                stockAdditional
                paid in capital
            
            
            3,441,880Retained
                deficit
            
            
            (4,245,983
            )Total
                stockholders' deficit
            
            
            (786,510
            )Total
                liabilities and stockholders' deficit
            
            $
            532,169





**The
      accompanying notes are an integral part of these financial
      statements**


1


**LEGACY
      HOLDINGS, INC.**


CONSOLIDATED
      STATEMENTS OF OPERATIONS (Unaudited)


For
      the
      Three and Nine Months Ended September 30, 2007 and 2006





Three Months Ended
            
            Nine Months EndedSeptember 30,
            
            September 30,2007
            
            2006
            
            2007
            
            2006Revenue:Product
                sales
            
            $
            47,108
            
            $
            13,856
            
            $
            313,668
            
            $
            65,209Service
                fees
            
            
            10,435
            
            
            8,198
            
            
            32,013
            
            
            30,634R&D
                contract
            
            
            30,000
            
            
            10,000
            
            
            55,000
            
            
            47,500Total
                revenue
            
            
            87,543
            
            
            32,054
            
            
            400,681
            
            
            143,343Cost
                of goods sold
            
            
            39,380
            
            
            13,294
            
            
            237,567
            
            
            87,130Gross
                profit (loss)
            
            
            48,163
            
            
            18,760
            
            
            163,114
            
            
            56,213Operating
                expenses:Research
                and development
            
            
            15,061
            
            
            37,352
            
            
            86,611
            
            
            108,857Sales
                and marketing
            
            
            1,186
            
            
            1,684
            
            
            2,191
            
            
            13,649General
                and administration
            
            
            42,332
            
            
            55,659
            
            
            135,728
            
            
            156,644Depreciation
            
            
            441
            
            
            847
            
            
            1,323
            
            
            2,540Facilities
            
            
            3,742
            
            
            8,180
            
            
            43,948
            
            
            28,292Total
                operating expenses
            
            
            62,762
            
            
            103,722
            
            
            269,800
            
            
            309,982Income
                (loss) from operations
            
            
            (14,599
            )
            
            (84,962
            )
            
            (106,686
            )
            
            (253,769
            )Other
                income (expense)Miscellaneous
                income
            
            
            
            
            
            (311
            )
            
            14,027
            
            
            110,582Interest
                expense
            
            
            
            
            
            
            
            
            (324
            )
            
            -Total
                other income (expense)
            
            
            -
            
            
            (311
            )
            
            13,703
            
            
            110,582Income
                (loss) before income taxes
            
            
            (14,599
            )
            
            (85,273
            )
            
            (92,983
            )
            
            (143,186
            )Income
                taxes
            
            
            
            
            
            
            
            
            (800
            )
            
            (800
            )Net
                income (loss)
            
            $
            (14,599
            )
            $
            (85,273
            )
            $
            (93,783
            )
            $
            (143,986
            )Weighted
                average common shares outstanding Basic and fully diluted
            
            
            17,324,507
            
            
            27,278,340
            
            
            15,866,226
            
            
            27,278,340Net
                income (loss) per share common
            
            
            (0.00
            )
            
            (0.00
            )
            
            ($0.01
            )
            
            (0.01
            )





**The
      accompanying notes are an integral part of these financial
      statements**


2


**LEGACY
      HOLDINGS, INC.**


CONSOLIDATED
      STATEMENT OF STOCKHOLDERS' EQUITY


For
      the
      Year Ended December 31, 2006 and the Nine Months Ended September 30,
      2007





Additional
            
            
            
            TotalCommon Stock
            
            Paid-In
            
            Deficit
            
            Stockholders'Shares
            
            Amount
            
            Capital
            
            Accumulated
            
            EquityBalances,
                December 31, 2005
            
            
            27,282,846
            
            
            27,283
            
            
            2,802,916
            
            
            (3,866,745
            )
            
            (1,036,546
            )Net
                Loss
            
            
            
            
            
            
            
            
            
            
            
            (285,455
            )
            $
            (285,455
            )Balances,
                December 31, 2006
            
            
            27,282,846
            
            $
            27,283
            
            $
            2,802,916
            
            $
            (4,152,200
            )
            $
            (1,322,001
            )Recapitalization
                at reverse merger
            
            
            (9,690,107
            )
            
            (9,690
            )
            
            638,964
            
            
            
            
            
            629,274Net
                Loss
            
            
            
            
            
            
            
            
            
            
            
            (93,783
            )
            
            (93,783
            )Balances,
                December 31, 2007
            
            
            17,592,739
            
            $
            17,593
            
            $
            3,441,880
            
            $
            (4,245,983
            )
            $
            (786,510
            )





**The
      accompanying notes are an integral part of these financial
      statements**


3


**CST
      ENTERTAINMENT, INC.**


CONSOLIDATED
      STATEMENTS OF CASH FLOWS (Unaudited)


For
      the
      Three and Nine Months Ended September 30, 2007 and 2006





Three
                Months Ended
            
            Nine
                Months EndedSeptember
                30,
            
            September
                30,2007
            
            2006
            
            2007
            
            2006Cash
                flows from operating activities:Net
                income (loss)
            
            $
            (14,599
            )
            $
            (85,273
            )
            $
            (93,783
            )
            $
            (143,986
            )Adjustments
                to reconcile increase in net assets to net cash provided by (used
                in)
                operating activities:Depreciation
                and amortization
            
            
            441
            
            
            847
            
            
            1,323
            
            
            2,541Common
                stock issued for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -Decrease
                (increase) in:Deferred
                product sales cost
            
            
            (787
            )
            
            -
            
            
            9,213
            
            
            (380,373
            )Inventory
            
            
            -
            
            
            -
            
            
            -
            
            
            -Increase
                (decrease) in:Accounts
                payable
            
            
            (1,216
            )
            
            (50,369
            )
            
            (35,412
            )
            
            (33,334
            )Deferred
                revenue
            
            
            -
            
            
            186,000
            
            
            (55,136
            )
            
            579,773Accrued
                wages and taxes
            
            
            39,134
            
            
            -
            
            
            118,372
            
            
            -Net
                cash provided (used in) operating activities
            
            
            22,973
            
            
            51,205
            
            
            (55,423
            )
            
            24,621Cash
                flows from investing activities:Additions
                to property and equipment
            
            
            -
            
            
            -
            
            
            -
            
            
            (4,502
            )Net
                cash provided by (used in) investing activities
            
            
            -
            
            
            -
            
            
            -
            
            
            (4,502
            )Cash
                flows from financing activities:Return
                of paid in capital
            
            
            
            
            
            (15,000
            )
            
            7,274
            
            
            (25,000
            )Redemption
                of preferred stock
            
            
            
            
            
            
            
            
            (15,000
            )Proceeds
                from note payable
            
            
            
            
            
            -
            
            
            
            
            
            150,000Payment
                on note payable
            
            
            
            
            
            (30,000
            )
            
            (30,000
            )
            
            (30,000
            )Proceeds
                (repayment) of stockholder loan
            
            
            (21,992
            )
            
            (29,402
            )
            
            79,552
            
            
            (118,628
            )Net
                cash provided by (used in) financing activities
            
            
            (21,992
            )
            
            (74,402
            )
            
            41,826
            
            
            (23,628
            )Net
                increase (decrease) in cash
            
            
            981
            
            
            (23,197
            )
            
            (13,597
            )
            
            (3,509
            )Cash
                at beginning of year
            
            
            5,521
            
            
            23,424
            
            
            20,099
            
            
            3,736Cash
                at end of year
            
            $
            6,502
            
            $
            227
            
            $
            6,502
            
            $
            227Supplementary
                Information:Cash
                paid for interest
            
            $
            -
            
            $
            -
            
            $
            324
            
            $
            -Cash
                paid for income taxes
            
            $
            -
            
            $
            -
            
            $
            800
            
            $
            800





**The
      accompanying notes are an integral part of these financial
      statements**


4


**LEGACY
      HOLDINGS, INC. AND SUBSIDIARY**


Notes
      to
      Consolidated Financial Statements


For
      the
      Three and Nine Months Ended September 30, 2007 and 2006





**Note
      A-Organization and Summary Of Significant Accounting
      Policies**




*Basis
      of Presentation*


The
      accompanying reviewed financial statements of Legacy Holdings, Inc. as of
      September 30, 2007 and for the three and nine month periods ended September
      30,
      2007 have been prepared in accordance with accounting principles generally
      accepted in the United States for interim financial reporting and in accordance
      with the instructions to Form 10-QSB. Accordingly, they do not include all
      information and footnotes necessary for a complete presentation of financial
      position, results of operations, cash flows, and stockholders’ equity in
      conformity with generally accepted accounting principles and should be read
      in
      conjunction with the audited consolidated financial statements and notes thereto
      for the year ended December 31, 2006 and December 31, 2007. In the opinion
      of
      management, all adjustments considered necessary for a fair presentation of
      the
      results of operations and financial position have been included and all such
      adjustments are of a normal recurring nature. Operating results for the three
      and nine months ended September 30, 2007 are not necessarily indicative of
      the
      results that can be expected for the year ended December 31, 2007.





*Organization*


Legacy
      Holdings, Inc. (the “Company”) is a Delaware corporation, FKA CST Entertainment,
      Inc. Located in Fremont, California. Legacy Systems, Inc. it’s wholly owned
      subsidiary was originally founded in Texas and later, in 1999 reincorporated
      in
      the California. The Company provides wet process wafer cleaning equipment to
      the
      semiconductor and related industries. The Company has developed chemical
      processes that are designed for device geometry technologies sized at 32mm
      and
      below. The processes employ "Green Chemistry" to provide an environmentally
      safe
      method for the removal of organic contaminates and photoresists from any size
      wafer or substrate. The Company is an industry leader in semiconductor wet
      processing holding multiple patents for more effective and environmentally
      safer
      processes. The Company is gaining recognition as an innovative company with
      very
      cost effective and environmentally friendly products. The Company is poised
      to
      be a major participant in the wet-process equipment market segment, as a
      supplier to both end users and wet station manufacturers.





*Acquisition*


On
      July
      11, 2007, Legacy Systems, Inc. signed a definitive agreement to be merged into
      CST Entertainment, Inc, (CST). The CST stockholders acquired all of the issued
      and outstanding common stock of Legacy Systems, Inc. The transaction is
      accounted for as a capital transaction and recapitalization by the accounting
      acquirer and as a re-organization by the accounting acquiree wherein CST
      Entertainment, Inc. is the acquiree and, Legacy Systems, Inc. is the acquirer.
      CST Entertainment, Inc. changed its name to Legacy Holdings at the date of
      merger July 11, 2007.





Accordingly,
      the consolidated financial statements include the following:





(1)
      The
      balance sheet consists of the net assets of the acquirer at historical cost
      and
      net assets of the acquiree at historical cost.





(2)
      The
      statements of operations include the operations of the acquirer for the periods
      presented and the operations of the acquiree from the date of merger.


5




**LEGACY
      HOLDINGS, INC. AND SUBSIDIARY**


Notes
      to
      Consolidated Financial Statements


For
      the
      Three and Nine Months Ended September 30, 2007 and 2006





**Note
      A-Organization and Summary Of Significant Accounting
      Policies**





**Summary
      of Significant Accounting Principles**





*Basis
      of Presentation*


The
      consolidated financial statements included herein were prepared under the
      accrual basis of accounting.





*Management’s
      Use of Estimates*


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosures of contingent assets and liabilities at the date
      of
      financial statements and the reported amounts of revenues and expenses during
      the reporting period. Actual results could differ from those estimates. The
      financial statements above reflect all of the costs of doing
      business.





*Concentrations
      of credit risk*


Financial
      instruments which potentially subject the Company to concentrations of credit
      risk consist principally of cash and cash equivalents. The Company deposits
      its
      cash and cash equivalents with a U.S. commercial financial institution. These
      amounts may, at times, exceed federally insured limits. Management believes
      that
      these institutions are financially sound and, accordingly, minimal credit risk
      exits.





*Cash
      and Cash Equivalents*


The
      Company considers all highly liquid debt instruments purchased with original
      maturity of three months or less to be cash equivalents.





*Accounts
      Receivable and Allowance for Doubtful Accounts*


The
      Company evaluates the collectability of its accounts receivable based on a
      combination of factors. When the Company believes a collection issue exists
      with
      respect to a specific receivable, the Company records an allowance to reduce
      that receivable to the amount that it believes to be collectible. At June 30,
      2008 the Company did not have receivables outstanding.





*Comprehensive
      Income (Loss)*


The
      Company adopted Financial Accounting Standards Board Statement of Financial
      Accounting Standards (SFAS) No. 130, *“Reporting
      Comprehensive Income,”* which
      establishes standards for the reporting and display of comprehensive income
      and
      its components in the consolidated financial statements.





*Impairment
      of Long-Lived Assets*


The
      Company evaluated the recoverability of its property and equipment, and other
      assets in accordance with Statements of Financial Accounting Standards (SFAS)
      No. 121, *“Accounting
      for the Impairment of Long-Lived Assets to be Disposed of,”* which
      requires recognition of impairment of long-lived assets in the event the net
      book value of such assets exceeds the estimated future undiscounted cash flows
      attributable to such assets or the business to which such intangible assets
      relate.


6




**LEGACY
        HOLDINGS, INC. AND SUBSIDIARY**
 Notes
        to
        Consolidated Financial Statements
 For
        the
        Three and Nine Months Ended September 30, 2007 and 2006




**Note
      A-Organization and Summary Of Significant Accounting
      Policies** **





*Stock-Based
      Compensation*


Employee
      stock-based compensation is accounted for in accordance with Accounting
      Principles Board Opinion No. 25, *“Accounting
      for Stock Issued to Employees”* (“APB
      25”) and the FASB interpretations thereof. Pursuant to those accounting
      pronouncements, compensation is recorded for share options granted to employees
      at the date of grant based on the difference between the exercise price of
      the
      options and the market value of the underlying shares at that date. Due to
      the
      terms of the grants, the fair value of the compensation in accordance with
      SFAS
      No. 123R, *"Accounting
      for Stock-Based Compensation"* approximates the values computed in accordance with APB No. 25. Stock-based
      compensation to non-employees is accounted for in accordance with SFAS No.
      123R.
      Under both accounting pronouncements, as part of the necessary computations,
      management is required to estimate the fair value of the underlying shares.
      Fair
      value has generally been determined by management, as the price at which the
      Company's shares were issued at the most recent private placement of the
      Company's Common Stock. Since the Company trades on the Pink Sheets fair value
      is determined according to stock market price. The timing of the grant and
      measurement of stock-based awards will not have a material effect on the
      Company's consolidated results of operations and financial position. Since
      no
      stock-based awards exist.





*Property
      and Equipment*


Property
      and equipment are stated at cost. Depreciation is provided on the
      double-declining method
      over the estimated useful lives of the assets ranging from five to seven years.
      When assets are
      retired or disposed of, the cost and accumulated depreciation are removed from
      the accounts, and any resulting gains or losses are included in income.
      Maintenance and repairs are charged to expense in the period
      incurred.





*Income
      Taxes*


The
      Company accounts for income taxes under an asset and liability approach.
      Deferred income taxes
      reflect the net tax effects of temporary differences between the carrying amount
      of the assets and
      liabilities for financial reporting purposes and the tax basis used for income
      tax purposes, and operating loss and tax credit carry-forwards measured by
      applying currently enacted tax laws. Valuation allowances are provided when
      necessary to reduce net deferred tax assets to an amount that is considered
      more
      likely than not to be realized.





*Fair
      Value of Financial Instruments*


The
      carrying amounts of the Company’s financial instruments, including cash,
      deferred product cost, inventory, accounts payable, deferred revenue, notes
      payable, accrued wages due officer and stockholder loans payable approximate
      their fair value due to their short maturities or market interest rates, if
      applicable, of such instruments.


7




**LEGACY
        HOLDINGS, INC. AND SUBSIDIARY**
 Notes
        to
        Consolidated Financial Statements
 For
        the
        Three and Nine Months Ended September 30, 2007 and 2006




**Note
      A-Organization and Summary Of Significant Accounting
      Policies** **





*Revenue
      Recognition*


Net
      sales
      include contracts for providing research and development, product sales, and
      related service income. The Company recognized revenue when all of the following
      criteria are met: persuasive evidence of an arrangement exists, delivery has
      occurred, the price is fixed or determinable, and collectability is reasonably
      assured. This is generally upon receipt of the customers acceptance form
      indicating the product has been completed to their satisfaction except for
      the
      research and development and service revenue which is recognized when the
      services have been
      performed. The Company defers prepayment on contracts until the above criteria
      have been met. The corresponding cost associated with those contracts is also
      deferred until the revenue is ultimately recognized.





*Research
      and Development Costs*


Research
      and development costs are charged to operations as incurred.





*Recently
      Issued Accounting Pronouncements*


In
      February 2007, the FASB issued Statement of Financial Accounting Standard No.
      159, “ *The
      Fair Value Option for Financial Assets and Financial Liabilities”
(* “SFAS
      No.
      159”). This statement permits entities to choose to measure many financial
      instruments and certain other items at fair value. Companies should report
      unrealized gains and losses on items for which the fair value option has been
      elected in earnings at each subsequent reporting date. This statement is
      effective as of the beginning of an entity’s first fiscal year that begins after
      November 15, 2007. The Company is currently assessing the potential impact,
      if
      any, for the adoption of SFAS No.159 on its consolidated financial
      statements.





In
      December 2007, the FASB issued two new statements: (a.) SFAS No. 141(revised
      2007), *Business
      Combinations* ,
      and
      (b.) No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements.* These
      statements are effective for fiscal years beginning after December 15, 2008
      and
      the application of these standards will improve, simplify and converge
      internationally the accounting for business combinations and the reporting
      of
      noncontrolling interests in consolidated financial statements. The Company
      is in
      the process of evaluating the impact, if any, on SFAS 141 (R) and SFAS 160
      and
      does not anticipate that the adoption of these standards will have any impact
      on
      its consolidated financial statements.





(a.)
      SFAS
      No. 141 (R) requires an acquiring entity in a business combination to: (i)
      recognize all (and only) the assets acquired and the liabilities assumed in
      the
      transaction, (ii) establish an acquisition-date fair value as the measurement
      objective for all assets acquired and the liabilities assumed, and (iii)
      disclose to investors and other users all of the information they will need
      to
      evaluate and understand the nature of, and the financial effect of, the business
      combination, and, (iv) recognize and measure the goodwill acquired in the
      business combination or a gain from a bargain purchase.





(b.)
      SFAS
      No. 160 will improve the relevance, comparability and transparency of financial
      information provided to investors by requiring all entities to: (i) report
      noncontrolling (minority) interests in subsidiaries in the same manner, as
      equity but separate from the parent’s equity, in consolidated financial
      statements.


8


**LEGACY
        HOLDINGS, INC. AND SUBSIDIARY**
 Notes
        to
        Consolidated Financial Statements
 For
        the
        Three and Nine Months Ended September 30, 2007 and 2006




**NOTE
      B – INVENTORIES**





Inventories
      are stated at the lower of cost or market, with costs determined on a first-in,
      first-out (FIFO) basis. Inventory consisted of parts and completed units and
      was
      $150,702 at September 30, 2007.





**NOTE
      C – PROPERTY AND EQUIPMENT**





Property
      and equipment consists of the following at September 30, 2007:





September 30,
              2007Furniture
                & Fixtures
            
            
            20,025Machinery
                & Equipment
            
            
            259,034Less
                Accumulated Depreciation
            
            
            (277,683
            )$
            1,375





**NOTE
      D – OPERATING LEASES AND COMMITMENTS**





The
      Company leases its operating and office facilities under an agreement that
      expires annually on September 1 st  of
      each
      year and is renewable at the option of the lessor. With each annual renewal
      the
      monthly rent may be adjusted at the option of the lessor by the increase, if
      any, of the September year to year change in the Consumer Price Index. For
      the
      three and nine months ended September 30, 2007, the Company paid $9,069 and
      $27,000, respectively in rent.





**NOTE
      E – NOTES PAYABLE**





In
      prior
      years the Company entered into a $150,000 debt agreement that incurred interest
      at a rate of 7.5% through May 19, 2006 and 12.5% thereafter until paid in full.
      During 2007 the Company negotiated with the lender to forgive the interest
      on
      the note. In 2007 the Company made a principal payment of $30,000 and owed
      $120,000 at September 30, 2007.





**NOTE
      F – LOANS FROM SHAREHOLDERS**





The
      Company has received loans and advances from the President and other
      shareholders at various times. At
      September 30, 2007 the balance outstanding on these loans was $167,338. These
      loans carry no stated interest rate but the imputed effects of interest are
      not
      material to the financial statements taken as a whole.





**NOTE
      G – STOCKHOLDERS’ EQUITY**





The
      Company is authorized to issue 100,000,000 shares of $0.001 par value common
      stock. At September 30, 2007, the Company had 17,592,739 shares issued and
      outstanding.


9




**LEGACY
      HOLDINGS, INC. AND SUBSIDIARY**


Notes
      to
      Consolidated Financial Statements


For
      the
      Three and Nine Months Ended September 30, 2007 and 2006





**NOTE
      H – INCOME TAXES**





Income
      tax provision for the nine months ended September 30, 2007 and 2006 was
      comprised of $800 of state current taxes, only.





**NOTE
      I – LITIGATION**





The
      Company is subject to certain routine legal proceedings, as well as demands,
      claims and threatened
      litigation, that arise in the normal course of its business. The Company
      believes that the ultimate
      amount of liability, if any, for any pending claims of any type, will not
      materially affect its consolidated financial position, results of operations
      or
      liquidity.





**NOTE –
      J GOING CONCERN**





Between
      2001 and 2006, the Company experienced significant operating losses, negative
      cash flows and had a stockholder deficit due to market conditions and R&D
      expenses. As of September 30, 2007, the Company had a repeat order backlog
      totaling approximately $856,000. With the increase in orders, management
      implemented a plan of action to move the Company towards profitability. The
      plan
      of action included, beginning in 2006 and continuing in the first half of 2007,
      the restructuring and retirement of a majority of its debt. Management has
      also
      repurchased all preferred shares of stock of its wholly owned subsidiary and
      converted the majority of shareholder loans to common stock. The Company plans
      to sell shares of its common stock to generate funds to meet new and increased
      demand for its products and services. Management believes that its plan of
      action will be sufficient to achieve this goal.





**NOTE
      K – SUBSEQUENT EVENTS**





On
      March
      12, 2008 the Company entered into a letter of intent to acquire 100% of the
      stock of Modutek Corporation, a California corporation for $4,186,050. Terms
      of
      the agreement include a cash payment of $1,916,096 at closing and a promissory
      note for the remainder of the acquisition cost. This transaction is a primary
      part of the Company’s plan of action to re-structure and is dependent upon new
      common stock financing to raise the necessary capital to complete the
      acquisition.





Legacy
      Holdings, Inc, (formerly CST Entertainment, Inc.) is filing Forms 10QSB and
      10KSB for all interim and annual periods beginning with the quarter ended
      December 31, 1996 through June 30, 2007.


10


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





**Note
      Regarding Forward Looking Statements**





Except
      for statements of historical fact, certain information contained herein
      constitutes ‘forward looking statements’ within the meaning of Section 27A of
      the Securities Act and Section 21E of the Securities Exchange Act. Forward
      looking statements address our current plans, intentions, beliefs and
      expectations and are statements of our expected future economic performance.
      Statements containing terms like ‘believes’, ‘does not believe’, ‘plans’,
‘expects’, ‘intends’, ‘estimates’, ‘anticipates’, and other phrases of similar
      meaning or the negative or other variations of these words or other comparable
      words or phrases are considered to imply uncertainty and are forward looking
      statements.





Such
      forward looking statements involve known and unknown risks, uncertainties and
      other factors which may cause the actual results or achievements of the Company
      to be materially different from any future results or achievements of the
      Company expressed or implied by such forward looking statements. Such factors
      include, but are not limited to, our ability to obtain capital to finance and
      expand our operations, changes in economic conditions, government regulations,
      contract requirements and abilities, behavior of existing and new competitor
      companies and other risks and uncertainties discussed in this report on Form
      10QSB, and in other documents the Company files from time to time with the
      SEC.
      You are cautioned not to place undue reliance on the forward-looking statements,
      which speak only as of the date of this Form 10-QSB.





We
      cannot
      guarantee our future results, level of activity, performance or achievements.
      Neither we nor any other person assumes responsibility for the accuracy and
      completeness of these forward-looking statements. We are under no duty to update
      any of the forward-looking statements after the date of this
      report.





Legacy
      Holdings, Inc. (the “Company”, or “Legacy”) provides wafer cleaning, etching and
      photoresist stripping equipment and process technology to the semiconductor
      industry, and related industries such as Solar Cells, Flat Panel Display’s, and
      Light Emitting Diodes. We have developed and patented a new, and what we believe
      is a breakthrough process that employs cost advantaged “Green” chemistry, to
      produce an environmentally safe process for photoresist removal over metal
      exposed surfaces and organic cleaning of any size substrate.





In
      1998,
      we began filing patent applications for new chemical processes, that utilizes
      Ozone and other environmentally friendly chemical processes for cleaning and
      photoresist stripping of silicon wafers of all sizes. These patented and patent
      pending technologies can be adopted to support wafer cleaning in a variety
      of
      different models. **** For our
      innovative process development of Green Chemistry, we received the U.S. EPA
      Green Chemistry Award issued by the White House in 1997. Legacy is the only
      semiconductor equipment company to receive this prestigious award.





In
      2002,
      we completed the transition from a chemical module supplier to a full wet
      station supplier, with the sale of our first wet station. We were still in
      the
      development phase of its dryer technology (DryZoneTM) which was needed to break
      away from the other wet station manufacturers. In 2006, we introduced our first
      fully automated dry in/dry out wet station. In 2007, we received customer
      acceptance sign-off of three wet stations from three different customers and
      we
      received orders for two expanded wet stations.


11


We
      provide a technology we believe creates a significant operational and financial
      advantage for companies which produce semiconductors. Our technology supports
      equipment that provides wafers for digital memory in computers (DRAM) and/or
      the
      newly emerging NAND technology. NAND flash is used in digital photography and
      for memory in notebook computers.





We
      produce automated wet process equipment for the semiconductor, flat panel,
      solar
      cell, and MEMS industries. The equipment utilizes both patented process and
      hardware technologies developed by Legacy. The heart of the process technology
      is a state-of-the-art ozone cleaning and drying system. The Ozone technology
      base eliminates or reduces hazardous chemistries and hazardous process
      conditions while increasing process performance and wafer throughput.





Our
      equipment manufacturing is all subcontracted out to other vendors currently.
      There are many companies that can manufacture to our specifications on a sub
      contract basis, and no one sub contractor is critical to our
      business.





We
      have
      developed a unique photoresist ozone based wet stripping process that is
      aggressive enough to remove advanced photoresist polymers in less than 10
      seconds from 300 mm sized wafers without affecting 32 nm dielectric films or
      etching sensitive copper/metal stack interconnects. Provided the necessary
      capital can be obtained, we are now positioned to provide this process
      technology and management proposes to build wet chemical delivery modules in
      the
      future to supply the ozone based chemistry for integration into manufacturer’s
      Wet Process Platforms. This same process line is proposed to generate a
      consumable chemistry which can be supplied to end-users. The chemical supply
      used in this process is an on-going requirement for photoresist
      removal.





Provided
      the necessary capital can be obtained, management plans to offer in house wafer
      processing services for customer Pre-diffusion cleaning and resist stripping
      operations.  In
      this
      scenario, we would receive the wafers, process them in our application lab,
      package the wafers and return them to the client.





**Results
      of Operations**





**Three
      and Nine Months Ended September 30, 2007 and 2006**





**Revenue**





Our
      revenues were $87,543 and $32,054 for the three months ended September 30,
      2007
      and 2006, respectively, representing an increase of $55,489, or
      173%.  The increase in revenues for the three month period ended
      September 30, 2007 compared to 2006 was due to customer acceptance of the
      wetstations and Legacy’s process technologies, thereby generating additional
      sales.


12


Our
      revenues were $400,681 and $143,343 for the nine months ended September 30,
      2007
      and 2006, respectively, representing an increase of $257,338, or 180%. The
      increase in revenues for the nine month period was due to station acceptance
      by
      customers on previously shipped wetstations .





**Costs
      and Operating Expenses for the Three Months Ended June 30,
      2008**





Our
      total
      costs and operating expenses were $62,762 and $103,722 for the three months
      ended September 30, 2007 and 2006, respectively, representing a decrease of
      $40,960, or 39%.  Our total costs and operating expenses were $269,800 and
      $309,982 for our nine months ended September 30, 2007 and 2006, respectively,
      representing a decrease of $40,182, or 13%. The lower costs and operating
      expenses in 2007 was principally due to the shift away from manufacturing to
      address the corporate infrastructure after the reverse merger.





*Research
      and Development Expenses.* Our
      Research and Development expenses for the three months ended September 30,
      2007
      and 2006, were $15,061 and $37,352 respectively, representing a decrease of
      $22,291 or 60%. Our Research and Development expenses for our nine months ended
      September 30, 2007 and 2006 were $86,611 and $108,857, representing a decrease
      of $22,246 or 20%. The decrease in our research and development expenses was
      principally due to the shift away from manufacturing to address the corporate
      infrastructure after the reverse merger.





*General
      and Administrative Expenses* .
      General
      and administrative expenses were $42,332 and $55,659 for the three months ended
      September 30, 2007 and 2006, respectively, representing a decrease of $13,327,
      or 24%.  General and administrative expenses were $135,728 and
      $156,644 for our nine months ended September 30, 2007 and 2006, respectively,
      representing a decrease of $20,917, or 13%. The decrease in our general and
      administrative expenses in 2007, as compared to 2006, is primarily related
      to
      the focus on equipment manufacturing and not sales and marketing due to the
      limited manpower.





Although
      the net changes and percent changes with respect to our revenues and our costs
      and operating expenses for our three and nine months ended September 30, 2007
      and 2006 are summarized above, these trends should not be viewed as a definitive
      indication of our future results.





**Liquidity
      and Capital Resources**





At
      September 30, 2007, our principal sources of liquidity consisted of $6,502
      of
      cash, as compared to $20,099 of cash at December 31, 2006.  In
      addition, we had a stockholders’ deficit of $786,510 at September 30, 2007,
      compared to a deficit of $1,322,001 at December 31, 2006, a reduction in the
      deficit of $535,491.





Our
      operations used net cash of $55,423 during our first nine months ending
      September 30, 2007, as compared to providing net cash of $24,621 during our
      nine
      months ending September 30, 2006.  The $80,044 decrease in the net
      cash provided by our operating activities was principally due to the significant
      decrease in deferred revenue.


13


Financing
      activities provided $41,826 in net cash during our nine months ending September
      30, 2007, compared to using $23,628 in net cash during our nine months ending
      September 30, 2006, or an increase of $65,454.





We
      have
      no significant contractual obligations or commercial commitments not reflected
      on our balance sheet as of this date.





**Plan
      of Operations**





During
      the next 12 months, we will continue to focus on acquisition of a synergistic
      manufacturing company, and introduction of our process technology to Tier 1
      customers such as Intel, Texas Instruments, and Samsung.





We
      intend
      to seek additional capital and lines of credit to increase our work force and
      expand our inventory.  At our nine months ending September 30, 2007, we had
      a working capital deficit of $789,208 and total current liabilities of
      $1,318,679, consisting of $167,338 in related party loans and $836,181 in
      deferred revenues and $315,160 in accrued wages and taxes, accounts payable
      and
      notes payable. Without increased capital we will be unable to substantially
      reduce our working capital deficit or reduce our current liabilities. Our
      financing efforts may be impaired by our limited revenues as well as the limited
      liquidity for our common stock.





We
      cannot
      assure that additional capital funding would be available through private or
      public equity financing or bank financing. Furthermore, outside events such
      as the trends in the silicon chip manufacturing business, the condition of
      the
      stock market, interest rate levels and the availability of credit could affect
      our ability to obtain financing.  We have no financing arrangements
      with any person to obtain additional funding on any terms and cannot assure
      that
      we will be able to do so.





**Critical
      Accounting Policies**





We
      have
      identified the policies outlined below as critical to our business
      operations and an understanding of our results of operations.  The
      list is not intended to be a comprehensive list of all of our accounting
      policies.  In many cases, the accounting treatment of a
      particular transaction is specifically dictated by accounting principles
      generally accepted in the United States, with no need for management's
      judgment in their application.  The impact and any associated
      risks related to these policies on our business operations is discussed
      throughout Management's Discussion and Analysis or Plan of Operations where
      such policies affect our reported and expected financial results.  For
      a detailed discussion on the application of these and other accounting
      policies, see the Notes to our Consolidated Financial
      Statements.  Note that our preparation of the financial
      statements requires us to make estimates and assumptions that affect the
      reported amount of assets and liabilities, disclosure of contingent assets
      and liabilities at the date of our financial statements, and the reported
      amounts of revenue and expenses during the reporting
      period.  There can be no assurance that actual results will not
      differ from those estimates.


14


**Revenue
      Recognition**





All
      revenues are derived from the sale of our products and services. Revenue and
      related taxes and operating expenses are recorded in the month the product
      or
      service is delivered to the purchaser.  Accounts receivable are stated at
      the amount management expects to collect.  Management provides for probable
      uncollectible amounts through a charge to earnings and a credit to an allowance
      based on its assessment of the collectibility of the receivable.  At
      our quarters ended September 30, 2007 and 2006, no allowance for doubtful
      accounts was deemed necessary.





**Income
      Taxes**





Provisions
      for income taxes are based on taxes payable or refundable and deferred
      taxes.   Deferred taxes are provided on differences between the tax
      bases of assets and liabilities and their reported amounts in the financial
      statements and tax operating loss carryforwards.   Deferred tax assets
      and liabilities are included in the financial statements at currently enacted
      income tax rates applicable to the period in which the deferred tax assets
      and
      liabilities are expected to be realized or settled.  As changes in tax
      laws or rates are enacted, deferred tax assets and liabilities are adjusted
      through the provision for income taxes.





**Accounting
      for Reorganization**





In
      view
      of Legacy Systems, Inc.’s reorganization with Legacy Holdings, Inc, a shell
      corporation, via a stock for stock exchange, the Company’s financial statements
      have been treated as a reorganization for presentation purposes.





**ITEM
      3. CONTROLS AND PROCEDURES**





(a)
              Evaluation
                  of disclosure controls and procedures





As
      required by Rule 13a-15(b) under the Exchange Act, we conducted an evaluation,
      under the supervision and participation of our management, including the
      Company’s President and Chief Financial Officer (who is the principal accounting
      officer). No weaknesses were noted and both the President and Chief Financial
      Officer concluded that the disclosure controls and procedures were effective
      as
      of the most recent fiscal quarter covered by this Form 10-QSB.





(b)
             Changes in internal controls




In
      accordance with Item 308 (c) of Regulation S-B, there were no changes in the
      Company’s internal control reporting in connection with the Company’s evaluation
      of its internal controls that occurred during the most recent fiscal quarter
      covered by this Form 10-QSB.


15


**PART
      II. OTHER INFORMATION**





Item
      1.  Legal
      Proceedings. None





Item
      2.  Unregistered
      Sales of Equity Securities and use of proceeds. None





Item
      3.  Defaults
      Upon Senior Securities. None





Item
      4.  Submission
      of Matters to a Vote of Security Holders. None





Item
      5.  Other
      Information. None





Item
      6.  Exhibits





Exhibit Number
            
            Title
                of Document31.1
            
            Certification
                of Principal Executive Officer and Principal Accounting Officer Pursuant
                to Rule 13a-1432.1
            
            Certification
                of Chief Executive Officer and Principle Accounting Officer Pursuant
                to 18
                U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002





**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the Registrant caused
      this
      Report to be signed on its behalf by the undersigned thereto duly
      authorized.




Date:
      August 27, 2008




**LEGACY
      HOLDING, INC.**





By:
            Robert
                MatthewsRobert
                MatthewsPresident,
                CEO and Treasurer


16