<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

            [ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2007
                                       OR
          [X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                        Commission file number 000-49709

                           CARDIFF INTERNATIONAL, INC.
                           ---------------------------
           (Name of Small Business Issuer as specified in its charter)

                  Colorado                                84-1044583
      -------------------------------                 -------------------
      (State or other jurisdiction of                  (I.R.S. employer
      incorporation or organization)                  identification No.)

                       16255 Ventura Boulevard, Suite 525
                                Encino, CA 91436
                                ----------------

         Issuer's telephone number, including area code: (818) 879-9722
                                                         --------------

    Securities registered pursuant to Section 12(b) of the Exchange Act: None

      Securities registered pursuant to Section 12(g) of the Exchange Act:
                            No Par Value Common Stock

     Check whether the Issuer (1) has 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. (1) Yes
[X] No [ ] ; (1) Yes [X] No [ ]

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of Issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K |_|.

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

     The Issuer's revenues for the fiscal year ended December 31, 2007 were $-0-

     As of December 31, 2007, there were 26,931,509 shares of the Issuer's
common stock issued and outstanding of which 17,518,133 were held by
non-affiliates.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE


                                       1
<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

PART I

     Item 1.  Description of Business                                          3

     Item 2.  Properties                                                       6

     Item 3.  Legal Proceedings                                                6

     Item 4.  Submission of Matters to a Vote of Security Holders              6

PART II

     Item 5.  Market for the Registrant's Common Stock and Related
                Security Holder Matters                                        6

     Item 6.  Management's Discussion and Analysis of Financial
                Condition and Results of Operation                             7

     Item 7.  Financial Statements                                            11

     Item 8.  Changes and Disagreements with Accountants on Accounting
                and Financial Disclosure                                      27

     Item 8A. Controls and Procedures                                         27

     Item 8B. Other Information                                               28

PART III

     Item 9.  Directors, Executive Officers, Promoters and Control
                Persons; Compliance with Section 16(a) of the
                Exchange Act                                                  28

     Item 10. Executive Compensation                                          29

     Item 11. Security Ownership of Certain Beneficial Owners and Management  30

     Item 12. Certain Relationships and Related Party Transactions            31

     Item 13. Principal Accountant Fees and Services                          31

PART IV

     Item 14. Exhibits                                                        32


                                       2
<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

         On November 10, 2005, Cardiff International, Inc. ("Cardiff"), a
Colorado corporation, acquired Legacy Card Company, Inc. ("Legacy"), a privately
held Nevada corporation in a triangular merger transaction (the "Merger"). The
effective date of the Merger was November 10, 2005. As a result of the Merger,
Legacy is now a wholly owned subsidiary of Cardiff.

         Legacy was formed as a California limited liability company in August
2001. In April 2005, Legacy was converted into a Nevada corporation.

         The Plan of Merger provided for the issuance by Cardiff to the
stockholders of Legacy of an aggregate of 18,000,000 shares of Cardiff common
stock, no par value per share in connection with the Merger. As a result of the
Merger, the former stockholders of Legacy are now the controlling stockholders
of Cardiff. As part of the Merger, the officers and directors of Cardiff,
resigned from their positions as officers and directors of Cardiff and the
officers and directors of Legacy were appointed as officers and directors of
Cardiff at the effective time of the Merger.

          As a result of the Merger described above, on November 1, 2005 Legacy
became a subsidiary of Cardiff. Legacy is a marketing and sales firm that has
developed the Simply Brilliant Tuition Card, which combines a Section 529
College Savings Plan with the credit card (the Simply Brilliant Tuition Card).
The Simply Brilliant Tuition Card is not currently available but is expected to
launch in St. Louis, Missouri in the second quarter of 2008.

           In January 2006, Cardiff changed its fiscal year end to December 31st
from September 30th to have the same year end as Legacy.

Description of Business of Legacy
---------------------------------

         Legacy is a marketing and sales firm that has developed the Simply
Brilliant Tuition Card program, a credit card program that provides card users
with an opportunity to save for their children's education on a tax-free basis
while making purchases utilizing this credit card. The Simply Brilliant Tuition
Card program has been developed to be tied into a card user's "529 College
Savings Plan" which is described below. The Simply Brilliant Tuition Card
program is a credit card rewards program with tax-free savings benefits to the
cardholder. Similarly, there are numerous credit cards and credit card programs
that offer users cash back or other rewards. Legacy management believes that the
Simply Brilliant Tuition Card program is a unique value-added credit card
program that allows consumers using the Simply Brilliant Tuition Card or any
other credit card in their wallet to save for a child's college education while
making normal consumer purchases. The Simply Brilliant Tuition Card program is a
unique, tax-free educational savings reward program that concentrates consumer
loyalty and buying on local and national retailers in the Legacy merchant
coalition.

         The potential success of the Simply Brilliant Tuition Card program
involves the participation of four groups: (i) Legacy as the marketer of the
credit card, (ii) an issuing bank as the issuer of the credit card, (iii) a
coalition of merchants who will make contributions to the consumer's designated
529 Education Account, and (iv) the card user. As a result of contributions made
to the card user's 529 Savings Plan, we expect that the card user will become
loyal customers of the coalition merchants and issuing bank.

         The Simply Brilliant Tuition Card program is expected to launch during
the second quarter of 2008. The retailers of the Legacy rewards program will
contribute an anticipated 1% to 10% of the total spent by the card holder to the
child's 529 tax-free educational fund account. The retailer contribution is
expected to be supplemented up to 1.0% contribution from the issuing bank. This
issuing bank contribution is applicable no matter where the cardholder shops,
therefore encouraging regular and daily usage of the Simply Brilliant Tuition
Card program.

         The Legacy Card Company marketing plan is the result of five years
development, focus groups and other market research studies. The Simply
Brilliant brand, image, programming, sales and marketing have been designed with
the intent to appeal to American parents and grandparents need to save for their
child's college tuition and expenses.

                                       3
<PAGE>

Description of Section 529 Plans
--------------------------------

         Section 529 plans were authorized by congress to provide tax incentives
savings for qualified higher education expenses (QHEE). Earnings in 529 plans
are tax-free if withdrawals are made for QHEE, otherwise there is a 10% penalty
on the earnings, which are taxed at ordinary rates. Although nonqualified
withdrawals are subject to a 10% penalty on the earnings, taxes on the earnings
are deferred until withdrawal. Federal legislation passed in 1996 allows states
to create section 529 plans.

         Section 529 plans are of two types. One is a tuition credit plan and
the other is a savings plan. Section 529 provides that qualified state tuition
programs' shall be exempt from taxation. Such plans must be established and
maintained by a State agency or instrumentality thereof. Most states have
outsourced the management of their programs to investment advisory or financial
service firms. While each state has its own specific requirements, the salient
requirements applicable to all plans are:

         1.  Only cash contributions are allowed.

         2.  There must be separate accounting for each designated beneficiary.

         3.  There may be no investment direction by any contributor to, or
             designated beneficiary under, such program. The account owner may
             choose among several broad-based investment options once per year.

         4.  No interest in the program may be used as security for a loan.

         5.  The program must provide adequate safeguards to prevent
             contributions on behalf of a designated beneficiary in excess of
             those necessary to provide for the QHEE of the beneficiary.

         6.  There must be a penalty imposed on distributions from an account
             that are not used for QHEE, except death or disability of the
             designated beneficiary, or to the extent the designated beneficiary
             receives a scholarship.

         QHEE include tuition, fees, books, supplies, and equipment required for
the enrollment or attendance of a designated beneficiary at an eligible
educational institution. Reasonable costs for room and board are also QHEE for
students who are enrolled at least half-time. An eligible educational
institution is one which is described in section 481 of the Higher Education Act
of 1965 (20 U.S. C. 1088) and which is eligible to participate in a program
under Title IV of such act. The designated beneficiary is the individual
designated at the commencement of the participation in the qualified state
tuition program. If the designated beneficiary is changed, the new beneficiary
must be a member of the original designated beneficiary's family (as defined in
the code) to avoid treatment as a nonqualified withdrawal.

Launching the Simply Brilliant Tuition Card
-------------------------------------------

         We anticipate that the Simply Brilliant Tuition Card will launch in St.
Louis, Missouri, during the second quarter of 2008. Our program is backed by a
unique marketing campaign with State and City participation. Through State and
City officials, Legacy will host special events to promote both merchant and
consumer participation. The city will provide local platforms covering PR, radio
coverage, outdoor advertising, event marketing, Museums, Stadiums, Hospital,
Elementary and Middle School participation, and other local market platforms.
Through grass root marketing, Legacy Card Company has the opportunity to
generate millions of consumer impressions.

         The Simply Brilliant Tuition Card program is more than a rewards
program. Legacy believes it is a unique new way for America's families to save
for college while spending. Unlike most other rewards programs (airline miles,
1% cash back), the Legacy reward program brings to bear a strong emotive
pull--saving for a child's tuition. Legacy's consumer benefit analysis suggests
that typical American parents using the Legacy credit card will save over $7,500
toward their child's college tuition.

         To produce these tangible benefits for its cardholders, Legacy has
established a merchant coalition. Each of its merchants involved in the Simply
Brilliant Tuition Card Program has agreed to make a 1-10% contribution to the
Legacy cardholder's child's 529 account. For families, they "save while they
spend," on purchases they would have made anyway. For our coalition merchants,
we have introduced a new marketing dynamic that is expected to change consumer
buying patterns/preferences, increasing consumer expenditures at participating
merchants.


                                       4
<PAGE>

Legacy Merchant Coalition
-------------------------

         As of December 31, 2007, approximately 1,200 St. Louis, Missouri area
retailers are participating in our merchant coalition. Each Merchant
participating in the Legacy Merchant Coalition enters into an agreement to
contribute a portion of the purchases made by the Simply Brilliant Tuition
cardholder, to the cardholder's 529 Savings Plan.

Issuer of the Simply Brilliant Tuition Card
-------------------------------------------

         Legacy has entered into a contract with Commerce Bank to become the
issuing bank for the Simply Brilliant Tuition Card.

Fund Managers
-------------

         One or more Section 529 Fund Managers will administer the 529 Plans for
the cardholders. These administrators are expected to be national brokerage
firms. We anticipate that the 529 Fund Managers will compensate Legacy as
follows:

         o    25 basis points for all section 529 funds held under management
              from the Simply Brilliant Tuition Card.

         The Omnibus Fund Manager will administer the Omnibus Educational Funds
for the cardholders. We anticipate that the Omnibus Fund Manager will compensate
Legacy as follows:

         o    100 basis points for all Omnibus funds held under management from
              the Simply Brilliant Tuition Card.

Various Agreements
------------------

         In connection with the activities related to the launch of the Simply
Brilliant Tuition Card in St. Louis, Legacy has entered into several short-term
agreements with independent marketing, advertising and other consultants. It is
intended that each of the consultants will provide services to Legacy which will
aid in the marketing of the Simply Brilliant Tuition Card. These consulting
agreements include the following:

Employees
---------

         Legacy currently has two employees but anticipates it will hire
additional personnel as the Simply Brilliant credit card is launched.

Overview of Cardiff Prior to the Merger
---------------------------------------

         Prior to the Merger Cardiff was an inactive, publicly held, SEC
reporting company. Cardiff was incorporated under the laws of the State of
Colorado under the name "Cardiff Financial, Inc.," on October 14, 1986.
Effective April 1989, Cardiff completed an acquisition transaction with, and
changed its name to, United American, Inc. The transaction was subsequently
rescinded and on December 4, 1989, Cardiff changed its name from United
American, Inc., to Cardiff International, Inc. Since that time, Cardiff has been
a shell corporation seeking to commence active business operations by acquiring
a business opportunity.

                                       5
<PAGE>

         Immediately prior to the Merger with Legacy, there were approximately
725,000 shares of Cardiff common stock issued and outstanding. Following the
Merger, there were approximately 19,900,000 shares of Cardiff common stock
issued and outstanding.

         Legacy Acquisition Corp. ("LAC") was a Nevada corporation, which prior
to the Merger, was a wholly-owned subsidiary of Cardiff. LAC was formed solely
to facilitate the Merger. As a result of the Merger, LAC was merged into Legacy
and no longer exists as of the effective time of the Merger.

ITEM 2.  PROPERTIES

         Currently, Legacy has not entered into any lease agreement for office
facilities. Legacy is currently using facilities in St. Louis, Missouri and
facilities in Encino, California provided by a firm that provides certain
professional services to Legacy. Legacy will obtain additional facilities in the
future as needed.

ITEM 3.  LEGAL PROCEEDINGS

         There have been no events under any bankruptcy act, no criminal
proceedings, and no judgment or injunction material to the evaluation of the
ability and integrity of any director or executive officer during the last five
years.

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

         No matters were submitted to Cardiff's shareholders for a vote during
the year ended December 31, 2007.


                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

         Our common stock is quoted on the OTC "Bulletin Board" under the symbol
"CDIF". During the last three years, there has only been limited trading in our
common stock.

Shares Issued in Unregistered Transactions
------------------------------------------

         We issued shares of our common stock in unregistered transactions
during 2005. All of the shares of common stock issued were issued in non
registered transactions in reliance on Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act"). As a result of the Merger, Cardiff
issued 18,000,000 shares of its common stock to the shareholders of Legacy
pursuant to the terms of the Plan of Merger.

         No underwriter or placement agent was involved in the above referenced
transactions. Cardiff is relying on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended, (the "Securities Act"),
and Rule 506 of Regulation D promulgated by the Securities Act.

Holders
-------

         As of December 31, 2007, there were 28,277,153 shares of common stock
outstanding and approximately 704 stockholders of record of common stock.

Dividends
---------

         We have not paid cash dividends since our inception and do not
anticipate paying dividends in the foreseeable future.

Purchases of Equity Securities by the Small Business Issuer and Affiliated
--------------------------------------------------------------------------
Purchasers
----------

         None

                                       6
<PAGE>

Limitation on Directors' Liability, Charter Provisions and Other Matters
------------------------------------------------------------------------

         Colorado law authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. The duty of care
requires that, when acting on behalf of the corporation, directors must exercise
an informed business judgment based on all material information reasonably
available to them. Absent the limitations authorized by Colorado law, directors
are accountable to corporations and their stockholders for monetary damages for
conduct constituting gross negligence in the exercise of their duty of care.
Colorado law enables corporations to limit available relief to equitable
remedies such as injunction or rescission. Our Certificate of Incorporation
limits the liability of our directors to us or to our stockholders (in their
capacity as directors but not in their capacity as officers) to the fullest
extent permitted by Colorado law.

         The inclusion of this provision in the Certificate of Incorporation may
have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter stockholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefited the Company and its
stockholders.

         Our Bylaws provide indemnification to our officers and directors and
certain other persons with respect to certain matters. Insofar as
indemnification for liabilities arising under the 1933 Act may be permitted to
our directors and officers, we have been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable.

Transfer Agent and Registrar
----------------------------

         Our transfer agent is Standard Registrar and Transfer, 12528 South 1840
East, Draper, Utah 84020; Tel: (801) 571-8844.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

Overview
--------

         Cardiff International, Inc. ("Cardiff"), acquired Legacy Card Company,
Inc. ("Legacy") in a merger transaction in November 2005. The transaction was
accounted for as a reverse merger transaction whereby Legacy, although a
subsidiary of Cardiff, was deemed to be the surviving entity for accounting
purposes. In January 2006, Cardiff changed its fiscal year end to December 31st
from September 30th to have the same year-end as Legacy.

         Legacy is a marketing and sales firm that has developed the Simply
Brilliant Tuition Card program, a rewards program. Legacy anticipates the
program will be available to the public in the second quarter of 2008. Legacy's
business plan calls for revenue to be generated as customers sign up for the
credit card and when purchases are made with their registered credit cards.
Legacy has generated no revenues since its inception and has expended
considerable funds in developing its business plan and funding its operations.

         Legacy was formed as a limited liability company in August 2001. In
April 2005, Legacy was converted into a Nevada corporation.

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

AT DECEMBER 31, 2007

         Since inception, the principal sources of cash have been funds raised
from the sale of common stock, advances from shareholders, and loans in the form
of debentures and convertible notes. At December 31, 2007, we had no cash and
cash equivalents and total assets amounted to $4,362. At December 31, 2006 we
had $6,431 of cash and cash equivalents, and total assets amounted to $23,816,
which included fixed assets and other assets.


                                       7
<PAGE>

         Net cash used in operating activities was $763,206 and $904,207 for the
years ended December 31, 2007 and 2006, respectively. The increase in the amount
of net cash used in operating activities during these periods were attributable
to increased fees and other operating costs.

         Net cash provided by financing activities was $756,775 and $910,638 for
the years ended December 31, 2007 and 2006, respectively. The cash flows from
financing activities during the year end December 31, 2007 was attributable to
proceeds from the sale of common stock of $712,250. In addition, we received
$280,649 and repaid $292,420 of shareholder advances during the year ended
December 31, 2007.

         Since inception, we have incurred operating losses and at December 31,
2007, we had an accumulated deficit of $7,586,601.

         Current liabilities at December 31, 2007 consisted primarily of
accounts payable and accrued payroll of $839,716, amounts due to shareholders of
$179,620, convertible and non-convertible promissory notes in the amount of
$618,000, a subscription deposit of $179,380 and accrued interest in the amount
of $242,783. Current liabilities at December 31, 2006 consisted primarily of
accounts payable of and accrued payroll $1,080,956, amounts due to shareholders
of $120,817, convertible and non-convertible promissory notes in the amount of
$718,000, and accrued interest in the amount of $172,983.

         Gary R. Teel and Daniel Thompson, the officers and directors of the
Company, have entered into employment agreements for a monthly salary of $25,000
($300,000 annually); however, both have waived their unpaid salaries. This
waiver of salary not only reduced our operating expenses and loss, it reduced
the amount of capital needed to fund operations. During the year ended December
31, 2007, we repaid $209,038 to Mr. Teel and $132,232 to Mr. Thompson on
outstanding advances. In addition, Gary Teel loaned back to the Company
$375,190.

         There can be no assurance that we will be able to obtain sufficient
capital from debt or equity transactions or from operations in the necessary
time frame or on terms acceptable to us. Should we be unable to raise sufficient
funds, we may be required to curtail our operating plans and possibly relinquish
rights to portions of our technology or products. In addition, increases in
expenses or delays in product development may adversely impact our cash position
and may require cost reductions. No assurance can be given that we will be able
to operate profitably on a consistent basis, or at all, in the future.

         In order to continue our operations, development of our products, and
implementation of our business plan, we need additional financing. During the
fourth quarter of 2007 we raised $245,000 from the sale of 2,466,667 shares of
our common stock. We are also currently attempting to obtain additional working
capital in a term loan transaction. Additionally, we anticipate that our credit
card will launch in the second quarter of 2008 thereby commencing the generation
of revenues shortly thereafter. In addition, we also anticipate that we will
continue to operate at a loss for the foreseeable future.

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

FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

         We had no operating revenues for the years ended December 31, 2007 and
2006.
         We had operating expenses of $690,979 for the year ended December 31,
2007 and $1,223,372 for the year ended December 31, 2006, representing a
decrease of $532,393.

          We had a net loss of $788,596, for the year ended December 31, 2007
compared to a net loss of $1,279,441 for the year ended December 31, 2008,
representing a decrease of $490,845 due to decreased fees and other operating
costs.

Inflation
---------

         We do not believe that inflation will negatively impact our business
plans.

                                       8
<PAGE>

Plan of Operation
-----------------

         Our current business plan is described in "Item 1 - Description of
Business"

Critical Accounting Policies
----------------------------

         This Management's Discussion and Analysis of Financial Condition and
Results of Operations discuss the Company's Financial Statements, which have
been prepared in accordance with accounting principles generally accepted in the
US.

         We have not yet commenced active operations. The preparation of our
financial statements requires management to make estimates and assumptions that
affect amounts of assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. On an ongoing basis,
management evaluates its estimates and assumptions. Management will base its
estimates and judgments on historical experience of the operations we may
acquire and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying value of assets and liabilities that are not apparent from
other sources. Actual results may differ from estimates under different
assumptions or conditions.

         Management believes the following critical accounting policies, among
others, will affect its more significant judgments and estimates used in the
preparation of our Consolidated Financial Statements:

         We utilize the fair value based method of accounting for stock-based
compensation, in accordance with Statement of Financial Accounting Standards No.
123(R).

Recent Accounting Pronouncements
--------------------------------

         In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements (SFAS 157). SFAS 157 establishes a framework for measuring fair
value in generally accepted accounting principles, and expands disclosures about
fair value measurements. SFAS 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007. The Company is required to
adopt the provision of SFAS 157, as applicable, beginning in fiscal year 2008.
Management does not believe the adoption of SFAS 157 will have a material impact
on the Company's financial position or results of operations.

Forward Outlook and Risks
-------------------------

         This Form 10-KSB for the year ended December 31, 2007 contain and
incorporate by reference certain "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act with
respect to results of our operations and businesses. All statements, other than
statements of historical facts, included in this Form 10-KSB, including those
regarding market trends, our financial position, business strategy, projected
costs, and plans and objectives of management for future operations, are
forward-looking statements. In general, such statements are identified by the
use of forward- looking words or phrases including, but not limited to,
"intended," "will," "should," "may," "expects," "expected," "anticipates," and
"anticipated" or the negative thereof or variations thereon or similar
terminology. These forward-looking statements are based on our current
expectations. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct. Because forward-looking statements
involve risks and uncertainties, our actual results could differ materially.
Important factors that could cause actual results to differ materially from our
expectations are disclosed hereunder and elsewhere in this Form 10-KSB. These
forward-looking statements represent our judgment as of the date of this Form
10-KSB. All subsequent written and oral forward-looking statements attributable
to Cardiff are expressly qualified by the Cautionary Statements. We disclaim,
any intent or obligation to update our forward-looking statements.

OPERATING HISTORY. We have not commenced active business operations. We
anticipate we will commence active operations during the second quarter of 200.
Potential investors should be aware that there is only a limited basis upon
which to evaluate our prospects for achieving our intended business objectives.
We have limited resources and have had no revenues since our formation.

POSSIBILITY OF TOTAL LOSS OF INVESTMENT. An investment in Cardiff is an
extremely high risk investment, and should not be made unless the investor has
no need for current income from the invested funds and unless the investor can
afford a total loss of his or her investment.

                                       9
<PAGE>

ADDITIONAL FINANCING REQUIREMENTS. We will likely be required to seek additional
financing in order to fund our operations and carry out our business plan. In
order to fund our operations and effect additional acquisitions, we will be
required to obtain additional capital. There can be no assurance that such
financing will be available on acceptable terms, or at all. We do not have any
arrangements with any bank or financial institution to secure additional
financing and there can be no assurance that any such arrangement, if required
or otherwise sought, would be available on terms deemed to be commercially
acceptable and in our best interest.

NO PUBLIC MARKET FOR SECURITIES. There is no active public market for our common
stock and we can give no assurance that an active market will develop, or if
developed, that it will be sustained.

AUDITOR'S OPINION HAS A GOING CONCERN QUALIFICATION. Our auditor's report dated
April 13, 2008 for the years ended December 31, 2007 and 2006 and for the period
from August 29, 2001 (date of inception) through December 31, 2007 includes a
going concern qualification which states that our significant recurring
operating losses and negative working capital raise substantial doubt about our
ability to continue as a going concern.

WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS AND ANY GAINS FROM YOUR INVESTMENT IN
OUR STOCK WILL HAVE TO COME FROM INCREASES IN THE PRICE OF SUCH STOCK. We
currently intend to retain any future earnings for use in our business and do
not anticipate paying any cash dividends in the foreseeable future.

WE OPERATE IN A COMPETITIVE MARKET. The credit card industry is competitive and
new offerings and technologies are becoming available regularly. We cannot
guarantee that we will compete successfully against our potential competitors,
especially those with significantly greater financial resources or brand name
recognition.


                                       10
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

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

                                                                          PAGE
                                                                        --------

Report of Independent Registered Public Accounting Firm                      12

Balance Sheets                                                               13

Statements of Operations                                                     14

Statements of Cash Flows                                                  15-16

Statements of Shareholders Equity                                            17

Notes to Financial Statements                                           18 - 26



                                       11
<PAGE>

                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM


To the Board of Directors
Cardiff International, Inc. dba Legacy Card Company

We have audited the accompanying consolidated balance sheets of Cardiff
International, Inc. dba Legacy Card Company (a development stage Company) (the
"Company") as of December 31, 2007 and 2006 and the related statements of
operations, shareholders' equity (deficit) and cash flows for the years then
ended and for the period from August 29, 2001 (date of inception) through
December 31, 2007. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards established by the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cardiff
International, Inc. dba Legacy Card Company as of December 31, 2007 and 2006,
and the results of its operations and cash flows for the years then ended and
for the period from August 29, 2001 (date of inception) through December 31,
2007, in conformity with accounting principles generally accepted in the United
States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has sustained operating losses since its
inception and has negative working capital and an accumulated deficit during the
years ended December 31, 2007 and 2006. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.


/s/ Rose, Snyder & Jacobs
A Corporation of Public Accountants

Encino, California
April 13, 2008

                                       12
<PAGE>


<TABLE>
<S>     <C>
              CARDIFF INTERNATIONAL, INC. dba LEGACY CARD COMPANY
                         (A DEVELOPMENT STAGE COMPANY)
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2007 AND 2006

                                     ASSETS
                                     ------
                                                        2007            2006
                                                     -----------    -----------
CURRENT ASSETS:
  Cash and cash equivalents                          $        --    $     6,431
  Advances to Employees                                    1,659          1,659
                                                     -----------    -----------
TOTAL CURRENT ASSETS                                       1,659          8,090

FIXED ASSETS:
  Artwork                                                  6,536          6,536
  Computer equipment                                      71,050         71,050
  Domain names                                             1,250          1,250
  Furniture and fixtures                                  72,984         72,984
  Leasehold improvements                                   9,201          9,201
  Office equipment                                        31,180         31,180
  Software                                                 1,596          1,596
  Accumulated depreciation                              (191,694)      (178,671)
                                                     -----------    -----------
FIXED ASSETS, NET                                          2,103         15,126
                                                     -----------    -----------
OTHER ASSETS:
  Deposits                                                   600            600
                                                     -----------    -----------
TOTAL ASSETS                                         $     4,362    $    23,816
                                                     ===========    ===========

                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

CURRENT LIABILITIES:
  Book overdraft                                     $     6,298    $        --
  Accounts payable                                       652,568        925,297
  Subscription deposit                                   179,380             --
  Interest payable                                       242,783        172,983
  Payroll and payroll tax payable                        187,148        155,659
  Advances from shareholders                             179,620        120,817
  Advance from ICE                                        50,000             --
  Note payable - Legacy Investors, current               518,000        618,000
  Note payable - Maricopa Equity Management
    Corporation, current                                 100,000        100,000
                                                     -----------    -----------
TOTAL CURRENT LIABILITIES                              2,115,797      2,092,756

NONCURRENT LIABILITIES:
  Note payable - Legacy Investors, noncurrent                 --             --
                                                     -----------    -----------
TOTAL LIABILITIES                                      2,115,797      2,092,756

SHAREHOLDERS EQUITY (DEFICIT):
  Common stock, no par value; 30,000,000 shares
    authorized; 28,274,658 and 22,514,403 shares
    issued and outstanding                             5,441,691      4,693,591
  Additional paid in capital                             208,474        208,474
  Subscription receivable                               (175,000)      (173,000)
  Deficit accumulated during the development stage    (7,586,600)    (6,798,005)
                                                     -----------    -----------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                  (2,111,435)    (2,068,940)

  TOTAL LIABILITIES AND SHAREHOLDERS'
    EQUITY (DEFICIT)                                 $     4,362    $    23,816
                                                     ===========    ===========


          See report of independent registered public accounting firm
   The accompanying notes are an integral part of these financial statements



                                       13
<PAGE>

                       CARDIFF INTERNATIONAL, INC. dba LEGACY CARD COMPANY
                                  (A DEVELOPMENT STAGE COMPANY)
                              CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND THE PERIOD
                  AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2007

                                                                       August 29, 2001
                                                                     (Date of Inception)
                                                                           through
                                          Years Ended December 31,       December 31,
                                           2007             2006            2007
                                        ------------    ------------    ------------
REVENUE                                 $         --    $         --    $         --

COST OF SALES                                     --              --              --
                                        ------------    ------------    ------------

  GROSS PROFIT                                    --              --              --

OPERATING EXPENSES:
  Consulting and outside services            142,890         240,875       1,640,614
  Advertising                                     --              --         363,800
  Legal services                              36,888         145,642         759,878
  Rent                                            --              --         411,586
  Guaranteed payments                             --              --         512,958
  Salaries and wages                         210,559         351,422       1,192,927
  Other operating expenses                   300,642         485,433       2,396,592
                                        ------------    ------------    ------------

TOTAL OPERATING EXPENSES                     690,979       1,223,372       7,278,355
                                        ------------    ------------    ------------

    LOSS FROM OPERATIONS                    (690,979)     (1,223,372)     (7,278,355)

OTHER INCOME AND (EXPENSES):
  Sublease rental income                          --              --          55,979
  Interest income                                 --              --           6,768
  Misc. income                                    --          36,958          85,770
  Interest expense                           (97,617)        (93,027)       (456,763)
                                        ------------    ------------    ------------

    TOTAL OTHER INCOME AND (EXPENSES)        (97,617)        (56,069)       (308,246)
                                        ------------    ------------    ------------

LOSS BEFORE INCOME TAXES                    (788,596)     (1,279,441)     (7,586,601)
                                        ------------    ------------    ------------
    NET LOSS                            $   (788,596)   $ (1,279,441)   $ (7,586,601)
                                        ============    ============    ============

Basic and diluted earnings (loss)
  per share                                    (0.03)          (0.06)
                                        ============    ============

Weighted average shares outstanding       24,170,851      21,612,166
                                        ============    ============

                  See report of independent registered public accounting firm
           The accompanying notes are an integral part of these financial statements


                                               14
<PAGE>

                       CARDIFF INTERNATIONAL, INC. dba LEGACY CARD COMPANY
                                  (A DEVELOPMENT STAGE COMPANY)
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND THE PERIOD
                  AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2007


                                                                                  August 29, 2001
                                                                                (Date of Inception)
                                                                                      through
                                                       Years Ended December 31,     December 31,
                                                         2007           2006           2007
                                                      -----------    -----------    -----------
CASH FLOW FROM OPERATING ACTIVITIES
  Net loss                                            $  (788,596)   $(1,279,441)   $(7,586,601)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
    Depreciation and amortization                          13,023         37,522        236,693
    Compensation expense                                       --         15,901        122,740
    Issuance of common stock for loan costs                    --             --        110,000
    Issuance of warrants as loan costs                         --             --         85,734
    Non-cash expenses                                      10,000             --         10,000
    (Increase) decrease in:
       Advances to Employees                                   --         (1,659)        (1,659)
       Deposits                                                --             --           (600)
    Increase (decrease) in:
       Accounts payable and accrued expenses              (86,859)       239,434        961,289
       Interest payable                                    89,226         84,036        434,235
                                                      -----------    -----------    -----------

          NET CASH USED IN OPERATING ACTIVITIES          (763,206)      (904,207)    (5,628,169)
                                                      -----------    -----------    -----------

CASH FLOW FROM INVESTING ACTIVITES
  Acquistion of equipment                                      --             --       (193,797)
                                                      -----------    -----------    -----------

          NET CASH USED IN INVESTING ACTIVITIES                --             --       (193,797)
                                                      -----------    -----------    -----------

CASH FLOW FROM FINANCING ACTIVITIES
  Proceeds from shareholder advances                      280,647        199,090      1,382,638
  Repayments of shareholder advances                     (292,420)      (545,644)    (1,406,289)
  Proceeds from ICE advance                                50,000             --         50,000
  Proceeds from note payable-Legacy Investors                  --             --        451,428
  Proceeds from note payable-Maricopa Equity
    Management Corporation                                     --             --        100,000
  Proceeds from convertible notes payable                      --             --      1,098,699
  Proceeds from sale of common stock                      712,250      1,283,600      3,984,812
  Book overdraft                                            6,298        (26,408)         6,298
                                                      -----------    -----------    -----------

          NET CASH PROVIDED BY FINANCING ACTIVITIES       756,775        910,638      5,667,586
                                                      -----------    -----------    -----------

          NET INCREASE (DECREASE) IN CASH                  (6,431)         6,431       (154,380)

CASH AT BEGINNING OF THE YEAR                               6,431             --             --
                                                      -----------    -----------    -----------

CASH AT END OF YEAR                                   $        --    $     6,431    $  (154,380)
                                                      ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURES
  Interest paid in cash                               $    13,331    $     8,991    $    27,454
                                                      ===========    ===========    ===========

                  See report of independent registered public accounting firm
           The accompanying notes are an integral part of these financial statements


                                               15
<PAGE>

               CARDIFF INTERNATIONAL, INC. dba LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
          FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND THE PERIOD
          AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2007


NON-CASH ACTIVITIES
-------------------

Accrued interest in the amounts of $19,426, $14,236 and $155,935 were
capitalized to shareholder advances for the years ended December 31, 2007 and
2006, and for the period from August 29, 2001 (inception) through December 31,
2007, respectively. Repayments of advances to shareholders includes payments of
capitalized interest.

During the year ended December 31, 2005, convertible debt in the about of
$1,098,699 plus the related accrued interest of $39,330, was converted into
998,635 shares of common stock.

Out of the $1,000,000 debentures from Legacy Investors, $106,572 was used to pay
loan related fees, and $442,000 remained in an escrow account at December 31,
2004. During the year ended December 31, 2005, the escrow funds were returned to
Legacy Investors.

During 2007, a shareholder repaid $100,000 to Legacy Investments on behalf of
the Company.

During 2007, 156,380 shares were issued to pay for $156,380 of services
previously rendered.



           See report of independent registered public accounting firm
    The accompanying notes are an integral part of these financial statements


                                       16
<PAGE>

                                       CARDIFF INTERNATIONAL, INC. dba LEGACY CARD COMPANY
                                                  (A DEVELOPMENT STAGE COMPANY)
                                    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                  FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 AND THE PERIOD
                                  AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2007

                                                                       Additional
                                                   Common Stock          Paid in    Subscription    Accumulated
                                             Shares        Amount        Capital     Receivable       Deficit        Total
                                           -----------   -----------   -----------   -----------    -----------    -----------
BALANCE, AUGUST 29, 2001
  (Date of Inception)                               --   $        --   $        --   $        --    $        --    $        --
  Issuance for cash, 2001                    2,066,717       200,833            --            --             --        200,833
  Issuance for cash, 2002                   10,703,678     1,040,129            --            --             --      1,040,129
  Net loss                                          --            --            --            --     (1,182,273)    (1,182,273)
                                           -----------   -----------   -----------   -----------    -----------    -----------

BALANCE, DECEMBER 31, 2002                  12,770,395     1,240,962            --            --     (1,182,273)        58,689
  Issuance for cash, 2003                    4,846,930       471,000            --            --             --        471,000
  Net loss                                          --            --            --            --     (1,608,882)    (1,608,882)
                                           -----------   -----------   -----------   -----------    -----------    -----------

BALANCE, DECEMBER 31, 2003                  17,617,325     1,711,962            --            --     (2,791,155)    (1,079,193)
  Net loss                                          --            --            --            --     (1,058,911)    (1,058,911)
                                           -----------   -----------   -----------   -----------    -----------    -----------

BALANCE, DECEMBER 31, 2004                  17,617,325     1,711,962            --            --     (3,850,066)    (2,138,104)
  Issuance for cash, March 2005                360,175        35,000            --            --             --         35,000
  Issuance for cash, April 2005                 22,500        45,000            --            --             --         45,000
  Stock options issued, May 2005                    --            --        63,790            --             --         63,790
  Stock options issued, August 2005                 --            --        39,869            --             --         39,869
  Issuance for consideration of loan,
    October 2005                               100,000       110,000            --            --             --        110,000
  Conversion of notes payable,
    November 2005                              998,635     1,138,029            --            --             --      1,138,029
  Warrants issued in connection with
    notes payable , November 2005                   --            --        85,734            --             --         85,734
  Stock options issued, November 2005               --            --         3,180            --             --          3,180
  Recapitalization of common equity,
    note 5                                   1,615,000            --            --            --             --             --
  Issuance for cash, November 2005             135,908       149,500            --            --             --        149,500
  Issuance for cash, December 2005              43,181        47,500            --            --             --         47,500
       Net loss                                     --            --            --            --     (1,668,498)    (1,668,498)
                                           -----------   -----------   -----------   -----------    -----------    -----------

BALANCE, DECEMBER 31, 2005                  20,892,724     3,236,991       192,573            --     (5,518,564)    (2,089,000)
  Issuance for cash, January 2006              183,634       202,000            --            --             --        202,000
  Issuance for cash, February 2006              70,000        77,000            --            --             --         77,000
  Issuance for cash, March 2006                265,545       268,100            --            --             --        268,100
  Issuance for cash, April 2006                 60,000        66,000            --            --             --         66,000
  Issuance for cash, June 2006                  24,000        30,000            --            --             --         30,000
  Compensation expense                              --            --        15,901            --             --         15,901
  Issuance for cash, September 2006            150,000       150,000            --            --             --        150,000
  Issuance of common stock, October 2006       550,000       451,000            --      (451,000)            --             --
  Payment on subscription receivable,
    October 2006                                    --            --            --       175,000             --        175,000
  Issuance for cash, October 2006               40,000        50,000            --            --             --         50,000
  Payment on subscription receivable,
    November 2006                                   --            --            --       120,000             --        120,000
  Payment on subscription receivable,
    December 2006                                   --            --            --       133,000             --        133,000
  Issuance for cash, December 2006              10,000        12,500            --            --             --         12,500
  Issuance for services, December 2006         120,000       150,000            --      (150,000)            --             --
       Net loss                                     --            --            --            --     (1,279,441)    (1,279,441)
                                           -----------   -----------   -----------   -----------    -----------    -----------

BALANCE, DECEMBER 31, 2006                  22,365,903     4,693,591       208,474      (173,000)    (6,798,005)    (2,068,940)
  Issuance for cash, January 2007              100,000        27,000            --            --             --         27,000
  Payment on subscription receivable,
    January 2007                                    --            --            --        23,000             --         23,000
  Issuance for cash, February 2007              40,000        10,000            --            --             --         10,000
  Issuance for cash, April 2007                 60,000        15,000            --            --             --         15,000
  Issuance for cash, June 2007                 500,000       100,000            --            --             --        100,000
  Issuance for cash, July 2007                 570,000       112,250            --            --             --        112,250
  Issuance for cash, September 2007          1,656,250       175,000            --            --             --        175,000
  Issuance for cash, October 2007            2,000,000       175,000            --            --             --        175,000
  Issuance for cash, November 2007             278,125        35,000            --            --             --         35,000
  Issuance of common stock,
    December 2007                              166,667        25,000            --       (25,000)            --             --
  Net loss                                          --            --            --            --       (778,597)      (778,597)
                                           -----------   -----------   -----------   -----------    -----------    -----------
BALANCE, DECEMBER 31, 2007                  27,736,945   $ 5,367,841   $   208,474   $  (175,000)   $(7,576,602)   $(2,175,287)
                                           ===========   ===========   ===========   ===========    ===========    ===========

                                   See report of independent registered public accounting firm
                            The accompanying notes are an integral part of these financial statements


                                                               17
</TABLE>
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       Organization and Nature of Operations
       -------------------------------------
       Legacy Card Company was formed as a Limited Liability Company on August
       29, 2001. On April 18, 2005, the Company converted from a California
       Limited Liability Company to a Nevada Corporation. On November 10, 2005,
       the Company merged with Cardiff International, Inc. ("Cardiff"), a
       publicly held corporation. The purpose of the Company is to develop a
       co-marketing agreement with a premier national bank to offer an
       integrated financial program to consumers. Legacy Card Company, LLC is a
       credit card marketing company. The Company offers a new credit card that
       takes advantage of Internal Revenue Code Section 529 educational savings
       tax-reform legislation, providing significant tax-free savings and
       economic incentives for families to save early and often for college
       tuition and related expenses. The Company will derive its revenues from
       new credit card one-time account fees, new mutual (ESA) one-time account
       fees, credit card dollar purchase fees, any negotiated mutual fund (ESA)
       annual account management fees and any negotiated credit card annual
       renewal fees. The Company expects to commence the launch of their credit
       card in a test market in Spring 2008.

       Development Stage Activities
       ----------------------------
       The Company is focusing its efforts in two areas during the development
       stage. First, the Company is devoting substantial time to the development
       of the credit card technology software, which will be used to capture
       information at the credit card transaction level. Second, the Company is
       working to contract with merchants to participate in the program and add
       incentives for consumers to both use the credit card and make purchases
       from these merchants.

       Going Concern
       -------------
       The Company has sustained operating losses since its inception and has
       negative working capital and an accumulated deficit. The accompanying
       financial statements have been prepared on a going concern basis of
       accounting, which contemplates continuity of operations, realization of
       assets and liabilities and commitments in the normal course of business.
       The accompanying financial statements do not reflect any adjustments that
       might result if the Company is unable to continue as a going concern. The
       ability of the Company to continue as a going concern and appropriateness
       of using the going concern basis is dependent upon, among other things,
       additional cash infusions. Management has prospective investors, and
       believes the raising of capital will allow the Company to pursue the
       development of its credit card business.

       Cash and Cash Equivalents
       -------------------------
       The Company considers all highly liquid investments with an original
       maturity of three (3) months or less to be cash equivalents.

       Property and Equipment
       ----------------------
       Property and equipment are carried at cost. Expenditures for major
       renewals and betterments that extend the useful lives of property and
       equipment are capitalized. Expenditures for maintenance and repairs are
       charged to expense as incurred. Depreciation and amortization of property
       and equipment is provided using the straight-line method for financial
       reporting purposes at rates based on the following estimated useful
       lives:

                                          Years
                                       -------------
       Artwork                              7
       Computer equipment                   3
       Domain and software                  3
       Furniture and fixtures               5
       Office equipment                     5
       Leasehold improvements          life of lease


       During the years ended December 31, 2007 and 2006, depreciation expense
       was $13,023 and $37,523, respectively.


                                       18
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

       Advertising Costs
       -----------------
       Advertising costs are charged to expense when incurred. During the years
       ended December 31, 2007 and 2006, the amount charged to expense was $0
       and $0, respectively. From inception through December 31, 2007,
       advertising costs was $363,800.

       Research and Development
       ------------------------
       Research and development costs are charged to expense when incurred.
       These costs primarily include the costs associated with the development
       of the credit card software technology. During the years ended December
       31, 2007 and 2006, the amount charged to expense was $0 and $0,
       respectively. From inception through December 31, 2007, research and
       development costs were $36,410.

       Use of Estimates
       ----------------
       The preparation of financial statements in conformity with generally
       accepted accounting principles requires management to make estimates and
       assumptions that affect certain reported amounts and disclosures.
       Management uses its historical records and knowledge of its business in
       making estimates. Accordingly, actual results could differ from those
       estimates.

       Income Taxes
       ------------
       The Company was treated as a partnership for federal income tax purposes
       up to April 18, 2005, when it converted to a Nevada Corporation.
       Consequently, federal income taxes were not payable by, or provided for,
       the Company. Members were taxed individually on their shares of the
       Company's earnings. The Company's net income or loss was allocated among
       the members in accordance with the regulations of the Company. The
       Company accounts for income taxes under the liability method, which
       requires the recognition of deferred tax assets and liabilities for the
       expected future tax consequences of events that have been included in the
       financial statements or tax returns. Under this method, deferred income
       taxes are recognized for the tax consequences in future years of
       differences between the tax bases of assets and liabilities and their
       financial reporting amounts at each period end based on enacted tax laws
       and statutory tax rates applicable to the periods in which the
       differences are expected to affect taxable income. Valuation allowances
       are established, when necessary, to reduce deferred tax assets to the
       amount expected to be realized. The provision for income taxes, if any,
       represents the tax payable for the period and the change during the
       period in deferred tax assets and liabilities.

       Earnings (Loss) per Share
       -------------------------
       Earnings (loss) per share is computed using the weighted average number
       of common shares outstanding during the periods presented. Warrants and
       options to purchase shares of the Company's stock may have a dilutive
       effect on the Company's earnings per share in the future, but are not
       included in the calculation for the years ended December 31, 2007 and
       2006 because they have an anti-dilutive effect in those periods.

       Stock Options
       -------------
       On January 1, 2006, The Company adopted the fair value recognition
       provisions of SFAS No. 123R relating to its stock-based compensation
       plans. Prior to January 1, 2006, The Company had accounted for stock
       options under SFAS No. 123.

       Recent Accounting Pronouncements
       --------------------------------
       In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements
       (SFAS 157). SFAS 157 establishes a framework for measuring fair value in
       generally accepted accounting principles, and expands disclosures about
       fair value measurements. SFAS 157 is effective for financial statements
       issued for fiscal years beginning after November 15, 2007. The Company is
       required to adopt the provision of SFAS 157, as applicable, beginning in
       fiscal year 2008. Management does not believe the adoption of SFAS 157
       will have a material impact on the Company's financial position or
       results of operations.

                                       19
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


2. RELATED PARTY TRANSACTIONS

       Advances from Shareholders
       --------------------------
       The Company borrows funds from Daniel Thompson and Gary Teel, both are
       Shareholders and Officers of the Company. The terms of repayment
       stipulate the loans are due twenty-four (24) months after the launch of
       the Legacy Tuition Card at an annual interest rate of six (6) percent.
       The balance due to both Daniel Thompson and Gary Teel at December 31,
       2007 and 2006, including accrued interest, is as follows:

                                                            December 31
                                                      2007               2006
                                                    --------            --------
            Daniel Thompson                         $ 89,810            $ 60,409
            Gary Teel                                 89,810              60,408
                                                    --------            --------
                Total                               $179,620            $120,817
                                                    ========            ========

       Employment Agreements
       ---------------------
       The employment agreements that both Daniel Thompson and Gary Teel have
       with the Company provides for their compensation to be $25,000 each, per
       month. Both Daniel Thompson and Gary Teel have waived their right to
       receive any unpaid balances.

3. NOTES PAYABLE, ESCROW DEPOSIT & LOAN FEES

       Legacy Investors, LLC
       ---------------------
       On August 5, 2004, the Company entered into a loan agreement with Legacy
       Investors, LLC, a Florida limited liability company. The initial loan
       amount of $1,000,000 (the "Initial Loan Amount") was made by Legacy
       Investors, LLC upon the satisfaction of the post-closing covenant,
       comprising of a convertible debenture in the amount of $500,000 and an
       initial debenture for the amount of $500,000. Lenders required funds to
       be deposited into an escrow account. Disbursements were required to be
       from an escrow agent.

       The convertible debenture in the amount of $500,000 bears an interest
       rate of 10.00% per year and matured in August 2006. The indebtedness was
       convertible into Series A Preferred Membership interests of the Company.

       The debenture in the amount of $500,000 bears an interest rate of 10.00%
       per year. Principal payments payable in thirty-six (36) consecutive
       monthly installments, commencing August 2004, are payable out of the net
       cash of the Company.

       Under an event of default, the interest rate on both debentures increases
       to 18% and the terms of repayment and the maturity dates are subject to
       change. Although Legacy Investors, LLC has raised an issue that the loan
       might be in default, management does not believe they are in breach of
       the terms of the agreement, and therefore no additional liability has
       been recorded relating to a higher interest rate.

                                       20
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

       The Company entered a security agreement that the assets of the Company
       as well as the stock are collateral on this loan.

       As of December 31, 2004, the Company received $451,428 of these funds,
       assumed $106,572 of fees and the balance of $442,000 was deposited in an
       escrow account. The balance remaining in the escrow account at December
       31, 2005 and 2004 was $0 and $442,000, respectively. In May 2005,
       $382,000 was paid back to Legacy Investors, LLC and $60,000 of fees was
       left with the escrow agent. Management believes this $60,000 was not owed
       to the escrow agent, but, nevertheless excluded the $60,000 from its
       assets. During 2007 an additional $100,000 was repaid by an officer on
       behalf of the Company. The balance on the note payable was $518,000 at
       December 31, 2007.

       Corporate Capital Management, LLC and VentureBanc, Inc.
       -------------------------------------------------------
       On March 28, 2005, the Company entered into a loan agreement of
       approximately $1,000,000 with Corporate Capital Management, LLC and
       VentureBanc, Inc. Simultaneously with the merger with Cardiff
       International, Inc. (See Note 5), Corporate Capital Management, LLC and
       VentureBanc, Inc. agreed to loan an additional $875,000 to the Company.
       These notes bear interest at 8% per annum and the term of the notes is 6
       months after receipt of the loan. At the date of the merger, the balance
       outstanding of $1,027,296 (including accrued interest) converted into
       898,635 shares of common stock of the Company at the rate of $1.10 per
       share. In addition, the holders of the notes received warrants to
       purchase 50% of the shares into which the notes are convertible. The term
       of the warrants is 5 years and the exercise price is $1.75 per share. The
       value of the warrants, established at $85,734 under the Black Scholes
       method was expensed in 2005.

       Convertible Promissory Note
       ---------------------------
       On October 19, 2005, the Company entered into a loan agreement in the
       amount of $110,000 with an unaffiliated third-party. The loan bears
       interest at 8% per annum and matured on April 16, 2006, 6 months after
       the date of issuance. At the date of the merger, the balance outstanding
       of $110,733 (including accrued interest) converted into 100,000 shares of
       common stock of the Company at the rate of $1.10 per share.

       Maricopa Equity Management Corporation
       --------------------------------------
       On October 27, 2005, the Company entered into a loan agreement in the
       amount of $100,000 with Maricopa Equity Management Corporation. The loan
       bears interest at 8% per annum and became due at the closing of the
       merger with Cardiff International, Inc. As of December 31, 2007, the
       balance of the loan of $100,000 remained outstanding. In connection with
       the loan, the Company issued 100,000 shares of common stock in 2005.

                                       21
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


       International Card Establishment, Inc.
       --------------------------------------
       The Company has entered into an agreement with International Card
       Establishment, Inc. ("ICE") as of April 19, 2007 whereby ICE will be the
       exclusive provider for the rewards and loyalty programs related to
       merchant contributions to a 529 College Savings Plan.

       In connection with the agreement, the Company received a $50,000 advance
       from ICE during the second quarter of 2007. This advance is to be repaid
       within 120 days of written notice by ICE if the Company launches the card
       in a test market and the results of that test launch prove to be
       unsuccessful. If the Company fails to make the required payment within
       120 days, the Company will be granted an additional 30 day period to
       remedy the default. If the Company does not remedy the default within
       this 30 day period, ICE may, at its discretion, convert the $50,000 debt
       to equity equaling 10% of the outstanding stock of the Company on a fully
       diluted basis.

       Also, if ICE determines that the test launch was successful, ICE shall
       obtain up to three (3) $500,000 loan facilities for the Company within
       five (5) business days of the successful completion of the test launch.
       The Company will be required to repay the $50,000 advance directly from
       the loan proceeds. Upon receipt of each of the $500,000 loan facilities,
       the Company shall issue ICE a warrant to purchase three and one-third
       percent (3 1/3%) of the Company's outstanding common stock on a fully
       diluted basis as of the date of issuance. Each warrant shall have an
       exercise price equal to $200,000 and shall have a five (5) year term from
       the issuance date.

       All warrants will have a cashless exercise provision and shall entitle
       ICE to one (1) demand registration right for each warrant, at the
       Company's expense.

       The balance outstanding on the advance from ICE at December 31, 2007 was
$50,000.

4. COMMITMENTS AND CONTINGENCIES

       Operating Lease
       ---------------
       In July 2006, the Company assumed auto leases for the two officers of the
       Company, of which one expires in July 2008 and the other expires in June
       2009. Future minimum rental payments under leases are:

       Years ending December
               31,
       ---------------------
              2008              $   25,437
              2009                  11,359
                                ----------
                   Total        $   36,796
                                ==========

       Rent expense for the years ended December 31, 2007 and 2006 was $0 and
       $0, respectively. From inception through December 31, 2007, rent expense
       was $411,586.

       In 2004, the Company was subletting their office on a month-to-month
       basis. During the years ended December 31, 2007 and 2006, and for the
       period from August 29, 2001 (date of inception) the Company received
       rental income of $0, $0 and $55,979, respectively.


                                       22
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


       Litigation
       ----------
       On June 2, 2005, the Company went to trial for a complaint filed by a
       prior officer of the Company, alleging that his employment was not
       terminated in January 2002, and claiming back wages. The Court issued a
       ruling and order that found that the officer was entitled to back pay. On
       September 15, 2006, the Company reached a settlement with the prior
       officer of the Company in the amount of $225,000, payable in monthly
       installments of $25,000, which resulted in a gain of $36,958. The unpaid
       amount balance amounted to $156,250 at December 31, 2006. The entire
       amount was paid in 2007.

       On February 1, 2003, the Company signed a lease with Red Bull North
       America, Inc. for office space. The lease commenced February 1, 2003 and
       was to expire March 31, 2006. The Company vacated the premises in 2004.
       The Company is in negotiation with its landlord, Red Bull North America,
       Inc., who is holding the Company's property and equipment as collateral
       for the balance owed.

       On December 15, 2005, the Company settled a mutual dispute with Sheppard
       Mullin Richter and Hampton concerning the representation of the Company.
       In final settlement, the Company is released from all by Sheppard Mullin
       Richter and Hampton and the Company released Sheppard Mullin Richter and
       Hampton claims, which resulted in a gain of $48,812.

       From time to time, the Company is also involved in claims and litigations
       arising during the course of business.

       Payroll Taxes
       -------------

       The Company has failed to remit payroll tax payments since 2006, as
       required by various taxing authorities. When payment is ultimately made
       management believes that the Company will be assessed various penalties
       for the delayed payments. As of December 31, 2007, management was unable
       to estimate the amount of penalties that the Company would incur as a
       result of these unpaid taxes.

5. RECAPITALIZATION

       In November 2005, Legacy Card consummated a transaction, pursuant to
       which Cardiff International, Inc. acquired all the outstanding shares of
       Legacy Card, with Legacy Card surviving as a wholly-owned subsidiary of
       Cardiff International. Legacy Card recorded this transaction as a
       recapitalization followed by the issuance of shares to the shareholders
       of Cardiff International. Prior to the recapitalization transaction,
       Cardiff International was not an operating company, and had no assets.
       Under the terms of the transaction, Cardiff International issued
       18,000,000 shares of Cardiff Int'l common stock to the former
       shareholders of Legacy Card in exchange for all the outstanding shares of
       Legacy Card.

                                       23
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

6. INCOME TAXES

       The Company utilizes the liability method under SFAS No. 109 to account
       for income taxes. Under this method, deferred tax assets and liabilities
       are determined based on differences between financial reporting and tax
       bases of assets and liabilities and are measured using the enacted tax
       rates and laws expected to apply when the differences are expected to
       reverse.

       The Company has adopted Financial Accounting Standards Board ("FASB")
       Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income
       Taxes - an interpretation of FASB Statement No. 109". FIN 48 clarifies
       the accounting for uncertainty in income taxes recognized in an
       enterprise's financial statements in accordance with FASB Statement 109,
       "Accounting for Income Taxes", and prescribes a recognition threshold of
       more likely than not and a measurement process for financial statement
       recognition and measurement of a tax position taken or expected to be
       taken in a tax return. In making this assessment, a company must
       determine whether it is more likely than not that a tax position will be
       sustained upon examination, based solely on the technical merits of the
       position and must assume that the tax position will be examined by taxing
       authorities. Our review of prior year tax positions using the criteria
       and provisions presented in FIN 48 did not result in a material impact on
       the Company's financial position or results of operations.

       At December 31, 2007, the Company has net operating loss carryforwards of
       approximately $3.8 million for federal tax purposes, which expire from
       2008 to 2028. Because of statutory "ownership changes" the amount of net
       operating losses which may be utilized in future years are subject to
       significant annual limitations. The Company also has operating loss
       carryforwards of approximately $3.8 million for California tax purposes,
       which expire from 2008 to 2018.

       At December 31, 2007, total deferred tax assets, consisting principally
       of net operating loss carryforwards, amount to approximately $1.3
       million. For financial reporting purposes, a valuation allowance has been
       recognized in an amount equal to such deferred tax assets due to the
       uncertainly surrounding their ultimate realization.

7. STOCK OPTIONS AND WARRANTS

       Stock Options
       -------------
       The Company granted stock options to consultants and employees during
       2005. These stock options have been valued using the Black Scholes
       method, with the following assumptions:

       Interest rate                 4.01 %
       Dividend yield                  --
       Term                       5 Years
       Expected volatility          30.00 %

       The following is a schedule summarizing stock option activity for the
       years ended December 31, 2007 and 2006:


                                       24
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

                                                                  Weighted-
                                                                   Average
                                                  Number of        Exercise
                                                   Options          Price
                                                  ----------      ----------
       Outstanding at January 1, 2006             $  425,000      $     1.37
          Granted                                         --              --
          Exercised                                       --              --
          Forfeited                                       --              --

       Outstanding at December 31, 2006              425,000      $     1.37
          Granted                                         --              --
          Exercised                                       --              --
          Forfeited                                       --              --

       Outstanding at December 31, 2007           $  425,000      $     1.37
                                                  ----------      ----------
       Exercisable at December 31, 2007           $  425,000      $     1.37
                                                  ==========      ==========


        As of December 31, 2007, the total unrecognized fair value compensation
cost related to non-vested stock options was $0.

                                                                  Weighted-
                                                                   Average
                                                 Number           Exercise
                                               Outstanding          Price
                                               -----------        ---------
Nonvested, January 1, 2006                          83,333             1.37
   Granted                                              --               --
   Forfeited                                            --               --
   Vested                                           83,333             1.37
                                               -----------        ---------
Nonvested, December 31, 2006                            --               --
   Granted                                              --               --
   Forfeited                                            --               --
   Vested                                               --               --
                                               -----------        ---------
Nonvested, December 31, 2007                            --               --


                                       25
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

        Information about stock options outstanding at December 31, 2007 is
summarized below:

                              Weighted-      Weighted-                 Weighted-
                               Average        Average                   Average
  Exercise      Number        Remaining      Exercise      Number      Exercise
   Price      Outstanding  Contractual Life    Price     Exercisable     Price
-----------   -----------  ----------------  ---------   -----------   ---------
$     1.25        325,000      3 years       $    1.25       325,000   $    1.25
$     1.75        100,000      3 years       $    1.75       100,000   $    1.75

       Warrants
       --------
       The Company also issued warrants to purchase shares of common stock in
       2007 and 2006. The following is a summary of the warrants outstanding at
       December 31, 2007:

       Number of Warrants         Exercise Price               Maturity
       ------------------         --------------         ----------------------
           449,318                $         1.75            April-Aug. 2010
            84,318                $         1.10         Jan. 2011 - Sept. 2013
           422,272                $         1.75           Jan. - June 2011
           375,000                $         0.50              Sept. 2011
         1,125,000                $         0.50              Oct. 2011
            60,000                $         1.75              Oct. 2011
           500,000                $         0.36              June 2013
           350,000                $         0.30              Sept. 2012
           166,667                $         0.25              Dec. 2013
           625,000                $         0.15              Oct. 2013
         1,625,000                $         0.10          Sept. - Oct. 2013

8. SUBSEQUENT EVENTS

       In the first quarter of 2008, $30,000 was contributed to the Company in
exchange for 100,000 shares of common stock.

                                       26
<PAGE>


ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

         On March 15, 2006 we filed a Form 8-K to announce the resignation of
our previous independent registered public accounting firm and the appointment
of Rose Snyder & Jacobs as our new independent registered public accounting
firm. There were no disagreements with the former accountant on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.

ITEM 8A. CONTROLS AND PROCEDURES

(a)      EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed,
summarized, and reported within the required time periods, and that such
information is accumulated and communicated to our management, including our
Chairman, Chief Executive Officer and Chief Financial Officer, as appropriate,
to allow for timely decisions regarding disclosure.

         There has been no change in our internal control over financial
reporting during the year ended December 31, 2006 that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting. Since the most recent evaluation date, there have been no
significant changes in our internal control structure, policies, and procedures
or in other areas that could significantly affect our internal control over
financial reporting.

         As described below under Management's Report on Internal Control over
Financial Reporting, our management has identified and reported to our audit
committee and Rose, Snyder & Jacobs, our independent registered public
accounting firm, a material weakness in our internal control over financial
reporting. As a result of this material weakness, our CEO and CFO have concluded
that, as of December 31, 2007, our disclosure controls and procedures were not
effective.

(b)      MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

         Our management is responsible for establishing and maintaining
effective internal control over financial reporting (as defined in Rule
13a-15(f) under the Securities Exchange Act of 1934, as amended). Our management
assessed the effectiveness of our internal control over financial reporting as
of December 31, 2007. A material weakness is a deficiency, or a combination of
deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the company's annual or
interim financial statements will not be prevented or detected on a timely
basis. In performing the assessment, management has identified the following
control deficiency that we have concluded is a material weakness in both the
design and operating effectiveness of internal control over financial reporting
as of December 31, 2007.

         INEFFECTIVE CONTROLS OVER THE ACCOUNTING FOR CASH DISBURSEMENTS

         Management has not obtained or maintained documentation supporting
selected cash disbursements.

         INEFFECTIVE CONTROLS OVER THE RECORDING OF EQUITY; COMMON STOCK
         ISSUANCES

         Management has not reconciled the total number of common shares
outstanding to the number of shares issued per the stock transfer agent.


THE SARBANES-OXLEY ACT OF 2002 (THE "ACT") imposed many requirements regarding
corporate governance and financial reporting. One requirement under section 404
of the Act, beginning with our annual report for the year ended December 31,
2007, is for management to report on Cardiff International's internal controls
over financial reporting.


                                       27
<PAGE>

ITEM 8B. OTHER INFORMATION

         We must disclose under this item any information required to be
disclosed in a report on Form 8-K during the fourth quarter of the year covered
by this Form 10-KSB, but not reported, whether or not otherwise required by this
Form 10-KSB. If disclosure of such information is made under this item, it need
not be repeated in a report on Form 8-K which would otherwise be required to be
filed with respect to such information or in a subsequent report on Form 10-KSB.
No additional disclosure is required under this item.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Identification of Directors and Executive Officers
--------------------------------------------------

         The current directors and officers of Cardiff who will serve until the
next annual meeting of shareholders or until their successors are elected or
appointed and qualified, are set forth below:

            Name                  Position
            -------------------   ---------------------------------------------

            Gary R. Teel          Chairman of the Board/CFO/Secretary/Treasurer
            Daniel Thompson       CEO/President/Director

         Background information about the Company's officers and directors is as
follows:

         GARY TEEL. CFO, Chairman and founder.Mr. Teel has over 20 years
experience in national advertising sales, and the provision of product placement
services for the entertainment industry. He has launched several co-branded
credit cards including special card programs for the cities of Branson MO;
Pigeon Forge TN; and Myrtle Beach SC. Gary is past president of Premier
Entertainment Services Inc., a product placement company that specialized in
generating valuable exposure for branded products on television and in feature
films. His major corporate clients included The Coca-Cola Company and General
Mills. He later formed Creative Film Promotions, Inc., where he was involved in
all aspects of film production. Previously, he was as a partner of Teel-Weir
Advertising Agency. Mr. Teel has a BA degree from the University of Nebraska.

         DANIEL THOMPSON. Mr. Thompson was appointed CEO/President of Legacy in
June 2002. Formerly a television and entertainment industry professional with a
30-year career that embraces network and cable advertising sales programming
production and product placement, Mr. Thompson was president of Creative
Entertainment Services, which he founded and successfully sold in a transaction
worth over $5 million. Mr. Thompson also founded and successfully sold an
industry service company - Creative Television Marketing, a producer of
short-form advertising concepts: Closed-Captioning Sponsorships, 10-Second
Promotional Advertising vehicles, and network Game Show Merchandising. He also
oversaw new business for A Creative Group, a full service entertainment
marketing company. Mr. Thompson also founded CableRep USA, a media sales firm
specializing in local market cable advertising, which he sold to Cox Cable in
1981. Mr. Thompson attended Wayne State University, Bellevue College, and
College of Continuing Studies at University of Nebraska at Omaha.

Other Involvement in Certain Legal Proceedings
----------------------------------------------

         There have been no events under any bankruptcy act, no criminal
proceedings and any judgments or injunctions material to the evaluation of the
ability and integrity of any director or executive officer during the last five
years.

                                       28
<PAGE>

Code of Ethics
--------------

         We adopted a code of ethics that applies to all officers, directors and
employees of the Company, a copy of which was filed as Exhibit 14 to this Form
10-KSB.

Committees of the Board of Directors
------------------------------------

         We do not have any committees established by our Board of Directors.
Accordingly we have no audit committee, compensation committee, nominating
committee or any other committee. Cardiff's common stock is currently traded on
the OTCBB. If Cardiff were ever to meet the qualifications for listing on a
securities exchange or for quotation on NASDAQ, it would be required to have an
audit committee and possibly other board committees.

Communications with Board Members
---------------------------------

         We have not adopted a formal process by which stockholders may
communicate with the Board of Directors. Until a formal process occurs,
stockholders may contact our CEO/President at dthompson@legacycard.com, or
(818)879-9722.

Compliance with Section 16(a)
-----------------------------

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who
beneficially own more than 10% of a registered class of the Company's equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company's securities with the SEC on Forms 3 (Initial Statement
of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of
Securities) and 5 (Annual Statement of Beneficial Ownership of Securities).
Directors, executive officers and beneficial owners of more than 10% of the
Company's Common Stock are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms that they file. The Company believes
that, during the year ended December 31, 2005, the Reporting Persons met all
applicable Section 16(a) filing requirements.


ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table
--------------------------

         The following table sets forth certain information concerning
compensation for services rendered for the past three years to the Company's
Chief Executive Officer and to the Company's most highly compensated officers
other than the CEO, whose annual salary and bonus exceeded $100,000:

<TABLE>
<S>     <C>
Name and Other Annual Year Salary  Bonus Other Annual Stock   Options/   LTIP      Other
Principal Position                       Compensation Awards  SAR's (#) Payouts Compensation
--------------------- ---- ------ ------ ------------ ------- --------- ------- ------------
Gary R. Teel          2007   -0-    -0-      -0-        -0-      -0-     -0-        -0-
                      2006   -0-    -0-      -0-        -0-      -0-     -0-        -0-
Chairman              2005   -0-    -0-      -0-        -0-      -0-     -0-        -0-

Daniel Thompson       2007   -0-    -0-      -0-        -0-      -0-     -0-        -0-
                      2006   -0-    -0-      -0-        -0-      -0-     -0-        -0-
CEO                   2005   -0-    -0-      -0-        -0-      -0-     -0-        -0-
</TABLE>

          Mr. Teel and Mr. Thompson each waived their unpaid salary since the
inception of Legacy.

Employment Agreements
---------------------

          On June 3, 2002 we entered into employment agreements with each of
Gary R. Teel and Daniel Thompson. The terms of the agreements are similar and
include the following terms: (1) monthly salaries of $25,000, (ii) annual bonus
of 2% pre-tax profits, (iii) five year term; (iv) medical and health benefits;
(v) termination without cause results in compensation paid for four years, (vi)
the sale of the Company results in compensation paid for three years. Mr. Teel
and Mr. Thompson each waived there salary since the inception of Legacy. We
anticipate salaries will be paid to each of them commencing in the second
quarter of 2008.

                                       29
<PAGE>

Stock Options Granted in the Last Fiscal Year
---------------------------------------------

         No options to purchase shares of common stock granted to officers/
directors during 2007.

Aggregated Option Exercise in Last Fiscal Year and Fiscal Year-end Option Values
--------------------------------------------------------------------------------

         No officer/ director of Cardiff were offered any options during 2007.

Equity Compensation Plan Information
------------------------------------

         We have not adopted any equity compensation plans as of the date of
this Form 10-KSB. It is likely that one or more equity compensation plans may be
adopted in the near future.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners
-----------------------------------------------

         The following table sets forth information regarding shares of our
Common Stock beneficially owned as of December 31, 2007 by: (1) each of our
officers and directors; (ii) all officers and directors as a group; and (iii)
each person known by us to beneficially own five percent or more of the
outstanding shares of its common stock.

Shareholder                          Common Stock (1)       Percentage
-------------------------------      ----------------       -----------

Gary R. Teel (2)                       6,334,848 (3)           23.5%
Daniel Thompson (2)                    3,078,528 (4)           11.4%

All officers and directors as a        9,413,376               34.9%
group 3 persons

TOTAL                                 26,931,509               100 %


         (1)       For purposes of this table "beneficial ownership" is
                   determined in accordance with Rule 13d-3 under the Securities
                   Exchange Act of 1934, pursuant to which a person or group of
                   persons is deemed to have "beneficial ownership" of any
                   common shares that such person or group has the right to
                   acquire within 60 days after March 29, 2005. For purposes of
                   computing the percentage of outstanding common shares held by
                   each person or group of persons named above, any shares that
                   such person or group has the right to acquire within 60 days
                   after March 29, 2005 are deemed outstanding but are not
                   deemed to be outstanding for purposes of computing the
                   percentage ownership of any other person or group.

         (2)       These are the officers and directors of the Company.

         (3)       Includes 3,934,848 shares issued in the name of Mr. Teel,
                   2,400,000 shares owned by the Teel Family Trust.

         (4)       Includes 1,478,528 shares issued in the name of Mr. Thompson,
                   1,600,000 shares owned by the Thompson Family Trust.

Outstanding Options and Warrants
--------------------------------

            Information about outstanding options and warrants are included in
foot note 7 of the financial statements included as Item 7 to this Form 10-KSB

                                       30
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

         In connection with the Merger transaction described in Item 1 of this
Form 10-KSB, our officers and directors exchanged their shares of Legacy for
shares of Cardiff. The number of shares issued are described in Item 5 of Form
10-KSB.

         During the year ended December 2007, we repaid loans to officers/
directors Gary Teel and Daniel Thompson. A total of $209,036 was repaid to Mr.
Teel and $132,234 was repaid to Mr. Thompson.

ITEM 13. PRINCIPAL ACCOUNTING FEES AND SERVICES

Independent Auditors
--------------------

         Rose, Snyder & Jacobs have been appointed to audit the consolidated
financial statements of Cardiff for the years ended December 31, 2007 and 2006
and to report the results of their audit to the Board of Directors.

Fees billed to Cardiff by Rose, Snyder & Jacobs
-----------------------------------------------

               ROSE, SNYDER & JACOBS               2007              2006
                                                 ---------         ---------
                 (1) Audit Fees                  $  53,465         $  64,910
                                                 =========         =========

                 (2) Tax Fees                    $      --         $      --
                                                 =========         =========
                 (3) All Other Fees              $      --         $      --
                                                 =========         =========


         (1)       Audit fees billed to Cardiff by Rose, Snyder & Jacobs were
                   for professional services performed in connection with the
                   audit of Cardiff's annual financial statements and for review
                   of the quarterly financial information.

         (2)       Tax services generally include fees for services performed
                   related to tax compliance and consulting services. Rose,
                   Snyder & Jacobs did not bill Cardiff for tax services during
                   2007 and 2006.

         (3)       Rose, Snyder & Jacobs did not bill Cardiff for other services
                   during 2007 and 2006.

         All audit and non-audit services and fees are pre-approved by the Audit
Committee or by the Chairman of the Audit Committee pursuant to delegated
authority.

         Effective May 6, 2003, the Securities and Exchange Commission adopted
rules that require that before Rose Snyder & Jacobs is engaged by us to render
any auditing or permitted non-audit related service, the engagement be:

         o    approved by our Audit Committee (our entire Board serves as our
              audit committee); or

         o    entered into pursuant to pre-approval policies and procedures
              established by the Audit Committee, provided the policies and
              procedures are detailed as to the particular service, the Audit
              Committee is informed of each service, and such policies and
              procedures do not include delegation of the Audit Committee's
              responsibilities to management.

         Under the direction of our Chairman, Gary Teel, our Board of Directors
acting as our audit committee pre-approves all services provided by our
independent auditors. All of the above services and fees were reviewed and
approved by the Board of Directors either before or after the respective
services were rendered. The Board of Directors has considered the nature and
amount of fees billed by Rose Snyder & Jacobs and Schumacher & Associates and
believes that the provision of services for activities unrelated to the audit is
compatible with maintaining both firms independence.

                                       31
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS

         A. Exhibits

            Exhibit
            Number    Exhibit
            --------- ----------------------------------------------------------
            3.1       Article of Incorporation (1)
            3.2       Bylaws (1)
            10.1      Form Convertible Note (1)
            10.2      Form Warrant (1)
            10.3      Employee Agreement Herschend (1)
            10.4      Employment Agreement Fisher (1)
            14.1      Code of Ethics (1)
            21.1      Subsidiaries of Registrant - Legacy Card Company, Inc. (1)
            31.1      Certification of Chief Executive Officer in accordance
                      with 18 U.S.C. Section 1350, as adopted by Section 302 of
                      the Sarbanes-Oxley Act of 2002 (3)
            31.2      Certification of Principal Financial Officer in accordance
                      with 18 U.S.C. Section 1350, as adopted by Section 302 of
                      the Sarbanes-Oxley Act of 2002 (3)
            32.1      Certification of Chief Executive Officer in accordance
                      with 18 U.S.C. Section 1350, as adopted by Section 906 of
                      the Sarbanes-Oxley Act of 2002 (3)
            32.2      Certification of Chief Financial Officer in accordance
                      with 18 U.S.C. Section 1350, as adopted by Section 906 of
                      the Sarbanes-Oxley Act of 2002 (3)

         (1)      Previously filed
         (3)      Filed herewith

                                   SIGNATURES
                                   ----------

           In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                     Cardiff International, Inc.

         Dated: April 15, 2008     By: /s/ Daniel Thompson
                                     -------------------------------------------
                                     Chief Executive Officer/President

         Dated: April 15, 2008     By: /s/ Gary R. Teel
                                     -------------------------------------------
                                     Chief Financial Officer/Secretary/Chairman

         In accordance with the Securities Exchange Act, this report has been
signed below by the following persons on behalf of the Company and in the
capacities and on the dates indicated.

Signature                       Capacity                        Date
---------                       --------                        ----

/s/ Daniel Thompson             CEO/President                   April 15, 2008

/s/ Gary R. Teel                CFO/Secretary/Chairman          April 15, 2008



                                       32