<PAGE>

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

                                   FORM 10-KSB

            |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2006
                                       OR
          |_| 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, 2006 were
$-0-

      As of April 11, 2007 there were 22,543,176 shares of the Issuer's common
stock issued and outstanding of which 12,825,027 were held by non-affiliates.


                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

                                       1
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                                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                                            12

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

     Item 8A. Controls and Procedures                                         27

     Item 8B. Other Information                                               27

PART III

     Item 9.  Directors, Executive Officers, Promoters and Control
                Persons; Compliance with Section 16(a) of the
                Exchange Act                                                  27

     Item 10. Executive Compensation                                          29

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

     Item 12. Certain Relationships and Related Party Transactions            30

     Item 13. Principal Accountant Fees and Services                          30

PART IV

     Item 14. Exhibits                                                        32


                                       2
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                                     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 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 10, 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 2007.

      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, a credit card 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
has been developed to be tied into a card user's "529 College Savings Plan,"
which is described below. The Simply Brilliant Tuition Card is a regular credit
card but with the added benefit of tax-free savings. Similarly, there are
numerous credit cards that offer users cash back or other rewards. Legacy's
management believes that the Simply Brilliant Tuition Card program is a unique
value-added credit card program that allows consumers using the credit card to
save for a child's college education while making normal consumer purchases. The
Simply Brilliant Tuition Card is a unique, tax-free educational savings reward
credit card that concentrates consumer loyalty and buying on national retailers
in the Legacy merchant coalition.

      The potential success of the Simply Brilliant Tuition Card 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 is expected to launch during the second
quarter of 2007. 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 by a 0.5% to 1.0% contribution from the issuing bank. This issuing
bank contribution is applicable no matter where the cardholder shops, thereby
encouraging regular and daily use of the Simply Brilliant Tuition Card.

      The Legacy Card Company marketing plan is the result of four 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 desire to save for
their child's college tuition and expenses.

                                       3
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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 allow 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 2007. Local participation from the
Chamber of Commerce has assisted Legacy in obtaining merchant participation and
in structuring events for card solicitation. Our event-marketing program is
anticipated to include stadium events, concerts, sporting events, shopping
malls, etc. Additional local advertising will include radio coverage,
billboard/outdoor advertising, and public relations. Legacy believes that
special event marketing efforts will provide a platform for a large base of
potential cardholders.

      The Simply Brilliant Tuition Card is more than a credit card. 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 Plan 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
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LEGACY MERCHANT COALITION

      As of December 31, 2006, approximately 1400 St. Louis, Missouri area
Merchants have signed up to participate in the Legacy Merchant Coalition. Each
Merchant participating in the Legacy Merchant Coalition enters into an agreement
with Legacy 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 is in final negotiations with a major banking institution 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:

                                  Contract     Termination     Monthly
Consultant                        Date         Date            Fee
--------------------------------------------------------------------------------

Delray Consulting & Management    9/1/05       Monthly         $4,000- $5,000(1)
Buck Communication Group          1/1/06       Monthly         $5,000(1)
Delta One Investments             3/23/05      Monthly         (2)

      (1)   In addition to the monthly fee, the consultant will be paid a
Royalty based upon the number of Legacy Credit Cards issued to customers of
certain associations. The royalty is to be paid for a period of three years.

      (2)   An initial retainer of $5,000 was paid to the consultant. The
consultant charges $200 per hour for services actually rendered.

      Legacy entered into an "Outsourcing of Services Agreement" with CDR, LLC
("CDR"). CDR is in the business of tracking credit card transactions and
micro-contributions, and related administrative services.

EMPLOYEES

      Legacy currently has four employees but anticipates it will hire
additional personnel as the Simply Brilliant Tuition Card is launched.

                                       5
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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.

      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, 2006.

                                     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 two 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.

                                       6
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HOLDERS

      As of December 31, 2006, there were 22,365,903 shares of common stock
outstanding and approximately 719 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

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 Atlas Stock Transfer, 5899 South State Street, Salt
Lake City, Utah 84107; Tel: (801) 266-7151.

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, a credit card. Legacy anticipates the credit card will
be available to the public in the second quarter of 2007. Legacy's business plan
calls for revenue to be generated as customers sign up for the credit card and
when purchases are made with the credit card. Legacy has generated no revenues
since its inception and has expended considerable funds in developing its
business plan and funding its operations.

                                       7
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      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, 2006

      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, 2006, we had $6,431 of or cash
equivalents and total assets amounted to $23,816. At December 31, 2005 we had no
cash or cash equivalents, and total assets amounted to $53,248, which included
fixed assets and other assets.

      Net cash used in operating activities was $904,207 and $1,098,940 for the
year ended December 31, 2006 and December 31, 2005, respectively. The decreases
in the amount of net cash used in operating activities during these periods were
attributable to decreased fees and other operating costs.

      Net cash provided by financing activities was $910,638 and $1,096,296 for
the year ended December 31, 2006 and December 31, 2005, respectively. The cash
flows from financing activities during the year end December 31, 2006 was
attributable to proceeds from the sale of common stock of $1,283,600. In
addition, we repaid $545,644 of shareholder advances during the year end
December 31, 2006.

      We have incurred operating losses and at December 31, 2006, we had an
accumulated deficit of $6,798,005.

      Current liabilities at December 31, 2006 consisted primarily of accounts
payable and accrued expenses of $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. Current liabilities at
December 31, 2005 consisted primarily of accounts payable and accrued expenses
of $841,522, amounts due to shareholders of $453,135, convertible and
non-convertible promissory notes in the amount of $718,000, and accrued interest
in the amount of $103,183.

      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 end December
31, 2006, we repaid $287,647 to Mr. Teel and $257,997 to Mr. Thompson on
outstanding advances.

      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 2006 we raised $623,500 from the sale of 916,500 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 2007 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, 2006 AND 2005

      We had no operating revenues for the year ended December 31, 2006 and
December 31, 2005.

      We had operating expenses of $1,223,372 for the year ended December 31,
2006 and $1,569,743 for the year ended December 31, 2005, representing a
decrease of $346,371.

                                       8
<PAGE>

      We had a net loss of $1,279,441, for the year ended December 31, 2006
compared to a net loss of $1,668,498 for the year ended December 31, 2005,
representing a decrease of $389,057 due to decreased advertising and consulting
fees and other operating costs.

INFLATION

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

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 the 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 SEC released Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 provides
interpretive guidance on the SEC's views regarding the process of quantifying
materiality of financial statement misstatements. SAB 108 is effective for
fiscal years ending after November 15, 2006. The Company does not anticipate
that the adoption of this accounting pronouncement will have a material effect
on its consolidated financial statements.

      In September 2006, the FASB issued FAS 157, "Fair Value Measurements."
This standard defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles, and expands disclosures about
fair value measurements. This statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007. The Company does not
anticipate that the adoption of this accounting pronouncement will have a
material effect on its consolidated financial statements.

      In July 2006, the FASB issued Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes" (FIN No. 48). This interpretation requires
recognition and measurement of uncertain income tax positions using a
"more-likely-than-not" approach. The provisions of FIN No. 48 are effective for
fiscal years beginning after December 15, 2006. The Company does not anticipate
that the adoption of this accounting pronouncement will have a material effect
on its consolidated financial statements.

      In March 2006, the FASB issued FAS 156, "Accounting for Servicing of
Financial Assets -- an Amendment of FASB Statement No. 140." This standard
clarifies when to separately account for servicing rights, requires servicing
rights to be separately recognized initially at fair value, and provides the
option of subsequently accounting for servicing rights at either fair value or
under the amortization method. The standard is effective for fiscal years
beginning after September 15, 2006 but can be adopted early as long as financial
statements for the fiscal year in which early adoption is elected, including
interim statements, have not yet been issued. The Company does not anticipate
that the adoption of this accounting pronouncement will have a material effect
on its consolidated financial statements.

                                       9
<PAGE>

      In February 2006, the FASB issued FAS 155, "Accounting for Certain Hybrid
Financial Instruments -- an amendment of FASB Statements No. 133 and 140." This
statement permits fair value remeasurement for any hybrid financial instrument
that contains an embedded derivative that would otherwise have to be accounted
for separately. The new statement also requires companies to identify interests
in securitized financial assets that are freestanding derivatives or contain
embedded derivatives that would have to be accounted for separately, clarifies
which interest-and principal-only strips are subject to Statement No. 133, and
amends Statement No. 140 to revise the conditions of a qualifying special
purpose entity due to the new requirement to identify whether interests in
securitized financial assets are freestanding derivatives or contain embedded
derivates. This statement is effective for all financial instruments acquired or
issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006. The Company does not anticipate that the adoption of this
accounting pronouncement will have a material effect on its consolidated
financial statements.

FORWARD OUTLOOK AND RISKS

      This Form 10-KSB for the year ended December 31, 2006 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 2007.
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.

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, 2007 for the year ended December 31, 2006 and 2005 and for the period
from August 29, 2001 (date of inception) through December 31, 2006 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.

                                       10
<PAGE>

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.

                                       11
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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

                                                                            PAGE
                                                                      ----------


Report of Independent Registered Public Accounting Firm                       13

Consolidated Balance Sheets                                                   14

Consolidated Statements of Operations                                         15

Consolidated Statements of Cash Flows                                    16 - 17

Consolidated Statements of Shareholders' Equity (Deficit)                     18

Notes to Consolidated Financial Statements                               19 - 26




                                       12
<PAGE>

                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM




To the Board of Directors and Shareholders
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, 2006 and 2005 and the related consolidated
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, 2006. 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 of 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, 2006 and 2005,
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,
2006, 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, 2006 and 2005. 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 Certified Public Accountants

Encino, California
April 13, 2007


                                       13
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2006 AND 2005

                                     ASSETS
                                     ------

                                                     2006             2005
                                                --------------   --------------
CURRENT ASSETS:
  Cash and cash equivalents                     $       6,431   $            -
  Advances to Employees                                 1,659                -
                                                --------------   --------------

    TOTAL CURRENT ASSETS                                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                           (178,671)        (156,149)
                                                --------------   --------------

    FIXED ASSETS, NET                                  15,126           37,648
                                                --------------   --------------
OTHER ASSETS:
  Deposits                                                600              600
  Loan fees, net of accumulated amortization
    of $30,000 and $15,000, respectively                    -           15,000
                                                --------------   --------------

      TOTAL ASSETS                              $      23,816    $      53,248
                                                ==============   ==============

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

CURRENT LIABILITIES:
  Book overdraft                                $           -    $      26,408
  Accounts payable                                    925,297          841,522
  Interest payable                                    172,983          103,183
  Payroll and payroll tax payable                     155,659                -
  Advances from shareholders                          120,817          453,135
  Note payable - Legacy Investors, current            618,000          618,000
  Note payable - Maricopa Equity Management
    Corporation, current                              100,000          100,000
                                                --------------   --------------

    TOTAL CURRENT LIABILITIES                       2,092,756        2,142,248

NONCURRENT LIABILITIES:
  Note payable - Legacy Investors, noncurrent               -                -
                                                --------------   --------------

    TOTAL LIABILITIES                               2,092,756        2,142,248

SHAREHOLDERS EQUITY (DEFICIT):
  Common stock, no par value; 30,000,000
    shares authorized; 22,365,903 and
    20,892,724 shares issued and outstanding        4,693,591        3,236,991
  Additional paid in capital                          208,474          192,573
  Subscription receivable                            (173,000)               -
  Deficit accumulated during the development
    stage                                          (6,798,005)      (5,518,564)
                                                --------------   --------------

    TOTAL SHAREHOLDERS' EQUITY (DEFICIT)           (2,068,940)      (2,089,000)

      TOTAL LIABILITIES AND SHAREHOLDERS'
        EQUITY (DEFICIT)                        $      23,816    $      53,248
                                                ==============   ==============

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

                                       14
<PAGE>
<TABLE>
<CAPTION>

                           CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                                      (A DEVELOPMENT STAGE COMPANY)
                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND THE PERIOD
                      AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006


                                                                                       August 29, 2001
                                                                                     (Date of Inception)
                                                       Years Ended December 31,             through
                                                        2006             2005         December 31, 2006
                                                   --------------   --------------    -----------------
<S>                                                <C>              <C>               <C>
REVENUE                                            $           -    $           -     $              -

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

    GROSS PROFIT                                               -                -                    -

OPERATING EXPENSES:
  Consulting and outside services                        240,875          622,986            1,497,724
  Advertising                                                  -          200,000              363,800
  Legal services                                         145,642          167,560              722,990
  Rent                                                         -            4,934              411,586
  Guaranteed payments                                          -                -              512,958
  Salaries and wages                                     351,422                -              982,368
  Other operating expenses                               485,433          574,263            2,095,950
                                                   --------------   --------------    -----------------

    TOTAL OPERATING EXPENSES                           1,223,372        1,569,743            6,587,376
                                                   --------------   --------------    -----------------

      NET INCOME (LOSS) FROM OPERATIONS               (1,223,372)      (1,569,743)          (6,587,376)

OTHER INCOME AND (EXPENSES):
  Sublease rental income                                       -                -               55,979
  Interest income                                              -                -                6,768
  Misc. income                                            36,958           48,812               85,770
  Interest expense                                       (93,027)        (147,567)            (359,146)
                                                   --------------   --------------    -----------------

    TOTAL OTHER INCOME AND (EXPENSES)                    (56,069)         (98,755)            (210,629)
                                                   --------------   --------------    -----------------

INCOME (LOSS) BEFORE INCOME TAXES                     (1,279,441)      (1,668,498)          (6,798,005)
                                                   --------------   --------------    -----------------

      NET INCOME (LOSS)                            $  (1,279,441)   $  (1,668,498)    $     (6,798,005)
                                                   ==============   ==============    =================


Basic and diluted earnings (loss) per share                (0.06)           (0.09)
                                                   ==============   ==============

Weighted average shares outstanding                   21,612,166       18,174,697
                                                   ==============   ==============

                      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
                      FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND THE PERIOD
                      AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006


                                                                                       August 29, 2001
                                                                                     (Date of Inception)
                                                       Years Ended December 31,             through
                                                        2006             2005         December 31, 2006
                                                   --------------   --------------    -----------------

CASH FLOW FROM OPERATING ACTIVITIES
  Net loss                                         $  (1,279,441)   $  (1,668,498)    $     (6,798,005)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
    Depreciation and amortization                         37,522           42,502              223,670
    Compensation expense                                  15,901          106,839              122,740
    Issuance of common stock for loan costs                    -          110,000              110,000
    Issuance of warrants as loan costs                         -           85,734               85,734
    (Increase) decrease in:
      Advances to Employees                               (1,659)               -               (1,659)
      Deposits                                                 -                -                 (600)
    Increase (decrease) in:
      Accounts payable and accrued expenses              239,434           83,135            1,171,278
      Interest payable                                    84,036          147,553              345,009
      Payroll and payroll tax payable                          -           (6,205)                   -
                                                   --------------   --------------    -----------------

        NET CASH USED IN OPERATING ACTIVITIES           (904,207)      (1,098,940)          (4,741,833)
                                                   --------------   --------------    -----------------

CASH FLOW FROM INVESTING ACTIVITES
  Acquisition of equipment                                     -           (2,500)            (193,797)
                                                   --------------   --------------    -----------------

        NET CASH USED IN INVESTING ACTIVITIES                  -           (2,500)            (193,797)
                                                   --------------   --------------    -----------------

CASH FLOW FROM FINANCING ACTIVITIES
  Proceeds from shareholder advances                     199,090          162,414            1,101,991
  Repayments of shareholder advances                    (545,644)        (568,225)          (1,113,869)
  Proceeds from note payable-Legacy Investors                  -                -              451,428
  Proceeds from note payable-Maricopa Equity
    Management Corporation                                     -          100,000              100,000
  Proceeds from convertible notes payable                      -        1,098,699            1,098,699
  Proceeds from sale of common stock                   1,283,600          277,000            3,272,562
  Book overdraft                                         (26,408)          26,408                    -
                                                   --------------   --------------    -----------------

        NET CASH PROVIDED BY FINANCING ACTIVITIES        910,638        1,096,296            4,910,811
                                                   --------------   --------------    -----------------

          NET INCREASE (DECREASE) IN CASH                  6,431           (5,144)             (24,819)

CASH AT BEGINNING OF THE YEAR                                  -            5,144                    -
                                                   --------------   --------------    -----------------

CASH AT END OF YEAR                                $       6,431    $           -     $        (24,819)
                                                   --------------   --------------    -----------------

SUPPLEMENTAL DISCLOSURES
  Interest paid in cash                            $       8,991    $           -     $         14,123
                                                   ==============   ==============    =================

                      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 CASH FLOWS
          FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND THE PERIOD
          AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006


NON-CASH ACTIVITIES
-------------------
Accrued interest in the amounts of $14,236, $32,356 and $136,509 were
capitalized to shareholder advances for the years ended December 31, 2006 and
2005 and for the period from August 29, 2001 (date of inception) through
December 31, 2006, respectively. Repayments of advances to shareholders include
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.

                                       17
<PAGE>

                                         CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                                                    (A DEVELOPMENT STAGE COMPANY)
                                      CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                    FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 AND THE PERIOD
                                    AUGUST 29, 2001 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006


                                                                          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)
                                            ============   ============   =========      ==========     ===========    ===========

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

                                                                 18
</TABLE>

<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

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 2007.

      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 that 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, which raise
      substantial doubt about the Company's ability to continue as a going
      concern. 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 the 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.
      However, if the Company is unable to raise additional capital we may have
      to cease operations.

      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
                                               -----------------
      Dormain and software                             3
      Furniture and fixtures                           5
      Office equipment                                 5
      Leasehold improvements                     life of lease


          See report of independent registered public accounting firm.
                                       19
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      During the years ended December 31, 2006 and 2005, depreciation expense
      was $37,523 and $42,502, respectively. From inception through December 31,
      2006, depreciation expense was $221,301.

      ADVERTISING COSTS
      Advertising costs are charged to expense when incurred. During the years
      ended December 31, 2006 and 2005, the amount charged to expense was $0 and
      $200,000, respectively. From inception through December 31, 2006,
      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, 2006
      and 2005, the amount charged to expense was $0 and $0, respectively. From
      inception through December 31, 2006, 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 these 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. Current
      income tax expense is the amount of income taxes expected to be payable
      for the current year. A deferred income tax asset or liability is
      established for the expected future consequences of temporary differences
      in the financial reporting and tax bases of assets and liabilities. The
      Company considers future taxable income and ongoing, prudent and feasible
      tax planning strategies, in assessing the value of its deferred tax
      assets. If the Company determines that it is more likely than not that
      these assets will not be realized, the Company will reduce the value of
      these assets to their expected realizable value, thereby decreasing net
      income. Evaluating the value of these assets is necessarily based on the
      Company's judgment. If the Company subsequently determined that the
      deferred tax assets, which had been written down, would be realized in the
      future, the value of the deferred tax assets would be increased, thereby
      increasing net income in the period when that determination was made.

      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, 2006 and 2005
      because they have an antidilutive effect in those periods.


          See report of independent registered public accounting firm.
                                       20
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      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
      using the modified prospective method. Under this method, compensation
      cost recognized during the year ended December 31, 2006 includes
      compensation cost for all share-based payments granted prior to, but not
      yet vested as of January 1, 2006, based on the fair value method. There
      were no options granted during the year ended December 31, 2006. Prior to
      January 1, 2006, the Company had accounted for stock options under SFAS
      No. 123.

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, 2006 and 2005,
      including accrued interest, is as follows:

                                                  December 31
                                             2006             2005
                                        --------------   --------------
      Daniel Thompson                   $      112,309   $      226,568
      Gary Teel                                  8,508          226,567
                                        --------------   --------------

        Total                           $      120,817   $      453,135
                                        ==============   ==============

      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 matures in August 2006, when the principal and
      accrued interest is due and payable in full. The indebtedness was
      convertible into Series A Preferred Membership interests of the Company.

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


          See report of independent registered public accounting firm.
                                       21
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

3.    NOTES PAYABLE, ESCROW DEPOSIT & LOAN FEES (Continued)

      LEGACY INVESTORS, LLC (CONTINUED)
      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.

      The Company entered into a security agreement stating that the assets of
      the Company as well as the stock pledges 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. 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. The balance on the note payable was
      $618,000 at December 31, 2006 and 2005.

      The loan fees related to the portion of loan funds that were not received
      by the Company as of December 31, 2006, were expensed during 2006, leaving
      an amortized balance of loan fees of $0. Amortization expense on loan fees
      amounted to $15,000 and $22,500 for the years ended December 31, 2006 and
      2005, respectively.

      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 was to mature 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, 2006 and 2005, the
      balance of the loan of $100,000 remained outstanding. In connection with
      their loan, the Company issued 100,000 shares of common stock ($110,000),
      which was expensed in 2005.


          See report of independent registered public accounting firm.
                                       22
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

4.    COMMITMENTS AND CONTINGENCIES

      OPERATING LEASE
      On April 22, 2003, the Company signed a lease with Pitney Bowes for
      mailing equipment. This lease commenced April 22, 2003 and expired October
      30, 2006. 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:

                2007                    $       39,032
                2008                            25,437
                2009                            11,359
                                        --------------

                Total                   $       75,828
                                        ==============

      Lease expense for the years ended December 31, 2006 and 2005 was $29,979
      and $0, respectively.

      Currently, the headquarters of the Company are located in the offices of
      one of the Company's consultant's and no rent is being charged. Rent
      expense for the years ended December 31, 2006 and 2005 was $0 and $4,934,
      respectively. From inception through December 31, 2006, rent expense was
      $411,586.

      In April 2004, the Company began subletting their office on a
      month-to-month basis, which ended in 2004. During the years ended December
      31, 2006 and 2005, the Company received rental income of $0 and $0,
      respectively. From inception through December 31, 2006, rental income was
      $55,979.

      LITIGATION

      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 Red Bull North America, Inc., who is
      holding the Company's property and equipment as collateral for the balance
      owed. The Company vacated the premises in 2004.

      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. At
      December 31, 2005 and 2004, the Company had $261,958 accrued as a payable
      to this officer, which does not include interest, should the officer be
      entitled to interest. 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 Company failed to make required payments in 2007. As
      such, the Company was subject to a 25% penalty of the outstanding
      principal balance as of the date of default in accordance with the
      settlement agreement. At December 31, 2006 the unpaid balance amounted to
      $156,250, which includes a penalty of $31,250.

      On December 15, 2005, the Company settled a mutual dispute with Sheppard
      Mullin Richter and Hampton concerning the representation of the Company.
      In full and final settlement, the Company is released from all sums
      claimed by Sheppard Mullin Richter and Hampton under the contract and the
      Company released Sheppard Mullin Richter and Hampton of all 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.


          See report of independent registered public accounting firm.
                                       23
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

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 International common stock to the former shareholders of Legacy
      Card in exchange for all the outstanding shares of Legacy Card.

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.

      At December 31, 2006, the Company has net operating loss carryforwards of
      approximately $3 million for federal tax purposes, which expire from 2007
      to 2026. 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 is in the process of
      determining the amount of loss carryforwards that may be used against
      future taxable income.

      At December 31, 2006, total deferred tax assets, consisting principally of
      net operating loss carryforwards, amount to approximately $1.2 million.
      For financial reporting purposes, a valuation allowance has been
      recognized in an amount equal to such deferred tax assets due to the
      uncertainty 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 year
      ended December 31, 2006:


          See report of independent registered public accounting firm.
                                       24
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

7.    STOCK OPTIONS AND WARRANTS (Continued)

                                                                   Weighted-
                                            Number of               Average
                                             Options            Exercise Price
                                          -------------        ----------------
      Outstanding at January 1, 2005                  -        $              -
      Granted                                   425,000                    1.37
      Exercised                                       -                       -
      Forfeited                                       -                       -
                                          -------------        ----------------

      Outstanding at December 31, 2005          425,000        $           1.37
      Granted                                         -                       -
      Exercised                                       -                       -
      Forfeited                                       -                       -
                                          =============        ================

      Exercisable at December 31, 2006          425,000        $           1.37
                                          =============        ================

      As of December 31, 2006, the total unrecognized fair value compensation
      cost related to non vested stock options was $0.

                                                                   Weighted-
                                            Number of               Average
                                             Options            Exercise Price
                                          -------------        ----------------
      Non Vested, January 1, 2006                83,333                    1.37
      Granted                                         -                       -
      Forfeited                                       -                       -
      Veted                                      83,333                    1.37
      Non Vested, December 31, 2006                   -                       -

      Information about stock options outstanding at December 31, 2006 is
      summarized below:

<TABLE>
<CAPTION>
                                  Weighted-
                                   Average          Weighted-                      Weighted-
      Exercise      Number        Remaining          Average          Number        Average
       Price     Outstanding   Contractual Life   Exercise Price   Exercisable   Exercise Price
      --------   -----------   ----------------   --------------   -----------   --------------
<S>                  <C>           <C>            <C>                <C>         <C>
      $   1.25       325,000       4 years        $         1.25     325,000     $         1.25
      $   1.75       100,000       4 years        $         1.75     100,000     $         1.75
</TABLE>

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


          See report of independent registered public accounting firm.
                                       25
<PAGE>

               CARDIFF INTERNATIONAL, INC. DBA LEGACY CARD COMPANY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

7.    STOCK OPTIONS AND WARRANTS (Continued)

        Number of Warrants        Exercise Price               Maturity
      ----------------------     ----------------        -------------------
             449,318             $           1.75         April-August 2010
              24,318             $           1.10            January 2011
             422,272             $           1.75         January-June 2011
             375,000             $           0.50           September 2011
           1,125,000             $           0.50            October 2011
              60,000             $           1.75            October 2011

8.    SUBSEQUENT EVENTS

      In the first quarter of 2007, $10,000 was contributed to the Company in
      exchange for 40,000 shares of common stock.

      Subsequent to the balance sheet date the Company received a demand letter
      from Legacy Investors, LLC demanding repayment of the balance owed to them
      and threatened litigation if the balance is not repaid by January 15,
      2007. As of April 13, 2007 the balance was not repaid.


          See report of independent registered public accounting firm.
                                       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

      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.

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 and for our independent registered public accountants
to attest to this report.

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/Secretary/Treasurer
      Daniel Thompson           CEO/President/Director


                                       27
<PAGE>

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

      GARY TEEL. 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.

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, 2006, the Reporting Persons met all applicable Section 16(a)
filing requirements.

                                       28
<PAGE>

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>
<CAPTION>

Name and Other Annual                                Other Annual    Stock     Options/    LTIP         Other
Principal Position        Year    Salary    Bonus    Compensation    Awards   SAR's (#)   Payouts    Compensation
-----------------------  ------  --------  -------  --------------  --------  ---------  ---------  --------------
<S>                      <C>     <C>       <C>      <C>             <C>       <C>        <C>        <C>
Gary R. Teel              2006      -0-      -0-         -0-           -0-       -0-        -0-          -0-
Chairman                  2005      -0-      -0-         -0-           -0-       -0-        -0-          -0-
                          2004      -0-      -0-         -0-           -0-       -0-        -0-          -0-

Daniel Thompson           2006      -0-      -0-         -0-           -0-       -0-        -0-          -0-
CEO                       2005      -0-      -0-         -0-           -0-       -0-        -0-          -0-
                          2004      -0-      -0-       $67,500         -0-       -0-        -0-          -0-
</TABLE>

      Mr. Teel and Mr. Thompson each waived their unpaid salary since the
inception of Legacy. We anticipate salaries will be paid to each of them
commencing in the first quarter of 2007.

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 2007.

      On August 3, 2005, Legacy entered into an employment agreement with Ruth
Martin Fisher. Under the agreement, Ms. Fisher will be Legacy's Executive Vice
President, Strategic Marketing. The term of the agreement is 60 months. The
agreement provides for a monthly salary of $15,000. In addition to her base
salary, Ms. Fisher is entitled to an annual performance bonus of 1/2 of 1% of
Gross Pre-Tax Profit. The agreement provides for an option to purchase 200,000
shares at $1.25. The option vests six months after employment was commenced. The
agreement provides for a vehicle allowance of $15,000 per year commencing 30
days after the Simply Brilliant Tuition Card is launched. If Ms. Fisher is
terminated without cause or if Legacy is sold, she is entitled to five years of
current salary.

      On August 5, 2005, Legacy entered into an employment agreement with Jacob
Herschend. Under the agreement, Mr. Herschend is Legacy's Vice President of
Corporate Marketing and Sales. The term of the agreement is 60 months. The
agreement provides for a monthly salary of $6,266, which will increase to $8,333
when the St. Louis Pilot Program is completed. In addition to his base salary,
Mr. Herschend is entitled to an annual performance bonus of 1/2 of 1% of Gross
Pre-Tax Profit. The agreement provides for an option to purchase 125,000 shares
at $1.25. If Mr. Herschend is terminated without cause, he is entitled to three
months compensation. If Legacy is sold, he is entitled to six months of
compensation.

      On November 7, 2005, Legacy entered into an employee agreement with Yaell
Ben-nun. Under the agreement, Ms. Ben-nun is responsible for Executive Assistant
and Accounting functions. The agreement provides for a monthly salary of $5,000.
In addition to the base salary, upon the launch of the St. Louis Missouri Pilot
Ms. Ben-nun is entitled to a quarterly performance bonus of $5,000. The
agreement provides for an option to purchase 100,000 shares at $1.75.

STOCK OPTIONS GRANTED IN THE LAST FISCAL YEAR

      No options to purchase shares of common stock granted to officers/
directors during 2006.

                                       29
<PAGE>

AGGREGATED OPTION EXERCISE IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

      No officer/ director of Cardiff were offered any options during 2006.

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, 2006 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)           28.4%
Daniel Thompson (2)                         3,078,528 (4)           13.8%

All officers and directors
as a group 3 persons                        9,413,376               42.2%

TOTAL                                      22,238,403               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 April 11, 2007.
            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 April 11, 2007 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

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 end December 2006, we repaid loans to officers/ directors
Gary Teel and Daniel Thompson. A total of $287,647 was repaid to Mr. Teel and
$257,997 was repaid to Mr. Thompson.

                                       30
<PAGE>

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 year ending December 31, 2006 and to
report the results of their audit to the Board of Directors. Schumacher &
Associates served as the auditor for Cardiff for the year ending December 31,
2004 and provided services during 2005.

FEES BILLED TO CARDIFF BY ROSE SNYDER & JACOBS AND SCHUMACHER & ASSOCIATES

      ROSE, SNYDER & JACOBS                    2006            2005
                                           ------------    ------------
      (1) Audit Fees                       $     64,910    $     59,290
                                           ============    ============
      (2) Tax Fees                         $               $
                                           ============    ============
      (3) All Other Fees                   $               $
                                           ============    ============

      SCHUMACHER & ASSOCIATES                  2006            2005
                                           ------------    ------------
      (1) Audit Fees                       $               $
                                           ============    ============
      (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 review of quarterly
            information.
      (2)   Tax services generally include fees for services performed related
            to tax compliance, consulting services.
      (3)   Rose, Snyder & Jacobs nor Schumacher & Associates billed Cardiff for
            other services during 2006 and 2005.

      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

                                   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 18, 2007             By: /s/ Daniel Thompson
                                            ------------------------------------
                                            Chief Executive Officer/President


      Dated: April 18, 2007             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 18, 2007

/s/ Gary R. Teel                CFO/Secretary/Chairman         April 18, 2007


                                       32