Legend Mobile, Inc - The unaudited consolidated financial...

Legend Mobile, Inc - Recent Material Event

Item 1.

Financial Statements

Consolidated Balance Sheet as of March 31, 2008 (unaudited)

Consolidated Statements of Operations for the

three months ended March 31, 2008 and 2007 (unaudited)

Consolidated Statements of Cash Flows for the

three months March 31, 2008 and 2007 (unaudited)

Notes to Consolidated Interim Financial Statements (unaudited)

Item 2.

Management's Discussion and Analysis or Plan of Operation

Item 3.

Controls and Procedures

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Submission of Matters to a Vote of Security Holders

Item 5.

Other Information

Item 6.

Exhibits

SIGNATURES


LEGEND MOBILIE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	MARCH	DECEMBER
	31, 2008	31, 2007
	(UNAUDITED)	(AUDITED)
CURRENT ASSETS:
Cash	$ 10	$ 47
Investments	29,562	29,562

TOTAL CURRENT ASSETS	29,572	29,609

FIXED ASSETS - at cost
Computer and office equipment	11,376	11,376
Less: Accumulated depreciation	(10,811)	(10,677)

NET FIXED ASSETS	565	699

TOTAL ASSETS	$ 30,137	$ 30,308

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable	$ 190,635	$ 190,635
Accrued expenses	599,658	555,908
Accrued interest	1,196,769	1,113,330
Accrued derivative liability	250,744	250,744
License fees payable	200,000	200,000
Advances from an officer	99,890	95,300
Due to related parties	74,689	83,688
Notes payable - other	95,000	95,000
Notes payable	565,750	565,750
Note payable - officer	1,229,649	1,229,649

TOTAL CURRENT LIABILITIES	4,502,784	4,380,004

COMMITMENTS AND CONTINGENCIES	-	-
STOCKHOLDERS' DEFICIT
Series A Preferred Stock, $0.001 par value, 1,000,000 shares
authorized; 2,225 shares issued and outstanding	22	22
Series B Convertible Preferred Stock, $0.01 par value; 850,000
shares authorized; 850,000 shares issued and outstanding
authorized; 1,000,000 Class A shares issued and outstanding	8,500	8,500
Series C Convertible Preferred Stock, $0.01 par value; 147,775
shares authorized; 147,775 shares issued and outstanding	1,478	1,478
Common stock; $0.001 par value; 75,000,000 shares
authorized; 73,313,521(December 31, 2007-71,513,521) issued and outstanding	73,313	71,513
Additional paid-in capital	16,331,721	16,324,521
Stock subscription receivable	(156,300)	(156,300)


Accumulated deficit	(20,731,381)	(20,599,430)

TOTAL STOCKHOLDERS' DEFICIT	(4,472,647)	(4,349,696)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 30,137	$ 30,308

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


LEGEND MOBILE, INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENT OF OPERATIONS
(UNAUDITED)

	THREE MONTHS ENDED
	MARCH 31,
	2008	2007


REVENUE	$ -	$ 165

COST OF REVENUE	-	125

GROSS PROFIT	-	40

EXPENSES:
Selling, general and administrative	48,512	2,297

TOTAL EXPENSES	48,512	2,297

LOSS FROM OPERATIONS	(48,512)	(2,257)

OTHER INCOME (EXPENSE):
Interest expense and financing costs	(83,439)	(88,802)

TOTAL OTHER INCOME (EXPENSE)	(83,439)	(88,802)

LOSS BEFORE PROVISION FOR INCOME TAXES	$ (131,951)	$ (91,059)

PROVISION FOR INCOME TAXES	-	-

NET LOSS	$ (131,951)	$ (91,059)

BASIC AND DILUTED LOSS PER
COMMON SHARE	$ (0.002)	$ (0.004)

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND DILUTED	71,769,959	25,298,021

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


LEGEND MOBILE, INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
(UNAUDITED)

	THREE MONTHS ENDED
	MARCH 31,
	2008	2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (131,951)	$ (91,059)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation	134	134
Changes in operating assets and liabilities:
Inventory	-	125
Accounts payable	-	(4,000)
Accrued expenses	43,750	-
Accrued interest	83,439	88,802

Net cash used in operating activities	(4,628)	(5,998)


CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from an officer, net	4,591	-
Advances to(from) related parties, net	-	5,691

Net cash provided by financing activities	4,591	5,691

INCREASE (DECREASE) IN CASH	(37)	(307)

CASH, Beginning of period	47	386

CASH, End of period	$ 10	$ 79

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	$ 83,439	$ 88,802
Income taxes paid	$ -	$ -

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

LEGEND MOBILE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The unaudited consolidated financial statements have been prepared by Legend Mobile, Inc. (the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are in the opinion of management necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended December 31, 2006 included in the Company's Annual Report on Form 10-KSB. The results of the three months ended March 31, 2007 are not necessarily indicative of the results to be expected for the full year ending December 31, 2007.

The Company was incorporated in Delaware on January 13, 1998 and is the successor to Interactive Entertainment Studio, Inc. (IES). IES was incorporated in the State of Nevada on May 27, 1997 and was merged into the Company in March 1998 for the sole purpose of changing the domicile of the Company to Delaware. This merger was retroactively reflected in the December 31, 1997 financial statements. On June 27, 2002, the Company filed a Certificate of Amendment to its Certificate of Incorporation to amend the Company's Certificate of Incorporation name from PTN Media, Inc. to Legend Mobile, Inc.

The Company is a developer and marketer of branded mobile phone products, including faceplates, phone accessories, SMS services, and mobile data applications. Through the Company's 50% owned subsidiary, Legend Credit, Inc. (formerly PTN Wireless, Inc. ("Legend Credit"), the Company also develops and markets stored value cards, including gift cards bearing the Visa and MasterCard logo. Effective October 1, 2004, Mr. Klamka, the Company's CEO and 60% owner of Legend Credit, contributed an additional 10% interest in Legend Credit to the Company. Legend Credit currently markets the Hello Kitty reloadable debit MasterCard card. The Hello Kitty card is sold via the www.hellokittycard.com. Hello Kitty is one of the most recognized animated characters in the world. Legend Credit generates revenues on the Hello Kitty Debit MasterCard card by charging cardholders a suite of fees, including an initial processing fee of up to $14.95, a monthly fee of up to $2.95, and an ATM withdrawal fee of up to $1.50. The Company derives limited revenues from the sale of covers for mobile phones. The Company's suppliers require it to purchase these products and resell them to consumers and wholesalers. The Company created products under its licenses from athletes, entertainers, and popular trademarks. The Company also sells a NASCAR-themed, SMS-based text messaging service called "Racemobile.com". The Company also is seeking to sell mobile application software either via over-the-air download or bundled with a particular mobile phone. These applications may be sold as a subscription or as a single download. The Company has entered into an agreement with the American Society of Composers, Authors and Publishers ("ASCAP") for the licensing of ringtones for mobile phones. ASCAP maintains the rights to 8 million copyrighted musical works.

In February 2001, the Company formed Legend Credit as a wholly owned subsidiary. On April 1, 2003, Mr. Peter Klamka, CEO of the Company, contributed the rights to an affinity credit card business valued at $37,000 to Legend Credit. Mr. Klamka's contribution has been determined pursuant to Accounting Principles Board Opinion No. 29, "Nonmonetary Transactions," using his cost basis in the investment, which is the most readily determinable cost. In exchange for this contribution, Legend Credit issued to Mr. Peter Klamka 60% of the issued and outstanding shares of Legend Credit common stock and the Company issued to Mr. Klamka 850,000 shares of Series B convertible preferred stock. These issuances were valued at $22,200 and $14,800, respectively. The Company retains a 40%

LEGEND MOBILE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

minority interest in Legend Credit which is accounted for using the equity method. Effective October 1, 2004, Mr. Klamka contributed an additional 10% interest in Legend Credit to the Company at was valued at $3,700 (10% of $37,000, the original value of the affinity credit card business).

Legend Credit signed a two-year license agreement with Mark Burnett Productions to create gift cards, debit cards, and virtual cards using the trademarks of "The Apprentice" television show, including the name and likeness of Donald Trump. "The Apprentice" premiered January 8, 2004, and immediately became a cultural phenomenon, scoring the highest ratings for any new series introduced throughout the 2003-04 season. "The Apprentice" resumed its hot streak in the fall, delivering the strongest ratings among viewers aged 18-49 of any unscripted series through the first half of the 2004-05 television season and the third-highest average among viewers aged 18-49 for all series. The show also continues to deliver the strongest concentration on primetime network television of upscale viewers in such key categories as viewers aged 18-49 living in homes with incomes of $75,000 and more. Legend Credit expects to market the cards in the third quarter of 2005.

In July 1999, the Company formed, Legend Studios, Inc. (formerly FragranceDirect.com, Inc.) ("Legend Studios"), a majority owned subsidiary. Through this entity, the Company sold fragrance products over the Internet. On June 28, 2004, Legend Studios entered into a definitive agreement to begin operating seven radio stations owned by Quorum Radio Partners, Inc. and Quorum Radio Partners of Virginia, Inc. Under the terms of the agreement, Legend Studios was to operate for a 12-month term, beginning July 1, 2004, seven stations located in Virginia, West Virginia and Missouri. Under this agreement, Legend Studios paid $50,000 for the right to operate the ratio stations, and that amount is being amortized over for a 12-month period. In February 2005, the Quorum entities forced Legend Studios to cease operating the radio stations and indicated that they were unwilling to proceed with Legend Studios' acquisition of the stations. Consequently, in February 2005, Legend Studios filed a lawsuit with the Supreme Court of New York County against Quorum Radio Partners, Inc., Quorum Radio Partners of Virginia, Inc, and Quorum Communications, Inc. This lawsuit alleges that the defendants breached the asset purchase agreement and local marketing agreement. The Company has expensed the unamortized portion of the $50,000 payment that Legend Studios made under the operating agreement and has discontinued recognition of this revenue, given that the Company is no longer able to control the radio operations.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company incurred a net loss for the three months ended March 31, 2008 and at March 31, 2007, had an accumulated deficit and a working capital deficit. In addition, the Company generates minimal revenue from its operations and is in default on the payment of note payable and license fee payable obligations. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company plans to take the following steps that it believes will be sufficient to provide the Company with the ability to continue in existence. The Company, through its subsidiary, Legend Credit, Inc., continues to sell branded debit cards. The Company is also seeking additional equity capital to expand its cellular phones faceplates, mobile data services, and mobile applications business.

LEGEND MOBILE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

Accounting Policies

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

The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its annual report on Form 10-KSB for the year ended December 31, 2007 and which is incorporated herein by reference. Specific reference is made to this report for a description of the Company's securities and the notes to the financial statements included therein.

Minority Interest

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

The accompanying consolidated financial statements do not reflect a minority interest liability as of March 31, 2008, as Legend Studios, on a stand-alone basis, had a stockholders' deficit as of such date. The accompanying consolidated statements of operations for the three months ended March 31, 2008 and 2007 do not reflect the minority interest's share of Legend Studios' losses for said periods as the related accrual would result in the Company's recording of a minority interest receivable.

In addition, during the year ended December 31, 2004, the Company's ownership in Legend Credit increased to 50% resulting in the Company consolidating the financial statement of Legend Credit with the Company. The accompanying consolidated financial statements do not reflect a minority interest liability as of March 31, 2008 as Legend Credit, on a stand-alone basis, had a stockholders' deficit as of such date. The accompanying consolidated statements of operations for the three months ended March 31, 2008 do not reflect the minority interest's share of Legend Credits' losses for the three months ended March 31, 2008 as the related accrual would result in the Company's recording of a minority interest receivable.

NOTE 2 - STOCKHOLDERS' DEFICIT

Series A Convertible Preferred Stock

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

The Company has 2,225 shares of $0.001 par value Series A Convertible Preferred Stock authorized of which 2,225 shares are issued and outstanding at March 31, 2008. Each share of Series A can be converted into 20 shares of common stock. Series A shares have no voting rights.

Series B Convertible Preferred Stock

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

The Company has 850,000 shares of $0.01 par value Series B Convertible Preferred Stock authorized of which 850,000 shares are issued and outstanding at March 31, 2008.

In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company, prior to the time the Series B becomes convertible into common shares, the holders of Series B shall be entitled to $0.01 per share. In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company after the time the Series B becomes convertible into common shares, the holders of Series B shall be entitled to share with the holders of common stock pari passu in the assets of the Company, on an as converted basis, whether such assets are capital or surplus of any nature. The Series B shall be convertible upon the earlier to occur of: (i) the date the Company generates net profits in any two consecutive fiscal quarters or (ii) April 1, 2006.

The conversion of Series B shall be on the basis of ten shares of common stock for one Series B share, as may be adjusted from time to time. Upon conversion, the holder of the Series B will be required to pay to the Company a conversion price for each share of common stock equal to $0.10.

LEGEND MOBILE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

The holders of the Series B shall vote on all matters with the holders of the common stock (and not as a separate class) on a ten votes per share basis. The holders of the Series B shall be entitled to receive all notices relating to voting as are required to be given to the holders of the common stock.

During 2003, the Company issued to Mr. Peter Klamka, the Company's CEO, 850,000 shares of Series B as consideration for the contribution of an affinity credit card business to Legend Credit.

Series C Convertible Preferred Stock

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

The Company has 147,775 shares of $0.01 par value Series C Convertible Preferred Stock authorized of which 147,775 shares are issued and outstanding at March 31, 2008.

In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company prior to the time the Series C becomes convertible into common shares, the holders of Series C shall be entitled to $0.01 per share. In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company after the time the Series C becomes convertible into common shares, the holders of Series C shall be entitled to share with the holders of shares of common stock and Series B convertible preferred stock pari passu in the assets of the Company, on an as converted basis, whether such assets are capital or surplus of any nature. . The Series C shall be convertible upon the earlier to occur of: (i) the date the Company generates net profits in any two consecutive fiscal quarters; (ii) April 1, 2006; or (iii) any date that the market price per share of common stock equals or exceeds $0.50.

The conversion of Series C shall be on the basis of one hundred shares of common stock for one Series C share, as may be adjusted from time to time. Upon conversion, the holder of the Series C will be required to pay to the Company a conversion price for each share of common stock equal to $0.10.

The holders of the Series C shall vote on all matters with the holders of the common stock (and not as a separate class) on a hundred votes per share basis. The holders of the Series C shall be entitled to receive all notices relating to voting as are required to be given to the holders of the common stock.

During 2004, the Company issued to Mr. Peter Klamka, the Company's CEO, 147,775 shares of Series C as consideration for the contribution of an additional 10% ownership in Legend Credit.

Common Stock

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

In February 2008, the Company issued 1,800,000 of common stock to retire $9,000 in notes payable.

LEGEND MOBILE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 – EARNING(LOSS) PER SHARE

The Company reports earnings (loss) per share in accordance with SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of options and warrants to purchase common shares would have an anti-dilutive effect. The following potential common shares have been excluded from the computation of diluted net loss per share for the three months ended March 31, 2008 and 2007 because the effect would have been anti-dilutive:

2008 2007

Conversion of Series A preferred stock

44,500 44,500

Conversion of Series B convertible preferred stock

8,500,000 8,500,000

Conversion of Series C convertible preferred stock 14,777,500 14,777,500

Stock options issued to employees and consultants

under the Company's stock option plan

1,150,000 1,150,000

Warrants issued to officers

231,000 231,000

Warrants issued for services

50,000 50,000

Warrants issued with notes

100,000 100,000

Warrants issued for penalty/interest

234,000 234,000

Warrants issued with note conversion3

300,000 300,000

25,387,000 25,387,000

NOTE 4 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measures" ("SFAS No. 157"). SFAS No157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles ("GAAP"), expands disclosures about fair value measurements, and applies under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 does not require any new fair value measurements, however the FASB anticipates that for some entities, the application of SFAS No. 157 will change current practice. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, which for the Company would be its fiscal year beginning November 1, 2008. The implementation of SFAS No. 157 is not expected to have a material impact on the Company's results of operations and financial condition.

LEGEND MOBILE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)". This statement requires employers to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multi-employer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The provisions of SFAS No. 158 are effective for employers with publicly traded equity securities as of the end of the fiscal year ending after December 15, 2006. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In September 2006, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 108 (Topic 1N), "Quantifying Misstatements in Current Year Financial Statements" ("SAB No. 108"). SAB No. 108 addresses how the effect of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires SEC registrants (i) to quantify misstatements using a combined approach which considers both the balance sheet and income statement approaches; (ii) to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors; and (iii) to adjust their financial statements if the new combined approach results in a conclusion that an error is material. SAB No. 108 addresses the mechanics of correcting misstatements that include effects from prior years. It indicates that the current year correction of a material error that includes prior year effects may result in the need to correct prior year financial statements even if the misstatement in the prior year or years is considered immaterial. Any prior year financial statements found to be materially misstated in years subsequent to the issuance of SAB No. 108 would be restated in accordance with SFAS No. 154, "Accounting Changes and Error Corrections." Because the combined approach represents a change in practice, the SEC staff will not require registrants that followed an acceptable approach in the past to restate prior years' historical financial statements. Rather, these registrants can report the cumulative effect of adopting the new approach as an adjustment to the current year's beginning balance of retained earnings. If the new approach is adopted in a quarter other than the first quarter, financial statements for prior interim periods within the year of adoption may need to be restated. SAB No. 108 is effective for fiscal years ending after November 15, 2006, which for Company would be its fiscal year beginning December 1, 2007. The implementation of SAB No. 108 is not expected to have a material impact on the Company's results of operations and financial condition.

In October 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) Financial Accounting Standard (“FAS”) 123(R)-5, Amendment of FSP FAS 123(R)-1, (“FSP FAS 123(R)-5”) to address whether a change to an equity instrument in connection with an equity restructuring should be considered a modification for the purpose of applying FSP No. FAS 123(R)-1, Classification and Measurement of Freestanding Financial Instruments Originally Issued in Exchange for Employee Services under FAS Statement No 123(R) (“FSP FAS 123(R)-1”). FSP FAS 123(R)-1 states that financial instruments issued to employees in exchange for past or future services are subject to the provisions of SFAS 123(R) unless the terms of the award are modified when the holder is no longer an employee. In FSP FAS 123(R)-5, the FASB staff concluded that changes to the terms of an award that are

made solely due to an equity restructuring are not considered modifications as described in FSP FAS 123(R)-1 unless the fair value of the award increases, anti-dilution provisions are added, or holders of the same class of equity instruments are treated unequally. FSP FAS 123(R)-5 is effective for the first reporting period beginning after October 10, 2006. The adoption of FSP FAS 123(R)-5 did not have a material impact on the Company’s condensed consolidated financial statements.

On February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Liabilities” (SFAS No. 159). Under this Standard, the Company may elect to report financial instruments and certain other items at fair value on a contract-by-contract basis with changes in value reported in earnings. This election is irrevocable. SFAS No. 159 provides an opportunity to mitigate volatility in reported earnings that is caused by measuring hedged assets and liabilities that were previously required to use a different accounting method than the related hedging contracts when the complex provisions of SFAS No. 133 are not met. SFAS No. 159 is effective for years beginning after November 15, 2007. The Company does not believe it will have an impact on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141R”). SFAS 141R amends SFAS 141 and provides guidance for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and any non-controlling interest in the acquiree. It also provides disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R will be effective for fiscal years beginning on or after December 15, 2008 and will be applied prospectively.

Item 2.
Management's Discussion and Analysis or Plan of Operation

Item 2.

Management's Discussion and Analysis or Plan of Operation

Forward looking statements

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Shareholders are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, our ability to fully establish our proposed websites and our ability to conduct business with Palm, Inc. and be successful in selling products. Although we believe the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the report will prove to be accurate.

GENERAL

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related footnotes for the year ended December 31, 2007 included in our Annual Report on Form 10-KSB. The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.

We were incorporated in Delaware on January 13, 1998 and are the successor to Interactive Entertainment Studio, Inc. (IES). IES was incorporated in the State Of Nevada on May 27, 1997 and was merged into us in March 1998 for the sole Purpose of changing the domicile of the company to Delaware. This merger was retroactively reflected in the December 31, 1997 financial statements. On June 27, 2002 we changed our name to Legend Mobile, Inc.

We are a developer and marketer of branded mobile phone products including faceplates, phone accessories, SMS services, and mobile data applications. Through our subsidiary Legend Credit, Inc. (which we own 50%), we also develop and market stored value cards including gift cards bearing the Visa and MasterCard logo. Legend Credit intends to develop and market additional branded consumer payment products including debit cards, gift cards, and credit cards. We currently market a MasterCard debit card using the trademarks of “The Apprentice” television show. Through our 91% subsidiary, Legend Studios, Inc., (formerly Fragrancedirect.com Inc.), we have entered into a local marketing agreement to operate and asset purchase agreement to purchase seven radio stations in Virginia, West Virginia, and Missouri on June 30, 2004. These agreements became the subject of litigation in February 2005.

Since our inception, we have incurred significant losses and at March 31, 2007 our current liabilities exceeded current assets. In addition, we are delinquent in certain payments due for license fees and notes payable. We may be unable to continue in existence unless we are able to arrange additional financing and achieve profitable operations. We plan to raise additional capital and expect to generate cash from the sale of "The Apprentice" gift card through Legend Credit, Inc.

We will continue to seek out licenses for popular trademarks in the areas of mobile communications and stored value products.

Significant Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences 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 readily apparent from other sources. Actual results may differ from these estimates under different

assumptions or conditions. The most significant accounting estimates inherent in the preparation of the Company's financial statements relate to the allowance for doubtful accounts. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the consolidated financial statements included in this Annual Report on Form l0-KSB for the year ended December 31, 2007.

Results of Operations

Three months ended March 31, 2008 vs. March 31, 2007

Revenue for the three months ended March 31, 2008 was $0 compared to $165 for the three months ended March 31, 2008

The cost of revenue for the three months ended March 31, 2008 was $0 since there was no revenue as compared to $1,125 for the period ended March 31, 2006

Selling, general and administrative expenses for the three months ended March 31, 2008 was $48,152 as compared to $2,297 for the three months ended March 31, 2007. The increase results from salaries of $43,750 for Peter Klamka that was not set up for the same period in 2007

Interest expense and financing costs for the three months ended March 31, 2008 was $83,439 as compared to $ 88,802 for the three months ended March 31, 2007.

Liquidity and Capital Resources

We have incurred net losses since our inception of $20,731,381. In order for us to continue in existence, we will have to raise additional capital through the sale of equity or debt or generate sufficient profits from operations, or a combination of both.

Off-balance sheet arrangements

There are no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3.

Controls and Procedures

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities & Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal

executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Part II.

OTHER INFORMATION

Item 1.

Legal Proceedings

The company is party to legal proceedings from time to time. None of the legal proceedings in management’s opinion would have an adverse material impact on the company.

Legend Studios, Inc. vs. Quorum Radio Partners, Inc., Quorum Radio Partners of Virginia, Inc. and Quorum Communications, Inc.

Legend Studios lawsuit arises from defendants' breach of the parties' Asset Purchase Agreement and Time Brokerage Agreement that govern the sale, programming, operations and revenues of certain radio stations (KELE-AM, KELE-FM, WIQO, WKEY and WKCI). Legend Studios seeks specific performance of the agreements, as well as in excess of $1.5 million in damages. Defendants have been served with the complaint, but have not filed answers and may be subject to entry of default. Quorum Radio Partners of Virginia, Inc., however, filed a bankruptcy petition after being served with the complaint, which stays Legend Studios's proceedings solely against that entity.

In the ordinary course of business, the Company is generally subject to claims, complaints, and legal actions. At March 31, 2008, management believes that the Company is not a party to any action which would have a material impact on its financial condition, operations, or cash flows.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.

Defaults Upon Senior Securities

None

Item 4.

Submission of Matters to a Vote of Security Holders

None

Item 5.

Other Information

None

Item 6.

Exhibits

31.1

Certification of the Chief Executive Officer and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of the Chief Executive Officer and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LEGEND MOBILE, INC.

May 14, 2008

By:

/s/ Peter Klamka

Legend Mobile, Inc - Recent Material Event

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