Pop N Go 10Q Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)
[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2008
[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________________ to _______________

333-88837

(Commission file number)

POP N GO, INC.

(Exact name of small business issuer as specified in its charter)


Delaware	95-4603172
(State or other jurisdiction	(IRS Employer
of incorporation or organization)	Identification No.)

12429 East Putnam Street, Whittier, California 90602

(Address of principal executive offices)

(562) 945-9351

(Issuer’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X ] No [ ]

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of September 17, 2008, - 462,109,732 shares of common stock

________________

Transitional Small Business Disclosure Format: Yes [ ] No [X ]

POP N GO, INC.

Index


		Page Number

PART I.	FINANCIAL INFORMATION	3

Item 1.	Consolidated Financial Statements (unaudited)	3

	Consolidated Balance Sheet as of June 30, 2008 (unaudited)	3

	Consolidated Statements of Operations for the
	three and nine month periods ended June 30, 2008 and 2007 (unaudited)	4

	Consolidated Statements of Cash Flows for the
	nine month periods ended June 30, 2008 and 2007 (unaudited)	5

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis or Plan of Operations	17

Item 3.	Controls and Procedures	22

PART II.	OTHER INFORMATION	23

Item 1.	Legal Proceedings	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Submission of Matters to a Vote of Security Holders	23

Item 5.	Other Information	23

Item 6.	Exhibits	24

	SIGNATURES	24

PART I.

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

POP N GO, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

UNAUDITED


				June 30,
				2008
				(unaudited)
ASSETS

CURRENT ASSETS
	Cash and cash equivalents		$	44,621
	Inventory			28,289
	Prepaid expenses and other current assets			10,357

TOTAL CURRENT ASSETS				83,267

RENTAL INVENTORY, net				51,823

TOTAL ASSETS			$	135,090


LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
	Accounts payable		$	753,096
	Accrued liabilities			86,597
	Consulting payable - related parties			517,669
	Debenture interest payable			3,621,242
	Accrued payroll and payroll taxes			191,151
	Customer deposits			595,278
	Loan payable - related party			240,000
	Short-term note payable			818,659
	Convertible debt, net			9,756,551
	Warrant liability			165,791
	Accrued derivative liability			468,190

TOTAL CURRENT LIABILITIES				17,214,224

LONG-TERM CONVERTIBLE DEBT, net				494,290

TOTAL LIABILITIES				17,708,514

STOCKHOLDERS' DEFICIT
	Common stock; $0.001 par value; 900,000,000 shares
		authorized; 440,609,732 shares issued and outstanding		440,610
	Common stock to be issued			684,632
	Additional paid-in capital			19,369,686
	Prepaid consulting			(18,174)
	Accumulated deficit			(38,050,178)

TOTAL STOCKHOLDERS' DEFICIT				(17,573,424)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			$	135,090

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

POP N GO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED


			Three Months Ended				Nine Months Ended
			June 30,		June 30,		June 30,		June 30,
			2008		2007		2008		2007
			(unaudited)		(unaudited)		(unaudited)		(unaudited)
SALES
	Equipment sales	$	42,894	$	219,932	$	320,389	$	346,172
	Revenue share income		4,607		10,373		25,503		47,800

TOTAL SALES			47,501		230,305		345,892		393,972

COST OF GOODS SOLD
	Cost of goods sold equipment		19,311		98,093		153,268		191,176
	Cost of goods sold revenue share income		2,508		13,991		15,223		36,754

TOTAL COST OF REVENUES			21,819		112,084		168,491		227,930

GROSS PROFIT			25,682		118,221		177,401		166,042

OPERATING EXPENSES
	Selling, general and administrative		424,033		475,905		1,324,433		1,798,073
TOTAL OPERATING EXPENSES			424,033		475,905		1,324,433		1,798,073

LOSS FROM OPERATIONS			(398,351)		(357,684)		(1,147,032)		(1,632,031)

OTHER INCOME (EXPENSES):
	Interest expense and financing costs		(508,119)		(609,745)		(1,665,526)		(1,948,160)
	Amortization of beneficial conversion feature and debt discount		(71,202)		(576,450)		(352,439)		(1,793,392)
	Change in fair value of warrant and derivative liabilities		172,536		821,484		1,851,348		1,419,303
	Loss on settlement of debt		-		-		-		-
	Other		-		3,944		-		11,276

TOTAL OTHER EXPENSE			(406,785)		(360,767)		(166,617)		(2,310,973)

LOSS BEFORE PROVISION FOR INCOME TAXES			(805,136)		(718,451)		(1,313,649)		(3,943,004)

PROVISION FOR INCOME TAXES			(800)		-		-		-

NET LOSS		$	(804,336)	$	(718,451)	$	(1,313,649)	$	(3,943,004)


LOSS PER SHARE - BASIC AND DILUTED		$	(0.00)	$	(0.00)	$	(0.00)	$	(0.02)

WEIGHTED AVERAGE COMMON EQUIVALENT
	SHARES OUTSTANDING - BASIC AND DILUTED		341,088,515		289,061,176		368,367,229		260,968,119

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

POP N GO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED


					Nine Months Ended
					June 30,		June 30,
					2008		2007
					(unaudited)		(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss			$	(1,313,649)	$	(3,943,004)
	Adjustment to reconcile net loss to net cash
		used in operating activities:
			Depreciation and amortization		4,037		13,735
			Loss on disposal of equipment		5,079		-
			Beneficial conversion feature		352,439		1,793,392
			Amortization of deferred finders fees		391,774		872,366
			Fair value of warrants issued for services				44,113
			Shares issued for loan incentive/services/debt settlement		30,654		218,000
			Change in fair value of warrant and derivative liabilities		(1,851,348)		(1,419,303)
			Amortization of prepaid consulting fees		9,366		39,114
	Changes in operating assets and liabilities:
	(Increase) decrease in:
		Accounts receivable			37,160		(244,472)
		Inventory			154,051		(100,638)
		Prepaid expenses and other current assets			3,010		75,722
	Increase (decrease) in:
		Accounts payable			59,471		16,271
		Accrued liabilities			(39,140)		2,768
		Accrued consulting - related party			122,595		20,825
		Debenture interest payable			1,042,870		514,905
		Accrued payroll and payroll taxes			32,408		6,497
		Customer deposits			558,923		-

Net cash used in operating activities					(400,300)		(2,089,709)

CASH FLOWS FROM INVESTING ACTIVITIES:
	Issuance of notes receivable				-		(49,000)
	Payments rental equipment				-		(65,242)

Net cash used in investing activities					-		(114,242)

CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from sale of convertible debentures				414,398		2,286,300
	Payments for convertible debenture				(13,000)		(52,663)
	Payments for debt issuance costs				(159,775)		(525,037)
	Payments for notes payable				-		(45,642)
	Proceeds from sale of common stock				100,000		-
	Proceeds from sale of common stock				-		1,000
Net cash provided by financing activities					341,623		1,663,958

NET INCREASE (DECREASE) IN CASH AND
	CASH EQUIVALENTS				(58,677)		(539,993)

CASH AND CASH EQUIVALENTS, Beginning of period					103,298		751,457

CASH AND CASH EQUIVALENTS, End of period				$	44,621	$	211,464


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Interest paid			$	-	$	-
	Income taxes paid			$	-	$	-

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

POP N GO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

UNAUDITED

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During the nine months ended June 30, 2008, the Company issued (1) 109,918,750 shares of common stock in exchange for debt totaling $307,005; (2) 524,546 shares of common stock in accrued interest totaling $5,770; (3) 400,000 shares of common stock in exchange for accounts payable totaling $6,363; and (4) 5,391,605 shares that the Company previously committed to issue.

During the nine months ended June 30, 2007, the Company (1) issued 47,868,501 shares of common stock for the conversion debt of $737,950; (2) issued 13,572,284 share of common stock for the conversion of accrued interest of $421,827; (3) issued 2,000,000 shares of common stock for a deposit on the MRI acquisition; and (4) issued 18,440,720 shares that the Company had previously committed to issue.

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

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited consolidated financial statements have been prepared by Pop N Go, 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 condensed or 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 September 30, 2007 included in the Company’s Annual Report on Form 10-KSB. The results of the nine months ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year ending September 30, 2008.

Principles of Consolidation

The Company’s consolidated financial statements include the accounts of the Pop N Go, Inc. and its wholly-owned subsidiaries, Nuts To Go, Inc and Branax, LLC. All inter-company balances and transactions have been eliminated.

Revenue Recognition

The Company recognizes its revenue in accordance with the Securities and Exchange Commissions (“SEC”) Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” (“SAB 104”). The Company is recognizing revenue from two sources; sale of equipment and the owner operated revenue share program. Equipment sales are recognized when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured. Revenues from the revenue sharing program are recognized upon monthly collections of proceeds from the machines. Generally, the Company extends credit to its customers and does not require collateral. The Company performs ongoing credit evaluations of its customers and historic credit losses have been within management’s expectations.

Stock-based compensation

The Company accounts for its stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123.” The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

Net Loss per Share

Net loss per share is calculated in accordance with Statement of Financial Accounting Standards No. 128, Earnings Per Share (“SFAS 128”). Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Weighted average number of shares used to compute basic and diluted loss per share is the same in these financial statements since the effect of dilutive securities is anti-dilutive. At June 30, 2008, the Company had 122,803,500 warrants outstanding that were anti-dilutive. In addition, the Company has convertible debentures that could be converted into 74,325,091 shares of the Company’s common stock.

Accounts Receivable

Accounts receivable consist primarily of amounts due from customers. The Company has not generated accounts receivable for the quartee ended June 30, 2008 as company has received full payments prior to shipments which have been accounted for in Customer Deposits.

Inventories

Inventories consist of small parts and supplies to be used in the manufacturing process of machines held for resale, work in process, and finished goods. Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out method.

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

Prepaid Consulting

Prepaid consulting relates to amounts paid to consultants with the Company’s common stock. The value of the consulting services is being expensed over the terms of the consulting agreements.

Rental equipment

Rental equipment is stated at cost. Depreciation is computed using the straight-line method over an estimated useful life of seven years. Depreciation expense was $4,037 and $13,735 for the nine months ended June 30, 2008 and 2007, respectively.

Customer Deposits

As of June 30, 2008, customers had paid deposits totaling $595,278 to the Company for machines which had not been delivered and for services not fully performed as of that date. In accordance with these agreements, the Company is required to operate, service, insure, maintain, keep in good repair, stock and supply its product for machines over the agreement term. Revenue on the sale of these machines will be recognized when the equipment isshipped.

Impairment or disposal of long-lived assets

In August 2001, the FASB issued Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. The Company has implemented FAS 144 for this fiscal year. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Advertising

The Company expenses advertising costs as incurred. Advertising expenses for the nine months ended June 30, 2008 and 2007 were insignificant.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses and other current assets, intangible assets, other assets, short-term notes payable, loan payable-related party, convertible debt, accounts payable, accrued liabilities, and customer deposits, the carrying amounts approximate fair value due to their short maturities.

Income Taxes

The Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Issuance of shares for service

The Company accounts for the issuance of equity instruments to acquire goods and services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably measurable.

Comprehensive Loss

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The provisions of this statement had no impact on the accompanying consolidated financial statements.

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Risk Concentrations

Substantially all of the Company’s revenue is generated from the sale of one product. The loss of, or an economic event related to this product, most likely would have a substantial impact on the Company’s revenue.

The Company maintains cash balances at a financial institution in California. Accounts at this institution are insured by the Federal Deposit Insurance Corporation up to $100,000. As of June 30, 2008, the Company did not have amounts in bank accounts in excess of FDIC insurance limit.

Segment Reporting

Statement of Financial Accounting Standards No. 131 (“SFAS 131”), “Disclosure About Segments of an Enterprise and Related Information” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Currently, SFAS 131 has no effect on the Company’s consolidated financial statements as substantially all of the Company’s operations are conducted in one industry segment during the nine months ended June 30, 2008 and 2007.

Reclassifications

For comparative purposes, prior period’s consolidated financial statements have been reclassified to conform to report classifications of the current period.

Recently Issued Accounting Pronouncements

On January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels are defined as follow:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company is currently evaluating its assets and liabilities that are required to be presented on the balance sheet at fair value.

In September 2006, 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 improves financial reporting by requiring an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer 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 improves financial reporting by requiring 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. An employer with publicly traded equity securities is required to initially recognize the funded status of a def ined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. An employer without publicly traded equity securities is required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after June 15, 2007. However, an employer without publicly traded equity securities is required to disclose the following information in the notes to financial statements for a fiscal year ending after December 15, 2006, but before June 16, 2007, unless it has applied the recognition provisions of this Statement in preparing those financial statements:

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

A brief description of the provisions of this Statement

The date that adoption is required

The date the employer plans to adopt the recognition provisions of this Statement, if earlier.

The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15,2008. Management is currently evaluating the effect of this pronouncement on financial statements.

In February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for their first quarter 2007 financial statements. The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. Management is curre ntly evaluating the effect of this pronouncement on financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for the Company’s fiscal year beginning October 1, 2009. Management is currently evaluating the effect of this pronouncement on financial statements.

In March 2008, the FASB issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The new standard also improves transparency about the location and amounts of derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under Statement 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. Management is currently evaluating the effect of th is pronouncement on financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement replaces SFAS No. 141, Business Combinations. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is on or after Company’s fiscal year beginning October 1, 2009. While the Company has not yet evaluated this statement for the impact, if any, that SFAS No. 141(R) will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after September 30, 2009.

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 2 - GOING CONCERN MATTERS

The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements, during the nine months ended June 30, 2008, the Company incurred net losses of $1,313,649. In addition, the Company had a negative cash flow in operating activities of $400,300 in the nine months ended June 30, 2008, and the Company’s accumulated deficit was $38,050,178 as of June 30, 2008. In addition, the Company’s cash flow requirements have been met by issuing convertible debentures, and much of the Company’s debt is currently in default. Assurance cannot be given that this source of financing will continue to be available to the Company and demand for the Company’s equity instruments will be sufficient to meet its capital needs. If the Company is unable to generate profits and una ble to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to retain its current financing, to obtain additional financing, and ultimately to attain profitability.

The Company has started to have its popcorn machines manufactured in Shanghai, China which will result in a significant cost savings and increase production capacity to 1,000 machines per month. The new requirement for healthy snacks in many school districts has resulted in a significant increase in demand for the Company’s hot air popcorn vending machines. The Company is also testing its machines in several school districts, hospitals and other public venues. The Company expects the nationwide trend toward healthy eating to play a major role in driving the demand for its popcorn machines.

NOTE 3 - SHORT-TERM NOTES PAYABLE

Short-term notes payable at June 30, 2008 consisted of the following


Note payable dated May 2, 2000, bearing interest at 12% per annum and due in January 2001. This note payable is currently in default.	$	222,192
Note payable dated June 26, 2001, bearing interest at 20% per annum and due June 26, 2002. This note payable is currently in default.		50,000
Note payable dated July 5, 2001, bearing interest at 15% per annum and due in September 2001. This note payable is currently in default.		8,076
Note payable dated April 3, 2000 assumed in acquisition of Branax, bearing interest at 12% per annum and due in July 2000. This note payable is currently in default.		15,000
Note payable dated December 29, 1998 assumed in acquisition of Branax, bearing interest at 7% per annum and due in March 1999. This note payable is currently in default.		28,083
Note payable dated December 18, 2000 assumed in acquisition of Branax, bearing interest at 8% per annum and due in January 2002. This note payable is currently in default.		3,000
Note payable dated April 24, 2002, bearing no interest and due in September 2002. This note payable is currently in default.		8,000

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

Note payable dated December 12, 2002, bearing interest of $1,500 due at maturity in January 2003. This note payable is currently in default.

26,650

Note payable dated December 2, 2002, bearing interest of $2,000 due at maturity in February 2003. This note payable is currently in default.

10,000

Note payable dated December 16, 2002, bearing interest of $8,250 due at maturity in May 2003. This note payable is currently in default.

25,000

Notes payable dated Dec.19, Oct. 7, Oct. 28, 2002, bearing interest of $4,000 due at maturity in May and July 2003. These notes payable are currently in default.

21,002

Note payable dated January 23, 2003, bearing interest of $3,000 plus $1,950 for 60 day renewal, due in June 2003. This note payable is currently in default.

15,000

Note payable dated Dec 18, 2002 and Feb 13, 2003, bearing interest of $5,000 plus $3,250 for 60 day renewal and $4,000, respectively, due in May 2003. These notes payable are currently in default.

45,000

Note payable dated June 1, 2003, bearing interest at 10%, due in December 2003. This note payable is currently in default.

15,231

Note payable dated December 9, 2003, bearing interest of $5,000 plus $5,000 for a 90 day renewal due June 2004.This note payable is currently in default.

30,000

Note payable dated December 17, 2003, bearing interest of $2,500 due in March 16, 2004. This note payable is currently in default.

15,000

Note payable dated December 18, 2003, bearing interest of $5,000 Plus $5,000 for a 90 day renewal due June 2004. This note payable is currently in default.

28,043

Note payable dated December 24, 2003, bearing interest of $5,000 due March 23, 2004. This note payable is currently in default.

30,000

Note payable dated January 29, 2004, bearing interest of $2,500 plus $2,500 for a 90 day renewal due July 2004. This note payable is currently in default.

13,475

Note payable dated February 25, 2004, April 27, 2004 and June 8, bearing interest of $5,000, $1,250 and $2,500 due August 2004, July 2004 and October 2004, respectively. These note payables are currently in default.

37,500

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)


Note payable dated March 11, 2004 and May 7, 2004, bearing interest of $1,250 and $1,250, due June 2004 and July 2004, respectively. These note payables are currently in default.		11,658
Note payable dated March 28, 2004, bearing interest of $2,500 plus $2,500 for a 90 day renewal, due September 24, 204. This note payable is currently in default.		14,730

Note payable dated August 21, 2006, bearing interest at 15% per annum, due on February 21, 2008		81,773
Note payable, bearing interest of 15%, due April 20, 2007. This note payable is currently in default.		20,496
Note payable dated January 1, 2006, bearing interest of 15%, due September 30, 2006.		33,750
Note payable dated September 24, 2007, bearing interest of 10%, due November 23, 2007		10,000
	$	818,659

NOTE 4- CONVERTIBLE DEBT

On November 16, 2005, the Company entered into a Securities Purchase Agreement with YA Global Investments, LP. (f/n/a Cornell Capital Partners, LP and hereinafter, “YA Global”). The terms of this agreement provide for the Company to issue up to $1,200,000 in convertible debentures to YA Global and to issue to YA Global a warrant to purchase 120,000,000 shares of the Company’s common stock for $0.01 per share. The convertible debentures can be converted into shares of the Company’s common stock at the option of YA Global at a conversion price of the lesser of $0.03 or 80% of the lowest closing bid price of the Company’s common stock for the five trading days immediately preceding the conversion date. On November 16, 2005, the Company issued a convertible debenture to YA Global in the amount of $700,000 and on December 21, 2005, the Company issued another convertible debenture to YA Global in the amount of $500,000. The Company rece ived net proceeds of $638,049 under the secured convertible debentures. The total net proceeds take into account estimated expenses in the amount of $80,000, the payment of $350,000 to YA Global for the repayment of the prior note issued to YA Global on February 9, 2005, accrued interest of $41,057 and $90,894 in structuring and commitment fees. The convertible debentures are secured by substantially all of the Company’s assets and accrue interest at 10% per annum. YA Global has the ability to foreclose on the Company’s assets if an event of default occurs pursuant to the underlying documents and is not remedied by the Company or waived by YA Global. The secured convertible debentures are due on November 16, 2008. Also, on November 16, 2005, the Company issued a warrant to YA Global to purchase 120,000,000 shares of the Company’s common stock for $0.01 per share. The warrant expires five years from the date of issuance.

Per EITF 00-19, paragraph 4, these convertible debentures do not meet the definition of a “conventional convertible debt instrument” since the debt is not convertible into a fixed number of shares. The debt can be converted into common stock at a conversions price that is a percentage of the market price; therefore the number of shares that could be required to be delivered upon “net-share settlement” is essentially indeterminate. Therefore, the convertible debenture is considered “non-conventional,” which means that the conversion feature must be bifurcated from the debt and shown as a separate derivative liability. This beneficial conversion liability has been calculated to be $ 466,691 at June 30, 2008 and is shown as a current liability in the accompanying consolidated balance sheet. In addition, since the convertible debenture is convertible into an indeterminate number of shares of common stock, it is assumed that the Company could never have enough authorized and unissued shares to settle the conversion of the warrants into common stock. Therefore, the warrants issued in connection with this transaction and all other non-employee options and warrants have been reported as liability at June 30, 2008 in the accompanying balance sheet with an aggregate fair value of $165,791. The value of the warrant was calculated using the Black-Scholes model using the following assumptions: Discount rate using the US Treasury bond equivalent yield (1.62% - 2.88%) consistent with the warrant term, volatility of 272% and expected term of 0.8 to 2.6 years. The fair value of the beneficial conversion feature and the warrant liability will be adjusted to fair value each balance sheet date with the change being shown as a component of net loss.

The fair value of the beneficial conversion feature and the warrants at the inception of these convertible debentures were $300,000 and $3,479,963, respectively. The first $1,200,000 of these discounts has been shown as a discount to the convertible debentures which will be amortized over the term of the debentures and the excess of $2,579,963 has been shown as financing costs in the accompanying statement of operations.

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

Below is a rollforward of the convertible debentures outstanding at June 30, 2008:



Balance at September 30, 2007	$	10,314,845
Additions		424,397
Repayments		(13,000)
Converted to equity		(318,130)
Balance at June 30, 2008	$	10,408,112

A summary of the convertible notes and related discounts is below:


		Total
Gross convertible debentures	$	10,408,112
Debt discounts		(95,143)
Deferred finders’ fee		(62,129)
Net		10,250,840
Less current portion		9,756,550
Long term portion	$	494,290

NOTE 5 - STOCKHOLDERS’ DEFICIT

Common Stock

During the nine months ended June 30, 2008, the Company issued:

109,918,750 shares of common stock in exchange for debt totaling $307,005;

524,546 shares of common stock in accrued interest totaling $5,770;

400,000 shares of common stock in exchange for accounts payable totaling $6,363;

5,391,605 shares that the Company previously committed to issue;

1,700,000 shares of common stock for services rendered totaling $12,600; and

10,000,000 shares of common stock in exchange for cash totaling $100,000

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

Stock to be Issued

At June 30, 2008, the Company had committed to issue 7,865,404 shares of its common stock valued at $684,632.

Stock Option Plan

The Company adopted the 1998 Non-Qualified Stock Option Plan (the “1998 Plan”) on August 31, 1998. The purpose of the 1998 Plan is to promote the growth and profitability of the Company by enabling the Company to attract and retain the best available personnel for positions of substantial responsibility, to provide employees with an opportunity for investment in the Company, and to give employees an additional incentive to increase their efforts on behalf of the Company.

Each employee or consultant as determined by the Board of Directors of the Company is eligible to be considered for the grant of awards under the 1998 Plan. The maximum number of shares of common stock that may be issued pursuant to awards granted under the 1998 Plan is 500,000. Any shares of common stock subject to an award, which for any reason expires or terminates unexercised, are again available for issuance under the 1998 Plan. Under the 1998 Plan, incentive stock options must not be less than the per share par or stated value of the shares on the date the stock options are granted, subject to certain provisions.

As of June 30, 2008, there were no options outstanding under this plan.

Stock Purchase Warrants

During the nine months ended June 30, 2008, the Company did not issue any warrants to purchase shares of the Company’s common stock.

The following table summarizes information about the warrants outstanding at June 30, 2008:



	Warrants	Average Exercise Price
Outstanding, September 30, 2007	129,299,269	$0.01
Expired/Forfeited in FY 2008	(6,495,769)	$0.02
Outstanding, June 30, 2008	122,803,500	$0.01

The intrinsic value of the outstanding warrants at June 30, 2008 was $0.



Weighted-Average Remaining Contractual Life	2.59
Range of Exercise Prices	$0.01-0.1
Weighted-Average Exercise Price of Warrants Outstanding	$0.01

Weighted Average Exercise Price of Warrants Exercisable	$0.01

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Litigation

A lawsuit was filed by a former consultant of the Company in October 2007 at the Los Angeles Central District Court House. The lawsuit alleged a cause of action against Pop N Go and its CEO, Mel Wyman, for breach of contract and fraud. A judgment was rendered in favor of Pop N Go on the complaint filed by the plaintiff in August 2008.

A lawsuit was filed in December 2007 against the company and its CEO, Mel Wyman, for breach of contract at the Superior Court in Pomona. The plaintiff alleges that it entered into an agreement with the company to pay plaintiff $50,450 for advertisement. The company is vigorously contesting the allegations and does not believe plaintiff will prevail in this litigation, although it is too early at this stage of the proceeding to predict. A change of venue was filed and the Company will re-answer complaint at new courthouse.

A lawsuit was filed in May 2008 at the Los Angeles Superior Court alleging that the Company owes money to the plaintiff based on a debenture bond issued by the Company and seeks to recover $55,565. The Company denies that it owes plaintiff the amount and filed an answer to the complaint. The company also intends to contest the validity of the claim and believes it will be able to settle this lawsuit.

A lawsuit was filed in July 2008 alleging the Company owes money to the plaintiff for services rendered. The complaint seeks to recover $110,000. The Company denies that it owes plaintiff any money and has filed an answer to the complaint. The Company intends to contest the validity of the claim. It is too early to predict the outcome of this case, but the Company believes it will prevail in the lawsuit if the matter is not settled. The Company believes it will be able to settle this lawsuit.

NOTE 7 - RELATED PARTY TRANSACTIONS

Loan payable – related party: At June 30, 2008, the Company owed a shareholder of the Company $240,000 under a loan payable agreement. The loan bears interest at 10% per annum and was due September 2001 and is currently in default. During the nine months ended June 30, 2008, the company recorded imputed interest at 12%.

The Company entered into a Consultant Agreement with Calblue, Inc. on October 1, 2006. Melvin Wyman, president of Calblue, was appointed as Chief Executive Officer and President and Chairman of the Board of Directors for Pop N Go. Calblue’s tenure is for a three-year term, and will automatically renew on October 1, 2009 unless the parties agree, in writing, to terminate or change the Agreement. Calblue’s compensation during the three-year term is $150,000, $180,000, $240,000, respectively, payable on a monthly basis. There is a $1,500 month allowance for insurance during term of agreement. Calblue was awarded $25,000 and 4,000,000 shares of restricted common stock (valued at $100,000) issuable upon the execution of a final employment agreement between consultant and the Company. Additionally, a performance bonus will be determined by incremental quarterly increase in the market capitalization of the company stock. T he parties agree to use $5 million as the baseline market cap for quarter one beginning October 1, 2006. Consultant will be paid an amount equal to 2% of each succeeding quarterly market cap increase. Payment will be made in cash or stock at the option of Calblue.

The Company also has accrued consulting to another shareholder of the Company. At June 30, 2008, total accrued consulting expenses to shareholders amounts to $453,169.

NOTE 8 - SEGMENT INFORMATION

Prior to October 1, 2002, the Company operated under two business units which had separate management and reporting infra-structures that offered different products and services. The business units had been aggregated into two reportable segments (machine sales and flavorings). During the nine months ended June 30, 2008 or 2007, the Company did not operate the flavoring segment.

POP N GO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007

(UNAUDITED)

The Company operates domestically as well as internationally. The Company sells its machines to various countries including Australia, and others in North America, Europe, Asia and South America. The Company operates its revenue sharing program at this time domestically and currently has no long lived assets outside of the United States.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Introduction-Forward Looking Statements

Forward-Looking Statements and Associated Risks. This Report contains forward-looking statements. Such forward-looking statements include statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing plans, (e) our anticipated needs for working capital, (f) our lack of operational experience, and (g) the benefits related to ownership of our common stock. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking state ments are based largely on our company’s expectations and are subject to a number of risks and uncertainties, including those described in “Business Risk Factors” of our Form 10-K for the year ended September 30, 2006. Actual results could differ materially from these forward-looking statements as a result of changes in trends in the economy and our company’s industry, demand for our products, competition, reductions in the availability of financing and availability of raw materials, and other factors. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Report will in fact occur as projected. Any forward-looking statement speaks only as of the date on which such statement is made, and Pop N Go, Inc. undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. Ne w factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Overview

Pop N Go, Inc. (the “Company”) was organized in October of 1996, for the purpose of conducting a business in the development, manufacturing, marketing and distribution of a new line of specialty food service and food vending machine equipment and related food products. Revenue streams are anticipated to be generated in the future from (1) the sale of the Pop N Go vending machines; and (2) the operation of Company-owned revenue share machines, and which are typically located in schools, airports, shopping malls, retail stores and high traffic public locations. The owner or operator and we share the revenue generated by Company-owned machines. Our personnel provide maintenance and collection services for revenue sharing machines.

Going Concern

Our independent auditor, Kabani & Co has expressed substantial doubt as to the Company’s ability to continue as a going concern for the year ended September 30, 2007 based on significant operating losses that the Company has incurred and the fact that the Company is currently in default on 70% of its convertible debentures and 100% of the short-term note payables. The Company owes delinquent payroll taxes of $187,803, which accrued prior to September 2002.

The Company has increased marketing activities to help generate sales sufficient to meet its cash flow obligations.

Management intends to continue to raise additional financing through private equity or debt financing to pay down Company debt and/or reduce the cost of debt service.

We have a working capital deficit of $17,130,957 at June 30, 2008, which means that our current liabilities exceeded our current assets on June 30, 2008 by that amount.

Assurances cannot be given that financing through private placements will continue to be available or will be sufficient to meet our capital needs. If we are unable to generate profits and unable to continue to obtain financing to meet our working capital requirements, we may have to curtail our business sharply or cease business altogether.

Management’s Strategy

We continually evaluate opportunities to improve popcorn machine models and assess the marketplace to capitalize on new business opportunities. The fundamental strategy is to launch a program to place our patented machines in schools, colleges and other major institutional facilities, including airports, hospitals and corporate cafeterias. We are also engaged in a revenue sharing program which allows major food service operators to quickly incorporate our machines into their systems without any capital expenditures and with minimal space and labor requirements.

The Company has started to have its popcorn machines manufactured in Shanghai, China which will result in a significant cost savings and increase production capacity to 1,000 machines per month. The new requirement for healthy snacks in many school districts has resulted in a significant increase in demand for the Company’s hot air popcorn vending machines. The Company expects the nationwide trend toward healthy eating to play a major role in driving the demand for its popcorn machines.

Results of Operations

Three Months Ended June 30, 2008 Compared To Three Months Ended June 30, 2007

The Company generated net loss of $804,136 for the three months ended June 30, 2008 as compared to a net loss of $718,451 for the three months ended June 30, 2007. This represents a loss from operations of $398,351 and $357,684 for the three months ended June 30, 2008 and 2007, respectively.

Total equipment sales for the three months ended June 30, 2008 were $42,894 as compared to $219,932 for the three months ended June 30, 2007. The decrease is due to the Company’s deferral of approximately $177,038 (80.5%) in revenue for sale of equipment in the current quarter that has not yet been delivered at June 30, 2008.

Total cost of goods sold for equipment sales was $19,311 (40.7% of sales) and $98,093 (44.6% of sales) for the three months ended June 30, 2008 and 2007. The decrease is due to the Company’s deferral of approximately $560,000 in revenue for sale of equipment in the current quarter that has not yet been delivered at June 30, 2008.

Total revenue share income for the three months ended June 30, 2008 was $4,607 as compared to $10,373 for the three months ended June 30, 2007. This represents a decrease in revenue share income of 5,766 (55.6 %) over the three months ended June 30, 2007. This decrease was primarily due to the Company’s moving away from revenue share business and growing its managed equipment business.

Total cost of goods sold for revenue share income for the three months ended June 30, 2008 was $2,508 as compared to $13,991 for the three months ended June 30, 2007. This decrease of $11,483 (82.1%) was primarily due to the Company’s moving away from revenue share business and growing its managed equipment business.

Total operating expenses consist primarily of general and administrative expenses. For the three months ended June 30, 2008, total general and administrative expenses were $424,033 as compared to $475,905 for the three months ended June 30, 2007. This represents a 10.9% decrease over the same period in the prior three months. This decrease is primarily a result of lower consulting, legal and marketing expenses that were incurred in previous year for the negotiations with China to manufacture equipment.

Other income (expenses) increased from $(360,767) for the three months ended June 30, 2007 to $(406,785) for three months ended June 30, 2008, which represents a 12.8% increase. The increase is principally due to the change in the fair value of the warrant and derivative liabilities. These liabilities principally relates to the fair value of the warrants issued in connection with the secured convertible debentures issued to YA Global Investments, L.P. (f/n/a Capital Partners, LP and hereinafter, “YA Global”) and the beneficial conversion feature embedded in the convertible debt.

Nine Months Ended June 30, 2008 Compared To Nine Months Ended June 30, 2007

The Company incurred a net loss of $1,313,649 for the nine months ended June 30, 2008 as compared to a net loss of $3,943,004 for the nine months ended June 30, 2007. This represents a loss from operations of $1,147,032 and $1,632,031 for the nine months ended June 30, 2008 and 2007, respectively.

Total equipment sales for the nine months ended June 30, 2008 were $320,389 as compared to $346,172 for the nine months ended June 30, 2007. The increase is due to the Company’s focus on expanding the marketing of the managed equipment sales program and beginning to sell its popcorn machines.

Total cost of goods sold for equipment sales was $153,268 (47.8% of sales) and $191,176 (55.2% of sales) for the nine months ended June 30, 2008 and 2007. The increase is due to the Company’s focus on expanding the marketing of the managed equipment sales program and beginning to sell its popcorn machines.

Total revenue share income for the nine months ended June 30, 2008 was $25,503 as compared to $47,800 for the nine months ended June 30, 2007. This represents a decrease in revenue share income of 46.6% over the six months ended June 30, 2007. This decrease was primarily due to the Company’s moving away from revenue share business and growing its managed equipment business.

Total cost of goods sold for revenue share income for the nine months ended June 30, 2008 was $15,223 (59.7% of sales) as compared to $36,754 (76.9% of sales) for the nine months ended June 30, 2007. The decrease of $21,521(58.6%) was due to the Company’s moving away from revenue share business and growing its managed equipment business.

Total operating expenses consist primarily of general and administrative expenses. For the nine months ended June 30, 2008, total general and administrative expenses were $1,324,433 as compared to $1,798,073 for the nine months ended June 30, 2007. This represents a 26.32% decrease over the same period in the prior nine months. This decrease is primarily a result of lower consulting, legal and marketing expenses that were incurred in previous year for the negotiations with China to manufacture equipment.

Other income (expenses) decreased from ($2,310,973) for the nine months ended June 30, 2007 to ($166,617) for nine months ended June 30, 2008, which represents a 92.8% decrease. The decrease is principally due to the amortization of beneficial conversion feature and debt discount and the change in the fair value of the warrant and derivative liabilities. These liabilities principally relates to the fair value of the warrants issued in connection with the secured convertible debentures issued to YA Global and the beneficial conversion feature embedded in the convertible debt.

Liquidity and Capital Resources

As of June 30, 2008, we had cash and cash equivalents of $44,621 as compared to cash and cash equivalents of $131,167 as of June 30, 2007. At June 30, 2008, we had a working capital deficiency (total current liabilities in excess of total current assets) of $17,130,957 as compared to a working capital deficiency (total current liabilities in excess of current assets) of $16,152,692 as of June 30, 2007. This increase in working capital deficiency was due to the increase in convertible debentures.

Net cash used in operating activities was $ 400,300 for nine months ended June 30, 2008, as compared to the net cash of $2,089,709 used in operating activities for the nine months ended June 30, 2007.

As shown in the consolidated financial statements, the Company’s accumulated deficit was $38,050,178 as of June 30, 2008. In addition, the Company’s cash flow requirements have been met by issuing convertible debentures, and much of the Company’s debt is currently in default. Assurance cannot be given that this source of financing will continue to be available to the Company and demand for the Company’s equity instruments will be sufficient to meet its capital needs. If the Company is unable to generate profits and unable to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether.

During the nine months ended June 30, 2008, the Company issued:

109,918,750 shares of common stock in exchange for debt totaling $307,005;

524,546 shares of common stock in accrued interest totaling $5,770;

400,000 shares of common stock in exchange for accounts payable totaling $6,363;

5,391,605 shares that the Company previously committed to issue;

1,700,000 shares of common stock for services rendered totaling $12,600; and

10,000,000 shares of common stock in exchange for cash totaling $100,000

On November 16, 2005, we entered into a Securities Purchase Agreement pursuant to which we sold to YA Global Investments, L.P. (f/n/a Cornell Capital Partners, LP and hereinafter, “YA Global”) convertible debentures in the aggregate principal amount of $1,200,000 pursuant to the terms of the secured convertible debentures and related financing agreements. The November 2005 secured convertible debentures in the principal amount of $1,200,000 consolidated prior convertible debentures and promissory notes issued to YA Global and included new additional convertible debentures, as described below. On February 9, 2005, we issued to YA Global a promissory note in the principal amount of $350,000, which accrued interest at 12% per annum (the “ February 2005 Note ”). The February 2005 Note was issued to consolidate the following: (i) a 5% convertible debenture in the original principal amount of $70,000 issued on May 17, 2004; (ii) a 5% c onvertible debenture in the original principal amount of $70,000 issued on July 22, 2004; (iii) a 5% convertible debenture in the original principal amount of $60,000 issued on September 13, 2004, and (iv) a November 24, 2004, 12% promissory note in the original principal amount of $150,000. On November 16 2005, the principal amount of the February 2005 Note plus accrued and unpaid interest was $350,000 in principal plus $41,057. On November 16, 2005, pursuant to the Securities Purchase Agreement, we surrendered the February 2005 Note for conversion into the convertible debentures and purchased additional convertible debentures for the total purchase price of $1,200,000.

Out of the total principal amount of $1,200,000, we received gross proceeds of $700,000 in November 2005 and $500,000 on December 21, 2005. We received net proceeds of $638,049 under the secured convertible debentures. The total net proceeds take into account estimated expenses in the amount of $80,000, the payment of $350,000 to YA Global for the repayment of the prior note issued to YA Global on February 9, 2005, accrued interest of $41,057 and $90,894 in structuring and commitment fees. The convertible debentures are secured by substantially all of our assets and accrue interest at 10% per annum. The secured convertible debentures are due on November 16, 2008. YA Global is entitled, at its option, to convert and sell all or any part of the principal amount of the convertible debentures, plus any and all accrued interest, into shares of common stock at a price equal to the lesser of (i) $0.03 and (ii) eighty percent (80%) of the lowest volume weighted average price of the common stock during the five (5) trading days immediately preceding the date of conversion as quoted by Bloomberg, LP.

We currently have $10,408,112 of outstanding convertible debentures, which includes convertible debentures issued to various private investors and the secured convertible debenture issued to YA Global. Of those debentures, $8,314,584, or 79.9% of the total convertible debentures, is in default as of June 30, 2008.

Convertible Debentures and Promissory Notes

We are attempting to become current on our obligations by converting the debentures and promissory notes to common stock and issuing long-term promissory notes. We currently have $10,408,112 of outstanding convertible debentures, which includes convertible debentures issued to various private investors and the secured convertible debenture issued to YA Global. Of those debentures, $8,314,584 or 79.9% of the total convertible debentures is in default. We also have short term notes in the amount of $818,659. We are in default on a significant majority of these notes and in addition we are also in default on a promissory note we issued to Branax, LLC in the amount of $240,000. We have been in discussions with holders of a majority of these obligations, and have requested renewals by offering a conversation rate more acceptable with today's market value. We have not yet been able to bring these obligations current and the repayment obligations under the defaulted debentures an d notes can be accelerated at any time by the holders of the notes.

In December 2005, the shareholders approved an increase in authorized shares from 300,000,000 to 900,000,000 which gives the Company the opportunity to convert our debentures and promissory notes to common stock of the Company. We expect to issue new long-term debt to refinance that portion of our debt that we do not convert to equity. Our ability to service any new long term notes will be dependent on our ability to successfully execute our business plan. There is no assurance that we will be able to make timely payments on any debt instruments that we issue in the future.

We issued a promissory note to Branax, LLC for $240,000 in connection with our acquisition of Branax in July 2001. Our default on this promissory note could result in litigation between Pop N Go and the former shareholders of Branax. If such litigation were to occur we would be forced to expend significant time, money and other resources that could otherwise be used to advance our business operations.

Branax, LLC

On July 6, 2001, pursuant to an agreement to purchase membership interests, Pop N Go, through our newly formed, wholly owned subsidiary, POPN Acquisition Corp, acquired 100% of the membership interests of Branax, LLC. Branax produces Flixstix, the first flavoring for popcorn to be offered in individual servings. Branax has been attempting to develop partnering programs with major food manufacturers. Although there was a successful program with one major customer, the delay in developing significant revenues from Branax has resulted in the decision to write off goodwill.

We believe that Branax has several opportunities for significantly expanding its sales which could be enhanced with the inflow of investment capital into Pop N Go during 2007. We believe the capital would enable Branax to develop the specialized packaging and product mix required by these significant customers. There is no assurance such capital will be available, or on what terms.

We are currently in default on a promissory note in the original principal amount of $240,000 that we issued to purchase Branax, LLC and such default could have legal ramifications.

Management’s Strategy

The Company has started to have its popcorn machines manufactured in Shanghai, China which will result in a significant cost savings and increase production capacity to 1,000 machines per month. The new requirement for healthy snacks in many school districts has resulted in a significant increase in demand for the Company’s hot air popcorn vending machines. The Company expects the nationwide trend toward healthy eating to play a major role in driving the demand for its popcorn machines.

Critical Accounting Policies

Our discussion and analysis of our financial conditions and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparations of financial statements require management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures on the date of the financial statements. On an on-going basis, we evaluate our estimates, including, but not limited to, those related to revenue recognition. The Company uses authoritative pronouncements, historical experience and other assumptions as the basis for making judgments. Actual results could differ from those estimates. The Company believes that the following critical accounting policies affect our more significant judgments and estimates in the preparation of our consolidated financial statements.

Rental inventory is amortized to an estimated salvage value over an estimated useful life of seven years. Used equipment inventory is sold as used and the un-amortized cost is charged to cost of sales. The Company amortizes the cost of rental inventory using the straight-line method designed to approximate the rate of revenue recognition. The Company believes that our amortization rates, salvage values, and useful lives are appropriate in our existing operating environment.

The Company recognizes revenues at the time products are shipped. Revenue streams are generated from (1) the sale of the Pop N Go vending machines; and (2) the operation of Company owned revenue share machines, which are owned by the Company, and are typically located in retail stores, shopping malls and high traffic locations. The owner or operator and the Company share the revenue generated by Company owned machines. Company personnel provide maintenance and collection services for revenue sharing machines. It is estimated that up to 80% of the Company’s machines will be operated on a revenue sharing program. There is of course no assurance that the Company will be successful or will realize profits from its activities.

The Company assesses the fair value and recoverability of our long-lived assets, including goodwill, whenever events and circumstances indicate the carrying value of an asset may not be recoverable from estimated future cash flows expected to result from its use and eventual disposition. In doing so, the Company makes assumptions and estimates regarding future cash flows and other factors to make our determination. The fair value of our long-lived assets and goodwill is dependent upon the forecasted performance of our business, changes in the industry, the market valuation of our common stock and the overall economic environment. When the Company determines that the carrying value of its long- lived assets and goodwill may not be recoverable, the Company measures any impairment based upon the excess of the carrying value that exceeds the estimated fair value of the assets. If the Company does not meet its operating forecasts or if the market value of its co mmon stock declines significantly, the Company may record impairment charges as needed .

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

(a)

Evaluation Of Disclosure Controls And Procedures

Pop N Go’s Principal Executive Officer/Principle Accounting and Financial Officer (one person), after evaluating the effectiveness of Pop N Go’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) as of the end of the period covered by this Report, have concluded that as of such date, Pop N Go disclosure controls and procedures were adequate and effective to ensure that material information relating to Pop N Go that is required to be disclosed by Pop N Go in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and accumulated and communicated to Pop N Go’s management, including its Principal Executive Officer/Principal Accounting and Financial Officer (one person), to allow timely decisions regarding required disclosure.

(b)

Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of Pop N Go’s internal controls during the Company’s last fiscal quarter, Pop N Go’s Principal Executive Officer/Principal Accounting Officer (one person) has determined that there are no changes to Pop N Go’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially effect, the Company’s internal controls over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

NOTE 9 - SUBSEQUENT EVENTS

On August 8, 2008, the Company converted debt on its Secured Debenture for $11,868 with the issuance of 21,500,000 shares of common stock. See Note 4 for a description of the terms of the Secured Debenture.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

We are in default in the repayment of principal on approximately $8,314,584 or 79.9% of our convertible debentures and are in default in the repayment of principal on 100% of our short-term notes.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


Exhibit Number	Description of Exhibit
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	Pop N Go, Inc.

September 18, 2008	By:	/s/ Melvin Wyman
		Melvin Wyman Chief Executive Officer and Chief Financial Officer



September 18, 2008	By:	/s/ Melvin Wyman
		Melvin Wyman Chief Financial Officer and Chief Financial Officer

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Pop N Go (POPN) Inactive 10-QQuarterly report

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