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 statements 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. New 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 $155,729, 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 $16,903,246 at March 31, 2008, which means that our current liabilities exceeded our current assets on March 31, 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 March 31, 2008 Compared To Three Months Ended March 31, 2007

The Company generated net income of $122,922 for the three months ended March 31, 2008 as compared to a net loss of $706,802 for the three months ended March 31, 2007. This represents a loss from operations of $411,321 and $476,247 for the three months ended March 31, 2008 and 2007, respectively.

Total equipment sales for the three months ended March 31, 2008 were $21,598 as compared to $118,645 for the three months ended March 31, 2007. The decrease is due to the Company's deferral of approximately $150,000 in revenue for sale of equipment in the current quarter that has not yet been delivered at March 31, 2008.

Total cost of goods sold for equipment sales was $17,324 (58.3% of sales) and $90,114 (67.2% of sales) for the three months ended March 31, 2008 and 2007.
The decrease is due to the Company's deferral of approximately $150,000 in revenue for sale of equipment in the current quarter that has not yet been delivered at March 31, 2008.

Total revenue share income for the three months ended March 31, 2008 was $8,137 as compared to $15,516 for the three months ended March 31, 2007. This represents a decrease in revenue share income of 47.6% over the three months ended March 31, 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 March 31, 2008 was $4,930 (16.6% of sales) as compared to $13,207 (9.8% of sales) for the three months ended March 31, 2007. This decrease 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 March 31, 2008, total general and administrative expenses were $418,002 as compared to $507,087 for the three months ended March 31, 2007. This represents a 17.6% 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 ($230,555) for the three months ended March 31, 2007 to $533,443 for three months ended March 31, 2008, which represents a 313.7% 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.

Six Months Ended March 31, 2008 Compared To Six Months Ended March 31, 2007

The Company incurred a net loss of $509,313 for the six months ended March 31, 2008 as compared to a net loss of $3,224,553 for the six months ended March 31, 2007. This represents a loss from operations of $749,481 and $1,274,347 for the six months ended March 31, 2008 and 2007, respectively.

Total equipment sales for the six months ended March 31, 2008 were $277,495 as compared to $126,240 for the six months ended March 31, 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 $133,957 (44.9% of sales) and $93,083 (56.9% of sales) for the six months ended March 31, 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 six months ended March 31, 2008 was $20,896 as compared to $37,427 for the six months ended March 31, 2007. This represents a decrease in revenue share income of 44.2% over the six months ended March 31, 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 six months ended March 31, 2008 was $12,715 (4.3% of sales) as compared to $22,763 (13.9% of sales) for the six months ended March 31, 2007. This decrease 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 six months ended March 31, 2008, total general and administrative expenses were $900,400 as compared to $1,322,168 for the six months ended March 31, 2007. This represents a 31.9% decrease over the same period in the prior six 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 ($1,950,206) for the six months ended March 31, 2007 to $240,618 for six months ended March 31, 2008, which represents a 112.8% 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 and the beneficial conversion feature embedded in the convertible debt.

Liquidity and Capital Resources

As of March 31, 2008, we had cash and cash equivalents of $10,124 as compared to cash and cash equivalents of $153,871 as of March 31, 2007. At March 31, 2008, we had a working capital deficiency (total current liabilities in excess of total current assets) of $16,903,246 as compared to a working capital deficiency (total current liabilities in excess of current assets) of $16,154,707 as of March 31, 2007. This increase in working capital deficiency was due to the increase in convertible debentures.

Net cash used in operating activities was $396,399 for six months ended March 31, 2008, as compared to the net cash of $1,486,750 used in operating activities for the six months ended March 31, 2007.

As shown in the consolidated financial statements, the Company's accumulated deficit was $37,245,842 as of March 31, 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 six months ended March 31, 2008, the Company issued:

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51,550,000 shares of common stock in exchange for debt totaling $249,300;

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

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

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

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

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11,000,000 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% convertible 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 $10,428,545 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, $7,305,584, or 70% of the total convertible debentures, is in default as of March 31, 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 $10,428,545 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, $7,305,584 or 70% 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 and 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

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.

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 common 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.