Tradeshow Marketing CO. Ltd. - Quarterly Report of Financial Condition (10QSB)

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: August 31, 2007

o	TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 001-32619

_____________________________________________________

The Tradeshow Marketing Company, Ltd.

(Exact name of registrant as specified in its charter)

Nevada	06-1754875
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

4550 East Cactus Road, Suite 220

Phoenix, AZ 85032-7702

(Address of principal executive offices including zip code)

(800) 585-8762

( Registrant’s telephone number, including area code)

Sierra Corporate Services

100 W. Liberty Street, 10 th Floor, Reno, NV 89501

(Name and address of agent for service)

(775) 788-2000

(Telephone Number, including area code, of agent for service)

with a copy to:

SteadyLaw Group, LLP

501 W. Broadway, Suite 800

San Diego, CA 92101

Telephone (619) 399-3090

Telecopier (619) 330-1888

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 o

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

Number of shares outstanding of the issuer’s common stock as of the latest practicable date: 22,394,323 shares of common stock, $.0001 par value per share, as of December 19, 2007.

Transitional Small Business Disclosure Format (check one): Yes o No x

Quarterly Report on FORM 10-QSB For The Period Ended

August 31, 2007

Table of Contents

The Tradeshow Marketing Company, Ltd.

PART I. FINANCIAL INFORMATION		4

Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis or Plan of Operation	12
Item 3.	Controls and Procedures	18

PART II. OTHER INFORMATION		19

Item 1.	Legal Proceedings	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
Item 5.	Other Information	19
Item 6.	Exhibits	19

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The Tradeshow Marketing Company, Ltd.

Balance Sheets

	Aug 31, 2007			May 31, 2007
	(unaudited)

ASSETS
Current Assests
Cash and Cash Equivalents	$	14,118		$	136,815
Merchant Service Holdbacks		4,983			5,257
Prepaid Expenses		19,280			17,645
Inventory		22,027			36,041
Total Current Assets		60,408			195,758

Long term Assets
Furniture & Equipment - Net		55,152			31,877
Vehicles - Net		6,990			8,426
Network Infrastructure & Software - Net		30,671			33,704
Other Assets		23,648			7,553
Total Long Term Assets		116,461			81,560

Total Assets	$	176,869		$	227,318

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Accounts Payable	$	20,480		$	28,277
Accured Liabilities		43,240			-
Shareholder Loan - Related Party		88,818			88,818
Current Portion - Vehicle Loan		5,484			5,484
Total Current Liabilities		158,022			122,579

Vehicle Loan		5,020			6,564

Total Liabilities		163,042			129,143

Stockholders' Equity

Common Stock, authorized 50,000,000
shares, par value $0.0001, 20,777,533 and
20,342,533 issued and outstanding at
Augus 31, 2007 and May 31, 2007		2,081			2,037
Paid in Capital		1,251,387			1,142,681
Accumulated Deficit		(1,239,641	)		(996,543	)

Total Shareholders' Equity		13,827			148,175

Total Liabilities and Stockholders' Equity	$	176,869		$	277,318

The Tradeshow Marketing Company, Ltd.

Statments of Operations

(unaudited)

	Three Months Ended
	August 31, 2007			August 31, 2006

Revenue	$	89.895		$	132,540

Cost of Sales		50,371			78,689

Gross Profit		39,524			53,851

Expenses

General and Administrative		249,110			83,592
Professional Fees		33,512			3,322

Total Expenses		282,622			86,914

Net Loss	$	(243,098	)	$	(33,063	)

Other Comprehensive Income/(Loss)
Currency Translation		-			-

Comprehensive Income (Loss)	$	(243,098	)	$	(33,063	)

Basic and Diluted
Loss per Share	$	(0.01	)	$	0.00

Weighted Average
Nubmer of Shares		20,548,892			17,882,761

The Tradeshow Marketing Company, Ltd.

Statements of Stockholders' Equity

For the Year Ended May 31, 2007 and the Three Months Ended August 31, 2007

								Foreign
	Common Stock				Paid in			Currency			Accumulated			Total
	Shares		Amount		Capital			Translation			Deficit			Equity
Balance, May 31, 2006		17,869,283		1,789		510,913			14,141			(449,972	)		76,871

Contributed Capital						14.141			(14.141	)					-

Sale of common stock		1,740,000		174		439,826									440.000

Shares issued for Services		365,750		37		97,838									97.875

Shares issued for conversion
of Debt at $0.25 per share		320,000		32		79,968									80.000

Shares per adjustment
provisions of prior acquisition		47,500		5		(5	)								0

Net Loss												(546,571	)		(546,571	)
Balance, May 31, 2007		20,342,533		2,037		1,142,681			-			(996,543	)		148,175

Shares issued for Services		80,000		8		19,992									20,000

Sale of common stock		335,000		36		88,714									88,750

Net Loss												(243,098	)		(243,098	)
Balance, August 31, 2007		20,777,533	$	2,081	$	1,251,387		$	-		$	(1,239,241	)	$	13,827

The Tradeshow Marketing Company, Ltd.

Statements of Cash Flows

(unaudited)

	Three Months Ended
	August 31, 2007			August 31, 2006

Operating Activities

Net Loss	$	(243,098	)	$	(33,063

Significant Non-Cash Translation
Stock issued for service		20,000			-
Depreciation/Amortization Expense		7,807			4,299
Changes in Assets and Liabilities
(Increase)/Decrease in Inventory		14,014			5,050
(Increase)/Decrease in Accounts Receiveable		274			(20,983	)
(Increase)/Decrease in Other Assets		(16,095	)		-
(Increase)/Decrease in Prepaid Expense		(1,635	)		-
Increase/(Decrease) in Accured Expense		43,240			-
Increase/(Decrease) in Payables		(7,797	)		(15,039	)
Net Cash Used by Operating Activities		(183,290	)		(53,736	)

Investment Activities
Purchase of Network Infastructure		-			(2,091	)
Equipment Purchase		(26,613	)		5,436
Net Case Provided (Used) by Investing Activities		(26,613	)		3,345

Financing Activities
Proceeds from Shareholder Loans		-			33,410
Proceeds/(Payments) - Equipment Financing		(1,544	)		(1,561	)
Proceeds from sale of Common Stock		88,750			10,000
Cash Provided by Financing Activities		87,206			41,843

Net Decrease in Cash		(122,697	)		(14,542	)

Cash, Begining of Period		136,815			43,538

Cash, End of Period	$	14,118		$	28,996

THE TRADESHOW MARKETING COMPANY INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(August 31, 2007 and May 31, 2006)

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

The Tradeshow Marketing Company, Inc. (the Company) was organized in the state of Nevada on December 3, 2003. The Company was formed to market specialty products at tradeshows, infomercials, specialty product shops and kiosks in malls. The Company through August 31, 2006 has only been selling at tradeshows and in malls.

On August 31, 2005, the Company purchased the inventory and executed a sublease agreement with two small retail stores in the Arrowhead and Paradise Valley Malls in Phoenix, Arizona.

On March 15, 2007 the Company organized the Sandstrom OnTV Company (Sandstrom) as a wholly-own subsidiary. Sandstrom was organized to sell unit franchises to operate retail stores under the tradename “Sandstrom OnTV.” These statements have been consolidated to reflect the operations of the Company and its subsidiary.

These statements have been adjusted to reflect the restatement of the Company’s May 31, 2006 and 2005 audited financial statements.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

The relevant accounting policies and procedures are listed below.

Adjustments within Financial Statements

These statements have been adjusted to reflect the restatement of the Company’s May 31, 2006 financial statements please refer to the restated financials for details.

The Balance Sheet and Statement of Stockholders’ Equity has been adjusted to reflect the increase in Paid in Capital of $14,141 to eliminate the $14,141 accumulated foreign currency translation.

Accounting Basis and Consolidation

The accompanying unaudited consolidated financial statements of The Tradeshow Marketing Company Inc. have been prepared in accordance with generally accepted accounting principles (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission, and are unaudited. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the three month period ended August 31, 2007, may not be indicative of the results for the entire year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-KSB for the fiscal year ended May 31, 2007.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and deposits in transit.

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

Translation of Currency

The company’s headquarters were in Canada through May 31, 2006 and maintained its financial records in $CDN. For the sake of reporting the Balance Sheet, amounts were converted to United States dollars using the exchange rate at the end of each period. Income statement amounts were converted using an average rate for the period resulting in a translation gain or loss for each period shown.

On June 1, 2006 the Company relocated its headquarters to Phoenix, Arizona and established its accounts in U.S. Banks and adopted the U.S. Dollar as its functional currency. The company has eliminated its accumulated adjustment for foreign currency translation to contributed capital.

Inventory

The company inventories finished products it has purchased for resale.

Revenue Recognition and Accounts Receivable

All the sales for the Company are on a point of sale/cash and carry basis. The Company does not carry receivables for any sales. All sales are final. Revenue is recognized when a sale is made. No warranties are expressed or offered on any goods except that of the manufacturer, which they support directly.

Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

Equipment

Equipment is stated at cost. Depreciation is computed using the straight-line method over the assets useful lives, which are 5 year to 7 years. Maintenance and repairs are charged to expense as incurred.

	31-Aug-07			31-May-07
Equipment	$	65,959		$	39,346
Accumulated Depreciation		(10,807	)		(7,469	)
Equipment – Net	$	55,152		$	31,877

Vehicle	$	23,906		$	23,906
Accumulated Depreciation		(16,916	)		(15,480	)
Vehicle - Net	$	6,990		$	8,426

Network Infrastructure	$	54,100		$	54,100
Accumulated Depreciation		(23,429	)		(20,396	)
Network Infrastructure – Net	$	30,671		$	33,704

Earnings per Share (EPS)

The basic earnings (loss) per share are calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share are calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity.

The Company has not issued any options or warrants since inception, or other dilutive securities.

The numerators and denominators used in the computations of basic and diluted EPS are presented in the following table:

	August 31,
	2007			2006

Numerators for Basic and Diluted EPS
Net income/(loss) to common shareholders	$	(243,098	)	$	(33,063	)

Denominators for Basic and Diluted EPS
Weighted average of shares outstanding		20,394,547			17,882,761

Basic and Diluted Earnings/(Loss) Per Share	$	(0.01	)	$	(0.00	)

NOTE 3. SEGMENT INFORMATION

The Company operates in two reportable business segments: Retail and Franchise Sales. The Retail segment is principally engaged in the operation of two retail outlets specializing in “As Seen on TV” products. On March 15, 2007 the Company organized the Sandstrom OnTV Company (Sandstrom) as a wholly-own subsidiary. Sandstrom was organized to sell unit franchises that operate retail stores under the tradename “Sandstrom OnTV.” The following table presents segment activity for the quarter ended August 31, 2007:

	As Seen
	On TV			Sandstorm			Tradeshow			Consolidated

Revenue	$	89,833		$	-		$	62		$	89,895

Cost of Sales		50,371			-			-			50,371

Gross Profit		39,462			-			62			39,524

Expenses
General and Administrative		83,277			120,853			6,179			210,309
Marketing and Advertising		77			32,532			-			32,609
Professional Fees		-			15,991			23,713			39,704

Total Expenses		83,524			169,376			29,892			282,622

Net Loss	$	(43,892	)	$	(169,376	)	$	(29,830	)	$	(243,098

NOTE 4. STOCKHOLDERS’ EQUITY

Transactions for the Year Ended May 31, 2007

On June 1, 2006 the Company recorded $14,141 contributed capital to eliminate the accumulated foreign currency translation balance.

On August 30, 2006 the Company issued 20,000 common shares in a private placement for $10,000.

On October 15, 2006 the Company issued 25,750 common shares for services at $12,875.

On December 30, 2006 the Company issued 200,000 common shares at $0.25 per share for services valued at $50,000.

On January 15, 2007 the Company issued 714,000 common shares at $0.25 per share for $178,500 cash and 320,000 common shares at $0.25 for the conversion of $80,000 shareholders loan.

On March 1, 2007 the Company issued 140,000 common shares at $0.25 per share for services valued at $35,000.

On May 11, 2007 the Company issued 47,000 common shares related to the July 20, 2005 purchase of the assets of Sandstrom stores in Phoenix wherein the Company issued 15,000 shares at a stated value of $1.00 per share. The additional 47,000 shares issued adjusts the value of the total shares issued to the fair value of $0.24 per share.

On May 15, 2007 the Company issued 1,006,000 common shares at $0.25 per share in a private placement for $251,500 cash.

Transactions for the Three Months Ended August 31, 2007

During the three months ended August 31, 2007 the Company issued 80,000 common shares for services valued at $20,000 and 355,000 common shares in a private placement for $88,750 cash.

NOTE 4. OPERATING LEASES AND OTHER COMMITMENTS:

The Company has two operating leases for retail outlets located in the Arrowhead and Paradise Valley Malls in Phoenix, Arizona with aggregate monthly payment of $9,830 or $117,969 per year. These leases expire in December 2008 and December 2011 respectively. The Company also has a lease for office space in the Scottsdale Airpark. The monthly payment is $5,432 or $65,184 per year. The lease expires in February 2010 with an option for a 2 year renewal. The numbers shown below assume that the company will be able to renew its leases and continue to operate these facilities at the current rate:

	Year 1		Year 2		Year 3		Year 4		Year 5
Retail Outlets	$	117,969	$	117,969	$	117,969	$	117,969	$	117,969
Office Space	$	65,184	$	65,184	$	65,184	$	65,184	$	65,184

NOTE 5. GOING CONCERN

The accompanying financial statements have been prepared assuming that the company will continue as a going concern. The Company has accumulated a total loss of [Missing Graphic Reference] since inception. This raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan of developing specialty retail products, purchasing retail stores in malls and developing product infomercials.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Nature of Business

The Tradeshow Marketing Company was incorporated on December 03, 2003. Over the past twenty years, Tradeshow’s management team and demonstration professionals have worked in the direct sales industry marketing a variety of products directly to consumers at trade shows, malls (kiosks), fairs and exhibitions throughout Canada and the United States. The Company’s product categories include specialty household, beauty and fitness, home and garden and electronics products. The products we retail are considered small ticket items, are innovative and are highly desired by the target audience. Price points for our products typically start in the $50 range and our target demographic is in the $50,000 - $100,000 annual income range.

Products from various suppliers that we have sold in the past included:

a) Ontel Products: “As Seen On TV” products that include the Swivel Sweeper, Glass Wizard and AB Master;

b) American Direct (TriStar): product supplied includes the Lateral Thigh Trainer and Jack Lalanne’s Power Juicer;

c) Cava Industries: supplies the Cold Heat Soldering Tool and Smart Spin containers;

d) ITW Space Bags: supplies Space Bags for storage;

e) Orange Glow International: suppliers of cleaning products OxiClean, Orange Glo, and Kaboom, among others;

f) Overbreak: supplies toys that include Hover Disc, Hover Copter and Rainbow Art.

Sales volumes for products fluctuate increasing significantly during the holiday season. Typically, the Company experiences the highest sales volume for products that are demonstrated via infomercials, during those periods when the infomercials are advertised on television. No one particular product represents a material portion of our revenues for the entire fiscal year. Rather, annual gross sales are derived from numerous products, with eight to ten feature products, on average, being the biggest sellers.

On March 15, 2007 the Company organized the Sandstrom OnTV Company (Sandstrom) as a wholly-own subsidiary. Sandstrom was organized to sell unit franchises that operate retail stores under the tradename “Sandstrom OnTV.

For the period ended August 31, 2007 our sales revenue has come primarily from our retail stores .

Measures Tradeshow has taken to build infrastructure

To date, Tradeshow has sold product at a number of venues that includes trade shows, malls (kiosks) fairs, exhibitions in the following cities: Canada: Vancouver, Abbotsford, Victoria, Nanaimo (includes mall kiosks), Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto (every second year); United States: Puyallup, WA, Tacoma, WA, Pomona, CA, Phoenix, AZ.

On August 31, 2005, Tradeshow acquired the assets and sub-leases of two retail stores in the Arrowhead and Paradise Valley Malls in Phoenix, Arizona. Following the acquisition, the Company changed the name of the two stores to “Sandstrom OnTV”. The Company’s Sandstrom OnTV stores feature a unique and diverse mix of innovative consumer products, which includes the same merchandise that the Company demonstrates and sells at tradeshow venues.

On December 23, 2005 the company announced the launch of its first eCommerce website for ON TV products. The site, located at www.ontvco.com, offers direct access to classic and the most popular ON TV Items. The site is managed by the company’s Chief Technical Officer and orders are fulfilled through the Paradise Valley retail store in Phoenix Arizona.

In December 2006, the Company hired Timothy J.McCarthy as Vice President of Franchise Development.

Acquisition of productive assets

The acquisition of the two retail stores was an acquisition of productive assets, as the Company purchased the assets of, and assumed the sub-leases for, both retail businesses. The Company also received the rights to use the “As Seen On TV” trade name for the stores, but has decided to use the name Sandstrom OnTV” instead. The Company acquired $35,000 dollars of stock and equipment in the acquisition. The assets acquired included an inventory of “as seen on TV” like products valued at the time of the transaction at $25,000 (based on the products wholesale prices; the retail value is approximately double that figure), and store fixtures, such as shelving, displays casing video surveillance equipment, computers, a cash register and a credit card machine, the value of which was deemed to be $10,000.

Currently, each store is fully operational and is open for business during regular mall hours. Both stores are staffed. There are four full-time employees (as at February 28, 2007). The approximate square footage of each store is 530 sq feet.

The Company has two operating leases for retail outlets located in the Arrowhead and Paradise Valley Malls in Phoenix, Arizona with aggregate monthly payment of $9,830 or $117,969 per year. These leases expire in December 2008 and December 2011 respectively. The Company also has a lease for office space in the Scottsdale Airpark. The monthly payment is $5,432 or $65,184 per year. The lease expires in February 2010 with an option for a 2 year renewal. The numbers shown below assume that the company will be able to renew its leases e and continue to operate these facilities at the current rate:

	Year 1		Year 2		Year 3		Year 4		Year 5
Retail Outlets	$	117,969	$	117,969	$	117,969	$	117,969	$	117,969
Office Space	$	65,184	$	65,184	$	65,184	$	65,184	$	65,184

Result of Operations

First Quarter of 2008 Compared to First Quarter of 2007

The following overview provides a summary of key information concerning our financial results for :

First quarter of our fiscal year ending May 31st, 2008:

	As Seen
	On TV			Sandstrom			Tradeshow			Consolidation

Revenue	$	89,833		$	-		$	62		$	89,895

Cost of Sales		50,371			-			-			50,371

Gross Profit		39,462			-			62			39,524

Expenses
General and Administrative		83,277			120,853			6,179			210,309
Marketing Advertising		77			32,532			-			32,609
Professional Fees		-			15,991			23,713			39,704

Total Expenses		83,354			169,376			29,892			282,621

Net Profit / (Loss)	$	(43,892	)	$	(169,376	)	$	(29,830	)	$	(243,098	)

	Three Months Ended
	August 31,			August 31,			Increase
	2007			2006			(Decrease)

		$			$
Revenue		89,895			132,540			(42,645	)

Cost of Sales		50,371			78,689			(28,318	)

Gross Profit		39,524			53,851			(14,327	)

Expenses
General and Administrative		249,110			83,592			165,518
Professional Fees		33,512			3,322			30,190

Total Expenses		282,622			86,914			195,708

Net Profit / (Loss)	$	(243,098	)	$	(33,063	)	$	(210,035	)

Revenue

For the three months ended August 31, 2007 revenues decreased by $42,645 compared to the three months ended August 31, 2006. The decrease was due to the fact that there were no sales in the Canadian market during this quarter. During this period, management decided to focus its entire effort in the USA.

There were no internet sales during this period as the company decided to focus its resources and energy on developing the franchise model.

Cost of Sales & Gross Profit

For the three months ended August 31, 2007 cost of sales decreased by $23,318 compared to the three months ended August 31, 2006.The decrease reflects the lack of internet activity and also the lack of activityin the Canadian market and consequent reduction in purchases for resale.

For the three months ended August 31, 2007 gross profit decreased by $14,327 compared to the three months ended August 31, 2006 .

Expenses

There was an increase of $ 165,518 in general and administrative expenses for the three months ended August 31, 2007 compared to the three months ended August 31, 2006. The increase was due to the concerted effort being made to develop the Sandstrom On TV franchise component of the business. Additional staff was hired for the franchise division , and the company maintains a separate office location for the franchise. Sandstrom On TV marketing fees, included in general expense were $32,531. There was an increase of $30,190 for professional fees connected with legal accounting and franchise development fees.

Net Loss

Our net loss for the three months ended August 31, 2007 was $243,098 compared to a loss of 33,063 for the three months ended August 31, 2006 . The loss is reflective of the increase in professional and consulting fees as well employee wages and benefits , which were deemed necessary by management in order to develop and promote our franchise sales effort.

Dividends

There are no restrictions in the Company’s articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit the Company from declaring dividends where, after giving effect to the distribution of the dividend:

	1.	The Company would not be able to pay its debts as they become due in the usual course of business; or

	2.	The Company total assets would be less than the sum of its total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

The Company has not declared any dividends and does not plan to declare any dividends in the foreseeable future.

Need for Additional Capital

We cannot guarantee that we will be successful in our business operations. The Company’s business is subject to risks inherent in the establishment of a new business enterprise. See Risk Factors below.

The Company has no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, the Company may not be unable to continue, develop or expand operations. Equity financing could result in additional dilution to existing shareholders.

Liquidity and Financial Condition

The Company had cash on hand of $14,118 as of August 31, 2007. The Company has not attained profitable operations and is dependent upon obtaining additional financing. For these reasons our auditors have stated in their report that they have substantial doubt that we will be able to continue as a going concern.

The financial statements accompanying this quarterly report contemplate the Company’s continuation as a going concern. However, the Company has sustained substantial losses and is still in the development stage. Additional funding will be necessary to continue development and marketing of our products. The Company intends to arrange for the sale of additional shares of our common stock to obtain additional operating capital for at least the next twelve months.

Off- Balance Sheet Arrangements

The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements are based on accounting principles generally accepted in the United States of America, many of which require management to make significant estimates and assumptions. We believe that the following are some of the more critical judgment areas in the application of our accounting policies that currently affect our financial condition and results of operation.

Revenue recognition . We recognize revenue at the point of sale at our retail stores, at our tradeshows and over the Internet. We do not carry any accounts receivable and all sales are final. No warranties are expressed or offered on any goods except that of the manufacturer, which they support directly.

Merchandise inventories . We record inventory at lower of cost (first-in, first-out method) or market value. We reduce the carrying value of our inventory for estimated obsolescence or unmarketable inventory by an amount equal to the excess of the cost of inventory over the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional reserves may be required.

Income taxes . The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

Stock Based Compensation: The Company accounts for its stock based compensation based upon provisions in SFAS No. 123, Accounting for Stock-Based Compensation . In this statement stock based compensation is divided into two general categories, based upon who the stock receiver is, namely: employees/directors and non-employees/directors. The employees/directors category is further divided based upon the particular stock issuance plan, namely compensatory and non-compensatory. The employee/directors non-compensatory securities are recorded at the sales price when the stock is sold. The compensatory stock is calculated and recorded at the securities’ fair value at the time the stock is given. SFAS 123 also provides that stock compensation paid to non-employees be recorded with a value which is based upon the fair value of the services rendered or the value of the stock given, whichever is more reliable. The Company has selected to utilize the fair value of the stock issued as the measure of the value of services obtained.

Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this Quarterly Report before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

Our accountants believe there is substantial doubt about our ability to continue as a going concern.

The Company has an accumulated deficit of approximately $1,400,00 at August 31, 2007. Our net loss for the three months ended August 31, 2007 was $243,098 compared to a loss of $33,063 for the three months ended August 31, 2006 . The loss is reflective of the increase in professional and consulting fees as well employee wages and benefits , which were deemed necessary by management in order to develop and promote our franchise sales effort.

The Company will require additional financing if the costs of our operations are greater than anticipated. We will also require additional financing to sustain our business operations if we are not successful in earning revenues. We currently do not have any arrangements for financing and we may not be able to obtain financing when required. The Company’s future is dependent upon our ability to obtain financing and upon future profitable operations from the development of our business. Obtaining additional financing would be subject to a number of factors. These factors may make the timing, amount, terms or conditions of additional financing unavailable to the Company.

Since this is a new business, we face a high risk of business failure due to our inability to predict the success of our business

The Company faces a high risk of business failure because of the unique difficulties and uncertainties inherent in new ventures.

Potential investors should be aware of the difficulties normally encountered by commencing a new business venture and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the business the Company plans to undertake.

Our stock is a “penny stock”, with the result that trading of our common stock in any secondary market may be impeded.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock as it is subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities.

FORWARD LOOKING STATEMENTS

The statements contained in this Quarterly Report on Form 10-QSB that are not historical fact are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The Company wishes to caution the reader that these forward-looking statements that are not historical facts are only predictions. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these projections and other forward-looking statements are based upon a variety of assumptions relating to the business of the Company, which, although considered reasonable by the Company, may not be realized. Because of the number and range of assumptions underlying the Company’s projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. Therefore, the actual experience of the Company and the results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate.

Seasonality

The Companies sales are quite seasonal, increasing with the shopping trends associated with the retail industry of sales peaking during the holiday season. In the prior year, a substantial portion of our total revenues and all or most of our earnings came in the third quarter ending February 28. The results of operations for this quarterly period are not necessarily indicative of the results for the full fiscal year.

ITEM 3. CONTROLS AND PROCEDURES

An evaluation as of the end of the period covered by this report was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Principal Accounting Officer concluded that those disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. In addition, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any material legal proceedings and to Management’s knowledge, no such proceedings are threatened or contemplated.

ITEM 2 RECENT SALES OF UNREGISTERED SECURITIES

During the period covered by this Report, the Company sold 355,000 shares of its common stock at $0.25 per share to accredited investors and/or friends and family of Company affiliates pursuant to a private offering. We received net proceeds of $88,750 and used those funds primarily for operating expenses including expenses related to the franchise development division. We believe that the issuance of such shares is exempt from registration under Section 4(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

N/A

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

No matters were submitted to the Company’s security holders for a vote during the period ended August 31, 2007

ITEM 5. OTHER INFORMATION

N/A

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

31.1		Certification of Quarterly report on form 10Q SB, Chief Executive Officer

31.2		Certification of Quarterly report on form 10Q SB, Chief Financial Officer

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Chief Executive Officer

32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Chief Financial Officer

SIGNATURES

In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.