UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549 FORM 10-QSB x
        QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarter ended September 30, 2007 OR o
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _________ to _________ Commission File No. 000-52723 POWER SMOOTHIE CAFÉ FRANCHISING INC. (Name of Small Business Issuer) Florida
        
        45-0501547(State or other jurisdiction ofIncorporation or Organization)
        
        (IRS EmployerIdentification No.)5645 Coral Ridge Drive #191Coral Springs, Florida
        
        33076(Address of principal executive offices)
        
        (Zip Code)
  888-818-7693 (Registrants Telephone Number, including Area Code)  Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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 filings requirements for the
past 90 days. YESxNOo Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). YESxNOo There were 10,116,000 issued and outstanding shares
of the registrants common stock, par value $.001 per share, at September 30, 2007.   POWER SMOOTHIE CAFÉ FRANCHISING, INC.

INDEX

SEPTEMBER 30, 2007

Page


Part I.
        Financial Information



Item 1.
        Financial Statements



Balance Sheet as of September 30, 2007 (Unaudited)
        3Statements of Operations for the Three Months and Nine Months EndedSeptember 30, 2007 (Unaudited)
        4Statement of Stockholders Equity as of September 30, 2007 (Unaudited)
        5Statement of Cash Flows for the Nine Months EndedSeptember 30, 2007 (Unaudited)
        6Notes to Financial Statements
        7

Item 2.
        Managements Discussion and Analysis of Financial Condition andResults of Operations
        13Item 3.
        Controls and Procedures
        16



Part II.
        Other Information



Item 1.
        Legal Proceedings
        17Item 1A.
        Risk Factors
        17Item 2.
        Unregistered Sales of Equity Securities and Use of Proceeds
        17Item 3.
        Defaults Upon Senior Securities
        17Item 4.
        Submission of Matters to a Vote of Security Holders
        17Item 5.
        Other Information
        17Item 6.
        Exhibits
        17



2

PART I - FINANCIAL INFORMATION


ITEM 1.
        FINANCIAL STATEMENTS

POWER SMOOTHIE CAFÉ FRANCHISING, INC.

BALANCE SHEET

AS OF SEPTEMBER 30, 2007

(Unaudited)




2007ASSETSCurrent AssetsCash
        $
        
        105,077Accounts Receivable, Net
        
        
        51,080Notes Receivable
        
        
        299,313Deferred Income Tax
        
        
        40,000Total Current Assets
        
        
        495,470Property and Equipment, Net
        
        
        3,640Other AssetsNotes Receivable
        
        
        70,687Security Deposit
        
        
        2,110Trademarks
        
        
        5,000Total Other Assets
        
        
        77,797TOTAL ASSETS
        $
        
        576,907LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccrued Expenses
        $
        
        280,191Deferred Revenue
        
        
        30,000Notes Payable  Related Party
        
        
        101,679Total Liabilities
        
        
        411,870STOCKHOLDERS EQUITYCommon Stock  100,000,000 Shares Authorized; $.001Par Value; 10,116,000 Shares Issued and Outstanding
        
        
        10,116Additional Paid-in Capital
        
        
        510,884Accumulated Deficit
        
        
        (356,963
        )Total Stockholders Equity
        
        
        165,037TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
        $
        
        576,907



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



3


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

STATEMENT OF OPERATIONS

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007

(Unaudited)




Three Months
Ended September 30,
2007
        
        Nine Months
Ended September 30,
2007Gross Sales
        $
        
        238,258
        
        $
        
        563,254Operating Expenses
        
        
        307,258
        
        
        
        627,940Operating Loss
        
        
        (69,000
        )
        
        
        (64,686
        )Corporate Income Tax (Benefit)
        
        
        (6,400
        )
        
        
        (6,000
        )Net Loss
        $
        
        (62,600
        )
        $
        
        (58,686
        )Weighted Average Number Of Shares Outstanding
        
        
        9,758,935
        
        
        
        9,698,053Net Loss Per Share
        $
        
        (0.00
        )
        $
        
        (0.00
        )



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



4


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

STATEMENT OF STOCKHOLDERS EQUITY

AS OF SEPTEMBER 30, 2007

(Unaudited)




AdditionalCommon Stock
        
        Paid in
        
        AccumulatedShares
        
        Amount
        
        Capital
        
        Deficit
        
        TotalBeginning Balance,January 1, 2007
        
        9,666,000
        
        $
        9,666
        
        $
        426,334
        
        $
        (297,277
        )
        $
        138,723Common SharesIssued @ $.189Per Share
        
        450,000
        
        
        450
        
        
        84,550
        
        
        -
        
        
        85,000Net (Loss) for theNine Months EndedSeptember 30, 2007
        
        
        
        
        
        
        
        
        
        $
        (58,686
        )
        $
        (58,686
        )Ending Balance,September 30, 2007
        
        10,116,000
        
        $
        10,116
        
        $
        510,884
        
        $
        (356,963
        )
        $
        165,037



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



5


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007

(Unaudited)




2007Cash Flows from Operating Activities:Net (Loss) for the Period
        $
        (58,686
        )Adjustments to Reconcile Net Loss to NetCash Used in Operating Activities:Depreciation
        
        1,140Changes in Assets and Liabilities(Increase) in Accounts Receivable
        
        (28,505
        )(Increase) in Notes Receivable
        
        (115,000
        )(Increase) in Security Deposit
        
        (511
        )(Increase) in Deferred Income Tax
        
        (6,000
        )Increase in Accrued Expenses
        
        61,014Increase in Deferred Revenue
        
        30,000Net Cash Used in Operating Activities
        
        (89,048
        )Cash Flows from Financing Activities:Sale of Common Shares
        
        85,000Loan Repayments  Related Party
        
        (8,000
        )Loans from Related Party
        
        66,181Net Cash Provided by Financing Activities
        
        143,181Net Increase in Cash and Cash Equivalents
        
        54,133Cash and Cash Equivalents  Beginning
        
        50,944Cash and Cash Equivalents  Ending
        $
        105,077Supplemental Cash Flow Information:Cash Paid for Interest
        $
        Cash Paid for Income Taxes
        $
        



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



6


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



Note A:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



This summary of significant accounting policies of Power Smoothie Café Franchising Inc., a Florida Corporation (the Company), is presented to assist in understanding the companys financial statements. The financial statements and notes are representations of the companys management, who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied to the preparation of the financial statements.



Nature of Operations



The Company was incorporated on October 21, 2002 and is based in Coral Springs, Florida. The Company provides worldwide franchise opportunities in relation to the establishment and operation of a quick service restaurant franchised business that serves a diversified menu including smoothies, wraps, salads, and sandwiches. The Company provides technical assistance in the establishment, business management and products within the framework of a franchise agreement. The Companys year-end is December 31st.



Nature of Significant Initial Services



When a franchise is purchased, the Company agrees to provide certain services to the new franchisee. Among the services provided by the Company are assistance with site selection and store design, assistance with initial inventory purchases, and training. If requested by the franchisee in writing, the Company will provide the new franchisee recommendations on the quantity, type, and sources for the equipment needed to operate the store.



When a master franchise is purchased, the Company agrees to provide certain services to the new master franchisee. The most significant service provided by the Company is an initial training program. Copies of operations manuals, store design plans, and advertising materials are also provided, as well as information relating to approved suppliers of equipment and services.



Basis of Accounting



The financial statements have been prepared on the accrual basis of accounting. Revenues are recognized as income when earned and expenses are recognized when they are incurred. Significant categories of costs include new store development expenses, wages, consulting expenses, legal and professional fees, and rent and are recorded as expense when the expense is incurred. For purposes of new store development fees, the expense is determined to have occurred at the time the store is sold to a new franchisee.



7


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



Note A:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Cash and Cash Equivalents



The Company considers cash on hand, cash in banks, certificates of deposit, time deposits, and U.S. government and other short-term securities with maturities of three months or less when purchased as cash and cash equivalents.



Property and Equipment



The Companys capital assets have been capitalized and are being depreciated over their estimated useful lives using straight line methods of depreciation for book purposes and accelerated methods of depreciation for income tax purposes.



Revenue Recognition



Royalty fees and advertising fund fees are a percentage of franchisees weekly gross receipts, as defined in the franchise agreement. These fees are recognized as income when earned. Revenue from sales of Master Franchise Agreements and Supply and Distribution Agreements is recognized when earned, which generally is when all material services required under the contract have been substantially performed or satisfied by the Company. Revenue from ongoing fees and royalties under Master Franchise Agreements and Supply and Distribution Agreements is recognized when earned, generally on a monthly basis based on actual reporting by the Master Franchisees and Suppliers, or based on our estimate of what should have been earned by us during that period under the terms of the Agreements.



Initial franchise fee revenue from franchise sales is recognized when all material services or conditions relating to the sale have been substantially performed or satisfied by the Company. The Company may recognize income before a new store opens if substantial performance exists at the end of the accounting period. After both parties sign the contract, the fee is non-refundable.



The Company also develops certain franchise stores and then sells the store, including all equipment, furnishings, and inventory to new franchisees. Income and expenses related to franchise store development activities are recognized upon the sale of the store to a new franchisee. Income is recognized on a gross basis and expenditures relating to the store development are capitalized when incurred and then are expensed as store development expenses and included in operating expenses at the time the store is sold to a franchisee.



See Note G.



8


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



Note A:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Advertising Expenses



The Company expenses advertising costs as incurred. Amounts received for the advertising fund from franchisees are required to be used for advertising by the Company. Amounts on hand from franchisees that not had yet been used for advertising as of September 30, 2007 was $-0-.



Management Estimates



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



Note B: NOTES RECEIVABLE



Notes Receivable at September 30, 2007 were as follows:




Master Franchise Agreement-PS Initiatives LLC
        $
        150,000Sale of Developed Store-A. Bhegani.
        
        130,000Sale of Area Rep Agreement-A. Bhegani
        
        40,000Sale of Area Rep Agreement-J. Cullen
        
        50,000370,000Less: current portion
        
        (299,313
        )Long-term
        $
        70,687



The note receivable  master franchise agreement, dated December 29, 2006, was for a face amount of $200,000 with a $45,000 down payment and required a payment of $5,000 by January 31, 2007 with future payments that are a percentage of the fees to which the master franchisee earns, beginning with the fourth franchised restaurant, until the principal amount has been paid in full. The note is non-interest bearing and is unsecured. All amounts due under this note are expected to be received by September 30, 2008.



The note receivable  sale of developed store, dated March 12, 2007, had an original face amount of $205,000 and required a $75,000 down payment, an additional $75,000 when permits are issued, and remaining payments upon final inspection of construction and at closing. The note is non-interest bearing and is unsecured. All amounts due under this note are expected to be received by September 30, 2008.



9


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



Note B:NOTES RECEIVABLE (continued)



The notes receivable  sales of area rep agreements, require monthly payments, have various amounts due each month and are unsecured.



Management evaluates collectability on a regular basis and sets up reserves for uncollectible amounts when it has determined that some or all of a receivable may be uncollectible. At September 30, 2007 management believes that 100% of the notes receivable principal amounts are collectible.



Note C:PROPERTY AND EQUIPMENT



The Company owns equipment recorded at its cost of $10,054. Depreciation expense for the nine months ended September 30, 2007 was $1,140.



Note D:ACCRUED EXPENSES



Accrued expenses at September 30, 2007 include amounts owed for payroll to an officer and director of the Company totalling $274,050.



Note E:COMMON STOCK



The Company has 100,000,000 shares of $.001 par value common stock authorized and 10,116,000 shares issued and outstanding as of September 30, 2007. During the three months ended September 30, 2007, the Company sold 450,000 shares for total consideration of $85,000.



Note F:RELATED PARTY TRANSACTIONS



The Company has received loans from Dorothy Cullen, the mother of the Companys Chief Executive Officer for working capital. The amounts received are unsecured, due on demand, and non-interest bearing. The total due under this note payable to a related party at September 30, 2007 was $101,679. During the nine months ended September 30, 2007, loans to the Company from Ms. Cullen totalled $66,181 and repayments made by the Company to Ms. Cullen totalled $8,000.



10


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



Note G:REVENUES AND COST OF SALES



Revenues during the three months and nine months ended September 30, 2007 consisted of the following:




Three Months Ended September 30, 2007
        
        Nine Months Ended September 30, 2007Gross sales of equipment, inventory,and supplies to franchisees
        $
        7,452
        
        $
        234,179Master Franchising
        
        215,000
        
        
        215,000Royalties
        
        12,547
        
        
        44,281Other
        
        3,259
        
        
        69,794Total Revenues
        $
        238,258
        
        $
        563,254



As part of its franchise sales process, the Company regularly will sign a lease, build out a store, supply it with inventory, and then sell this store to a franchisee. Revenues from the start-up period and the sale of the store to a franchisee are included above. The costs related to the start-up of the store are included in operating expenses and totalled $95,000 and $170,000 for the three months and nine months ended September 30, 2007. Costs related to the start-up of a store prior to it being sold, including store build-out, equipment and improvements, and inventory are capitalized when incurred and then expensed when the store is sold to a franchisee.



Note H:INCOME TAXES



For the periods ended September 30, 2007, the Company has incurred cumulative net losses and, therefore, has no tax liability.   The cumulative net operating loss carry-forward is approximately $118,000 at September 30, 2007, and will expire in various amounts through the year 2027. The cumulative net operating loss carry-forward for income tax purposes differs from the cumulative financial statement loss due to timing differences between book and tax reporting.



The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:




2007Deferred tax asset attributable to:Net operating loss carryover
        
        $
        40,000



11


POWER SMOOTHIE CAFÉ FRANCHISING, INC.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



Note I:FRANCHISES IN OPERATION



The franchise activity for the nine months ended September 30, 2007:




2007Operating at beginning of year
        7Franchises opened
        0Franchises closed
        0Operating at September 30
        7



The above does not include 5 stores that have been sold but have not yet opened and begun operations.



Note J:RECENT ACCOUNTING PRONOUNCEMENTS



The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Companys results of operations, financial position or cash flow.



Note K:OPERATING LEASE



The company is a party to a 60 month lease for office space at September 30, 2007 that expires November 30, 2011 and which requires monthly rental payments totalling $5,739.90 per month during the first twelve months with an annual percentage increase. Rent to be paid under this lease in the future is summarized as follows:




September 30, 2008
        $
        69,516September 30, 2009
        
        71,448September 30, 2010
        
        73,452September 30, 2011
        
        75,536September 30, 2012
        
        51,312Total
        $
        358,482



The Company has signed a sub-lease with a tenant under a Supply and Distribution Agreement which requires the tenant to pay the Company $4,500 per month in advance on the first day of every month for use of the warehouse space in the facility the Company occupies. The rental rate increase by 4% each year. The term of the rental is 10 years and the Agreement contains a renewal clause. Amounts received under this sub-lease are recorded as a reduction in the Companys lease expense. For the nine months ended September 30, 2007 total rent expense was $54,773 and rent received under the sub-lease was $31,731.



Note L:INTELLECTUAL PROPERTY RIGHTS



The Company has acquired the domain name www.powersmoothie.com as well as various trademarks for the name Power Smoothie. The Company has also acquired a trademark for the logo for Power Smoothie Cafe.



12


ITEM 2.
        MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



You should read the following discussion and analysis in conjunction with our financial statements and related notes included elsewhere in this report. Except for historical information, the discussion in this report contains certain forward-looking statements that involve risks and uncertainties. We have based these forward-looking statements on our current expectations and assumptions about future events. In some cases, you can identify forward-looking statements by terminology, such as may, should, could, predict, potential, continue, expect, anticipate, future, intend, plan, believe, estimate, forecast and similar expressions (or the negative of such expressions.) Forward-looking statements are based on our beliefs
as well as assumptions based on information currently available to us, including financial and operational information, legal counsel, and current competitive conditions. As a result, these statements are subject to various risks and uncertainties. For a discussion of material risks and uncertainties that the Company faces, see the discussion the Risk Factors section of the Companys Form 10-SB/A.

POWER SMOOTHIE OVERVIEW

Power Smoothie Café Franchising, Inc. (the Company or we) was incorporated in Florida on October 21, 2002 as Power Smoothie Café Franchising, Inc.

We sell high quality gourmet fitness smoothies, tropical smoothies, low calorie smoothies, coffee smoothies and coffees, protein shakes, breakfast items including omelettes and breakfast sandwiches, power oatmeal, fresh salads and gourmet fresh pita sandwiches, lettuce wraps, toasted wraps and water, soda, energy drinks and supplements from franchised retail stores.

We currently have 12 franchised locations (7 in operations) all within Florida and are expecting to open 4 locations in Texas in 2008. We also expect to open our first company-owned store in 2008. We do not operate any company-owned stores at this time.

Our immediate goal is to capitalize on the success of our existing stores with a new national franchisee program that will help us expand the Power Smoothie name into new domestic markets. Each of our store locations will continue to focus on our core business concepts: consistently providing freshly prepared local foods in a quick service and casual atmosphere. We have entered into an agreement with an outsourced distributor for the delivery of all products to all of our franchisees. We derive income from sales of master franchise agreements, fees based on gross sales in franchised stores, and mark-up of product delivered to our franchised retail stores.

The results of operations section below reflects the operating results of the Company for the period ended September 30, 2007. Information regarding the Company and its historical earnings was furnished in the Companys Form 10-SB/A filed September 10, 2007, which is not incorporated by reference.

13


EXECUTIVE OVERVIEW

During the three month period ended September 30, 2007, the Company continued to focus on servicing the franchisees and increasing the number of potential franchised store locations and building the foundation for future growth. The Company made investments in product development, marketing, and training in order to attract new customers and increase the number of store locations. Income from operations appears herein.

During the period ended September 30, 2007, the Company engaged in the formation and articulation of its strategy. In particular, the Company has outlined a path of growth for 2008 and beyond that includes an aggressive roll out of franchised stores and the opening of a Company-owned location. The Company-owned location will provide the Company with a deeper understanding of the retail business, will provide better knowledge regarding acceptable and expected margins, and will provide another avenue for new- product market testing.

Also, during this period, the Companys management increased focus on selling master franchising agreements. Management believes that the sale of the master franchising agreements, rather than the sale of individual franchises, will provide accelerated growth to the Company and will be a better use of Company resources.

We believe a key to increasing long-term stockholder value is to invest in the people and systems that will drive performance and productivity. The remainder of Fiscal 2007 and Fiscal 2008 are periods for building our organizational capabilities to ensure the Companys readiness to meet its growth demands. Our goal is to leverage this infrastructure in Fiscal 2008 and, in particular, reduce our general and administrative expenses as a percentage of total revenue.

The Company expects continued cost pressures for the remainder of Fiscal 2007 and forward as  a result of droughts, unusually high temperatures and other weather patterns that may disrupt the cost of goods sold and their availability.

RESULTS OF OPERATIONS  3 MONTH PERIOD ENDED September 30, 2007

For the three months ended September 30, 2007, the Company experienced a net loss of $62,600 and the net loss for the nine months ended September 30, 2007 in the amount of $58,686. The Companys total assets at September 30, 2007 were $576,907.

REVENUES

The Companys total operating revenues were $238,258 for the three month period ended September 30, 2007 and total revenues were $563,254 for the nine month period ended September 30, 2007. The Company recognizes revenues in three primary areas:  Sales of supplies to franchisees, Sales of master franchise agreements, and Royalty fees. For the three month period ended September 30, 2007, the Company recognized revenues in those areas of $7,452, $215,000, and $12,547, respectively. For the nine month period ended September 30, 2007, the Company had revenues in those areas in the amount of $234,179, $215,000, and $44,281, respectively.

The number of franchise locations as of September 30, 2007 was 12 (7 in operations).

14


EXPENSES

For the three month period ended September 30, 2007, the Company had operating expenses of $307, 258, and operating expenses for the nine month period ended September 30, 2007 were $627,940. As part of its franchise sales process, the Company regularly will sign a lease, build out a store, supply it with inventory, and then sell this store to a franchisee. The costs related to the start-up of the store are included in operating expenses and totalled $95,000 for the three months ended September 30, 2007. Costs related to the start-up of a store prior to it being sold, including store build-out, equipment and improvements, and inventory are capitalized when incurred and then expensed when the store is sold to a franchisee.

LIQUIDITY AND CAPITAL RESOURCES

The Companys cash position as of September 30, 2007 was $105,077, compared to $4,477 on June 30, 2007. For the three month period ended September 30, 2007, the Companys operations had a loss of $62,600.

As of September 30, 2007, the Companys working capital was $83,600, compared to a deficit of $90,261 at June 30, 2007. The increase in working capital was due, in part, on the sales generated during the period and their effect on the Companys cash position and notes receivable.

The Company anticipates that the revenues generated for the three months ended September 30, 2007 will cover operating costs until longer term capital is obtained to finance the Companys future development. There is no assurance, however, that this can be done on terms satisfactory to the Company. Additionally, the revenues tend to be inconsistent from quarter to quarter and our success is currently dependent on our ability to successfully sell new franchises and new master franchise and area rep agreements.

15


ITEM 3.
        CONTROLS AND PROCEDURES



Disclosure Controls and Procedures

The Companys president currently acts both as its chief executive officer and chief financial officer and is responsible for establishing and maintaining disclosure controls and procedures designed to ensure that information required to be disclosed 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 rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as applicable, to allow timely decisions regarding required disclosure. Disclosure controls are also designed with the objective of ensuring that is information is accumulated and communicate to the Companys management, including the Companys
chief executive officer and chief financial officer, as appropriate, to allow timely decision regarding required disclosure.

Management has evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)), as required by paragraph (b) of Exchange Act Rules 13a-15 as of the end of the period covered by this quarterly report. Because the Company was unable to submit this quarterly report in a timely manner, our chief executive officer and our chief financial officer, as applicable, have concluded that based on such evaluation, the Companys disclosure controls and procedures were not effective as of September 30, 2007.

Managements Remediation Plans

As of the end of the period covered by this quarterly report, the Company has taken and will take steps towards improving the internal control over financial reporting. This includes hiring additional accounting personnel and other experts, as well as implementing controls over the documentation and review of all matters related to filings.

Inherent Limitations over Controls

Our management recognizes that any controls and procedures can only provide reasonable assurance that the objectives of the control system are achieved. Management also recognizes that the control system design must weigh resource constraints with the benefits of controls, relative to cost. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving the objectives, however, due to inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within the Company, have been detected.

Critical Accounting Policies

There was no change in the Companys internal control over financial reporting that occurred during the period covered by this quarterly report on Form 10-QSB that has materially affected, or is reasonably likely to affect, the Companys internal control over financial reporting.

In the notes to the consolidated financial statements for the quarter ended September 30, 2007 included in the Companys Form 10-QSB, the Company discussed accounting policies that are considered to be significant in determining the results of operations and our financial position. We believe that the accounting principles utilized by us conform to accounting principles generally accepted in the United States of America.

16


PART II - OTHER INFORMATION




Item1.
        Legal Proceedings



The Company is not currently a party to any legal proceeding that management believes would have a material adverse effect on the consolidated financial position or results of operations of the Company.




Item1A.
        Risk Factors



The risk factors included in the Companys Form 10-SB/A filed on September 10, 2007 have not materially changed.




Item2.
        Unregistered Sales of Equity Securities and Use of Proceeds



During the period ended September 30, 2007, the Company issued an aggregated of 85,000 restricted shares of common stock to an accredited individual. The Company issued the shares in reliance upon an exemption from registration provided by the Securities Act and the Company used the proceeds to finance business operations.




Item3.
        Defaults Upon Senior Securities



None.




Item4.
        Submission of Matters to a Vote of Security Holders



None.




Item5.
        Other Information



None.




Item6.
        Exhibits




Exhibit Number
        Description31.1
        Certification of Chief Executive Officer and Financial Officer  pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *32.1
        Certification of Chief Executive Officer and Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes *



* Filed Herewith



17


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, on the 17th day of March, 2008.




POWER SMOOTHIE CAFÉ FRANCHISING, INC.By:
        
        /s/ William CullenWilliam CullenChief Executive Officer, President, andChief Financial Officer



18