U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB





x  QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For
      the
      quarter ended June 30, 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: 000-52150





FRANKLIN
      TOWERS ENTERPRISES, INC.


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





Nevada
              (State
                of incorporation)
            20-4069588
              (IRS
                Employer ID Number)





5
      Ash
      Drive


Center
      Barnstead, New Hampshire 03225


(Address
      of principal executive offices)





(702)
      966-0436


(Issuer's
      telephone number)




________________________________________________________________


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





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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


YES  ̈ NO x





As
      of
      August 14, 2007, the issuer had 30,250,000 shares of common stock and 5,000,000
      shares of Series A Convertible Preferred Stock issued and
      outstanding.





Transitional
      Small Business Format Yes o No x










**TABLE
      OF CONTENTS**


**PART
                  I - FINANCIAL INFORMATION**Item
                  1.
              
              Financial
                  Statements
              
              3Item
                  2.
              
              Management’s
                  Discussion and Analysis of Financial Condition
              
              13Item
                  3.
              
              Control
                  and Procedures
              
              15**PART
                  II - OTHER INFORMATION**Item
                  1.
              
              Legal
                  Proceedings
              
              16Item
                  2.
              
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              
              16Item
                  3.
              
              Defaults
                  Upon Senior Securities
              
              16Item
                  4.
              
              Submission
                  of Matters to a Vote of Security Holders
              
              16Item
                  5.
              
              Other
                  Information
              
              16Item
                  6.
              
              Exhibits
              
              16Signatures
              
              
              
              17




2




**PART
      I**


**FINANCIAL
      INFORMATION**





**Item
      1.**  **Financial
      Statements.**




FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


CONDENSED
      CONSOLIDATED BALANCE SHEET


JUNE
      30, 2007


(Unaudited)


ASSETSCurrent
                  Assets:Cash
              
              $
              761,274Inventories
              
              
              102,488Prepaid
                  Expenses
              
              
              1,854Total
                  Current Assets
              
              
              865,616Property
                  and Equipment, Net
              
              
              330,537Total
                  Assets
              
              $
              1,196,153LIABILITIES
                  AND STOCKHOLDERS’ EQUITYCurrent
                  Liabilities:Notes
                  Payable
              
              $
              20,000Accounts
                  Payable and Accrued Expenses
              
              
              82,832Loans
                  Payable - Related Party
              
              
              94,836Security
                  Deposit Payable
              
              
              578Total
                  Current Liabilities
              
              
              198,246Total
                  Liabilities
              
              
              198,246Commitments
                  and ContingenciesStockholders’
                  Equity:Preferred
                  Stock, $.001 par value; 5,000,000 shares authorized,
                  5,000,000shares
                  issued and outstanding; liquidation preference, $.01 per
                  share
              
              
              5,000Common
                  Stock, $.0001 par value; 1,250,000,000 shares authorized,30,250,000
                  shares issued and outstanding
              
              
              3,025Additional
                  Paid-In Capital
              
              
              1,096,639Accumulated
                  Deficit
              
              
              (135,036
              )Accumulated
                  Other Comprehensive Income
              
              
              28,279Total
                  Stockholders’ Equity
              
              
              997,907Total
                  Liabilities and Stockholders’ Equity
              
              $
              1,196,153




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





3





FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


CONDENSED
      CONSOLIDATED STATEMENT OF OPERATIONS


(Unaudited)


For
                  the Six Months Ended June 30, 2007
              
              For
                  the Three Months Ended June 30, 2007Net
                  Revenues
              
              $
              -
              
              $
              -Operating
                  Expenses:Professional
                  Fees
              
              
              95,048
              
              
              20,984Other
                  General and Administrative Expenses
              
              
              10,699
              
              
              8,051Depreciation
                  and Amortization
              
              
              233
              
              
              233Total
                  Costs and Expenses
              
              
              105,980
              
              
              29,268Loss
                  from Operations
              
              
              (105,980
              )
              
              (29,268
              )Other
                  Income (Expense):Interest
                  Expense
              
              
              (96
              )
              
              (96
              )Interest
                  Income
              
              
              512
              
              
              117Total
                  Other Income (Expense)
              
              
              416
              
              
              21Net
                  Loss
              
              $
              (105,564
              )
              $
              (29,247
              )Net
                  Loss per Common Share (Basic)
              
              $
              .00
              
              $
              .00Weighted
                  Average Common Shares Outstanding (Basic)
              
              
              30,250,000
              
              
              30,250,000Net
                  Loss per Common Share (Diluted)
              
              $
              .00
              
              $
              .00Weighted
                  Average Common Shares Outstanding (Diluted)
              
              
              33,446,044
              
              
              36,642,088




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





4




FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY


FOR
      THE SIX MONTHS ENDED JUNE 30, 2007


(Unaudited)


AccumulatedAdditional
              
              
              
              OtherPreferred
                  Stock
              
              Common
                  Stock
              
              Paid-In
              
              Accumulated
              
              ComprehensiveShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Deficit
              
              Income
              
              TotalBalance
                  - January 1, 2007
              
              
              -
              
              $
              -
              
              
              30,250,000
              
              $
              3,025
              
              $
              91,475
              
              $
              (118,863
              )
              $
              -
              
              $
              (24,363
              )Issuance
                  of Preferred Stock inConnection
                  with Recapitalization
              
              
              5,000,000
              
              
              5,000
              
              
              -
              
              
              -
              
              
              (5,000
              )
              
              -
              
              
              -
              
              
              -Effect
                  of Recapitalization
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,010,164
              
              
              89,391
              
              
              1,132
              
              
              1,100,687Comprehensive
                  Income (Loss):Net
                  (Loss) for the Six MonthsEnded
                  June 30, 2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (105,564
              )
              
              -
              
              
              (105,564
              )Foreign
                  Currency TranslationAdjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              27,147
              
              
              27,147Total
                  Comprehensive Loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (78,417
              )Balance
                  - June 20, 2007
              
              
              5,000,000
              
              $
              5,000
              
              
              30,250,000
              
              $
              3,025
              
              $
              1,096,639
              
              $
              (135,036
              )
              $
              28,279
              
              $
              997,907





5





FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


CONDENSED
      CONSOLIDATED STATEMENT OF CASH FLOWS


FOR
      THE SIX MONTHS ENDED JUNE 30, 2007


(Unaudited)


Cash
                  Flows from Operating Activities:Net
                  Loss
              
              $
              (105,564
              )Adjustments
                  to Reconcile Net Loss to Net Cash Usedin
                  Operating Activities:Depreciation
                  and Amortization
              
              
              233Changes
                  in Assets and Liabilities:(Increase)
                  in Inventories
              
              
              (102,488
              )(Increase)
                  in Prepaid Expenses
              
              
              (1,854
              )Increase
                  in Accounts Payable and Accrued Expenses
              
              
              41,467Increase
                  in Security Deposit Payable
              
              
              578Net
                  Cash (Used) in Operating Activities
              
              
              (167,628
              )Cash
                  Flows from Investing Activities:Capital
                  Expenditures
              
              
              (329,390
              )Net
                  Cash (Used) in Investing Activities
              
              
              (329,390
              )Cash
                  Flows from Financing Activities:Proceeds
                  of Additional Paid-In Capital
              
              
              768,600Net
                  Cash of Business Acquired
              
              
              (2,552
              )Proceeds
                  of Loans- Related Party
              
              
              80,674Net
                  Cash Provided by Financing Activities
              
              
              846,722Effect
                  of Exchange Rate Changes on Cash
              
              
              27,147Net
                  Change in Cash and Cash Equivalents
              
              
              376,851Cash
                  and Cash Equivalents - Beginning of Period
              
              
              384,423Cash
                  and Cash Equivalents - End of Period
              
              $
              761,274Supplemental
                  Disclosures of Cash Flow Information:Interest
                  Paid
              
              $
              -Income
                  Taxes Paid
              
              $
              -Supplemental
                  Disclosures of Non-Cash Investing and Financing
                  Activities:Preferred
                  Stock Issued in Connection with Recapitalization
              
              $
              5,000




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




6





FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      1 -  Description
      of Business and Basis of Presentation





Basis
      of Presentation





In
      the
      opinion of the Company’s management, the accompanying unaudited condensed
      consolidated financial statements contain all adjustments (consisting of only
      normal recurring adjustments) necessary to present fairly the information set
      forth therein. These financial statements are condensed and therefore do not
      include all of the information and footnotes required by accounting principles
      generally accepted in the United States of America for complete financial
      statements.





Results
      of operations for interim periods are not necessarily indicative of the results
      of operations for a full year.





Organization





Franklin
      Towers Enterprises, Inc *.* (“Franklin”) was incorporated on March 23, 2006 under the laws of the State of
      Nevada. Franklin intended to engage in the manufacture, processing and
      distribution of frozen pan Asian food. Franklin has not generated any revenue
      to
      date and its operation has been limited to organizational, start-up and fund
      raising activities.





On
      June
      19, 2007, Franklin entered into a Share Purchase Agreement with the shareholders
      of Chongqing Qiluo Textile Co. Ltd., a limited liability company organized
      under
      the laws of the People’s Republic of China (“Qiluo”), whereby Franklin agreed to
      acquire 100% of the issued and outstanding registered capital of Qiluo for
      consideration of 5,000,000 shares of Franklin’s Series A Convertible Preferred
      Stock (convertible into 52,880,000 shares of common stock) (See Note 7). Upon
      consummation of such purchase, Qiluo became a wholly-owned subsidiary of
      Franklin. Through our subsidiary, Qiluo, we will focus on the production and
      sale of raw silk.




Qiluo
      was
      incorporated on December 15, 2006, under the name “Chongqing Qiluo Industry
      Ltd.” under the laws of the People’s Republic of China. Qiluo intends to engage
      in the manufacture and sale of silk and silk products. The Company started
      test
      production at the end of June. The Company has not generated revenue from
      planned principal operations and is considered a development stage company
      as
      defined in Statement of Financial
      Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development
      Stage Enterprises”.





The
      acquisition is accounted for as a “reverse acquisition”, since the stockholders
      of Qiluo owned a majority of Franklin’s common stock immediately following the
      transaction. Qiluo is treated as the continuing entity although Franklin is
      the
      legal acquirer. Consequently, the consolidated financial statements include
      the
      assets and liabilities of Qiluo and Franklin (collectively, the “Company”),
      historical operations of Qiluo, and operations of Qiluo and Franklin from the
      date of the acquisition.





After
      the
      acquisition, Franklin will focus on the production and sale of silk and silk
      products.





Principles
      of Consolidation





The
      accompanying consolidated financial statements included the accounts of Franklin
      (Parent) and its wholly owned subsidiary Qiluo. All significant intercompany
      accounts and transactions have been eliminated in consolidation.




7


FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
      2 -  Summary
      of Significant Accounting Policies





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 revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.





Cash
      and Cash Equivalents





The
      Company considers all highly liquid investments purchased with a maturity of
      three months or less to be cash equivalents.





Fair
      Value of Financial Instruments





The
      carrying amounts of the Company’s cash, accounts receivable, accounts payable,
      and notes and loans payable approximate fair value because of the immediate
      or
      short-term maturity of these financial instruments.





Inventories





Inventories
      consist primarily of raw materials, work-in-process and finished products and
      are stated
      at lower of cost or market, first-in, first out method.





Property
      and Equipment





Property
      and equipment is stated at cost. Depreciation is computed using the
      straight-line method over the estimated useful lives of the related
      assets.





Revenue
      Recognition





The
      Company has not generated any revenue to date. For revenue from product sales,
      the Company will recognize revenue in accordance with Staff Accounting Bulletin
      No. 104, “Revenue Recognition” (“SAB No. 104”), which superseded Staff
      Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB
      No. 101”). SAB No. 104 requires that four basic criteria must be met before
      revenue can be recognized: (1) persuasive evidence of an arrangement exists,
      (2)
      delivery has occurred; (3) the selling price is fixed and determinable; and
      (4)
      collectibility is reasonably assured. Determination of criteria (3) and (4)
      are
      based on management’s judgment regarding the fixed nature of the selling prices
      of the products delivered and the collectibility of those amounts. Provisions
      for discounts and rebates to customers, estimated returns and allowances, and
      other adjustments will be provided for in the same period the related sales
      are
      recorded.





Advertising
      Costs





Advertising
      costs are expensed as incurred. The Company did not incur any adverting costs
      for the quarter ended June 30, 2007.




8


FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
      2 -  Summary
      of Significant Accounting Policies (Continued)





Income
      Taxes





The
      Company accounts for income taxes using the asset and liability method described
      in SFAS No. 109, “Accounting For Income Taxes”, the objective of which is to
      establish deferred tax assets and liabilities for the temporary differences
      between the financial reporting and the tax bases of the Company’s assets and
      liabilities at enacted tax rates expected to be in effect when such amounts
      are
      realized or settled. A valuation allowance related to deferred tax assets is
      recorded when it is more likely than not that some portion or all of the
      deferred tax assets will not be realized.





No
      provision has been made for corporation income taxes due to the current loss.
      In
      addition, no future tax benefit has been calculated. According the tax
      regulations of China, the amount of loss that will carry over to the next tax
      period should be assessed and approved by the tax regulation agency. The maximum
      carry over period is five years.





Foreign
      Currency Translation





The
      financial statements of the Company are translated pursuant to Statement of
      Financial Accounting Standards (SFAS) No. 52 - “Foreign Currency Translation.”
Qiluo is located and operated in China. The Chinese Yuan is the functional
      currency. The financial statements of Qiluo is translated to U.S. dollars using
      quarter-end rates of exchange for assets and liabilities, and average rates
      of
      exchange for revenues, costs and expenses. Translation gains and losses are
      deferred and recorded in accumulated other comprehensive income as a component
      of stockholders’ equity.





Net
      Loss Per Common Share





Basic
      loss per share is computed by dividing net loss by the weighted average number
      of common shares outstanding during the period. The common stock issued and
      outstanding with respect to the pre-merger Franklin stockholders has been
      included since March 23, 2006.





Diluted
      loss per share is computed similarly to basic loss per share except that it
      includes the potential dilution that could occur if dilutive securities were
      converted. Accordingly, dilutive loss per share includes the conversion of
      5,000,000 shares of Franklin Series A Convertible Preferred Stock into
      52,880,000 shares of Franklin common stock.





Recently
      Issued Accounting Pronouncements





In
      July
      2006, the Financial Accounting Standards Board issued FASB Interpretation No.
      48, “Accounting for Uncertainty in Income Taxes” (“Interpretation No. 48”).
      Interpretation No. 48 clarifies the accounting for uncertainty in income taxes
      recognized in an enterprise’s financial statements in accordance with SFAS No.
      109, “Accounting for Income Taxes.” Interpretation No. 48 prescribes a
      recognition threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. Interpretation No. 48 also provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure and transition. Interpretation No. 48 is effective beginning January
      1, 2007. The Company believes that the adoption of Interpretation No. 48 will
      not have a material impact on its financial statements.





9


FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      3 -  Inventories





Inventories
      consist of the following:


Raw
                  Materials
              
              $
              71,740Work-in-Process
              
              
              30,748$
              102,488





NOTE
      4 -  Property
      and Equipment





Property
      and equipment is summarized as follows:




Estimated
              Useful
                Life
            
            CostMachinery
            
            
            7
            
            $
            314,200Auxiliary
                equipment
            
            
            5
            
            
            5,913Computers
            
            
            3
            
            
            3,342Office
                equipment
            
            
            5
            
            
            894Furniture
                and Fixtures
            
            
            7
            
            
            8,199332,548Less:
                Accumulated Depreciation
            
            
            
            
            
            2,011$
            330,537





Depreciation
      expense was $2,011 for the six months ended June 30, 2007. Among which, $1,677
      was inventory cost; $101 was eliminated to additional paid in capital in
      connection with the recapitalization.


NOTE
      5
      -  Loans
      Payable - Related Parties





Due
      to
      related parties represents advances made to the Company by its significant
      stockholder and officers. Advances amounting to $81,539 are payable on demand
      and bear no interest. Loans from the Company’s officers in the amount of $13,297
      bear interest at 8% per annum. As of June 30, 2007, the accrued interest payable
      was in the amount of $817.




NOTE
      6
      -  Notes
      Payable





The
      Company borrowed $20,000 from two individuals. Each of these loans, $10,000
      each, with a borrowing line of up to $20,000, bears the interest at 8% per
      annum. The principal and interest is due on April 24, 2008. As of June 30,
      2007
      the accrued interest totaled $1,885.




10


FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      7
      -  Stockholders’
      Equity and Share Purchase Agreement





Effective
      April 23, 2007 the Company amended its articles of incorporation for the purpose
      of effecting a one for two and a half (1 for 2.5) forward stock split of its
      common stock. In addition, the authorized common stock of the Company was
      increased from 500,000,000 shares, $.001 par value to 1,250,000,000 shares,
      $.0001 par value. All share and per share data have been given retroactive
      effect to reflect this recapitalization.





On
      June
      19, 2007, Franklin entered into a Share Purchase Agreement (the “Share Purchase
      Agreement”) with the following persons: Chongqing Qiluo Textile Co. Ltd., a
      limited liability company organized under the laws of the People’s Republic of
      China (“Qiluo”); Xinshengxiang Industrial Development Co., Ltd., a limited
      liability company organized under the laws of the People’s Republic of China
      (“Xinshengxiang”); Mr. Dingliang Kuang (“Dingliang”); and Ms. Yue Kuang (“Yue,”
and together with Xinshengxiang and Dingliang, the "Qiluo Shareholders").
      Pursuant to the Share Purchase Agreement, Franklin agreed to acquire Qiluo
      at a
      closing held simultaneously therewith by purchasing from the Qiluo Shareholders
      all of their respective shares of Qiluo’s registered capital, which represent
      100% of the issued and outstanding registered capital stock of Qiluo. Upon
      the
      consummation of such purchase, Qiluo became a wholly-owned subsidiary of
      Franklin. In consideration therefor, Franklin agreed to issue to the Qiluo
      Shareholders an aggregate of 5,000,000 shares of Franklin’s Series A Convertible
      Preferred Stock (convertible into 52,880,000 shares of common stock), which
      were
      allocated between the Qiluo Shareholders as follows: 4,750,000 shares to
      Xinshengxiang; 125,000 shares to Dingliang; and 125,000 shares to Yue. Each
      share of Series A Convertible Preferred Stock is convertible, at the option
      of
      the holder thereof, into 10.576 of Franklin's common stock.





In
      connection with the foregoing transaction, on June 19, 2007, Kelly Fan, the
      President, Chief Executive Officer, Treasurer, and Director of Franklin, sold
      to
      the Qiluo Shareholders 18,000,000 shares of the common stock of Franklin which
      were issued and outstanding and held by Ms. Fan. Such shares were allocated
      between the Qiluo Shareholders as follows: 17,100,000 shares to Xinshengxiang
      Industrial Development Co., Ltd.; 450,000 shares to Dingliang Kuang; and 450,000
      shares to Yue Kuang.





As
      a
      result of the foregoing transactions:




(a),
      Xinshengxiang Industrial Development Co., Ltd. holds approximately 81% of the
      total combined voting power of all classes of Franklin’s capital stock entitled
      to vote. (b) Diangliang Kuang is the principal owner and manager of
      Xinshengxiang Industrial Development Co., Ltd. and thus has voting, investment,
      and dispositive control over the shares of Franklin’s capital stock owned by
      Xinshengxiang Industrial Development Co., Ltd. Accordingly, Mr. Kuang is also
      deemed to be the indirect beneficial owner the shares of Franklin’s capital
      stock owned by Xinshengxiang Industrial Development Co., Ltd. Mr. Kuang thus
      directly and indirectly (by Xinshengxiang Industrial Development Co., Ltd.)
      holds approximately 83% of the total combined voting power of all classes of
      Franklin’s capital stock entitled to vote. (c) Yue Kuang, who is the sister of
      Diangliang Kuang, directly holds approximately 2% of the total combined voting
      power of all classes of Franklin’s capital stock entitled to vote.




NOTE
      8
      -  Preferred
      Stock





On
      June
      18, 2007, we designated a series of Preferred Stock known as the “Series A
      Convertible Preferred Stock” (the “Series A Preferred Stock”) by filing a
      Certificate of Designation with the Secretary of State of Nevada. The number
      of
      shares constituting such Series A Preferred Stock was designated to be 5,000,000
      shares, par value $0.001 per share. Pursuant to the Certificate of Designation,
      the principal rights, preferences, powers, limitations and restrictions of
      the
      Series A Preferred Stock are as follows:




11


FRANKLIN
      TOWERS ENTERPRISES, INC. AND SUBSIDIARY


NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      8
      -  Preferred
      Stock (Continued)





Each
      share of Series A Preferred Stock is convertible, at the option of the holder
      thereof, without payment of additional consideration, 10.576 shares of the
      Company’s common stock. Holders of Series A Preferred Stock shall be entitled to
      vote, together with holders of common stock as a single class, on all matters
      upon which stockholders of the Company are entitled to vote, with each share
      of
      Series A Preferred Stock having one vote. The Series A Preferred Stock shall
      rank senior to the common stock. In the event of any liquidation, dissolution
      or
      winding up of the Company, the holders of Series A Preferred Stock shall be
      entitled to receive, prior and in preference to any distribution of any of
      the
      assets of the Company to the holders of the common stock of the Company and
      any
      other issue of stock, should there be any, by reason of their ownership thereof,
      an amount per share equal to $0.01 per each share of Series A Preferred Stock
      owned by such shareholder plus any declared and unpaid dividends on the Series
      A
      Preferred Stock.





NOTE
      9 -  Concentration
      of Credit Risk





The
      Company maintains cash balances in various banks in China. Currently, no deposit
      insurance system has been set up in China. Therefore, the Company will bear
      a
      risk if any of these banks become insolvent. As of June 30, 2007, the Company’s
      uninsured cash balance was approximately $761,000.





The
      financial position and results of operations of the Company are recorded in
      Chinese Yuan. Therefore, exchange rate fluctuations could affect the future
      business operations of the Company as translated to US dollars.




NOTE
      10 -  Commitments
      and Contingencies





On
      January 28, 2007, the Company signed a twenty (20) year lease with
      Xinshengxiang, a related party, see Note 7, for the use of a factory building
      located in Fulin, Chongqing. The lease commenced on March 1, 2007 and calls
      for
      annual base rent of $26,963 plus other occupancy costs.





Future
      minimum rentals are as follows:


Year
                  Ending
                December
                  31,
              
              Future
                  Minimum
                Rent
                  Payments
                US
                  Dollars2007
              
              $
              13,4822008
              
              
              26,9632009
              
              
              26,9632010
              
              
              26,9632011
              
              
              26,9632012
              
              
              26,963Thereafter
              
              
              381,979Total
              
              $
              530,276





12




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





As
      used
      in this Form 10-QSB, references to the “Franklin”, “Company,” “we,” “our” or
“us” refer to Franklin Towers Enterprises, Inc., unless the context otherwise
      indicates.





This
      Management’s Discussion and Analysis or Plan of Operation should be read in
      conjunction with the financial statements and the notes thereto.





**Forward-Looking
      Statements**





This
      quarterly report on Form 10-QSB contains forward-looking statements that involve
      risks and uncertainties. These include statements about our expectations,
      beliefs, intentions or strategies for the future, which we indicate by words
      or
      phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,”
“the Company believes,” “management believes” and similar language. The
      forward-looking statements involve numerous risks and uncertainties, including
      the “Risk Factors” discussed in our annual report on Form 10-KSB for the year
      ended December 31, 2006, which was filed with the Securities and Exchange
      Commission (the “SEC”) on April 16, 2007. Our actual results could differ
      significantly from those in the forward-looking statements included in this
      quarterly report. Except as required by law, including the federal securities
      laws, we assume no obligation to update the forward-looking statements included
      in this quarterly report. Statements contained in this Form 10-QSB that are
      not
      historical facts are forward-looking statements that are subject to the "safe
      harbor" created by the Private Securities Litigation Reform Act of 1995.





**Critical
      Accounting Policies**





Certain
      of our accounting policies are particularly important to the portrayal and
      understanding of our financial position and results of operations and require
      us
      to apply significant judgment in their application. As a result, these policies
      are subject to an inherent degree of uncertainty. In applying these policies,
      we
      use our judgment in making certain assumption and estimates. Our critical
      accounting policies are described in our Annual Reports on Form 10-KSB and
      Form
      10-KSB/A for the year ended December 31, 2006. There have been no material
      changes to our critical accounting policies as of and for the three months
      ended
      June 30, 2007.





**Overview**





Franklin
      was incorporated on March 23, 2006 in the State of Nevada. Prior to our
      acquisition of Chongqing Qiluo Textile Co. Ltd. (“Qiluo”), as disclosed in the
      Company’s Current Report on Form 8-K filed with the SEC on June 20, 2007,
      Franklin intended to engage in the manufacture, processing, and distribution
      of
      frozen Pan Asian foods. Franklin has not generated any revenue to date and
      its
      operations have been limited to organizational, start-up, and fund raising
      activities.





On
      July
      20, 2006, the SEC declared effective Franklin’s Registration Statement on Form
      SB-2 (Commission File No. 333-135199) relating to the primary offering by
      Franklin of up to 4,000,000 shares of our common stock at a purchase price
      equal
      to $0.025 per share. Such offering commenced on July 1, 2006 and was terminated
      and concluded on September 25, 2006. Franklin sold all 4,000,000 shares of
      common stock offered in such offering and raised gross proceeds of $100,000.
      Franklin incurred offering costs of $16,000, and net proceeds amounted to
      $84,000. To date, $70,000 of the proceeds have been utilized to engage
      consultants in areas including culinary cuisine, kitchen equipment, development
      of a marketing plan, food samples and web site development.




13




On
      April
      23, 2007, Franklin amended its Articles of Incorporation for the purposes of
      implementing a one for two and a half (1:2.5) forward stock split and increasing
      its authorized shares of common stock on a corresponding basis. As a result
      of
      such forward stock split, shares of common stock held by each holder of record
      on April 23, 2007 were automatically split at the rate of one for two and a
      half
      (1:2.5), so that each pre-split share of the Corporation was equal to two and
      a
      half post-split shares without any further action on the part of the
      shareholders. The number of shares of common stock issued and outstanding prior
      to the forward stock split was 12,100,000 shares. After the forward stock split,
      the number of shares of common stock issued and outstanding was 30,250,000
      shares. In addition, the authorized shares of common stock of the Company were
      increased from 500,000,000 shares, par value $0.001, to 1,250,000,000 shares,
      par value $0.0001.





On
      June
      18, 2007, Franklin authorized and created a series of preferred stock,
      designated as the “Series A Convertible Preferred Stock” (the “Series A
      Preferred Stock”), consisting of 5,000,000 shares. Each share of Series A
      Preferred Stock is convertible, at the option of the holder thereof, into 10.576
      shares of Franklin's common stock. The holders of shares of Series A Preferred
      Stock are entitled to vote together with the holders of the common stock, as
      a
      single class, upon all matters submitted to holders of common stock for a vote.
      Each share of Series A Preferred Stock will carry a number of votes equal to
      the
      number of shares of common stock issuable as if converted at the record date.
      The Series A Preferred Stock shall rank senior to the common stock. In the
      event of any liquidation, dissolution or winding up of Franklin, the holders
      of
      Series A Preferred Stock shall be entitled to receive, prior and in preference
      to any distribution of any of the assets of Franklin to the holders of the
      common stock of Franklin and any other issue of stock, should there be any,
      by
      reason of their ownership thereof, an amount per share equal to $0.01 per each
      share of Series A Convertible Preferred Stock owned by such shareholder plus
      any
      declared and unpaid dividends on the Series A Convertible Preferred Stock.





On
      June
      19, 2007, pursuant to a Share Purchase Agreement dated such date, Franklin
      purchased from the shareholders of Qiluo all of the issued and outstanding
      shares of registered capital of Qiluo. As a result of such purchase, Qiluo
      became a wholly-owned subsidiary of Franklin. In exchange therefor, Franklin
      issued to the Qiluo Shareholders an aggregate of 5,000,000 shares of Franklin’s
      Series A Convertible Preferred Stock, which were allocated among Qiluo’s
      shareholders as follows: 4,750,000 shares to Xinshengxiang Industrial
      Development Co., Ltd.; 125,000 shares to Dingliang Kuang; and 125,000 shares
      to
      Yue Kuang.  The
      acquisition is accounted for as a “reverse acquisition,” since the stockholders
      of Qiluo owned a majority of Franklin’s common stock immediately following the
      transaction. Qiluo is treated as the continuing entity although Franklin is
      the
      legal acquirer. Consequently, the consolidated financial statements include
      the
      assets and liabilities of Qiluo and Franklin, historical operations of Qiluo,
      and operations of Qiluo and Franklin from the date of the
      acquisition.





Qiluo
      was
      incorporated on December 15, 2006, under the name “Chongqing Qiluo Textile Co.
      Ltd.” under the laws of the People’s Republic of China. Qiluo’s executive office
      is located in the Fuling District of Chongqing Municipality, China. Prior to
      the
      acquisition of Qiluo by Franklin, Qiluo purchased machinery for use in its
      manufacturing facility in the Fuling District of Chongqing Municipality, China.
      Such manufacturing facilities are capable of conducting the entire silk
      manufacturing process, from sericulture to harvesting and processing the
      cocoons, to the manufacturing and exportation of either finished or raw silk
      products. Qiluo’s
      current manufacturing facilities are capable of producing 485 tons of raw silk
      per year.





Since
      its
      acquisition of Qiluo, Franklin no longer intends to engage in the manufacture,
      processing, and distribution of frozen Pan Asian foods. Instead, it will focus
      on the production and sale of raw silk.





**Plan
      of Operation**





Through
      our subsidiary, Qiluo, we intend to engage in the manufacture and sale of raw
      silk in the in the Fuling District of Chongqing Municipality, China. The primary
      goal of Qiluo is to be the leader in silk manufacturing in the local area of
      Fuling, Chongqing, China.




14




Qiluo
      began operations in late June 2007, although it has not yet generated any
      revenues and there is no assurance that it will be able to do so or achieve
      profitability. Over the next twelve months, we expect to produce between 400
      tons and 600 tons of raw silk. It is anticipated that revenues generated from
      sales of our product will satisfy our cash flow requirements.





Qiluo
      intends to sell its products to the following markets: silk brokers, textile
      manufacturing, computer technology companies (used in plastics and materials)
      and the auto industry. Qiluo intends to employ an in house sales and
      distribution team. This division of Qiluo will be in charge of national and
      international sales as well as providing for all logistical needs including
      transporting of product by the various shipping needs by land, rail, and sea.





We
      are
      contemplating the acquisition of various silk worm farms and/or other existing
      manufacturing facilities. Should these initiatives move forward, additional
      funds may be required. There can be no assurance that additional capital will
      be
      available to us. Although we may seek to raise additional funds, we have no
      specific plans, understandings or agreements with respect to such an offering,
      and we have given no contemplation with respect to the securities to be offered
      or any other issue with respect to any offering. We may have to issue debt
      or
      equity or enter into a strategic arrangement with a third party. We currently
      have no agreements, arrangements or understandings with any person to obtain
      funds through bank loans, lines of credit or any other sources.





**Liquidity
      and Capital Resources**





As
      of
      June 30, 2007, we had $761,000 in cash. In order to implement our business
      plans, we may need to raise additional funds. We have no specific plans,
      understandings or agreements with respect to the raising of such funds, and
      we
      may seek to raise the required capital by the issuance of equity or debt
      securities or by other means. Since we have no such arrangements or plans
      currently in effect, our inability to raise funds for a marketing program will
      have a severe negative impact on our ability to remain a viable company.




The
      Company had no revenues and incurred a net loss of approximately $29,000 for
      the
      quarter ended June 30, 2007 and a net loss of $106,000 for the six months ended
      June 30, 2007.





**Off-Balance
      Sheet Arrangements**





We
      have
      no off-balance sheet arrangements.





**Item
      3.**  **Controls
      and Procedures.**





**Evaluation
      of Disclosure Controls and Procedures**





Our
      disclosure controls and procedures are designed to ensure that information
      required to be disclosed in reports that we file or submit under the Securities
      Exchange Act of 1934 is recorded, processed, summarized and reported within
      the
      time periods specified in the rules and forms of the United States Securities
      and Exchange Commission. Our principal executive and financial officer has
      reviewed the effectiveness of our "disclosure controls and procedures" (as
      defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c))
      within the end of the period covered by this Quarterly Report on Form 10-QSB
      and
      has concluded that the disclosure controls and procedures are effective to
      ensure that material information relating to the Company is recorded, processed,
      summarized, and reported in a timely manner. There were no significant changes
      in our internal controls or in other factors that could significantly affect
      these controls subsequent to the last day they were evaluated by our principal
      executive and financial officer.




15




**Changes
      in Internal Controls over Financial Reporting**





There
      have been no changes in the Company's internal control over financial reporting
      during the last quarterly period covered by this report that have materially
      affected, or are reasonably likely to materially affect, the Company's internal
      control over financial reporting.




**PART
      II**


**OTHER
      INFORMATION**





**Item
      1.**  **Legal
      Proceedings.**





There
      are
      no pending legal proceedings to which the Company is a party or in which any
      director, officer or affiliate of the Company, any owner of record or
      beneficially of more than 5% of any class of voting securities of the Company,
      or security holder is a party adverse to the Company or has a material interest
      adverse to the Company. The Company’s property is not the subject of any pending
      legal proceedings.





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





**Unregistered
      Sales of Equity Securities**





Other
      than the sales of unregistered equity securities previously disclosed in the
      Company’s Current Report of Form 8-K filed with the SEC on June 20, 2007, there
      were no other such sales during the quarter ended June 30, 2007.





**Item
      3.**  **Defaults
      Upon Senior Securities.**





None.





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





There
      was
      no matter submitted to a vote of security holders during the fiscal quarter
      ended June 30, 2007.





**Item
      5.**  **Other
      Information.**





None.





**Item
      6.**  **Exhibits**





Exhibit
                No.
            
            Description31.1
            
            Rule
                13a-14(a)/15d14(a) Certifications of Kelly Fan, the President, Chief
                Executive Officer, Treasurer, and Director (Attached
                Hereto)31.2
            
            Rule
                13a-14(a)/15d14(a) Certifications of Patricia E. Dowell, the Secretary
                (Attached Hereto)32.1
            
            Section
                1350 Certifications of Kelly Fan, the President, Chief Executive
                Officer,
                Treasurer, and Director (Attached Hereto)32.2
            
            Section
                1350 Certifications of Patricia E. Dowell, the Secretary (Attached
                Hereto)




16


**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this quarterly report on Form 10-QSB to be signed on its behalf
      by
      the undersigned thereunto duly authorized.


FRANKLIN
                TOWERS ENTERPRISES, INC.Date: August
                14, 2007
            By:
            /s/ Kelly
                FanName:
                Kelly Fan
              Title:
                President, Chief Executive Officer, Treasurer, and Director
              (Principal
                Executive, Financial, and Accounting Officer)


Date: August
                14, 2007
            By:
            /s/ Patricia
              E. DowellName:
              Patricia E. DowellTitle:
                Secretary




17