**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**Form 10-Q**


þ
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**





**For
      the quarterly period ended March 31, 2008**


**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 number 0-21061**




**ORGANIC
      TO GO FOOD CORPORATION**


**(Exact
      name of registrant as specified in its charter)**









**Delaware**
            
            **58-2044990**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)





**3317
      Third Avenue South**


**Seattle,
      Washington 98134**


**(206) 838-4670**


**(Address
      principal executive offices)**


**(Registrant’s
      telephone number, including area code)**




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 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
þ  No
o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting
      company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
      Exchange Act.





oLarge
                accelerated filer
            oAccelerated
                fileroNon-accelerated
                filer
            þSmaller
                reporting company





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





As
      of
      May 5, 2008, 36,329,755 shares of the Company’s Common Stock, par value
      $0.001 per share, were outstanding.







**Organic
      To Go Food Corporation**





**Table
      of Contents**





**Page No.****PART
                I FINANCIAL INFORMATION**Item
                1. Unaudited Condensed
                Consolidated Financial Statements:Balance
                Sheets as of December 31, 2007 and March 31, 2008
            1Statements
                of Operations for the Three Months Ended March 31, 2007 and
                2008
            2Statement
                of Stockholders’ Equity for the Three Months Ended March 31,
                2008
            3Statements
                of Cash Flows for the Three Months Ended March 31, 2007 and
                2008
            4Notes
                to Condensed Consolidated Financial Statements
            5Item
                2. Management’s Discussion
                and Analysis of Financial Condition and Results of
                Operations
            14Item
                3. Quantitative and
                Qualitative Disclosures About Market Risk
            17Item
                4. Controls and
                Procedures
            17**PART
                II OTHER INFORMATION**Item
                6. Exhibits
            18SIGNATURES
            19










***PART
      I. FINANCIAL INFORMATION***





**Item
      1. Unaudited Condensed Consolidated Financial Statements**





**Organic
      To Go Food Corporation and its wholly-owned subsidiary, Organic To Go,
      Inc.**


**Condensed
      Consolidated Balance Sheets**


**(In
      thousands, except per share amounts)**





**(*****audited*****)**
              **December 31,**
              **2007**
            
            **(*****unaudited*****)**
              **March 31,**
              **2008****ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            668
            
            $
            8,601Accounts
                receivable, net
            
            
            1,099
            
            
            1,437Inventory
            
            
            845
            
            
            1,042Prepaid
                expenses and other current assets
            
            
            489
            
            
            810Total
                current assets
            
            
            3,101
            
            
            11,890Property
                and equipment, net
            
            
            5,465
            
            
            6,723Identifiable
                intangible assets, net
            
            
            3,853
            
            
            2,542Deposits
                and other assets
            
            
            521
            
            
            264TOTAL
                ASSETS
            
            $
            12,940
            
            $
            21,419**LIABILITIES
                AND SHAREHOLDERS’ EQUITY**Current
                liabilities:Accounts
                payable
            
            $
            2,040
            
            $
            2,152Accrued
                liabilities
            
            
            780
            
            
            546Current
                portion of notes payable,
            
            
            1,474
            
            
            1,091Current
                portion of capital lease obligations
            
            
            463
            
            
            683Total
                current liabilities
            
            
            4,757
            
            
            4,472Deferred
                rent
            
            
            52
            
            
            52Notes
                payable, net of current portion
            
            
            1,044
            
            
            1,364Capital
                lease obligations, net of current portion
            
            
            440
            
            
            1,001TOTAL
                LIABILITIES
            
            
            6,293
            
            
            6,889Commitments
                and Contingencies (see Note 7)Shareholders’
                equity:Preferred
                Stock - $0.001 par value per share, 10,000,000 shares authorized,
                no
                shares issued and outstanding
            
            
            -
            
            
            -Common
                stock and additional paid-in capital - $0.001 par value per share,
                500,000,000 shares authorized, 27,758,326 and 36,329,755 shares issued
                and
                outstanding
            
            
            33,215
            
            
            43,944Accumulated
                deficit
            
            
            (26,568
            )
            
            (29,414
            )TOTAL
                SHAREHOLDERS’ EQUITY
            
            
            6,647
            
            
            14,530TOTAL
                LIABILITIES AND SHAREHOLDERS’ EQUITY
            
            $
            12,940
            
            $
            21,419




*See
      accompanying notes to condensed consolidated financial
      statements.*





1




**Organic
      To Go Food Corporation and its wholly-owned subsidiary, Organic To Go,
      Inc.**


**Condensed
      Consolidated Statements of Operations**


**(Unaudited
      and in thousands, except per share amounts)**




**Three Months Ended**
              **March 31,****2007**
            
            **2008**Sales
            
            $
            3,618
            
            $
            5,175Cost
                of sales
            
            
            1,842
            
            
            1,981Gross
                profit
            
            
            1,776
            
            
            3,194Operating
                expenses
            
            
            3,462
            
            
            4,205Depreciation
                and amortization
            
            
            434
            
            
            1,770Total
                operating expenses
            
            
            3,896
            
            
            5,975Loss
                from operations
            
            
            (2,120
            )
            
            (2,781
            )Interest
                income (expense), net
            
            
            (347
            )
            
            (65
            )Loss
                before income taxes
            
            
            (2,467
            )
            
            (2,846
            )Income
                taxes
            
            
            -
            
            
            -Net
                loss
            
            $
            (2,467
            )
            $
            (2,846
            )Basic
                and diluted net loss per share
            
            $
            (0.21
            )
            $
            (0.09
            )Weighted
                average shares outstanding
            
            
            12,022
            
            
            31,479




*See
      accompanying notes to condensed consolidated financial
      statements.*




2


**Organic
      To Go Food Corporation and its wholly-owned subsidiary, Organic To Go,
      Inc.**


**Condensed
      Consolidated Statement of Stockholders’ Equity**


**(Unaudited
      and in thousands, except share amounts)**




**Common
                Stock****and
                Additional**
            
            
            
            **Total****Paid
                In Capital**
            
            **Accumulated**
            
            **Stockholders’****Shares**
            
            **Amount**
            
            **Deficit**
            
            **Equity**Balance
                at December 31, 2007
            
            
            27,758,326
            
            $
            33,215
            
            $
            (26,568
            )
            $
            6,647Issuance
                of common shares and warrants for cash
            
            
            8,571,429
            
            
            12,000
            
            
            -
            
            
            12,000Stock
                issue costs
            
            
            -
            
            
            (1,386
            )
            
            -
            
            
            (1,386
            )Share
                based compensation
            
            
            -
            
            
            115
            
            
            -
            
            
            115Net
                loss
            
            
            -
            
            
            -
            
            
            (2,846
            )
            
            (2,846
            )Balance
                at March 31, 2008
            
            
            36,329,755
            
            $
            43,944
            
            $
            (29,414
            )
            $
            14,530




*See
      accompanying notes to condensed consolidated financial
      statements.*




3


**Organic
      To Go Food Corporation and its wholly-owned subsidiary, Organic To Go,
      Inc.**


**Condensed
      Consolidated Statements of Cash Flows**


**(Unaudited
      and in thousands)**





**Three Months Ended**
              **March 31,****2007**
            
            **2008**Cash
                flows from operating activities:Net
                loss
            
            $
            (2,467
            )
            $
            (2,846
            )Adjustments
                to reconcile net loss to net cash used by operating
                activities:Depreciation
                and amortization
            
            
            434
            
            
            1,771Share-based
                compensation cost
            
            
            19
            
            
            115Amortization
                of debt issue costs and debt discount included in interest
                expense
            
            
            232
            
            
            -Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (210
            )
            
            (338
            )Inventory
            
            
            (91
            )
            
            (197
            )Prepaid
                expenses and other current assets
            
            
            (420
            )
            
            (321
            )Accounts
                payable
            
            
            (251
            )
            
            (38
            )Accrued
                liabilities
            
            
            203
            
            
            (234
            )Other
            
            
            (72
            )
            
            (19
            )Net
                cash used by operating activities
            
            
            (2,623
            )
            
            (2,107
            )Cash
                flows from investing activities:Purchases
                of property, equipment and other assets
            
            
            (494
            )
            
            (605
            )Purchase
                of intangible assets
            
            
            (580
            )
            
            -Net
                cash used in investing activities
            
            
            (1,074
            )
            
            (605
            )Cash
                flows from financing activities:Principal
                payments on notes payables
            
            
            (347
            )
            
            (63
            )Principal
                payments on capital lease obligations
            
            
            (39
            )
            
            (186
            )Proceeds
                from sale of common stock, net of issue costs
            
            
            6,002
            
            
            10,894Net
                cash provided by financing activities
            
            
            5,616
            
            
            10,645Net
                increase in cash and cash equivalents
            
            
            1,919
            
            
            7,933Cash
                and cash equivalentsBeginning
                of period
            
            
            865
            
            
            668End
                of period
            
            $
            2,784
            
            $
            8,601Supplemental
                disclosure of cash flow information:Cash
                paid for interest
            
            $
            66
            
            $
            74Cash
                paid for income taxes
            
            
            -
            
            
            -Non-cash
                investing and financing activities:Fixed
                assets acquired though capital lease
            
            $
            -
            
            $
            967Fixed
                assets purchased though accounts payable
            
            $
            -
            
            $
            150




*See
      accompanying notes to condensed consolidated financial
      statements.*




4


**Organic
      To Go Food Corporation and its wholly-owned subsidiary, Organic To Go,
      Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**March
      31, 2008**





**Note
      1.  Description of Business, Basis of Presentation and Summary of
      Significant Accounting Policies**





**Organization
      and Business**





Organic
      To Go Food Corporation, formerly SP Holding Corporation (“SP”) prior to May
      2007, and its wholly owned subsidiary Organic To Go, Inc. (“Organic” and
      together with Organic To Go Food Corporation, collectively, the “Company”),
      which was acquired in a reverse merger on February 12, 2007, provides convenient
      retail cafes and delivery and catering services, preparing and serving “grab and
      go” lunch, dinner, and breakfast foods and beverages prepared using organic
      ingredients, whenever possible. The Company also distributes its products
      through select wholesale accounts. In October 2006, Organic expanded its
      catering operations in the California area by acquiring the assets of a catering
      operation headquartered in Los Angeles, California, and in March 2007, it
      expanded its catering operations by acquiring the assets of a catering operation
      located in Seattle, Washington. During 2007, the Company further expanded its
      operations by acquiring the assets of three separate businesses, for a total
      of
      six additional locations in San Diego, California. As of March 31, 2008, the
      Company operates six stores in Washington and twenty stores in California.





**Basis
      of Presentation**





In
      the
      opinion of management, the accompanying Condensed Consolidated Balance Sheets
      and related Condensed Consolidated Statements of Operations, Condensed
      Consolidated Statement of Stockholders’ Equity and Statements of Cash Flows have
      been prepared in accordance with accounting principles generally accepted in
      the
      United States of America (“ GAAP”)
      for interim financial information and with the instructions to Form 10-Q and
      Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
      information and notes required by GAAP for complete financial statements.
      Management believes that all adjustments (consisting of normal recurring
      adjustments) considered necessary for fair presentation have been included.
      Interim results are not necessarily indicative of results for a full year.
      The
      information included in this Form 10-Q should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of
      Operations” and the financial statements and notes thereto included in the
      Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
      2007.





The
      presentation of financial statements prepared in conformity with GAAP
      contemplates continuation of the Company as a going concern. The Company has
      reported recurring losses and cash used by operating activities, and at
      March **** 31,
      2008
      has a net working capital deficiency and accumulated deficit that could raise
      doubt about its ability to continue as a going concern.





Since
      inception, the Company has funded its operations and business development and
      growth through debt and equity financings. During the three months ended March
      31, 2007, proceeds of approximately $6.9 million were received from the sale
      of
      equity securities in connection with its reverse merger and private placement,
      and approximately $5.3 million of notes payable were converted into common
      shares. Additionally, during the three months ended June 30, 2007, proceeds
      of
      approximately $6.7 million were received from the sale of debt and equity
      securities. In October 2007, the Company closed its private placement offering
      and issued approximately 3.2 million shares of Company common stock and warrants
      to purchase approximately 1.5 million shares of Company common stock. The
      aggregate gross proceeds raised by the Company were approximately $5.7 million.
      Subsequent to December 31, 2007, the Company closed a private placement offering
      in January 2008 and issued approximately 1.4 million shares of Company common
      stock and warrants to purchase approximately 0.6 million shares of Company
      common stock. The aggregate gross proceeds raised by the Company were
      approximately $2.0 million. In February 2008, the Company closed a private
      placement offering and issued approximately 7.1 million shares of Company common
      stock and a warrant to purchase approximately 4.3 million shares of Company
      common stock and a conditional warrant to purchase shares of Company common
      stock, which may only be exercised under certain circumstances. The aggregate
      gross proceeds raised by the Company were approximately $10.0 million. Company
      management intends to continue to be engaged in additional fund-raising
      activities to fund future capital expenditures, potential acquisitions of
      businesses, and provide additional working capital. The accompanying financial
      statements do not include any adjustments to reflect the possible future effects
      on the recoverability and classification of assets or the amounts and
      classifications of liabilities that could result should the Company not continue
      as a going concern.




5




**Use
      of Estimates**





Preparation
      of financial statements in conformity with GAAP requires management to make
      estimates and assumptions that affect reported amounts of assets and liabilities
      and disclosure of contingent assets and liabilities at the date of the financial
      statements and reported amounts of revenue and expenses during the reporting
      period. Actual results could differ from those estimates. The more significant
      accounting estimates inherent in the preparation of the Company's financial
      statements include estimates as to the depreciable lives of property and
      equipment, recoverability of receivables, valuation and recoverability of
      inventories, recoverability of long-lived assets, valuation of intangible assets
      and allocation of purchase price, valuation of equity-related instruments
      issued, and valuation allowance for deferred income tax assets.





**Summary
      of Significant Accounting Policies**





Cash
      and cash equivalents - The
      Company considers all highly liquid investments purchased with maturities of
      three months or less to be cash equivalents. The Company places its cash
      balances on deposit with high credit, highly-rated financial institutions.
      At
      times, such balances may be in excess of the FDIC insurance limit. At
      March 31, 2008, approximately $8.6 million was in excess of the FDIC limit.





Contingencies -
      Certain conditions may exist as of the date financial statements are issued,
      which may result in a loss to the Company, but which will only be resolved
      when
      one or more future events occur or fail to occur. Company management and its
      legal counsel assess such contingent liabilities, and such assessment inherently
      involves an exercise of judgment. In assessing loss contingencies related to
      legal proceedings that are pending against the Company or unasserted claims
      that
      may result in such proceedings, the Company's legal counsel evaluates the
      perceived merits of any legal proceedings or unasserted claims as well as the
      perceived merits of the amount of relief sought or expected to be sought
      therein. If the assessment of a contingency indicates that it is probable that
      a
      liability has been incurred and the amount of the liability can be estimated,
      then the estimated liability would be accrued in the Company's financial
      statements. If the assessment indicates that a potentially material loss
      contingency is not probable but is reasonably possible, or is probable but
      cannot be estimated, then the nature of the contingent liability, together
      with
      an estimate of the range of possible loss if determinable would be disclosed.





Concentrations  **-** All
      of
      the Company’s operations are currently located in Washington and California. As
      a result, the Company is sensitive to negative occurrences in markets where
      the
      Company is located, and particularly susceptible to adverse trends and economic
      conditions including labor markets. In addition, given geographic concentration,
      negative publicity regarding any of our operations in Washington or California
      could have a material adverse effect on the Company’s business and operations,
      as could other regional occurrences such as local strikes, earthquakes or other
      natural disasters.




Fair
      value of financial instruments - The
      Company measures its financial assets and liabilities in accordance with GAAP.
      For certain of the Company's financial instruments, including cash and cash
      equivalents, accounts receivable, accounts payable and accrued liabilities,
      the
      carrying amounts approximate fair value due to their short maturities. Amounts
      recorded for notes payable also approximate fair value because current interest
      rates offered to the Company for debt of similar maturities are substantially
      the same **.**





Accounts
      receivable - The
      Company extends credit to certain of its customers. Accounts receivable are
      customer obligations due under normal trade terms. The Company performs credit
      evaluations of its customers’ financial condition. Management reviews accounts
      receivable on a regular basis on contracted terms and how recent payments have
      been received in order to determine estimates of amounts that could potentially
      be uncollectible. The Company includes an estimate of the amount that is more
      likely than not to be uncollectible in its allowance for doubtful accounts.
      Accounts uncollected are ultimately written off after all reasonable collection
      efforts have been exhausted.




6




Inventory  **-** Inventory,
      which consists primarily of food, beverages and packaging products, is stated
      at
      the lower of cost or market. Cost is determined according to the first-in,
      first-out method. In assessing the ultimate realization of inventories, Company
      management makes judgments as to future demand requirements compared to current
      inventory levels.





Property
      and equipment -
      Property and equipment is stated at cost. Additions and improvements that
      significantly add to the productive capacity or extend the life of an asset
      are
      capitalized. Maintenance and repairs are expensed as incurred. Depreciation
      is
      computed using the straight-line method over five to seven years for furniture,
      fixtures, equipment and vehicles, and over three years for computer software
      and
      hardware. Leasehold improvements are amortized over the shorter of the lease
      term or ten years.





Identifiable
      intangible assets -
      Through its acquisitions of other businesses, the Company has acquired certain
      identifiable intangible assets including customer-based intangibles and a
      covenant not to compete. All such intangible assets have been accounted for
      in
      accordance with Statement of Financial Accounting Standards No. 141, “Business
      Combinations” (“SFAS 141”). The estimate of useful lives of each intangible
      asset was based on an analysis by management of all pertinent factors, and
      selection of an estimated useful life of up to two years has been identified
      for
      each intangible asset. Customer based intangible assets are amortized utilizing
      an accelerated method and non-compete intangible assets are amortized on a
      straight-line basis.





Statement
      of Financial Accounting Standards No. 142, “Goodwill and Other Intangible
      Assets,” (“SFAS 142”) requires that long-lived assets and certain
      identifiable intangibles be reviewed for impairment whenever events or changes
      in circumstances indicate that the carrying amount of an asset may not be
      recoverable. Recoverability of assets to be held and used is measured by a
      comparison of the carrying amount of an asset to future net discounted cash
      flows expected to be generated by the asset or other valuation methods. If
      such
      assets are considered to be impaired, impairment to be recognized is measured
      by
      the amount by which the carrying amount of the assets exceeds the asset’s fair
      value.





Impairment
      of long-lived assets -
      Long-lived assets are reviewed for impairment whenever events or changes in
      circumstances indicate that the carrying amount of the assets may not be
      recoverable. Impairment of long-lived assets would be recognized in the event
      that the net book values of such assets exceed the future undiscounted cash
      flows attributable to such assets.




Debt
      discount - The
      Company records the fair value of warrants issued with debt securities as a
      debt
      discount, which is amortized as an adjustment to interest expense over the
      life
      of the borrowing.





Revenue
      recognition -
      Revenues are recognized at the point of sale at retail locations or upon
      delivery of the product for delivery and wholesale transactions.





Cost
      of sales - Cost
      of sales includes the cost of food and paper products.





Pre-operating
      costs - Costs
      incurred in connection with start-up and promotion of new store openings are
      expensed as incurred.





Income
      taxes - The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards No. 109, “ *Accounting
      for Income Taxes* ”
(“SFAS
      109”), which requires recognition of deferred tax assets and liabilities for
      expected future tax consequences of events that have been included in financial
      statements or tax returns. Under this method, deferred income taxes are
      recognized for the tax consequences in future years of differences between
      the
      tax bases of assets and liabilities and their financial reporting amounts at
      each period end based on enacted tax laws and statutory tax rates applicable
      to
      the periods in which the differences are expected to affect taxable income.
      Valuation allowances are established, when necessary, to reduce deferred tax
      assets to amounts expected to be realized. The Company continues to provide
      a
      full valuation allowance to reduce its net deferred tax asset to zero, inasmuch
      as Company management has not determined that realization of deferred tax assets
      is more likely than not.




7




Stock-based
      compensation - The
      Company accounts for its share-based compensation under the provisions of FASB
      Statement No. 123(R), *Share-Based
      Payment* ,
      (“FAS
      123R”).The Company adopted FAS 123R effective beginning January 1, 2006 using
      the modified prospective method.





The
      Company accounts for equity instruments issued to non-employees in accordance
      with the provisions of FAS 123R and Emerging Task Force Issue No. 96-18,
“Accounting for Equity Instruments that are Issued to Other Than Employees for
      Acquiring or in Conjunction with Selling Goods or Services.” Compensation
      expense related to equity instruments issued to non-employees is recognized
      as
      the equity instruments vest.





Basic
      and diluted net loss per share - Basic
      net loss per common share is computed by dividing net loss by the
      weighted-average number of common shares outstanding during the period. Diluted
      net loss per common share is determined using the weighted-average number of
      common shares outstanding during the period, adjusted for the dilutive effect
      of
      common stock equivalents, consisting of shares that might be issued upon
      exercise of common stock options, warrants or convertible promissory notes,
      or
      conversion of preferred stock shares. In periods where losses are reported,
      the
      weighted-average number of common shares outstanding excludes common stock
      equivalents, because their inclusion would be anti-dilutive. Computations of
      net
      loss per share for the periods ending March 31, 2007 and 2008 exclude
      approximately 5.3 million and 12.4 million common shares, respectively, issuable
      upon exercise of outstanding and issuable warrants, 2.1 million and 4.9 million
      shares, respectively, of common stock issuable upon exercise of outstanding
      stock options, and 766,000 and 302,000 shares, respectively, of common stock
      issuable upon conversion of convertible notes payable. These common stock
      equivalents could have the effect of decreasing diluted net income per share
      in
      future periods when the Company generates net income.




Reclassifications -
      Certain reclassifications have been made to prior years’ financial statements to
      conform to current year presentation. Such reclassifications had no effect
      on
      stockholders’ equity, net loss or net increase in cash and cash
      equivalents.





Recent
      accounting pronouncements - In
      December 2007, the FASB issued SFAS No. 141(revised 2007), *Business
      Combinations* (“SFAS 141R”),
      which revises current purchase accounting guidance in SFAS 141, *Business
      Combinations* .
      SFAS 141R requires most assets acquired and liabilities assumed in a
      business combination to be measured at their fair values as of the date of
      acquisition. SFAS 141R also modifies the initial measurement and subsequent
      remeasurement of contingent consideration and acquired contingencies, and
      requires that acquisition related costs be recognized as expense as incurred
      rather than capitalized as part of the cost of the acquisition. SFAS 141R
      is effective for fiscal years beginning after December  15,
      2008
      (the Company’s fiscal 2009) and is to be applied prospectively to business
      combinations occurring after adoption. The impact of SFAS 141R on the
      Company’s consolidated financial statements will depend on the nature and extent
      of the Company’s future acquisition activities.





In
      December 2007, the FASB issues SFAS 160, Noncontrolling Interests in
      Consolidated Financial Statements – an amendment of ARB No. 51 (“SFAS
      160”).  SFAS 160 establishes accounting and reporting standards for
      the noncontrolling interest in a subsidiary and for the deconsolidation of
      a
      subsidiary.  SFAS 160 clarifies that a noncontrolling interest in a
      subsidiary is an ownership interest in the consolidated entity that should
      be
      reported as equity in the consolidated financial statements and requires
      retroactive adoption of the presentation and disclosure requirements for
      existing minority interests, of which the Company currently has
      none.  All other requirements of SFAS 160 shall be applied
      prospectively.  SFAS 160 is effective for fiscal years beginning after
      December 15, 2008.





8





**Note
      2. Inventories**




Inventories
                consist of the following (in thousands):
            
            December
                31,
              2007
            
            March
                31,
              2008Food
                and beverages
            
            $
            820
            
            $
            1,014Paper
                products
            
            
            25
            
            
            28Total
                inventories
            
            $
            845
            
            $
            1,042




**Note
      3. Property and Equipment**


Property
                  and equipment consists of the following (in thousands):
              
              December
                  31,
                2007
              
              March
                  31,
                2008Leasehold
                  improvements
              
              $
              2,389
              
              $
              2,933Furniture,
                  fixtures and equipment
              
              
              3,878
              
              
              4,090Vehicles
              
              
              1,156
              
              
              1,156Leased
                  equipment
              
              
              686
              
              
              1,6488,109
              
              
              9,827Less
                  accumulated depreciation and amortization
              
              
              2,644
              
              
              3,104Total
                  property and equipment, net
              
              $
              5,465
              
              $
              6,723




Amortization
      of leased equipment is included in depreciation and amortization
      expense.





**Note
      4. Identifiable Intangible Assets**





Identifiable
                intangible assets consist of the following (in thousands):
            
            December
                31,
              2007
            
            March
                31,
              2008Customer
                based intangible assets
            
            $
            6,303
            
            $
            6,303Non-compete
                intangible assets
            
            
            589
            
            
            5896,892
            
            
            6,892Less
                accumulated amortization
            
            
            (3,039
            )
            
            (4,350
            )Total
                identifiable intangible assets, net
            
            $
            3,853
            
            $
            2,542





The
      Company recorded amortization expense on intangible assets of $211,000 and
      $1.3
      million, respectively, for the periods ended March 31, 2007 and
      2008.





9


**Note
      5. Notes Payable**


Notes
                  payable consist of the following (in thousands):
              
              December
                  31,
                2007
              
              March
                  31,
                2008Notes
                  payable, 6% to 25% interest collateralized by vehicles and
                  equipment
              
              $
              141
              
              $
              103Convertible
                  note payable, 8.25% interest, collateralized by substantially all
                  assets
              
              
              759
              
              
              759Notes
                  payable, 7.75% interest, collateralized by certain assets, due
                  April
                  2010
              
              
              418
              
              
              418Note
                  payable, 9.25% interest, due March 2009
              
              
              97
              
              
              78Note
                  payable, 8.0% interest, due October 2009
              
              
              54
              
              
              47Notes
                  payable, 18% interest, due May 2008
              
              
              500
              
              
              500Notes
                  payable, 10.5% interest, due December 2009
              
              
              549
              
              
              550Total
                  notes payable
              
              
              2,518
              
              
              2,455Less:
                  current portion of notes payable
              
              
              (1,474
              )
              
              (1,091
              )Notes
                  payable, net of current portion
              
              $
              1,044
              
              $
              1,364




The
      Company has a borrowing agreement with a vendor pursuant to which the Company
      has had outstanding borrowings of approximately $759,000 since March 31, 2006.
      The note payable requires monthly payments of interest at the prime rate plus
      1%
      (8.25% at December 31, 2007 and 6.25% at March 31, 2008), with the principal
      due
      in September, 2007. The note is convertible at the note holder’s option into
      shares of the Company’s common stock at an exchange ratio adjusted conversion
      price of approximately $1.68 per share. If the note was not converted in full
      on
      or before the maturity date, the then outstanding principal balance and accrued
      interest automatically converts into a term note, which shall provide for
      thirty-six equal monthly payments and a final maturity date in September 2010.
      Since the note was not converted or repaid on or prior to the maturity date
      the
      original note has been replaced with a 36 month term loan with interest at
      prime
      plus 1%. The note is collateralized by a pledge of Company assets.





In
      December 2007, the proceeds from the issuance of two separate promissory notes
      payable in the amounts of $258,500 and $291,500 were used to pay off a prior
      note payable in the amount of $550,000. Each bears interest at 10.5% per annum
      and both are due in December, 2009. The holder of each note can elect to require
      payment in full in December, 2008.




During
      2007, the Company borrowed $500,000 from three of the Company’s equity and
      bridge note investors pursuant to a promissory note payable of $500,000, bearing
      interest at 18% per annum, all of which are due in May, 2008.





Also
      during 2007, as part of asset purchase agreements, the Company issued to the
      sellers promissory notes of $150,000 and $75,000, bearing interest at 9.25%
      and
      8% per annum, payable monthly and due in March, 2009 and October, 2010,
      respectively.





Future
      minimum principal payments on notes payable at March 31, 2008 are as follows
      (in
      thousands):





One
                year (4/2008 – 3/2009)
            
            $
            1,091Two
                years (4/2009 – 3/2010)
            
            
            1,238Three
                years (4/2010 – 3/2011)
            
            
            126Total
            
            $
            2,455





10





**Note
      6. Stockholders’ Equity**





Authorized
      shares –
The
      Company is currently authorized under its Amended and Restated Certificate
      of
      Incorporation to issue 500,000,000 shares of its common stock and 10,000,000
      shares of its preferred stock.





Warrants - During
      the three months ended March 31, 2008, in conjunction with various equity
      financing related agreements and related issuance of equity securities, the
      Company issued warrants for a term of approximately 5 years to purchase shares
      of the Company’s common stock at an exercise price of $2.50 per share for
      approximately 7.9 million shares. As of March 31, 2008, there were a total
      of
      12.4 million warrants outstanding as follows:





**Exercise
                Price**
            
            **Number of warrants**$
                1.38
            
            
            
            66,6291.68
            
            
            
            2,151,9862.12
            
            
            
            2,229,430


2.50
            
            
            
            7,938,56312,386,608





Stock
      options –
From
      time to time, the Company grants to its directors, officers, employees and
      consultants options to purchase shares of the Company’s common stock. The
      Company accounts for its share-based compensation under the provisions of FAS
      123R. Options have a term of 10 years from the date of grant, with exercise
      prices at no less than the price of a share of the Company’s common stock on the
      date of grant. The Company uses the Black-Scholes option pricing model to
      estimate the fair value of its stock options on the date of grant. Fair value
      determination using this model is affected by the Company’s stock price on the
      date of grant as well as the expected life of the award, expected stock price
      volatility over the term of the award and actual and projected exercise
      behaviors. FAS 123R requires that the Company recognize compensation expense
      for
      only the portion of options that are expected to vest. Therefore, management
      applies an estimated forfeiture rate for projected future employee turnover
      rates. The estimated forfeiture rate is approximately 12%. If the actual number
      of forfeitures differs from those estimated by management, additional
      adjustments to compensation expense may be required in future periods. The
      Company’s stock price volatility, option lives and expected forfeiture rates
      involve management’s best estimates at the time of such determination, all of
      which impact the fair value of the option calculated under the Black-Scholes
      methodology and, ultimately, the expense that will be recognized over the life
      of the option. The Company typically issues stock options with a four-year
      vesting period (defined by FAS 123R as the requisite service period). The
      Company amortizes stock compensation cost ratably over the requisite service
      period.





Although
      the fair value of share-based awards is determined in accordance with FAS 123R
      and SAB 107, the Black-Scholes option pricing model requires the input of highly
      subjective assumptions, and other reasonable assumptions could provide different
      results. The weighted average fair value of stock options granted during the
      quarters ended March 31, 2007 and 2008 was approximately $0.50 and $0.64 per
      share, respectively, determined using the Black-Scholes option pricing model
      with the following assumptions: dividend yield of 0%; expected volatility of
      50%
      (based on the volatilities of common stock of comparable public companies);
      risk-free interest rates of approximately 5.0% and 2.9 %, respectively; and
      estimated lives of 5 years.





Compensation
      expense recognized for stock options and restricted stock approximated $19,000
      and $115,000, respectively, for the quarters ended March 31, 2007 and 2008.
      As
      of March 31, 2008, there was approximately $2.3 million of unrecognized
      compensation cost related to unvested stock options and restricted stock, which
      is expected to be recognized as expense over a period of approximately 3 years.
      The following summarizes activity for stock options:




11


**Options**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              
              **Weighted**
                **Average**
                **Remaining**
                **Contractual**
                **Term**
              
              **Aggregate**
                **Intrinsic**
                **Value**Outstanding
                  at December 31, 2007
              
              
              3,050,938
              
              $
              1.50Grants
              
              
              2,076,000Cancellations
              
              
              (212,000
              )
              
              3.08Outstanding
                  at March 31, 2008
              
              
              4,914,938
              
              $
              1.38
              
              
              9.3
                  years
              
              $
              483,000Exercisable
                  at March 31, 2008
              
              
              834,502
              
              $
              0.90
              
              
              8.6
                  years
              
              $
              357,000Available
                  for grant at March 31, 2008
              
              
              430,024





The
      aggregate intrinsic value in the table above represents the total pretax
      intrinsic value for all “in-the-money” options (i.e., the difference between the
      Company’s closing stock price on the last trading day of its first quarter of
      2008 and the exercise price, multiplied by the number of shares) that would
      have
      been received by the option holders had all option holders exercised their
      options on March 31, 2008. Aggregate intrinsic value changes, based on the
      fair
      market value of the Company’s stock on a daily basis. The intrinsic value of
      stock options outstanding and exercisable at March 31, 2008 is based on the
      closing price for the Company’s common stock as reported by the OTCBB of $1.25
      per share.





Additional
      information regarding stock options outstanding as of March 31, 2008, is as
      follows:


**Outstanding Options**
              
              **Exercisable Options****Range of**
                **Exercise Prices**
                **Per Share**
              
              **Number**
                **Outstanding**
              
              **Weighted**
                **Average**
                **Remaining**
                **Life (Years)**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              
              **Number**
                **Exercisable**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**$
                  0.17
              
              
              335,298
              
              
              7.9
              
              $
              0.17
              
              
              282,058
              
              $
              0.17$
                  0.34
              
              
              132,584
              
              
              8.3
              
              $
              0.34
              
              
              58,005
              
              $
              0.34$
                  1.37 - $ 1.38
              
              
              2,712,674
              
              
              9.5
              
              $
              1.38
              
              
              363,614
              
              $
              1.38$
                  1.40 - $ 1.48
              
              
              979,781
              
              
              9.7
              
              $
              1.43
              
              
              130,825
              
              $
              1.41$
                  1.60 - $ 1.92
              
              
              293,000
              
              
              9.5
              
              $
              1.82
              
              
              -
              
              $
              -$
                  2.23
              
              
              461,601
              
              
              9.1
              
              $
              2.23
              
              
              -
              
              $
              -$
                  0.17 - $ 2.23
              
              
              4,914,938
              
              
              9.3
              
              $
              1.38
              
              
              834,502
              
              $
              0.90





**Note
      7. Commitments and Contingencies**





The
      Company leases its cafes, central kitchens and office facilities under
      non-cancelable operating leases, some with renewal options. Rents are fixed
      base
      amounts, some with escalating rents and some with contingent rentals based
      on
      sales. Lease provisions also require additional payments for maintenance and
      other expenses. Rent is expensed on a straight-line basis over the term of
      the
      lease. The difference between amounts paid and expensed is recorded as a
      deferred rent credit. The Company also leases certain point-of-sale computer
      hardware and software pursuant to capital leases. At March 31, 2008, minimum
      future annual lease obligations are as follows (in thousands):




12


Operating
                Leases
              
              Capital
                Leases
              
              Total1
                  year (April 2008 – March 2009)
              
              $
              1,459
              
              $
              841
              
              $
              2,3002
                  years (April 2009 – March 2010)
              
              
              1,183
              
              
              568
              
              
              1,7513
                  years (April 2010 – March 2011)
              
              
              1,096
              
              
              476
              
              
              1,5724
                  years (April 2011 – March 2012)
              
              
              917
              
              
              85
              
              
              1,0025
                  years and thereafter (April 2012 and beyond)
              
              
              2,239
              
              
              12
              
              
              2,2516,894
              
              
              1,982
              
              
              8,876Less
                  amounts representing interest
              
              
              -
              
              
              (298
              )
              
              (298
              )Total
                  lease obligations
              
              $
              6,894
              
              $
              1,684
              
              $
              8,578





On
      January 8, 2008, Esther Sanchez, a former employee of Organic To Go, Inc.,
      the
      Company’s wholly owned subsidiary, brought suit against the Company, seeking
      damages in the Superior Court of the State of California for the County of
      Los
      Angeles, claiming wrongful termination, sexual harassment and related causes
      of
      action in connection with the termination of Ms. Sanchez’s employment. The
      Company’s employment practices liability insurer has agreed to provide a defense
      on its behalf, subject to a reservation of rights letter and the terms and
      conditions of its insurance policy.





The
      Company is currently in mediation pursuant to the Standard Form of Agreement
      with Wheelihan Construction, Inc. This matter arose out of tenant improvements
      made by Wheelihan Construction, Inc. and its subcontractors at one of the
      Company’s retail locations in San Diego, California. In connection with the
      matter, four subcontractors/suppliers have commenced actions against the
      Company, Wheelihan Construction, Inc. and other defendants.





From
      time
      to time, the Company is subject to various legal proceedings and claims that
      may
      arise in the ordinary course of business. Further, in the past, certain vendors
      have taken legal action against the Company as a result of untimely payment
      of
      invoices. In some cases, the courts have stipulated judgment requiring the
      Company to pay interest and comply with payment schedules. Company management
      currently believes that resolution of such legal matters will not have a
      material adverse impact on the Company’s financial statements. The Company is
      not a party to any other material legal proceedings other than those disclosed
      above, nor is it aware of any circumstance that may reasonably lead a third
      party to initiate material legal proceedings against it at this
      time.




**Note
      8. Subsequent Events**





On
      May
      14, 2008, pursuant to terms an asset purchase agreement, the Company acquired
      for $250,000
      cash, shares of Company’s common stock having a fair value of $500,000 and
      another $950,000 due in six quarterly installments beginning August 14, 2008,
      all inventory, furniture, fixtures, equipment, customer lists, trade names
      and
      leasehold improvements used in connection with a retail business operating
      three
      stores in Seattle, Washington. The Company also entered into a consulting
      agreement with the seller wherein that individual will provide consulting
      services to the Company for a one year period, pursuant to which, among other
      things, the Company will pay monthly fees of $8,333. The Company assumed
      operating leases for the three locations, as well as various equipment leases
      and financing agreements. The total purchase price of approximately $1.7 million
      will be allocated to assets acquired based on estimated fair values, which
      will
      result in the majority being allocated to trade names, customer-based intangible
      assets, and goodwill.




13


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





*The
      following discussion and analysis of the results of operations and financial
      condition of Organic To Go Food Corporation for the periods ended March 31,
      2007
      and 2008 should be read in conjunction with our financial statements and the
      notes to those financial statements that are included elsewhere in this Form
      10-Q. This discussion includes forward-looking statements based upon current
      expectations that involve risks and uncertainties, such as plans, objectives,
      expectations and intentions. Actual results and the timing of events could
      differ materially from those anticipated in these forward-looking statements
      as
      a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,”
“continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,”
“could,” and similar expressions are used to identify forward-looking
      statements.*





**Overview**





*Organization
      and Business -* Organic
      Holding Company, Inc., d/b/a Organic To Go, whose name was changed to Organic
      To
      Go, Inc. effective February 27, 2007, is a wholly owned subsidiary of Organic
      To
      Go Food Corporation and was incorporated in the state of Delaware in February
      2004. We are the nation’s first fast casual café chain to be certified as an
      organic retailer, with our food available in more than 160 locations. We provide
      convenient cafés which prepare and serve fresh custom-made and “grab and go”
breakfast, lunch and dinner foods and beverages prepared using organic
      ingredients, whenever possible. We also distribute our products through
      delivery, catering and wholesale accounts. Our company has grown through both
      organic expansion and acquisitions. In October 2006, we expanded our catering
      operations in the California area by acquiring the assets of a catering
      operation headquartered in Los Angeles, California. In March 2007, we expanded
      our catering operations by acquiring the assets of a catering operation located
      in Seattle, Washington, and in July, September and October 2007 we further
      expanded our operations by acquiring the assets of six retail and catering
      stores in San Diego, California. At March 31, 2008, we operated six stores
      in
      Washington and twenty stores in California, with central kitchens in Seattle,
      Los Angeles and San Diego. In addition to the twenty-six cafés, our food is
      available in more than 120 wholesale locations, 14 universities and 11 locations
      at Los Angeles International Airport.





Management
      believes we have the opportunity to capture increasing market share in all
      three
      of our business channels: Retail Cafes, Delivery and Catering,, and Wholesale
      of
      our “grab & go” sandwiches, wraps and salads, by providing customers with
      delicious, healthy, wholesome and organic food choices. Management is focused
      in
      the near and long term on the challenges and risks that we face in expanding
      our
      business. These include our ability to obtain retail cafés, catering customers
      and wholesale locations, building a sufficient infrastructure to support our
      expansion, and obtaining a customer base and margin improvement sufficient
      to
      achieve and sustain profitability.





*Basis
      of Presentation and Liquidity -* Since
      our
      inception, we have funded operations and business development and growth through
      debt and equity financings. In this regard we closed two private placement
      offerings raising a total of approximately $12 million, The proceeds are
      intended to be used for the expansion of the company and working capital needs.
      In January 2008, we closed a private placement offering and issued approximately
      1.4 million shares of Company common stock and warrants to purchase
      approximately 0.6 million shares of common stock. The aggregate gross proceeds
      raised by the Company were approximately $2.0 million. Additionally, in February
      2008, we closed a private placement offering and issued approximately 7.1
      million shares of common stock, a warrant to purchase approximately 4.3 million
      shares of common stock and a conditional warrant to purchase shares of common
      stock, which may be exercised only under certain circumstances. The aggregate
      gross proceeds raised by the Company were $10.0 million. Our management intends
      to continue to be engaged in additional fund-raising activities to fund future
      capital expenditures, potential acquisitions of businesses, and provide
      additional working capital.




14




**Critical
      Accounting Policies and Estimates**





Management's
      discussion and analysis of financial condition and results of operations are
      based on our financial statements, which have been prepared in accordance with
      accounting principles generally accepted in the United States. The preparation
      of these financial statements requires our management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      the
      disclosure of contingent assets and liabilities at the date of the financial
      statements, as well as the reported net sales and expenses during the reporting
      periods. On an ongoing basis, estimates and assumptions are evaluated. Estimates
      are based on historical experience and on various other factors believed
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying value of assets and liabilities that are
      not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions. A summary of significant
      accounting policies is presented in Note 1 to our financial statements included
      elsewhere in this Form 10-Q. The following accounting policies are considered
      the more critical to aid in understanding and evaluating our results of
      operations and financial condition.





*Use
      of Estimates -* In
      preparing the financial statements in conformity with accounting principles
      generally accepted in the United States of America, management makes estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosures of contingent assets and liabilities at the dates of the financial
      statements, as well as the reported amounts of revenues and expenses during
      the
      reporting years. Actual results could differ from those estimates. The more
      significant accounting estimates inherent in the preparation of our financial
      statements include estimates as to the depreciable lives of property and
      equipment, recoverability of long-lived assets, valuation of inventories,
      valuation of equity related instruments issued, and valuation allowance for
      deferred income tax assets.





*Inventory
      -* Inventory,
      which consists primarily of food, beverages and packaging products, is stated
      at
      the lower of cost or market. Cost is determined on a first-in, first-out basis.
      In assessing the ultimate realization of inventories, our management makes
      judgments as to future demand requirements compared to current inventory levels.





*Intangible
      Assets -* In
      connection with our 2006 and 2007 asset acquisitions, we acquired certain
      identifiable intangible assets including customer-based intangibles. These
      acquisitions have been accounted for in accordance with SFAS No. 141. Amounts
      allocated to intangible assets were identified by management and have been
      valued based on a number of factors. The estimate of useful lives of each
      intangible asset was based on an analysis by management of all pertinent
      factors. Management selected an estimated useful life of two years for each
      identifiable intangible asset.




*Revenue
      Recognition -* Revenues
      are recognized at the point of sale at retail locations or upon delivery of
      products for delivery and wholesale transactions.





*Cost
      of Sales -* Cost
      of
      sales includes the cost of food, beverages and paper products.




*Stock-based
      Compensation –* We
      account for share-based compensation under the provisions of FAS 123R, which
      we
      adopted effective beginning January 1, 2006 using the modified prospective
      method.





**Results
      of Operations**





*Sales
      -* Sales
      for
      the first quarter of 2008 increased approximately 43%, to $5.2 million, as
      compared with $3.6 million in the first quarter of 2007. Retail café sales were
      $2.3 million during the quarter ended March 31, 2008, an increase of
      approximately 54% over $1.5 million during the comparable prior year period.
      Café sales comprised 44% of total sales in the 2008 quarter compared to 41% of
      total sales in the first quarter of 2007. The increase in year-over-year retail
      sales is primarily a result of the addition of eleven Retail Cafés that were
      opened or acquired from July through October in 2007 and three more that were
      opened during the first quarter of 2008. We ended the first quarter of 2008
      with
      twenty-six Retail Cafés as compared with twelve at the end of the same period in
      2007.





Delivery
      and Catering sales were nearly $2.0 million for the first quarter of 2008,
      an
      increase of $467,000, or approximately 31% over $1.5 million during the first
      quarter of 2007. Delivery and Catering sales comprised 38% of total sales in
      the
      first period of 2008 as compared with 42% for the same period of the prior
      year.
      In addition to increased business volume in all delivery and catering
      operations, the increase in delivery and catering sales in 2008 is attributable
      to the mid- to late-2007 fiscal year acquisitions of catering businesses in
      Seattle and San Diego.




15




Wholesale
      sales were $917,000 in the quarter ending March 31, 2008, an increase of nearly
      47%, as compared with $624,000 in the comparable quarter of 2007. Wholesale
      sales comprised 18% of total sales in the 2008 period as compared with 17%
      in the comparable 2007 period. In addition to increased sales efforts in all
      markets, the increase in wholesale sales is due to our entrance into the San
      Diego market in mid-2007.





*Cost
      of Sales -* Cost
      of
      sales includes the cost of food and paper products. Cost of sales for the first
      quarter of 2008 increased only 8% as compared to a 43% increase in sales, to
      nearly $2.0 million, as compared with $1.8 million for the first quarter of
      2007. Cost of sales for quarter ended March 31, 2008 was approximately 38%
      as a
      percent of sales as compared with 51% during the comparable prior year
      period. Later in 2007, we were able to negotiate lower costs on our food and
      paper products and reduce the amount of food waste and spoilage, which has
      brought positive changes to our cost of sales in early 2008 when compared to
      the
      prior year period.





*Gross
      Profit -* Gross
      profit increased approximately 80%, to $3.2 million for the first quarter in
      2008, as compared with $1.8 million for the first quarter in 2007. Gross profit
      for our 2008 period was approximately 62% of sales as compared with 49%
      during the comparable 2007 period. In addition to negotiating lower costs on
      our
      food and paper products and reducing the amount of food waste and spoilage,
      we
      also increased retail and wholesale prices during 2007, which has improved
      our
      gross margin.





*Operating
      Expenses -* Operating
      expenses for the first quarter of 2008 were $4.2 million, as compared with
      $3.5 million for the comparable 2007 period; a 21% increase or approximately
      half the sales increase percentage Operating expenses are comprised primarily
      of
      labor, and, to a lesser extent, occupancy, utilities, and selling, general
      and
      administrative expenses. Operating expenses increased in 2008 as
      compared with 2007, primarily due to increased labor and related costs as a
      result of continued growth since the prior year period, including the
      acquisition of two catering businesses, increasing the number of Retail Cafés
      from twelve as of March 31, 2007 to twenty-six as of March 31, 2008, and
      preparing for future growth, both in facilities leases and with the hiring
      of
      members to the executive management team.





*Depreciation
      and Amortization -* Depreciation
      and amortization expense for the first quarter of 2008 increased to $1.8 million
      as compared with $434,000 during the comparable 2007 period, due primarily
      to amortization of identifiable intangible assets acquired in the catering
      and
      retail business acquisitions in the latter part of 2006 and throughout 2007.
      Depreciation and amortization for the periods ended March 31, 2007 and 2008
      were
      approximately 12% and 34% of sales, respectively. We amortize identifiable
      intangibles over a relatively short period, generally no more than two
      years.





*Loss
      from Operations -* Loss
      from
      operations during the first quarter of 2008 increased to approximately $2.8
      million as compared with $2.1 million during the first quarter of 2007. The
      increase in loss from operations over the prior year period is the result of
      an
      increase in gross profit of $1.4 million being offset by a $2.1 million increase
      in total operating expenses.





*Interest
      Expense, Net –* Net
      interest expense for the quarter ended March 31, 2008 decreased to $65,000
      as
      compared with $347,000 for the quarter ended March 31, 2007. The decrease was
      primarily due to an increase in total debt from July 2006 through March 2007,
      prior to $5.3 million of debt being converted into equity in March 2007.





*Net
      Loss -* Net
      loss
      in the first quarter of 2008 increased to $2.8 million, or $(0.09) basic and
      diluted net loss per share, as compared with $2.5 million, or $(0.21) basic
      and diluted net loss per share in the first quarter of 2007.





**Liquidity
      and Capital Resources**





As
      planned, we have funded operations through financing activities consisting
      primarily of private placements of debt and equity securities. In January and
      February 2008, gross proceeds of approximately $12.0 million were received
      from
      the sales of equity securities. We intend to continue to engage in additional
      fund-raising activities to fund future capital expenditures, potential
      acquisitions of businesses, and provide additional working capital.




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Net
      cash
      used by operating activities was approximately $2.1 million during the first
      quarter of 2008 and $2.6 million in the comparable 2007 period. The decrease
      in
      cash used by operating activities was due primarily to an increase in net loss
      offset by an adjustment for depreciation and amortization expense, most of
      which
      represented amortization of identifiable intangible assets.





Net
      cash
      used in investing activities was approximately $605,000 and $1.1 million for
      the
      quarters ended March 31, 2008 and 2007, respectively. Uses of cash flow for
      investing activities in both periods was primarily related to capital
      expenditures associated with business expansion for the acquisition of store
      and
      kitchen fixtures, equipment and leasehold improvements, although to a lesser
      extent during the 2008 period.




Net
      cash
      provided by financing activities was approximately $10.6 million and $5.6
      million for the quarters ended March 31, 2008 and 2007, respectively. The
      increase of net cash provided during the first quarter of 2008 was due to an
      increase in proceeds, net of issuance costs, from the issuance of common stock
      in private placements.





**Item
      3. Quantitative and Qualitative Disclosures About Market
      Risk.**





Not
      applicable.





**Item
      4. Controls and Procedures**





(a) Evaluation
      of Disclosure Controls and Procedures .





Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer, evaluated the effectiveness of our disclosure controls and
      procedures (as defined in the rules and regulations of the Securities and
      Exchange Commission under the Securities Exchange Act of 1934, as amended) as of
      the end of the period covered by this report (the “Evaluation Date”). Based on
      this evaluation, our Chief Executive Officer and Chief Financial Officer have
      concluded that our disclosure controls and procedures were effective as of
      the
      Evaluation Date.





(b) Changes
      in Internal Control Over Financial Reporting .





During
      the fiscal quarter ended March 31, 2008, there were no changes to our internal
      controls over financial reporting that have materially affected, or are
      reasonably likely to materially affect, our internal controls over financial
      reporting.





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**PART
      II. OTHER INFORMATION**





**Item
      6. Exhibits**





(a) Exhibits .





31.1
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002


31.2
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002


32.1
            Certification
                of Chief Executive Officer and Chief Financial Officer under Section
                906
                of the Sarbanes-Oxley Act of 2002





18





**SIGNATURES**





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





ORGANIC
                TO GO FOOD CORPORATIONDated:  May
                15, 2008
            /s/
                Michael GatsMichael
                Gats, Chief Financial Officer(Principal
                Financial and Accounting Officer)




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