Company Quick10K Filing
Quick10K
Apawthecary Pets
10-Q 2019-05-31 Quarter: 2019-05-31
10-Q 2019-02-28 Quarter: 2019-02-28
10-Q 2018-11-30 Quarter: 2018-11-30
10-K 2018-08-31 Annual: 2018-08-31
10-Q 2018-05-31 Quarter: 2018-05-31
10-Q 2018-02-28 Quarter: 2018-02-28
10-Q 2017-11-30 Quarter: 2017-11-30
10-K 2017-08-31 Annual: 2017-08-31
10-Q 2017-05-31 Quarter: 2017-05-31
10-Q 2017-02-28 Quarter: 2017-02-28
10-Q 2016-11-30 Quarter: 2016-11-30
10-K 2016-08-31 Annual: 2016-08-31
10-Q 2016-05-31 Quarter: 2016-05-31
10-Q 2016-02-29 Quarter: 2016-02-29
10-Q 2015-11-30 Quarter: 2015-11-30
10-K 2015-08-31 Annual: 2015-08-31
10-Q 2015-05-31 Quarter: 2015-05-31
10-Q 2015-02-28 Quarter: 2015-02-28
10-Q 2014-11-30 Quarter: 2014-11-30
10-K 2014-08-31 Annual: 2014-08-31
10-Q 2014-05-31 Quarter: 2014-05-31
10-Q 2014-02-28 Quarter: 2014-02-28
10-Q 2013-11-30 Quarter: 2013-11-30
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APAW 2019-05-31
Part I-Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part Ii-Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosure.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 apaw_ex311.htm
EX-32.1 apaw_ex321.htm

Apawthecary Pets Earnings 2019-05-31

APAW 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 apaw_10q.htm FORM 10-Q apaw_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended May 31, 2019

 

000-55513

Commission File Number

 

Apawthecary Pets USA.

(Exact name of registrant as specified in its charter)

 

 

 

Nevada

 

26-1679929

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

c/o Bradley Kersch 1223 Fletcher Way, Port Coquitlam, British Columbia

 

V3C6B5 

(Address of principal executive offices) 

 

(Zip Code)

 

(323) 634-1000

(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. x Yes  ¨ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

 

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

 

Large accelerated filer

¨

Non-accelerated filer

x

Accelerated filer

¨

Smaller reporting company

x

 

 

Emerging growth companyx

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ¨ Yes ¨ No

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of July 15, 2019 we had 24,827,264 shares of common stock outstanding.

 

 
 
 
 

 

TABLE of CONTENTS

 

PART I—FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

Financial Statements

 

 3

 

 

 

 

 

Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

10

 

 

 

 

 

Item 3. 

Quantitative and Qualitative Disclosures About Market Risk

 

 11

 

 

 

 

 

Item 4. 

Controls and Procedures

 

 11

 

 

 

 

 

PART II—OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

 12

 

 

 

 

 

Item 1A.

Risk Factors

 

 12

 

 

 

 

 

Item 2.

Unregistered Sales of Securities and Use of Proceeds

 

 12

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

 12

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

 12

 

 

 

 

 

Item 5.

Other Information

 

 12

 

 

 

 

 

Item 6.

Exhibits

 

 13

 

 

 
2
 
Table of Contents

 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

 

Apawthecary Pets USA

 

Financial Statements

(Expressed in U.S. Dollars)

For the three and nine months ended ended May 31, 2019 and 2018

(Unaudited)

 

 

 

 

 
3
 
Table of Contents

 

Apawthecary Pets USA

Balance Sheets

(Expressed in U.S. Dollars)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

May 31,

 

 

August 31,

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$25,553

 

 

$42,594

 

Inventory

 

 

7,200

 

 

 

7,200

 

Total current assets

 

 

32,753

 

 

 

49,794

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$32,753

 

 

$49,794

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$11,778

 

 

$5,069

 

Accounts payable due to related parties (Note 3)

 

 

551

 

 

 

551

 

Due to related parties (Note 3)

 

 

70,673

 

 

 

70,673

 

Total current liabilities

 

 

83,002

 

 

 

76,293

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

83,002

 

 

 

76,293

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Capital stock (Note 4)

 

 

 

 

 

 

 

 

Authorized

 

 

 

 

 

 

 

 

75,000,000 of common shares, par value $0.001

 

 

 

 

 

 

 

 

Issued and outstanding

 

 

 

 

 

 

 

 

24,827,264 common shares issued and outstanding

 

 

 

 

 

 

 

 

(August 31, 2018 - 24,827,264), par value $0.001

 

 

24,827

 

 

 

24,827

 

Additional paid in capital

 

 

349,223

 

 

 

349,223

 

Accumulated deficit

 

 

(424,299)

 

 

(400,549)

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(50,249)

 

 

(26,499)

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Deficit

 

$32,753

 

 

$49,794

 

 

 
4
 
Table of Contents

  

Apawthecary Pets USA

Statements of Operations

(Expressed in U.S. Dollars)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 For the 

 

 

 For the 

 

 

 For the 

 

 

 For the 

 

 

 

 three month

 

 

 three month

 

 

 nine month

 

 

 nine month

 

 

 

 period ended

 

 

 period ended

 

 

 period ended

 

 

 period ended

 

 

 

 May 31,

 

 

 May 31,

 

 

 May 31,

 

 

 May 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees

 

$4,281

 

 

$1,552

 

 

$21,288

 

 

$28,305

 

General and administrative

 

 

481

 

 

 

377

 

 

 

2,462

 

 

 

11,958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating Expenses

 

 

4,762

 

 

 

1,929

 

 

 

23,750

 

 

 

40,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(4,762)

 

$(1,929)

 

$(23,750)

 

$(40,263)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share - basic and diluted

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic and diluted

 

 

24,827,264

 

 

 

24,827,264

 

 

 

24,827,264

 

 

 

24,811,696

 

 
 
5
 
Table of Contents

 

Apawthecary Pets USA

Statements of Changes in Equity

(Expressed in U.S. Dollars)

For the three month periods ended May 31, 2019 and 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Common stock

 

 

 Additional

 

 

 Accumulated

 

 

 

 

 

 

 Shares

 

 

 Amount

 

 

 paid-in capital

 

 

 Deficit

 

 

 Total

 

Balance at February 28, 2019

 

 

24,827,264

 

 

 

24,827

 

 

 

349,223

 

 

 

(419,537)

 

 

(45,487)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,762)

 

 

(4,762)

Balance at May 31, 2019

 

 

24,827,264

 

 

 

24,827

 

 

 

349,223

 

 

 

(424,299)

 

 

(50,249)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at February 28, 2018

 

 

24,827,264

 

 

 

24,827

 

 

 

349,223

 

 

 

(390,609)

 

 

(16,559)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,929)

 

 

(1,929)

Balance at May 31, 2018

 

 

24,827,264

 

 

 

24,827

 

 

 

349,223

 

 

 

(392,538)

 

 

(18,488)

 

Apawthecary Pets USA
Statements of Changes in Equity
(Expressed in U.S. Dollars)
For the nine month periods ended May 31, 2019 and 2018        

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Paid-in Capital

 

 

Deficit

 

 

Total

 

Balance at August 31, 2018

 

 

24,827,264

 

 

 

24,827

 

 

 

349,223

 

 

 

(400,549)

 

 

(26,499)
Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(23,750)

 

 

(23,750)
Balance at May 31, 2019

 

 

24,827,264

 

 

 

24,827

 

 

 

349,223

 

 

 

(424,299)

 

 

(50,249)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at August 31, 2017

 

 

23,977,264

 

 

 

23,977

 

 

 

265,073

 

 

 

(352,275)

 

 

(63,225)
Common shares sold for cash

 

 

850,000

 

 

 

850

 

 

 

84,150

 

 

 

-

 

 

 

85,000

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(40,263)

 

 

(40,263)
Balance at May 31, 2018

 

 

24,827,264

 

 

 

24,827

 

 

 

349,223

 

 

 

(392,538)

 

 

(18,488)
 

 
6
 
Table of Contents

 

Apawthecary Pets USA

Statements of Operations

(Expressed in U.S. Dollars)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 For the 

 

 

 For the 

 

 

 

 nine month

 

 

 nine month

 

 

 

 period ended

 

 

 period ended

 

 

 

 May 31,

 

 

 May 31,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$(23,750)

 

$(40,263)

Changes in operating asssets and liabilities:

 

 

 

 

 

 

 

 

Decrease in inventory

 

 

-

 

 

 

(7,200)

Increase in accounts payable and accrued liabilities

 

 

6,709

 

 

 

5,396

 

 

 

 

 

 

 

 

 

 

Cash flows used in operating activities

 

 

(17,041)

 

 

(42,067)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from common shares sold for cash

 

 

-

 

 

 

85,000

 

 

 

 

 

 

 

 

 

 

Cash provided by financing activities

 

 

-

 

 

 

85,000

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

 

(17,041)

 

 

42,933

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

 

42,594

 

 

 

13,380

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of year

 

$25,553

 

 

$56,313

 

 

 
7
 
Table of Contents

  

Apawthecary Pets USA

Notes to Financial Statements

(Expressed in U.S. Dollars)

For the three and nine months periods ended May 31, 2019 and 2018

(Unaudited)

 

1.
Nature and Continuance of Operations

 

Apawthecary Pets USA (the “Company”) was incorporated under the laws of the States of Nevada on December 27, 2007. The Company intends to operate in the pet industry.

 

On July 20 2017, the Company changed its name from Bookedbyus Inc. to Apawthecary Pets USA.

 

In the opinion of the management, all normal recurring adjustments which are necessary for a fair presentation of financial statements of the results for the periods ended May 31, 2019 and 2018 have been included.

 

The Company’s financial statements as of May 31, 2019 and for the period then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company generated a net loss of $23,750 for the nine-month period ended May 31, 2019 and had a working capital deficit of $50,249 as of May 31, 2019. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

 

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy during the fiscal year ended August 31, 2019. However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

As of May 31, 2019, the Company was not engaged in continued business, and had significant expenses from early stage activities. Although management is currently attempting to implement its business plan and is seeking additional sources of financing, there is no assurance the activity will be successful. Accordingly, the Company must rely on its president to perform essential functions without compensation until a business operation can be commenced. The financial statements do not include any adjustments that may result from the outcome of this uncertainty.

 

2. Significant Accounting Policies

 

Basis of presentation

 

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the Company’s audited financial statement for the year ended August 31, 2018, as filed with the SEC on Form 10-K. In the opinion of management, all normal recurring adjustments which are necessary for a fair presentation of financial statements of the results for the interim period ended May 31, 2019, have been included. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period ended August 31, 2018, as reported in the From 10-K have been omitted.

 

Inventory

 

Inventories are stated at the lower of cost or net realizable value, using the first-in first-out method. Cost includes materials, labor and manufacturing overhead related to the purchase and production of inventories. The Company regularly review inventory quantities on hand, future purchase commitments with supplies, and the estimated utility of inventory. If the review indicates a reduction in utility below carrying value, the Company reduces the inventory to a new cost basis through a charge to cost of goods sold.

 

3. Due to Related Parties and Related Party Transactions

 

The outstanding balance of management fees payable to a consultant, Brad Kersch, who was under contract until December 31, 2016 was $551 as of May 31, 2019 and August 31, 2018, respectively.

 

As of May 31, 2019, the Company utilized office space located at 619 S.Ridgley, Los Angeles CA at no cost. The office space is operated by a company with an officer in common.

 

 
8
 
Table of Contents

 

Apawthecary Pets USA

Notes to Financial Statements

(Expressed in U.S. Dollars)

For the three and nine months periods ended May 31, 2019 and 2018

(Unaudited)

 

3. Due to Related Parties and Related Party Transactions (Continued)

 

As of May 31, 2019, related parties of the Company have provided a series of loans, totaling $70,673 (August 31, 2018 ­ $70,673), for working capital purposes. These amounts are unsecured, interest free and are due on demand.

 

Yuying Liang has contributed uncompensated financial accounting services to Apawthecary Pets USA.

 

On August 24, 2017 Apawthecary Pets USA entered into a license agreement with Solace Management Group Inc. a British Columbia corporation. The material terms of such license agreement are:

 

 

1.Upon execution of the Agreement, the Apawthecary Pets USA shall provide a non­refundable license fee in the amount of $100,000 (the "License Fee") to be held in an escrow account pursuant and subject to the terms of an escrow agreement whereby the License Fee will remain in the escrow account until the earlier of a $3,000,000 raise by the Licensee or after the Set­up Period.

 

 

 

 

2.Term of the License Agreement is 10 years with a 5 year renewal term.

 

 

 

 

3.The license is an exclusive, non­transferable, non­sub licensable license to manufacture, sell, represent, market, distribute and advertise the Licensed Products within the Territory on the terms and conditions set forth in the License Agreement and shall include access to, and use of, the Solace Products within the Territory on the terms and conditions set forth in the License Agreement and shall include access to, and use of, the Solace Management Group Inc.’s Licensed Products and Services, Marks, Manuals, brands, and the business format, formulations, methods, specifications, standards, and operating procedures.

 

 

 

 

4.Apawthecary Pets USA shall pay the Solace Management Group Inc. for all packaging and shipment expenses to the Licensee at the then current market rate plus 20%.

 

 

 

 

5.Royalties will commence to accrue when the Licensed Products are accepted by the Apawthecary Pets USA. Apawthecary Pets USA shall pay quarterly royalties in addition to the yearly royalty fee, 10% of sales based on the wholesale price of each item.

 

Solace Management Group Inc. owns the brand and intellectual property rights to Apawthecary Pets.

 

Apawthecary Pets Inc., a Canadian corporation licensed the brand and distribution rights for Apawthecary Pets for use in Canada from Solace Management Group Inc.

 

Solace Management Group Inc. and Apawthecary Pets USA have an officer and director in common, Bradley Kersch. Apawthecary Pets USA has negotiated a licensing and distribution agreement with Solace Management Group Inc. The $100,000 License fee has not been paid as of May 31, 2019.

 

4. Capital Stock

 

The total authorized capital is 75,000,000 common shares with a par value of $0.001 per common share.

 

Issued and outstanding

 

The Company had 24,827,264 common shares issued and outstanding as at May 31, 2019 and August 31, 2018, respectively.

   

 
9
 
Table of Contents

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Management’s Discussion and Analysis

 

This section of the Form 10-Q includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

Apawthecary Pets USA (formerly Bookedbyus Inc.) (the “Company”) was incorporated under the laws of the State of Nevada on December 27, 2007.  The Company intends to operate in the pet industry. We have commenced only limited operations, primarily focused on organizational matters in connection with this offering. The Company has not yet implemented its business model.

 

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

On August 24, 2017, Apawthecary Pets USA entered into a license agreement with Solace Management Group Inc. a British Columbia corporation. The material terms of such license agreement are:

 

 

1.Upon execution of the Agreement, the Apawthecary Pets USA shall provide a non-refundable license fee in the amount of $100,000 (the “License Fee”) to be held in an escrow account pursuant and subject to the terms of an escrow agreement whereby the License Fee will remain in the escrow account until the earlier of a $3,000,000 raise by the Licensee or after the Set-up Period.

 

 

 

 

2.Term of the License Agreement is 10 years with a 5 year renewal term.

 

 

 

 

3.The license is an exclusive, non-transferable, non-sub licensable license to manufacture, sell, represent, market, distribute and advertise the Licensed Products within the Territory on the terms and conditions set forth in the License Agreement and shall include access to, and use of, the Solace Management Group Inc.’s Licensed Products and Services, Marks, Manuals, brands, and the business format, formulations, methods, specifications, standards, and operating procedures.

 

 

 

 

4.Apawthecary Pets USA shall pay the Solace Management Group Inc. for all packaging and shipment expenses to the Licensee at the then current market rate plus 20%.

 

 

 

 

5.Royalties will commence to accrue when the Licensed Products are accepted by the Apawthecary Pets USA. Apawthecary Pets USA shall pay quarterly royalties in addition to the yearly royalty fee, 10% of sales based on the wholesale price of each item.

 

Solace Management Group Inc. owns the brand and intellectual property rights to Apawthecary Pets.

 

Apawthecary Pets Inc., a Canadian corporation licensed the brand and distribution rights for Apawthecary Pets for use in Canada from Solace Management Group Inc.

 

Solace Management Group Inc. and Apawthecary Pets USA have an officer and director in common, Bradley Kersch. Apawthecary Pets USA has negotiated a licensing and distribution agreement with Solace Management Group Inc. The $100,000 License fee has not been paid as of May31, 2019.

           

Capital Resources and Liquidity

 

Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business unless we obtain additional capital. No substantial revenues from our planned business model are anticipated until we have raised sufficient monies to implement our business model. The Company will need to seek capital from other resources such as private placements in the Company’s common stock or debt financing, which may not even be available to the Company. However, if such financing were available, because we are a development stage company with no or limited operations to date, it would likely have to pay additional costs associated with such financing and in the case of high risk loans be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such financing.  If the company cannot raise additional proceeds via such financing, it would be required to cease business operations.

 

As of May 31, 2019, we had $25,553 in cash as compared to $42,594 as at August 31, 2018. As of the date of this Form 10-Q, the current funds available to the Company will not be sufficient to fund the expenses related to the implementation of our business and continue maintaining a reporting status. The Company’s sole officer and director, Mr. Kersch has indicated that he may be willing to provide a maximum of $20,000, required to maintain the reporting status, in the form of a non-secured loan for the next twelve months as the expenses are incurred if no other proceeds are obtained by the Company. However, there is no contract or written agreement in place.

 

We do not anticipate researching any further products nor the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees.

 

 
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Results of Operations

  

We had $nil in revenue for the three and nine months period ended May 31, 2019 as compared to revenue for three and nine months period ended May 31, 2018 of $nil.

 

Total operating expenses for the three months period ended May 31, 2019 were $4,762 as compared to total operating expenses for the three month period ended May 31, 2018 of 1,929 resulting in a net loss for the three months period ended May 31, 2019 of $4,762 as compared to a net loss of $1,929 for three months period ended May 31, 2018. The net loss for the three month period ended May 31, 2019 is a result of professional fees of $4,281, general and administrative expense of $481 as compared to the net loss for the three month period ended May 31, 2018 of $1,929 is a result of professional fees of $1,552 comprised of legal and accounting fees and general and administrative expense of $377.

 

Total operating expenses for the nine months period ended May 31, 2019 were $23,750 as compared to total operating expenses for the nine months period ended May 31, 2018 of $40,263 resulting in a net loss for the nine months period ended May 31, 2019 of $23,750 as compared to a net loss of $40,263 for nine months period ended May 31, 2018. The net loss for the nine months period ended May 31, 2019 is a result of professional fees of $21,288 and general and administrative expense of $2,462 as compared to the net loss for the nine months period ended May 31, 2018 of $40,263 which was a result of professional fees of $28,305 comprised of legal and accounting fees and general and administrative expense of $11,958.

 

Off-balance sheet arrangements

 

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the company is a party, under which the company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

Item 4.  Controls and Procedures.

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

 

In connection with this quarterly report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company's management, including our company's principal executive officer and principal financial officer. Based upon that evaluation, our company's principal executive officer and principal financial officer concluded that as of May 31, 2019 our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting.

  

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended May 31, 2019 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 1. Legal Proceedings.

 

Currently we are not involved in any pending litigation or legal proceeding.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. 

 

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

 

None

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosure.

 

None

 

Item 5. Other Information.

 

(a) None

 

 

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Item 6. Exhibits.

 

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

 

Exhibit No.

 

Description

 

 

 

3.1

 

Certificate of Amendment as previously filed with the SEC on Form S-1 on September 15, 2017

3.2

 

By-Laws Inc. as previously filed with the SEC on Form S-1 on September 7, 2011

31.1

 

Certification of Chief Executive Officer Pursuant to Rule 13a–14(a) or 15d-14(a) of the Securities Exchange Act of 1934

31.2

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934*

32.1

 

Certification of Chief Executive Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

 

Certification of Chief Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

101

 

Interactive data files pursuant to Rule 405 of Regulation S-T

____________________ 

*     Included in Exhibit 31.1 

**   Included in Exhibit 32.1

 

 
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SIGNATURES*

 

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

 

 

Apawthecary Pets USA.

 

 

Date: July 19, 2019

By:

/s/ Bradley Kersch

 

 

Bradley Kersch

 

 

President, Chief Executive Officer (Principal Executive Officer) and Director

 

 

 

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