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0001528697
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2018-05-31
0001528697
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2017-05-31
0001528697
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0001528697
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2017-08-01
2017-08-24
0001528697
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2017-08-24
0001528697
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2018-05-31
0001528697
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2017-05-31
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2017-05-31
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23977264
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Apawthecary Pets USA
0001528697
2018-05-31
false
--08-31
No
No
Yes
Smaller Reporting Company
Q3
2018
10-Q
-63225
-18488
Nevada
2007-12-27
75000000
75000000
24827264
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 4%; text-align: justify"> </td>
<td style="width: 4%; text-align: justify"><font style="font-size: 10pt">1.</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">Upon execution of the Agreement, the Apawthecary Pets USA shall provide a non-refundable license fee in the amount of $100,000 (the " <b>License</b> <b>Fee</b>") 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.</font></td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify"><font style="font-size: 10pt">2.</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">Term of the License Agreement is 10 years with a 5 year renewal term.</font></td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify"><font style="font-size: 10pt">3.</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">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.</font></td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify"><font style="font-size: 10pt">4.</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">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%.</font></td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify"><font style="font-size: 10pt">5.</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">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.</font></td></tr>
</table>
<p style="margin: 0pt"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
April 2017, the Company changed its name from Bookedbyus Inc. to Apawthecary Pets USA.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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 interim ended May 31, 2018, have been included.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company’s unaudited interim financial statements as at May 31, 2018 and for the nine months 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 has a loss of $40,263 for the nine months period ended May 31, 2018
(2017 - $23,373) and has a working capital deficit of $18,488 at May 31, 2018. These factors raise substantial doubt about
the ability of the Company to continue as a going concern.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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, 2018. 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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">As
at May 31, 2018, 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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Basis
of Presentation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim financial statements of Apawthecary Pets USA 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 statements for the year ended August 31, 2017, 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, 2018, 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, 2017, as reported in the Form 10-K, have been omitted.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Inventory</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Inventories
are stated at the lower of cost or market 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. All inventory as of May 31, 2018 is finished goods.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Recent
accounting pronouncements</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these financial
statements and does not believe that any of these pronouncements will have a material impact on the Company's financial position
and results of operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months period ended May 31, 2018, the Company accrued management fees in the amount of $Nil (2017 - $9,600) to a consultant,
Brad Kersch, who is under contract until December 31, 2016. The outstanding balance of management fees payable was $599 as of
May 31, 2018 and as of August 31, 2017.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">As
of May 31, 2018, the Company has an undetermined amount use of 619 S.Ridgley, Los Angeles CA suite for an indefinite period of
time at no cost.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">As
of May 31, 2018, related parties of the Company have provided a series of loan, totaling $70,673 (August 31, 2017 - $70,673),
for working capital purposes. These amounts are unsecured, interest free and are due on demand.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Yuying
Liang has contributed uncompensated financial accounting services to the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">  <b>  </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
August 24, 2017, the Company entered into a license agreement with Solace Management Group Inc. a British Columbia corporation.
The material terms of such license agreement are:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: top">
<td style="width: 4%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 4%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1.</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Upon execution of
the Agreement, the Company shall provide a non-refundable license fee in the amount of $100,000 (the "<b>License Fee</b>")
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.</font></td></tr>
<tr>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2.</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Term of the License
Agreement is 10 years with a 5 year renewal term.</font></td></tr>
<tr>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">3.</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></td></tr>
<tr>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">4.</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company shall
pay the Solace Management Group Inc. for all packaging and shipment expenses to the Licensee at the then current market rate
plus 20%.</font></td></tr>
<tr>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">5.</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Royalties will commence
to accrue when the Licensed Products are accepted by the Company. The Company shall pay quarterly royalties in addition to
the yearly royalty fee, 10% of sales based on the wholesale price of each item.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Solace
Management Group Inc. owns the brand and intellectual property rights to Apawthecary Pets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Apawthecary
Pets Inc., a Canadian corporation licensed the brand and distribution rights for Apawthecary Pets for use in Canada from Solace
Management Group Inc.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Solace
Management Group Inc. and the Company have an officer and director in common, Bradley Kersch. The Company 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, 2018. The
Company does not have right to the license until such as been paid.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
total authorized capital is 75,000,000 common shares with a par value of $0.001 per common share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Issued
and outstanding</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company had 24,827,264 and 23,977,264 common shares issued and outstanding as at May 31, 2018 and August 31, 2017, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months period ended May 31, 2018, the Company issued 850,000 common shares for cash proceeds of $85,000.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim financial statements of Apawthecary Pets USA 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 statements for the year ended August 31, 2017, 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, 2018, 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, 2017, as reported in the Form 10-K, have been omitted.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Inventories
are stated at the lower of cost or market 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. All inventory as of May 31, 2018 is finished goods.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these financial
statements and does not believe that any of these pronouncements will have a material impact on the Company's financial position
and results of operations.</font></p>
6183
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During
the review of the Company’s financial statements for the interim period May 31, 2018, the Company identified an error in
the accounting and presentation of professional fee expense recorded due to double booked legal expense of $6,183 during
the six months February 28, 2018. The professional fees should have been $26,753 but was recorded as $32,936 for the six months
February 28, 2018, resulting in adjustments to previously reported financial statements of the Company for the six months February
28, 2018. In accordance with the SEC's Staff Accounting Bulletin Nos. 99 and 108 (SAB 99 and SAB 108), the Company evaluated this
error and, based on an analysis of quantitative and qualitative factors, determined that the error was immaterial to the prior
reporting period. However, if the adjustments to correct the cumulative effect of the above error had been recorded in the three
and nine months ended May 30, 2018, the Company believes the impact would have been significant and would impact comparisons to
prior periods. Therefore, as permitted by SAB 108, the Company corrected, in the current filing, previously reported results for
the three and nine months ended May 31, 2018.</font></p>