10-Q

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 November 30, 2019

000-55513

Commission File Number

APAWTHECARY PETS USA

(Exact name of registrant as specified in it’s charter)

Nevada	26-1679929
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
c/o Brad Kersch 619 S. Ridgeley Drive, Los Angeles, CA	90036
(Address of principal executive offices)	(Zip Code)

(323) 345-4587

(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, 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:

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

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). x Yes     ¨ 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 January 21, 2020, 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.	12
Item 4.	Controls and Procedures.	12
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings.	13
Item 1A.	Risk Factors.	13
Item 2.	Unregistered Sales of Securities and Use of Proceeds.	13
Item 3.	Defaults Upon Senior Securities.	13
Item 4.	Mine Safety Disclosures.	13
Item 5.	Other Information.	13
Item 6.	Exhibits.	14

2

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Apawthecary Pets USA
Balance Sheets
(Stated in US dollars)
	November 30,			August 31,
	2019			2019
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	10,113		$	20,256
Total current assets		10,113			20,256
Total Assets	$	10,113		$	20,256
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable and accrued liabilities	$	5,366		$	9,957
Accounts payable - related parties		2,522			2,522
Due to related parties		70,673			70,673
Total current liabilities		78,561			83,152
Total Liabilities	$	78,561		$	83,152
Stockholders' Deficit
Authorized
75,000,000 of common shares, par value $0.001
Issued and outstanding
24,827,264 common shares issued and outstanding
as of November 30, 2019, and August 31, 2019	$	24,827		$	24,827
Additional paid in capital		349,223			349,223
Accumulated deficit		(442,498	)		(436,946	)
Total stockholders' deficit	$	(68,448	)	$	(62,896	)
Total Liabilities and Stockholders' Deficit	$	10,113		$	20,256

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

3

Apawthecary Pets USA
Statements of Operations
(Stated in U.S. Dollars)
	For the			For the
	three months			three months
	period ended			period ended
	November 30,			November 30,
	2019			2018
	(Unaudited)			(Unaudited)
Operating Expenses
General and administrative	$	5,552		$	5,122
Total Operating Expenses		5,552			5,122
Net loss	$	(5,552	)	$	(5,122	)
Basic and diluted net loss per common share - basic and diluted	$	(0.00	)	$	(0.00	)
Weighted average number of common shares - basic and diluted		24,827,264			24,827,264

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

4

Apawthecary Pets USA

Statements Of Changes In Stockholders Deficit

(Stated in US dollars)

For the three months ended November 30, 2019 and 2018

(Unaudited)

	Common stock				Additional		Accumulated
	Shares		Amount		paid-in capital		Deficit			Total
Balance at August 31, 2019		24,827,264	$	24,827	$	349,223	$	(436,946	)	$	(62,896	)
Net loss		-		-		-		(5,552	)		(5,552	)
Balance at November 30, 2019		24,827,264	$	24,827	$	349,223	$	(442,498	)	$	(68,448	)
Balance at August 31, 2018		24,827,264	$	24,827	$	349,223	$	(400,549	)	$	(26,499	)
Net loss		-		-		-		(5,122	)		(5,122	)
Balance at November 30, 2018		24,827,264	$	24,827	$	349,223	$	(405,671	)	$	(31,621	)

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

5

Apawthecary Pets USA
Statements of Cash Flows
(Stated in US dollars)
	For the			For the
	three months			three months
	ended			ended
	November 30,			November 30,
	2019			2018
	(Unaudited)			(Unaudited)
Cash flows from operating activities
Net loss	$	(5,552	)	$	(5,122	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable and accrued liabilities		(4,591	)		370
Cash flows used in operating activities		(10,143	)		(4,752	)
Net decrease in cash		(10,143	)		(4,752	)
Cash and cash equivalents, beginning of period		20,256			42,594
Cash and cash equivalents, end of period	$	10,113		$	37,842
Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-
Income tax paid	$	-		$	-

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

6

Apawthecary Pets USA

Notes to Financial Statements

(Expressed in U.S. Dollars)

(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. The Company’s financial statements as at November 30, 2019 and for the year 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 $5,552 for the three months ended November 20, 2019 and $5,122 for the three months ended November 30, 2018 and has a working capital deficit at November 30, 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 for the twelve months after the date the audited financial statements were issued. 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 November 30, 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, 2019, 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 November 30, 2019, have been included.

7

Apawthecary Pets USA

Notes to Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

2.	Significant Accounting Polices (Continued)
	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 year ended August 31, 2019, as reported in the Form 10-K have been omitted.
3.	Due to Related Parties and Related Party Transactions
	The outstanding balance of management fees payable is $2,522 and $2,522 as of November 30, 2019 and August 31, 2019 respectively. As of November 30, 2019, related parties of the Company have provided a series of loans, totaling $70,673 (August 31, 2019 - $70,673). 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.

8

Apawthecary Pets USA

Notes to Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

	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 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.
3.	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%.
4.	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 a common officer and director, 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, and the agreement was not effective as of November 30, 2019.
	Aerock Fox provides consulting service to the Company without compensation.
	Digital Pilot Inc., a company that has a common director (Aerock Fox) with Apawthecary Pets USA, provides an office located in 619 S. Ridgley, Los Angeles CA for an indefinite period of time.
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 November 30, 2019 and August 31, 2019 respectively.

9

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. 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 a common officer and director, 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 and the agreement was not effective as of November 30, 2019.

10

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 or in the Company’s sales of registered securities, 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 November 30, 2019, we had $10,113 in cash as compared to $20,256 as at August 31, 2019. As of the date of this Form 10-Q, management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy twelve months after the date that the financial statements are issued. 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.

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.

Results of Operations

We had $nil in revenue for the three months period ended November 30, 2019 as compared to revenue of $nil for three months period ended November 30, 2018.

Total expenses in the three months period ended November 30, 2019 were $5,552 as compared to total expenses of $5,122 for the three months period ended November 30, 2018, resulting in a net loss of $5,122 for the three months period ended November 30, 2019 as compared to a net loss of $5,122 for the three months ended November 30, 2018. The net loss for the three months period ended November 30, 2019 is a result of professional fees of $5,072 comprised of legal and accounting fees, and general and administrative expense of $480 as compared to the net loss of $5,122 for the three months period ended November 30, 2018 was a result of professional fees of $4,620 comprised of legal and accounting fees, and general and administrative expense of $502.

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.

11

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 subject to the inherent limitations noted in this Part II, Item 9A(T) as of November 30, 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 November 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

12

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

13

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**

_________

* Included in Exhibit 31.1

** Included in Exhibit 32.1

14

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
January 21, 2020	By:	/s/ Brad Kersch
		Brad Kersch
		President and Director Principal Executive Officer Principal Financial Officer

15

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Bradley Kersch, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Apawthecary Pets USA;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

January 21, 2020
By:	/s/ Bradley Kersch
	Bradley Kersch
	Director, Chief Executive Office, President, Treasurer, Chief Financial Officer and Principal Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Apawthercary Pets USA (the “Company”) for the quarter ended November 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned Chief Executive Officer and President and the principal accounting and financial officer of the Company hereby certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

January 21, 2020

/s/ Bradley Kersch

Bradley Kersch

Director, Chief Executive Office, President, Treasurer,

Chief Financial Officer and Principal Accounting Officer

XML

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Nov. 30, 2019	Nov. 30, 2018
Cash flows from operating activities
Net loss	$ (5,552)	$ (5,122)
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable and accrued liabilities	(4,591)	370
Cash flows used in operating activities	(10,143)	(4,752)
Net decrease in cash	(10,143)	(4,752)
Cash and cash equivalents, beginning of period	20,256	42,594
Cash and cash equivalents, end of period	10,113	37,842
Supplemental disclosures of cash flow information
Interest paid
Income tax paid

XML

Balance Sheets - USD ($)	Nov. 30, 2019	Aug. 31, 2019
Current assets
Cash and cash equivalents	$ 10,113	$ 20,256
Total current assets	10,113	20,256
Total Assets	10,113	20,256
Current liabilities
Accounts payable and accrued liabilities	5,366	9,957
Accounts payable - related parties	2,522	2,522
Due to related parties	70,673	70,673
Total current liabilities	78,561	83,152
Total Liabilities	78,561	83,152
Stockholders' deficit
Authorized 75,000,000 of common shares, par value $0.001 Issued and outstanding 24,827,264 common shares issued and outstanding as of November 30, 2019, and August 31, 2019	24,827	24,827
Additional paid in capital	349,223	349,223
Accumulated deficit	(442,498)	(439,946)
Total stockholders' deficit	(68,448)	(62,896)
Total Liabilities and Stockholders' Deficit	$ 10,113	$ 20,256

XML

Significant Accounting Policies (Policies)

3 Months Ended

Nov. 30, 2019

Significant Accounting Policies (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, 2019, 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 November 30, 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 year ended August 31, 2019, as reported in the Form 10-K have been omitted. 

XML

Nature and Continuance of Operations

3 Months Ended

Nov. 30, 2019

Nature and Continuance of Operations

NOTE - 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.

The Company’s financial statements as at November 30, 2019 and for the year 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 $5,552 for the three months ended November 20, 2019 and $5,122 for the three months ended November 30, 2018 and has a working capital deficit at November 30, 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 for the twelve months after the date the audited financial statements were issued. 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 November 30, 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. 

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Balance Sheets (Parenthetical) - $ / shares	Nov. 30, 2019	Aug. 31, 2019
Stockholders' deficit
Common Stock, Par Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	75,000,000	75,000,000
Common Stock, Shares Issued	24,827,264	24,827,264
Common Stock, Shares Outstanding	24,827,264	24,827,264

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Capital Stock (Details Narrative) - $ / shares	Nov. 30, 2019	Aug. 31, 2019
Capital Stock (Details Narrative)
Common Stock, Per Share Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	75,000,000	75,000,000
Common Stock, Shares Issued	24,827,264	24,827,264
Common Stock, Shares Outstanding	24,827,264	24,827,264

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Capital Stock

3 Months Ended

Nov. 30, 2019

Capital Stock

NOTE - 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 November 30, 2019 and August 31, 2019 respectively. 

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Due to Related Parties and Related Party Transactions

3 Months Ended

Nov. 30, 2019

Due to Related Parties and Related Party Transactions

NOTE - 3. Due to Related Parties and Related Party Transactions

The outstanding balance of management fees payable is $2,522 and $2,552 as of November 30, 2019 and August 31, 2019 respectively.

As of November 30, 2019, related parties of the Company have provided a series of loans, totaling $70,673 (August 31, 2019 - $70,673).

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.
	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 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.
3.	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%.
4.	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 a common officer and director, 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, and the agreement was not effective as of November 30, 2019.

Aerock Fox provides consulting service to the Company without compensation.

Digital Pilot Inc., a company that has a common director (Aerock Fox) with Apawthecary Pets USA, provides an office located in 619 S. Ridgley, Los Angeles CA for an indefinite period of time.

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Statements Of Changes In Stockholders Deficit - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balance, amount at Aug. 31, 2018	$ (26,499)	$ 24,827	$ 349,223	$ (400,549)
Balance, shares at Aug. 31, 2018		24,827,264
Net Income (Loss)	$ (5,122)			$ (5,122)
Balance, shares at Nov. 30, 2018		24,827,264
Balance, amount at Nov. 30, 2018	$ (31,621)	$ 24,827	$ 349,223	$ (405,671)
Balance, amount at Aug. 31, 2019	$ (62,896)	$ 24,827	$ 349,223	$ (436,946)
Balance, shares at Aug. 31, 2019		24,827,264
Net Income (Loss)	$ (5,552)			$ (5,552)
Balance, shares at Nov. 30, 2019		24,827,264
Balance, amount at Nov. 30, 2019	$ (68,448)	$ 24,827	$ 349,223	$ (442,498)

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Document and Entity Information - shares	3 Months Ended
	Nov. 30, 2019	Jan. 21, 2020
Document And Entity Information
Entity Registrant Name	Apawthecary Pets USA
Entity Central Index Key	0001528697
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Entity Small Business	true
Entity Shell Company	true
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	Nov. 30, 2019
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Ex Transition Period	true
Entity Common Stock Shares Outstanding		24,827,264
EntityFileNumber	000-55513
EntityAddressAddressLine1	619 S. Ridgeley Drive
EntityAddressPostalZipCode	90036
EntityTaxIdentificationNumber	261679929
EntityAddressCityOrTown	Los Angeles
LocalPhoneNumber	345-4587
CityAreaCode	323
EntityAddressStateOrProvince	CALIFORNIA

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Nature and Continuance of Operations (Details Narrative) - USD ($)	3 Months Ended
	Nov. 30, 2019	Nov. 30, 2018
Nature and Continuance of Operations (Details Narrative)
State of incorporation	Nevada
Date of incorporation	Dec. 27, 2007
Net loss	$ (5,552)	$ (5,122)

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Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Nov. 30, 2019	Nov. 30, 2018
Operating Expenses
General and administrative	$ 5,552	$ 5,122
Total operating Expenses	5,552	5,122
Net loss	$ (5,552)	$ (5,122)
Basic and diluted net loss per common share - basic and diluted	$ (0.00)	$ (0.00)
Weighted average number of common shares - basic and diluted	24,827,264	24,827,264

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Significant Accounting Policies

3 Months Ended

Nov. 30, 2019

Significant Accounting Policies

NOTE - 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, 2019, 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 November 30, 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 year ended August 31, 2019, as reported in the Form 10-K have been omitted. 

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Due to Related Parties and Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended
	Aug. 24, 2017	Nov. 30, 2019	Aug. 31, 2019
Unpaid license fee		$ 100,000
Outstanding balance of management fees payable		2,522	$ 2,552
Due to related parties		$ 70,673	$ 70,673
License Agreement [Member] | Solace Management Group Inc [Member]
Current market rate	20.00%
Material terms of license agreement description	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 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.
Royalty fee	10.00%