UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

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

For the fiscal year ended December 31, ~~2011~~2012

¨ £ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-33300

ALL AMERICAN PET COMPANY, INC.

(Exact name of registrant as specified in its charter)

Nevada		91-2186665
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1880 Century Park East Suite 1402
1100 Glendon Avenue, 17th Floor
Los Angeles, California 90067		90067
Los Angeles, California 90024		90024
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number: (310) ~~432~~689-~~9032~~7355

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ¨ No x

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Yes ¨ No x

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨£ (Do not check if a smaller reporting company) Smaller reporting company x

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

~~The~~Yes ~~aggregate market value of the voting~~¨ No ~~and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold was $17,813,511.~~x

~~The~~As ~~number~~of June 30, 2012, the last business day of ~~shares~~the registrant's most recently completed second fiscal quarter, the aggregate market value of ~~Common~~the ~~Stock~~registrant's common stock held by non-affiliates was $8,550,000, based upon the last reported sale price ($0.~~001 par~~02) ~~value,~~of ~~outstanding~~the registrant's common stock on ~~September~~that date 21as reported by OTCMarkets.com. For the purposes of the foregoing calculation only, ~~2012~~all ~~was~~of ~~614~~the registrant's directors,~~734,834~~ ~~shares~~executive officers and persons known to the registrant to hold ten percent or greater of the registrant's outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not a determination for other purposes.

The number of shares of Common Stock, $0.001 par value, outstanding on June 14, 2013 was 837,929,245 shares.

TABLE OF CONTENTS

PART I		Page
		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	25
Item 4.	Mine Safety Disclosures	2726
PART II
Item 5.	Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	2726
Item 6.	Selected Financial Data	3229
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3230
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk
Item 8.	Financial Statements and Supplementary Data	3634
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	3634
Item 9A	Control and Procedures	3734
Item 9B.	Other Information	4137
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	4438
Item 11.	Executive Compensation	4540
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	4842
Item 13.	Certain Relationships and Related Transactions, and Director Independence	4943
Item 14	Principal Accounting Fees and Services	4944
PART IV
Item 15.	Exhibits, Financial Statement Schedules	5044
Signatures		5347
Index to Financial Statements
Reports of Independent Registered Public Accounting Firm		F-1
Reports of Independent Registered Public Accounting Firms
Financial Statements for the Years Ended December 31, 2011 and 2010		F-2
Financial Statements for the Years Ended December 31, 2012 and 2011		F-1

USE OF FORWARD LOOKING STATEMENTS IN THIS REPORT

This Annual Report contains forward-looking statements. within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, predictions regarding:

•

our business plan;

• the commercial viability of our ~~technology and~~ products ~~incorporating our technology~~;

• the effects of competitive factors on our ~~technology and~~ products ~~incorporating our technology~~;

• expenses we will incur in operating our business and revenues we will earn in operating our business;

•

our liquidity and sufficiency of existing cash;

•

the success of our financing plans; and

• the outcome of existing, pending or threatened litigation.

You can identify these and other forward-looking statements by the use of words such as “may”, “will”, “expects”, “anticipates”, “believes”, “estimates”, “continues”, or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under the heading “Risk Factors”. All forward-looking statements included in this document are based on information available to us on the date hereof. We assume no obligation to update any forward-looking statements.

The information contained in this Annual Report is as of December 31, ~~2011~~2012, unless expressly stated otherwise.

As used in this report, the term Company, we, us and our refers to All American Pet Company, Inc., a Nevada corporation, and its consolidated subsidiaries.

PART I

ITEM 1.

BUSINESS

Overview

All American Pet Company, Inc. and its consolidated subsidiaries (“AAPT”) is adevelops ~~developer~~ and ~~marketer~~markets of innovative first-to-market pet wellness products including ~~super premium dog foods and antibacterial wipes. In 2010~~ ~~and 2011, AAPT produced, marketed, and sold two~~ super-premium dog ~~foods under the brand names Grrr-nola®Natural Dog Food and Chompions®. Both Grrr-nola®Natural Dog Food and Chompions® were the first dog~~ food ~~products that were formulated for canine heart health and endorsed by a veterinary cardiac surgeon. The Company has launched its line of Pawtizer™ pet wipes and spray~~bars, ~~the pet care industry’s first alcohol-free anti-bacterial~~ dog ~~cleaner. The Company has also announced and is preparing to market its Mutt™ Great Food for Great Dogs super premium dry kibble dog~~ food, ~~and~~snacks ~~its Nutra Bars™ line of portable, convenient~~ and ~~functional,~~antibacterial ~~super~~paw ~~premium 4 ounce dog food bars~~wipes. ~~Each 4 ounce bar has a kcal equivalent of 8 ounces of super premium dry dog food.~~

~~Our~~The executive offices are located at ~~1880~~1100 ~~Century~~Glendon ~~Park East~~Avenue, ~~Suite~~17th ~~1402~~Floor, Los Angeles, California ~~90067~~90024. ~~and~~The ~~our~~office telephone number ~~at that location~~ is (310) ~~432~~689-~~9032~~7355. Our websites are www.allamericanpetcompany.com and www.pawtizer.com. The information on our websites are not, and shall not be deemed to be, a part of this report or incorporated by reference into this or any other filing we make with the Securities and Exchange Commission (the “SEC”).

The Company’s online sites are www.allamericanpetcompany.com, www.nutrabar.com, www.pawtizer.com, www.facebook.com/nutrabar, www.facebook.com/pawtizer, www.vetresearchlibrary.com, http://issuu.com/nutrabar and http://bewelllivelong.wordpress.com

The information on our websites are not, and shall not be deemed to be, a part of this report or incorporated by reference into this or any other filing we make with the Securities and Exchange Commission (the “SEC”)

History of the Company and its Current Status

All American Pet Company, Inc. was initially organized under the laws of the State of New York (“All American Pet Company, Inc. NY”) in February 2003. In January 2006, All American Pet Company, Inc. NY merged into All American Pet Company, Inc. a Maryland ~~corporation~~Corporation (“All American Pet Company, Inc. MD”). In June 2012, All ~~America~~American Pet Company, Inc. MD merged into a Nevada Corporation, (“All American Pet Company, Inc. NV”). The Company has formed a number of wholly owned subsidiaries to provide for accountability of each of its operations. All American PetCo, Inc. was formed in January 2008 to provide corporate infrastructure and management services. All American Pet Brands, Inc. was formed in April 2009 to be the Company’s manufacturing and warehousing operation. In September 2009 the Company signed a license and distribution agreement with AAP Sales and Distribution Inc. a third party company that obtained the rights to manufacture and sell certain of the Company’s products on a non-exclusive basis. AAP Sales and Distribution Inc.’s operations have been consolidated with All American Pet Company, Inc. based on accounting guidelines for Variable Interest Entities.

The Company has formed a number of wholly owned subsidiaries to provide for accountability of each of its operations. All American PetCo, Inc. was formed in January 2008 to provide corporate infrastructure and management services. All American Pet Brands, Inc. was formed in April 2009 to be the Company’s manufacturing and warehousing operation. In September 2009, the Company signed a license and distribution agreement with AAP Sales and Distribution, Inc. a third party company that obtained the rights to sell certain of the Company’s products on a non-exclusive basis. AAP Sales and Distribution, Inc.’s operations have been consolidated with All American Pet Company, Inc. based on accounting guidelines for Variable Interest Entities.

In 2010 and 2011, AAPT produced, marketed, and beta tested two super-premium dog foods under the brand names Grrr-nola®Natural Dog Food and Chompions®. We believe that both Grrr-nola®Natural Dog Food and Chompions® were the first dog food products that were formulated for canine heart health and endorsed by a veterinary cardiac surgeon.

~~The~~In ~~Company~~2012, ~~has~~after ~~never~~the ~~operated~~beta attesting, athe ~~profit~~Company completed market research, proprietary scientific formulation and istesting ~~dependent~~for ~~upon~~an ~~additional~~all-natural ~~financing~~super topremium ~~remain~~bar acategory ~~going~~called NutraBar™ ~~concern~~- original, low fat and senior formulas. ~~During~~It ~~2011,~~also ~~the~~produced ~~Company~~proprietary ~~obtained~~formulations ~~new~~for ~~equity~~two ~~capital~~additional inbars ~~the~~– ~~amount~~Chomp ofBar™ ~~$722~~and Mutt Bar™. It has successfully launched its portable,~~499~~ convenient and ~~continues~~functional toNutraBar™ ~~seek~~line of ~~additional~~all ~~equity~~natural ~~capital~~true food super premium bars to ~~sustain~~both ~~operations.~~online ~~The~~and ~~Company~~traditional ~~remains~~brick ~~under~~and ~~significant financial~~mortar ~~strain~~retailers. ~~primarily~~Each ~~because~~gluten-free of4 ~~its~~ounce bar ~~low~~has ~~level~~a kCal equivalent of ~~sales~~8 ~~and~~ounces ~~limited~~of ~~operating~~super-premium ~~funds~~dry dog food. The ~~limited~~bars ~~amount~~have ofbeen ~~operating~~both ~~capital may~~manufactured ~~preclude~~and ~~the~~packaged by the Company’s ~~ability~~since tothe ~~execute~~fourth ~~its~~quarter ~~manufacturing,~~2012 ~~marketing,~~ and ~~distribution~~related ~~objectives~~sales orcommenced toin ~~continue operations~~2013.

The Company has shown and announced to the U.S. market the first line of all-natural super premium dog treats called CHEWIES™, which comes in three flavors, and is preparing to market its CHEWIES™ line of flavored all-natural super-premium 27% protein dog treats.

During 2012, the Company also launched its PAWtizer™ line of wet wipes and spray, the pet care industry’s first alcohol-free, anti-bacterial dog cleaner.

The Company has never operated at a profit and is dependent upon additional financing to remain a going concern. Throughout 2012, the Company obtained equity capital in the amount of approximately $3,000,000 and continues to seek additional equity capital to sustain operations. The Company remains under significant financial strain, primarily because of its limited operating funds and a significant amount of past due debts. The limited amount of operating capital may preclude the Company’s ability to execute its manufacturing, marketing, and distribution objectives or to continue operations. As a result, the reports of the independent registered public accounting firms on the Company’s 2012 and 2011 consolidated financial statements include explanatory paragraphs expressing substantial doubt regarding the Company’s ability to continue as a going concern.

Products

The Company has developed ~~and is preparing to launch or re-launch~~ a number of innovative pet wellness products. The Company is also in the process of developing new products, variations of existing products and other items that will complement and enhance the Company’s array of product offerings. The Company requires significant additional financing to market, manufacture and sell its existing products and to develop new products. Key components of the Company’s product offerings are described below:

~~Pawtizer~~NutraBar™

~~Developed for the purpose of~~The ~~protecting~~Company ~~the~~has 46developed ~~million~~(and ~~American~~launched ~~families~~in ~~that~~2013) ~~are~~the ~~homes~~pet toindustry’s 78first ~~million~~dog ~~dogs~~food ~~from~~product ~~infectious~~packaged ~~human~~as ~~germs~~a ~~such~~nutritional asfood ~~MRSA, E~~bar. ~~Coli,~~ ~~Salmonella~~With ~~and~~three ~~other~~product ~~bacteria~~lines ~~that~~targeting ~~are~~the ~~innocently~~super-premium ~~picked~~dog upfood ~~by dogs~~ and ~~transferred~~dog totreat ~~humans.~~segments, ~~Pawtizer™ is~~ the ~~pet care industry~~Company’s ~~first alcohol~~all-~~free~~natural ~~anti-bacterial~~bars are ~~dog cleaner. With Pawtizer,~~ the ~~Company~~equivalent isof ~~delivering~~8 aounces ~~product~~of ~~that~~dry ~~research has~~kibble ~~shown~~in toa be4 ~~more~~ounce ~~useful~~bar. ~~and~~These ~~effective~~bars ~~than~~offer ~~alcohol.~~a ~~Pawtizer™~~high ~~will~~protein bemeal ~~available~~or insnack ~~canisters~~without the inconvenience of ~~100~~bags and 45bowls. ~~count,~~AAPT’s ~~chemically treated~~true ~~wet~~food ~~wipes~~bars ~~that~~are ~~have~~formulated ~~been shown~~ to ~~kill~~contain ~~99.9% of the germs resident on~~ a ~~typical~~blend ~~dog~~of ~~paw.~~natural ~~Pawtizer™ also comes in~~ingredients aand ~~convenient~~provide 8essential ~~ounce~~nutrients ~~spray~~optimized ~~with~~to ~~Bitrex®~~promote ~~added. Bitrex® is~~ a ~~“bittering”~~dog’s ~~agent~~nutrition, ~~that~~health, ~~will prevent dogs from licking their paws~~ and ~~thus extending the reach of the antibacterial effects of Pawtizer™~~vitality.

The principal active ingredient in Pawtizer™ products is 0.13% Benzalkonium Chloride, a germ reducing agent that has been widely accepted for use as a topical antiseptic for human cuts and scrapes and “leave on skin” cosmetics.

Mutt™ Super Premium Dog Food

The Company plans to enter the premium dog food market with its Mutt™ Great Food for Great Dogs brand of dry kibble super premium dry dog food products. Mutt™ will be the pet industry’s first pet food product that targets mixed breed dogs. Although mixed breed dogs represent approximately 59% of the total U.S. dog population according to APPA and Mars Corporation’s Mutt census, all other known dog food products have targeted pedigree breeds. Mixed breeds are generally healthier and more active than pure breeds. Mixed breed dogs also live, on average, 2.5 years longer than the average dog, thus extending the customer life cycle of our product.

~~Mutt~~CHOMPBar™ ~~products will contain 25% protein and be vitamin fortified. The Company intends to price Mutt™ products, at wholesale, in between the Pedigree® and Beneful® brands.~~

~~Nutra~~The ~~Bars™~~line contains 27% protein quad segmented 4 ounce bars with digestive fiber enhancements in addition to functional vitamin and mineral supplementation. It comes in original, low fat and senior formulas.

The Company has developed and is preparing to launch the Pet industry’s first dog food product packaged as a nutritional dog food bar. With two product lines targeting the premium and super premium pet food segments, the Company’s nutritional dog food bars will be the equivalent of 8 ounces of dry kibble in a 4 ounce bar. These bars are portable and offer a high protein meal or snack without the inconvenience of bags and bowls. AAPT’s nutritional bars are formulated to contain a blend of natural ingredients and provide essential nutrients optimized to promote a dog’s nutrition, health, and vitality. MUTTBar™

~~Chewies~~Mutt™Bar ~~Dog~~products ~~snacks~~contain 25% protein and are supplemented with omega 3 fatty acid to promote healthy skin and coat. They are fortified with vitamin and amino acids. The bars will also be a quad-segmented 4 ounce wrapped bar available singly, as well as in full-color display cartons of a dozen. They also come in original, low fat, and senior formulas.

~~The Company’s line of high protein dog snacks will be made with the same nutritive ingredients as the food bars and additional flavoring will be added. Chewies~~CHEWIES™ ~~will be packaged in 16 ounce canisters containing approximately 64 bite sized pieces.~~

~~Grrr-Nola™,~~The ~~Chompions™,~~Company’s line of ~~Fido~~27% ~~Flakes~~high protein dog snacks will be made with the same nutritive ingredients as the food bars with additional flavorings added. CHEWIES™, will be packaged in 8 ounce and ~~Chewa~~16 ~~Bunga™~~ounce ~~Heart~~re-sealable ~~Healthy~~pouches ~~Super~~containing ~~Premium~~approximately ~~Dog~~32 ~~Foods~~and 64 bite sized pieces.

In 2010 and 2011, AAPT produced, marketed, and sold two lines of super-premium dog foods under the brand names Grrr-nola®Natural Dog Food and Chompions®. Both Grrr-nola®Natural Dog Food and Chompions® were the first dog food products to be formulated and endorsed by a veterinary cardiac surgeon. The Company suspended sales of Grrr-nola®Natural Dog Food and Chompions® in the winter of 2011 as slotting fees were exceeding gross sales of products The Company is planning to reintroduce both product lines after reformulating and repackaging the products. The revised versions of Grrr-nola®Natural Dog Food, Chompions® Chewa-Bunga®, and Fido Flakes® will each be formulated with amino acids to support canine health at all life stages. PAWtizer™

The Company developed PAWtizer™ for the purpose of protecting the 53 million American families that are homes to 78 million dogs from infectious human germs such as MRSA, E. coli, Salmonella and other bacteria that are innocently picked up by dogs and transferred to humans. PAWtizer™ is the pet care industry’s first alcohol-free anti-bacterial dog cleaner. With PAWtizer™, the Company is delivering a product that research has shown to be more useful and effective than alcohol. PAWtizer™ is available in canisters of 100 and 45 count, chemically treated wet wipes that have been shown to kill 99.9% of the germs resident on a typical dog paw. PAWtizer|™ also comes in a convenient 8 ounce spray with Bitrex® added. Bitrex® is a “bittering” agent that will prevent dogs from licking their paws and thus extending the reach of the antibacterial effects of PAWtizer™.

The principal active ingredient in PAWtizer™ products is 0.13% Benzalkonium chloride, a germ reducing agent that has been widely accepted for use as a topical antiseptic for human cuts and scrapes and “leave on skin” cosmetics.

The Pet Industry

~~The~~Indulgent ~~Pet~~pet ~~Food~~parents ~~industry~~will isdrive ~~growing~~up ~~rapidly with~~demand ~~combined~~for ~~worldwide~~premium annual revenue of about $47 billion per year according to industry data provided by Tully and Holland. According to the 2011-2012 APPA’s National Pet Owners Survey, 62% of U.S. households or 73.6 million homes own a pet~~. The U.S. pet~~ food and snack category is a $19.8 billion dollar a year market, with $11.5 billion spent exclusively on dog foods and treats according to the Euromonitor International 2011 annual report. Euromonitor International breaks the market down as follows:services

The Pet Food industry is growing rapidly with combined worldwide annual revenue of about $53 billion per year according to industry data provided by Tully and Holland in 2012. According to the 2011-2012 APPA’s (American Pet Products Manufacturers Association) National Pet Owners Survey, 53 million American families are homes to 78.5 million dogs.

The U.S. ~~Pet~~pet ~~Food~~food ~~Sales~~and ~~(Billions)~~snack category is a $19.8 billion dollar a year market, with $12.6 billion spent exclusively on dog foods and treats according to the Euromonitor International 2011-2012 annual report. Euromonitor International breaks the market down as follows:

	2003		2010		2011 (est)
Dog Food – Dry	$	5.3	$	7.7	$	8.0
Dog Treats	$	1.4177	$	2.2	$	2.3

U.S. Pet Food Sales ($ Billions)

	2003		2010		2011 - 2012
Dog Food – Dry	$	5.3	$	7.7		$8.0 – $8.8
Dog Treats	$	1.4	$	2.2		$2.3 – $2.6

Source: Euromonitor International

Tully & Holland’s made higher estimates of the U.S. market size for dog foods and treats with $13.5 ~~Billion~~billion in 2012 and $12.7 ~~Billion~~billion in 2011.

The pet industry in the United States ~~and~~ and many other countries is experiencing solid growth as Americans own more pets than ever before. Growth in the sector is derived both from increasing pet ownership, as well as from increased spending per pet. Pet pampering is becoming the norm, as pet owner spending has moved far beyond simple food and grooming expenses to include innovative and specialized premium products. Accordingly, people increasingly view their pets as part of the family and are willing to spend even during difficult economic times.

According to the American Pet Product Association (APPA), Americans spent approximately $47.7 billion on pet products and services in 2010, an increase of 4.8% over 2009. Since 1988, pet ownership has expanded from 56% of households to 62% today. Approximately 4653% of all households own more than one pet and dogs can be found in at least ~~one~~six out of ~~three~~ten homes. Other pet industry analysts are more optimistic. An overall rise in the number of pets in the USU.S. and increased spending per pet are the main factors that will contribute to the pet’s industry expected growth in the years ahead. Even with the overall economic recovery taking longer than expected, annual revenue growth in pet products and services is anticipated to be approximately 45.47% through 2016 according to the U.S. Pet Market Outlook ~~2010~~2011/1112. As the recovery takes hold, U.S. Pet Market Outlook ~~2010~~2011/1112 also anticipates that household disposable income will rise even faster, and spending on pets will pick up even more.

According to the IBIS World "Animal Food Production in the US: Market Research Report", steady growth in pet ownership, spikes in feed prices and increasing demand from farm supplies wholesalers have contributed to industry revenue gains at an annualized rate of 3.8 percent since 2007. "The industry's future prospects are modest, with slow but sustained growth anticipated through the next five years. The forecast predicted a moderate increase in disposable incomes and, subsequently, pet ownership, which will likely drive demand for pet foods, a segment typified by high profit margins and brand-loyal consumers. According to IBIS World industry analyst, Josh McBee. The recession did slow down the rate of growth of purchases, but revenue expansion remained strongly positive throughout the worst of the crisis. The stats reveal a CAGR (compound annual growth rate) of 6.7% from 1994 through 2010, including 4.8% in 2010.

The ~~Pet Food Production industry provides sustenance for pets in the US and around the world~~U. ~~Americans stood by their pets during the Great Recession in the 1930's, with canine ownership growing despite falling personal disposable income~~S. ~~As such, IBIS World industry analyst Josh McBee expects “that through 2017, demand for pet foods~~ is ~~once again anticipated to rise faster than GDP growth. A projected trend toward greater brand optimization will help manufacturers retain and expand market share during~~ the ~~period.~~largest ~~Pet~~marketplace ~~food~~for ~~producers’~~dog ~~claims are increasingly mirroring those of human food makers, touting healthy enrichments with multi-grains, leafy greens and fruits or foods produced without preservatives or artificial flavors~~treats.” Furthermore, organic and functional pet foods have also increased in popularity as evidenced by a host of new product introductions such as Hill's Science Diet Healthy Mobility Canine and other products featuring customized formulas. These products attract the highest margins, and demand remains relatively resilient since they target the premium segment of the buying market.

~~Demand~~According ~~for~~to ~~products~~the ~~that~~IBIS ~~address~~World ~~deficiencies~~"Animal Food Production in ~~commercial~~the ~~dog~~US: ~~food~~Market isResearch onReport", ~~the~~steady ~~rise~~growth asin ~~the~~pet ~~number~~ownership, ofspikes ~~serious~~in ~~medical~~feed ~~conditions~~prices inand ~~dogs~~increasing demand ~~grows. These~~from ~~concerns~~farm supplies wholesalers have contributed to industry revenue gains at an annualized rate of 4.2 percent since 2007. ~~resulted~~"The inindustry's ~~“natural”~~future ~~pet~~prospects ~~food~~are ~~becoming~~modest, ~~the~~with ~~fastest~~slow ~~growing~~but ~~sector~~sustained ingrowth anticipated through the ~~pet~~next ~~food~~five ~~industry~~years. ~~Statistics~~ The ~~show~~forecast ~~that~~predicted ~~more~~a ~~than~~moderate 30increase ~~million~~in ~~dogs~~disposable incomes and, subsequently, pet ownership, which will ~~have~~likely ~~cardiac~~drive ~~disease~~demand for pet foods, a segment typified by ~~the~~high ~~time~~profit ~~they~~margins ~~reach~~and brand-loyal consumers,” according to IBIS World industry analyst, Josh McBee. The recession did slow down the ~~age~~rate of ~~7. AAPT~~growth isof ~~currently~~purchases, but revenue expansion remained strongly positive throughout the ~~only~~worst ~~dog~~of ~~food~~the ~~company~~crisis. ~~that~~The ~~has~~stats ~~products~~reveal ~~endorsed~~a byCAGR a(compound ~~cardiac~~annual ~~veterinarian~~growth ~~surgeon~~rate) of 6.7% from 1994 through 2010, including 4.8% in 2010.

~~According~~The toPet Food ~~Packaged~~Production ~~Facts,~~industry ~~the~~provides ~~fastest growing~~sustenance ~~segment~~for ofpets in the ~~companion~~U.S. ~~animal~~and ~~market,~~around isthe ~~pet~~world. ~~healthcare,~~Americans stood ~~with~~by ~~annual~~their ~~revenues~~pets ofduring ~~$34~~the ~~billion~~Great ~~(bigger~~Recession ~~than~~in the ~~toy~~1930's, ~~pasta, and~~with ~~baby~~canine ~~food~~ownership ~~industries~~growing ~~combined)~~despite falling personal disposable income. As such, ~~and~~IBIS ~~growing~~World atindustry ~~about~~analyst ~~15%~~Josh ~~per~~McBee ~~year. People~~expects ~~who~~“that ~~are~~through ~~becoming~~2017, ~~educated~~demand ~~regarding~~for pet ~~healthcare are~~foods ~~driving~~is ~~the~~once ~~domestic~~again ~~pet~~anticipated to ~~market,~~rise ~~which~~faster ~~includes~~than 78GDP growth.5 ~~million~~A ~~dogs~~projected intrend ~~the~~toward ~~U.S. Driving~~greater ~~this~~brand ~~growth~~optimization ~~are~~will ~~people~~help ~~that tend~~manufacturers toretain beand atexpand market share during the ~~top~~period. ofPet ~~their~~food ~~economic~~producers’ ~~cycle~~claims ~~and~~are ~~have~~increasingly amirroring ~~higher~~those ~~propensity~~of tohuman ~~purchase~~food makers, touting healthy ~~products~~enrichments ~~for~~produced ~~their~~without ~~pets. AAPT’s super~~preservatives ~~premium~~or ~~dog~~artificial ~~food~~flavors.” isFurthermore, ~~specially~~natural ~~formulated~~and byfunctional apet ~~leading~~foods have ~~canine~~also ~~nutritionist~~increased ~~and~~in ~~can~~popularity. beThese ~~part~~products ofattract athe ~~diet~~highest ~~that~~margins, ~~decreases~~and ~~the~~demand ~~impact of~~remains ~~cardiac~~relatively ~~conditions,~~resilient ~~musculoskeletal~~since ~~stress,~~they target ~~obesity,~~the ~~and~~premium ~~Type~~segment IIof ~~diabetes~~the buying market.

~~Hand~~Demand ~~Sanitizer~~for products that address deficiencies in commercial dog food is on the rise as the number of serious medical conditions in dogs grows. These concerns have resulted in “natural” pet food becoming the double digit growth sector in the pet food industry. Statistics show that more than 30 million dogs will have cardiac disease by the time they reach the age of 7.

~~There~~According isto noPackaged ~~known~~Facts, ~~market~~the ~~or industry data~~fastest ~~for~~growing ~~Pet~~segment ~~Sanitizers.~~of ~~The~~the ~~Company~~companion ~~believes~~animal ~~that~~market, ~~the~~is ~~consumer~~pet ~~demographics~~healthcare, ofwith ~~anti-bacterial~~annual ~~dog~~revenues ~~paw~~of ~~wipes~~$34 ~~will~~billion be(bigger ~~very~~than ~~similar to~~ the ~~primary~~toy, ~~consumers~~pasta, and ofbaby ~~hand~~food ~~sanitizers~~industries combined), and ~~baby~~growing ~~wipes.~~at ~~These~~about ~~markets~~15% ~~are~~per ~~dominated~~year. People bywho ~~women~~are ~~aged~~becoming ~~21-34,~~educated ~~new~~regarding ~~mothers~~pet ~~and other~~healthcare ~~females~~are ~~aged~~driving 50the ~~and~~domestic ~~up.~~pet ~~Many~~market, ~~sanitary~~which ~~wipe~~includes ~~consumers~~78.5 ~~live~~million ~~within~~dogs ~~households~~in ~~with~~the ~~annual~~U.S. Driving ~~household~~this ~~incomes~~growth inare ~~excess~~people ~~of $70,000.~~that ~~Management~~tend ~~believes~~to ~~that~~be at the ~~demographics~~top ~~for~~of ~~the~~their ~~Pet~~economic ~~Sanitizer~~cycle ~~business~~and ~~will~~have bea ~~very~~higher ~~similar~~propensity to ~~the~~purchase ~~hand~~healthy ~~sanitizer~~food ~~market.~~products ~~Approximately $146~~for ~~and~~their ~~$142~~pets. AAPT’s super ~~million~~premium ~~was~~dog ~~spent~~food onbars ~~hand sanitizers in 2011~~ and ~~2010,~~treats ~~respectively~~are ~~according~~specially toformulated ~~Drug~~by ~~Store~~a ~~Management.~~leading Bycanine ~~extrapolating this~~nutritionist ~~data~~and tocan ~~62%~~be part of ~~U.S.~~a ~~homes~~diet that decreases ~~have~~the ~~dogs,~~impact ~~management~~of ~~believes~~cardiac ~~that~~conditions, ~~the~~musculoskeletal ~~market~~stress, ~~potential~~obesity, ~~for~~and ~~Pet~~Type ~~Sanitizers~~I ~~is approximately $40-$50 million~~diabetes.

Human Food Bars

The Human Food Bar business was approximately $56.73 billion in ~~2011~~2012 according to Convenience Store News. The human food bar market demographics encompasses all age, sex and ~~income~~ income brackets. Of the 78.5 million dog population in the U.S., management estimates the domestic market potential for dog food ~~bars~~ bars at $300-$400 million.

CHEWIES™ Treats

The U.S. is the largest market for dog treats. What sets CHEWIES™ apart from the competitors in the market space is its significant percentage of all natural super-premium chicken meal protein; 27%. Additionally, CHEWIES™ is a formula extension of the BARS, which assures consumers of a product their dogs will prefer while reducing the costs of manufacturing owing to utilization of common ingredients and manufacturing equipment. CHEWIES™ is all natural, but incorporates air borne aromatics to create a variety of unique flavors without impacting its “all natural” credential. CHEWIES™ will be available in peanut, cheese and bacon flavors packaged in vapor blocking re-sealable 8 ounce and 16 ounce bags.

Hand Sanitizer

Management is not aware of market or industry data for Pet Sanitizers. The Company believes that the consumer demographics of anti-bacterial dog paw wipes will be very similar to the primary consumers of hand sanitizers and baby wipes. These markets are dominated by women aged 21-34, new mothers and other females aged 50 and up. Many sanitary wipe consumers live within households with annual household incomes in excess of $70,000. Management believes that the demographics for the Pet Sanitizer business will be very similar to the hand sanitizer market. Approximately $152 and $146 million was spent on hand sanitizers in 2012 and 2011, respectively according to Drug Store Management. By extrapolating this data to 62% of U.S. homes that have dogs, management believes that the market potential for Pet Sanitizers is approximately $40-$50 million.

Marketing

The marketing of AAPT’s brands began in ~~2009. We~~2011 ~~initially~~with ~~ran~~the ~~trade~~introduction ~~advertising~~of toPAWtizer™, ~~build~~followed by the ~~presence~~introduction of ~~our~~the ~~product~~three ~~line~~NutraBar™ ~~with~~lines ~~buyers~~in ~~and~~late ~~retail merchandisers~~2012. The Company continues to build awareness for their brands, mostly through ~~editorials~~electronic media and ~~other~~retail ~~public relations initiatives~~promotions.

The Company’s strategy is to build a national distribution footprint that will benefit from regional and national marketing campaigns. The Company has approached a broad range of mass merchants, pet centers, supermarket chains, drug store chains, and convenience store chains regarding selling AAPT products in their stores. AAPT is currently an approved vendor to retail outlets with over 2560,000 locations nationwide. In addition to online sales through the nation’s largest online retailer, AAPT has developed a network of food brokers who ~~have~~ have strong relationships with national retail chains representing over 125,000 stores that carry pet food, pet snacks and other ~~pet~~ pet products. The Company has also brought in outside merchandising experts to market and increase public awareness of the Company’s products. AAPT’s sales efforts are focused on setting sales and delivery dates for their new product lines. We commenced online sales of Pawtizer™ in May of 2012 and retail sales of this product commenced in August 2012. The Company is anticipating additional purchases to result from its vendor status with these retailers in 2012 and beyond. The Company will leverage its strong standing with its retail customers to streamline introduction of other All American Pet Company products.

~~Educating the public regarding~~ AAPT ~~products and the benefits that dogs will receive from them is an important aspect of AAPT~~’s ~~business. The~~sales ~~Company~~efforts ~~has~~are ~~employed~~focused ~~advanced~~on ~~media~~setting sales and ~~promotional~~delivery ~~techniques~~dates tofor ~~educate~~new ~~consumers~~product ~~about the health benefits of their revolutionary pet wellness and dog food products~~lines. It isWe ~~our~~commenced ~~belief~~online ~~that consumer education will lead to increased~~ sales of ~~our~~PAWtizer™ ~~products. The current~~in ~~media-driven~~May ~~tools~~of ~~AAPT~~2012 ~~is using include direct marketing~~ and ~~data~~retail sales ~~gathering~~of ~~programs,~~this ~~Internet~~product ~~marketing,~~commenced ~~strategic~~in ~~media, promotional~~August ~~alliances,~~2012. ~~traditional~~We ~~and~~also ~~non-traditional~~commenced ~~advertising~~online ~~campaigns,~~sales and ~~national,~~retail ~~local,~~sales ~~and~~of ~~print~~NutraBar™ ~~news interviews~~2013. The Company is ~~also~~anticipating ~~intends~~additional purchases to ~~use~~result ~~loyalty~~from ~~mass~~its ~~mailers;~~vendor ~~“end~~status ~~cap”~~with ~~displays~~these ~~and~~retailers ~~related~~in ~~sales~~2013 ~~promotions,~~ and ~~high profile shopping center publicity events~~beyond. The ~~company~~Company ~~is in the process of developing a video news release (VNR) that~~ will be ~~distributed~~organically toexpand ~~media~~its ~~outlets~~sales ~~nationwide. The~~from ~~goal~~its ofcore ~~the~~retailers ~~VNR is~~ to ~~educate~~streamline ~~and~~introduction ~~inform potential consumers~~ of ~~the~~other ~~benefits of~~All ~~the~~American ~~company’s~~Pet Company products.

~~The~~Educating ~~Company~~the ~~intends~~public toregarding ~~build~~AAPT ~~a brand franchise~~products ~~combining~~and ~~food~~the ~~and~~benefits ~~non-food~~that ~~consumables~~dogs ~~with~~will ~~products~~receive ~~designed~~from ~~for~~them ~~intellectual~~is ~~(more~~an ~~informed)~~important ~~purchase~~aspect ~~choices~~of asAAPT’s ~~opposed~~business. The toCompany has ~~emotional/impulse~~employed oradvanced ~~novelty~~media ~~purchases,~~and ~~while~~promotional ~~focusing~~techniques ~~more~~to oneducate ~~mixed~~consumers ~~breeds~~about ~~and~~the ~~offering~~health ~~products~~benefits toof ~~both~~their ~~the~~revolutionary pet ~~owner~~ wellness and ~~the pet~~dog food products. It Inis ~~order~~our tobelief ~~reach~~that ~~the~~consumer ~~most~~education ~~convertible~~will ~~population~~lead to increased sales of ~~potential~~our ~~consumers~~products. The current atmedia-driven ~~the~~tools ~~lowest~~AAPT ~~possible~~is ~~cost~~using include direct marketing and data gathering programs, ~~the~~Internet ~~Company~~marketing, ~~intends~~strategic media, topromotional ~~initially~~alliances, ~~use~~traditional ~~email~~and non-traditional advertising campaigns, ~~direct~~and ~~mail~~national, ~~text~~local, ~~message~~and ~~campaigns~~print ~~other~~news ~~low~~interviews. The Company ~~cost/high~~also ~~impact~~intends ~~techniques~~to ~~supported~~use byloyalty ~~social~~mass ~~media~~mailers; “end-cap” displays and related sales promotions.

The ~~Marketing~~Company ofintends ~~Pawtizer™~~to ~~will~~build be a ~~dual~~brand ~~pronged~~franchise combining ~~approach~~Bars, ~~consisting~~Treats ofand ~~email,~~anti- ~~text~~bacterial ~~messaging,~~wipes ~~video~~with ~~tagging~~products ~~directed~~designed atfor ~~highly~~intellectual ~~targeted~~(more ~~lists~~informed) ofpurchase ~~potential~~choices ~~consumers~~as opposed ~~within~~to ~~expected~~emotional/impulse ~~consumer~~or ~~demographics~~novelty ~~with~~purchases, ~~simultaneous~~while ~~programs~~focusing ~~directed~~more aton ~~Brand~~mixed ~~Influencers/Ambassadors~~breeds ~~such~~and asoffering products to both the ~~customer~~ pet owner and the ~~direct~~pet. ~~mail~~In ~~campaigns~~order ~~targeting~~to reach the most convertible ~~consumers.~~population ~~Dog~~of ~~food~~potential ~~products~~consumers ~~will~~at bethe ~~sold~~lowest ~~into~~possible ~~distribution~~cost, ~~with~~the ~~conventional~~Company intends ~~retailers~~to initially use email, direct mail, twitter, video campaigns and other low cost/high impact techniques supported by ~~conventional~~social ~~advertising~~media.

The marketing of PAWtizer™ and NutraBar™ is a dual pronged approach consisting of email, Twitter, video campaign and other low cost high impact techniques directed at highly targeted lists of potential consumers within expected consumer demographics with simultaneous programs directed at Brand Influencers/Ambassadors.

Manufacturing

The Company is dependent upon one non-affiliated prime contract manufacturer with three non-affiliated component manufacturers to produce its ~~Pawtizer~~PAWtizer™ product. The Company has one non-affiliated dry dog food manufacturer and one non-affiliated manufacturer of its ~~Nutra-Bar~~NutraBar™ product line. AAPT purchases approximately 90% of the materials necessary for the production of their products from these third party sources. The other 10% of the materials necessary for production comes from various packaging manufacturers, shipping companies, and other vendors of supplies. AAPT does not maintain supply agreements with these parties, but instead purchases products through the use of purchase orders in the ordinary course of business. AAPT is currently ~~testing~~manufacturing NutraBar™ with a “human food grade” forming machine. ~~for~~The ~~potential~~Company ~~use~~has inacquired ~~future~~a ~~production~~substantial amount of the ~~Nutra~~equipment ~~Bars™~~necessary ~~product~~to ~~line.~~become Ifits ~~these~~own ~~tests~~manufacturer ~~are~~at ~~successful,~~its ~~the Company~~leased ~~intends~~facility toin ~~acquire~~Shawnee, Kansas and management expects the manufacturing equipment ~~necessary~~ to ~~become~~be ~~its~~fully ~~own~~operational ~~manufacturer~~by the 3rd quarter of ~~Nutra~~2013, ~~Bars™~~subject atto the ~~facility~~availability inof ~~Shawnee,~~sufficient ~~Kansas~~financing. The Company has also ~~intends~~obtained ~~to obtain~~ the packaging and wrapping equipment necessary to wrap, carton, and case pack the ~~Nutra~~NutraBar™ ~~Bars~~and CHEWIES™ ~~line~~lines for retail shipment and distribution. Management believes that there is adequate space and resources in the Shawnee, Kansas facility to execute all of these manufacturing objectives.

The Company entered a license agreement in August 2009 that expands the Company’s sales and marketing capacity. The agreement grants AAP Sales and Distribution, Inc., a non-affiliated company, a non-exclusive license agreement to sell, distribute under certain conditions, and, with the supervision of All American Pet Company, Inc., manufacture the Company’s products, which will augment the Company’s ability to cover the marketplace. This non-exclusive agreement allows the licensee the use of AAPT’s intellectual property and branding to manufacture and sell certain AAPT products. This agreement allows the Company to leverage its management time and assets to assisting in expanding our ability to build our distribution. AAP Sales and Distribution Inc.’s operations have been consolidated with All American Pet Company inc. based on accounting guidelines for Variable Interest Entities.

AAPT retains the rights to all of its formulas, trade secrets, and brands. The license covers AAPT’s products: “Heart Healthy” Dry Dog Food, the Grrr-nola® Natural Dog Food, Chewabunga® Healthy Breakfast for Dogs, BowWow Breakfast®, and Grrr-nola® Multi-grain Food Bar, and others to be mutually agreed upon. This agreement provides that AAPT receive advance payments, minimum royalties, and a royalty on all sales of product by the licensee based on sales and guaranteed payments providing an attractive economic benefit to AAPT.

Competition

The pet food business is highly competitive. Virtually all of the manufacturers, distributors, and marketers of pet food have substantially greater management, financial, brand recognition, research and development, marketing, and manufacturing resources than AAPT at the moment. Competitors in the super-premium ~~pet~~dog food market include, among others: Colgate-Palmolive Co., whose major brand is Hills’ Science Diet; Proctor and Gamble, whose major dog food brands are ~~Iams~~IAM’s and Eukanuba; and Nestle Corporation, whose major dog food brand is Purina.

InThere ~~addition,~~are ~~AAPT~~several ~~competes~~dog ~~with~~grooming ~~current~~aids and ~~private~~dog ~~label~~cleaners ~~supermarket~~available ~~high-priced~~in ~~dog~~the ~~foods,~~marketplace. asTo ~~well~~the asCompany's ~~private~~knowledge, ~~label~~none ~~premium~~of ~~dog~~these ~~foods~~products ~~offered~~are inalcohol ~~the~~free ~~specialty pet stores~~ and ~~mass merchants~~anti-bacterial. ~~The~~ Accordingly, ~~Company~~there ~~perceives~~are ~~that~~several ~~the~~somewhat ~~dog~~similar ~~food~~products ~~recalls~~to ~~that~~PAWtizer™, ~~occurred~~but in ~~2011~~the ~~and~~view ~~2012~~of ~~will~~the ~~lead~~Company tonone ~~the opening~~ of ~~shelf~~these ~~space~~products can inbe ~~supermarket~~considered ~~stores,~~directly ~~mass~~competitive ~~merchants,~~in ~~pet~~function ~~centers,~~ and ~~drug~~performance ~~store~~to ~~locations~~the ~~for~~PAWtizer™ ~~new~~line ~~and~~of ~~innovative~~dog ~~pet wellness and pet food products~~cleaners.

~~There~~Presently, ~~are~~we ~~several~~believe ~~dog~~AAPT ~~grooming~~is ~~aids~~the ~~and~~only ~~dog~~manufacturer ~~cleaners available in the marketplace. None~~ of ~~these~~true ~~products~~food ~~are~~bars ~~alcohol~~for ~~free~~dogs ~~and~~meeting ~~anti-bacterial.~~the ~~Accordingly,~~Association ~~there~~of ~~are~~American ~~several somewhat~~Feed ~~similar~~Control ~~products~~Officials to(AAFCO) ~~Pawtizer™,~~standards ~~but none~~ of ~~these products can be considered directly competitive in function and~~nutrition ~~performance~~ to ~~the~~be ~~Pawtizer™~~called ~~line~~a ~~of dog cleaners~~“food.”

Regulation

We are subject to a broad range of federal, state and local laws and regulations intended to protect public health, natural resources and the environment. Our operations ~~are~~ are subject to regulation by the Occupational Safety and Health Administration (“OSHA”), the Food and Drug Administration (“FDA”), the Department of Agriculture (“DOA”) and various state and local authorities regarding the processing, packaging, storage, distribution, advertising and labeling of our products, including food safety standards. Due to the widely publicized pet food recalls in the last few years, both our Company and our dog food suppliers are doing more quality assurance testing for salmonella, e-coli, and other potential contaminants. A task force has been established to assert more stringent “country of origin” labeling. We will be working with our suppliers and the FDA in solving this industry wide issue. In addition, we will require our suppliers to test all flour samples for salmonella and e-E.coli and with the new test curve set up to handle contaminants. ~~Our~~AAPT ~~manufacturer~~ will also be researching amino acid profiling of new suppliers to validate the legitimacy of protein sources.

Employees

As of December 31, ~~2011~~2012, wethe Company had 216 employees~~, both of whom were officers~~. WeOur ~~also~~employees ~~had~~are anot ~~marketing~~subject ~~consultant~~to ~~who~~collective ~~works~~bargaining ~~with us on a nearly full-time basis~~arrangements.

ITEM 1A. RISK FACTORS

An investment in our securities involves a high degree of risk. Before making a decision to purchase our securities, you should carefully consider all of the risks described in this annual report. The risks and uncertainties described below are not the only ones that we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business and results of operations. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment.

The Company faces a number of significant risks associated with its current plan of operations. These include the following:

Our business is difficult to evaluate because we have a limited operating history.

The Company was formed in February 2003, and has incurred losses in each period since commencing operations. From the time of our formation until the end of 2004, we formulated and tested our products. We did not begin to sell our products until the beginning of 2005 and were forced to stop manufacturing and selling our products in 2007 due to a lack of funding. ToIn ~~date~~2011 and 2012, we developed new products, which to date, have generated limited revenues and the development of our business plan will require substantial capital expenditures. Our business could be subject to any or all of the problems, expenses, delays and risks inherent in the establishment of a new business enterprise, including, but not limited to limited capital resources, possible delays in product development, possible cost overruns due to price and cost increases in raw product and manufacturing processes, uncertain market acceptance, and the inability to respond effectively to competitive developments and to attract, retain and motivate qualified employees. Therefore, there can be no assurance that our business or products will be successful, that we will be able to achieve or maintain a profitable operation, or that we will not encounter unforeseen difficulties that may deplete our capital resources more rapidly than anticipated. There can be no assurance that we will achieve or sustain profitability or positive cash flows from our operating activities.

We have never generated any significant revenues, have a history of losses, and cannot assure you that we will ever become or remain profitable.

We have not yet generated any significant revenue from operations and, accordingly, we have incurred net losses every year since our inception. To date, we have dedicated most of our financial resources to general and administrative expenses, and sales and marketing activities. We have funded all of our activities through sales of our securities. We anticipate net losses and negative cash flow to continue for the foreseeable future until such time as revenue is generated in sufficient amounts to offset operating ~~losses~~costs. Due to ~~limited~~ limited financial resources, we have ~~significantly~~limited ~~curtailed~~ our sales and marketing efforts during the past year. ~~Consequently~~Furthermore, we ~~will~~have ~~need~~a ~~to generate~~ significant ~~additional~~working capital ~~revenue~~deficit ~~from~~as ~~financing~~of ~~activities~~December to31, ~~fund~~2012. ~~our~~Consequently, ~~operations until~~ we ~~can~~will ~~once~~need ~~again recommence~~to ~~sales~~generate ~~and~~significant ~~marketing~~additional ~~activities,~~cash ~~manufacturing~~from offinancing ~~our~~activities to ~~products~~fund ~~and placement of~~ our ~~products in stores for sale to consumers~~operations. This has put a proportionate corresponding demand on capital. Our ability to achieve profitability is dependent upon our sales and marketing efforts, and our ability to manufacture and sell our products. There can be no assurance that we will ever generate revenues or that any revenues that may be generated will be sufficient for us to become profitable or thereafter maintain profitability. We may also face unforeseen problems, difficulties, expenses or delays in implementing our business plan.

We have a significant amount of past due debts.

As of December 31, 2012, we have a working capital deficit of $4,456,477. Furthermore, given our poor financial position and lack of liquidity, we have not fulfilled the terms of numerous debt settlement agreements that we have previously made and we have not repaid amounts we have borrowed under past note agreements. In addition, the Company is delinquent in the filing and payment of Federal and state payroll taxes. Significant management time and effort is required to manage past due debts and prioritizing cash payments made by the Company. Such obligations make it difficult for the Company to raise equity or debt funds, finance any capital expenditures, obtain terms for normal business operating expenses and, generally, to transact business.

We have limited commercial experience in marketing or selling any of our products, and unless we develop these capabilities, we may not be successful.

Even if we are able to develop and manufacture our products on a large scale, we have limited experience in operating our business in the volumes that will be necessary for us to achieve commercial sales and in marketing or selling our products to potential customers. We cannot assure you that we will be able to manufacture and deliver our products on a timely basis, in sufficient quantities, or on commercially reasonable terms.

We have been the subject of a going concern opinion from our independent registered public accounting firm, raising a substantial doubt about our ability to continue as a going concern.

Our independent registered public ~~accountants~~accounting firm included an explanatory paragraph in ~~their~~its audit report in connection with our ~~2011~~2012 financial statements stating that because we we have incurred a net loss of $23,~~018~~006,~~881~~767 and a negative cash flow from operations of $~~866~~3,~~369~~022,426 for the ~~year~~ year ended December 31, ~~2011~~2012 and had a working capital deficiency of $4,~~733~~456,~~192~~477 and a stockholders' deficiency of $54,~~010~~571,~~050~~ 339 at December 31, ~~2011~~2012, there is substantial doubt about our ability to continue as a going concern. ~~These factors, along with others, may indicate that we will be unable to continue as a going concern over the next twelve months.~~

Our continuing as a going concern is dependent on our ability to raise additional funds through private placements of our common stock ~~sufficient~~or the issuance of debt securities sufficient to pursue our business plan to meet our current obligations and to cover operating expenses during ~~2012~~2013 and ~~2013~~into 2014. Without immediate capital infusion in the near future, and without a significantly substantial infusion of capital within a short time thereafter, we may be forced to limit our operations severely, and may not be able to survive. There is no assurance that we will be able to secure additional funding in the future, and in the event we are unable to raise additional capital in the near future, it is probable that any investment in the Company will be lost.

We have had negative cash flows from operations and our business operations may fail if our actual cash requirements exceed our estimates, and we are not able to obtain further financing.

We have had negative cash flows from operations, and as of December 31, ~~2011~~2012, we have incurred significant expenses, and have incurred a significant amount of debt, in product development and administration in order to ready our products for market. Our business plan calls for additional significant expenses necessary to bring our products to market. We do not have sufficient funds to satisfy our near-term cash requirements.

We need significant additional funds to maintain and develop our business.

We have a significant working capital deficit. Our current capital resources are insufficient to fund operations at the present time, and we will require substantial additional capital in order to sustain our operations, fund sales and marketing activities, pay for the manufacture of our products, and implement our business plan. Our ability to continue as a going concern is dependent on our ability to raise capital.

13Although management is in discussions to arrange for one or more such financings, we cannot assure you that we will successfully negotiate or obtain such additional financing, or that we will obtain financing on acceptable or favorable terms, if at all. There are no commitments in place for such financings at this time. If we cannot obtain needed capital, when and as we need it, our sales and marketing plans, ability to manufacture products for sale, business, prospects, results of operations and financial condition and our ability to reduce losses and generate profits are likely to be materially and adversely affected.

Although management is in discussions to arrange for one or more such financings, we cannot assure you that we will successfully negotiate or obtain such additional financing, or that we will obtain financing on acceptable or favorable terms, if at all. There are no commitments in place for such financings at this time. If we cannot obtain needed capital, when and as we need it, our sales and marketing plans, ability to manufacture products for sale, business, prospects, results of operation and financial condition and our ability to reduce losses and generate profits are likely to be materially and adversely affected.

We expect that any commitments for additional financings will be in the form of “best efforts” financings. Our ability to obtain additional capital depends on market conditions, the economy and other factors, many of which are outside our control. If we cannot obtain needed capital, our research and development, and marketing plans, business and financial condition and our sales and marketing plans, ability to manufacture products for sale, and ability to reduce losses and generate profits are likely to be materially and adversely affected. Our failure to secure necessary financing would likely have a material adverse effect on our business, prospects, financial condition and results of operations.

~~The~~Exposure ~~cost~~to ofpossible ~~maintaining our public~~litigation ~~company~~and ~~reporting~~legal ~~obligations~~liability ismay ~~high.~~adversely Weaffect ~~expect~~our tobusiness, ~~incur~~financial ~~increased~~condition ~~costs~~and ~~under~~results ~~the Sarbanes-Oxley Act~~ of ~~2002~~operations.

WeIn ~~are obligated to maintain our periodic public filings and public reporting requirements, on a timely basis, under~~ the ~~Rules and Regulations of the SEC. In order to meet these obligations~~past, we ~~will~~have ~~need~~been toexposed ~~continue~~ to ~~raise capital. If adequate funds are not available to us, we will be unable to comply with those requirements and could cease to be qualified to have our stock traded in the public market. As~~ a ~~public company, we~~ ~~have~~variety ~~incurred and will incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act~~ of ~~2002,~~litigation ~~as well~~claims ~~as related rules adopted by the SEC, has imposed substantial requirements on public companies, including certain corporate governance practices~~ and ~~requirements~~there ~~relating~~can tobe ~~internal~~no ~~control~~assurance ~~over~~that financial reporting under Section 404 of the Sarbanes-Oxley Act. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. Although, under rules issued by the SEC, as currently in effect, we will not be ~~required~~subject to ~~evaluate how~~other tolitigation ~~document~~in ~~and test our internal control procedures under Section 404 of~~ the ~~Sarbanes-Oxley~~future ~~Act and the related rules~~that ofmay ~~the~~adversely ~~SEC.~~affect ~~Effective~~our ~~disclosure~~business, ~~controls and procedures and internal controls are necessary for us to produce reliable~~ financial ~~reports~~ ~~and~~condition ~~are~~or ~~important~~results ~~in helping prevent financial fraud generally. We must begin to implement proper procedures significantly in advance~~ of ~~this date and will incur significant up-front expenses to do so~~operations. ~~If we are unable to achieve and maintain adequate disclosure controls and procedures and internal controls, our business and operating results could be harmed.~~

The cost of maintaining our public company reporting obligations is high. We expect to incur increased costs under the Sarbanes-Oxley Act of 2002.

We are obligated to maintain our periodic public filings and public reporting requirements, on a timely basis, under the rules and regulations of the SEC. In order to meet these obligations, we will need to continue to raise capital. If adequate funds are not available to us, we will be unable to comply with those requirements and could cease to be qualified to have our stock traded in a public market. As a public company, we have incurred and will incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act of 2002, as well as related rules adopted by the SEC, has imposed substantial requirements on public companies, including certain corporate governance practices and requirements relating to internal control over financial reporting. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. Effective disclosure controls and procedures and internal controls are necessary for us to produce reliable financial reports and are important in helping prevent financial fraud generally. If we are unable to achieve and maintain adequate disclosure controls and procedures and internal controls, our business and operating results could be harmed. As described in Item 9A, as of December 31, 2012, we did not maintain effective disclosure controls and procedures and we did not maintain effective internal control over financial reporting.

Our stockholders face further potential dilution in any new financing.

During 2012, the Company issued a significant number of shares of its common stock. Any additional equity that we raise would dilute the interest of the current stockholders and any persons who may become stockholders before such financing. Given the low price of our common stock, such dilution in any financing of a significant amount could be substantial.

Our stockholders face further potential adverse effects from the terms of preferred stock which may be issued in the future.

In order to raise capital to meet expenses, or to engage in extraordinary transactions such as the acquisition of a business, our Board of Directors may seek to issue additional stock, including preferred stock. Any preferred stock, which we may issue, may have voting rights, liquidation preferences, redemption rights and other rights, preferences and privileges. The rights of the ~~holder’s~~holders of our common stock will be subject to, and in many respect subordinate to, the rights of the holders of any such preferred stock. Furthermore, such preferred stock may have ~~other~~ other rights, including economic rights, senior to our common stock that could have a material adverse effect on the value of our ~~common~~ common stock. Preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, can also have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock, thereby delaying, deferring or preventing a change in control of the Company.

Our small size and limited history negatively affect our ability to raise capital.

It is difficult for us to find any capital sources because of our relatively small capitalization, our losses to date, our current working capital position, our lack of sales and other factors. It is possible that we may not be able to raise sufficient funds in the future in order to survive and pursue our business plan.

Attempts to grow our business could have an adverse effect on the Company.

Because of our small size, we desire to grow rapidly in order to achieve certain economies of scale. To the extent that rapid growth does occur, it will place a significant strain on our financial, technical, operational and administrative resources. Our planned growth will result in increased responsibility for both existing and new management personnel. Effective growth management will depend upon our ability to integrate new personnel, to improve our operational, management and financial systems and controls, to train, motivate and manage our employees, and to increase our sources of raw materials, product manufacturing and packaging. If we are unable to manage growth effectively, our business, results of operations and financial condition may be materially and adversely affected. In addition, it is possible that no growth will occur or that growth will not produce profits for the Company.

If we cannot successfully compete with existing pet food companies that have greater resources than we have, our business may not survive.

The pet food business is highly competitive. Virtually all of the manufacturers, distributors and marketers of pet food have substantially greater management, financial, research and development, marketing and manufacturing resources than we do. Competitors in the super-premium pet food market include, among others: Colgate-Palmolive Co. (Hills' Science Diet), Iams Co. and Nestle’s Purina brands. Brand loyalty to existing products may prevent us from achieving certain sales objectives. Additionally, the long-standing relationships maintained by existing premium pet food manufacturers with veterinarians and pet breeders may prevent us from obtaining professional recommendations for our products. In addition, we compete with ~~current~~private label supermarket ~~high-priced~~ dog foods, as well as premium dog foods offered in the specialty ~~pet~~ pet stores. Although the dominant existing premium pet food brands are not currently available in supermarkets and mass merchants, ~~and~~ there can be no assurance that this situation will continue. In addition, there are no barriers to prevent the entry of such ~~brands~~ brands into the supermarket and mass merchant distribution channel, and in the event we fail to meet sales goals determined by them for our products they could cease shelving our products in their stores or replace our products with those of our competitors. The entrance into the supermarket or mass merchant distribution channel of an existing or new premium pet food by any of our competitors could have a material adverse effect on the Company. If we are not successful in competing in these markets, we may not be able to attain our business objectives.

If we are unable to market our products to compete with new or existing products developed by well-established competitors, our business will be negatively affected.

Our potential success with Pawtizer™, Mutt™ Great Food for Great Dogs and ~~Nutra Bars~~NutraBar™ brands is significantly dependent upon our ability to market, ~~promote~~develop, promote and deliver the brand. As is typical with new products, demand for and market acceptance of new products is ~~subject~~ subject to uncertainty. Achieving market acceptance for new products may require substantial marketing and other efforts, and the expenditure of significant funds to create customer demand. There can be no assurance that our efforts will be successful. In addition, the failure of new products to gain sufficient market acceptance could adversely affect the image of our brand name and the demand for our products in the future.

If our products do not gain market acceptance, it is unlikely that we will become profitable.

The market for pet food is competitive and subject to changing consumer preferences, including sensitivities to product ingredients and nutritional claims. At this time, our products are largely unproven in the commercial arena. Market acceptance may depend on many factors, including factors beyond our control, including but not limited to:

· price

· aroma

· taste

· ingredients

· nutritional claims; and

· word-of-mouth recommendations by pet owners

Increases in raw materials, packaging, oil and natural gas costs and volatility in the commodity markets may adversely affect our results of operations.

Our financial results depend to a large extent on the costs of raw materials, packaging, oil and natural gas, and our ability to pass the costs of these materials onto our customers. Historically, market prices for commodity grains and food stocks have fluctuated in response to a number of factors, including economic conditions such as inflation, changes in U.S. government farm support programs, changes in international agricultural trading policies, impacts of disease outbreaks on protein sources and the potential effect on supply and demand as well as weather conditions during the growing and harvesting seasons. Fluctuations in paper, steel and oil prices, which affect our costs for packaging materials, have resulted from changes in supply and demand, general economic conditions and other factors. In addition, we have exposure to changes in the pricing of oil and natural gas, which affects our manufacturing, transportation and packaging costs.

If there is any increase in the cost of raw materials, packaging, or oil and natural gas expenses, we may be required to charge higher selling prices for our products to avoid margin deterioration. We cannot provide any assurances regarding the timing or the extent of our ability to successfully charge higher prices for our products, or the extent to which any price increase will affect future sales volumes. Our results of operations may be materially and adversely affected by this volatility.

Restrictions imposed in reaction to outbreaks of "mad cow disease," "foot-and-mouth,” "bird flu" or other animal diseases could adversely impact the cost and availability of our protein-based raw materials.

The cost of the protein-based raw materials used in our products has been adversely impacted in the past by the publicity surrounding bovine spongiform encephalopathy, which is also known as "mad cow disease," and which is a terminal brain disease for cattle. Cases of bovine spongiform encephalopathy were found in Europe, among other areas, in late 2000, and in Canada and the United States in 2003. As a result of extensive global publicity and trade restrictions imposed to provide safeguards against this disease, the cost of alternative sources of the protein-based raw materials used in our products, such as soybeans, pork meat and bone meal, has from time to time increased significantly and may increase again in the future if additional cases of bovine spongiform encephalopathy are found.

In 2001, an outbreak of foot-and-mouth disease was discovered in Europe. Foot-and-mouth disease affects animals with cloven hooves, such as cattle, swine, sheep, goats and deer. While foot-and-mouth disease is not considered a threat to humans, people who come in contact with the virus can spread it to animals. Any break out of foot-and-mouth disease could adversely affect the availability of our protein-based raw materials.

In 2004, a case of highly pathogenic avian influenza, and commonly known as the "bird flu," was detected in the United States. Highly pathogenic avian influenza virus was identified as the H5N2 strain and, while classified as highly virulent to birds, has not been shown to affect humans, and is not related to the highly publicized H5N1 strain of the Asian highly pathogenic avian influenza virus. The H5N1 strain of of the Asian highly pathogenic avian influenza virus first emerged in Hong Kong in 1997, re-emerged in 2003 in South Korea, and is is known to have spread to China, Vietnam, Thailand, Cambodia, Laos, Indonesia, Turkey, Romania, Russia and Greece. 71 of the ~~approximately~~ approximately 138 people who are known to have contracted the virus associated with the H5N1 strain, purportedly from exposure to infected birds, have died. In an effort to limit the spread of the H5N1 strain, governmental authorities have been ordering the destruction of infected flocks of birds and imposing bans against imports of poultry from countries where the virus is known to exist. These measures may adversely impact the price and availability of our sources of chicken meal and other protein-based raw materials used in our products.

In an effort to limit the spread of the H5N1 strain, governmental authorities have been ordering the destruction of infected flocks of birds and imposing bans against imports of poultry from countries where the virus is known to exist. These measures may adversely impact t he price and availability of our sources of chicken meal and other protein-based raw materials used in our products.

If bovine spongiform encephalopathy, foot-and-mouth disease, highly pathogenic avian influenza or any other animal disease impacts the availability of the protein-based raw materials used in our products, we may be required to locate alternative sources for protein-based raw materials. We can give no assurance that those sources would be available to sustain our sales volumes, that these alternative sources would not be more costly or that these alternative sources would not affect the quality and nutritional value of the All American Pet brand. If outbreaks of bovine spongiform encephalopathy, foot-and-mouth disease, highly pathogenic avian influenza or any other animal disease or the regulation or publicity resulting there from impacts the cost of the protein-based raw materials used in our products, or the cost of the alternative protein-based raw materials necessary for our products as compared to our current costs, we may be required to increase the selling price of our products to avoid margin deterioration. We can give no assurance regarding the timing or the extent of our ability to successfully charge higher prices for our products, or the extent to which any price increase will affect future sales volumes.

We are dependent on third party manufacturers who may not provide us with the quality competitive products at reasonable prices.

We do not have the required financial and human resources or capability to manufacture our own products. Accordingly, our business model calls for the outsourcing of the manufacturing of our products. We must enter into agreements with other companies that can assist us and provide certain capabilities, including sourcing and manufacturing, which we do not possess. We may not be successful in entering into such alliances on favorable terms or at all. Even if we do succeed in securing such agreements, we may not be able to maintain them. Furthermore, any delay in entering into agreements could delay the production or commercialization of our products or reduce their competitiveness even if they reach the market. Any such delay related to such future agreements could adversely affect our business.

We have been and will continue to be materially dependent on a limited number of non-affiliated third parties for the manufacture and production of our dog food.

The Company is dependent upon one non-affiliated prime contract manufacturer with three non-affiliated component manufacturers to produce its Pawtizer™ product. The Company has one non-affiliated dry dog food manufacturer and one non-affiliated manufacturer of its Nutra-Bar™ product line. We ~~do not~~are ~~maintain supply agreements with these parties, but instead purchase products through the use of purchase orders in the ordinary course of business. We will be substantially~~ dependent on ~~the~~third ~~ability of these parties to, among other things, meet our performance~~party ~~and~~manufacturers ~~quality~~who ~~specifications. Failure by these parties to comply with these and other requirements could have a material adverse effect on the Company. Furthermore, these parties~~ may not ~~dedicate~~provide sufficient production capacity to meet our scheduled delivery requirements, and they may not have sufficient production capacity to satisfy our requirements during any period of sustained demand. Their failure to supply, or their delay in supplying us with ~~products, could have a material adverse effect on~~ the ~~Company. In addition,~~quality ~~the~~competitive ~~success of our~~ products isat ~~significantly~~reasonable dependent on mass merchant, pet centers, drug stores, and supermarket demand for our products, and if we fail to secure orders from mass merchant, pet centers, drug stores or supermarkets for our products (and any subsequent decrease in such orders) would have a material adverse effect on usprices.

We do not have the required financial and human resources or capability to manufacture our own products. Until we obtain these resources and capabilities, if ever, our business model calls for the outsourcing of the manufacturing of our products. We must enter into agreements with other companies that can assist us and provide certain capabilities, including sourcing and manufacturing, which we do not possess. We may not be successful in entering into such alliances on favorable terms or at all. Even if we do succeed in securing such agreements, we may not be able to maintain them. Furthermore, any delay in entering into agreements could delay the production or commercialization of our products or reduce their competitiveness even if they reach the market. Any such delay related to such future agreements could adversely affect our business.

We have been and will continue to be materially dependent on a limited number of non-affiliated third parties for the manufacture and production of our products.

The Company is dependent upon one non-affiliated prime contract manufacturer with three non-affiliated component manufacturers to produce its PAWtizer™ product. The Company has one non-affiliated dry dog food manufacturer and one non-affiliated manufacturer of its NutraBar™ product line. We do not maintain supply agreements with these parties, but instead purchase products through the use of purchase orders in the ordinary course of business. We will be substantially dependent on the ability of these parties to, among other things, meet our performance and quality specifications. Failure by these parties to comply with these and other requirements could have a material adverse effect on the Company. Furthermore, these parties may not dedicate sufficient production capacity to meet our scheduled delivery requirements, and they may not have sufficient production capacity to satisfy our requirements during any period of sustained demand. Their failure to supply, or their delay in supplying us with products, could have a material adverse effect on the Company. In addition, the success of our products is significantly dependent on mass merchant, pet centers, drug stores, and supermarket demand for our products, and if we fail to secure orders from mass merchant, pet centers, drug stores or supermarkets for our products (and any subsequent decrease in such orders) would have a material adverse effect on us.

Furthermore, in March 2007, The Federal Food and Drug Administration announced that it found the chemical Melamine in pet foods manufactured in the United States. Melamine, a chemical banned in this country and used to make plastics and fertilizer in Asia was detected in wheat gluten used as an ingredient in wet-style canned pet products. The FDA issued a recall of more than 100 brands of pet food, which amounted to more than 60 million cans of tainted pet food. Because the melamine ingested food caused acute kidney failure, the FDA confirmed about 15 pet deaths, however the number of pet deaths related to kidney failure was believed to be in the thousands.

If our products do not gain market acceptance, it is unlikely that we will become profitable.

· price

· aroma

· taste

· ingredients

· nutritional claims; and

· word-of-mouth recommendations by pet owners

If we or our customers are the subject of product liability claims, we may incur significant and unexpected costs and our business reputation could be adversely affected.

We may be exposed to product liability claims and adverse public relations if consumption or use of our products is alleged to cause injury or illness. ~~Our~~Because ~~insurance~~the Company ~~may~~self-insures ~~not~~its ~~be adequate to cover all liabilities we incur in connection with~~ product liability ~~claims.~~exposures, ~~We may not be able to continue to maintain our existing insurance or obtain comparable insurance at~~ a ~~reasonable cost, if at all. A~~ product liability judgment against us or our agreement to settle a product liability claim could also result in substantial and unexpected expenditures, which ~~would~~ ~~reduce~~could ~~operating~~potentially ~~income~~require ~~and~~us ~~cash~~to ~~flow~~cease operations. In addition, even if product liability claims against us are not successful or are not fully pursued, defending these claims would likely be costly and time-consuming, and may require management to spend time defending the claims rather than operating our business. Product liability claims, or any other events that cause consumers to no longer associate our brand with high quality and safety may decrease the value of our brand and lead to lower demand for our products. Product liability claims may also lead to increased scrutiny of our operations by federal and state regulatory agencies, and could have a material adverse effect on our brands, business, results of operations and financial condition.

We are subject to extensive governmental regulation, and our compliance with existing or future laws and regulations, as well as the possibility of any mandatory product recalls imposed by future regulations, could cause us to incur substantial expenditures.

We are subject to a broad range of federal, state and local laws and regulations intended to protect public health, natural resources and the environment. Our operations are subject to regulation by OSHA, the FDA, the DOA and various state and local authorities regarding the processing, packaging, storage, distribution, advertising and labeling of our products, including food safety standards. Violations of or liability under any of these laws and regulations may result in administrative, civil or criminal penalties against us, revocation or modification of applicable permits, environmental investigations or remedial activities, voluntary or involuntary product recalls, or cease and desist orders against operations that are not in compliance. These laws and regulations may change in the future, and we may incur material costs in our efforts to comply with current or future laws and regulations or in any required product recalls. These matters may have a material adverse effect on our business.

Negative publicity resulting from recalls on pet foods in the United States could negatively affect the sales and marketability of our products.

In March 2007, the FDA discovered certain contaminants in vegetable proteins imported into the United States from China. Subsequently, the FDA began investigating an imported rice protein concentrate that contained melamine, which may have been used as an ingredient in some pet foods. As a result of this investigation, a number of dog food manufacturers recalled dog foods that contained the chemical melamine, which is banned in the United States, in dog food that contained wheat gluten. Even though our products do not use wheat gluten, any recall of dog food products and resulting publicity or regulations may adversely affect the Company and the sales of our products.

If we experience product recalls, we may incur significant and unexpected costs and our business reputation could be adversely affected.

We may be exposed to product recalls and adverse public relations if our products are alleged to cause injury or illness or if we are alleged to have violated governmental regulations. A product recall could result in substantial and unexpected expenditures, ~~which~~as ~~would~~well ~~reduce~~as ~~our~~sales ~~operating~~declines, ~~income~~which would ~~and~~negatively impact our cash flows. In addition, a product recall may require significant management attention. Product recalls may damage the value of our brand and lead to decreased demand for our products. Product recalls may also lead to increased scrutiny by federal, state and local regulatory agencies, and could have a material adverse effect on our brand, business, results of operations and financial condition.

Our lack of product and business diversity could inhibit our ability to adapt our business to industry changes and developments.

We are currently engaged in the dog food business and other pet wellness products targeting dogs. Additionally, our efforts to date have been concentrated in high-end ~~products~~ products and super-premium dry dog foods. Our current business plan is focused on the development, manufacturing and sale of dog sanitizers and nutrition treats. This lack of diverse business operations exposes us to significant risks. Our future success ~~may~~ may be dependent upon our success in developing and expanding our areas of concentration and upon the general economic success of the dog food industry. In addition, decline in the market demand for our products could have a material adverse effect on our brand, business, results of operations and financial condition.

We are highly dependent upon our marketing efforts.

The success of our business is significantly dependent on our ability to market our products to supermarkets, grocery stores, mass merchants, drug stores, and specialty pet stores., Weas ~~must~~well ~~increase~~as the ~~level of awareness of unique breakfast food for dogs in~~ general, ~~and our products in particular~~public. We will be required to devote substantial management and financial resources to these marketing and advertising efforts, and it is possible we will not be successful in these efforts.

Nondisclosure agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

We rely in part on nondisclosure agreements with our employees, consultants, agents and others to whom we disclose our proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such parties. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. Since we rely on trade secrets and nondisclosure agreements to protect some of our intellectual property, there is a risk that third parties may obtain and improperly utilize our proprietary information to our competitive disadvantage. We may not be able to detect unauthorized use or take appropriate and timely steps to enforce our intellectual property rights.

If we lose our key personnel or are unable to attract and retain additional personnel, we may be unable to achieve profitability.

Our future success is substantially dependent on the efforts of our senior management, particularly Barry Schwartz, our Chief Executive Officer, and a director of the Company; and Lisa Bershan, our President and a director of the Company. The loss of the services of either Mr. Schwartz or Ms. Bershan, who are husband and wife and are the only two Company directors, may significantly delay or prevent the achievement of product development and other business objectives. If we lose their services, or do not successfully recruit key personnel, the growth of our business could be substantially impaired. At present, we do not maintain key person insurance for any of our senior management.

The Company’s Board of Directors does not adequately provide management oversight and accountability.

The Company’s Board of Directors is presently comprised of only two individuals and they are also the Company’s Chief Executive Officer and President. Furthermore, these two individuals are husband and wife. As a result of this corporate structure, the Board of Directors is not independent of management, and therefore, has no ability to oversee management’s financial and operational performance and hold management accountable for the achievement of the Company’s goals and objectives.

We may not be able to attract or retain qualified senior personnel.

We believe we are currently able to manage our current business with our existing management team. However, as we expand the scope of our operations, we will need to obtain the full-time services of additional senior management and other personnel. Competition for highly skilled personnel is intense, and there can be no assurance that we will be able to attract or retain qualified senior personnel. Our failure to do so could have an adverse effect on our ability to implement our business plan. As we add full-time senior personnel, our overhead expenses for salaries and related items will increase from current levels and, depending upon the number of personnel we hire and their compensation packages, these increases could be substantial.

Our common stock is thinly traded and largely illiquid.

Our stock is currently quoted on the Over the Counter (“Pink Sheets”). Being quoted on the Pink Sheets has made it more difficult to buy or sell our stock and from time to time has ~~lead~~led to a significant decline in the frequency of trades and trading volume. Continued trading on the Pink Sheets will also likely adversely affect the Company’s ability to obtain financing in the future due to the decreased liquidity of the Company’s shares and other restrictions that certain investors have for investing in Pink Sheets traded securities. While the Company intends to seek listing on the NASDAQ Stock Market (“NASDAQ”) or another stock exchange, when the Company is eligible, there can be no assurance when or if the Company’s common stock will be listed on NASDAQ or another stock exchange.

The market price of our stock is subject to volatility.

Because our stock is thinly traded, its price can change dramatically over short periods, even in a single day. An investment in our stock is subject to such volatility and, consequently, is subject to significant risk. The market price of our common stock could fluctuate widely in response to many factors, including:

· developments with respect to patents or proprietary rights;

announcements of product innovations by us or our competitors;

· announcements of new products or new ~~contracts~~customers by us or our competitors;

actual or anticipated variations in our operating results due to the level of development expenses and other factors;

· changes in financial estimates by securities analysts and whether any future earnings of ours meet or exceed such estimates;

conditions and trends in our industry;

· new accounting standards;

general economic, political and market conditions and other factors; and

the occurrence of any of the risks described in this report.

You may have difficulty selling our shares because they are deemed “penny stocks”.

Because our common stock is not quoted on the NASDAQ National Market or NASDAQ Capital Market or listed on a national securities exchange, if the trading price of our common stock remains below $5.00 per share, trading in our common stock will be subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-NASDAQ equity security that has a market price of less than $5.00 per share, subject to certain exceptions). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally defined as an investor with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with a spouse). For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of the common stock and the ability of holders of the common stock to sell their shares.

You may have difficulty selling our shares because they are deemed “penny stocks”.

Because our common stock is not quoted on the NASDAQ Global Market or NASDAQ Capital Market or listed on a national securities exchange, if the trading price of our common stock remains below $5.00 per share, trading in our common stock will be subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-NASDAQ equity security that has a market price of less than $5.00 per share, subject to certain exceptions). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally defined as an investor with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with a spouse). For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of the common stock and the ability of holders of the common stock to sell their shares.

We have not and do not anticipate paying dividends in the foreseeable future.

We have not paid any cash dividends to date with respect to our common stock. We do not anticipate paying dividends on our common stock in the foreseeable future since we will use all of our earnings, if any, to finance expansion of our operations. However, we are authorized to issue preferred stock and may in the future pay dividends on the preferred stock that may be issued.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal executive offices are presently located at ~~1880~~1100 ~~Century~~Glendon ~~Park East~~Ave, ~~Suite~~17th ~~1402~~Floor, Los Angeles, California ~~90067~~90024. The Company ~~subleases~~leases 31,~~250~~000 square feet of office space for $75,~~000~~326 per month ~~ending~~for its corporate offices on ~~July~~a ~~31,~~month-to-month ~~2014~~lease. The Company ~~executive~~also ~~offices~~subleases ~~were~~19,000 ~~previous~~square feet of a 33,000 square foot warehouse located at ~~9601~~8310 ~~Wilshire~~Hedge ~~Blvd, Suite~~Lane ~~M200~~Terrace, ~~Beverly Hills~~Shawnee, ~~California 90210~~Kansas.

The Company ~~also subleases 19,000 square~~ ~~feet of a 33,000 square foot warehouse located at 8310 Hedge Lane Terrace, Shawnee, Kansas. The Company~~ utilizes the Shawnee premises for light manufacturing, business offices and warehouse storage facilities. The Shawnee ~~facility~~ facility lease commenced on April 16, 2012 and runs for a 5 year minimum term with monthly rent of $8,371, taxes of $2,336, insurance of of $~~162~~218, and $110 in common area maintenance fees, plus utilities, as incurred. The Company also holds an option to purchase ~~the~~ the entire property at the expiration of the third year of the ~~Lease~~lease at a price based upon the most current assessment of the ~~County~~ County Appraiser’s office and on terms acceptable to the Lessor and ~~Lessee~~us.

In July 2011, the Company vacated the leased premises in Nebraska City, Nebraska that was used as the Company’s warehouse and production facility. The Company surrendered its dog food inventory valued at $98,164 and the rental security deposit of $3,300. The Company also returned $122,450 of leased equipment to the lessor. The early termination of the Nebraska City Leases and the abandonment or return of the assets located there resulted in an impairment of inventory charge of $98,164 and a loss on abandonment of machinery and equipment of $7,812.

ITEM 3. LEGAL PROCEEDINGS

The Company ~~was and~~ is involved in various litigation involving ~~trade creditors~~vendors, ~~professionals and former employees. A videographer filed suit in Small Claims Court in Mercer,~~ New Jersey for $2,000 and received a default judgment in November 2007. The Company has contacted the plaintiff in this matter, but no settlement agreement has been concluded. A materials handling company was granted a judgment for $3,654 by Superior Court of California on January 18, 2008. There has been no further collection activity on this account. A media company filed a suit to collect unpaid fees dating from October 30, 2007 of $71,033. The media company was granted a judgment for $71,033 by Los Angeles Superior Court on April 6, 2010, which is still owed by the Company. There have been no efforts on the part of the media company to collect the judgment and the Company believes that it will be able to settle the amount for a reduced final payment. Three former employees ~~hold judgments for unpaid wages in the amounts of $9~~,~~274,~~ ~~$15,600~~ and $16,995 from labor board judgments in 2008. With penalties and accrued interest, the three labor judgments amounted to $60,529 as of December 31, 2011. An internet marketing company filed suit against the Company and agreed to arbitration which was settled for $20,000 in October 2010. There have been no payments made on this settlement. A public relations firm obtained a ~~judgment~~promissory ~~in the amount of $44,323 on April 9, 2010 for fees owed for services~~noteholder. ~~There has been no collection activity and the Company intends to negotiate a reduced settlement of the final balance owed.~~

An accounting firm that provided services to the Company obtained a judgment through arbitration that was confirmed by the Circuit Court in West Palm Beach for $150,000 on August 25, 2010. Subsequent to the balance sheet date, on July, 23, 2012, the attorneys for the accounting firm filed an action in the Circuit Court in and for the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, against the Company and CEO, Barry Schwartz and President, Lisa Bershan as individuals, seeking $150,000 in principal plus 6% interest from the default date of March 19, 2010, legal fees of $49,950, arbitrator fees, a filing fee of $3,781 and a state court fee of $1,200.Vendors

AAs ~~grocery~~of ~~services~~December ~~company~~31, ~~filed~~2011, toone ~~substitute~~vendor had ~~attorneys~~a onsettlement ~~its~~agreement ~~filing~~for ~~to collect~~ $2220,000. inDuring ~~fees~~2012, ~~for~~six ~~advertising~~vendors ~~services~~made onclaims ~~February~~or ~~22,~~were ~~2011. The~~awarded ~~expense~~judgments ~~was~~against ~~incurred~~the Company for a total inof ~~2009~~$364,473, and related payments of $2,000 were made. The ~~Company~~balance ~~believes~~outstanding itto ~~will~~these bevendors ~~settled~~at ~~for~~December a31, ~~nominal~~2012, was $382,473 and such amount ~~based~~has onbeen ~~the~~accrued ~~age~~for ofin the ~~payable~~Company’s December 31, 2012 consolidated balance sheet.

On ~~February~~July 323, ~~2011~~2012, ~~through mediation, the Company and~~ a ~~Federal~~vendor ~~Bankruptcy~~filed ~~Trustee~~an ~~settled~~action against ~~litigation with a former sales person in which~~ the ~~former sales~~Company ~~person~~and ~~would~~certain ~~return~~officers ~~750,000~~as ~~shares~~individuals offor ~~Company~~an ~~stock~~original ~~valued at~~ $90150,000 injudgment ~~exchange~~previously ~~for~~awarded ~~payments~~in ~~of $92~~arbitration,~~069~~ ~~over a 14~~4.75% ~~month~~interest, ~~period.~~legal ~~The~~fees ~~Federal Bankruptcy trustee will return all~~ of ~~the shares to the Company once all of the payments are made to the Bankruptcy Trustee. The Company has recorded a~~ $9049,~~000~~950, ~~liability~~and toother ~~the~~fees ~~former~~of ~~employee and a~~ $904,~~000 common stock receivable for the shares being held by the bankruptcy trustee~~981. The ~~Bankruptcy~~action ~~Trustee~~has ~~received~~not ~~$2,069~~been inheard ~~2011 from monies levied~~ by ~~the~~a ~~Los Angeles County Sheriff~~court. The ~~shares~~Company ~~will~~has ~~remain in the bankruptcy trustee possession until the~~recognized ~~outstanding~~$221,463 ~~balance due is paid~~ in ~~full.~~its ~~As of~~ December 31, ~~2011,~~2012 ~~the~~consolidated balance ~~due~~sheet ~~the~~relating ~~Federal~~to ~~Bankruptcy~~this ~~trustee was $90,000~~matter.

Former Employees

As of December 31, 2011, six former employees made claims or were awarded judgments against the Company for a total of $211,961. During 2012, one former employee entered into a settlement agreement for $50,000, and there were no payments. The balance outstanding at December 31, 2012 was $268,245, and includes accrued interest. Such amount has been accrued for in the Company’s December 31, 2012 consolidated balance sheet.

On April 6, 2010, the Company settled litigation with one of the six former employees. Terms of the settlement required the former employee to place 400,000 shares of Company stock valued at $52,000 in an escrow account in exchange for an initial payment of $8,000 and 27 monthly payments of $1,571. The Company will receive the shares of Common stock after all of the payments have been made. The Company made no payments in 2012 and $3,342 in 2011. The outstanding balance at December 31, 2012 and 2011 was $31,432.

On February 3, 2011, through mediation, the Company settled litigation with one of the former six former employees. Terms of the settlement required the former employee to place 750,000 shares of Company stock valued at $90,000 in an escrow account in exchange for 14 monthly payments of $6,576. The Company will receive the shares of Common stock after all of the payments have been made. The Company made no payments in 2012 and $2,069 in 2011. The outstanding balance at December 31, 2012 and 2011 was $90,000.

On January 18, 2013, All American Pet Company, Inc. (the “Company”) filed an action entitled All American Pet Company, Inc. vs. Eric Grushkin et al, in the Superior Court of the State of California, County of Los Angeles, West District against defendant Eric Grushkin (Case Number: SC119776). As previously announced, on January 11, 2013, the Company was made aware that a former employee sent communications that contained intentionally misleading and harmful disclosures as well as confidential information regarding the Company to a selected group of shareholders. These communications included allegations that the Company’s chief executive officer and president engaged in acts of malfeasance, misfeasance and negligence in the management and conduct of the Company business. The Company believes that this employee made multiple unauthorized disclosures of confidential information and misinformation to these shareholders on January 10, 2013 and thereafter. The complaint seeks damages and injunctive relief for:

breach of contract

misappropriation of trade secrets

intentional interference with prospective economic advantage

breach of fiduciary duty

violation of computer fraud and abuse act, and

conversion

Motions made by the defendant to remove to U.S. District Court and then to Dismiss have been denied. Other motions by the defendant have also been denied. This matter is currently pending in California State Court.

OnPromissory March 11, 2011, a judgment of $2,068, plus costs of $80, was entered in small claims court in Beverly Hills, California against the Company and Mr. Schwartz and Ms. Bershan for animal training services rendered. On July 24, 2012, the Company settled this dispute in full for $500.Noteholder

On ~~April~~August 69, ~~2010~~2012, the Company settled ~~litigation~~ litigation with ~~a former controller in which~~ the ~~former~~holder ~~controller agreed to return 400,000 shares~~ of ~~Company~~a ~~stock~~promissory ~~valued~~note ~~at $52,000 in exchange~~ for $8300,000. ~~and~~Interest ~~payments~~accrues ofat ~~$1,571 over a 27 month period~~8%. ~~The~~Terms ~~former~~of ~~controller delivered~~ the ~~shares~~settlement torequire ~~an escrow agent and the~~quarterly ~~escrow~~payments ~~agent will return all~~ of ~~the~~$30,000 ~~shares~~beginning toOctober ~~the~~1, ~~Company~~2012. ~~once~~Total ~~all of the~~ payments ~~are~~during ~~made~~2012 towere ~~the former employee~~$80,000. The ~~shares will remain in the escrow account until the~~ outstanding balance ~~due~~as ~~is paid in full. The Company made two payments~~ of $1December 31,~~571~~ ~~for a~~2012, ~~total~~was of $3227,~~142~~281 ininclusive ~~the year ended December 31, 2011. As~~ of ~~December~~accrued ~~31, 2011, the balance due the former controller was $31,432~~interest.

OnIn ~~May 5, 2011,~~ the ~~lessor~~event of ~~the Company’s leased office facility filed suit in the Superior Court of the State of California (West District) for unpaid rent from January 1~~default, ~~2011 through April 14, 2011 in~~ the ~~amount of $23,387 plus damages estimated at $225 per day commencing~~noteholder ~~April~~can ~~15,~~enter ~~2011.~~a Onstipulated ~~June~~judgment 2,against ~~2011,~~ the Company and ~~the~~certain ~~lessor~~officers ~~agreed~~as toindividuals ~~resolve~~in the ~~matter~~amount ~~with the Company making one payment~~ of $141,~~000 on or before June 10~~197,190. ~~2011~~As ~~and three monthly payments~~ of ~~$7,000 thereafter on or before July 10, August 10 and~~the ~~September~~date ~~10,~~of ~~2011,~~this ~~respectively. Additionally~~filing, the Company ~~would~~has ~~vacate~~not made the ~~premises~~required inJanuary ~~good~~1 ~~condition~~or ~~prior~~April ~~to September 30~~1, ~~2011.~~2013 Onpayments ~~July 13, 2011, the agreement was modified~~ and the ~~lessor~~noteholder ~~agreed~~has tonot ~~apply the Company’s cashier’s~~filed ~~check in~~ the ~~amount~~stipulated ~~of $3,500 to additional legal expenses incurred by the lessor in addition to $6,260 of legal fees reflected in the~~ judgment ~~and~~against the ~~remaining $625 in the lessor’s legal fees by July 28, 2011. Subsequent to the modified letter agreement of July 13, 2011, the~~ Company ~~made rent and legal expense payments to the lessor totaling $31,263 and vacated the premises prior to September 30, 2011~~. ~~The Company also surrendered its $39,000 deposit to the lessor upon vacating the premises.~~

OnFrom ~~April~~time 4to ~~2012~~time, awe ~~former~~are ~~human~~involved ~~resources~~in ~~coordinator~~other atlitigation ~~the~~arising ~~Company filed suit against the Company and its subsidiaries~~ in the ~~Superior~~normal ~~Court~~course of ~~California, West District Beverly Hills Courthouse, for unpaid severance stemming from a November 12, 2010 severance agreement between the Company and the former Human Resources coordinator~~business. ~~Pursuant~~Management tobelieves ~~the~~that ~~terms~~resolution of ~~the~~these ~~November~~other ~~12,~~matters ~~2010~~will ~~agreement, the Company was to pay a total of~~not ~~$30,000~~result in ~~$1,000~~any ~~monthly~~payment ~~payments over 30 months commencing on December 15~~that, ~~2010.~~in Asthe ~~of September 21~~aggregate, ~~2012,~~would ~~the~~be ~~Company~~material ~~has not made any of the payments pursuant~~ to ~~the~~our ~~severance~~financial ~~agreement~~position ~~and~~or ~~the~~results ~~Company~~of ~~intends to defend against the severance claim made by the former human resources coordinator~~operations.

On June 7, 2012, a media subcontractor filed suit in the small claims division of the Superior Court of California, County of Los Angeles, West District in Santa Monica pursuant to the terms of a services subcontract dated February 29, 2012. The Company defended in this action and attempted to negotiate a rescheduling of the subcontracted work. On July 7, 2012, judgment was rendered in favor of the media subcontractor in the amount of $4,585 plus costs of $50.

On August 9, 2012, the Company settled litigation with the holder of a $150,000 note bearing interest at 10% which was in default at December 31, 2011. Under the terms of the settlement, the Company will pay the note holder $300,000 with 8% interest accruing on the unpaid balance. The Company made two payments of $25,000 on August 13, 2012 and will make nine additional quarterly payments of $30,000 commencing on October 1, 2012 and continuing through October 1, 2014. A final payment of $4,265 is due on January 1, 2015. In the event of any default of this settlement agreement, the note holder can enter a stipulated judgment against the Company, and CEO Barry Schwartz and President, Lisa Bershan, as individuals, in the amount of $1,197,190.

ITEM 4. MINE SAFETY DISCLOSURES

~~None~~Not applicable.

Market Information

The ~~Company’s~~table ~~common~~below ~~stock~~represents ~~had~~the ~~been~~quarterly ~~quoted~~high onand ~~the~~low ~~OTCBB~~bid ~~under~~prices ~~the~~for ~~symbol “AAPT”. In April of 2008~~ the Company’s common stock, ~~has been~~ quoted ~~on the “Pink Sheets”~~ under the symbol “AAPT.PK”, for the last two fiscal years as reported by OTCMarkets.com.

The table below represents the quarterly high and low bid prices for the Company’s common stock for the last two fiscal years as reported by the Pink Sheets.

	2011				2012
	High		Low		High		Low
First Quarter	$	0.045	$	0.006	$	0.01	$	0.01
Second Quarter	$	0.030	$	0.010	$	0.07	$	0.01
Third Quarter	$	0.020	$	0.001	$	0.04	$	0.01
Fourth Quarter	$	0.005	$	0.001	$	0.04	$	0.01

	2011				2010
	High		Low		High		Low
First Quarter	$	0.045	$	0.006	$	0.130	$	0.060
Second Quarter	$	0.030	$	0.010	$	0.120	$	0.051
Third Quarter	$	0.020	$	0.001	$	0.075	$	0.035
Fourth Quarter	$	0.005	$	0.001	$	0.070	$	0.200

As of June 14, 2013, there were approximately 269 holders of record of our common stock.

Dividends

The Company has never declared or paid a cash dividend to stockholders. The board of directors presently intends to retain any earnings, which may be generated in the future to finance Company operations.

2726

Capital Stock

All American Pet Company, Inc. was initially organized under the laws of the State of New York (“All American Pet Company, Inc. NY”) in February 2003. In January 2006, All American Pet Company, Inc. NY merged into All American Pet Company, Inc. a Maryland ~~corporation~~Corporation (“All American Pet Company, Inc. MD”). All American Pet Company, Inc. MD was formed under Maryland law on January 4, 2006 with 50,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock. On October 13, 2009, All American Pet Company, Inc., MD, held a stockholders’ meeting and the stockholders voted to increase the authorization of common stock from 50,000,000 shares to 250,000,000 shares. On February 28, 2011, ~~the~~ All American Pet Company, Inc. ~~Maryland~~ MD held a stockholders meeting and voted to increase the authorized number of $0.001 par value Common stock from 250,000,000 to 500,000,000. In June 2012, All America Pet Company, Inc. MD merged into a Nevada Corporation, (“All American Pet Company, Inc. ~~NV”).~~ Concurrent with the merger into All American Pet Company, Inc. NV, the Board of Directors voted to increase the authorized number of common shares outstanding to 1,010,000,000. In June 2013, our authorized number of common shares was increased to 3,000,000,000.

Private Offerings of Common Shares

During the year ended December 31, ~~2011~~2012, the Company received and accepted subscriptions for ~~608~~285,~~442~~544,000 shares of unregistered common stock at $0.01 per share. The sale of equity securities resulted in a capital increase of $~~608~~ 3,~~442~~012,441, ~~before~~after offering costs ~~of $80,079~~. The Company recorded a $~~569~~677,~~642~~156 common stock payable on ~~its books~~ at December 31, ~~2011~~2012 to reflect the value of the ~~$411~~77,~~942~~598,571 of common shares not yet issued ~~and~~for cash receipts and $~~157~~187,~~700~~894 of common stock value earned by various consultants during the year ~~ending~~ended December 31, ~~2011~~2012. As of December 31, ~~2011~~ 2012, there were ~~254~~695,~~804~~494,866 shares of ~~common~~issued ~~stock~~and outstanding.

Conversion of Preferred Stock to Common Stock

InOn February 27, 2009, the Company entered into an agreement with the two preferred stockholders to convert all 56,500 shares of Series “A” Preferred shares held by them in exchange for 5,000,000 shares of the Company’s common stock (the “Share Guarantee”). The delivery of the common stock to the preferred stockholders took place in March 2009 and the Company was released by the stockholders ~~(the "Releases") from~~ from any and all future claims and liabilities. The preferred stockholders have the right to sell the common stock at a rate of 1,250,000 in the aggregate every 90 days starting May 15, 2009 and the right to sell at will after March 31, 2010. The Company has agreed that the total value of the shares sold over the Liquidation Period, which is defined as the period from May 15, 2009 to April 30, 2010, to be at a minimum of $800,000 or the market value of 5,000,000 shares at $0.16 per share. If the value of the shares sold during the Liquidation Period is less than $800,000, then the Company will have the right to purchase any unsold shares at a price of $0.16 per share. If the gross proceeds from all sales ~~are~~is still less than $800,000 then the Company shall have the right and not the obligation to make up the difference by making a cash payment on or before May 31, 2010. In addition, no later than June 15, 2010, the Company ~~will~~is obligated to issue an additional 3,000,000 shares of the common stock in total to these stockholders if the sales proceeds and any additional payments made by the Company is less than $800,000. This agreement was extended on May 25, 2010 to August 31, 2010 with an agreement to issue an additional 1,000,000 shares as compensation for the extension and 3,000,000 were issued on May 26, 2010 based on the terms of the original agreement that called for the shares to be issued if the value was not paid on or before June 15, 2010. During the nine months ended September 30, 2010, the Company recorded an $800,000 share guarantee expense to account for the obligation described above. The June 1, 2010 amendment to the March 7, 2009 agreement was amended to extend the liquidation period to achieve the $800,000 guaranteed liquidation value to March 31, 2011. The Company issued an additional 2,000,000 shares of Common stock as the fee for this extension. As of December 31, 2011, the share guarantee liability totaled $600,000.

28The Share Guarantee was subsequently amended to extend the Liquidation Period described above to March 31, 2011 and those amendments required the Company to issue 6,000,000 shares of common stock with a fair value of $400,000 in 2010. In connection with the Share Guarantee, the Company recognized an additional expense, and a corresponding accrued liability, of $600,000 in 2010.

~~Warrants~~In ~~Issued~~October ~~with~~2012, ~~Shares~~the ofShare ~~Common~~Guarantee ~~Stock~~was amended, subject to the Company’s ability to satisfy certain required payments and other conditions. As the Company did not satisfy its contractual obligations, the amendment was cancelled and became null and void.

~~There~~Although ~~were~~the noCompany’s ~~warrants~~contractual obligations ~~issued~~under the Share Guarantee terminated in 2011, management intends to fulfill the Company’s obligations under the related agreements and ~~2010~~amendments. Based on the $800,000 amount of the guarantee, amounts realized by the counterparties from selling related shares, and the number of shares the counterparties have left to sell, management estimates the Company’s obligation under the Share Guarantee to be $400,000 as of December 31, 2012.

~~Warrants Outstanding~~ 27

AWarrants ~~summary of the Company’s outstanding warrants and activity for the year ended December 31, 2011 and 2010 is as follows:~~

	Number of Units		Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2009		10,237,031		0.16
Expired in 2010		3,437,031
Outstanding at December 31, 2010		6,800,000		0.16
Expired in 2010		1,800,000
Outstanding at December 31, 2011		5,000,000		0.16

There were no warrants issued in 2012 and 2011. As of December 31, 2012, the Company has 5,000,000 warrants outstanding with a weighted average exercise price per share of $0.17. The warrants were issued to the Chief Executive Officer and the President and expire in August 2018.

Stock Receivable

~~The~~As ~~Company~~described ~~has~~under ~~moved~~“Legal ~~forward with settling~~Proceedings”, ~~former~~on ~~employee litigation. See Item 1 of Part II. On~~ April 6, 2010, the Company settled litigation with a former controller in which the former controller agreed to return 400,000 shares of Company stock valued at $52,000 in exchange for $8,000 and payments of $1,571 over a 27 month period. The former controller delivered the shares to an escrow agent and the escrow agent will return all of the shares to the Company once all of the payments are made to the former employee. On In addition, on February 3, 2011, through mediation, the Company and a Federal Bankruptcy Trustee settled litigation with a former sales person in which the former employee would return 750,000 shares of Company stock valued at $90,000 in exchange for payments of $92,069 over a 14 month period. The Federal Bankruptcy trustee will return all of the shares to the Company once all of the payments are made to the Bankruptcy Trustee. The Company has recorded a $90,000 liability to the former sales person and a $90,000 common stock receivable for the shares being held by the bankruptcy trustee. As Atof December 31, 2012 and 2011, common stock receivable ~~was~~aggregated $142,000.

Common Shares to Vendors and Consultants

During the year ended December 31, ~~2010~~2011, the Company ~~issued~~did ~~72,228,830~~not issue shares of common stock ~~valued at $4,286,910~~ to ~~various~~ consultants, vendors and/or professionals for services ~~rendered~~ ~~and to be~~ rendered. ~~Since~~ ~~some~~During the ~~shares were issued for services to be performed over a period of time the Company~~ ~~recorded~~year asended ~~prepaid~~December ~~expenses~~31, and the value is amortized over the service period. All restricted trading shares were valued based on the price of the ongoing private placement. All free trading shares were valued on these issuances based on the market price of the shares as quoted on the primary quotation service where the shares are traded on the date of issue. Shares were issued at prices ranging from $0.04 per share to $0.12 per share. Of the total shares issued2012, the Company issued 210,~~250~~650,000 shares of ~~its~~unregistered ~~restricted~~ common stock ~~valued at $135,000 to pay finder’s fees for referred funding sources. Of the total shares issued, the company negotiated to pay accrued fees to two marketing consultants~~ with ~~shares~~a offair ~~restricted~~value ~~common stock. The Board~~ of ~~Directors authorized the transaction on April 7, 2010. Accrued fees of~~ $6187,~~693~~894 ~~were converted~~ to ~~334~~ consultants,~~628~~ ~~shares~~vendors ~~of common stock~~ and/or ~~$59,554~~professionals infor ~~accrued~~services ~~fees was converted to 2,977,714 shares of common stock~~rendered.

During the year ending December 31, 2010 the Company issued 6,000,000 shares of common stock to two individuals related to the conversion of preferred stock to common stock described above. The fair value of the shares was $400,000. See paragraph above titled “Conversion of Preferred Stock to Common Stock”.28

In addition to the shares issued for cash the Company also used shares to pay for services to retain working capital in the year ending December 31, 2010. The Company issued 11,000,000 shares of its Common stock at a price of $.06 per share valued at $540,000 on September 30, 2010 to pay for talent, production costs and media time for a series of video advertisements to promote the launch of its products and build brand recognition for the Company and its products. The Company issued 2,500,000 shares of Common stock on September 30, 2010 for technical production expertise to consultants at a price of $.06 per share valued at $150,000. The Company issued 2,750,000 shares of its Common stock for distribution and manufacturing advisors in the European Community at a price of $.06 per shares for a value of $165,000. The Company issued 7,000,000 for financial advisory and public relations services from advisors in the European Community in September of 2010 at a price of $.06 per share for a value of $420,000. The Company issued 4,500,000 shares of Common stock to reimburse the Company’s sales and distribution licensee for the costs of delays experienced by the Company in being able to deliver its products. The shares were issued to cover the settlement of these expenses for the 12 months ending December 31, 2010 in the amount of 4,500,000 shares at $.06 per share valued at $270,000. AAP Sales and Distribution Inc.’s operations have been consolidated with All American Pet Company Inc, based on accounting guidelines for Variable Interest Entities. Shares were issued to the Company’s marketing consultant based on converting $80,000 of debt to 2,000,000 shares of Common stock. The Company issued 3,000,000 shares as a distributor fee for the distribution agreement for sales in the New York Tri-state area in the amount of 3,000,000 shares of Common stock the price was $.06 per shares and valued at $180,000.

During the year ended December 31, 2011 the Company did not issue restricted shares of common stock to consultants, vendors and/or professionals for services rendered. The Company has recorded a Common stock payable in the amount of $157,500 at December 31, 2011 for the value of services rendered to the Company that are to be paid in common stock.

Related Party Transactions

On ~~April~~March 56, 2012, ~~2010~~the Board of Directors, acomprised ~~former~~of ~~officer~~the ~~converted~~Chief Executive Officer and the President, who are husband and wife, authorized the Company to execute a ~~note~~Convertible inRevolving ~~the~~Grid ~~amount~~Note for a principal sum of up to $161,~~176~~000,000 towith ~~808~~the Chief Executive Officer,~~793~~ Barry ~~shares~~Schwartz ofand ~~restricted~~the ~~Common~~President, ~~stock~~Lisa Bershan. The ~~fair~~Grid ~~value~~note bears interest at 10% per year and may be converted into common stock of the ~~shares~~Company ~~was~~at a conversion price of $480.0022 any time before March 6,~~528~~ 2013. On March 1, 2013, this Note was renewed with the following changes to the terms: Interest rate was lowered to 6.5% per year and the ~~difference~~maturing date was amended to be due and payable not later than 48 months from the original issue date of the Revolving Grid Note. See Form 8-K filed on March 1, 2013. As of December 31, 2012, no advances on the Note were made. As of June 14, 2013, a total of $32521,~~352~~000 ~~was~~has ~~charged~~been advanced to ~~interest~~the ~~expense~~Company on this Grid Note whereby increasing the holders’ beneficial ownership by 236,818,181 shares of common stock. As of June 14, 2013, no portion of this Note has been converted into shares of common stock.

OnDuring ~~April 8, 2010,~~ the ~~Board~~year ofended ~~Directors reached~~December an31, ~~agreement with certain officers of~~ 2012, the Company tomade ~~convert~~advances ~~their past due accrued salary~~ to, ~~shares~~and ofreceived ~~common~~advances ~~stock. Lisa Bershan~~from, ~~President,~~an ~~converted~~entity ~~$90,645~~owned inby ~~accrued~~the ~~salary~~Company’s toChief ~~4,532,267~~Executive ~~shares,~~Officer. ~~the~~These advances ~~former~~are ~~CFO~~not ~~converted~~collateralized ~~$30,000~~and todo ~~1,500,000 shares~~not ofbear ~~common~~interest. ~~stock,~~As ~~and~~of ~~Barry~~December ~~Schwartz~~31, ~~CEO~~2012, ~~converted~~no ~~$93,400~~amounts inare ~~accrued~~due ~~salary~~from toand ~~4,669,986~~no ~~shares~~amounts ofare ~~common~~due to ~~stock~~this related entity.

There were no related party transactions in the year ending December 31, 2011 other than deferred officer salary transactions.

On March 6, 2012, the Board of Directors authorized the Company to execute a Convertible Revolving Grid Note for a principal sum of up to $1,000,000 with CEO Barry Schwartz and President, Lisa Bershan. The Grid note bears interest at 10% per year and may be converted into common stock of the Company at a conversion price of $0.0022 any time before March 6, 2013. Neither Mr. Schwartz nor Ms. Bershan has advanced capital under the terms of the grid note as of September 21, 2012.

On April 30, 2012, subsequent to the balance sheet date, the Board of Directors approved salary advances not to exceed $250,000 for Mr. Schwartz and Ms. Bershan in 2012, The Board of Directors requires that all salary advances are repaid in full before any transactions pursuant to the grid note are consummated. The Company made salary advances to Mr. Schwartz and Ms. Bershan, which the balance of officer advances as of September 21, 2012 is $332,299.

Securities Authorized for Issuance Under Equity Compensation Plans

The Board of Directors adopted the 2010 Non-Qualified Professional, Consultant, & Employee Stock Compensation Plan on September 8, 2010. The purpose of the Plan is to provide compensation in the form of ~~Common~~common ~~Stock~~stock of the Company to eligible professionals, consultants and employees that have previously rendered services or that will render services during the term of the 2010 Plan. The total number of shares of ~~Common~~common ~~Stock~~stock to be subject to this Plan is 35,000,000.

31The Plan shall be administered by the Board of Directors, subject to the Company’s Bylaws, all decisions made by the Directors in selecting eligible Common Stockholders, establishing the number of shares, and construing the provisions of this Plan shall be final and conclusive. Shares shall be granted only to Professionals, Consultants and Employees that are within that class for which Form S-8 is applicable.

~~The~~During ~~Plan shall be administered by~~ the ~~Board of~~years ~~Directors,~~ended ~~subject~~December ~~to the Corporation’s Bylaws~~31, ~~all~~2012 and ~~decisions made by the Directors in selecting eligible Common Stockholders~~2011, ~~establishing~~ ~~the~~no ~~number~~common of shares, ~~and~~were ~~construing~~issued under the ~~provisions of this~~ Plan ~~shall be final and conclusive~~. ~~Shares shall be granted only to Professionals, Consultants and Employees that are within that class for which Form S-8 is applicable.~~

~~During~~Purchases ~~the~~of ~~year~~Equity ~~ended~~Securities ~~December~~by ~~31, 2010~~the ~~there~~Issuer ~~were~~or ~~19,750,000~~Affiliated ~~shares~~Purchasers ~~issued under the Plan. In the year ending December 31, 2011, no common shares were issued under the Plan.~~

None.

ITEM 6. SELECTED FINANCIAL DATA

Pursuant to item 301(e) of Regulation S-K , smaller reporting companies are not required to provide the information required by this section.

~~ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~29

~~Overview~~ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All American Pet Company, Inc. (“AAPT”) is a developer and marketer of innovative pet wellness products including super premium dog foods and antibacterial wipes. In 2010 and 2011, AAPT produced, marketed, and sold two super-premium dog foods under the brand names Grrr-nola®Natural Dog Food and Chompions®. Both Grrr-nola®Natural Dog Food and Chompions® were the first dog food products that were formulated for canine heart health and endorsed by a veterinary cardiac surgeon. The Company has launched its line of Pawtizer™ pet wipes and spray, the pet care industry’s first alcohol-free anti-bacterial dog cleaner. The Company has also announced and is preparing to market its Mutt™ Great Food for Great Dogs super premium dry kibble dog food, and its Nutra Bars™ line of portable, convenient and functional, super premium 4 ounce dog food bars. Each 4 ounce bar has a kcal equivalent of 8 ounces of super premium dry dog food. Overview

~~History~~All American Pet Company, Inc. (“AAPT” and the “Company”) is a developer and marketer of innovative pet wellness products including super premium dog foods and antibacterial wipes. In 2011, AAPT produced, marketed, and sold two super-premium dog foods under the brand names Grrr-nola®Natural Dog Food and Chompions®. Both Grrr-nola®Natural Dog Food and Chompions® were the first dog food products that were formulated for canine heart health and endorsed by a veterinary cardiac surgeon. The Company has launched its line of PAWtizer™ pet wipes and spray, the pet care industry’s first alcohol-free anti-bacterial dog cleaner. The Company has also announced and is preparing to market its ~~Current~~Mutt™ Great Food for Great Dogs super premium ~~Status~~dry kibble dog food, and its NutraBars™ line of portable, convenient and functional, super premium 4 ounce dog food bars. Each 4 ounce bar has a kcal equivalent of 8 ounces of super premium dry dog food.

~~All~~History ~~American Pet Company, Inc., was initially organized under the laws~~ of the ~~State of New York (“All American Pet~~ Company, Inc. NY”) in February 2003. In January 2006, All American Pet merged into All American Pet Company, Inc. a Maryland corporation (“All American Pet Company, Inc. MD”). In June of 2012, All America Pet Company Inc. merged (the “Merger”) into a Nevada Corporation (“All American Pet Company, Inc. NV”). The Company has formed a number of wholly owned subsidiaries to provide for accountability of each of its operations. All American PetCo, Inc. was formed in January of 2008 to provide corporate infrastructure and management services. All American Pet Brands, Inc. was formed in April of 2009 to be the Company’s warehousing and manufacturing operation. In September of 2009 the Company signed a license and distribution agreement with AAP Sales and Distribution Inc. a third party company that obtained the rights to manufacture and sell certain of the Company’s products on a non-exclusive basis. AAP Sales and Distribution Inc.’s operations have been consolidated with All American Pet Company, Inc. based on accounting guidelines for Variable Interest Entities. As used in this report, the terms “The Company” and “AAPT” refers to All American Pet Company, Inc. NY and All American Pet Company, Inc. MD before the Merger, and to All American Pet Company, Inc. NV, All American Pet Company, Inc. and its ~~wholly owned subsidiaries and Variable Interest Entities after the Merger.~~Current Status

32All American Pet Company, Inc. was initially organized under the laws of the State of New York (“All American Pet Company, Inc. NY”) in February 2003. In January 2006, All American Pet Company, Inc. NY merged into All American Pet Company, Inc. a Maryland Corporation (“All American Pet Company, Inc. MD”). In June of 2012, All America Pet Company Inc. merged (the “Merger”) into a Nevada Corporation (“All American Pet Company, Inc.”). The Company has formed a number of wholly owned subsidiaries to provide for accountability of each of its operations. All American PetCo, Inc. was formed in January of 2008 to provide corporate infrastructure and management services. All American Pet Brands, Inc. was formed in April of 2009 to conduct the Company’s warehousing and manufacturing operation. In September of 2009 the Company signed a license and distribution agreement with AAP Sales and Distribution Inc., a third party company that obtained the rights to manufacture and sell certain of the Company’s products on a non-exclusive basis. AAP Sales and Distribution Inc.’s operations have been consolidated with All American Pet Company, Inc. based on accounting guidelines for Variable Interest Entities. As used in this report, the terms “The Company” and “AAPT” refers to All American Pet Company, Inc. MD before the Merger, and to All American Pet Company, Inc., and its wholly owned subsidiaries and Variable Interest Entities after the Merger.

The Company has never operated at a profit and is dependent upon additional financing to remain a going concern. ~~The~~Although the Company ~~has~~ obtained ~~substantial~~approximately ~~new~~$3,000,000 ~~equity~~from the ~~capital~~sale ~~and continues~~of tothe ~~seek~~Company’s ~~new~~unregistered ~~equity~~common stock during 2012, the Company requires substantial capital to ~~sustain~~execute ~~operations~~its business plan and pay its debts. The Company remains under significant financial strain primarily because of its low level of sales, past due debts and limited operating funds. The limited amount of operating capital may preclude the Company’s ability to execute its manufacturing, marketing, and distribution objectives or to continue operations. No assurance can be given that the Company will secure adequate funds to sustain operations or that it will continue as a going concern.

Our executive offices are located at 1880 Century Park East, Suite 1402, Los Angeles, California 90067 and our telephone number at that location is (310) 432-9032. Our websites are www.allamericanpetcompany.com and www.pawtizer.Com. The information on our websites are not, and shall not be deemed to be, a part of this report or incorporated by reference into this or any other filing we make with the Securities and Exchange Commission (the “SEC”).30

~~Liquidity~~Our executive offices are located at 1100 Glendon Ave., ~~Capital~~17th ~~Resources~~Floor, Los Angeles, California 90024 and ~~Going~~our telephone number at that location is ~~Concern~~(310) 689-7355. Our websites are www.allamericanpetcompany.com, www.nutrabar.com, www.pawtizer.com, www.facebook.com/nutrabar, www.facebook.com/pawtizer, www.vetresearchlibrary.com, http://issuu.com/nutrabar and http://bewelllivelong.wordpress.com. The information on our websites are not, and shall not be deemed to be, a part of this report or incorporated by reference into this or any other filing we make with the Securities and Exchange Commission (the “SEC”).

~~Our liquidity requirements arise principally from our working capital needs~~Liquidity, ~~including~~Capital ~~the~~Resources ~~cost of goods, inventory, marketing~~ and ~~payroll and general and administrative costs.~~Going ~~In the future we intend to fund our liquidity requirements through a combination of cash flows from operations and external financings.~~Concern

Our ~~principal~~liquidity ~~sources~~requirements ofarise ~~liquidity~~principally ~~have~~from ~~been sales of equity securities and borrowings. To meet~~ our ~~current~~working ~~requirements~~capital ~~to operate~~needs, ~~the~~including ~~Company has sold common stock and is currently attempting to undertake~~ the ~~sale~~cost of ~~additional equity securities. As new funds are obtained~~goods, ~~our principal uses of capital would be to meet our operating requirements~~inventory, ~~production~~marketing, ~~marketing~~officer ~~and~~compensation ~~advertising expenditures,~~ and ~~make~~payroll ~~investments in inventory. Additional cash could be used to reduce past due taxes~~ and ~~other debts~~ general and ~~payables~~administrative costs. ~~Until cash~~In ~~generated~~the ~~from~~future, ~~operations~~we isintend ~~sufficient~~ to ~~satisfy~~fund our ~~future~~ liquidity requirements, ~~we will be investigating purchase order and accounts receivable funding from different sources, as well as other sources of capital. We will also be looking to seek equity capital~~ through ~~the~~a ~~issuance~~combination of ~~additional~~cash ~~common~~flows ~~stock with other round(s) of funding. As of December 31, 2011,~~from ~~there~~operations ~~were no commitments or other known sources for this funding. Subsequent to the balance sheet date, the Company’s founders, CEO Barry Schwartz~~ and ~~President~~external ~~Lisa Bershan committed to provide up to $1,000,000 in funding to the Company, in the form of a grid note convertible into common stock at $0~~financings.~~0022 per common share. If these funds are obtained, it would result in additional dilution to our stockholders.~~

33Our principal sources of liquidity have been sales of equity securities and borrowings. To meet our current requirements to operate, the Company has sold unregistered common stock and is currently attempting to undertake the sale of additional equity securities. As new funds are obtained, our principal uses of capital are to meet our operating requirements, production, marketing and advertising expenditures, and make investments in inventory and equipment. Additional funds could be used to reduce past due taxes and other debts and payables. Until cash generated from operations is sufficient to satisfy our future liquidity requirements, we will be investigating purchase order and accounts receivable funding from different sources, as well as other sources of capital. We will also be looking to seek equity capital through the issuance of additional common stock. As of December 31, 2012, there were no commitments or other known sources for this funding other than a $1,000,000 credit facility commitment from the Company’s, Chief Executive Officer, Barry Schwartz, and President, Lisa Bershan, provided to the Company in March 2012. On March 1, 2013, this credit facility was renewed with the following changes to the terms: Interest rate was lowered to 6.5% per year and the maturing date was amended to be due and payable not later than 48 months from the original issue date of the Revolving Grid Note. As of December 31, 2012, no advances were made under this facility. As of June 14, 2013, a total of $521,000 has been advanced to the Company under the amended credit facility and such amount is convertible into 236,818,181 shares of the Company’s common stock. Our need for significant future funding will likely result in significant additional dilution to our stockholders.

Because of our lack of funding and limited ability to adequately market our products, the Company has experienced slotting fees in excess of gross sales, and incurred high costs in manufacturing and marketing our products. As a result, we have experienced large operating losses and negative cash flow. We have funded our operations primarily through the issuance of equity securities and debt. Additional capital infusions will be needed to manufacture, distribute and promote our products, sustain operations and make payments and settlements of existing debts and obligations. We believe that our future profitability will depend on the commercial and consumer acceptance of our products, effective marketing strategies, efficient production and proper execution of our business plan, as to all or any of which no assurance can be given. Additionally, success with our external financing strategies will be needed to effectuate our business plans. Our limited operating history makes it difficult to evaluate our prospects for success and our revenue and profitability potential, particularly for newly introduced products, is unproven. Furthermore, there can be no assurance that our external financing strategies will yield any capital or the amount of capital necessary to execute our business plan.31

InBecause ~~their~~of ~~report~~our inlack ~~connection~~of ~~with~~funding ~~our~~and limited ~~2011~~ability ~~financial~~to ~~statements,~~adequately market our ~~independent~~products, ~~registered~~the ~~public~~Company ~~accounting~~has ~~firm~~experienced ~~included~~slotting anfees ~~explanatory~~in ~~paragraph~~excess ~~stating~~of ~~that~~gross sales, ~~because we~~and incurred ahigh costs ~~net~~in ~~loss~~manufacturing ofand $2marketing our products. Further,~~366~~ the Company has incurred significant fixed costs,~~832~~ including officer compensation, occupancy and public company costs. As a result, we have experienced large operating losses and negative cash flow. We ~~from~~have funded our operations primarily through the issuance of ~~$608,244~~equity ~~for~~securities ~~the~~and ~~year~~debt. ~~ended~~Additional ~~December~~capital 31infusions will be needed to manufacture, ~~2011~~distribute and promote our products, sustain operations and make payments and settlements of existing debts and ~~had~~obligations. aWe ~~working~~believe ~~capital~~that ~~deficit~~our future profitability will depend on the commercial and consumer acceptance of $4our products,~~733~~ effective marketing strategies,~~192~~ efficient production and aproper ~~stockholders'~~execution ~~deficit~~of our business plan, as to all or any of $5which,~~010~~ no assurance can be given. Additionally,~~050,~~ ~~these~~success ~~matters~~with ~~raise~~our ~~substantial~~external ~~doubt about~~financing strategies will be needed to effectuate our ~~ability~~business plans. Our limited operating history makes it difficult to ~~continue~~evaluate asour aprospects ~~going~~for ~~concern~~success and our revenue and profitability potential, particularly for newly introduced products, is unproven. Furthermore, there can be no assurance that our external financing strategies will yield any capital or the amount of capital necessary to execute our business plan.

~~Results~~In ofits ~~Operations~~report ~~for~~in ~~the~~connection ~~Year~~with our 2012 ~~Ended~~consolidated ~~December~~financial 31statements, ~~2011~~our ~~compared~~independent ~~with~~registered ~~the~~public ~~Year~~accounting ~~Ended~~firm ~~December~~included ~~31,~~an ~~2010~~explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.

~~The~~Results ~~following~~of ~~discussion~~Operations offor the ~~results~~Year ofEnded ~~operations~~December ~~should~~31, be2012 ~~read~~compared ~~in conjunction~~ with ~~our~~the ~~financial~~Year ~~statements~~Ended ~~and notes thereto for years ended~~ December 31, 2011 ~~and December 31, 2010 included in this Annual Report.~~

~~For~~The ~~the~~following ~~year~~discussion ~~ending~~of ~~December~~the ~~31, 2011,~~results ~~gross sales decreased by $86,872 as sales~~ of ~~both~~operations ~~Grrr-nola®~~should ~~Natural~~be ~~Dog~~read ~~Food and Chompions® were suspended~~ in ~~the~~conjunction ~~year~~with ~~ending~~our ~~December~~consolidated ~~31,~~financial ~~2011.~~statements ~~Net~~and ~~sales~~notes ~~declined~~thereto ~~from~~for ~~$20~~each inof the ~~year~~ years ended December 31, ~~2011~~2012 toand ~~($82,153) as slotting fees decreased from ($146,578) in the year ending~~ December 31, ~~2010 to ($141,879) in the year ending December 31,~~ 2011. ~~Cost~~included ~~of goods sold decreased from $101,349 to $58,670~~ in ~~the~~this ~~year~~Annual ~~ending December 31, 2011, consistent with the suspension of product sales in the year ending December 31, 2011~~Report.

For the year ~~ending~~ended December 31, ~~2011~~2012, gross sales ~~and marketing expenses~~ decreased by $~~696~~35,~~201,~~025 from ~~$1,113,409~~prior ~~in the~~ year ~~ending~~due ~~December 31, 2010~~ to ~~$417,208 in~~ the ~~year ending~~suspension ~~December~~of ~~31,~~sales ~~201.~~of ~~The~~both ~~decrease~~Grrr-nola® Natural isDog ~~attributable~~Food toand aChompions® ~~decrease~~combined ofwith ~~$530,109~~the delay in ~~advertising~~going ~~and~~to ~~promotion,~~market awith ~~decrease~~two ofnew ~~$106,454~~products: ofPAWtizer™ ~~consulting~~ and ~~research,~~NutraBar™. aNet ~~decrease~~sales offor ~~$62,412~~the inyear ~~public~~ended ~~relations~~December ~~and website expenses~~31, a2012 ~~decrease~~increased of $31106,~~558~~854 inover ~~product~~the ~~and package~~prior ~~development~~year ~~and~~due to athe ~~net~~absence ~~increase~~ of ~~$34,332~~slotting fees in ~~other sales and marketing activity~~2012. ~~General~~Cost ~~and~~of ~~Administrative~~goods ~~expenses~~sold ~~were~~ decreased ~~by $3,744,094~~ from $558,~~256,644~~670 ~~in the year ended December 31, 2010~~ to $110,~~512,550~~463 in the year ended December 31, ~~2011.~~2012, ~~This~~consistent ~~amount~~with ~~consisted~~the ~~of a~~ decrease of ~~$2,437,637~~sales. inSales ~~consulting expenses, a decrease of $654,799~~ in ~~legal,~~2012 ~~accounting,~~related ~~trademark and~~principally ~~other~~to ~~professional~~sales ~~services, a decrease~~ of ~~$94,837~~PAWtizer™ ~~in payroll~~ and ~~payroll~~the ~~taxes, a decrease of $85,426 in office expenses,~~Company’s agross ~~decrease~~margin inon ~~facilities~~these ~~expense~~sales ofwas ~~$47,170, a decrease in officer compensation of $104,676, and a net decrease of $319,549 in other general and administrative expenses~~58%.

34For the year ended December 31, 2012, sales and marketing expenses increased by $65,872, from $417,208 in the year ended December 31, 2011 to $483,080 in the year ended December 31, 2012. The increase is attributable to advertising expenses required to bring two new products, PAWtizer™ and NutraBar™, to market.

~~During~~General ~~the~~and ~~year~~administrative ~~ended~~expenses increased ~~December~~by 31$1, ~~2011~~202, ~~the~~477, ~~Company~~from ~~vacated~~$1,512,550 in the ~~warehouse~~year ~~and~~ended ~~manufacturing~~December ~~facility~~31, in2011 ~~Nebraska~~to ~~City~~$2,715,027 ~~Nebraska.~~in ~~Upon~~the ~~vacating~~year ofended ~~the~~December ~~facility~~31, ~~the company~~ ~~discarded~~2012. ~~the~~This onincrease ~~hand~~is ~~product~~primarily ~~inventory~~attributable asto ~~the~~an ~~Company~~increase ~~had~~of ~~determined~~executive ~~that~~compensation in the ~~cost~~amount toof ~~store~~$341,172, ~~and~~increased facility orexpense ~~sell~~for the ~~remaining~~Shawnee, ~~inventory exceeded~~Kansas ~~the~~factory ~~net~~and ~~proceeds~~warehouse ~~that could be realized from an orderly disposal~~ of ~~this~~$343,648, ~~inventory.~~and ~~The~~increased ~~transaction~~payroll ~~resulted~~expense ~~in an impairment charge~~ of $98343,~~164~~706 required into bring the ~~year~~new ~~ending~~products ~~December~~to ~~30, 2011~~market.

InDuring the year ended December 31, ~~2011~~2012, ~~the~~ the Company ~~cancelled~~recognized a ~~capital~~gain ~~lease~~on ofdebt aforgiveness ~~bar~~to ~~forming~~a ~~machine~~former ~~and~~officer ~~returned~~in the ~~equipment~~amount toof ~~the~~$131,911, ~~lessor.~~which ~~The~~was ~~transaction~~partially ~~resulted~~offset inby other losses attributable to settlements and judgments resulting in a ~~write-down~~net ofgain ~~warehouse~~on ~~equipment~~forgiveness ~~from~~of ~~$122,450~~debt toof $079,851. The Company also recognized a ~~loss~~gain ~~on abandonment~~ of ~~machinery~~$200,000 ~~and~~attributable ~~equipment of~~to ~~$7,812~~an inadjustment to the ~~year~~Share ~~ending~~Guarantee ~~December~~liability ~~31,~~as ~~2011~~discussed in Item 5.

~~Impact of Recently Issued Accounting Statement~~ 32

~~See~~Inventories ~~Note~~grew #3in 2012 resulting in an inventory balance of PAWtizer™ in the amount of $715,869 by December 31, 2012. Investments in machinery and equipment grew from $2,542 as of December 31, 2011 to $69,366 as of December 31, 2012 consistent with the ~~Notes~~build-out of facilities necessary to ~~Financial~~begin ~~Statements~~production of NutraBar™. Deposits were made for other production equipment not received by December 31, 2012 in –the ~~“New~~amount ~~Accounting~~of ~~Pronouncements”~~$79,490.

~~Critical~~Impact ~~Accounting~~of ~~Policies/Estimates~~Recently Issued Accounting Statement

~~Use~~See ofNote ~~Estimates~~3 to the Notes to Consolidated Financial Statements – “New Accounting Pronouncements.”

~~The preparation of financial statements~~Critical inAccounting conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Management believes that the estimates used are reasonable. Significant estimates made by management include estimates for bad debts, excess and obsolete inventory, coupon liabilities and other trade spending liabilities.Policies/Estimates

~~Revenue~~Our ~~Recognition~~consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. In preparing these financial statements, ~~Sales~~we ~~Incentives~~make assumptions, judgments and estimates that can have a significant impact on amounts reported in our financial statements. We base our assumptions, judgments and ~~Slotting~~estimates ~~Fees~~on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis we evaluate our assumptions, judgments and estimates and make changes accordingly. We believe that, of the significant accounting policies discussed in our consolidated financial statements, the following accounting policies require our most difficult, subjective or complex judgments:

~~Revenues~~Revenue ~~are recognized upon passage of title to the customer~~Recognition, ~~typically~~Sales ~~upon product pick-up, shipment or delivery to customers. The Company’s revenue arrangements~~Incentives ~~with its customers often include sales incentives~~ and other promotional costs such as coupons, volume-based discounts, slotting fees and off-invoice discounts. These costs are typically referred to collectively as “trade spending”. Pursuant to ASC Topic 605, these costs are recorded when revenue is recognized and are generally classified as a reduction of revenue. Slotting ~~fees~~ ~~refer~~Fees to arrangements pursuant to which the retail grocer allows our products to be placed on the store’s shelves in exchange for a slotting fee. Given that there are no written contractual commitments requiring the retail grocers to allocate shelf space for twelve months, we expense the slotting fee at the time orders are first shipped to customers.

35Revenues are recognized upon passage of title to the customer, typically upon product pick-up, shipment or delivery to customers. The Company’s revenue arrangements with its customers often include sales incentives and other promotional costs such as coupons, volume-based discounts, slotting fees and off-invoice discounts. These costs are typically referred to collectively as “trade spending.” Pursuant to ASC Topic 605, these costs are recorded when revenue is recognized and are generally classified as a reduction of revenue. Slotting fees refer to arrangements pursuant to which the retail grocer allows our products to be placed on the store’s shelves in exchange for a slotting fee. Given that there are no written contractual commitments requiring the retail grocers to allocate shelf space for twelve months, we expense the slotting fee at the time orders are first shipped to customers.

Stock-based compensation

The Company records stock -based compensation in accordance with the guidance in ASC Topic 718, which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic ~~value~~ value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.33

Transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date on which it is probable that performance will occur.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by ~~ITEM~~Item 8 is included on pages F-1 to F-25.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company engaged De Joya Griffith, LLC to audit the financial statements for each of the years ended December 31, 2011 and 2010, and review each of the three month periods ending March 31, June 30, and September 30, 2011, and 2010None.

During the Company's two most recent fiscal years and the subsequent interim period through the date of engagement of De Joya Griffith, LLC, the Company did not consult De Joya Griffith, LLC regarding either (i) the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's financial statements; or (ii) any matter that was the subject of a disagreement.

ITEM 9A. CONTROLS AND PROCEDURES

Our management, with the participation of the Company’s ~~Chief~~Principal Executive Officer and Principal Financial ~~and Accounting~~ Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s Principal ~~Chief~~ Executive Officer and Principal Financial Officer have concluded that as of December 31, ~~2011~~2012, the Company’s ~~disclosure~~ disclosure controls and procedures were not effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Principal Financial and Accounting Officer, as appropriate to allow timely discussions regarding required disclosure; due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure that our consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our consolidated financial condition, results of operations, changes in stockholders’ equity and cash flows for the periods presented.

~~Management Report on Internal Control Over Financial Reporting~~ 34

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed 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. The Company’s internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

~~All~~A ~~internal~~material ~~control~~weakness ~~systems,~~is noa ~~matter~~control deficiency ~~how~~(within ~~well~~the ~~designed,~~meaning ~~have~~of ~~inherent~~Public ~~limitations.~~Company ~~Therefore,~~Accounting ~~even~~Oversight ~~those~~Board ~~systems~~(“PCAOB”) ~~determined~~Auditing toStandard beNo. 5) ~~effective~~or ~~can provide only reasonable~~combination ~~assurance~~of ~~with~~control ~~respect to financial statement preparation and reporting. Also~~deficiencies, ~~projections~~that ofresults ~~any~~in ~~evaluation~~a ofreasonable ~~effectiveness~~possibility ~~to future periods are subject to the risk~~ that ~~controls~~a ~~may~~material ~~become~~misstatement ~~inadequate because~~ of ~~changes~~the inannual ~~conditions,~~ or ~~that~~interim ~~the degree~~financial ofstatements ~~compliance~~will ~~with~~not ~~the~~be ~~policies~~prevented or ~~procedures~~detected ~~may~~on ~~deteriorate~~a timely basis.

37Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2012 based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of management’s assessment and evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective due to the material weaknesses described below.

A· ~~material~~Inadequate ~~weakness~~resources. isThe Company did not consistently maintain a ~~control~~sufficient ~~deficiency (within~~complement ~~the~~of ~~meaning~~personnel with an appropriate level of ~~Public~~accounting ~~Company~~knowledge, ~~Accounting~~SEC ~~Oversight~~experience ~~Board~~and training to (~~“PCAOB”~~i) ~~Auditing~~ensure ~~Standard~~the ~~No. 5)~~timely orand ~~combination~~ accurate preparation of ~~control~~interim ~~deficiencies,~~and ~~that~~annual ~~results~~financial statements in ~~more~~accordance ~~than~~with aaccounting ~~remote~~principles ~~likelihood~~generally ~~that~~accepted ain ~~material~~the ~~misstatement~~United States of ~~the~~America ~~annual~~(U.S. orGAAP), ~~interim~~(ii) ~~financial statements~~effectively ~~will~~segregate ~~not~~certain beincompatible ~~prevented~~functions, orand ~~detected~~(iii) remediate previously communicated deficiencies. In addition, the Company placed substantial reliance on amanual ~~timely~~procedures ~~basis~~and detective controls that lacked adequate management monitoring for compliance.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the period covered by this report based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of management’s assessment and evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer concluded that our internal control over financial reporting was not effective due to the material weaknesses described below.35

~~Material~~· ~~Weaknesses~~Control environment. We did not maintain an effective control environment. Specifically, we did not maintain: (i) a documented risk assessment process that adequately addresses COSO objectives, (ii) sufficient anti-fraud controls, including a whistleblower program, formal written policies and procedures for the review and approval of transactions with related parties, a qualified and independent audit committee, and directors that are independent of management, (iii) adequate monitoring of existing controls over financial reporting and individual and corporate performance against expectations, (iv) appropriate human resource policies, such as background investigations and consistent performance reviews for key personnel, and (v) adequate documentation of actions taken by the Board regarding: fraud oversight, review and approval of external financial statements, actions supporting executive performance and compensation.

1· Period-end financial reporting processes. ~~The~~Effective ~~Company’s~~controls ~~management~~over ~~assessed~~period-end ~~the~~financial ~~effectiveness~~reporting ofprocesses ~~the~~were ~~Company’s~~not ~~internal~~maintained ~~control~~to ~~over~~effectively ~~financial~~ensure: ~~reporting~~(i) assignificant ofagreements, ~~December~~or 31amendments thereto, ~~2011.~~are Inanalyzed ~~making~~and ~~this~~accurately ~~assessment,~~accounted for in the ~~Company’s~~proper ~~management~~period, ~~used~~(ii) ~~the~~key ~~framework~~reconciliations, ~~set~~account ~~forth~~analyses, byand ~~the~~summaries ~~Committee~~are ofperformed ~~Sponsoring~~and ~~Organizations~~approved ofwith ~~the~~appropriate ~~Treadway~~resolution ~~Commission~~of reconciling items in ~~“Internal~~a ~~Control~~timely –manner, ~~Integrated~~(iii) ~~Framework.”~~journal ~~Based~~entries, onboth ~~this~~recurring ~~assessment~~and non-recurring, ~~management~~are ~~concluded~~analyzed ~~that~~and approved, as(iv) ofthe ~~December~~resulting 31financial information, ~~2011~~statements and disclosures are reviewed and appropriate checklists are used for compliance with U.S. GAAP, ~~the~~(v) ~~Company’s~~monthly ~~internal~~closing quality control ~~over~~checklists were used consistently and thoroughly to ensure all financial reporting ~~was~~procedures ~~not~~and ~~effective~~controls ~~based~~were onperformed, ~~this~~and ~~framework~~(vi) documented reviews of financial results are compared to budgets and expectations.

~~Management~~· ~~evaluated~~Cash ~~the~~expenditures. ~~impact~~Effective ofcontrols ~~ineffective control~~related ~~over~~to ~~financial~~expenditures ~~reporting~~were not maintained. Specifically, controls were not properly designed or operating effectively to ensure: (i) officer compensation, including benefits, are authorized, reviewed and ~~concluded~~approved ~~that~~on a timely basis, and are in accordance with contractual agreements and (ii) expenditures made by management contained adequate and appropriate supporting documentation to establish the ~~control~~related ~~deficiency~~business ~~represented~~purpose aof ~~material~~the ~~weakness~~expenditure.

2. In connection with the audit of our consolidated financial statements for the year ended December 31, 2011, our independent registered accounting firm, De Joya Griffith, LLC, reported to the Company’s Board of Directors that they observed inadequate review and approval of certain aspects of the accounting process that they considered to be a material weakness in internal control.

After a review of the Company’s current review and approval of certain aspects of the accounting process, management concluded that the inadequate review and approval process represented a material weakness.

Attestation Report of the Independent Registered Public Accounting Firm

This annual report does not include an attestation report by the Company’s registered public accounting firm regarding internal control over financial reporting, because Management’s report in the annual report was not subject to attestation by the Company’s independent registered public accounting firm, pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

Inherent Limitations on the Effectiveness of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control during 2011 over financial reporting (as such term is defined in Rules 13-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

As of December 31, 2011, the Company carried out an assessment under the supervision and with the participation of our Chief Executive and Principal Financial and Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(1) and I 5d-15(1)). Our Chief Executive Officer and Principal Financial and Accounting Officer concluded that the Company's disclosure controls and procedures were not effective as of December 31, 2011.

Material Weaknesses and Related Remediation Initiative

To remediate the material weaknesses identified above, we have done the following subsequent to December 31, 2011, which correspond to the two material weaknesses identified above.

1. In connection with the ineffective assessment of the Company’s internal control over financial reporting, management plans to implement additional controls to improve the effectiveness of the Company’s disclosure controls and procedures.

Management believes this remediation will remediate the corresponding material weakness described in Item 1, immediately above.

2. In connection with the reported inadequate review and approval of certain aspects of the accounting process, management has reiterated the Company’s current review and approval processes, to insure that all accounting reconciliations, journal entries and complex transactions are reviewed and approved on a timely basis.

Management believes this remediation has remediated the corresponding material weakness described in Item 2, immediately above.

Remediation of Internal Control Deficiencies and Expenditures

It is reasonably possible that, if not remediated, one or more of the material weaknesses described above could result in a material misstatement in our reported financial statements that might result in a material misstatement in a future annual or interim period. We are developing specific action plans for each of the above material weaknesses. We are uncertain at this time of the costs to remediate all of the above listed material weaknesses~~, however, we do not believe these costs will be significant and we expect to ratably incur the remediation costs during the year~~. ~~We cannot guarantee that the actual costs to remediate these deficiencies will not exceed this amount.~~

We believe that we are addressing the deficiencies that affected our internal control over financial reporting as of December 31, 2012. Because the remedial actions may require hiring of additional personnel, and relying extensively on manual review and approval, the successful operation of these controls for at least several quarters may be required before management may be able to conclude that the material weaknesses have been remediated. We intend to continue to evaluate and strengthen our internal control over financial reporting systems. These efforts require significant time and resources. If we are unable to establish adequate internal control over financial reporting systems, we may encounter difficulties in the audit or review of our financial statements by our independent registered public accounting firm, which in turn may have a material adverse effect on our ability to prepare financial statements in accordance with GAAP and to comply with our SEC reporting obligations.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the ~~most~~period ~~recently~~since ~~completed~~our ~~fiscal~~last ~~quarter~~quarterly report (September 30, 2012) and the date of this filing that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On January 1030, ~~2012~~2013, the ~~Company~~Board ~~executed~~of Directors approved a ~~sublease~~private ~~effective~~placement ~~January~~offering ~~15, 2012 for the rental~~ of ~~approximately~~up ~~3,217 of office space~~ to be200,000,000 ~~used~~shares ~~as the Company’s headquarters. The initial cost~~ of ~~the~~common ~~space~~stock ~~was~~at $~~5,800~~0.01 per ~~month and the term was month-to-month~~share. This ~~The~~offering ~~Company~~expired on ~~posted~~February ~~a $5~~28,~~800~~ ~~deposit for the use of the space~~2013. On March 161, ~~2012~~2013, the ~~Company~~Boarded ~~increased~~of ~~the~~Directors ~~square~~approved ~~footage~~a ~~utilized~~private ~~and~~placement ~~its~~offering ~~monthly~~of ~~payment~~up ~~was~~to ~~increased~~285, ~~accordingly~~714,000 shares toof common stock at $~~7,000~~0.007 per ~~month~~share.

On ~~March~~February 626, ~~2012~~2013, the Board of Directors authorized the Company to ~~execute~~amend athe Convertible Revolving Grid Note for a principal sum of up to $1,000,000 with ~~CEO~~Chief Executive Officer, Barry Schwartz , and President, Lisa Bershan, dated March 6, 2012. The ~~Grid~~amendment ~~note~~reduced ~~bears~~ interest atto 106.5% per year, extended the maturity date to four years, and extended the conversion date to October 31, 2013. Borrowings made under this credit facility may be converted ~~into~~by ~~common~~the ~~stock~~Chief Executive Officer and President into shares of the Company ’s common stock at a conversion price of $0.0022 ~~any~~per ~~time before March 6, 2013~~share. As of ~~September~~June 2114, ~~2012~~2013, ~~neither~~ Mr. Schwartz ~~nor~~and Ms. Bershan ~~has~~ have loaned ~~any~~$521,000 ~~money~~to the Company under the terms of the grid note, and such amount is convertible into 236,818,181 shares of the Company’s common stock.

~~During~~On February 12, 2013, the ~~three~~Company ~~months~~entered into ~~ended~~an ~~March~~unsecured, 31convertible promissory note with an unrelated third party for $103, ~~2012~~500, ~~the~~less ~~Company~~a ~~converted~~$3,500 fee. The loan bears interest at 8% per annum and a ~~convertible~~balloon ~~note~~payment ~~entered~~of ~~into~~principal and accrued interest is due on ~~December~~November 612, ~~2010~~2013. At ~~for~~any time ~~the~~180 ~~principal~~days ~~balance~~after the date of ~~$37~~the note,~~500~~ ~~and~~the ~~$7,495 in~~lender can convert the principal and accrued interest into ~~56,321,448~~ shares of the Company’s common stock ~~and~~at a 39% discount based on the ~~notes~~average ~~were~~of ~~deemed~~the ~~paid~~lowest inthree trading prices during a ten day period ending one day ~~full~~prior to the conversion date.

~~During~~On ~~the~~June, ~~three~~2013, ~~months~~the ~~ended~~Board ~~March~~of ~~31, 2012,~~Directors ~~the~~voted ~~Company~~to ~~converted~~increase anauthorized 8%shares ~~convertible~~of ~~note~~common ~~entered~~stock ~~into~~from on1 ~~February~~billion ten ~~11,~~million ~~2011~~to ~~for~~3 ~~the~~billion ~~principal~~shares. ~~balance~~As of ~~$75~~June 14,~~000~~ ~~and $12~~2013,~~740 of~~ ~~accrued~~there ~~interest~~were ~~into 76~~837,~~856~~929,~~713~~245 shares of common stock issued and ~~the~~outstanding ~~notes~~and 77,598,571 ~~were~~subscribed ~~deemed~~but ~~paid~~not ~~in full~~yet issued.

On April 4 2012, a former human resources coordinator at the Company filed suit against the Company and its subsidiaries in the Superior Court of California, West District Beverly Hills Courthouse, for unpaid severance stemming from a November 12, 2010 severance agreement between the Company and the former Human Resources coordinator. Pursuant to the terms of the November 12, 2010 agreement, the Company was to pay a total of $30,000 in $1,000 monthly payments over 30 months commencing on December 15, 2010. As of September 21, 2012, the Company has not made any of the payments pursuant to the severance agreement and the Company intends to defend against the severance claim made by the former human resources coordinator.37

OnDuring ~~April~~the ~~16,~~periods ~~2012,~~from ~~the~~January ~~Company~~1, ~~executed~~2013 ato ~~sublease~~June ~~for~~14, 2013, the ~~rental~~Company ofreceived ~~approximately~~and ~~19,000~~accepted ~~square~~subscriptions ~~feet~~for ~~of a 33~~2,500,000 ~~square~~shares ~~foot~~of ~~warehouse~~common ~~located~~stock at ~~8310~~$0.02 ~~Hedge~~per ~~Lane~~share ~~Terrace~~and 93, ~~Shawnee~~455,771 shares ~~Kansas. The~~of ~~Company~~common ~~utilizes~~stock ~~the~~at ~~Shawnee~~$0.007 ~~premises~~per ~~for~~share. ~~light~~The ~~manufacturing,~~sales ~~business~~of ~~offices~~equity ~~and~~securities ~~warehouse~~resulted ~~storage facilities. The~~in ~~Shawnee~~a ~~facility~~capital ~~lease~~increase ~~runs~~of ~~for~~$704,190, abefore ~~five~~offering costs. ~~year~~Had ~~minimum~~the ~~term~~current ~~with~~balance ~~monthly~~of ~~rent~~the ofGrid Note ($8521,~~371,~~000) ~~taxes~~been ofconverted $2into shares,~~336, insurance~~ shares of ~~$162,~~common ~~$110~~stock inissued ~~common~~and ~~area~~outstanding would ~~maintenance~~increase ~~fees~~to 1,074,747,426. ~~plus~~(See ~~utilities~~ITEM 7, asLiquidity, ~~incurred~~Capital Resources and Going Concern).

On May 31, 2012, the Company unilaterally terminated a credit line offer for accounts receivable financing and a credit line offer for inventory and purchase order financing.

On June 11, 2012 the Board of Directors approved an increase the authorized number of $0.001 par value Common stock from 500,000,000 to 1,000,000,000. The stockholders also approved the change of domicile of the Company from Maryland to Nevada on June 11, 2012.

On June 25, 2012, the Company filed several past due tax returns and filed an Offer in Compromise with the Internal Revenue Services in an attempt to settle past due Federal payroll taxes. The Company’s Federal tax liability, as reported by the IRS and the Company’s records as of May 4, 2012 was $714,964. The Company’s Offer in Compromise was $50,000 payable over five months. There is no assurance that the Internal Revenue Services will accept the Company’s offer in comprise and there is no assurance whatsoever that any offer less than the balance due would be accepted.

On June 26, 2012, the Company and the former Chief Financial Officer agreed to fully settle all debts and obligations of the Company payable to the former Chief Financial Officer for $65,000 payable over six months. There was no impact on the financial statements as of December 31, 2011. The Company has made its scheduled payments and as of September 21, 2012, the total outstanding balance to the former Chief Financial Officer was $30,000.

During the three months ended June 30, 2012, the Company purchased approximately $369,130 of Pawtizer™ inventory and commenced sale activity.

On July 1, 2012, the Company engaged the services of an investor relation consultant As consideration, the Company shall issue a total of 2,000,000 shares of common stock valued at the day of the engagement entered into with a monthly payment of $7,500. As of the September 21, 2012, the Company has yet issue the 2,000,000 common shares to the consultant.

On August 9, 2012, the Company settled litigation with the holder of a $150,000 note bearing interest at 10% which was in default at December 31, 2011. Under the terms of the settlement, the Company will pay the note holder $300,000 with 8% interest accruing on the unpaid balance. The Company made two payments of $25,000 each on August 13, 2012 and intends to make nine additional quarterly payments of $30,000 each commencing on October 1, 2012 and continuing through October 1, 2014. A final payment of $4,265 is due on January 1, 2015. In the event of any default of this settlement agreement, the note holder can enter a stipulated judgment against the Company, CEO Barry Schwartz and President, Lisa Bershan, as individuals, in the amount of $1,197,190.

On August 13, 2012, the Board of Directors approved a private placement offering of up to 60,000,000 shares of common stock at $0.02 per share.

On August 20, the Company committed to purchase $633,632 of extrusion equipment and $267,455 cooling system to be used in the production of Nutra Bar™ dog food bars. On September 17, 2012, the Company made an initial deposit on the equipment of $40,000. From January 1, 2012 through September 21, 2012, total purchases of manufacturing equipment were $943,270.

On August 4, 2012, the Company rented a $8,000 forklift at $725 per month for 12 months. On September 13, 2012, the Company rented a $150,000 forming machine for $5,000 per month, payable over 30 months with an option to purchase the equipment. On September 19, 2012, the Company rented a $48,950 wrapping machine for $3,875 per month with an option to purchase at $48,950 less 50% of the rental payments to date. Total minimum monthly rental payments are $9,600.

During the periods from January 1, 2012 to September 21, 2012, the Company received and accepted subscriptions for 206,590,600 shares of common stock at $0.01 per shares and 21,600,000 shares of common stock at $0.02 per shares. The sales of equity securities resulted in a capital increase of $2,844,406, less offering costs of $84,046 in cash and $476,597 for 11,385,000 shares of common stocks. As of September 21, 2012, the Company issued a total of 196,851,807 shares of common stock for cash receipt during the period.

During the periods from January 1, 2012 to September 21, 2012, the Company issued 5,500,000 shares of common stock as bonuses to employees and formal employee, 2,700,000 common shares as placement fees and 700,000 common shares were issued for services rendered to the Company.

During the periods from January 1, 2012 to September 21, 2012, the Company issued a total of 6,000,000 shares of common stock that valued at $80,000 for services rendered during the year ended December 31, 2011. The $80,000 was a reduction of the stock payable as of December 31, 2011.

During the periods from January 1, 2012 to September 21, 2012, the Company issued a total of 15,000,000 shares of common stock that valued at $150,000 for cash receipts during the year ended December 31, 2011. The $150,000 was a reduction of the stock payable as of December 31, 2011.

As of September 21, 2012, there were 614,734,834 shares of common stock issued and outstanding.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following is certain information regarding our directors and executive officers:

Name	Position	Age	Director Since
Barry Schwartz	Chief Executive Officer, and Chairman of the Board of Directors	6667	February 2003
Lisa Bershan	President, Secretary and Director	5557	February 2003

Biographical Information Regarding ~~Directors~~ Directors and Nominees

Barry Schwartz has served as Chief Executive Officer, President and Chief Financial Officer and a director of the Company since its inception in February 2003. Mr. Schwartz relinquished the title of President when Lisa Bershan assumed that position in January of 2007. Mr. Schwartz is a senior retail and operations executive with more than 30 years of experience in consumer durables and food. From 1995 to 1997, Mr. Schwartz served as the President of Chorus Line Corp., where he helped launch a concept apparel chain for an apparel manufacturer. From 1997 to 1999, Mr. Schwartz served as the Vice President of Cache, Inc., a woman’s ~~apparel~~ apparel company, where he was responsible for the Company's profit and loss performance for the Northeast, Atlantic and Midwest territories. From 2000 to the Company's inception in 2003, Mr. Schwartz served as the President and Chief Executive Officer of Whizgrill, Inc., a quick service, casual dining restaurant chain. In that capacity, Mr. Schwartz created an upscale fast food concept that was competitive with other fast food chain stores.

Lisa Bershan became President in January of 2007. She also held the positions of Executive Vice President, Secretary and a director of the Company since its inception in February 2003. In 1978, Ms. Bershan founded Incredible Edibles, a chain of gourmet stores, which she sold in 1986 to Piedmont Specialty Foods. Ms. Bershan was the President and Chief Executive Officer of Incredible Edibles during this time ~~and~~ and also served on its Board of Directors. From 1986 to 1994, Ms. Bershan served as Vice President and Director of Sales with ~~Piedmont~~ Piedmont Specialty Foods where she helped launch numerous snack food products into major supermarket chains. In 1994, Ms. Bershan ~~founded~~ founded Lisa's Gourmet Snacks, where she served as President and Chief Executive Officer and marketed unique foods including the ~~first~~ first baked chips under the Lisa's Incredible Edibles brand. In 1999, she founded Java Joint Candies, a unique caffeine enhanced ~~product~~ product and served as its President and Chief Executive Officer until 2001. Ms. Bershan was a consultant between 2001 and the time she co-founded the Company in 2003.

4438

Mr. Schwartz and Ms. Bershan are husband and wife and are the Company’s only directors and officers.

~~Compliance with~~ Section 16(a) ~~of the~~Beneficial ~~Exchange~~Ownership ~~Act~~Reporting Compliance

~~Section 16(a)~~Corporate ofGovernance the Securities Exchange Act of 1934 requires the Company’s directors, certain officers and persons holding 10% or more of the Company’s common stock to file reports regarding their ownership and regarding their acquisitions and dispositions of the Company’s common stock with the SEC. Such persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

ToThe ~~our~~Company’s Code ~~knowledge,~~of ~~directors~~Ethics ~~and~~will ~~stockholders beneficially~~be ~~owning~~provided 5%without orcharge ~~greater~~to ofany ~~the~~stockholder ~~outstanding~~upon ~~shares~~written request made to Secretary, ~~the~~All American Pet Company, Inc., ~~believes~~1100 ~~that~~Glendon ~~such~~Ave., ~~persons~~17th ~~have~~Floor, Los Angeles, California 90024. The information on our website is not, ~~filed~~and ~~pursuant~~shall not be deemed to ~~the~~ ~~requirements~~be, a part of ~~the~~this ~~SEC~~proxy onstatement aor ~~timely~~incorporated ~~basis~~by reference into this or any other filing we make with the SEC.

Because of our small size and limited resources, we do not presently have an Audit Committee, Compensation Committee or Nominating/Corporate Governance Committee. Our board of directors consists of Mr. Schwartz, and Ms. Bershan, who are husband and wife. Neither Mr. Schwartz, nor Ms. Bershan are independent as defined under NASDAQ Marketplace rules. The Company intends to seek independent directors and create standing committees of the board as the Company’s growth and financial conditions warrant.

~~The~~We ~~Company’s Code~~have ofadopted ~~Ethics~~a ~~will~~code beof ~~provided~~ethics ~~without~~that applies ~~charge~~ to ~~any~~our ~~stockholder~~Chief ~~upon~~Executive ~~written~~Officer ~~request~~and ~~made~~Principal toFinance ~~Secretary,~~and ~~All~~Accounting ~~American~~officer ~~Pet~~or ~~Company, Inc.,~~persons ~~1880~~performing ~~Century~~similar ~~Park~~functions ~~East,~~(as well ~~Suite~~as ~~1402,~~our ~~Los~~other ~~Angeles~~employees, ~~California~~if ~~90067. The information on our website is not~~any, and ~~shall not be deemed to be, a part of this proxy statement or incorporated by reference into this or any other filing we make with the SEC~~directors).

~~Because~~Meetings of our small size and limited resources, we do not presently have an Audit Committee, Compensation Committee or Nominating/Corporate Governance Committee. Our board of directors consists of Mr. Schwartz, and Ms. Bershan, who are husband and wife. Neither Mr. Schwartz, nor Ms. Bershan are independent as defined under NASDAQ Marketplace rules. The Company intends to seek independent directors and create standing committees of the ~~board~~Board ~~as the Company’s growth and financial conditions warrants.~~

WeThe ~~have~~Board ~~adopted~~acted by awritten ~~code~~consent of7 ~~ethics~~times ~~that~~in ~~applies to~~2011 ~~our~~and ~~Chief~~24 ~~Executive~~times ~~Officer~~in ~~and~~2012. ~~Principal~~Mr. ~~Finance~~Schwartz and ~~Accounting~~Ms. ~~officer~~Bershan orattended 100% ~~persons~~of ~~performing~~the ~~similar~~aggregate ~~functions~~number ~~(as~~of ~~well~~meetings ~~as our~~of ~~other~~the ~~employees,~~Board ifand ~~any,~~committees on which the director served in 2011 and ~~directors)~~2012.

~~Meetings of the Board~~ 39

The Board acted by written consent 32 times during 2010 and 7 times in 2011. Mr. Schwartz and Ms. Bershan attended 100% of the aggregate number of meetings of the Board and committees on which the director served in 2010 and 2011.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the cash compensation of the Company’s executive officers during the last fiscal year of the Company. The remuneration described in the table does not include the cost to the Company for benefits if any furnished to the named executive officers, including premiums for health insurance and other benefits provided to such individuals that are extended in connection with the conduct of the Company’s business.

SUMMARY COMPENSATION TABLE
Name and Principal Position	Fiscal Year Ended December 31,	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compen- sation ($)		Nonqualified Deferred Compen- sation Earnings ($)		All Other Compen-sation ($)			Total ($)
Barry Schwartz,
CEO/Director	2012	$	195,255	$	136,179	$	0		-0-		-0-		-0-	$	45,746	(1)	$	377,181
	2011	$	179,626		-0-		-0-		-0-		-0-		-0-	$	26,969	(2)	$	206,595

Lisa Bershan,
President/Director	2012	$	195,255	$	136,179	$	0		-0-		-0-		-0-	$	45,746	(1)	$	377,181
	2011	$	179,626		-0-		-0-		-0-		-0-		-0-	$	26,969	(2)	$	206,595

~~SUMMARY~~(1) ~~COMPENSATION~~Includes ~~TABLE~~$18,000 auto allowance, $12,000 insurance allowance, and accrued vacation pay of $15,746

Name and Principal Position	Fiscal Year Ended December 31,		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)			Total ($)
Barry Schwartz,
CEO/Director		2010	$	170,320		-0-	$	0		-0-		-0-		-0-	$	42,000	(1)	$	212,320
		2011	$	179,626		-0-		-0-		-0-		-0-		-0-	$	26,969	(2)	$	206,595
Lisa Bershan,
President/Director		2010	$	170,320		-0-	$	0		-0-		-0-		-0-	$	42,000	(1)	$	212,320
		2011	$	179,626		-0-		-0-		-0-		-0-		-0-	$	26,969	(2)	$	206,595

(1) Received 2,375,000 shares of common stock at $0.06 as a signing bonus in 2008

(2)

Includes $12,000 auto allowance and accrued vacation pay of $14,969.

Employment Agreements with Officers

On August 24, 2008, All American Pet ~~executed~~Company, Inc. executed five and one-half-year Employment Agreements with Mr. Barry Schwartz, as ~~CEO~~Chief Executive Officer and Director and Ms. Lisa Bershan, as President and Director. The agreements expire on January 31, ~~2013~~2014. During the year ended December 31, 2012, compensation paid to our Chief Executive Officer and President exceeded the amounts established in the respective employment agreements.

Barry Schwartz

Pursuant to the August 24, 2008 Employment Agreement, ~~All~~we ~~American Pet~~ agreed to compensate Mr. Schwartz with a starting base salary of $150,000 per year for his services. ~~The~~Base ~~base~~ salary ~~called~~calls for increases ~~for~~each ~~years~~year of service. ~~and~~The ~~the~~ base salary ~~for 2011~~ was $195,255 in 2012 and $179,626 in ~~addition~~2011. ~~there~~Additionally, isin ~~transportation~~2012 ~~allowance~~total ofcompensation ~~$12,000~~includes ~~per~~allowances ~~year~~for auto and ~~medical~~insurance ~~expense~~($18,000 ~~payments~~and in$12,000, ~~2011.~~respectively) Inand ~~2008~~accrued ~~Mr.~~vacation ~~Schwartz~~pay ~~received 2~~of $15,~~375~~746,~~000~~ ~~shares~~as ofwell ~~Common stock~~ as abonuses ~~signing~~of ~~bonus~~$136,179.

Lisa Bershan

Pursuant to the August 24, 2008 Employment Agreement, ~~All~~we ~~American Pet~~ agreed to compensate Ms. Bershan with a starting base salary of $150,000 per year for her services. ~~The~~Base ~~base~~ salary ~~called~~calls for increases ~~for~~each ~~years~~year of service. ~~and~~The ~~the~~ base salary ~~for 2010~~ was $195,255 in 2012 and $179,626 in ~~addition~~2011. ~~there~~Additionally, isin ~~transportation~~2012 ~~allowance~~total ofcompensation ~~$12,000~~includes ~~per~~allowances ~~year~~for auto and ~~medical~~insurance ~~expense~~($18,000 ~~payments~~and in$12,000, ~~2011.~~respectively) Inand ~~2008~~accrued ~~Ms.~~vacation ~~Bershan~~pay ~~received 2~~of $15,~~375~~746,~~000~~ ~~shares~~as ofwell ~~Common stock~~ as abonuses ~~signing~~of ~~bonus~~$136,179.

Director Compensation

Directors currently do not receive any cash compensation for serving on the Board of Directors, or for any other services rendered to the Company in their capacity as a director of the Company, but are reimbursed for expenses they incur in connection with their attendance.

Compensation Analysis

The Board of Directors has the authority to engage, terminate and pay compensation consultants, independent legal counsel and other advisors in its discretion. Prior to retaining any such compensation consultant or other advisor, the Board evaluates the experience and capabilities of such advisor. The Board also evaluates the independence of such advisor and whether such advisor has a conflict of interest. During 2011 and 2012, the Company did not use an external compensation consultant to evaluate and set executive compensation; however, during 2013, the Board engaged an independent compensation consulting firm to provide advisory services with regard to 2012 executive compensation. This firm, Performensation, concluded that, given the Company’s current compensation philosophy of focusing pay on salary bonus potential and perquisites, such as auto allowance, total compensation for both Mr. Schwartz and Ms. Bershan are within a given range of reasonableness for a company within the Company’s peer group.

Certain Relationships and Related Transactions

As of December 31, ~~2011~~2012 and ~~2010~~2011, the ~~Company~~ Company owed a total of $0 and $0, respectively, to the officers of the Company for reimbursement of expenses.

As of December 31, ~~2011~~2012 and ~~2010~~2011, the ~~Company~~ Company owed a total of $~~47,446~~0 and $4047,~~625~~446, respectively, to the officers of the Company for accrued salaries.

On March 6, 2012, the Board of Directors authorized the Company to execute a Convertible Revolving Grid Note (the “Note”) for a principal sum of up to $1,000,000 with ~~CEO~~Chief Executive Officer, Barry Schwartz and President, Lisa Bershan. The ~~Grid~~Note ~~note~~ bears interest at 10% per year and may be converted into common stock of the Company at a conversion price of $0.0022 any time before March 6, 2013. On March 1, 2013, the Note was renewed with the following changes to the terms. ~~Neither~~Interest Mrrate was lowered to 6.5% ~~Schwartz~~per ~~nor~~year and Msthe maturing date was amended to be due and payable not later than 48 months from the original issue date of the Note. ~~Bershan~~As of December 31, 2012, no advances on the Note were made. See Item 13 below and Form 8-K filed on March 1, 2013. As of June 14, 2013 a total of $521,000 has been advanced ~~capital~~to ~~under~~ the ~~terms~~Company ofon the ~~grid~~Note ~~note~~allowing the holders to convert the Note into as ofmuch ~~September~~as 21236,818,181 ~~2012~~shares of the Company’s common stock at the Note’s current balance.

OnDuring ~~April~~the ~~30,~~year ~~2012,~~ended ~~subsequent~~December ~~to the balance sheet date~~31, 2012, the ~~Board~~Company ofmade ~~Directors approved salary~~ advances ~~not~~ to ~~exceed $250~~,~~000~~ ~~for Mr. Schwartz~~ and ~~Ms.~~received ~~Bershan~~advances ~~in 2012~~from, ~~The Board~~an ofentity ~~Directors~~owned ~~requires~~by ~~that~~the ~~all~~Company’s ~~salary~~Chief ~~advances~~Executive ~~are~~Officer. ~~repaid~~These advances ~~in full before any transactions pursuant to the grid note~~ are ~~consummated. The~~not ~~Company~~collateralized ~~made~~and ~~salary~~do ~~advances~~not tobear Mrinterest. ~~Schwartz~~As ~~and~~of ~~Ms.~~December ~~Bershan~~31, ~~which~~2012, ~~the~~no ~~balance~~amounts ofare ~~officer~~due ~~advances~~from asand ofno ~~September~~amounts ~~21,~~are ~~2012~~due isto ~~$332,299~~this related entity.

Equity Compensation Plans

We established an equity compensation ~~plan~~ plan on September 30, 2010, which may be utilized to compensate directors, officers or employees and certain qualifying consultants or vendors of goods and services. The plan authorizes the issue of up to 35,000,000 shares of common stock. No shares have been issued under this plan as of December 31, 2012.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock as of ~~December~~June 3114, ~~2011~~2013 by (i) all stockholders known to the Company to be beneficial owners of more than 5% of the outstanding common stock; (ii) each director and executive officer of the Company individually and (iii) all directors and executive officers of the Company as a group:

Name and address of beneficial owner(1)	Amount of Beneficial Ownership(2)		Percent of Class (3)
5% Holders
Barry Schwartz (2)		20,437,363		7.58	%
Lisa Bershan (2)		17,432,639		6.47	%
Perfekt Beteeiligun Mgmt GmbH		18,000,000		6.68	%
Directors and Officers
Barry Schwartz (2) (4) 1880 Century Park East Los Angeles, CA 90067		20,437,363		7.58	%
Barry Schwartz (2) (4) 1100 Glendon Avenue, 17th Floor Los Angeles, CA 90024		20,437,363		1.9	%
Lisa Bershan (2) (4) 1880 Century Park East Los Angeles, CA 90067		17,432,639		6.47	%
Lisa Bershan (2) (4) 1100 Glendon Avenue, 17th Floor Los Angeles, CA 90024		17,432,639		1.6	%
All executive officers and directors as a group (two persons).		37,870,002		14.05	%
Barry Schwartz and Lisa Bershan [see Item 11] (5)		236,818,181		22.0	%
All executive officers and directors as a group.		274,688,183		25.6	%

(1) Except as noted in any footnotes below, each person has sole voting power and sole dispositive power as to all of the shares shown as beneficially owned by them.

(2) Other than as footnoted below, or as indicated under ITEM 13 with regard to shares issuable under a Convertible Revolving Grid Note, none of these security holders has the right to acquire any amount of the shares within 60 days following December 31, ~~2011~~2012 from options, warrants, convertible securities or similar obligations.

(3) Percentage ownership is based on ~~269~~1,~~486~~074,~~179~~747,426 shares of common stock outstanding on ~~December~~June 3114, ~~2011~~2013. This amount is the sum of a) actual shares issued and outstanding (837,929,245) and b) the increase of shares (236,818,181) required by the conversion feature of the Grid Note. See ITEM 13. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days, are deemed outstanding for determining the number of shares beneficially owned and for computing the percentage ownership of the person holding such options, but are not deemed outstanding for computing the percentage ownership of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

(4) Mr. Schwartz and Ms. Bershan are husband and wife and each disclaims beneficial ownership of the shares owned by the other.

~~ITEM~~(5) ~~13.~~As ~~CERTAIN~~of ~~RELATIONSHIPS~~June ~~AND~~14, ~~RELATED~~2013, ~~TRANSACTIONS~~there were $521,000 ~~AND~~advances ~~DIRECTOR~~made ~~INDEPENDENCE~~on the Grid Note equal to 236,818,181 beneficial shares due to its conversion feature. See Item 13.

OnThe ~~April 8, 2010, the Board of Directors reached an agreement with certain officers of the~~ Company tohas ~~convert~~not ~~their~~adopted ~~past~~formal ~~due accrued salary to shares of common stock. Lisa~~written ~~Bershan,~~policies ~~President,~~and ~~converted~~procedures ~~$90,645~~for ~~in accrued salary to 4,532,267 shares,~~ the ~~former~~review ~~CFO~~and ~~converted~~approval ~~$30,000 to 1,500,000 shares~~ of ~~common~~transactions ~~stock,~~with ~~and~~related ~~Barry Schwartz, CEO, converted $93,400 in accrued salary to 4,669,986 shares of common stock~~parties.

~~Director~~On ~~Independence~~March 6, 2012, the Board of Directors authorized the Company to execute a Convertible Revolving Grid Note (the “Note”) for a principal sum of up to $1,000,000 with Chief Executive Officer, Barry Schwartz and President, Lisa Bershan. The Note bears interest at 10% per year and may be converted into common stock of the Company at a conversion price of $0.0022 any time before March 6, 2013. On March 1, 2013, the Note was renewed with the following changes to the terms. Interest rate was lowered to 6.5% per year and the maturing date was amended to be due and payable not later than 48 months from the original issue date of the Note. Should the holders of the note elect to convert the outstanding principal balance and unpaid accrued interest that may at any time be owing to the lenders, then any shares received on such conversion or conversions shall be locked up and not subject to sale, transfer or hypothecation of any kind whatsoever until the earliest to occur of:

~~Our Board of Directors is made up of Barry Schwartz and Lisa Bershan, who are husband and wife~~i. ~~Mr.~~24 ~~Schwartz~~months ~~serves~~from as the ~~Company's~~date ~~Chief~~or ~~Executive~~dates ~~Officer and Chief Financial and Accounting Officer and Ms. Bershan serves as the President. Since we are not currently subject to corporate governance standards relating to the independence~~ of ~~our~~any ~~directors~~such conversion, we choose to define an "independent" director in accordance with the NASDAQ Global Market's requirements for independent directors (NASDAQ Marketplace Rule 4200). The Board has determined that neither Mr. Schwartz nor Ms. Bershan is independent as defined under NASDAQ Marketplace rules.or

~~ITEM~~ii. 14the average closing price per share, as determined over a period of 30 trading days ending one trading day prior to the notice date of conversion, is not less than $0.035 ~~PRINCIPAL~~per ~~ACOUNTING~~share, ~~FEES~~subject ~~AND~~to ~~SERVICES~~adjustment for share dividends, forward splits of common stock or reverse splits of common stock, as may be appropriate, or

~~De Joya Griffith, LLC served as All American Pet’s independent registered public accounting firm for fiscal year 2011 and 2010~~iii. ~~Representatives~~the ~~from~~sale ~~that~~of ~~firm~~the ~~were~~registrant ~~not present~~or atsubstantially ~~the~~all ~~meeting~~ of ~~stockholders.~~its business, or

~~Aggregate~~iv. ~~fees~~merger ~~billed~~of tothe ~~All~~registrant ~~American~~with ~~Pet for~~another corporation where the ~~year~~current ~~ending~~shareholders ~~December~~as ~~31,~~a ~~2011~~group bydo Denot ~~Joya~~own ~~Griffith,~~at ~~LLC~~least ~~were~~51% asof ~~follows:~~the resulting merged entity.

49See Form 8-K filed by the Company on March 1, 2013. As of December 31, 2012, no advances on the Note were made. As of June 14, 2013 a total of $521,000 has been advanced to the Company on the Note and such amount is convertible into 236,818,181 shares of the Company’s common stock.

~~(1) Audit Fees~~43

~~The~~No ~~aggregate~~Director ~~fees~~Independence billed for professional services rendered by De Joya Griffith, LLC, for the audit of our annual financial statements Form 10-K and review of the financial statements included in our Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal year ended December 31, 2011 were $38,000.

Our Board of Directors is made up of Barry Schwartz and Lisa Bershan, who are husband and wife. Mr. Schwartz also serves as the Company's Chief Executive Officer and Chief Financial and Accounting Officer and Ms. Bershan also serves as the President. Since we are not currently subject to corporate governance standards relating to the independence of our directors, we choose to define an "independent" director in accordance with the NASDAQ Global Market's requirements for independent directors (2)NASDAQ ~~Tax~~Marketplace ~~Filing~~Rule ~~Related~~4200). The ~~Fees~~Board has determined that neither Mr. Schwartz nor Ms. Bershan is independent as defined under NASDAQ Marketplace rules.

~~The~~ITEM ~~aggregate~~14. ~~fees~~PRINCIPAL ~~billed~~ACCOUNTANT byFEES DeAND ~~Joya Griffith, LLC and Hawkins Accounting for professional services rendered for tax related for fiscal years ended December 31, 2011 and December 31, 2010 were $0 and $0.~~SERVICES

~~(4)~~DeJoya ~~Any~~Griffith, ~~Other~~LLC ~~Fees~~served as our independent registered public accounting firm for fiscal year 2011 and the first two 10-Q filings in 2012. Haskell & White LLP served as our independent registered public accounting firm for our fiscal year 2012 audit and third quarter 2012 10-Q filing.

~~The~~Aggregate ~~aggregate~~ fees billed byto Deus ~~Joya Griffith, LLC~~ for ~~professional~~the ~~services rendered for other services for fiscal years~~ year ended December 31, ~~2011~~2012 ~~and~~by ~~December~~Haskell ~~31,~~& ~~2010~~White LLP were ~~$500 and~~as ~~$500.~~follows:

~~PART~~(1) IVAudit Fees: $37,800

Haskell & White LLP did not provide any other professional services in the year ended December 31, 2012.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Annual Report:

Financial Statements:

(i) The consolidated financial statements of All American Pet Company, Inc. under Item 8 of this Annual Report are listed on the “Index to Consolidated Financial Statements” on page F-1 of this report.

(b) Exhibits: THIS SECTION NEEDS TO BE UPDATED BY LEGAL

Incorporated by reference

Exhibit
Number

Exhibit Description

Filed
herewith

Form

Period
ending

Exhibit

Filing
date

4.2

Specimen Series A Preferred Stock Certificate.

10-KSB

12/31/06

4.2

07/17/07

4.3

Agreement, effective November 30, 2005, by and between the Company and Nortia Capital Partners, Inc.

SB-2/A-3

4.3

12/28/06

10.1

Equipment Lease Agreement dated March 8, 2006 by and between Bev-Lin Enterprises, Inc. and All American Pet

SB-2

10.1

06/23/06

5044

			Incorporated by reference
Exhibit Number	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date

10.2	Form of Subscription Agreement.		SB-2		10.2	06/23/06

10.3	Letter Agreement with L. Phillips Brown.		SB-2		10.3	06/23/06

10.4	Lease Agreement dated January 18, 2005 for rental of office premises.		SB-2		10.4	06/23/06

10.5	Lease Agreement dated March 6, 2006 for rental of warehouse space.		SB-2/A-3		10.5	12/28/06

10.6	Loan Agreement dated as of April 27, 2004, by and between the Company and George LaCapra.		SB-2		10.6	06/23/06

10.7	Broker Agreement dated August 1, 2006 between Crossmark, Inc. and All American Pet Company, Inc.		SB-2		10.7	06/23/06

10.8	Loan Agreement dated as of August 29, 2006 by and between the Company and Barry Schwartz.		10-KSB	12/31/06	10.8	07/17/07

10.9	Loan Agreement dated as of October 10, 2006 by and between the Company and Eckard Kirsch.		10-KSB	12/31/06	10.9	07/17/07

10.10	Loan Agreement dated as of October 27, 2006 by and between the Company and Eckard Kirsch.		10-KSB	12/31/06	10.10	07/17/07

10.11	Loan Agreement dated as of November 7, 2006 by and between the Company and Eckard Kirsch.		10-KSB	12/31/06	10.11	07/17/07

10.12	Loan Agreement dated as of November 21, 2006 by and between the Company and Eckard Kirsch.		10-KSB	12/31/06	10.12	07/17/07

10.13	Loan Agreement dated as of December 27, 2006 by and between the Company and Eckard Kirsch.		10-KSB	12/31/06	10.13	07/17/07

10.14	Lease Agreement Dated July 21, 2008 - Rental agreement for new office space.		10-K	12-31-09	10.14	8-19-10

10.15	Standard Sublease dated July 21, 2008		10-K	12-31-09	10.15	8-19-10

10.16	Addendum No. 1 to Standard Sublease dated July 21, 2008		10-K	12-31-09	10.16	8-19-10

10.17	Debt Conversion Agreement – Barry Schwartz – Dated June 20, 2008		10-K	12-31-09	10.17	8-19-10

10.18	Debt Conversion Agreement – Lisa Bershan – Dated June 20, 2008		10-K	12-31-09	10.18	8-19-10

5145

			Incorporated by reference
Exhibit Number	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
10.19	Employment Agreement – Barry Schwartz – Dated August 24, 2008		10-K	12-31-09	10.19	8-19-10
10.20	Employment Agreement – Lisa Bershan – Dated August 24, 2008		10-K	12-31-09	10.20	8-19-10
10.21	Warrant Agreement – Barry Schwartz – Dated August 24, 2008		10-K	12-31-09	10.21	8-19-10
10.22	Warrant Agreement – Lisa Bershan – Dated August 24, 2008		10-K	12-31-09	10.22	8-19-10
10.23	Asher Enterprises Inc. Convertible Note Dated May 4, 2010	X
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act	X
		X
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act	X
10.24	Asher Enterprises Inc. Convertible Note Dated June 15. 2010	X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	X
10.25	Asher Enterprises Inc. Convertible Note Dated August 27, 2010	X
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	X
10.26	Asher Enterprises Inc. Convertible Note Dated December 6, 2011	X
10.27	Asher Enterprises Inc. Convertible Note Dated February 11, 2011	X
31	Certification of Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act	X
32	Certification of Chief Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act	X

5246

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~October~~June 217, ~~2012~~2013 By: /S/ BARRY SCHWARTZ

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints, jointly and severally, Barry Schwartz and Lisa Bershan, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date indicated:

Name	Title	Date
/S/ BARRY SCHWARTZ Barry Schwartz	Chairman of the Board, Chief Executive Officer	October 2, 2012
/S/ BARRY SCHWARTZ	Chairman of the Board,	June 17, 2013
/S/ LISA BERHSAN Lisa Bershan	President, Director	October 2, 2012
Barry Schwartz	Chief Executive Officer
/S/ LISA BERHSAN	President, Director	June 17, 2013
Lisa Bershan

5347

ALL AMERICAN PET COMPANY, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, ~~2011~~2012 and ~~2010~~2011

	PAGES
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – HASKELL & WHITE LLP
CONSOLIDATED BALANCE SHEETS	F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – DEJOYA GRIFFITH, LLC
CONSOLIDATED STATEMENTS OF OPERATIONS	F-3
CONSOLIDATED BALANCE SHEETS	F-1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT	F-4
CONSOLIDATED STATEMENTS OF OPERATIONS	F-2
CONSOLIDATED STATEMENTS OF CASH FLOWS	F-5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT	F-3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-6 – F-17
CONSOLIDATED STATEMENTS OF CASH FLOWS	F-4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-5 – F-20

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

All American Pet Company, Inc.

We have audited the accompanying consolidated balance sheet of All American Pet Company, Inc. (the “Company”) as of December 31, 2012, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of All American Pet Company, Inc. as of December 31, 2012, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As described in Note 1 to the consolidated financial statements, the Company has a history of experiencing operating losses, cash flow deficits and nominal revenues. Further, as of December 31, 2012, the Company has a working capital deficit, significant amounts of past due debts, a stockholders’ deficit, and insufficient liquidity to operate its business for a period of at least twelve months. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

	/s/ Haskell & White LLP

	HASKELL & WHITE LLP

Irvine, California
June 17, 2013

Office Locations

Las Vegas, NV

New York, NY

Pune, India

Beijing, China

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

All American Pet Company, Inc. & Subsidiaries

We have audited the accompanying consolidated balance ~~sheets~~sheet of All American Pet Company, Inc. & Subsidiaries (the “Company”) as of December 31, 2011 and ~~2010 and~~ the related consolidated statements of operations, stockholders’ deficit and cash flows for ~~each of~~ the ~~years in the two-~~year ~~period~~ ended December 31, 2011. All American Pet Company, Inc. & Subsidiaries’ management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our ~~audits~~audit.

We conducted our ~~audits~~audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our ~~audits~~audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of All American Pet Company, Inc. & Subsidiaries as of December 31, 2011 and ~~2010 and~~ the results of their operations and their cash flows for ~~each of~~ the ~~years in the two-~~year ~~period~~ ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ De Joya Griffith, LLC

Henderson, Nevada

September 27, 2012

De Joya Griffith, LLC ● 2580 Anthem Village Dr. ● Henderson, NV ● 89052 Telephone (702) 563-1600 ● Facsimile (702) 920-8049 www.dejoyagriffith.com

F-1

ALL AMERICAN PET COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(AUDITED)

	December 31,			December 31,
	2012			2011
ASSETS
Current Assets:
Cash	$	13,376		$	2,396
Inventory		715,869			-
Prepaid Expenses		-			96,154
Total current assets		729,245			98,550
Machinery and equipment, net		69,366			2,542
Other assets		85,290			5,800
TOTAL ASSETS	$	883,901		$	106,892

LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities:
Bank overdraft	$	90,095		$	97,070
Accounts payable		2,605,638			2,145,668
Accounts payable due to former officer		-			196,912
Current portion contest prize		133,332			93,333
Settlement and judgments payable		877,999			231,480
Share guarantee liability		400,000			600,000
Accrued wages		36,678			57,070
Placement fees payable		54,372			-
Accrued payroll taxes		889,711			797,422
Notes payable in default, net of debt discount		50,000			392,000
Accrued interest		47,897			220,787
Total current liabilities		5,185,722			4,831,742
Long-term Liabilities:
Net present value contest prize obligation		269,518			285,200
Total long-term liabilities		269,518			285,200
TOTAL LIABILITTIES		5,455,240			5,116,942

COMMITMENTS AND CONTINGENCIES (Notes 8-12)
Stockholders' deficit
Common stock, $0.001 par value; authorized 1,010,000,000 shares at December 31, 2012 (695,494,866 issued and outstanding) and 500,000,000 shares at December 31, 2011 (254,804,866 issued and outstanding)		695,495			254,805
Additional paid-in capital		18,486,273			15,588,999
Common stock payable		677,156			569,642
Common stock receivable		(142,000	)		(142,000	)
Accumulated deficit		(23,729,397	)		(20,933,116	)
Non-controlling interest		(558,866	)		(348,380	)
Total Stockholders’ deficit		(4,571,339	)		(5,010,050	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	883,901		$	106,892

	December 31, 2011			December 31, 2010
ASSETS
Current Assets:
Cash	$	2,396		$	114
Inventory		-			136,806
Prepaid expenses		96,154			775,415
Total current assets		98,550			912,335
Machinery and equipment, net		2,542			125,977
Other assets		5,800			42,300
TOTAL ASSETS	$	106,892		$	1,080,612
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities:
Bank overdraft	$	97,070		$	91,496
Accounts payable		2,145,668			1,729,340
Accounts payable due to former officer		196,912			85,193
Current portion contest prize		93,333			60,000
Settlement and judgments payable		231,480			142,921
Current portion of capital lease obligation		-			40,032
Share guarantee liability		600,000			600,000
Accrued officers salaries		57,070			40,625
Deferred rent		-			3,060
Accrued payroll taxes		797,422			764,335
Notes payable, net of debt discount		392,000			327,908
Accrued interest		220,787			182,000
Total current liabilities		4,831,742			4,066,910
Long-term liabilities:
Net present value contest prize obligation		285,200			297,517
Employee settlement payable		-			16,383
Employee severance payable		-			18,000
Capital lease obligation		-			47,519
Total long-term liabilities		285,200			379,419
TOTAL LIABILITIES		5,116,942			4,446,329
COMMITMENTS AND CONTINGENCIES
Stockholders' deficit
Common stock, $0.001 par value Authorized 250,000,000 shares issued and outstanding December 31, 2011 (254,804,866) and Decemeber 31, 2010 (221,213,571)		254,805			221,214
Additional paid-in capital		15,588,999			15,379,733
Common stock payable		569,642			-
Common stock receivable		(142,000	)		(52,000	)
Accumulated deficit		(20,933,116	)		(18,717,315	)
Non-controlling interest		(348,380	)		(197,349	)
Total Stockholders deficit		(5,010,050	)		(3,365,717	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	106,892		$	1,080,612

See accompanying notes to the consolidated financial statements and the reports of the independent registered public accounting firms.

~~See Accompaniyng Notes to Consolidated Financial Statements.~~F-1

ALL AMERICAN PET COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2012			2011

Revenue	$	24,701		$	59,726
Slotting fees		-			(141,879	)
Net sales		24,701			(82,153	)

Cost of goods sold		10,463			58,670
GROSS PROFIT (LOSS)		14,238			(140,823	)

OPERATING EXPENSES
Sales and marketing		483,080			417,208
General and administrative		2,715,027			1,512,550
Impairment of inventory		-			98,163
Loss on abandonment of machinery and equipment		-			7,812
TOTAL OPERATING EXPENSES		3,198,107			2,035,733

LOSS FROM OPERATIONS		(3,183,869	)		(2,176,556	)

OTHER EXPENSE/(INCOME)
Gain on forgiveness of debt		(79,851	)		-
Interest expense		102,749			89,148
Reduction of share guarantee liability (Note 8)		(200,000	)		-
Debt discount amortization		-			101,128
TOTAL OTHER EXPENSE		(177,102	)		190,276

LOSS BEFORE TAXES		(3,006,767	)		(2,366,832	)

Provision for income taxes		-			-
NET LOSS		(3,006,767	)		(2,366,832	)

Net loss attributable to noncontrolling interest		210,486			151,031

NET LOSS ATTRIBUTABLE TO ALL AMERICAN PET COMPANY, INC.	$	(2,796,281	)	$	(2,215,801	)

BASIC AND DILUTED LOSS PER COMMON SHARE	$	(0.006	)	$	(0.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (BASIC AND DILUTED)		472,237,035			233,288,191

See accompanying notes to the consolidated financial statements and the reports of the independent registered public accounting firms.

F-2

ALL AMERICAN PET COMPANY, INC.

~~CONSOLIDATED~~STATEMENT ~~STATEMENTS~~ OF ~~OPERATIONS~~SHAREHOLDERS' DEFICIT

(AUDITED)

			COMMON		ADDITIONAL			COMMON		COMMON						NON-			TOTAL
	COMMON		STOCK		PAID-IN			STOCK		STOCK			ACCUMULATED			CONTROLLING			STOCKHOLDERS'
	STOCK		AMOUNT		CAPITAL			PAYABLE		RECEIVABLE			DEFICIT			INTEREST			DEFICIT

BALANCE AT 31-Dec-10		221,213,571	$	221,214	$	15,379,733		$	-	$	(52,000	)	$	(18,717,315	)	$	(197,349	)	$	(3,365,717	)

Conversion of note payable - unrelated party		12,741,295		12,741		103,306			-		-			-			-			116,047

Stock issued through private placement, net offering costs		19,650,000		19,650		104,760			-		-			-			-			124,410

Stock issued as placement fees		1,200,000		1,200		1,200			-		-			-			-			2,400

Common stock payable		-		-		-			569,642		-			-			-			569,642

Common stock receivable		-		-		-			-		(90,000	)		-			-			(90,000	)

Net loss attributable to non-controlling interest		-		-		-			-		-			-			(151,031	)		(151,031	)

Net loss		-		-		-			-		-			(2,215,801	)		-			(2,215,801	)

BALANCE AT 31-Dec-11		254,804,866		254,805		15,588,999			569,642		(142,000	)		(20,933,116	)		(348,380	)		(5,010,050	)

Conversion of note payable - unrelated party		133,178,000		133,178		47,504			-		-			-			-			180,682

Stock issued through private placement, net of offering costs		285,544,000		285,544		2,726,897			-		-			-			-			3,012,441

Stock issued for services		10,650,000		10,650		177,244			-		-			-			-			187,894

Stock issued as placement fees		11,318,000		11,318		(54,371	)		-		-			-			-			(43,053	)

Common stock payable		-		-		-			107,514		-			-			-			107,514

Net loss attributable to non-controlling interest		-		-		-			-		-			-			(210,486	)		(210,486	)

Net loss		-		-		-			-		-			(2,796,281	)		-			(2,796,281	)

BALANCE AT 31-Dec-12		695,494,866	$	695,495	$	18,486,273		$	677,156	$	(142,000	)	$	(23,729,397	)	$	(558,866	)	$	(4,571,339	)

	Years Ended December 31,
	2011			2010
Revenue	$	59,726		$	146,598
Slotting fees		(141,879	)		(146,578	)
Net sales		(82,153	)		20
Cost of goods sold		58,670			101,349
GROSS LOSS		(140,823	)		(101,329	)
OPERATING EXPENSES
Sales and marketing		417,208			1,113,409
General and administrative		1,512,550			5,256,644
Impairment of inventory		98,163			-
Loss on abandonment of machinery and equipment		7,812			-
TOTAL OPERATING EXPENSES		2,035,733			6,370,053
LOSS FROM OPERATIONS		(2,176,556	)		(6,471,382	)
OTHER EXPENSE/(INCOME)
Gain on forgiveness of debt		-			(94,475	)
Interest expense		89,148			262,818
Stock guaranty expense		-			1,000,000
Debt discount amortization		101,128			65,099
TOTAL OTHER EXPENSE		190,276			1,233,442
LOSS BEFORE TAXES		(2,366,832	)		(7,704,824	)
Provision for income taxes		-			(800	)
NET LOSS		(2,366,832	)		(7,705,624	)
Net loss attributable to noncontrolling interest		151,031			265,849
NET LOSS ATTRIBUTABLE TO ALL AMERICAN PET COMPANY, INC.	$	(2,215,801	)	$	(7,439,775	)
BASIC LOSS PER COMMON SHARES	$	(0.01	)	$	(0.05	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (BASIC)		233,288,191			144,422,215

See accompanying notes to the consolidated financial statements and the reports of the independent registered public accounting firms.

See Accompanying Notes to Consolidated Financial Statements.

F-3

ALL AMERICAN PET COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AUDITED)

	Years Ended December 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3,006,767	)	$	(2,366,832	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		12,750			985
Impairment of inventory		-			98,894
Amortization of contest prize		24,317			21,016
Loss on abandonment of machinery and equipment		-			7,812
Amortization of debt discount		-			101,128
Common stock issued for services		187,894			845,761
Reduction of share guarantee liability		(200,000	)		-
(Increase) decrease in:
Inventory		(715,869	)		37,912
Other assets		16,664			36,500
Increase (decrease) in:
Accounts payable		459,970			420,222
Accounts payable - related party					111,719
Due to former officer		(196,912	)		-
Accrued officer/consulting salaries		(57,070	)		16,445
Accrued payroll taxes		92,289			33,087
Accrued liabilities		36,679			-
Settlements and judgments		496,519			-
Deferred rent		-			(3,060	)
Accrued interest		(172,889	)		65,991
Employee severance		-			(35,824	)
NET CASH USED IN OPERATING ACTIVITIES		(3,022,426	)		(608,244	)

CASH FLOWS FROM INVESTING ACTIVITIES
Equipment purchases		(79,574	)		-
NET CASH USED BY INVESTING ACTIVITIES		(79,574	)		-

CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft		(6,975	)		5,574
Proceeds from notes payable - others		-			75,000
Placement fees paid		(85,000	)		-
Proceeds from sale of common stock		3,204,955			529,952
NET CASH PROVIDED BY FINANCING ACTIVITIES		3,112,980			610,526

Increase in cash and cash equivalents		10,980			2,282
Cash at beginning of period		2,396			114
CASH AT END OF PERIOD	$	13,376		$	2,396

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest	$	-		$	-
Income Taxes	$	-		$	-

NON CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for placement fees	$	43,053		$	-
Accrual of placement fees	$	54,372		$	-
Common stock issued for services	$	187,894		$	-
Conversion of debt for shares of common stock	$	180,682		$	116,047

	For the Years Ending December 31,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,366,832	)	$	(7,705,624	)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for income taxes		-			800
Depreciation and amotization		985			983
Impairment of inventory		98,894			-
Amortization of contest prize		21,016			4,517
Amortization of finance cost		-			57,788
Loss on abandonment of machinery and equipment		7,812			-
Amortization of debt discount		101,128			65,100
Gain on debt forgiveness		-			(94,475	)
Common stock issued as additional financing cost		-			196,292
Common stock issued for officer compensation		-			368,090
Common stock issued for services		845,761			3,600,953
Common stock issued for employee bonus		-			3,000
Non-cash stock guarantee and extention expense		-			1,000,000
(Increase) decrease in:
Inventory		37,912			(136,076	)
Other assets		36,500			(3,300	)
Increase (decrease) in:
Accounts payable		420,222			302,982
Accounts payable- related party		111,719			195,193
Accrued officer/consulting salaries		16,445			60,933
Accrued payroll taxes		33,087			110,588
Deferred rent		(3,060	)		3,060
Accrued interest		65,991			17,555
Employee severance		(35,824	)		30,000
NET CASH USED IN OPERATING ACTIVITIES		(608,244	)		(1,921,641	)
CASH FLOW (USED) FROM INVESTING ACTIVITIES
Equipment purchases		-			(11,100	)
NET CASH FLOW USED BY INVESTING ACTIVITIES		-			(11,100	)
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft		5,574			91,496
Capital lease		-			(23,799	)
Proceeds from notes payable-others		75,000			137,500
Repayment of notes payable-other		-			(35,000	)
Repayment of notes payable-officer		-			(4,300	)
Payment settlement obligation		-			(16,765	)
Proceeds from sale of common stock		529,952			1,782,715
NET CASH PROVIDED BY FINANCING ACTIVITIES		610,526			1,931,847
Decrease in cash and cash equivalents		2,282			(894	)
Cash at beginning of period		114			948
CASH AT END OF PERIOD	$	2,396		$	54
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest	$	-		$	-
Income Taxes	$	-		$	800
NON CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued as additional financing cost	$	-		$	329,625
Common stock issued for officer compensation	$	-		$	368,090
Common stock issued for services	$	-		$	312,167
Common stock issued for employee bonus	$	-		$	3,000
Conversion of debt for shares of common stock	$	116,047		$	76,293

See accompanying notes to the consolidated financial statements and the reports of the independent registered public accounting firms.

See Accompanying Notes to Consolidated Financial Statements.

F-4

ALL AMERICAN PET COMPANY, INC.

STATEMENT OF SHAREHOLDERS' DEFICIT

(AUDITED)

	COMMON STOCK		COMMON STOCK AMOUNT		ADDITIONAL PAID-IN CAPITAL		COMMON STOCK SUBSCRIPTION RECEIVABLE			COMMON STOCK PAYBLE		COMMON STOCK RECEIVABLE			ACCUMULATED DEFICIT			NON- CONTROLLING INTEREST			TOTAL STOCKHOLDERS' DEFICIT
BALANCE AT
31-Dec-09		96,024,013	$	96,024	$	8,329,903	$	70,000			-		-		$	(11,277,540	)		-		$	(2,921,613	)
Conversion of note payable- unrelated party		3,553,598		3,553		72,739		-			-		-			-			-			76,292
Conversion of note payable- related party		808,793		809		47,719		-			-		-			-			-			48,528
Stock issued for employee bonus		50,000		50		2,950		-			-		-			-			-			3,000
Stock issued for consulting fee to various vendors		25,928,830		25,929		1,755,981		-			-		-			-			-			1,781,910
Stock issued to various vendors prior to services rendered		40,400,000		40,400		2,198,600		-			-		-			-			-			2,239,000
Stock issued through private placement		31,647,084		31,648		1,612,568		(70,000	)		-		-			-			-			1,714,216
Stock issued for officer compensation		9,202,253		9,202		542,933		-			-		-			-			-			552,135
Stock issued to settle accounts payable with related party		3,500,000		3,500		106,500		-			-		-			-			-			110,000
Stock issued to settle accrued liabilities and accounts payable		2,400,000		2,400		153,600		-			-		-			-			-			156,000
Stock issued for interest expense		1,699,000		1,699		162,241		-			-		-			-			-			163,940
Stock issued for share guarantee		6,000,000		6,000		394,000		-			-		-			-			-			400,000
Common stock receivable		-		-		-		-			-		(52,000	)		-			-			(52,000	)
Net loss attributable to non-controlling interest		-		-		-		-			-		-			-			(197,349	)		(197,349	)
Net loss		-		-		-		-			-		-			(7,439,775	)		-			(7,439,775	)
BALANCE AT
31-Dec-10		221,213,571	$	221,214	$	15,379,733		-			-	$	(52,000	)	$	(18,717,315	)	$	(197,349	)	$	(3,365,717	)
Conversion of note payable- unrelated party		12,741,295		12,741		103,306		-			-		-			-			-			116,047
Stock issued through private placement, net offering costs		19,650,000		19,650		86,677		-			-		-			-			-			106,327
Stock issued as placement fees		1,200,000		1,200		1,200		-			-		-			-			-			2,400
Common stock payable		-		-		-		-			587,725		-			-			-			587,725
Common stock receivable		-		-		-		-			-		(90,000	)		-			-			(90,000	)
Net loss attributable to non-controlling interest		-		-		-		-			-		-			-			(151,031	)		(151,031	)
Net loss		-		-		-		-			-		-			(2,215,801	)		-			(2,215,801	)
BALANCE AT
31-Dec-11		254,804,866	$	254,805	$	15,570,916		-		$	587,725	$	(142,000	)	$	(20,933,116	)	$	(348,380	)	$	(5,010,050	)

See Accompanying Notes to Consolidated Financial Statements.

F-5

ALL AMERICAN PET COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

All American Pet Company, Inc. (“AAPT”) or the “Company”) is a developer and marketer of innovative pet wellness products including super-premium dog foods and antibacterial wipes. In 2010 and 2011, AAPT produced, marketed, and sold two super-premium dog foods under the brand names Grrr-nola® Natural Dog Food and Chompions®. Both Grrr-nola® Natural Dog Food and Chompions® were the first dog food products that were formulated for canine heart health and endorsed by a veterinary cardiac surgeon. ~~The Company~~In ~~has~~2012, ~~launched~~the Company launched its line of Pawtizer™ pet wipes and spray, the pet care industry’s first alcohol-free anti-bacterial dog cleaner. The Company has also announced and is ~~preparing~~marketing ~~to market~~ its Mutt™ Great Food for Great Dogs super-premium dry kibble dog food, and its Nutra Bars™ line of portable, convenient and functional, super-premium 4 ounce dog food bars. Each 4 ounce bar has a kcal equivalent of 8 ounces of super-premium dry dog food.

All American Pet Company, Inc. was initially organized under the laws of the State of New York (“All American Pet Company, Inc. NY”) in February 2003. In January 2006, All American Pet Company, Inc. NY merged into All American Pet Company, Inc. a Maryland corporation (“All American Pet Company, Inc. MD”). In June 2012, All America Pet Company Inc. merged into a Nevada Corporation, (“All American Pet Company, Inc. NV”). The Company has formed a number of wholly owned subsidiaries to provide for accountability of each of of its operations. All American PetCo, Inc. was formed in January 2008 to provide corporate infrastructure and management services. All American Pet Brands, Inc. was formed in April 2009 to be the Company’s manufacturing and warehousing operation. In September 2009, the Company signed a license and distribution agreement with AAP Sales and Distribution Inc. a third party company that obtained the rights to manufacture and sell certain of the Company’s products on a non-exclusive basis. AAP Sales and Distribution, Inc.’s operations have been consolidated with All American Pet Company, Inc. based on accounting guidelines for Variable Interest Entities.

Unless the context otherwise requires, references in these financial statements to the “Company” or “AAPT” refer to All American Pet Company, Inc., a Nevada corporation, and its subsidiaries, and its predecessors, All-American Pet Company Inc., MD, a Maryland Corporation and All-American Pet Company Inc., NY, a New York corporation. All financial statements give effect to this reincorporation as if it occurred at the beginning of the period.

F-6

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. ~~The~~As described below, the Company has incurred ~~consistent~~ consistent losses, limited liquid assets, significant pas due debts, and has a ~~negative~~ stockholders' ~~equity~~deficit. These conditions, among others, raise substantial doubt as to the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in in accordance with accounting principles generally accepted in the United States.

~~Going Concern~~ F-5

~~These~~Going ~~financial~~Concern ~~statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets~~ and the satisfaction of liabilities and commitments in the normal course of business. The Company has a limited operating history and limited funds. As shown in the financial statements, the Company incurred a net loss of $2,366,832, used $608,244 cash for operations in for the year ended December 31, 2011, had a working capital deficit of $4,733,192 and total stockholdersManagement’ ~~deficit of $5,010,050 as of December 31, 2011. These factors raise substantial doubt about the Company’~~s ~~ability~~ to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty. Plans

~~The~~These ~~Company~~financial isstatements ~~dependent~~have ~~upon~~been ~~outside financing~~prepared toin ~~continue~~accordance ~~operations.~~with ~~Management~~generally ~~plans~~accepted toaccounting ~~raise~~principles ~~funds~~applicable ~~via~~to a ~~private~~going ~~placement~~concern ofwhich ~~its~~contemplates ~~common~~the ~~stock~~realization toof assets ~~satisfy~~and the ~~capital~~satisfaction ~~requirements~~ of liabilities and commitments in the ~~Company’s~~normal ~~business~~course ~~plan~~of business. ~~There~~ isThe noCompany ~~assurance~~has ~~that~~a ~~the~~limited ~~Company~~operating history ~~will~~and belimited ~~able~~funds. toAs ~~obtain~~shown in the ~~necessary~~consolidated ~~funds through~~financial ~~continuing~~statements, ~~equity~~the ~~and~~Company ~~debt~~incurred ~~financing~~a tonet ~~have~~loss ~~sufficient~~of ~~operating~~$3,006,767, ~~capital~~used $3,022,426 tocash ~~execute~~for operations in for the ~~Company's~~year ~~business~~ended ~~plan.~~December If31, ~~the Company~~2012, ishad ~~able~~a toworking ~~obtain~~capital ~~necessary~~deficit ~~funds~~of $4,456,477 ~~there~~and istotal nostockholders’ deficit ~~assurance~~of ~~that~~$4,571,339 ~~the~~as ~~Company~~of ~~will~~December ~~successfully~~31, ~~implement~~2012. ~~its~~In ~~business~~addition, ~~plan or~~the ~~raise~~Company ~~sufficient~~has ~~capital~~limited toliquid ~~complete~~assets, ~~the~~significant ~~execution~~past ofdue ~~its~~debts, including ~~business~~unpaid ~~plan.~~payroll ~~The~~taxes, ~~Company’s~~and ~~continuation~~minimal asrevenues. aThese ~~going~~factors ~~concern is~~raise ~~dependent~~substantial ondoubt about the Company’s ability to continue ~~raise~~as ~~additional~~a ~~funds~~going ~~through~~concern. aThe ~~private~~accompanying ~~placement~~consolidated offinancial ~~its~~statements ~~equity~~do ornot ~~debt~~include ~~securities or~~any ~~other~~adjustments ~~borrowings~~relating ~~sufficient~~ to ~~meet~~the recoverability ~~its~~and ~~obligations~~classification onof arecorded ~~timely~~asset ~~basis~~amounts or amounts and ~~ultimately~~classification toof ~~attain~~liabilities ~~profitable~~that ~~operations~~might result from the outcome of this uncertainty.

~~F-7~~The Company is dependent upon outside financing to continue operations. Management plans to raise funds via private placements of its common stock and/or the issuance off debt instruments to satisfy the capital requirements of the Company’s business plan. There is no assurance that the Company will be able to obtain the necessary funds through continuing equity and debt financing to have sufficient operating capital to execute the Company's business plan. If the Company is able to obtain necessary funds, there is no assurance that the Company will successfully implement its business plan or raise sufficient capital to complete the execution of its business plan. The Company’s continuation as a going concern is dependent on the Company’s ability to raise additional funds through a private placement of its equity or debt securities or other borrowings sufficient to meet its obligations on a timely basis and ultimately to attain profitable operations.

Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of All American Pet Company, Inc. (a Nevada corporation), and its wholly-owned subsidiaries All American PetCo., Inc. (a Nevada corporation), All American Pet Brands, Inc. (a Nevada corporation) and AAP Sales and Distribution, Inc. (a Nevada corporation). AAP Sales and Distribution, Inc. is considered a variable interest entity. All significant inter-company balances and transactions have been eliminated. All American Pet Company, Inc., All American PetCo, Inc., All American Pet Brands, Inc., and AAP Sales and Distribution Inc., will be collectively referred to herein as the “Company”.

The consolidated financial statements include the accounts of the Company and AAP Sales and Distribution, Inc., its variable interest entity ("VIE") in which the Company is the primary beneficiary. Effective January 1, 2010, the Company adopted the accounting standards for nonF-controlling interests and reclassified the equity attributable to its non-controlling interests as a component of equity in the accompanying consolidated balance sheets. All significant intercompany balances and transactions have been eliminated in consolidation.6

The consolidated financial statements include the accounts of the Company and AAP Sales and Distribution, Inc., a variable interest entity ("VIE") for which the Company is the primary beneficiary. Effective January 1, 2010, the Company adopted the accounting standards for non-controlling interests and reclassified the equity attributable to its non-controlling interests as a component of equity in the accompanying consolidated balance sheets. All significant intercompany balances and transactions have been eliminated in consolidation.

Critical Accounting Policies/Estimates

Use of Estimates

The preparation of ~~financial~~consolidated ~~statements~~financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make ~~estimates~~ estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results ~~could~~ could materially differ from those estimates. Management believes that the estimates used are reasonable. Significant estimates ~~made~~ made by management include estimates for bad debts, excess and obsolete inventory, ~~coupon liabilities~~ and other trade spending liabilities.

Revenue Recognition, Sales Incentives and Slotting Fees

Revenues are recognized upon passage of title to the customer, typically upon product pick-up, shipment or delivery to customers. The Company’s revenue arrangements with its customers ~~often~~may include sales incentives and other promotional costs such as coupons, volume-based discounts, slotting fees and off-invoice discounts. These costs are typically referred to collectively as “trade spending”. Pursuant to Accounting Standards Codification (“ASC”) Topic 605, these costs are recorded when revenue is recognized and are generally classified as a reduction of revenue. Slotting fees refer to arrangements pursuant to which the retail grocer allows our products to be placed on the store’s shelves in exchange for a slotting fee. Given that there are no written contractual commitments requiring the retail grocers to allocate shelf space for twelve months, we expense the slotting fee at the time orders are first shipped to customers.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718, which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

FTransactions with non-8employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date off the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date on which it is probable that performance will occur.

~~ASC 505, "Compensation~~F-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.7

Earnings (Loss) Per Share

Net loss per share is calculated using the weighted average number of common stock outstanding for the period and diluted loss per share is computed using the weighted average number of common stock and dilutive common equivalent stock outstanding. The weighted average number of common stock outstanding was ~~233~~472,~~288~~237,~~191~~035 and ~~144~~233,~~422~~288,~~215~~191 for the ~~twelve~~year ~~months~~ ended December 31, ~~2011~~2012 and ~~2010~~2011, respectively. Net loss per share and diluted net loss per share are the same for all periods presented.

Fair Value of Financial Instruments

~~Accounting Standards Codification (“~~ASC”) 820, Fair Value Measurements and Disclosures, requires disclosing fair value to the extent practicable for financial instruments that are recognized or unrecognized in the balance sheet. Fair value of financial instruments is the amount at which the instruments could be exchanged in a current transaction between willing parties. The Company considers the carrying amounts of cash, ~~restricted cash, revenue in excess of billings,~~ accounts receivable, related party and other receivables, accounts payable, notes payable, related party and other payables, ~~customer~~to ~~deposits, and short term loans~~ approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. ~~The Company considers the carrying amount of long term bank loans to approximate their fair values based on the interest rates of the instruments and the current market rate of interest.~~

~~Level~~ASC ~~1 The~~820 ~~preferred inputs~~prioritizes tothe ~~valuation~~inputs ~~efforts are “quoted prices~~ used in ~~active~~measuring ~~markets~~fair ~~for~~value ~~identical~~into ~~assets or liabilities,” with~~ the ~~caveat that~~following the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.hierarchy:

Level 21 ~~FASB~~Quoted ~~acknowledged~~market ~~that~~prices in active markets for identical assets ~~and~~or liabilities ~~are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information~~. ~~To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.~~

~~F-9~~Level 2 Observable inputs other than those included in Level 1 (for example, quoted prices for similar assets in active markets or quoted prices for identical assets in inactive markets).

Level 3 ~~If inputs~~Unobservable ~~from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3~~ inputs asreflecting ~~“unobservable,”~~management’s ~~and~~own ~~limits~~assumptions ~~their~~about ~~use by saying they “shall be used to measure fair value to~~ the ~~extent that observable~~ inputs ~~are~~used ~~not available.” This category allows “for situations~~ in ~~which~~estimating ~~there is~~the ~~little,~~value ifoff ~~any, market activity for~~ the asset or liability ~~at the measurement date”~~. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

The Company has no financial instruments measured at fair value on a recurring or nonrecurring basis as of December 31, 2012 or 2011.

Cash Equivalents

Cash equivalents consist of highly liquid investments with maturities at the date of purchase of 90 days or less.

F-8

Accounts Receivable and Allowances for Uncollectible Accounts

Credit limits are established through a process of reviewing the financial history and stability of each customer. The Company regularly evaluates the collectability of the trade receivable balances by monitoring past due balances. If it is determined that a customer will be unable to meet its financial obligation, the Company records a specific reserve for bad debts to reduce the related receivable to the amount that is expected to be recovered.

Inventories

Inventories consist of raw materials, packaging supplies and finished goods and are valued at the lower of cost, determined on a first-in, first-out (“FIFO”) basis, or market.

Machinery, Equipment and Leasehold Improvements

Machinery and equipment are stated at cost. Significant improvements are capitalized and maintenance and repairs are expensed. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets. Machinery and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable ~~in accordance with ASC Topic 360~~. The Company evaluates recoverability of property, plant and equipment to be held and used by comparing the carrying amount of the asset to estimated future net undiscounted cash flows to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Estimated useful lives are as follows:

Computer equipment 3 – 5 years

Furniture and fixtures 5 – 10 years

Warehouse equipment 5 – 10 years

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

F-109

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. InAs of December 31, 2012 and 2011, the ~~event~~Company’s only significant deferred tax asset is its net operating loss carryforwards. Based on the Company’s ~~were~~recurring tolosses ~~determine~~and ~~that~~financial itposition, ~~would~~the benet ~~able~~deferred tax assets (approximately $6.5 million as of December 31, 2012) have been fully reserved for as of December 31, 2012 and 2011. Net operating losses begin to ~~realize~~expire ~~deferred~~in ~~income~~2022 for Federal purposes and 2014 for state purposes. The U.S. tax ~~assets~~laws incontain provisions (Section 382 limitations) that limit the ~~future~~annual inutilization ~~excess~~of net operating loss (and credit carryforwards) upon the occurrence of ~~their~~certain ~~net~~events ~~recorded~~including ~~amount~~a significant change in ownership interest. Generally, wesuch ~~would~~limitations ~~make~~arise when the ownership of certain shareholders or public groups in the stock of a corporation change by more than 50 percentage points over a three-year period. The Company may have incurred such an ~~adjustment~~event or events; however, the Company has not completed a current study to determine the ~~valuation~~extent ~~allowance~~of ~~which~~the ~~would~~limitations, ~~reduce~~if any. Until a study is completed and the ~~provision~~extent ~~for~~of ~~income~~the ~~taxes~~limitations is able to be determined, no amounts are being presented as an uncertain tax position.

~~The~~A ~~Company follows the accounting guidance which provides that a~~ tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. The Company has no unrecognized tax benefits as of December 31, 2012 and 2011. Given that the Company’s net operating losses have yet to be utilized, all previous tax years remain open to examination by Federal authorities and other jurisdictions in which the Company operates.

Reclassifications

Certain amounts in the ~~balance~~consolidated ~~sheets for~~balance ~~the~~sheet ~~year~~as ~~ended~~of December 31, 2011 have been reclassified to be consistent with the current year presentation. ~~Settlement and judgment payable previously separated as current portion of settlement payable and current portion employee severance payable in the balance sheets.~~ The reclassification had no impact on the Company’s consolidated financial condition, results of operations or cash flows.

Recent Accounting Pronouncements Adopted

On January 1, 2012, the Company adopted Accounting Standards Update No. 2011-05, “Presentation of Comprehensive Income” that improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The update did not impact the Company’s consolidated financial statements, as the Company did not have any items of comprehensive income in 2012 or 2011.

2. VARIABLE INTEREST ENTITY

~~Following~~The following is a description of ~~our~~the ~~financial~~Company’s financial interests in a variable interest entity that wemanagement ~~consider~~considers significant, those for which wemanagement ~~have~~has determined that wethe ~~are~~Company is the primary beneficiary of the entity and, therefore, ~~have~~has consolidated the entity into ~~our~~the Company’s financial statements.

On August 12, 2009, we entered into a License Agreement with AAP Sales and Distribution, Inc. (“AAPSD”). Under the terms of the agreement, AAPSD has the non-exclusive right to manufacture and market certain products of the Company (“AAPT”). The duration of the agreement is for a period of five years. AAPSD is the primary beneficiary of the Company because management of AAPT controls the ~~relatively~~ economic resources of AAPSD and provides significant financial support ~~provided~~ to AAPSD in the form of the production and distribution and deferred payment arrangements between AAPSD the Company.

FAAPSD owes the Company payments for product purchased and for royalties at the stated rate of 18.5% of net revenues, which are due and payable within five business days of receipt of funds by AAPSD from any sale when good funds are received from the sale. The 18.5% royalty payments will be applied to all minimum guarantee payments. The minimum guaranteed royalties, as amended, are due based within the 12-11month period following the time at which AAPT has delivered 3,000,000 pounds of finished product. AAPSD does not owe the Company any royalties until AAPSD has recouped any costs of marketing or placement fees. All royalty payments due from sales are accumulated and are applied toward to the minimum royalty payment for the year. If the 18.5% royalties are less than the minimum then AAPSD is obligated pay AAPT the difference between what was paid during the 12 month period and the required minimum. Minimum royalty payments are due in the normal course of business as AAPSD has ten days at the end of each quarter to report any sales and royalties due and AAPC has the right to review the reports and agree on what amounts are owed based on sales and a statement of any minimum guarantees that may be due and payable. All payments are to be made in the normal course of business as agreed at the time of the annual royalty report’s acceptance by AAPT.

AAPSD owes the Company payments for product purchased and for royalties at the stated rate of 18.5% of net revenues, which are due and payable within five business days of receipt of funds by AAPSD from any sale when good funds are received from the sale. The 18.5% license payments will be applied to all minimum guarantee payments. The minimum guaranteed royalties, as amended, are due based within the 12F-month period following the time at which AAPC has delivered 3,000,000 pounds of finished product. AAPSD does not owe the Company any royalties until AAPSD has recouped any costs of marketing or placement fees. All Royalty payments due from sales are accumulated and are applied toward to the minimum royalty payment for the year. If the 18.5% royalties are less than the minimum then AAPSD is obligated pay us the difference between what was paid during the 12 month period and the required minimum. Minimum royalty payments are due in the normal course of business as AAPSD has ten days at the end of each quarter to report any sales and royalties due and AAPC has the right to review the reports and agree on what amounts are owed based on sales and a statement of any minimum guarantees that may be due and payable. All payments are to be made in the normal course of business as agreed at the time of the annual royalty report’s acceptance by AAPC.10

WeManagement ~~have~~has determined that weAAPT ~~are~~ is the primary beneficiary of AAPSD as ~~our~~the Company’s interest in the entity is subject to variability based on results from operations and changes in the fair value. During the year ended December 31, ~~2011~~2012 and ~~2010~~2011, all operations of AAPSD are included in the accompanying consolidated financial statements. ~~Therefore,~~For ~~for~~ the ~~year~~years ~~ending~~ended December 31, 2012 and 2011, sales of $5924,~~726~~701 toand ~~AAPSD are offset by~~ ($~~141~~82,~~879 in slotting fees~~153), ~~resulting~~respectively, inand ~~negative~~ net ~~sales~~losses of ($82210,~~153~~486) and ($151,031), respectively, were recognized as a result of the consolidation.

The ~~results of operations for AAPSD have been included in the~~ financial ~~statements of the Company. The unaudited financial~~ position of AAPSD at December 31, ~~2011~~2012 is as follows:

Total Assets	$	-715,869
Total Liabilities		(~~348~~1,~~380~~274,735	)
Total Stockholders’ Deficit	$	~~348~~558,~~380~~866

3. INVENTORY

Inventory consists of the following:

	December 31, 2011		December 31, 2010
	December 31, 2012		December 31, 2011
Raw materials	$	-	$	~~48,250~~-
Work in process		-		-
Finished goods		-715,869		~~88,556~~-
	$	-715,869	$	~~136,806~~-

~~F-12~~During the year ended December 31, 2011, the Company vacated the warehouse and manufacturing facility in Nebraska City, Nebraska. Upon vacating of the facility, the Company discarded the on hand product inventory as the Company had determined that the cost to store and or sell the remaining inventory exceeded the net proceeds that could be realized from an orderly disposal of this inventory. The transaction resulted in an impairment charge of $98,164 in the year ended December 30, 2011. There was no impairment charge against inventory during the year ended December 31, 2012, and the reserve for inventory obsolescence was $0 as of December 31, 2012 and 2011.

During the year ended December 31, 2011, the Company vacated the warehouse and manufacturing facility in Nebraska City, Nebraska. Upon vacation of the facility, the company discarded the on hand product inventory as the Company had determined that the cost to store and or sell the remaining inventory exceeded the net proceeds that could be realized from an orderly disposal of this inventory The transaction resulted in an impairment charge of $98,164 in the year ending December 30, 2011.F-11

4. MACHINERY AND EQUIPMENT

Machinery and equipment consists of the following:

	December 31, 2011			December 31, 2010
	December 31, 2012			December 31, 2011
Computer equipment and software	$	272,~~095~~769		$	27,~~094~~095
Warehouse		-			122,450
Furniture and Fixtures		1,991			-
Total		27,095			149,544
Warehouse and food production equipment		73,562			-
Less: Accumulated depreciation		(24,552	)		(23,567	)
Total		78,322			27,095
	$	2,542		$	125,977
Less: Accumulated depreciation		(8,956	)		(24,552	)
Net Property and Equipment	$	69,366		$	2,542

InDuring the year ended December 31, 2011, ~~the~~ the Company cancelled a capital lease of a bar forming machine and returned the equipment to the lessor. The transaction resulted in in a ~~write-down~~reduction of warehouse equipment ~~from~~of $122,450 to $0. ~~The~~and the Company recognized a loss on abandonment of machinery and equipment of $7,812 ~~in the year ending December 31, 2011~~.

In 2012, obsolete and fully depreciated computer equipment in the amount of $27,095 was scrapped. Depreciation expense for the years ended December 31, ~~2011~~2012 and ~~2010~~ 2011 was $~~915~~12,750 and $~~264~~915, respectively.

5. PAYROLL TAXES

The Company did not make certain ~~filings~~required filings and payments of required federal and state payroll taxes. The Company has provided an estimate ~~for~~of ~~any possible~~ penalty assessments ~~and~~ and interest. The collective amount of payroll taxes, interest and penalties due at December 31, ~~2011~~2012 and ~~December 31,~~2011 ~~2010~~ totaled $~~797~~889,~~422~~711 and $~~764~~797,~~335~~422, respectively. Under the Internal Revenue Code, the Internal Revenue Service may impose a civil penalty on the Company’s responsible persons that is distinct from the Company’s responsibilities. This civil penalty may equal 100% of the Company’s delinquent trust fund taxes.

F-1312

6. NOTES PAYABLE

Notes payable consists of the following:

	December 31,		December 31,
	2011		2010
	2012		2011
Notes Payable – Non-Related Parties. Interest at 10% per annum. Interest and principle due on demand	$	150,000	$	150,000
Notes Payable – Interest at 10% per annum; interest and principal due on demand	$	-	$	150,000
Notes Payable, Other – In default, interest due at 15% per annum		50,000		50,000
Notes Payable interest at 17% per annum; interest and principal due on demand; demand has been made and the note is in default at December 31, 2012		50,000		50,000
Convertible 8% Note Payable due March 17, 2011		-		56,018
Convertible 8% Note Payable due September 8, 2011		-		64,000
Convertible 8% Note Payable due May 31, 2011		-		56,018
Convertible 8% Note Payable due November 14, 2011		-		128,000
Convertible 8% Note Payable due September 8, 2011		64,000		64,000
Total Notes Payable	$	50,000	$	392,000
Convertible 8% Note Payable due November 14, 2011		128,000		-
Total Notes Payable	$	392,000	$	376,036
Less: Debt Discount		-		(48,128	)
Notes payable, net of debt discount	$	392,000	$	327,908

~~Convertible~~On ~~Debt~~April 27, 2004, the Company entered into an unsecured promissory note with an unrelated third party for $150,000. The loan bears interest at 10% per annum and had an original due date of April 27, 2005. Extended due dates were granted up through 2011. On August 9, 2012, a stipulated settlement amount of $300,000, which included principal of $150,000 and accrued interest of $150,000, was reached with the noteholder. As a result of the stipulated settlement, the related $300,000 has been classified in settlements and judgments at December 31, 2012 in the accompanying consolidated balance sheet (Note 9).

In 2010, the Company entered into an unsecured promissory note with an unrelated third party for $50,000. The loan bears interest at 17% and is due on demand. On March 16, 2012, the noteholder demanded repayment of the note and all accrued interest. The Company has not made any payments and is in default on the note.

On June 15, 2010, the Company entered into an unsecured, convertible promissory note with an unrelated third party for $30,000. The loan bears interest at 8% per annum and a balloon payment of principal and accrued interest is due on March 17, 2011. At any time 180 days after the date of the note, the lender can convert the principal and accrued interest into shares of the Company’s common stock at a 45% discount based on the average of the lowest three trading prices during a ten day period ending one day prior to the conversion date. On January 3, 2011, $10,000 of the principal balance was converted into 1,098,901 shares. On January 13, 2011, $10,000 of the principal balance was converted into 1,162,791 shares. On January 19, 2011, $10,000 of the remaining principal balance and $1,200 in interest was converted into 1,454,545 shares and the note was deemed paid in full.

On August 27, 2010, the Company entered into an unsecured, convertible promissory note with an unrelated third party for $30,000. The loan bears interest at 8% per annum and a balloon payment of principal and accrued interest is due on May 31, 2011. At any time 180 days after the date of the note, the lender can convert the principal and accrued interest into shares of the Company’s common stock at a 45% discount based on the average of the lowest three trading prices during a ten day period ending one day prior to the conversion date. On March 8, 2011, $10,000 of the principal balance was converted into 1,639,344 shares. On March 22, 2011, $15,000 of the principal balance was converted into 4,285,714 shares. On June 23, 2011, the Company received a default notice from the holder of the note. The default notice was issued in regards to the Company’s failure to maintain current Securities Exchange Commission Filings. The note holder demanded accelerated payments and default interest rates as a result of this default. On September 8, 2011, the remaining $5,000 principle balance and $1,200 in interest of the 8% Note dated August 27, 2010 and due May 31, 2011, was converted into 3,100,000 shares of common stock and the note was deemed paid in full.F-13

On August 27, 2010, the Company entered into an unsecured, convertible promissory note with an unrelated third party for $30,000. The loan bears interest at 8% per annum and a balloon payment of principal and accrued interest is due on May 31, 2011. At any time 180 days after the date of the note, the lender can convert the principal and accrued interest into shares of the Company’s common stock at a 45% discount based on the average of the lowest three trading prices during a ten day period ending one day prior to the conversion date. On March 8, 2011, $10,000 of the principal balance was converted into 1,639,344 shares. On March 22, 2011, $15,000 of the principal balance was converted into 4,285,714 shares. On June 23, 2011, the Company received a default notice from the holder of the note. The default notice was issued in regards to the Company’s failure to maintain current Securities Exchange Commission filings. The noteholder demanded accelerated payments and default interest rates as a result of this default. On September 8, 2011, the remaining $5,000 principal balance and $1,200 in interest of the 8% note dated August 27, 2010 and due May 31, 2011, was converted into 3,100,000 shares of common stock and the note was deemed paid in full.

On December 6, 2010, the Company entered into an unsecured, convertible promissory note with an unrelated third party for $37,500. The loan bears interest at 8% per annum and a balloon payment of principal and accrued interest is due on September 8, 2011. At any time 180 days after the date of the note, the lender can convert the principal and accrued interest into shares of the Company’s common stock at a 40% discount based on the average of the lowest three trading prices during a ten day period ending one day prior to the conversion date. On June 23, 2011, the Company received a default notice from the holder of the note. The default notice was issued in regards to the Company’s failure to maintain current Securities Exchange Commission filings. The noteholder demanded accelerated payments and default interest rates as a result of this default. The Company did not repay or convert any of this convertible debt into common stock in the year ended December 31, 2011. During 2012, $64,000, consisting of accrued interest and the outstanding principal balance was converted into 56,321,448 shares of common stock and the note was deemed paid in full.

F-14

On December 6, 2010, the Company entered into an unsecured, convertible promissory note with an unrelated third party for $37,500. The loan bears interest at 8% per annum and a balloon payment of principal and accrued interest is due on September 8, 2011. At any time 180 days after the date of the note, the lender can convert the principal and accrued interest into shares of the Company’s common stock at a 40% discount based on the average of the lowest three trading prices during a ten day period ending one day prior to the conversion date. On June 23, 2011, the Company received a default notice from the holder of the note. The default notice was issued in regards to the Company’s failure to maintain current Securities Exchange Commission Filings. The note holder demanded accelerated payments and default interest rates as a result of this default. The Company did not repay or convert any of this convertible debt into common stock in the year ended December 31, 2011. During the three months ended March 31, 2012, $37,500 of the principal balance and $7,495 in accrued interest was converted into 56,321,448 shares and the note was deemed paid in full.

On February 11, 2011, the Company entered into an unsecured, convertible promissory note with an unrelated third party for $75,000, less a $3,000 fee. The loan bears interest at 8% per annum and a balloon payment of principal and accrued interest is due on November 14, 2011. At any time 180 days after the date of the note, the lender can convert the principal and accrued interest into shares of the Company’s common stock at a 40% discount based on the average of the lowest three trading prices during a ten day period ending one day prior to the conversion date. On June 23, 2011, the Company received a default notice from the holder of the note. The default notice was issued in regards to the Company’s failure to maintain current Securities Exchange Commission Filings. The note holder demanded accelerated payments and default interest rates as a result of this default. The Company did not repay or convert any of this convertible debt into common stock in the year ended December 31, 2011. On February 21, 2012, $7,500 of the principal balance was converted into 8,823,529 shares. On February 27, 2012, $12,000 of the principle balance was converted into 15,000,000 shares. On March 1, 2012, $11,500 of the principal balance was converted into 15,131,579 shares. On March 7, 2012, $12,000 of the principle balance was converted into 15,189,873 shares. On March 12, 2012, $9,000 of the principal balance was converted into 8,181,818 shares. On March 14, 2012, $9,500 of the principle balance was converted into 7,307,692 shares. On February 15, 2012, the remaining $13,500 of principle balance and $12,740 in interest was converted into 7,222,222 shares and the note was deemed paid in full.

7. RELATED PARTY TRANSACTIONS

As of December 31, 2011 ~~and 2010~~, the Company owed a total of $47,446 ~~and $40,625, respectively,~~ to the officers of the Company for accrued salaries which was paid in 2012.

On March 6, 2012, ~~subsequent~~the toBoard ~~the~~of ~~balance~~Directors, ~~sheet~~consisting ~~date,~~of ~~the~~Mr. ~~Board~~Schwartz ofand ~~Directors~~Ms. Bershan, authorized the Company to execute a Convertible Revolving Grid Note (the “Grid Note”) for a principal sum of up to $1,000,000 with CEO Barry Schwartz and President, Lisa Bershan. The Grid ~~note~~Note bears interest at 10% per year and may be converted into common stock of the Company at a conversion price of $0.0022 any time before March 6, 2013. Neither Mr. Schwartz nor Ms. Bershan has advanced capital under the terms of the grid note as of ~~September~~December 2131, 2012. In March 2013, the Grid Note was amended (Note 12).

~~F-15~~On April 30, 2012, the Board of Directors approved salary advances not to exceed $250,000 for Mr. Schwartz and Ms. Bershan. In 2012, the Board of Directors required that all salary advances are repaid in full before any transactions pursuant to the Grid Note are consummated. As of December 31, 2012, there were no outstanding salary advances, as all amounts received by Mr. Schwartz and Ms. Bershan were deemed to be, in substance, officer compensation.

8. STOCKHOLDERS’ DEFICIT

Capital Stock

All American Pet Company, Inc. was formed under Maryland law on January 4, 2006 with 50,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock. On January 27, 2006, All-American Pet Company Inc., a New York corporation, merged with and into All American Pet Company, Inc., a Maryland corporation. In June 2012, All-American Pet Company Inc., Maryland, merged with and into All American Pet Company, Inc., a Nevada corporation.

Increase in Authorized Common Stock

Concurrent with the June 11, 2012 re-domicile to a Nevada corporation, the shareholders voted to increase the number of authorized shares of $0.001 par value common stock to 1,~~000~~010,000,000. ~~The~~Previously, the shareholders voted on February 26, 2011 to increase the number of authorized shares of $0.001 par value common stock to 500,000,000. Authorized shares ~~were~~had been increased from 50,000,000 to 250,000,000 in 2009.

In 2013, the Board of Directors increased the number of authorized shares to 3,000,000,000 (Note 12).

Sales of Common Stock

During the year ended December 31, ~~2011~~2012, the Company received and accepted subscriptions for ~~608~~285,~~442~~544,000 shares of common stock at $0.01 per share. The sale of unregistered equity securities resulted in a capital increase of $~~599~~3,~~642~~012,441, ~~before~~after offering costs ~~of $72,090~~. The Company recorded a $~~569~~677,~~642~~156 common stock ~~payable~~ payable on its books at December 31, ~~2011~~2012 to reflect the value of the ~~$403~~77,~~142~~598,571 of common shares not yet issued, but for which cash ~~receipt~~has been received and $~~166~~187,~~500~~ 894 of common stock ~~value~~ earned by various consultants during the year ~~ending~~ended December 31, ~~2011~~2012. As of December 31, ~~2011~~2012, there were ~~254~~ 695,~~804~~494,866 shares issued and outstanding.

F-1615

Conversion of Preferred Stock to Common Stock

On February 27, 2009, the Company entered into an agreement with the two preferred stockholders to convert all 56,500 shares of Series “A” Preferred shares ~~held~~ held by them in exchange for 5,000,000 shares of the Company’s common stock (the “Share Guarantee”). The delivery of the common stock to the preferred stockholders took place in March 2009 and the Company was released by the stockholders ~~(the Releases)~~ from any and all future claims and liabilities. The preferred stockholders have the right to sell the common stock at a rate of 1,250,000 in the aggregate every 90 days starting May 15, 2009 and the right to sell at will after March 31, 2010. The Company has agreed that the total value of the shares sold over the Liquidation Period, which is defined as the period from May 15, 2009 to April 30, 2010, to be at a minimum of $800,000 or the market value of 5,000,000 shares at $0.16 per share. If the value of the shares sold during the Liquidation Period is less than $800,000, then the Company will have the right to purchase any unsold shares at a price of $0.16 per share. If the gross proceeds from all sales is still less than $800,000 then the Company shall have the right and not the obligation to make up the difference by making a cash payment on or before May 31, 2010. In addition, no later than June 15, 2010, the Company is obligated to issue an additional 3,000,000 shares of the common stock in total to these stockholders if the sales proceeds and any additional payments made by the Company is less than $800,000. This agreement was extended on May 25, 2010 to August 31, 2010 with an agreement to issue an additional 1,000,000 shares as compensation for the extension and 3,000,000 were issued on May 26, 2010 based on the terms of the original agreement that called for the shares to be issued if the value was not paid on or before June 15, 2010. During the year ended December 31, 2010, the Company recorded $1,000,000 as share guarantee expense to account for the obligation described above. The June 1, 2010 amendment to the March 7, 2009 agreement was amended to extend the liquidation period to achieve the $800,000 guaranteed liquidation amount to March 31, 2011. The Company issued an additional 2,000,000 shares of Common stock as the fee for this extension at $0.06 per share for a total of $120,000. As of December 31,, 2011, the share guarantee liability remained at $600,000.

AThe ~~summary~~Share ofGuarantee ~~the~~was ~~Company’s~~subsequently ~~outstanding~~amended to ~~warrants~~extend ~~and~~the ~~activity for~~Liquidation ~~the~~Period ~~year~~described ~~ended~~above ~~December~~to March 31, 2011 and those amendments required the Company to issue 6,000,000 shares of common stock with a fair value of $400,000 in 2010. isIn asconnection ~~follows:~~with the Share Guarantee, the Company recognized an additional expense, and a corresponding accrued liability, of $600,000 in 2010.

	Number of Units		Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2009		10,237,031		0.16
Expired in 2010		3,437,031
Outstanding at December 31, 2010		6,800,000		0.16
Expired in 2010		1,800,000
Outstanding at December 31, 2011		5,000,000		0.16

In October 2012, the Share Guarantee was amended, subject to the Company’s ability to satisfy certain required payments and other conditions. As the Company did not satisfy its contractual obligations, the amendment was cancelled and became null and void.

Although the Company’s contractual obligations under the Share Guarantee terminated in 2011, management intends to fulfill the Company’s obligations under the related agreements and amendments. Based on the $800,000 amount of the guarantee, amounts realized by the counterparties from selling related shares, and the number of shares the counterparties have left to sell, management estimates the Company’s obligation under the Share Guarantee to be $400,000 as of December 31, 2012.

Warrants Outstanding

A summary of the Company’s outstanding warrants and activity for each of the years ended December 31, 2012 and 2011 is as follows:

	Number of Units			Weighted- Average Exercise Price Per Share

Outstanding at December 31, 2010		6,800,000		$	0.16
Expired in 2011		(1,800,000	)		0.10
Outstanding at December 31, 2011		5,000,000			0.17
Issued		-
Exercised		-
Outstanding at December 31, 2012		5,000,000		$	0.17

F-16

Pursuant to August 24, 2008 Employment Agreements, both Barry Schwartz and Lisa Bershan, officers of the Company, are entitled to receive 2,500,000 warrants each at an exercise price of $0.17 per share as bonus. A Black Scholes calculation determined the value of the warrants was $118,750 of bonus to each officer, which was recognized as compensation expense in 2008. The Black Scholes calculation takes into consideration the following assumptions: 5,000,000 as number of shares, a stock price of $0.05, an exercise price of $0.17, volatility rate of 409.67% discount rate of 3.875%, immediate vesting period and a term of ten years.

Common Stock Receivable

On April 6, 2010, the Company settled litigation with a former ~~controller~~employee. inTerms ~~which~~of the ~~former~~settlement ~~controller~~required ~~agreed~~the former employee to ~~return~~place 400,000 shares of Company common stock valued at $52,000 in an escrow account in exchange for an initial payment of $8,000 and 27 monthly payments of $1,571 ~~per month over a 27 month period~~. The Company ~~made two payments totaling $3,242 in the year ended~~will ~~December~~receive ~~31, 2011. The escrow agent is obligated to return all of~~ the shares toof ~~the~~common ~~Company~~stock ~~once~~after all of the payments ~~are~~have ~~made~~been ~~to the former controller~~made. The ~~balance~~Company ofmade ~~the~~no ~~settlement~~payments ~~payable~~in ~~and~~2012 ~~common~~or ~~stock~~2011 ~~receivable pertaining~~ related to ~~the~~this ~~former~~arrangement ~~controller at December 31, 2011 was $31,432 and $52,000, respectively. See~~ (Note 9 ~~- Litigation and Judgments below~~).

On February 3, 2011, through mediation, the Company settled litigation with a former employee. Terms of the settlement required the former employee to place 750,000 shares of Company stock valued at $90,000 in an escrow account in exchange for 14 monthly payments of $6,576. The Company will receive the shares of common stock after all of the payments have been made. The Company made no payments in 2012 and $2,069 in 2011 (Note 9).

9. LITIGATION, CLAIMS, AND JUDGMENTS

The Company is involved in various litigation, claims and judgments involving vendors, former employees, and a promissory noteholder. A summary is as follows:

	December 31,		December 31,
	2012		2011

Vendors	$	382,473	$	20,000

Former Employees		268,245		211,480

Promissory Noteholder		227,281		-

	$	877,999	$	231,480

F-17

On February 3, 2011, through mediation, the Company and a Federal Bankruptcy Trustee settled litigation with a former salesperson in which the former sales person would return 750,000 shares of Company stock valued at $90,000 in exchange for payments totaling of $92,069 over a 14 month period. The Federal Bankruptcy trustee has agreed to return all of the shares to the Company once all of the payments are made to the Bankruptcy Trustee. The Bankruptcy Trustee received $2,069 in the year ending December 31, 2011 from monies levied by the Los Angeles County Sherriff. The Company has recorded $90,000 as a common stock receivable for the shares being held by the bankruptcy trustee pertaining to the former salesperson. See Note 9 - Litigation and Judgments below.Vendors

~~Total~~As ~~settlements~~of ~~and~~December 31, 2011, one vendor had a settlement agreement for $20,000. During 2012, six vendors made claims or were awarded judgments ~~payable~~against the Company for a total ~~was~~of $~~231~~364,~~480~~473, and aggregate payments of $2,000 were made. The balance outstanding at December 31, ~~2011~~2012, was $382,473.

9On July 23, 2012, a vendor filed an action against the Company and certain officers as individuals for an original $150,000 judgment previously awarded in arbitration, 4.75% interest, ~~LITIGATION~~legal ~~AND~~fees ~~JUDGMENTS~~of $49,950, and other fees of $4,981. The action has not been heard by a court.

~~The~~As Company was and is involved in various litigation involving trade creditors, professionals and former employees. A videographer filed suit in Small Claims Court in Mercer, New Jersey for $2,000 and received a default judgment in November of 2007. The Company has contacted the plaintiff in this matter, but no settlement agreement has been concluded. A materials handling company was granted a judgment for $3,654 by Superior Court of California on January 18, 2008. There has been no further collection activity on this account. A media company filed a suit to collect unpaid fees dating from October 30, 2007 of $71,033. The media company was granted a judgment for $71,033 by Los Angeles Superior Court on April 6, 2010, which is still owed by the Company. There have been no efforts on the part of the media company to collect the judgment and the Company believes that it will be able to settle the amount for a reduced final payment. Three former employees hold judgments for unpaid wages in the amounts of $9,274, $15,600 and $16,995 from labor board judgments in 2008. With penalties and accrued interest, the three labor judgments amounted to $60,529 as of December 31, 2011. An internet marketing company filed suit against the Company and agreed to arbitration which was settled for $20,000 in October of 2010. There have been no payments made on this settlement. A public relations firm obtained a judgment in the amount of $44,323 on April 9, 2010 for fees owed for services. There has been no collection activity and the Company intends to negotiate a reduced settlement of the final balance owed. An accounting firm that provided services to the company obtained a judgment through arbitration that was confirmed by the Circuit Court in West Palm Beach for $150,000 on August 25, 2010. Subsequent to the balance sheet date, on July, 23, 2012, the ~~attorneys for the accounting firm filed an action in the Circuit Court in and for the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, against the~~ Company ~~and CEO,~~has ~~Barry~~accrued ~~Schwartz and President, Lisa Bershan as individuals, seeking~~ $~~150~~221,~~000~~463 inrelating ~~principal plus 6% interest from the default date of March 19, 2010, legal fees of $49,950, arbitrator fees, a filing fee of $3,781 and a state court fee of $1,200. A grocery services company filed~~ to substitute attorneys on its filing to collect $22,000 in fees for advertising services on February 22, 2011. The expense was incurred in 2009. The Company believes it will be settled for a nominal amount if anything based on the age of the payable. On March 11, 2011, a judgment of $2,068, plus costs of $80, was entered in small claims court in Beverly Hills, California against the Company and Mr. Schwartz and Ms. Bershan for animal training services. On July 24, 2012, the Company settled this ~~dispute in full for $500~~matter.

Former Employees

As of December 31, 2011, six former employees made claims or were awarded judgments against the Company for a total of $211,480. During 2012, one former employee entered into a settlement agreement for $50,000, and there were no payments made in 2012. The balance outstanding at December 31, 2012 was $268,245, and includes accrued interest.

As described in Note 8, the Company has settlement agreements with two former employees that require monthly cash payments and provide for the return of 1,150,000 shares of common stock if the Company satisfies its payment obligations to the former employees.

Promissory Noteholder

On August 9, 2012, the Company settled litigation with a note holder. The settlement requires the Company to pay cash of $300,000 and interest at 8% per annum. Terms of the settlement require an initial payment of $50,000 and quarterly payments of $30,000 beginning October 1, 2012. Total payments during 2012 were $80,000. The outstanding principal balance and accrued interest as of December 31, 2012, was $227,281.

In the event of default, the noteholder can enter a stipulated judgment against the Company and certain officers as individuals in the amount of $1,197,190. The Company has not made the required January 1, 2013 or April 1, 2013 payments and the noteholder has not filed the stipulated judgment against the Company.

F-18

On April 6, 2010, the Company settled litigation with a former controller in which the former controller agreed to return 400,000 shares of Company stock valued at $52,000 in exchange for $8,000 and payments of $1,571 per month over a 27 month period. The former controller delivered the shares to an escrow agent and the escrow agent has agreed to return all of the shares to the Company once all of the payments are made to the former controller. The Company has recorded $52,000 as a common stock receivable for the shares in escrow. The Company made two payments totaling $3,342 in the yearended December 31, 2011. As of December 31, 2011, the balance due the former controller was $31,432. On February 3, 2011, through mediation, the Company and a Federal Bankruptcy Trustee settled litigation with a former sales person in which the former sales person would return 750,000 shares of Company stock valued at $90,000 in exchange for payments totaling $92,069 over a 14 month period. The Federal Bankruptcy trustee will return all of the shares to the Company once all of the payments are made to the Bankruptcy Trustee. The Bankruptcy Trustee received $2,069 in the three months ending March 31, 2011 from funds levied by the Los Angeles County Sherriff. The Company has recorded a $90,000 liability to the former sales person and a $90,000 common stock receivable for the shares being held by the bankruptcy trustee.

Subsequent to the balance sheet date, on April 4 2012, a former human resources coordinator at the Company filed suit against the Company and its subsidiaries in the Superior Court of California, West District Beverly Hills Courthouse, for unpaid severance stemming from a November 12, 2010 severance agreement between the Company and the former Human Resources coordinator. Pursuant to the terms of the November 12, 2010 agreement, the Company was to pay a total of $30,000 in $1,000 monthly payments over 30 months commencing on December 15, 2010. As of September 21, 2012, the Company has not made any of the payments pursuant to the severance agreement and the Company intends to defend against the severance claim made by the former human resources coordinator.

On June 7, 2012, a media subcontractor filed suit in the small claims division of the Superior Court of California, County of Los Angeles, West District in Santa Monica. The Company defended in this action and attempted to negotiate a rescheduling of the subcontracted work. On July 7, 2012, judgment was rendered in favor of the media subcontractor in the amount of $4,585.20 plus costs of $50.

On August 9, 2012, the Company settled litigation with the holder of a $150,000 note bearing interest at 10% which was in default at December 31, 2011. Under the terms of the settlement, the Company will pay the note holder $300,000 with 8% interest accruing on the unpaid balance. The Company made payments two payments of $25,000 each in August, 2012 and will make nine additional quarterly payments of $30,000 each commencing on October 1, 2012 and continuing through October 1, 2014. A final payment of $4,265 is due on January 1, 2015. In the event of any default of this settlement agreement, the note holder can enter a stipulated judgment against the Company, CEO Barry Schwartz and President, Lisa Bershan, as individuals, in the amount of $1,197,190.

F-19

10. CUTEST DOG COMPETITION

In May 2009, the Company finalized plans to host a nationwide viral marketing contest known as the “Cutest Dog Competition”. The contest started on August 1, 2009, allowing every dog owner in America to have the opportunity to submit a picture of their dog. The Company announced the winner of the “Cutest Dog Competition” on its website as well as at a major venue on Thanksgiving Day. Prizes were distributed for regional winners, and three top regional winners received a $5,000 prize each, qualified as finalists for the final event. Regional winners from all over the country then competed for the title of the “Cutest Dog Competition” and that winner was awarded the $1 million prize. OnIn November 2009, the winner was announced.

The present value of the $1,000,000 obligation payable over 30 years at 7.5% present value is $336,500. The discount of $663,500 is being amortized over 30 years with an annual cash payment of $33,333. The Company did not make any payments in the ~~year~~years ~~ending~~ended December 31, 2012 and 2011. As of December 31, ~~2011~~2012 and ~~2010~~2011, $~~378~~402,~~533~~849 and $~~357~~378,~~517~~533, respectively were recorded as prize liabilities in the accompanying consolidated balance sheets.

11. ~~SUBSEQUENT~~COMMITMENTS ~~EVENTS~~AND CONTINGENCIES

OnLease January 10, 2012, the Company executed a sublease effective January 15, 2012 for the rental of approximately 3,217 of office space to be used as the Company’s headquarters. The initial cost of the space was $5,800 per month and the term was month-to-month. The Company posted a $5,800 deposit for the use of the space. On March 16, 2012, the Company increased the square footage utilized and its monthly payment was increased to $7,000 per month.commitments

OnIn ~~March 6, 2012,~~ the ~~Board~~normal course of ~~Directors authorized~~business, the Company enters tointo ~~execute~~ a ~~Convertible~~number ~~Revolving~~of ~~Grid~~off-balance ~~Note~~sheet ~~for~~commitments. aThese ~~principal~~commitments ~~sum~~expose ofthe upCompany to ~~$1,000,000~~varying ~~with~~degrees ~~CEO~~of ~~Barry~~credit ~~Schwartz~~ and ~~President,~~market risk ~~Lisa~~and ~~Bershan.~~are ~~The~~subject ~~Grid~~to ~~note~~the ~~bears~~same ~~interest~~credit ~~at 10% per year~~ and ~~may~~market berisk ~~converted~~limitation ~~into~~reviews ~~common~~as ~~stock~~those ofrecorded on the Company’s consolidated atbalance asheets. ~~conversion~~The ~~price~~Company ofleases ~~$0.0022~~space ~~per~~for ~~share~~its ~~any~~manufacturing ~~time~~operations ~~before~~in ~~March 6~~Shawnee, ~~2013.~~Kansas Asand ofleases ~~September~~equipment ~~21,~~used ~~2012,~~in ~~neither~~operations at Mrthat location. ~~Schwartz~~Amounts ~~nor~~of ~~Ms. Bershan~~minimum ~~has~~future ~~loaned~~annual ~~any~~commitments ~~money~~ under ~~the~~non-cancelable ~~terms~~operating ofleases ~~the~~are ~~grid~~as ~~note.~~follows:

During the three months ended March 31, 2012, the Company converted a convertible note entered into on December 6, 2010 for the principal balance of $37,500 and $7,495 in accrued interest into 56,321,448 shares of common stock and the note was deemed paid in full.

2013	$	167,599
2014		150,327
2015		106,029
2016		108,022
2017 and thereafter		45,305
Total	$	577,282

~~During~~In ~~the~~addition ~~three~~to ~~months~~these ~~ended March 31~~commitments, ~~2012,~~ the Company ~~converted~~pays amonthly ~~convertible~~rent ~~note~~for ~~entered~~its ~~into~~corporate onoffices ~~February~~and ~~11,~~rent ~~2011~~ for ~~the~~a ~~principal~~warehouse ~~balance of $75~~forklift,~~000~~ ~~and~~both ~~$12,740~~on ofmonth ~~accrued interest~~to ~~into~~month 76basis,~~856,713~~ ~~shares~~totaling of$6,395 ~~common stock and the note was deemed paid in full~~per month.

Litigation

In addition to the matters described in Note 9, from time to time, the Company is involved in litigation arising in the normal course of business. Management believes that resolution of these other matters will not result in any payment that, in the aggregate, would be material to the Company’s consolidated financial position or results of operations.

F-19

12. SUBSEQUENT EVENTS

On January 30, 2013, the Board of Directors approved a private placement offering of up to 200,000,000 shares of common stock at $0.01 per share. This offering expired on February 28, 2013. On March 1, 2013, the Board of Directors approved a private placement offering of up to 285,714,000 shares of common stock at $0.007 per share.

On February 26, 2013, the Board of Directors authorized the Company to amend the Convertible Revolving Grid Note (Note 7) for a principal sum of up to $1,000,000 with Chief Executive Officer Barry Schwartz and President, Lisa Bershan dated March 6, 2012. The amendment reduced interest to 6.5% per year, extended the maturity date to 4 years, and extended the conversion date to October 31, 2013. As of June 14, 2013, Mr. Schwartz and Ms. Bershan have loaned $521,000 under the terms of the Grid Note and such amount is convertible into 236,818,181 shares of the Company’s common stock.

On February 12, 2013, the Company entered into an unsecured, convertible promissory note with an unrelated third party for $103,500, less a $3,500 fee. The loan bears interest at 8% per annum and a balloon payment of principal and accrued interest is due on November 12, 2013. At any time 180 days after the date of the note, the lender can convert the principal and accrued interest into shares of the Company’s common stock at a 39% discount based on the average of the lowest three trading prices during a ten day period ending one day prior to the conversion date.

In June 2013, the Board of Directors voted to increase authorized shares from 1 billion and 10 million to 3 billion shares. As of June 14, 2013, there were 837,929,245 shares of common stock issued and outstanding.

During the period from January 1, 2013 to June 14, 2013, the Company received and accepted subscriptions for 2,500,000 shares of common stock at $0.02 per share and 93,455,771 shares of common stock at $0.007 per share. Proceeds from the sales of equity securities aggregated $704,190, less before offering costs.

breach of contract

misappropriation of trade secrets

intentional interference with prospective economic advantage

breach of fiduciary duty

violation of computer fraud and abuse act, and

conversion

F-20

On April 4, 2012, a former human resources coordinator at the Company filed suit against the Company and its subsidiaries in the Superior Court of California, West District Beverly Hills Courthouse, for unpaid severance stemming from a November 12, 2010 severance agreement between the Company and the former Human Resources coordinator. Pursuant to the terms of the November 12, 2010 agreement, the Company was to pay a total of $30,000 in $1,000 monthly payments over 30 months commencing on December 15, 2010. As of September 21, 2012, the Company has not made any of the payments pursuant to the severance agreement and the Company intends to defend against the severance claim made by the former human resources coordinator.

On April 16, 2012, the Company executed a sublease for the rental of approximately 19,000 square feet of a 33,000 square foot warehouse located at 8310 Hedge Lane Terrace, Shawnee, Kansas. The Company utilizes the Shawnee premises for light manufacturing, business offices and warehouse storage facilities. The Shawnee facility lease runs for a five year minimum term with monthly rent of $8,371, taxes of $2,336, insurance of $162, $110 in CAM, plus utilities, as incurred.

On May 31, 2012, the Company unilaterally terminated a credit line offer for accounts receivable financing and a credit line offer for inventory and purchase order financing.

On June 25, 2012, the Company filed several past due tax returns and filed an Offer in Compromise with the Internal Revenue Services in an attempt to settle on its obligations for past due Federal payroll taxes. The Company’s Federal tax liability, as reported by the IRS and the Company’s records as of May 4, 2012 was $714,964. The Company’s Offer in Compromise was $50,000 payable over five months. There is no assurance that the Internal Revenue Services will accept the Company’s offer in comprise and there is no assurance whatsoever that any offer less than the balance due would be accepted.

F-21

During the three months ended June 30, 2012, the Company purchased approximately $369,130 of Pawtizer™ inventory and commenced sale activity.

On August 9, 2012, the Company settled litigation with the holder of a $150,000 note bearing interest at 10% which was in default at March 31, 2011. Under the terms of the settlement, the Company will pay the note holder $300,000 with 8% interest accruing on the unpaid balance. The Company made payments two payments of $25,000 on August 13, 2012 and will make nine additional quarterly payments of $30,000 commencing on October 1, 2012 and continuing through October 1, 2014. A final payment of $4,265 is due on January 1, 2015. In the event of any default of this settlement agreement, the note holder can enter a stipulated judgment against the Company, CEO Barry Schwartz and President, Lisa Bershan, as individuals, in the amount of $1,197,190.

On August 13, 2012, the Board of Directors approved a private placement offering of up to 60,000,000 shares of common stock at $0.02 per share.

During the periods from January 1, 2012 to September 21, 2012, the Company received and accepted subscriptions for 206,590,600 shares of common stock at $0.01 per shares and received subscriptions for 21,600,000 shares of common stock at $0.02 per shares. The sales of equity securities resulted in a capital increase of $2,844,406, less offering costs of $84,046 in cash and $476,597 for 11,385,000 shares of common stocks. As of September 21, 2012, the Company issued a total of 196,851,807 shares of common stock for cash receipt during the period.

F-22

As of September 21, 2012, there were 614,734,834 shares of common stock issued and outstanding.

F-23

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