UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended ~~September~~March 3031, ~~2012~~2013

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 Ave, 17th Floor
Los Angeles, California		~~90067~~90024
(Address of principal executive offices)		(Zip Code)

(310) ~~432~~689-~~9032~~7355

(Registrant’s telephone number, including area code)

Indicate by check mark whether the issuer (1) 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 x No ¨x

[Company has not yet filed all reports; if it has been subject to filing requirements last 90 days, should check no]; DESPITE THIS BEING FOR 3/31/11

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨x

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

~~Indicate~~ Yes ~~the number of shares of outstanding~~¨ ofNo each of the Registrant’s classes of common equity, as of the last practicable date: As of November 14, 2012, the Registrant had outstanding 695,494,417 shares of Common Stock, no shares of Preferred Stock, and warrants exercisable for 5,000,000 shares of Common Stock.x

Indicate the number of shares of outstanding of each of the Registrant’s classes of common equity, as of the last practicable date: As of June 14, 2013, the Registrant had outstanding 837,929,245 shares of Common Stock, no shares of Preferred Stock, and warrants exercisable for 5,000,000 shares of Common Stock.

ALL AMERICAN PET COMPANY, INC.

FOR THE ~~NINE~~THREE MONTHS ENDED

~~September~~March 3031, ~~2012~~2013

Index to Report on Form 10-Q

		Page
PART I	FINANCIAL INFORMATION
Item 1	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011
	Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011	4
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and September 30, 2011	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2	Managements’ Discussion and Analysis of Financial Condition and Results of Operations	1516
Item 3	Quantitative and Qualitative Disclosures about Market ~~Risks~~Risk	1921
Item 4	Controls and Procedures	1921
PART II	~~Other~~OTHER ~~Information~~INFORMATION
Item 1	Legal Proceedings	2223
Item 1a	Changes in Risk Factors	22
Item 1A	Changes in Risk Factors	24
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	2325
Item 3	Defaults Upon Senior Securities	2325
Item 4	Mine Safety Disclosures	2325
Item 5	Other Information	2325
Item 6	Exhibits	2426
	Signatures	2527
	Certifications

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

ALL AMERICAN PET COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	Unaudited			Audited
	September 30, 2012			December 31, 2011
	March 31,			December 31,
	2013			2012
ASSETS
Current Assets:
Cash	$	~~74,949~~815		$	213,~~396~~376
Accounts recievable		448			-
Accounts receivable		103,107			-
Inventory		359,873			-
Prepaid consulting fees		183,333			-
Prepaid expenses		113,187			96,154
Inventory		744,731			715,869
Total current assets		~~548~~1,~~457~~031,986			98729,~~550~~245
Machinery and equipment, net		6096,~~576~~539			269,~~542~~366
Other assets		67126,~~415~~388			585,~~800~~290
TOTAL ASSETS	$	~~676~~1,~~448~~254,913		$	~~106~~883,~~892~~901
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities:
Bank overdraft	$	9689,~~275~~626		$	9790,~~070~~095
Accounts payable		2,~~280~~908,~~635~~633			2,~~145~~605,~~668~~638
Accounts payable due to former officer		50,000			196,912
Current portion contest prize		141,665			133,332
Current portion contest prize		118,325			93,333
Settlements and judgments payable		884,153			877,999
Settlements and judgments payable		310,073			231,480
Share guarantee liability		400,000			400,000
Current portion of long term debt		105,238			-
Accrued wages		-			36,678
Share guarantee liability		600,000			600,000
Placement fees payable		54,372			54,372
Accrued officers salaries		-			57,070
Accrued payroll taxes		905,487			889,711
Accrued payroll taxes		872,270			797,422
Grid note, advances		62,276			-
Notes payable - net of debt discount		50,000			392,000
Notes payable, net of debt discount		85,409			50,000
Accrued interest		4449,~~253~~746			~~220~~47,~~787~~897
Total current liabilities		45,~~527~~581,~~069~~367			45,~~831~~185,~~742~~722
Long-term liabilities:
Notes payable - non related party		116,801			-
Net present value contest prize obligation		266,714			269,518
Net present value contest prize obligation		275,837			285,200
Total long-term liabilities		266,714			269,518
Total long-term liabilities		392,638			285,200
TOTAL LIABILITIES		5,848,081			5,455,240
TOTAL LIABILITIES		4,919,707			5,116,942
COMMITMENTS AND CONTINGENCIES
Stockholders' deficit
Common stock, $0.001 par value
Common stock, $0.001 par value; authorized 1,010,000,000 shares
Authorized 1,000,000,000 shares, issued and outstanding at September 30, 2012 (620,600,527) and December 31, 2011 (254,804,866)		620,601			254,805
at March 31, 2013 and December 31, 2012;
Additional paid-in capital		17,506,092			15,588,999
issued and outstanding March 31, 2013 (784,284,203)
Common stock payable		1,033,548			569,642
and December 31, 2012 (695,494,866)		781,785			695,495
Additional paid-in capital		19,192,568			18,486,273
Common stock payable		542,127			677,156
Common stock receivable		(142,000	)		(142,000	)
Advances to officers		(371,117	)		-
Accumulated deficit		(24,493,133	)		(23,729,397	)
Accumulated deficit		(22,481,745	)		(20,933,116	)
Non-controlling interest		(474,515	)		(558,866	)
Non-controlling interest		(408,638	)		(348,380	)
Total Stockholders' deficit		(4,593,168	)		(4,571,339	)
Total Stockholders’ deficit		(4,243,259	)		(5,010,050	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,254,913		$	883,901
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	676,448		$	106,892

See ~~Accompaning~~accompanying ~~Notes~~notes to ~~Consolidated~~the condensed ~~Financial~~consolidated ~~Statements~~financial statements.

ALL AMERICAN PET COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended						For the Nine Months Ended
	Unaudited			Unaudited
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
	Three Months Ended March 31,
REVENUE	$	6,067		$	-		$	19,496		$	59,726
	2013			2012
Slotting fees		(112	)		-			(2,611	)		(141,879	)
Revenue	$	115,019		$	-
Net sales		5115,~~955~~019			-			~~16,885~~			~~(82,153~~	)
Cost of goods sold		372,~~174~~764			~~671~~-			~~8,688~~			~~59,340~~
GROSS PROFIT/(LOSS)		2,781			(671	)		8,197			(141,493	)
GROSS PROFIT <LOSS>		42,255			-
OPERATING EXPENSES
Sales and marketing		7066,~~790~~531			2977,~~757~~472			~~248,523~~			~~371,721~~
General and administrative		~~588~~527,~~196~~820			~~240~~343,~~355~~493			~~1,337,745~~			~~1,322,751~~
Loss on abandonment of machinery and equipment		-			7,812			-			7,812
TOTAL OPERATING EXPENSES		594,351			420,965
Impairment of inventory		-			98,164			-			98,164
LOSS FROM OPERATIONS		(552,096	)		(420,965	)
TOTAL OPERATING EXPENSES		658,986			376,088			1,586,268			1,800,448
OTHER EXPENSE/(INCOME)
LOSS FROM OPERATIONS		(656,205	)		(376,759	)		(1,578,071	)		(1,941,941	)
Interest expense		127,289			35,244
OTHER EXPENSE/(INCOME)
TOTAL OTHER EXPENSE		127,289			35,244
Loss (Gain) on Settlement		70,966			-			(60,946	)		-
LOSS BEFORE TAXES		(679,385	)		(456,209	)
Interest expense		27,745			17,362			91,761			72,194
Provision for income taxes		-			-
Debt discount amortization		-			23,556			-			92,295
NET LOSS		(679,385	)		(456,209	)
TOTAL OTHER EXPENSE		98,711			40,918			30,815			164,489
Net income (loss) attributable to noncontrolling interest		84,352			(19,895	)
LOSS BEFORE TAXES		(754,916	)		(417,677	)		(1,608,886	)		(2,106,430	)
NET LOSS ATTRIBUTABLE TO ALL AMERICAN PET COMPANY, INC.	$	(763,737	)	$	(436,314	)
Provision for income taxes		-			-			-			-
BASIC AND DILUTED LOSS PER COMMON SHARE		(0.001	)		(0.001	)
NET LOSS		(754,916	)		(417,677	)		(1,608,886	)		(2,106,430	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (BASIC AND DILUTTED)		742,599,048			350,135,852
Net loss attributable to non-controlling interest		17,246			636			60,258			151,012
NET LOSS ATTRIBUTABLE TO
ALL AMERICAN PET COMPANY, INC.	$	(737,670	)	$	(417,041	)	$	(1,548,628	)	$	(1,955,418	)
BASIC LOSS PER COMMON STOCK	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (BASIC)		603,853,435			233,954,866			470,615,556			230,631,656

See ~~Accompaning~~accompanying ~~Notes~~notes to ~~Consolidated~~the condensed ~~Financial~~consolidated ~~Statements~~financial statements.

ALL AMERICAN PET COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

	For the Nine Months Ended
	Unaudited			Unaudited
	September 30, 2012			September 30, 2011
	Three Months Ended March 31,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1679,~~608,886~~385	)	$	(2456,~~106,430~~209	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		8,008			738
Depreciation and amortization		5,840			113
Impairment of inventory		-			98,894
Amortization of contest prize		5,529			5,206
Amortization of contest prize		15,629			15,763
Amortization of prepaid consulting fees		16,667			-
Loss on abandonment of machinery and equipment		-			7,812
Amortization of debt discount		13,613			-
Amortization of debt discount		-			92,295
Common stock issued for services		43,380			11,539
Gain on settlements		(60,946	)		-
Common stock issued as additional financing costs		100,000			-
Common stock issued for services and equity placement		-			830,223
(Increase) decrease in:
Accounts receivable		(~~448~~103,107	)		-
Inventory		(~~359~~28,~~873~~862	)		~~37,912~~-
Prepaid expenses		(17,033	)		-
Other assets		(41,098	)		-
Other assets		(61,615	)		3,300
Increase (decrease) in:
Accounts payable		~~134~~302,~~967~~995			~~376~~14,~~953~~822
Accounts payable due to former officer		(15,000	)		106,719
Accrued officer/consulting salaries		-			(36,850	)
Accrued officer salaries		(57,070	)		198,311
Accrued payroll taxes		15,776			29,128
Accrued payroll taxes		74,848			33,051
Accrued liabilities		(36,678	)		1,513
Deferred rent		-			(3,060	)
Settlements and judgments		6,154			-
Accrued interest		~~(16~~1,~~868~~849	)		~~44,198~~-
Advances to officers		(371,117	)
NET CASH USED IN OPERATING ACTIVITIES		(377,325	)		(430,738	)
Employee severance		-			(37,300	)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH USED IN OPERATING ACTIVITIES		(2,335,404	)		(300,621	)
Equipment purchases		(33,015	)		(1,422	)
CASH FLOW FROM INVESTING ACTIVITY
NET CASH FLOW USED BY INVESTING ACTIVITIES		(33,015	)		(1,422	)
Equipment purchases		(66,042	)		-
NET CASH FLOW USED IN INVESTING ACTIVITIES		(66,042	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft		(~~795~~469	)		510,~~492~~507
Repayment of notes payable-other		(80,000	)		75,000
Proceeds from note payable - others		100,000			-
Net payments for placement of common stock		(63,612	)		-
Proceeds from notes payable - Grid note		62,276			-
Proceeds from sale of common stock		2235,~~618,406~~972			~~220~~419,~~015~~947
NET CASH PROVIDED BY FINANCING ACTIVITIES		2397,~~473,999~~779			~~300~~430,~~507~~454
Increase (decrease) in cash as cash equivalents		72,553			(114	)
Decrease in cash and cash equivalents		(12,561	)		(1,706	)
Cash at beginning of period		213,~~396~~376			~~114~~2,396
CASH AT END OF PERIOD	$	~~74,949~~815		$	-690
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
Interest	$	-		$	-
Income taxes	$	-		$	-
NON CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued as additional financing cost	$	100,000		$	-
Common stock issued for officer compensation	$	-		$	-
Common stock issued for placement fees	$	43,380		$	-
Accrual of placement fees	$	-		$	-
Common stock issued for debt	$	-		$	-
Common stock issued for employee bonus	$	-		$	-
Conversion of debt for shares of common stock	$	-		$	116,047

See ~~Accompaning~~accompanying ~~Notes~~notes to ~~Consolidated~~the condensed ~~Financial~~consolidated ~~Statements~~financial statements.

ALL AMERICAN PET COMPANY, INC.

NOTES TO CONDENSED 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. ~~The~~In ~~Company~~2010 ~~markets~~and 2011, AAPT produced, marketed, and ~~distributes~~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. In 2012, 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™, ~~Chomp~~line ~~Bars™, and Mutt™ lines~~ 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~~ super-premium dry dog food. 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.

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 ~~American~~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~~ 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~~Corporation and All-American Pet Company Inc., NY, a New York corporation. ~~The~~All ~~accompanying~~ financial statements give effect to this ~~reincorporation~~ reincorporation as if it occurred at the beginning of the period.

Basis of Presentation

The accompanying ~~unaudited~~consolidated ~~condensed~~ financial statements have been prepared in ~~accordance~~conformity with ~~the~~accounting ~~United~~principles ~~States~~ generally accepted ~~accounting~~in ~~principles~~the ~~for~~United ~~interim~~States ~~financial~~of America, which ~~information~~contemplate ~~and~~continuation ~~with~~of the ~~instructions~~Company toas ~~Form~~a ~~10-Q~~going concern. ~~Accordingly~~As described below, ~~they~~the doCompany ~~not~~has ~~include~~incurred ~~all~~consistent oflosses, ~~the~~limited liquid ~~information~~assets, significant past due debts, and ~~notes~~has ~~required~~a stockholders' deficit. These conditions, among others, raise substantial doubt byas ~~United~~to ~~States~~the ~~generally~~Company's ~~accepted~~ability ~~accounting~~to ~~principles~~continue ~~for~~as ~~complete~~a going concern. These consolidated financial statements. Indo not include any adjustments that might result from the ~~opinion~~outcome of ~~management,~~this ~~all adjustments~~uncertainty. ~~(consisting~~These ofconsolidated ~~normal~~financial ~~recurring~~statements ~~accruals)~~do ~~considered~~not ~~necessary~~include ~~for~~any aadjustments relating ~~fair~~to ~~presentation~~the recoverability and classification of ~~the~~recorded ~~financial~~asset ~~positions~~amounts, ~~results~~ ofor ~~operations~~amounts and ~~cash~~classification ~~flows~~of ~~for~~liabilities ~~the~~that might ~~interim~~be ~~periods~~necessary ~~presented~~should ~~have~~the ~~been~~Company ~~included.~~be ~~These~~unable ~~financial~~to ~~statements~~continue ~~should~~as ~~be read~~a ingoing ~~conjunction~~concern. ~~with~~The ~~the~~accompanying consolidated financial statements have ~~and~~been ~~related~~prepared ~~notes~~on ~~included~~the inaccrual ~~the~~basis ~~Company’s~~of ~~Annual~~accounting ~~Report on~~in ~~Form~~accordance ~~10-K~~with ~~for~~accounting ~~the~~principles ~~year~~generally ~~ended~~accepted ~~December~~in ~~31,~~the ~~2011~~United States.

~~Going~~The ~~Concern~~accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly certain information and notes required by generally accepted accounting principles in annual financial statements have been omitted or condensed. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2012, as reported by us in our Annual Report on Form 10-K filed with the SEC on June 17, 2013. The year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The consolidated financial statements include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of our financial position as of March 31, 2013, and results of operations and cash flows for the interim periods presented. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results to be expected for the entire year.

~~These~~Going ~~financial~~Concern ~~statements have been prepared in accordance with United States generally accepted accounting principles applicable to a going concern which contemplate 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 $1,608,886, used $2,335,404 of cash for operations during the nine months ended September 30, 2012, had a working capital deficit of $3,978,612 and total stockholdersManagement’ ~~deficit of $4,243,259 as of September 30, 2012. 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~~prepared ~~financing~~in toaccordance ~~continue~~with ~~operations.~~generally ~~Management~~accepted ~~plans~~accounting toprinciples ~~raise~~applicable ~~funds~~to ~~via~~ a ~~private~~going ~~placement~~concern ofwhich ~~its~~contemplates ~~common~~the ~~stock~~realization toof assets ~~satisfy~~and the ~~capital requirements~~satisfaction of ~~the~~liabilities ~~Company’s~~and ~~business~~commitments ~~plan. There~~in isthe nonormal ~~assurance~~course ~~that~~of ~~the~~business. The Company ~~will~~has bea ~~able~~limited tooperating history ~~obtain~~and ~~the necessary~~limited funds. ~~through~~As ~~continuing~~shown ~~equity~~in ~~and~~the ~~debt~~consolidated ~~financing~~financial tostatements, ~~have~~the ~~sufficient~~Company ~~operating~~incurred ~~capital~~a tonet ~~execute~~loss ~~the~~of ~~Company's~~$679,385, ~~business~~used ~~plan.~~$377,325 Ifcash ~~the~~for ~~Company~~operations isin ~~able~~for tothe ~~obtain~~quarter ~~necessary~~ended ~~funds~~March 31, ~~there~~2013, ishad noa ~~assurance~~working ~~that~~capital ~~the~~deficit ~~Company~~of ~~will~~$4,549,381 ~~successfully~~and ~~implement~~total ~~its~~stockholders’ ~~business~~deficit ~~plan~~of or$4,593,168 ~~raise~~as ~~sufficient~~of ~~capital~~March to31, ~~complete~~2013. In addition, the ~~execution~~Company ofhas ~~its~~limited ~~business~~liquid ~~plan.~~assets, ~~The~~significant ~~Company’s~~past ~~continuation~~due asdebts, including aunpaid ~~going~~payroll ~~concern~~taxes, isand ~~dependent~~minimal onrevenues. These factors raise substantial doubt about the Company’s ability to ~~raise~~continue as ~~additional~~a ~~funds~~going ~~through~~concern. aThe ~~private~~accompanying ~~placement~~consolidated offinancial ~~its~~statements ~~equity or~~do ~~debt~~not ~~securities~~include orany ~~other~~adjustments ~~borrowings~~relating ~~sufficient~~ to ~~meet~~the ~~its~~recoverability and ~~obligations~~classification onof arecorded ~~timely~~asset ~~basis~~amounts or amounts and ~~ultimately~~classification toof ~~attain~~liabilities ~~profitable~~that might result from the outcome of ~~operations~~this uncertainty.

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 of 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) and All American Pet Brands, Inc. (a Nevada corporation). AAP Sales and Distribution, Inc. (a Nevada corporation) is considered a variable interest entity and is consolidated because management believes the Company is the primary beneficiary. 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”.

All significant intercompany balances and transactions have been eliminated in consolidation.

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.

Cash Equivalents

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

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, wethe ~~expense~~Company expenses 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.

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 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.

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 ~~470~~742,~~615~~599,~~556~~048 and ~~230~~350,~~631~~135,~~656~~852 for the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2012~~2013 and ~~2011~~2012, respectively. Net loss per share and diluted net loss per share are the same for all periods presented.

2.Fair ~~VARIABLE~~Value ~~INTEREST~~of ~~ENTITY~~Financial Instruments

~~Following~~ASC is820, aFair ~~description~~Value ofMeasurements ~~our~~and Disclosures, requires disclosing fair value to the extent practicable for financial ~~interests~~ instruments that are recognized or unrecognized in athe ~~variable~~balance ~~interest~~sheet. ~~entity~~Fair ~~that~~value weof ~~consider~~financial ~~significant,~~instruments ~~those~~is ~~for~~the amount at which wethe ~~have~~instruments ~~determined~~could ~~that~~be weexchanged ~~are~~in ~~the~~a ~~primary~~current ~~beneficiary~~transaction ofbetween willing parties. The Company considers the ~~entity~~carrying amounts of cash, accounts receivable, related party and other receivables, ~~therefore~~accounts payable, ~~have~~notes ~~consolidated~~payable, related party and other payables, to approximate their fair values because of the ~~entity~~short ~~into~~period ~~our~~of ~~financial~~time ~~statements~~between the origination of such instruments and their expected realization.

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. The duration of the agreement is for a period of five years. AAPSD is the primary beneficiary of the Company because of the relatively significant financial support provided to AAPSD in the form of the production and distribution and deferred payment arrangements between AAPSD the Company.7

~~AAPSD~~ASC ~~owes~~820 ~~the~~prioritizes ~~Company payments for product purchased and for royalties at~~ the ~~stated~~inputs ~~rate~~used ~~of 18.5% of net revenues, which are due and payable within five business days of~~in ~~receipt~~measuring offair ~~funds~~value byinto ~~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 12-month 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 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 AAPT. During the three and nine month periods ended September 30, 2012, no royalty payments were earned by AAPT.hierarchy:

Level 1 Quoted market prices in active markets for identical assets or liabilities.

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 Unobservable inputs reflecting management’s own assumptions about the inputs used in estimating the value off the asset or liability.

The Company has no financial instruments measured at fair value on a recurring or nonrecurring basis as of March 31, 2013 or December 31, 2012.

Cash Equivalents

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

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. The Company evaluates recoverability of machinery 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

Leasehold improvements are stated at cost and are amortized over the life of the related lease or the estimated useful life, whichever is shorter.

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.

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. As of March 31, 2013 and 2012, the Company’s only significant deferred tax asset is its net operating loss carryforwards. Based on the Company’s recurring losses and financial position, the net deferred tax assets (approximately $7.1 million as of March 31, 2013) have been fully reserved for as of March 31, 2013 and 2012. Net operating losses begin to expire in 2022 for Federal purposes and 2014 for state purposes. The U.S. tax laws contain provisions (Section 382 limitations) that limit the annual utilization of net operating loss (and credit carryforwards) upon the occurrence of certain events including a significant change in ownership interest. Generally, such limitations 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 event or events; however, the Company has not completed a current study to determine the extent of the limitations, if any. Until a study is completed and the extent of the limitations is able to be determined, no amounts are being presented as an uncertain tax position.

WeA ~~have~~tax ~~determined~~benefit from ~~that~~an weuncertain ~~are~~tax ~~the~~position ~~primary~~may ~~beneficiary~~be ofrecognized ~~AAPSD as~~when ~~our~~it ~~interest~~is inmore likely than not that the ~~entity~~position iswill ~~subject~~be tosustained ~~variability~~upon ~~based~~examination, including onresolutions ~~results~~of ~~from~~any ~~operations~~related ~~and~~appeals ~~changes~~or inlitigation processes, based on the ~~fair~~technical ~~value~~merits. Income ~~During~~tax provisions ~~the~~must ~~nine~~meet ~~months~~a ~~ended~~more-likely-than-not ~~September~~recognition ~~30,~~threshold ~~2012~~at ~~and~~the ~~2011,~~effective ~~all~~date ~~operations~~to ofbe ~~AAPSD~~recognized ~~are~~initially ~~included~~and in ~~the~~subsequent ~~consolidated financial statements~~periods. The ~~results~~Company ofhas ~~operations~~no ~~for~~unrecognized ~~AAPSD~~tax ~~have~~benefits ~~been~~as ~~included~~of inMarch ~~the~~31, ~~financial~~2013 ~~statements~~and of2012. Given that the Company.’s ~~The~~net ~~unaudited financial position~~operating oflosses ~~AAPSD~~have atyet ~~September~~to 30be utilized, ~~2012~~all isprevious astax ~~follows:~~years remain open to examination by Federal authorities and other jurisdictions in which the Company operates.

Total Assets	$	372,923
Total Liabilities		(781,561	)
Total Stockholders’ Deficit	$	408,638

2. VARIABLE INTEREST ENTITY

The following is a description of the Company’s financial interests in a variable interest entity that management considers significant, those for which management has determined that the Company is the primary beneficiary of the entity and, therefore, has consolidated the entity into the Company’s financial statements.

On August 12, 2009, the Company 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 economic resources of AAPSD and provides significant financial support to AAPSD in the form of the production and distribution and deferred payment arrangements between AAPSD the Company.

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% royalty payments will be applied to all minimum guarantee payments. The minimum guaranteed royalties, as amended, are due based within the 12-month period following the time at which AAPT has delivered 3,000,000 pounds of finished product. AAPSD does not have a royalty obligation to the Company until AAPSD has recouped any costs of marketing or placement fees. All royalty payments due from sales are accumulated and are applied toward 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.

Management has determined that AAPT is the primary beneficiary of AAPSD as the Company’s interest in the entity is subject to variability based on results from operations and changes in the fair value. During the quarter ended March 31, 2013 and 2012, all operations of AAPSD are included in the accompanying consolidated financial statements. For the quarter ended March 31, 2013 and 2012, sales of $115,019 and none, respectively, and net income(losses) of $84,352 and ($19,895), respectively, were recognized as a result of the consolidation.

The financial position of AAPSD at March 31, 2013 is as follows:

Total Assets	$	821,504
Total Liabilities		(1,296,019	)
Total Stockholders’ Deficit	$	474,515

3. INVENTORY

Inventory consists of the following:

	September 30, 2012		December 31, 2011
	March 31, 2013		December 31, 2012
Raw materials	$	-30,035	$	-
Work in process		-		-
Finished goods		~~359~~714,~~873~~696		-715,869
	$	~~359~~744,~~873~~731	$	-715,869

Inventory began to scale during the three months ended March 31, 2013 due to the initial manufacturing of NutraBar™.

4. MACHINERY AND EQUIPMENT

Machinery and equipment consists of the following:

	September 30, 2012			December 31, 2011
	March 31, 2013			December 31, 2012
Computer equipment and software	$	~~777~~2,769		$	272,~~095~~769
Warehouse equipment		62,391			-
Furniture and Fixtures		1,991			1,991
Furniture, fixtures and equipment		2,987			-
Leasehold improvements		31,219			-
Total		66,155			27,095
Warehouse and food production equipment		75,357			73,562
Less: Accumulated depreciation		(5,579	)		(24,553	)
Total		111,336			78,322
	$	60,576		$	2,542
Less: Accumulated depreciation		(14,797	)		(8,956	)
Net Machinery and Equipment	$	96,539		$	69,366

Depreciation expense for the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2012~~ 2013 and ~~2011~~2012 was $85,~~008~~842 and $~~738~~246, respectively.

5. PAYROLL TAXES

The Company ~~was~~did ~~delinquent~~not onmake certain required filings and payments of required federal and state payroll taxes. The ~~Company~~collective ~~has provided an estimate of related penalty assessments and interest. The~~ amount of payroll taxes, ~~penalties~~interest and ~~interest~~ penalties due at ~~September~~March 3031, ~~2012~~2013 and December 31, ~~2011~~ 2012 totaled $~~872~~905,~~270~~487 and $~~797~~889,~~422~~711, 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.

6. NOTES ~~COMMITTMENTS~~PAYABLE

~~The~~Notes ~~Company~~payable ~~commenced~~consists ~~an operating lease for its executive offices on January 15, 2012. The lease requires a monthly payment~~ of ~~$7,000 and expires on July 31, 2014. The warehouse and light manufacturing facility lease commenced on April 16, 2012. During~~ the three month period ended September 30, 2012, the Company commenced various operating leases for equipment used in the warehouse and distribution facility. Total Minimum payments due under these operating leases as of September 30, 2012 arefollowing:

					Equipment
	March 31,		December 31,
	Office		Warehouse		Leases		Total
	2013		2012
2012	$	21,000	$	29,121	$	32,287	$	82,408
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
2013		84,000		116,484		127,696		328,180
Convertible 8% Note Payable due November 12, 2013		100,000
2014		49,000		116,484		102,694		268,178
Total Notes Payable	$	150,000	$	50,000
2015		-		116,484		5,810		122,294
2016		-		116,484		-		116,484
2017		-		29,121		-		29,121

Total minimum payments due under all operating leases is $946,665.

7. NOTES PAYABLE

Unsecured notes payable consists of the following:

	September 30,		December 31,
	2012		2011
Notes Payable – Non-Related Parties. Interest at 8% per annum. Due January 1, 2015	$	222,039	$	150,000
Notes Payable, Other – In default at 17% interest		50,000		50,000
Convertible 8% Note Payable due September 8, 2011		-		64,000
Convertible 8% Note Payable due November 14, 2011		-		128,000
Total Notes Payable	$	272,039	$	392,000
Less: Debt Discount		-		(8,833	)
Notes payable, net of debt discount	$	272,039	$	383,167

On ~~August~~April 927, ~~2012~~2004, the Company ~~settled~~entered ~~litigation~~into an unsecured promissory note with ~~the~~an ~~holder~~unrelated ofthird aparty for $150,000. ~~note~~The ~~bearing~~loan bears interest at 10% ~~which~~per ~~was~~annum ~~in default. Principal~~ and ~~accrued interest of~~had ~~the~~an ~~note~~original ~~was~~due ~~$300,497~~date as of ~~August~~April 927, ~~2012~~2005. ~~Under~~Extended ~~the~~due ~~terms~~dates ofwere ~~the~~granted ~~settlement,~~up ~~the~~through ~~Company will pay the note holder $300,000 with 8% interest accruing on the unpaid balance~~2011. ~~The~~On ~~Company made two payments of $25,000 on~~ August 139, 2012, ~~and~~a ~~one~~stipulated ~~payment~~settlement amount of $30300,000 ~~on September 26~~, ~~2012.~~which ~~The~~included ~~Company~~principal ~~will make 8 additional quarterly payments~~ of $30150,000 ~~commencing on January 1, 2013~~ and ~~continuing through~~accrued ~~October~~interest ~~1, 2014. A final payment~~ of $4150,~~265~~000, iswas ~~due~~reached onwith ~~January~~the ~~1, 2015~~noteholder. InAs a ~~the~~result ~~event~~ of ~~any~~the ~~default~~stipulated ~~of this~~ settlement ~~agreement~~, the ~~note~~related ~~holder~~$300,000 ~~can~~has ~~enter~~been aclassified ~~stipulated~~in ~~judgment~~settlements ~~against the Company, CEO Barry Schwartz~~ and ~~President,~~judgments ~~Lisa~~at ~~Bershan,~~March ~~as individuals~~31, 2013 inand ~~the~~December ~~amount of $1~~31,~~197,190.~~ ~~The~~2012 ~~Company recognized a gain on settlement~~ in the ~~amount~~accompanying ofcondensed ~~$497~~consolidated inbalance ~~the~~sheet ~~three~~(Note ~~months ending September 30, 2012~~9).

8In 2010, the Company entered into an unsecured promissory note with an unrelated third party for $50,000. ~~RELATED~~The ~~PARTY~~loan ~~TRANSACTIONS~~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 ~~March~~February 612, ~~2012~~2013, the ~~Board~~Company ~~of Directors~~entered ~~authorized~~into ~~the~~an ~~Company~~unsecured, toconvertible ~~execute~~promissory anote ~~Convertible~~with ~~Revolving~~an ~~Grid~~unrelated ~~Note~~third party for $103,500, less a ~~principal~~$3,500 ~~sum~~fee. The ofloan upbears interest toat ~~$1,000,000~~8% ~~with~~per ~~CEO~~annum ~~Barry~~and ~~Schwartz~~ a balloon payment of principal and ~~President,~~accrued ~~Lisa~~interest ~~Bershan~~is due on November 12, 2013. At ~~The~~any time ~~Grid~~180 days after the date of the note, ~~bears~~the ~~interest~~lender atcan ~~10%~~convert ~~per~~the ~~year~~principal and ~~may~~accrued beinterest ~~converted~~ into ~~common~~shares ~~stock~~ of the Company’s common stock at a ~~conversion~~39% ~~price~~discount ofbased ~~$0.0022~~on ~~any~~the ~~time~~average ~~before~~of ~~March~~the 6,lowest ~~2013.~~three ~~Neither~~trading ~~Mr.~~prices ~~Schwartz~~during ~~nor~~a ~~Ms.~~ten ~~Bershan~~day ~~has~~period ~~advanced~~ending ~~capital~~one ~~under~~day prior to the ~~terms~~conversion date. Management determined the intrinsic value of the ~~grid~~beneficial ~~note~~conversion feature to be $78,204 as of the ~~November~~commitment 14date. Such amount has been recognized as a debt discount and amortized over the note’s stated term. As a result, $13,613 ~~2012~~of interest expense was recognized during the quarter ended March 31, 2013.

~~On April 30, 2012, the Board of Directors approved salary advances not to exceed $250,000 for each of Mr~~7. ~~Schwartz~~RELATED ~~and~~PARTY ~~Ms.~~TRANSACTIONS 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 30, 2012 is $371,117.

9On March 6, 2012, the Board of Directors, consisting of Mr. ~~STOCKHOLDERS’~~Schwartz ~~DEFICIT~~and 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 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 December 31, 2012. In March 2013, the Grid Note was amended.

On February 26, 2013, the Board of Directors authorized the Company to amend the Convertible Revolving Grid Note 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.

During the quarter ended March 31, 2013, the Company received advances from Mr. Schwartz and Ms. Bershan totaling $62,276, under the Grid Note and such amount is convertible into 28,307,272 shares of common stock.

During the quarter ended March 31, 2013 and year ended December 31, 2012, the Company made advances to, and received advances from, an entity owned by the Company’s Chief Executive Officer. These advances are not collateralized and do not bear interest. As of March 31, 2013 and December 31, 2012, no amounts were due from and no amounts were due to this related entity.

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 ~~three~~quarter ~~months~~ ended ~~September 30,~~March ~~2012~~31, 2013, the Company received ~~$585,500~~and inaccepted subscriptions for 3129,~~200~~067,~~000~~236 shares of common stock,. ~~of which 3~~2,~~850~~500,000 ~~common~~of ~~shares were~~these ~~subscribed~~subscriptions were accepted at $0.0102 per share and 2726,~~350~~567,~~000~~236 ~~shares~~ were ~~subscribed~~accepted at $0.02007 per share. The ~~Company~~sale ~~incurred~~of unregistered equity securities resulted in a capital increase of $235,972, before offering costs ~~valued~~. atThe Company recorded a $87542,~~545~~127 incommon ~~the~~stock ~~equity~~payable ~~sales~~on ~~effort.~~its Asbooks ofat ~~September~~March 3031, ~~2012,~~2013 to reflect the ~~Company~~value ~~has~~of athe 54,212,734 of common shares not yet issued. Common stock payable is comprised of $1342,~~033~~127 cash receipts for stock purchases (34,~~548~~212,700 shares) and stock for ~~subscriptions~~ ~~received~~consulting services valued at $200,000 (for 10,000,000 shares which will be issued over the course of one year). A total of 3,575,500 shares ~~have~~of ~~not~~common ~~yet~~stock ~~been~~with a value of $43,380 was issued in the form of offering costs and 10 million shares of common stock was issued with a value of $100,000 as interest payment on debt during the quarter ended March 31, 2013. As of March 31, 2013, there were 784,284,203 shares issued and outstanding.

During the three months ended September 30, 2012, the Company issued 155,497,500 shares of common stock of which 144,180,000 common shares was a reduction of the stock payable as of June 30, 2012 valued at $1,441,800 and 11,317,500 common shares, valued at $438,527, were issued as offering costs payable to placement agents. As of September 30, 2012, there were 620,600,527 common shares outstanding.

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 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. OnIn ~~June 1~~addition, ~~2010, the Company agreed to issue an additional~~ ~~3,000,000~~no ~~shares~~later ofthan ~~the~~June ~~common stock in total to these stockholders and extend the release date through September~~ 15, 2010~~. On September 17~~, ~~2010,~~ the Company ~~agreed~~is obligated to issue an additional 23,000,000 shares of the common stock in total to these ~~stockholders~~ asstockholders aif ~~fee for~~ the ~~extension~~sales ~~and~~proceeds ~~extend the release date through March 31, 2011. The share guaranty liability was valued at $600,000 at September 30, 2012~~ and ~~December~~any ~~31,~~additional ~~2011.~~payments ~~Subsequent~~made toby the ~~balance sheet date, on October 8, 2012, the~~ Company ~~agreed~~ tois ~~settle~~less ~~the~~than ~~share guaranty liability by issuing 10,000,000 shares of common stock valued at~~ $~~0.02 and making two payments of $225~~800,000 ~~on December 31, 2012 and March 31, 2013~~. ~~The Company will recognize a $50,000 share guarantee liability expense in its financial statements for the quarter ended December 31, 2012.~~

~~Warrants~~The ~~Outstanding~~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.

AIn ~~summary~~October of2012, the Share Guarantee was amended, subject to the Company’s ~~outstanding~~ability ~~warrants~~to satisfy certain required payments and ~~activity~~other conditions. As the Company did not assatisfy ofits ~~September~~contractual 30obligations, ~~2012~~the ~~and~~amendment ~~December~~was ~~31,~~cancelled ~~2011~~and isbecame asnull ~~follows:~~and void.

			Weighted Average
	Number of		Exercise Price
	Units		per Share
Outstanding at December 31, 2011		5,000,000	$	0.16
Granted/Expired in First Quarter 2012		-	$	-
Granted/Expired in Second Quarter 2012		-	$	-
Granted/Expired in Third Quarter 2012		-	$	-
Outstanding at September 30, 2012		5,000,000	$	0.16

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. In March 2013, payment of 10 million shares of common stock with a value of $100,000 was granted to these stockholders as consideration for interest due to past due payments on the Company’s obligation under this agreement.

~~10.~~Warrants ~~LITIGATION~~and ~~AND~~Stock ~~JUDGMENTS~~Options

The Company ~~was~~did ~~and~~not isissue ~~involved~~any inwarrants ~~various litigation~~or ~~involving~~stock ~~trade~~options ~~creditors, professionals and former employees. A videographer filed suit in Small Claims Court in Mercer,~~during ~~New Jersey for $2,000 and received a default judgment in November of 2007. The Company has contacted~~ the ~~plaintiff in~~quarter ~~this~~ended ~~matter,~~March ~~and a settlement agreement has been reached. A materials handling company was granted a judgment for $3~~31,~~654 by~~ ~~Superior Court of California on January 18, 2008~~2013. ~~There~~ ~~has been no further collection activity on this account. A media company filed a suit to collect unpaid fees dating from October 30~~Further, ~~2007~~there ofwere ~~$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~~warrant 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 $65,184 as of September 30, 2012. 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. On October 18, 2012, the Circuit Court in West Palm Beach issued a final judgment confirming the arbitration award to the plaintiff in the amount of $153,781, plus interest at $4.75% from May 5, 2010 plus attorney fees and the Company recognized a loss on settlement in the amount of $71,463 in the three months ending September 30, 2012. A grocery services company filed suit to collect $22,000 in fees for advertising services incurred in 2009. The Company has not been in contact with the Company or their legal counsel since February 22, 2011. The Company believes it will be settled for a nominal amount, if anything, based on the age of the payable. 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~~option ~~at $52~~exercises,~~000~~ inexpirations ~~exchange~~or ~~for~~cancellations ~~$8,000~~during ~~and payments of $1,571 over a 27 month period. The former controller delivered~~ the ~~shares~~quarter toended anMarch 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. As of September 30, 2012, 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 employee would return 750,000 shares of Company stock valued at $90,000 in exchange for payments of $92,069 over a 14 month period2013. 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.

Common Stock Receivable

On April 6, 2010, the Company settled litigation with a former employee. Terms of the settlement required the former employee to 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. The Company will receive the shares of common stock after all of the payments have been made. The Company made no payments in 2012 or 2011 related to this arrangement (Note 9).

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 during the three months ended March 31, 2013 and no payments during the year ended December 31, 2012 (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:

	March 31, 2013		December 31, 2012
Vendors	$	382,473	$	382,473

Former Employees		269,916		268,245

Promissory Noteholder		231,764		227,281

	$	884,153	$	877,999

~~11. CUTEST DOG COMPETITION~~Vendors

As of December 31, 2011, one vendor had a settlement agreement for $20,000. During 2012, six vendors made claims or were awarded judgments against the Company for a total of $364,473, and aggregate payments of $2,000 were made. The balance outstanding to these vendors at March 31, 2013 and December 31, 2012 was $382,473.

On 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, legal fees of $49,950, and other fees of $4,981. The action has not been heard by a court. The Company has recognized $221,463 in its March 31, 2013 and December 31, 2012 consolidated balance sheets relating to this 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 March 31, 2013 and 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 March 31, 2013, was $233,435.

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.

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. In 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 with annual cash ~~payment~~payments of $33,333. The Company did not make any payments induring the ~~nine~~quarter ~~months~~ended ~~ending~~March ~~September 30~~31, 2013 or in the years ended December 31, 2012 and 2011. As of ~~September~~March 3031, ~~2012~~2013 and December 31, ~~2011~~2012, $~~383~~408,379 and $~~378~~402,~~533~~850, respectively, were recorded as prize liabilities in the accompanying condensed consolidated balance sheets.

1211. ~~SUBSEQUENT~~COMMITMENTS ~~EVENTS~~AND CONTINGENCIES

OnLease October 8, 2012, the Company agreed to settle the share guaranty liability resulting from the conversion of preferred stock to common stock by issuing 10,000,000 shares valued at $0.02 and making two payments of $225,000 on December 31, 2012 and March 31, 2013. The Company will recognize a $50,000 share guarantee liability expense in its financial statements for the quarter ended December 31, 2012. The Company issued the 10,000,000 shares on October 19, 2012.commitments

OnIn ~~November~~the 8,normal ~~2012~~course of business, the ~~Board~~Company enters into a number of ~~Director~~off-balance sheet commitments. These commitments expose the Company to varying degrees of credit and market risk and are subject to the same credit and market risk limitation reviews as those recorded on the Company’s consolidated ~~approved~~balance asheets. ~~private~~The ~~placement~~Company ~~offering~~leases ofspace upfor toits 60manufacturing operations in Shawnee,~~000,000~~ ~~shares~~Kansas ofand ~~common~~leases ~~stock~~equipment used in operations at $0that location.~~007~~ ~~per~~Amounts ~~share.~~of minimum future annual commitments under non-cancelable operating leases are as follows:

Between October 1, 2012 and November 14, 2012, the Company received and accepted subscriptions for 31,000,000 common shares, of which 6,850,000 were subscribed at $0.02 per share and 24,150,000 common shares were subscribed at $0.007. The sale of equity securities resulted in a net capital increase of $306,050 less offering costs valued at $5,873.

2013	$	112,885
2014		150,327
2015		106,029
2016		108,022
2017 and thereafter		45,305
Total	$	534,193

Between October 1 and October 21, 2012, the Company issued 74,893,890 shares, of which 57,893,893 were subscribed at $0.01 per share, 6,850,000 shares were subscribed at $0.02 per share, 1,350,000 shares valued at $35,640 were collectively issued to three key employees as bonuses, 10,000,000 shares valued at $200,000 were issued pursuant to the share guaranty obligation resulting from the conversion of preferred stock to common stock, and 3,800,000 shares were issued for consulting services valued at $100,320.

On November 9, 2012, the Company terminated its relationship with the investor relations consultant hired on July 1, 2012.

As of November 14, 2012, there were 695,494,417 shares of common stock issued and outstanding.

In addition to these commitments, the Company pays monthly rent for its corporate offices and rent for a warehouse forklift, both on month to month basis, totaling $6,395 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.

12. SUBSEQUENT EVENTS

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 April 1, 2013 to June 14, 2013, the Company received and accepted subscriptions for 57,945,385 shares of common stock at $0.007 per share. Proceeds from the sales of equity securities aggregated $457,750, before offering costs.

During the period from April 1, 2013 to June 14, 2013, additional advances of approximately $459,000 were made to the Company under the Grid Note bring the balance of the Note to $521,000. This amount is convertible into 236,818,181 shares of common stock.

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

Overview

All American Pet Company, Inc. ~~(“AAPT”~~and its orconsolidated ~~the~~subsidiaries (“~~Company~~AAPT”) isdevelops ~~a developer~~ and ~~marketer~~markets of innovative ~~pet wellness products including super premium dog foods and antibacterial wipes. The Company markets and distributes 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~~pet ~~Mutt™~~wellness ~~Great Food~~products ~~for Great Dogs super premium dry kibble dog food, and its Nutra Bars™, Chomp Bars™, and Mutt™ lines of~~including ~~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. 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~~snacks ~~that were formulated for canine heart health~~ and ~~endorsed~~antibacterial bypaw ~~a veterinary cardiac surgeon~~wipes.

~~Summary~~The ofexecutive ~~the~~offices ~~Company~~are ~~and~~located ~~its~~at ~~Current~~1100 ~~Status~~Glendon Avenue, 17th Floor, Los Angeles, California 90024. The office telephone number is (310) 689-7355.

~~All~~The ~~American Pet~~ Company,’s ~~Inc.,~~online ~~was~~sites ~~initially organized~~are ~~under the laws of the State of New York (“All American Pet Company, Inc~~www. ~~NY”) in February 2003~~allamericanpetcompany. ~~In January 2006~~com, ~~All American Pet merged into All American Pet Company, Inc~~www. ~~a Maryland corporation (“All American Pet Company, Inc~~nutrabar. ~~MD”). In June of 2012~~com, ~~All American Pet Company Inc~~www. ~~merged (the “Merger”) into a Nevada Corporation (“All American Pet Company, Inc~~pawtizer. ~~NV”). The Company has formed a number of wholly owned subsidiaries to provide for accountability of each of its operations. All American PetCo~~com, ~~Inc~~www. ~~was formed in January of 2008 to provide corporate infrastructure and management services~~facebook. ~~All American Pet Brands~~com/nutrabar, ~~Inc~~www. ~~was formed in April of 2009 to be the Company’s warehousing and manufacturing operation~~facebook. 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 Companycom/pawtizer, ~~Inc~~www. ~~based on accounting guidelines for Variable Interest Entities~~vetresearchlibrary. ~~As used in this report~~com, ~~the terms “The Company” and “AAPT” refers to All American Pet Company, Inc~~http://issuu. NY com/nutrabar and ~~All American Pet Company, Inc~~http://bewelllivelong. ~~MD before the Merger, and to All American Pet Company, Inc~~wordpress. ~~NV, All American Pet Company, Inc. and its wholly owned subsidiaries and Variable Interest Entities after the Merger.~~com

The ~~Company~~information ~~has~~on ~~never~~our ~~operated~~websites ~~at a profit and is dependent~~are ~~upon~~not, ~~additional financing to remain a going concern. The Company has obtained new equity capital~~ and ~~continues~~shall tonot ~~seek~~be ~~new~~deemed ~~equity capital~~ to ~~sustain operations. The Company remains under significant financial strain primarily because of its low level of sales~~be, ~~limited~~ ~~operating~~a ~~funds~~part ~~and accumulated debts. The limited amount~~ of ~~operating~~this ~~capital~~report ~~may~~or ~~preclude~~incorporated ~~the~~by ~~Company’s~~reference ~~ability to~~into ~~execute~~this ~~its manufacturing, marketing, and distribution objectives~~ or toany ~~continue~~other ~~operations.~~filing Nowe ~~assurance~~make ~~can be given that~~with the ~~Company~~Securities ~~will~~and ~~secure~~Exchange ~~adequate~~Commission ~~funds~~(the ~~to sustain operations or that it will continue as a going concern.~~“SEC”)

~~Our~~History 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~~Company and ~~Exchange~~its ~~Commission (the “SEC”).~~Current Status

15All 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 American Pet Company, Inc. MD merged into a Nevada Corporation, (“All American Pet Company, Inc.”).

~~LIQUIDITY~~The ~~AND~~Company ~~CAPITAL~~has ~~RESOURCES~~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.

~~Our liquidity requirements arise principally from our working capital needs, including the cost of goods and marketing costs.~~ In ~~the~~2010 ~~future we intend to fund our liquidity requirements through a combination of cash flows from operations~~ and ~~external financings. For the nine months ended September 30~~2011, ~~2012,~~AAPT ~~the Company incurred a net loss of $1~~produced,~~608,886~~ ~~on revenues of $16~~marketed,~~885~~ and ~~cash~~beta ~~used~~tested ~~from~~two ~~operations~~super-premium ofdog ~~$2,335,404~~foods ~~for~~ under the ~~nine~~brand ~~month~~names ~~period~~Grrr-nola®Natural ~~ended~~Dog ~~September~~Food ~~30,~~and ~~2012~~Chompions®. ~~In their report in connection with our 2011 financial statements, our former independent~~ ~~registered~~We ~~public~~believe ~~accountants included an explanatory paragraph stating~~ that, ~~because~~both weGrrr-nola®Natural ~~incurred~~Dog aFood ~~net loss of $2,366,832~~ and a ~~negative~~Chompions® ~~cash~~were ~~flow from operations of $608,244 for~~ the ~~year~~first ~~ended~~dog ~~December~~food products ~~31,~~that ~~2011,~~were ~~and~~formulated ~~had~~for acanine ~~working~~heart ~~capital~~health ~~deficiency of $4,733,192~~ and aendorsed ~~stockholders’~~by ~~deficiency of $5,010,050 at December 31, 2011 there was substantial doubt about our ability to continue as~~ a ~~going~~veterinary ~~concern~~cardiac surgeon.

~~Our~~In ~~ability~~2012, toafter ~~initiate~~the ~~our~~beta ~~plan~~testing, ofthe ~~operations~~Company ~~and~~completed ~~continue~~market asresearch, aproprietary ~~going~~scientific ~~concern~~formulation isand ~~currently~~testing ~~dependent~~for onan ~~our~~all-natural ~~ability~~super topremium ~~introduce~~bar ~~products~~category ~~into~~called NutraBar™ ~~the~~- ~~marketplace that gain consumer acceptance~~original, ~~build~~low ~~our~~fat ~~customer base,~~ and ~~achieve~~senior ~~profitable operations~~formulas. ~~Until~~It ~~these~~also ~~objectives~~produced ~~are~~proprietary ~~realized,~~formulations ~~the~~for ~~Company~~two ~~will be~~additional ~~dependent~~bars ~~upon~~– Chomp ~~external~~Bar™ ~~financings~~and toMutt ~~sustain operations~~Bar™. ~~Due~~It tohas ~~our~~successfully ~~stock~~launched ~~being~~its ~~thinly~~portable, ~~traded~~convenient and ~~the~~functional ~~current~~NutraBar™ ~~state~~ line of ~~our balance~~all ~~sheet,~~natural ~~including~~true afood ~~lack~~super ofpremium ~~hard~~bars ~~assets against which~~ to ~~borrow~~both online and ~~significant~~traditional ~~accumulated~~brick ~~debts,~~and wemortar ~~believe~~retailers. ~~that~~Each itgluten-free ~~will~~4 ounce bebar ~~very~~has ~~difficult~~a tokCal ~~obtain~~equivalent ~~any form~~ of ~~debt~~8 ~~financing~~ounces ~~with~~of orsuper-premium ~~without~~dry ~~equity~~dog ~~conversion terms~~food. WeThe ~~are~~bars ~~concerned~~have ~~about~~been ~~the~~both ~~ability to~~manufactured ~~raise~~and ~~any~~packaged ~~capital~~by in the ~~future~~Company since atthe ~~terms~~fourth ~~that~~quarter ~~would~~2012 beand inrelated ~~the~~sales ~~shareholders'~~commenced ~~best~~in ~~interest or at all~~2013.

~~Because~~The ~~of our lack of funding and limited ability to adequately market our products, the~~ Company has ~~incurred~~shown ~~high costs in manufacturing~~ and ~~marketing~~announced ~~our products. We~~to ~~have funded our operations primarily through~~ the ~~issuance of equity securities and debt~~U. ~~Additional capital infusions may be needed to manufacture, distribute and promote our products, sustain operations and make payments and settlements of existing debts and obligations~~S. Wemarket ~~believe that our future profitability will depend on~~ the ~~commercial~~first ~~and~~line ~~consumer acceptance~~ of ~~our~~all-natural ~~products,~~super ~~effective marketing~~premium ~~strategies,~~dog ~~efficient~~treats ~~production~~called ~~and~~CHEWIES™, ~~proper~~which ~~execution~~comes ofin ~~our~~three ~~business plan. Additionally~~flavors, ~~success with our external~~and ~~financing~~is ~~strategies~~preparing ~~will be needed~~ to ~~effectuate~~market ~~our~~its ~~business~~CHEWIES™ ~~objectives.~~line ~~Our~~of ~~limited~~flavored ~~operating~~all-natural ~~history~~super-premium ~~makes~~27% itprotein ~~difficult~~dog ~~to evaluate our prospects for success and our revenue and profitability potential, particularly for newly introduced products, is unproven~~treats. ~~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.~~

~~Our~~During ~~principal sources of liquidity have been sales of equity securities and borrowings. To meet our current requirements to operate~~2012, the Company ~~has~~also ~~sold common stock~~launched ~~and~~its isPAWtizer™ ~~currently~~line ~~attempting to undertake the sale~~ of ~~additional~~wet ~~equity~~wipes ~~securities. As new funds are obtained, our principal uses of capital would be to meet our operating requirements, production, marketing~~ and ~~advertising expenditures~~spray, and make investments in inventory. Additional cash 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~~pet ~~additional~~care ~~common stock with other round(~~industry’s) offirst ~~funding. There are currently no commitments or other known sources for this funding~~alcohol-free, ~~other~~anti-bacterial ~~than~~dog ~~the $1,000,000 convertible revolving grid note commitment made by CEO Barry Schwartz and President, Lisa Bershan~~cleaner. ~~If these funds are obtained, it would result in additional dilution to our stockholders. Alternative financing may not be available in the future in amounts or on terms acceptable to us, if at all.~~

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. During the three months ended March 31, 2013, the Company obtained $235,972 of equity capital and incurred $162,276 of debt 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.

InProducts ~~the nine months ended September 30, 2012, the Company raised $2,618,406 before offering costs at a valuation of $631,451. We are currently seeking additional sources of funding.~~

~~Results~~The Company has developed a number of ~~Operations~~innovative pet ~~for~~wellness products. The Company is also in the ~~Nine Months~~process ~~Ended~~of ~~September~~developing 30new products, ~~2012~~variations ~~compared~~of ~~with~~existing products and other items that will complement and enhance the ~~Nine~~Company’s ~~Months~~array ~~Ended~~of ~~September~~product 30offerings. The Company requires significant additional financing to market, ~~2011~~manufacture and sell its existing products and to develop new products. Key components of the Company’s product offerings are described below:

The following discussion of the results of operations should be read in conjunction with our financial statements and notes thereto for nine month period ended September 30, 2012 and September 30, 2011 included in this Quarterly Report as well as the statements included in our Form 10-K for the year ended December 31, 2011.NutraBar™

The Company’s ~~expenses~~has ~~have~~developed ~~increased dramatically~~(and launched in ~~relation~~2013) tothe ~~sales~~pet asindustry’s ~~the~~first ~~Company~~dog isfood ~~launching~~product ~~new~~packaged ~~products~~as ~~and~~a ~~preparing~~nutritional ~~for~~food ~~future growth~~bar. With ~~For~~three ~~the~~product ~~nine~~lines ~~months ended~~targeting ~~September~~the ~~30,~~super-premium ~~2012,~~dog ~~net~~food ~~sales~~and ~~increased~~dog bytreat ~~$99~~segments,~~038~~ asthe ~~sales~~Company’s ofall-natural ~~Pawtizer™~~ bars are ~~not~~the ~~subject~~equivalent toof ~~minimum~~8 ~~slotting~~ounces ~~fees as~~of ~~was~~dry ~~Chompions®~~kibble ~~and~~in ~~Grrr-nola®Natural~~a ~~Dog~~4 ~~Food~~ounce bar. ~~Cost~~These ofbars ~~goods~~offer ~~sold~~a ~~decreased~~high ~~$50,652~~protein ~~from~~meal ~~$59,340~~or tosnack ~~$8,688~~without in the ~~nine~~inconvenience ~~months~~of ~~ending~~bags ~~September 30, 2012~~ and ~~gross~~bowls. ~~profit~~AAPT’s ~~increased~~true ~~$149,690~~food ~~from~~bars ~~($141,493)~~are formulated to ~~$8,197~~contain ina ~~the~~blend ~~nine~~of ~~months~~natural ~~ending September~~ingredients ~~30,~~and ~~2012,~~provide ~~reflective~~essential ofnutrients ~~the~~optimized ~~increased~~to ~~profitability~~promote ofa ~~Pawtizer™~~dog’s asnutrition, ~~opposed~~health, ~~to Chompions®~~ and ~~Grrr-nola®Natural Dog Food~~vitality.

For the nine months ended September 30, 2012, sales and marketing expenses decreased by $123,198, from $371,721 in the nine months ending September 30, 2011 to $248,523 in the nine months ended September 30, 2012. The decrease is attributable to a decrease of $177,552 in consulting and research, an increase of $27,233 in advertising and promotion, and a net increase of $27,121 in other sales and marketing activity. General and administrative expenses increased by $14,994 from $1,322,751 in the nine months ended September 30, 2011 to $1,337,745 in the nine months ended September 30, 2012. This amount consisted of a decrease of $376,084 in consulting expenses, an increase in payroll of $109,580, an increase of $22,485 in legal, accounting, patent and trademark services, a increase of $148,551 in facilities and office expenses, an increase in research and development of $99,075, and a net increase of $11,387 in other general and administrative expenses.CHOMPBar™

~~Results~~The ofline ~~Operations~~contains ~~for~~27% ~~the Three~~protein ~~Months~~quad ~~Ended~~segmented ~~September~~4 ~~30,~~ounce ~~2012~~bars ~~compared~~ with ~~the~~digestive ~~Three~~fiber ~~Months~~enhancements ~~Ended~~in ~~September~~addition 30to functional vitamin and mineral supplementation. It comes in original, ~~2011~~low fat and senior formulas.

The following discussion of the results of operations should be read in conjunction with our financial statements and notes thereto for three month period ended September 30, 2012 and September 30, 2011 included in this Quarterly Report as well as the statements included in our Form 10-K for the year ended December 31, 2011.MUTTBar™

~~The~~Mutt™Bar ~~Company’s expenses have increased dramatically in relation to sales as the Company is launching new~~ products ~~and preparing for future growth. For the three months~~contain ~~ended~~25% ~~September~~protein ~~30, 2012~~ and ~~September~~are ~~30,~~supplemented ~~2011,~~with ~~net~~omega ~~sales~~3 ~~increased~~fatty ~~from~~acid ~~$0 in the three months ended September 30, 2011~~ to ~~$5,955 in~~promote ~~the~~healthy ~~three~~skin ~~months ended September 30, 2012, as sales of Pawtizer™ commenced~~ and ~~no sales occurred in the three months ended September 30, 2011~~coat. ~~For~~They ~~the~~are ~~three~~fortified ~~months~~with ~~ended~~vitamin ~~September 30, 2012, sales~~ and ~~marketing expenses increased by $41,033, from~~ ~~$29,757~~amino ~~in the three months ended September 30, 2011 to $70,790 in the three months ending September 30, 2012~~acids. The ~~increase~~bars ~~is attributable~~will toalso anbe ~~increase of $11,285 in consulting and research, an increase of $15,476 in advertising and promotion, and~~ a ~~net~~ ~~increase~~quad-segmented of4 ~~$14,272~~ounce inwrapped ~~other~~bar ~~sales~~available ~~and marketing activity. General and administrative expenses were increased by $347~~singly,~~841 from~~ ~~$240,355~~as inwell ~~the~~as ~~three months ended September 30, 2011 to $588,196~~ in ~~the~~full-color ~~three~~display ~~months ended September 30, 2012. This amount~~cartons ~~consisted~~ of ~~an increase in payroll of $134,168,~~ a ~~decrease~~dozen. ofThey ~~$35,178~~also income ~~consulting expenses, an increase of $32,548~~ in ~~legal~~original, ~~accounting,~~ ~~patent,~~low ~~and trade mark services~~fat, ~~an increase of $124,410 in facilities~~ and ~~office~~senior ~~expenses, an increase of $66,664 in research & development, and a net increase of $25,229 in other general and administrative expenses~~formulas.

CHEWIES™

The Company’s line of 27% 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 16 ounce re-sealable pouches containing approximately 32 and 64 bite sized pieces.

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.

LIQUIDITY AND CAPITAL RESOURCES

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

Our 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 payroll 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.

In February 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.

As of March 31, 2013, one other source for funding was the $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 March 31, 2013, advances to the Company under this facility totaled $62,276, increasing the holders’ beneficial ownership by 28,307,272 shares of common stock. As of June 14, 2013, a total of $521,000 has been advanced to the Company on this Grid Note whereby increasing beneficial ownership by 236,818,181 shares of common stock. The Company’s 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 incurred high costs in manufacturing and marketing our products. Further, the Company has incurred significant fixed costs, including officer compensation, occupancy and public company costs. As a result, we have experienced large operating losses and negative cash flow. The Company has funded its 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. The Company believes that its future profitability will depend on the commercial and consumer acceptance of its products, effective marketing strategies, efficient production and proper execution of its business plan, as to all or any of which, no assurance can be given. Additionally, success with its external financing strategies will be needed to effectuate our business plans. The Company’s limited operating history makes it difficult to evaluate prospects of success, particularly because its business plan is founded on new and unproven products. Furthermore, there can be no assurance that the Company’s external financing strategies will yield any capital or the amount of capital necessary to execute its business plan.

In the three months ended March 31, 2013, the Company raised $235,972 of equity capital before offering costs and received $162,276 through the issuance of debt instruments. The Company is currently seeking additional sources of funding.

Results of Operations for the Three Months Ended March 31, 2013 and 2012

The following discussion of the results of operations should be read in conjunction with our financial statements and notes thereto for three month period ended March 31, 2013 and 2012 included in this Quarterly Report as well as the statements included in our Form 10-K for the year ended December 31, 2012.

The Company’s expenses have increased dramatically in relation to sales as the Company is launching new products and preparing for future growth. For the three months ended March 31, 2013, net sales were $115,019 which is attributable to the introduction of the NutraBar™ product line. Cost of goods sold were $72,764 during the same period. There were no sales or cost of sales for the three months ended March 31, 2012.

Sales and marketing expenses decreased $10,941, from $77,472 to $66,531, for the three months ended March 31, 2013 and 2012, respectively. Higher expenses in the first three months of the prior year are primarily due to product development, testing, and promotion of the NutraBar™ product line while the Company was in early stages of NutraBar™ development. General and administrative expenses increased $184,327, from $343,493 to $527,820, for the three months ended March 31, 2013 and 2012. This increase is attributable to payroll and facility expenses for our new manufacturing division in Shawnee, KS of approximately $106,000, and increases to legal, consulting and commission expenses of approximately $78,000 over the same period last year.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Forward Looking Statements

This Quarterly Report contains forward-looking statements. These forward-looking statements include, but are not limited to, predictions regarding:

·• our business plan; · the commercial viability of our products; · the effects of competitive factors on products; · expenses we will incur in operating our business; · our liquidity and sufficiency of cash; · the success of our financing plans; and · the outcome of pending or threatened litigation.

•

the commercial viability of our products;

•

the effects of competitive factors on our products;

•

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 Quarterly Report is as of ~~September~~March 3031, ~~2012~~2013, unless expressly stated otherwise.

1820

As used in this report, the term Company refers to All American Pet Company, Inc., a Nevada corporation and its 100% owned subsidiaries, All American Pet Brands Inc. a Nevada corporation, and All American PetCo, Inc. a Nevada Corporation, and its Variable Interest Entity, AAP Sales and Distribution, Inc., a Nevada Corporation.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

As a smaller reporting company, All American Pet Company, Inc. is not required to provide the information required by this item

Item 4. Controls and Procedures

Our management, with the participation of the Company’s 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 ~~and Accounting~~ Officer ~~has~~have concluded that as of ~~September~~ 30March 31, ~~2012~~2013, the Company’s 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~~Inadequate resources. The Company did not consistently maintain a sufficient complement of personnel with an appropriate level of accounting knowledge, SEC experience and training to (i) ensure the timely and accurate preparation of interim and annual financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), (ii) effectively segregate certain incompatible functions, and (iii) remediate previously communicated deficiencies. In addition, the Company placed substantial reliance on ~~Internal~~manual ~~Control Over~~procedures ~~Financial~~and ~~Reporting~~detective controls that lacked adequate management monitoring for compliance.

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:

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

	2.	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
	3.	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 internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and reporting. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5) or combination of control deficiencies, that results in a reasonable possibility more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

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.

In connection with the audit of our consolidated financial statements for the year ended December 31, 2011, our former independent registered accounting firm, De Joya Griffith & Company, 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.

Changes in Internal Control over Financial Reporting

There have not been any material adverse changes in the Company’s internal control during the three months ended September 30, 2012 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.

Material Weaknesses and Related Remediation Initiatives

Set forth below is a summary of the various significant deficiencies which caused management to conclude that we had the material weaknesses identified above. Through the efforts of management, we have developed a specific action plan to remediate the material weaknesses. We expect to implement these various action plans during 2012 and anticipate that the material weaknesses will be remediated by December 31, 2012.

We did not effectively implement comprehensive entity-level internal controls and did not maintain a sufficient level of resources within our accounting department, as discussed below:

· Financial Close Process. The Company only prepares financial statements on a quarterly basis which increases the potential that any unusual activities or transactions will not be detected on a timely basis.

· Cash Disbursement Process. Payments to related parties and costs incurred by the Company were not subject to review and approval by independent parties which increased the potential that any improper distributions would not be detected on a timely basis.

· Reporting Deficiencies. We did not perform timely and sufficient internal or external reporting of our progress and evaluation of prior year material weaknesses or the current fiscal year internal control deficiencies.

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 September 30, 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.

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.

Period-end financial reporting processes. Effective controls over period-end financial reporting processes were not maintained to effectively ensure: (i) significant agreements, or amendments thereto, are analyzed and accurately accounted for in the proper period, (ii) key reconciliations, account analyses, and summaries are performed and approved with appropriate resolution of reconciling items in a timely manner, (iii) journal entries, both recurring and non-recurring, are analyzed and approved, (iv) the resulting financial information, statements and disclosures are reviewed and appropriate checklists are used for compliance with U.S. GAAP, (v) monthly closing quality control checklists were used consistently and thoroughly to ensure all financial reporting procedures and controls were performed, and (vi) documented reviews of financial results are compared to budgets and expectations.

Cash expenditures. Effective controls related to expenditures were not maintained. Specifically, controls were not properly designed or operating effectively to ensure: (i) officer compensation, including benefits, are authorized, reviewed and approved 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 related business purpose of the expenditure.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. 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 of 2007. The Company has contacted the plaintiff in this matter, and a settlement agreement has been reached. 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 $65,184 as of September 30, 2012. 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~~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. On October 18, 2012, the Circuit Court in West Palm Beach issued a final judgment confirming the arbitration award to the plaintiff in the amount of $153,781, plus interest at $4.75% from May 5, 2010 plus attorney fees and the Company recognized a loss on settlement in the amount of $71,463 in the three months ending September 30, 2012. A grocery services company filed suit to collect $22,000 in fees for advertising services incurred in 2009. The Company has not been in contact with the Company or their attornies since February 22, 2011. The Company believes it will be settled for a nominal amount if anything based on the age of the payable. 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. As of September 30, 2012, 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 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.

~~Item 1a. Change in Risk Factors.~~Vendors

~~There~~As ~~are~~of noDecember ~~material~~31, ~~changes~~2011, inone ~~Risk~~vendor had ~~Factors~~a ~~from~~settlement ~~the~~agreement ~~Form~~for ~~10-K~~$20,000. During 2012, six vendors made claims or were awarded judgments against the Company for ~~year-end~~a ~~December~~total of 31$364,473, ~~2011~~and ~~filed~~related onpayments ~~September~~of 28$2,000 were made. The balance outstanding to these vendors at March 31, 2013 and December 31, 2012 was $382,473.

22On 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, legal fees of $49,950, and other fees of $4,981. The action has not been heard by a court.

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 March 31, 2013 and December 31, 2012 was $268,245, and includes accrued interest.

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 during the three months ended March 31, 2013, no payments in 2012, and $3,342 in 2011. The outstanding balance at March 31, 2013 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 during the three months ended March 31, 2013, no payments in 2012, and $2,069 in 2011. The outstanding balance at March 31, 2013 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.

Item 1A. Change in Risk Factors.

There are no material changes in Risk Factors from the Form 10-K for year-end December 31, 2012 filed on June 17, 2013.

Item 2. Unregistered Sales of Equity Securities

During the three months ended ~~September~~March 31, 302013, ~~2012,~~ the Company received $~~585~~235,~~500~~972 in subscriptions for 3129,~~200~~067,~~000~~236 shares of common stock, of which 32,~~850~~500,000 common shares ~~were~~ were subscribed at $0.0102 per share and 2726,~~350~~567,~~000~~236 shares were subscribed at $0.02007 per share. The Company incurred offering costs ~~valued~~ valued at $875,~~545~~757 in the equity sales effort. As of ~~September~~March 3031, ~~2012~~2013, the Company has a common stock payable of $1542,~~033,548~~127. The Company sold the shares without registration under the Securities Act of 1933, as amended, or state securities laws, in reliance on the exemptions provided by Section 4(2) of the Securities Act of 1933 and/or Regulation D promulgated thereunder . There were no more than 35 purchasers of the common stock, appropriate financial and business information was provided to the purchasers in accordance with Rule 502(b), there was no form of general solicitation or general advertising relating to the offer and the Company exercised reasonable care to assure that the purchasers of the common stock were not underwriters within the meaning of section 2(a)(11) of the Securities Act. Based on information received, the Company believes that each purchaser of shares is an accredited investor within the meaning of the federal securities laws. The shares have not been registered. The shares may not be offered or sold by the investors absent registration or an applicable exemption from registration requirements, such as the exemption afforded by Rule 144 under the Securities Act of 1933.

During the three months ended ~~September~~March 31, 302013, ~~2012,~~ the Company issued ~~155~~88,~~497~~789,~~500~~786 shares of common stock of which ~~144~~64,~~180~~500,000 common shares was a reduction of the stock ~~payable~~ payable as of ~~June~~December 3031, 2012 valued at $1500,~~441~~000. Additionally,~~800~~ ~~and 11~~575,~~317,5000~~500 common shares, valued at $~~438~~5,~~527~~757, were issued as offering costs payable to placement agents, and 10,000,000 common shares, valued at $100,000, were issued to promissory note holders in consideration for interest due to past due payments on the Company’s obligation. As of ~~September~~March 3031, ~~2012~~2013, there were ~~620~~784,~~600~~284,~~527,~~203 common shares outstanding. As of June 14, 2013, the Company had 837,929,245 shares of common stock outstanding.

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. Management determined the intrinsic value of the beneficial conversion feature to be $78,000 as of the commitment date. Such amount has been recognized as a debt discount and amortized over the note’s stated term. As a result, $13,000 of interest expense was recognized during the quarter ended March 31, 2013.

On March 6, 2012, the Board of Directors, consisting of Mr. Schwartz and 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 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 December 31, 2012. In March 2013, the Grid Note was amended.

Item 3. Defaults Upon Senior Securities

As described in Note 76 to the March 31, 2013 condensed consolidated financial statements, the Company is in default of a $50,000 note.

As described in Note 9 to the March 31, 2013 condensed consolidated financial statements, the Company is subject to various litigation, claims and judgments.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

On October 8, 2012, the Company agreed to settle the share guaranty liability resulting from the conversion of preferred stock to common stock by issuing 10,000,000 shares valued at $0.02 and making two payments of $225,000 on December 31, 2012 and March 31, 2013. The Company will recognize a $50,000 share guarantee liability expense in its financial statements at December 31, 2012. The Company issued the 10,000,000 shares on October 19, 2012.

On November 8, 2012, the Board of Director’s approved a private placement offering of up to 60,000,000 shares of common stock at $0.007 per share.

On November 9, 2012, the Company terminated its relationship with the investor relations consultant hired on July 1, 2012.

As of November 14, 2012, there were 695,494,417 shares of common stock issued and outstanding.

Item 6 Exhibits

Incorporated by reference

Exhibit Number

Exhibit Description

Filed Herewith

Form

Period Ending

Exhibit

Filing date

Certification pursuant to Section 302 of the Sarbanes-Oxley Act

Certification pursuant to Section 906 of the Sarbanes-Oxley Act

SIGNATURES

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

ALL AMERICAN PET COMPANY, INC.
(Registrant)
By:	/S/ Barry Schwartz
	Barry Schwartz, CEO
	(On behalf of the registrant and as Principal Financial and Accounting Officer)
Date: November 14, 2012

Item 6. Exhibits

Incorporated by reference

Exhibit

Number

Exhibit Description

Filed

Herewith

Form

Period

Ending

Exhibit

Filing
date

Certification pursuant to Section 302 of the Sarbanes-Oxley Act

Certification pursuant to Section 906 of the Sarbanes-Oxley Act

SIGNATURES

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

ALL AMERICAN PET COMPANY, INC.
(Registrant)

By:	/S/ Barry Schwartz
	Barry Schwartz, CEO
	(On behalf of the registrant and as Principal Financial and Accounting Officer)

Date: June 20, 2013

Filing Compare · ALL AMERICAN PET COMPANY, INC.