UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~May~~November 3130, 2019

000-55513

Commission File Number

~~Apawthecary~~APAWTHECARY ~~Pets~~PETS USA. (Exact name of registrant as specified in ~~its~~it’s charter)

Nevada		26-1679929
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
c/o Bradley Kersch 1223 Fletcher Way, Port Coquitlam, British Columbia		V3C6B5
c/o Brad Kersch 619 S. Ridgeley Drive, Los Angeles, CA		90036
(Address of principal executive offices)		(Zip Code)

(323) ~~634~~345-~~1000 (Registrant’s telephone number, including area code)~~4587

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

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

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

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of ~~July~~January 1521, ~~2019~~2020, we had 24,827,264 shares of common stock outstanding.

TABLE ofOF CONTENTS

PART I—FINANCIAL INFORMATION	~~PART I—FINANCIAL INFORMATION~~
Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	1112
Item 4.	Controls and Procedures.	1112
PART II—OTHER INFORMATION	~~PART II—OTHER INFORMATION~~
Item 1.	Legal Proceedings.	1213
Item 1A.	Risk Factors.	1213
Item 2.	Unregistered Sales of Securities and Use of Proceeds.	1213
Item 3.	Defaults Upon Senior Securities.	1213
Item 4.	Mine Safety Disclosures.	1213
Item 5.	Other Information.	1213
Item 6.	Exhibits.	1314

2 ~~Table of Contents~~

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Apawthecary Pets USA

Apawthecary Pets USA
Balance Sheets
(Stated in US dollars)

	November 30,			August 31,
	2019			2019
	(Unaudited)
Assets

Current assets
Cash and cash equivalents	$	10,113		$	20,256
Total current assets		10,113			20,256

Total Assets	$	10,113		$	20,256

Liabilities and Stockholders' Deficit

Current liabilities
Accounts payable and accrued liabilities	$	5,366		$	9,957
Accounts payable - related parties		2,522			2,522
Due to related parties		70,673			70,673
Total current liabilities		78,561			83,152

Total Liabilities	$	78,561		$	83,152

Stockholders' Deficit
Authorized
75,000,000 of common shares, par value $0.001
Issued and outstanding
24,827,264 common shares issued and outstanding
as of November 30, 2019, and August 31, 2019	$	24,827		$	24,827
Additional paid in capital		349,223			349,223
Accumulated deficit		(442,498	)		(436,946	)

Total stockholders' deficit	$	(68,448	)	$	(62,896	)

Total Liabilities and Stockholders' Deficit	$	10,113		$	20,256

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

(Expressed in U.S. Dollars)

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

(Unaudited)

Table of Contents

Apawthecary Pets USA Balance Sheets (Expressed in U.S. Dollars) (Unaudited)

Apawthecary Pets USA
Statements of Operations
(Stated in U.S. Dollars)

	For the			For the
	three months			three months
	period ended			period ended
	November 30,			November 30,
	2019			2018
	(Unaudited)			(Unaudited)
Operating Expenses
General and administrative	$	5,552		$	5,122

Total Operating Expenses		5,552			5,122

Net loss	$	(5,552	)	$	(5,122	)

Basic and diluted net loss per common share - basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average number of common shares - basic and diluted		24,827,264			24,827,264

	May 31,			August 31,
	2019			2018
Assets
Current assets
Cash and cash equivalents	$	25,553		$	42,594
Inventory		7,200			7,200
Total current assets		32,753			49,794
Total Assets	$	32,753		$	49,794
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable and accrued liabilities	$	11,778		$	5,069
Accounts payable due to related parties (Note 3)		551			551
Due to related parties (Note 3)		70,673			70,673
Total current liabilities		83,002			76,293
Total Liabilities		83,002			76,293
Stockholders' deficit
Capital stock (Note 4)
Authorized
75,000,000 of common shares, par value $0.001
Issued and outstanding
24,827,264 common shares issued and outstanding
(August 31, 2018 - 24,827,264), par value $0.001		24,827			24,827
Additional paid in capital		349,223			349,223
Accumulated deficit		(424,299	)		(400,549	)
Total stockholders' deficit		(50,249	)		(26,499	)
Total Liabilities and Stockholders' Deficit	$	32,753		$	49,794

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

Table of Contents

Apawthecary Pets USA Statements ofOf ~~Operations~~Changes In Stockholders Deficit (~~Expressed~~Stated in ~~U.S.~~US ~~Dollars~~dollars) For the three months ended November 30, 2019 and 2018 (Unaudited)

	For the			For the			For the			For the
	Common stock						Additional			Accumulated
	three month			three month			nine month			nine month
	Shares			Amount			paid-in capital			Deficit			Total
	period ended			period ended			period ended			period ended
Balance at August 31, 2019		24,827,264		$	24,827		$	349,223		$	(436,946	)	$	(62,896	)
	May 31,			May 31,			May 31,			May 31,
Net loss		-			-			-			(5,552	)		(5,552	)
	2019			2018			2019			2018
Balance at November 30, 2019		24,827,264		$	24,827		$	349,223		$	(442,498	)	$	(68,448	)
Operating Expenses
Balance at August 31, 2018		24,827,264		$	24,827		$	349,223		$	(400,549	)	$	(26,499	)
Professional fees	$	4,281		$	1,552		$	21,288		$	28,305
Net loss		-			-			-			(5,122	)		(5,122	)
General and administrative		481			377			2,462			11,958
Balance at November 30, 2018		24,827,264		$	24,827		$	349,223		$	(405,671	)	$	(31,621	)
Total operating Expenses		4,762			1,929			23,750			40,263
Net loss	$	(4,762	)	$	(1,929	)	$	(23,750	)	$	(40,263	)
Basic and diluted net loss per common share - basic and diluted		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Weighted average number of common shares - basic and diluted		24,827,264			24,827,264			24,827,264			24,811,696

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

Table of Contents

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

Apawthecary Pets USA
Statements of Cash Flows
(Stated in US dollars)

	For the			For the
	three months			three months
	ended			ended
	November 30,			November 30,
	2019			2018
	(Unaudited)			(Unaudited)
Cash flows from operating activities
Net loss	$	(5,552	)	$	(5,122	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable and accrued liabilities		(4,591	)		370

Cash flows used in operating activities		(10,143	)		(4,752	)

Net decrease in cash		(10,143	)		(4,752	)

Cash and cash equivalents, beginning of period		20,256			42,594

Cash and cash equivalents, end of period	$	10,113		$	37,842

Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-
Income tax paid	$	-		$	-

	Common stock				Additional		Accumulated
	Shares		Amount		paid-in capital		Deficit			Total
Balance at February 28, 2019		24,827,264		24,827		349,223		(419,537	)		(45,487	)
Net loss		-		-		-		(4,762	)		(4,762	)
Balance at May 31, 2019		24,827,264		24,827		349,223		(424,299	)		(50,249	)
Balance at February 28, 2018		24,827,264		24,827		349,223		(390,609	)		(16,559	)
Net loss		-		-		-		(1,929	)		(1,929	)
Balance at May 31, 2018		24,827,264		24,827		349,223		(392,538	)		(18,488	)

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

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

	Common Stock				Additional		Accumulated
	Shares		Amount		Paid-in Capital		Deficit			Total
Balance at August 31, 2018		24,827,264		24,827		349,223		(400,549	)		(26,499	)
Net loss		-		-		-		(23,750	)		(23,750	)
Balance at May 31, 2019		24,827,264		24,827		349,223		(424,299	)		(50,249	)
Balance at August 31, 2017		23,977,264		23,977		265,073		(352,275	)		(63,225	)
Common shares sold for cash		850,000		850		84,150		-			85,000
Net loss		-		-		-		(40,263	)		(40,263	)
Balance at May 31, 2018		24,827,264		24,827		349,223		(392,538	)		(18,488	)

Table of Contents

Apawthecary Pets ~~USA~~USANotes ~~Statements~~to ofFinancial ~~Operations~~ Statements(Expressed in U.S. Dollars) (Unaudited)

		For the			For the
1.	Nature and Continuance of Operations
		nine month			nine month
	Apawthecary Pets USA (the ”Company”) was incorporated under the laws of the States of Nevada on December 27, 2007. The Company intends to operate in the pet industry.
		period ended			period ended
	On July 20, 2017, the Company changed its name from Bookedbyus Inc. to Apawthecary Pets USA. The Company’s financial statements as at November 30, 2019 and for the year then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has a loss of $5,552 for the three months ended November 20, 2019 and $5,122 for the three months ended November 30, 2018 and has a working capital deficit at November 30, 2019. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy for the twelve months after the date the audited financial statements were issued. However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. As of November 30, 2019, the Company was not engaged in continued business, and had significant expenses from early stage activities. Although management is currently attempting to implement its business plan and is seeking additional sources of financing, there is no assurance the activity will be successful. Accordingly, the Company must rely on its president to perform essential functions without compensation until a business operation can be commenced. The financial statements do not include any adjustments that may result from the outcome of this uncertainty.
		May 31,			May 31,
		2019			2018
Cash flows from operating activities
Net loss		$	(23,750	)	$	(40,263	)
Changes in operating asssets and liabilities:
Decrease in inventory			-			(7,200	)
Increase in accounts payable and accrued liabilities			6,709			5,396
Cash flows used in operating activities			(17,041	)		(42,067	)
Cash flows from financing activities
Proceeds from common shares sold for cash			-			85,000
Cash provided by financing activities			-			85,000
Net (decrease) increase in cash and cash equivalents			(17,041	)		42,933
Cash and cash equivalents, beginning of year			42,594			13,380
Cash and cash equivalents, end of year		$	25,553		$	56,313

2.	Significant Accounting Policies

	Basis of presentation

	The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the Company’s audited financial statement for the year ended August 31, 2019, as filed with the SEC on Form 10-K. In the opinion of management, all normal recurring adjustments which are necessary for a fair presentation of financial statements of the results for the interim period ended November 30, 2019, have been included.

Table of Contents

Apawthecary Pets ~~USA~~USANotes ~~Notes~~ to Financial Statements (Expressed in U.S. Dollars) ~~For the three and nine months periods ended May 31, 2019 and 2018~~(Unaudited)

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

2.	Significant Accounting Polices (Continued)

	The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended August 31, 2019, as reported in the Form 10-K have been omitted.

3.	Due to Related Parties and Related Party Transactions

	The outstanding balance of management fees payable is $2,522 and $2,522 as of November 30, 2019 and August 31, 2019 respectively. As of November 30, 2019, related parties of the Company have provided a series of loans, totaling $70,673 (August 31, 2019 - $70,673). On August 24, 2017 Apawthecary Pets USA entered into a license agreement with Solace Management Group Inc. a British Columbia corporation. The material terms of such license agreement are:

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

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

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

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

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

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

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

2. Significant Accounting Policies

Basis of presentation

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

Inventory

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

3. Due to Related Parties and Related Party Transactions

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

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

Table of Contents

Apawthecary Pets ~~USA~~USANotes ~~Notes~~ to Financial Statements (Expressed in U.S. Dollars) ~~For the three and nine months periods ended May 31, 2019 and 2018~~(Unaudited)

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

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

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

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

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

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

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

	Solace Management Group Inc. and Apawthecary Pets USA have a common officer and director, Bradley Kersch. Apawthecary Pets USA has negotiated a licensing and distribution agreement with Solace Management Group Inc. The $100,000 License fee has not been paid, and the agreement was not effective as of November 30, 2019.

	Aerock Fox provides consulting service to the Company without compensation.

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

4.	Capital Stock

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

	Issued and outstanding

	The Company had 24,827,264 common shares issued and outstanding as at November 30, 2019 and August 31, 2019 respectively.

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

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

1. Upon execution of the Agreement, the Apawthecary Pets USA shall provide a nonrefundable license fee in the amount of $100,000 (the "License Fee") to be held in an escrow account pursuant and subject to the terms of an escrow agreement whereby the License Fee will remain in the escrow account until the earlier of a $3,000,000 raise by the Licensee or after the Setup Period. 2. Term of the License Agreement is 10 years with a 5 year renewal term. 3. The license is an exclusive, nontransferable, nonsub licensable license to manufacture, sell, represent, market, distribute and advertise the Licensed Products within the Territory on the terms and conditions set forth in the License Agreement and shall include access to, and use of, the Solace Products within the Territory on the terms and conditions set forth in the License Agreement and shall include access to, and use of, the Solace Management Group Inc.’s Licensed Products and Services, Marks, Manuals, brands, and the business format, formulations, methods, specifications, standards, and operating procedures. 4. Apawthecary Pets USA shall pay the Solace Management Group Inc. for all packaging and shipment expenses to the Licensee at the then current market rate plus 20%. 5. Royalties will commence to accrue when the Licensed Products are accepted by the Apawthecary Pets USA. Apawthecary Pets USA shall pay quarterly royalties in addition to the yearly royalty fee, 10% of sales based on the wholesale price of each item.

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

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

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

4. Capital Stock

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

Issued and outstanding

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

Table of Contents

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

Management’s Discussion and Analysis

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

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

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

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

1. Upon execution of the Agreement, the Apawthecary Pets USA shall provide a non-refundable license fee in the amount of $100,000 (the “ License Fee”) to be held in an escrow account pursuant and subject to the terms of an escrow agreement whereby the License Fee will remain in the escrow account until the earlier of a $3,000,000 raise by the Licensee or after the Set-up Period. 2. Term of the License Agreement is 10 years with a 5 year renewal term. 3. The license is an exclusive, non-transferable, non-sub licensable license to manufacture, sell, represent, market, distribute and advertise the Licensed Products within the Territory on the terms and conditions set forth in the License Agreement and shall include access to, and use of, the Solace Management Group Inc.’s Licensed Products and Services, Marks, Manuals, brands, and the business format, formulations, methods, specifications, standards, and operating procedures. 4. Apawthecary Pets USA shall pay the Solace Management Group Inc. for all packaging and shipment expenses to the Licensee at the then current market rate plus 20%. 5. Royalties will commence to accrue when the Licensed Products are accepted by the Apawthecary Pets USA. Apawthecary Pets USA shall pay quarterly royalties in addition to the yearly royalty fee, 10% of sales based on the wholesale price of each item.

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

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

Solace Management Group Inc. and Apawthecary Pets USA have ana common officer and director ~~in common~~, Bradley Kersch. Apawthecary Pets USA has negotiated a licensing and distribution agreement with Solace Management Group Inc. The $100,000 License fee has not been paid and the agreement was not effective as of ~~May31~~November 30, 2019.

Table of Contents

Capital Resources and Liquidity

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

AsThe ofCompany ~~May~~will ~~31,~~need ~~2019,~~to weseek ~~had~~capital ~~$25,553~~from inother ~~cash~~resources such as ~~compared~~private toplacements ~~$42,594~~or asin atthe ~~August~~Company’s ~~31,~~sales ~~2018. As~~ of ~~the~~registered ~~date~~securities, ofor ~~this~~debt ~~Form 10-Q~~financing, ~~the~~which ~~current~~may ~~funds~~not even be available to the Company. ~~will~~However, ~~not~~if besuch ~~sufficient~~financing towere ~~fund~~available, ~~the~~because ~~expenses~~we ~~related~~are toa ~~the~~development ~~implementation~~stage ofcompany ~~our~~with ~~business~~no ~~and~~or ~~continue~~limited ~~maintaining~~operations ato ~~reporting~~date, ~~status.~~it ~~The~~would ~~Company’s~~likely ~~sole~~have ~~officer~~to ~~and~~pay ~~director,~~additional ~~Mr.~~costs ~~Kersch~~associated ~~has~~with ~~indicated~~such ~~that~~financing heand ~~may~~in bethe ~~willing~~case toof ~~provide~~high arisk ~~maximum~~loans ofbe ~~$20,000,~~subject ~~required~~ to ~~maintain~~an ~~the~~above ~~reporting~~market ~~status,~~interest inrate. ~~the~~At ~~form~~such oftime athese ~~non-secured~~funds ~~loan~~are ~~for~~required, ~~the~~management ~~next~~would ~~twelve~~evaluate ~~months as~~ the ~~expenses~~terms ~~are~~of ~~incurred~~such iffinancing. noIf ~~other~~the ~~proceeds~~company ~~are~~cannot ~~obtained~~raise byadditional ~~the~~proceeds ~~Company.~~via ~~However~~such financing, ~~there~~it iswould nobe ~~contract~~required orto ~~written~~cease ~~agreement~~business ~~in place~~operations.

As of November 30, 2019, we had $10,113 in cash as compared to $20,256 as at August 31, 2019. As of the date of this Form 10-Q, management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy twelve months after the date that the financial statements are issued. However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.

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

10 Table of Contents

Results of Operations

We had $nil in revenue for the three ~~and nine~~ months period ended ~~May~~November 3130, 2019 as compared to revenue of $nil for three ~~and nine~~ months period ended ~~May~~November 3130, 2018 ~~of $nil~~.

Total ~~operating~~ expenses ~~for~~in the three months period ended ~~May~~November 3130, 2019 were $45,~~762~~552 as compared to total ~~operating~~ expenses of $5,122 for the three ~~month~~months period ended ~~May~~November 3130, 2018 ~~of 1~~,~~929~~ resulting in a net loss of $5,122 for the three months period ended ~~May~~November 3130, 2019 ~~of $4,762~~ as compared to a net loss of $15,~~929~~122 for the three months ~~period~~ ended ~~May~~November 3130, 2018. The net loss for the three ~~month~~months period ended ~~May~~November 3130, 2019 is a result of professional fees of $45,~~281~~072 comprised of legal and accounting fees, and general and administrative expense of $~~481~~480 as compared to the net loss of $5,122 for the three ~~month~~months period ended ~~May~~November 3130, 2018 ofwas ~~$1,929 is~~ a result of professional fees of $14,~~552~~620 comprised of legal and accounting fees, and general and administrative expense of $~~377~~502.

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

Off-balance sheet arrangements

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

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

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

In connection with this quarterly report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company'’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company'’s management, including our company'’s principal executive officer and principal financial officer. Based upon that evaluation, our company'’s principal executive officer and principal financial officer concluded that subject to the inherent limitations noted in this Part II, Item 9A(T) as of ~~May~~November 3130, 2019, our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended ~~May~~November 3130, 2019 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

1112 Table of Contents

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 1A. Risk Factors.

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

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

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosure.

None

Item 5. Other Information.

(a) None

1213 Table of Contents

Item 6. Exhibits.

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

Exhibit No.		Description
3.1		Certificate of Amendment as previously filed with the SEC on Form S-1 on September 15, 2017
3.2		By-Laws Inc. as previously filed with the SEC on Form S-1 on September 7, 2011
31.1		Certification of Chief Executive Officer Pursuant to Rule 13a–14(a) or 15d-14(a) of the Securities Exchange Act of 1934
31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934*
32.1		Certification of Chief Executive Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101		Interactive data files pursuant to Rule 405 of Regulation S-T

~~____________________~~ _________

* Included in Exhibit 31.1

** Included in Exhibit 32.1

1314 Table of Contents

SIGNATURES*

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

	Apawthecary Pets USA.
	Apawthecary Pets USA
Date: July 19, 2019	By:	/s/ Bradley Kersch
January 21, 2020	By:	/s/ Brad Kersch
		Bradley Kersch
		Brad Kersch
		President, Chief Executive Officer (Principal Executive Officer) and Director
		President and DirectorPrincipal Executive OfficerPrincipal Financial Officer

1415

Filing Compare · Apawthecary Pets USA