8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported)    November 14, 2011 

The PAWS Pet Company, Inc.

(Exact Name of Registrant as Specified in Charter)

Illinois	333-130446	20-3191557
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

2001 Gateway Place, Suite 410

San Jose, CA 95110

(Address of Principal Executive Offices) (Zip Code)

(408) 248-6000

Registrant’s telephone number, including area code

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition

On November 14, 2011, The PAWS Pet Company, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2011.  A copy of the press release, including financial information released as a part thereof, is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02 of this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that Section.  The information in this Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01      Financial Statements and Exhibits.

(d)  Exhibits.   The following exhibits are filed with this report:

Exhibit No .	Description of Exhibit
99.1	Press Release dated November 14, 2011, announcing financial results for the quarter ended September 30, 2011.

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 hereunto duly authorized.

	The PAWS Pet Company, Inc.
Date:  November 14, 2011	By:	/s/ Andrew C. Warner
		Name: Andrew C. Warner
		Title: Chief Financial Officer

EX-99.1

Company Contact:

Investor Relations

408 248 6000 ext. 198

ir@petairways.com

Investor Contact:

Laurel Moody

Corporate Profile

646 810 0608

lmoody@corporateprofile.com

The PAWS Pet Company Beats Expectations, Reports Third Quarter 2011 Revenues Increase by

62% to $577,000;  Reports Gross Profit of $213,000

San Jose, CA – November 14, 2011 -  The PAWS Pet Company, Inc. (OTCQB: PAWS.PK) or “the Company”, the innovative pet services company, reported record financial results for the third quarter ended September 30, 2011, including significant revenue increases for the three and nine-months period, first-time gross profits and net income for the three months ended September 30, 2011.

“Our Pet Airways subsidiary continued revenue growth in the third quarter of 2011, and we are pleased to report a positive gross profit of $213,751, one quarter ahead of guidance,” commented Andrew Warner, President and CFO of The PAWS Pet Company. “Our positive gross profits were driven by flight schedule optimizations implemented this quarter.”

Highlights for the Third Quarter Ended September 30, 2011

· Revenue for the third quarter of 2011 increased 63% to $578,000 compared to $356,000 in the third quarter of 2010.

· Revenues for the nine months ended September 30, 2011 jumped by 71% to $1,490,000 compared to $873,000 in the nine months ended September 30, 2010.

· Gross profit for the third quarter of 2011 was $214,000 or 37% of revenues compared to a gross margin loss of $(235,000) in the third quarter of 2010.

· Net income for the third quarter of 2011 was $6.4 million or $0.14 per common share, including $7.2 million in non-cash warrant liability benefit associated with the Socius financing, compared to net loss of $2.2 million or $0.06 per common share in the third quarter of 2010.

Dan Wiesel, Chairman and CEO of The PAWS Pet Company, added, “We are excited to report results that exceeded our expectations for the third quarter. As we move toward 2012, we look forward to further expansion and growth"

Updated Guidance

Based on our ability to meet the conditions of the Socius agreement, or raise significant additional capital from other sources during the remainder of 2011 to fund our growth, and other operating assumptions detailed in the Form 8-K filed with the SEC on March 8, 2011, the Company now expects full year 2011 revenues to grow between 15% and 30% compared to full year 2010 revenues. The Company expects continued revenue growth and positive gross margins in 2012, and to be breakeven on a cash basis in the fourth quarter of 2012.

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About The PAWS Pet Company

The PAWS Pet Company, Inc. provides innovative pet services. It’s wholly owned subsidiary Pet Airways is the only airline specifically designed for the safe and comfortable transportation of pets. Pet Airways' Pawsengers™ travel in the specially equipped main cabin of its planes - where pets are continuously monitored by an In-Flight Pet Attendant and the climate is controlled for maximum pet comfort. With Pet Airways, pet parents can be assured their pets will be treated with tender, loving care by pet professionals throughout the journey. The airline launched flight operations in 2009 and serves coast-to-coast destinations across the United States.

For more information on PetAirways, go to www.petairways.com.

For more information on The PAWS Pet Company go to www.thepawspetcompany.com

Forward-Looking Statements

This press release includes statements that may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical facts, including, without limitation, statements regarding future financial position, business strategy, budgets, projected sales, projected costs, and management objectives, are forward-looking statements.  Terminology such as "may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates," “illustrates”, or "believes" or the negative thereof, any variation thereon or similar terminology are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely from the results proposed in such statements.  Important factors that could cause actual results to differ from our expectations include, but are not limited to: the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our business plan; our ability to control costs; our ability to attract and retain customers; transportation demand; general economic conditions; costs of aviation fuel; competitive pricing pressures; governmental regulation; weather conditions; and statements of assumption underlying any of the foregoing, as well as other factors set forth under the caption "Risk Factors" in the Form 8-K filed with the Securities and Exchange Commission (“SEC”) on March 8, 2011 and other filings with the SEC.  Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by the foregoing cautionary statements. We assume no duty to update or revise our forward-looking statements based on changes

Tables Follow –

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THR PAWS PET COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2011			December 31, 2010
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	23,805		$	1,511,057
Receivables and prepaid expenses		80,789			242,488
Deferred financing fees		427,073			-
Total current assets		531,667			1,753,545
Property and equipment, net		172,232			129,959
Other non-current assets		24,779			30,787
Total assets	$	728,678		$	1,914,291
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
14% debenture	$	-		$	250,000
Accounts payable and accrued expenses		889,561			892,375
Unearned revenue		148,220			125,603
Derivative warrant liability		6,143,013			-
Total current liabilities		7,180,794			1,267,978
Non-current liabilities:
Convertible debentures, net of debt discount		257,690			304,193
Total liabilities		7,438,484			1,572,171
Commitments and contingencies		-			-
Stockholders' (deficit) equity		(6,709,806	)		342,120
Total liabilities and stockholders’ (deficit) equity	$	728,678		$	1,914,291

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THE PAWS PET COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In dollars, except share data)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011			2010
	(Unaudited)						(Unaudited)
Revenue	$	577,691		$	356,057		$	1,489,450		$	872,594
Cost of revenue		363,940			590,871			1,530,393			1,164,477
Gross income (loss)		213,751			(234,814	)		(40,943	)		(291,883	)
Operating expense:
Sales, general and administrative		900,278			1,862,228			2,788,147			2,274,393
Loss from operations		(686,527	)		(2,097,042	)		(2,829,090	)		(2,566,276	)
Other income (expense), net:
Interest expense, net		(82,118	)		(73,703	)		(569,092	)		(80,292	)
Loss on extinguishment of debt		-			-			(571,122	)		-
Derivative warrant valuation, net		7,166,847			-			(5,673,012	)		-
Net income (loss) before income taxes		6,398,202			(2,170,745	)		(9,642,316	)		(2,646,568	)
Provision (benefit) for income taxes		-			-			-			-
Net income (loss)	$	6,398,202		$	(2,170,745	)	$	(9,642,316	)	$	(2,646,568	)
Net income (loss) per share, basic	$	0.14		$	(0.06	)	$	(0.23	)	$	(0.09	)
Weighted average shares used in calculation of basic net loss per share		44,750,634			34,244,506			41,864,799			30,843,566

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