10-Q/A

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q/A

(Mark One)

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

For the quarterly period ended September 30, 2012

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                 to                                

Commission file number: 333-130446

THE PAWS PET COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)

Illinois	20-3191557
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

455 N.E. 5th Avenue, Suite D464 Delray Beach, Fl.	33483
(Address of Principal Executive Offices)	(Zip Code)

(561) 2746805

(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.

Yes [  ] No [X]

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 [X] No [  ]

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

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).

Yes [  ] No [X]

The number of shares outstanding of the registrant’s common stock as September 30, 2012 was 86,468,313 shares.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A amends the Company’s Quarterly Report on Form 10-Q for the Quarterly period ended September 30, 2012 filed with the Securities and Exchange Commission on April 12, 2013 (the “Original Report”) and is being filed for the purposes of providing XBRL Filing.

Except for the information described above, the Company has not modified or updated disclosures presented in the Original Report in this Form 10-Q/A.

Accordingly, this Form 10-Q/A does not reflect events occurring after the filing of the Original Report or modify or update those disclosures affected by subsequent events. Information not affected by this amendment is unchanged and reflects the disclosures made at the time the Original Report was filed.

Item 6. Exhibits.

Exhibit No.	Description
31.1*	Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* These exhibits were previously included or incorporated by reference in THE PAWS PET COMPANY, INC.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012, filed with the Securities and Exchange Commission on April 12, 2012.

 

** Filed Herewith.

SIGNATURE

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: April 19, 2013

THE PAWS PET COMPANY, INC.
By:	/s/ Dan Wiesel
	Dan Wiesel
	Chief Executive Officer

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Net Loss per Share (Details Narrative)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Earnings Per Share [Abstract]
Shares issuable upon exercise of warrants	36,087,181	36,087,181
Shares issuable upon conversion of debt	1,575,000	1,575,000

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Equity

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Equity

3. Equity

Preferred Stock Authorized

On May 27, 2011, the Company filed an amended and restated Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of the State of Illinois that designated 500 such shares as Series A Preferred Stock (the “Preferred Stock”). A summary of the Certificate of Designations is set forth below:

Ranking. The Preferred Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the Common Stock, and any other classes of stock or series of preferred stock of the Company other than a class or series of preferred stock intended to be listed for trading and (ii) junior to any and all existing and future indebtedness of the Company.

No right of Conversion. The Preferred Stock is not convertible into Common Stock.

Dividends and Other Distributions. Commencing on the date of issuance of any such shares of Preferred Stock, holders of Preferred Stock shall be entitled to receive dividends on each outstanding share of Preferred Stock, which shall accrue at a rate equal to 10% per annum from the date of issuance. Accrued dividends shall be payable upon redemption of the Preferred Stock. So long as any shares of Preferred Stock are outstanding, no dividends or other distributions may be paid, declared or set apart with respect to any junior securities other than dividends or other distributions payable on the Common Stock solely in the form of additional shares of Common Stock. After payment of dividends at the annual rates set forth above, any additional dividends declared shall be distributed ratably among all holders of Preferred Stock and Common Stock in proportion to the number of shares of Common Stock that would be held by each such holder of Preferred Stock as if the Preferred Stock were converted into Common Stock by taking the Series A Liquidation Value (as defined below) divided by the market price of one share of Common Stock on the date of distribution.

Liquidation. Upon any liquidation, dissolution or winding up of the Company after payment or provision for payment of debts and other liabilities of the Company and any liquidation preferences to the senior securities, before any distribution or payment is made to the holders of any junior securities, the holders of Preferred Stock shall first be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount with respect to the Series A Liquidation Value, after which any remaining assets of the Company shall be distributed ratably among the holders of the Preferred Stock and the holders of junior securities, as if the Preferred Stock were converted into Common Stock by taking the Series A Liquidation Value divided by the market price of one share of Common Stock on the date of distribution.

Redemption. The Company may redeem, for cash or by an offset against any outstanding note payable from Socius to the Company that was issued by Socius CG II, Ltd. (“Socius”), any or all of the Preferred Stock at any time at a redemption price per share equal to $10,000 per share of Preferred Stock, plus any accrued but unpaid dividends with respect to such share of Preferred Stock (the “Series A Liquidation Value”).

On June 2, 2011, the Company’s Board of Directors designated 1,200,000 shares as Series A Preferred Stock. On September 30, 2012, no shares of Preferred Stock were outstanding.

Socius CG II, Ltd. Financing

On June 3, 2011, the Company entered into a securities purchase agreement with Socius, pursuant to which it secured $500,000 of immediate funding through the issuance and sale of 2,253,470 shares of common stock and a warrant to purchase up to 20,476,707 shares of common stock at an initial exercise price of $1.02 (subject to anti-dilution adjustments). In addition, Socius agreed to purchase up to an additional $5 million in non-convertible shares of Preferred Stock from the Company over the next two years, subject to the Company meeting certain conditions.

Subject to the terms and conditions of the securities purchase agreement, beginning 75 days after the closing of the initial purchase, at the Company’s sole discretion, the Company may submit to Socius a tranche notice to purchase a certain dollar amount of the Company’s Preferred Stock at $10,000 per share. The maximum amount that may be funded under any tranche cannot exceed 20% of the cumulative trading volume of the common stock for the 10 trading day-period prior to the applicable tranche notice date.

In connection with the securities purchase agreement, the Company agreed to issue on the 75 day anniversary of the initial purchase by Socius, 1,126,735 shares of common stock to Socius as consideration for executing the securities purchase agreement. The fair value of the consideration was $371,823 using the August 18, 2011 common stock closing price of $0.33 per share and was recorded as a deferred financing fee.

In addition, with the closing of the Socius financing, the Company approved the issuance of an aggregate of 1,800,000 shares of common stock as contingent consideration valued at $1,260,000 using the June 3, 2011 common stock closing price of $0.70 per share to two non-employee consultants. The share issuance was recorded as APIC and as financing cost charged to APIC.

In connection with the issuance of the warrant to purchase up to 20,476,707 shares of common stock at an initial exercise price of $1.02 (subject to full ratchet, anti-dilution adjustment), using the Black Scholes option pricing model that valued the warrants at $0.70 and $0.65 per share at June 3 and June 30, 2011 respectively, the Company recorded a charge to operations of $12,839,860 and to additional paid in capital of $470,000. In connection with this transaction the Company recorded deferred financing fees of $843,957 at June 30, 2011. Given that access to the financing is based on a percentage formula of the dollar value of stock traded, the Company feels that is unlikely that sufficient stock volume will be reached over the balance of the term of the financing and has expensed the balance of the deferred financing in the quarter ended September 30, 2012.

On December 29, 2011, an additional 458,678 warrants were issued to Socius with an exercise price of $0.20 per share to reflect an anti-dilution adjustment.

On February 23, 2012, an additional 4,336,503 warrants were issued to Socius with an exercise price of $0.14 per share to reflect an anti-dilution adjustment.

On March 2, 2012, an additional 252,449 warrants were issued to Socius with an exercise price of $0.14 per share to reflect an anti-dilution adjustment.

On April 2, 2012, an additional 53,811 warrants were issued to Socius with an exercise price of $0.05 per share to reflect an anti-dilution adjustment.

On April 10, 2012, an additional 3,995,247 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 20, 2012, an additional 405,839 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 20, 2012, an additional 828,089 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 25, 2012, an additional 184,335 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 27, 2012, an additional 302,046 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On June 7, 2012, an additional 109,489 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment.

On June 15, 2012, an additional 733,848 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment

On June 30, 2012, an additional 761,126 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment.

On July 24, 2012, an additional 217,390 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment.

The value of the derivative warrant liability was $182,136 and $2,930,955 at September 30, 2012 and December 31, 2011, respectively.

Common Stock Issued

On January 26, 2012 the Company issued 45,833 shares of common stock valued, using the closing stock price, at $5,500 as compensation for a license fee to non-employees.

On February 23, 2012 pursuant to the share exchange agreement by which the Company acquired ISN, the Company issued 7,394,056 shares of its common stock, no par value per share. These shares were issued pursuant to the exemption from registration provided under Section 4(2) of the Securities Act.

On February 26, 2012 the Company issued 45,833 shares of common stock valued at $6,417 using the closing stock price of the day, as compensation for a license fee to non-employees.

On March 26, 2012 the Company issued 45,833 shares of common stock valued at $4,583 using the closing stock price of the day, as compensation for a license fee to non-employees

On March 31, 2012 the Company elected to issue 49,354 shares of common stock valued, using the closing stock price of the day, at $4,442 in lieu of cash to satisfy interest payable at March 31, 2012 to the convertible debentures holders.

On April 2, 2012 the Company sold 200,000 shares of common stock for cash consideration of $10,000.

On April 10, 2012 the Company issued 6,170,950 shares of common stock valued at $740,514 using the closing stock price of the day, as compensation for services rendered to employees and non-employees.

On April 20, 2012 the Company issued 1,500,000 shares of common stock valued at $180,000 using the closing stock price of the day, as compensation for services rendered to non-employees.

On April 27, 2012 the Company issued 350,000 shares of common stock valued at $42,000, using the closing stock price of the day, as compensation for services rendered to non-employees.

On April 30, 2012 the Company issued 250,000 shares of common stock following the conversion of $100,000 of a $350,000 14% convertible debenture.

On May 1, 2012 the Company issued 595,836 shares of common stock valued at $41,709 using the closing stock price of the day, as compensation for a license fee to non-employees

On June 7, 2012 the Company sold 1,500,000 shares of common stock for cash consideration of $15,000.

On June 15, 2012 the Company sold 10,000,000 shares of common stock for cash consideration of $100,000.

On June 30, 2012 the Company sold 10,000,000 shares of common stock for cash consideration of $100,000.

On June 30, 2012 the Company elected to issue 44,063 shares of common stock valued, using the closing stock price of the day, at $1,763 in lieu of cash to satisfy interest payable at June 30, 2012 to the convertible debentures holders.

On September 4, 2012 the Company issued 2,033,898 shares of common stock following the conversion of $12,000 of a $47,500 8% convertible debenture.

On September 30, 2012 the Company elected to issue 41,545 shares of common stock valued, using the closing stock price of the day, at $228 in lieu of cash to satisfy interest payable at September 30, 2012 to the convertible debentures holders.

Warrants

On December 29, 2011, 458,678 warrants were issued to Socius with an exercise price of $0.20 per share to reflect an anti-dilution adjustment.

On February 23, 2012, 4,336,503 warrants were issued to Socius with an exercise price of $0.14 per share to reflect an anti-dilution adjustment.

On March 2, 2012, 252,449 warrants were issued to Socius with an exercise price of $0.14 per share to reflect an anti-dilution adjustment.

On April 2, 2012, an additional 53,811 warrants were issued to Socius with an exercise price of $0.05 per share to reflect an anti-dilution adjustment.

On April 10, 2012, an additional 3,995,247 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 20, 2012, an additional 405,839 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 20, 2012, an additional 828,089 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 25, 2012, an additional 184,335 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On April 27, 2012, an additional 302,046 warrants were issued to Socius with an exercise price of $0.12 per share to reflect an anti-dilution adjustment.

On June 7, 2012, an additional 109,489 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment.

On June 15, 2012, an additional 733,848 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment

On June 30, 2012, an additional 761,126 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment.

On July 24, 2012, an additional 217,390 warrants were issued to Socius with an exercise price of $0.01 per share to reflect an anti-dilution adjustment.

Stock Incentive Plan

In 2010, the Company adopted its Stock Incentive Plan (the “Plan”). Under the Plan, at September 30, 2012 we had 4,000,000 shares approved and reserved and at December 31, 2011 we had 4,000,000 shares reserved for the issuance of stock options to employees, officers, directors and outside advisors. Under the Plan, the options may be granted to purchase shares of common stock at fair market value at the date of grant.

At September 30, 2012 and December 31, 2011 the Company had 1,172,000 shares issued under the plan and 2,828,000 available for issuance.

On February 9, 2012 the Company adopted the 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan the Company had 10,000,000 shares and shares underlying stock options approved and reserved for the issuance to employees, officers, directors and outside advisors. At September 30, 2012 the Company had 6,170,950 shares issued under the 2012 Plan and 3,829,050 available for issuance.

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Business Overview And Organizational History

9 Months Ended

Sep. 30, 2012

Business Overview And Organizational History

Business Overview and Organizational History

2. Business Overview and Organizational History

Business Overview

From inception until January 2012, the Company, through its wholly-owned subsidiary, Pet Airways, operated an airline designed specifically for the comfortable and safe transportation of pets by traveling in the main cabin of the aircraft. Pet owners booked their pets on flights online at the Company’s website or booked with its agents by phone. On the day of the scheduled flight, pet owners dropped off their pets at one of the Company’s facilities located at the departure airport. The Company placed the pet passengers into a pet-friendly carrier and then boarded the carrier into the main cabin of the aircraft. The Company ran a scheduled coast to coast service. By the end of January 2012, the Company suspended flight operations due to low bookings and insufficient capital and in April 2012 decided to cease airline operations.

On February 23, 2012, pursuant to a share exchange agreement (“the Agreement”) the Company acquired the 100% of the issued and outstanding capital stock of Impact Social Networking, Inc. (“ISN”), a Georgia corporation in exchange for 7,394,056 shares of the Company’s common stock, no par value per share valued at $1,035,168 on the date of the acquisition. Under the terms of the Agreement, the Company may issue additional shares of its Common Stock to the former owners of ISN based upon the attainment by the Company of certain milestones. ISN owns a number of technology assets that had not reached technical feasibility at the time of the acquisition. With the exception of these technology assets ISN had no other assets or liabilities at the time of the acquisition, and had except for the development costs incurred for these assets, had no other costs and no revenue. Following, the acquisition, the Company commenced a new strategy of developing technologies for pet owners and pet caregivers.

On March 16, 2012, the Company launched a beta version of a social media application called “Pawdoodle.” This was an application that could be used in conjunction with social media platforms such as Facebook, Twitter and Google Plus. We believe Pawdoodle was the first social networking application that had been developed specifically for pet owners and pet caregivers that worked across a number of social media platforms. By using Pawdoodle, pet owners could build web pages for their pets, post and view pictures of their pets, follow pet breeds and pet adoptions. Pawdoodle also allowed pet owners to store pet microchip data.

In September 2012, the Company closed the Pawdoodle application.

On March 9, 2013 the Company entered into a Securities Exchange Agreement (the “Agreement”) whereby the Company issued 80,000 shares of the Company’s Series B Convertible Preferred Stock (the “B Preferred”) to the members of Advanced Access Pharmacy Services, LLC, a Nevada limited liability company (“AAPS”) in exchange for 100% of the outstanding units of limited liability company membership interests of AAPS.

AAPS was created to exploit specific niche opportunities in wholesale and retail pharmacies. AAPS intends to focus on workers’ compensation and in-office physician pharmacy distribution as well as the limited purchase and collection of pharmaceutical and services related receivables. Leveraging decades of experience in pharmacy and medical receivables collections of the people being hired, the Company believes that it should be able to achieve significant profitability in a very short period with very limited investment.

See Note 7 - Subsequent Events for more details.

Organizational History

The Company was incorporated in the State of Illinois on June 6, 2005 as American Antiquities, Inc. In June 2010, the Company formed Pet Airways by the conversion of successor entity Panther Air Cargo, LLC (“Panther Air”) a limited liability company. Effective the date of the conversion, Panther Air began operating as Pet Airways, Inc. (Florida).

On August 13, 2010, the Company completed a reverse acquisition transaction through a share exchange with Pet Airways (the “Acquisition”), whereby the Company acquired 100% of the issued and outstanding capital stock of Pet Airways in exchange for 25,000,000 shares of the Company’s common stock, which constituted approximately 73% of its issued and outstanding capital stock on a post-acquisition basis as of and immediately after the consummation of the Acquisition.

Upon completion of the Acquisition, the Company changed its name from American Antiquities, Inc. to Pet Airways, Inc. and commenced trading under the symbol “PAWS” on the OTC QB. The OTC QB market tier of the OTC market helps investors identify companies that are current in their reporting obligations with the SEC. OTC QB securities are quoted on OTC Markets Group’s quotation and trading system. On July 27, 2011, the Company filed Articles of Amendment to amend its Articles of Incorporation to change its name to The PAWS Pet Company, Inc.

The share exchange transaction was treated as a reverse acquisition for accounting purposes, with Pet Airways as the acquirer and The PAWS Pet Company, Inc. as the acquired party. Unless the context suggests otherwise, references in this report to business and financial information for periods prior to the consummation of the reverse acquisition, refer to the business and financial information of Pet Airways, Inc. and its predecessors. For accounting purposes, the acquisition of Pet Airways, Inc. has been treated as a recapitalization with no adjustment to the historical book and tax basis of the Company’s assets and liabilities.

In January 2012, the Company suspended flight operations and in April 2012, ceased airline operations.

On February 23, 2012, pursuant to the Agreement the Company acquired the 100% of the issued and outstanding capital of ISN, a Georgia corporation in exchange for 7,394,056 shares of the Company’s common stock, no par value per share valued at $1,035,168 on the date of the acquisition. Under the terms of the Agreement, the Company may issue additional shares of its Common Stock to the former owners of ISN based upon the attainment by the Company of certain milestones. ISN owns a number of technology assets that had not reached technical feasibility at the time of the acquisition. With the exception of these technology assets ISN had no other assets or liabilities at the time of the acquisition, and had except for the development costs incurred for these assets, had no other costs and no revenue. Following, the acquisition, the Company commenced a new strategy of developing technologies for pet owners and pet caregivers. In September we closed our social media application and are currently evaluating alternative business strategies.

On July 13, 2012 the company increased its authorized share capital of common stock to 350,000,000.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 92,981	$ 38,256
Receivable due from credit card clearing house		59,418
Prepaid expenses	3,223	1,537
Deferred financing fee		427,073
Total current assets	96,204	526,284
Property and equipment, at cost	169,136	256,199
Less: accumulated depreciation and amortization	(104,010)	(101,665)
Property and equipment, net	65,126	154,534
Security deposits and other		39,689
Total assets	161,330	720,507
Current liabilities:
Convertible debentures, net of debt discount of $268,052 and $0 at September 30, 2012 and December 31, 2011, respectively	547,448
Accounts payable	767,426	945,083
Accrued expenses	1,769,242	965,577
Total current liabilities	3,084,116	1,910,660
Convertible debentures, net of debt discount of $0 and $482,003 at September 30, 2012 and December 31, 2011, respectively		342,997
Warrant liability	182,136	2,930,955
Total liabilities	3,266,252	5,184,612
Stockholders' deficit:
Series A preferred stock, 10,000,000 shares authorized, none issued and outstanding at September 30, 2012 and December 31, 2011, respectively
Common stock, no par value, 350,000,000 shares authorized, 86,468,383 and 46,201,182 issued and outstanding at September 30, 2012 and December 31, 2011, respectively
Additional paid-in capital	11,566,697	9,114,465
Accumulated deficit	(14,671,619)	(13,578,570)
Total stockholders' deficit	(3,104,922)	(4,464,105)
Total liabilities and stockholders' deficit	$ 161,330	$ 720,507

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Statements of Cash Flows (Parenthetical)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Issuance of common stock for conversion of convertile debentures	1,300,000	0
Conversion Of 8% Convertible Debentures [Member]
Issuance of common stock for conversion of convertile debentures	1,300,000	1,300,000
Debt instrument, interest rate	8.00%	8.00%
Conversion Of 8% Convertible Debentures One [Member]
Issuance of common stock for conversion of convertile debentures	2,033,898	2,033,898
Debt instrument, interest rate	80.00%	8.00%
Conversion Of 14% Convertible Debentures [Member]
Issuance of common stock for conversion of convertile debentures	250,000	250,000
Debt instrument, interest rate	14.00%	14.00%
Issuance of convertible debentures in exchange of warrants, interest rate	14.00%	14.00%

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Debt Obligations - Schedule of Principal Unamortized Debt Discount and Equity Components (Details) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 04, 2012	Jul. 24, 2012	Jun. 30, 2012	Apr. 30, 2012	Apr. 25, 2012	Mar. 02, 2012	Feb. 23, 2012	Jun. 03, 2011	Jan. 31, 2011
Principal amount of convertible debenture	$ 547,448			$ 12,000	$ 27,500		$ 100,000	$ 27,500	$ 475,000		$ 350,000	$ 525,000
Unamortized debt discount	(268,052)		(482,003)		(27,500)			(27,500)		(34,397)	(332,415)
Net carrying amount	547,448		342,997	47,500		47,500	350,000
Equity component (recognized in Additional paid-in capital)	879,528	790,131	790,131
Principal Amount 8% Convertible Debenture Short Term [Member]
Principal amount of convertible debenture	565,500
Principal Amount 8% Convertible Debenture Long Term [Member]
Principal amount of convertible debenture			475,000
Principal Amount 14% Convertible Debenture [Member]
Principal amount of convertible debenture	$ 250,000		$ 350,000

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Commitments and Contingencies - Schedule Of Minimum Future Annual Rental Commitments (Details) (USD $)	Sep. 30, 2012
Commitments and Contingencies Disclosure [Abstract]
2013	$ 113,387
2014	10,000
2015
Thereafter
Total minimum lease payments	$ 123,387

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of The PAWS Pet Company, Inc. (the “Company”), formerly known as Pet Airways, Inc., and its wholly owned subsidiaries Pet Airways, Inc. (“Pet Airways”) and Impact Social Networking, Inc.(“ISN”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying condensed consolidation financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2012 and 2011. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The results for the three months ended September 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2011.

Certain prior period amounts have been reclassified or adjusted to conform to the current presentation. These reclassifications and adjustments had no material impact on the consolidated financial position, results of operations and net cash flows from operations for all periods presented.

Going Concern Matters

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company does not presently have adequate cash from operations or financing activities to meet its long-term financing needs. For the nine month period ended September 30, 2012 and the year ended December 31, 2011, the Company had $92,981 and $38,256, respectively, in cash and cash equivalents to use in executing its business plan. For the nine months ended September 30, 2012, the Company generated no revenues and recorded a net loss of $(1,093,049) including non-cash charges of $(1,035,168) in acquisition expenses following the acquisition of the technology assets from Impact Social Networking, a $2,748,819 gain in derivative valuation expenses, a $(313,350) in non-cash interest expenses and a $(41,569) loss on abandonment of property and equipment. For the year ended December 31, 2011, the Company generated $1,584,432 in revenues and recorded a net loss of $(7,513,562). As a result of these and other factors, the Company’s independent registered public accounting firm has included an explanatory paragraph in their audited consolidated financial statements and footnotes in the Annual Report on Form 10-K for the year ended December 31, 2011 as to the substantial doubt about the Company’s ability to continue as a going concern. As further described in Footnote 2 “Equity” to the unaudited condensed consolidated financial statements, on June 3, 2011 the Company issued 2,253,470 shares of common A stock (“common stock”) and a warrant to purchase 20,476,707 shares of common stock at a price of $1.02 per share to Socius CG II, Ltd. (“Socius”) for cash of $500,000 and secured an equity line of credit for up to $5 million subject to the Company meeting certain conditions.

The Company will require additional working capital to continue its operations during the next 12 months and to support its long-term growth strategies. Since the company was unable to meet the conditions permitted to make draw downs under its financing arrangement with Socius, the Company needs to seek alternative funding required through one or more sources and credit facilities, if available, or through the sale of debt or issuance of additional equity securities. However, there is no assurance that funding of any type would be available to the Company, or that it would be available at rates or other terms and conditions that would be financially acceptable and viable to the Company in the long term. If the Company is unable to raise the necessary additional financing when needed, the Company may be required to stop developing technologies, sell assets or enter into a merger or other combination with a third party, any of which could adversely affect the value of its common stock, or render it worthless. If the Company issues additional debt or equity securities, such securities may enjoy rights, privileges and priorities (including but not limited to coupon rates, conversion rights, rights to fixed or preferential dividends, anti-dilution rights or preference as to the distribution of assets upon a liquidation) superior to those enjoyed by holders of the Company’s common stock, thereby diluting the value of the Company’s common stock.

The Company’s prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly given that the Company has limited financial resources. The Company may not be successful in addressing such risks and difficulties.

Critical Accounting Policies and Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements requires management of the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company based these estimates and assumptions on historical experience and evaluates them on an on-going basis to ensure they remain reasonable under current conditions. Actual results could differ from those estimates. Critical accounting policies and estimates are summarized below.

Revenue Recognition

The Company recognizes revenue when the earnings process is completed.

In the Company’s Pet Airways business, the earnings process was completed when the scheduled flight service, or a replacement flight service, purchased by the buyer had been delivered. Revenue from tickets sold prior to a scheduled flight was initially recorded as unearned revenue, net of any discounts, and was recognized as revenue in the period when the scheduled service had been provided or offered to the buyer as agreed. In the ordinary course of the Company’s business, a portion of the tickets sold were sometimes not used by the buyer on the agreed date of the flight. In such cases, for a nominal change fee, the Company issued holders of unused tickets a “voucher” which stated value could have been applied toward the purchase of a flight for up to one year. Accordingly, the change fee was earned when the voucher was issued and the stated voucher value remained unearned until recorded as revenue upon the earlier of the vouchers expiration date or delivery of the flight service. Tickets purchased for scheduled flights that were cancelled by the Company may have been refunded or applied towards another flight at the buyer’s request. Refunds processed were removed from unearned revenue. Any inconvenience cost incurred by the Company for the benefit of the buyer was charged to cost of revenue when incurred. Fees charged by the credit card processors for handling the ticket sales were recorded to cost of sales at the time when the tickets were sold.

For our social media application we expected to generate revenues from the sale of advertising space within the application. Revenues were to be recognized where there was evidence of a contractual arrangement, we had delivered our obligations based on the contract, pricing could be determined and there was a reasonable expectation that the associated receivable could have been collected. Advertising revenue was expected to be generated from the display of advertisements on our platform. The arrangements would have been evidenced by either online acceptance of terms and conditions or contracts that stipulate the types of advertising to be delivered, the timing and the pricing. We expected to recognize revenue from the display of impression-based advertisements on our application in the contracted period when the impressions were to be delivered. Impressions were considered delivered when an advertisement appears in pages delivered to users. We expected to recognize revenue from the delivery of click-based advertisements on our website. Revenue associated with these advertisements was to be recognized in the period that a user clicks on an advertisement.

The Company is not currently generating revenues.

Derivative Liabilities

The Company has utilized convertible debentures with warrants to purchase shares of common stock to settle certain liabilities and fund operations resulting in the recording of a derivative liability. Current guidance for valuing and classifying transactions of this type includes Accounting Standards Codification (“ASC”) 470-20 “Debt with Conversion and Other Options”. Accordingly, the Company has used the Black-Scholes option-pricing model as its method of determining the fair value of the convertible debenture issued with a warrant. The resulting calculation of the beneficial conversion feature (“BCF”) and warrant equity component are recorded to additional paid in capital (“APIC”) with an offset discount to the principal value of the convertible debenture. The Company has used the effective yield interest method for amortizing the discount to interest expense over the maturity term of the convertible debenture. The Company records to interest expense the unamortized discount value associated with a debenture converted in a period.

The Company accounts for certain its Warrants (see Note 2, Equity, Socius CG II, Ltd. Financing) as derivatives under the guidance of ASC 815-10, Accounting for Derivative Instruments and Hedging Activities, and ASC 815-40, Contracts in an Entity’s Own Stock.

Accruals for Contingent Liabilities

The Company makes estimates of liabilities that arise from various contingencies for which values are not fully known at the date of the accrual or during the periodic financial planning and analysis cycle. These contingencies may include, but are not limited, to accruals for reserves for expenses, costs and awards involving legal settlements. Events may occur that are resolved over a period of time or on a specific future date. Management makes estimates using the facts available of the probability of the outcomes and range of cost, if measurable, of these occurrences and charges them to expense in the appropriate periods. If the ultimate resolution of any event is different than management’s estimate caused by a change in facts or material operating assumptions, corresponding entries to earnings may be required.

Equity Based Compensation

The Company applies ASC 718-10 Stock Compensation and ASC 505-50 Equity Based Payments to Non-Employees in accounting for stock options issued to employees and non-employees, respectively. For stock options and warrants issued to non-employees, the Company applies the same standard, which requires the recognition of compensation cost based upon the fair value of stock options and warrant at the grant date using the Black-Scholes option pricing model. The Company’s determination of fair value of share-based payment awards on the date of grant using the option-pricing model is affected by its equity price as well as assumptions regarding its expected equity price volatility over the term of the awards, the selection of a risk free interest rate, the ultimate disposition of the award and the impact of the award on earnings per share. For example, in calculating the expected equity price volatility, the Company may consider using its historical experience only, its experience plus that of a publicly trade index volatility experience, or a blended volatility experience for public peer companies. The Company also evaluates carefully the expected life term of an award though the vesting of awards to date have been immediate. Finally, the Company attempts to use a risk free rate that is widely quoted and pertinent across a broad range of transactions.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at financial institutions that are insured by the Federal Deposit Insurance Corporation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reservation System and Development Costs

The Company accounts for reservation system (“website”) and development costs in accordance with ASC 350-50 “Website Development Costs.” All costs incurred in the planning stage are expensed as incurred. Costs incurred in the website application and infrastructure development stage are accounted for in accordance with ASC 350-50, which requires the capitalization of certain costs that meet specific criteria. Costs incurred in the day to day operation of the website are expensed as incurred. Costs associated with the development of the Company’s social media application are expensed in the month when they incurred.

Fair Value Measurements

The Company has adopted a single definition of fair value, a framework for measuring fair value, and expanded disclosures concerning fair value. In this valuation, the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date and fair value is a market-based measurement and not an entity-specific measurement.

The Company utilizes the following hierarchy in fair value measurements:

● Level 1 – Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

● Level 2 – Inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

● Level 3 – Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

Depreciation, Amortization and Capitalization

The Company records depreciation and amortization, when appropriate, using the straight-line method over the estimated useful life of the assets (three to five years). Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property’s useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriate accounts and the resultant gain or loss is included in operating income or loss.

Long-Lived Assets

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of its trademark costs. If and when such factors, events or circumstances indicate possible impairment to its trademark costs, the Company would make an estimate of undiscounted cash flows over the remaining lives of the respective assets in measuring recoverability from future operations. The Company incurred no impairment losses during the periods presented.

Income Taxes

The Company follows ASC 740, Income Taxes. Deferred tax assets or liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each year-end. These amounts are adjusted, as appropriate, to reflect enacted changes in tax rates expected to be in effect when the temporary differences reverse.

The Company records deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities and on operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed consolidated financial statements.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Convertible debentures current, debt discount	$ 268,052	$ 0
Convertible debentures noncurrent, debt discount	$ 0	$ 482,003
Series A preferred stock, shares authorized	10,000,000	10,000,000
Series A preferred stock, issued	0	0
Series A preferred stock, outstanding	0	0
Common stock, no par value
Common stock, shares authorized	350,000,000	350,000,000
Common stock, issued	86,468,383	46,201,182
Common stock, outstanding	86,468,383	46,201,182

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Net Loss per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Schedule of Earnings per Share Reconciliation

The following is a reconciliation of the weighted average number of common shares used to calculate basic net loss per share to the weighted average common and potential common shares used to calculate diluted net loss per share for the three and nine months ended September 30, 2012 and 2011:

	Three months ended September 30,					Nine months ended September 30,
	2012			2011		2012			2011
	(Unaudited)					(Unaudited)
Numerator:
Net income (loss ), basic	$	256,085		$	6,398,202	$	(1,093,049	)	$	(9,642,316	)
Effect of interest expense and discount amortization		-	(1)		-		-	(1)		-
Net income (loss), dilutive	$	256,085		$	6,398,202	$	(1,093,049	)	$	(9,642,316	)
Denominator:
Weighted shares outstanding, basic		59,324,455			44,750,634		65,970,450			41,864,799
Effect of dilutive securities:
Convertible debentures and warrants		-	(1)		-		-	(1)		-
Weighted shares outstanding, dilutive		59,324,455			44,750,634		65,970,450			41,864,799
Net income (loss) per share, basic	$	0.00		$	0.14	$	(0.02	)	$	(0.23	)

(1) For the three and nine month periods ended Sept. 30, 2012, weighted shares outstanding excludes 36,087,181 shares issuable upon exercise of warrants and 1,575,000 shares issuable for the conversion of debt, due to a loss from continuing operations.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012
Document And Entity Information
Entity Registrant Name	PAWS Pet Company, Inc.
Entity Central Index Key	0001346973
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	86,468,313
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012

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Summary of Significant Accounting Policies (Details Narrative) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Jun. 30, 2012	May 01, 2012	Apr. 30, 2012	Apr. 27, 2012	Apr. 20, 2012	Apr. 10, 2012	Mar. 31, 2012	Mar. 26, 2012	Feb. 26, 2012	Jan. 26, 2012	Jun. 30, 2011	Jun. 03, 2011	Dec. 31, 2010
Accounting Policies [Abstract]
Cash and cash equivalents	$ 92,981	$ 23,805	$ 92,981	$ 23,805	$ 38,256											$ 102,436		$ 1,511,057
Revenue		577,691		1,489,450	1,584,432
Net loss	256,085	6,398,202	(1,093,049)	(9,642,316)	(7,513,562)
Non-cash charges			(1,035,168)
Gain in derivative valuation expenses			2,748,819
Non-cash interest expenses			(313,350)
Loss on abandonment of property and equipment	(41,569)		(41,569)
Common stock Class A shares issued	86,468,383		86,468,383		46,201,182	2,033,898	595,836	250,000	350,000	1,500,000	6,170,950	49,394	45,833	45,833	45,833		2,253,470
Warrants issued to purchase of common stock, number																	20,476,707
Warrants issued to purchase of common stock, price per share																	$ 1.02
Warrants issued to purchase of common stock value																	500,000
Warrants issued for cash																	500,000
Maximum limit of secured equity line of credit																	$ 5,000,000

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Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement [Abstract]
Revenue		$ 577,691		$ 1,489,450
Cost of revenue		363,940	5,843	1,530,393
Gross loss		213,751	(5,843)	(40,943)
Operating expense:
Sales, general and administration	733,840	900,278	3,541,167	2,788,147
Loss from operations	(733,840)	(686,527)	(3,547,010)	(2,829,090)
Other income (expense):
Interest income		4		8
Interest expense	(93,962)	(82,122)	(313,350)	(569,099)
Net (loss) gain on conversion of convertible notes	(8,339)		61,661
Loss on abandonment of property and equipment	(41,569)		(41,569)
Loss on extinguishment of debt				(571,122)
Warrant liability valuation, net	1,133,795	7,166,847	2,748,819	(5,673,013)
Other income (expense), net	989,925	7,084,729	2,455,561	(6,813,226)
Loss before income taxes	256,085	6,398,202	(1,091,449)	(9,642,316)
Provision (benefit) for income taxes			(1,600)
Net income (loss)	$ 256,085	$ 6,398,202	$ (1,093,049)	$ (9,642,316)
Net income (loss) per share, basic and diluted	$ 0.00	$ 0.14	$ (0.02)	$ (0.23)
Weighted average shares used in calculation of basic and diluted net income (loss) per share	59,324,455	44,750,634	65,970,450	41,864,799

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Net Loss per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Net Loss per Share

6. Net loss per share

The Company computes net loss per share in accordance with GAAP. Basic net loss per share is computed by dividing net loss attributable to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period.

The following is a reconciliation of the weighted average number of common shares used to calculate basic net loss per share to the weighted average common and potential common shares used to calculate diluted net loss per share for the three and nine months ended September 30, 2012 and 2011:

	Three months ended September 30,					Nine months ended September 30,
	2012			2011		2012			2011
	(Unaudited)					(Unaudited)
Numerator:
Net income (loss ), basic	$	256,085		$	6,398,202	$	(1,093,049	)	$	(9,642,316	)
Effect of interest expense and discount amortization		-	(1)		-		-	(1)		-
Net income (loss), dilutive	$	256,085		$	6,398,202	$	(1,093,049	)	$	(9,642,316	)
Denominator:
Weighted shares outstanding, basic		59,324,455			44,750,634		65,970,450			41,864,799
Effect of dilutive securities:
Convertible debentures and warrants		-	(1)		-		-	(1)		-
Weighted shares outstanding, dilutive		59,324,455			44,750,634		65,970,450			41,864,799
Net income (loss) per share, basic	$	0.00		$	0.14	$	(0.02	)	$	(0.23	)

(1) For the three and nine month periods ended Sept. 30, 2012, weighted shares outstanding excludes 36,087,181 shares issuable upon exercise of warrants and 1,575,000 shares issuable for the conversion of debt, due to a loss from continuing operations.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. Commitments and Contingencies

The Company leased space for certain of its offices and airport facilities under leases expiring from one month to two years after September 30, 2012. For the three and nine months ending September 30, 2012 rent expense was $56,832 and $189,168, respectively. Amounts of minimum future annual rental commitments under non-cancelable operating leases in each of the four periods ending September 30, 2013 through 2015 were:

Operating leases

Year	September 30,
2013	$	113,387
2014		10,000
2015		-
Thereafter		-
Total minimum lease payments	$	123,387

During the year the Company abandoned the leased properties but remain still liable for unpaid rent which has been accrued.

The Company, from time to time, is involved in legal proceedings, claims, and litigation that occur in connection with its business. The Company routinely assesses its liabilities and contingencies in connection with these matters based upon the latest available information and, when necessary, seeks input from its third-party advisors when making these assessments. Consistent with SEC rules and requirements, described below are material pending legal proceedings (other than ordinary routine litigation incidental to the Company’s business), material proceedings known to be contemplated by governmental authorities, other proceedings arising under federal, state, or local environmental laws and regulations (including governmental proceedings involving potential fines, penalties, or other monetary sanctions in excess of $10,000) and such other pending matters that we may determine to be appropriate.

There are no other proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to the Company’s interest.

The Company is self-insured and has not accrued a reserve against potential loss.

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Commitments and Contingencies (Details Narrative) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 56,832	$ 189,168
Pending governmental proceedings involving potential fines penalties	$ 10,000	$ 10,000

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Business Overview and Organizational History (Details Narrative) (USD $)	0 Months Ended					0 Months Ended
	Feb. 23, 2012	Sep. 30, 2012	Jul. 13, 2012	Dec. 31, 2011	Mar. 09, 2013 Advanced Access Pharmacy Services, LLC [Mmeber]	Feb. 23, 2012 Impact Social Networking Inc [Member]	Aug. 13, 2010 Pet Airways [Member]
Percentage of acquisition of the capital stock					100.00%	100.00%	100.00%
Shares issued on acquisition, price per share						$ 0.00
Issuance of shares in business acquisition	7,394,056					7,394,056	25,000,000
Value of shares exchanged in business acquisition						$ 1,035,168
Issuance of Series A Comvertible Preferred Stock		0		0	80,000
Issuance of capital stock on exchange of ownership is equal to percentage of post acquisition issued and outstanding capital stock							73.00%
Common stock, shares authorized		350,000,000	350,000,000	350,000,000

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Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Schedule of Principal Unamortized Debt Discount and Equity Components

The following table summarizes the principal, unamortized debt discount and equity components of the Company’s convertible debentures derivative liability net carrying amount:

	September 30, 2012			December 31, 2011
Principal amount 8% convertible debenture short term	$	565,500		$	-
Principal amount 8% convertible debenture long term		-			475,000
Principal amount 14% convertible debenture		250,000			350,000
Unamortized debt discount		(268,052	)		(482,003	)
Net carrying amount	$	547,448		$	342,997
Equity component (recognized in Additional paid-in capital)	$	879,528		$	790,131

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

7. Subsequent Events

On March 9, 2013 the Company entered into a Securities Exchange Agreement (the “Agreement”) whereby the Company issued 80,000 shares of the Company’s Series B Convertible Preferred Stock (the “B Preferred”) to the members of Advanced Access Pharmacy Services, LLC, a Nevada limited liability company (“AAPS”) in exchange for 100% of the outstanding units of limited liability company membership interests of AAPS.

AAPS was created to exploit specific niche opportunities in wholesale and retail pharmacies. AAPS intends to focus on workers’ compensation and in-office physician pharmacy distribution as well as the limited purchase and collection of pharmaceutical and services related receivables. Leveraging decades of experience in pharmacy and medical receivables collections of the people being hired, the Company believes that it should be able to achieve significant profitability in a very short period with very limited investment.

Under the Agreement, the Company is obligated to file certain delinquent periodic reports with the Securities and Exchange Commission (the “SEC”). Upon filing such reports, the board of the Company will appoint two new board members designated by the former members of AAPS. Upon generating $450,000 in revenue subsequent to the transaction, one of the current members of the board will resign. If the Company does not generate $900,000 in revenue within nine (9) months after filing its Annual Report, on Form 10-K for the year ended December 31, 2012 with the SEC, then the newly appointed members to the board will resign from the board and, if a current board member resigned as previously set forth, such board member or another designee of the remaining current director will be appointed to the Board.

After a request to convert any part of the B Preferred, the number of shares of the Company’s common stock to be issued is equal to 0.001% of the number of shares of the Common Stock that would be issued and outstanding after the hypothetical conversion and issuance of all of the outstanding shares of any and all classes of convertible stock and/or any and all other convertible debt instruments, options and/or warrants outstanding at the time. If all the 80,000 B Preferred were to be converted at the same time the holders would get 80% of the Company’s then outstanding common stock including all other convertible instruments. The B Preferred Stock is non-voting until converted into common stock, which common stock shall similarly be non-voting until sold by the former members of AAPS to non-affiliated third parties.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of The PAWS Pet Company, Inc. (the “Company”), formerly known as Pet Airways, Inc., and its wholly owned subsidiaries Pet Airways, Inc. (“Pet Airways”) and Impact Social Networking, Inc.(“ISN”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying condensed consolidation financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2012 and 2011. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The results for the three months ended September 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2011.

Certain prior period amounts have been reclassified or adjusted to conform to the current presentation. These reclassifications and adjustments had no material impact on the consolidated financial position, results of operations and net cash flows from operations for all periods presented.

Going Concern Matters

Going Concern Matters

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company does not presently have adequate cash from operations or financing activities to meet its long-term financing needs. For the nine month period ended September 30, 2012 and the year ended December 31, 2011, the Company had $92,981 and $38,256, respectively, in cash and cash equivalents to use in executing its business plan. For the nine months ended September 30, 2012, the Company generated no revenues and recorded a net loss of $(1,093,049) including non-cash charges of $(1,035,168) in acquisition expenses following the acquisition of the technology assets from Impact Social Networking, a $2,748,819 gain in derivative valuation expenses, a $(313,350) in non-cash interest expenses and a $(41,569) loss on abandonment of property and equipment. For the year ended December 31, 2011, the Company generated $1,584,432 in revenues and recorded a net loss of $(7,513,562). As a result of these and other factors, the Company’s independent registered public accounting firm has included an explanatory paragraph in their audited consolidated financial statements and footnotes in the Annual Report on Form 10-K for the year ended December 31, 2011 as to the substantial doubt about the Company’s ability to continue as a going concern. As further described in Footnote 2 “Equity” to the unaudited condensed consolidated financial statements, on June 3, 2011 the Company issued 2,253,470 shares of common A stock (“common stock”) and a warrant to purchase 20,476,707 shares of common stock at a price of $1.02 per share to Socius CG II, Ltd. (“Socius”) for cash of $500,000 and secured an equity line of credit for up to $5 million subject to the Company meeting certain conditions.

The Company will require additional working capital to continue its operations during the next 12 months and to support its long-term growth strategies. Since the company was unable to meet the conditions permitted to make draw downs under its financing arrangement with Socius, the Company needs to seek alternative funding required through one or more sources and credit facilities, if available, or through the sale of debt or issuance of additional equity securities. However, there is no assurance that funding of any type would be available to the Company, or that it would be available at rates or other terms and conditions that would be financially acceptable and viable to the Company in the long term. If the Company is unable to raise the necessary additional financing when needed, the Company may be required to stop developing technologies, sell assets or enter into a merger or other combination with a third party, any of which could adversely affect the value of its common stock, or render it worthless. If the Company issues additional debt or equity securities, such securities may enjoy rights, privileges and priorities (including but not limited to coupon rates, conversion rights, rights to fixed or preferential dividends, anti-dilution rights or preference as to the distribution of assets upon a liquidation) superior to those enjoyed by holders of the Company’s common stock, thereby diluting the value of the Company’s common stock.

The Company’s prospects must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly given that the Company has limited financial resources. The Company may not be successful in addressing such risks and difficulties.

Critical Accounting Policies And Estimates

Critical Accounting Policies and Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements requires management of the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company based these estimates and assumptions on historical experience and evaluates them on an on-going basis to ensure they remain reasonable under current conditions. Actual results could differ from those estimates. Critical accounting policies and estimates are summarized below.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when the earnings process is completed.

In the Company’s Pet Airways business, the earnings process was completed when the scheduled flight service, or a replacement flight service, purchased by the buyer had been delivered. Revenue from tickets sold prior to a scheduled flight was initially recorded as unearned revenue, net of any discounts, and was recognized as revenue in the period when the scheduled service had been provided or offered to the buyer as agreed. In the ordinary course of the Company’s business, a portion of the tickets sold were sometimes not used by the buyer on the agreed date of the flight. In such cases, for a nominal change fee, the Company issued holders of unused tickets a “voucher” which stated value could have been applied toward the purchase of a flight for up to one year. Accordingly, the change fee was earned when the voucher was issued and the stated voucher value remained unearned until recorded as revenue upon the earlier of the vouchers expiration date or delivery of the flight service. Tickets purchased for scheduled flights that were cancelled by the Company may have been refunded or applied towards another flight at the buyer’s request. Refunds processed were removed from unearned revenue. Any inconvenience cost incurred by the Company for the benefit of the buyer was charged to cost of revenue when incurred. Fees charged by the credit card processors for handling the ticket sales were recorded to cost of sales at the time when the tickets were sold.

For our social media application we expected to generate revenues from the sale of advertising space within the application. Revenues were to be recognized where there was evidence of a contractual arrangement, we had delivered our obligations based on the contract, pricing could be determined and there was a reasonable expectation that the associated receivable could have been collected. Advertising revenue was expected to be generated from the display of advertisements on our platform. The arrangements would have been evidenced by either online acceptance of terms and conditions or contracts that stipulate the types of advertising to be delivered, the timing and the pricing. We expected to recognize revenue from the display of impression-based advertisements on our application in the contracted period when the impressions were to be delivered. Impressions were considered delivered when an advertisement appears in pages delivered to users. We expected to recognize revenue from the delivery of click-based advertisements on our website. Revenue associated with these advertisements was to be recognized in the period that a user clicks on an advertisement.

The Company is not currently generating revenues.

Derivative Liabilities

Derivative Liabilities

The Company has utilized convertible debentures with warrants to purchase shares of common stock to settle certain liabilities and fund operations resulting in the recording of a derivative liability. Current guidance for valuing and classifying transactions of this type includes Accounting Standards Codification (“ASC”) 470-20 “Debt with Conversion and Other Options”. Accordingly, the Company has used the Black-Scholes option-pricing model as its method of determining the fair value of the convertible debenture issued with a warrant. The resulting calculation of the beneficial conversion feature (“BCF”) and warrant equity component are recorded to additional paid in capital (“APIC”) with an offset discount to the principal value of the convertible debenture. The Company has used the effective yield interest method for amortizing the discount to interest expense over the maturity term of the convertible debenture. The Company records to interest expense the unamortized discount value associated with a debenture converted in a period.

The Company accounts for certain its Warrants (see Note 2, Equity, Socius CG II, Ltd. Financing) as derivatives under the guidance of ASC 815-10, Accounting for Derivative Instruments and Hedging Activities, and ASC 815-40, Contracts in an Entity’s Own Stock.

Accruals for Contingent Liabilities

Accruals for Contingent Liabilities

The Company makes estimates of liabilities that arise from various contingencies for which values are not fully known at the date of the accrual or during the periodic financial planning and analysis cycle. These contingencies may include, but are not limited, to accruals for reserves for expenses, costs and awards involving legal settlements. Events may occur that are resolved over a period of time or on a specific future date. Management makes estimates using the facts available of the probability of the outcomes and range of cost, if measurable, of these occurrences and charges them to expense in the appropriate periods. If the ultimate resolution of any event is different than management’s estimate caused by a change in facts or material operating assumptions, corresponding entries to earnings may be required.

Equity Based Compensation

Equity Based Compensation

The Company applies ASC 718-10 Stock Compensation and ASC 505-50 Equity Based Payments to Non-Employees in accounting for stock options issued to employees and non-employees, respectively. For stock options and warrants issued to non-employees, the Company applies the same standard, which requires the recognition of compensation cost based upon the fair value of stock options and warrant at the grant date using the Black-Scholes option pricing model. The Company’s determination of fair value of share-based payment awards on the date of grant using the option-pricing model is affected by its equity price as well as assumptions regarding its expected equity price volatility over the term of the awards, the selection of a risk free interest rate, the ultimate disposition of the award and the impact of the award on earnings per share. For example, in calculating the expected equity price volatility, the Company may consider using its historical experience only, its experience plus that of a publicly trade index volatility experience, or a blended volatility experience for public peer companies. The Company also evaluates carefully the expected life term of an award though the vesting of awards to date have been immediate. Finally, the Company attempts to use a risk free rate that is widely quoted and pertinent across a broad range of transactions.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at financial institutions that are insured by the Federal Deposit Insurance Corporation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reservation System and Development Costs

Reservation System and Development Costs

The Company accounts for reservation system (“website”) and development costs in accordance with ASC 350-50 “Website Development Costs.” All costs incurred in the planning stage are expensed as incurred. Costs incurred in the website application and infrastructure development stage are accounted for in accordance with ASC 350-50, which requires the capitalization of certain costs that meet specific criteria. Costs incurred in the day to day operation of the website are expensed as incurred. Costs associated with the development of the Company’s social media application are expensed in the month when they incurred.

Fair Value Measurements

Fair Value Measurements

The Company has adopted a single definition of fair value, a framework for measuring fair value, and expanded disclosures concerning fair value. In this valuation, the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date and fair value is a market-based measurement and not an entity-specific measurement.

The Company utilizes the following hierarchy in fair value measurements:

● Level 1 – Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

● Level 2 – Inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

● Level 3 – Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

Depreciation, Amortization and Capitalization

Depreciation, Amortization and Capitalization

The Company records depreciation and amortization, when appropriate, using the straight-line method over the estimated useful life of the assets (three to five years). Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property’s useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriate accounts and the resultant gain or loss is included in operating income or loss.

Long-Lived Assets

Long-Lived Assets

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of its trademark costs. If and when such factors, events or circumstances indicate possible impairment to its trademark costs, the Company would make an estimate of undiscounted cash flows over the remaining lives of the respective assets in measuring recoverability from future operations. The Company incurred no impairment losses during the periods presented.

Income Taxes

Income Taxes

The Company follows ASC 740, Income Taxes. Deferred tax assets or liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each year-end. These amounts are adjusted, as appropriate, to reflect enacted changes in tax rates expected to be in effect when the temporary differences reverse.

The Company records deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities and on operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed consolidated financial statements.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Minimum Future Annual Rental Commitments

Amounts of minimum future annual rental commitments under non-cancelable operating leases in each of the four periods ending September 30, 2013 through 2015 were:

Operating leases

Year	September 30,
2013	$	113,387
2014		10,000
2015		-
Thereafter		-
Total minimum lease payments	$	123,387

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Debt Obligations (Details Narrative) (USD $)	0 Months Ended					1 Months Ended			3 Months Ended		9 Months Ended
	Sep. 04, 2012	Jul. 24, 2012	Apr. 25, 2012	Mar. 02, 2012	Jun. 03, 2011	Apr. 30, 2012	Jan. 31, 2011	Aug. 31, 2010	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Feb. 23, 2012	Dec. 31, 2011	Jun. 30, 2010
Principal amount of unsecured debenture								$ 500,000								$ 250,000
Interest rate per annum	8.00%		8.00%	8.00%		14.00%	8.00%	8.00%					8.00%			14.00%
Amount of debt extinguished					250,000
Conversion price per share					$ 0.50			$ 0.50
Maturity date		Apr. 19, 2013	Jan. 18, 2013	Nov. 29, 2012	Aug. 14, 2013			Aug. 31, 2013
Issuance of warrants to purchase common stock					875,000
Warrants expiration date					2016-06-03
Loss on extinguishment of debt					571,122							(571,122)
Accrued interest payable					10,128
Unamortized debt discount		27,500	27,500		332,415				268,052		268,052			34,397	482,003
Fair value of detached warrant					481,250
Debenture principal amount	47,500					350,000			547,448		547,448		47,500		342,997
Amount of convertible debentures	12,000	27,500	27,500	475,000	350,000	100,000	525,000		547,448		547,448
Debentures converted into common stock	2,033,898					250,000	1,300,000				1,300,000	0
Amortized debt discount to interest expense	2,747					56,333			91,863		244,267	145,731
8 % Debenture [Member]
Convertible debentures outstanding amount									565,500		565,500
14 % Debenture [Member]
Convertible debentures outstanding amount									$ 250,000		$ 250,000

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Net Loss per Share - Schedule of Earnings per Share Reconciliation (Details) (USD $)	3 Months Ended			9 Months Ended			12 Months Ended
	Sep. 30, 2012		Sep. 30, 2011	Sep. 30, 2012		Sep. 30, 2011	Dec. 31, 2011
Earnings Per Share [Abstract]
Net income (loss), basic	$ 256,085		$ 6,398,202	$ (1,093,049)		$ (9,642,316)	$ (7,513,562)
Effect of interest expense and discount amortization		[1]			[1]
Net income (loss), dilutive	$ 256,085		$ 6,398,202	$ (1,093,049)		$ (9,642,316)
Weighted shares outstanding, basic	59,324,455		44,750,634	65,970,450		41,864,799
Convertible debentures and warrants		[1]			[1]
Weighted shares outstanding, dilutive	59,324,455		44,750,634	65,970,450		41,864,799
Net income (loss) per share, basic	$ 0.00		$ 0.14	$ (0.02)		$ (0.23)

[1] (1) For the three and nine month periods ended Sept. 30, 2012, weighted shares outstanding excludes 36,087,181 shares issuable upon exercise of warrants and 1,575,000 shares issuable for the conversion of debt, due to a loss from continuing operations.

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Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,093,049)	$ (9,642,316)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	47,840	45,380
Equity based compensation	25,173	32,394
Warrant valuation, net	(2,748,819)	6,143,013
Loss on abandonment of property and equipment	(41,569)
Loss on extinguishment of 14% debenture		571,122
Accelerated amortization of debt discount from conversion of debenture	59,080	325,399
Amortization of debt discount	244,267	145,731
Gain on conversion of convertible note	(61,661)
Common shares issued for the acquisition of Impact Social Networks	1,035,168
Warrants issued in lieu of cash for services rendered by non-employees		169,062
Common shares issued in lieu of cash to Intellicell for license fee	58,209	82,500
Common shares issued in lieu of cash for interest to non-employees	6,432	413,073
Common shares issued in lieu of cash for services rendered by non-employees	818,514
Common shares issued in lieu of cash compensation to employees	144,000
Deferred financing fee	427,073	(427,073)
Changes in certain assets and liabilities:
Receivable due from credit card clearing house	59,418	53,584
Prepaid expenses	(1,686)	108,115
Security deposits and other	39,689	6,008
Accounts payable	(177,656)	(292,916)
Accrued expenses	803,664	344,708
Unearned revenue		22,617
Net cash used in operating activities	(272,775)	(1,899,599)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(87,653)
Net cash used in investing activities		(87,653)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	225,000	500,000
Proceeds from issuance of debt	102,500
Net cash provided by financing activities	327,500	500,000
Net change in cash and cash equivalents	54,725	(1,487,252)
Cash and cash equivalents at beginning of period	38,256	1,511,057
Cash and cash equivalents at end of period	92,981	23,805
Cash paid during the year for:
Income taxes		800
Interest expense
Non-cash transactions:
Conversion of 8% convertible debentures to 1.3 million shares of common stock		525,000
Conversion of 8% convertible debentures to 2,033,898 shares of common stock	12,000
Conversion of 14% convertible debentures to 250,000 shares of common stock	30,000
Derivative warrant valuation APIC component		470,000
Issuance of 14% convertible debenture with warrants in exchange for 14% debenture		350,000
Derivative liability discount from issuance of 14% convertible debenture with warrants		342,632
Extinguishment of 14% debenture exchanged for 14% convertible debenture		250,000
Common shares issued in 2011 in lieu of cash for 2011 and 2010 interest due		245,677
Common shares issued in 2011 for services rendered in 2010 by non-employees		$ 298,824

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Debt Obligations

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Debt Obligations

4. Debt Obligations

Extinguishment of 14% Debenture

In June 2010, Pet Airways issued a $250,000 principal amount unsecured debenture, with an interest rate of 14% per annum and a maturity date of June 18, 2011 (“14% debenture”). Interest on the 14% debenture is payable quarterly starting January 1, 2011. At the Company’s option, interest due may be settled in cash or shares of Company common stock.

On June 3, 2011, the Company extinguished the $250,000 principal amount 14% debenture in exchange for a $350,000 principal amount convertible debenture with a coupon interest rate of 14% per annum, a conversion price of $0.50 per share of common stock and a maturity date of August 14, 2013 (“14% convertible debenture”) and a warrant to purchase 875,000 shares of common stock at an exercise price of $0.50 per share with an expiration date of June 3, 2016. The extinguishment of the $250,000 principal amount 14% debenture resulted in a total loss on the extinguishment of debt of $571,122 including $10,128 of accrued interest payable.

The 14% convertible debenture and warrant described above are subject to derivative liability accounting. Using the Black-Scholes option pricing model, a fair value of the debenture’s beneficial conversion feature and warrant component derivative was determined to be $332,415 and has been recorded as APIC and debt discount. Using the Black-Scholes option pricing model, a fair value of the detached warrant was determined to be $481,250 and has been recorded as APIC and element of the total loss on the extinguishment of debt.

Convertible Debentures

In August 2010, in a series of transactions, the Company issued five unsecured, convertible debentures, with an aggregate principal balance of $500,000, with interest rates of 8% per annum and a maturity date of August 2013. The debentures are convertible into shares of the Company’s stock at a conversion price of $0.50 per share. Also, in August 2010, the Company issued an unsecured, convertible debenture in the principal amount of $500,000 with an interest rate of 8% and a maturity date of August 2013. The debenture is convertible into shares of the Company’s stock at a conversion price of $0.40 per share. Interest on the above debentures is payable quarterly. At the Company’s option, interest due may be settled in cash or shares of Company common stock.

In January 2011, the debenture holders of aggregate $525,000 principal amount of 8% convertible debentures elected to convert their debentures into 1,300,000 shares of common stock.

On March 2, 2012 the Company issued an 8% convertible debenture, with a principal balance of $47,500, and a maturity date of November 29, 2012.

On April 25, 2012 the Company issued an 8% convertible debenture, with a principal balance of $27,500, and a maturity date of January 18, 2013.

On April 30, 2012, the debenture holder of $350,000 principal amount of 14% convertible debentures elected to convert $100,000 of the debenture into 250,000 shares of common stock.

On July 24, 2012 the Company issued an 8% convertible debenture, with a principal balance of $27,500, and a maturity date of April 19, 2013.

On September 4, 2012 the Company issued 2,033,898 shares of common stock following the conversion of $12,000 of a $47,500 8% convertible debenture.

At September 30, 2012, an aggregate of $565,500 and $250,000 principal amount 8% and 14% convertible debentures, respectively, were outstanding.

Debt Discount

On February 23, 2012, the Company issued an 8% convertible debenture that was subject to derivative liability accounting. Using the Black-Scholes option pricing model, a fair value of the debenture’s beneficial conversion feature was determined to be $34,397 and has been recorded as debt discount.

On April 25, 2012 the Company issued an 8% convertible debenture that was subject to derivative liability accounting. Using the Black-Scholes option pricing model, the fair value of the debenture’s beneficial conversion feature was determined to be $27,500 and has been recorded as debt discount.

On April 30, 2012 following the conversion of $100,000 principal amount 14% debenture, the Company amortized $56,333 of debt discount to interest expense.

On July 24, 2012 the Company issued an 8% convertible debenture that was subject to derivative liability accounting. Using the Black-Scholes option pricing model, the fair value of the debenture’s beneficial conversion feature was determined to be $27,500 and has been recorded as debt discount.

On September 4, 2012 following the conversion of $12,000 principal amount 8% debenture, the Company amortized $2,747 of debt discount to interest expense.

For the three and nine month period ended September 30, 2012, the Company amortized to interest expense using the effective interest method $91,863 and $244,267 respectively of the debt discount related to the convertible debentures.

At September 30, 2012 and December 31, 2011, the aggregate unamortized debt discount was $268,052 and $482,003, respectively. The unamortized debt discount at September 30, 2012 is being amortized to interest expense using the effective interest method through the earlier of the conversion date or the maturity dates of the convertible debentures.

The following table summarizes the principal, unamortized debt discount and equity components of the Company’s convertible debentures derivative liability net carrying amount:

	September 30, 2012			December 31, 2011
Principal amount 8% convertible debenture short term	$	565,500		$	-
Principal amount 8% convertible debenture long term		-			475,000
Principal amount 14% convertible debenture		250,000			350,000
Unamortized debt discount		(268,052	)		(482,003	)
Net carrying amount	$	547,448		$	342,997
Equity component (recognized in Additional paid-in capital)	$	879,528		$	790,131

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Subsequent Events (Details Narrative) (USD $)	0 Months Ended
	May 09, 2013
Subsequent Events [Abstract]
Convertible preferred stock issued in exchange of membership interest	$ 80,000
Percentage of the outstanding units of limited liability company membership interests	100.00%
Revenue generation at which current board members resign	450,000
Minimum revenue level which if not reached newly appointed members of board resign	$ 900,000
Percentage of common stock issued and outstanding after hypothetical conversion	0.001%
Percentage of common stock issued to preferred stock holders upon conversion of all of its preferred stock	80.00%

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Equity (Details Narrative) (USD $)	0 Months Ended						9 Months Ended																										0 Months Ended
	Jun. 30, 2012	Jun. 15, 2012	Jun. 07, 2012	Apr. 02, 2012	Feb. 23, 2012	Jun. 03, 2011 D	Sep. 30, 2012	Sep. 04, 2012	Jul. 24, 2012	May 01, 2012	Apr. 30, 2012	Apr. 27, 2012	Apr. 25, 2012	Apr. 20, 2012	Apr. 10, 2012	Mar. 31, 2012	Mar. 26, 2012	Mar. 02, 2012	Feb. 26, 2012	Jan. 26, 2012	Dec. 31, 2011	Dec. 29, 2011	Aug. 18, 2011	Jun. 30, 2011	Jun. 02, 2011	May 27, 2011	Jan. 31, 2011	Aug. 31, 2010	Jun. 30, 2010	Apr. 20, 2012 ShareWarrantsMember	Sep. 30, 2012 2012 Stock Incentive Plan [Member]	Feb. 09, 2012 2012 Stock Incentive Plan [Member]	Sep. 30, 2012 Stock Incentive [Member]
Preferred shares designated by Board of Directors																									1,200,000	500
Percentage of preferred stock dividends							10.00%
Pereferred stock redemption price per share							$ 10,000
Preferred stock, price per share						$ 10,000
Series A preferred stock, outstanding							0														0
Warrant to purchase maximum number of common stock						20,476,707
Series A preferred stock, issued							0														0
Issuance of common stock amount						$ 500,000
Issuance of common stock shares						2,253,470
Exercise price of common stock						$ 1.02
Additional payment to purchase non-convertible Preferred Stock						5,000,000
Percentage of maximum amount funded under tranche						20.00%
Number of trading periods						10
Common stock initial purchase consideration of shares																							1,126,735
Common stock consideration at fair value																							371,823
Common stock closing price per share						$ 0.70																	$ 0.33
Stock issued during period for contingent consideration, shares						1,800,000
Stock issued during period for contingent consideration						1,260,000
Valuation of warrants per share						$ 0.70																		$ 0.65
Warrants charge to operations																								12,839,860
Additional paid in capital							11,566,697														9,114,465			470,000
Deferred finance costs net																								843,957
Additional warrants issued to Socius to reflect an anti-dilution adjustment	761,126	733,848	109,489	53,811	4,336,503				217,390			302,046	184,335	828,089	3,995,247			252,449				458,678								405,839
Warrants exercise price	$ 0.01	$ 0.01	$ 0.01	$ 0.05	$ 0.14				$ 0.01			$ 0.12	$ 0.12	$ 0.12	$ 0.12			$ 0.14				$ 0.20								$ 0.12
Derivative warrant liability value							182,136														2,930,955
Common stock, shares issued	2,033,898					2,253,470	86,468,383			595,836	250,000	350,000		1,500,000	6,170,950	49,394	45,833		45,833	45,833	46,201,182
Compensation for license fee to non-employees					7,394,056
Number of common stock issued to acquire ownership					7,394,056
Value of common stock shares issued at closing stock price	1,763						228			41,709		42,000		180,000	740,514	4,442	4,583		6,417
Sale of common stock, shares	10,000,000	10,000,000	1,500,000	200,000
Sale of common stock, value	100,000	100,000	15,000	10,000
Principal amount of debt	47,500						547,448	47,500			350,000										342,997
Convertible debt amount	12,000										100,000
Percentage of convertible debt	8.00%							8.00%			14.00%		8.00%					8.00%									8.00%	8.00%	14.00%
Shares approved and reserved for issuance under employee benefit plan							4,000,000														4,000,000										4,000,000	10,000,000
Shares issed under the employee benefit plans							1,172,000																										6,170,950
Shares available for issuance under the employee benefit plans																					2,828,000										3,829,050
Compensation for a license fee to non-employees					$ 7,394,056
Common shares issued in lieu of accrued interest	44,063						41,545