UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

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

For the quarterly period ended: May 31, 2019

¨ 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: ____________

Poverty Dignified, Inc.

(Exact name of registrant as specified in its charter)

Nevada		46-3754609
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification Number)

6428 W. Wilkinson Boulevard, Suite 305

Belmont, North Carolina 28012

Telephone No.: (928) 713-2386

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).

Yes ¨ No x

As of July 24, 2019, there were 1 75,267,834 shares of the registrant's common stock issued and outstanding.

EXPLANATORY NOTE

We are filing this Amendment No. 1 on Form 10-Q/A to amend and restate the following items of our Quarterly Report on Form 10-Q for the quarter ended May 31, 2019 as originally filed with the Securities and Exchange Commission on July 19, 2019 (the “Original Form 10-Q”): (i) Cover Page (ii) Item 1 of Part I “Financial Information,” and (iii) Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and we have also updated the signature page, the certifications of our Chief Executive Officer and Chief Financial Officer in Exhibits 31.1, 31.2, and 32, and our financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibits 101. No other sections were affected, but for the convenience of the reader, this report on Form 10-Q/A restates in its entirety, as amended, our Original Form 10-Q.

We have determined that our previously reported shares outstanding as of the filing date erroneously excluded several share issuances as a result of conversions of convertible debt that occurred after our quarter end day of May 31, 2019, but prior to our original filing date of July 19, 2019. Our amendment includes share issuances up through our amended filing date, July 24, 2019. As a result, we also updated our subsequent events disclosure on the notes to the financial statements and our discussion of changes in convertible debt in the Management’s Discussion and Analysis of Financial Condition and Results of Operations. Additionally, we removed a sentence stating that we had no operations at the date of the filing.

This amendment as a result of a change in the shares outstanding as of the filing date had no impact on the previously reported financial statements.

Poverty Dignified, Inc.

Quarterly Report on Form 10-Q

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		Page Number
	PART I – FINANCIAL INFORMATION

Item 1	Financial Statements	3

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4	Controls and Procedures	25

	PART II – OTHER INFORMATION

Item 1	Legal Proceedings	27

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3	Defaults Upon Senior Securities	27

Item 4	Mine Safety Disclosures	27

Item 5	Other Information	27

Item 6	Exhibits	28

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Poverty Dignified, Inc.

Consolidated Balance Sheets

Unaudited

	May 31, 2019			August 31, 2018

ASSETS

Current assets
Cash	$	40,927		$	1,819
Prepaid expenses and other current assets		6,221			10,092
Current assets of discontinued operation		2,190			2,174
Total current assets		49,338			14,085

Total assets	$	49,338		$	14,085

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities
Accounts payable	$	37,714		$	53,777
Notes payable - related party		1,114,207			1,114,207
Accrued payroll expenses		1,089,950			1,013,863
Accrued expenses		51,005			6,330
Due to former officer		6,725			6,725
Convertible notes payable, net of discount of $23,706 and $52,831, respectively		230,654			158,669
Derivative liabilities		141,533			56,220
Current liabilities of discontinued operation		407,807			415,371
Total current liabilities		3,079,595			2,825,162

Total liabilities		3,079,595			2,825,162

Stockholders' equity (deficit):
Preferred stock par value $.0001: 10,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock par value $.0001: 2,490,000,000 shares authorized; 82,646,606 and 10,107,394 shares issued and outstanding as of May 31, 2019 and August 31, 2018, respectively		8,265			1,011
Series E preferred stock par value $.001: 1,000,000 shares authorized; 1,000,000 and no shares issued and outstanding as of May 31, 2019 and August 31, 2018, respectively		1,000			-
Additional paid in capital		10,057,903			8,812,361
Accumulated deficit		(13,069,212	)		(11,596,587	)
Accumulated other comprehensive loss - discontinued operation		(28,213	)		(27,862	)
Total stockholders' equity (deficit)		(3,030,257	)		(2,811,077	)

Total liabilities and stockholders' equity (deficit)	$	49,338		$	14,085

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

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Poverty Dignified, Inc.

Consolidated Statements of Operations and Comprehensive Loss

Unaudited

	Three Months Ended						Nine Months Ended
	May 31, 2019			May 31, 2018			May 31, 2019			May 31, 2018

General and administrative
Payroll	$	16,602		$	56,962		$	101,428		$	219,661
Stock-based compensation expense		136,061			29,000			337,018			114,750
Professional fees		36,991			7,550			118,201			84,117
Advertising		-			214			102			214
Travel		577			-			2,296			11,596
Other		3,816			3,930			19,942			18,929
Total general and administrative		194,047			97,656			578,987			449,267

Total operating expenses		194,047			97,656			578,987			449,267

Net operating loss		(194,047	)		(97,656	)		(578,987	)		(449,267	)

Interest expense		(63,662	)		(54,390	)		(185,224	)		(175,096	)
Gain (loss) on valuation of derivative liabilities		(133,049	)		43,537			(35,652	)		(83,632	)
Loss on extinguishment of convertible notes		(550,990	)		(78,340	)		(569,480	)		(168,431	)
Debt penalty recovery (expense)		(30,000	)		5,104			(30,000	)		(46,288	)
Loss on cashless exercise of warrants		(71,484	)		-			(71,484	)		-
Gain on prepayment of convertible notes		-			2,967			-			2,967

Net loss from continuing operations		(1,043,232	)		(178,778	)		(1,470,827	)		(919,747	)

Loss from discontinued operation		-			(147,992	)		(1,798	)		(364,802	)

Net loss		(1,043,232	)		(326,770	)		(1,472,625	)		(1,284,549	)

Other comprehensive income (loss):
Foreign currency translation adjustment - discontinued operation		1,793			(4,654	)		(351	)		(8,606	)

Comprehensive loss	$	(1,041,439	)	$	(331,424	)	$	(1,472,976	)	$	(1,293,155	)

Basic and diluted net loss per common share
-Continuing operations	$	(0.02	)	$	(0.02	)	$	(0.03	)	$	(0.10	)
-Discontinued operation		-			(0.02	)		(0.00	)		(0.04	)
Net loss per share	$	(0.02	)	$	(0.04	)	$	(0.03	)	$	(0.14	)

Weighted average common shares outstanding
-Basic and diluted		47,371,379			9,232,394			46,377,000			9,004,622

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

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Poverty Dignified, Inc.

Consolidated Statement of Changes in Stockholders' Equity (Deficit)

Unaudited

	Common Stock				Series E Preferred Stock				Additional					Accumulated Other			Total Stockholders'
	Number of Shares		Amount		Number of Shares		Amount		Paid In Capital		Accumulated Deficit			Comprehensive Loss			Equity (Deficit)

For the nine months ended May 31, 2019

Balance at August 31, 2018		10,107,394	$	1,011		-	$	-	$	8,812,361	$	(11,596,587	)	$	(27,862	)	$	(2,811,077	)

Stock-based compensation		1,288,758		129		-		-		200,828		-			-			200,957
Net loss		-		-		-		-		-		(363,268	)		-			(363,268	)
Other comprehensive loss		-		-		-		-		-		-			(2,973	)		(2,973	)

Balance at November 30, 2018		11,396,152		1,140		-		-		9,013,189		(11,959,855	)		(30,835	)		(2,976,361	)

Issuance of common stock through conversion of convertible notes payable		700,000		70		-		-		35,930		-			-			36,000
Net loss		-		-		-		-		-		(66,125	)		-			(66,125	)
Other comprehensive income		-		-		-		-		-		-			829			829

Balance at February 28, 2019		12,096,152		1,210		-		-		9,049,119		(12,025,980	)		(30,006	)		(3,005,657	)

Issuance of common stock through conversion of convertible notes payable		67,352,971		6,735		-		-		802,559		-			-			809,294
Issuance of common stock for exercise of warrants		3,107,983		311		-		-		71,173		-			-			71,484
Stock-based compensation		89,500		9		1,000,000		1,000		135,052		-			-			136,061
Net loss		-		-		-		-		-		(1,043,232	)		-			(1,043,232	)
Other comprehensive income		-		-		-		-		-		-			1,793			1,793

Balance at May 31, 2019		82,646,606	$	8,265		1,000,000	$	1,000	$	10,057,903	$	(13,069,212	)	$	(28,213	)	$	(3,030,257	)

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

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	Common Stock				Series E Preferred Stock				Additional						Accumulated Other			Total Stockholders'
	Number of Shares		Amount		Number of Shares		Amount		Paid In Capital			Accumulated Deficit			Comprehensive Loss			Equity (Deficit)

For the nine months ended May 31, 2018

Balance at August 31, 2017		8,511,850	$	851		-	$	-	$	8,272,310		$	(9,784,847	)	$	(41,665	)	$	(1,553,351	)

Issuance of common stock		16,800		2		-		-		17,098			-			-			17,100
Issuance of common stock through conversion of convertible notes payable		131,152		13		-		-		126,063			-			-			126,076
Reclassification of beneficial conversion feature to derivative liabilities		-		-		-		-		(51,075	)		-			-			(51,075	)
Net loss		-		-		-		-		-			(427,119	)		-			(427,119	)
Other comprehensive loss		-		-		-		-		-			-			(1,029	)		(1,029	)

Balance at November 30, 2017		8,659,802		866		-		-		8,364,396			(10,211,966	)		(42,694	)		(1,889,398	)

Issuance of common stock through conversion of convertible notes payable		132,592		13		-		-		63,931			-			-			63,944
Stock-based compensation		175,000		17		-		-		85,733			-			-			85,750
Net loss		-		-		-		-		-			(530,660	)		-			(530,660	)
Other comprehensive loss		-		-		-		-		-			-			(2,923	)		(2,923	)

Balance at February 28, 2018		8,967,394		896		-		-		8,514,060			(10,742,626	)		(45,617	)		(2,273,287	)

Issuance of common stock through conversion of convertible notes payable		430,000		44		-		-		125,457			-			-			125,501
Stock-based compensation		100,000		10		-		-		28,990			-			-			29,000
Net loss		-		-		-		-		-			(326,770	)		-			(326,770	)
Other comprehensive loss		-		-		-		-		-			-			(4,654	)		(4,654	)

Balance at May 31, 2018		9,497,394	$	950		-	$	-	$	8,668,507		$	(11,069,396	)	$	(50,271	)	$	(2,450,210	)

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

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Poverty Dignified, Inc.

Consolidated Statements of Cash Flows

Unaudited

	Nine Months Ended
	May 31, 2019			May 31, 2018

Cash Flows From Operating Activities
Net loss from continuing operations	$	(1,470,827	)	$	(919,747	)
Loss from discontinued operation		(1,798	)		(364,802	)
Net loss		(1,472,625	)		(1,284,549	)

Adjustments to reconcile net loss from continuing operations to net cash used in operating activities - continuing operations:
Stock-based compensation expense		337,018			114,750
Amortization of debt discounts		114,946			129,934
Loss on valuation of derivative liabilities		35,652			83,632
Loss on extinguishment of convertible notes		569,480			168,431
Debt penalty expense		30,000			46,288
Loss on cashless exercise of warrants		71,484			-
Gain on prepayment of convertible notes		-			(2,967	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		3,871			5,658
Accounts payable		(16,063	)		(10,226	)
Accrued payroll expenses		76,087			193,644
Accrued expenses		62,939			19,482
Net cash used in operating activities - continuing operations		(185,413	)		(171,121	)
Adjustments to reconcile loss from discontinued operation to net cash used in operating activities - discontinued operation:
Loss on impairment of property and equipment of discontinued operation		-			54,141
Changes in discontinued operation assets and liabilities		(7,580	)		38,727
Net cash used in operating activities - discontinued operation		(9,378	)		(271,934	)
Net cash used in operating activities		(194,791	)		(443,055	)

Cash Flows From Financing Activities
Proceeds from notes payable - related party		-			580,800
Payments on notes payable - related party		-			(11,543	)
Advances from (payments to) former officer, net		-			(219	)
Issuance of common stock		-			17,100
Proceeds from convertible notes payable		240,250			186,500
Repayments of convertible notes payable		-			(301,560	)
Debt issuance costs		(6,000	)		(19,500	)
Net cash provided by financing activities - continuing operations		234,250			451,578
Net cash provided by financing activities		234,250			451,578

Effect of foreign currency translation - discontinued operation		(351	)		(8,606	)

Net increase (decrease) in cash		39,108			(83	)
Cash - beginning of period		1,819			2,039
Cash - end of period	$	40,927		$	1,956

Non-Cash Financing Activities:
Debt issuance costs netted from proceeds on convertible notes payable	$	26,750		$	-
Original issue discount in connection with convertible note payable	$	-		$	12,500
Issuance of common stock through conversion of convertible notes payable	$	845,294		$	315,521
Reclassification of beneficial conversion feature to derivative liabilities	$	-		$	51,075

Supplementary Disclosure Of Cash Flow Information
Cash paid during the period for interest	$	-		$	39,516
Cash paid during the period for income taxes	$	-		$	-

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

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Poverty Dignified, Inc.

Notes to Unaudited Consolidated Financial Statements

May 31, 2019

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Poverty Dignified, Inc. was incorporated in the State of Nevada on September 27, 2013, and is headquartered in Belmont, North Carolina. The Company was established as a renewable energy company, incubating solar technologies to establish electrification, education, connectivity and community development infrastructures in rural communities across the globe to empower the individual, community and local economy. My Power Solutions, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc., was incorporated in the State of Nevada on March 13, 2014 as a franchise business opportunity in the United States and Global Markets. Africhise, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc. is a Delaware Corporation, and was formed on August 28, 2015 to be the franchise management arm of My Power Solutions, Inc's franchise operations. My Power Solutions Bahamas, Inc., a wholly-owned subsidiary of My Power Solutions, Inc., is a Delaware Corporation, and was formed on June 14, 2018 to establish itself as a renewable energy solutions company in the Bahamas. B4dignity, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc. is a Delaware Corporation, and was formed on January 18, 2019 to be a cause marketing company.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they may not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.

The unaudited interim consolidated financial statements are condensed and should be read in conjunction with the Company’s Form 10-K, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the year ended August 31, 2018. The interim results for the nine months ended May 31, 2019 are not necessarily indicative of results for the full fiscal year.

The consolidated financial statements include the accounts of Poverty Dignified, Inc., My Power Solutions, Inc., Africhise, Inc., and My Power Solutions Bahamas, Inc., and B4dignity, Inc. However, My Power Solutions Bahamas, Inc. and B4dignity, Inc. have yet to establish operations and have minimal activity to date. All significant intercompany accounts and transactions have been eliminated in consolidation. These entities are collectively referred to herein as Poverty Dignified, or the Company.

In May 2018, following an operational review, the Company decided to withdraw all operations of My Power Solutions, Inc. in South Africa. With a lack of significant revenues and higher than expected expenses due to training on-the-ground personnel and the implementation of solar installations, plus the instability of the political environment, the established operating structure and initial business plan was not sustainable. The decision to cease the operations of My Power Solutions, Inc. in rural South African communities represents a strategic shift that impacts the Company’s financial reporting and results. As such, My Power Solutions, Inc. in South Africa has been classified as a discontinued operation.

Since it has been classified as a discontinued operation, the balance sheet amounts and results of operations for My Power Solutions, Inc. in South Africa have been reclassified from their historical presentation to assets and liabilities of discontinued operation on the Consolidated Balance Sheets and to discontinued operation on the Consolidated Statements of Operations and Comprehensive Loss, respectively, for all periods presented. Losses associated with impairment of assets are recorded in discontinued operation in the period of the disposal. The Consolidated Statements of Cash Flows has also been reclassified for assets, liabilities and results of the discontinued operation for all periods presented. See Note 11 for more details regarding the discontinued operation.

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NOTE 2 - GOING CONCERN AND PLAN OF OPERATION

Going Concern

The accompanying 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. As of May 31, 2019, the Company had cash of $40,927, a working capital deficit of $3,030,257 and a stockholders’ deficit of $3,030,257. The Company has incurred net losses from start-up costs and minimal operations since inception to May 31, 2019 and has ceased operations of its subsidiary, My Power Solutions, Inc. in South Africa. As a result, as of May 31, 2019, these issues raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company needs to generate revenues or must raise additional capital, reduce expenses and curtail cash outflows in order to be able to accomplish its business plan. In the interim, the Company will continue to pursue bridge capital as needed. The Company’s $3,079,595 of total liabilities at May 31, 2019 includes $1,114,207 of notes payable to a related party, $1,089,950 of accrued payroll expenses due to current and former Company management, and $6,725 due to a former officer of the Company, all of which we believe, but cannot guarantee, we can delay payment on over the next twelve months. During the nine months ended May 31, 2019, we received net proceeds totaling $240,250 from four convertible notes payable. For all of our convertible notes payable, payments become due in the fourth quarter of fiscal year 2019 or in early fiscal year 2020, or can be repaid through conversion into the Company’s common stock. During the nine months ended, payments totaling $254,140 have been netted against the outstanding principal of convertible notes payable through the issuance of common stock. Based on our current cash position and our ability to issue additional convertible notes payable to our lending partners, we believe we have the capabilities and available resources to continue for the next twelve months, although we cannot guarantee that we will be able to do so.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of consolidated 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, disclosure of contingent assets and liabilities, and reported amounts of expenses in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash

The Company maintains funds in financial institutions that are members of the Federal Deposit Insurance Corporation (“FDIC”). As such, funds are insured based on Federal Reserve limits. The Company has not experienced any losses in the past, and management believes it is not exposed to any significant credit risk on the current account balances, which do not exceed FDIC limits. At times, cash balances may exceed insured limits.

The Company has determined that the functional currency of its foreign subsidiaries is the local currency. At May 31, 2019 and August 31, 2018, the Company had no cash in foreign bank accounts.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of payments primarily related to a professional fee retainer and short-term deposits.

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Property and Equipment, Net

Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. As of May 31, 2019 and August 31, 2018, property and equipment consists of computer equipment with a total cost of $1,607 and accumulated depreciation of $1,607. There was no depreciation expense during the nine months ended May 31, 2019 and 2018.

The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. As a result of the discontinued operation in South Africa, during the nine months ended May 31, 2018, the solar equipment for containers was written down to its net realizable value of $-0- and the Company recognized a loss on impairment of $54,141.

Accrued Expenses

Accrued expenses are recorded when incurred and primarily consist of accrued interest on notes payable and amounts due for supplies and travel. Accrued payroll consists of salary amounts earned but deferred by the Company's management team.

Derivative Liabilities

The Company has certain financial instruments that contain embedded derivatives. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be accounted for separately. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to income or expense as part of gain or loss on extinguishment.

Advertising

Advertising expenditures are charged to expense as incurred and are included in general and administrative expense. Total advertising expense for the nine months ended May 31, 2019 and 2018 was $102 and $214, respectively.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, prepaid expenses and other current assets, current assets of discontinued operation, accounts payable, accrued payroll expenses, accrued expenses, current liabilities of discontinued operation, derivative liabilities, convertible notes and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

The three-level hierarchy for fair value measurements is defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;

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Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement

The following table summarizes fair value measurements by level at May 31, 2019 and August 31, 2018, measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3		Total

May 31, 2019
Liabilities
Derivative liabilities	$	-	$	-	$	141,533	$	141,533

August 31, 2018
Liabilities
Derivative liabilities	$	-	$	-	$	56,220	$	56,220

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be classified as additional income taxes in the consolidated statements of income. No interest or penalties were recognized for the years ended August 31, 2018 or 2017.

Tax years 2015 and forward remain open to examination under United States statute of limitations. Management is not aware of any material uncertain tax positions and no liability has been recognized at May 31, 2019 or August 31, 2018.

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Earnings Per Share

Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Potential dilutive securities outstanding at May 31, 2019 and August 31, 2018 include convertible notes payable convertible into approximately 81,000,000 and 149,100,000, respectively, shares of common stock and common stock purchase warrants convertible into approximately 17,800,000 and 20,900,000, respectively, shares of common stock. These items are not included in the computation of diluted earnings per share due to their anti-dilutive effect from continuing losses.

Foreign Currency Translation

For financial reporting purposes, the functional currency of the discontinued foreign operation of My Power Solutions, Inc. is the local currency. The assets and liabilities of the discontinued foreign operation for which the local currency is the functional currency are translated into the U.S. dollar at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the period. The accumulated foreign currency translation adjustment is presented as a component of accumulated other comprehensive loss in the consolidated statement of changes in stockholders’ equity (deficit). Gains and losses on foreign current transactions, if any, are recorded in earnings in the period of settlement.

Recent Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB) and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of operations.

NOTE 4 - STOCKHOLDERS’ EQUITY (DEFICIT)

In September 2013, the Company authorized the issue of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock at a par value of $.0001. To meet the reserve demand for its convertible note holders and to have adequate shares available for future acquisitions, the Company increased its authorized shares of common stock to 490,000,000 on May 21, 2019 and again to 2,490,000,000 on May 28, 2019. There is a total of 82,646,606 and 10,107,394 shares of common stock issued and outstanding at May 31, 2019 and August 31, 2018, respectively. Preferred stockholders could receive preferential treatment relative to declared dividends, should there be any, and to distributions upon a liquidation event. As of May 31, 2019, no preferred stock has been issued.

During the nine months ended May 31, 2019, the Company issued 1,378,258 shares of common stock for stock compensation expense of $201,718, 3,107,983 shares of common stock for loss on cashless exercise of warrants of $71,484, and 68,052,971 shares of common stock through conversions of convertible notes payable and recognized a loss on extinguishment of convertible notes of $569,480. During the nine months ended May 31, 2018, the Company issued 10,800 shares of common stock at a discounted price of $0.75 per share and 6,000 shares at a price of $1.50 for total proceeds of $17,100, 275,000 shares of common stock for stock compensation expense of $114,750, and 693,744 shares of common stock through conversions of convertible notes payable and recognized a loss on extinguishment of convertible notes of $168,431.

On May 21, 2019, the Company amended its Articles of Incorporation in the State of Nevada to designate a series of preferred stock, the Series E Preferred Stock. The Company established 1,000,000 shares of the Series E Preferred Stock as available for issuance. The Series E Preferred Stock is not convertible into common stock, nor does the Series E Preferred Stock have any right to dividends and any liquidation preference. The Series E Preferred Stock entitles its holder to a number of votes per share equal to sixty-six and two thirds of the voting rights of the Company. On May 28, 2019, the Company issued 500,000 shares of its Series E Preferred Stock to its President, Matthew D. Alpeter, and 500,000 shares of its Series E Preferred Stock to its Chief Financial Officer, George C. Critz, III. The Company valued the Series E Preferred Stock issued to these officers at $135,300 based on a valuation performed by an independent valuation firm. The valuation was performed in accordance with the fair value standard set forth in ASC 820-10-35-37, Fair Value in Financial Instruments. The valuation used a market value approach to estimate the fair value of the Series E Preferred Stock which represent a permanent controlling voting interest in the Company. As such, the Company recorded stock-based compensation expense of $135,300 for the issuance of the Series E Preferred Stock.

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NOTE 5 – COMMITMENTS AND CONTINGENCIES

Based on a May 2018 performance review by Poverty Dignified Inc.’s Board of Directors, the decision was made to withdraw all operations of its wholly owned subsidiary, My Power Solutions, Inc., in South Africa. As a result, My Power Solutions South African employees and consultants have filed a dispute with The Commission for Conciliation, Mediation and Arbitration (CCMA) in South Africa. As the Company winds down its local operations in South Africa, legal counsel has confirmed that the creditors of the Company will only have claims against the insolvent estate of the local external company and not against My Power Solutions, Inc. or Poverty Dignified Inc in the United States. It is therefore management’s position that there is no probable recourse that will have an adverse effect on Poverty Dignified, Inc.

NOTE 6 – CONVERTIBLE NOTES PAYABLE

On December 21, 2017, the Company entered into a Securities Purchase Agreement whereas, Crown Bridge Partners, LLC (the "buyer") wished to purchase from the Company securities consisting of the Company’s 8% convertible notes payable for an aggregate principal amount of up to $120,000. As additional consideration, the Company issued a Common Stock Purchase Warrant (the “warrant”) for 32,000 shares at an exercise price of $1.25 over an exercise period of 5 years. Due to the provisions of the warrant, the warrant was classified as a derivative warrant liability, the fair value of which was determined using the Black-Scholes valuation model. On May 11, 2018, the Company repaid the convertible note payable. The warrant remained outstanding after the repayment of the convertible note payable (see Notes 7 and 8).

On June 21, 2018, the Company issued a convertible note to Power Up Lending Group, LTD. for $128,000. The note bears interest at 12%, matures on March 30, 2019, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $3,000 debt discount due to issuance fees. The holder’s conversion option under the note does not become active until 180 days after the issuance date. During the nine months ended May 31, 2019, the holder’s option to convert became active and the Company recorded a derivative liability of $38,008, in which the fair value of the embedded derivative was determined using the Black-Scholes valuation model. The value of the derivative liability was attributed to debt discount. The debt discount is amortized over the term of the note or to the date of conversion, and the derivative liability is revalued at each conversion or reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. During the nine months ended May 31, 2019, the holder exercised its conversion options to settle the note payable of $128,000 plus accrued interest of $7,680 in exchange for 26,281,973 shares of the Company’s common stock. As a result, the Company recorded a loss on extinguishment of debt of $266,660.

On July 13, 2018, the Company entered into a Securities Purchase Agreement whereas, EMA Financial, LLC (the "buyer") wishes to purchase from the Company a 10% convertible note for a principal amount of $83,500. On July 13, 2018, the Company issued a convertible promissory note (the “note”) to the buyer for $81,830 in proceeds, after a $1,670 original issue discount. The note matured on April 12, 2019. The note is convertible at a conversion price of 50% of the lowest trading price during the 10 days prior to the conversion date. At the closing, the Company paid closing costs and a consulting fee totaling $7,340. Accordingly, the Company recorded a debt discount of $9,010. At issuance, the holder’s option to convert was active and the Company recorded a derivative liability of $48,702, in which the fair value of the embedded derivative was determined using the Black-Scholes valuation model. The derivative liability was attributed to debt discount. The debt discount is amortized over the term of the note or to the date of conversion, and the derivative liability is revalued at each conversion or reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. During the nine months ended May 31, 2019, the holder effected conversions for a total of 21,217,000 shares to extinguish a portion of the convertible note payable. As a result, the Company recorded a loss on extinguishment of debt of $198,773. Also during the nine months ended May 31, 2019, in accordance with the terms of the note agreement, the Company incurred debt penalties totaling $30,000 for market loss and for failure to timely replenish reserve shares, which was added to outstanding principal balance of the convertible note payable

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On September 27, 2018, the Company issued a convertible note to Power Up Lending Group, LTD. for $53,000. The note bears interest at 12%, matures on July 15, 2019, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $3,000 debt discount due to issuance fees. The holder’s conversion option under the note did not become active until 180 days after the issuance date. During the nine months ended May 31, 2019, the holder exercised its conversion options to settle the note payable of $53,000 plus accrued interest of $3,180 in exchange for 11,467,898 shares of the Company’s common stock. As a result, the Company recorded a loss on extinguishment of debt of $53,788.

On November 6, 2018, the Company entered into a Securities Purchase Agreement whereas, Auctus Fund, LLC (the "buyer") wishes to purchase from the Company a 12% convertible note for a principal amount of $111,000. On November 6, 2018, the Company issued a convertible promissory note (the “note”) to the buyer for $97,250 in proceeds, after a $13,750 reduction for issuance fees. The note matures on August 6, 2019. The note is convertible at a conversion price of 55% of the lowest trading price during the 25-day period ending one trading day prior to the date of the conversion notice. At the closing, the Company paid closing costs and fees totaling $6,000. Accordingly, the Company recorded a debt discount of $19,750. At issuance, the holder’s option to convert was active and the Company recorded a derivative liability of $15,063, in which the fair value of the embedded derivative was determined using the Black-Scholes valuation model. The derivative liability was attributed to debt discount. The debt discount is amortized over the term of the note or to the date of conversion, and the derivative liability is revalued at each conversion or reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. During the nine months ended May 31, 2019, the holder effected conversions for a total of 9,086,100 shares to extinguish a portion of the convertible note payable. As a result, the Company recorded a loss on extinguishment of debt of $50,259.

On April 2, 2019, the Company issued a convertible note to Power Up Lending Group, LTD. for $25,000. The note bears interest at 12%, matures on February 15, 2020, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $3,000 debt discount due to issuance fees. The holder’s conversion option under the note does not become active until 180 days after the issuance date.

On May 7, 2019, the Company issued a convertible note to Power Up Lending Group, LTD. for $78,000. The note bears interest at 12%, matures on March 15, 2020, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $7,000 debt discount due to issuance fees. The holder’s conversion option under the note does not become active until 180 days after the issuance date.

The following table summarizes the balances of convertible notes payable:

	May 31,		August 31,
	2019		2018

Power Up Lending Group, LTD	$	-	$	125,667
EMA Financial, LLC		47,928		33,002
Auctus Fund, LLC		88,481		-
Power Up Lending Group, LTD		22,545		-
Power Up Lending Group, LTD		71,700		-

Convertible notes payable, net of discount	$	230,654	$	158,669

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Amortization of the debt discounts recorded as interest expense during the nine months ended May 31, 2019 and 2018 totaled $114,946 and $129,934, respectively.

Each of the convertible notes payable include a debt covenant stating that during the period the conversion right exists, the borrower will reserve from its authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the notes issued pursuant to the securities purchase agreement. The borrower is required at all times to have authorized and reserved between five to ten times the number of shares that would be issuable upon full conversion of the note. At July 24, 2019, the Company had sufficient authorized and unissued common stock to meet the reserve demand of its convertible notes payable.

NOTE 7 – WARRANTS EXERCISABLE INTO COMMON SHARES

As additional consideration for its convertible note payable agreement with Crown Bridge Partners (see Note 6), the Company issued a Common Stock Purchase Warrant (the “warrant”) for 32,000 shares at an exercise price of $1.25 over an exercise period of 5 years. The warrant has full ratchet price protection, cashless exercise rights, and an anti-dilution clause. During the nine months ended May 31, 2019, the anti-dilution clause was triggered, increasing the number of common shares from 32,000 to 21,164,021 at an exercise price of $0.00189.

On May 22, 2019, Crown Bridge Partners, LLC executed a cashless exercise of 3,386,243 warrant shares for 3,107,983 shares of common stock. As a result of the cashless exercise, the Company recorded a loss of $71,484.

For the periods ended August 31, 2018 and May 31, 2019, a summary of the Company’s warrant activity is as follows:

	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)

Outstanding at August 31, 2017		-			-		-
Granted		32,000			1.25000		5.00
Exercised		-			-		-
Forfeited		-			-		-

Outstanding at August 31, 2018		32,000			1.25000		4.31
Granted		-			-		-
Anti-Dilution		21,132,021			0.00189		3.56
Exercised		(3,386,243	)		0.00189		-
Forfeited		-			-		-

Outstanding at May 31, 2019		17,777,778			0.00189		3.56

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at May 31, 2019 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). As of May 31, 2019, the aggregate intrinsic value of warrants outstanding was $103,289 based on the closing market price of $0.0077 on May 31, 2019.

The Company determined the warrants qualify for derivative accounting as a result of the related issuance of the convertible note payable and based on the fact that the number of shares and exercise price can change due to market changes in the price of the common stock (see Note 8).

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NOTE 8 – DERIVATIVE LIABILITIES

The Company analyzed the warrant and beneficial conversion features (“BCF”) for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the warrant was a derivative warrant liability and that the conversion options on convertible notes payable become derivatives at the point the holder’s option to convert becomes active and there is active trading of the Company’s stock.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of May 31, 2019 and August 31, 2018. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.

The following weighted-average assumptions were used at May 31, 2019 and August 31, 2018:

	May 31,			August 31,
	2019			2018

Expected term	3.56 years			0.614-4.31 years
Expected average volatility		270.53	%	85.45%-130.21		%
Expected dividend yield		0.00	%		0.00	%
Risk-free interest rate		1.90	%	2.46%-2.74		%

The following table summarizes the balances of derivative liabilities:

	May 31,		August 31,
	2019		2018

EMA Financial, LLC	$	-	$	49,134
Crown Bridge Partners, LLC - Warrant		141,533		7,086

Total derivative liabilities	$	141,533	$	56,220

The following table summarizes the change in derivative liabilities included in the balance sheet for the nine months ended May 31, 2019:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

Balance - August 31, 2018	$	56,220
Addition of new derivative liabilities as debt discounts, upon issuance of warrants and convertible notes		15,063
Addition of new derivative liabilities as debt discounts, upon holder's option becoming active		38,008
Reduction in derivative liabilities due to conversions of convertible notes to common stock		(3,410	)
Loss on change in fair value of derivative liabilities		35,652

Balance - May 31, 2019	$	141,533

NOTE 9 – INCOME TAXES

Due to continued operating losses, there is a full valuation against gross deferred tax assets for the period from inception through May 31, 2019.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.

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The Company’s total deferred tax asset, calculated using effective tax rates is as follows:

	May 31,			August 31,
	2019			2018

Net operating loss carryforwards	$	855,902		$	630,534
Foreign net operating losses		275,306			274,803
Organization costs		48,502			51,916
Accrued payroll		228,701			212,932

Gross deferred tax asset		1,408,411			1,170,185

Valuation allowance		(1,408,411	)		(1,170,185	)

Net deferred tax asset	$	-		$	-

The Company has not recognized a deferred tax asset for its stock compensation expense due to its non-deductibility. The Company has no plans to pursue any tax benefits relative to its recognized stock compensation expense.

The reconciliation of income taxes is computed at a rate of 21% for federal income taxes for the nine months ended May 31, 2019 and 2018, and at 28% for foreign income taxes is as follows:

	Nine Months Ended May 31,
	2019			2018

Income tax computed at the federal statutory rate	$	(308,497	)	$	(193,147	)
Foreign income tax		(503	)		(102,145	)
Non-deductible stock compensation expense		70,774			24,097
Impact of rate change from 35% to 21%		-			512,105

Total		(238,226	)		240,910

Change in valuation allowance		238,226			(240,910	)

Provision for income taxes	$	-		$	-

As of May 31, 2019, the Company had net operating loss carryforwards in the amount of $5,058,962, of which $4,075,725 was incurred in the U.S. and $983,237 was the result of cumulative operating losses of the Company’s subsidiaries in South Africa, which have now been discontinued. Because of the Company’s lack of earnings history and uncertainty regarding the usability of the losses from its discontinued operation in South Africa, the net operating loss carryforwards and other deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $238,226 and decreased by $240,910 during the nine months ended May 31, 2019 and 2018, respectively.

Our federal net operating losses will begin to expire in 2034 and our state tax loss carryforwards will begin to expire in 2029. Federal net operating losses incurred in 2018 and after carryforward indefinitely.

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NOTE 10 – RELATED PARTY TRANSACTIONS

Due to Former Officer

On March 13, 2016, John K. Lowther, now former Chief Executive Officer and Director, advanced the Company $12,916. The balance outstanding at May 31, 2019 and August 31, 2018 is $6,725. This advance does not bear interest.

Notes Payable – Related Party

During the year ended August 31, 2015, Power It Perfect, Inc. loaned the Company $194,500 for working capital purposes in exchange for promissory notes. During the year ended August 31, 2016, Power It Perfect, Inc. loaned the Company $208,160 for working capital purposes in exchange for promissory notes. During the year ended August 31, 2017, Power It Perfect, Inc. loaned the Company an additional $313,450 for working capital purposes in exchange for promissory notes. During the year ended August 31, 2018, Power It Perfect, Inc. loaned the Company an additional $678,358 (including $580,800 during the nine months ended May 31, 2018) for working capital and other purposes in exchange for promissory notes. All the notes bear interest at five percent per annum, are non-collateralized and due for repayment in installments as soon as the Company has a stream of revenue. Through May 31, 2019 and August 31, 2018, the Company had made repayments totaling $280,261 (including $11,543 during the nine months ended May 31, 2018.) As such, the balance of the notes payable was $1,114,207 at May 31, 2019 and August 31, 2018. Accrued interest on the notes, which is included in accrued expenses, totaled $43,968 and $2,300 at May 31, 2019 and August 31, 2018, respectively. There are no conversion provisions associated with the notes.

Stock-Based Compensation

During the nine months ended May 31, 2019, the Company issued 1,378,258 shares to employees of an affiliated company for services rendered to the Company. These services were valued at the market value of shares at the time of issuance. The stock-based compensation expense recognized by the Company for the nine months ended May 31, 2019 totaled $201,718.

On May 28, 2019, the Company issued 1,000,000 shares of Series E Preferred Stock to its President and Chief Financial Officer. Based on an independent valuation of the fair value of these shares, the Company recognized stock-based compensation expense of $135,300 for the nine months ended May 31, 2019.

During the nine months ended May 31, 2018, the Company issued 275,000 shares to employees of an affiliated company for services rendered to the Company. These services were valued at the market value of shares at the time of issuance. The stock-based compensation expense recognized by the Company for the nine months ended May 31, 2018 totaled $114,750.

NOTE 11 – DISCONTINUED OPERATION

In May 2018, the Company decided to withdraw all operations of My Power Solutions, Inc. in South Africa. The decision to cease the operations of My Power Solutions, Inc. in rural South African communities represents a strategic shift that impacts the Company’s financial reporting and results. As such, My Power Solutions, Inc. has been classified as a discontinued operation.

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The major classes of line items constituting the loss from discontinued operation are presented in the table below.

	Nine Months Ended May 31,
	2019			2018

Revenue	$	-		$	-
Franchise and operating expenses		(1,798	)		(310,661	)
Loss on impairment of property and equipment		-			(54,141	)

Loss from discontinued operation	$	(1,798	)	$	(364,802	)

The major components of the assets and liabilities of the discontinued operation are presented in the table below.

	May 31,		August 31,
	2019		2018

Assets:
Prepaid expenses and other assets	$	2,190	$	2,174

Current assets of discontinued operation	$	2,190	$	2,174

Liabilities:
Accounts payable	$	16,934	$	16,812
Accrued payroll and expenses		33,874		41,560
Other liabilities		356,999		356,999

Current liabilities of discontinued operation	$	407,807	$	415,371

NOTE 12 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through July 24, 2019, which is the date when these consolidated financial statements were issued, and is aware of none requiring disclosure, except as follows:

Since May 31, 2019, the Company has issued 1, 000,000 shares of common stock to its CEO for stock-based compensation, 1,000,000 shares of its common stock to consumma te the Stock Purchase Agreement noted below, 11,177,734 shares of common stock for the cashless exercise of outstanding warrants, and 7 9,443,494 shares of common stock for the conversion of $26,794 of principal on convertible promissory notes.

On July 9, 2019, the Company entered into and consummated a Stock Purchase Agreement with Sun Ovens International, Inc. (“Sun Oven”) and its shareholders. In exchange for the issuance 1,000,000 shares of its common stock to the shareholders of Sun Oven, the Company acquired all the outstanding shares of Sun Oven, such that after the transaction, Sun Oven is a wholly-owned subsidiary of the Company. Sun Oven is a privately-held Illinois corporation engaged in the business of manufacturing and distributing sun powered devices for cooking, baking, and other functions. The Company has refocused its growth strategy and made a shift from organic growth to growth through acquisition. This acquisition marks the first step in this direction and allows the Company to vertically integrate.

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

With the exception of historical matters, the matters discussed herein are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning anticipated trends in revenues and net income, projections concerning operations and available cash flow. Our actual results could differ materially from the results discussed in such forward-looking statements. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto appearing elsewhere herein.

Background Overview

Poverty Dignified, Inc. was incorporated in the State of Nevada on September 27, 2013, and is headquartered in Belmont, North Carolina. The Company was established as a renewable energy company, incubating solar technologies to establish electrification, education, connectivity and media distribution infrastructures in rural communities across the globe to empower the individual, community and local economy. My Power Solutions, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc., was incorporated in the State of Nevada on March 13, 2014 as a franchise business opportunity with Franchise Disclosure Documents for franchise sales in both the United States and South African markets. Africhise, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc. is a Delaware Corporation, and was formed on August 28, 2015 to be the franchise management arm of My Power Solutions, Inc's franchise operations in Africa. My Power Solutions Bahamas, Inc., a wholly-owned subsidiary of My Power Solutions, Inc., is a Delaware Corporation, and was formed on June 14, 2018 to establish itself as a renewable energy solutions company in the Bahamas. B4dignity, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc. is a Delaware Corporation, and was formed on January 18, 2019 to be a cause marketing company.

Going Concern

The Company needs to generate revenues or must raise additional capital, reduce expenses and curtail cash outflows in order to be able to accomplish its business plan. In the interim, the Company will continue to pursue bridge capital as needed. The Company’s $3,079,595 of total liabilities at May 31, 2019 includes $1,114,207 of notes payable to a related party, $1,089,950 of accrued payroll expenses due to current and former Company management, and $6,725 due to a former officer of the Company, all of which we believe, but cannot guarantee, we can delay payment on over the next twelve months. During the nine months ended May 31, 2019, we received net proceeds totaling $240,250 from four convertible notes payable. For all of our outstanding convertible notes payable, payments become due in the fourth quarter of fiscal year 2019 or in early fiscal year 2020, or can be repaid through conversion into the Company’s common stock. During the nine months ended, payments totaling $254,140 have been netted against the outstanding principal of convertible notes payable through the issuance of common stock. Based on our current cash position and our ability to issue additional convertible notes payable to our lending partners, we believe we have the capabilities and available resources to continue for the next twelve months, although we cannot guarantee that we will be able to do so.

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Plan of Operation

As a renewable energy Company, Poverty Dignified remains committed to incubating solar technologies that establish electrification, education, connectivity and community development infrastructures in rural communities across the globe to empower the individual, community and local economy. Plans are underway to recapitalize the Company over the next two quarters, which if successful, would provide the necessary operational capital to execute its plan of operation.

The core values of the Company are 1) To be a renewable energy company focused on community development that champions the cause of dignity for a forgotten people by empowering them to implement practical solutions through an intentional, hands on engagement model that promotes entrepreneurial education, micro-business incubation and installation of basic solar power solutions. 2) To implement entrepreneurial education programs that strengthen and enhance the local community through actionable awareness of basic solar technology, discovery and implementation of business development opportunities and hands-on vocational training programs. 3) To develop a repeatable micro-business incubation model (with an emphasis on apprenticeships) that creates a sustainable economic development blueprint for rural communities to improve the quality of life for everyone. 4) To install basic solar power solutions as a transformation catalyst to kickstart the stalled economic growth in rural communities.

The Company strives to promote a cycle of sustainability in rural communities, and to recognize a need for reliable and affordable power, and we believe solar power is the best solution for rural settings. For this reason, we intend to combine entrepreneurial education, micro-business development and solar power installations – with the hope of creating jobs through micro-business development and installation of solar power in rural communities to achieve the goal of stimulating economic growth and creating a pathway out of poverty into dignity.

Poverty Dignified, Inc. is not a charity, and is not under any impression that it needs to rescue rural communities, but rather a for profit business, that believes in developing integrated business partnerships to create opportunities for empowerment for everyone. Poverty Dignified, Inc’s goal is: 1) to integrate solar technology solutions that will improve power efficiency and 2) facilitate business development through entrepreneurial education and community development.

In June 2018, the Company established My Power Solutions Bahamas, Inc. to begin offering renewable energy solutions throughout the Bahamas, but to date has minimal operations. On January 18, 2019, the Company established B4dignity, Inc. as a cause marketing company focused on lowering the cost of solar power for rural communities, but to date has minimal operations. It plans to partner with rural communities to create micro-business opportunities that invite interest in doing a pilot implementation of low-cost, energy efficient solar power generation and power storage products. In this way, funding for solar energy solutions in rural communities could become a realistic and achievable goal. Through an established eco-system of partners who provide basic products and services to the community, it can champion the rural community development story, and build a diversified online platform to facilitate e-commerce marketing efforts that can achieve sustainable business growth to help fund the implementation of basic solar power for the community. With an apprenticeship approach, and vocational skills training programs, individuals in rural communities can apply their skills and training anywhere they wish, either to grow a business of their own, or as a valuable employee of an existing local business to support their family and community.

A portion of all sales from products and services will be used to offset the initial cost of installing solar power for a family or school in the community. By sharing their story, the voice of rural communities can be elevated and highlight the sustainable micro-business development model that is being championed for rural communities. It is Poverty Dignified Inc’s belief that this is a repeatable model that can be implemented in any rural community across the globe to provide renewable solar power and sustainable community development.

In addition to working with local community business partners to install solar power solutions and provide business development skills training, Poverty Dignified, Inc is also building joint venture relationships with technology companies that are revolutionizing solar power technology and battery power management. It is already seeing positive results that may lead to significant efficiency improvements and lower the cost for solar power generation and distribution, which could make solar power available to everyone at an affordable price. These new solutions could make a powerful impact on the local economy and transform rural communities, which in turn, would drive revenue for the Company. Poverty Dignified, Inc. believes in changing lives and making a profit at the same time.

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On July 9, 2019, the Company, in exchange for the issuance 1,000,000 shares of its common stock, the Company acquired all the outstanding shares of Sun Oven, such that after the transaction, Sun Oven is a wholly-owned subsidiary of the Company. Sun Oven is a privately-held Illinois corporation engaged in the business of manufacturing and distributing sun powered devices for cooking, baking, and other functions.

Results of Operations

For the three and nine months ended May 31, 2019

There were no revenues for the three and nine months ended May 31, 2019. The net loss from continuing operations for the three and nine months ended May 31, 2019 was $925,099 and $1,352,694, respectively.

Our primary expenses for the nine months ended May 31, 2019 were related payroll expenses of $101,428, non-cash stock-based compensation expense of $337,018, and professional fees of $118,201. $76,087 of the payroll expenses related to amounts accrued for, but not paid to, the Company’s current and former management team. Interest expense for the nine months ended May 31, 2019 totaled $185,224, of which $114,946 related to amortization of debt discounts.

The Company recorded a loss on the changes in fair value of derivative liabilities of $35,652 for the nine months ended May 31, 2019. Due to principal payments made through the conversions of common stock, the Company recorded a loss on extinguishment of convertible notes of $569,480 for the nine months ended May 31, 2019. Additionally, the Company recorded a debt penalty expense of $30,000 and loss on cashless exercise of warrants of $71,484 during the nine months ended May 31, 2019.

Significant expense and loss items for the three months ended May 31, 2019 included payroll of $16,602, non-cash stock-based compensation expense of $136,061, professional fees of $36,991, interest expense of $63,662, loss on the changes in fair value of derivative liabilities of $133,049, loss on extinguishment of debt of $550,990, debt penalty expense of $30,000, and a loss on cashless exercise of warrants of $71,484.

The loss from the discontinued operation was $-0- and $1,798 during the three and nine months ended May 31, 2019, respectively.

For the three and nine months ended May 31, 2018

There were no revenues from continuing operations for the three and nine months ended May 31, 2018.

Our expenses for the nine months ended May 31, 2018 were related to professional fees of $84,117, and general and administrative costs of $365,150. General and administrative costs primarily consisted of payroll expenses of $219,661, non-cash stock-based compensation expense of $114,750 and $11,596 of travel related costs. $193,644 of the payroll expenses related to amounts accrued for, but not paid to, the Company’s management team.

Additionally, we incurred interest expense of $175,096 for the nine months ended May 31, 2018, primarily due to interest on our related party and convertible notes payable and amortization of the debt discounts on the convertible notes payable.

The Company recorded a loss on the changes in fair value of derivative liabilities of $83,632 for the nine months ended May 31, 2018. As a result of conversions of convertible debt during the nine months ended May 31, 2018, the Company recorded a loss on extinguishment of debt of $168,431. Additionally, due to an event of default on one of its convertible notes payable, the Company recorded debt default penalty expense of $46,288 during the nine months ended May 31, 2018.

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Significant expense and loss items for the three months ended May 31, 2018 included payroll of $56,962, non-cash stock-based compensation expense of $29,000, interest expense of $54,390 and loss on extinguishment of debt of $78,340. These were offset by a gain on valuation of derivative liabilities of $43,537 during the three months ended May 31, 2018.

For the three and nine months ended May 31, 2018, we recognized a loss from discontinued operation of $147,992 and $364,802, respectively. The loss from discontinued operation was primarily derived from payroll costs, professional fees and a loss on the disposal of property and equipment.

Liquidity and Capital Resources

In May 2018, we ceased all operations of MPS South Africa. Though we formed MPS Bahamas on June 14, 2018 and B4dignity, Inc. on January 18, 2019, both companies are not currently operational and have engaged in no material business activities.

To continue as a going concern and achieve a profitable level of operations, we will need, among other things, additional capital resources. Management’s plan to continue as a going concern includes raising investment capital through leveraging equity in the Company, generating revenue through operations and securing additional debt and/or equity financing. However, management cannot provide any assurances that we will be successful in accomplishing any of our plans to raise additional investment capital or generate revenue through operations. Our ability to continue as a going concern is dependent upon management’s ability to successfully implement the plans described above. Management cannot provide any assurance that unforeseen circumstances that may occur at any time within the next twelve months, or thereafter, will not increase the need for us to raise additional capital on an immediate basis. There can be no assurance that we will be able to continue to raise funds in subsequent debt or equity financings, in which case the Company may be unable to meet its obligations.

Equity Offerings

Subsequent to May 31, 2019, the Company issued 1,000,000 shares of common stock to its CEO as stock-based compensation.

Subsequent to May 31, 2019, the Company issued 1,000,000 shares of common stock to consummate the Stock Purchase Agreement noted above.

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Convertible Notes

Since August 31, 2018, the Company has engaged in the following transactions:

	·	On September 27, 2018, the Company issued a convertible promissory note to Power Up Lending Group, LTD in the amount of $53,000, resulting in $50,000 in net proceeds to the Company after the payment of debt issuance costs totaling $3,000. The note matures on July 15, 2019. After 180 days from the date of the note agreement, the note is convertible at a conversion price of 58% of the average of the lowest three trading price during the 10 days prior to the conversion date.

	·	On November 6, 2018, the Company issued a convertible promissory note to Auctus Fund, LLC in the amount of $111,000, resulting in $97,250 of net proceeds to the Company after the payment of debt issuance costs totaling $12,750. The note matures on August 6, 2019 and bears interest at 12%. The note is convertible into shares of common stock at the lesser of market price at the date of the conversion or 55% of the lowest trading price during the 25-day period ending one trading day prior to the date of the conversion notice.

	·	On April 2, 2019, the Company issued a convertible promissory note to Power Up Lending Group, LTD in the amount of $25,000, resulting in $22,000 in net proceeds to the Company after the payment of debt issuance costs totaling $3,000. The note matures on December 2, 2019. After 180 days from the date of the note agreement, the note is convertible at a conversion price of 58% of the average of the lowest three trading price during the 10 days prior to the conversion date.

	·	On May 7, 2019, the Company issued a convertible promissory note to Power Up Lending Group, LTD in the amount of $78,000, resulting in $71,000 in net proceeds to the Company after the payment of debt issuance costs totaling $7,000. The note matures on March 15, 2020. After 180 days from the date of the note agreement, the note is convertible at a conversion price of 58% of the average of the lowest three trading price during the 10 days prior to the conversion date.

	·	During the nine months ended May 31, 2019, 21,217,000 shares of common stock were issued to EMA Financial, LLC for the conversion of $58,358 of principal on a convertible promissory note.

	·	During the nine months ended May 31, 2019, 26,281,973 shares of common stock were issued to Power Up Lending Group, LTD. for the conversion of $128,000 of principal, plus $7,680 of accrued interest, on a convertible promissory note.

	·	During the nine months ended May 31, 2019, 11,467,898 shares of common stock were issued to Power Up Lending Group, LTD. for the conversion of $53,000 of principal, plus $3,180 of accrued interest, on a convertible promissory note.

	·	During the nine months ended May 31, 2019, 9,086,100 shares of common stock were issued to Auctus Fund, LLC for the conversion of $14,782 of principal, plus $7,404 of accrued interest, on a convertible promissory note.

	·	On March 26, 2019, 632,000 shares of common stock were issued to Power Up Lending Group, LTD. for the conversion of $4,740 of principal on a convertible promissory note.

	·	On May 23, 2019, 3,107,983 shares of common stock were issued to Crown Bridge Partners, LLC for the cashless exercise of warrant shares.

	·	Subsequent to May 31, 2019, 11,177,734 shares of common stock were issued to Crown Bridge Partners, LLC for the cashless exercise of warrant shares.

	·	Subsequent to May 31, 2019, 56,4 00,000 shares of common stock were issued to EMA Financial, LLC for the conversion of $19,724 of principal on a convertible promissory note.

	·	Subsequent to May 31, 2019, 23,043,494 shares of common stock were issued to Auctus Fund, LLC for the conversion of $7,070 of principal, plus $1,511 of accrued interest, on a convertible promissory note.

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Related Party Notes Payable

Since August 31, 2018, there have been no additional borrowings or repayments of notes payable to related party. Accrued interest on the notes totaled $43,968 and $2,300 at May 31, 2019 and August 31, 2018, respectively.

Cash

As of May 31, 2019, the Company had cash of $40,927, an increase of $39,108 during the nine months ended May 31, 2019. Our net cash used in operating activities of our continuing operation was only $185,413 for the nine months ended May 31, 2019. However, we do not currently have enough cash on hand to deploy our business plan in 2019. To achieve a profitable level of operations, we will need, among other things, additional capital resources. Management’s plan to continue as a going concern includes raising investment capital through leveraging equity in the Company, generating revenue through operations and by securing additional debt and/or equity financing. However, management cannot provide any assurances that we will be successful in accomplishing any of our plans to raise additional investment capital or generate revenue through operations. Our ability to continue as a going concern is dependent upon management’s ability to successfully implement the plans described above. Management cannot provide any assurance that unforeseen circumstances that may occur at any time within the next twelve months, or thereafter, will not increase the need for us to raise additional capital on an immediate basis. There can be no assurance that we will be able to continue to raise funds in subsequent debt or equity financings, in which case the Company may be unable to meet its obligations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based upon an evaluation of the effectiveness of disclosure controls and procedures, our principal executive and financial officer has concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) were not effective. The Company’s principal executive and financial officer has determined that there are material weaknesses in our disclosure controls and procedures.

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The material weaknesses in our disclosure control procedures are as follows:

1)	lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures; and
2)	inadequate segregation of duties consistent with control objectives;

We recognize the importance of the control environment as it sets the overall tone for the organization and is the foundation for all other components of internal control.

As of July 24, 2019, while we have a third-party consultant to help us with our public reporting and disclosures we have not taken action to correct the material weaknesses identified above in our internal control over financial reporting. Once the Company has additional sales activities and has sufficient personnel available, then our Board of Directors, in connection with the aforementioned weaknesses, will implement the following remediation measures:

We will hire additional personnel with sufficient qualifications to allow us to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. We plan to use some of the funds through the private placement offering to allocate to this additional salary cost.

And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

If we are able to raise additional capital, we anticipate having sufficient funds to at least partially, if not fully, implement our plans by August 31, 2019. Additionally, we plan to test our updated controls and remediate our deficiencies by August 31, 2019.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

No director, officer, or affiliate of the issuer and no owner of record or beneficiary of more than 5% of the securities of the issuer, or any security holder is a party adverse to the small business issuer or has a material interest adverse to the small business issuer.

Based on a recent performance review by Poverty Dignified Inc.’s Board of Directors, the decision was made to withdraw all operations of its wholly owned subsidiary, My Power Solutions, Inc., in South Africa. As a result, My Power Solutions South African employees and consultants have filed a dispute with The Commission for Conciliation, Mediation and Arbitration (CCMA) in South Africa. As the Company winds down its local operations in South Africa, legal counsel has confirmed that the creditors of the Company will only have claims against the insolvent estate of the local external company and not against My Power Solutions, Inc. or Poverty Dignified Inc in the United States. It is therefore management’s position that there is no probable recourse that will have an adverse effect on Poverty Dignified, Inc.

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

During the nine months ended May 31, 2019, the Company issued 1,378,258 shares under restricted stock agreements for $-0- in proceeds. The Company record stock-based compensation expense of $201,718 related to these shares.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

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Item 6. Exhibits

Exhibit 31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

Exhibit 31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

Exhibit 32			Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101			Interactive data files pursuant to Rule 405 of Regulation S-T

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SIGNATURES

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

Poverty Dignified, Inc.

/s/ Matthew D. Alpeter
Matthew D. Alpeter Chief Executive Officer (Principal Executive Officer)

/s/ George C. Critz, III
George C. Critz, III Chief Financial Officer (Principal Financial Officer)

Dated: July 24, 2019

Poverty Dignified, Inc. 10-Q/A