VirExit Technologies, Inc. - Annual Report: 2017 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

For the fiscal year ended August 31, 2017

OR

For the transition period from ________ to _________

Commission file number: 000-55558

330 Grapevine Highway

Hurst, Texas 76054

(719) 761-1869

(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

None

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

Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

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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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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 December 13, 2017 there were 8,653,802 shares of common stock, par value $0.0001 per share, outstanding.

There was no trading market for the Registrants voting stock on the last business day of the Registrant’s most recently completed second fiscal quarter.

DOCUMENTS INCORPORATED BY REFERENCE

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TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (the “Annual Report”) contains “forward-looking statements.” Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations of the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets, business strategies, future cash flows, financing plans, plans and objectives of management, any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts. These risks and others described under “Risk Factors” may not be exhaustive.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this Annual Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

Unless otherwise provided in this Annual Report, references to the “Company,” the “Registrant,” “PD,” “we,” “us” and “our” refer to Poverty Dignified, Inc.

PART I

Item 1. Business

Introduction

Poverty Dignified, Inc. was incorporated in the State of Nevada on September 27, 2013, and is headquartered in Hurst, Texas. The Company has established itself as a renewable energy company, incubating franchise business concepts designed to affect the individual, community and local economy in rural and peri-urban areas across the globe. 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. These entities are collectively referred herein to as Poverty Dignified, or the Company.

The report of our independent registered public accounting firm on our consolidated financial statements for the years ended August 31, 2017 and 2016 contains an explanatory paragraph regarding our ability to continue as a going concern. Our business will require significant amounts of capital to sustain operations and make the investments we need to execute our longer-term business plan. Our net loss for the year ended August 31, 2017 was $1,540,175 and the deficit accumulated by us amounts to $9,784,847 from the period of inception through August 31, 2017. This raises substantial uncertainty with regards to our ability to continue as a going concern. The accompanying audited consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

In order 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 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.

Our Corporate History and Background

We were incorporated in the state of Nevada on September 27, 2013 and commenced our planned principal operations shortly thereafter. The Company selected August 31 as its fiscal year end. To date, we have invested in developing our business plan, building strategic relationships at the local, regional and national levels of Government and in a variety of potential marketplaces, developing our microgrid technology for rollout through our wholly-owned subsidiary, My Power Solutions, Inc. On March 30, 2015, we sold our first franchise unit. On June 18, 2015, our filing under Form S-1 was declared “effective”. On April 27, 2016, we received clearance for our ticker symbol PVDG.

Our Industry and Concept

Poverty Dignified, Inc. is a renewable energy company, incubating microgrid solar technologies to service the energy needs of poor households in rural and peri-urban areas across the globe. These needs have presented many opportunities for innovative technologies that support the franchise business environment as a means to solve essential problems and enhance the quality of life for millions of people. In addition to incubating microgrid solar energy infrastructures, the Company has also incubated both digital education and connectivity infrastructures for rural and peri-urban areas across the globe. To this, end, Poverty Dignified’s wholly-owned subsidiary, My Power Solutions, Inc., intends to provide electrification, education and connectivity services. Poverty Dignified plans to become the largest rural electrification company in Africa by positioning itself at the heart of poverty stricken, bottom of the pyramid areas, where its technology was designed to provide the solutions necessary to empower the individual, community and local economy.

Our Business Incubation Model

Business incubation is a business support process that accelerates the successful deployment and development of SME’s (small-to-medium size enterprises), by providing an array of targeted resources and services. These services are strategically designed by management and offer a business incubation environment and a network of contacts that we call an “ecosystem”. The main goal of our business incubation model is to produce successful small-to-medium size enterprises that will leave a lasting footprint of sustainability. These incubated small-to-medium size enterprises have the potential to create jobs, revitalize neighborhoods, commercialize new technologies, and strengthen local and national economies.

Our hope is that our business incubation process serves to nurture the development of small-to-medium size enterprise, helping them to survive and grow under our care over a 25 year life cycle, and then be turned over to the local municipality to serve the community indefinitely. Our incubation program is designed to provide local franchise operators with business support services and resources tailored to start-up small-to-medium size enterprises. The general goals of our incubation model are to create jobs in a community, enhance the local entrepreneurial climate, retain sustainable businesses in a community that they know and understand, and to assist in building or accelerating growth and diversification in local economies.

Critical to the definition of an incubator is the provision of management guidance, technical assistance and consulting tailored to small-to-medium size enterprises. We provide access to technology support services, accounting, and assistance in accessing the “ecosystem” necessary for continued growth. Poverty Dignified, Inc. is at the forefront of developing new and innovative technologies – creating products and services that improve the quality of lives in poor communities around the world.

Two core principles that we feel characterize effective business incubation – 1) We aspire to have a positive impact on a community’s economic health by maximizing the success of the small-to-medium size enterprise with which we choose to work, and 2) Our focus on building, into each project, a dynamic model of sustainability, with solid profitability. We believe that if done right, you can change lives and make a profit at the same time.

Our incubation program can be distinguished by our commitment to incorporate industry best practices with a commitment to the following:

The Nexus of Business Incubation and Franchising: Context for Opportunity

PD’s business model takes advantage of and synergizes two existing business models – business incubation and franchising. These two are by no means new.

In the case of business incubation, the first business incubator on record in the United States was established in 1959. Business incubation is still a growing sector and has evolved significantly since 1959. It has gone through three significant waves. The first wave (1950s-1980s) focused on infrastructure and economies of scale for entrepreneurs and SMEs by offering office space and common equipment. The second wave (1980s-1990s) added another focus, which was accelerating the learning curve by offering intense training and coaching programs as an example. In the third wave (1990s-present), we see the focus being placed on providing access to external resources, networks, and knowledge. Access to technical, professional, and financial networks is common.

Our best practices for successful business incubation programs include:

For a small-to-medium size enterprise on his or her own, developing a business, no less a franchise, is difficult, time consuming, and daunting. This creates the perfect opportunity for PD. We define “franchise” as a replicable business model or process offered through a license partnership or other agreement. PD has worked hard to develop its sustainable business incubation and franchise model and there are few, if any, true business incubators that specialize in franchise development for small-to-medium size enterprises.

Over and over again, business incubation programs, especially in a rural setting, have proven to be unsustainable as a for-profit venture. The vast majority of successful business incubators are non-profit, but they only create dependency and put a band aid on the problem. While this is a challenge for PD, it is also an opportunity to innovate sustainable small-to-medium size enterprise models for business incubation. This is where focusing on business ideas that can be developed as a franchises model can be the game changer for rural transformation.

PD is not just a for-profit enterprise, it is also a social impact enterprise. Social enterprises are those that use for-profit opportunities to do social good. In this case, PD strives to spur local economic development. PD has chosen a product/service mix that works to achieve its social mandate. Both business incubation and franchising models are seen as tools by governments and development agencies to enhance and catalyze economic development.

PD synergizes the business incubation/franchising models by developing indigenous business ideas into franchises to create wealth in local communities to eliminate poverty. A small-to-medium size enterprise franchise is a small or micro enterprise that can easily be replicated by following proven marketing and operational concepts. Small-to-medium size enterprise franchising differs from traditional franchising in the following ways:

Small-to-medium size enterprise franchise business models can be a better means of improving the livelihoods of low-income people in communities because, as opposed to a typical bottom of the pyramid (“BOP”) business, small-to-medium size enterprise franchisees generally have access to suppliers and markets; lower business risk; a business model that emerged from a defined market need; and receive transfer of business tools, skills, and knowledge. PD’s model for synergizing business incubation and franchise, particularly small-to-medium size enterprise franchise development, involves identifying and incubating potentially profitable, sustainable business ideas and concepts that directly impact the individual, community and local economy.

Market Overview

PD’s market focus is both rural and global, but specific to those regions that are growing the fastest overall and have fast growing middle classes. Therefore, Africa, Asia, India and Latin America will be regions the company will initially focus on.

The initial region for market penetration is Africa. Africa has the fastest growing population and has maintained positive growth rates, exceeding the global and developed nation average, for over 10 years.

Africa also has the fastest growing middle class. It has a young demographic with over 65% of Africa’s population being under the age of 40, with a significant number of this young population being under 21. Africa has hit its youth bulge.

Unfortunately, much of the population lives in poverty with high unemployment, particularly among youth. In addition to the social and economic duress of poverty, this creates a governance issue as high rates of youth unemployment have the potential to cause youth movements that can de-stabilize communities and nations. Social, government, and even business entities in Africa are looking for ways to address the poverty and high unemployment and see spurring new entrepreneurs and supporting existing entrepreneurs as mechanisms to address the problems.

The Company believes entrepreneurs in Africa face daunting challenges compared to other regions in the world with a lack of sufficient resources, skill, capital, and support services for them. It is PD’s belief that SME franchising and business incubation are seen as solutions to address these challenges and transform rural communities.

Concerning the relevance of business incubation in Africa, World Bank’s InfoDev says, “African policymakers are increasingly view business incubation as an important tool to unleash human ingenuity, enable competitive enterprises and create sustainable jobs. Business incubators can also be instrumental in developing new economic sectors.” InfoDev actually provides financial and technical support to business incubators across Africa and it is driving African Incubator Network (AIN).

Concerning the relevance of franchising, the African Development Bank’s paper, “Study on Franchising Opportunities in Africa,” says that franchising can contribute to the Continent’s economic development by: 1) promotion of entrepreneurship, 2) transfer of technologies and know-how, 3) growth of small and medium enterprise sector, 4) creation of direct and indirect employment, 5) enhancement of foreign exchange earnings, and 6) contribute to poverty reduction. The paper also says that it is not only foreign-owned franchises, but also indigenous franchises and “branchises” (chain operations that are converted to franchise models), that provide significant opportunities to catalyze economic development.

As a renewable energy company, incubating franchise business concepts designed to impact the individual, community and local economy, PD aims to cultivate small-to-medium size enterprise franchise models, strategically designed to bring electricity, digital education and connectivity infrastructures to rural communities and turn poverty conditions into opportunities to cultivate prosperity. These SME franchises are also designed to serve the needs of communities, so they address both business and social goals. In Africa, business and social development are key imperatives that are interlinked due to the high poverty rate.

Client Overview

The primary target (direct and indirect) of PD’s incubation model are indigenous Africans in rural communities. First, PD provides the tools, training and resources necessary for rural African entrepreneurs who have a desire to serve the needs of people and communities through business development strategies. Second, a franchise concept is birthed and deployed. Local Africans are then hired and trained as managers/operators, and will have the opportunity to acquire their own franchise business after completing a one- to two-year training, mentoring, and coaching program.

The demographics of these franchise locations are diverse. Opportunities can be from any socioeconomic stratum, can be for male or female, can be for well-educated or those with minimal education. Increasingly, PD also provides secondary opportunities to anyone local who has a unique idea that solves a relevant problem and that can be developed into a sustainable, profitable and replicable business model. In the near future, PD plans to leverage the energy, education, connectivity and retail service infrastructures, that it has developed in South Africa, to broaden its base and geographic reach throughout the continent of Africa.

Model for Incubation

First of all, PD’s business model is for-profit. PD believes that a sustainable business should have the qualities of changing lives and making a profit at the same time. It should also be expected for franchise models to make money while solving social issues in communities. To date, the Company has only one operational franchise.

Second, PD’s model for incubation focuses not only on process and support, but also on the specific physical space that provides basic services to the community. It is more attuned to the second and third waves of business incubation and focuses on accelerating the learning process and providing access to external resources, ecosystem networks, and growth capital. However, PD’s incubation mode is comprehensive enough to addresses the vital infrastructures necessary to insure continued community growth such as, education, electrification, connectivity and retail sales.

Third, PD has raised its own capital for incubated businesses through the public stock markets in the United States. Liquidity and exit strategies in Africa are low compared to other regions and investors want to be able to exit at their convenience. To achieve this, PD is a publicly traded company, in its second year of trading on the OTCQB under the ticker symbol PVDG.

Fourth, PD plans to provide all the support necessary to develop a lasting and sustainable franchise concept, including professional services (e.g. accounting, legal, and marketing), corporate and business process and procedure development, corporate organization and governance, training, coaching, and mentoring, as well as access to capital.

Fifth, PD intends to function as a conglomerate structure in which its incubated business and/or franchise models become a subsidiary of PD. Poverty Dignified’s incubation model falls within two categories: 1) An existing business outside of the Poverty Dignified umbrella, who has not been able to capitalize their idea, concept or technology, and desires to partner with Poverty Dignified through equity consideration in a joint development agreement; 2) An internal business idea, concept or technology, that has been birthed solely from within Poverty Dignified as a wholly-owned subsidiary. When Poverty Dignified enters into an agreement with a business outside of the Poverty Dignified umbrella, it seeks a significant minority shareholder stake (up to 49%) and plans to hold that stake indefinitely. Such business will remain organizationally intact and will not be reorganized under the Poverty Dignified umbrella as a subsidiary. PD is more inclined to remain as a minority shareholder in these joint venture, than to sell its position, but leaves its options open should selling its minority stake be in the best interest of Poverty Dignified, Inc. and its shareholders. Management and affiliates will, and can provide equity or other support to associated businesses but with the best interests of Poverty Dignified, Inc. and its shareholders in mind. When Poverty Dignified’s equity, support or resources are deployed in the process of business, the company will be directly compensated for the resources consumed.

Sixth, PD intends to become a part of the management team that develops and deploys any joint development relationship, not just a group that provides consulting and support. When PD brings in a joint venture opportunity, it considers itself to be part of the business’ internal team not a distant support structure.

Seventh, every incubated business is intended to be shaped for franchising, duplication and scaling purposes from the beginning.

Incubation Process

The incubation process has two key objectives – developing a sustainable business model that will succeed in its market objectives to impact the individual, community and local economy, as well as, reducing risk and increasing value in the enterprise for stakeholders. PD’s incubation process starts with the intent to solve indigenous problems and ends when the franchise concept is rolled out after a pilot period. We expect this process to typically take two to three years.

The incubation process starts with refining the concept so that it can be tested. Some call this pre-feasibility. The goal is to build as much into the business model before additional resources are allocated for franchise development. The goal is to model a sustainable business venture with minimum cost.

The next step is the proof-of-concept, which seeks to implement the proposed business model on a small, but significant scale. This allows PD to test, evaluate, and refine the various components of the business model under realistic, but manageable conditions. The proof-of-concept phase could be anywhere from six months to two years, however, PD will begin the final development process during this period and do iterative improvements as feedback is received from the proof-of-concept location.

If the proof-of-concept proves successful, the venture then goes through the final development process of refining the business model and building all the necessary components to operate the business at the corporate and franchise level. The proof-of-concept location remains in operation during this time so that PD and can continue to test aspects of the business and receive feedback. During this period, discussions begin with stakeholders and local partners to get initial feedback and insight about how to deploy in the local market, as well as, establishing solid involvement from the local municipality, regional and national levels of government.

Once the venture has been deemed a valid “franchise,” PD begins the process of planning the in-country set-up, pilot, and full rollout. External suppliers and partners are engaged at this stage of the incubation process, and a ecosystem is born. This stage is expected to last three to six months and begins at least six months prior to the launch date of the franchise concept.

The franchise pilot is expected to last from six months to a year or more, but after the first three months, there may be the roll out of additional locations. Typically, the new franchise concept will launch with corporate-owned branches/locations rather than franchisees, so that PD can retain control, while issues that may arise because of the “newness” of the franchise concept can be addressed more efficiently. As the model matures, branches will be converted to franchise locations with local ownership and new franchises will be made available to interested parties.

Our first incubated franchise model – My Power Solutions, Inc.

Poverty Dignified has worked hard to develop its sustainable franchise model, My Power Solutions, Inc. (“MPS”) was originally organized in the State of Nevada in 2014, and is wholly-owned by Poverty Dignified, and is the first renewable energy franchise concept incubated by the Company. We chose the franchise business model, because by very definition it conveys a system of how to run a business that can be replicated and offered through a license partnership or other agreement, which we believe is a key to long term, successful growth. We also knew that there would be different phases of franchise development, but first wanted to establish our first franchise model as an individually owned business opportunity for those interested in impacting the individual, community and local economies in rural areas across the globe. From there we plan to enter into an expanded phase of franchise development.

On March 30, 2015, the Company sold its first franchise compliance with its Franchise and Trademark Agreement, and discussed below. As of the date of this filing, one My Power Solutions franchise unit is operational.

According to the Franchise and Trademark Agreement, once a franchisee has been approved, and the purchase complete with a signed Franchise and Trademark Agreement and payment of the franchise fee has been made, the site selection process begins. From this point forward, the company has a legal responsibility to assist with this process. As stated in Article 2, Section 2.2 Selection of Location for New Business: “If this Agreement is for a new Business, you agree to propose a location for your Business in the Territory within 90 days after the Agreement Date. Your proposed location must conform to our site selection guidelines and requirements and is subject to our approval.” Currently our first franchisee has completed the site location process and is operational. The very act of approving a new franchisee places a legal responsibility on the company to fulfill all its responsibilities as a franchisor under the Franchise Disclosure Document, and sets in operation events such as the training program. Once the site location has been approved, training begins as stated in Article 5, Section 5.1 Training Programs: “If you (or, if applicable, your Operating Partner) have not previously attended, and successfully completed our initial training program, then prior to opening or operating your Business, you (or your Operating Partner) must attend and successfully complete an initial training program on the operation of a My Power Solutions Business.” Once training is complete, the franchise unit is setup and equipped according to Article 7, Operating Standards, which includes all products and equipment being ordered and delivered and involves our procurement team operating in their roles and responsibilities to ensure the franchise business opens successfully. Operations officially commenced to fulfill our legal Franchisor responsibilities on March 30, 2015 with the sale of our first franchise. This franchise is now operational.

When Poverty Dignified started in the Kibera Slums of Kenya, it started with a pilot program to prove the concept and test the model. From the success of the pilot program in the Kibera Slums, Poverty Dignified then designed and built, through its Research and Development, the full franchise business model and the prototype of the renewable energy model, My Power Solutions, that was then sent to Africa to scale and is in commercial operation. The My Power Solutions franchise model is a distinct business concept that brings the infrastructure for electricity, connectivity, digital education and retail services to developing regions of the world through the use of microgrid solar technology. At the present time, we determined that the most immediate viable markets for this service are the regions in Africa where approximately 600 million people are without conventional electricity facilities. Each My Power Solutions franchise is setup on school property through the invitation of both the local municipality and the Department of Basic Education and consists of electricity for 1,000 homes, three digital eLearning classrooms with charging trolleys, digital whiteboards and 7 inch tablets and internet and wi-fi service for 1,000 homes and the school. Each unit is located in a designated territory that is granted to a franchisee or investor. The unit has the capacity to service the school and community up to 1,000 customers. Each customer of a My Power Solutions franchise or unit buys monthly pre-paid electricity, internet/wi-fi and data packages, as well as, pocket-size portable batteries, LED diode lights, mp3 players, 7 inch tablets, DC powered stoves, refrigerators, and TV’s through its retail services. There may be other services offered to the customer at the My Power Solutions unit.

In this first phase of our operations, we’ve offered qualified persons the right to own and operate a My Power Solutions franchise at an agreed upon location under our standard form Franchise and Trademark Agreement. Prospective franchisees for a My Power Solutions location must sign our standard form franchise application before signing the franchise agreement.

The second phase of expanded franchise capacity will encompass corporate-owned franchise units, joint development agreements or special purpose vehicles, and would involve fractional ownership by various parties of many different franchise units. These types of franchise development could also culminate in Public Private Partnerships with government entities to provide solutions to rural communities for electrification, digital education and connectivity. Under a Public Private Partnership with a branch of government, My Power Solutions would own a percentage of a special purpose vehicle organized to facilitate the rollout of many My Power Solutions franchise units over a specific period time, each having a twenty-five year life cycle, after which complete ownership of the franchise unit would be turned over to government.

We have developed and intend to make available to franchisees comprehensive business methods and systems for developing and operating a My Power Solutions unit, including technical information and expertise relating to authorized products and services, site selection criteria, sales, marketing and advertising programs and management information, services and techniques.

This particular business is unique in that a franchisee can only operate a My Power Solutions in a pre-selected developing region of the world that does not yet have access to conventional grid power sources. At the current time, the only countries that we intend to offer My Power Solutions are the countries located on the continent of Africa, specifically South Africa. There are no My Power Solutions that will be offered to operate in North America at this time. Franchisee competitors will be electrical companies that offer conventional power to a customer’s home, other microgrid solar providers and retailers that offer generators or other mobile power sources. We are not aware of any other franchise model or businesses that offer the same unit model that is the focus of our franchise system. PD and MPS do not have any affiliates that offer franchises in any other lines of business or provide products or services to franchisees.

Certain aspects of this offering may be regulated by the laws of the different countries where the My Power Solutions franchise units are to be located. From time to time we may enter into Area Development Agreements of the type contained in our draft franchisee application. Under this type of agreement, we will grant an exclusive right to a franchisee to develop a specific geographic area to place and operate multiple My Power Solutions units in exchange for the payment by the franchisee of an area development fee in addition to the initial franchise fee and continuing royalties and advertising contributions. We have not yet granted any Area Development Agreements to any person or legal entity.

The Purpose of My Power Solutions

Africa has a big problem with energy access. Of the close to 1.14 billion people on the continent, less than 50% have access to electricity, especially in rural communities. Without it, people have to limit their activities in terms of quality and time. This affects education, productivity, cell phone usage, etc.

My Power Solutions intends to provide electricity, lighting, cell phone recharging, digital education, internet and wi-fi connectivity and retail services in one community location. Customers can purchase monthly pre-paid electricity, internet/wi-fi and data packages, as well as, pocket-size portable batteries, LED diode lights, mp3 players, 7 inch tablets, DC powered stoves, refrigerators, and TV’s through its retail services. The solution is designed to be sustainable, affordable, portable, durable, simple to use, and convenient. Its target market is areas without electricity, particularly rural communities. This solution reduces the need for paraffin or candles, as well as reducing the need for kerosene, minimizing exposure to unhealthy and unsafe practices.

We intend to place My Power Solutions franchise units in high-traffic locations in communities within walking distance of its customers, so it is convenient for them to get customer support on a daily basis. This removes the loss of time, money, convenience, and productivity in having to go to a location that requires transport to access. Because of its portability, we believe a new unit can be deployed quickly to areas without electricity.

We intend for each franchise unit to employ indigenous people from within each community, providing jobs for twelve people. Our model calls for consistent training and coaching through our learnership program. We intend to provide management with entrepreneurial training, coaching and mentoring and the opportunity to transition into owning their own franchise unit. We also intend to allocate 10% of the gross revenues from each unit to re-investment initiatives with in the local community. We have one operational franchise unit. We do not expect to generate any significant revenues until the second to third quarters of fiscal 2018, of which there is no guarantee.

We intend for the primary revenue generation for a My Power Solutions franchise to come from selling monthly pre-paid electricity, internet/wi-fi and data packages, as well as, pocket-size portable batteries, LED diode lights, mp3 players, 7 inch tablets, DC powered stoves, refrigerators, and TV’s through its retail services.

Africhise, Inc., a Delaware Corporation, was formed on August 28, 2015 to be the franchise management arm of My Power Solutions, Inc’s franchise operations in Africa. Africhise, Inc. is planning to succeed as a service oriented company, having the ability to grow by consistently improving and continuously enhancing its services to franchisees. By taking advantage of a use of franchising as a business strategy, Africhise, Inc. will have a distinct competitive edge in the African marketplace. Africhise, Inc. hopes to develop the capacity on the ground in Africa to provide guidance for successful franchise rollouts. Africhise, Inc. plans to provide management and maintenance services to franchise owners and operational oversight in Africa.

The Market Environment

We have successfully completed our pilot program and are now operational in South Africa.

Over 500 million people in sub-Saharan Africa lack access to electricity, according to the World Bank. In South Africa, the majority of un-electrified settlements will not receive grid power for the next 20 years. Furthermore, this lack of access to electricity has forced people to use fuels such as paraffin for heating and cooking, which has led to a prevalence of fires in such areas in South Africa and cause severe injury, death and destruction of sole possessions.

In South Africa, the problem is at a management level, where traditionally there has been a lack of co-ordination, clearly defined strategies, resources and multiple approaches. Most of the projects have been executed by the largest power company in South Africa, as the main power provider. As a result, the development of local companies and skilled labor has not been sufficiently promoted, leading to a strong dependence on a monopoly that controls the knowledge, skills, materials and replacement parts.

Moreover, services offered under this system do not often match the needs and payment capacity of all end users. Direct consequences of this are the limited lifetime and impact of projects developed under this system. Inadequate maintenance procedures combined with a lack of sufficient financing, have proved to be the main barriers to the success of electrification projects.

The diversity of the South African market has meant that non-sustainable product placement has resulted in a lack of long-term responsibility, and thus, rural communities have become the dumping ground for products that don’t work. To overcome this problem, My Power Solutions provides the solution.

A privately owned renewable energy businesses, such as My Power Solutions, is necessary to help provide energy services to these rural areas. We believe that the electrification of rural areas is now possible on a large scale for the first time on a cost-effective basis. Our Solar Systems toolkits, have been prepared especially for the South African market, and allow an entrepreneur to assess the market of an un-electrified area, for the introduction of a renewable energy business. These businesses will provide income generation and energy services to un-electrified communities, something which no one else has been able to supply.

Expected Milestones

In addition to the continued operation of our one franchise unit under the first phase of our franchise development, the following are our expected milestones under the second phase of our expanded franchise capacity for the next 12 months:

We developed these milestones and the expected timeframes utilizing various factors. These factors include internal projections developed by our Director of Operations in Africa, based on the status of the organizing activities in Africa, execution of our proposed Public Private Partnership [PPP] with the Development Bank of South Africa, continued relationships with local municipalities in South Africa, combined with our knowledge that we have seen interest and received invitations to present our Franchise opportunity to organizations in the US who have verbally represented to us they are interested in ownership opportunities.

Additionally, we are in final discussions with the Development Bank of South Africa to work within a consortium to electrify rural communities throughout all nine provinces in South Africa. If those discussions lead to a Public Private Partnership [PPP], we estimate that 240 additional franchise units could be added in these nine provinces over the next 36 months.

The projected milestones above are influenced by numerous factors that are both uncertain and also subject to revision as more information becomes available. Due to the uncertainty of the factors involved, the timelines and the actual sales of franchise units may be subject to unforeseen delays or may not occur at all.

Competition

Our business model is one that has been primarily attempted by non-profit organizations. We believe we will have a competitive advantage by presenting a solution to the traditional non-profit model by rolling out our for-profit, sustainable My Power Solutions franchise model. To date, we have been unable to identify direct, for-profit, competitors in our space, as they are ill equipped to survive the harsh economic conditions found in Rural Africa.

Because we are a for-profit enterprise, we receive more favor and better treatment from rural municipalities as our for-profit model stimulates economic growth, creates jobs, accelerates education and solves the electrification problem, and empower the individual and community, while non-profit organizations just create more dependency and continue to put a band aid on the problem. Therefore, we find it easier to enter into countries or local marketplaces.

Intellectual Property & Proprietary Rights

“My Power Solutions” is a United States registered trademark (Registration No. 5059930). It is registered to our wholly own subsidiary “My Power Solutions, Inc.”

We are preparing to file patent applications related to proprietary technical aspects of Poverty Dignified’s multi-functional containers (e.g., distributing power in a portable container).

We claim copyright protection for our Operations Manual and for most publications we issue, although we have not registered anything with the United States Copyright Office. We also consider certain information relating to the development and operation of our My Power Solutions units as our proprietary information (“Confidential Information”). This Confidential Information includes: (1) technical information and expertise relating to Authorized Products and Services and the equipment used with them; (2) site selection criteria for our franchisees; (3) sales, marketing and advertising programs and techniques for our franchise units; (4) knowledge of operating results and financial performance of our franchise units; (5) comprehensive methods of operating the business, including pricing information; and (6) computer software programs.

Government Regulation

The Franchise Disclosure Requirement

Under the Federal Trade Commission’s (FTC) “Franchise Rule,” franchisors must provide prospective franchisees with certain information regarding the franchise. The Franchise Rule specifies the form and content of the disclosures a franchisor must give. The disclosures are shown in a “Franchise Disclosure Document,” or an “FDD.” The predecessor of the FDD was the “Uniform Franchise Offering Circular,” or the “UFOC.” The Franchise Rule also specifies the timing of delivery of the FDD.

The FDD must disclose facts about the franchisor, the franchise transaction, and the franchise documents. These facts are consolidated into sections of the FDD called “Items.” The FDD must contain 23 Items, including:

There are some exemptions where the franchisor does not have to comply with the Franchise Rule when selling a franchise. These exemptions include:

State Franchise Law

While every franchise business is subject to the franchise rules laid out by the FTC, franchises are also subject to state franchise laws and regulations. While the FTC franchise rule is aimed at all types of franchises, many state regulations are industry-specific. Further, franchise law is not a completely separate body of law, since it also involves other state laws such as trademark, intellectual property, and commercial laws. This means that there can be many different nuances between franchise laws from state to state.

Some states have comprehensive franchise regulations. The franchise laws in these states usually require the franchisor to register with the state government. While the FTC rule states that a FDD must be given to the franchisee, many states with comprehensive franchise laws will have further rules on what must be provided to a potential franchisee. Various states may also require the franchisor to file the necessary documents with the state. States with comprehensive franchise laws will also generally review the franchisor’s financial information as well as any documents it plans to give to a potential franchisee.

A primary intention of these high-regulation states is to reduce fraudulent business practices. A state can deny the registration of a franchise business if it determines that franchise documents contain false or misleading information. These states may also deny registration if there are circumstances in which selling the franchise would be deceptive in some manner. The FTC website has information about which states currently have registration or notice requirements.

There are other various franchise laws that apply in certain states. Many states have laws that regulate the relationship between the franchisor and the franchisee, called franchise relationship laws. These relationship laws typically require, for example, that the franchisor have “good cause” in order to refuse to renew a franchise contract with the franchisee.

Employees

As of December 13, 2017, we have 5 full time employees. We plan to use consultants, attorneys, accountants, and technology personnel, as necessary and do not plan to engage any additional full-time employees in the near future. We believe the use of non-salaried personnel allows us to expend our capital resources as a variable cost as opposed to a fixed cost of operations. In other words, if we have insufficient revenues or cash available, we are in a better position to only utilize those services required to generate revenues as opposed to having salaried employees. We may hire marketing and online employees based on the projected size of the market and the compensation necessary to retain development employees.

Legal Proceedings

In the normal course of our business, we may periodically become subject to various lawsuits. However, there are currently no legal actions pending against us, or, to our knowledge, are any such proceedings contemplated.

Corporate Information

Our principal office is located at 330 Grapevine Highway, Hurst, Texas, 76054. Our telephone number is (719) 761-1869.

Item 1A. Risk Factors

You should carefully consider the following risk factors and all other information contained in this Annual Report. If any of the following risks occur, our business, financial conditions or results of operations may be materially and adversely affected. This Annual Report also contains forward-looking statements that involve risks and uncertainties. There can be no assurance that actual results will not materially differ from expectations. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements.

Risks Related to Our Business

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

The report of our independent auditors on our consolidated financial statements for the years ended August 31, 2017 and 2016 included an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern. Our auditors’ doubts are based on our incurring significant net loss and our working capital deficit position. Our ability to continue as a going concern will be determined by our ability to obtain additional funding in the short term to enable us to realize the commercialization of our planned business operations. We cannot provide any assurance or guarantee that we will be able to raise funds at all or on terms acceptable to us or to generate operational cash flows that are necessary for us to continue as a going concern.

We are significantly dependent on our primary officer and director, who has limited experience. The loss or unavailability to Poverty Dignified of Mr. Lowther’s services would necessitate a replacement and could have an adverse effect on our business, operations and prospects in that we may not be able to obtain new management under the same financial arrangements, which could result in a loss of your investment.

Our business plan is significantly dependent upon the abilities and continued participation of Kevin Lowther, our Chief Executive Officer and Director. It would be difficult to replace Mr. Lowther at such an early stage of development of Poverty Dignified. The loss by or unavailability to Poverty Dignified of Mr. Lowther’s services would have an adverse effect on our business, operations and prospects, in that our inability to replace Mr. Lowther could result in the loss of one’s investment. There can be no assurance that we would be able to locate or employ personnel to replace Mr. Lowther, should his services be discontinued. In the event that we are unable to locate or employ personnel to replace Mr. Lowther we would be required to cease pursuing our business opportunity, which would result in a loss of your investment.

Mr. Lowther has limited experience in framing a business incubation company or a third world energy provider. The lack of experience in framing such businesses could limit or eliminate your return on investment.

As a result of our reliance on Mr. Lowther and his lack of experience in developing a business incubation company in the third world as well as energy distribution business, our investors are at risk in losing their entire investment. Mr. Lowther intends to hire personnel in the future, when sufficiently capitalized, who may have the experience required to manage our company; such management is not anticipated until the occurrence of future financing. Since the initial offering was not sufficient to capitalize our Company, future offerings will be necessary to satisfy capital needs. Until such future offering occurs, and until such management is in place, we are reliant upon Mr. Lowther to make the appropriate management decisions.

We have a limited operating history on which to evaluate our potential and determine if we will be able to execute our business plan.

We began operations in September 2013. Through December __, 2017, we have one operational franchise. Consequently, our historical results of operations may not provide an accurate indication of our future operations or prospects. Investment in our securities should be considered in light of the risks and difficulties we will encounter as we attempt to implement and execute our business plan.

We depend on the market acceptance of our products and services, and significant slowdown in demand for those products would reduce our revenues and our profits.

Currently, we do not sell products to end users as it is our intent to incubate franchise model businesses to sell to an end customer. As a result, our success depends almost entirely upon the widespread market acceptance of our franchisees’ work. Any significant slowdown in the demand for our products would likely reduce our revenues and profits. Therefore, we must identify industries that have significant growth potential and establish strong, long-term relationships with manufacturers in those industries. Our failure to identify potential growth opportunities or establish these relationships would limit our revenue growth and profitability.

If we are unable to implement and execute our business plan, our potential for growth and our results of operations could be harmed significantly.

A critical factor in our future viability will be our ability to implement, execute and expand our business incubation and franchising concepts. Our growth plans contemplate deploying a number of businesses for incubation in future months and years, in addition to franchising. If we do not open, operate and/or sell new franchises, our growth and results of operations could be harmed significantly. Our ability to access and open new businesses and franchises in a timely manner and operate them profitably depends upon a number of factors, many of which are beyond our control, including the following:

We may develop new opportunities which may not gain market acceptance, and our significant costs in researching and developing new products and services may not result in sufficient revenue to offset those costs or to produce profits.

We operate in an industry characterized by frequent and rapid technological and economic advances, the introduction of new products and new businesses needed in the developing world. As a result, we may be required to expend funds and commit resources to research and development activities, possibly requiring additional personnel; travel; and development and research. We may invest in equipment employing new production techniques for existing products and new equipment in support of new technologies that fail to generate adequate returns on the investment due to insufficient productivity, functionality or market acceptance of the products for which the equipment may be used. We could, therefore, incur significant sums in design and manufacturing services for new products, services, and sell franchises, that do not result in sufficient revenue to make those investments profitable.

Our future growth plans depend in large part on our ability to identify, attract and retain qualified persons or partnerships and to manage our proposed franchise business model.

We expect to grow our business through our My Power Solutions concept. As a result, our future growth will depend on our ability to attract and retain qualified persons or partnerships, the ability to execute our concept and capitalize upon our brand recognition and marketing, and the ability to timely develop their business. We may not be able to recruit persons or develop partnerships that have the business abilities or financial resources necessary to open units on schedule, or at all, or who will conduct operations in a manner consistent with our concept and standards. Also, we may not be able to operate units in a profitable manner.

In addition, FTC rules require us to furnish prospective franchisees or partners with an FDD containing prescribed information before entering into a binding agreement or accepting any payment for the franchise. Sixteen states also have state franchise sales or business opportunity laws which require us to add to the federal disclosure document additional state-specific disclosures and to register our offering with a state agency before we may offer our franchises for locations in the state or to state residents. We will have to file and receive approval of our FDD before we can sell franchises. Applicable laws in states provide state examiners with discretion to disapprove registration applications based on a number of factors. There can be no assurance that we will be successful in obtaining registration in all states or be able to continue to comply with these regulations, which could have a material adverse effect on our business and results of operations.

Finally, our future franchise operations will be dependent upon our ability to:

It will be the responsibility of each franchisee to work with their financial institution to collect all receivables due to them, and their inability to collect such receivables may have an adverse effect on our immediate and long-term liquidity. To date, we have one operational franchise.

We do not intend to, via our franchisees, extend credit to customers for any reason. It will be the responsibility of the franchisee to execute the sales process as it relates to their established financial institution. It will be important to note that overseas customers may be subject to economic cycles and conditions that may adversely affect us. Each individual lending institution may choose to extend microfinance loans to their customers and in doing so have their own set of guidelines to consider. These microfinance loans could present a challenge to potential customers who wish to secure our products and services via a microfinance loan.

The viability of our business model is dependent on a number of factors that are not within our control.

The viability of our Company-owned and potential franchised operations is, and will continue to be, subject to a number of factors that are not within our control, including:

Our inability to manage our growth could impede our ability to generate revenues and profits and to otherwise implement our business plan and growth strategies, which would have a negative impact on our revenues and results of operation.

We intend to quickly increase the number of our franchise programs and intend to expand further the number and diversity of our programs. We may also be required to increase staffing and other expenses as well as expenditures on equipment and property in order to meet the anticipated demand of our customers.

Our planned growth will require us to:

In addition, our expansion plans will likely require us to:

The time and costs to effectuate these steps may place a significant strain on our management personnel, systems and resources, particularly given the limited amount of financial resources and skilled employees that may be available at the time. As a result, it may become more difficult to both implement more sophisticated managerial, operational and financial systems, procedures and controls and to train and manage the personnel necessary to implement these functions. We cannot assure you that we will institute, in a timely manner or at all, the improvements to our managerial, operational and financial systems, procedures and controls necessary to support our anticipated increased levels of operations and to coordinate our various corporate functions.

Potential strategic alliances may not achieve their objectives, which could lead to wasted effort or involvement in ventures that are not profitable and could harm our company’s reputation.

We are currently exploring strategic alliances designed to enhance, develop and deploy our business incubation model and franchises. Any strategic alliances we enter into may not achieve their strategic objectives, and parties to our strategic alliances may not perform as contemplated. As a result, the alliances themselves may run at a loss, which would reduce our profitability, and if the products or customer service provided by such alliances were of inferior quality, our reputation in the marketplace could be harmed, affecting our existing and future customer relationships.

We may take a minority stake in a company or concept as compensation for incubating a business. If we take a minority stake, we will lack control which will increase our risks of investment.

When Poverty Dignified enters into an incubation agreement with a business outside of the Poverty Dignified umbrella of wholly-owned subsidiaries, it will mostly likely seek a significant minority share. Since it would be our intention to remain a minority stakeholder, we would lack control over the operations, resulting in increased risk of loss of our investment in such an incubated business. Therefore, it will be important to conduct lengthy due diligence on any business which intend to incubate. Despite a lengthy and thorough due diligence process, we may neglect to uncover certain facts or risks related to the incubated business.

Government regulations could restrict our ability to grow.

We will be subject to federal regulation and state laws that regulate the offer and sale of franchises and substantive aspects of a franchisor-franchisee relationship. We are also subject to various other international, federal, state and local laws, rules and regulations affecting our business, and our future franchisees will be subject to these laws, rules and regulations as well. There can be no assurance that our franchisees will remain in compliance with applicable laws or licenses that such franchisees will obtain, the failure of which would adversely affect our growth strategy.

Because our operations are international, we will be subject to significant worldwide political, economic, legal and other uncertainties that may make collection of amounts owed to us difficult or costly, or conducting operations more difficult should materials needed from certain places be unavailable for an indefinite or extended period of time.

Our first franchise is operational. We are initially deploying our business model in the continent of Africa, specifically South Africa. We will be subject to the laws and currency fluctuations in the countries which we operate. Specifically in South Africa, there is an unemployment rate of 27.7% with over 50% of the population living below the poverty line. South Africa is also ranked 64 out of 175 countries for corrupt dealings. The availability of skilled and educated labor is also low. Moreover, we are subject to a variety of United States laws and regulations, changes to which may affect our ability to transact business with certain customers or in certain product categories.

We are also subject to numerous national, state and local governmental regulations, including environmental, labor, waste management, health and safety matters and product specifications. We are subject to laws and regulations governing our relationship with our employees, including: wage and hour requirements, working and safety conditions, citizenship requirements, work permits and travel restrictions. These include local labor laws and regulations, which may require substantial resources for compliance. We are subject to significant government regulation with regard to property ownership and use in connection with any property in foreign lands, import restrictions, currency restrictions and restrictions on the volume of domestic sales and other areas of regulation, all of which can limit our ability to react to market pressures in a timely or effective way, thus causing us to lose business or miss opportunities to expand our business.

We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.

Since we intend to do business in emerging markets around the globe, we may be subject to the Foreign Corrupt Practice Act, or the FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We intend to have operations, agreements with third parties and franchise sales in Africa. Our potential activities in Africa could create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents or distributors of our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

Our ability to grow and compete in the future will be adversely affected if adequate capital is not available to us or not available on terms favorable to us.

The ability of our business to grow and compete depends on the availability of adequate capital, which in turn depends in large part on our cash flow from operations and the availability of equity and debt financing. We cannot assure you that our cash flow from operations will be sufficient or that we will be able to obtain equity or debt financing on acceptable terms, if at all, to implement our growth strategy. As a result, we cannot assure you that adequate capital will be available to finance our current growth plans, take advantage of business opportunities or respond to competitive pressures, any of which could harm our business.

Our success relies on consumers purchasing our products and services. Changes in consumer preferences and market conditions may affect our ability to be profitable.

Our operating results may fluctuate significantly from period to period as a result of a variety of factors, including purchasing patterns of our franchisee’s customers, competitive pricing, debt service and principal reduction payments, and general economic conditions. Consequently, our revenues may vary by quarter, and our operating results may experience fluctuations.

Our business plan depends on our ability to successfully integrate and manage our future franchise operations.

Our business plan relies on the substantial expansion of our business through franchising. However, we lack prior experience with establishing and managing franchise operations. The success of our franchises depends upon, among other things, the skills and business acumen of our franchisees, the identification of suitable locations for franchises, the effective management of those franchises’ locations, and our managerial and administrative resources. Our future success will depend on our ability to operate and oversee a significant number of franchises and franchisees.

We will not be able to exercise control over the day-to-day operations of our franchises or franchisees. While we will try to ensure that franchises meet the same operating standards that we demand of Company operated locations, one or more franchises may not do so. Any operational shortcomings of our franchises are likely to be attributed to our system-wide operations and could adversely affect our reputation and have a direct negative impact on the franchised royalty revenues we receive from those franchises.

Our business plan depends on our ability to successfully enter into new markets.

A significant element of our future growth strategy involves the expansion of our business into new geographic markets. Expansion of our operations depends, among other things, on the acceptance of our business model in various geographic locations.

Our franchise business model presents a number of disadvantages and risks.

We intend to have a high percentage of franchises, and we expect the number of franchises to increase as we continue to implement our growth plans. Our franchised business model, especially those owned by others as individuals or through joint development agreements or special purpose vehicles, presents a number of drawbacks, such as our limited influence over franchisees and reliance on franchisees to implement major initiatives, limited ability to facilitate changes in ownership, or unwillingness of franchisees to participate in our strategic initiatives.

Our results can be adversely affected by unforeseen events, such as political unrest, natural disasters or catastrophic events.

Unforeseen events, such as political unrest, natural disasters or catastrophic events, can adversely impact our sales. Natural disasters can keep customers in the affected area from our franchise sites and result in adversely affecting our sales. Because a significant portion of our operating costs is fixed or semi-fixed in nature, the loss of sales during these periods hurts our operating margins and can result in operating losses.

Being a public company may strain the Company’s resources, divert management’s attention and affect its ability to attract and retain qualified directors.

The Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The requirements of these laws and the rules and regulations promulgated thereunder entail significant accounting, legal and financial compliance costs, and have made, and will continue to make, some activities more difficult, time consuming or costly and may place significant strain on the Company’s personnel, systems and resources.

Risks Related to Our Common Stock

There is a limited to no market for our common stock, which may make it difficult for you to sell your stock.

We are currently quoted on the Over-the-Counter Bulletin Board under the ticker symbol PVDG. However, as of the date of this filing, we have very little trade volume. As a result, investors may be unable to liquidate their investment for any reason.

The market price of our common stock may be highly volatile, and you could lose all or part of your investment.

The trading price of our common stock is likely to be volatile. This volatility may prevent you from being able to sell your shares at or above the price you paid for your shares. Our stock price could be subject to wide fluctuations in response to a variety of factors, which include:

Our common stock is considered a “penny stock,” and thereby subject to additional sale and trading regulations that may make it more difficult to sell.

Our common stock is considered to be a low-priced security, or a “penny stock,” under rules promulgated under the Exchange Act. A stock is considered to be a “penny stock” if it meets one or more of the definitions in Rules 15g-2 through 15g-6 promulgated under Section 15(g) of the Exchange Act. These include but are not limited to the following: (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange; (iii) it is not quoted on The NASDAQ Stock Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company with net tangible assets less than $2.0 million, if in business more than a continuous three year period, or with average revenues of less than $6.0 million for the past three years. The principal result or effect of being designated a “penny stock” is that securities broker-dealers cannot recommend the stock but must trade in it on an unsolicited basis.

The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Securities Exchange Act of 1934. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

As an issuer of “penny stock”, the protection provided by the federal securities laws relating to forward-looking statements does not apply to us.

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, as our common stock is considered “penny stock”, we do not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

Future issuance of our common stock could dilute the interests of existing stockholders.

We may issue additional shares of our common stock in the future. The issuance of a substantial number of shares of common stock could have the effect of substantially diluting the interests of our existing stockholders and any subsequent sales or resales by our stockholders could have an adverse effect on the market price of our common stock.

We have outstanding convertible notes payable.

The conversion of outstanding convertible notes payable into shares of common stock would dilute the then-existing stockholders’ percentage ownership of common stock, and any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices for the common stock.

FINRA sales practice requirements may also limit your ability to buy and sell our common stock, which could depress the price of our shares.

FINRA rules require broker-dealers to have reasonable grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status and investment objectives, among other things. Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some customers. Thus, FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our shares, have an adverse effect on the market for our shares, and thereby depress our share price.

We have no plans to pay dividends.

To date, we have paid no cash dividends on our common shares. For the foreseeable future, earnings generated from our operations will be retained for use in our business and not to pay dividends.

Unanticipated changes in our tax positions or effective tax rate could adversely affect our future results.

We are subject to income taxes in the United States and potentially various foreign jurisdictions.

Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses arising from stock option compensation, the valuation of deferred tax assets and liabilities and changes in federal, state or international tax laws and accounting principles. Increases in our effective tax rate could materially affect our net results.

In addition, we could potentially be subject to income tax audits by many tax jurisdictions throughout the world.

The Company has never been labeled a public shell. If we are ever determined to be a public shell, our shareholders may no longer be allowed to use the exception under Rule 144 of the Securities Act.

Selling shareholders may not be able to rely upon Rule 144 under the Securities Act to sell their shares in open market transactions if we are determined to be a public shell. Under Rule 144(i), Rule 144 is not available to companies that have no or nominal operations and assets consisting of cash and nominal other assets.

If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our consolidated financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

As a public company, we have significant additional requirements for enhanced financial reporting and internal controls. We cannot assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our consolidated financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

If we are unable to unable to remediate our ineffective internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our consolidated financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. Based on our evaluation at August 31, 2017, we concluded that we had “material weaknesses” in our control environment and financial reporting process consisting of the 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 inadequate segregation of duties consistent with control objectives.

To date, while we have a third-party consultant help us with our public reporting and disclosures we have not taken action to correct the material weaknesses identified 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 create a position 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. 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. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our consolidated financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

Lack of experience as officers of publicly-traded companies of our management team may hinder our ability to comply with SEC regulations.

It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the SEC. We may need to hire additional financial reporting, internal controls and other finance staff or consultants in order to develop and implement appropriate internal controls and reporting procedures.

We have incurred increased costs as a public company which may affect our profitability.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. We are subject to the SEC’s rules and regulations relating to public disclosure. SEC disclosures generally involve a substantial expenditure of financial resources. Compliance with these rules and regulations significantly increase our legal and financial compliance costs and some activities are more time-consuming and costly. Management may need to increase compensation for senior executive officers, engage additional senior financial officers who are able to adopt financial reporting and control procedures, allocate a budget for an investor and public relations program, and increase our financial and accounting staff in order to meet the demands and financial reporting requirements as a public reporting company. Such additional personnel, public relations, reporting and compliance costs may negatively impact our financial results.

Public company compliance may make it more difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. As a public company, we expect these rules and regulations to increase our compliance costs and to make certain activities more time consuming and costly. As a public company, we also expect that these rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as executive officers.

Because our directors and executive officers are among our largest shareholders, they can exert significant control over our business and affairs and have actual or potential interests that may depart from investors.

Our directors and executive officers collectively and beneficially own 64.62% of outstanding common stock. Additionally, the holdings of our directors and executive officers may increase in the future upon vesting or other maturation of exercise rights under any of the options or warrants they may hold or in the future be granted or if they otherwise acquire additional shares of our common stock. The interests of such persons may differ from the interests of our other shareholders. As a result, in addition to their board seats and offices, such persons will have significant influence over and control all corporate actions requiring shareholder approval, irrespective of how our other shareholders may vote, including the following actions:

Such persons’ stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company, which in turn could reduce our stock price or prevent our shareholders from realizing a premium over our stock price.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties

Our principal office is located at 330 Grapevine Highway, Hurst, Texas, 76054. Our telephone number is (719) 761-1869. We lease this facility on a month-to-month basis. The Company has a 12 month lease for its office in South Africa, which expires on May 31, 2018. We believe these facilities can adequately meet our needs over the next 12 months.

Item 3. Legal Proceedings

In the normal course of our business, we may periodically become subject to various lawsuits. However, there are currently no legal actions pending against us or, to our knowledge, are any such proceedings contemplated.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities

Market Information

We are currently quoted on the Over-the-Counter Bulletin Board under the ticker symbol PVDG. However, as of the date of this filing, we have very little trade volume.

Holders

As of August 31, 2017, there are approximately 85 record holders of our common stock.

Dividends

The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant’s business.

Recent Sales of Unregistered Securities

Poverty Dignified, Inc. is currently doing a Private Placement Memorandum, in which the Company is offering 2,000,000 unregistered shares to accredited investors at a price of $1.50 per share to raise an additional $3,000,000 of growth capital. As of the date of this filing, the Company has sold 210,500 shares of common stock under this offering, including the sale of 193,700 shares prior to August 31, 2017.

Repurchase of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 6. Selected Financial Data

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forwarding looking statements as a result of certain factors, including but not limited to, those which are not within our control.

Overview

Poverty Dignified, Inc. is incorporated in the State of Nevada in September 2013. We were formed to operate as a renewable energy company, incubating franchise business concepts designed to affect the individual, community and local economy in rural and peri-urban areas across the globe. In September 2013, we commenced our planned principal operations. To date, we have invested in developing our business plan, developing relationships with a variety of potential marketplaces, developing our wholly-owned subsidiary, My Power Solutions, Inc, and developing our franchise agreement. On March 30, 2015, we sold our first franchise. As of the date of this filing, we have one operational franchise.

Since our inception on September 27, 2013 to August 31, 2017, we have generated revenues of $146,180 and $143,829 of franchise expenses and cost of product revenue from one franchise and have an accumulated loss of $9,784,847, due in part from recording stock compensation for issuing our stock at par value to certain insiders in exchange for cash and services. Since incorporation, the Company has raised capital through private sales of its common stock. As of August 31, 2017, 6,106,000 of our 8,511,850 outstanding shares of common stock were issued to various stockholders in exchange for services and/or under restricted stock agreements. Relative to those shares, since inception, the Company has recognized total expense of $6,081,000. Although we do not value the services at this price, we value the stock at the per share price under the current Private Placement Memorandum or other equity offerings in effect at the time the services are rendered, which we believe represents the fair value of the stock issued.

Going Concern

The report of our independent registered public accounting firm on our consolidated financial statements for the years ended August 31, 2017 and 2016 contains an explanatory paragraph regarding our ability to continue as a going concern. As of August 31, 2017, the Company had cash of $7,146; a working capital deficit of $1,553,415 and a stockholders’ deficit of $1,553,351. The Company has incurred net losses from start-up costs and minimal operations since inception to August 31, 2017 and continues to expend cash in order to accomplish its business objectives. Based on the Company’s current progress in its business plan, it has not successfully implemented its plan to mitigate the going concern issue. Specifically, the Company has only one operational franchise, and has not been effective in reducing operational expenses. As a result, as of August 31, 2017, 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.

In order 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 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.

The Company’s primary source of operating funds since inception has been equity financings through a private placement. In its private placement memorandum dated January 2014 and closed November 2014, the Company raised $1,182,180 for its operations, research and development, and marketing of its franchise opportunities. Additionally, the Company has borrowed funds from a related party for working capital purposes and $486,373 remains outstanding under notes payable to this related party at August 31, 2017.

Through August 31, 2017, we have one operational franchise. As such, the Company has recognized revenues of $146,180 and associated franchise expenses and cost of product revenue of $143,829 since its inception through August 31, 2017. The Company needs to generate additional revenues or raise additional capital in order to be able to accomplish its business plan. In the interim, the Company will accrue for management salaries and will continue to borrow funds from affiliates as needed.

Since our original Private Placement Offering was not sufficient to capitalize the Company, Poverty Dignified, Inc. recently closed a Private Investment in Public Equity transaction, in which the Company offered 1,000,000 unregistered shares to accredited investors at a discounted price of $0.75 per share to raise an additional $750,000 of growth capital. Under this offering, the Company sold 999,970 shares of common stock for proceeds of $749,977, including 784,302 shares of common stock for proceeds of $588,226 during the year ended August 31, 2017. Poverty Dignified, Inc. is currently doing a Private Placement Memorandum, in which the Company is offering 2,000,000 shares at a price of $1.50 per share to raise an additional $3,000,000 in growth capital. In this Private Placement Memorandum, the Company has the option to sell shares at a price lower than the $1.50 per share. Through August 31, 2017, under this Private Placement Memorandum, the Company has issued 144,000 shares of common stock at a discounted price of $0.75 per share for proceeds of $108,000 and has issued 36,000 shares of common stock at the offering price of $1.50 per share for proceeds of $74,550.

During the second or third quarter of fiscal year 2018, Poverty Dignified, Inc. plans to ask for approval for a secondary offering. Upon approval, the Company plans to register 1,000,000 shares in an S-1 registration. Once “effective” by the SEC, these shares will be made available to the public market.

During the year ended August 31, 2017, the Company entered into two separate convertible note payable agreements, which provided net proceeds of $125,075, after payment of debt issuance costs totaling $24,925.

Subsequent to August 31, 2017, we have entered into two separate convertible note payable agreements for $55,000 and $48,000, respectively. After the payment of debt issuance costs totaling $15,250, net proceeds to the Company were $87,750.

Under the second phase of its expanded franchise capacity, Poverty Dignified, Inc’s wholly-owned subsidiary, My Power Solutions, Inc., is currently in the final stages of completing its involvement in a Public Private Partnership with the Development Bank of South Africa. Should this Public Private Partnership befully executed, My Power Solutions, Inc. will have the responsibility of placing 240 franchise units in rural communities over the next thirty-six months, beginning in early 2018. It will be working within a consortium, headed by InovaSure, to bring electricity, connectivity and digital education to 240,000 homes. This Public Private Partnership would impact our near-term operational cash flow significantly though upfront development funds, projected to be $150,000 per location, or $36,000,000, over the next thirty-six months. Additionally, MPS would receive ongoing revenues to manage and maintain each of the 240 franchise units over a twenty-five year period.

Poverty Dignified, Inc. is an “Incubation” company. The Company is constantly incubating other business concepts and technologies that will be wholly-owned subsidiaries of Poverty Dignified. These concepts could contribute to the overall profitability of Poverty Dignified, Inc. and allow the necessary funds to be in place to offset any additional costs from the operations of My Power Solutions, Inc.

Results of Operations:

Year Ended August 31, 2017

For the year ended August 31, 2017, there were franchise revenues of $10,857, related primarily to our royalty fees and other items related to franchise operations, and franchise expenses of $19,220, from the costs of certain items provided to launch the first franchise. Franchise expenses exceed franchise revenues due to the Company bearing additional, unforeseen set-up costs on the first franchise.

During the year ended August 31, 2017, we recognized $15,936 of revenue and $20,222 of cost of revenue associated with product sale and installation of equipment for digital classroom purposes within a school in our initial franchise market, but not included in our initial franchise unit.

Our expenses for the year ended August 31, 2017 were related to franchise expenses of $19,220, cost of product revenue of $20,222, research and development of $558, professional fees of $199,016, and general and administrative costs of $1,271,747. General and administrative costs primarily consisted of payroll expenses of $729,146, $150,000 of non-cash stock-based compensation, $155,189 in advertising and $151,467 of travel related costs. Of the payroll expenses, $291,964 related to amounts accrued for, but not paid to, the Company’s management team.

Additionally, we have incurred interest expense of $56,205 for the year ended August 31, 2017, primarily due to interest on our related party and convertible notes payable and amortization of the debt discounts on the convertible notes payable.

Our expenses since inception to August 31, 2017 related mostly to the development of our solar products, development of our solar panels, controller, and container, marketing of our franchise opportunity, and development of our franchise materials. For the above-mentioned developments, we employed the services of multiple outside companies and consultants. We also incurred $6,081,000 in non-cash expenses from the issuance of our common stock in exchange for services.

Year Ended August 31, 2016

For the year ended August 31, 2016, there were franchise revenues of $119,387, related to our initial franchise fee and the delivery of equipment, inventory, and other items related to franchise operations, and franchise expenses of $104,387, from the costs of the franchise equipment, inventory and other items provided to launch the first franchise. There was a net loss of $860,204, mostly in relation to payroll and professional services, for the year ended August 31, 2016.

Our expenses for the year ended August 31, 2016 were related to research and development of $25,043, professional fees of $103,201, and general and administrative costs of $746,960. General and administrative costs primarily consisted of stock compensation of $75,000, payroll expenses $552,714, travel of $45,621, and advertising $2,704.

Liquidity and Capital Resources

The Company currently has one operational franchise in South Africa. From inception to August 31, 2017, we have generated revenues of $146,180 and $143,829 of franchise expenses and cost of product revenue from one franchise and have incurred operating expenses totaling $9,782,496, of which $6,081,000 was non-cash compensation. We do not expect to incur many of these costs on a regular basis as they were for research and development and stock to our founders and consultants. Although we do believe we will continue to need the services of our founders and consultants, we do not believe that we will continue to issue large quantities of stock for those services. Stock to our founders and consultants was tendered at par value and for various services. We also believe that we will not invest as much capital for research and development, and therefore, our expenses will decrease. Furthermore, we issued significant amounts of stock in exchange for services. We do not believe that we will continue this trend in the future. The Company needs to generate additional revenues or raise additional capital in order to be able to accomplish its business plan. In the interim, the Company will accrue for management salaries and will continue to borrow funds from affiliates as needed.

The Company’s primary source of operating funds since inception has been equity financings through a private placement. In its private placement memorandum dated January 2014 and closed November 2014, the Company raised $1,182,180 for its operations, research and development, and marketing of its franchise opportunities. Additionally, the Company has borrowed funds from a related party for working capital purposes and $486,373 remains outstanding under notes payable to this related party at August 31, 2017.

Since our original Private Placement Offering was not sufficient to capitalize the Company, Poverty Dignified, Inc. recently closed a Private Investment in Public Equity transaction, in which the Company offered 1,000,000 unregistered shares to accredited investors at a discounted price of $0.75 per share to raise an additional $750,000 of growth capital. Under this offering, the Company sold 999,970 shares of common stock for proceeds of $749,977, including 784,302 shares of common stock for proceeds of $588,226 during the year ended August 31, 2017.

Poverty Dignified, Inc. is currently doing a Private Placement Memorandum, in which the Company is offering 2,000,000 shares at a price of $1.50 per share to raise an additional $3,000,000 in growth capital. In this Private Placement Memorandum, the Company has the option to sell shares at a price lower than the $1.50 per share. Through August 31, 2017, under this Private Placement Memorandum, the Company has issued 144,000 shares of common stock at a discounted price of $0.75 per share for proceeds of $108,000 and has issued 36,000 shares of common stock at the offering price of $1.50 per share for proceeds of $74,550.

During the second or third quarter of fiscal year 2018, Poverty Dignified, Inc. plans to ask for approval for a secondary offering. Upon approval, the Company plans to register 1,000,000 shares in an S-1 registration. Once “effective” by the SEC, these shares will be made available to the public market. Further, we may be required to raise funds in addition to this offering. We cannot provide any assurance or guarantee that we will be able to conduct other additional rounds of financing at all or on terms acceptable to us.

During the year ended August 31, 2017, the Company entered into two separate convertible note payable agreements, which provided net proceeds of $125,075, after payment of debt issuance costs totaling $24,925.

As of August 31, 2017, we had cash of $7,146 and have had a net decrease in cash of $13,411 during the year ended August 31, 2017. We believe in the near future we will generate revenues from operations. We are substantially complete with our research and development activities as it relates to My Power Solutions and our operations in Africa. We do not expect to incur any additional research and development expenses at this time with respect to the aforementioned My Power Solutions business concept. However, if we want to develop and expand our business concept, we will need to reinvest all of our earnings into our operations. Therefore, we do not believe we will have any profits in the near future, nor we will be distributing any dividends.

We do not currently have enough cash on hand to deploy our current business plan in 2018. In order 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.

Subsequent to August 31, 2017, we have entered into two separate convertible note payable agreements for $55,000 and $48,000, respectively. After the payment of debt issuance costs totaling $15,250, net proceeds to the Company were $87,750.

Under the second phase of its expanded franchise capacity, Poverty Dignified, Inc’s wholly-owned subsidiary, My Power Solutions, Inc., is currently in the final stages of completing its involvement in a Public Private Partnership with the Development Bank of South Africa. Should this Public Private Partnership befully executed, My Power Solutions, Inc. will have the responsibility of placing 240 franchise units in rural communities over the next thirty-six months, beginning in early 2018. It will be working within a consortium, headed by InovaSure, to bring electricity, connectivity and digital education to 240,000 homes. This Public Private Partnership would impact our near-term operational cash flow significantly though upfront development funds, projected to be $150,000 per location, or $36,000,000, over the next thirty-six months. Additionally, MPS would receive ongoing revenues to manage and maintain each of the 240 franchise units over a twenty-five year period.

Poverty Dignified, Inc. is an “Incubation” company. The Company is constantly incubating other business concepts and technologies that will be wholly-owned subsidiaries of Poverty Dignified. These concepts could contribute to the overall profitability of Poverty Dignified, Inc. and allow the necessary funds to be in place to offset any additional costs from the operations of My Power Solutions, Inc.

Critical Accounting Policies

Our significant accounting policies are more fully described in Note 3 to our consolidated financial statements. 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, liabilities, revenues, and expenses, and the related disclosures of contingent assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions.

Revenue Recognition

The Company recognizes revenue once pervasive evidence that an agreement exists; the product and/or service have been rendered; the fee is fixed and determinable; and collection of the amount due is reasonably assured

Franchise Revenue

Our franchise-related revenue is comprised of three separate and distinct earnings processes: area development fees, initial franchise fees, and continuing royalty payments.

Area Development Fees – Our area development fee consists of an initial, non-refundable payment of $15,000 per unit to be developed in consideration for the services we perform in preparation of executing each area development agreement. $5,000 of this initial area development fee relates to services, which include, but are not limited to, conducting market and territory analysis, are completed prior to our execution of the area development agreement and receipt of the corresponding area development fee. As a result, we recognize this portion of the area development fee as revenue upon receipt. The remaining $10,000 is allocated to the opening of the franchise and is recognized in accordance with our revenue recognition policy on initial franchise fee revenue noted below.

Initial Franchise Fees – The Company executes franchise agreements that set the terms of its arrangement with each franchisee. The franchise agreements require the franchisee to pay an initial, non-refundable fee of $15,000. Initial franchise fee revenue from the sale of a franchise is recognized when the Company has substantially performed or satisfied all of its material obligations relating to the sale. Substantial performance has occurred when the Company has (a) performed substantially all of its initial services required by the franchise agreement, such as assistance in site selection, personnel training and implementation of an accounting and quality control system; and (b) completed all of its other material pre-opening obligations. Additionally, at the contract signing, the franchisee is required to fund $90,000 for purchases of equipment, inventory, point of sale software and computer hardware, furniture, fixtures and décor and signage and payment of import taxes and freight costs. Revenue for these items is recognized upon delivery of the assets. The Company defers revenue from the initial franchise fee and other amounts due at contract signing until the respective revenue recognition milestones are met.

Continuing Royalty Payments – On an ongoing basis, royalties of 14% of gross revenues on authorized products and services will be recognized in the period in which they are earned.

Product Revenue

Product revenue represents amounts earned for equipment delivered and set up by the Company for digital classroom purposes within schools in its franchise markets, but not included in the franchises themselves. For products that include installation, and if the installation meets the criteria to be considered a separate element, product revenue is recognized upon delivery, and installation revenue is recognized when the installation is complete. For revenue that includes customer-specified acceptance criteria, revenue is recognized after the acceptance criteria have been met. Certain of the Company’s products require specialized installation. Revenue for these products is deferred until installation is completed.

Recently Issued Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, Accounting Standards Updates issued by the Financial Accounting Standards Board and does not expect the future adoption of such pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.

Off-Balance Sheet Arrangements

We have not entered into 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 and would be considered material to investors.

Inflation

We do not believe that inflation has had a material effect on our Company’s results of operations.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 8. Financial Statements and Supplementary Data

The financial statements of the Company are filed under this Item 8, beginning on page F-1 of this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

We carried out an evaluation required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” and “internal control over financial reporting” as of the end of the period covered by this Annual Report.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Our principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this Annual Report (the “Evaluation Date”), pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective.

Limitations on the Effectiveness of Controls

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated 2013 Framework. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of consolidated financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements. Based on our evaluation under the framework described above, our management concluded that we had “material weaknesses” (as such term is defined below) in our control environment and financial reporting process consisting of the following as of the Evaluation Date:

A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

Management believes that the material weaknesses set forth in items (1) and (2) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our Board of Directors result in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which, combined with the inadequate segregation of duties, could result in a material misstatement in our consolidated financial statements in future periods.

Remediation of a Material Weakness in Internal Control Over Financial Reporting

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 December 13, 2017, while we have a third party consultant 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 create a position 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 raise additional funds through our capital raise to allocate to these control objectives. 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.

We anticipate that these initiatives will be at least partially, if not fully, implemented by August 31, 2018. Additionally, we plan to test our updated controls and remediate our deficiencies by August 31, 2018. If we are able to raise capital through our planned offering pursuant or generate sufficient revenues through franchise sales, we anticipate having sufficient capital.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permits the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, fourth quarter of the fiscal year ended August 31, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

Kevin Lowther, Director, President and Chief Executive Officer:

Mr. Lowther was appointed as President and Chief Executive Officer of Poverty Dignified, Inc. at its inception in September 2013. At that time he was also appointed as a member of the Board of Directors for the company. He also serves as President of My Power Solutions, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc. From September 2009 until January 2012 Mr. Lowther served as the Vice President of Two Rivers Water Company in Denver, Colorado.

George Critz, Director, Vice President and Chief Financial Officer:

Mr. Critz serves as the Director, Vice President and Chief Financial Officer of Poverty Dignified, Inc., a position which he has held since its inception in September 2013. He also was appointed to the company’s Board of Directors in September 2014. He also serves as Vice President and Chief Trainer for My Power Solutions, Inc. From December 2007 to Present he is a Member of Enverdia, LLC, located in Charlotte, North Carolina, and was appointed Managing Member in January 2012, a position he still holds. From November 2010 to November 2011 he worked on the sales development team at WebVisible, LLC, located in Playa Vista, California. From July 2009 until June 2010 Mr. Critz was a design consultant with Arizona Internet Marketing, Inc., out of Chino Valley, Arizona.

Lloyd Bustard, Director:

Mr. Bustard is number 18 from a family of 19 kids born in the small fishing village of Blacks Harbor, Canada. He is the founder and Senior Pastor of World Worship Church, in Charlotte, NC. Pastor Lloyd is also an accomplished musician, singer & songwriter. His creativity in music is the driving force behind the worship experience at World Worship Church. His mission is to inspire people to Think Big so they can accomplish their purpose on the earth.

Ken Napier, Director:

Mr. Napier has been in Technology Development and technology commercialization directly or indirectly for over 40 years. He has functioned at many levels of leadership and authority for government agencies and commercial corporations. Ken is a Vietnam Veteran and served both in the enlisted ranks and as an officer in the US Army and retired after 23 years with his last assignment as the Deputy Director for Systems Engineering at the Joint Electronic Warfare Center in San Antonio Texas. Mr. Napier went on to private industry and has worked in many technology oriented positions with key emphasis in Research and Development, Aerospace, Telecommunications and National Security corporations. He started his own company in 1991 and also helped build and IPO several other companies in the Technology Industry. He currently is CEO and President of TechBase and Associates a Technology Commercialization Company, President of CITE Health Services Management, an elder housing/care company. He has in the past served on International and Domestic Corporation boards and currently serves in similar capacities for both profit and non-profit boards. Mr. Napier’s principal work orientation is in market development/expansion, and technology commercialization.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, requires that our directors and executive officers and persons who beneficially own more than 10% of our Common Stock (referred to herein as the “Reporting Persons”) file with the SEC various reports as to their ownership of and activities relating to our Common Stock. Such Reporting Persons are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of the copies of the forms received by us and written representations from certain reporting persons, we believe that during the year ended August 31, 2017, our executive officers, directors and greater-than-ten percent stockholders have complied with the Section 16(a) filing requirements.

Code of Conduct and Ethics

We have adopted a corporate Code of Conduct and Ethics that applies to our officers, employees and directors.

Director Independence

We are not currently subject to any standards regarding the “independence” of directors on our Board, or otherwise subject to any requirements of any national securities exchange or an inter-dealer quotation system with respect to the need to have a majority of our directors be independent. Although we are not required to comply with these requirements, our Board of Directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based on this review, the board has determined that none of the directors are “independent directors” as defined by Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended.

Committees

We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors. We believe that an audit committee financial expert is not required because the cost of hiring an audit committee financial expert to act as one of our directors and to be a member of an Audit Committee outweighs the benefits of having an audit committee financial expert at this time. However, we intend to implement a comprehensive corporate governance program, including establishing various board committees in the future. In addition, we have secured Directors and Officers insurance consistent with the Company’s and Board of Director’s mandates.

Item 11. Executive Compensation

Summary Compensation Table

_______________

Directors’ Compensation

Directors are not entitled to receive compensation for services rendered to Poverty Dignified, or for each meeting attended except for reimbursement of out-of-pocket expenses. There are no formal or informal arrangements or agreements to compensate directors for services provided as a director.

Stock Option Grants

Poverty Dignified did not grant any stock options to the executive officer during the year ended August 31, 2017. Poverty Dignified has also not granted any stock options to the Executive Officers since incorporation.

Employment Agreements

We have agreed to the following compensation to our officers and employees. We currently do not have any written employment agreements.

Stock Based Compensation

Total stock compensation expense since inception related to the initial common stock issued to the founders and others is $6,081,000.

2015 and Prior

When the company was organized in September of 2013, John K. Lowther was granted 1,500,000 founders shares at par value of .0001 for services already rendered in the start-up development and growth of the company. He was also granted 500,000 additional shares at par value in exchange for services as CEO. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $2,000,000. Mr. Lowther’s services to date have included development of our intellectual property, development of our business plan, negotiation of bringing our services to the African marketplace, development of relationships in the African marketplace.

When the company was organized in September of 2013, Jonathan Biggs was granted 1,500,000 founders shares at par value of .0001 for services already rendered in the start-up development and growth of the company. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $1,500,000. Mr. Biggs will continue to serve in his capacity as International Business Manager, managing our franchisee setups, relationship development in the continent of Africa, and organization of business in the continent of Africa.

When the company was organized in September of 2013, George C. Critz, III, through his LLC, Enverdia, was granted 1,000,000 founders shares at par value of .0001 for services already rendered in the start-up development and growth of the company. He was also granted 450,000 additional shares at par value in exchange for services as CFO. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $1,450,000. Mr. Critz’s services to date have included services as our financial officer, development and protection of our intellectual property, as well as development with churches within the United States.

When the company was organized in September of 2013, Larry J. Blevins was granted 100,000 founders shares at par value of .0001 for services already rendered in the start-up development and growth of the company. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $100,000.

When the company was organized in September of 2013, Lloyd Bustard was granted 500,000 founders shares at par value of .0001 for services already rendered in the start-up development and growth of the company. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $500,000.

When the company was organized in September of 2013, Richard C. Elkins was granted 25,000 founders shares at par value of .0001 for services already rendered in the start-up development and growth of the company. He was also granted 75,000 additional shares at par value in exchange for services rendered in marketing, advertising and graphic design. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $100,000.

In exchange for services in church consulting and franchise sales networking, Morton Bustard was granted 100,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $100,000.

In exchange for services as VP of Operations in the Continent of Africa, Warwick Ernstzen was granted 50,000 shares at .0001 par value per share. The underlying value of stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $50,000.

In exchange for services in franchise sales and development, Steve Kaloper was granted 5,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $5,000.

In exchange networking services, Nadya Dickson was granted 1,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $1,000.

In exchange for consulting services, Sterling Interests, LLC, was granted 50,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $50,000.

2016

In exchange for consulting services, Frank Soccorsi, was granted 75,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $1.00 per share based on the sale of the stock to third parties in a private placement offering during the first half of 2014. Stock compensation expense related to services rendered was $75,000.

2017

Anthony Griffith was granted 10,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $0.75 per share based on the terms of a restricted stock agreement. Stock compensation expense under the restricted stock agreement was $7,500.

David Newman was granted 30,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $0.75 per share based on the terms of a restricted stock agreement. Stock compensation expense under the restricted stock agreement was $22,500.

Lloyd and Pamela Bustard were granted 50,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $0.75 per share based on the terms of a restricted stock agreement. Stock compensation expense under the restricted stock agreement was $37,500.

Michael and Denise Fitzsimmons were granted 10,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $0.75 per share based on the terms of a restricted stock agreement. Stock compensation expense under the restricted stock agreement was $7,500.

Randy and Renee Hollis were granted 50,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $0.75 per share based on the terms of a restricted stock agreement. Stock compensation expense under the restricted stock agreement was $37,500.

Robert and Angela Rowan were granted 25,000 shares at .0001 par value per share. The underlying value of the stock was deemed to be valued at $1.50 per share based on the terms of a restricted stock agreement. Stock compensation expense under the restricted stock agreement was $37,500.

Future Compensation

We currently do not have any future compensation agreements contemplated.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of August 31, 2017 for: (i) each of our directors; (ii) each of our executive officers: (iii) all of our directors and executive officers as a group; and (iv) all persons, to our knowledge, are the beneficial owners of more than five percent (5%) of the outstanding shares of common stock. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to the securities.

Except as indicated in footnotes to this table, we believe each person named in this table has sole voting and investment power with respect to the shares of common stock set forth opposite such person’s name. Percentage ownership is based on 8,511,850 shares of common stock outstanding on August 31, 2017.

_____________

“Beneficial ownership” means the sole or shared power to vote or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days from the date of this prospectus.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Transactions

Except as disclosed below, none of the following persons has any direct or indirect material interest in any transaction to which we are a party in the Company’s last fiscal year or in any proposed transaction to which we are proposed to be a party:

Item 14. Principal Accountant Fees and Services.

The following table sets forth fees billed to us by our independent registered public accounting firm during the years ended August 31, 2017 and 2016 for: (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly consolidated financial statements; (ii) services by our independent registered public accounting firms that are reasonably related to the performance of the audit or review of our consolidated financial statements and that are not reported as Audit Fees; (iii) services rendered in connection with tax compliance, tax advice and tax planning; and (iv) all other fees for services rendered.

AUDIT FEES. Consists of fees billed for professional services rendered for the audit of the Company’s consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are provided by Spiegel Accountancy Corp.

AUDIT-RELATED FEES. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of consolidated financial statements and are not reported under “Audit Fees.” There were no Audit-Related services provided in fiscal 2017 or 2016.

TAX FEES. Consists of fees billed for professional services for tax preparation and other tax services. Tax services for 2017 and 2016 will be/were rendered by a firm other than our principal auditor.

ALL OTHER FEES. Consists of fees for products and services other than the services reported above. There were no other fees during fiscal 2017 or 2016.

Audit Committee Policies

The Board of Directors is solely responsible for the approval in advance of all audit and permitted non-audit services to be provided by the independent auditors (including the fees and other terms thereof), subject to the de minimus exceptions for non-audit services provided by Section 10A(i)(1)(B) of the Exchange Act, which services are subsequently approved by the Board of Directors prior to the completion of the audit. None of the fees listed above are for services rendered pursuant to such de minimus exceptions.

Item 15. Exhibits and Financial Statement Schedules.

Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable or the amounts are immaterial, not required, or the required information is presented in the consolidated financial statements and notes thereto in Item 8 of Part II above.

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.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Poverty Dignified, Inc.

Hurst, Texas

We have audited the accompanying consolidated balance sheets of Poverty Dignified, Inc. and subsidiary (the “Company”) as of August 31, 2017 and 2016, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years ended August 31, 2017 and 2016. Poverty Dignified, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Poverty Dignified, Inc. as of August 31, 2017 and 2016, and the results of its operations and its cash flows for the years ended August 31, 2017 and 2016, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has experienced recurring losses from operations and its total liabilities exceed its total assets. The Company has a net loss from operations of $1,540,175 for the year ended August 31, 2017. As of August 31, 2017, the Company has cash of $7,146, a working capital deficit of $1,553,415, and a stockholders’ deficit of $1,553,351. This raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters also are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Spiegel Accountancy Corporation

Pleasant Hill, California

December 13, 2017

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

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

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

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

NOTE 1 – NATURE OF OPERATIONS

Poverty Dignified, Inc. was incorporated in the State of Nevada on September 27, 2013, and is headquartered in Hurst, Texas. The Company has established itself as a renewable energy company, incubating franchise business concepts designed to affect the individual, community and local economy in rural and peri-urban areas across the globe. 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. These entities are collectively referred herein to as Poverty Dignified, or the Company.

NOTE 2 - GOING CONCERN AND MANAGEMENT’S PLANS

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 August 31, 2017, the Company had cash of $7,146, a working capital deficit of $1,553,415 and a stockholders’ deficit of $1,553,351. The Company has incurred net losses from start-up costs and minimal operations since inception to August 31, 2017 and continues to expend cash in order to accomplish its business objectives. Based on the Company’s current progress in its business plan, it has not successfully implemented its plan to mitigate the going concern issue. Specifically, the Company has only one operational unit and has not been effective in reducing operating expenses. As a result, as of August 31, 2017, 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 additional 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 accrue for management salaries and defer certain payments and will continue to borrow funds from affiliates as needed. From the Company’s inception through August 31, 2017, the Company has one operational franchise unit. As such, the Company has recognized franchise revenue of $146,180 and associated franchise expenses and cost of product revenue of $143,829 from inception through August 31, 2017.

The Company’s primary source of operating funds since inception has been equity financings through a private placement. In its private placement memorandum dated January 2014 and closed November 2014, the Company raised $1,182,180 for its operations, research and development, and marketing of its franchise opportunities.

Since our original Private Placement Offering was not sufficient to capitalize the Company, Poverty Dignified, Inc. recently closed a Private Investment in Public Equity transaction, in which the Company offered 1,000,000 unregistered shares to accredited investors at a discounted price of $0.75 per share to raise an additional $750,000 of growth capital. Under this offering, the Company sold 999,970 shares of common stock for proceeds of $749,977, including 784,302 shares of common stock for proceeds of $588,226 during the year ended August 31, 2017. Poverty Dignified, Inc. is currently doing a Private Placement Memorandum, in which the Company is offering 2,000,000 shares at a price of $1.50 per share to raise an additional $3,000,000 in growth capital. In this Private Placement Memorandum, the Company has the option to sell shares at a price lower than the $1.50 per share. Through August 31, 2017, under this Private Placement Memorandum, the Company has issued 144,000 shares of common stock at a discounted price of $0.75 per share for proceeds of $108,000 and has issued 49,700 shares of common stock at the offering price of $1.50 per share for proceeds of $74,550.During the second or third quarter of fiscal year 2018, Poverty Dignified, Inc. plans to ask for approval for a secondary offering. Upon approval, the Company plans to register 1,000,000 shares in an S-1 registration. Once “effective” by the SEC, these shares will be made available to the public market.

The Company has borrowed funds from a related party for working capital purposes and $486,373 remains outstanding under notes payable to this related party at August 31, 2017.

During the year ended August 31, 2017, the Company entered into two separate convertible note payable agreements, which provided net proceeds of $125,075, after payment of debt issuance costs totaling $24,925.

Subsequent to August 31, 2017, we have entered into two separate convertible note payable agreements for $55,000 and $48,000, respectively. After the payment of debt issuance costs totaling $15,250, net proceeds to the Company were $87,750.

Under the second phase of its expanded franchise capacity, Poverty Dignified, Inc’s wholly-owned subsidiary, My Power Solutions, Inc., is currently in the final stages of completing its involvement in a Public Private Partnership with the Development Bank of South Africa. Should this Public Private Partnership befully executed, My Power Solutions, Inc. will have the responsibility of placing 240 franchise units in rural communities over the next thirty-six months, beginning in early 2018. It will be working within a consortium, headed by InovaSure, to bring electricity, connectivity and digital education to 240,000 homes. This Public Private Partnership would impact our near-term operational cash flow significantly though upfront development funds, projected to be $150,000 per location, or $36,000,000, over the next thirty-six months. Additionally, MPS would receive ongoing revenues to manage and maintain each of the 240 franchise units over a twenty-five year period.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements and with Form 10-K and article 8 of the Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred.

The consolidated financial statements include the accounts of Poverty Dignified, Inc. and My Power Solutions, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

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 various 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. At times, cash balances may exceed insured limits.

Prepaid Inventory

Prepaid inventory consisted of amounts paid in advance to a supplier for products related to the sale of franchise units that had not been received or for which neither the Company nor the franchisee had taken ownership. Due to a change in product specifications for its franchise units, during the year ended August 31, 2017, the Company expensed its prepaid inventory as an advertising expense.

Prepaid Expenses and Other Current Assets

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

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 August 31, 2017, property and equipment consists of computer equipment and solar equipment for containers with a total cost of $55,673. As of August 31, 2016, property and equipment solely consisted of computers at a cost of $1,608. Accumulated depreciation as of August 31, 2017 and 2016 is $2,168 and $1,333, respectively. Depreciation expense for the years ended August 31, 2017 and 2016 was $835 and $535, respectively.

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.

Revenue Recognition

The Company recognizes revenue once pervasive evidence that an agreement exists; the product and/or service have been rendered; the fee is fixed and determinable; and collection of the amount due is reasonably assured.

Franchise Revenue

Our franchise-related revenue is comprised of three separate and distinct earnings processes: area development fees, initial franchise fees, and continuing royalty payments.

Area Development Fees – Our area development fee consists of an initial, non-refundable payment of $15,000 per unit to be developed in consideration for the services we perform in preparation of executing each area development agreement. $5,000 of this initial area development fee relates to services, which include, but are not limited to, conducting market and territory analysis, are completed prior to our execution of the area development agreement and receipt of the corresponding area development fee. As a result, we recognize this portion of the area development fee as revenue upon receipt. The remaining $10,000 is allocated to the opening of the franchise and is recognized in accordance with our revenue recognition policy on initial franchise fee revenue noted below. From inception through August 31, 2017, the Company had not executed any area development agreements.