UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: November 30, 2015

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

For the transition period from: _____________ to _____________

Comission file number: ____________ 

10617 Kettering Drive, Suite 219

Charlotte, NC 28226

Telephone No.: (719) 761-1869

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

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

Check whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ¨ No x (Not required by smaller reporting companies)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting Company.

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

As of January 13, 2016, there were 7,038,180 shares of the registrant's common stock issued and outstanding.

Poverty Dignified, Inc.

Quarterly Report on Form 10-Q

Table of Contents

PART I - FINANCIAL INFORMATION

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

Poverty Dignified, Inc.
Consolidated Statements of Operations
Unaudited

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

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

Poverty Dignified, Inc.
Consolidated Statements of Cash Flows
Unaudited

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

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Poverty Dignified, Inc. was incorporated in the State of Nevada on September 27, 2013, and is headquartered in Charlotte, North Carolina. The Company established itself as a business incubation company developing micro-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 concept providing cell phone charging, LED lighting systems and MP3 players for education and entertainment. 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. These entities are collectively referred herein to as Poverty Dignified, or the Company.

The Company is currently exploring market opportunities in South Africa and Kenya.

Basis of Presentation

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

The unaudited interim consolidated financial statements should be read in conjunction with the Company's Form 10-K, which contains the audited financial statements and notes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations, for the year ended August 31, 2015. The interim results for the three months ended November 30, 2015 are not necessarily indicative of results for the full fiscal year.

The unaudited consolidated financial statements include the accounts of Poverty Dignified, Inc. and My Power Solutions, Inc. Africhise, Inc. has had no activity since its inception. All significant intercompany accounts and transactions have been eliminated in consolidation.

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 November 30, 2015, the Company had cash of $1,253; working capital deficit of $503,805 and a stockholders' deficiency of $503,128. The Company has not generated any revenues from ongoing operations since inception to November 30, 2015, has incurred net losses since inception 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 sold one unit that is not operational and has not been effective in reducing operational expenses. As a result, as of November 30, 2015, 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.

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION (continued)

Going Concern and Management's Plans (continued)

The Company needs to sell additional franchises or 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 Officer salaries and will defer payments until the franchise sales are finalized and has the ability to borrow funds from affiliates as needed. Management believes that it will be successful in closing the pending franchise sales; however, no assurance can be provided that the Company will be able to do so.

The Company also has a history of raising capital and has the ability to continue to raise capital through the issuance of stock if needed. 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. The Company plans to commence a private placement offering of up to $750,000 but there are no assurances or guarantees that it will be able to raise any of or the full offering. The Company also has the ability to sell Master Franchise Agreements for various territories throughout Africa, which could generate sufficient cash to fund working capital needs. 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.

During fiscal year 2016, 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.

Risks and Uncertainties

Our initial market will be South Africa and Kenya. Poverty Dignified's activities are subject to significant risks and uncertainties, including failing to secure funding to operationalize the franchise business concept.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates.

Prepaid Inventory

Prepaid inventory consists of amounts paid in advance to a supplier for products related to the sale of franchise units that have not been received or for which the Company nor the franchisee have taken ownership.

Prepaid Expenses and Other Current Assets

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

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 November 30, 2015 and August 31, 2015, property and equipment solely consists of computers. Accumulated depreciation as of November 30, 2015 and August 31, 2015 was $931 and $798, respectively and depreciation expense for each of the three month periods ended November 30, 2015 and 2014 was $133.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 CEO and CFO.

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

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. As of November 30, 2015, the Company had not executed any area development agreements.

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. As of November 30, 2015 and August 31, 2015, the Company had sold one franchise but has yet to complete the services required to recognize the revenue. As such, the Company has recorded deferred revenue of $15,000 and a franchise liability of $90,000 at November 30, 2015 and August 31, 2015.

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.

Advertising

Advertising expenditures are charged to expense as incurred. Total advertising expense for the three month periods ended November 30, 2015 and 2014 was $-0- and $6,895, respectively, and is included in general and administrative expenses.

Research and Development

Research and development expenditures are charged to expense as incurred.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

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

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

The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be classified as additional income taxes in the consolidated statements of income.

Tax years 2013 and forward remain open to examination under United States statute of limitations. Management is not aware of any material uncertain tax positions and no liability has been recognized at November 30, 2015 or August 31, 2015.

Earnings Per Share

Basic Earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding.

Recent Accounting Pronouncements

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

NOTE 3 - STOCKHOLDERS' EQUITY

In September 2013, the Company authorized the issue of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock at a par value of $.0001. There are a total of 7,038,180 shares of common stock issued and outstanding at November 30, 2015 and August 31, 2015. No preferred stock has been issued.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

Under the terms of the Company's agreement with a supplier, as of November 30, 2015 and August 31, 2015, the Company was committed to the purchase of a total of 1,500 kits, 2 solar power collection systems, 260 battery charging trays, and 2,000 power packs. These products will be allocated in part or in full to the production of 3 full franchise units. The total commitment for the products is $155,155, of which $77,578 was paid prior to August 31, 2015 and is included in prepaid inventory at November 30, 2015 and August 31, 2015. The remaining balance is due upon receipt of the products.

The Company maintains a month to month lease on its corporate headquarters location.

NOTE 5 – INCOME TAXES

Due to the operating loss and the inability to recognize an income tax benefit, there is no provision for current or deferred federal or state income taxes for the period from inception through November 30, 2015.

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

The Company's total deferred tax asset, calculated using federal and state effective tax rates is as follows: 

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

The reconciliation of income taxes computed at the federal statutory income tax rate of 35% to total income taxes for the three months ended November 30, 2015 and 2014 is as follows:

NOTE 5 – INCOME TAXES (continued)

Because of the Company's lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by $54,894 and $119,932 during the three months ended November 30, 2015 and 2014, respectively.

As of November 30, 2015, the Company had a federal and state net operating loss carryforward in the amount of $1,185,102. The net operating loss carryforward differs from the accumulated deficit incurred to date primarily due to the non-deductibility of stock compensation and organizational costs capitalized for income tax purposes.

NOTE 6 – RELATED PARTY TRANSACTIONS

During the three months ended November 30, 2015, the Company was reimbursed $27,524 by Power It Perfect, Inc., an affiliated company primarily owned by John K. Lowther (CEO and Director of the Company) and George C. Critz, III (CFO and Director of the Company) for the use of Company employees and various other expenses. This amount has been recorded as an offset to those expenses in the accompanying consolidated statements of operations. There were no such use of resources or reimbursements during the three months ended November 30, 2014.

Lloyd Bustard, a shareholder who owns 7.1% of the outstanding common stock at November 30, 2015, did not provide any consulting services during the three months ended November 30, 2015, but provided consulting services of $39,214 during the three months ended November 30, 2014.

Due to Officer

On March 13, 2015, John K. Lowther, Chief Executive Officer and Director, advanced the Company $12,916. The balance outstanding at November 30, 2015 and August 31, 2015 is $5,278 and $6,623, respectively. This advance does not bear interest.

Notes Payable – Related Party

During the year ended August 31, 2015, Power It Perfect, Inc. loaned the Company $194,500 for working capital purposes in exchange for three promissory notes of $175,000, $12,000 and $7,500, respectively, that all bear interest at five percent. During the three months ended November 30, 2015, Power It Perfect, Inc. loaned the Company and additional $31,184 for working capital purposes in exchange for five promissory notes of $3,251, $1,000, $2,917, $2,016, and $22,000, respectively, that all bear interest at five percent. All the notes are non-collateralized and due on demand, as soon as the Company has a stream of revenue available for repayment. The balance of the notes payable was $225,684 at November 30, 2015 and $194,500 at August 31, 2015. Accrued interest on the notes, which is included in accrued expenses, totaled $4,619 at November 30, 2015 and $2,147 at August 31, 2015. There are no conversion provisions associated with the notes.

NOTE 7 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through January 13, 2016, which is the date when these consolidated financial statements were issued, and is aware of none requiring disclosure, except as noted below.

In December 2015 Power It Perfect, Inc. loaned the Company $58,608 in exchange for 6 promissory notes that all bear interest at five percent. The loans are non-collateralized and are due on demand.

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

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

Background Overview

Poverty Dignified, Inc. is incorporated in the State of Nevada in September 2013. We were formed to operate as a micro-franchise business incubation company servicing the energy needs of poor households 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 charging station for our wholly owned subsidiary, My Power Solutions, Inc, and developing our franchise agreement. On March 30, 2015, we sold our first franchise for $105,000. 

Since our inception on September 27, 2013 to November 30, 2015, we have not generated any revenues and have incurred a loss of $7,541,308, due in part from recording stock compensation for issuing our stock at par value to certain insiders in exchange for cash and services. Although we do not value the services at this price, we value the stock at a $1 based on a Private Placement Memorandum where we raised $1,182,180 at a $1 per share. During this time since our inception, we incurred operating expenses of $7,541,308 resulting in a cumulative loss of $7,541,308; expenses, not including the expense of our stock value for services, were incurred totaling $1,685,894 relating to research and development, professional fees, and all other general and administrative expenses. For the three months ended November 30, 2015, we incurred expenses of $156,840. Since inception we have been developing our business plan, advertising our potential franchise model, paying professional fees and developing our charging stations. 

Going Concern

As of November 30, 2015, the Company had cash of $1,253; working capital deficit of $503,805 and a stockholders' deficiency of $503,128. The Company has not generated any revenues from ongoing operations since inception to November 30, 2015, has incurred net losses since inception 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 sold one unit that is not operational and has not been effective in reducing operational expenses. As a result, as of November 30, 2015, 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'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. 

The Company needs to sell additional franchises or raise additional capital, reduce expenses and curtail cash outflows in order to be able to accomplish its business objectives. The Company intends to sell additional franchises which will raise adequate cash to accomplish its business plan. In the interim, the Company will accrue for Officer salaries and will defer payments until the franchise sales are finalized and has the ability to borrow funds from affiliates as needed. Management believes that it will be successful in closing the pending franchise sales; however, no assurance can be provided that the Company will be able to do so.

Results of Operations

For the three months ended November 30, 2015

There were no revenues for the three months ended November 30, 2015. There was a net loss of $156,840.

Our expenses for the three months ended November 30, 2015 were related to research and development of $7,500, professional fees of $4,906, and general and administrative costs of $144,434. General and administrative costs primarily consisted of payroll expenses of $130,972. $127,208 of the payroll expenses related to amounts accrued for, but not paid to, the Company's CEO and CFO.

For the three months ended November 30, 2014

There were no revenues for the three months ended November 30, 2014. There was a net loss of $342,664.

Our expenses for the three months ended November 30, 2014 were related to research and development of $58,575, professional fees of $92,735, and general and administrative costs of $191,354. General and administrative costs primarily consisted of payroll expenses of $135,708, travel of $24,568 and advertising of $6,895.

Liquidity and Capital Resources

The Company had $573 in cash and a balance of $82,368 in prepaid expenses at August 31, 2015. As of November 30, 2015 the Company had a cash balance of $1,253 and $78,720 of prepaid expenses. Additional cash will be necessary to continue the development of our business plan, roll out of the sales of our franchises in My Power Solutions, travel expenses for our management to Africa to deploy our business plan, research and development, and relationship development with potential franchisees.

We are currently exploring market opportunities in Kenya and South Africa. From inception to November 30, 2015, we have expensed $7,541,308 of which $5,855,414 was non-cash compensation and $1,685,894 was other start-up and operational costs. 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 have valued the stock at $1 per share based on our Private Placement price of $1 per share that commenced fundraising in January 2014 and closed in November 2014. In March 2015, we sold our first franchise for $105,000. We believe we will continue selling franchises over the next 12 months and this will provide for our expenses. 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. Thus, we believe that we will see a significant reduction in our monthly burn rate now that we have moved into an operational stage and out of a development stage. We define burn rate as the rate which we spend capital in excess of revenues.

We also have a history of raising capital and have the ability to continue to raise capital through the issuance of stock if needed. In our private placement memorandum dated January 2014 and closed November 2014, we raised $1,182,180 for operations, research and development, and marketing of franchise opportunities. $435,144 was raised during the three month period ended November 30, 2014. We have the ability to sell Master Franchise Agreements for various territories throughout Africa, generating sufficient cash to fund working capital needs. 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, and thus contributing to the revenues and profitability of Poverty Dignified as a whole.

As of November 30, 2015, we had cash of $1,253 and have had a net increase in cash of $680 during the three months ended November 30, 2015. We will need to find additional sources of capital to continue. We believe in the near future we will generate revenues from the deployment of our franchises. We are substantially complete with our research and development activities as it relates to My Power Solutions and our franchise operations in Africa. We do not expect to incur any additional significant research and development expenses at this time with respect to the aforementioned My Power Solutions business concept. We believe we will begin generating revenues under the My Power Solutions business concept in 2016 of which there can be no guarantee. However, if we want to develop additional franchising concepts, we will need to reinvest much of our net income into research and development. 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 and to open franchises in South Africa and over time in Kenya in 2016. We plan to commence a private placement offering of up to $750,000 pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended (the "Securities Act"). We cannot provide any assurance or guarantee that we will be able to raise the full amount or any additional funds under this offering. 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.

Poverty Dignified, Inc. plans sometime in the second quarter 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.

Equity Distribution to Management

Since our incorporation, we have raised capital through private sales of our common equity. As of November 30, 2015 we have issued 5,856,000 shares of our common stock to various shareholders, in exchange for cash and services. Since inception, we have recognized total expense of $5,855,414. No such expenses were recognized during the three months ended November 30, 2015 or 2014.

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

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

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 January 13, 2016, while we have hired a third party consultant to help us with our public reporting and disclosures we have not taken action to correct the material weaknesses identified above in our internal control over financial reporting. Once the Company has additional sales activities and has sufficient personnel available, then our Board of Directors, in connection with the aforementioned weaknesses, will implement the following remediation measures:

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

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

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

If we are able to raise capital through our planned $750,000 private placement offering pursuant to Rule 506 of Regulation D of the Securities Act or generate sufficient revenues through franchise sales, we anticipate having sufficient capital.we anticipate that these initiatives will be at least partially, if not fully, implemented by August 31, 2016. Additionally, we plan to test our updated controls and remediate our deficiencies by August 31, 2016.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

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

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

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

Item 6. Exhibits

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.

19