Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2019 | Jul. 24, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Poverty Dignified, Inc. | |
Entity Central Index Key | 0001591615 | |
Document Type | 10-Q/A | |
Document Period End Date | May 31, 2019 | |
Amendment Flag | true | |
Amendment Description | We are filing this Amendment No. 1 on Form 10-Q/A to amend and restate the following items of our Quarterly Report on Form 10-Q for the quarter ended February 28, 2019 as originally filed with the Securities and Exchange Commission on April 15, 2019 (the Original Form 10-Q ): We removed a sentence stating that we had no operations at the date of the filing. Additionally, we have also updated the signature page, the certifications of our Chief Executive Officer and Chief Financial Officer in Exhibits 31.1, 31.2 and 32. No other sections were affected, but for the convenience of the reader, this report on Form 10-Q/A restates in its entirety, as amended, our Original Form 10-Q. This report on Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way other than as noted above. | |
Current Fiscal Year End Date | --08-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Ex Transition Period | false | |
Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 175,267,834 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Shell Company | false | |
Entity File Number | 000-55558 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Current assets | ||
Cash | $ 40,927 | $ 1,819 |
Prepaid expenses and other current assets | 6,221 | 10,092 |
Current assets of discontinued operation | 2,190 | 2,174 |
Total current assets | 49,338 | 14,085 |
Total assets | 49,338 | 14,085 |
Current liabilities | ||
Accounts payable | 37,714 | 53,777 |
Notes payable - related party | 1,114,207 | 1,114,207 |
Accrued payroll expenses | 1,089,950 | 1,013,863 |
Accrued expenses | 51,005 | 6,330 |
Due to former officer | 6,725 | 6,725 |
Convertible notes payable, net of discount of $23,706 and $52,831, respectively | 230,654 | 158,669 |
Derivative liabilities | 141,533 | 56,220 |
Current liabilities of discontinued operation | 407,807 | 415,371 |
Total current liabilities | 3,079,595 | 2,825,162 |
Total liabilities | 3,079,595 | 2,825,162 |
Stockholders' equity (deficit): | ||
Preferred stock par value $.0001: 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock par value $.0001: 2,490,000,000 shares authorized; 82,646,606 and 10,107,394 shares issued and outstanding as of May 31, 2019 and August 31, 2018, respectively | 8,265 | 1,011 |
Additional paid in capital | 10,057,903 | 8,812,361 |
Accumulated deficit | (13,069,212) | (11,596,587) |
Accumulated other comprehensive loss - discontinued operation | (28,213) | (27,862) |
Total stockholders' equity (deficit) | (3,030,257) | (2,811,077) |
Total liabilities and stockholders' equity (deficit) | 49,338 | 14,085 |
Series E Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock par value $.0001: 10,000,000 shares authorized; no shares issued and outstanding | $ 1,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Current liabilities | ||
Convertible notes payable, net of discount | $ 23,706 | $ 52,831 |
Stockholders' equity (deficit) | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 2,490,000,000 | 2,490,000,000 |
Common stock, shares issued | 82,646,606 | 10,107,394 |
Common stock, shares outstanding | 82,646,606 | 10,107,394 |
Series E Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000,000 | 0 |
Preferred stock, shares outstanding | 1,000,000 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
General and administrative | ||||
Payroll | $ 16,602 | $ 56,962 | $ 101,428 | $ 219,661 |
Stock-based compensation expense | 136,061 | 29,000 | 337,018 | 114,750 |
Professional fees | 36,991 | 7,550 | 118,201 | 84,117 |
Advertising | 214 | 102 | 214 | |
Travel | 577 | 2,296 | 11,596 | |
Other | 3,816 | 3,930 | 19,942 | 18,929 |
Total general and administrative | 194,047 | 97,656 | 578,987 | 449,267 |
Total operating expenses | 194,047 | 97,656 | 578,987 | 449,267 |
Net operating loss | (194,047) | (97,656) | (578,987) | (449,267) |
Interest expense | (63,662) | (54,390) | (185,224) | (175,096) |
Gain (loss) on valuation of derivative liabilities | (133,049) | 43,537 | (35,652) | (83,632) |
Loss on extinguishment of convertible notes | (550,990) | (78,340) | (569,480) | (168,431) |
Debt penalty recovery (expense) | (30,000) | 5,104 | (30,000) | (46,288) |
Loss on cashless exercise of warrants | (71,484) | (71,484) | ||
Gain on prepayment of convertible notes | 2,967 | 2,967 | ||
Net loss from continuing operations | (1,043,232) | (178,778) | (1,470,827) | (919,747) |
Loss from discontinued operation | (147,992) | (1,798) | (364,802) | |
Net loss | (1,043,232) | (326,770) | (1,472,625) | (1,284,549) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment - discontinued operation | 1,793 | (4,654) | (351) | (8,606) |
Comprehensive loss | $ (1,041,439) | $ (331,424) | $ (1,472,976) | $ (1,293,155) |
Basic and diluted net loss per common share | ||||
- Continuing operations | $ (0.02) | $ (0.02) | $ (0.03) | $ (0.10) |
- Discontinued operation | (0.02) | 0 | (0.04) | |
Net loss per share | $ (0.02) | $ (0.04) | $ (0.03) | $ (0.14) |
Weighted average common shares outstanding - Basic and diluted | 47,371,379 | 9,232,394 | 46,377,000 | 9,004,622 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity (Deficit) - USD ($) | Common Stock | Preferred Stock Series E [Member] | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning Balance, Shares at Aug. 31, 2017 | 8,511,850 | |||||
Beginning Balance, Amount at Aug. 31, 2017 | $ 851 | $ 8,272,310 | $ (9,784,847) | $ (41,665) | $ (1,553,351) | |
Issuance of common stock, Shares | 16,800 | |||||
Issuance of common stock, Amount | $ 2 | 17,098 | 17,100 | |||
Issuance of common stock through conversion of convertible notes payable, Shares | 131,152 | |||||
Issuance of common stock through conversion of convertible notes payable, Amount | $ 13 | 126,063 | 126,076 | |||
Reclassification of beneficial conversion feature to derivative liabilities | (51,075) | (51,075) | ||||
Net Loss | (427,119) | (427,119) | ||||
Other comprehensive loss | (1,029) | (1,029) | ||||
Ending Balance, Shares at Nov. 30, 2017 | 8,659,802 | |||||
Ending Balance, Amount at Nov. 30, 2017 | $ 866 | 8,364,396 | (10,211,966) | (42,694) | (1,889,398) | |
Beginning Balance, Shares at Aug. 31, 2017 | 8,511,850 | |||||
Beginning Balance, Amount at Aug. 31, 2017 | $ 851 | 8,272,310 | (9,784,847) | (41,665) | $ (1,553,351) | |
Issuance of common stock, Shares | 6,000 | |||||
Net Loss | $ (1,284,549) | |||||
Ending Balance, Shares at May. 31, 2018 | 9,497,394 | |||||
Ending Balance, Amount at May. 31, 2018 | $ 950 | 8,668,507 | (11,069,396) | (50,271) | (2,450,210) | |
Beginning Balance, Shares at Nov. 30, 2017 | 8,659,802 | |||||
Beginning Balance, Amount at Nov. 30, 2017 | $ 866 | 8,364,396 | (10,211,966) | (42,694) | (1,889,398) | |
Issuance of common stock through conversion of convertible notes payable, Shares | 132,592 | |||||
Issuance of common stock through conversion of convertible notes payable, Amount | $ 13 | 63,931 | 63,944 | |||
Stock-based compensation, Shares | 175,000 | |||||
Stock-based compensation, Amount | $ 17 | 85,733 | 85,750 | |||
Net Loss | (530,660) | (530,660) | ||||
Other comprehensive loss | (2,923) | (2,923) | ||||
Ending Balance, Shares at Feb. 28, 2018 | 8,967,394 | |||||
Ending Balance, Amount at Feb. 28, 2018 | $ 896 | 8,514,060 | (10,742,626) | (45,617) | (2,273,287) | |
Issuance of common stock through conversion of convertible notes payable, Shares | 430,000 | |||||
Issuance of common stock through conversion of convertible notes payable, Amount | $ 44 | 125,457 | 125,501 | |||
Stock-based compensation, Shares | 100,000 | |||||
Stock-based compensation, Amount | $ 10 | 28,990 | 29,000 | |||
Net Loss | (326,770) | (326,770) | ||||
Other comprehensive loss | (4,654) | (4,654) | ||||
Ending Balance, Shares at May. 31, 2018 | 9,497,394 | |||||
Ending Balance, Amount at May. 31, 2018 | $ 950 | 8,668,507 | (11,069,396) | (50,271) | (2,450,210) | |
Beginning Balance, Shares at Aug. 31, 2018 | 10,107,394 | |||||
Beginning Balance, Amount at Aug. 31, 2018 | $ 1,011 | 8,812,361 | (11,596,587) | (27,862) | (2,811,077) | |
Stock-based compensation, Shares | 1,288,758 | |||||
Stock-based compensation, Amount | $ 129 | 200,828 | 200,957 | |||
Net Loss | (363,268) | (363,268) | ||||
Other comprehensive loss | (2,973) | (2,973) | ||||
Ending Balance, Shares at Nov. 30, 2018 | 11,396,152 | |||||
Ending Balance, Amount at Nov. 30, 2018 | $ 1,140 | 9,013,189 | (11,959,855) | (30,835) | (2,976,361) | |
Beginning Balance, Shares at Aug. 31, 2018 | 10,107,394 | |||||
Beginning Balance, Amount at Aug. 31, 2018 | $ 1,011 | 8,812,361 | (11,596,587) | (27,862) | $ (2,811,077) | |
Issuance of common stock for exercise of warrants, Shares | 3,107,983 | |||||
Net Loss | $ (1,472,625) | |||||
Ending Balance, Shares at May. 31, 2019 | 82,646,606 | 1,000,000 | ||||
Ending Balance, Amount at May. 31, 2019 | $ 8,265 | $ 1,000 | 10,057,903 | (13,069,212) | (28,213) | (3,030,257) |
Beginning Balance, Shares at Nov. 30, 2018 | 11,396,152 | |||||
Beginning Balance, Amount at Nov. 30, 2018 | $ 1,140 | 9,013,189 | (11,959,855) | (30,835) | (2,976,361) | |
Issuance of common stock through conversion of convertible notes payable, Shares | 700,000 | |||||
Issuance of common stock through conversion of convertible notes payable, Amount | $ 70 | 35,930 | 36,000 | |||
Net Loss | (66,125) | (66,125) | ||||
Other comprehensive loss | 829 | 829 | ||||
Ending Balance, Shares at Feb. 28, 2019 | 12,096,152 | |||||
Ending Balance, Amount at Feb. 28, 2019 | $ 1,210 | 9,049,119 | (12,025,980) | (30,006) | (3,005,657) | |
Issuance of common stock through conversion of convertible notes payable, Shares | 67,352,971 | |||||
Issuance of common stock through conversion of convertible notes payable, Amount | $ 6,735 | 802,559 | 809,294 | |||
Stock-based compensation, Shares | 89,500 | 1,000,000 | ||||
Stock-based compensation, Amount | $ 9 | $ 1,000 | 135,052 | 136,061 | ||
Issuance of common stock for exercise of warrants, Shares | 3,107,983 | |||||
Issuance of common stock for exercise of warrants, Amount | $ 311 | 71,173 | 71,484 | |||
Net Loss | (1,043,232) | (1,043,232) | ||||
Other comprehensive loss | 1,793 | 1,793 | ||||
Ending Balance, Shares at May. 31, 2019 | 82,646,606 | 1,000,000 | ||||
Ending Balance, Amount at May. 31, 2019 | $ 8,265 | $ 1,000 | $ 10,057,903 | $ (13,069,212) | $ (28,213) | $ (3,030,257) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
May 31, 2019 | Nov. 30, 2018 | May 31, 2018 | Nov. 30, 2017 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Cash Flows From Operating Activities | |||||||
Net loss from continuing operations | $ (1,043,232) | $ (178,778) | $ (1,470,827) | $ (919,747) | |||
Loss from discontinued operation | (147,992) | (1,798) | (364,802) | ||||
Net loss | (1,043,232) | $ (363,268) | (326,770) | $ (427,119) | (1,472,625) | (1,284,549) | |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities - continuing operations: | |||||||
Stock-based compensation expense | 136,061 | 29,000 | 337,018 | 114,750 | |||
Amortization of debt discounts | 114,946 | 129,934 | |||||
Loss on valuation of derivative liabilities | 133,049 | (43,537) | 35,652 | 83,632 | |||
Loss on extinguishment of convertible notes | 550,990 | 78,340 | 569,480 | 168,431 | |||
Debt penalty expense | 30,000 | (5,104) | 30,000 | 46,288 | |||
Loss on cashless exercise of warrants | 71,484 | 71,484 | |||||
Gain on prepayment of convertible notes | (2,967) | (2,967) | |||||
Changes in operating assets and liabilities: | |||||||
Prepaid expenses and other current assets | 3,871 | 5,658 | |||||
Accounts payable | (16,063) | (10,226) | |||||
Accrued payroll expenses | 76,087 | 193,644 | |||||
Accrued expenses | 62,939 | 19,482 | |||||
Net cash used in operating activities - continuing operations | (185,413) | (171,121) | |||||
Adjustments to reconcile loss from discontinued operation to net cash used in operating activities - discontinued operation: | |||||||
Loss on impairment of property and equipment of discontinued operation | 54,141 | ||||||
Changes in discontinued operation assets and liabilities | (7,580) | 38,727 | |||||
Net cash used in operating activities - discontinued operation | (9,378) | (271,934) | |||||
Net cash used in operating activities | (194,791) | (443,055) | |||||
Cash Flows From Financing Activities | |||||||
Proceeds from notes payable - related party | 580,800 | ||||||
Payments on notes payable - related party | (11,543) | ||||||
Advances from (payments to) former officer, net | (219) | ||||||
Issuance of common stock | 17,100 | ||||||
Proceeds from convertible notes payable | 240,250 | 186,500 | |||||
Repayments of convertible notes payable | (301,560) | ||||||
Debt issuance costs | (6,000) | (19,500) | |||||
Net cash provided by financing activities - continuing operations | 234,250 | 451,578 | |||||
Net cash provided by financing activities | 234,250 | 451,578 | |||||
Effect of foreign currency translation - discontinued operation | (351) | (8,606) | |||||
Net increase (decrease) in cash | 39,108 | (83) | |||||
Cash - beginning of period | $ 1,819 | $ 2,039 | 1,819 | 2,039 | $ 2,039 | ||
Cash - end of period | $ 40,927 | $ 1,956 | 40,927 | 1,956 | $ 1,819 | ||
Non-Cash Financing Activities: | |||||||
Debt issuance costs netted from proceeds on convertible notes payable | 26,750 | ||||||
Original issue discount in connection with convertible notes payable | 12,500 | ||||||
Issuance of common stock through conversion of convertible notes payable | 845,294 | 315,521 | |||||
Reclassification of beneficial conversion feature to derivative liabilities | 51,075 | ||||||
Supplementary Disclosure Of Cash Flow Information | |||||||
Cash paid during the period for interest | 39,516 | ||||||
Cash paid during the period for income taxes |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION | Poverty Dignified, Inc. was incorporated in the State of Nevada on September 27, 2013, and is headquartered in Belmont, North Carolina. The Company was established as a renewable energy company, incubating solar technologies to establish electrification, education, connectivity and community development infrastructures in rural communities across the globe to empower the individual, community and local economy. My Power Solutions, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc., was incorporated in the State of Nevada on March 13, 2014 as a franchise business opportunity in the United States and Global Markets. Africhise, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc. is a Delaware Corporation, and was formed on August 28, 2015 to be the franchise management arm of My Power Solutions, Inc's franchise operations. My Power Solutions Bahamas, Inc., a wholly-owned subsidiary of My Power Solutions, Inc., is a Delaware Corporation, and was formed on June 14, 2018 to establish itself as a renewable energy solutions company in the Bahamas. B4dignity, Inc., a wholly-owned subsidiary of Poverty Dignified, Inc. is a Delaware Corporation, and was formed on January 18, 2019 to be a cause marketing company. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they may not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The unaudited interim consolidated financial statements are condensed and should be read in conjunction with the Company’s Form 10-K, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the year ended August 31, 2018. The interim results for the nine months ended May 31, 2019 are not necessarily indicative of results for the full fiscal year. The consolidated financial statements include the accounts of Poverty Dignified, Inc., My Power Solutions, Inc., Africhise, Inc., and My Power Solutions Bahamas, Inc., and B4dignity, Inc. However, My Power Solutions Bahamas, Inc. and B4dignity, Inc. have yet to establish operations and have minimal activity to date. All significant intercompany accounts and transactions have been eliminated in consolidation. These entities are collectively referred to herein as Poverty Dignified, or the Company. In May 2018, following an operational review, the Company decided to withdraw all operations of My Power Solutions, Inc. in South Africa. With a lack of significant revenues and higher than expected expenses due to training on-the-ground personnel and the implementation of solar installations, plus the instability of the political environment, the established operating structure and initial business plan was not sustainable. The decision to cease the operations of My Power Solutions, Inc. in rural South African communities represents a strategic shift that impacts the Company’s financial reporting and results. As such, My Power Solutions, Inc. in South Africa has been classified as a discontinued operation. Since it has been classified as a discontinued operation, the balance sheet amounts and results of operations for My Power Solutions, Inc. in South Africa have been reclassified from their historical presentation to assets and liabilities of discontinued operation on the Consolidated Balance Sheets and to discontinued operation on the Consolidated Statements of Operations and Comprehensive Loss, respectively, for all periods presented. Losses associated with impairment of assets are recorded in discontinued operation in the period of the disposal. The Consolidated Statements of Cash Flows has also been reclassified for assets, liabilities and results of the discontinued operation for all periods presented. See Note 11 for more details regarding the discontinued operation |
GOING CONCERN AND PLAN OF OPERA
GOING CONCERN AND PLAN OF OPERATION | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 2 - GOING CONCERN AND PLAN OF OPERATION | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of May 31, 2019, the Company had cash of $40,927, a working capital deficit of $3,030,257 and a stockholders’ deficit of $3,030,257. The Company has incurred net losses from start-up costs and minimal operations since inception to May 31, 2019 and has ceased operations of its subsidiary, My Power Solutions, Inc. in South Africa. As a result, as of May 31, 2019, these issues raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company needs to generate revenues or must raise additional capital, reduce expenses and curtail cash outflows in order to be able to accomplish its business plan. In the interim, the Company will continue to pursue bridge capital as needed. The Company’s $3,079,595 of total liabilities at May 31, 2019 includes $1,114,207 of notes payable to a related party, $1,089,950 of accrued payroll expenses due to current and former Company management, and $6,725 due to a former officer of the Company, all of which we believe, but cannot guarantee, we can delay payment on over the next twelve months. During the nine months ended May 31, 2019, we received net proceeds totaling $240,250 from four convertible notes payable. For all of our convertible notes payable, payments become due in the fourth quarter of fiscal year 2019 or in early fiscal year 2020, or can be repaid through conversion into the Company’s common stock. During the nine months ended, payments totaling $254,140 have been netted against the outstanding principal of convertible notes payable through the issuance of common stock. Based on our current cash position and our ability to issue additional convertible notes payable to our lending partners, we believe we have the capabilities and available resources to continue for the next twelve months, although we cannot guarantee that we will be able to do so. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash The Company maintains funds in financial institutions that are members of the Federal Deposit Insurance Corporation (“FDIC”). As such, funds are insured based on Federal Reserve limits. The Company has not experienced any losses in the past, and management believes it is not exposed to any significant credit risk on the current account balances, which do not exceed FDIC limits. At times, cash balances may exceed insured limits. The Company has determined that the functional currency of its foreign subsidiaries is the local currency. At May 31, 2019 and August 31, 2018, the Company had no cash in foreign bank accounts. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of payments primarily related to a professional fee retainer and short-term deposits. Property and Equipment, Net Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. As of May 31, 2019 and August 31, 2018, property and equipment consists of computer equipment with a total cost of $1,607 and accumulated depreciation of $1,607. There was no depreciation expense during the nine months ended May 31, 2019 and 2018. The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. As a result of the discontinued operation in South Africa, during the nine months ended May 31, 2018, the solar equipment for containers was written down to its net realizable value of $-0- and the Company recognized a loss on impairment of $54,141. Accrued Expenses Accrued expenses are recorded when incurred and primarily consist of accrued interest on notes payable and amounts due for supplies and travel. Accrued payroll consists of salary amounts earned but deferred by the Company's management team. Derivative Liabilities The Company has certain financial instruments that contain embedded derivatives. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be accounted for separately. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to income or expense as part of gain or loss on extinguishment. Advertising Advertising expenditures are charged to expense as incurred and are included in general and administrative expense. Total advertising expense for the nine months ended May 31, 2019 and 2018 was $102 and $214, respectively. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, prepaid expenses and other current assets, current assets of discontinued operation, accounts payable, accrued payroll expenses, accrued expenses, current liabilities of discontinued operation, derivative liabilities, convertible notes and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The Company adopted ASC Topic 820, Fair Value Measurements The three-level hierarchy for fair value measurements is defined as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement The following table summarizes fair value measurements by level at May 31, 2019 and August 31, 2018, measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total May 31, 2019 Liabilities Derivative liabilities $ - $ - $ 141,533 $ 141,533 August 31, 2018 Liabilities Derivative liabilities $ - $ - $ 56,220 $ 56,220 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be classified as additional income taxes in the consolidated statements of income. No interest or penalties were recognized for the years ended August 31, 2018 or 2017. Tax years 2015 and forward remain open to examination under United States statute of limitations. Management is not aware of any material uncertain tax positions and no liability has been recognized at May 31, 2019 or August 31, 2018. Earnings Per Share Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Potential dilutive securities outstanding at May 31, 2019 and August 31, 2018 include convertible notes payable convertible into approximately 81,000,000 and 149,100,000, respectively, shares of common stock and common stock purchase warrants convertible into approximately 17,800,000 and 20,900,000, respectively, shares of common stock. These items are not included in the computation of diluted earnings per share due to their anti-dilutive effect from continuing losses. Foreign Currency Translation For financial reporting purposes, the functional currency of the discontinued foreign operation of My Power Solutions, Inc. is the local currency. The assets and liabilities of the discontinued foreign operation for which the local currency is the functional currency are translated into the U.S. dollar at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the period. The accumulated foreign currency translation adjustment is presented as a component of accumulated other comprehensive loss in the consolidated statement of changes in stockholders’ equity (deficit). Gains and losses on foreign current transactions, if any, are recorded in earnings in the period of settlement. Recent Accounting Pronouncements The Company has reviewed all recently issued, but not yet effective, Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB) and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of operations. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 4 - STOCKHOLDERS' EQUITY (DEFICIT) | In September 2013, the Company authorized the issue of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock at a par value of $.0001. To meet the reserve demand for its convertible note holders and to have adequate shares available for future acquisitions, the Company increased its authorized shares of common stock to 490,000,000 on May 21, 2019 and again to 2,490,000,000 on May 28, 2019. There is a total of 82,646,606 and 10,107,394 shares of common stock issued and outstanding at May 31, 2019 and August 31, 2018, respectively. Preferred stockholders could receive preferential treatment relative to declared dividends, should there be any, and to distributions upon a liquidation event. As of May 31, 2019, no preferred stock has been issued. During the nine months ended May 31, 2019, the Company issued 1,378,258 shares of common stock for stock compensation expense of $201,718, 3,107,983 shares of common stock for loss on cashless exercise of warrants of $71,484, and 68,052,971 shares of common stock through conversions of convertible notes payable and recognized a loss on extinguishment of convertible notes of $569,480. During the nine months ended May 31, 2018, the Company issued 10,800 shares of common stock at a discounted price of $0.75 per share and 6,000 shares at a price of $1.50 for total proceeds of $17,100, 275,000 shares of common stock for stock compensation expense of $114,750, and 693,744 shares of common stock through conversions of convertible notes payable and recognized a loss on extinguishment of convertible notes of $168,431. On May 21, 2019, the Company amended its Articles of Incorporation in the State of Nevada to designate a series of preferred stock, the Series E Preferred Stock. The Company established 1,000,000 shares of the Series E Preferred Stock as available for issuance. The Series E Preferred Stock is not convertible into common stock, nor does the Series E Preferred Stock have any right to dividends and any liquidation preference. The Series E Preferred Stock entitles its holder to a number of votes per share equal to sixty-six and two thirds of the voting rights of the Company. On May 28, 2019, the Company issued 500,000 shares of its Series E Preferred Stock to its President, Matthew D. Alpeter, and 500,000 shares of its Series E Preferred Stock to its Chief Financial Officer, George C. Critz, III. The Company valued the Series E Preferred Stock issued to these officers at $135,300 based on a valuation performed by an independent valuation firm. The valuation was performed in accordance with the fair value standard set forth in ASC 820-10-35-37, Fair Value in Financial Instruments |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 5 - COMMITMENTS AND CONTINGENCIES | Based on a May 2018 performance review by Poverty Dignified Inc.’s Board of Directors, the decision was made to withdraw all operations of its wholly owned subsidiary, My Power Solutions, Inc., in South Africa. As a result, My Power Solutions South African employees and consultants have filed a dispute with The Commission for Conciliation, Mediation and Arbitration ( CCMA |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 6 - CONVERTIBLE NOTES PAYABLE | On December 21, 2017, the Company entered into a Securities Purchase Agreement whereas, Crown Bridge Partners, LLC (the "buyer") wished to purchase from the Company securities consisting of the Company’s 8% convertible notes payable for an aggregate principal amount of up to $120,000. As additional consideration, the Company issued a Common Stock Purchase Warrant (the “warrant”) for 32,000 shares at an exercise price of $1.25 over an exercise period of 5 years. Due to the provisions of the warrant, the warrant was classified as a derivative warrant liability, the fair value of which was determined using the Black-Scholes valuation model. On May 11, 2018, the Company repaid the convertible note payable. The warrant remained outstanding after the repayment of the convertible note payable (see Notes 7 and 8). On June 21, 2018, the Company issued a convertible note to Power Up Lending Group, LTD. for $128,000. The note bears interest at 12%, matures on March 30, 2019, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $3,000 debt discount due to issuance fees. The holder’s conversion option under the note does not become active until 180 days after the issuance date. During the nine months ended May 31, 2019, the holder’s option to convert became active and the Company recorded a derivative liability of $38,008, in which the fair value of the embedded derivative was determined using the Black-Scholes valuation model. The value of the derivative liability was attributed to debt discount. The debt discount is amortized over the term of the note or to the date of conversion, and the derivative liability is revalued at each conversion or reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. During the nine months ended May 31, 2019, the holder exercised its conversion options to settle the note payable of $128,000 plus accrued interest of $7,680 in exchange for 26,281,973 shares of the Company’s common stock. As a result, the Company recorded a loss on extinguishment of debt of $266,660. On July 13, 2018, the Company entered into a Securities Purchase Agreement whereas, EMA Financial, LLC (the "buyer") wishes to purchase from the Company a 10% convertible note for a principal amount of $83,500. On July 13, 2018, the Company issued a convertible promissory note (the “note”) to the buyer for $81,830 in proceeds, after a $1,670 original issue discount. The note matured on April 12, 2019. The note is convertible at a conversion price of 50% of the lowest trading price during the 10 days prior to the conversion date. At the closing, the Company paid closing costs and a consulting fee totaling $7,340. Accordingly, the Company recorded a debt discount of $9,010. At issuance, the holder’s option to convert was active and the Company recorded a derivative liability of $48,702, in which the fair value of the embedded derivative was determined using the Black-Scholes valuation model. The derivative liability was attributed to debt discount. The debt discount is amortized over the term of the note or to the date of conversion, and the derivative liability is revalued at each conversion or reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. During the nine months ended May 31, 2019, the holder effected conversions for a total of 21,217,000 shares to extinguish a portion of the convertible note payable. As a result, the Company recorded a loss on extinguishment of debt of $198,773. Also during the nine months ended May 31, 2019, in accordance with the terms of the note agreement, the Company incurred debt penalties totaling $30,000 for market loss and for failure to timely replenish reserve shares, which was added to outstanding principal balance of the convertible note payable On September 27, 2018, the Company issued a convertible note to Power Up Lending Group, LTD. for $53,000. The note bears interest at 12%, matures on July 15, 2019, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $3,000 debt discount due to issuance fees. The holder’s conversion option under the note did not become active until 180 days after the issuance date. During the nine months ended May 31, 2019, the holder exercised its conversion options to settle the note payable of $53,000 plus accrued interest of $3,180 in exchange for 11,467,898 shares of the Company’s common stock. As a result, the Company recorded a loss on extinguishment of debt of $53,788. On November 6, 2018, the Company entered into a Securities Purchase Agreement whereas, Auctus Fund, LLC (the "buyer") wishes to purchase from the Company a 12% convertible note for a principal amount of $111,000. On November 6, 2018, the Company issued a convertible promissory note (the “note”) to the buyer for $97,250 in proceeds, after a $13,750 reduction for issuance fees. The note matures on August 6, 2019. The note is convertible at a conversion price of 55% of the lowest trading price during the 25-day period ending one trading day prior to the date of the conversion notice. At the closing, the Company paid closing costs and fees totaling $6,000. Accordingly, the Company recorded a debt discount of $19,750. At issuance, the holder’s option to convert was active and the Company recorded a derivative liability of $15,063, in which the fair value of the embedded derivative was determined using the Black-Scholes valuation model. The derivative liability was attributed to debt discount. The debt discount is amortized over the term of the note or to the date of conversion, and the derivative liability is revalued at each conversion or reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. During the nine months ended May 31, 2019, the holder effected conversions for a total of 9,086,100 shares to extinguish a portion of the convertible note payable. As a result, the Company recorded a loss on extinguishment of debt of $50,259. On April 2, 2019, the Company issued a convertible note to Power Up Lending Group, LTD. for $25,000. The note bears interest at 12%, matures on February 15, 2020, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $3,000 debt discount due to issuance fees. The holder’s conversion option under the note does not become active until 180 days after the issuance date. On May 7, 2019, the Company issued a convertible note to Power Up Lending Group, LTD. for $78,000. The note bears interest at 12%, matures on March 15, 2020, and is convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. The Company also recorded a $7,000 debt discount due to issuance fees. The holder’s conversion option under the note does not become active until 180 days after the issuance date. The following table summarizes the balances of convertible notes payable: May 31, August 31, 2019 2018 Power Up Lending Group, LTD $ - $ 125,667 EMA Financial, LLC 47,928 33,002 Auctus Fund, LLC 88,481 - Power Up Lending Group, LTD 22,545 - Power Up Lending Group, LTD 71,700 - Convertible notes payable, net of discount $ 230,654 $ 158,669 Amortization of the debt discounts recorded as interest expense during the nine months ended May 31, 2019 and 2018 totaled $114,946 and $129,934, respectively. Each of the convertible notes payable include a debt covenant stating that during the period the conversion right exists, the borrower will reserve from its authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the notes issued pursuant to the securities purchase agreement. The borrower is required at all times to have authorized and reserved between five to ten times the number of shares that would be issuable upon full conversion of the note. At July 24, 2019, the Company had sufficient authorized and unissued common stock to meet the reserve demand of its convertible notes payable. |
WARRANTS EXERCISABLE INTO COMMO
WARRANTS EXERCISABLE INTO COMMON SHARES | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 7 – WARRANTS EXERCISABLE INTO COMMON SHARES | As additional consideration for its convertible note payable agreement with Crown Bridge Partners (see Note 6), the Company issued a Common Stock Purchase Warrant (the “warrant”) for 32,000 shares at an exercise price of $1.25 over an exercise period of 5 years. The warrant has full ratchet price protection, cashless exercise rights, and an anti-dilution clause. During the nine months ended May 31, 2019, the anti-dilution clause was triggered, increasing the number of common shares from 32,000 to 21,164,021 at an exercise price of $0.00189. On May 22, 2019, Crown Bridge Partners, LLC executed a cashless exercise of 3,386,243 warrant shares for 3,107,983 shares of common stock. As a result of the cashless exercise, the Company recorded a loss of $71,484. For the periods ended August 31, 2018 and May 31, 2019, a summary of the Company’s warrant activity is as follows: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Outstanding at August 31, 2017 - - - Granted 32,000 1.25000 5.00 Exercised - - - Forfeited - - - Outstanding at August 31, 2018 32,000 1.25000 4.31 Granted - - - Anti-Dilution 21,132,021 0.00189 3.56 Exercised (3,386,243 ) 0.00189 - Forfeited - - - Outstanding at May 31, 2019 17,777,778 0.00189 3.56 Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at May 31, 2019 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). As of May 31, 2019, the aggregate intrinsic value of warrants outstanding was $103,289 based on the closing market price of $0.0077 on May 31, 2019. The Company determined the warrants qualify for derivative accounting as a result of the related issuance of the convertible note payable and based on the fact that the number of shares and exercise price can change due to market changes in the price of the common stock (see Note 8). |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 8 - DERIVATIVE LIABILITIES | The Company analyzed the warrant and beneficial conversion features (“BCF”) for derivative accounting consideration under ASC 815, “ Derivatives and Hedging,” The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of May 31, 2019 and August 31, 2018. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used at May 31, 2019 and August 31, 2018: May 31, August 31, 2019 2018 Expected term 3.56 years 0.614-4.31 years Expected average volatility 270.53 % 85.45%-130.21 % Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 1.90 % 2.46%-2.74 % The following table summarizes the balances of derivative liabilities: May 31, August 31, 2019 2018 EMA Financial, LLC $ - $ 49,134 Crown Bridge Partners, LLC - Warrant 141,533 7,086 Total derivative liabilities $ 141,533 $ 56,220 The following table summarizes the change in derivative liabilities included in the balance sheet for the nine months ended May 31, 2019: Fair Value Measurements Using Significant Observable Inputs (Level 3) Balance - August 31, 2018 $ 56,220 Addition of new derivative liabilities as debt discounts, upon issuance of warrants and convertible notes 15,063 Addition of new derivative liabilities as debt discounts, upon holder's option becoming active 38,008 Reduction in derivative liabilities due to conversions of convertible notes to common stock (3,410 ) Loss on change in fair value of derivative liabilities 35,652 Balance - May 31, 2019 $ 141,533 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 9 - INCOME TAXES | Due to continued operating losses, there is a full valuation against gross deferred tax assets for the period from inception through May 31, 2019. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes. The Company’s total deferred tax asset, calculated using effective tax rates is as follows: May 31, August 31, 2019 2018 Net operating loss carryforwards $ 855,902 $ 630,534 Foreign net operating losses 275,306 274,803 Organization costs 48,502 51,916 Accrued payroll 228,701 212,932 Gross deferred tax asset 1,408,411 1,170,185 Valuation allowance (1,408,411 ) (1,170,185 ) Net deferred tax asset $ - $ - The Company has not recognized a deferred tax asset for its stock compensation expense due to its non-deductibility. The Company has no plans to pursue any tax benefits relative to its recognized stock compensation expense. The reconciliation of income taxes is computed at a rate of 21% for federal income taxes for the nine months ended May 31, 2019 and 2018, and at 28% for foreign income taxes is as follows: Nine Months Ended May 31, 2019 2018 Income tax computed at the federal statutory rate $ (308,497 ) $ (193,147 ) Foreign income tax (503 ) (102,145 ) Non-deductible stock compensation expense 70,774 24,097 Impact of rate change from 35% to 21% - 512,105 Total (238,226 ) 240,910 Change in valuation allowance 238,226 (240,910 ) Provision for income taxes $ - $ - As of May 31, 2019, the Company had net operating loss carryforwards in the amount of $5,058,962, of which $4,075,725 was incurred in the U.S. and $983,237 was the result of cumulative operating losses of the Company’s subsidiaries in South Africa, which have now been discontinued. Because of the Company’s lack of earnings history and uncertainty regarding the usability of the losses from its discontinued operation in South Africa, the net operating loss carryforwards and other deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $238,226 and decreased by $240,910 during the nine months ended May 31, 2019 and 2018, respectively. Our federal net operating losses will begin to expire in 2034 and our state tax loss carryforwards will begin to expire in 2029. Federal net operating losses incurred in 2018 and after carryforward indefinitely. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 10 - RELATED PARTY TRANSACTIONS | Due to Former Officer On March 13, 2016, John K. Lowther, now former Chief Executive Officer and Director, advanced the Company $12,916. The balance outstanding at May 31, 2019 and August 31, 2018 is $6,725. This advance does not bear interest. Notes Payable – Related Party During the year ended August 31, 2015, Power It Perfect, Inc. loaned the Company $194,500 for working capital purposes in exchange for promissory notes. During the year ended August 31, 2016, Power It Perfect, Inc. loaned the Company $208,160 for working capital purposes in exchange for promissory notes. During the year ended August 31, 2017, Power It Perfect, Inc. loaned the Company an additional $313,450 for working capital purposes in exchange for promissory notes. During the year ended August 31, 2018, Power It Perfect, Inc. loaned the Company an additional $678,358 (including $580,800 during the nine months ended May 31, 2018) for working capital and other purposes in exchange for promissory notes. All the notes bear interest at five percent per annum, are non-collateralized and due for repayment in installments as soon as the Company has a stream of revenue. Through May 31, 2019 and August 31, 2018, the Company had made repayments totaling $280,261 (including $11,543 during the nine months ended May 31, 2018.) As such, the balance of the notes payable was $1,114,207 at May 31, 2019 and August 31, 2018. Accrued interest on the notes, which is included in accrued expenses, totaled $43,968 and $2,300 at May 31, 2019 and August 31, 2018, respectively. There are no conversion provisions associated with the notes. Stock-Based Compensation During the nine months ended May 31, 2019, the Company issued 1,378,258 shares to employees of an affiliated company for services rendered to the Company. These services were valued at the market value of shares at the time of issuance. The stock-based compensation expense recognized by the Company for the nine months ended May 31, 2019 totaled $201,718. On May 28, 2019, the Company issued 1,000,000 shares of Series E Preferred Stock to its President and Chief Financial Officer. Based on an independent valuation of the fair value of these shares, the Company recognized stock-based compensation expense of $135,300 for the nine months ended May 31, 2019. During the nine months ended May 31, 2018, the Company issued 275,000 shares to employees of an affiliated company for services rendered to the Company. These services were valued at the market value of shares at the time of issuance. The stock-based compensation expense recognized by the Company for the nine months ended May 31, 2018 totaled $114,750. |
DISCONTINUED OPERATION
DISCONTINUED OPERATION | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 11 - DISCONTINUED OPERATION | In May 2018, the Company decided to withdraw all operations of My Power Solutions, Inc. in South Africa. The decision to cease the operations of My Power Solutions, Inc. in rural South African communities represents a strategic shift that impacts the Company’s financial reporting and results. As such, My Power Solutions, Inc. has been classified as a discontinued operation. The major classes of line items constituting the loss from discontinued operation are presented in the table below. Nine Months Ended May 31, 2019 2018 Revenue $ - $ - Franchise and operating expenses (1,798 ) (310,661 ) Loss on impairment of property and equipment - (54,141 ) Loss from discontinued operation $ (1,798 ) $ (364,802 ) The major components of the assets and liabilities of the discontinued operation are presented in the table below. May 31, August 31, 2019 2018 Assets: Prepaid expenses and other assets $ 2,190 $ 2,174 Current assets of discontinued operation $ 2,190 $ 2,174 Liabilities: Accounts payable $ 16,934 $ 16,812 Accrued payroll and expenses 33,874 41,560 Other liabilities 356,999 356,999 Current liabilities of discontinued operation $ 407,807 $ 415,371 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
May 31, 2019 | |
Notes to Financial Statements | |
NOTE 12 - SUBSEQUENT EVENTS | Management has evaluated subsequent events through July 24, 2019, which is the date when these consolidated financial statements were issued, and is aware of none requiring disclosure, except as follows: Since May 31, 2019, the Company has issued 1,000,000 shares of common stock to its CEO for stock-based compensation, 1,000,000 shares of its common stock to consummate the Stock Purchase Agreement noted below, 11,177,734 shares of common stock for the cashless exercise of outstanding warrants, and 79,443,494 shares of common stock for the conversion of $26,794 of principal on convertible promissory notes. On July 9, 2019, the Company entered into and consummated a Stock Purchase Agreement with Sun Ovens International, Inc. (“Sun Oven”) and its shareholders. In exchange for the issuance 1,000,000 shares of its common stock to the shareholders of Sun Oven, the Company acquired all the outstanding shares of Sun Oven, such that after the transaction, Sun Oven is a wholly-owned subsidiary of the Company. Sun Oven is a privately-held Illinois corporation engaged in the business of manufacturing and distributing sun powered devices for cooking, baking, and other functions. The Company has refocused its growth strategy and made a shift from organic growth to growth through acquisition. This acquisition marks the first step in this direction and allows the Company to vertically integrate. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
May 31, 2019 | |
Summary Of Significant Accounting Policies | |
Use of Estimates | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash | The Company maintains funds in financial institutions that are members of the Federal Deposit Insurance Corporation (“FDIC”). As such, funds are insured based on Federal Reserve limits. The Company has not experienced any losses in the past, and management believes it is not exposed to any significant credit risk on the current account balances, which do not exceed FDIC limits. At times, cash balances may exceed insured limits. The Company has determined that the functional currency of its foreign subsidiaries is the local currency. At May 31, 2019 and August 31, 2018, the Company had no cash in foreign bank accounts. |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of payments primarily related to a professional fee retainer and short-term deposits. |
Property and Equipment, Net | Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. As of May 31, 2019 and August 31, 2018, property and equipment consists of computer equipment with a total cost of $1,607 and accumulated depreciation of $1,607. There was no depreciation expense during the nine months ended May 31, 2019 and 2018. The Company periodically evaluates the fair value of fixed assets whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. As a result of the discontinued operation in South Africa, during the nine months ended May 31, 2018, the solar equipment for containers was written down to its net realizable value of $-0- and the Company recognized a loss on impairment of $54,141. |
Accrued Expenses | Accrued expenses are recorded when incurred and primarily consist of accrued interest on notes payable and amounts due for supplies and travel. Accrued payroll consists of salary amounts earned but deferred by the Company's management team. |
Derivative Liabilities | The Company has certain financial instruments that contain embedded derivatives. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be accounted for separately. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to income or expense as part of gain or loss on extinguishment. |
Advertising | Advertising expenditures are charged to expense as incurred and are included in general and administrative expense. Total advertising expense for the nine months ended May 31, 2019 and 2018 was $102 and $214, respectively. |
Fair Value of Financial Instruments | The Company’s financial instruments consist primarily of cash, prepaid expenses and other current assets, current assets of discontinued operation, accounts payable, accrued payroll expenses, accrued expenses, current liabilities of discontinued operation, derivative liabilities, convertible notes and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The Company adopted ASC Topic 820, Fair Value Measurements The three-level hierarchy for fair value measurements is defined as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement The following table summarizes fair value measurements by level at May 31, 2019 and August 31, 2018, measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Total May 31, 2019 Liabilities Derivative liabilities $ - $ - $ 141,533 $ 141,533 August 31, 2018 Liabilities Derivative liabilities $ - $ - $ 56,220 $ 56,220 |
Income Taxes | Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be classified as additional income taxes in the consolidated statements of income. No interest or penalties were recognized for the years ended August 31, 2018 or 2017. Tax years 2015 and forward remain open to examination under United States statute of limitations. Management is not aware of any material uncertain tax positions and no liability has been recognized at May 31, 2019 or August 31, 2018. |
Earnings Per Share | Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Potential dilutive securities outstanding at May 31, 2019 and August 31, 2018 include convertible notes payable convertible into approximately 81,000,000 and 149,100,000, respectively, shares of common stock and common stock purchase warrants convertible into approximately 17,800,000 and 20,900,000, respectively, shares of common stock. These items are not included in the computation of diluted earnings per share due to their anti-dilutive effect from continuing losses. |
Foreign Currency Translation | For financial reporting purposes, the functional currency of the discontinued foreign operation of My Power Solutions, Inc. is the local currency. The assets and liabilities of the discontinued foreign operation for which the local currency is the functional currency are translated into the U.S. dollar at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the period. The accumulated foreign currency translation adjustment is presented as a component of accumulated other comprehensive loss in the consolidated statement of changes in stockholders’ equity (deficit). Gains and losses on foreign current transactions, if any, are recorded in earnings in the period of settlement. |
Recent Accounting Pronouncements | The Company has reviewed all recently issued, but not yet effective, Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB) and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
May 31, 2019 | |
Summary Of Significant Accounting Policies Tables Abstract | |
Fair value liabilities measured on recurring and nonrecurring basis | Level 1 Level 2 Level 3 Total May 31, 2019 Liabilities Derivative liabilities $ - $ - $ 141,533 $ 141,533 August 31, 2018 Liabilities Derivative liabilities $ - $ - $ 56,220 $ 56,220 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 9 Months Ended |
May 31, 2019 | |
Convertible Notes Payable | |
Schedule of convertible notes payable | May 31, August 31, 2019 2018 Power Up Lending Group, LTD $ - $ 125,667 EMA Financial, LLC 47,928 33,002 Auctus Fund, LLC 88,481 - Power Up Lending Group, LTD 22,545 - Power Up Lending Group, LTD 71,700 - Convertible notes payable, net of discount $ 230,654 $ 158,669 |
WARRANTS EXERCISABLE INTO COM_2
WARRANTS EXERCISABLE INTO COMMON SHARES (Tables) | 9 Months Ended |
May 31, 2019 | |
Warrants Exercisable Into Common Shares | |
Schedule of warrant activity | Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Outstanding at August 31, 2017 - - - Granted 32,000 1.25000 5.00 Exercised - - - Forfeited - - - Outstanding at August 31, 2018 32,000 1.25000 4.31 Granted - - - Anti-Dilution 21,132,021 0.00189 3.56 Exercised (3,386,243 ) 0.00189 - Forfeited - - - Outstanding at May 31, 2019 17,777,778 0.00189 3.56 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
May 31, 2019 | |
Derivative Liabilities Tables Abstract | |
Schedule of weighted-average assumptions | May 31, August 31, 2019 2018 Expected term 3.56 years 0.614-4.31 years Expected average volatility 270.53 % 85.45%-130.21 % Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 1.90 % 2.46%-2.74 % |
Schedule of derivative liabilities at fair value | May 31, August 31, 2019 2018 EMA Financial, LLC $ - $ 49,134 Crown Bridge Partners, LLC - Warrant 141,533 7,086 Total derivative liabilities $ 141,533 $ 56,220 |
Summary of change in derivative liabilities | Fair Value Measurements Using Significant Observable Inputs (Level 3) Balance - August 31, 2018 $ 56,220 Addition of new derivative liabilities as debt discounts, upon issuance of warrants and convertible notes 15,063 Addition of new derivative liabilities as debt discounts, upon holder's option becoming active 38,008 Reduction in derivative liabilities due to conversions of convertible notes to common stock (3,410 ) Loss on change in fair value of derivative liabilities 35,652 Balance - May 31, 2019 $ 141,533 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
May 31, 2019 | |
Income Taxes Tables Abstract | |
Schedule of deferred tax assets and liabilities | May 31, August 31, 2019 2018 Net operating loss carryforwards $ 855,902 $ 630,534 Foreign net operating losses 275,306 274,803 Organization costs 48,502 51,916 Accrued payroll 228,701 212,932 Gross deferred tax asset 1,408,411 1,170,185 Valuation allowance (1,408,411 ) (1,170,185 ) Net deferred tax asset $ - $ - |
Schedule of components of income tax expense (benefit) | Nine Months Ended May 31, 2019 2018 Income tax computed at the federal statutory rate $ (308,497 ) $ (193,147 ) Foreign income tax (503 ) (102,145 ) Non-deductible stock compensation expense 70,774 24,097 Impact of rate change from 35% to 21% - 512,105 Total (238,226 ) 240,910 Change in valuation allowance 238,226 (240,910 ) Provision for income taxes $ - $ - |
DISCONTINUED OPERATION (Tables)
DISCONTINUED OPERATION (Tables) | 9 Months Ended |
May 31, 2019 | |
Discontinued Operation | |
Schedule of income (loss) form discontinued operation | Nine Months Ended May 31, 2019 2018 Revenue $ - $ - Franchise and operating expenses (1,798 ) (310,661 ) Loss on impairment of property and equipment - (54,141 ) Loss from discontinued operation $ (1,798 ) $ (364,802 ) |
Schedule of assets and liabilities of the discontinued operation | May 31, August 31, 2019 2018 Assets: Prepaid expenses and other assets $ 2,190 $ 2,174 Current assets of discontinued operation $ 2,190 $ 2,174 Liabilities: Accounts payable $ 16,934 $ 16,812 Accrued payroll and expenses 33,874 41,560 Other liabilities 356,999 356,999 Current liabilities of discontinued operation $ 407,807 $ 415,371 |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) | 9 Months Ended |
May 31, 2019 | |
Organization And Basis Of Presentation | |
State of incorporation | Nevada |
Date of incorporation | Sep. 27, 2013 |
GOING CONCERN AND PLAN OF OPE_2
GOING CONCERN AND PLAN OF OPERATION (Details Narrative) - USD ($) | 9 Months Ended | |||||||
May 31, 2019 | May 31, 2018 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | |
Cash | $ 40,927 | $ 1,819 | ||||||
Working capital deficit | (3,030,257) | |||||||
Stockholders' equity (deficit) | (3,030,257) | $ (2,450,210) | $ (3,005,657) | $ (2,976,361) | (2,811,077) | $ (2,273,287) | $ (1,889,398) | $ (1,553,351) |
Total liabilities | 3,079,595 | 2,825,162 | ||||||
Accrued payroll expenses | 1,089,950 | 1,013,863 | ||||||
Due to former officer | 6,725 | 6,725 | ||||||
Notes payable - related party | 1,114,207 | $ 1,114,207 | ||||||
Repayment of debt | 301,560 | |||||||
Proceeds from convertible notes payable | 240,250 | $ 186,500 | ||||||
Convertible Notes Payable [Member] | ||||||||
Repayment of debt | 254,140 | |||||||
Proceeds from convertible notes payable | $ 240,250 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Liabilities | ||
Derivative Liabilities | $ 141,533 | $ 56,220 |
Level 1 [Member] | ||
Liabilities | ||
Derivative Liabilities | ||
Level 2 [Member] | ||
Liabilities | ||
Derivative Liabilities | ||
Level 3 [Member] | ||
Liabilities | ||
Derivative Liabilities | $ 141,533 | $ 56,220 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Depreciation expense | |||||
Loss on impairment of property and equipment of discontinued operation | 54,141 | ||||
Advertising expense | $ 214 | $ 102 | $ 214 | ||
Potential dilutive securities outstanding | 81,000,000 | 149,100,000 | |||
Common stock shares | 17,800,000 | 20,900,000 | |||
Solar Equipment [Member] | |||||
Net realizable value | 0 | $ 0 | |||
Computer Equipment [Member] | |||||
Property and equipment, gross | 1,607 | 1,607 | $ 1,607 | ||
Accumulated depreciation | $ 1,607 | $ 1,607 | $ 1,607 | ||
Minimum [Member] | |||||
Estimated useful lives | 3 years | ||||
Maximum [Member] | |||||
Estimated useful lives | 5 years |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
May 21, 2019 | May 31, 2019 | May 31, 2018 | Nov. 30, 2017 | May 31, 2019 | May 31, 2018 | May 28, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 28, 2018 | Aug. 31, 2017 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Common stock, authorized | 490,000,000 | 2,490,000,000 | 2,490,000,000 | 2,490,000,000 | 2,490,000,000 | |||||||
Common stock, issued | 82,646,606 | 82,646,606 | 10,107,394 | |||||||||
Common stock, outstanding | 82,646,606 | 82,646,606 | 10,107,394 | |||||||||
Shares issued for share based compensation | 1,378,258 | 275,000 | ||||||||||
Stock-based compensation | $ 136,061 | $ 29,000 | $ 337,018 | $ 114,750 | ||||||||
Unregistered shares offering | 6,000 | |||||||||||
Offering price | $ 1.50 | |||||||||||
Proceeds from the sale of common stock | $ 17,100 | |||||||||||
Common stock, loss on cashless exercise of warrants | 3,107,983 | |||||||||||
Loss on cashless exercise of warrants | $ (71,484) | $ (71,484) | ||||||||||
Common stock through conversions of convertible notes payable | 68,052,971 | 693,744 | ||||||||||
Loss on extinguishment of convertible notes | $ 569,480 | $ 168,431 | ||||||||||
Preferred Stock Series E [Member] | ||||||||||||
Stock-based compensation | $ 135,300 | |||||||||||
Unregistered shares offering | ||||||||||||
Proceeds from the sale of common stock | $ 135,300 | |||||||||||
Shares issued | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Preferred Stock Series E [Member] | President [Member] | ||||||||||||
Shares issued | 500,000 | |||||||||||
Preferred Stock Series E [Member] | Chief Financial Officer [Member] | ||||||||||||
Shares issued | 500,000 | |||||||||||
Discount price [Member] | ||||||||||||
Offering price | $ 0.75 | |||||||||||
Shares issued | 10,800 | 10,800 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | May 31, 2019 | May 07, 2019 | Apr. 02, 2019 | Aug. 31, 2018 |
Convertible notes payable, net of discounts | $ 230,654 | $ 158,669 | ||
Power Up Lending Group, LTD [Member] | ||||
Convertible notes payable, net of discounts | $ 78,000 | $ 25,000 | 125,667 | |
EMA Financial LLC [Member] | ||||
Convertible notes payable, net of discounts | 47,928 | 33,002 | ||
Auctus Fund, LLC [Member] | ||||
Convertible notes payable, net of discounts | 88,481 | |||
Power Up Lending Group, LTD One [Member] | ||||
Convertible notes payable, net of discounts | 22,545 | |||
Power Up Lending Group, LTD Two [Member] | ||||
Convertible notes payable, net of discounts | $ 71,700 |
CONVERTIBLE NOTES PAYABLE (De_2
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | May 07, 2019 | Apr. 02, 2019 | Nov. 06, 2018 | Jul. 13, 2018 | Sep. 27, 2018 | Jun. 21, 2018 | May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | Dec. 21, 2017 |
Convertible note payable, net of discount | $ 230,654 | $ 230,654 | $ 158,669 | |||||||||
Common stock shares issued | 82,646,606 | 82,646,606 | ||||||||||
Amortization of debt discounts | $ 114,946 | $ 129,934 | ||||||||||
Warrant exercise period | 5 years | |||||||||||
Proceeds from issuance of convertible debt | $ 240,250 | $ 186,500 | ||||||||||
Shares issued upon conversion of convertible notes | 68,052,971 | 693,744 | ||||||||||
Loss on extinguishment of debt | $ (550,990) | $ (78,340) | $ (569,480) | $ (168,431) | ||||||||
Option exercised | (3,386,243) | |||||||||||
Convertible Notes Payable [Member] | ||||||||||||
Proceeds from issuance of convertible debt | $ 240,250 | |||||||||||
Shares issued upon conversion of convertible notes | 21,217,000 | |||||||||||
Loss on extinguishment of debt | $ 198,773 | |||||||||||
Debt penalties | 30,000 | |||||||||||
Auctus Fund, LLC [Member] | ||||||||||||
Convertible note payable, net of discount | 88,481 | 88,481 | ||||||||||
Auctus Fund, LLC [Member] | Securities Purchase Agreement [Member] | Convertible Note [Member] | ||||||||||||
Convertible note payable, net of discount | $ 111,000 | |||||||||||
Debt Discount | $ 19,750 | $ 50,259 | $ 50,259 | |||||||||
Interest rate | 12.00% | |||||||||||
Proceeds from issuance of convertible debt | $ 97,250 | |||||||||||
Maturity date | Aug. 6, 2019 | |||||||||||
Description for conversion price | The note is convertible at a conversion price of 55% of the lowest trading price during the 25-day period ending one trading day prior to the date of the conversion notice. | |||||||||||
Consulting fees | $ 6,000 | |||||||||||
Debt issuance fees | 13,750 | |||||||||||
Derivative liability | $ 15,063 | |||||||||||
Option exercised | 9,086,100 | |||||||||||
Crown Bridge Partners, LLC [Member] | Securities Purchase Agreement [Member] | Convertible promissory note [Member] | ||||||||||||
Convertible note payable, net of discount | $ 120,000 | |||||||||||
Interest rate | 8.00% | |||||||||||
Crown Bridge Partners, LLC [Member] | Securities Purchase Agreement [Member] | Common Stock Purchase Warrant [Member] | ||||||||||||
Common stock shares issued | 32,000 | 32,000 | ||||||||||
Warrant exercise price per share | $ 1.25 | $ 1.25 | ||||||||||
Power Up Lending Group, LTD [Member] | ||||||||||||
Convertible note payable, net of discount | $ 78,000 | $ 25,000 | $ 125,667 | |||||||||
Debt Discount | $ 7,000 | $ 3,000 | ||||||||||
Interest rate | 12.00% | 12.00% | ||||||||||
Maturity date | Mar. 15, 2020 | Feb. 15, 2020 | ||||||||||
Description for conversion price | Convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. | Convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. | ||||||||||
Power Up Lending Group, LTD [Member] | Convertible Note [Member] | ||||||||||||
Convertible note payable, net of discount | $ 53,000 | $ 128,000 | 128,000 | 128,000 | ||||||||
Debt Discount | $ 3,000 | |||||||||||
Interest rate | 12.00% | 12.00% | ||||||||||
Maturity date | Jul. 15, 2019 | Mar. 30, 2019 | ||||||||||
Description for conversion price | Convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion. | Convertible into common stock at 58% of the lowest 3 closing market prices of the previous 10 trading days prior to conversion | ||||||||||
Derivative liability | 38,008 | $ 38,008 | ||||||||||
Terms of conversion feature | The holder's conversion option under the note does not become active until 180 days after the issuance date. | The holder's conversion option under the note does not become active until 180 days after the issuance date | ||||||||||
Shares issued upon conversion of convertible notes | 26,281,973 | |||||||||||
Loss on extinguishment of debt | $ 266,660 | |||||||||||
Accrued interest | $ 7,680 | $ 7,680 | ||||||||||
Power Up Lending Group, LTD [Member] | Convertible Note [Member] | May 31, 2019 [Member] | ||||||||||||
Convertible note payable, net of discount | $ 53,000 | |||||||||||
Shares issued upon conversion of convertible notes | 11,467,898 | |||||||||||
Loss on extinguishment of debt | $ 53,788 | |||||||||||
Accrued interest | $ 3,180 | |||||||||||
EMA Financial, LLC [Member] | Securities Purchase Agreement [Member] | Convertible Note [Member] | ||||||||||||
Convertible note payable, net of discount | $ 83,500 | |||||||||||
Debt Discount | $ 9,010 | |||||||||||
Interest rate | 10.00% | |||||||||||
Proceeds from issuance of convertible debt | $ 81,830 | |||||||||||
Maturity date | Apr. 12, 2019 | |||||||||||
Description for conversion price | The note is convertible at a conversion price of 50% of the lowest trading price during the 10 days prior to the conversion date | |||||||||||
Consulting fees | $ 7,340 | |||||||||||
Discount on original issue | $ 1,670 |
WARRANTS EXERCISABLE INTO COM_3
WARRANTS EXERCISABLE INTO COMMON SHARES (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
May 31, 2019 | Aug. 31, 2018 | |
Exercised | (3,386,243) | |
Warrant [Member] | ||
Number of shares outstanding, Beginning balance | 32,000 | |
Granted | 32,000 | |
Anti- Dilution | 21,132,021 | |
Exercised | (3,386,243) | |
Forfeited | ||
Number of shares outstanding, Ending balance | 17,777,778 | 32,000 |
Weighted Average Exercise Price Beginning | $ 1.25000 | |
Granted | 1.25000 | |
Anti-Dilution | 0.00189 | |
Exercised | 0.00189 | |
Forfeited | ||
Weighted Average Exercise Price Ending | $ 0.00189 | $ 1.25000 |
Weighted average remaining life Beginning | ||
Granted | 5 years | |
Anti-Dilution | 3 years 6 months 21 days | |
Exercised | ||
Weighted average remaining life Ending | 3 years 6 months 21 days | 4 years 2 months 16 days |
WARRANTS EXERCISABLE INTO COM_4
WARRANTS EXERCISABLE INTO COMMON SHARES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | |
Common stock shares issued | 82,646,606 | 82,646,606 | |||
Anti-dilution clause description | The anti-dilution clause was triggered, increasing the number of common shares from 32,000 to 21,164,021 at an exercise price of $0.00189. | ||||
Issuance of common stock for exercise of warrants, Shares | 3,107,983 | ||||
Number of shares exercised | (3,386,243) | ||||
Loss on cashless exercise of warrants | $ (71,484) | $ (71,484) | |||
Aggregate intrinsic value | $ 103,289 | $ 103,289 | |||
Closing market price | $ 0.0077 | $ 0.0077 | |||
Warrant [Member] | |||||
Anti-Dilution weighted average exercise price | $ 0.00189 | ||||
Number of shares exercised | (3,386,243) | ||||
Common Stock Purchase Warrant [Member] | Securities Purchase Agreement [Member] | Crown Bridge Partners, LLC [Member] | |||||
Common stock shares issued | 32,000 | 32,000 | |||
Warrant exercise price per share | $ 1.25 | $ 1.25 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) | 9 Months Ended | 12 Months Ended |
May 31, 2019 | Aug. 31, 2018 | |
Expected term | 3 years 6 months 21 days | |
Expected average volatility | 270.53% | |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.90% | |
Minimum [Member] | ||
Expected term | 7 months 10 days | |
Expected average volatility | 85.45% | |
Risk-free interest rate | 2.46% | |
Maximum [Member] | ||
Expected term | 4 years 3 months 22 days | |
Expected average volatility | 130.21% | |
Risk-free interest rate | 2.74% |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details 1) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Total derivative liabilities | $ 141,533 | $ 56,220 |
EMA Financial, LLC [Member] | ||
Total derivative liabilities | 49,134 | |
Crown Bridge Partners, LLC - Warrant [Member] | ||
Total derivative liabilities | $ 141,533 | $ 7,086 |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Derivative Liabilities Details 2Abstract | ||||
Balance - August 31, 2018 | $ 56,220 | |||
Addition of new derivative liabilities as debt discounts, upon issuance of warrants and convertible notes | 15,063 | |||
Addition of new derivative liabilities as debt discounts, upon holder's option becoming active | 38,008 | |||
Reduction in derivative liabilities due to conversions of convertible notes to common stock | (3,410) | |||
Gain on change in fair value of derivative liabilities | $ 133,049 | $ (43,537) | 35,652 | $ 83,632 |
Balance - May 31, 2019 | $ 141,533 | $ 141,533 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 855,902 | $ 630,534 |
Foreign net operating losses | 275,306 | 274,803 |
Organization costs | 48,502 | 51,916 |
Accrued payroll | 228,701 | 212,932 |
Gross deferred tax asset | 1,408,411 | 1,170,185 |
Valuation allowance | (1,408,411) | (1,170,185) |
Net deferred tax asset |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 9 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Taxes Details 1Abstract | ||
Income tax computed at the federal statutory rate | $ (308,497) | $ (193,147) |
Foreign income tax | (503) | (102,145) |
Non-deductible stock compensation expense | 70,774 | 24,097 |
Impact of rate change from 35% to | 512,105 | |
Total | (238,226) | 240,910 |
Change in valuation allowance | 238,226 | (240,910) |
Provision for income taxes |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 9 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Net operating loss carryforwards | $ 5,058,962 | |
Federal net operating loss expiry year | Begin to expire in 2034 | |
State tax loss carryforwards expiry year | Begin to expire in 2029 | |
Foreign income taxes rate | 28.00% | |
Change in valuation allowance | $ 238,226 | $ (240,910) |
U S [Member] | ||
Net operating loss carryforwards | 4,075,725 | |
South Africa [Member] | ||
Net operating loss carryforwards | $ 983,237 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
May 21, 2019 | May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2015 | May 28, 2019 | Mar. 13, 2016 | |
Due to officer | $ 6,725 | $ 6,725 | $ 6,725 | ||||||||
Proceeds from notes payable - related party | $ 580,800 | ||||||||||
Repayment of note payable - related party | 11,543 | ||||||||||
Notes payable | 1,114,207 | 1,114,207 | $ 1,114,207 | ||||||||
Stock-based compensation, Amount | $ 136,061 | $ 29,000 | $ 337,018 | 114,750 | |||||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||||||
Chief Executive Officer [Member] | |||||||||||
Due to officer | $ 12,916 | ||||||||||
Power It Perfect, Inc [Member] | |||||||||||
Proceeds from notes payable - related party | $ 580,800 | $ 678,358 | $ 313,450 | $ 208,160 | $ 194,500 | ||||||
Repayment of note payable - related party | $ 280,261 | $ 11,543 | |||||||||
Interest rate | 5.00% | 5.00% | |||||||||
Accrued interest | $ 43,968 | $ 43,968 | $ 2,300 | ||||||||
Common Stock | |||||||||||
Stock-based compensation, Shares | 1,378,258 | 275,000 | |||||||||
Stock-based compensation, Amount | $ 201,718 | $ 114,750 | |||||||||
Preferred Stock Series E [Member] | |||||||||||
Stock-based compensation, Amount | $ 135,300 | ||||||||||
Preferred Stock Series E [Member] | President and Chief Financial Officer [Member] | |||||||||||
Stock-based compensation, Amount | $ 135,300 | ||||||||||
Preferred stock, shares issued | 1,000,000 |
DISCONTINUED OPERATION (Details
DISCONTINUED OPERATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | |
Discontinued Operation Details Abstract | ||||
Revenue | ||||
Franchise and operating expenses | (1,798) | (310,661) | ||
Loss on impairment of property and equipment | (54,141) | |||
Loss from discontinued operation | $ (147,992) | $ (1,798) | $ (364,802) |
DISCONTINUED OPERATION (Detai_2
DISCONTINUED OPERATION (Details 1) - USD ($) | May 31, 2019 | Aug. 31, 2018 |
Assets: | ||
Prepaid expenses and other assets | $ 2,190 | $ 2,174 |
Current assets of discontinued operation | 2,190 | 2,174 |
Liabilities: | ||
Accounts payable | 16,934 | 16,812 |
Accrued payroll and expenses | 33,874 | 41,560 |
Other liabilities | 356,999 | 356,999 |
Current liabilities of discontinued operation | $ 407,807 | $ 415,371 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | Jul. 09, 2019 | Aug. 31, 2018 | |
Shares issued upon conversion of convertible notes | 68,052,971 | 693,744 | ||
Issuance of common stock for exercise of warrants, Shares | 3,107,983 | |||
Common stock shares issued | 82,646,606 | 10,107,394 | ||
Subsequent Event [Member] | ||||
Shares issued upon conversion of convertible notes | 79,443,494 | |||
Debt conversion converted amount | $ 26,794 | |||
Common shares issuable under agreement | 1,000,000 | |||
Issuance of common stock for exercise of warrants, Shares | 11,177,734 | |||
Subsequent Event [Member] | Stock Purchase Agreement [Member] | ||||
Share issued during period share based compensation | 1,000,000 | |||
Subsequent Event [Member] | Chief Executive Officer [Member] | ||||
Common stock shares issued | 1,000,000 |