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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
| For the quarterly period ended October 31, 2023 |
or
☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
| For the transition period from _________ to ________ |
Commission File Number 333-213744 |
GPO PLUS, INC. |
(Exact name of registrant as specified in its charter) |
Nevada | | 37-1817132 |
(State or other jurisdiction of incorporation or organization) | | (IRS Employer Identification No.) |
3571 E. Sunset Road, Suite 300, LasVegas, NV | | 89120 |
(Address of principal executive offices) | | (Zip Code) |
855-935-9111 |
(Registrant’s telephone number, including area code) |
|
N/A |
(Former name, former address, and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
n/a | n/a | n/a |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large, accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated Filer | ☒ | Smaller reporting company | ☒ |
| | Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ Yes ☒ No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ YES ☐ NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
44,223,860 common shares issued and outstanding as of December 8, 2023.
GPO PLUS, INC.
FORM 10-Q
TABLE OF CONTENTS
Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our unaudited interim condensed financial statements for the three-month period ended October 31, 2023, form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with generally accepted accounting principles in the United States.
GPO PLUS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
| | October 31, | | | April 30, | |
| | 2023 | | | 2023 | |
ASSETS |
Current Assets: | | | | | | |
Cash | | $ | 74,102 | | | $ | 55,496 | |
Accounts receivable | | | 69,288 | | | | 43,614 | |
Prepaid expenses | | | 38,078 | | | | 69,351 | |
Inventory | | | 251,418 | | | | 156,997 | |
Total Current Assets | | | 432,886 | | | | 325,458 | |
| | | | | | | | |
Finance lease right-of-use assets, net | | | 232,678 | | | | 129,367 | |
Property and equipment, net | | | 88,041 | | | | 72,886 | |
Intangible assets, net | | | 48,031 | | | | 62,290 | |
TOTAL ASSETS | | $ | 801,636 | | | $ | 590,001 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
Current Liabilities: | | | | | | | | |
Accounts payable and accrued liabilities | | | 994,604 | | | | 517,037 | |
Accrued interest | | | 218,874 | | | | 119,488 | |
Accrued liabilities - related parties | | | 220,738 | | | | 253,235 | |
Deposits | | | 6,000 | | | | - | |
Convertible note payable, net of debt discount of $0 | | | 188,000 | | | | 263,000 | |
Promissory note payable, net of debt discount of $135,183 and $293,952, respectively | | | 2,017,667 | | | | 1,211,548 | |
Finance lease liabilities | | | 41,844 | | | | 25,383 | |
Total Current Liabilities | | | 3,687,727 | | | | 2,389,691 | |
| | | | | | | | |
Finance lease liabilities - non-current | | | 169,125 | | | | 88,221 | |
Total Liabilities | | | 3,856,852 | | | | 2,477,912 | |
| | | | | | | | |
Commitments and Contingencies (Note 11) | | | - | | | | - | |
| | | | | | | | |
Founders Series A Non-Voting Redeemable Preferred Stock, $0.0001 par value, $15 stated value; 500,000 shares authorized; 21,250 and 28,750 shares issued and outstanding at October 31, 2023 and April 30, 2023, respectively | | | 167,154 | | | | 224,905 | |
Series A Non-Voting Redeemable Preferred Stock, $0.0001 par value, $10 stated value; 175,000 designated; 175,000 shares issued and outstanding | | | 1,750,000 | | | | 1,750,000 | |
| | | | | | | | |
Stockholders' Deficit: | | | | | | | | |
Series A Preferred Shares, $0.0001 par value, 1,000,000 shares designated; 1,000,000 shares issued and outstanding | | | 100 | | | | 100 | |
Series C Preferred Shares, $0.0001 par value, 200 shares designated; 17.5 shares and 0 shares issued and outstanding at October 31, 2023 and April 30, 2023, respectively | | | - | | | | - | |
Founders Class A Common stock, $0.0001 par value, 10,000,000 shares authorized; 115,000 shares issued and outstanding | | | 12 | | | | 12 | |
Common stock, $0.0001 par value, 90,000,000 shares authorized; 44,108,860 and 39,454,300 shares issued and outstanding at October 31, 2023 and April 30, 2023, respectively | | | 4,412 | | | | 3,947 | |
Stock payable | | | 124,190 | | | | - | |
Stock payable - related parties | | | 66,415 | | | | - | |
Additional paid in capital | | | 31,527,492 | | | | 30,635,238 | |
Accumulated deficit | | | (36,694,991 | ) | | | (34,502,113 | ) |
Total Stockholders' Deficit | | | (4,972,370 | ) | | | (3,862,816 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | | $ | 801,636 | | | $ | 590,001 | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
GPO PLUS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| | Three Months Ended | | | Six Months Ended | |
| | October 31, | | | October 31, | |
| | 2023 | | | 2022 | | | 2023 | | | 2022 | |
| | | | | | | | | | | | |
Revenues | | $ | 1,217,570 | | | $ | 64,658 | | | $ | 2,188,305 | | | $ | 82,321 | |
Cost of revenue | | | 1,016,805 | | | | 44,528 | | | | 1,763,836 | | | | 57,621 | |
Gross Profit | | | 200,765 | | | | 20,130 | | | | 424,469 | | | | 24,700 | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
General and administrative | | | 321,033 | | | | 74,848 | | | | 652,543 | | | | 115,619 | |
Professional fees | | | 455,077 | | | | 633,140 | | | | 893,770 | | | | 809,961 | |
Professional fees - related parties | | | 66,415 | | | | 512,288 | | | | 323,714 | | | | 557,963 | |
Management fees and salaries - related parties | | | 114,613 | | | | 143,465 | | | | 242,201 | | | | 232,172 | |
Total Operating Expenses | | | 957,138 | | | | 1,363,741 | | | | 2,112,228 | | | | 1,715,715 | |
| | | | | | | | | | | | | | | | |
Loss from operations | | | (756,373 | ) | | | (1,343,611 | ) | | | (1,687,759 | ) | | | (1,691,015 | ) |
| | | | | | | | | | | | | | | | |
Other Expense | | | | | | | | | | | | | | | | |
Interest expense | | | (218,697 | ) | | | (62,651 | ) | | | (505,119 | ) | | | (92,093 | ) |
Total Other Expense | | | (218,697 | ) | | | (62,651 | ) | | | (505,119 | ) | | | (92,093 | ) |
| | | | | | | | | | | | | | | | |
Net Loss | | $ | (975,070 | ) | | $ | (1,406,262 | ) | | $ | (2,192,878 | ) | | $ | (1,783,108 | ) |
| | | | | | | | | | | | | | | | |
Net Loss Per Common Share: Basic and Diluted | | $ | (0.02 | ) | | $ | (0.04 | ) | | $ | (0.05 | ) | | $ | (0.06 | ) |
| | | | | | | | | | | | | | | | |
Weighted Average Number of Common Shares Outstanding: Basic and Diluted | | | 43,586,080 | | | | 32,751,927 | | | | 41,679,959 | | | | 32,288,897 | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
GPO PLUS, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE SIX MONTHS ENDED OCTOBER 31, 2023, AND 2022
(Unaudited)
Three and Six Months Ended October 31, 2023
| | | | | | | | | | | | | | Stockholders' Deficit | |
| | Founders Series A Non-Voting Redeemable Preferred Stock | | | Series A Non-Voting Redeemable Preferred Stock | | | Series A Convertible Preferred Shares | | | Series C Preferred Shares | | | Founders Class A Common stock | | | Common stock | | | Stock | | | Stock Payable-Related | | | Additional Paid In | | | Accumulated | | | Total Stockholders' | |
| | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Payable | | | Parties | | | Capital | | | Deficit | | | Deficit | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, April 30, 2023 | | | 28,750 | | | $ | 224,905 | | | | 175,000 | | | $ | 1,750,000 | | | | 1,000,000 | | | $ | 100 | | | | - | | | $ | - | | | | 115,000 | | | $ | 12 | | | | 39,454,300 | | | $ | 3,947 | | | $ | - | | | $ | - | | | $ | 30,635,238 | | | $ | (34,502,113 | ) | | $ | (3,862,816 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of common stock for conversion of debts | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 613,437 | | | | 61 | | | | - | | | | - | | | | 93,089 | | | | - | | | | 93,150 | |
Stock payable | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 302,344 | | | | - | | | | - | | | | - | | | | 302,344 | |
Stock payable - related parties | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 257,299 | | | | - | | | | - | | | | 257,299 | |
Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1,217,808 | ) | | | (1,217,808 | ) |
Balance, July 31, 2023 | | | 28,750 | | | $ | 224,905 | | | | 175,000 | | | $ | 1,750,000 | | | | 1,000,000 | | | $ | 100 | | | | - | | | $ | - | | | | 115,000 | | | $ | 12 | | | | 40,067,737 | | | $ | 4,008 | | | $ | 302,344 | | | $ | 257,299 | | | $ | 30,728,327 | | | $ | (35,719,921 | ) | | $ | (4,427,831 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of common stock for conversion of Founders Series A Non-voting Redeemable Preferred Stock | | | (7,500 | ) | | | (57,751 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 400,000 | | | | 40 | | | | - | | | | - | | | | 57,711 | | | | - | | | | 57,751 | |
Issuance of Series C Preferred Shares for cash | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 18 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 175,000 | | | | - | | | | 175,000 | |
Issuance of common stock for loan extension | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 400,000 | | | | 40 | | | | (57,390 | ) | | | - | | | | 76,480 | | | | - | | | | 19,130 | |
Issuance of common stock for loan inducement | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 786,000 | | | | 79 | | | | (59,201 | ) | | | - | | | | 59,122 | | | | - | | | | - | |
Issuance of common stock to related parties for services | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,470,279 | | | | 147 | | | | - | | | | (257,299 | ) | | | 257,152 | | | | - | | | | - | |
Issuance of common stock for services | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 984,844 | | | | 98 | | | | (173,798 | ) | | | - | | | | 173,700 | | | | - | | | | - | |
Stock payable | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 112,235 | | | | - | | | | - | | | | - | | | | 112,235 | |
Stock payable - related parties | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 66,415 | | | | - | | | | - | | | | 66,415 | |
Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (975,070 | ) | | | (975,070 | ) |
Balance, October 31, 2023 | | | 21,250 | | | $ | 167,154 | | | | 175,000 | | | $ | 1,750,000 | | | | 1,000,000 | | | $ | 100 | | | | 18 | | | $ | - | | | | 115,000 | | | $ | 12 | | | | 44,108,860 | | | $ | 4,412 | | | $ | 124,190 | | | $ | 66,415 | | | $ | 31,527,492 | | | $ | (36,694,991 | ) | | $ | (4,972,370 | ) |
Three and Six Months Ended October 31, 2022
| | | | | | | | | | | | | | Stockholders' Deficit | |
| | Founders Series A Non-Voting Redeemable Preferred Stock | | | Series A Non-Voting Redeemable Preferred Stock | | | Series A Convertible Preferred Shares | | | Founders Class A Common stock | | | Common stock | | | Additional Paid In | | | Accumulated | | | Total Stockholders' | |
| | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Deficit | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, April 30, 2022 | | | 28,750 | | | $ | 224,905 | | | | 175,000 | | | $ | 1,750,000 | | | | 1,000,000 | | | $ | 100 | | | | 115,000 | | | $ | 12 | | | | 31,361,572 | | | $ | 3,136 | | | $ | 27,795,796 | | | $ | (30,466,600 | ) | | $ | (2,667,555 | ) |
Stock based compensation | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 61,000 | | | | 6 | | | | 12,804 | | | | - | | | | 12,810 | |
Stock based compensation - related party | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 217,500 | | | | 22 | | | | 45,653 | | | | - | | | | 45,675 | |
Issuance of common stock for lease | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 23,810 | | | | 2 | | | | 4,998 | | | | - | | | | 5,000 | |
Issuance of common stock for cash | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 6,500 | | | | 1 | | | | 9,749 | | | | - | | | | 9,750 | |
Issuance of common stock for exercise of warrants | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 280,000 | | | | 28 | | | | 41,972 | | | | - | | | | 42,000 | |
Issuance of common stock for intangible assets | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 200,000 | | | | 20 | | | | 58,980 | | | | - | | | | 59,000 | |
Issuance of common stock for note inducement | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 75,000 | | | | 8 | | | | 15,743 | | | | - | | | | 15,750 | |
Issuance of common stock for salary payable - related party | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 80,000 | | | | 8 | | | | 35,192 | | | | - | | | | 35,200 | |
Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (376,846 | ) | | | (376,846 | ) |
Balance, July 31, 2022 | | | 28,750 | | | $ | 224,905 | | | | 175,000 | | | $ | 1,750,000 | | | | 1,000,000 | | | $ | 100 | | | | 115,000 | | | $ | 12 | | | | 32,305,382 | | | $ | 3,231 | | | $ | 28,020,887 | | | $ | (30,843,446 | ) | | $ | (2,819,216 | ) |
Stock based compensation | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 520,000 | | | | 52 | | | | 568,148 | | | | - | | | | 568,200 | |
Stock based compensation - related party | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 308,460 | | | | 31 | | | | 512,257 | | | | - | | | | 512,288 | |
Issuance of common stock for lease | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 7,500 | | | | 1 | | | | 13,949 | | | | - | | | | 13,950 | |
Issuance of common stock for cash | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 10,000 | | | | 1 | | | | 14,999 | | | | - | | | | 15,000 | |
Issuance of common stock for note conversion | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 133,333 | | | | 13 | | | | 19,987 | | | | - | | | | 20,000 | |
Issuance of common stock for note inducement | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,000,000 | | | | 100 | | | | 305,052 | | | | - | | | | 305,152 | |
Forgiveness of related party loan | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 145,737 | | | | - | | | | 145,737 | |
Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1,406,262 | ) | | | (1,406,262 | ) |
Balance, October 31, 2022 | | | 28,750 | | | $ | 224,905 | | | | 175,000 | | | $ | 1,750,000 | | | | 1,000,000 | | | $ | 100 | | | | 115,000 | | | $ | 12 | | | | 34,284,675 | | | $ | 3,429 | | | $ | 29,601,016 | | | $ | (32,249,708 | ) | | $ | (2,645,151 | ) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
GPO PLUS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| | Six Months Ended | |
| | October 31, | |
| | 2023 | | | 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | |
Net loss | | $ | (2,192,878 | ) | | $ | (1,783,108 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
Stock based compensation for services | | | 262,135 | | | | 663,010 | |
Stock based compensation for services - related parties | | | 323,714 | | | | 557,963 | |
Non-cash interest expense for promissory note extension | | | 76,520 | | | | - | |
Non-cash interest expense for promissory note | | | 13,493 | | | | - | |
Stock payable for lease expense | | | 14,315 | | | | 18,950 | |
Depreciation of furniture and equipment | | | 12,845 | | | | 572 | |
Depreciation of right-of-use-assets | | | 18,649 | | | | - | |
Amortization of intangible assets | | | 14,259 | | | | 9,005 | |
Amortization of promissory note discount | | | 302,215 | | | | 48,367 | |
Amortization of convertible note discount | | | - | | | | 15,480 | |
Interest expense on finance lease | | | 7,184 | | | | - | |
Changes in operating assets and liabilities: | | | | | | | | |
Accounts receivable | | | (25,674 | ) | | | (13,146 | ) |
Prepaid expenses | | | 5,073 | | | | - | |
Inventory | | | (94,421 | ) | | | (32,822 | ) |
Accounts payable and accrued liabilities | | | 477,566 | | | | 53,019 | |
Accrued interest | | | 99,386 | | | | 28,172 | |
Accrued liabilities - related parties | | | (32,497 | ) | | | 1,012 | |
Deposit | | | 6,000 | | | | - | |
Net cash used in Operating Activities | | | (712,115 | ) | | | (433,526 | ) |
| | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
Purchase of intangible assets | | | - | | | | (26,553 | ) |
Purchase of property and equipment | | | (28,000 | ) | | | - | |
Net cash used in Investing Activities | | | (28,000 | ) | | | (26,553 | ) |
| | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| | | (21,779 | ) | | | - | |
Proceeds from issuance of common stock | | | - | | | | 24,750 | |
Proceeds from exercise of warrants | | | - | | | | 42,000 | |
Proceeds from issuance of promissory notes | | | 708,500 | | | | 575,000 | |
Repayment of promissory notes | | | (103,000 | ) | | | - | |
Proceeds from issuance of series C preferred shares | | | 175,000 | | | | - | |
Net cash provided by Financing Activities | | | 758,721 | | | | 641,750 | |
| | | | | | | | |
Net change in cash for period | | | 18,606 | | | | 181,671 | |
Cash at beginning of period | | | 55,496 | | | | 2,877 | |
Cash at end of period | | $ | 74,102 | | | $ | 184,548 | |
| | | | | | | | |
SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | | | |
Cash paid for income taxes | | $ | - | | | $ | - | |
Cash paid for interest | | $ | 5,941 | | | $ | 74 | |
| | | | | | | | |
NON-CASH INVESTING AND FINANCING ACTIVITIES | | | | | | | | |
Forgiveness of related party loan | | $ | - | | | $ | 145,737 | |
Recognition of finance lease right-of-use assets | | $ | 121,960 | | | $ | - | |
Stock payable for note inducement | | $ | 24,245 | | | $ | - | |
Issuance of common stock for intangible assets | | $ | - | | | $ | 59,000 | |
Issuance of common stock for note inducement | | $ | 59,201 | | | $ | 320,902 | |
Issuance of common stock for salary payable - related party | | $ | - | | | $ | 35,200 | |
Issuance of common stock for conversion of debts | | $ | 93,150 | | | $ | 20,000 | |
Issuance of common stock for conversion of Founders Series A | | $ | 57,751 | | | $ | - | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
GPO PLUS, INC.
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
SIX MONTHS ENDED OCTOBER 31, 2023, AND 2022
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
GPO Plus, Inc. (the “Company”) is a corporation originally established under the name of Koldeck, Inc. under the corporation laws in the State of Nevada on March 29, 2016.
On April 2, 2018, the Company changed our corporate name from Koldeck Inc. to Global House Holdings Ltd. and merged with our wholly owned subsidiary Global House Holdings Ltd. Koldeck Inc. remained the surviving company of the merger, continuing under the name Global House Holdings Ltd.
On June 19, 2020, the Company changed our corporate name from Global House Holdings Ltd. to GPO Plus, Inc. and merged with our wholly owned subsidiary GPO Plus, Inc. Global House Holdings Ltd. remained the surviving company of the merger, continuing under the name GPO Plus, Inc
Effective May 5, 2020, Brett H. Pojunis acquired 5,000,000 (post-split) of the issued and outstanding common shares of the Company from Jian Han Chen. As a result of the transaction, Mr. Pojunis had voting and dispositive control over 53.67% of our outstanding voting securities. Mr. Pojunis’s ownership has since been diluted to 20%, and Mr. Chen no longer holds any equity interest in the Company.
On June 7, 2022, the Company entered into a Master Distribution Agreement with DEV Distribution LLC, which appoints GPOX as a master distributor for the best-efforts sale of Branded Products, Bulk Products and White Label Products within a specific Territory.
GPO Plus (GPOX) is a product development, manufacturing, and distribution company which offers a diverse portfolio of high-quality innovative products sold directly to consumers and retailers. Our business is organized around four key areas: products (developing and manufacturing), distribution (getting our products to customers), marketing (promoting our products), and sales (selling our products to consumers and retailers). Our goal is to expand our product line and distribution reach to meet market demand and the needs of our customers.
NOTE 2 - GOING CONCERN
The Company’s financial statements as of October 31, 2023, have been prepared using generally accepted accounting principles in the United States of America (“US GAAP”) applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company has incurred a cumulative deficit of $36,694,991. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with US GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended October 31, 2023, are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2023 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended April 30, 2023, included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on August 31, 2023.
Use of Estimates
Preparing financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.
As of October 31, 2023 and April 30, 2023, the Company had cash of $74,102 and $55,496, respectively.
Accounts Receivable
Accounts receivables are recorded in accordance with ASC 310, “Receivables,” at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company does not currently have any amount recorded as an allowance for doubtful accounts. Based on management’s estimate and based on all accounts being current, the Company has not deemed it necessary to reserve for doubtful accounts at this time.
As of October 31, 2023, and April 30, 2023, the Company had accounts receivable of $69,288 and $43,614, respectively.
As of October 31, 2023, the Company has one customer concentrated over 10% of the accounts receivable at 84%.
As of April 30, 2023, the Company has two customers concentrated over 10% of the accounts receivable at 67% and 27%, respectively.
Prepaid Expense
Prepaid expenses relate to security deposit for an office premise and prepayment made for future services in advance that will be expensed over time as the benefit of the services is received in the future expected within one year. As of October 31, 2023, and April 30, 2023, prepaid expense was $38,078 and $69,351, respectively. As of October 31, 2023 and April 30, 2023, $36,078 and $67,351 was a prepayment for common shares issued to consultants, respectively, and $2,000 is related to a security deposit for an office premise.
| | October 31, | | | April 30, | |
| | 2023 | | | 2023 | |
Security Deposit | | $ | 2,000 | | | $ | 2,000 | |
Prepayment for shares issued to consultants | | | 36,078 | | | | 67,351 | |
Total | | $ | 38,078 | | | $ | 69,351 | |
Inventory
Inventory is stated at lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method.
No reserves are considered necessary for slow moving or obsolete inventory as inventory on hand at year-end was purchased near the end of the year. The Company continuously evaluates the adequacy of these reserves and adjusts these reserves as required.
As of October 31, 2023 and April 30, 2023, the Company had finished goods inventory of $251,418 and $156,997, respectively. As of October 31, 2023, the Company had $160,171 of Mr. Vapor inventory, $48,422 of Nutriumph inventory, $38,755 of Distro inventory and $4,070 of Flayvorz inventory. As of April 30, 2023, the Company had $124,437 of Mr. Vapor inventory and $32,560 of Nutriumph inventory. (Note 4)
Intangible Assets
The Company accounts for intangible assets (including trademarks and formula) in accordance with ASC 350 “Intangibles-Goodwill and Other.”
ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below it carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.
The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology, and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted. (Note 4)
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Property, Plant and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:
Furniture and Equipment | 3-5 years |
Computer Equipment | 2 years |
Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.
The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the six months ended October 31, 2023, and 2022, no impairment losses have been identified.
Revenue Recognition
The Company recognizes revenue from the sale of products in accordance with ASC 606, “Revenue Recognition” following the five steps procedure:
Step 1: Identify the contract(s) with customers - The invoice has been generated and provided to the customer.
Step 2: Identify the performance obligations in the contract - The performance obligations of delivery of products are stated in the invoice.
Step 3: Determine the transaction price - The transaction price has been identified in the invoice.
Step 4: Allocate the transaction price to performance obligations - The Company has allocated the transaction price to performance obligation in the invoice.
Step 5: Recognize revenue when the entity satisfies a performance obligation - The Company has shipped out the product and, therefore, satisfied the performance obligation. The risk of loss passed to the customers at the point of shipment.
GPOPlus+ (GPOX)
GPO Plus (GPOX) is a product development, manufacturing, and distribution company which offers a diverse portfolio of high-quality innovative products sold directly to consumers and retailers. Our business is organized around four key areas: products (developing and manufacturing), distribution (getting our products to customers), marketing (promoting our products), and sales (selling our products to consumers and retailers). Our goal is to expand our product line and distribution reach to meet market demand and the needs of our customers. Our business is organized around four key areas:
| • | Products (developing and manufacturing unique products) |
| | |
| • | Distribution (getting our products to customers through Direct to store Delivery "DSD" and independent sales organizations "ISO's") |
| | |
| • | Branding (promoting our Products and our Company) |
| | |
| • | Sales (a technology and data-driven approach) |
We recently successfully deployed our new “White Glove” Direct to Store (“DSD”) service. This new service includes new point of sale displays for our flagship brand “The Feel Good Shop+” and “Mr. Vapor”. To implement the new DSD service program GPOX created “Mini Hubs” supported by a Regional Distribution Hub in Lubbock, Texas.
Currently, GPOX services approximately 570 stores across 12 states centralized in the Southwest and Midwest regions of the United States. The Company has already identified 316 locations approved for the new program, with approximately 100 currently active. The next 116 stores in Dallas, TX, Austin, TX, and Albuquerque, NM, plan to be activated before the end of October 2023. The Company also has in its growth plans to activate an additional 103 stores in Wyoming, Kansas, and Missouri marketplaces by the end of October 2023.
Once the Company opens a Mini Hub, sales teams actively look to add additional specialty retailers (gas stations, smoke shops, vape shops, and liquor stores), with a goal of each Mini Hub servicing approximately 100 to 150 locations. This equates to an initial goal of 1,000 to 1,500 retail locations to be supported by the Regional Hub in Lubbock.
During the six months ended October 31, 2023 and 2022, the Company recognized $2,188,280 and $82,069 of revenues related to merchandise and product sales, and $25 and $252 of revenues related to shipping recovered on merchandise sales, respectively, resulting in total revenue of $2,188,305 and $82,321, respectively. The Company incurred cost of revenue of $1,763,836 and $57,621 and generated gross profit of $424,469 and $24,700 during the six months ended October 31, 2023 and 2022, respectively. In regard to the sales that occurred during the six months ended October 31, 2023 and 2022, there are no unfulfilled obligations related to the merchandise and product sales.
During the six months ended October 31, 2023, the Company has one customer contributed over 10% of total sales at 94%.
During the six months ended October 31, 2022, the Company has two customers contributed over 10% of total sales at 2%, respectively.
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities refers to trade payable to non-affiliate vendors and payroll liabilities to employees. As of October 31, 2023 and April 30, 2023, accounts payable and accrued liabilities was $994,604 and $517,037, comprised of trade payable of $952,140 and $514,337 and payroll liabilities of $42,464 and $2,700, respectively.
Leases
We determine if an arrangement is a lease at inception and whether the lease obligation is an operating lease or finance lease in accordance with ASC 842, “Leases.” A lease obligation is classified as a finance lease, if at least one of the following criteria is met:
| · | A transferal of ownership of an asset to the lessee at the end of the term of the initial lease |
| · | The lessee is reasonably certain that they will exercise a purchase option at the end of the term of the lease |
| · | The leased asset has no alternative use to the lessor at the end of the lease |
| · | The lease term is a major part of the economic life (75%) of the underlying asset |
| · | The present value of lease payments is substantially all of the fair value of the leased asset (90%) |
Operating leases
Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term by adding interest expense determined using the effective interest method to the amortization of right-of-use asset. Amortization of the right-of-use asset is calculated as the difference between the straight-line expense and the interest expense on the lease liability over the lease term. Lease expense is presented at a single line item in the operating expense in the statement of operations. The right-of-use assets is tested for impairment in accordance with ASC 360.
Finance lease
Finance leases are included in finance lease right-of-use (“ROU”) assets, finance lease liabilities - current, and finance lease liabilities - noncurrent on the balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The finance lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Interest expense is determined using the effective interest method. Amortization is recorded on the right-of-use asset on a straight-line basis. Interest and amortization expense are generally presented separately in the statement of operations. The right-of-use asset is tested for impairment in accordance with ASC 360.
Segments
Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates and manages its business as one operating segment and all of the Company’s revenues and operations are currently in the United States.
Financial Instruments
The carrying values of our financial instruments comprised of our current assets and liabilities approximate their fair value due to the short maturities of these financial instruments.
Related Party Balances and Transactions
The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. (Note 7)
Convertible Financial Instruments
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable US GAAP with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable US GAAP.
When the Company has historically determined that the embedded conversion options should not be bifurcated from their host instruments, discounts have been recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument. On May 1, 2021, the Company chose to early adopt ASU 2020-06 and did not record a beneficial conversion feature (“BCF”) discount on the issuance of convertible notes with the conversion rate below the Company’s market stock price on the date of note issuance.
Share-Based Compensation
The Company accounts for share-based compensation under the fair value method in accordance with ASC 718, “Compensation - Stock Compensation,” which requires all such compensation to employees and non-employees to be calculated based on its fair value of the equity instrument at the grant date and recognized in the earnings over the requisite service or vesting period.
During the six months ended October 31, 2023, and 2022, the Company recorded $585,849 stock-based compensation expense and $1,220,973 stock-based compensation expense, which includes amortization of stock issued for prepaid services of $16,200 and $250,300, respectively. The stock-based compensation incurred from common stock awarded to consultants and executives was reported under professional fees and professional fees - related parties in the statements of operation.
| | Six Months Ended | |
| | October 31, | |
| | 2023 | | | 2022 | |
Common stock award to consultants | | $ | 262,135 | | | $ | 663,010 | |
Common stock award to management and executives - related parties | | | 323,714 | | | | 557,963 | |
| | $ | 585,849 | | | $ | 1,220,973 | |
Basic and Diluted Loss per Share
Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.
For the six months ended October 31, 2023, and 2022, Series A preferred stock, convertible notes, warrants and common stock payable were potentially dilutive instruments and were not included in the calculation of diluted loss per share as their effect would be antidilutive.
| | October 31, | | | October 31, | |
| | 2023 | | | 2022 | |
| | (Shares) | | | (Shares) | |
Series A Preferred Shares | | | 1,000,000 | | | | 1,000,000 | |
Convertible Notes | | | 188,000 | | | | 759,714 | |
Warrants | | | 168,000 | | | | 168,000 | |
Common Stock Payable | | | 1,491,842 | | | | - | |
| | | 2,847,842 | | | | 1,927,714 | |
The Company had 1,000,000 shares of Series A Preferred Stock issued and outstanding at October 31, 2023, and 2022, that are convertible into shares of common stock at a one-for-one rate. (Note 6)
As of October 31, 2023 and 2022, convertible shares from the Company’s non-affiliate convertible notes were 188,000 shares and 759,714 shares, respectively. (Note 8)
As of October 31, 2023 and 2022, the outstanding warrants issued in connection with these convertible notes were 168,000 and 168,000, respectively. (Note 6)
As of October 31, 2023 and 2022, the Company had stock payable of $190,605 and $0 for outstanding 1,491,842 shares and 0 shares of common stock, respectively. (Note 6)
Net loss per share for each class of common stock is as follows:
| | Six Months Ended | |
| | October 31, | |
| | 2023 | | | 2022 | |
Net loss per share, basic diluted | | $ | (0.05 | ) | | $ | (0.06 | ) |
Net loss per common shares outstanding: | | | | | | | | |
Founders Class A Common stock | | $ | (19.07 | ) | | $ | (15.51 | ) |
Ordinary Common stock | | $ | (0.05 | ) | | $ | (0.06 | ) |
| | | | | | | | |
Weighted average shares outstanding: | | | | | | | | |
Founders Class A Common stock | | | 115,000 | | | | 115,000 | |
Ordinary Common stock | | | 41,564,959 | | | | 32,173,897 | |
Total weighted average shares outstanding | | | 41,679,959 | | | | 32,288,897 | |
New Accounting Pronouncements
The Company’s management has considered all recent accounting pronouncements issued and believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
NOTE 4 – ASSETS PURCHASE
On July 7, 2022, the Company entered into an Assets Purchase Agreement to acquire inventory and intangible assets from Orev LLC. The purchase price consisted of $50,000 cash and 200,000 shares at $0.30 per share of the Company’s common stock for total consideration of $109,000. The Company acquired inventory of $23,447 and intangible assets valued at $85,553.
The inventory acquired are Nutriumph Products for resale purpose. These inventory items have been sold during the year ended April 30, 2023.
The intangible assets comprised of proprietary formula at $85,553 and Herberall trademarks with a deemed value of $0. The proprietary formula has an estimated useful life of three years. The Company incurred amortization expense of $14,259 and $9,005 for the six months ended October 31, 2023 and 2022, recorded as general and administrative expense. As of October 31, 2023, and April 30, 2023, the intangible asset was $48,031 and $62,290, net of accumulated amortization of $37,522 and $23,263. Based on the carrying value of definite-lived intangible assets as of April 30, 2023, the amortization expense for the next three years will be as follows:
| | Amortization | |
Year Ended April 30, | | Expense | |
2024 | | $ | 14,258 | |
2025 | | | 28,518 | |
Thereafter | | | 5,255 | |
| | $ | 48,031 | |
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment as of October 31, 2023, and April 30, 2023, are summarized as follows:
Cost | | Furniture and Equipment | | | Computer Equipment | | | Automobile | | | Total | |
April 30, 2023 | | $ | 72,504 | | | $ | 9,215 | | | $ | - | | | $ | 81,719 | |
Additions | | | - | | | | - | | | | 28,000 | | | | 28,000 | |
October 31, 2023 | | $ | 72,504 | | | $ | 9,215 | | | $ | 28,000 | | | $ | 109,719 | |
| | | | | | | | | | | | | | | | |
Accumulated Depreciation | | Furniture and Equipment | | | Computer Equipment | | | Automobile | | | Total | |
April 30, 2023 | | $ | 7,681 | | | $ | 1,152 | | | $ | - | | | $ | 8,833 | |
Additions | | | 10,404 | | | | 2,304 | | | | 137 | | | | 12,845 | |
October 31, 2023 | | $ | 18,085 | | | $ | 3,456 | | | $ | 137 | | | $ | 21,678 | |
| | | | | | | | | | | | | | | | |
Net book value | | Furniture and Equipment | | | Computer Equipment | | | Automobile | | | Total | |
April 30, 2023 | | $ | 64,823 | | | $ | 8,063 | | | $ | - | | | $ | 72,886 | |
October 31, 2023 | | $ | 54,419 | | | $ | 5,759 | | | $ | 27,863 | | | $ | 88,041 | |
On April 30, 2023, the Company issued 400,000 shares of common stock at $0.19 per share for total consideration of $76,000 to acquire furniture and warehouse equipment of $66,785 and computer equipment of $9,215.
On October 23, 2023, the Company acquired an automobile of $28,000.
As of October 31, 2023 and April 30, 2023, Property and Equipment was $88,041 and $72,886, respectively. Depreciation expense of $12,845 and $572 was incurred during the six months ended October 31, 2023 and 2022, respectively.
NOTE 6 - CAPITAL STOCK
Share Capital
On November 20, 2020, the Company filed amended and restated article of incorporation, resulting in increasing the authorized share capital from 125,000,000 shares to 200,000,000 shares and par value from $0.001 per share to $0.0001 per share consisting of the following:
| · | 90,000,000 shares of ordinary common stock |
| · | 10,000,000 shares of founders’ class A common stock |
| · | 50,000,000 shares of blank check common stock |
| · | 500,000 shares of founders’ series A non-voting redeemable preferred stock |
| · | 49,500,000 shares of blank check preferred stock |
On January 21, 2021, the Company filed amended certification of stock designation after issuance of class/series for designating 1,000,000 shares of blank check preferred stock as Series A Preferred Stock.
Equity Compensation Plans
On March 27, 2023, the board of directors and majority shareholder of the Company approved the adoption of the GPO Plus, Inc. 2023 Equity Incentive Plan (the “2023 Equity Incentive Plan”). The purpose of the 2023 Equity Incentive Plan is to foster and promote the Company’s long-term financial success and increase stockholder value by motivating performance through incentive compensation. The 2023 Equity Incentive Plan is intended to encourage participants to acquire and maintain ownership interests in the Company and to attract and retain the services of talented individuals upon whose judgment and special efforts the successful conduct of the Company’s business is largely dependent. A total of 2,200,000 shares of common stock are reserved and may be issued under the 202 Equity Incentive Plan. The 2023 Equity Incentive Plan provides for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares and performance units to our employees, officers, directors, and consultants, including incentive stock options, non-qualified stock options, restricted stock, and other benefits.
Equity Compensation Plan Information | | | | | | | | | |
| | | | | | | | | |
Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (1) | |
Equity compensation plans approved by security holders | | | | | | | | 1,867,122 common | |
| | | - | | | | N/A | | | shares | |
| (1) | On April 4, 2023, the Company issued 332,878 shares of immediately vested common stock to employees and consultants under the 2023 Equity Incentive Plan. The market value of the shares on the grant date was $0.162 per share, resulting in a $53,892.96 expense and 1,867,122 remaining shares issuable under the plan. No options or warrants were issued in connection with these common shares. |
Ordinary Common Stock
Six months ended October 31, 2023
During the six months ended October 31, 2023, the Company issued 613,437 shares of common stock for the conversion of convertible note principal of $93,150 at a fixed conversion rate of $0.15 per share. (Note 8)
During the six months ended October 31, 2023, the Company issued 400,000 shares of common stock for the conversion of 7,500 founders series A non-voting redeemable preferred Stock of $57,751.
During the six months ended October 31, 2023, the Company issued 400,000 shares of common stock for term extension of three promissory notes.
During the six months ended October 31, 2023, the Company issued 786,000 shares of common stock as loan inducements for promissory notes of $478,500 issued on the same dates.
During the six months ended October 31, 2023, the Company issued 1,470,279 shares of common stock to senior management and executives.
During the six months ended October 31, 2023, the Company issued 984,844 shares of common stock to consultants and employees for services.
Six months ended October 31, 2022
During the six months ended October 31, 2022, the Company issued 581,000 shares of common stock to consultants for services.
During the six months ended October 31, 2022, the Company issued 525,960 shares of common stock to executives and employees.
During the six months ended October 31, 2022, the Company issued 31,310 shares of common stock to the Company’s landlord for partial payment of rent.
During the six months ended October 31, 2022, the Company issued 16,500 shares of common stock to a consultant for cash proceeds of $24,750.
During the six months ended October 31, 2022, the Company issued 280,000 shares of common stock through the exercise of warrant shares from the convertible note of $280,000 issued on June 16, 2021, for proceeds of $42,000 at $0.15 per share.
On July 7, 2022, in pursuant to an asset purchase agreement to acquire assets from Nutriumph, the Company made a $50,000 cash payment and issued 200,000 shares of common stock at $0.30 per share totalling $59,000.
During the six months ended October 31, 2022, the Company issued 1,075,000 shares of common stock valued at $320,902 to noteholders as an inducement for convertible notes of $625,000 issued during the period.
During the six months ended October 31, 2022, the Company issued 80,000 shares of common stock at $35,200 to the VP Sales and Marketing of the Company in payment of accrued salary.
During the six months ended October 31, 2022, the Company issued 133,333 shares of common stock for the conversion of convertible note principal of $20,000 at a fixed conversion rate of $0.15 per share.
As of October 31, 2023 and April 30, 2023, the issued and outstanding ordinary common stock was 44,108,860 and 39,454,300 shares, respectively.
Founders’ Class A Common Stock and Founders’ Series A Non-Voting Redeemable Preferred Stock
During the year ended April 30, 2021, the Company issued common and preferred stock units comprising 115,000 shares of founders’ class A common stock and 28,750 shares of founder’s series A non-voting redeemable preferred stock to non-affiliates for total consideration of $287,500.
The founder’s series A non-voting redeemable preferred stock has a redemption value of $15 per share and is contingently redeemable at the holder’s option, and as a result was classified as mezzanine equity in the Company’s balance sheet. The redemption value of $224,905 was determined to be its fair market value. The excess of the cash consideration of $287,500 over the fair value of the founder’s series A non-voting redeemable preferred stock of $224,905 was allocated to the common stock at $62,595.
During the six months ended October 31, 2023, the Company issued 400,000 shares of common stock for the conversion of 7,500 founders series A non-voting redeemable preferred stock of $57,751.
As of October 31, 2023 and April 30, 2023, the Company had 115,000 shares of founders’ class A common stock and 21,250 shares of founders’ series A non-voting redeemable preferred stock issued and outstanding.
Series A Convertible Preferred Stock
The Company has designated 1,000,000 shares of series A convertible preferred s