UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the fiscal year ended:
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(g) of the Act:
N/A
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. Yes ☐
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 last 90 days.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The aggregate market value of Common Stock held by non-affiliates of the Registrant as of October 31, 2022, the last business day of the Registrant’s most recently completed second fiscal quarter, was approximately $
As of August 30, 2023, the Registrant had
TABLE OF CONTENTS
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| RISK FACTORS | 8 | |
| UNRESOLVED STAFF COMMENTS | 9 | |
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FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this current report and unless otherwise indicated, the terms “we,” “us,” “our” and “our company” mean GPO Plus, Inc., unless otherwise indicated.
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PART I
ITEM 1. BUSINESS
General Overview
History
GPO Plus, Inc. (the “Company”) was incorporated in the State of Nevada on March 29, 2016, under the name Koldeck, Inc. for the purpose of operating a publishing business providing services of professional ghost writers, content writers, editors and publishers. We have since changed our business model and now operating as a publicly traded global holding company of industry specific group purchasing organizations (GPOs), presently trading under the stock symbol GPOX.
Our business and corporate headquarters address is 3571 E. Sunset Road, Suite 300, Las Vegas, NV 89120 and our telephone number is 702-840-1020. Our corporate website is gpoplus.com and our section for shareholder is gpoplus.com/ir.
We do not have any subsidiaries as of the date of this Annual Report.
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The Company
Our Current Business
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) |
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| • | Distribution (getting our products to customers through Direct to store Delivery "DSD" and independent sales organizations "ISO's") |
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| • | Branding (promoting our Products and our Company) |
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| • | 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.
Our Divisions
DISTRO+
DISTRO+ is a Group Purchasing Organization (GPO) + distributor of premium products for the emerging specialty retailer sector and wholesalers. DISTRO+ proudly represents best-in-class brands focusing on nutraceuticals, hemp-derived Farm Bill Compliant products, and Kratom. DISTRO+ operates a Direct to Store Delivery “DSD” distribution model, which provides its customers with the highest level of service. It’s backed by a robust technology portal that gives our partners and customers the IT backbone to manage logistics, inventory, and payments while shopping from real time product catalogues and inventory. Through the power of Group Purchasing, DISTRO+ offers its network competitive pricing with low MOQs that realize similar discounts as major retailers with large buying power.
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Nutriumph® Supplements
Nutriumph® is an innovative supplement company whose mission is to offer premium nutraceuticals to assist consumers to reach their health and wellness goals with natural ingredients. Nutriumph® products are made with the finest quality ingredients but unlike many other supplement manufacturers, their products come with strict key certifications including but not limited to Gluten-Free, Sugar-Free, 100% Vegan, Non-GMO, and USDA Certified Organic. All Nutriumph® products are Made in the USA at FDA inspected facilities that follow Good Manufacturing Practices (cGMP). Nutriumph® has offices in Las Vegas, Nevada, and Los Angeles, California, and its Laboratory is located in Newnan, Georgia.
Nutriumph®’s top-selling product HERBERALL® is a powerful and 100% natural dietary Brain support supplement (Nootropic) blend that promotes mental awareness and alertness. Designed as a natural alternative to potentially harmful and addiction-forming ADD/ADHD medications. Made from herbs and plants, HERBERALL® improves your energy and mental focus without jitters or crashes.
Since its inception, Nutriumph® developed a strong direct-to-consumer (DTC) online sales infrastructure including optimized and seasoned seller accounts on Amazon, Walmart Marketplace, Etsy, and eBay as well as their primary websites Nutriumph.com and HERBERALL.com. The next growth phase will be expanding Nutriumph® and HERBERALL® into retailers nationally through our distribution division, DISTRO+.
Feel Good Shop+
The Feel-Good Shop+ is an innovative “store within a store” retail concept offering an extensive range of CBD and other hemp-derived cannabinoid products. The Feel-Good Shop+ offers consumers an extensive range of hemp-derived cannabinoid products, including Delta-8, HHC, and other leading products from trusted companies like Hempacco, Kill Cliff, Canopy Growth, and CaliGold’s Flavorz. Consumers will be able to find all their favorite products in one place.
GPOX Labs
GPOX Labs is the division of GPOPlus+ that powers its technology, product development, and digital marketing to drive growth by improving operational efficiencies, developing innovative consumer products, and exploring new ways to connect with customers.
Our Products
Our product portfolio comprises best-in-class, high-quality, innovative, and fully compliant products representing numerous brands spanning multiple categories. We offer GPOX Brands, Licensed Brands, and Partner Brands, each designed to deliver value and performance to our customers.
| ● | GPOX Brands - GPOX branded products have the highest margins for GPOX. The initial focus has been on CBD, recreational hemp, and nutraceutical products where the Company maintains a competitive advantage, creating long term value to the Company with proprietary house brands. We strategically evaluate additional house brands that align with current distribution channels to grow GPOX.
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| ● | Licensed Brands - We collaborate with established brands to create and manufacture high quality products that consumers are familiar with. We enter Licensing Agreements and pay a royalty on products sold, normally with exclusivity. By way of example, we completed a licensing agreement to create Yuengling's Ice Cream flavored recreational hemp and CBD products, as many people are familiar with the brand that is currently sold at thousands of retail locations.
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| ● | Partner Brands - We identify "category killer" established brands such as Mr. Vapor and FLAVYOR'S and enter into distribution agreements to help increase sales for our Partner brands. |
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Product Categories
| ● | Vitamins, Nutraceuticals + Nutritional Products. |
| ● | Tobacco: Disposable Nicotine Vape Products+ Accessories. |
| ● | General Merchandise for Specialty Retailers. |
| ● | Recreational Hemp, Kratom + CBD Consumer Packaged Goods. |
Branding + Marketing
Branding begins with creating meaningful connections between our brands and their audience. While point of sale placement at retailers provides immediate attention, we create additional touch points to create brand awareness, build loyalty and increase sales. This may sound like a basic concept, but many companies approach their products as commodities, and we strongly disagree with that strategy. We differentiate ourselves by using a variety of cutting-edge technologies, marketing platforms, and channels to engage with our existing customers creating multiple touch points to expand our reach to new audiences. We constantly test and iterate new marketing strategies and techniques to find the most effective ways to build brand awareness and increase revenue.
Sales
GPOX has multiple sales channels to sell our products both direct-to-consumer and to retailers. Our sales channels include online eCommerce, tele sales, and traditional retail channels.
The Company developed proprietary software, MSRP+ ("Multiple Site Replicating Platform"), which allows multiple fully Search Engine Optimized eCommerce websites to be supported from one centralized backend platform, creating efficiencies to test targeted digital campaigns, reduce costs, improve the shopping experience, analyze market opportunities, and enhance the Company's competitive edge.
As we continue to develop and optimize our sales channels, we explore new and innovative ways to meet the evolving needs of our customers and drive growth in our business. Our strategic approach to sales, coupled with our focus on innovation and customer satisfaction, underscores our commitment to delivering long-term value for our investors.
Suppliers
We source our products from various suppliers and serve as an important partner for our suppliers by providing them access to our growing customer base. Many of our suppliers provide products to each of our reportable divisions, while others sell to only one division. Our supplier base consists of large and small vendors selling national regional brands. We particularly maintain close relations with vendors specializing in our CBD products as these are products new to the US market. Many of our suppliers provide sales material and sales support for the products that we purchase.
Pricing
Our pricing for customers is either set by contract with the customer or is priced at the time of order. If the price is by contract, fixed markup per unit.
Trademarks and Trade Names
We have perpetual trademarks and trade names that are of significant importance, including HERBERALL® and Nutriumph®.
Human Capital Resources
One of our primary strategies is to attract, train, develop, and retain talented individuals who feel empowered to fully contribute their diverse backgrounds, experiences, and innovative ideas to the success of the Company. We also recognize the importance of keeping our associates safe and healthy, as well as giving them a voice and listening to their concerns and suggestions.
Available Information
We file annual, quarterly, and current reports, proxy statements and other information with the SEC. Our filings with the SEC are available to the public on the SEC’s website at www.sec.gov. Those filings are also available to the public on, or accessible through, our website for free via the “Investors” section at www.pfgc.com. The information we file with the SEC or contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference herein and is not part of this Form 10-K.
Website and social media Disclosure
We use our website (www.gpoplus.com) and our corporate Facebook and Twitter accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about GPO when you enroll in your e-mail address by visiting the “Newsletter” section of our website at investors.gpoplus.com. The contents of our website and social media channels are not, however, a part of this Form 10-K.
Government Regulation
GPOX is regulated by various federal, state, and local governmental agencies, such as the U.S. Department of Agriculture ("USDA"), the U.S. Food and Drug Administration, the Occupational Safety and Health Administration, the Bureau of Alcohol Tobacco and Firearms, and the U.S. Department of Transportation. These regulatory bodies establish standards concerning product quality, sanitation, workplace safety, and distribution policies.
The Company operates in 12 states and is required to adhere to state regulations regarding the distribution and sale of nicotine, tobacco, and Farm Bill compliant hemp derived CBD products. These regulations usually involve licensing and bonding requirements. Additionally, both state and federal regulatory agencies have the authority to levy excise taxes on cigarette and tobacco products. In recent times, several states have increased these excise taxes in response to budget shortfalls and to discourage tobacco product usage. We anticipate this trend to persist as legislators seek alternative revenue sources and ways to discourage nicotine, tobacco, and Farm Bill compliant hemp derived CBD consumption.
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Status of Any Publicly Announced New Product or Service.
We have not developed any new or unique products or services that have not already been announced.
Dependence on Limited Customers
We are not dependent upon any specific customers at this time.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts
We do not own, either legally or beneficially, any patent or trademark. We claim common law trademark rights to our corporate names, and copyright in our marketing and promotional materials.
Need for Government Approval of Principal Products or Services
None of the services we plan to offer require specific government approval. Local government rules may dictate the need for a business license.
Research and Development during Our Last Two Fiscal Years
We have not in the past two years conducted any research and development activities.
Employees and Consultants
We had 8 employees as of April 30, 2023, or as at the date of this Annual Report. As of the date of this Annual Report we are actively recruiting employees. We anticipate that we will require approximately 15 to 20 employees during fiscal 2024. We may also engage independent contractors as required to assist us in developing our business.
ITEM 1A. RISK FACTORS
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES
Our principal business and corporate address are 3571 E. Sunset Road, Suite 300, Las Vegas, NV 89120. This office is currently leased for a term of 12 months at the cost of $5.000 per month, consisting of $2,500 payable in common shares of the Company (calculated based on a 10% discount to fair market value at the time of payment) and $2,500 payable in cash. We may extend our lease on a month-to-month basis following the expiration of the initial term.
The Company also operates a Regional Distribution Hub in Lubbock, Texas. This office is located at 512 East 42nd Street Lubbock, Texas 79404. This office is approximately 9,940 square feet and is currently leased for a term ending March 31, 2024, at a cost of $3,600 per month.
We do not, currently, have any investments or interests in any real estate, nor do we have investments or an interest in any real estate mortgages or securities of persons engaged in real estate activities.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business.
As of the date of this Annual Report, we are not involved in any pending legal proceeding or litigation, and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party, and which would reasonably be likely to have a material adverse effect on our company.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
There is a limited public market for our common shares. Our common shares have been listed for quotation on the OTCQB under the trading symbol “GPOX” since March 2021. Trading in stocks quoted on the OTC Markets is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. OTC securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Market issuers are traditionally smaller companies that are financially distressed, in bankruptcy, or do not meet the financial and other listing requirements of a regional or national stock exchange.
Holders
As of August 29, 2023, we had 134 shareholders of record of our common stock with 44,223,860 shares of common stock outstanding.
Dividends
We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
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 2023 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.
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The following table provides information regarding our equity compensation plans as of April 30, 2023:
Equity Compensation Plan Information |
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Equity compensation plans approved by security holders |
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| 1,867,122 common | |
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| (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 $53,893 expenses and 1,867,122 remaining shares issuable under the plan. No options or warrants were issued in connection with these common shares. |
Recent Sales of Unregistered Securities
There were no sales of equity securities during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by the Company.
During the year ended April 30, 2023, the Company issued 1,670,701 shares of common stock to consultants and employees at $630,734 for services.
During the year ended April 30, 2023, the Company issued 1,962,865 shares of common stock to executives at $816,263 for services.
During the year ended April 30, 2023, the Company issued 450,000 shares of common stock at $63,450 for term extension of promissory notes for three additional months.
During the year ended April 30, 2023, the Company issued 505,000 shares of common stock for prepaid expenses at $200,700 to consultants for services.
During the year ended April 30, 2023, the Company issued 81,975 shares of common stock to landlord at $32,591 for lease payment on office premise.
During the year ended April 30, 2023, the Company issued 16,500 shares of common stock for cash proceed of $24,757.
During the year ended April 30, 2023, 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.
During the year ended April 30, 2023, the Company issued 400,000 shares of common stock for the acquisition of $76,000 in property and equipment from an unaffiliated firm at $0.19 per share.
During the year ended April 30, 2023, 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 totaling $59,000.
During the year ended April 30, 2023, the Company issued 1,133,332 shares of common stock for the conversion of convertible note principal of $170,000 at a fixed conversion rate of $0.15 per share.
During the year ended April 30, 2023, the Company issued 2,975,000 shares at total value of $468,894 to noteholders as inducement for promissory notes.
During the year ended April 30, 2023, in pursuant of their resignation agreement, the COO and President of the Company returned 1,369,333 shares and 750,000 shares of common stock to the Company, respectively. The returned shares were immediately cancelled.
From May 1, 2023 through August 29, 2023, the Company issued 613,437 shares of common stock for the conversion of note principal amount of $93,150.
Pursuant to the exchange agreement entered on May 18, 2023, the Company issued 400,000 shares of common stock for the conversion of 7,500 Founders Series A Non-Voting Redeemable Preferred Stock.
On August 15, 2023, the Company issued an aggregate of 400,000 shares of common stock for term extension of three promissory notes.
On August 15, 2023, the Company issued 675,377shares of common stock to consultants for services.
On August 15, 2023, the Company issued 786,000 shares of common stock as loan inducements for to promissory notes.
On Aug 15, 2023, the Company issued 1,629,746 shares of common stock to executives and employees.
Issuer Purchases of Equity Securities
There were no repurchases of common stock for the year ended April 30, 2023, or subsequently through the date of this report.
ITEM 6. RESERVED
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report.
Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Results of Operations
The following summary of our results of operations should be read in conjunction with our financial statements for the years ended April 30, 2023 and 2022, which are included herein.
We had revenues of $653,516 for the year ended April 30, 2023, and $1,162,822 revenues from our operations during the year ended April 30, 2022.
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Year Ended April 30, 2023 Compared to Year Ended April 30, 2022 |
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Revenues |
| $ | 653,516 |
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| $ | 1,162,822 |
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Cost of revenue |
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Gross Profit |
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| 885 | % |
Operating Expenses |
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Loss from Operations |
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Other Expenses |
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Net Loss |
| $ | (4,035,513 | ) |
| $ | (29,590,456 | ) |
| $ | 25,554,943 |
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Our audited financial statements report a net loss of $4,035,513 for the year ending April 30, 2023, compared to a net loss of $29,590,456 for the year ending April 30, 2022. The decrease in net loss during the year ended April 30, 2023 was due to a decrease in the operating expenses, which was primarily attributable to an approximately $26 million decrease in stock-based compensation during fiscal 2023 as compared to 2022.
During the years ended April 30, 2023 and 2022, the Company recognized revenue of $653,516 and $1,162,822 and incurred cost of revenue of $467,504 and $1,143,947, generating gross profit of $186,012 and $18,875, respectively.
Our operating expenses for the year ended April 30, 2023 were $3,800,241 compared to $29,279,447 for the year ended April 30, 2022. The operating expenses consist of general and administrative expenses of $590,088, professional fees of $1,784,260, professional fees – related parties of $843,226 and management fees and salaries – related parties of $582,667. The operating expenses for the year ended April 30, 2022 consisted of general and administrative expenses of $333,961, professional fees of $7,670,331, professional fees – related parties of $21,003.523 and management fees and salaries – related parties of $271,632. The decrease in operating expenses during the year ended April 30, 2023 was due to the decrease in stock based compensation incurred. During the year ended April 30, 2023, we incurred stock based compensation of $2,139,257 as compared to $27,848,384 during the year ended April 30, 2022.
Liquidity and Financial Condition |
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Working Capital |
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Current Assets |
| $ | 325,458 |
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| $ | 449,614 |
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Current Liabilities |
| $ | 2,389,691 |
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| $ | 1,146,362 |
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Working Capital (Deficiency) |
| $ | (2,064,233 | ) |
| $ | (696,748 | ) |
Our total current assets as of April 30, 2023 were $325,458 as compared to total current assets of $449,614 as of April 30, 2022, due to a decrease in prepaid expense primarily offset with increases to accounts receivable and inventory.
Our total current liabilities as of April 30, 2023 were $2,389,691 as compared to total current liabilities of $1,146,362 as of April 30, 2022. The increase was primarily due to an increase in promissory notes, accrued interest and accounts payable.
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Our working capital deficit on April 30, 2023 was $2,064,233 as compared to working capital deficit of $696,748 as of April 30, 2022. The increase in working capital deficiency was attributed to an increase in promissory notes, accrued interest and accounts payable and a decrease in prepaid expenses.
Cash Flows
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| Year Ended |
|
|
| |||
|
| April 30, |
|
|
| |||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Cash Flows used in Operating Activities |
| $ | (1,338,214 | ) |
| $ | (414,623 | ) |
Cash Flows used in Investing Activities |
|
| (26,553 | ) |
|
| (21,310 | ) |
Cash Flows provided by Financing Activities |
|
| 1,417,386 |
|
|
| 426,403 |
|
Net increase (decrease) in cash during period |
| $ | 52,619 |
|
| $ | (9,530 | ) |
Operating Activities
Net cash used in operating activities was $1,338,214 for the year ended April 30, 2023, compared with net cash used in operating activities of $414,623 during the prior year.
During the year ended April 30, 2023, the net cash used in operating activities was attributed to net loss of $4,035,513, decreased by stock-based compensation of $2,139,257, stock issued for promissory note extension of $63,450, lease expense settled by common stock $32,591, depreciation of furniture and equipment of $7,212, depreciation of right-of-use assets of $2,753, amortization of intangible assets of $23,263, amortization of promissory note discount of $311,441, amortization of convertible note discount of $15,480, interest expense on finance lease of $855, and net changes in operating assets and liabilities of $110,997.
During the year ended April 30, 2022, the net cash used in operating activities was attributed to net loss of $29,590,456, decreased by stock-based compensation of $27,848,384, lease expense settled by common stock of $52,900, depreciation of furniture and equipment of $1,143, amortization of convertible note discount of $298,580, bad debt expense of $84,442, and share issuance cost of $1,035, and net changes in operating assets and liabilities of $2,085.
.
Investing Activities
During the year ended April 30, 2023, we used $26,553 for purchase of intangible assets. During the year ended April 30, 2022, we used $21,310 for investing activities related to advances on loan receivable from a related party.
Financing Activities
During the year ended April 30, 2023, net cash from financing activities was $1,417,386 compared to $426,403 during the year ended April 30, 2022. During the year ended April 30, 2023, we made repayments for finance leases of $19,371 and promissory notes of $55,000, and, received proceeds from issuance of common stock of $24,757, exercise of warrants of $42,000, and issuance of promissory notes of $1,425,000. During the year ended April 30, 2022, the Company received proceeds from the issuance of preferred stock of $18, common stock of $29,385, and convertible notes of $397,000.
| 13 |
| Table of Contents |
Cash Requirements
As of April 30, 2023, we had cash and cash equivalents of $55,496, accounts receivable of $43,614, prepaid expenses of $69,351 and inventory of $156,997. During the year ended April 30, 2023, we received proceeds from issuance of promissory notes of $1,425.000. During the year ended April 30, 2023, the Company recognized revenue of $653,516, incurred cost of revenue of $467,504 and generated gross profit of $186,012. During the year ended April 30, 2022, the Company recognized revenue of $1,162,822, incurred cost of revenue of $1,143,947 and generated gross profit of $18,875.
We will require additional funds for our budgeted expenses over the next 12 months. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.
Specifically, based on nominal operations we estimate our operating expenses and working capital requirements for the next 12 months to be as follows:
|
| Estimated |
| |
Description |
| Expenses ($) |
| |
Public Company + Professional Fees |
| $ | 170,000 |
|
General & Administrative Expense |
| $ | 800,000 |
|
Marketing Expenses |
| $ | 540,000 |
|
Initial Personnel |
| $ | 150,000 |
|
GPO Distro |
| $ | 500,000 |
|
GPO Supplies - Inventory |
| $ | 70,000 |
|
Unallocated Working Capital/Contingency |
| $ | 100,000 |
|
Total Expenses |
| $ | 2,330,000 |
|
We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, including approximately $2,330,000 over the next 12 months to pay for our planned expenses. In addition, our planned expenses, including legal, accounting and audit fees, and general and administrative expenses, may be higher in the event we enter into any significant transactions. These planned cash requirements are in excess of our current cash and working capital resources. Although our cash requirements may be offset in part by anticipated revenues, we will require additional financing in order to continue operations, execute our business plan, and repay our liabilities. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.
We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuance of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities. We presently do not have any arrangements for additional financing for the expansion of our future operations, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations. If we are not successful in raising sufficient capital to execute our business plan, we will be required to scale down or delay our plan of operation to accommodate our available resources.
Contractual Obligations
Not required for smaller reporting companies
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
| 14 |
| Table of Contents |
Critical Accounting Policies
The preparation of financial statements in 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Revenue Recognition
During the year ended April 30, 2023, the Company generated its first revenue since its establishment. The Company recognizes revenue from the sale of products in accordance with ASC 606, “Revenue Recognition” following the five steps procedure:
| • | The invoice has been generated and provided to the customer. |
| • | The performance obligations for delivery of products are stated in the invoice. |
| • | The transaction price has been identified in the invoice. |
| • | The Company has allocated the transaction price to performance obligation in the invoice. |
| • | The Company has shipped out the product and, therefore, satisfied the performance obligation. |
| 15 |
| Table of Contents |
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 generally accepted accounting principles 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 U.S. GAAP.
When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, discounts are 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.
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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
| 16 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
GPO Plus, Inc.
Las Vegas, NV
Opinion on the Financial Statements
We have audited the accompanying balance sheets of GPO Plus, Inc. (the Company) as of April 30, 2023 and 2022, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Considerations
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses since inception, has a working capital deficit, and has not achieved profitable operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Pinnacle Accountancy Group of Utah
Pinnacle Accountancy Group of Utah
(a dba of Heaton & Company, PLLC)
We have served as the Company’s auditor since 2018.
August 30, 2023
(Pinnacle PCAOB ID:
| 17 |
| Table of Contents |
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
GPO PLUS, INC.
AUDITED BALANCE SHEETS
|
| April 30, |
|
| April 30, |
| ||
|
| 2023 |
|
| 2022 |
| ||
ASSETS |
|
|
|
|
|
| ||
Current Assets: |
|
|
|
|
|
| ||
Cash |
| $ |
|
| $ |
| ||
Accounts receivable |
|
|
|
|
|
| ||
Prepaid expenses |
|
|
|
|
|
| ||
Inventory |
|
|
|
|
|
| ||
Total Current Assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Finance lease right-of-use assets, net |
|
|
|
|
|
| ||
Property and equipment, net |
|
|
|
|
|
| ||
Intangible assets, net |
|
|
|
|
|
| ||
TOTAL ASSETS |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
|
|
| ||
Accrued interest |
|
|
|
|
|
| ||
Accrued liabilities - related parties |
|
|
|
|
|
| ||
Convertible note payable, net of debt discount of $ |
|
|
|
|
|
| ||
Promissory note payable, net of debt discount of $ |
|
|
|
|
|
| ||
Finance lease liabilities |
|
|
|
|
|
| ||
Total Current Liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Finance lease liabilities |
|
|
|
|
|
| ||
Total Liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 11) |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Founders Series A Non-Voting Redeemable Preferred Stock, $ |
|
|
|
|
|
| ||
Series A Non-Voting Redeemable Preferred Stock, $ |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Stockholders' Deficit: |
|
|
|
|
|
|
|
|
Series A Preferred Shares, $ |
|
|
|
|
|
| ||
Founders Class A Common stock, $ |
|
|
|
|
|
| ||
Common stock, $ |
|
|
|
|
|
| ||
Additional paid in capital |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Total Stockholders' Deficit |
|
| ( | ) |
|
| ( | ) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these audited financial statements.
| 18 |
| Table of Contents |
GPO PLUS, INC.
AUDITED STATEMENTS OF OPERATIONS
|
|
| Year Ended |
| ||||||
|
|
| April 30, |
| ||||||
|
|
| 2023 |
|
| 2022 |
| |||
|
|
|
|
|
|
|
| |||
Revenues |
|
| $ |
|
| $ |
| |||
Cost of revenue |
|
|
|
|
|
|
| |||
Gross Profit |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |
Operating Expenses |
|
|
|
|
|
|
|
|
| |
General and administrative |
|
|
|
|
|
|
| |||
Professional fees |
|
|
|
|
|
|
| |||
Professional fees - related parties |
|
|
|
|
|
|
| |||
Management fees and salaries - related parties |
|
|
|
|
|
|
| |||
Total Operating Expenses |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |
Loss from operations |
|
|
| ( | ) |
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
| |
Other Expense |
|
|
|
|
|
|
|
|
| |
Interest expense |
|
|
| ( | ) |
|
| ( | ) | |
Total Other Expense |
|
|
| ( | ) |
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
| |
Net Loss |
|
| $ | ( | ) |
| $ | ( | ) | |
|
|
|
|
|
|
|
|
|
| |
Net Loss Per Common Share: Basic and Diluted |
|
| $ | ( | ) |
| $ | ( | ) | |
|
|
|
|
|
|
|
|
|
| |
Weighted Average Number of Common Shares Outstanding: Basic and Diluted |
|
|
|
|
|
|
| |||
The accompanying notes are an integral part of these audited financial statements.
| 19 |
| Table of Contents |
GPO PLUS, INC.
AUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED APRIL 30, 2023 AND 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, 2021 |
|
|
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||||||||
Issuance of preferred stock for cash |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Stock based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Stock based compensation - related party |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for prepaid expense |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for lease |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for cash |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for conversion of debts |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Warrants issued in conjunction with convertible note |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance, April 30, 2022 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||||||
Stock based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Stock based compensation - related party |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for promissory note extension |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for prepaid expense |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for lease |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for cash |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for exercise of warrants |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Issuance of common stock for furniture and equipment |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
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| - |
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| |||||||||
Issuance of common stock for intangible assets |
|
| - |
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|
|
| - |
|
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|
| - |
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| - |
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| |||||||||
Issuance of common stock for note conversion |
|
| - |
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| - |
|
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|
|
| - |
|
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| - |
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| |||||||||
Issuance of common stock for note inducement |
|
| - |
|
|
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|
|
| - |
|
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|
|
| - |
|
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| - |
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| |||||||||
Issuance of common stock for salary payable - related party |
|
| - |
|
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|
|
| - |
|
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|
|
| - |
|
|
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|
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| - |
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| |||||||||
Cancellation of common stock - related parties |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
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| - |
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| ( | ) |
|
| ( | ) |
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| |||||||
Forgiveness of related party loan |
|
| - |
|
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| - |
|
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|
|
| - |
|
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|
|
| - |
|
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| - |
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| ||||||||
Net loss |
|
| - |
|
|
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|
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| - |
|
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|
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| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance, April 30, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||||||
The accompanying notes are an integral part of these audited financial statements.
| 20 |
| Table of Contents |
GPO PLUS, INC.
AUDITED STATEMENTS OF CASH FLOWS
|
| Year Ended |
| |||||
|
| April 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
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| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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|
Stock based compensation for services |
|
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Stock Issued for promissory note extension |
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Stock based compensation for services - related parties |
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Lease expense settled by common stock |
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Depreciation of furniture and equipment |
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Depreciation of right-of-use-assets |
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Amortization of intangible assets |
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Amortization of promissory note discount |
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Amortization of convertible note discount |
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Interest expense on finance lease |
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Bad debt expense |
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Share issuance cost |
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Changes in operating assets and liabilities: |
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|
Accounts receivable |
|
| ( | ) |
|
| ( | ) |
Prepaid expenses |
|
| ( | ) |
|
| ( | ) |
Inventory |
|
| ( | ) |
|
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| |
Accounts payable and accrued liabilities |
|
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| ||
Accrued interest |
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| ||
Accrued liabilities - related parties |
|
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| ||
Stock payable for lease |
|
|
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|
| ( | ) | |
Net cash used in Operating Activities |
|
| ( | ) |
|
| ( | ) |
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CASH FLOWS FROM INVESTING ACTIVITIES |
|
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Purchase of intangible assets |
|
| ( | ) |
|
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| |
Advances on loan receivable - related party |
|
|
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|
| ( | ) | |
Net cash used in Investing Activities |
|
| ( | ) |
|
| ( | ) |
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|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
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Repayment for finance leases |
|
| ( | ) |
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| |
Proceeds from issuance of preferred stock for cash |
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| ||
Proceeds from issuance of common stock |
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| ||
Proceeds from exercise of warrants |
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Proceeds from issuance of promissory notes |
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Repayment of promissory note |
|
| ( | ) |
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| |
Proceeds from issuance of convertible notes |
|
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| ||
Net cash provided by Financing Activities |
|
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| ||
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|
Net change in cash for period |
|
|
|
|
| ( | ) | |
Cash at beginning of period |
|
|
|
|
|
| ||
Cash at end of period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for income taxes |
| $ |
|
| $ |
| ||
Cash paid for interest |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Recognition of finance lease right-of-use assets |
| $ |
|
| $ |
| ||
Forgiveness of related party loan |
| $ |
|
| $ |
| ||
Warrants issued in conjunction with the issuance of convertible note |
| $ |
|
| $ |
| ||
Issuance of common stock for intangible assets |
| $ |
|
| $ |
| ||
Issuance of common stock for note inducement |
| $ |
|
| $ |
| ||
Issuance of common stock for salary payable - related party |
| $ |
|
| $ |
| ||
Issuance of common stock for note conversion |
| $ |
|
| $ |
| ||
Issuance of common stock for furniture and equipment |
| $ |
|
| $ |
| ||
Issuance of common stock for prepaid expense |
| $ | |
|
| $ | |
|
Cancellation of common stock by related parties |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these audited financial statements.
| 21 |
| Table of Contents |
GPO PLUS, INC.
NOTES TO THE AUDITED FINANCIAL STATEMENTS
APRIL 30, 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
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.
We are a start-up company engaged in the business of organizing, promoting, and operating industry-specific group purchase organizations (GPOs). A GPO is an entity created to leverage the purchasing power of a group of businesses (or individuals) to obtain discounts from vendors.
NOTE 2 - GOING CONCERN
The Company’s financial statements as of April 30, 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 $
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.
| 22 |
| Table of Contents |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) and are presented in US dollars. The Company’s year-end is April 30.
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.
Reclassifications
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 April 30, 2023 and 2022, the Company had cash of $
Accounts Receivable
Accounts receivable 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 April 30, 2023 and 2022, the Company had accounts receivable of $
As of April 30, 2023, the Company has two customers concentrated over 10% of the accounts receivable at 67% and 27%, respectively.
As of April 30, 2022, the Company has three customers concentrated over 10% of the accounts receivable at 46%, 30% and 21%, respectively.
Prepaid Expense
Prepaid expenses relate to security deposit for 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 April 30, 2023 and 2022, prepaid expense was $
|
| April 30, |
|
| April 30, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Security Deposit |
| $ |
|
| $ |
| ||
Prepayment for shares issued to consultants |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
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 makes adjustments to these reserves as required.
As of April 30, 2023 and 2022, the Company had finished goods inventory of $
Intangible Assets
The Company accounts for intangible assets (including trademarks and formula) in accordance with ASC 350 “Intangibles-Goodwill and Other.”
| 23 |
| Table of Contents |
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 its 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 | |
Computer Equipment | |
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 nine months ended April 30, 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.
The Company engages in the business of organizing, promoting, and operating industry-specific group purchase organizations (GPOs). A GPO is an entity created to leverage the purchasing power of a group of businesses (or individuals) to obtain discounts from vendors. The Company identifies underserved markets, segments, and industries where there is little to no competition and develops specific GPOs around them. The Company develops industry specific GPOs that leverage the aggregated purchasing power of its members. The GPOs use collective buying power to obtain and negotiate discounts on products and services from vendors. The discounted rates are then shared with its members saving them money and time by also improving supply chain efficiencies.
The Company is comprised of HealthGPO, a Group Purchasing Organization for the Healthcare industry, cbdGPO, a Group Purchasing Organization for the hemp industry, DISTRO+, our distribution division and GPO for specialty retailers, and Nutriumph® Supplements. In addition, GPOPlus offers professional services through GPOPRO Services.
During the years ended April 30, 2023 and 2022, the Company recognized $
| 24 |
| Table of Contents |
During the year ended April 30, 2023, the Company has three customers contributed over 10% of total sales at 54%, 31% and 10%, respectively.
During the year ended April 30, 2022, the Company has three customers contributed over 10% of total sales at 21%, 13% and 12%, respectively.
Accounts payable and accrued liabilities
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.
| 25 |
| Table of Contents |
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 transaction. (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 years ended April 30, 2023 and 2022, the Company recorded $
|
| Year Ended |
| |||||
|
| April 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Common stock award to consultants |
| $ |
|
| $ |
| ||
Common stock award to management and executives - related parties |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
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 year ended April 30, 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.
|
| April 30, |
|
| April 30, |
| ||
|
| 2023 |
|
| 2022 |
| ||
|
| (Shares) |
|
| (Shares) |
| ||
Series A Preferred Shares |
|
|
|
|
|
| ||
Convertible Notes |
|
|
|
|
|
| ||
Warrants |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
The Company had
| 26 |
| Table of Contents |
As of April 30, 2023 and 2022, convertible shares from the Company’s non-affiliate convertible notes were
As of April 30, 2023 and 2022, the outstanding warrants issued in connection with these convertible notes were
Net loss per share for each class of common stock is as follows:
|
| Year Ended |
| |||||
|
| April 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Net loss per share, basic diluted |
| $ | ( | ) |
| $ | ( | ) |
Net loss per common shares outstanding: |
|
|
|
|
|
|
|
|
Founders Class A Common stock |
| $ | ( | ) |
| $ | ( | ) |
Ordinary Common stock |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Founders Class A Common stock |
|
|
|
|
|
| ||
Ordinary Common stock |
|
|
|
|
|
| ||
Total weighted average shares outstanding |
|
|
|
|
|
| ||
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 temporary 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 be applied 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 when a different tax rate is enacted.
Pursuant to the provisions of ASC 740, “Income Taxes,” the Company provides valuation allowances for deferred tax assets for which it does not consider realization of such assets to be more likely than not. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the historical taxable income generation, projected future taxable income, the reversal of existing deferred tax liabilities and tax planning strategies in making this assessment (Note 12).
New Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with Conversion and Other Options” and ASC subtopic 815-40 “Hedging-Contracts in Entity’s Own Equity.” The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a CCF and (2) convertible instruments with a beneficial conversion feature (“BCF”). With the adoption of ASU 2020-06, entities will not separately present in equity an embedded conversion feature these debts. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company chose to early adopt this standard on May 1, 2021, financial statements and did not record BCF on the issuance of convertible notes with conversion rate below the Company’s market stock price on the date of note issuance.
Management has considered all other recent accounting pronouncements issued. The Company’s management 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 $
| 27 |
| Table of Contents |
The inventory acquired are Nutriumph Products for resale purpose. As of April 30, 2023, these inventory items have been sold.
The intangible assets comprised of proprietary formula at $
|
| Amortization |
| |
Year Ended April 30, |
| Expense |
| |
2024 |
| $ |
| |
2025 |
|
|
| |
Thereafter |
|
|
| |
|
| $ |
| |
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment as of April 30, 2023 and 2022 are summarized as follows:
Cost |
| Furniture and Equipment |
|
| Computer Equipment |
|
| Total |
| |||
April 30, 2022 |
| $ |
|
| $ |
|
| $ |
| |||
Additions |
|
|
|
|
|
|
|
|
| |||
April 30, 2023 |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation |
| Furniture and Equipment |
|
| Computer Equipment |
|
| Total |
| |||
April 30, 2022 |
| $ |
|
| $ |
|
| $ |
| |||
Additions |
|
|
|
|
|
|
|
|
| |||
April 30, 2023 |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
| Furniture and Equipment |
|
| Computer Equipment |
|
| Total |
| |||
April 30, 2022 |
| $ |
|
| $ |
|
| $ |
| |||
April 30, 2023 |
| $ |
|
| $ |
|
| $ |
| |||
On April 30, 2023, the Company issued
As of April 30, 2023 and 2022, Property and Equipment was $
NOTE 6 - CAPITAL STOCK
Share Capital
On November 20, 2020, the Company filed amended and restated article of incorporation, resulting in increasing the
| · | |
| · | |
| · | |
| · | |
| · |
| 28 |
| Table of Contents |
On January 21, 2021, the Company filed amended certification of stock designation after issuance of class/series for designating
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
Equity Compensation Plan Information |
|
|
|
|
|
|
|
|
| |||
|
| Number of securities to |
|
|
|
|
|
|
| |||
|
| be issued |
|
| Weighted-average |
|
| Number of securities |
| |||
|
| upon exercise |
|
| exercise price |
|
| remaining available |
| |||
|
| of outstanding |
|
| of outstanding |
|
| for future issuance |
| |||
|
| options, |
|
| options, |
|
| under equity |
| |||
|
| warrants and |
|
| warrants and |
|
| compensation plans |
| |||
Plan category |
| rights |
|
| rights |
|
| (1 | ) | |||
Equity compensation plans approved by security holders |
|
|
|
|
|
|
|
| ||||
|
|
| - |
|
|
| N/A |
|
| shares |
| |
| (1) | On April 4, 2023, the Company issued |
Ordinary Common Stock
Year ended April 30, 2023
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, pursuant to an asset purchase agreement to acquire assets from Nutriumph, the Company made a $
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023, in pursuant of their resignation agreement, the COO and President of the Company returned
Year ended April 30, 2022
During the year ended April 30, 2022, the Company issued
| 29 |
| Table of Contents |
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2022, the Company issued 20,000 shares of common stock for cash proceed of $
On January 31, 2022, the Company issued
As of April 30, 2023 and 2022, the issued and outstanding ordinary common stock was
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
The founder’s series A non-voting redeemable preferred stock has a redemption value of $
As of April 30, 2023 and 2022, the Company had
Series A Convertible Preferred Stock
The Company has designated
On January 21, 2021, the Company issued
On January 21, 2021, the Company issued
As of April 30, 2023 and 2022, the Company had
Series A Non-Voting Redeemable Preferred Stock
On May 21, 2021, the Company issued
The series A non-voting redeemable preferred stock has a redemption value of $10 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 $
As of April 30, 2023 and 2022, the Company had
Warrants
On June 16, 2021, in conjunction with the issuance of a convertible note on June 16, 2021, the Company issued
On September 8, 2021, in conjunction with the issuance of a convertible note on September 8, 2021, the Company issued 168,000 stock purchase warrants, exercisable for three years from issuance at exercise price of $1.25 per share. (Note 8)
The below table summarizes the activity of warrants exercisable for shares of common stock during the year ended April 30, 2023 and year ended April 30, 2022:
|
| Number of Shares |
|
| Weighted- Average Exercise Price |
| ||
Balances as of April 30, 2021 |
|
| - |
|
| $ | - |
|
Granted |
|
|
|
|
|
| ||
Redeemed |
|
| - |
|
|
| - |
|
Exercised |
|
| - |
|
|
| - |
|
Forfeited |
|
| - |
|
|
| - |
|
Balances as of April 30, 2022 |
|
|
|
| $ |
| ||
Granted |
|
| - |
|
|
| - |
|
Redeemed |
|
| - |
|
|
| - |
|
Exercised |
|
| ( | ) |
|
|
| |
Forfeited |
|
| - |
|
|
| - |
|
Balances as of April 30, 2023 |
|
|
|
| $ |
| ||
| 30 |
| Table of Contents |
The fair value of the warrants on the date of grant was estimated at $
|
| Year Ended |
| |
|
| April 30, |
| |
|
| 2022 |
| |
Exercise price |
| $ |
| |
Expected term |
|
| ||
Expected average volatility |
| % | ||
Expected dividend yield |
|
| - |
|
Risk-free interest rate |
| % | ||
The following table summarizes information relating to outstanding and exercisable warrants as of April 30, 2023:
Warrants Outstanding |
|
| Warrants Exercisable |
| ||||||||||||||
|
|
| Weighted Average |
|
|
|
|
|
|
|
|
|
| |||||
Number |
|
| Remaining Contractual |
|
| Weighted Average |
|
| Number |
|
| Weighted Average |
| |||||
of Shares |
|
| life (in years) |
|
| Exercise Price |
|
| of Shares |
|
| Exercise Price |
| |||||
|
|
|
|
|
| $ |
|
|
| - |
|
| $ | - |
| |||
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 April 30, 2023, for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). As of April 30, 2023, the aggregate intrinsic value of warrants outstanding was $0 based on the closing market price of $0.16 on April 30, 2023.
NOTE 7 - RELATED PARTY TRANSACTIONS
Related party compensation for the year ended April 30, 2023 and 2022, and shareholding and salary payable as of April 30, 2023 and 2022, are summarized as below:
|
| Year ended April 30, 2023 |
| |||||||||
Title |
| Wages Expense |
|
| Management/Consulting Fees |
|
| Stock Compensation |
| |||
CEO |
| $ |
|
| $ |
|
| $ |
| |||
Advisor - Affiliate |
|
|
|
|
|
|
|
|
| |||
President |
|
|
|
|
|
|
|
|
| |||
COO |
|
|
|
|
|
|
|
|
| |||
Interim CFO/Consultant |
|
|
|
|
|
|
|
|
| |||
VP Sales and Marketing |
|
|
|
|
|
|
|
|
| |||
President - Distro Plus |
|
|
|
|
|
|
|
|
| |||
Operational Manager |
|
|
|
|
|
|
|
|
| |||
VP - Distro Plus |
|
|
|
|
|
|
|
|
| |||
|
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
Year ended April 30, 2022 |
|
|
|
|
|
Title |
| Wages Expense |
|
| Management/Consulting Fees |
|
| Stock Compensation |
| |||
CEO |
| $ |
|
| $ |
|
| $ |
| |||
Advisor - Affiliate |
|
|
|
|
|
|
|
|
| |||
President |
|
|
|
|
|
|
|
|
| |||
COO |
|
|
|
|
|
|
|
|
| |||
Interim CFO/Consultant |
|
|
|
|
|
|
|
|
| |||
VP Sales and Marketing |
|
|
|
|
|
|
|
|
| |||
|
| $ |
|
| $ |
|
| $ |
| |||
| 31 |
| Table of Contents |
|
| As of April 30, 2023 |
| |||||||||||||
|
| Common Stock |
|
| Convertible Series A Preferred |
|
| Series A non-voting redeemable preferred |
|
|
|
| ||||
Title |
| (Shares) |
|
| (Shares) |
|
| (Shares) |
|
| Salary/Consulting Fees Payable |
| ||||
CEO and CFO |
|
|
|
|
|
|
|
| - |
|
| $ |
| |||
Advisor - Affiliate |
|
|
|
|
|
|
|
|
|
|
|
| ||||
President |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
COO |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
Interim/Consultant |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
VP Sales and Marketing |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
President - Distro Plus |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
Operational Manager |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
VP - Distro Plus |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of April 30, 2022 |
| |||||||||||||
|
| Common Stock |
|
| Convertible Series A Preferred |
|
| Series A non-voting redeemable preferred |
|
|
|
|
| |||
Title |
| (Shares) |
|
| (Shares) |
|
| (Shares) |
|
| Salary/Consulting Fees Payable |
| ||||
CEO and CFO |
|
|
|
|
|
|
|
| - |
|
| $ |
| |||
Advisor - Affiliate |
|
|
|
|
|
|
|
|
|
|
|
| ||||
President |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
COO |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
Interim CFO/Consultant |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
VP Sales and Marketing |
|
|
|
|
| - |
|
|
| - |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| $ |
| ||||
CEO and CFO
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2023, the Company issued
During the years ended April 30, 2023 and 2022, the Company incurred management fees of $
During the year ended April 30, 2023 and 2022, the Company incurred management salary expense of $
Advisor - Affiliate
During the year ended April 30, 2022, the Company issued
| 32 |
| Table of Contents |
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2022, the Company received $
During the years ended April 30, 2023 and 2022, the Company incurred consulting fees of $
President
On October 18, 2022, the Company accepted the voluntary resignation of the President of the Company who will remain an independent member of the Board. On October 21, 2022, the Company entered into a share recapture agreement for the future recapture of
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2023, the Company issued
On April 30, 2023, pursuant to an agreement entered with the President of the Company for his resignation, the President returned
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $
COO
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2022, the Company awarded
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2023, the Company issued
On October 18, 2022, the Company accepted the voluntary resignation of the COO of the Company, a member of the Board, and all other positions with the Company. On October 18, 2022, the Company has entered into a share recapture agreement for the recapture
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $
Interim CFO/Consultant
On August 22, 2022, the Company’s CFO resigned and entered into month-to-month Independent Contractor Agreement as Interim CFO.
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2023, the Company issued
During the year ended April 30, 2023 and 2022, the Company incurred management salary of $
| 33 |
| Table of Contents |
VP Sales and Marketing
During the year ended April 30, 2022, the Company issued
During the year ended April 30, 2023, the Company issued
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $
The VP Sales and Marketing resigned on March 27, 2023 and rejoined the Company as Lead Technologist of the Company on April 10, 2023.
President – Distro Plus
During the year ended April 30, 2023, the Company issued
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $
During the years ended April 30, 2023 and 2022, the Company incurred consulting fees of $
Operational Manager
During the year ended April 30, 2023, the Company issued
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $
VP – Distro Plus
During the year ended April 30, 2023, the Company issued
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $
As of April 30, 2023 and 2022, the amount due to the related parties was $
NOTE 8 - COVERTIBLE NOTE PAYABLE
Convertible note payable at April 30, 2023 and 2022 consists of the following:
|
| April 30, 2023 |
|
| April 30, 2022 |
| ||
Dated June 16, 2021 |
| $ |
|
| $ |
| ||
Dated September 8, 2021 |
|
|
|
|
|
| ||
Total convertible notes payable, gross |
|
|
|
|
|
| ||
Less: Unamortized debt discount |
|
|
|
|
| ( | ) | |
Total convertible notes |
| $ |
|
| $ |
| ||
On June 16, 2021, the Company issued a $
| 34 |
| Table of Contents |
On September 8, 2021, the Company issued a $
During the years ended April 30 2023 and 2022, the Company recorded interest expense of $
As of April 30, 2023 and 2022, the convertible note payable was $
NOTE 9 - PROMISSORY NOTE PAYABLE
Promissory note payable at April 30, 2023 and 2022, consists of the following:
|
| April 30, 2023 |
|
| April 30, 2022 |
| ||
June 2022 |
| $ |
|
| $ | - |
| |
August 2022 |
|
|
|
|
| - |
| |
September 2022 |
|
|
|
|
| - |
| |
October 2022 |
|
|
|
|
| - |
| |
November 2022 |
|
|
|
|
| - |
| |
January 2023 |
|
|
|
|
| - |
| |
February 2023 |
|
|
|
|
| - |
| |
March 2023 |
|
|
|
|
| - |
| |
April 2023 |
|
|
|
|
| - |
| |
Total promissory notes payable, gross |
|
|
|
|
| - |
| |
Less: Unamortized debt discount |
|
| ( | ) |
|
| - |
|
Total promissory notes |
| $ |
|
| $ | - |
| |
On June 7, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On August 17, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
| 35 |
| Table of Contents |
On August 17, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued an $
On September 9, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On September 27, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On October 10, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On October 14, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On October 18, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
| 36 |
| Table of Contents |
On October 18, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On November 3, 2022, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On January 11, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On January 12, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On January 27, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On February 22, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On February 22, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
| 37 |
| Table of Contents |
On March 20, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On March 30, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $50,000 Promissory Note for a purchase price of $
On April 13, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
On April 14, 2023, the Company entered into a Security Purchase Agreement with an investor pursuant to which the Company issued a $
During the year ended April 30, 2023 and 2022, the Company recorded interest expense of $
As of April 30, 2023 and April 30, 2022, the promissory note payable was $
NOTE 10 – LEASES
In March 2023, the Company entered into finance lease contracts for three vehicles with the ownership of the vehicles transferred to the Company at the end of the term of the leases.
As of April 30, 2023, the Company had the following lease obligations:
|
| Discount |
|
|
| April 30, |
| |
|
| Rate |
| Maturity |
| 2023 |
| |
Current |
|
|
| $ |
| |||
Non-current |
|
|
|
|
| |||
|
|
|
|
|
| $ |
| |
Balance - April 30, 2022 |
| $ |
| |
Lease liability additions |
|
|
| |
Repayment of Lease liability |
|
| ( | ) |
Imputed interest |
|
|
| |
Balance - April 30, 2023 |
| $ |
|
| 38 |
| Table of Contents |
The following table summarizes the maturity of our lease liabilities as of April 30, 2023:
Year Ended April 30, |
|
|
| |
2024 |
| $ |
| |
2025 |
|
|
| |
2026 |
|
|
| |
2027 |
|
|
| |
Total lease payments |
|
|
| |
Less: imputed interest |
|
| ( | ) |
Lease liabilities |
| $ |
| |
As of April 30, 2023, the Company has right-of-use assets as follows:
Balance - April 30, 2022 |
| $ |
| |
Additions |
|
|
| |
Depreciation |
|
| ( | ) |
Balance - April 30, 2023 |
| $ |
|
NOTE 11 - COMMITTMENTS AND CONTINGENCIES
The Company’s principal business and corporate address is 3571 E. Sunset Road, Suite 300, Las Vegas, NV 89120.
On August 5, 2020, the Company entered into a lease agreement for the office premise under a term of
NOTE 12 - INCOME TAX
The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
The reconciliation of the net operating loss for year ended April 30, 2023 and 2022 is shown as follows:
|
| Year Ended |
| |||||
|
| April 30, |
|
| April 30, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Add: Stock based compensation |
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| ||
Net operating loss |
| $ | ( | ) |
| $ | ( | ) |
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of April 30, 2023 and 2022 are as follows:
|
| April 30, |
|
| April 30, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Net operating loss carryforward |
| $ | ( | ) |
| $ | ( | ) |
Effective tax rate |
|
| % |
|
| % | ||
Deferred tax asset |
|
| ( | ) |
|
| ( | ) |
Less: Valuation allowance |
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| ||
Net deferred asset |
| $ |
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| $ |
| ||
| 39 |
| Table of Contents |
The valuation allowance increased by $
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the years ended April 30, 2023 or 2022. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at April 30, 2023 or 2022. Tax returns for the years ended 2016 through 2023 are subject to review by the tax authorities.
NOTE 13 - SUBSEQUENT EVENTS
Subsequent to April 30, 2023, and through the date that these financials were issued, the Company had the following subsequent events:
From May 1, 2023 through August 29, 2023, the Company issued
Pursuant to the exchange agreement entered on May 18, 2023, the Company issued
On August 15, 2023, the Company issued an aggregate of
On August 15, 2023, the Company issued
On August 29, 2023, the Company issued
On August 15, 2023, the Company issued
On Aug 15, 2023, the Company issued
From May 1, 2023 through August 29, 2023, the Company issued promissory notes for aggregate principal amount of $
During May 1, 2023 through August 29, 2023, the Company made repayment of $
| 40 |
| Table of Contents |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, April 30, 2023. This evaluation was carried out under the supervision and with the participation of our management, including our President and Chief Financial Officer (our principal executive officer and principal accounting officer).
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our President and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, including our President and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.
| 41 |
| Table of Contents |
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of April 30, 2023, based on criteria established in Internal Control-Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of April 30, 2023, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending April 30, 2024: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. The management’s report was not subject to attestation by our registered public accounting firm because as a smaller reporting company we are not subject to Section 404(b) of the Sarbanes‑Oxley Act of 2002.
Changes in Internal Control Over Financial Reporting
There were no changes in our company’s internal control over financial reporting during the quarter ended April 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Our management, which consists of our sole officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.
ITEM 9B. OTHER INFORMATION
Except as provided above, there is no information to be disclosed in a report on Form 8-K during the fourth quarter of the year covered by this Form 10-K that has not been previously filed with the Securities and Exchange Commission.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
| 42 |
| Table of Contents |
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
Name |
| Position held with the Company |
| Age |
| Date First Elected or Appointed |
|
Brett H. Pojunis |
| Chairman, Chief Executive Officer, Chief Financial Officer and Director |
| 43 |
| May 5, 2020 |
|
Ronald McCormick |
| Director |
| 55 |
| December 03, 2021 |
|
Christopher Harter |
| Director |
| 40 |
| October 24, 2022 |
|
Joseph Jaconi |
| Chief Revenue Officer |
| 53 |
| August 29, 2022 |
|
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Brett H. Pojunis, President, Chairman, Chief Executive Officer, and Director
Mr. Pojunis has served as the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and Director since May 5, 2020. Since 2014, Mr. Pojunis has served on the Board of Directors of a publicly traded agriculture company whose holdings include Green Leaf Farms, a Las Vegas based Nevada licensed Cultivation and Production facility, and Green Leaf Farms International, a 33,600-acre cultivation farm in Jujuy, Argentina.
Prior to founding GPO Plus, Mr. Pojunis was one of the leaders of the Libertarian Party serving two-terms on the Libertarian National Committee (LNC), two terms as the Chairman of the Libertarian Party of Nevada, and was part of the senior staff for the 2016 Johnson/Weld Presidential campaign. Mr. Pojunis was very involved with state level legislation and advocacy which included Question 2 (in 2016) as well as an advisor to other statewide initiatives. Mr. Pojunis hosted and produced over 150 political events including the 2016 Libertarian Presidential Debate hosted by Penn Jillette (Penn & Teller) that included video questions from well-known celebrities which aired on TheBlaze Network. Mr. Pojunis was the creator of multiple politically focused events and conferences including LPEX – the Libertarian Political Expo, a political conference for Libertarian political training, and The Political Party, a non-partisan organization with the goal of getting more Nevadans involved in the political process with the well-known “Meet the Candidates” events series.
Mr. Pojunis has been involved in finance and the public markets since 1999. Mr. Pojunis has been a consultant to many start-up companies as well as publicly traded companies including high tech Internet to traditional brick and mortar companies. From 2002 through October 2009, Mr. Pojunis has been involved in nightlife and entertainment ventures bridging technology and social media with events. He has hosted over 650 events in Las Vegas as well as other markets throughout the United States. Mr. Pojunis served on the Board of Directors of multiple private and public companies and organizations. Mr. Pojunis has military training ranging from Civil Affairs Specialist (38A) to Combat Engineer (12B). While in the US ARMY he was awarded the Outstanding American award, twice. Mr. Pojunis is a fellow at The Leadership Institute which provides political activism training. Mr. Pojunis studied Environmental Liberal Arts at Green Mountain College and Entrepreneurship classes at the Simon School of Business at the University of Rochester. Mr. Pojunis attended elective International Business and Finance classes at Rochester Institute of Technology.
Our Company believes that Mr. Pojunis’ business experience and industry expertise qualify him to serve as an officer and a director of our company.
Ronald McCormick, Director
Ron McCormick is a serial entrepreneur with over 30 years of business experience in operations, sales, product development, manufacturing, distribution, and management. McCormick started his career as a nutritionist focusing on health, wellness, and fitness. McCormick developed and pioneered some of the most popular vitamins and supplements with global distribution generating millions of dollars in annual revenue.
He developed a profitable business model for large regional membership-based nutrition stores which serve healthy deli-style food along with an organic juice/smoothie bar. To date, McCormick launched 15 nutritional stores and successfully exited from 14 stores generating millions in profit. He continues to operate one of his flagship stores in Henderson, Nevada.
Additionally, McCormick’s long list of achievements includes developing one of the first liquid multivitamins, power green and power red nutrient-rich supplements, he developed VitaNourish (www.VitaNourish.com), currently the only alkaline nano vitamin water on the market and is the first and only high alkaline (9.0 PH) electrolyte nano multi-vitamin water with no flavors, colors, or tastes resulting in refreshing clean water with incredible health benefits. VitaNourish is sold nationally and distributed from well-known distribution companies including Pepsi, RSI, and Budweiser as well as other national distributors.
Over six (6) years ago he began to apply his experience, network, expertise, and a strong background in health and wellness to the new emerging CBD industry. He created hemp water and a vertically integrated water-soluble nano CBD product line. McCormick personally developed and oversaw each phase of these projects from farming, extraction, and manufacturing to distribution and sales. His products are well distributed nationally and some internationally as well.
Our company believes that Mr. McCormicks’ business experience and industry expertise qualify him to serve as director of our company.
On October 18, 2022, the Company accepted the voluntary resignation of Ron McCormick as President. Mr. McCormick will remain an independent member of the Board.
| 43 |
| Table of Contents |
Chris Harter has been a director of the Company since October 24, 2022. From 2017- 2018 Mr. Harter worked at Nazar Holdings and served as a member of the Board of Directors. While as a director at Nazar, Chris lead the acquisition of Harbor Dunes golf course. From 2018- 2021 Mr. Harter worked at CBD Station as President oversaw the west coast store expansion and product development From 2021 to 2022, Chris worked at HMM Holdings 2 as President opening 2 dispensaries and 2 processing facilities.
Joseph Jaconi is the Chief Revenue Officer at GPO Plus and has extensive business development and management experience with over 30 years in consumer-packaged goods for both domestic and international channels.
Joseph Co-Founded Tech Armor in 2012, disrupting the brick-and-mortar accessory business creating the #1 Selling Screen Protector brand with over 25 million units sold globally in over 40 countries. Tech Armor has generated over $100 Million in revenue since its inception with key partnerships including Amazon, eBay, and WalMart.com and traditional retail including Apple specialists, Verizon, and AT&T. Expanding beyond Joseph’s experience in Direct-to-Consumer e-commerce, Joseph has developed additional consumer brands targeting specialty retailers including Convenience Stores, Pharmacies and CBD Stores throughout the U.S., focusing on the nutraceutical and recreational segments. Developed brands include Kino Hawaiian Skincare, Paws Effect Nutrition, Hammerhead, Deep Sea Moonrock, Ritual Tinctures, and Fuego branded products. Licensed brands include development of the John Daly Collection, Slightly Stoopid and Rob Van Dam products.
Mr. Jaconi began his career working for the University of Southern California in Madrid, Spain before moving to Mexico City to work for the U.S. Embassy. He then entered the world of commerce joining the Singer Sewing Company and managing their small electronics and appliance business unit developing channels throughout Latin America. Joseph returned to the U.S. in 2004 and joined Belkin in Compton, California developing numerous product categories and launching 1000’s of retail skus into Wal-Mart, Staples, Office Depot and Best Buy before joining Belkin’s Business Development Team managing Latin America, Canada and e-commerce efforts.
Mr. Jaconi has degrees in International Relations and in Spanish from the University of Southern California, studied in Madrid, Spain and has taken additional coursework at UCLA. Joseph and his wife Linda of 15 years have three children.
Employment Agreements
On August 22, 2022, the Company entered into a month to month Independent Contractor Agreement with Laurence Rule for financial services.
On August 29, 2022, the Company entered into an Employment Agreement with Joseph Jaconi as President of Distro Plus, a division of GPO Plus. The Agreement has a three (3) year term.
Family Relationships
Not Applicable
Involvement in certain legal proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
1. | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences); |
|
|
2. | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; |
|
|
3. | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; |
|
|
4. | been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
|
|
5. | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
|
|
6. | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Section 16(a) Beneficial Ownership Reporting Compliance
Our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, our executive officers and directors and persons who own more than 10% of a registered class of our equity securities are not subject to the beneficial ownership reporting requirements of Section 16(1) of the Exchange Act.
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller. We only have one officer and director and do not believe we need a code of ethics at this time.
Committees of the Board
Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the board of directors.
| 44 |
| Table of Contents |
Our company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.
A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our CEO at the address appearing on the first page of this annual report.
Board and Committee Meetings
Our board of directors held no formal meetings during the year ended April 30, 2023. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
Audit Committee Financial Expert
Currently our audit committee consists of our entire board of directors. We do not currently have a director who is qualified to act as the head of the audit committee.
ITEM 11. EXECUTIVE COMPENSATION
The particulars of the compensation paid to the following persons:
| (a) | our principal executive officers. |
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|
| (b) | each of our most highly compensated executive officers who were serving as executive officers at the end of the years ended April 30, 2023 and 2022 (each, a “Named Executive Officer”); and |
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| (c) | up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended April 30, 2023 and 2022 who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year: |
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| SUMMARY COMPENSATION TABLE |
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| Change in |
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| Pension |
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| ||||||||||||||||
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| Value and |
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| Non- |
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| Nonqualified |
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| |||||||||||||||
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| Equity |
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| Deferred |
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| All |
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| ||||||||||||||
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| Incentive |
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| Compensa- |
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| Other |
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| Stock |
|
| Option |
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| Plan |
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| tion |
|
| Compensa- |
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Name and |
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| Awards |
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| Awards |
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| Compensa- |
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| Earnings |
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| tion |
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Principal Position |
| Year | Salary ($) |
|
| Bonus ($) |
|
| ($) |
|
| ($) |
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| tion ($) |
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| ($) |
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| ($) |
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| Total ($) |
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Brett H. H. Pojunis |
| 2023 |
|
| 67,670 |
|
|
| - |
|
|
| 152,625 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 220,295 |
|
CEO and CFO |
| 2022 |
|
| 58,730 |
|
|
| - |
|
|
| 2,121,563 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,179,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Laurence Ruhe (1) |
| 2023 |
|
| 216,950 |
|
|
| - |
|
|
| 545,267 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 762,219 |
|
Consultant |
| 2022 |
|
| 18,462 |
|
|
|
|
|
|
| 129,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 147,837 |
|
|
|
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|
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Ronald McCormick (2) |
| 2023 |
|
| 15,000 |
|
|
| - |
|
|
| 13,125 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 28,125 |
|
President |
| 2022 |
|
| 20,000 |
|
|
| - |
|
| 2,405.937 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,425,937 |
| |
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Wayne Smeal (3) |
| 2023 |
|
| 15,000 |
|
|
| - |
|
|
| 13,125 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 28,125 |
|
COO |
| 2022 |
|
| 27,000 |
|
|
| - |
|
|
| 3,386,040 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3,413,040 |
|
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|
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Bryan Garabrandt (4) |
| 2023 |
|
| 81,335 |
|
|
| - |
|
|
| 47,125 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 128,460 |
|
Vice President |
| 2022 |
|
| 57,800 |
|
|
| - |
|
|
| 1,531,336 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,589,136 |
|
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Joesph Jaconi (5) |
| 2023 |
|
| 98,716 |
|
|
| - |
|
|
| 48,567 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 147,284 |
|
CMO |
| 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
(1) | Laurence Ruhe was the Chief Financial Officer of the Company from November 1, 2021 through August 22, 2022 and is now a contractor for the Company. |
(2) | Ronald McCormick served as President of the Company from December 3,2021 through October 18, 2022. |
(3) | Wayne Smeal served as Chief Operating Officer from December 29, 2021 through November 8, 2022. |
(4) | Bryan Garabrandt hired as Vice President of Sales and Marketing on May 3, 2021 and resigned on March 27, 2023. He rejoined the Company as Lead Technologist on April 10, 2023. |
(5) | Joesph Jaconi was hired as President of Distro Plus Division on August 29, 2022. |
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
| 45 |
| Table of Contents |
Grants of Plan-Based Awards
During the fiscal year ended April 30, 2023, we did not grant any stock options.
Option Exercises and Stock Vested
During our fiscal year ended April 30, 2023, there were no options exercised by our named officers.
Compensation of Directors
We do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of August 29, 2023, the number of shares of common stock beneficially owned by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of its outstanding shares of common stock; (ii) each of the Company’s directors (iii) each Named Executive Officer and (iv) all of the Company’s executive officers and directors as a group. The information relating to beneficial ownership of Common Stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC. Under these rules, a person is deemed to be a beneficial owner of a security if that person directly or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest. Unless otherwise indicated below, each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder’s address is c/o 3571 E. Sunset Road, Suite #300, Las Vegas, Nevada 89120.
As of August 29, 2023, there were 44,223,860 shares of our common stock issued and outstanding.
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Name and Address of Beneficial Owner |
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Brett H. Pojunis |
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| 7,475,000 |
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| 16.90 | % |
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| 500,000 |
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| 50.00 | % |
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| - |
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| - |
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Bryan Garabrandt |
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| 1,363,002 |
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| 3.08 | % |
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| - |
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| - |
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| - |
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| - |
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Ronald McCormick |
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| 1,824,167 |
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| 4.12 | % |
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| - |
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| - |
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| - |
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Joseph Jaconi |
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| 699,806 |
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| 1.58 | % |
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| - |
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| - |
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| - |
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| - |
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Laurence Ruhe |
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| 1,892,336 |
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| 4.28 | % |
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| - |
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| - |
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| - |
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| - |
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Christopher Harter |
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| 1,103,939 |
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| 2.50 | % |
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Michael Fugler |
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| 6,453,000 |
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| 14.60 | % |
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| 500,000 |
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| 50.00 | % |
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| 175,000 |
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| 100.00 | % |
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Directors and Executive Officers as a Group () |
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| 20,811,270 |
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| 47.05 | % |
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| 500,000 |
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| 50.00 | % |
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| - |
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5% Shareholders as a Group |
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| 13,928,000 |
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| 31.49 | % |
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| 1,000,000 |
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| 100.00 | % |
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| 175,000 |
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| 100.00 | % |
| 46 |
| Table of Contents |
The company has adopted the following equity compensation.
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.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended April 30, 2023, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years.
Brett H. Pojunis - Chief Executive Officer and Chief Financial Officer
During the year ended April 30, 2022, the Company issued 2,100,000 shares of common stock to Brett H. Pojunis valued at $2,100,000.
During the year ended April 30, 2022, the Company issued 2,162,500 shares of restricted common stock to Brett H. Pojunis valued at $2,121,563.
During the year ended April 30, 2023, the Company issued 250,000 shares of common stock to Brett H. Pojunis valued at $152,625.
During the years ended April 30, 2023 and 2022, the Company incurred management fees of $0 and $43,370 with the Brett H. Pojunis, respectively.
During the year ended April 30, 2023 and 2022, the Company incurred management salary expense of $67,670 and $15,000 to Brett H. Pojunis, respectively. As of April 30, 2023 and 2022, salary payable was $3,462 and $8,077, respectively.
Advisor - Affiliate
During the year ended April 30, 2022, the Company issued 175,000 series A non-voting redeemable preferred shares to the affiliated advisor of the Company at $10 stated value per share valued at $1,750,000 and for cash consideration of $18. The remaining portion of $1,749,982 was recorded as stock-based compensation expense in professional fees - related party.
During the year ended April 30, 2022, the Company issued 4,818,000 shares of common stock to the affiliated advisor valued at $7,227,000 for services rendered.
During the year ended April 30, 2022, the Company received $210 cash consideration for the issuance of 1,635,000 shares of ordinary common stock to the executive in pursuant to an agreement signed on August 27, 2021. The Company recorded stock payable for services valued at $2,452,500, with $2,452,290 recorded as stock-based compensation expense in Professional fees – related party.
During the years ended April 30, 2023 and 2022, the Company incurred consulting fees of $60,000 and $90,000 which includes a sign on bonus of $50,000 to the affiliated advisor, respectively. As of April 30, 2023 and 2022, the total amount due to the affiliated advisor was $150,000 and $90,000, respectively.
Ronald McCormick - President
On October 18, 2022, the Company accepted the voluntary resignation of Ronald McCormick as the President of the Company who will remain an independent member of the Board. On October 21, 2022, the Company entered into a share recapture agreement for the future recapture of 750,000 shares of common stock out of 2,574,167 common shares that he held. During the year ended April 30, 2023, the Company recorded forgiveness of debt from Pure Nutrition, which is owned by the President at $84,660, to additional paid in capital.
| 47 |
| Table of Contents |
During the year ended April 30, 2022, the Company issued 2,384,167 shares of common stock to Ronald McCormick valued at $2,405,938.
During the year ended April 30, 2023, the Company issued 62,500 shares of common stock to Ronald McCormick valued at $13,125 for services rendered.
On October 18, 2022, pursuant to an agreement entered with Ronald McCormick for his resignation, Mr. McCormick returned 750,000 shares of common stock to the Company. The returned shares were immediately cancelled.
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $15,000 and $20,000 Mr. McCormick, respectively. During the year ended April 30, 2023, the President forgave management salary payable of $35,000 and the Company recorded it to additional paid in capital. As of April 30, 2023 and 2022, salary payable was $0 and $20,000, respectively.
Wayne Smeal – Chief Operating Officer
During the year ended April 30, 2022, the Company issued 55,000 shares of common stock to Wayne Smeal, the Chief Operating Officer valued at $82,500.
During the year ended April 30, 2022, the Company awarded 2,100,000 shares of common stock to Mr. Smeal value at $3,149,790, net of cash proceeds of $210.
During the year ended April 30, 2022, the Company issued 208,333 shares of restricted common stock to Mr. Smeal at $153,750.
During the year ended April 30, 2023, the Company issued 62,500 shares of common stock to Mr. Smeal valued at $13,125 for services rendered.
On October 18, 2022, the Company accepted the voluntary resignation of Mr. Smeal of the Company, a member of the Board, and all other positions with the Company. On October 18, 2022, the Company entered into a share recapture agreement for the recapture 1,369,333 shares of common stock. On November 8, 2022, Mr. Smeal returned 1,369,333 shares of common stock. The returned shares were immediately cancelled.
During the years ended April 30, 2023, and 2022, the Company incurred management salary of $15,000 and $27,000 to Mr. Smeal, respectively. During the year ended April 30, 2023, Mr. Smeal forgave management salary payable of $26,077 and the Company recorded it to additional paid in capital. As of April 30, 2023 and April 30, 2022, salary payable was $0 and $11,076, respectively.
Lawernce Ruhe - Interim Chief Financial Officer
On August 22, 2022, the Company’s Chief Financial Officer resigned and entered into month-to-month Independent Contractor Agreement with the Company as Interim Chief Financial Officer.
During the year ended April 30, 2022, the Company issued 375,000 shares of common stock to Mr. Ruhe valued at $129,375.
During the year ended April 30, 2023, the Company issued 1,080,959 shares of common stock to Mr. Ruhe valued at $545,269.
During the year ended April 30, 2023 and 2022, the Company incurred management salary of $23,762 and $18,462 and incurred consulting fees of $193,188 and $0 to Ruhe, respectively. As of April 30, 2023 and 2022, consulting and salary payable was $87,500 and $8,077, respectively.
| 48 |
| Table of Contents |
Brian Garabrandt - VP Sales and Marketing
During the year ended April 30, 2022, the Company issued 1,366,336 shares of common stock to Mr. Garabrandt, the VP Sales and Marketing valued at $1,531,336.
During the year ended April 30, 2023, the Company issued 229,166 shares of common stock to Mr. Garabrandt valued at $47,125.
During the years ended April 30, 2023, and 2022, the Company incurred management salary of $81,335 and $57,800 to Mr. Garabrandt, respectively. As of April 30, 2023, and 2022, salary payable was $5,538 and $40,702, respectively.
Joseph Jaconi - President – Distro Plus
During the year ended April 30, 2023, the Company issued 299,799 shares of common stock to Joseph Jaconi, President of Distro Plus Division valued at $48,567.
During the years ended April 30, 2023, and 2022, the Company incurred management salary of $88,716 and $0 to Mr. Jaconi, respectively. As of April 30, 2023, and 2022, salary payable was $4,038 and $0, respectively.
During the years ended April 30, 2023, and 2022, the Company incurred consulting fees of $10,000 and $0 to Mr. Jaconi, respectively.
Operational Manager
During the year ended April 30, 2023, the Company issued 115,000 shares of common stock to the Operational Manager valued at $18,630.
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $15,947 and $0 to the Operational Manager, respectively. As of April 30, 2023 and 2022, salary payable was $903 and $0, respectively.
VP – Distro Plus
During the year ended April 30, 2023, the Company issued 29,380 shares of common stock to the Vice President of Distro Plus Division valued at $4,760.
During the years ended April 30, 2023 and 2022, the Company incurred management salary of $12,050 and $0 to the Vice President of Distro Plus Division, respectively. As of April 30, 2023 and 2022, salary payable was $1,794 and $0, respectively.
As of April 30, 2023 and 2022, the amount due to the related parties was $253,235 and $177,932, respectively.
Director Independence
We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system that has requirements that a majority of the board of directors be “independent.” Our board of directors currently has three (3) members, Brett H. Pojunis, Ronald McCormick, and Christoper Carter. We believe that all of our directors except Mr. Pojunis who serves as our Chief Executive Officer, Chief Financial Officer, President and Secretary, is “independent” within the definition of independence provided in the Marketplace Rules of the National Association of Securities Dealers and the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934.
From inception to present date, we believe that the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our consolidated financial statements and understanding internal controls and procedures for financial reporting.
| 49 |
| Table of Contents |
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The aggregate fees billed for the most recently completed fiscal year ended April 30, 2023 and for fiscal year ended April 30, 2022 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
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| Year Ended |
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| Year Ended |
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| April 30, |
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| April 30, |
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Fee Category |
| 2023 |
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| 2022 |
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Audit Fees |
| $ | 40,350 |
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| $ | 38,500 |
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Audit-Related Fees |
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| - |
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| - |
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Tax Fees |
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| - |
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| - |
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All Other Fees |
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| - |
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Total Fees |
| $ | 40,350 |
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| $ | 38,500 |
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Audit committee policies & procedures
We do not currently have a standing audit committee. The above services were approved by our Board of Directors.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
| 50 |
| Table of Contents |
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
| (a) | Financial Statements |
| (1) | Financial statements for our company are listed in the index under Item 8 of this document. |
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| (2) | All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto. |
| (b) | Exhibits |
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| INCORPORATED BY REFERENCE | |||||
EXHIBIT NUMBER |
| Exhibit Description |
| Form |
| Exhibit |
| Filing Date |
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| S-1 |
| 3.1 |
| September 22, 2016 | ||
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| S-1 |
| 3.2 |
| September 22, 2016 | ||
| Articles of Merger filed with the Nevada Secretary of State on January 31, 2018 |
| 8-K |
| 3.1 |
| March 29, 2018 | |
| Certificate of Change filed with the Nevada Secretary of State on January 31, 2018 |
| 8-K |
| 3.2 |
| March 29, 2018 | |
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| 8-K |
| 3.1 |
| August 20, 2020 | ||
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| 8-K |
| 3.2 |
| August 20, 2020 | ||
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| 8-K |
| 10.1 |
| February 14, 2023 | ||
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| 8-K |
| 10.1 |
| March 9, 2023 | ||
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| 8-K |
| 10.1 |
| December 14, 2022 | ||
| Asset Purchase Agreement, dated July 7, 2022, by and between GPO Plus, Inc. and LLC. |
| 8-K |
| 4.1 |
| July 13, 2022 | |
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| S-8 |
| 10.1 |
| March 28, 2023 | ||
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101.INS** |
| Inline XBRL Instance Document |
101.SCH** |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL** |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF** |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB** |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE** |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
*Filed herewith.
ITEM 16. FORM 10-K SUMMARY
None.
| 51 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
| GPO PLUS, INC. |
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Dated: August 30, 2023 | by: | /s/ Brett H. Pojunis |
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| Brett H. Pojunis |
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| President, Chief Executive Officer, |
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| Chief Financial Officer, Treasurer, Secretary and |
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| Director |
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| (Principal Executive Officer, |
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| Principal Financial Officer and Principal Accounting |
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| Officer) |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature |
| Title |
| Dated |
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/s/ Brett H. Pojunis |
| Brett H. Pojunis |
| August 30, 2023 |
Brett H. Pojunis |
| President, Chief Executive Officer, Treasurer and Secretary and Director |
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/s/ Ronald McCormick |
| Director |
| August 30, 2023 |
Ronald McCormick |
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/s/ Chris Harter |
| Director |
| August 30, 2023 |
Chris Harter |
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| 52 |