GPO Plus, Inc. - Annual Report: 2023 (Form 10-K)

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 10-K

(Mark One)

Registrant’s telephone number, including area code: 852-5238-9111

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 ☐     No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ☐     No ☒

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. Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

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

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 ☐     No ☒

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 $7,887,062 based on a $0.57 average bid and asked price on such date. Solely for the purpose of this disclosure, such shares of common stock held by executive officers, directors, and beneficial holders of 10% or more of the outstanding common stock of the Registrant as of such date have been excluded because such persons may be deemed to be affiliates.

As of August 30, 2023, the Registrant had 44,223,860 shares of common stock issued and outstanding.

TABLE OF CONTENTS

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.

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.

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:

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.

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.

Product Categories

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.

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. 

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.

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.

The following table provides information regarding our equity compensation plans as of April 30, 2023:

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.

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.

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.

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

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.

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:

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.

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:

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.

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.

Pinnacle Accountancy Group of Utah

Farmington, Utah

August 30, 2023

(Pinnacle PCAOB ID: 6117)

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GPO PLUS, INC.

AUDITED BALANCE SHEETS

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

GPO PLUS, INC.

AUDITED STATEMENTS OF OPERATIONS

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

GPO PLUS, INC.

AUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED APRIL 30, 2023 AND 2022

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

GPO PLUS, INC.

AUDITED STATEMENTS OF CASH FLOWS

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

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 5,000,000 (post-split) of the issued and outstanding common shares of the Company from Jian Han Chen. As a result of the transaction, Mr. Pojunis had voting and dispositive control over 53.67% of our outstanding voting securities. Mr. Pojunis’s ownership has since been diluted to 20%, and Mr. Chen no longer holds any equity interest in the Company.

On June 7, 2022, the Company entered into a Master Distribution Agreement with DEV Distribution LLC, which appoints GPOX as a master distributor for the best-efforts sale of Branded Products, Bulk Products and White Label Products within a specific Territory.

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 $34,502,113. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The 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 $55,496 and $2,877, respectively.

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 $43,614 and $1,104, respectively.

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 $69,351and $445,633, respectively. As of April 30, 2023 and 2022, $67,351 was a prepayment for common shares issued to consultants and $2,000 is related to a security deposit for office premise. As of April 30, 2022, $443,633 was a prepayment for common shares issued to consultants and $2,000 is related to a security deposit for office premise.

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 $156,997 and $0, respectively. As of April 30, 2023, the company had $124,437 of Mr. Vapor inventory ad $32,560 of Nutriumph inventory (Note 4)

Intangible Assets

The Company accounts for intangible assets (including trademarks and formula) in accordance with ASC 350 “Intangibles-Goodwill and Other.”

ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below 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:

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 $653,000 and $1,157,119 of revenues related to merchandise and product sales, and $516 and $5,703 of revenues related to shipping recovered on merchandise sales, respectively, resulting in total revenue of $653,516 and $1,162,822, respectively. The Company incurred cost of revenue of $467,504 and $1,143,947 and generated gross profit of $186,012 and $18,875 during the years ended April 30, 2023 and 2022, respectively. In regard to the sales that occurred during the years ended April 30, 2023 and 2022, there are no unfulfilled obligations related to the merchandise and product sales.

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:

Operating leases

Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term by adding interest expense determined using the effective interest method to the amortization of right-of-use asset. Amortization of the right-of-use asset is calculated as the difference between the straight-line expense and the interest expense on the lease liability over the lease term. Lease expense is presented at a single line item in the operating expense in the statement of operations. The right-of-use assets is tested for impairment in accordance with ASC 360.

Finance lease

Finance leases are included in finance lease right-of-use (“ROU”) assets, finance lease liabilities - current, and finance lease liabilities - noncurrent on the balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The finance lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Interest expense is determined using the effective interest method. Amortization is recorded on the right-of-use asset on a straight-line basis. Interest and amortization expense are generally presented separately in the statement of operations. The right-of-use asset is tested for impairment in accordance with ASC 360.

Segments

Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates and manages its business as one operating segment and all of the Company’s revenues and operations are currently in the United States.

Financial Instruments

The carrying values of our financial instruments comprised of our current assets and liabilities approximate their fair value due to the short maturities of these financial instruments.

Related Party Balances and Transactions

The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party 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 $2,202,707 stock-based compensation expense and $27,848,384 stock-based compensation expense, which includes amortization of stock issued for prepaid services of $617,327 and $3,968 respectively. The stock-based compensation incurred from common stock awarded to consultants and executives was reported under professional fees and professional fees - related parties in the statements of operation.

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.