FORWARD LOOKING STATEMENTS
This quarterly 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 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 unaudited financial statements are stated in United States Dollars (US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly 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 quarterly report.
In this quarterly 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 quarterly report, the terms "we, "us," "our" and "our company"
mean GPO Plus, Inc., unless otherwise indicated.
General Overview
GPO Plus identifies underserved markets, segments, and industries where there is
little to no competition and develops specific group-purchase organizations
(GPOs) around them. In addition, unlike major GPOs, GPO Plus has low MOQ's
(minimum order quantities) which enable small and mid-sized companies to
participate with larger corporations. We communicate with our members to
determine their needs to ensure GPO Plus provides relevant products and
services, sustainable low prices and cost structures, increased efficiencies,
and attentive customer service.
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GPO Plus 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.
On August 17, 2022, the Company entered into a Security Purchase Agreement with
an investor pursuant to which the Company issued a $55,000 Promissory Note for a
purchase price of $50,000, convertible at 25% of the average of the five (5)
lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days immediately
preceding the date on which the Market Price is being determined, the Holder
elects to convert all or part of the note in the event of default. The note
matures on July 17, 2023, and accrues interest at 10%. The Company has also
issued 100,000 Restricted Common Shares to the investor as an inducement. The
Company recorded total debt discount of $38,589 comprising original issue
discount of $5,000 and discount from note inducement of $33,589. During the six
months ended October 31, 2022, the Company recorded amortization of debt
discount of $8,512 reporting under interest expense in the statements of
operations. As of October 31, 2022, the debt discount was $30,077. As of October
31, 2022, the promissory note was $24,923.
On August 17, 2022, the Company entered into a Security Purchase Agreement with
an investor pursuant to which the Company issued an $82,500 Promissory Note for
a purchase price of $75,000, convertible at 25% of the average of the five (5)
lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days immediately
preceding the date on which the Market Price is being determined, the Holder
elects to convert all or part of the note in the event of default. The note
matures on July 17,2023 and accrues interest at 10%. The Company has also issued
150,000 Restricted Common Shares to the investor as an inducement. The Company
recorded total debt discount of $57,884 comprising original issue discount of
$7,500 and discount from note inducement of $50,384. During the six months ended
October 31, 2022, the Company recorded amortization of debt discount of $12,768
reporting under interest expense in the statements of operations. As of October
31, 2022, the debt discount was $45,115. As of October 31, 2022, the promissory
note was $37,385.
On September 9, 2022, the Company entered into a Security Purchase Agreement
with an investor pursuant to which the Company issued a $55,000 Promissory Note
for a purchase price of $50,000, convertible at 25% of the average of the five
(5) lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days
immediately preceding the date on which the Market Price is being determined,
the Holder elects to convert all or part of the note in the event of default.
The note matures on August 09,2023 and accrues interest at 10%. The Company has
also issued 100,000 Restricted Common Shares to the investor as an inducement.
The Company recorded total debt discount of $38,589 comprising original issue
discount of $5,000 and discount from note inducement of $33,589. During the six
months ended October 31, 2022, the Company recorded amortization of debt
discount of $6,008 reporting under interest expense in the statements of
operations. As of October 31, 2022, the debt discount was $32,581. As of October
31, 2022, the promissory note was $22,419.
On September 27, 2022, the Company entered into a Security Purchase Agreement
with an investor pursuant to which the Company issued a $55,000 Promissory Note
for a purchase price of $50,000, convertible at 25% of the average of the five
(5) lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days
immediately preceding the date on which the Market Price is being determined,
the Holder elects to convert all or part of the note in the event of default.
The note matures on August 27,2023 and accrues interest at 10%. The Company has
also issued 100,000 Restricted Common Shares to the investor as an inducement.
The Company recorded total debt discount of $38,589 comprising original issue
discount of $5,000 and discount from note inducement of $33,589. During the six
months ended October 31, 2022, the Company recorded amortization of debt
discount of $3,928 reporting under interest expense in the statements of
operations. As of October 31, 2022, the debt discount was $34,661. As of October
31, 2022, the promissory note was $20,339.
On September 28, 2022, the Company issued 300,000 shares of common stock to a
consulting firm at $0.53 per share for prepaid expense of $159,000 for services
with a six-month term.
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On October 10, 2022, the Company entered into a Security Purchase Agreement with
an investor pursuant to which the Company issued a $82,500 Promissory Note for a
purchase price of $75,000, convertible at 25% of the average of the five (5)
lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days immediately
preceding the date on which the Market Price is being determined, the Holder
elects to convert all or part of the note in the event of default. The note
matures on September 10 ,2023 and accrues interest at 10%. The Company has also
issued 150,000 Restricted Common Shares to the investor as an inducement. The
Company recorded total debt discount of $57,884 comprising original issue
discount of $7,500 and discount from note inducement of $50,384. During the six
months ended October 31, 2022, the Company recorded amortization of debt
discount of $3,618 reporting under interest expense in the statements of
operations. As of October 31, 2022, the debt discount was $54,266. As of October
31, 2022, the promissory note was $28,234.
On October 14, 2022, the Company entered into a Security Purchase Agreement with
an investor pursuant to which the Company issued a $82,500 Promissory Note for a
purchase price of $75,000, convertible at 25% of the average of the five (5)
lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days immediately
preceding the date on which the Market Price is being determined, the Holder
elects to convert all or part of the note in the event of default. The note
matures on September 14, 2023, and accrues interest at 10%. The Company has also
issued 150,000 Restricted Common Shares to the investor as an inducement. The
Company recorded total debt discount of $57,884 comprising original issue
discount of $7,500 and discount from note inducement of $50,384. During the six
months ended October 31, 2022, the Company recorded amortization of debt
discount of $2,935 reporting under interest expense in the statements of
operations. As of October 31, 2022, the debt discount was $45,115. As of October
31, 2022, the promissory note was $37,385.
On October 17, 2022, the Company issued 247,500 shares of common stock to
employees and executives at $1.86 per share totalling $460,350 for services.
On October 17, 2022, the Company issued 215,000 shares of common stock to
consultants at $1.86 per share totalling $399,900 for services.
On October 17, 2022, the Company issued 5,000 shares of common stock to a
consultant at $1.86 per share for prepaid expenses of $9,300 for services.
On October 17, 2022, the Company issued 7,500 shares of common stock at $1.86
per share of $13,950 to the Company's landlord for partial payment of rent.
On October 17, 2022, the Company issued 10,000 shares of common stock to a
consultant $1.50 per share for cash proceeds of $15,000.
On October 17, 2022 and October 28, 2022, the Company issued 750,000 and 250,000
shares of common stock respectively with a total value of $305,152 to
noteholders as inducement for promissory notes of $550,000 issued during the six
months ended October 31, 2022.
On October 18, 2022, the Company entered into a Security Purchase Agreement with
an investor pursuant to which the Company issued a $55,000 Promissory Note for a
purchase price of $50,000, convertible at 25% of the average of the five (5)
lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days immediately
preceding the date on which the Market Price is being determined, the Holder
elects to convert all or part of the note in the event of default. The note
matures on September 18, 2023, and accrues interest at 10%. The Company has also
issued 100,000 Restricted Common Shares to the investor as an inducement. The
Company recorded total debt discount of $26,293 comprising original issue
discount of $5,000 and discount from note inducement of $21,293. During the six
months ended October 31, 2022, the Company recorded amortization of debt
discount of $1,020 reporting under interest expense in the statements of
operations. As of October 31, 2022, the debt discount was $25,273. As of October
31, 2022, the promissory note was $29,727.
On October 18, 2022, the Company entered into a Security Purchase Agreement with
an investor pursuant to which the Company issued a $82,500 Promissory Note for a
purchase price of $75,000, convertible at 25% of the average of the five (5)
lowest Daily VWAP over the ten (10) consecutive VWAP Trading Days immediately
preceding the date on which the Market Price is being determined, the Holder
elects to convert all or part of the note in the event of default. The note
matures on September 18, 2023, and accrues interest at 10%. The Company has also
issued 150,000 Restricted Common Shares to the investor as an inducement. The
Company recorded total debt discount of $39,440 comprising original issue
discount of $7,500 and discount from note inducement of $31,940. During the six
months ended October 31, 2022, the Company recorded amortization of debt
discount of $1,530 reporting under interest expense in the statements of
operations. As of October 31, 2022, the debt discount was $37,909. As of October
31, 2022, the promissory note was $44,591.
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On October 28, 2022, the Company issued 60,960 shares of common stock to the CFO
at $0.852 per share of $51,938 for services.
On October 28, 2022, the Company issued 133,333 shares of common stock for the
conversion of convertible note principal of $20,000 at a fixed conversion rate
of $0.15 per share.
Results of Operations
The following summary of our results of operations should be read in conjunction
with our financial statements for the three months ended October 31, 2022, and
2021 and the six months ended October 31, 2022, and 2021 which are included
herein.
Three Months Ended October 31, 2022, Compared to the Three Months October 31,
2021
Three Months Ended
October 31,
2022 2021 Changes %
Revenues $ 64,658 $ 229,161 $ (164,503 ) (72 %)
Cost of revenue (44,528 ) (237,489 ) (192,961 ) (81 %)
Gross Profit 20,130 (8,328 ) 28,458 (342 %)
Operating Expenses (1,363,741 ) (2,991,384 ) 1,627,643 (54 %)
Loss from Operations (1,343,611 ) (2,999,712 ) 1,656,101 (55 %)
Other Expenses (62,651 ) (108,593 ) 45,942 (42 %)
Net Loss $ (1,406,262 ) $ (3,108,305 ) $ 1,702,043 (55 %)
Revenues
We had revenues of $64,658 from operations during the three months October 31,
2022, as compared to $229,161 of revenues during the three months ended October
31, 2021. The decrease in revenue is attributed to decreased business activities
during the three months ended October 31, 2022.
Net Loss
Our unaudited financial statements report a net loss of $1,406,262 for the three
months ended October 31, 2022, compared to a net loss of $3,108,305 for the
three months ended October 31, 2021. The decrease in net loss was due to a
decrease in operating expenses and other expenses.
Expenses
Our operating expenses for the three months ended October 31, 2022, were
$1,363,741 compared to $2,991,384 for the three months ended October 31, 2021.
Operating expenses for the three months ended October 31, 2022, consisted of
$74,848 in general and administrative, $633,140 in professional fees, $512,288
in professional fees - related parties and $143,465 in management fees and
salaries - related parties. Operating expenses for the three months ended
October 31, 2021, consisted of $201,640 in general and administrative and
$216,294 in professional fees, $2,486,040 in professional fees - related parties
and $87,410 in management fees and salaries - relates parties. The decrease in
operating expenses during the three months ended October 31, 2022, was mainly
due to the decrease in professional Fees- related parties for $512,288 incurred
during the three months ended October 31, 2022, as compared to $2,486,040
incurred during the three months ended October 31, 2021. During the three months
ended October 31, 2022, the Company incurred stock based compensation of
$538,300 for common stock award to consultants and $512,288 for common stock
award to related parties as compared to stock based compensation of $82,500 for
common stock award to consultants and $2,546,040 for common stock award to
related parties during the three months ended October 31, 2021. Compensation was
recorded under professional fees in the statements of operations.
Our other expenses for the three months ended October 31, 2022, were $62,651
compared to $108,593 for the three months ended October 31, 2021. The decrease
in other expense is attributed to a decrease in amortization of convertible note
discount during the three months ended October 31, 2022.
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Six Months Ended October 31, 2022, Compared to the Six Months October 31, 2021
Six Months Ended
October 31,
2022 2021 Changes %
Revenues $ 82,321 $ 598,719 $ (516,398 ) (86 %)
Cost of revenue (57,621 ) (519,595 ) 461,974 (89 %)
Gross Profit 24,700 79,124 (54,424 ) (69 %)
Operating Expenses (1,715,715 ) (22,148,461 ) 20,432,746 (92 %)
Loss from Operations (1,691,015 ) (22,069,337 ) 20,378,322 (92 %)
Other Expenses (92,093 ) (148,625 ) 56,532 (38 %)
Net Loss $ (1,783,108 ) $ (22,217,962 ) $ 20,434,854 (92 %)
Revenues
We had revenues of $82,321 from operations during the six months October 31,
2022, as compared to $598,719 of revenues during the six months ended October
31, 2021. The decrease in revenue is attributed to decreased business activities
during the six months ended October 31, 2022.
Net Loss
Our unaudited financial statements report a net loss of $1,783,108 for the six
months ended October 31, 2022, compared to a net loss of $22,217,962 for the six
months ended October 31, 2021. The decrease in net loss was due to a decrease in
operating expenses and other expenses.
Expenses
Our operating expenses for the six months ended October 31, 2022, were
$1,715,715 compared to $22,148,461 for the six months ended October 31, 2021.
Operating expenses for the six months ended October 31, 2022, consisted of
$115,619 in general and administrative, $809,961 in professional fees, $557,963
in professional fees - related parties and $232,172 in management fees and
salaries - related parties. Operating expenses for the six months ended October
31, 2021, consisted of $300,652 in general and administrative and $6,291,367 in
professional fees, $15,460,312 in professional fees - related parties and
$96,130 in management fees and salaries - relates parties. The decrease in
operating expenses during the six months ended October 31, 2022, was mainly due
to the decrease in professional fees for $809,961 and professional fees- related
parties for $557,963 incurred during the six months ended October 31, 2022, as
compared to $6,291,367 and $15,460,312 incurred during the six months ended
October 31, 2021. During the six months ended October 31, 2022, the Company
incurred stock based compensation of $663,010 for common stock award to
consultants and $557,963 for common stock award to related parties as compared
to stock based compensation of $6,122,463 for common stock award to consultants
and $15,520,312 for common stock award to related parties during the six months
ended October 31, 2021. Compensation was recorded under professional fees in the
statements of operations.
Our other expenses for the six months ended October 31, 2022, were $92,093
compared to $148.625 for the six months ended October 31, 2021. During the six
months ended October 31, 2022, and 2021. The decrease in other expense is
attributed to a decrease in amortization of convertible note discount during the
six months ended October 31, 2022.
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Liquidity and Financial Condition
Working Capital
October 31, April 30,
2022 2022
Current Assets $ 595,253 $ 449,614
Current Liabilities $ 1,345,573 $ 1,146,362
Working Capital (Deficiency) $ (750,320 ) $ (696,748 )Our total current assets as of October 31, 2022, were $593,253 as compared to
total current assets of $449,614 as of April 30, 2022, due primarily to an
increase in cash from convertible note proceeds and increase in inventory,
offset by a decrease in prepaid expenses.
Our total current liabilities as of October 31, 2022, were $1,345,573 as
compared to total current liabilities of $1,146,362 as of April 30, 2022, due
primarily to an increase in promissory notes and accrued interest.
Our working capital deficit on October 31, 2022, was $750,320 as compared to
working capital deficit of $696,748 as of April 30, 2022. The increase in
working capital deficit was mainly attributed to the factors noted above.
Cash Flows
Six Months Ended
October 31,
2022 2021
Cash Flows used in Operating Activities $ (433,526 ) $ (381,086 )
Cash Flows used in Investing Activities (26,553 ) (12,500 )
Cash Flows provided by Financing Activities 641,750 397,438
Net increase in cash during period
$ 181,671 $ 3,852
Operating Activities
Net cash used in operating activities was $433,526 for the six months ended
October 31, 2022, compared with $381,086 net cash used in operating activities
during the same period in 2021.
During the six months ended October 31, 2022, net cash used in operating
activities was attributed to net loss of $1,783,108, decreased by stock-based
compensation of $1,220,973, depreciation of furniture and equipment of $572,
amortization of promissory and convertible note discount of $63,847,
amortization of intangible assets of $9,005 and lease expense settle by common
stock of $18,950 and a net change in operating assets and liabilities of
$36,235.
During the six months ended October 31, 2021, the net cash used in operating
activities was attributed to net loss of $22,217,962 from operations, decreased
by stock-based compensation of $15,946,945, depreciation of furniture and
equipment of $572, amortization of convertible note discount of $136,971 and
lease expense settle by common stock of $30,000 and a net change in operating
assets and liabilities of $5,722,388.
Investing Activities
During the six months ended October 31, 2022, and 2021, we used $26,553 and
$12,500, respectively, in investing activities. During the six months ended
October 31, 2022, the Company acquired intangible assets by cash of $26,553.
During the six months ended October 31, 2021, the Company advanced to a related
party of $12,500.
Financing Activities
During the six months ended October 31, 2022, net cash from financing activities
was $641,750 compared to $397,438 during the same period in 2021. Proceeds from
financing activities during the six months ended October 31, 2022, were derived
from proceeds from issuance of promissory notes totalling of $575,000, proceeds
from issuance of common stock of $24,750 and proceeds from warrants exercised of
$42,000. Proceeds from financing activities during the six months ended October
31, 2021, were derived from issuance of convertible notes totalling of $397,000,
proceeds from issuance of proceeds from issuance of stock subscription $420 and
proceeds from issuance of preferred stock for cash $18.
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Going Concern
As of October 31, 2022, we had cash on hand of $184,548. We generated revenues
of $82,321 and gross profit of $24,700 during the six months ended October 31,
2022, incurred net loss of $1,783,108 during the period and a cumulative net
loss of $32,249,708 since our inception. We expect to generate additional losses
for the foreseeable future while we establish our business.
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. We anticipate continuing to rely on equity sales of our
common stock in order to continue to fund our business operations. Issuances 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.
Recent Accounting Pronouncements
Management has considered all recent accounting pronouncements issued. Our
company's management believes that these recent pronouncements will not have a
material effect on our financial statements.
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