10-Q 1 gpox_10q.htm FORM 10-Q gpox_10q.htm

 

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: January 31, 2024

 

or

 

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________________ to ________________

 

Commission File Number: 333-213744

 

GPO PLUS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

37-1817132

(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)

 

3571 E. Sunset RoadSuite 300Las VegasNV 89120

(Address of principal executive offices)

 

(855)935-9111

(Registrant’s telephone number, including area code)

 

____________________________________________________________

Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange

on which registered

N/A

 

N/A

 

N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒     No ☐

 

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

 

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large, accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer

Accelerated filer

 Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     ☒ No

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ YES     ☐ NO

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

45,723,860 common shares issued and outstanding as of March 15, 2024.

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

Page No.

PART I - FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

Unaudited Condensed Financial Statements

 

3

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

4

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

8

 

Item 4.

Controls and Procedures

 

9

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

Item 1.

Legal Proceedings

 

10

 

Item 1A.

Risk Factors

 

10

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

10

 

Item 3.

Defaults Upon Senior Securities

 

10

 

Item 4.

Mine Safety Disclosures

 

10

 

Item 5.

Other Information

 

10

 

Item 6.

Exhibits

 

11

 

SIGNATURES

 

12

 

 

2

Table of Contents

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements include, among others, those statements including the words “believes”, “anticipates”, “expects”, “intends”, “estimates”, “plans” and words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

Forward-looking statements are based on our current expectations and assumptions regarding our business, potential target businesses, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include changes in local, regional, national or global political, economic, business, competitive, market (supply and demand) and regulatory conditions.

 

A description of these and other risks and uncertainties that could affect our business appears in the section captioned “Risk Factors” in our Annual Report on Form 10-K which we filed with the Securities and Exchange Commission (“SEC”) on August 31, 2023 (the “Form 10-K”). The risks and uncertainties described under “Risk Factors” are not exhaustive.

 

Given these uncertainties, readers of this Quarterly Report on Form 10-Q (“Quarterly Report”) are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the SEC and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. 

 

 

3

Table of Contents

 

GPO PLUS, INC.

 

CONDENSED FINANCIAL STATEMENTS

January 31, 2024 (UNAUDITED)

 

INDEX TO CONDENSED FINANCIAL STATEMENTS

 

Condensed Balance Sheets on January 31, 2024 (Unaudited) and April 30, 2023

 

F-2

 

 

 

Condensed Statements of Operations for the three and nine months ended January 31, 2024 and 2023 (Unaudited)

 

F-3

 

 

 

Condensed Statements of Changes in Shareholders’ Equity for the three and nine months ended January 31, 2024 and 2023(Unaudited)

 

F-5

 

 

 

Condensed Statements of Cash Flows for the nine months ended January 31, 2024 and 2023 (Unaudited)

 

F-5

 

 

 

Notes to Condensed Financial Statements (Unaudited)

 

F-6

 

 
F-1

Table of Contents

 

GPO PLUS, INC.

CONDENSED BALANCE SHEETS

 

 

 

January 31,

 

 

April 30,

 

 

 

2024

 

 

2023

 

 

 

(Unaudited)

 

 

 

 

ASSETS

Current Assets:

 

 

 

 

 

 

Cash

 

$406,662

 

 

$55,496

 

Accounts receivable

 

 

32,470

 

 

 

43,614

 

Prepaid expenses

 

 

8,844

 

 

 

69,351

 

Inventory

 

 

419,500

 

 

 

156,997

 

Total Current Assets

 

 

867,476

 

 

 

325,458

 

 

 

 

 

 

 

 

 

 

Finance lease right-of-use assets, net

 

 

221,109

 

 

 

129,367

 

Property and equipment, net

 

 

111,738

 

 

 

72,886

 

Intangible assets, net

 

 

40,902

 

 

 

62,290

 

TOTAL ASSETS

 

$1,241,225

 

 

$590,001

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

1,399,842

 

 

 

517,037

 

Accrued interest

 

 

274,621

 

 

 

119,488

 

Accrued liabilities - related parties

 

 

232,800

 

 

 

253,235

 

Convertible note payable, net of debt discount of $0

 

 

188,000

 

 

 

263,000

 

Promissory note payable, net of debt discount of $84,656 and $293,952, respectively

 

 

2,418,194

 

 

 

1,211,548

 

     Other current liabilities

 

 

 346,003

 

 

 

 -

 

Finance lease liabilities

 

 

42,766

 

 

 

25,383

 

Total Current Liabilities

 

 

4,902,226

 

 

 

2,389,691

 

 

 

 

 

 

 

 

 

 

Finance lease liabilities - non-current

 

 

157,474

 

 

 

88,221

 

Total Liabilities

 

 

5,059,700

 

 

 

2,477,912

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 11)

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Founders Series A Non-Voting Redeemable Preferred Stock, $0.0001 par value, $15 stated value; 500,000 shares authorized; 21,250 and 28,750 shares issued and outstanding at January 31, 2024 and April 30, 2023 respectively

 

 

167,154

 

 

 

224,905

 

Series A Non-Voting Redeemable Preferred Stock, $0.0001 par value, $10 stated value; 175,000 designated; 175,000 shares issued and outstanding

 

 

1,750,000

 

 

 

1,750,000

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit:

 

 

 

 

 

 

 

 

Series A Preferred Shares, $0.0001 par value, 1,000,000 shares designated; 1,000,000 shares issued and outstanding

 

 

100

 

 

 

100

 

Series C Preferred Shares, $0.0001 par value, 175 shares designated; 49.5 shares and 0 shares issued and outstanding at January 31, 2024 and April 30, 2023, respectively

 

 

-

 

 

 

-

 

Founders Class A Common stock, $0.0001 par value, 10,000,000 shares authorized; 115,000 shares issued and outstanding

 

 

12

 

 

 

12

 

Common stock, $0.0001 par value, 90,000,000 shares authorized; 44,108,860 and 39,454,300 shares issued and outstanding at January 31, 2024 and April 30, 2023, respectively

 

 

4,412

 

 

 

3,947

 

Additional paid in capital

 

 

31,838,476

 

 

 

30,635,238

 

Accumulated deficit

 

 

(37,578,629)

 

 

(34,502,113)

Total Stockholders' Deficit

 

 

(5,735,629)

 

 

(3,862,816)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$1,241,225

 

 

$590,001

 

 

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

 

 
F-2

Table of Contents

 

GPO PLUS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 January 31,

 

 

 January 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$1,089,583

 

 

$104,620

 

 

$3,277,888

 

 

$186,941

 

Cost of revenue

 

 

928,413

 

 

 

64,852

 

 

 

2,692,249

 

 

 

122,473

 

Gross Profit

 

 

161,170

 

 

 

39,768

 

 

 

585,639

 

 

 

64,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

453,012

 

 

 

178,628

 

 

 

1,105,555

 

 

 

294,247

 

Professional fees

 

 

328,436

 

 

 

317,361

 

 

 

1,222,206

 

 

 

1,127,322

 

Professional fees - related parties

 

 

28,194

 

 

 

128,234

 

 

 

351,908

 

 

 

686,197

 

Management fees and salaries - related parties

 

 

98,764

 

 

 

152,560

 

 

 

340,965

 

 

 

384,732

 

Total Operating Expenses

 

 

908,406

 

 

 

776,783

 

 

 

3,020,634

 

 

 

2,492,498

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(747,236)

 

 

(737,015)

 

 

(2,434,995)

 

 

(2,428,030)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

8,800

 

 

 

-

 

 

 

8,800

 

 

 

-

 

Interest expense

 

 

(145,202)

 

 

(134,144)

 

 

(650,321)

 

 

(226,237)

Total Other Income (Expense)

 

 

(136,402)

 

 

(134,144)

 

 

(641,521)

 

 

(226,237)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$(883,638)

 

$(871,159)

 

$(3,076,516)

 

$(2,654,267)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss Per Common Share: Basic and Diluted

 

$(0.02)

 

$(0.03)

 

$(0.07)

 

$(0.08)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding: Basic and Diluted

 

 

44,223,860

 

 

 

33,807,556

 

 

 

42,527,926

 

 

 

32,795,117

 

 

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

 

 
F-3

Table of Contents

 

GPO PLUS, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

(Unaudited)

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

Founders Series A Non-Voting Redeemable Preferred Stock

 

 

Series A Non-Voting Redeemable Preferred Stock

 

 

Series A Convertible Preferred Shares

 

 

Series C Preferred Shares

 

 

Founders Class A Common stock

 

 

Common stock

 

 

Additional Paid In

 

 

Accumulated

 

 

Total Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance, April 30, 2023

 

 

28,750

 

 

$224,905

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

-

 

 

$-

 

 

 

115,000

 

 

$12

 

 

 

39,454,300

 

 

$3,947

 

 

$30,635,238

 

 

$(34,502,113)

 

$(3,862,816)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for conversion of debts

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

613,437

 

 

 

61

 

 

 

93,089

 

 

 

-

 

 

 

93,150

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,217,808)

 

 

(1,217,808)

Balance, July 31, 2023

 

 

28,750

 

 

$224,905

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

-

 

 

$-

 

 

 

115,000

 

 

$12

 

 

 

40,067,737

 

 

$4,008

 

 

$30,728,327

 

 

$(35,719,921)

 

$(4,987,474)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for conversion of Founders Series A Non-Voting Redeemable Preferred Stock

 

 

(7,500)

 

 

(57,751)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

400,000

 

 

 

40

 

 

 

57,711

 

 

 

-

 

 

 

57,751

 

Issuance of Series C Preferred Shares for cash

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

18

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

175,000

 

 

 

-

 

 

 

175,000

 

Issuance of common stock for loan extension

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

400,000

 

 

 

40

 

 

 

76,480

 

 

 

-

 

 

 

76,520

 

Issuance of common stock for loan inducement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

786,000

 

 

 

79

 

 

 

59,122

 

 

 

-

 

 

 

59,201

Issuance of common stock to related parties for services

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,470,279

 

 

 

147

 

 

 

257,152

 

 

 

-

 

 

 

257,299

 

Issuance of common stock for services

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

984,844

 

 

 

98

 

 

 

173,700

 

 

 

-

 

 

 

173,798

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(975,070)

 

 

(975,070)

Balance, October 31, 2023

 

 

21,250

 

 

$167,154

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

18

 

 

$-

 

 

 

115,000

 

 

$12

 

 

 

44,108,860

 

 

$4,412

 

 

$31,527,492

 

 

$(36,694,991)

 

$(5,162,975)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series C Preferred Shares for cash

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

32

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

320,000

 

 

 

-

 

 

 

320,000

 

Adjustment for Issuance of common stock for settlement of payable for assets acquisition

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

(8,800)

 

 

 

 -

 

 

 

 (8,800)

 

Adjustment on Valuation of common stock issued 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (216)

 

 

 

 -

 

 

 

 (216)

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(883,638)

 

 

(883,638)

Balance, January 31, 2024

 

 

21,250

 

 

$167,154

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

50

 

 

$-

 

 

 

115,000

 

 

$12

 

 

 

44,108,860

 

 

$4,412

 

 

$31,838,476

 

 

$(37,578,629)

 

$(5,735,629)

  

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

Founders Series A Non-Voting Redeemable Preferred Stock

 

 

Series A Non-Voting Redeemable Preferred Stock

 

 

Series A Convertible Preferred Shares

 

 

Founders Class A Common stock

 

 

Common stock

 

 

Additional

Paid In

 

 

Accumulated

 

 

Total Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, April 30, 2022

 

 

28,750

 

 

$224,905

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

115,000

 

 

$12

 

 

 

31,361,572

 

 

$3,136

 

 

$27,795,797

 

 

$(30,466,600)

 

$(2,667,555)

Stock based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

61,000

 

 

 

6

 

 

 

12,804

 

 

 

-

 

 

 

12,810

 

Stock based compensation - related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

217,500

 

 

 

22

 

 

 

45,653

 

 

 

-

 

 

 

45,675

 

Issuance of common stock for lease

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

23,810

 

 

 

2

 

 

 

4,998

 

 

 

-

 

 

 

5,000

 

Issuance of common stock for cash

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,500

 

 

 

1

 

 

 

9,749

 

 

 

-

 

 

 

9,750

 

Issuance of common stock for exercise of warrants

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

280,000

 

 

 

28

 

 

 

41,972

 

 

 

-

 

 

 

42,000

 

Issuance of common stock for intangible assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

200,000

 

 

 

20

 

 

 

58,980

 

 

 

-

 

 

 

59,000

 

Issuance of common stock for note inducement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

75,000

 

 

 

8

 

 

 

15,742

 

 

 

-

 

 

 

15,750

 

Issuance of common stock for salary payable - related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

80,000

 

 

 

8

 

 

 

35,192

 

 

 

-

 

 

 

35,200

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(376,846)

 

 

(376,846)

Balance, July 31, 2022

 

 

28,750

 

 

$224,905

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

115,000

 

 

$12

 

 

 

32,305,382

 

 

$3,231

 

 

$28,020,887

 

 

$(30,843,446)

 

$(2,819,216)

Stock based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

520,000

 

 

 

52

 

 

 

568,148

 

 

 

-

 

 

 

568,200

 

Stock based compensation - related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

308,460

 

 

 

31

 

 

 

512,257

 

 

 

-

 

 

 

512,288

 

Issuance of common stock for lease

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,500

 

 

 

1

 

 

 

13,949

 

 

 

-

 

 

 

13,950

 

Issuance of common stock for cash

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10,000

 

 

 

1

 

 

 

14,999

 

 

 

-

 

 

 

15,000

 

Issuance of common stock for note conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

133,333

 

 

 

13

 

 

 

19,987

 

 

 

-

 

 

 

20,000

 

Issuance of common stock for note inducement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,000,000

 

 

 

100

 

 

 

305,052

 

 

 

-

 

 

 

305,152

 

Forgiveness of related party loan

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

145,737

 

 

 

-

 

 

 

145,737

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,406,262)

 

 

(1,406,262)

Balance, October 31, 2022

 

 

28,750

 

 

$224,905

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

115,000

 

 

$12

 

 

 

34,284,675

 

 

$3,429

 

 

$29,601,016

 

 

$(32,249,708)

 

$(2,645,151)

Stock based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

175,000

 

 

 

18

 

 

 

36,732

 

 

 

-

 

 

 

36,750

 

Stock based compensation - related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

610,641

 

 

 

61

 

 

 

128,174

 

 

 

-

 

 

 

128,235

 

Issuance of common stock for lease

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

32,808

 

 

 

3

 

 

 

6,887

 

 

 

-

 

 

 

6,890

 

Issuance of common stock for furniture and equipment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

400,000

 

 

 

40

 

 

 

75,960

 

 

 

-

 

 

 

76,000

 

Issuance of common stock for note conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

999,999

 

 

 

100

 

 

 

149,900

 

 

 

-

 

 

 

150,000

 

Issuance of common stock for note inducement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

700,000

 

 

 

70

 

 

 

55,208

 

 

 

-

 

 

 

55,278

 

Cancellation of common stock - related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,369,333)

 

 

(137)

 

 

137

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(871,159)

 

 

(871,159)

Balance, January 31, 2023

 

 

28,750

 

 

$224,905

 

 

 

175,000

 

 

$1,750,000

 

 

 

1,000,000

 

 

$100

 

 

 

115,000

 

 

$12

 

 

 

35,833,790

 

 

$3,584

 

 

$30,054,014

 

 

$(33,120,867)

 

$(3,063,157)

 

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

 

 
F-4

Table of Contents

 

GPO PLUS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 Nine Months Ended

 

 

 

 January 31,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$(3,076,516)

 

$(2,654,267)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock based compensation for services

 

 

355,575

 

 

 

917,089

 

Stock based compensation for services - related parties

 

 

351,908

 

 

 

686,198

 

lease expense settled by common stock

 

 

-

 

 

 

25,840

 

Other income from issuance of common stock for assets acquisition

 

 

(8,800

)

 

 

-

 

Non-cash interest expense for promissory note extension

 

 

76,520

 

 

 

-

 

Non-cash interest expense for promissory note

 

 

13,493

 

 

 

-

 

Stock payable for lease expense

 

 

21,815

 

 

 

-

 

Depreciation of furniture and equipment

 

 

20,650

 

 

 

858

 

Depreciation of right-of-use-assets

 

 

30,218

 

 

 

-

 

Amortization of intangible assets

 

 

21,388

 

 

 

16,134

 

Amortization of promissory note discount

 

 

386,890

 

 

 

156,019

 

Amortization of convertible note discount

 

 

-

 

 

 

15,480

 

Interest expense on finance lease

 

 

11,593

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

11,144

 

 

 

(6,891)

Prepaid expenses

 

 

 26,207 

 

 

-

 

Inventory

 

 

288,079

 

 

(23,071)

Accounts payable and accrued liabilities

 

 

332,224

 

 

 

60,191

 

Accrued interest

 

 

155,133

 

 

 

54,663

 

Accrued liabilities - related parties

 

 

(20,435)

 

 

-

 

Deposit

 

 

-

 

 

 

7,900

 

Net cash used in Operating Activities

 

 

(1,002,914)

 

 

(743,857)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of intangible assets

 

 

-

 

 

 

(26,553)

Purchase of property and equipment

 

 

(59,503)

 

 

-

 

Net cash used in Investing Activities

 

 

(59,503)

 

 

(26,553)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Repayment for finance leases

 

 

(36,917)

 

 

-

 

Proceeds from issuance of common stock

 

 

-

 

 

 

24,757

 

Proceeds from exercise of warrants

 

 

-

 

 

 

42,000

 

Proceeds from issuance of promissory notes

 

 

1,058,500

 

 

 

925,000

 

Repayment of promissory notes

 

 

(103,000)

 

 

-

 

Proceeds from issuance of series C preferred shares

 

 

495,000

 

 

 

-

 

Net cash provided by Financing Activities

 

 

1,413,583

 

 

 

991,757

 

 

 

 

 

 

 

 

 

 

Net change in cash for period

 

 

351,166

 

 

 

221,347

 

Cash at beginning of period

 

 

55,496

 

 

 

2,877

 

Cash at end of period

 

$406,662

 

 

$224,224

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$-

 

 

$-

 

Cash paid for interest

 

$5,941

 

 

$74

 

 

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Forgiveness of related party loan

 

$-

 

 

$145,737

 

Recognition of finance lease right-of-use assets

 

$121,960

 

 

$-

 

Stock payable for note inducement

 

$58,393

 

 

$-

 

Issuance of common stock for intangible assets

 

$-

 

 

$59,000

 

Issuance of common stock for note inducement

 

$59,201

 

 

$376,180

 

Issuance of common stock for salary payable - related party

 

$-

 

 

$35,200

 

Issuance of common stock for conversion of debts

 

$93,150

 

 

$170,000

 

Issuance of common stock for conversion of Founders Series A

 

$57,751

 

 

$-

 

Issuance of common stock for furniture and equipment

 

$-

 

 

$76,000

 

Cancellation of common stock by related party

 

$-

 

 

$137

 

 

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

 

 
F-5

Table of Contents

 

GPO PLUS, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

 

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.

 

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 three key areas: products (developing and manufacturing), distribution (getting our products to customers), and sales and marketing (selling and promoting our products). Our goal is to expand our product line and distribution reach to meet market demand and the needs of our customers.

 

NOTE 2 - GOING CONCERN

 

The Company’s financial statements as of January 31, 2024, 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 revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company has incurred a cumulative deficit of $37,578,629. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.

 

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

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with US GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended January 31, 2024 are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2023 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended April 30, 2023 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on August 31, 2023.

 

 
F-6

Table of Contents

 

Use of Estimates

 

Preparing financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

 

Cash and Cash Equivalents

 

For the 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 January 31, 2024 and April 30, 2023, the Company had cash of $406,662 and $55,496, respectively.

 

Accounts Receivable

 

Accounts receivables are recorded in accordance with ASC 310, “Receivables,” at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company does not currently have any amount recorded as an allowance for doubtful accounts. Based on the 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 January 31, 2024 and April 30, 2023, the Company had accounts receivable of $32,470 and $43,614, respectively.

 

As of January 31, 2024, the Company has three customers concentrated over 10% of the accounts receivable at 59%. 27% and 19%, respectively.

 

As of April 30, 2023, the Company has two customers concentrated over 10% of the accounts receivable at 67% and 27%, respectively.

 

Prepaid Expense

 

Prepaid expenses relate to security deposit for an office premise and prepayment made for future services in advance that will be expensed over time as the benefit of the services is received in the future expected within one year. As of January 31, 2024 and April 30, 2023, prepaid expenses were $8,844 and $69,351, respectively. As of January 31, 2024 and April 30, 2023, $6,844 and $67,351 was a prepayment for common shares issued to consultants, respectively, and $2,000 is related to a security deposit for an office premise.

 

 

 

January 31,

 

 

April 30,

 

 

 

2024

 

 

2023

 

Security Deposit

 

$2,000

 

 

$2,000

 

Prepayment for shares issued to consultants

 

 

6,844

 

 

 

67,351

 

Total

 

$8,844

 

 

$69,351

 

 

Inventory

 

Inventory is stated at lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method.

 

As of January 31, 2024, the Company accessed that there was no slow moving or obsolete inventory so no reserves are considered necessary. The Company continuously evaluates the adequacy of these reserves and adjusts these reserves as required.

 

As of January 31, 2024 and April 30, 2023, the Company had finished goods inventory of $419,500 and $156,997, respectively. As of January 31, 2024, the Company had $24,195 of Mr. Vapor inventory, $45,218 of Nutriumph inventory, $28,680 of Distro inventory and $321,407 of Loon inventory. As of April 30, 2023, the Company had $124,437 of Mr. Vapor inventory and $32,560 of Nutriumph inventory. (Note 4)

 

 
F-7

Table of Contents

 

Intangible Assets

 

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

 

ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below it carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

 

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology, and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted. (Note 4)

 

Long-Lived Assets

 

Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.

 

Property, Plant and Equipment

 

Property and equipment are stated at cost. Depreciation is computed using the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:

 

Furniture and Equipment

3-5 years

Computer Equipment

   2 years

Automobile

   5 years

 

Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.

 

The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the nine months ended January 31, 2024 and 2023, 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.

 

 
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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 three key areas: products (developing and manufacturing), distribution (getting our products to customers), and sales and marketing (selling and promoting our products). Our goal is to expand our product line and distribution reach to meet market demand and the needs of our customers. Our business is organized around four key areas:

 

 

Products (developing and manufacturing unique products)

 

 

 

 

Distribution (getting our products to customers through our Direct to Store Delivery "DSD.")

 

 

 

 

Sales and Marketing  (selling and promoting our Products and our Company)

 

 

 

 

We successfully deployed our new “White Glove” Direct to Store (“DSD”) service. This service includes new point of sale displays for our flagship brand “The Feel -Good Shop+” and “Nicotine Shops.” To implement the new DSD service program GPOX created “Mini Hubs” supported by a Regional Distribution Hubs. Currently, GPOX services approximately 570 stores across 12 states centralized in the Southwest and Midwest regions of the United States.

 

During the nine months ended January 31, 2024 and 2023, the Company recognized $3,277,863 and $186,425 of revenues related to merchandise and product sales, and $25 and $516 of revenues related to shipping recovered on merchandise sales, respectively, resulting in total revenue of $3,277,888 and $186,941, respectively. The Company incurred cost of revenue of $2,692,249 and $122,473 and generated gross profit of $585,639 and $64,468 during the nine months ended January 31, 2024 and 2023, respectively. In regard to the sales that occurred during the nine months ended January 31, 2024 and 20223, there are no unfulfilled obligations related to the merchandise and product sales.

 

During the nine months ended January 31, 2024, the Company has one customer contributed over 10% of total sales at 95%.

 

During the nine months ended January 31, 2023, the Company has one customer contributed over 10% of total sales at 96%.

 

Accounts payable and accrued liabilities

 

Accounts payable and accrued liabilities refers to trade payable to non-affiliate vendors and payroll liabilities to employees. As of January 31, 2024 and April 30, 2023, accounts payable and accrued liabilities was $1,399,842 and $517,037, comprised of trade payable of $1,361,368 and $514,337 and payroll liabilities of $38,474 and $2,700, respectively.

 

Leases

 

We determine if an arrangement is a lease at inception and whether the lease obligation is an operating lease or finance lease in accordance with ASC 842, “Leases.” A lease obligation is classified as a finance lease, if at least one of the following criteria is met:

 

 

·

A transferal of ownership of an asset to the lessee at the end of the term of the initial lease

 

·

The lessee is reasonably certain that they will exercise a purchase option at the end of the term of the lease

 

·

The leased asset has no alternative use to the lessor at the end of the lease

 

·

The lease term is a major part of the economic life (75%) of the underlying asset

 

·

The present value of lease payments is substantially all of the fair value of the leased asset (90%)

 

 
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Operating leases

 

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

 

Finance lease

 

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

 

Segments

 

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

 

Financial Instruments

 

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

 

Related Party Balances and Transactions

 

The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. (Note 7)

 

Convertible Financial Instruments

 

The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable US GAAP with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable US GAAP.

 

When the Company has historically determined that the embedded conversion options should not be bifurcated from their host instruments, discounts have been recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument. On May 1, 2021, the Company chose to early adopt ASU 2020-06 and did not record a beneficial conversion feature (“BCF”) discount on the issuance of convertible notes with the conversion rate below the Company’s market stock price on the date of note issuance.

 

 
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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 nine months ended January 31, 2024 and 2023, the Company recorded $707,483 stock-based compensation expense and $1,603,287 stock-based compensation expense, which includes amortization of stock issued for prepaid services of $24,300 and $299,337, 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.

 

 

 

Nine months ended

 

 

 

January 31,

 

 

 

2024

 

 

2023

 

Common stock award to consultants

 

$355,575

 

 

$917,089

 

Common stock award to management and executives - related parties

 

 

351,908

 

 

 

686,198

 

 

 

$707,483

 

 

$1,603,287

 

 

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 nine months ended January 31, 2024 and 2023, 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. 

 

 

 

January 31,

 

 

January 31,

 

 

 

2024

 

 

2023

 

 

 

(Shares)

 

 

(Shares)

 

Series A Preferred Shares

 

 

1,000,000

 

 

 

1,000,000

 

Convertible Notes

 

 

188,000

 

 

 

263,000

 

Warrants

 

 

168,000

 

 

 

168,000

 

Common Stock Payable

 

 

2,440,863

 

 

 

-

 

 

 

 

3,796,863

 

 

 

1,431,000

 

 

The Company had 1,000,000 shares of Series A Preferred Stock issued and outstanding at January 31, 2024 and 2023, that are convertible into shares of common stock at a one-for-one rate. (Note 6)

 

As of January 31, 2024 and 2023, convertible shares from the Company’s non-affiliate convertible notes were 188,000 shares and 263,000 shares, respectively. (Note 8)

 

As of January 31, 2024 and 2023, the outstanding warrants issued in connection with these convertible notes were 168,000 and 168,000, respectively. (Note 6)

 

As of January 31, 2024 and 2023, the Company had stock payable of $346,003 and $0 for outstanding 2,440,863 shares and 0 shares of common stock, respectively. (Note 6)

 

 
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Net loss per share for each class of common stock is as follows:

 

 

 

Nine Months Ended

 

 

 

 January 31,

 

 

 

2024

 

 

2023

 

Net loss per share, basic diluted

 

$(0.07)

 

$(0.08)

Net loss per common shares outstanding:

 

 

 

 

 

 

 

 

Founders Class A Common stock

 

$(26.75)

 

$(23.08)

Ordinary Common stock

 

$(0.07)

 

$(0.08)

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Founders Class A Common stock

 

 

115,000

 

 

 

115,000

 

Ordinary Common stock

 

 

42,412,926

 

 

 

32,680,117

 

Total weighted average shares outstanding

 

 

42,527,926

 

 

 

32,795,117

 

 

New Accounting Pronouncements

 

The Company’s management has considered all recent accounting pronouncements issued and believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 4 – ASSETS PURCHASE

 

On July 7, 2022, the Company entered into an Assets Purchase Agreement to acquire inventory and intangible assets from Orev LLC. The purchase price consisted of $50,000 cash and 200,000 shares at $0.30 per share of the Company’s common stock for total consideration of $109,000. The Company acquired inventory of $23,447 and intangible assets valued at $85,553.

 

The inventory acquired are Nutriumph Products for resale purposes. These inventory items have been sold during the year ended April 30, 2023.

 

The intangible assets comprised of proprietary formula at $85,553 and Herberall trademarks with a deemed value of $0. The proprietary formula has an estimated useful life of three years. The Company incurred amortization expenses of $21,388 and $16,134 for the nine months ended January 31, 2024 and 2023, recorded as general and administrative expense. As of January 31, 2024 and April 30, 2023, the intangible assets were $40,902 and $62,290, net of accumulated amortization of $44,651 and $23,263. Based on the carrying value of definite-lived intangible assets as of April 30, 2023, the amortization expense for the next three years will be as follows:

 

 

 

Amortization

 

Year Ended April 30,

 

Expense

 

2024 (excluding the nine months ended January 31, 2024)

 

$7,127

 

2025

 

 

28,518

 

Thereafter

 

 

5,257

 

 

 

$40,902

 

 

 
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NOTE 5 – PROPERTY AND EQUIPMENT

 

Property and equipment as of January 31, 2024 and April 30, 2023, are summarized as follows:

 

Cost

 

Furniture and Equipment

 

 

Computer

Equipment

 

 

Automobile

 

 

Total

 

April 30, 2023

 

$72,504

 

 

$9,215

 

 

$-

 

 

$81,719

 

Additions

 

 

-

 

 

 

-

 

 

 

59,503

 

 

 

59,503

 

January 31, 2024

 

$72,504

 

 

$9,215

 

 

$59,503

 

 

$141,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated Depreciation

 

Furniture and Equipment

 

 

Computer

Equipment

 

 

Automobile

 

 

Total

 

April 30, 2023

 

$7,681

 

 

$1,152

 

 

$-

 

 

$8,833

 

Additions

 

 

15,607

 

 

 

3,456

 

 

 

1,588

 

 

 

20,651

 

January 31, 2024

 

$23,288

 

 

$4,608

 

 

$1,588

 

 

$29,484

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

Furniture and Equipment

 

 

Computer

Equipment

 

 

Automobile

 

 

Total

 

April 30, 2023

 

$64,823

 

 

$8,063

 

 

$-

 

 

$72,886

 

January 31, 2024

 

$49,216

 

 

$4,607