UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

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

 

For the quarterly period ended July 31, 2020

or

 

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ___________

 

Commission File Number 333-213744

 

GPO PLUS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		37-1817132
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

 

3571 E. Sunset Road, Suite 300, Las Vegas, NV		89120
(Address of principal executive offices)		(Zip Code)

 

855.935.4769 (GPOX)

(Registrant’s telephone number, including area code)

N/A

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

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
n/a	n/a	n/a

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☐

YES

☒

NO

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 

☐

YES

☒

NO

 

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

 

9,316,667 common shares issued and outstanding as of October 26, 2020

 

 

GPO PLUS, INC.

 

FORM 10-Q

 

TABLE OF CONTENTS

 

Contents

 

PART I - FINANCIAL INFORMATION
	Item 1.	Unaudited Consolidated Financial Statements	3
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
	Item 4.	Controls and Procedures	23
PART II - OTHER INFORMATION
	Item 1.	Legal Proceedings	24
	Item 1A.	Risk Factor	24
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
	Item 3.	Defaults Upon Senior Securities	24
	Item 4.	Mine Safety Disclosures	24
	Item 5.	Other Information	24
	Item 6.	Exhibits	25
SIGNATURES			26

 

2

  

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements 

 

Our unaudited interim financial statements for the three month period ended July 31, 2020 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with generally accepted accounting principles in the United States.

 

 

GPO PLUS, INC.

BALANCE SHEETS

(Unaudited)

 

		July 31,				April 30,
		2020				2020
ASSETS
Current Assets:
Cash and cash equivalents		$	30,585			$	-
Accounts receivable			6,338				-
Prepaid expenses			-				16,127
Total Current Assets			36,923				16,127
Operating lease right-of-use assets			16,564				-
Property, Plant, and Equipment			1,916				-
TOTAL ASSETS		$	55,403			$	16,127
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued liabilities			16,379				5,221
Operating lease liabilities			16,564				-
Deposit			50,000				-
Total Current Liabilities			82,943				5,221
Total Liabilities			82,943				5,221
Commitments and Contingencies (Note 6)			-				-
Stockholders' Equity (Deficit):
Common stock, $0.001 par value, 125,000,000 shares authorized, 9,316,667 shares issued and outstanding			9,317				9,317
Additional paid in capital			120,405				120,405
Accumulated deficit			(157,262	)			(118,816	)
Total Stockholders' Equity (Deficit)			(27,540	)			10,906
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		$	55,403			$	16,127

 

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

 

3

Table of Contents

 

GPO PLUS, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

 

		Three Months Ended
		July 31,
		2020				2019
Revenues		$	6,338			$	-
Operating Expenses
General and administrative			19,407				400
Professional fees			25,377				6,796
Total Operating Expenses			44,784				7,196
Loss from operations			(38,446	)			(7,196	)
Net Loss		$	(38,446	)		$	(7,196	)
Net Loss Per Common Share: Basic and Diluted		$	(0.00	)		$	(0.00	)
Weighted Average Number of Common Shares Outstanding: Basic and Diluted			9,316,667				9,316,667

 

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

 

4

Table of Contents

 

GPO PLUS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

(Unaudited)

 

		Common Stock								Additional				Accumulated
		Shares				Amount				Paid In Capital				Deficit				Total
*Balance, April 30, 2020			9,316,667			$	9,317			$	120,405			$	(118,816	)		$	10,906
Net loss for the period			-				-				-				(38,446	)			(38,446	)
*Balance, July 31, 2020			9,316,667			$	9,317			$	120,405			$	(157,262	)		$	(27,540	)

 

*Retroactively restated reverse stock split 12:1

 

		Common Stock								Additional				Accumulated
		Shares				Amount				Paid In Capital				Deficit				Total
*Balance, April 30, 2019			9,316,667			$	9,317			$	18,746			$	(91,450	)		$	(63,387	)
Net loss for the period			-				-				-				(7,196	)			(7,196	)
*Balance, July 31, 2019			9,316,667			$	9,317			$	18,746			$	(98,646	)		$	(70,583	)

 

*Retroactively restated reverse stock split 12:1

  

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

 

5

Table of Contents

 

GPO PLUS, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Three Months Ended
		July 31,
		2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(38,446	)		$	(7,196	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of right-of-use assets			5,446				-
Changes in operating assets and liabilities:
Accounts receivable			(6,338	)			-
Prepaid expenses			16,127				1,296
Accounts payable and accrued liabilities			11,158				5,900
Operating lease liabilities			(5,446	)			-
Net cash used in Operating Activities			(17,499	)			-
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment			(1,916	)			-
Net cash used in Investing Activities			(1,916	)			-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from deposit			50,000				-
Net cash provided by Financing Activities			50,000				-
Net change in cash for period			30,585				-
Cash at beginning of period			-				-
Cash at end of period		$	30,585			$	-
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes		$	-			$	-
Cash paid for interest		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Recognition of operating right-of-use assets and operating lease liability		$	22,010			$	-

  

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

 

6

Table of Contents

 

GPO PLUS, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

JULY 31, 2020

 

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. The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the Company’s business plan.

 

On April 2, 2018, the Company approved an agreement and plan of merger for the purposes of changing our corporate name from Koldeck Inc. to Global House Holdings Ltd. Pursuant to the agreement and plan of merger, our company merged with our wholly-owned subsidiary Global House Holdings Ltd., a Nevada corporation. Koldeck Inc. remained the surviving company of the merger, continuing under the name Global House Holdings Ltd. The name change, as well as a 20:1 forward stock split, was approved by FINRA and effective April 3, 2018.

 

On June 19, 2020, the Company approved an agreement and plan of merger for the purposes of changing our corporate name from Global House Holdings Ltd. to GPO Plus, Inc. Pursuant to the agreement and plan of merger, our company merged with our wholly-owned subsidiary GPO Plus, Inc., a Nevada corporation. Global House Holdings Ltd. remained the surviving company of the merger, continuing under the name GPO Plus, Inc. The name change, as well as a 12:1 reverse stock split, was approved by FINRA and effective August 20, 2020. The issued and outstanding shares and authorized capital have been restated retroactively in the financial statements. 

 

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 July 31, 2020 have been prepared using generally accepted accounting principles in the United States of America 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 net loss of $157,262. 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 generally accepted accounting principles 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 three months ended July 31, 2020 are not necessarily indicative of the results that may be expected for the year ending April 30, 2021. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2019 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, 2020 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on September 25, 2020.

 

7

Table of Contents

 

Reclassification

 

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

 

Use of Estimates

 

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

 

As of July 31, 2020 and April 30, 2020, the Company had cash and cash equivalents of $30,585 and $0, respectively.

 

Prepaid Expense

 

Prepaid expenses relate to prepayment made for future services in advance and will be expensed over time as the benefit of the services is received in the future, expected within one year.

 

As of July 31, 2020 and April 30, 2020, Prepaid expense was $0 and $16,127, respectively.

 

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

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” (“ASC 360”), 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 three months ended July 31, 2020 and 2019, no impairment losses have been identified.

 

As of July 31, 2020 and April 30, 2020, Property, Plant and Equipment was $1,916 and $0, respectively.

 

8

Table of Contents

 

Leases

 

Effective May 1, 2020, the Company adopted the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016- 02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The Company adopted the new leases standard utilizing the modified retrospective transition method, under which amounts in prior periods presented were not restated. For contracts existing at the time of adoption, the Company elected to not reassess (i) whether any are or contain leases, (ii) lease classification, and (iii) initial direct costs. Upon adoption, the Company recorded $22,010 of right-of-use (“ROU”) assets and $22,010 of lease liabilities on its Balance Sheet.  See Note 6.

 

Deposit

 

Deposit relates to funds paid by investors in advance for issuances of the Company’s equity in future periods pending the designation and approval of various planned equity classes through the State of Nevada. As of July 31, 2020 and April 30, 2020, the deposit balance was $50,000 and $0, respectively.

 

Revenue Recognition

 

During the three months ended July 31, 2020, the Company generated its first time 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:

 

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

 

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 GPO that leverage the aggregated purchasing power of its members. The GPO’s 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 main business segments are HealthGPO, a Group Purchasing Organization for the Healthcare industry, and cbdGPO, a Group Purchasing Organization for the Hemp industry. In addition, the Company offers professional services through GPOPRO Services.

 

HealthGPO works with companies that have well priced high-quality products and services with advantageous terms. The Company’s primary offerings are volume supply acquisitions, access to quality personal protective equipment (PPE), essential necessities and medical equipment from non-traditional, yet fully accredited suppliers. Additionally, the Company identify “best of breed” products that have a unique value proposition and become distributors with some form of exclusivity and/or favorable terms. HealthGPO is developing a b2b healthcare portal to offer medical products to everyday business. Technology will continue to play an important role in exceeding our stated goals.

 

HealthGPO also addresses the needs of individual consumers who want access to products at a good price that is typically only available to healthcare professionals. The Company intend on developing a b2c (business to consumer) portal to sell healthcare and wellness products directly to consumers.

 

In accordance with ASC 606, revenues are recognized when:

 

	·	The invoice has been generated and provided to the customer.
	·	The performance obligations of delivery of products are stated in the invoice.
	·	The transaction price has been identified in the invoice.
	·	The Company has allocated the transaction price to performance obligation in the invoice.
	·	The Company has shipped out the product and, therefore, satisfied the performance obligation.

 

During the three months ended July 31, 2020, the Company recognized revenue of $6,338.

 

9

Table of Contents

 

Financial Instruments

 

The carrying values of our financial instruments including cash and cash equivalent, accounts receivable, and accounts payable, and accrued expenses approximate their fair value due to the short maturities of these financial instruments.

 

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. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company had no potentially dilutive instruments outstanding during the periods presented.

 

COVID-19

 

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. Due to the outbreak and spread of COVID-19, the Company’s management and advisors responsible for financial reporting have experienced administrative delays, include travel restrictions and reduced work hours. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position at July 31, 2020.  The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarter Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained.

 

New Accounting Pronouncements

 

There were various accounting standards and interpretations issued recently, none of which have or are expected to a have a material impact on our financial position, operations or cash flows.

 

NOTE 4 – ACCONTS RECEIVABLE

 

The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivables are reflected as a current asset and no allowance for bad debt has been recorded as of July 31, 2020. As at July 31, 2020, the Company had accounts receivable of $6,338.

 

10

Table of Contents

 

NOTE 5 – CAPITAL STOCK

 

Common Shares

 

On June 19, 2020, the Company announced a reverse stock split of the issued and authorized shares of common stock on the basis of 1 new share for 12 old shares. The reverse stock split has been reviewed by the Financial Industry Regulatory Authority (“FINRA”) and has been approved with an effective date of August 20, 2020. Our issued and outstanding capital decreased from 111,800,000 shares of common stock to 9,316,667 shares of common stock. The reverse stock split also resulted in the decrease of the authorized capital from 1,500,000,000 shares of common stock to 125,000,000 shares of common stock. The issued and outstanding shares and authorized capital have been restated retroactively in the financial statements.

 

As of July 31, 2020 and April 30, 2020, the Company had 9,316,667 shares of common stock issued and outstanding.

 

NOTE 6 – LEASE

 

On May 1, 2020, the Company entered into a lease agreement for an office premise at 3375 Shoal Line Blvd., Hernando Beach, Florida 34607. This office is leased for a term of 12 months, commencing on May 1, 2020 and expiring on April 30, 2021 at the cost of $1,857 per month.

 

Balance - April 30, 2020		$	-
Lease Liability additions			22,010
Lease payment			(5,573	)
Interest expense on lease liabilities			127
Balance - July 31, 2020		$	16,564

 

As of July 31, 2020, the Company owned ROU assets under operating leases for the office premise of $16,564 and operating lease liabilities of $16,564.

 

		July 31, 2020
Operating lease ROU assets		$	16,564
Current portion of operating lease liabilities			16,564
Noncurrent portion of operating lease liabilities			-
Total operating lease liabilities		$	16,564

 

The following summarizes other supplemental information about the Company’s operating lease as of July 31, 2020:

 

Weighted-average remaining lease term		0.75 years
Weighted-average discount rate			2.76	%

 

Future minimum lease payments under operating leases that have initial non-cancelable lease terms in excess of one year at July 31, 2020 were as follows:

 

Year Ended April 30, 2021		$	16,718
Thereafter			-
Total operating lease payments		$	16,718
Less: Imputed interest			154
Total operating lease liabilities		$	16,564

 

We had operating lease costs of $5,573 for the year ended July 31, 2020, which are included in general and administrative expenses in the statement of operations.

 

11

Table of Contents

 

NOTE 7 – SUBSEQUENT EVENTS

 

Subsequent to July 31, 2020 and through the date that these financials were issued, the Company had the following subsequent events:

 

Effective Date of Reverse Stock Split, Merger and Name Change

 

On June 19, 2020, Global House Holdings Ltd. announced a reverse stock split of its issued and authorized shares of common stock on the basis of 1 new share for 12 old shares. The Company concurrently announced an agreement and plan of merger for the purposes of changing our corporate name from Global House Holdings Ltd. to GPO Plus, Inc. Pursuant to the agreement and plan of merger, our company merged with our wholly-owned subsidiary GPO Plus, Inc., a Nevada corporation. Global House Holdings Ltd. remained the surviving company of the merger, continuing under the name GPO Plus, Inc.

 

On August 19, 2020, FINRA announced that the 1 for 12 reverse split, merger, name and symbol change took effect at the open of business on August 20, 2020. The reverse stock split resulted in the decrease of our authorized capital from 1,500,000,000 shares of common stock to 125,000,000 shares of common stock. Correspondingly, our issued and outstanding capital decreased from 111,800,000 shares of common stock to 9,316,667 shares of common stock. The $0.001 par value of our common shares remained unchanged. The reverse split was payable upon surrender and no fractional shares were issued. Fractional shares were rounded up.

 

New Symbol and CUSIP

 

As a result of the corporate actions, effective August 20, 2020, the new CUSIP identifier for our common shares became 38402T100 and our ticker symbol changed to GHHHD. After 20 business days, our symbol changed to GPOX.

 

Designated Territory Distribution Agreement with SafeHandles LLC (“SafeHandles”)

 

On August 19, 2020, we entered into a Designated Territory Distribution Agreement with SafeHandles LLC (“SafeHandles”). SafeHandles is a California based creator and supplier of certain products known as SafeHandles®, which include antimicrobial sleeves, Ster-Roll™ Tape, ADA adhesive products, and other related accessories. Pursuant to the agreement, SafeHandles has appointed the Company as the exclusive distributor of its product in the states of Nevada, Colorado, Texas, Florida, Mississippi, and for the Gaming Industry. “Gaming Industry” means all casinos and hotels affiliated with the gaming industry, casinos and companies engaged in gambling operations and auxiliary restaurant and hotel services including stand-alone casinos, casino hotels, riverboat casinos, bingo halls, gambling machine manufacturers, horse and dog racing tracks, but excluding cruise ships. The exclusive rights granted are subject to certain mutually agreed exceptions for existing key accounts in the territory. The Company will also hold non-exclusive distribution rights outside the territory.

 

The initial term of the agreement began on July 30, 2020 and continues through December 31, 2025, subject to fulfillment of sales targets. If the Company is not in breach of the Agreement at the end of the initial term (December 31, 2025) and the Agreement has not been otherwise terminated, the Distributor may extend the Agreement for an additional five (5) year term in its discretion,

 

Lease agreement

 

On August 5, 2020, the Company entered into a lease agreement for an office premise at 3571 E. Sunset Road Las Vegas Nevada under a term of 6 months at the cost of $4,500 per month, consisting of $2,500 payable in common shares of the Company and $2,000 payable in cash.  The Company may extend the lease on a month to month basis following expiration of the initial term.

 

12

Table of Contents

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

 

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.

 

As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean GPO Plus, Inc., unless otherwise indicated.

 

General Overview

 

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.

 

Corporate Background

 

Our principal office is located at 3571 E. Sunset Road, Suite 300, Las Vegas, NV.   We also maintain a sales office at 3375 Shoal Line Blvd., Hernando Beach, Florida 34607.  Our corporate website is gpoplus.com and our section for shareholder is GPOPlus.com/ir.

 

We were incorporated under the laws of the State of Nevada on March 29, 2016 under the name Koldeck, Inc. We were formerly engaged in the business of providing content writing and editing services.

 

13

Table of Contents

 

On October 16, 2017, Mr. Jian Han Chen acquired 3,000,000 common shares of our Company from Svetlana Mazur.  The shares were purchased in a private transaction in consideration for the aggregate purchase price of $350,000 or approximately $0.116 per share.  The source of funds used in the purchase were Mr. Chen’s personal funds.  As a result of the transaction, Mr. Chen acquired direct voting and dispositive control over, approximately 53.66% of our issued and outstanding voting securities. Concurrently with the change of control, Svetlana Mazur resigned as our sole officer and director.  Jian Han Chen was appointed President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director of the Company, and Mr. Chun Hao Chen was appointed Secretary of the Company.  Ms. Mazur’s resignation was not the result of any disagreements with the Company regarding our operations, policies, practices or otherwise.  

 

On October 26 2017, our Board of Directors approved a forward stock split of our issued and authorized shares of common stock on the basis of 20 new shares for one (1) old share, increasing of our authorized capital from 75,000,000 shares of common stock to 1,500,000,000 shares of common stock. Correspondingly, our issued and outstanding capital increased from 5,590,000 shares of common stock to 111,800,000 shares of common stock. The $0.001 par value of our common shares remained unchanged. The forward stock split was payable upon surrender and no fractional shares were issued. Fractional shares were rounded up.  Also, on October 26, 2017, our board of directors approved an agreement and plan of merger for the purposes of changing our corporate name from Koldeck Inc. to Global House Holdings Ltd.  

 

On January 31, 2018, we filed a Certificate of Change and Articles of Merger with the Nevada Secretary of State to give effect to the forward stock split and name change. The name change and forward stock split were subsequently approved by FINRA on March 29, 2018 with a market effective date of April 3, 2018.  Pursuant to the agreement and plan of merger, our company merged with our wholly-owned subsidiary Global House Holdings Ltd., a Nevada corporation. Koldeck Inc. remained the surviving company of the merger, continuing under the name Global House Holdings Ltd.  As a result, effective April 3, 2018, we adopted the new trading symbol GHHH.

 

Effective May 5, 2020, Brett H. Pojunis acquired 60,000,000 of the issued and outstanding common shares of the Company from Jian Han Chen.  As a result of the transaction, Mr. Pojunis has voting and dispositive control over 53.67% of our outstanding voting securities.  The shares were acquired in a private transaction using Mr. Pojunis’ personal funds.  Mr. Chen no longer holds any equity interest in our Company.   

 

Concurrently with the above described change in control, Mr. Chen resigned as the President, Chief Executive Officer, Chief Financial Officer, Treasurer and director of the Company, and Chun Hao Chen resigned as the Secretary of the Company.  Having consented to act as sole officer and director of the Company, Mr. Pojunis was appointed to fill the ensuing vacancies.

 

On June 11, 2020, our Board of Directors approved a reverse stock split of our issued and authorized shares of common stock on the basis of twelve (12) old shares for one (1) new share.  Also, on June 11, 2020, our Board of Directors approved an agreement and plan of merger for the purposes of changing our corporate name from Global House Holdings Ltd. to GPO Plus, Inc.

 

The 1 for 12 reverse split, merger, name and symbol change became effective at the open of business on August 20, 2020.  As a result of the reverse stock split, our authorized capital decreased from 1,500,000,000 shares of common stock to 125,000,000 shares of common stock. Correspondingly, our issued and outstanding capital decreased from 111,800,000 shares of common stock to 9,316,667 shares of common stock. The $0.001 par value of our common shares remains unchanged. The reverse split is payable upon surrender and no fractional shares were issued. Fractional shares were be rounded up. Pursuant to the agreement and plan of merger, our Company merged with our wholly-owned subsidiary GPO Plus, Inc., a Nevada corporation. Global House Holdings Ltd. remains the surviving company of the merger, continuing under the name GPO Plus, Inc.

 

As a result of the corporate actions, effective August 20, 2020, the new CUSIP identifier for our common shares became 38402T100 and our ticker symbol changed to GHHHD. After 20 business days, our symbol changed to GPOX.

 

14

Table of Contents

 

On July 31, 2020 we announced the launch of cbdGPO, https://cbdgpo.com/, a group purchasing organization (GPO) for the CBD and Hemp industry, and the establishment of a sales office for cbdGPO in Hernando Beach, Florida.  The announcement was made in connection with the abandonment of our former business, and our plan to establish and operate GPOs to services a variety of industries.  A GPO is an entity that is created to leverage the purchasing power of a group of businesses (or individuals) to obtain discounts from vendors based on the collective buying power of the GPO members.  Through cbdGPO, we will seek to make the process of ordering premium CBD products fast, simple, reliable, and affordable.  cbdGPO and GPO Plus, Inc. are brokers and do not take possession of CBD products.

 

On August 19, 2020, we entered into a Designated Territory Distribution Agreement with SafeHandles LLC (“SafeHandles”).  SafeHandles is a California based creator and supplier of certain products known as SafeHandles®, which include antimicrobial sleeves, Ster-Roll™ Tape, ADA adhesive products, and other related accessories.  Pursuant to the agreement, SafeHandles has appointed the Company as the exclusive distributor of its product in the states of Nevada, Colorado, Texas, Florida, Mississippi, and for the Gaming Industry.  “Gaming Industry” means all casinos and hotels affiliated with the gaming industry, casinos and companies engaged in gambling operations and auxiliary restaurant and hotel services including stand-alone casinos, casino hotels, riverboat casinos, bingo halls, gambling machine manufacturers, horse and dog racing tracks, but excluding cruise ships.  The exclusive rights granted are subject to certain mutually agreed exceptions for existing key accounts in the territory.  The Company will also hold non-exclusive distribution rights outside the territory.

 

The initial term of the agreement began on July 30, 2020 and continue through December 31, 2025, subject to fulfillment of sales targets. If the Company is not in breach of the Agreement at the end of the initial term (December 31, 2025) and the Agreement has not been otherwise terminated, the Distributor may extend the Agreement for an additional five (5) year term in its discretion,

 

We do not have any subsidiaries as of the date of this Quarterly Report.

 

Our Current Business

 

GPO Plus identifies underserved markets, segments and industries where there is little to no competition and develops specific GPOs around them. In addition, unlike major GPO’s, 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.

 

GPO Plus develops industry specific GPO that leverage the aggregated purchasing power of its members. The GPO’s 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.

 

Principal Products or Services and their Markets

 

The main business segments are HealthGPO, a Group Purchasing Organization for the Healthcare industry, and cbdGPO, a Group Purchasing Organization for the Hemp industry. In addition, GPOPlus offers professional services through GPOPRO Services.

 

HealthGPO

 

HealthGPO is a Group Purchasing Organization (GPO) for healthcare related products and services for the emerging alternative market. Our target members are in and around the healthcare industry that includes hospitals, medical practice groups, laboratories, and professional physicians as well as entities not directly related to healthcare such as general businesses and governmental agencies. We save our members money by aggregating purchases, negotiating with vendors, and sharing discounts. We save our members time and alleviate headaches by streamlining orders and offering integrated solutions leading to considerable supply chain efficiencies.

 

What We Do

 

Aggregate, Negotiate + Share

 

	·	Aggregate - HealthGPO aggregates the purchasing power of our members.
	·	Negotiate - We use the collective buying power to negotiate discounts.
	·	Share - The discounts are shared with our members to save them money.

 

15

Table of Contents

 

HealthGPO leverages the aggregated purchasing power of our members. They 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.

 

Products and Services

 

HealthGPO works with companies that have well priced high-quality products and services with advantageous terms. Our primary offerings are volume supply acquisitions, access to quality personal protective equipment (PPE), essential necessities and medical equipment from non-traditional, yet fully accredited suppliers. Additionally, we identify “best of breed” products that have a unique value proposition and become distributors with some form of exclusivity and/or favorable terms. HealthGPO is developing a b2b healthcare portal to offer medical products to everyday business. Technology will continue to play an important role in exceeding our stated goals.

 

HealthGPO also addresses the needs of individual consumers who want access to products at a good price that is typically only available to healthcare professionals. We intend on developing a b2c (business to consumer) portal to sell healthcare and wellness products directly to consumers.

 

On August 19, 2020, we entered into a Designated Territory Distribution Agreement with SafeHandles LLC (“SafeHandles”).  Pursuant to that agreement, we have acquired the right to distribute the SafeHandles® line of anti-microbial products, which include antimicrobial sleeves, Ster-Roll™ Tape, ADA adhesive products, and other related accessories.

 

SafeHandles^TM are shrunk to fit, adhesive antimicrobial film covers that are designed to fit over common touch-points, such as door handles, push plates and hand railings.  SafeHandles film contains a slow-release, silver-based pesticide that is registered and approved by the EPA to inhibit the growth of certain microbes, including damaging bacteria, mold, mildew, and fungi.  SafeHandles films are fundamentally cleaner and more durable than untreated handles, so they are ideal for use in high-traffic environments where cleanliness is critical, where users need to eliminate filthy handles. SafeHandles is a proven technology that is trusted for high-traffic areas found in schools and businesses across the United States to supplement their standard hygiene procedures.

 

Approved Suppliers

 

Our suppliers are critical to our goal of delivering products and services that meet our Members’ ever-evolving needs. By securing access to a robust and dynamic portfolio of products, and maintaining the highest standards of customer care and service, HealthGPO will offer differentiated, high-quality group purchasing and consulting services to help our members lower costs.

 

HealthGPO’s Business Model

 

HealthGPO is committed to becoming an alternative option for all the needs of today’s healthcare industry. As demand increases for medical products, HealthGPO is responding by offering discounts (usually substantial discounts) on quality products with small MOQ’s. Our business is represented by an increasing number of offerings across the broad spectrum of medical supplies, including emerging medical and preventative products that have unique value propositions.

 

Membership

 

HealthGPO is developing a tiered, fee-based membership structure for our prospective members.  Members will be entitled to receive priority services and benefits according to their membership tier.  We expect to implement our planned membership structure during fiscal 2021.  Fees and benefits will be assessed and adjusted on an ongoing basis to optimize our supply chain and meet the needs of our members.  Participation in HealthGPO will be on a trial basis until our membership structure is finalized.

 

Problems

 

Current domestic market conditions expose how medical supplies have become increasingly more expensive. Product quality ranges drastically due to the relaxation of regulatory standards, and suppliers require high MOQs (minimum order quantities) which force businesses to make sizable investments in product purchases. Front-line businesses face overpowering competition, leaving established organizations to dominate the market and dictate the pricing. They also must compete with the government.

 

16

Table of Contents

 

Crisis also breeds opportunity; unfortunately, sometimes not always honorable or altruistic. There are those who have ulterior motives, driven more by profit than service or quality. Businesses who are unfamiliar with this sector struggle to evaluate products and services among the widely divergent choices available.  HealthGPO seeks to identify viable options to protect our members.

 

Solutions

 

Through innovative strategies, technology, and key relationships within the healthcare industry HealthGPO utilizes the power of Group Purchasing for the exclusive benefit of our members. HealthGPO brings new solutions to businesses and established healthcare companies seeking alternatives to enter or expand in the industry. HealthGPO provides discounted new sources of non-traditional, yet fully approved and vetted materials, products that have a unique value proposition, and a wide range of business consulting services for new and existing businesses.

 

This will also include focused concentration on Supply Chain optimization. Their members will get the products and services they need, when they need them at a price they can afford.

 

Opportunity

 

An alternative market has been emerging due to increased mandated compliance with public health standards and procedures in response to the global pandemic. Governments, non-healthcare commercial buildings, and general businesses now have a need for medical and protective equipment and have to perform continuous disinfecting procedures. These businesses are providing customers common PPE items such as hand sanitizers, protective masks, and in some instances, even gloves.

 

HealthGPO’s potential market is significant. In addition to traditional healthcare companies, consider the new emerging market which includes many businesses such as convenience stores, hotels, strip mall stores, restaurants, etc. The businesses in this emerging alternative market have a need for additional services, medical equipment, and PPE products. Previously, existing GPO’s wouldn’t consider servicing these businesses and presumably couldn’t facilitate the new demand. In some cases, healthcare GPO’s internal governance prohibits them from working with companies that are not in the healthcare industry.

 

Many companies have been affected by reduced cash-flow and now face additional expenses and challenges to stay in business and be compliant. To meet the needs of its members, HealthGPO makes purchasing necessary products and essential supplies easy and affordable. Furthermore, due to the relationships with vendors, HealthGPO has unique access to “in demand” products that other organizations don't have and can't get access to.

 

cbdGPO

 

cbdGPO will employ an operating structure and strategy similar to HealthGPO to provide an alternative procurement option to the Hemp industry. As demand for Hemp products continues to increase due to increased demand, cbdGPO will aim to offer quality proven products at discounts without having to place substantial orders. To that end, they plan to offer a wide range of products and services to meet the needs of their members.

 

GPO Plus created the first Hemp/CBD Group Purchasing Organization in order to extend large volume pricing of Hemp products and raw materials to small quantity buyers, allowing them to get the highest quality products at bulk pricing discounts without a minimum order quantity.

 

cbdGPO is a membership-based buying group to help hemp companies including wholesalers, manufacturers, distributors, and labs realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors, and other vendors. We foresee that cbdGPO will allow wholesalers and other hemp companies to obtain the best quality consistent products at the best value.

 

17

Table of Contents

 

Following the Federal legalization of Hemp products in the United States, there is an overwhelming demand for high quality Hemp products for both consumers as well as businesses looking to break into this lucrative industry. cbdGPO ensures that its suppliers deliver safe, cost-effective Hemp products to its members.

 

Membership

 

cbdGPO is developing a tiered, fee-based membership structure for our prospective members.  Members will be entitled to receive priority services and benefits according to their membership tier.  We expect to implement our planned membership structure during fiscal 2021.  Fees and benefits will be assessed and adjusted on an ongoing basis to optimize our supply chain and meet the needs of our members.  Participation in cbdGPO will be on a trial basis until our membership structure is finalized. 

 

Purchasing Strategy and Request for Proposal Process

 

cbdGPO’s purpose is to help our future members to realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors, and other vendors.  We seek to offer our members the best products at the best value with approved suppliers.

 

Approved Suppliers

 

cbdGPO suppliers will manufacture and produce raw materials (isolate and distillate) and/or white label and private label Hemp products. They only partner with licensed Hemp suppliers, preferred vendors, manufacturers, and/or agents of cbdGPO.

 

All suppliers have been and will continue to be thoroughly vetted by cbdGPO.  Vetting procedure may include, without limitation, site inspection(s), independent testing, and corporate background checks. Suppliers must be compliant with all applicable federal and state regulations. Approved suppliers must produce a complete chain of product custody (including all COA’s from DEA approved labs) and confirm all manufacturing of products are conducted in FDA inspected and approved facilities.

 

GPOPRO Services

 

In addition to addressing industry specific purchasing needs, GPOPlus plans to offer professional services through GPOPRO Services to its members.  Planned services include:

 

	·	GPO PAY—low-cost reliable payment processing. GPOPlus will work directly with institutions to provide low-cost and reliable payment processing services to its members.
	·	GPO SAFE-SHIP—a licensed, insured, and bonded shipping solution for our members. The primary focus will be business to business shipping; however, we intend to offer direct-to-consumer shipping as well.
	·	GPO INSURANCE— offering multiple types of insurance and coverage to our members.
	·	GPO SUPPLIES—GPO Supplies will offer custom packaging, labels, lab equipment and materials, apparel, merchandise, general printing, and promotional items to all members.

 

Competition and Competitive Strategy

 

Competition

 

The group purchasing marketplace remains one of the fastest growing industries in the country.  Group purchasing is used in many industries to purchase raw materials and supplies, but it is common practice in the grocery industry, healthcare, electronics, industrial manufacturing and agricultural industries. In recent years, group purchasing has begun to take root in the nonprofit community. In the healthcare field, GPOs have most commonly been accessed by acute-care organizations, but non-profit Community Clinics and Health Centers throughout the U.S. have also been engaging in group purchasing.

 

18

Table of Contents

 

Some of the companies holding the largest market share in the Healthcare related Group Purchasing Organizations industry include:

 

	·	Premier, Inc. NASDAQ: PINC (Charlotte, N.C.) - is a leading healthcare improvement company, uniting an alliance of more than 4,000 U.S. hospitals and health systems and approximately 175,000 other providers and organizations to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services, Premier enables better care and outcomes at a lower cost. In addition to leveraging contracts for its member providers, Premier also has a clinical database containing information on approximately $41 billion in annual purchasing data, approximately 2.5 million real-time daily clinical transactions and data on one third of discharges nationwide.
	·	McKesson Corporation NYSE: MCK (Irving, TX) - McKesson Corporation is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions. McKesson partners with pharmaceutical manufacturers, providers, pharmacies, governments and other organizations in healthcare to help provide the right medicines, medical products and healthcare services to the right patients at the right time, safely and cost-effectively. United by its ICARE shared principles, its employees work every day to innovate and deliver opportunities that make its customers and partners more successful - all for the better health of patients.
	·	Intalere PRIVATE (St. Louis, MO) Intalere is a group purchasing organization whose mission focuses on elevating the health of healthcare by designing solutions to improve its members’ financial, operational and clinical performance. Intalere empowers its customers and delivers measurable results through its highly personalized approach of creating strategies and programs focused on their goals. From managing their entire spend to strategic consulting around diagnosing particular areas of concern, Intalere’s unique provider-owned model allows us it leverage nationally recognized best practices in supply chain and patient outcomes to drive efficiencies for its members.
	·	MedAssets (Alpharetta, Ga.) -. MedAssets is an exclusively healthcare-focused GPO that serves four out of five hospitals in the U.S. The GPO manages more than $50 billion in supply expense, $2.5 billion in labor expense and $365 billion in gross revenue on behalf of its clients.

 

While the market health industry GPOs are well established, GPO participation in the emerging Hemp industries is in its infancy. Certain refined and unrefined Hemp products are presently offered by a small number of generalized healthcare and agricultural group purchasers however no GPO has emerged as a dominant market presence to meet the needs of the growing global Hemp market.

 

Competitive Strategy

 

As a development stage provider of GPOs and related services, we plan on establishing our competitive position by leveraging industry relationships, superior market research, operational flexibility and marketing strategies tailored to new and developing markets in the Healthcare and Hemp industries.

 

Marketing Strategy

 

We plan to market our services through a variety of channels including industry targeted print advertising campaigns, email, and telephone-focused direct marketing. We also intend to establish a network of sales offices in major industry centers. In July 2020, we established our first sales office in Florida. Will we seek to develop alliances with key industry organizations in order to access the broadest possible range of industry participants.  Attending major industry conferences and tradeshows will increase our visibility in the markets from which we intend to draw our membership base.

 

In order to attract members and promote products through our website. We will also market through online advertisements.

 

19

Table of Contents

 

For online marketing we will use the following methods:

 

	·	Implement a strong SEO (search engine optimization) strategy to generate web traffic
	·	Develop and launch websites focused on specific product lines
	·	Hire social media marketers and approach industry influencers
	·	Offer a blog with valuable information about our industry

 

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 have not reported any revenues 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 no employees as at July 31, 2020 or as at the date of this Quarterly Report. Our sole officer and director furnishes his time to the development of our company at no cost. As at the date of this Quarterly Report we are actively recruiting employees. We anticipate that we will require approximately 15 to 20 employees during fiscal 2021. We may also engage independent contractors as required to assist us in developing our business.

 

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 July 31, 2020 and 2019, which are included herein.

 

We earned revenues of $6,338 from our operations during the three months ended July 31, 2020.  We did not earn any revenues during the three months ended July 31, 2019.

 

Three Months Ended July 31, 2020 Compared to the Three Months July 31, 2019

 

		Three Months Ended
		July 31,
		2020				2019				Changes				%
Revenues		$	6,338			$	-			$	6,338				100	%
Operating Expenses			(44,784	)			(7,196	)			(37,588	)			522	%
Loss from Operations			(38,446	)			(7,196	)			(31,250	)			434	%
Net Loss		$	(38,446	)		$	(7,196	)		$	(31,250	)			(434	)%

 

20

Table of Contents

 

Our financial statements report a net loss of $38,446 for the three months ended July 31, 2020 compared to a net loss of $7,196 for the three months ended July 31, 2019.

 

Our operating expenses for the three months ended July 31, 2020 were $44,784 compared to $7,196 for the three months ended July 31, 2019. The increase in operating expenses during the three months ended July 31, 2020 was due to an increase in operating activity resulting in increased general and administrative expense and professional fees for the period.

 

Liquidity and Financial Condition

 

Working Capital

 

		July 31,				July 31,
		2020				2019
Current Assets		$	36,923			$	16,127
Current Liabilities		$	82,943			$	5,221
Working Capital (Deficiency)		$	(46,020	)		$	10,906

 

Our current assets as of July 31, 2020 were $36,923 as compared to total current assets of $16,127 as of July 31, 2019 due to an increase in cash and cash equivalents and accounts receivable offset by a decrease in prepaid expenses.

 

Our total current liabilities as of July 31, 2020 were $82,943 as compared to total current liabilities of $5,221 as of July 31, 2019. The increase was primarily due to operating lease liabilities related to our executive offices and deposit of $50,000 relates to funds paid by an investor in advance for issuances of the Company’s equity in future periods pending the designation and approval of various planned equity classes through the State of Nevada.

 

Our resulting working capital deficiency as of July 31, 2020 was $46,020 as compared to our working capital of $10,906 as of July 31, 2019. The increase in working capital deficiency was due to a decrease in prepaid expenses, an increase in accounts payable and accrued liabilities, an increase in operating lease liabilities and an increase in deposit.

 

Cash Flows

 

		Three Months Ended
		July 31,
		2020				2019
Cash Flows used in Operating Activities		$	(17,499	)		$	-
Cash Flows used in Investing Activities			(1,196	)			-
Cash Flows provided by Financing Activities			50,000				-
Net increase in cash during period		$	30,585			$	-

 

Operating Activities

 

Net cash used in operating activities was $17,499 for the three months ended July 31, 2020 compared with no net cash used in operating activities during the same period in 2019.

 

During the three months ended July 31, 2020, the net cash used in operating activities was attributed to net loss of $38,446 from operations, decreased by amortization of operating right-of-use assets of $5,446 and net changes in operating assets and liabilities of $15,501.

 

During the three months ended July 31, 2019, the net cash used in operating activities was attributed to net loss of $7,196 from operations, offset by net changes in operating and liabilities of $7,196

 

21

Table of Contents

 

Investing Activities

 

During the three months ended July 31, 2020 and 2019, we used $1,916 and $0, respectively, in investing activities. Investing activities in 2020 consisted of an investment in office equipment.

 

Financing Activities

 

During the three months ended July 31, 2020, net cash from financing activities was $50,000 compared to $0 during the same period in 2019.  Proceeds from financing activities during the three months ended July 31, 2020 were derived entirely from private placement subscription advances from investors for securities which were not yet issued as at the date of this Quarterly Report.  Terms of the private placement are not finalized as at the date of this report.

 

Cash Requirements

 

As of July 31, 2020, we had cash on hand of $30,585.  We generated our first revenues of $6,338 during the three months ended July 31, 2020, but incurred a loss of $38,446 during the period and a cumulative net loss of $157,262 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.

 

Specifically, based on nominal operations we estimate our operating expenses and working capital requirements for the 12 months beginning May 1, 2020 to be as follows:

 

Description		Estimated Expenses ($)
Public Company + Professional Fees		$	171,707
General & Administrative Expense		$	108,650
Marketing Expenses		$	542,357
Initial Personnel		$	531,500
HealthGPO		$	89,503
cbdGPO		$	59,669
GPO PAY - Portal Development		$	21,000
GPO SAFE-SHIP		$	13,500
GPO Distro		$	21,310
GPO Supplies - Inventory		$	92,344
Unallocated Working Capital/Contingency		$	60,000
Total Expenses		$	1,711,540

 

We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, including approximately $1,711,000 to pay for our planned expenses during the current fiscal year. 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. 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.

 

22

Table of Contents

 

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.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures 

 

Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer (our principal executive officer, principal financial officer and principal accounting officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer has concluded that as of such date, our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

  

23

Table of Contents

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings 

 

On August 14, 2020 the Company was included in what it believes to be a non-material litigation filed in the Circuit Court of the Firth Judicial Circuit, Hernando County, Florida Case No. 20-CA-0652, MNP Industries, LLC vs Smeal et al.  The complaint, which alleges the breach of certain non-compete agreements by multiple defendants, attempts to implicate the Company on the mistaken belief that the Company had acquired another defendant, Miracle Products, LLC.  There is not, however, any common ownership or affiliate relationship among the Company and the co-defendants, and the Company is not party to any non-compete agreement with the plaintiff. The Company has instructed counsel to file a motion to dismiss the complaint as it relates to the Company on the grounds that it fails to state a cause of action for which relief may be granted.

 

With the exception of the above described complaint, which we believe to be non-material, 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 1A. Risk Factors 

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

 

None.

 

Item 3. Defaults Upon Senior Securities 

 

None.

 

Item 4. Mine Safety Disclosures 

 

Not applicable.

 

Item 5. Other Information 

 

None

 

24

Table of Contents

 

Item 6. Exhibits 

 

				INCORPORATED BY REFERENCE
EXHIBIT NUMBER		Exhibit Description		Form		Exhibit		Filing Date
(3)		(i) Articles of Incorporation, (ii) Bylaws
3.1		Articles of Incorporation		S-1		3.1		September 22, 2016
3.2		By-Laws		S-1		3.2		September 22, 2016
3.3		Articles of Merger filed with the Nevada Secretary of State on January 31, 2018		8-K		3.1		March 29, 2018
3.4		Certificate of Change filed with the Nevada Secretary of State on January 31, 2018		8-K		3.2		March 29, 2018
3.5		Agreement and Plan of Merger		8-k		3.1		August 20, 2020
3.6		Certificate of Change		8-k		3.2		August 20, 2020
(31)		(i) Rule 13a-14(a)/15d-14(a) Certifications, (ii) Rule 13a-14/15d-14 Certifications
31.1*		Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer and Chief Financial Officer
(32)		Section 1350 Certifications
32.1**		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
(100)		Interactive Data File
101.INS**		XBRL Instance Document
101.SCH**		XBRL Taxonomy Extension Schema Document
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document

__________

*Filed herewith.

 **Furnished herewith.

 

25

Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	GPO PLUS, INC.
	(Registrant)
Dated: October 28, 2020	/s/ Brett H. Pojunis
	Brett H. Pojunis
	President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

 

26

<