ITEM 1. BUSINESS
General Overview
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.
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 will change to GPOX.
On July 31, 2020 we announced the launch of cbdGPO, www.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,
Our business and corporate headquarters address is 3571 E. Sunset Road, Suite 300, Las Vegas, NV 89120 and our telephone number is 702.840.1020. Our corporate website is gpoplus.com and our section for shareholder is GPOPlus.com/ir.
We do not have any subsidiaries as of the date of this Annual Report.
Our Current Business
As used in this report, “we,” “our,” “us” and similar pronouns refer to GPO Plus, Inc. and our operating divisions, unless the context requires otherwise. We are a development stage 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.
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
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Aggregate - HealthGPO aggregates the purchasing power of our members.
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Negotiate - We use the collective buying power to negotiate discounts.
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Share - The discounts are shared with our members to save them money.
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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.
SafeHandlesTM 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 toa 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.
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.
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:
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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.
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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.
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GPO INSURANCE— offering multiple types of insurance and coverage to our members.
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GPO SUPPLIES—GPO Supplies will offer custom packaging, labels, lab equipment and materials, apparel, merchandise, general printing, and promotional items to all members.
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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.
Some of the companies holding the largest market share in the Healthcare related Group Purchasing Organizations industry include:
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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. 3,000 hospitals and 110,000 other healthcare providers. 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.
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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 our ICARE shared principles, our employees work every day to innovate and deliver opportunities that make our customers and partners more successful - all for the better health of patients.
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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 our members’ financial, operational and clinical performance. We empower our customers and deliver measurable results through our 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, our unique provider-owned model allows us to leverage nationally recognized best practices in supply chain and patient outcomes to drive efficiencies for our members.
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MedAssets (Alpharetta, Ga.) - 4,400 hospitals and 122,000 non-acute healthcare providers. 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.
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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.
For online marketing we will use the following methods:
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Implement a strong SEO (search engine optimization) strategy to generate web traffic
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Develop and launch websites focused on specific product lines
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Hire social media marketers and approach industry influencers
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Offer a blog with valuable information about our industry
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Status of Any Publicly Announced New Product or Service.
We have not developed any new or unique products or services that have not already been announced.
Dependence on Limited Customers
We 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 April 30, 2020 or as at the date of this Annual Report. Our sole officer and director furnishes his time to the development of our company at no cost. As at the date of this Annual 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.
ITEM 1A. RISK FACTORS
Risks Related to our Business
We have a limited operating history with significant losses.
We have generated no revenues and incurred a cumulative deficit of $118,816 for the period from March 29, 2016 (inception) to April 30, 2020. We also anticipate sustaining a loss from operations for the fiscal year ended April 30, 2021. Our profitability will depend on our ability to successfully market and attract members for our GPO’s and sell products and services to our GPO’s membership, and there can be no assurance that we will be able to do so. If we are unable to achieve profitability or to raise sufficient capital to carry out our business plan, we may not be able to continue operations.
We may not be able to secure additional financing to meet our future capital needs due to changes in general economic conditions.
We anticipate needing significant capital to develop our sales force and effectively market our GPOs. We may use capital more rapidly than currently anticipated and incur higher operating expenses than currently expected, and we will require external financing to satisfy our operating and capital needs. We will need new or additional financing in the future to conduct our operations or expand our business. Any sustained weakness in the general economic conditions and/or financial markets in the United States or globally could adversely affect our ability to raise capital on favorable terms or at all. From time to time we have relied, and may also rely in the future, on access to financial markets as a source of liquidity to satisfy working capital requirements and for general corporate purposes. We may be unable to secure debt or equity financing on terms acceptable to us, or at all, at the time when we need such funding.
Beginning in 2020, the global COVID-19 pandemic significantly increased the volatility of financial markets worldwide. Significant volatility or disruptions of the capital markets could eliminate our access to financing, and/or significantly increase its cost. Such volatility or disruptions in the capital markets may cause lenders to be unwilling to provide us with financing to fund our ongoing operations and growth.
If we do raise funds by issuing additional equity or securities, the ownership percentages of existing stockholders would be reduced, and the securities that we issue may have rights, preferences or privileges senior to those of the holders of our common stock or may be issued at a discount to the market price of our common stock which would result in dilution to our existing stockholders. If we raise additional funds by issuing debt, we may be subject to debt covenants, which could place limitations on our operations including our ability to declare and pay dividends. Our inability to raise additional funds on a timely basis would make it difficult for us to achieve our business objectives and would have a negative impact on our business, financial condition, and results of operations.
Our prospects must be considered in light of the risks, expenses, delays and difficulties frequently encountered in establishing a new business in an evolving industry, including the following factors:
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our business model and strategy are still evolving and are continually being reviewed and revised;
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we may not be able to raise the capital required to develop our initial client base and reputation; and
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we may not be able to successfully develop our planned products and services.
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We cannot be sure that we will be successful in meeting these challenges and addressing these risks and uncertainties. If we are unable to do so, our business will not be successful and the value of your investment in us will decline.
Outbreaks of epidemic diseases, including COVID-19, could adversely impact our business operations.
Our business, operations and financial condition could be materially adversely affected by public health crises, including epidemics, pandemics and or other health crises, such as the outbreak of COVID-19. The current COVID-19 global health pandemic is significantly impacting the global economy, including retail, commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown and, to date, has included volatility in financial markets, volatility in commodity prices (including precious metals), significant restrictions on travel, temporary business closures, quarantines, and a general reduction in economic and consumer activity, globally, all of which raise concern about a prolonged global recession. In addition, the COVID-19 outbreak may result in operating, supply chain and project development delays which may have material adverse effects on the operations of our current and planned supplier and customers. Such third party operations may be suspended for precautionary purposes, or due to the imposition of emergency measures or other government action to combat the spread of COVID-19. If the operation or development of one or more third party businesses upon which we rely is suspended, it may have a material adverse impact on our results of operations and financial condition, or on the trading price of our securities.
Additional pandemic-related risks to our business include without limitation, the risk of breach of material contracts, employee health, workforce productivity, limitations on travel, the availability of industry experts and personnel, unknown adverse global public health developments, and other factors beyond the Company’s control, any of which may have a material and adverse effect on the our business, financial condition, results of operations, and securities.
As at the date of this Annual Report, the duration of any business disruptions and related financial impact of the COVID-19 outbreak cannot be reasonably estimated. It is unknown whether and how we may be affected if the COVID-19 outbreak persists for an extended period of time.
Competition within the GPO industry may prevent us from becoming profitable.
The GPO industry is competitive and fragmented and includes numerous small organizations capable of competing effectively in the markets we target, as well as numerous large companies that possess substantially greater financial and other resources than we do. Larger competitors’ greater resources could allow those competitors to compete more effectively than we can. Our competitors have developed mature businesses and have successfully built their names as GPOs in the industries in which we intend to complete, including healthcare, CDB, and hemp. These various competitors may be able to offer products or services more competitively priced and more widely available than our offerings, and also have greater resources to acquire members and suppliers than us. Failure to compete in the GPO industry may prevent us from becoming profitable, and thus you may lose your entire investment.
Risks Related to our Stockholders and Shares of Common Stock
The continued sale of our equity securities will dilute the ownership percentage of our existing stockholders and may decrease the market price for our common stock.
As of April 30, 2020, the Company had no cash reserves and approximately $16,127 in prepaid expenses. We expect to continue our efforts to develop, market, and establish our GPO operations. However, we anticipate that we will be required to sell additional equity securities which will result in dilution to our existing stockholders. Furthermore, our continued need to sell equity will result in reduced percentage ownership interests for all of our investors, which may decrease the market price for our common stock.
We do not intend to pay dividends and there will thus be fewer ways in which you are able to make a gain on your investment.
We have never paid dividends and do not intend to pay any dividends for the foreseeable future. To the extent that we may require additional funding currently not provided for in our financing plan, our funding sources may prohibit the declaration of dividends. Because we do not intend to pay dividends, any gain on your investment will need to result from an appreciation in the price of our common stock. There will therefore be fewer ways in which you are able to make a gain on your investment. In the future when we do intend to pay dividends, we will formalize a dividend policy.
Because the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.
Our shares are classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) which imposes additional sales practice requirements on brokers-dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, broker-dealers must make a special suitability determination and receive a written agreement prior from you to making a sale on your behalf. Because of the imposition of the foregoing additional sales practices, it is possible that broker-dealers will not want to make a market in our common stock. This could prevent you from reselling your shares and may cause the value of your investment to decline.
Financial Industry Regulatory Authority (FINRA) sales practice requirements may limit your ability to buy and sell our common stock, which could depress the price of our shares.
FINRA rules require broker-dealers to have reasonable grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status and investment objectives, among other things. Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some customers. Thus, FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our shares, have an adverse effect on the market for our shares, and thereby depress our share price.