Company: BLIS
Filing Date: 2025-09-11
Form Type: 10-K
Source: 0001199835-25-000302
Chunk: 1

Company: NAPC Defense, Inc.
Filing Date: 2025-09-11
Form: 10-K
Item: Item 7
Chunk 1
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Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion and analysis is intended to provide a narrative of our financial results and an evaluation of our financial condition
and results of operations. The discussion should be read in conjunction with our consolidated financial statements and notes thereto.
A description of our business is discussed in Item 1 of this report, which contains an overview of our business as well as the status
of our ongoing project operations.

Critical Accounting Estimates

Impairment of long-lived and intangible assets

Long-lived assets are reviewed for impairment whenever
events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates
whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses
market quotes, if available or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining
life in measuring whether or not the asset values are recoverable. Identified intangible assets are reviewed for impairment at least
annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the year ended
April 30, 2025 the Company’s Management determined that three of its vessels were impaired and the Company wrote down the carrying
value of the vessels of $140,296 to $0, included in the loss from discontinued operations.

Non-cash equity grants

The Company recognizes all share-based payments to
employees and service providers, including grants of employee stock options, as compensation expense in the audited financial statements
based on their fair values. That expense will be recognized over the period during which an employee or service provider is required
to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the
share-based payments vest immediately.

Results
of operations

We
have incurred recurring losses to date. Our consolidated financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification
of liabilities that might be necessary should we be unable to continue in operation.

We
will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other
things, the sale of equity or debt securities. However, there can be no assurances that we will be able to raise additional capital.
Based on its historical rate of expenditures, the