Company: BLIS
Filing Date: 2025-09-19
Form Type: 10-K/A
Source: 0001199835-25-000330
Chunk: 24

Company: NAPC Defense, Inc.
Filing Date: 2025-09-19
Form: 10-K/A
Chunk 24
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-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features.

Convertible Notes

Given that the Convertible
Notes, Warrants and Common Stock (“Commitment Shares”) that were issued in a singular transaction are not subject to subsequent
fair value accounting treatment, Management determined the relative fair value method shall be used for allocating the proceeds of the
transaction. Under the relative fair value method, the instrument being analyzed is allocated a portion of the proceeds based on
its fair value to the sum of the fair value of all the instruments covered in the allocation.

Customer Deposits

Customer deposits are an amount paid by a customer prior to the Company providing it with goods or services. The Company has an obligation to provide the goods or services to the customer or to return the money. The Company had $ 8,700in customer deposits as of April 30, 2025 and 2024.

Leases

The Company accounts for leases under ASU 842. At the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

Operating lease right of use (“ROU”)
assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present
value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate,
the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value
of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented
in operating expenses on the consolidated statements of operations.

Finance leases are recorded as a finance lease liability and property, plant and equipment asset, based on the present value of lease payments. The asset is depreciated, and the liability is amortized with interest expense incurred over the life of the lease.

As permitted under the guidance, the Company