Company: BLIS
Filing Date: 2025-02-26
Form Type: 10-Q
Source: 0001199835-25-000051
Chunk: 3

Company: NAPC Defense, Inc.
Filing Date: 2025-02-26
Form: 10-Q
Item: Part I, Item 1
Chunk 3
---
 or the classifications of the liabilities that might be necessary should the Company be unable to continue as
a going concern.

Convertible
Notes Payable and Notes Payable, in Default

The
Company does not have additional sources of debt or equity financing to refinance or pay off its convertible notes payable that are currently
in default. If the Company is unable to obtain additional capital, such lenders may file suit, including suit to foreclose on the assets
held as collateral for the obligations arising under the secured notes. If any of the lenders file suit to foreclose on the assets held
as collateral, then the Company may be forced to significantly scale back or cease its operations which would more than likely result
in a complete loss of all capital that has been invested in or borrowed by the Company.

The
convertible notes that have been issued by the Company are convertible at the lender’s option. These convertible notes represent
significant potential dilution to the Company’s current shareholders. As such when these notes are converted into equity there
is typically a highly dilutive effect on current shareholders and very high probability that such dilution may significantly negatively
affect the trading price of the Company’s common stock.

See
Note 6 - Notes Payable and Convertible Notes Payable, for further information regarding the Company’s convertible notes payable
and notes that are currently in default.

NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis
of the Presentation

The
accompanying condensed consolidated financial statements and related disclosures have been prepared in accordance with generally
accepted accounting principles in the United States of America (“ GAAP”), and pursuant to the rules and regulations of the
SEC and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly
present the financial position, results of operations and cash flows of the Company for the three and six months ended October 31,
2024 and 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US
GAAP have been condensed or omitted pursuant to such rules and regulations. They should be read in conjunction with the annual
financial statements reported in the latest Form 10-K filed for the year ended April 30, 2024. The results of operations of any
interim period are not necessarily indicative of the results for the full year. The fiscal year end is April 30.

Use
of Estimates

The
preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and