NAPC Defense, Inc 10-K for FY2024
NAPC Defense, Inc. (NAPD)
About this 10-K
NAPC Defense, Inc filed this 10-K on August 13, 2024, covering the fiscal year ended April 30, 2024 (FY2024).
Headline figures
Fiscal year ended April 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $711.99K
- compared with a net loss of $941.13K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
year ended
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission
File Number:
Formerly Treasure & Shipwreck Recovery, Inc. |
||
| (Exact name of registrant as specified in its charter) |
| 7310 | ||
| (State
or Other Jurisdiction of Incorporation or Organization) |
(Primary
Standard Industrial Classification Code Number) |
(IRS Employer Identification No.) |
Edward K. West
Chief Executive Officer
| (Address and telephone number of registrant’s principal offices) |
| None |
| Securities registered under Section 12(b) of the Exchange Act |
| None |
| Securities registered under Section 12(g) of the Exchange Act |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o
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.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | o | Accelerated filer | o | |
| o | Smaller reporting company | |||
| (Do not check if a smaller reporting company) | Emerging growth company | |||
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o
The aggregate market value of
the voting common equity held by non-affiliates of the registrant was approximately $
As of August 13, 2024 the Registrant had outstanding shares of its common stock, $0.001 par value.
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TABLE OF CONTENTS
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PART I
Forward-looking statements
Statements made in this Form 10-K that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
Item 1. Description of Business
Overview
NAPC Defense, Inc. (Formerly Treasure & Shipwreck Recovery, Inc (“NAPC Defense, Inc.” or the “Company”), was incorporated in the State of Nevada on October 24, 2016 as Beliss Corp. The Company changed its name to Treasure & Shipwreck Recovery Inc. on June 26, 2019. The Company is in the colonial era treasure shipwreck recovery business operating salvage crews on the east coast of Florida. On April 1, 2024, the Company changed its name to NAPC Defense, Inc. with the State of Nevada, for an additional direction in the military arms and law enforcement field.
Corporate History
NAPC Defense, Inc. (Formerly Treasure & Shipwreck Recovery, Inc.), was incorporated in the State of Nevada on October 24, 2016 as Beliss Corp. The Company changed its name to Treasure & Shipwreck Recovery Inc. on June 26, 2019. The Company was centered in the colonial era treasure shipwreck recovery business operating salvage crews on the east coast of Florida. On April 1, 2024, the Company changed its name to NAPC Defense, Inc. with the State of Nevada, for an additional direction in the military arms and law enforcement field. The Company will produce and supply CornerShot units under license from Silver Shadow of Israel, to both overseas military and governments as allowed by the US Government, and sales to US based law enforcement agencies. As well the Company intends and has direct lines of sourcing personal ballistics protection for personnel, such as helmets, bullet resistant vests and shields for overseas sale and domestic sale to US entities. In addition, the Company will use contacts and sources for the sale of small caliber arms in form of rifles and pistols including newly developing technologies and products for overseas and domestic sales. Other areas of brokering existing contacts from overseas of larger scale ammunition and artillery from overseas sources is being followed from known sources of supply for brokered sales to US approved allies and other countries. The brokering of armored vehicles for domestic purchase and overseas sales is also being pursued.
Exploration and Salvage of Historic Shipwrecks
During three seasons of treasure recovery operations the Company had contracted with entities for recoveries on 1715 fleet and other or ancient wreck sites along the coast of Florida. Thus, during the 2023 search season, recoveries were made of limited quantities of artifact finds during the treasure season. NAPC Defense, Inc. continued the pursuit of aa reality or other series during this fiscal year.
For the 2023 Treasure recovery season, the Company purchased a treasure recovery vessel and support vessel in March 2023. The 36’ foot vessel is outfitted with prop blowers for bottom removal, and numerous technologies for search and diving. The vessel was used for operations in the 1715 fleet area. the Company still owns the 71’ foot research vessel the Bellows which is still used for research
For the 2023 Summer Season the Company contracted with entities for recoveries on 1715 fleet and other or ancient wreck sites along the coast of Florida. The value of the found artifacts and treasure will be assessed at distribution time, sometime in the fall of 2024.
The Company is still actively pursuing a television or other media for a reality treasure hunting show which is in negotiations presently for development if feasible. the Company intends to own such production and rights for sale and distribution if it occurs.
Salvage of historic shipwrecks is both very speculative and risky as the Company worked through the last three treasure seasons off the East Coast of Florida. The Company still maintains information and expertise on locations of treasure sites, which it is marketing to other companies and players in the treasure business.
During the period of January 2024, the Board of Directors determined that it was in the best interest to explore a new business opportunity which existed for the change in business focus to take advantage of new business opportunities in a defense related industry, while maintaining treasure operations. The Company entered into diligence, enquiry, exploration and negotiations for acquisition and rights for defense related technology and rights with a known party.
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By March 2024, the board determined and entered into an acquisition agreement for the acquisition of the rights, intellectual property, and associated contracts, letters of intent, and assets from Native American Pride Constructors, LLC for acquisition of certain rights to sale and production of the CornerShot firearms and surveillance technology, owned by Silver Shadow of Israel and licensed to Native American Pride Constructors LLC (Native American), and other associated leads and rights into the defense industry, including munitions brokering overseas under United Stated State Department Approval for artillery, rocket, and other munitions sales from off shore sources to U.S. approved allies and other countries. Native American held rights to a number of ATF licenses for sale and production of arms, was a party to a transaction for potential contract and sale of the Cornershot to Saudi Arabia and for sale in the US, and held large access to broker munitions under US approval overseas, from foreign sourced to US Allies and approved countries.
In addition other defense lines of technology development including small arms, suppressor technology development business, and other items of opportunity held by Native American Pride Contstructors LLC, the board determined that an acquisition agreement of such rights was in the best interest of the Company to pursue as an additional business direction while maintaining its treasure related business. Such agreement was reached on March 26, 2024, however, was subject to further diligence and verification of the list of acquired rights and business plans with a close out date of May 1, 2024 and sign off by NAPC Defense, Inc./BLIS by the CEO for release of the consideration to be made for the purchase of such rights. The board concluded that the addition of this business direction was in the best interest of the Company, regardless of the specific acquisition transaction closing. Pursuant to the March 26, 2024 agreement such acquisition of rights was made for 95,000,000 shares of common stock to be distributed upon approval by NAPC Defense, Inc../BLIS to enumerated parties at such time being May 1, 2024 or after. Such shares were not to be distributed to Native American upon release, so there was no change in control to Native American. There was an acquisition of such rights, intellectual property, sales leads, letters of intent, contract rights and leads, and other matters set forth in such agreement to gain the rights from Native American Pride and change the Company’s name to its new defense line of work to NAPC Defense, Inc. but still maintain the treasure business on a more limited basis.
Such shares were subject to release by the Company upon approval of the business lines, by the then current but now former CEO and Director. Such shares did not cause a change in ownership control by any majority shareholder and have been under the rights as set forth in the acquisition agreement. The matters of diligence to be completed for the acquisition completion were as follows:
Items acquired for NAPC Defense, Inc. on acquisition made, including
| ● | CornerShot rights for sale, domestically and through Saudi Arabia as existing with Silver Shadow of Israel, including the LOI for the CornerShot sale for Saudi Arabia from the Ministry of Defense, which is expected, for an expected order and contract for some 37,000 units of the CornerShot firearms and tactical units to Saudi Arabia as held by Native American Pride for the Silver Shadow of Israel, amount owed for Saudi Arabian payment potential under a contract if transacted. Such rights include the ability to contract and utilize the ATF licenses held for production and sale of firearms and accessories related to such technology under contract with NAPC Defense, Inc./BLIS, and existing approvals from the Department of State for foreign arms transactions, an existing or expected approval for firearms under approval from the Saudi Government. As well this includes the existing relationship with the Saudi Ministry of Defense for interest in the CornerShot purchase, including the relationship and visits expected for closing of such contract. Rights to the proceeds from the joint venture in Saudi Arabia for such introductions and potential future sales, visit to occur in Saudi Arabia, and domestic US sales potentials, including domestic law enforcement shows, conventions and US Military demonstration. |
| ● | In addition, the ability and agreements to produce the CornerShot domestically in the United States which includes a current plastics manufacturer relationship and metals production relationship, both to be contracted, for such units of the CornerShot to be produced for all contracts or purchase orders which could be achieved. Including planned showings of the technology at planned conventions and conferences in Florida in June 2024, and in New Jersey in June 2024 and the visit for Saudi Arabia in the summer of 2024. |
| ● | Rights as existing to the CornerShot from Silver Shadow of Israel. To include the foreign sales to Saudi Arabia created by persons related to Native American, as well as domestic sales to law enforcement or government agencies in the United States. To include all media, CornerShot units, additional show and demonstration units, videos, and other rights. |
| ● | Overseas brokering opportunities of ammunition sales to US Allies, with State Dept. the DDTC (Directorate of Defense Trade Controls, a government agency within the United States Department of State) as a registered broker the ability to request pre-brokering approval. This includes the sources and leads existing to large scale munitions inventories from third parties, including those on a revolving list that is held by parties which are available overseas for sale, to approved countries and end users. This includes all contacts and relations to overseas producers, holders, and potential purchasers of large-scale munitions sales for such areas as Allied and US military or foreign add to Ukraine. These leads and brokering needed confirmation as to available inventories from owners overseas by the Company through relations created with the new operations. The amounts and the available rolling catalogues of available munitions and sources were subject to review and approval for final distribution. The verification was to be made as of or after May 1, 2024, through the former CEO with his experience and knowledge. |
| ● | Verification for ability to design, manufacture and sell new items and lines of firearms and accessories to include but not be limited to rifles, small arms, ammunition, and accessories. the Company had additional information and contacts and will use the abilities of production and sales under the Native American Pride permits to conduct such study of new technologies, firearms, production, prototyping knowledge, and sales rights as necessary. |
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Thus on April 1, 2024 there was the change in officers and directors, which was made for an additional new segment of the Company into the defense and law enforcement business. Pursuant to the Board of Directors resolution there was no change in control of the Issuer to any party. The change in officers and directors was made to include the following for the change in the main direction of the Company: The Agreement was entered into without abandoning the treasure and recovery business, while the board made a change in officers and directors. There was no change in control of the Company.
Thus, pursuant to the Board of Directors intent for the new addition of a business line for defense, it was decided and concluded that as of April 1, 2024, Craig A. Huffman, Patrick Scheider, and Frederick Conte, resigned as officer and directors, with Craig A. Huffman to continue as Secretary and Chief Legal Officer for the Corporation while overseeing and approval of the acquisition, overseeing corporate compliance, contracting and numerous other matters on a continuing basis. The board appointed Edward K. West as Director and Chief Executive Officer, Stephen L. Gurba as President and Director, Evelyn R. Gurba as director, Derrick West as director, and John Spence as director and Chief Financial Officer.
As of April 1, 2024, the Company determined the new business priority would best be reflected by a change in the name to NAPC Defense, which was reflected by a change of the Corporate name in the State of Nevada to NAPC Defense, Inc. Additional changes were made subsequently with the State of Florida for business registration, the SEC, and is in process for OTCMarkets.com.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 1B. Unresolved Staff Comments
Not applicable to smaller reporting companies.
Item 2. Description of Property
We do not own any real estate or other properties.
Item 3. Legal Proceedings
In May of 2023, NAPC Defense, Inc. was sued in county court over a contract by the firm of Delmar which contends that NAPC Defense, Inc. NAPC Defense, Inc. did not follow through on a contract for their services related to its regulation A offering in 2022. The Company has defended and is defending such on the basis that Del Mar never performed on its obligations and therefore was discharged on the contract. Such matter is pending motions by NAPC Defense, Inc. in the county court. Such lawsuit is seeking $20,000 by Delmar. As of August 1, 2024, the suit was pending dismissal for lack of prosecution.
Item 4. Mine Safety Disclosures
Not applicable to smaller reporting companies.
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PART II
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
Our common stock is presently quoted on the Pink Sheets under the symbol “BLIS”, as reflected below, though the current trading volume is small. No assurance can be given that any market for our common stock will continue in the future or be maintained. If an “established trading market” ever develops in the future, the sale of “restricted securities” (common stock) pursuant to Rule 144 of the Securities and Exchange Commission by members of management, consultants, promissory note holders or others may have a substantial adverse impact on any such market and the sale of restricted securities by management or others may significantly depress the market price of the Company’s shares. There is currently a limited trading market for our securities on the Pink Sheets. We cannot assure when and if an active-trading market in our shares will be established, or whether any such market will be sustained or sufficiently liquid to enable holders of shares of our common stock to liquidate their investment in our company. If an active public market should develop in the future, the sale of unregistered and restricted securities by current shareholders may potentially have a substantial negative impact on any such market. The Company’s share price is quoted on the Pink Sheets. Accordingly, an investment in our securities should only be considered by those investors who do not require liquidity and can afford to suffer a total loss of their investment. An investor should consider consulting with professional advisers before making such an investment. Furthermore, the price of our common stock may be subject to a very high degree of volatility, which makes owning shares of our common stock highly risky. Shareholders may find it to be very difficult to deposit our shares into a brokerage account and should consult with a financial advisor before purchasing NAPC Defense Inc.’s shares.
Our stock price fluctuated between $0.0440 and $0.0044 for the year ended April 30, 2024 and $0.06 and $0.01 for the year ended April 30, 2023. The price of our shares may fluctuate significantly despite the absence of any apparent reason. In addition, our stock is thinly traded, leading to even greater volatility. You should expect this volatility to continue into the foreseeable future.
The following table reflects the high and low prices of our stock for each quarter during the periods ended April 30, 2024 and 2023:
| Quarter Ended | High Price | Low Price | ||
| July 31, 2022 | 0.06 | 0.02 | ||
| October 31, 2022 | 0.04 | 0.02 | ||
| January 31, 2023 | 0.02 | 0.01 | ||
| April 30, 2023 | 0.05 | 0.03 | ||
| July 31, 2023 | 0.0440 | 0.0200 | ||
| October 31, 2023 | 0.0290 | 0.0083 | ||
| January 31, 2024 | 0.0150 | 0.0044 | ||
| April 30, 2024 | 0.0300 | 0.0046 |
Approximate Number of Holders of Common Stock
As of April 30, 2024, there were 168,400,211 issued and outstanding shares of common stock held by a total of 35 shareholders of record.
Dividends
No cash dividends were paid on our shares of common stock during the fiscal years ended April 30, 2024 and 2023.
Recent Sales and Other Issuances of Unregistered Securities
Purchase or Sale of our Equity Securities by Officers and Directors
During the years ended April 30, 2024 and 2023 there have been no sales of securities to officers and directors.
Item 6. Selected Financial Data
Not applicable to smaller reporting companies.
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.
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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 Company expects to expend its available cash in less than one month from August 13, 2024.
Summary of the Year Ended April 30, 2024 Results of Operations Compared to the Year Ended April 30, 2023 Results of Operations
Revenue
The Company recorded revenue of $0 and $85,000 and during the years ended April 30, 2024 and 2023, respectively. Revenue in 2023 is due to the Company granting an exclusive license to use photographic and video rights of the Company’s treasure recovery activities for use to publicize non-fungible token sales as well as appearances by the Company persons for such publication and sales.
Operating Expenses
During the year ended April 30, 2024, the Company incurred consulting and accounting expense of $248,722, labor expense of $73,992, professional fees of $14,300, legal fees of $17,040, boat expense of $108,499, rent expense of $9,600, general and administrative expense of $94,345 and depreciation expense of $17,222.
During the year ended April 30, 2023, the Company incurred consulting and accounting expense of $148,807, labor expense of $24,218, professional fees of $75,862, legal fees of $75,363, boat expense of $127,455, research and development of $8,349, general and administrative expense of $80,054 and depreciation expense of $8,914.
The increase in operating expenses for the year ended April 30, 2024 is attributable to increased consulting and accounting expense of $99,915, increased labor expenses of $49,744, increased general and administrative expense of $14,291 and increased depreciation of $8,308, which is a result of more exploration activity during the year ended April 30, 2024.
Other Expenses
Total other expenses were $128,266 during the year ended April 30, 2024 and $477,103 during the year ended April 30, 2023. Other expenses in 2024 and 2023 were due to interest expenses. The interest expense was a result of interest on notes and the amortization of the interest relating to the beneficial conversion features of several convertible promissory notes. Other expenses were down in 2024 due to the conversion of multiple notes and the commensurate decrease in interest expenses related to the notes.
Net Loss
For the year ended April 30, 2024 the Company incurred net losses of $711,986 versus net losses of $941,125, for the year ended April 30, 2023. The decrease in net loss was primarily attributable to decreased interest expenses in 2024.
Liquidity and Capital Resources and Cash Requirements
Liquidity and capital resources
As at April 30, 2024, our total assets were $1,759,732.
As at April 30, 2024, our current liabilities were $1,045,060 and stockholders’ equity was $714,672.
As of April 30, 2024, we had a net working capital deficit of $1,045,060.
Cash flows from operating activities
For the year ended April 30, 2024 net cash flows used in operating activities was $340,738.
For the year ended April 30, 2023 net cash flows used in operating activities was $424,056.
The decrease in cash used in operating activities is attributable to decreased interest and boat expenses.
Cash flows from investing activities
For the year ended April 30, 2024 net cash flows used in investing activities was $0. For the year ended April 30, 2023 net cash flows used in investing activities was $148,225.
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The decrease in net cash flows used in investing activities was attributable to the purchase of two additional vessels during 2023, with no purchases in 2024.
Cash flows from financing activities
For the year ended April 30, 2024 cash flows provided by financing activities were $134,016.
For the year ended April 30, 2023 cash flows provided by financing activities were $732,000.
The decrease in cash provided by financing activities is attributable to decreased proceeds from the sale of common stock.
We qualify as a “smaller reporting company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
For example, smaller reporting companies are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or the auditor attestation of internal controls over financial reporting.
Future Financings
We will continue to rely on equity sales of the Company’s common shares in order to continue to fund business operations. Issuances of additional shares will result in dilution to existing shareholders. There is no assurance that the Company will achieve any additional sales of equity securities or arrange for debt or other financing to fund planned operations. Future financing activities involving the sale of common stock under subscription agreements or entering into convertible promissory note agreements may cause substantial dilution to current shareholders and a significant decline in the price of our stock.
The Company may not be able to continue as a going concern. The report of our independent auditors for the years ended April 30, 2024 and 2023 raises substantial doubt as to our ability to continue as a going concern. Our independent auditors believe, based on our financial results as of April 30, 2024, that such results raised substantial doubts about the Company’s ability to continue as a going concern. If the Company is not able to continue as a going concern, it is highly likely that all capital invested in the Company will be lost.
Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Company’s success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. The Company’s management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement its business plan and impede the speed of its operations.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated very negligible revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.
Item 8. Financial Statements and Supplementary Data
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NAPC Defense, Inc.
CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2024 and 2023
Table of Contents
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
NAPC Defense, Inc.
(formerly Treasure & Shipwreck Recovery, Inc.)
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of NAPC Defense, Inc. (the Company) as of April 30, 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended April 30, 2024, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2024, and the results of its operations and its cash flows for the year ended April 30, 2024, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has incurred net losses and negative cash flow from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans raises substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
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We have served as the Company’s auditor since 2024. | |
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PCAOB Firm ID# | |
| August 13, 2024 | |
3702 W Spruce St #1430 i Tampa, Florida 33607 i +1.813.441.9707
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Treasure & Shipwreck Recovery, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Treasure & Shipwreck Recovery, Inc. (the Company) as of April 30, 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended April 30, 2023, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2023, and the results of its operations and its cash flows for the year ended April 30, 2023, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has incurred net losses and negative cash flow from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans raises substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| 3001 N. Rocky Point Dr. East Suite 200 ● Tampa, Florida 33607 ● 813.440-3527 |
F-3
Revenue Recognition
As described in Note 3 to the Company’s consolidated financial statements, the Company recognizes revenue in accordance with ASC 606, including licensing revenue. To determine whether the Company’s promise to provide a right to access its intellectual property or a right to use its intellectual property, the Company considers the nature of the intellectual property to which the customer will have rights.
We identified the Company’s application of revenue recognition as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the high degree of subjectivity in the Company’s judgments in determining the qualitative factors. Auditing these judgments and assumptions by the Company involves auditor judgment due to the nature and extent of audit evidence and effort required to address these matters.
The primary procedures we performed to address these critical audit matters included the following:
| ● | We obtained the licensing agreement and management’s assessment of ASC 606 and performed the following procedures: | |||
| - | Reviewed the licensing agreement for relevant terms. | |||
| - | Reviewed management’s assessment and conclusion of ASC 606 in relation to the licensing agreement and evaluated the appropriateness of management’s application of their accounting policies in the determination of the revenue to be recognized. | |||
We have served as the Company’s auditor since 2019.
PCAOB Firm ID#3289
Tampa, Florida
August 30, 2023
F-4
| NAPC Defense, Inc. |
| CONSOLIDATED BALANCE SHEETS |
| As of April 30, 2024 and 2023 |
| April 30, 2024 | April 30, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Total current assets | ||||||||
| Fixed Assets | ||||||||
| Fixed assets, net of depreciation | ||||||||
| Total fixed assets | ||||||||
| Other Assets | ||||||||
| Prepaid product rights | ||||||||
| Security deposit | ||||||||
| Total other assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest expenses | ||||||||
| Customer deposits | ||||||||
| Convertible notes payable, net of discounts | ||||||||
| Short term loans | ||||||||
| Related party convertible loan | ||||||||
| Contingent liabilities | ||||||||
| Total current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Preferred stock, $ par value; shares authorized, shares issued and outstanding | ||||||||
| Common stock, par value $; shares authorized, and shares issued and outstanding at April 30, 2024 and 2023, respectively | ||||||||
| Common stock to be issued | ||||||||
| Additional paid in capital | ||||||||
| Unearned compensation | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ||||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
F-5
| NAPC Defense, Inc. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| Years ended April 30, 2024 and 2023 |
| Year ended April 30, 2024 | Year ended April 30, 2023 | |||||||
| REVENUES | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| OPERATING EXPENSES | ||||||||
| Consulting and accounting | ||||||||
| Boat expenses | ||||||||
| General and administrative expenses | ||||||||
| Professional fees | ||||||||
| Legal fees | ||||||||
| Rent | ||||||||
| Labor | ||||||||
| Depreciation | ||||||||
| Research and development | ||||||||
| TOTAL OPERATING EXPENSES | ||||||||
| NET LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME ( EXPENSES) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| TOTAL OTHER EXPENSES | ( | ) | ( | ) | ||||
| NET LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ||||
| Provision for income tax | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| NET LOSS PER SHARE: BASIC AND DILUTED | $ | ( | ) | $ | ( | ) | ||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | ||||||||
See accompanying notes to the consolidated financial statements.
F-6
| NAPC Defense, Inc. |
| CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) |
| Years ended April 30, 2024 and 2023 |
| Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Common Stock to be Issued | Additional Paid-in Capital | Unearned | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||
| Balance, April 30, 2022 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
| Sale of common stock | - | |||||||||||||||||||||||||||||||||||
| Shares issued for service | - | |||||||||||||||||||||||||||||||||||
| Conversion of debt and interest to equity | - | |||||||||||||||||||||||||||||||||||
| Warrants issued with debt | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, April 30, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
| Shares issued for services | - | ( | ) | |||||||||||||||||||||||||||||||||
| Conversion of debt and accrued expenses to equity | - | |||||||||||||||||||||||||||||||||||
| Exploration investment | - | - | ||||||||||||||||||||||||||||||||||
| Shares issued for investment | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, April 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
F-7
| NAPC Defense, Inc. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Years ended April 30, 2024 and 2023 |
| Year ended April 30, 2024 | Year ended April 30, 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of discount | ||||||||
| Stock compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Security deposits | ||||||||
| Account payable | ( | ) | ||||||
| Accrued interest expenses | ||||||||
| CASH FLOWS USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of fixed assets | ( | ) | ||||||
| CASH FLOWS USED IN INVESTING ACTIVITIES | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from sale of common stock | ||||||||
| Proceed from sales of convertible notes | ||||||||
| Increase in notes payable | ||||||||
| Proceeds from related party loan | ||||||||
| Contingent liability | ||||||||
| CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | ||||||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Product rights prepaid in common stock | $ | $ | ||||||
| Debt and interest converted to equity | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
F-8
| NAPC Defense, Inc. |
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
| Years ended April 30, 2024 and 2023 |
Note 1 – ORGANIZATION AND NATURE OF BUSINESS
Treasure & Shipwreck Recovery, Inc (“TSR” or the “Company”), was incorporated in the State of Nevada on October 24, 2016 as Beliss Corp. The Company changed its name to Treasure & Shipwreck Recovery Inc. on June 26, 2019. The Company changed its name to NAPC Defense, Inc. in April 2024.
TSR Holdings, Inc., a wholly owned subsidiary, on August 22, 2019 as the Company’s operating vehicle to focus on the recovery of sunken treasure from historic shipwrecks. The Company was originally focused on the development of high impact internet marketing, search engine optimization (“SEO”) software and techniques, and the development of digital properties (collectively “Internet Marketing”).
Note 2 – GOING CONCERN
These
consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its
assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred net losses
since inception, which raises substantial doubt about the Company’s ability to continue as a going concern. Based on its historical
rate of expenditures, the Company expects to expend its available cash in less than one month from August 13, 2024. Management’s
plans include raising capital through the equity markets to fund operations and, eventually, the generation of revenue through its business.
The Company does not expect to generate any significant revenues for the foreseeable future. At April 30, 2024, the Company had a net
working capital deficit of $
Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern; however, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets 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 5 – 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 Presentation
This summary of significant accounting policies of NAPC Defense, Inc. is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the consolidated financial statements. The Company’s year-end is April 30.
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of NAPC Defense Holdings, Inc. and NAPC Defense Media Group, Inc., which are wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The process of preparing consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Significant estimates for the years ended April 30, 2024 and 2023 include the useful life of property and equipment, valuation allowances against deferred tax assets and fair value of non cash equity transactions.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
There
were no cash equivalents at April 30, 2024 and $206,722 at April 30, 2023. Financial instruments that potentially subject the Company
to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit
Insurance Corporation (“FDIC”) up to $
F-9
Research and Development Expenses
Expenditures for research and development are expensed as incurred.
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from contracts with customers. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price to the performance obligations in the contract and Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Specifically, Section 606-10-50 requires an entity to provide information about: a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; b. Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities; c. Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; and d. Significant judgments, and changes in judgments, made in applying the requirements to those contracts.
The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.
Licensing Revenue
The Company recognizes licensing revenue under ASC 606-10-55-59. In order to determine whether the Company’s promise to provide a right to access or to use its intellectual property, the Company should consider the nature of the intellectual property to which the customer will have rights. Intellectual property is either:
| a. | Functional intellectual property. Intellectual property that has significant standalone functionality (for example, the ability to process a transaction, perform a function or task, or be played or aired). Functional intellectual property derives a substantial portion of its utility (that is, its ability to provide benefit or value) from its significant standalone functionality. |
| b. | Symbolic intellectual property. Intellectual property that is not functional intellectual property (that is, intellectual property that does not have significant standalone functionality). Because symbolic intellectual property does not have significant standalone functionality, substantially all of the utility of symbolic intellectual property is derived from its association with the entity’s past or ongoing activities, including its ordinary business activities. |
Intellectual property that has significant standalone functionality is functional IP. Functional IP is a right to use IP because the IP has standalone functionality and the customer can use the IP as it exists at a point in time.
All of the Company’s revenue in 2023 consists of revenue pursuant to a Media Use and License Agreement, which was determined to be Functional IP.
The Company has adopted the Financial Accounting Standards Board (“FASB”) ASC 260-10, which provides for the calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity.
The potentially dilutive common stock equivalents for the years ended April 30, 2024 and 2023 were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss. As of April 30, 2024 and 2023, there were approximately and shares of common stock underlying our outstanding convertible notes payable and warrants, respectively.
Fair Value of Financial Instruments
The carrying amounts of financial assets and liabilities, such as cash, accounts payable, short term loans, and the Company’s related party convertible loan from a shareholder approximate their fair values because of the short maturity of these instruments.
Fixed Assets
Fixed assets are recorded at historical cost. Depreciation is computed on the straight-line method over the estimated useful lives of the respective assets. Gains and losses upon disposition are reflected in the consolidated statements of operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. Currently the Company’s only assets are three diving vessels and a magnetometer. They are being depreciated over three to twelve year useful lives.
F-10
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.
Stock Based Compensation to Employees and Service Providers
The Company recognizes all share-based payments to employees and service providers, including grants of employee stock options, as compensation expense in the consolidated financial statements based on their fair values. That expense will be recognized over the period during which an employee 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.
Convertible Notes Payable
The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. ASC 470-10 addresses classification determination for specific obligations, such as short-term obligations expected to be refinanced on a long-term basis, due-on-demand loan arrangements, callable debt, sales of future revenue, increasing rate debt, debt that includes covenants, revolving credit agreements subject to lock-box arrangements and subjective acceleration clauses. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt.
Customer Deposits
Customer
deposits discloses 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 $
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Recent Accounting Pronouncements
All other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.
Note 4 – FIXED ASSETS
Fixed assets at April 30, 2024 and 2023 are summarized below:
Schedule of Fixed Assets
| Fixed Assets | April 30, 2024 | April 30, 2023 | ||||||
| Diving Vessel | $ | $ | ||||||
| Magnetometer | ||||||||
| Diving Vessel (Boston Whaler) | ||||||||
| Diving Vessel (Commander) | ||||||||
| Accumulated Depreciation | ( | ) | ( | ) | ||||
| Fixed Assets, Net | $ | $ | ||||||
Depreciation
expense was $
F-11
Note 5 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE
Related Party Convertible Loan
An officer of the Company provided
a loan to NAPC Defense, Inc., under a convertible promissory note in the year ended April 30, 2022. This convertible promissory note
is unsecured, non-interest bearing, and is convertible into common shares of the Company stock at $2.75 per share and due on demand.
The balance due to the officer was $
On
April 20, 2022, the Company entered into a convertible note payable with an individual who is a member of the Company’s Board of
Directors. The convertible note payable, with a face value of $
On August 1, 2023, the Company entered into a convertible note payable with an individual who is a member of the Company’s Board of Directors. The note payable, with a face value of $50,000, bears interest at 10.0% per annum and is due on August 1, 2024. The convertible note payable is convertible upon default, at the note holder’s option, into the Company’s common shares at a fixed conversion rate of $0.01. The conversion of the note into shares of the Company’s common stock is potentially highly dilutive to current shareholders. If the note holder elects to sell the shares that it has acquired as a result of converting the note into shares of common stock, then any such sales may result in a significant decrease in the market price of the Company’s shares.
On February 1, 2024 the Company entered into a Master Convertible Corporate Note Agreement with Native American Price, LLC. Native American Pride, LLC advanced $63,791 to NAPC Defense, Inc. during the year ended April 30, 2024 to cover various operating expenses. The loan balance is convertible into the shares of NAPC Defense, Inc. at the discretion of the Native American Price, LLC at a rate of $0.03 per share. The note does not pay interest and there is no specific time frame for repayment of the principal balance. At April 30, 2024 the balance owed on the note was $63,791.
Short Term Loans
As
of January 31, 2024, the Company had loans totaling $
Convertible Notes Payable
The following table reflects the convertible notes payable as of April 30, 2024 and April 30, 2023:
Schedule of Notes Payable
| Issue Date | Maturity Date | April 30, 2024 Principal Balance | April 30, 2023 Principal Balance | Rate | Conversion Price | |||||||||||
| Convertible notes payable, in default | ||||||||||||||||
| Face Value | $ | $ | ||||||||||||||
| Face Value | ||||||||||||||||
| Face Value | ||||||||||||||||
| Face Value | ||||||||||||||||
| Face Value | ||||||||||||||||
| Balance convertible notes payable, in default | $ | $ | ||||||||||||||
The
Company recorded interest expense related to the amortization of debt discounts on these notes of $
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.
F-12
Note 6 – STOCKHOLDERS’ DEFICIT
Series A Preferred Stock
On May 1, 2020, the Company’s Board authorized the creation of Series A preferred shares. The Series A preferred shares will pay a quarterly payment based upon gaming revenue sharing, which all 100 Series A preferred shares will receive twenty percent of NAPC Defense, Inc.’s portion of the game revenue from its game app., which equates to thirteen percent of total game gross revenues. Each Series A preferred share was priced at $4,000 with a minimum purchase of three Series A preferred shares and are only eligible to be purchased by accredited investors. Each Series A preferred share will receive one one hundredth of twenty percent of NAPC Defense, Inc.’s game net as revenue sharing. Each Series A preferred share will continue to exist, unless the game app. is sold to another entity, at which time the Series A preferred shareholders will receive their same percentage of the game sales proceeds price, if or when such occurs. The Series A preferred shares are not convertible into common shares and are subject to all other restrictions on securities as set forth.
At April 30, 2024 and 2023 the Company had shares of Series A preferred shares outstanding.
Warrants
There were no warrants issued during the year ended April 30, 2024. There were warrants at a strike price of $0.06 granted during the year ended April 30, 2023.
At April 30, 2024, there were warrants with a weighted average exercise price of $, weighted average remaining life of years, and an average intrinsic value of $. There were no warrants granted during the year ended April 30, 2024. A total of warrants expired during the year ended April 30, 2024. At April 30, 2023 there were warrants with a weighted average exercise price of $, weighted average remaining life of years, and an average intrinsic value of $.
Note 7 – COMMITMENTS AND CONTINGENCIES
Litigation
During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with FASB ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of April 30, 2024, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.
Media Use and License Agreement
On February 5, 2023, the Company entered into a Media Use and License Agreement with a corporation. Under the terms of the Media Use and License Agreement, Treasure & Shipwreck Recovery, Inc. granted the user entity (the “Licensee”) an exclusive license to use photographic and video rights of Treasure & Shipwreck Recovery, Inc. ’s treasure recovery activities for use to publicize non-fungible token sales as well as appearances by Treasure & Shipwreck Recovery, Inc. persons for such publication and sales. The authority to use the works includes the right to visit and photograph or video activities of Treasure & Shipwreck Recovery, Inc. treasure recovery operations, interviews of Treasure & Shipwreck Recovery, Inc persons, crew or captains, as well as posts about the treasure industry by Treasure & Shipwreck Recovery, Inc. on media channels provided by the Licensee and other media sources. Treasure & Shipwreck Recovery, Inc. also agreed to allow the Licensee rights to purchase recovered objects or treasure as give aways or sales by the corporation to be negotiated upon recoveries being available by Treasure & Shipwreck Recovery, Inc. after the 2023 treasure season. The Licensee agreed to pay to Treasure & Shipwreck Recovery, Inc. an initial net rights fee of $85,000. Treasure & Shipwreck Recovery, Inc. shall be owed a royalty from any net revenue to the Licensee for such amounts of sales over the initial rights payment in the amount of 30% for such net sales for any which shall be calculated within thirty days of annual year end. Treasure & Shipwreck Recovery, Inc. shall have the right to review all revenues and expenditures by the Licensee related to the Media Use and License Agreement.
Vessel Loan and Treasure Recovery Agreement
On March 5, 2023, the Company entered into a loan agreement with an individual. Under the terms of the loan agreement, the lender provided a loan to Treasure & Shipwreck Recovery, Inc. toward the purchase price of a vessel at auction in the amount of $50,000 at a 0% per annum rate of interest. In exchange for the loan, Treasure & Shipwreck Recovery, Inc. agreed to grant to the lender an amount of treasure recovered from the vessel for the 2023, 2024, and 2025 treasure recovery seasons, at a percentage of recovery from the gross amount, being 1% for each $10,000 loaned to Treasure & Shipwreck Recovery, Inc. for such purchase up to a maximum of 5% for $50,000, or if less than an even $10,000 increment, then that fraction of such amount as a percentage. In addition, Treasure & Shipwreck Recovery, Inc. shall allow the lender up to 3% of such treasure recovered for a fourth year, if such amount is required to reach $30,000 or more for such purchase. The lender was also given a lien on the vessel. This amount is recorded as a contingent liability on the consolidated balance sheets.
Trademark and Usage Purchase Agreement Gaming and Media Rights Payments
Treasure & Shipwreck Recovery, Inc. . entered into a Trademark and Usage Purchase Agreement on March 5, 2020, Purchase of Trademark, Graphics, Related Media and Product Materials. Under the terms of the agreement, Treasure & Shipwreck Recovery, Inc. is obligated to pay ten percent of the gaming rights and five percent of television media revenue, which shall be for rights of the gaming name rights, as used in all such app, online or other gaming as owned by Treasure & Shipwreck Recovery, Inc. and any television related media.
F-13
Note 8 – INCOME TAXES
The Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. The Company has no tax position at April 30, 2024 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company does recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at April 30, 2024 and 2023. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended activities.
The valuation allowance at April
30, 2024 and 2023 was $
Reconciliation between the provision for income taxes and the expected tax benefit using the federal statutory rate of 21% for 2024 and 2023:
Schedule of Effective Income Tax Rate Reconciliation
| For the Year Ended | For the Year Ended | |||||||
| April 30, 2024 | April 30, 2023 | |||||||
| Income tax at federal statutory rate | % | % | ||||||
| Valuation allowance | ( | %) | ( | %) | ||||
| Income tax expense | ||||||||
The
Company has a net operating loss carryforward for tax purposes totaling $
Schedule of Deferred Tax Assets and Liabilities
| As of April 30, 2024 | As of April 30, 2023 | |||||||
| Non-current deferred tax assets: | ||||||||
| Net operating loss carryforward | $ | $ | ||||||
| Tax rate | % | % | ||||||
| Deferred tax asset | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
The Company is currently in the process of gathering the information necessary for filing tax returns for past years, due to the Company’s lack of revenue since inception management does not believe that there is any income tax liability for past years.
Note 9 – RELATED PARTY TRANSACTIONS
On March 26, 2024 The Company entered into an Agreement for Acquisition (the “Agreement”) with a disabled veteran Native American and woman owned limited liability company, Native American Pride Constructors, LLC, that is involved with government construction contracts as its primary business, and has access to a license opportunity with intellectual property rights as held, the business leads, letter of intent for overseas sales overseas opportunity for Saudi Arabia, other foreign sales of arms related items under US approved transactions, and matters specified in the agreement subject to final approval of the enumerated items, to be acquired by the Company and in exchange for restricted common share of the Company. The Board determined that it would enter the defense and law enforcement arena as an additional business realm and is only acquiring rights to such defense related contracts, rights, defense business model, and the identified persons to build the defense industry business arm. The Company is not acquiring any interest in the limited liability company, but starting its own defense related business, while purchasing the potential contract rights, and other matters.
The Company issued
shares of its restricted common stock valued at $
As of April 30, 2024 and April 30, 2023, an officer of the Company has provided a loan to TSR under a convertible promissory note. This convertible promissory note is unsecured, non-interest bearing, and is convertible into common shares of the Company stock at $2.75 per share and due on demand. The balance due to the officer was $60,890 as of January 31, 2024 and April 30, 2023.
In June of 2023, the issuer issued to a related party director, the amount of 2,525,618 shares for debt conversion and satisfaction of a note for $50,000, including $25,769 in accrued interest, at the rate of $0.03 per share.
During the years ended April 30, 2024 and 2023, the Company paid its President $48,900 and $93,350 respectively, for services provided which are included in operating expenses in the consolidated statements of operations.
The above transactions and amounts are not necessarily what third parties would agree to.
F-14
Note 10 – SUBSEQUENT EVENTS
Subsequent to April 30, 2024, the Company issued shares of its common stock as follows:
| i) | sales of 2,292,857 shares of restricted common stock under subscription agreements for proceeds received of $60,000; |
| ii) | 12,628,574 shares to settle a total of $195,076 of the principal balances, accrued interest and fees of various convertible notes payable; |
| iii) | issuance of 1,666,667 shares to settle a $50,000 vessel loan and treasure recovery agreement; and |
| iv) | issuance of 1,196,430 shares of restricted common stock valued at $40,916 for loan financing fees. |
The Company also entered into the following convertible note agreements:
| (i) | A convertible note with a face value of $150,000, annual rate of interest of 10% that is convertible into shares at $0.028 and that is due on June 16, 2025; and |
| (ii) | A convertible note with a face value of $75,000, annual rate of interest of 10% that is convertible into shares at $0.028 and that is due on July 3, 2025 |
On June 3, 2024, the Company increased the authorized shares per Nevada Statute under Article from to as filed with the State of Nevada per the requirements of necessary business transactions which were developing.
F-15
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None
Item 9A. Controls and Procedures.
(a) Management’s Annual Report on Internal Control over Financial Reporting.
Management’s Responsibility for Controls and Procedures
The Company’s management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting. The Company’s controls over financial reporting are designed under the supervision of the Company’s President and Principal Financial Officer to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our President and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of April 30, 2024. Based on this evaluation, management concluded that our financial disclosure controls and procedures were not effective so as to timely record, process, summarize and report financial information required to be included on our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. However, as a result of our evaluation and review process, management believes that the financial statements and other information presented herewith are materially correct.
Internal Control Over Financial Reporting
As of April 30, 2024, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our internal control over financial reporting, as defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 and based on the criteria for effective internal control described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (as revised). Based on our evaluation, management concluded that our internal control over financial reporting was not effective so as to timely record, process, summarize and report financial information required to be included on our SEC reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. However, as a result of our evaluation and review process, management believes that the financial statements and other information presented herewith are materially correct.
The management including its Principal Executive Officer/Principal Financial Officer, does not expect that its disclosure controls and procedures, or its internal controls over financial reporting will prevent all error and all fraud. A control system no matter how well conceived and operated, can provide only reasonable not absolute assurance that the objectives of the control system are met. Further, the design of the control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
The Company has limited resources and as a result, a material weakness in financial reporting currently exists, because of our limited resources and personnel, including those described below.
| * | The Company has an insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis. |
| * | We have not achieved the optimal level of segregation of duties relative to key financial reporting functions. |
| * | We do not have an audit committee or an independent audit committee financial expert. While not being legally obligated to have an audit committee or independent audit committee financial expert, it is management’s view that to have an audit committee, comprised of independent board members, and an independent audit committee financial expert is an important entity-level control over the Company’s financial statements. |
A material weakness is a deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) auditing standard 5) or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that a material weakness exists due to a lack of segregation of duties, resulting from the Company’s limited resources and personnel.
9
Remediation Efforts to Address Deficiencies in Internal Control Over Financial Reporting
As a result of these findings, management, upon obtaining sufficient capital and operations, intends to take practical, cost-effective steps in implementing internal controls, including the possible remedial measures set forth below. As of April 30, 2024, we did not have sufficient capital and/or operations to implement any of the remedial measures described below.
| * | Assessing the current duties of existing personnel and consultants, assigning additional duties to existing personnel and consultants, and, in a cost effective manner, potentially hiring additional personnel to assist with the preparation of the Company’s financial statements to allow for proper segregation of duties, as well as additional resources for control documentation. |
| * | Assessing the duties of the existing officers of the Company and, in a cost effective manner, possibly promote or hire additional personnel to diversify duties and responsibilities of such executive officers. |
| * | Board to review and make recommendations to shareholders concerning the composition of the Board of Directors, with particular focus on issues of independence. The Board of Directors will consider nominating an audit committee and audit committee financial expert, which may or may not consist of independent members. |
| * | Interviewing and potentially hiring outside consultants that are experts in designing internal controls over financial reporting based on criteria established in Internal Control Integrated Framework issued by Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (as revised). |
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
(b) Change in Internal Control Over Financial Reporting
The Company has not made any change in our internal control over financial reporting during the year ended April 30, 2024.
Item 9B. Other Information.
None.
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company
Directors of the Company are elected by the shareholders to a term of one year and serve until their successors are replaced by the Board, or elected and qualified. Officers of the Company are appointed by the Board of Directors to a term of one year or longer under any agreement and serve until their successors are duly appointed and qualified, or until the officer is removed from office. The Board of Directors has no nominating, auditing or compensation committees.
The name, age and position of the company officers and director is set forth below:
| Name | Age | Position | Since | |||
| Edward K. West | age 64 | Chief Executive Officer and Director | since appointment of March 26, 2024 | |||
| John Spence | age 33 | Treasurer, Chief Financial Officer and Director of the Company | March 26, 2024 | |||
| Stephen L. Gurba | age 67 | President and Director | March 26, 2024 | |||
| Evelyn Gurba | age 60 | Outside Director | March 26, 2026 | |||
| Derrick West | age 42 | Director | March 26, 2024 |
Corporate Governance
The Company does not have a compensation committee and it does not have an audit committee financial expert. It does not have a compensation committee because its Board of Directors consists of only one director whom is not independent, as he is also an officer. There is no independent audit committee financial expert because it is believed the cost related to retaining a financial expert at this time is prohibitive due to the current circumstances of the Company. Further, because there are only minimal operations at the present time, it is believed the services of a financial expert are not warranted.
10
Conflicts of Interest
The Company does not currently foresee any conflict of interest.
Section 16(a) Beneficial Ownership Reporting Compliance
16(a) of the Securities Exchange Act of 1934 requires the company directors and executive officers, and persons who own more than ten percent of the Company’s common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes of ownership of its common stock. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the company with copies of all Section 16(a) forms they file. The Company intends to ensure to the best of its ability that all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners are complied with in a timely fashion.
Item 11. Executive Compensation
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to our named executive officer paid by us during the years ended April 30, 2024 and 2023, in all capacities for the accounts of our executives, including the President and Chief Financial Officer (CFO):
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Period End | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||
| Craig Huffman(1) | 04/30/2024 | — | — | — | — | — | — | 48,900 | 48,900 | |||||||||||||||||||||||||
| President, CFO | 04/30/2023 | — | — | — | — | — | — | 93,350 | 93,350 | |||||||||||||||||||||||||
| (1) | During the years ended April 30, 2024 and 2023 the Company did not pay any stock based compensation, options, or bonuses to Mr. Huffman. |
Narrative Disclosure to Summary Compensation Table
There are no compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
Outstanding Equity Awards at Fiscal Year-End
No executive officer received any equity awards, or holds exercisable or unexercisable options, for the year ended April 30, 2024.
Long-Term Incentive Plans
There are no arrangements or plans in which the Company would provide pension, retirement or similar benefits for our director or executive officer.
Compensation Committee
The Company currently does not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.
Compensation of Directors
Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.
Security Holders Recommendations to Board of Directors
The Company welcomes comments and questions from the shareholders. Shareholders can direct communications to the Chairman of the Board of Directors and President, Craig A. Huffman, at our executive offices. However, while the Company appreciates all comments from shareholders, it may not be able to individually respond to all communications. Management attempts to address shareholder questions and concerns in press releases and documents filed with the SEC so that all shareholders have access to information about the Company at the same time. Craig A. Huffman collects and evaluates all shareholder communications. All communications addressed to the Board of Directors and executive officers will be reviewed by Craig A. Huffman, unless the communication is clearly frivolous.
11
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following tables set forth certain information regarding beneficial ownership of our capital stock as of the date hereof by (i) each person whom we know to beneficially own more than five percent (5%) of any class of our common stock, (ii) each of our directors, (iii) each of the executive officers and (iv) all our directors and executive officers as a group. Unless otherwise indicated, each of the persons listed below has sole voting and investment power with respect to the shares beneficially owned.
Our total authorized capital stock consists of 168,400,211 shares of common stock, $0.001 par value per share. As of April 30, 2024, there were 168,400,211 shares of our common stock outstanding, all of which were fully paid, non-assessable and entitled to vote. Each share of our common stock entitles its holder to one vote on each matter submitted to our stockholders.
This table reflects shares that were issued and outstanding as of April 30, 2024.
| Shares of | Percentage of | |||||||
| common stock | common shares | |||||||
| beneficially owned | beneficially owned 2 | |||||||
| Name and Address of Beneficial Owners 1 | ||||||||
| NAPC, LLC | 95,000,000 | 56.41 | % | |||||
| All beneficial holders as group (two persons or entities) | 95,000,000 | 56.41 | % | |||||
| (1) | Unless otherwise indicated, the address of each person listed below is c/o Treasure & Shipwreck Recovery, Inc., 13046 Racetrack Road, #234, Tampa, Florida 33626. |
| (2) | Percentages are based on 168,400,211 shares of common stock issued and outstanding at April 30, 2024. |
Changes in Control
There are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.
Item 13. Certain Relationships and Related Transactions, and Director Independence
As of April 30, 2024 and April 30, 2023, an officer of the Company has provided a loan to NAPC Defense, Inc. under a convertible promissory note. This convertible promissory note is unsecured, non-interest bearing, and is convertible into common shares of the Company stock at $2.75 per share and due on demand. The balance due to the officer was $60,890 as of April 30, 2024 and April 30, 2023.
On February 1, 2024 the Company entered into a Master Convertible Corporate Note Agreement with Native American Pride, LLC. Native American Pride, LLC advanced $63,791 to NAPC Defense, Inc. during the year ended April 30, 2024 to cover various operating expenses. The loan balance is convertible into the shares of NAPC Defense, Inc. at the discretion of the Native American Price, LLC at a rate of $0.03 per share. The note does not pay interest and there is no specific time frame for repayment of the principal balance. At April 30, 2024 the balance owed on the note was $63,791.
Except for the foregoing, none of the following persons has any direct or indirect material interest in any transaction to which the Company was or is a party since the beginning of the last fiscal year, or in any proposed transaction to which the Company proposes to be a party:
| ● | (A) any of the director(s) or executive officer(s); |
| ● | (B) any nominee for election as one of the Company’s directors; |
| ● | (C) any person who is known by the Company to beneficially own, directly or indirectly, shares carrying more than 5% of the voting rights attached to the Company’s Common Stock, or |
| ● | (D) any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons named in paragraph (A),(B) or (C) above. |
There are not currently any conflicts of interest by or among the Company’s current officer, director, key employee or advisors. The Company has not yet formulated a policy for handling conflicts of interest, if any arise; however, it intends to do so upon completion of this offering and, in any event, prior to hiring any additional employees.
12
Item 14. Principal Accountant Fees and Services
On July 26, 2024 NAPC Defense, Inc. notified Accell Audit and Compliance, LLC (“Accell”), the Company’s independent accounting firm, that it had elected to change accounting firms and, therefore, was dismissing Accell. On July 26, 2024, the Company engaged Astra Audit &Compliance (“Astra”) as its new independent accounting firm.
For the years ended April 30, 2024 and 2023, the Company paid $0 and $0 respectively, in fees related to services rendered by our principal accountant for professional services rendered for the audit and review of our consolidated financial statements. April 30, 2024 and 2023, the Company paid $42,000 and $33,250, in fees related to services rendered by our previous principal accountant for professional services rendered for the audit and review of our financial statements.
Tax Fees
For the years ended April 30, 2024 and 2023, the Company paid $0 in fees for professional services rendered related to services rendered by our principal accountant for tax compliance, tax advice, and tax planning.
All Other Fees
The Company did not incur any other fees related to services rendered by our principal accountant for the years ended April 30, 2024 and 2023.
13
PART IV
Item 15. Exhibits
| Exhibit No. | Description |
| 31.1 | Certification of Chief Executive Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14 and 15d-14. Filed with this Form 10-K. |
| 31.2 | Certification of Principal Accounting Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14 and 15d-14. Filed with this Form 10-K. |
| 32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed with this Form 10-K. |
| 32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed with this Form 10-K. |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
14
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.
| Treasure & Shipwreck Recovery, Inc. | ||
| Date: August 13, 2024 | By: | /s/ Edward K.West |
Edward K. West
Chief Executive Officer Chairman of the Board of Directors (Principal Executive Officer ) | ||
| Date: August 13, 2024 | By: | /s/ Stephen L. Gurba |
|
Stephen L. Gurba President Director | ||
| Date: August 13, 2024 | By: | /s/ John Spence |
John Spence Chief Financial Officer Director | ||
| Date: August 13, 2024 | By: | /s/ Craig A Huffman |
Craig A. Huffman Chief Legal Officer, Secretary | ||
| Date: August 13, 2024 | By: | /s/ Evelyn R. Gurba |
| Director | ||
| Date: August 13, 2024 | By: | /s/ Derrick West |
| Director | ||
15
EXHIBIT 31.1
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934,
RULES 13a-14 AND 15d-14
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Edward K. West, Chief Executive Officer of the registrant, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of Treasure & Shipwreck Recovery, Inc.; |
| 2. | Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this Report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted account principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and to the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| /s/ Edward K.West | |
| Kenny West Chief Executive Officer (Principal Executive Officer) Date: August 13, 2024 | |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL
EXECUTIVE OFFICER AND PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934,
RULES 13a-14 AND 15d-14
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Craig Huffman, Chief Legal Officer of the registrant, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of NAPC Defense, Inc.; |
| 2. | Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this Report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted account principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and to the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| /s/ Craig A. Huffman | |
| Craig A. Huffman Chief Legal Officer (Principal Financial Officer) Date: August 13, 2024 | |
EXHIBIT 32.1
CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002:
I, Edward K. West, the undersigned Chief Executive Officer of NAPC Defense, Inc. (the “Company”), hereby certifies, based on my knowledge, that the Annual Report on Form 10-K of the Company for the year ended April 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”):
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 13, 2024
| /s/ Edward K.West | |
| Edward K. West | |
Chief Executive Officer (Principal Executive Officer) | |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002:
I, Craig Huffman, the undersigned Chief Legal Officer of NAPC Defense, Inc. (the “Company”), hereby certifies, based on my knowledge, that the Annual Report on Form 10-K of the Company for the year ended April 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”):
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 13, 2024
| /s/ Craig A. Huffman | |
| Craig A. Huffman | |
| Chief Legal Officer | |
| (Principal Financial Officer) | |