NAPC Defense Reports Revenue Growth but Faces Increased Losses and Financial Challenges

NAPC Defense, Inc., formerly known as Treasure & Shipwreck Recovery, Inc., reported its financial results for the six months ending October 31, 2024, revealing a revenue of $67,467, a significant increase from zero revenue during the same period in 2023. However, the company also faced challenges, including a net loss of $889,784, which represents a 112% increase in losses compared to the $419,968 loss reported in the prior year. The increase in revenue was attributed to consulting services provided to a private company in Saudi Arabia, although the company later deemed this revenue uncollectible, leading to a bad debt expense of $67,467.

Operating expenses for the six-month period rose to $529,229, up 36% from $387,861 in the previous year. Notable increases were seen in general and administrative expenses, which surged by approximately 481% to $178,530, and legal fees, which rose by 151% to $35,650. The company also incurred significant rent expenses of $155,000 due to leasing a new commercial office and warehouse facility. In contrast, boat expenses decreased dramatically by 94% to $5,675, reflecting a shift in operational focus.

The company underwent a strategic transformation, officially changing its name to NAPC Defense, Inc. on April 1, 2024, to reflect its new direction in the defense and law enforcement sectors. This included the acquisition of rights to produce and supply CornerShot units under license from Silver Shadow of Israel. The company is also pursuing contracts for small arms and ballistic protection products, indicating a significant shift from its previous focus on treasure recovery operations. As part of this transition, NAPC Defense has established partnerships for distribution and is exploring opportunities in the defense technology market.

As of October 31, 2024, NAPC Defense reported total assets of $1,628,919 and total liabilities of $1,003,055, resulting in stockholders' equity of $625,864. The company has a working capital deficit of $990,136, raising concerns about its ability to continue as a going concern. Management has indicated that it will need to raise additional capital through equity or debt financing to support ongoing operations, as it expects to exhaust its available cash by February 2025.

Looking ahead, the company acknowledges the challenges it faces in securing financing and generating sufficient revenue to sustain its operations. The management's outlook remains cautious, emphasizing the need for additional capital to meet long-term operational requirements. The company is actively seeking options for financing while navigating the complexities of its new business model in the defense sector.