Note 5 – Debt

The following represents a summary of the Company’s debt (convertible notes payable, notes payable, convertible notes payable – related parties and mortgage notes payable) at September 30, 2025 and June 30, 2025:

Schedule of Debt

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Convertible Notes Payable

The following represents a summary of the Company’s convertible notes payable at September 30, 2025 and June 30, 2025:

Schedule of Convertible Notes Payable 

The following represents a detail of the Company’s convertible notes payable at September 30, 2025 and June 30, 2025:

Schedule of Convertible Notes Payable Details 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

In connection with the acquisition of SWC on March 31, 2025, the Company acquired convertible notes payable that became convertible as of the acquisition date, resulting in their classification as derivative liabilities. The aggregate fair value of these derivative liabilities at acquisition was $530,572.

The related debt discounts were measured using the commitment-date fair value of the embedded derivative liabilities. Consistent with ASC 470-20-25, each discount was limited to the face amount of the respective note, with any excess fair value recognized as derivative expense.

See Notes 11 and 12.

Loans #16/#17 – Amendments

On July 23, 2024 (fiscal year end June 30, 2025), the Company amended the terms of these notes to remove the right to adjust the conversion price. In exchange, the Company increased the amount due under the notes by 10%, and issue 1,667 shares of Series D, convertible preferred stock.

Upon amendment of terms, the Company evaluated the changes under ASC 470-50-40, Debt Modifications and Extinguishments, and determined the modification constituted a substantial change, resulting in a loss on debt extinguishment as follows:

In connection with this transaction, the Company recorded a loss on debt extinguishment as follows:

Schedule of Loss on Debt Extinguishment 

See Note 8 for additional information regarding the issuance of the Series D, convertible preferred stock in connection with these debt extinguishments.

In April 2025, the maturity date of the notes was extended from April 2025 to November 2025. No additional consideration was paid in connection with the extensions. In accordance with ASC 470-50-40, the Company evaluated the terms of the modification and concluded that the changes did not result in a substantially different instrument. As a result, the modification was accounted for as a continuation of the existing debt arrangement, with no gain or loss recognized and no impact on the consolidated financial statements.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Debt Conversions

Fiscal Year End June 30, 2026

Loan #1

In July 2025, the Company issued 6,600,000 shares of common stock in connection with the settlement of outstanding default interest of $216,050, respectively, plus additional fees of $1,750, on loan #1, for a total conversion of $217,800. Pursuant to the debt agreement, the shares were converted at a fixed rate of $0.033/share. Accordingly, no gain or loss was recorded upon debt conversion.

In September 2025, the Company issued 6,000,000 shares of common stock in connection with the partial settlement of principal and related outstanding accrued interest on loan #1 of $49,397 and $34,748, respectively, plus default interest of $112,105 and additional fees of $1,750 for a total conversion of $198,000. Pursuant to the debt agreement, the shares were converted at a fixed rate of $0.033/share. Accordingly, no gain or loss was recorded upon debt conversion.

Loan #16

In August 2025, the Company issued 1,002,339 shares of common stock in connection with the partial settlement of principal and related outstanding accrued interest on loan #16 of $28,750 and $2,577, respectively, plus additional fees of $1,750 for a total conversion of $33,077. Pursuant to the debt agreement, the shares were converted at a fixed rate of $0.033/share. Accordingly, no gain or loss was recorded upon debt conversion.

In August 2025, the Company issued 1,378,562 shares of common stock in connection with the full settlement of principal and related outstanding accrued interest on loan #16 of $43,475 and $268, respectively, plus additional fees of $1,750 for a total conversion of $45,493. Pursuant to the debt agreement, the shares were converted at a fixed rate of $0.033/share. Accordingly, no gain or loss was recorded upon debt conversion.

Fiscal Year End June 30, 2025

Loan #2

In April 2025, the Company issued 6,000,000 shares of common stock in connection with the settlement of outstanding accrued interest of $20,963 and default interest of $175,287, respectively, plus additional fees of $1,750, on loan #2, for a total conversion of $198,000. Pursuant to the debt agreement, the shares were converted at a fixed rate of $0.033/share. Accordingly, no gain or loss was recorded upon debt conversion.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Loan #16

In April 2025, the Company issued 1,000,170 shares of common stock in connection with the partial settlement of principal and related outstanding accrued interest on loan #16 of $7,425 and $23,831, respectively, plus additional fees of $1,750 for a total conversion of $33,006. Pursuant to the debt agreement, the shares were converted at a fixed rate of $0.033/share. Accordingly, no gain or loss was recorded upon debt conversion.

In May 2025, the Company issued 1,003,444 shares of common stock in connection with the partial settlement of principal and related outstanding accrued interest on loan #16 of $29,000 and $2,364, respectively, plus additional fees of $1,750 for a total conversion of $33,114. Pursuant to the debt agreement, the shares were converted at a fixed rate of $0.033/share. Accordingly, no gain or loss was recorded upon debt conversion.

Debt Extinguishments

The Company accounted for these debt conversions as debt extinguishments under ASC 470-50 and ASC 405-20. As the fair value of the equity issued equaled the carrying value of the extinguished debt, no gain or loss was recognized upon conversion.

Notes Payable

The following represents a summary of the Company’s notes payable at September 30, 2025 and June 30, 2025:

Summary of Notes Payable 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

The following represents a detail of the Company’s notes payable at September 30, 2025 and June 30, 2025:

Schedule of Notes Payable 

Loans #30/#31

Notes Payable – Victorville Acquisition

During April 2025 and June 2025, the Company also entered into two loan agreements (Loans #30 and #31) with the then–prospective seller of the Victorville hotel property (the “Target”). Under these agreements, the Target advanced the Company an aggregate of $1,547,000 for working capital purposes. The loans were unsecured and bore interest at an annual rate of 15%.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Pursuant to the loan terms:

The Victorville acquisition closed on August 31, 2025, and, accordingly, the related $1,547,000 balance (including accrued interest) was eliminated in consolidation as an intercompany amount. As a result, this balance has been removed from the current-year notes payable schedule.

The Company did not recognize any gain on forgiveness, as the elimination represented an intercompany transaction rather than income from extinguishment of debt.

Convertible Notes Payable – Related Parties

The following represents a summary of the Company’s convertible notes payable – related parties at September 30, 2025 and June 30, 2025:

Schedule of Convertible Notes Payable Related Parties 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

The following represents a detail of the Company’s convertible notes payable – related parties at September 30, 2025 and June 30, 2025:

 Schedule of Notes Payable Related Parties

Schedule of Convertible Notes Payable Related Parties

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

The following represents a summary of the Company’s mortgage notes payable at September 30, 2025 and June 30, 2025:

 Schedule of Mortgage Notes Payable Related to Acquisition

During the fiscal year ended June 30, 2026, the Company completed the acquisitions of two hotel properties located in Victorville, California and Rancho Mirage, California. In connection with these acquisitions, the Company assumed existing mortgage indebtedness secured by the respective properties.

As part of the required purchase price allocations under ASC 805, the assumed mortgage notes were recorded at their estimated fair values as of the respective acquisition dates. The fair value measurements reflected market-based assumptions regarding interest rates and credit spreads for comparable debt instruments at the time of acquisition. As a result, the carrying amounts of the assumed mortgage obligations include a step-up adjustment from the contractual principal balances to reflect their fair value at acquisition.

The Victorville acquisition resulted in the recognition of an assumed mortgage note with a fair value of $9,492,000, and the Rancho Mirage acquisition resulted in the recognition of an assumed mortgage note with a fair value of $9,992,000. See Note 9.

Accordingly, the Company’s total mortgage notes payable were $19,482,659 as of September 30, 2025. The assumed mortgage notes remain secured by the respective hotel properties and contain customary covenants and repayment terms.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

The following represents a detail of the Company’s mortgage notes payable at September 30, 2025 and June 30, 2025:

 Schedule of Mortgage Notes Payable

 Schedule of Mortgage Notes Payable Related to Debt

Debt Maturities

The following represents future maturities of the Company’s various debt arrangements as follows:

 Schedule of Maturities of Various Debt Arrangements

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Note 5 – Debt

The following represents a summary of the Company’s debt (notes payable and convertible notes payable) at June 30, 2025 and 2024:

Schedule of the Company’s Debt

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

The following represents a summary of the Company’s convertible notes payable at June 30, 2025 and 2024:

Schedule of Convertible Notes Payable