v3.25.4
Temporary Equity and Stockholders’ Deficit
 3 Months Ended 12 Months Ended
Sep. 30, 2025
Jun. 30, 2025
Equity [Abstract]    
Temporary Equity and Stockholders’ Deficit

Note 8 – Temporary Equity and Stockholders’ Deficit

 

As of September 30, 2025, the Company had six (6) classes of stock, detailed as follows:

 

With respect to Series B, C and D convertible preferred stock, see policy above in Note 1 regarding classification as temporary equity.

 

Preferred Stock

 

The Company’s preferred stock is as follows.

 

●Authorized Shares: 1,000,000
●Par Value: $0.001 per share

 

The Board of Directors has the authority to issue preferred stock in one or more series and determine the rights, privileges, and restrictions of each series without further stockholder approval.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

Series A, Preferred Stock – Related Party

 

●Designated Shares: 1,000
●Issued & Outstanding: 1,000 shares as of September 30, 2025 and June 30, 2025, respectively. All shares are owned by the Company’s Chief Executive Officer.
●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: None
●Dividend Provisions: None
●Voting Rights: Equal to the number of votes on an as converted basis of all other classes of securities plus one (1)
●Liquidation Preference: None
●Redemption Rights: None
●Derivative Liability Assessment:
   
◌Evaluated under ASC 815 (“Derivatives and Hedging”)
◌The Series A Convertible Preferred Stock does not meet the definition of a derivative liability because it does not contain any variable equity conversion features or other contingent provisions that would require derivative accounting.

 

Series B, Convertible Preferred Stock

 

●Designated Shares: 5,000
●Issued & Outstanding: 1,950 shares as of September 30, 2025 and June 30, 2025, respectively
●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: convertible into 5,000 shares of common stock and 5,000 warrants with an exercise price of $0.033/share.
●Dividend Provisions: None
●Voting Rights: None
●Liquidation Preference: None
●Redemption Rights: None
●Derivative Liability Assessment:
   
◌Evaluated under ASC 815 (“Derivatives and Hedging”)
◌The Series B Convertible Preferred Stock and the related warrants do not meet the definition of derivative liabilities because they contain fixed conversion terms and do not include any variable equity conversion features or other contingent provisions requiring derivative accounting.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

Deemed Dividends – Series B Convertible Preferred Stock

 

In connection with the issuance of Series B Convertible Preferred Stock, the Company recognizes deemed dividends due to periodic reductions in the conversion price, which increased the intrinsic value of the shares issuable upon conversion. These adjustments effectively conveyed additional value to the preferred stockholders and were accounted for as deemed dividends.

 

The deemed dividends were recorded as a reclassification from additional paid-in capital to accumulated deficit. This treatment did not affect total stockholders’ deficit but did reduce income available to common shareholders for purposes of earnings per share.

 

During the three months ended September 30, 2025 and the year ended June 30, 2025, the Company recorded additional deemed dividends of $0 and $11,566, respectively.

 

Series C, Convertible Preferred Stock

 

●Designated Shares: 500,000
●Issued & Outstanding: 145,966 and 13,333 shares as of September 30, 2025 and June 30, 2025, respectively
●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: convertible into 6,000 shares of common stock
●Dividend Provisions: None
●Voting Rights: None
●Liquidation Preference: None
●Redemption Rights: None
●Rank junior to Series B, convertible preferred stock
●Derivative Liability Assessment:
   
◌Evaluated under ASC 815 (“Derivatives and Hedging”)
◌The Series C Convertible Preferred Stock does not meet the definition of a derivative liability because it does not contain any variable equity conversion features or other contingent provisions that would require derivative accounting.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

Preferred Stock Transactions for the Year Ended June 30, 2026

 

Shares Issued in Acquisitions

 

On August 27, 2025 and September 30, 2025, the Company completed the acquisitions of the Victorville (“VV”) and Rancho Mirage (“RM”) hotel properties, respectively. As part of the purchase consideration for these business combinations, the Company issued 216,667 shares and 176,167 shares of Series C Convertible Preferred Stock.

 

In accordance with ASC 805, Business Combinations, the Series C shares issued in connection with the VV and RM acquisitions were measured at their estimated fair values of $39,000,060 and $52,000,080, respectively, as of the applicable acquisition dates. These fair value amounts have been included in the preliminary purchase price allocations and will be updated, if necessary, during the measurement period as additional information becomes available.

 

See Note 9.

 

Preferred Stock Transactions for the Year Ended June 30, 2025

 

Series C, Convertible Preferred Shares Issued for Services

 

On February 17, 2025, the Company issued 2,000 shares of Series C, convertible preferred stock to a consultant for services rendered. The fair value of the Series C shares was based on the quoted closing trading price of $0.0081/share. Applying the 6,000:1 conversion ratio, the grant equates to 12,000,000 common shares on an as-converted basis, resulting in a total fair value of $97,200.

 

On March 25, 2025, the Company granted 94,250 shares of Series C, convertible preferred stock to several service providers as compensation. The fair value of the Series C shares was based on the quoted closing trading price of $0.0068/share. Applying the 6,000:1 conversion ratio, the grant equates to 565,500,000 common shares on an as-converted basis, resulting in a total fair value of $3,845,400.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

Pursuant to the applicable service agreements, vesting is contingent upon the achievement of the following milestones:

 

1.Closing of the acquisitions of both SWC and Skytech – 1/3 vested on March 31, 2025.
2.Successful uplisting of the Company’s common stock to a national securities exchange (e.g., NYSE or Nasdaq) – 1/3 to vest upon such uplisting.
3.Achievement of total stockholders’ equity of $40 million — one-third vests upon reaching this milestone, as evidenced in the first Form 10-Q or Form 10-K in which the balance sheet reflects this level of equity.

 

In the event that one or more of the remaining milestones are not achieved, the unvested portion of the award will vest ratably over a 20-month period (April 2025 – November 2026).

 

Unvested Series C, Convertible Preferred Stock – Compensation

 

      Weighted Average
   Number of  Gant Date
Non-Vested Shares  Shares  Fair Value
June 30, 2024   -     $-   
Granted   94,250    0.0068 
Vested   (37,300)   0.0068 
Cancelled/Forfeited   -      -   
June 30, 2025   56,950   $0.0068 
Granted   -        
Vested   (10,050)     
Cancelled/Forfeited   -        
September 30, 2025   46,900   $0.0068 
           
Unrecognized compensation  $1,913,520      
           
Weighted average remaining period (years)   1.17      

 

During the three months ended September 30, 2025 and 2024, respectively, the Company recognized $410,040 and $0 of compensation expense related to vesting.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

Shares Issued in Acquisitions

 

On March 31, 2025, the Company completed the acquisitions of SWC and Skytech. In connection with these transactions, the Company issued 83,333 and 10,000 shares of Series C, convertible preferred stock, respectively, as part of the purchase consideration.

 

Contingent Compensation Related to the Skytech Acquisition

 

In connection with the Skytech acquisition, certain additional equity awards may be issued to the sellers contingent upon achieving specified revenue and/or EBITDA milestones. These awards are structured as compensation for post-combination services and are not considered part of the purchase price under ASC 805, Business Combinations. Accordingly, any related expense will be recognized in the Company’s consolidated statement of operations in accordance with ASC 718, Compensation – Stock Compensation.

 

Performance-Based Equity Awards

 

These awards are each to be granted once, are independent and cumulative, and are to be measured based on a 30-day volume-weighted average price (VWAP) of the Company’s common stock as of the applicable measurement date.

 

The Company will evaluate the fair value of these awards and recognize compensation expense over the requisite service periods in accordance with ASC 718, based on the probability of achieving the specified performance conditions.

 

Revenue-Based Equity Awards

 

Sellers are eligible to receive awards of restricted stock with an aggregate maximum value of $35 million, based on the following revenue milestones:

 

Company Revenue  Restricted Stock Award (% of equity)
    
$50,000,000    3.0%
$100,000,000    3.5%
$150,000,000    4.0%
$200,000,000    4.5%
$300,000,000    5.0%

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

EBITDA-Based Equity Awards

 

Sellers are eligible to receive additional restricted stock with an aggregate maximum value of $18.11 million, based on the following EBITDA thresholds:

 

Company EBITDA  Restricted Stock Award (% of equity)
$1,000,000    2%
$3,000,000    3%
$5,000,000    4%
$10,000,000    5%
$20,000,000    6%
$30,000,000    7%
$50,000,000    8%
$100,000,000    10%

 

These awards will be allocated pro rata among eligible recipients and are subject to continued service through each measurement date. The Company will recognize compensation expense over the vesting periods based on the estimated fair value of awards deemed probable of vesting.

 

As of September 30, 2025, none of these award milestones have been met.

 

Lock-Up Restrictions

 

Pursuant to the acquisition agreement, each Seller is subject to a lock-up period restricting the sale, transfer, pledge, or other disposition of any equity securities received as part of the transaction (“Restricted Buyer Securities”) for a period of six (6) months following the closing date. During this period, Sellers are prohibited from transferring or encumbering such securities or entering into agreements that would transfer economic ownership, except in limited circumstances where transferees agree to be bound by the same restrictions.

 

The Company and its transfer agent are authorized to block any transfer in violation of this restriction. The lock-up may be terminated earlier at the sole discretion of the Company.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

Seniority of Series B, Convertible Preferred Stock to Series C, Convertible Preferred Stock

 

The Sellers acknowledged that the Series C, convertible preferred stock issued in connection with the acquisition is subordinate to the Company’s Series B preferred stock in terms of liquidation preference, dividend rights, and any other rights or entitlements. This subordination may affect the timing or amount of future distributions or conversions for the holders of Series C shares. See Note 9 for acquisitions of SWC and Skytech.

 

Series D, Convertible Preferred Stock

 

●Designated Shares: 100,000
●Issued & Outstanding: 3,334 shares as of September 30, 2025 and June 30, 2025, respectively
●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: convertible into 6,000 shares of common stock
●Dividend Provisions: None
●Voting Rights: None
●Liquidation Preference: None
●Redemption Rights: None
●Rank junior to Series B, convertible preferred stock
●Derivative Liability Assessment:
   
◌Evaluated under ASC 815 (“Derivatives and Hedging”)
◌The Series D Convertible Preferred Stock and the related warrants do not meet the definition of derivative liabilities because they contain fixed conversion terms and do not include any variable equity conversion features or other contingent provisions requiring derivative accounting.

 

Series D, Convertible Preferred Stock Transactions for the Year Ended June 30, 2025:

 

On July 22, 2024, the Company issued an additional 1,667 shares of Series D, Convertible Preferred Stock in connection with the modification of an existing debt arrangement. In accordance with ASC 470-50, the transaction was evaluated to determine whether it represented a modification or an extinguishment of debt. Based on the terms and quantitative assessment, the transaction qualified as an extinguishment, and a loss was recognized accordingly.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

The fair value of the equity issued was estimated to be $113,955, based on the as-converted value of the underlying common stock, adjusted for a restricted stock discount to reflect lack of marketability and transfer restrictions. This valuation was conducted pursuant to guidance in ASC 718-10-30, and supported by an independent third-party valuation report.

 

See Note 5 for additional discussion regarding debt and related calculation of loss on debt extinguishment.

 

Common Stock

 

●Authorized Shares: 200,000,000
●Issued & Outstanding:
   
◌151,941,922 shares as of September 30, 2025
◌136,961,021 shares as of June 30, 2025
   
●Par Value: $0.001 per share
●Voting Rights: 1 vote per share

 

Equity Transactions for the Year Ended June 30, 2026

 

Common Stock Issued in connection with Conversion of Convertible Notes Payable

 

The Company issued an aggregate of 14,980,901 shares of common stock to certain convertible debt holders upon conversion of their outstanding notes and related accrued interest payable. The shares had a total fair value of $494,370 (approximately $0.033 per share), determined in accordance with the conversion terms set forth in the underlying lending agreement. See Note 5 for additional information.

 

Equity Transactions for the Year Ended June 30, 2025

 

Stock Issued for Services

 

The Company issued 50,000 shares of common stock to consultants for services rendered, having a fair value of $995 ($0.0199/share), based upon the quoted closing trading price.

 

Common Stock Issued in connection with Conversion of Convertible Notes Payable

 

The Company issued an aggregate of 8,003,164 shares of common stock to certain convertible debt holders upon conversion of their outstanding notes and related accrued interest payable. The shares had a total fair value of $264,120 (approximately $0.033 per share), determined in accordance with the conversion terms set forth in the underlying lending agreement. See Note 5 for additional information.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

 

Warrants

 

Warrant activity for the three months ended September 30, 2025 and the year ended June 30, 2025 are summarized as follows:

 

           Weighted     
           Average     
       Weighted   Remaining   Aggregate 
   Number of   Average   Contractual   Intrinsic 
Warrants  Warrants   Exercise Price   Term (Years)   Value 
Outstanding - June 30, 2024   191,799,274   $0.24    3.21   $6,140,000 
Exercisable - June 30, 2024   191,799,274   $0.24    3.21   $6,140,000 
Granted   2,068,869   $0.10           
Exercised   -                
Cancelled/Forfeited   (1,871,800)  $0.16           
Outstanding - June 30, 2025   191,996,343   $0.05    2.21   $- 
Exercisable - June 30, 2025   191,996,343   $0.05    2.21   $- 
Granted   -   $0.10           
Exercised   -                
Cancelled/Forfeited   (500,000)  $0.50           
Outstanding - September 30, 2025   191,496,343   $0.05    1.97   $999,404 
Exercisable - September 30, 2025   191,496,343   $0.05    1.97   $999,404 

 

Note 8 – Temporary Equity and Stockholders’ Deficit

 

As of June 30, 2025, the Company had six (6) classes of stock, detailed as follows:

 

With respect to Series B, C and D convertible preferred stock, see policy above in Note 1 regarding classification as temporary equity.

 

Preferred Stock

 

The Company’s preferred stock is as follows.

 

●Authorized Shares: 1,000,000
●Par Value: $0.001 per share

 

The Board of Directors has the authority to issue preferred stock in one or more series and determine the rights, privileges, and restrictions of each series without further stockholder approval.

 

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

 

Series A, Preferred Stock

 

●Designated Shares: 1,000
●Issued & Outstanding: 1,000 shares as of June 30, 2025 and 2024, respectively
●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: None
●Dividend Provisions: None
●Voting Rights: Equal to the number of votes on an as converted basis of all other classes of securities plus one (1)
●Liquidation Preference: None
●Redemption Rights: None
●Derivative Liability Assessment:

 

○Evaluated under ASC 815 (“Derivatives and Hedging”)
○The Series A, Convertible Preferred Stock does not meet the definition of a derivative liability since it has no variable equity conversion feature.

 

Series B, Convertible Preferred Stock

 

●Designated Shares: 5,000
●Issued & Outstanding: 1,950 shares as of June 30, 2025 and 2024, respectively
●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: convertible into 5,000 shares of common stock and 5,000 warrants with an exercise price of $0.033/share.
●Dividend Provisions: None
●Voting Rights: None
●Liquidation Preference: None
●Redemption Rights: None
●Derivative Liability Assessment:

 

○Evaluated under ASC 815 (“Derivatives and Hedging”)
○The Series B, Convertible Preferred Stock and related warrants do not meet the definition of a derivative liability due to a fixed conversion price and no variable equity conversion features.

 

Deemed Dividends – Series B Convertible Preferred Stock

 

In connection with the issuance of Series B Convertible Preferred Stock, the Company recognizes deemed dividends due to periodic reductions in the conversion price, which increased the intrinsic value of the shares issuable upon conversion. These adjustments effectively conveyed additional value to the preferred stockholders and were accounted for as deemed dividends.

 

The deemed dividends were recorded as a reclassification from additional paid-in capital to accumulated deficit. This treatment did not affect total stockholders’ deficit but did reduce income available to common shareholders for purposes of earnings per share.

 

During the years ended June 30, 2025 and 2024, the Company recorded additional deemed dividends of $11,566 and $84,106, respectively.

 

Series C, Convertible Preferred Stock

 

●Designated Shares: 500,000
●Issued & Outstanding: 145,966 and 13,333 shares as of June 30, 2025 and 2024, respectively
●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: convertible into 6,000 shares of common stock
●Dividend Provisions: None
●Voting Rights: None
●Liquidation Preference: None
●Redemption Rights: None
●Rank junior to Series B, convertible preferred stock
●Derivative Liability Assessment:

 

○Evaluated under ASC 815 (“Derivatives and Hedging”)
○The Series C, Convertible Preferred Stock does not meet the definition of a derivative liability since it has no variable equity conversion features.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

 

Preferred Stock Transactions for the Year Ended June 30, 2025

 

Series C, Convertible Preferred Shares Issued for Services

 

On February 17, 2025, the Company issued 2,000 shares of Series C, convertible preferred stock to a consultant for services rendered. The fair value of the Series C shares was based on the quoted closing trading price of $0.0081/share. Applying the 6,000:1 conversion ratio, the grant equates to 12,000,000 common shares on an as-converted basis, resulting in a total fair value of $97,200.

 

On March 25, 2025, the Company granted 94,250 shares of Series C, convertible preferred stock to several service providers as compensation. The fair value of the Series C shares was based on the quoted closing trading price of $0.0068/share. Applying the 6,000:1 conversion ratio, the grant equates to 565,500,000 common shares on an as-converted basis, resulting in a total fair value of $3,845,400.

 

Pursuant to the applicable service agreements, vesting is contingent upon the achievement of the following milestones:

 

1.Closing of the acquisitions of both SWC and Skytech – 1/3 vested on March 31, 2025.
2.Successful uplisting of the Company’s common stock to a national securities exchange (e.g., NYSE or Nasdaq) – 1/3 to vest upon such uplisting.
3.Achievement of total stockholders’ equity of $40 million – final 1/3 to vest upon this milestone.

 

In the event that one or more of the remaining milestones are not achieved, the unvested portion of the award will vest ratably over a 20-month period (April 2025 – November 2026).

 

Unvested Series C, Convertible Preferred Stock – Compensation

 

       Weighted Average 
   Number of   Gant Date 
Non-Vested Shares  Shares   Fair Value 
June 30, 2024   -    - 
Granted   94,250    0.0068 
Vested   (37,300)   0.0068 
Cancelled/Forfeited   -    - 
June 30, 2025   56,950    0.0068 
           
Unrecognized compensation  $2,323,560      
           
Weighted average remaining period (years)   1.42      

 

During the years ended June 30, 2025 and 2024, respectively, the Company recognized $1,521,840 and $0 of compensation expense related to vesting.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

 

Shares Issued in Acquisitions

 

On March 31, 2025, the Company completed the acquisitions of SWC and Skytech. In connection with these transactions, the Company issued 83,333 and 10,000 shares of Series C, convertible preferred stock, respectively, as part of the purchase consideration.

 

Contingent Compensation Related to the Skytech Acquisition

 

In connection with the Skytech acquisition, certain additional equity awards may be issued to the sellers contingent upon achieving specified revenue and/or EBITDA milestones. These awards are structured as compensation for post-combination services and are not considered part of the purchase price under ASC 805, Business Combinations. Accordingly, any related expense will be recognized in the Company’s consolidated statement of operations in accordance with ASC 718, Compensation – Stock Compensation.

 

Performance-Based Equity Awards

 

These awards are each to be granted once, are independent and cumulative, and are to be measured based on a 30-day volume-weighted average price (VWAP) of the Company’s common stock as of the applicable measurement date.

 

The Company will evaluate the fair value of these awards and recognize compensation expense over the requisite service periods in accordance with ASC 718, based on the probability of achieving the specified performance conditions.

 

Revenue-Based Equity Awards

 

Sellers are eligible to receive awards of restricted stock with an aggregate maximum value of $35 million, based on the following revenue milestones:

 

Company Revenue   Restricted Stock Award
(% of equity)		 
        
$50,000,000    3.0%
$100,000,000    3.5%
$150,000,000    4.0%
$200,000,000    4.5%
$300,000,000    5.0%

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

 

EBITDA-Based Equity Awards

 

Sellers are eligible to receive additional restricted stock with an aggregate maximum value of $18.11 million, based on the following EBITDA thresholds:

 

Company EBITDA  

Restricted Stock Award

(% of equity)

 
$1,000,000    2%
$3,000,000    3%
$5,000,000    4%
$10,000,000    5%
$20,000,000    6%
$30,000,000    7%
$50,000,000    8%
$100,000,000    10%

 

These awards will be allocated pro rata among eligible recipients and are subject to continued service through each measurement date. The Company will recognize compensation expense over the vesting periods based on the estimated fair value of awards deemed probable of vesting.

 

As of June 30, 2025, none of these award milestones have been met.

 

Lock-Up Restrictions

 

Pursuant to the acquisition agreement, each Seller is subject to a lock-up period restricting the sale, transfer, pledge, or other disposition of any equity securities received as part of the transaction (“Restricted Buyer Securities”) for a period of six (6) months following the closing date. During this period, Sellers are prohibited from transferring or encumbering such securities or entering into agreements that would transfer economic ownership, except in limited circumstances where transferees agree to be bound by the same restrictions.

 

The Company and its transfer agent are authorized to block any transfer in violation of this restriction. The lock-up may be terminated earlier at the sole discretion of the Company.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

 

Seniority of Series B, Convertible Preferred Stock to Series C, Convertible Preferred Stock

 

The Sellers acknowledged that the Series C, convertible preferred stock issued in connection with the acquisition is subordinate to the Company’s Series B preferred stock in terms of liquidation preference, dividend rights, and any other rights or entitlements. This subordination may affect the timing or amount of future distributions or conversions for the holders of Series C shares. See Note 9 for acquisitions of SWC and Skytech.

 

Series D, Convertible Preferred Stock

 

●Designated Shares: 100,000
●Issued & Outstanding: 3,334 and 1,667 shares as of June 30, 2025 and 2024, respectively
 ●Par Value: $0.001 per share
●Stated Value: None
●Conversion Terms: convertible into 6,000 shares of common stock
●Dividend Provisions: None
●Voting Rights: None
●Liquidation Preference: None
●Redemption Rights: None
●Rank junior to Series B, convertible preferred stock
●Derivative Liability Assessment:

 

○Evaluated under ASC 815 (“Derivatives and Hedging”)
○The Series C, Convertible Pref erred Stock does not meet the definition of a derivative liability since it has no variable equity conversion features.

 

Series D, Convertible Preferred Stock Transactions for the Year Ended June 30, 2025:

 

On July 22, 2024, the Company issued an additional 1,667 shares of Series D, Convertible Preferred Stock in connection with the modification of an existing debt arrangement. In accordance with ASC 470-50, the transaction was evaluated to determine whether it represented a modification or an extinguishment of debt. Based on the terms and quantitative assessment, the transaction qualified as an extinguishment, and a loss was recognized accordingly.

 

The fair value of the equity issued was estimated to be $113,955, based on the as-converted value of the underlying common stock, adjusted for a restricted stock discount to reflect lack of marketability and transfer restrictions. This valuation was conducted pursuant to guidance in ASC 718-10-30, and supported by an independent third-party valuation report.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

 

See Note 5 for additional discussion regarding debt and related calculation of loss on debt extinguishment.

 

Series D, Convertible Preferred Stock Transactions for the Year Ended June 30, 2024:

 

On February 7, 2024, the Company issued 1,667 shares of Series D, Convertible Preferred Stock in connection with the modification of an existing debt arrangement. In accordance with ASC 470-50, the transaction was evaluated to determine whether it represented a modification or an extinguishment of debt. Based on the terms and quantitative assessment, the transaction qualified as an extinguishment, and a loss was recognized accordingly.

 

The fair value of the equity issued was estimated to be $113,955, based on the as-converted value of the underlying common stock, adjusted for a restricted stock discount to reflect lack of marketability and transfer restrictions. This valuation was conducted pursuant to guidance in ASC 718-10-30, and supported by an independent third-party valuation report.

 

See Note 5 for additional discussion regarding debt and related calculation of loss on debt extinguishment.

 

Common Stock

 

●Authorized Shares: 200,000,000
●Issued & Outstanding:

 

○136,961,021 shares as of June 30, 2025
○128,907,407 shares as of June 30, 2024

 

●Par Value: $0.001 per share
●Voting Rights: 1 vote per share

 

Equity Transactions for the Year Ended June 30, 2025

 

Stock Issued for Services

 

The Company issued 50,000 shares of common stock to consultants for services rendered, having a fair value of $995 ($0.0199/share), based upon the quoted closing trading price.

 

Common Stock Issued in connection with Conversion of Convertible Notes Payable

 

The Company issued an aggregate 8,003,164 shares of common stock to certain convertible debt holders, having a fair value of $264,120 ($0.033/share), based upon the quoted closing trading price. See Note 5 for additional discussion.

 

Equity Transactions for the Year Ended June 30, 2024

 

Stock Issued as Financing Costs

 

The Company issued 3,333,333 shares of common stock for financing costs related to commitment shares issued in connection with the execution of a promissory note to a third party lender, having a fair value of $50,000 ($0.015/share), based upon the quoted closing trading price.

 

Stock Issued for Services

 

The Company issued 300,000 shares of common stock to consultants for services rendered, having a fair value of $7,800 ($0.026/share), based upon the quoted closing trading price.

 

Exercise of Warrants – Cashless

 

The Company issued 686,106 shares of common stock in connection with the cashless exercise of 1,818,182 warrants ($0.001/share). The transaction had a net effect of $0 on stockholders’ deficit. See warrant table below.

 

Stock Issued in Connection with Settlement of Accrued Liabilities

 

The Company issued 1,000,000 shares of common stock having a fair value of $16,400 ($0.164/share), based upon the quoted closing trading price, in connection with the settlement of accrued interest ($31,250) and other accrued expenses ($1,750) for a total of $33,000. The Company recorded a gain of $16,600.

 

 

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

 

Warrants

 

Warrant activity for the years ended June 30, 2025 and 2024 are summarized as follows:

 

           Weighted     
           Average     
       Weighted   Remaining   Aggregate 
   Number of   Average   Contractual   Intrinsic 
Warrants  Warrants   Exercise Price   Term (Years)   Value 
Outstanding - June 30, 2023   113,836,388   $0.07    5.00   $4,215,000 
Exercisable - June 30, 2023   113,836,388   $0.07    5.00   $4,215,000 
Granted   80,181,068   $0.03           
Exercised   (1,818,182)  $0.03           
Cancelled/Forfeited   (400,000)  $0.30           
Outstanding - June 30, 2024   191,799,274   $0.24    3.21   $6,140,000 
Exercisable - June 30, 2024   191,799,274   $0.24    3.21   $6,140,000 
Granted   2,068,869   $0.10           
Exercised   -   $-           
Cancelled/Forfeited   (1,871,800)  $0.16           
Outstanding - June 30, 2025   191,996,343   $0.05    2.21   $- 
Exercisable - June 30, 2025   191,996,343   $0.05    2.21   $-