Note 8 – Temporary Equity and Stockholders’ Equity (Deficit)

As of March 31, 2026, 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.

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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

Series A, Preferred Stock – Related Party

Series B, Convertible Preferred Stock

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.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

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 nine months ended March 31, 2026 and the year ended June 30, 2025, the Company recorded additional deemed dividends of $0 and $11,566, respectively.

Conversion of Series B, Convertible Preferred Stock

Effective October 28, 2025, the Company amended the conversion ratio applicable to its Series B Convertible Preferred Stock from 5,000:1 to 8,366:1, eliminating the previously issuable cashless-exercise warrants. Using the revised conversion ratio, the Company converted all 1,950 outstanding shares of Series B Preferred Stock into 16,313,700 shares of common stock on November 12, 2025.

The Company evaluated the modification under ASC 470-20-40 and ASC 260-10-S99-2 by comparing the fair value of the securities issued under the modified terms to the fair value of the securities that would have been issuable under the original terms, measured at the conversion date. The fair value of the warrants foregone was estimated using the Black-Scholes option pricing model. Based on this analysis, the fair value of the consideration under the modified terms did not exceed the fair value under the original terms, and accordingly, no deemed dividend was recognized.

As the Series B Preferred Stock was equity-classified, the conversion was accounted for as a reclassification within stockholders’ equity with no income statement impact. Following the conversion, no shares of Series B Preferred Stock remain outstanding.

Series C, Convertible Preferred Stock

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

Increase in Authorized Shares for Designation

The original Certificate of Designation authorized 500,000 shares. On December 3, 2025, the Company filed a Certificate of Amendment to Designation with the Nevada Secretary of State increasing the number of designated shares from 500,000 to 800,000 to accommodate the issuance of additional shares as acquisition consideration and compensation.

Lock-Up Provisions

Certain shares of Series C Convertible Preferred Stock issued as compensation and as acquisition consideration are subject to contractual lock-up provisions that restrict conversion into common stock for a specified period following issuance.

As of March 31, 2026, of the 538,138 shares of Series C Convertible Preferred Stock issued and outstanding, 535,875 shares are subject to contractual lock-up provisions and are not currently eligible for conversion, representing 3,215,250,000 restricted common share equivalents. Only 2,263 shares, convertible into 13,578,000 shares of common stock, are currently eligible for conversion.

Because the locked-up shares cannot currently be converted, they have been excluded from the Company’s authorized share sufficiency analysis. See Note 2 (Basic and Diluted Net Loss Per Share - Convertible Preferred Stock Classification) for the Company’s assessment of authorized share sufficiency and the reclassification from temporary equity to permanent stockholders’ equity effective November 19, 2025.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

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, (excluding potential contingent consideration of an additional $7,125,000) and $42,280,080 (excluding potential contingent consideration of an additional $4,800,000), 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.

Stock Issued for Services

On October 22, 2025, the Company issued 589 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 $0.08/share. Applying the 6,000:1 conversion ratio, the grant equates to 3,534,000 common shares on an as-converted basis, resulting in a total fair value of $282,720.

Conversion of Series C, Convertible Preferred Stock

The Company converted 45,634 shares of Series C Preferred Stock into 273,804,000 shares of common stock.

As the Series C Preferred Stock was equity-classified, the conversion was accounted for as a reclassification within stockholders’ equity with no income statement impact.

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:

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

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

 Schedule of Unvested Series C Convertible Preferred Stock

During the three and nine months ended March 31, 2026 and 2025, respectively, the Company recognized $990,760 and $1,810,840 of compensation expense related to vesting.

Shares Issued in Acquisitions

On March 31, 2025, the Company completed the acquisitions of SWC and TechForce. 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.

See Note 9 for additional information regarding these acquisitions.

Contingent Performance-Based Equity Awards — TechForce Acquisition

In connection with the TechForce acquisition, certain additional shares of Series C Convertible Preferred Stock may be issued to the sellers contingent upon achieving specified revenue and EBITDA milestones.

These awards are structured as compensation for post-combination services and are not part of the purchase consideration under ASC 805, Business Combinations. Accordingly, related expense will be recognized in the Company’s consolidated statement of operations in accordance with ASC 718, Compensation — Stock Compensation, based on the probability of achieving the specified performance conditions.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

Each award is to be granted once upon achievement, is independent and cumulative, and is to be measured based on a 30-day volume-weighted average price of the Company’s common stock as of the applicable measurement date.

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, based on the probability of achieving the specified performance conditions.

Each award is to be granted once upon achievement, is independent and cumulative, and is to be measured based on a 30-day volume-weighted average price of the Company’s common stock as of the applicable measurement date

Revenue-Based Equity Awards

The sellers are eligible to receive shares of Series C Convertible Preferred Stock with an aggregate maximum value of $35,000,000 based on the following Company revenue milestones:

 Schedule of Revenue Based Equity Awards

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

EBITDA-Based Equity Awards

The sellers are eligible to receive additional shares of Series C Convertible Preferred Stock with an aggregate maximum value of $18,110,000 based on the following Company EBITDA milestones:

 Schedule of EBITDA Based Equity Awards

Awards are allocated pro rata among eligible recipients and are subject to continued service through each measurement date. The Series C shares issued upon achievement of milestones are subject to the same lock-up restrictions described below. As of March 31, 2026, none of the revenue or EBITDA milestones have been achieved and no awards have been issued.

Lock-Up Restrictions

Pursuant to the TechForce acquisition agreement, each seller is subject to a lock-up period restricting the sale, transfer, pledge, or other disposition of any equity securities received in connection with the transaction for a period of six months (6) following the closing date. During this period, sellers are prohibited from transferring or encumbering such securities, except in limited circumstances where transferees agree to be bound by the same restrictions. The lock-up may be terminated earlier at the sole discretion of the Company.

Seniority of Series B Convertible Preferred Stock

Under the original Certificate of Designation, the Series C Convertible Preferred Stock ranked junior to the Company’s Series B Convertible Preferred Stock with respect to liquidation preference. In October 2025, all outstanding shares of Series B Preferred Stock were converted into common stock (see Series B Convertible Preferred Stock above), and the subordination is no longer applicable.

Series D, Convertible Preferred Stock

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

Under the original Certificate of Designation, the Series D Convertible Preferred Stock ranked junior to the Company’s Series B Convertible Preferred Stock with respect to liquidation preference. In October 2025, all outstanding shares of Series B Preferred Stock were converted into common stock (see Series B Convertible Preferred Stock above), and the subordination is no longer applicable.

Series D, Convertible Preferred Stock Transactions for the Year Ended June 30, 2026

In December 2025, the Company issued 9,000,000 shares of common stock upon the conversion of 1,500 shares of Series D Convertible Preferred Stock at the 6,000:1 conversion ratio. The transaction was accounted for as a reclassification within stockholders’ equity at the par value of the shares issued and received, with no impact to total stockholders’ equity.

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.

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

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

Common Stock

Equity Transactions for the Year Ended June 30, 2026

Stock Issued for Cash

The Company issued 22,360,575 shares of common stock in several private placements for $894,423 ($0.04/share).

Common Stock Issued in connection with Conversion of Convertible Notes Payable and Related Accrued Interest Payable

The Company issued an aggregate of 36,366,895 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 $1,200,107 (approximately $0.033 per share), determined in accordance with the conversion terms set forth in the underlying note agreement. See Note 5 for additional information.

Stock Issued for Services

The Company issued 2,000,000 shares of common stock to consultants for services rendered, having a fair value of $84,000 ($0.042/share), based upon the quoted closing trading price. See Note 15.

Acquisition of BIM-E Intellectual Property and Technology Assets

The Company issued 7,000,000 shares of common stock to an individual seller as consideration for the acquisition of the BIM-E intellectual property and technology assets, having a fair value of $253,400 ($0.0362/share), based upon the quoted closing trading price. The aggregate consideration was expensed as in-process research and development within general and administrative expenses in accordance with ASC 730-10-25-2(c). See Note 2.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

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 and Related Accrued Interest Payable

The Company issued an aggregate of 8,003,614 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 note agreement. See Note 5 for additional information.

Warrants

Warrant activity for the nine months ended March 31, 2026 and the year ended June 30, 2025 are summarized as follows:

 Schedule of Stock Warrant Activity

Common Stock Issued Upon Cashless Exercise of Warrants

During the nine months ended March 31, 2026, holders exercised 3,844,697 warrants on a cashless basis, resulting in the issuance of 2,465,698 shares of common stock. The transaction was accounted for as a reclassification within stockholders’ equity at par value, with no impact to total stockholders’ equity.

Warrants Issued as Deferred Offering Costs

On October 8, 2025, the Company entered into an Equity Purchase Agreement with a material debt lender, allowing the Company to sell up to $25,000,000 of common stock at its discretion over a 24-month period. In connection with the agreement, the Company issued a warrant to purchase 6,000,000 shares of common stock at an exercise price of $0.10 per share. The warrant is immediately exercisable and expires five years from the date of issuance.

The fair value of the warrant was estimated at $258,723 using the Black-Scholes option pricing model with the following assumptions:

 Schedule of Fair Value of Warrant

The fair value was recorded as a deferred offering cost and is presented as a separate line item within current assets in the consolidated balance sheets. The deferred offering cost will be charged against the proceeds of future equity sales under the agreement on a pro rata basis. As of March 31, 2026, no sales had been made under the agreement and the deferred offering cost of $258,723 remained unamortized.

Subsequent to March 31, 2026, the Company sold 1,204,780 shares of common stock for $28,790 ($0.02295 - $0.2457/share), under the equity purchase agreement.

NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES

DBA TECHFORCE ROBOTICS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026