UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the fiscal year ended
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Commission
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The
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per share (“Common Stock”), held by non-affiliates,
computed by reference to the price at which the Common Stock was last sold as of December 31, 2025, the last business day of the registrant’s
most recently completed second fiscal quarter, was approximately $
The number of shares of the registrant’s Common Stock outstanding as of October 12, 2026 was shares.
TABLE OF CONTENTS
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PART I
Cautionary Note Regarding Forward-Looking Information
Certain statements made in this Annual Report involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, technological developments related to business support services and outsourced business processes, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control.
Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the factors set forth herein under the headings “Business”.
Item 1. Business Overview
Nightfood Holdings was incorporated on October 16, 2013, in the State of Nevada in connection with a reorganization of Nightfood, Inc., incorporated on January 14, 2010 as a New York corporation, whereby it became the first wholly-owned subsidiary of Nightfood Holdings. We are also the sole shareholder of MJ Munchies, Inc., currently revoked in the State of Nevada, which owns certain intellectual property, but does not have any operations as of the period covered by these financial statements.
Nightfood Holdings operates through five wholly owned subsidiaries that collectively position us to capitalize on the accelerating demand for automation and efficiency in the hospitality and foodservice industries: TechForce Robotics, Inc. (formerly Skytech Automated Solutions Inc.), Future Hospitality Ventures Holdings Inc. (d/b/a RoboOp365), SWC Group, Inc. (d/b/a CarryOutSupplies.com), Victorville Treasure Holdings, LLC and Treasure Mountain Holdings, LLC.
Treasure Mountain Holdings, LLC is a hotel located at 71700 Highway 111, Rancho Mirage, California 92270. This property is owned by the Company as of September 30, 2025. Both hotel properties are encumbered by the mortgage notes payable described in Note 5 to the consolidated financial statements.
TechForce Robotics, Inc., or TechForce or Skytech, a Delaware corporation which we acquired on March 31, 2025, serves as the Company’s operational backbone, supported by a team with deep expertise in hospitality operations and a proven track record of building, managing, and scaling hotel and foodservice platforms. This operational strength enables TechForce to lead to the deployment of robotic and AI-enhanced automation solutions, ensuring seamless integration into daily operations. Management believes Skytech’s depth of experience is a key differentiator that positions the Company to execute where many robotics competitors may struggle.
Future Hospitality Ventures Holdings Inc., or FHVH, Ventures Holdings or Future Hospitality, a Nevada corporation which we acquired on February 2, 2024, enhances this foundation by delivering advanced AI-enabled robotic systems designed to reduce labor costs, increase efficiency, and improve consumer experience. Launched in California shortly before the state’s 2025 minimum wage increase in foodservice and hospitality, Ventures Holdings has benefited from heightened industry awareness and urgency around automation. Its plug-and-play solutions are designed to integrate easily into restaurants, hotels, healthcare facilities, school cafeterias, and other foodservice environments, with exponential benefits for operators managing multiple locations is our initial strategic focus.
SWC Group, Inc., or SWC, a California corporation which we acquired on March 31, 2025, further complements the Company’s ecosystem, having served more than 6,000 foodservice operators across the United States. As a recognized leader in custom-printed foodservice packaging, SWC generates recurring revenue while also providing a ready-made distribution and marketing channel for cross-selling our robotic solutions to an established base of industry decision-makers.
On August 27, 2025, the Company completed the acquisition of the Holiday Inn Victorville, a 155-room hotel property, through an all-equity transaction valued at approximately $39.0 million (excluding contingent consideration of $7.13 million), consisting of the issuance of 216,667 shares of the Company’s Series C Convertible Preferred Stock. This property is one of two hotel assets recently acquired by the Company and is intended to support the Company’s operational presence in the hospitality sector and facilitate evaluation of its robotic solutions within an operating hotel environment.
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On September 30, 2025, the Company completed the acquisition of Rancho Mirage Hilton LLC, the owner of the Hilton Garden Inn Palm Springs - Rancho Mirage, for total consideration of approximately $42.28 million (excluding contingent consideration of $4.8 million), which was satisfied through the issuance of 176,167 shares of Series C Convertible Preferred Stock.
The hotel properties support the Company’s hospitality operations and provide operating environments for evaluating and demonstrating its robotic solutions. Both properties are encumbered by the mortgage notes payable described in Note 5 to the consolidated financial statements.
The following diagram illustrates our corporate structure as of the date of this Annual Report.

Recent development
On September 17, 2026, the Company announced the formation of TechForce Advanced Manufacturing, Inc. (“TAMI”), a Nevada corporation established to support the Company’s planned expansion into the semiconductor manufacturing equipment industry. As of October 12, 2026, the Company is negotiating an agreement to acquire specified intellectual property and technology assets from JUN LONG MACHINE INDUSTRIAL CO., LTD. (“JUN LONG”), a Taiwan corporation. The definitive agreement has not been finalized or executed, and the proposed transaction has not closed.
Under the structure currently being negotiated, the Company would acquire technology and intellectual property relating to wafer sorters and automated optical inspection (“AOI”) systems, including designs, software, firmware, technical documentation, and manufacturing know-how. The Company would own the acquired assets and grant TAMI an exclusive, worldwide, royalty-free license to manufacture, sell, and support products using the technology. The proposed transaction is structured solely as an acquisition of specified intellectual property and technology assets.
The proposed acquisition consideration would consist of shares of the Company’s Series C Convertible Preferred Stock and a 49% equity interest in TAMI issued to JUN LONG, with the Company retaining a 51% controlling interest. The parties are also negotiating separate, performance-based preferred stock incentives tied to qualifying revenue from new customers introduced by JUN LONG. The consideration, incentive terms, and other transaction provisions remain subject to negotiation and final agreement.
TAMI’s initial commercial focus would be the manufacture and commercialization of wafer sorter and AOI systems for 8-inch and 12-inch silicon wafers, including applications supporting Chip-on-Wafer-on-Substrate, Chip-on-Panel-on-Substrate, and other advanced semiconductor packaging technologies. TAMI is expected to conduct operations in its own name and for its own account, using its own facility and equipment and developing its own workforce. The Company expects to provide strategic oversight, commercialization support, public-company infrastructure, and funding through intercompany loans. JUN LONG is expected to provide limited technical support and training under arrangements that remain subject to negotiation.
Subject to execution of definitive agreements, satisfaction of applicable closing and regulatory requirements, establishment of manufacturing capacity, availability of funding, and customer demand, the Company is targeting commencement of production and initial revenue during the fourth quarter of calendar 2026. Revenue recognition would depend on the applicable contractual terms, delivery and acceptance requirements, and U.S. GAAP. There can be no assurance that the proposed transaction will close or that production or revenue will commence within the targeted period.
Our vision
Looking ahead, the Company intends to extend its robotics and automation solutions beyond hospitality into other labor-intensive sectors, including healthcare facilities, convention centers, educational institutions, and large-scale entertainment venues, while also pursuing a planned entry into the semiconductor manufacturing equipment industry. Through TechForce Advanced Manufacturing, the Company expects to apply its automation, commercialization and public company capabilities to the development, manufacture, commercialization, installation and support of semiconductor automation and inspection systems, initially focused on Wafer Sorter and Automated Optical Inspection systems for 8-inch and 12-inch silicon wafers and related advanced-packaging applications. By combining TechForce’s operational expertise, Future Hospitality’s advanced AI robotics, SWC’s extensive customer access, our owned hotel assets as innovation test beds, and JUN LONG’s technical know-how, manufacturing expertise, product development capabilities and customer relationships, the Company seeks to build a diversified, vertically integrated platform designed to drive innovation, efficiency, and long-term shareholder value across multiple industries. TechForce Advanced Manufacturing’s initiative remains subject to completion of a definitive agreement and other applicable commercial, operational and qualification requirements.
Our Products and Services
The Company provides robotics, automation, and foodservice packaging products and services and is pursuing entry into semiconductor automation and inspection equipment. Through TechForce Robotics and Future Hospitality, the Company offers AI-enhanced robotic systems and automation services designed to support repetitive, labor-intensive tasks, including food delivery, bussing, cleaning, and back-of-house operations in hospitality and other commercial environments. SWC complements these offerings with custom-printed cups, containers, and other foodservice supplies, while providing an established customer channel for introducing the Company’s robotics solutions.
Through TechForce Advanced Manufacturing, Inc., the Company plans to expand into semiconductor automated optical inspection (“AOI”) and wafer-handling systems, with an intended focus on integrating AI-assisted image analysis and robotic arms to support defect detection, wafer handling, and production efficiency. In connection with this initiative, the Company is negotiating the acquisition of specified intellectual property and technology assets from JUN LONG MACHINE INDUSTRIAL CO., LTD. As of October 12, 2026, the definitive agreement has not been finalized or executed, and the transaction has not closed. Development and commercialization remain subject to completion of the proposed acquisition, technical validation, applicable customer qualification requirements, and sufficient funding. These planned capabilities represent an intended expansion of the Company’s product portfolio, and there can be no assurance that they will be commercially deployed or achieve the anticipated performance or operating benefits.
TechForce’s Products and Services
The Company believes TechForce is uniquely positioned as the operational backbone of its robotics platform, leveraging decades of hands-on hospitality and food service expertise to ensure the successful deployment of AI-enhanced automation solutions. Unlike many robotics companies that focus solely on hardware, TechForce combines robotics with deep operational know-how, enabling seamless integration of automation into real-world environments.
TechForce offers a suite of robotics and automation solutions under the Robots-as-a-Service (RaaS) model, designed to address repetitive, labor-intensive, and injury-prone tasks that are increasingly difficult for staff to manage. These solutions support both guest-facing and back-of-house operations, helping operators achieve cost savings, efficiency improvements, and enhanced service consistency.
Products and Solutions
TechForce Robotics offers a portfolio of AI-enhanced robotic systems designed to support operational, logistics, and service functions in hospitality, foodservice, and other commercial environments.
(a) BIM-E - Beverage and Inventory Management Engine
BIM-E is an AI-enhanced robotic system designed to automate beverage preparation and dispensing in high-volume service environments, including hotels, resorts, stadiums, and event venues. The system is designed to support standardized beverage preparation, inventory monitoring, and operational data capture. BIM-E may integrate with point-of-sale and other operational systems, subject to configuration, and is intended to reduce manual labor requirements and improve operational consistency.
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(b) TIM-E - Task and Intelligent Mobility Engine
TIM-E is an AI-enhanced autonomous mobile robotics platform designed to perform configurable logistics and service tasks within hospitality and commercial facilities. The platform supports autonomous navigation and integration with elevators and access systems, subject to site configuration. TIM-E is designed to accommodate modular payloads, enabling deployment across multiple operational use cases, including internal delivery and facility support functions.
(c) Concierge - Autonomous Delivery System
Concierge is an autonomous robotic delivery system designed for use in hotel and resort environments. The system is intended to support the transport of items such as meals, beverages, and guest supplies within a facility. Concierge supports autonomous navigation and secure compartmentalization and is designed to operate in conjunction with existing building infrastructure, subject to site configuration.
(d) LIN-E - Laundry and Housekeeping Support System
LIN-E is an AI-enhanced robotic system designed to support housekeeping and back-of-house logistics operations. The system is intended to transport laundry, linens, and waste materials within large facilities, including hotels, convention centers, and stadiums. LIN-E supports autonomous navigation and building access integration, subject to site configuration, and is designed to reduce manual handling requirements.
(e) Matradee - Food Service Support System
Matradee is a robotic system designed to assist front-of-house foodservice operations by transporting prepared food items within dining environments. The system is intended to operate alongside human staff and support service flow efficiency in high-volume foodservice settings.
(f) Dustee - Autonomous Cleaning System
Dustee is an autonomous robotic system designed to perform routine sweeping and basic floor-cleaning tasks in hospitality and commercial environments. The system is intended to support daily cleaning operations and reduce reliance on manual labor for repetitive cleaning functions.
TechForce’s management has an established track record of building and managing more than 300+ hotels and developing over 50+ properties from the ground up. This operational background provides the Company with a unique advantage: the ability to test, refine, and implement robotic solutions in live hospitality environments with confidence and precision.
In recent months, TechForce’s team has begun positioning its solutions for deployment across hotels, convention centers, healthcare facilities, and shopping malls. The Company is also using its owned hotel assets-including the recently acquired Holiday Inn Victorville-as innovation hubs to validate and showcase real-world use cases for robotics and AI-enhanced automation.
Future Hospitality’s Products and Services
The Company believes it is revolutionizing the hospitality industry with plug-and-play robotics and automation solutions designed to enhance service efficiency and consistency.
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Future Hospitality offers two key robotics solutions through the RaaS business model, which can transform both front-end and back-end operations within the hospitality industry.
Future Hospitality offers the following products and solutions:
(a) Front-End Solutions
The serving robot, an advanced front-end solution, works alongside wait staff to ensure faster and more reliable service. These server robots help streamline service delivery, enhancing guest experiences by minimizing wait times and reducing human errors.
(b) Back-End Solutions
Smart cooking bots provide game-changing back-end solutions to support chefs in high-volume environments. The advanced kitchen assistant ensures consistent food quality and enables even inexperienced staff to prepare delicious meals quickly, addressing critical challenges in busy kitchens.
In recent months, Future Hospitality has been actively showcasing the capabilities of its service robots and automated systems to various regional restaurant franchises, assisted living facilities, hotels, and hospital operators. These demonstrations have sparked significant interest among industry leaders seeking to solve service inconsistency, labor shortages, and ongoing staffing replacement costs.
Future Hospitality is in active discussions with several organizations interested in implementing these automation solutions at scale in their day-to-day operations.
SWC’s Products and Services
The Company believes that SWC (and its commercial used name CarryOutSupplies.com) is one of the most recognized names in the custom-printed foodservice packaging industry, serving as both a revenue-generating subsidiary and a strategic channel for introducing our robotics and automation solutions to the market. With over 6,000 customers served across the United States since inception, SWC has established a strong reputation for quality, reliability, and service.
SWC provides a wide range of foodservice packaging products, specializing in custom printing that helps operators strengthen their brand identity while meeting day-to-day operational needs.
SWC offers the following products and solutions:
(a) Custom-Printed Cups
Disposable paper and plastic cups available in multiple sizes, with high-quality custom printing to promote brand visibility and enhance customer experience
(b) Takeout Containers and Boxes
Eco-friendly and durable packaging for restaurants, caterers, and foodservice operators, designed to keep food fresh during transport while showcasing custom branding.
(c) Utensils and Accessories
Branded or generic foodservice accessories, including straws, cutlery, napkins, and lids, to provide operators with a one-stop shop for all consumable needs.
(d) Eco-Friendly Packaging Solutions
Compostable and recyclable packaging options are designed to meet increasing consumer and regulatory demand for sustainable products, helping operators align with ESG and green initiatives.
In addition to providing consumables, SWC serves as a strategic sales and distribution channel for the Company’s robotics offerings. Its established relationships with thousands of foodservice operators give the Company immediate access to decision-makers who are increasingly seeking automation solutions to reduce costs and improve efficiency.
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By offering consumable products alongside its robotic solutions, SWC seeks to generate recurring revenue and support adoption of the Company’s automation technologies in hospitality and foodservice environments. The integrated offering is intended to support operational efficiencies through standardized supplies and coordinated logistics.
Competition
Service robotics is still an emerging sector in the United States. While many countries have already adopted automation across a wide range of industries, the U.S. market remains several years behind and is still in the early stages of adaptation. This creates both challenges and opportunities.
Overseas manufacturers currently hold meaningful market share outside the United States; however, many have limited or no presence in the U.S. market. We believe this gap provides a unique opportunity for the Company to establish itself as a first mover in the domestic market. By combining our in-depth operational expertise with a home-field advantage in the U.S., we believe we are well positioned to capture significant market share, set industry standards, and emerge as a market leader.
Furthermore, we anticipate that our platform can become the preferred distribution and deployment channel for other robotic manufacturers and innovators seeking entry into the U.S. market. By leveraging our experience, infrastructure, and established customer relationships, we aim to accelerate adoption and build a leadership position as the U.S. service robotics industry matures.
Government Regulations
In the United States, the National Institute of Standards and Technology (NIST) has developed frameworks and guidelines to help ensure the safety, reliability, and interoperability of robotics and autonomous systems. These standards provide guidance for developing, deploying, and operating robots in a variety of applications.
The United States has been a leader in robotics innovation for several decades and is home to some of the most prominent robotics companies, including Boston Dynamics, iRobot, and Amazon Robotics (formerly Kiva Systems). The U.S. government has recognized the potential of robotics to drive economic growth, enhance productivity, and improve efficiency, and it has implemented policies and programs to support industry development.
One of the most significant initiatives is the National Robotics Initiative (NRI), launched in 2011. The NRI is a multi-agency collaboration involving the National Science Foundation, NASA, the Department of Defense, and the Department of Agriculture, among others. The program provides funding for robotics research and development across multiple industries, including manufacturing, healthcare, and transportation, with a particular focus on human-robot collaboration (“co-robotics”).
In addition, the U.S. Department of Labor has supported apprenticeship and workforce training programs in robotics and advanced manufacturing through its Apprenticeship USA framework and related initiatives. These programs are designed to address the skills gap in the workforce and ensure workers are trained to meet the growing demand for robotics expertise.
Beyond these initiatives, companies operating in the robotics industry must also consider data privacy, AI ethics, and workplace safety requirements under existing U.S. regulations. Compliance with standards such as OSHA guidelines, emerging AI governance frameworks, and data protection policies is expected to play an increasing role as robotics solutions scale into mainstream use.
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Item 1A. Risk Factors
Smaller reporting companies are not required to provide the information required by this item.
Item 1B. Unresolved Staff Comments
None.
We rely on the integrity and availability of our information technology (“IT”) systems, as well as those of certain third-party service providers, to support our operations and safeguard sensitive information. These systems may store or process confidential business data, intellectual property, financial records, and personal information.
Most of our robots leverage on-site servers, which provides greater control over data and reduces reliance on overseas or manufacturer-hosted servers often used by other robotics companies. We believe this approach enhances system security and protects sensitive operational and customer information.
Oversight of cybersecurity risk currently rests with department managers, who are responsible for monitoring IT systems, addressing potential risks, and reporting issues directly to senior management. At this stage, the Company has not established formal Board-level committees dedicated to cybersecurity; however, management, led by our Chief Executive Officer, President, Subsidiary Chief Executive Officers and Chairman, oversees day-to-day cybersecurity operations and engages external specialists as needed.
We have implemented, and continue to enhance, a cybersecurity risk management program designed to identify, assess, and mitigate threats to our systems and data. Current measures include:
| ● | Use of firewalls, antivirus and endpoint protection tools, and restricted access to critical systems; |
| ● | Multi-factor authentication for select systems and administrative users; |
| ● | Employee training programs focused on phishing awareness and data security practices; |
| ● | Incident response procedures to detect, contain, and remediate security events; and |
| ● | Engagement of third-party providers to conduct vulnerability testing and supplement technical expertise where internal resources are limited. |
We are in the process of expanding our policies and procedures to better align with recognized security standards and improve documentation of our cybersecurity framework. We acknowledge that, given our size and available resources, the maturity of our program may be more limited than that of larger organizations.
Third-Party Vendor Risk
A significant portion of our data storage, communications, and operational systems are hosted or managed by third-party vendors. While we perform diligence and require certain contractual security obligations, we do not directly control these external systems. As a result, our operations may be impacted by cybersecurity vulnerabilities or incidents affecting our vendors.
Incident History
To date, we are not aware of any cybersecurity incidents that have had a material adverse effect on our operations, business, results of operations, or financial condition. We have, however, experienced routine attempted phishing attacks, malware probes, and other common malicious activity. These attempts have been contained without material impact.
Potential Risks
Cybersecurity threats, if realized, could disrupt operations, compromise sensitive data, damage our reputation, subject us to regulatory investigations or penalties, and result in significant financial losses. While we maintain processes and controls designed to prevent or mitigate such risks, no system can provide absolute assurance.
Future Enhancements
We are committed to strengthening our cybersecurity posture as our operations expand. Planned initiatives include enhancing continuous monitoring capabilities, expanding multi-factor authentication to additional systems, improving vendor oversight, and formalizing Board-level oversight of cybersecurity through dedicated committees. These steps are intended to align our practices more closely with recognized industry standards and support long-term resilience.
Item 2. Properties
Our corporate address is 13501 S Main Street, Los Angeles, CA 90061 and our telephone number is 866-291-7778.
Future Hospitality Ventures Holdings, Inc. rents office space at 177 E Colorado Blvd Ste 200, Pasadena, CA 91105 TechForce Robotics, Inc. rents office space at 42225 Remington Ave, #A15, Temecula, CA, 92590
We do not own any real estate at the above locations.
Victorville Treasure Holdings, LLC is a hotel located at 15494 Palmdale Road, Victorville, California 92392. This property is owned by the Company as of August 27, 2025.
Treasure Mountain Holdings, LLC is a hotel located at 71700 Highway 111, Rancho Mirage, California 92270. This property is owned by the Company as of September 30, 2025.
Item 3. Legal Proceedings
From time to time, the Company may be subject to claims arising in the ordinary course of business. The Company is not currently a party to any material pending legal proceedings. See Note 7 to the consolidated financial statements.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
a) Market Information
Our common stock is currently quoted on the OTC market “QB” under the symbol “NGTF”.
The following table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by OTCMarkets. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
The last reported price was $0.03 on September 22, 2026.
| Period Ending June 30, 2026 | High | Low | ||||||
| September 30, 2025 | $ | 0.0410 | $ | 0.0338 | ||||
| December 31, 2025 | 0.0600 | 0.0515 | ||||||
| March 31, 2026 | 0.0324 | 0.0290 | ||||||
| June 30, 2026 | 0.0496 | 0.0311 | ||||||
| Period Ending June 30, 2025: | ||||||||
| September 30, 2024 | $ | 0.0170 | $ | 0.0150 | ||||
| December 31, 2024 | 0.0069 | 0.0060 | ||||||
| March 31, 2025 | 0.0088 | 0.0076 | ||||||
| June 30, 2025 | 0.0200 | 0.0180 | ||||||
b) Holders
On June 30, 2026, there are approximately 270 holders of record of our common stock. The number of stockholders of record does not include beneficial owners of our common stock, whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.
c) Dividends
No dividends have ever been declared by the Board of Directors on our common stock. Our losses do not currently indicate the ability to pay any cash dividends, and we do not have the intention of paying cash dividends on our common stock in the foreseeable future.
d) Securities Authorized for Issuance Under Equity Compensation Plans
We have no equity compensation plan approved by our stockholders. During the fiscal year ended June 30, 2026, we granted options to purchase 34,630,305 shares of common stock under individual option agreements not approved by stockholders, as described in Item 12. No equity compensation plan was adopted during the fiscal year ended June 30, 2025.
e) Recent Sales of Unregistered Securities
During the fiscal year ended June 30, 2026, the Company issued the following securities that were not registered under the Securities Act of 1933, as amended (the “Securities Act”).
Common Stock Issued for Cash
In December 2025, the Company sold 22,360,575 shares of common stock to several accredited investors in private placements at $0.04/share for cash proceeds of $894,423. The Company also sold 2,896,511 shares of common stock to a material lender under the Equity Purchase Agreement described below for gross proceeds of $68,129 ($0.021/share to $0.0281/share), and issued 1,049,044 shares under that agreement for $24,700 recorded as a subscription receivable at June 30, 2026. Together these issuances total 26,306,130 shares for $987,252.
Common Stock Issued on Conversion of Convertible Notes Payable
From July 28, 2025, through February 23, 2026, the Company issued 36,366,895 shares of common stock to two (2) noteholders on conversion of $1,200,107 of principal and accrued interest at the contractual conversion price of $0.033/share.
Common Stock Issued on Conversion of Preferred Stock
| ● | On November 12, 2025, the Company issued 16,313,700 shares of common stock on conversion of all 1,950 outstanding shares of Series B Convertible Preferred Stock. | |
| ● | On December 15, 2025, the Company issued 9,000,000 shares of common stock on conversion of 1,500 shares of Series D Convertible Preferred Stock at 6,000 shares of common stock for each share. | |
| ● | From March 16, 2026, through March 20, 2026, the Company issued 273,804,000 shares of common stock to fourteen (14) holders on conversion of 45,634 shares of Series C Convertible Preferred Stock at 6,000 shares of common stock for each share. |
Common Stock Issued on Cashless Exercise of Warrants
On November 5, 2025, and November 24, 2025, the Company issued 2,465,698 shares of common stock to two (2) warrant holders on the cashless exercise of 3,844,697 warrants with an exercise price of $0.033/share.
Common Stock Issued for Services and Intellectual Property
| ● | On February 1, 2026, the Company issued 2,000,000 shares of common stock to an advisor for services, having a fair value of $84,000 ($0.042/share) based on the quoted closing trading price. | |
| ● | On February 17, 2026, the Company issued 7,000,000 shares of common stock to an individual seller as consideration for intellectual property and technology assets, having a fair value of $253,400 ($0.0362/share) based on the quoted closing trading price. |
Series C Convertible Preferred Stock
| ● | On August 27, 2025, the Company issued 216,667 shares of Series C Convertible Preferred Stock to the sellers of the Victorville hotel property as acquisition consideration, having a fair value of $39,000,060 ($0.03/share of common stock on an as-converted basis). The sellers may earn up to 41,667 additional shares on achievement of post-closing milestones. | |
| ● | On September 30, 2025, the Company issued 176,167 shares of Series C Convertible Preferred Stock to the sellers of the Rancho Mirage hotel property as acquisition consideration, having a fair value of $42,280,080 ($0.04/share of common stock on an as-converted basis). The sellers may earn up to 20,000 additional shares on achievement of post-closing milestones through December 31, 2027. | |
| ● | On October 22, 2025, the Company issued 589 shares of Series C Convertible Preferred Stock to a consultant for services, having a fair value of $282,720 ($0.08/share of common stock on an as-converted basis). | |
| ● | During the fiscal year, 49,096 shares of Series C Convertible Preferred Stock were issued to officers, directors and service providers on vesting of compensation awards granted March 25, 2025, for which the Company recognized compensation expense of $2,003,110. |
Each share of Series C Convertible Preferred Stock is convertible into 6,000 shares of common stock. The shares issued as acquisition consideration and as compensation are subject to contractual lock-up provisions.
Convertible Notes Payable
| ● | On October 8, 2025, January 10, 2026, and March 19, 2026, the Company issued senior secured convertible notes to an institutional investor with face amounts of $2,270,000, $1,175,000 and $1,176,471, respectively, for proceeds of $1,929,500, $998,750 and $1,000,000, respectively, net of original issue discount and before fees of $25,002 (aggregate net cash proceeds of $3,903,248). The notes are convertible at the lower of $0.033/share or 80% of the lowest closing price during the five (5) trading days before conversion. | |
| ● | On March 31, 2026, the Company issued a convertible note of $73,927 to a related party in settlement of accounts payable of the same amount. | |
| ● | On June 18, 2026, the Company issued a convertible note with a face amount of $184,706 to an investor. The note is convertible at the lower of $0.033/share or 80% of the lowest trading price during the ten (10) trading days before conversion. |
Warrants
On October 8, 2025, the Company issued warrants to purchase 6,000,000 shares of common stock at $0.10/share, expiring October 8, 2030, to an institutional investor as a commitment fee under the Equity Purchase Agreement. The warrants had a fair value of $258,723. The exercise price resets to the lowest price at which common stock is sold under the Equity Purchase Agreement, with the number of shares increasing so that the aggregate exercise price of $600,000 is unchanged; at June 30, 2026, the exercise price was $0.02/share and 30,000,000 shares were issuable.
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Stock Options
On May 1, 2026, and June 1, 2026, the Company granted options to purchase 34,030,305 and 600,000 shares of common stock, respectively, at $0.033/share to employees, consultants and members of its advisory board. The options had an aggregate grant date fair value of $937,986.
Exemptions from Registration
| ● | The sales of common stock for cash, the convertible notes, the warrants, the stock options and the securities issued for services, intellectual property and acquisitions were issued in reliance on Section 4(a)(2) of the Securities Act and, where applicable, Rule 506(b) of Regulation D. The recipients were accredited investors with access to information about the Company, no general solicitation was used, and the securities carry restrictive legends. | |
| ● | The shares of common stock issued on conversion of convertible notes and preferred stock and on cashless exercise of warrants were issued in reliance on Section 3(a)(9) of the Securities Act, as exchanges with existing security holders for which no commission or other remuneration was paid. |
No underwriters were involved in any of these transactions. Cash proceeds were used for working capital and general corporate purposes.
f) Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Penny Stock Regulation
Shares of our common stock have been and will likely continue to be subject to rules adopted the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:
| ● | a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; | |
| ● | a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities laws; | |
| ● | a brief, clear, narrative description of a dealer market, including “bid” and “ask” prices for penny stocks and the significance of the spread between the “bid” and “ask” price; | |
| ● | a toll-free telephone number for inquiries on disciplinary actions; | |
| ● | definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and | |
| ● | such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation. |
Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:
| ● | the bid and offer quotations for the penny stock; | |
| ● | the compensation of the broker-dealer and its salesperson in the transaction; | |
| ● | the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and | |
| ● | monthly account statements showing the market value of each penny stock held in the customer’s account. |
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.
Reverse Stock Split
On July 22, 2026, the Board of Directors and the holder of the Company’s Series A Super Voting Preferred Stock, representing a majority of the voting power of the Company’s capital stock, authorized the Board of Directors to effect a reverse stock split of the Company’s common stock at a ratio in the range of 1-for-150 to 1-for-250, to be determined by the Board of Directors based on market conditions and the trading price of the common stock, at any time before July 21, 2027, in connection with a potential listing on a national securities exchange.
On September 9, 2026, the Board of Directors determined the ratio to be 1-for-150 and authorized the filing of a Certificate of Change with the Secretary of State of the State of Nevada.
The reverse stock split becomes effective on the filing of the Certificate of Change with the Secretary of State of the State of Nevada, which may not occur earlier than the twentieth (20th) calendar day after the information statement was first mailed, and on the completion by the Financial Industry Regulatory Authority (“FINRA”) of its processing of the corporate action. As of the date of the filing of this Form 10-K, the reverse stock split had not yet been declared effective.
On effectiveness at a ratio of 1-for-150, every one hundred fifty (150) shares of issued and outstanding common stock will be combined into one (1) share, with fractional shares rounded up to the next whole share at the participant level.
The number of authorized shares of common stock will remain 900,000,000 and the par value will remain $0.001 per share
The approval of the reverse stock split was submitted in furtherance of the Company’s listing application submitted to NASDAQ. The Company understands that there is no assurance that it will meet NASDAQ’s listing qualifications or that NASDAQ will even list the Company.
Item 6. Reserved
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read together with our consolidated financial statements and the related notes included in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors described under “Cautionary Note Regarding Forward-Looking Information” and elsewhere in this report.
Overview
We are a service robotics and hospitality technology company with three (3) reportable segments: Hotel Operations, Foodservice Packaging Distribution and Robotics-as-a-Service (“RaaS”). Our legacy snacks and beverages business was discontinued on June 30, 2025, and is presented as discontinued operations for both years.
Fiscal 2026 was the first year in which all three segments operated. The Company acquired the Holiday Inn Victorville on August 27, 2025, and the Hilton Garden Inn Rancho Mirage on September 30, 2025, each for Series C Convertible Preferred Stock (see Note 9). The hotels contributed $6,455,902 of revenue, or 79% of consolidated revenue, and added property-level operating costs, depreciation, mortgage debt and goodwill to the consolidated financial statements. Operating results at both hotels were below the forecasts on which the purchase prices were negotiated, and in connection with the annual impairment test as of June 30, 2026, we recorded goodwill impairment charges of $61,537,000 on the two (2) hotel reporting units and $2,349,000 on the SWC reporting unit. Goodwill impairment accounts for $63,886,000 of our $84,654,946 net loss for the year and is discussed under item C below and in Note 9.
The matters that we believe are most important to an understanding of our results and financial condition are:
| ● | the goodwill impairment charges of $63,886,000 and the possibility of further impairment if the hotels do not perform to the revised projections (item C); | |
| ● | our dependence on debt and equity financing, our working capital deficit of $29,761,991 and the substantial doubt about our ability to continue as a going concern (see “Liquidity and Capital Resources”); | |
| ● | principal of $7,049,557 that was in default at June 30, 2026, accruing interest at default rates, and a related party revolving line of credit under which further advances are at the lender’s sole discretion; | |
| ● | non-cash charges that move with our stock price, including the change in fair value of derivative liabilities and stock-based compensation, which together accounted for a substantial portion of the loss before the impairment; and | |
| ● | potential dilution from variable-price convertible notes, and the Equity Purchase Agreement. |
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RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2026 AND 2025
| For the Year Ended June 30, | Period Change | |||||||||||||||||
| 2026 | 2025 | $ Change | % Change | Ref | ||||||||||||||
| Revenues - net | $ | 8,127,029 | $ | 482,285 | $ | 7,644,744 | 1585 | % | A | |||||||||
| Cost of sales | 2,807,691 | 412,503 | 2,395,188 | 581 | % | B | ||||||||||||
| Impairment of goodwill | 63,886,000 | 897,542 | 62,988,458 | 7018 | % | C | ||||||||||||
| Depreciation and amortization | 3,194,106 | 45,552 | 3,148,554 | 6912 | % | D | ||||||||||||
| General and administrative expenses | 15,850,047 | 3,673,760 | 12,176,287 | 331 | % | E | ||||||||||||
| Total costs and expenses | 85,737,844 | 5,029,357 | 80,708,487 | 1605 | % | |||||||||||||
| Loss from operations | (77,610,815 | ) | (4,547,072 | ) | (73,063,743 | ) | (1607 | )% | ||||||||||
| Total other income (expense) - net | (7,040,347 | ) | (3,389,112 | ) | (3,651,235 | ) | (108 | )% | ||||||||||
| Net loss from continuing operations | (84,651,162 | ) | (7,936,184 | ) | (76,714,978 | ) | (967 | )% | ||||||||||
| Net loss from discontinued operations | (3,784 | ) | (179,694 | ) | 175,910 | 98 | % | F | ||||||||||
| Provision for income taxes | - | - | - | N/M | ||||||||||||||
| Net loss | $ | (84,654,946 | ) | $ | (8,115,878 | ) | $ | (76,539,068 | ) | (943 | )% | |||||||
A. Revenues - net
Revenues were $8,127,029 for the year ended June 30, 2026, compared to $482,285 for the year ended June 30, 2025. Revenues by reportable segment were:
| ● | Hotel Operations: $6,455,902, or 79% of revenues, from the Victorville and Rancho Mirage hotels from their acquisition dates of August 27, 2025, and September 30, 2025; there were no hotel revenues in fiscal 2025; | |
| ● | Foodservice Packaging Distribution: $1,609,016, or 20% of revenues, compared to $466,633 in fiscal 2025, which included only the quarter following the acquisition of SWC Group, Inc. (“SWC”) on March 31, 2025; and | |
| ● | RaaS: $62,111, or 1% of revenues, compared to $15,652 in fiscal 2025, from pilot deployments and recurring service fees. |
Substantially all of the increase reflects the acquired businesses rather than organic growth. No single customer accounted for 10% or more of consolidated revenues.
B. Cost of Sales
Cost of sales was $2,807,691, compared to $412,503 in fiscal 2025, and consists of property-level operating costs at the hotels (payroll, utilities, guest supplies, food and beverage, and franchise, management and other property costs), product and fulfillment costs at SWC, and direct deployment costs in the RaaS segment. The prior year reflected one quarter of SWC. Cost of sales of the discontinued snacks and beverages business is included in the loss from discontinued operations for both years.
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C. Impairment of Goodwill
We recorded goodwill impairment charges of $63,886,000 for the year ended June 30, 2026, consisting of $29,544,000 at the Victorville reporting unit, $31,993,000 at the Rancho Mirage reporting unit and $2,349,000 at the SWC reporting unit, compared to $897,542 in fiscal 2025 related to goodwill from the February 2024 acquisition of Future Hospitality Ventures Holdings, Inc. The impairment at the SWC reporting unit, which comprises the Foodservice Packaging Distribution segment, resulted from operating results at SWC falling below the expectations and forecasts used at its acquisition date. Its fair value was determined using an income approach prepared with the assistance of a third-party valuation firm and is a Level 3 measurement.
The goodwill recognized on the hotel acquisitions represented the excess of the fair value of the Series C Convertible Preferred Stock issued as consideration, measured at the quoted market price of our common stock on the acquisition dates, over the fair value of the identifiable net assets acquired. The purchase prices were negotiated on forecasts that assumed each hotel would reach stabilized occupancy and average daily rates within the first year of ownership and that the planned renovations would be completed on the schedule and at the cost contemplated at closing. Results at both properties were below those forecasts:
| ● | transient demand in both markets was softer than assumed, and the hotels could not hold the underwritten rate levels without giving up occupancy; | |
| ● | the Rancho Mirage property experienced the seasonal decline in Coachella Valley demand more severely than forecast; | |
| ● | operating costs, principally labor, insurance, utilities and property taxes following reassessment at acquisition, were higher than forecast; and | |
| ● | the renovations took longer and cost more than planned, in part because management temporarily reallocated available funding from the hotel buildouts to the launch of the robotics business while the Nasdaq uplisting process is taking longer than anticipated, pushing the Victorville franchise conversion and the Rancho Mirage guestroom additions into fiscal 2027. |
In the fourth quarter, in connection with the annual impairment test and the fiscal 2027 budget, management revised the projected cash flows of each property for the results achieved since acquisition, a longer period to reach stabilized operations, higher operating costs and the revised timing and cost of the renovation and franchise-conversion plans. The fair value of each reporting unit was estimated with the assistance of a third-party valuation firm using an income approach based on discounted cash flows, corroborated by a market approach based on recent sales of comparable hotels on a price per room basis, and is a Level 3 measurement. No interim test was required through March 31, 2026; the full-year results and revised forecasts were the first indication that fair value was below carrying amount.
Following the charges, the carrying amounts of the Victorville, Rancho Mirage and SWC reporting units approximate their estimated fair values. Further shortfalls in occupancy or average daily rate against the revised projections, delays or cost increases in the renovation and franchise-conversion plans, or an increase in the discount rate could result in additional impairment in future periods. The property and equipment of each hotel was tested for recoverability before goodwill and no impairment of long-lived assets was recognized.
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D. Depreciation and Amortization
Depreciation and amortization was $3,194,106, compared to $45,552 in fiscal 2025. The increase reflects depreciation of the hotel buildings, land improvements and furniture, fixtures and equipment from the acquisition dates and amortization of the franchise, customer relationship and other intangible assets acquired with the hotels and SWC.
E. General and Administrative Expenses
General and administrative expenses were $15,850,047, compared to $3,673,760 in fiscal 2025, an increase of $12,176,287, or 331%. Non-cash charges included in general and administrative expenses were $2,003,110 from the vesting of Series C Convertible Preferred Stock issued as compensation (fiscal 2025: $1,521,840), $439,608 of stock option expense on options granted during the year (fiscal 2025: none), $366,720 of stock issued for services, being $84,000 of common stock and $282,720 of Series C Convertible Preferred Stock (fiscal 2025: $98,195), $253,400 of common stock issued for intellectual property (fiscal 2025: none) and $58,769 of bad debt expense (fiscal 2025: $201,859). General and administrative expenses also include operating lease cost of $488,727 (fiscal 2025: none). The remaining increase reflects:
| ● | a full year of SWC and TechForce Robotics, Inc. (“TechForce”) compensation, occupancy and operating overhead, compared to one quarter in fiscal 2025; | |
| ● | hotel-level and hotel-segment administrative costs, including third-party management, revenue management and information technology, from the acquisition dates; | |
| ● | public company professional fees, including audit, legal, SEC reporting, valuation, transfer agent, directors and officers insurance and investor relations, and the costs of the Nasdaq uplisting process and the pending reverse stock split; and | |
| ● | integration and start-up costs of combining the hotel, packaging and robotics operations, including robotics development and pilot deployment costs. |
Loss from Operations and Segment Operating Performance
Loss from operations was $(77,610,815), compared to $(4,547,072) in fiscal 2025. Operating loss by segment, as reported in Note 13, was:
| ● | Hotel Operations: $(64,000,030), consisting of the goodwill impairment of $61,537,000 and an operating loss before impairment of $(2,463,030), reflecting stabilization-period occupancy and rates, renovation disruption and property-level costs above forecast; |
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| ● | Foodservice Packaging Distribution: $(3,376,232), consisting of the goodwill impairment of $2,349,000 and an operating loss before impairment of $(1,027,232), compared to $(271,347) for the quarter owned in fiscal 2025, reflecting a full year of warehouse, personnel and fulfillment costs against gross margin on $1,609,016 of revenue; | |
| ● | RaaS: $(3,510,266), compared to $(1,319,345) in fiscal 2025 (which included the $897,542 goodwill impairment), reflecting robotics development, pilot deployments and platform commercialization costs ahead of meaningful revenue; and | |
| ● | Corporate overhead: $(6,724,287), compared to $(2,956,380), consisting of public company compliance, executive management, finance and legal costs and the non-cash stock-based compensation described in item E; corporate overhead is not allocated to the reportable segments. |
Other Income (Expense) - net
Other expense, net, was $(7,040,347), compared to $(3,389,112) in fiscal 2025, an increase in net other expense of $3,651,235, or 108%. The increase reflects higher interest expense and amortization of debt discount on the mortgage notes assumed with the hotels and the convertible notes issued during the year, and higher derivative expense on the new convertible notes, partially offset by a non-cash gain on the change in fair value of derivative liabilities and the absence of the prior-year loss on settlement of pre-existing assets. Each line is discussed under “Other Income (Expense) - net” below.
Net Loss from Continuing Operations
Net loss from continuing operations was $(84,651,162), compared to $(7,936,184) in fiscal 2025, an increase of $76,714,978. Of the increase, $62,988,458 is the increase in goodwill impairment and $3,651,235 is the increase in net other expense; the balance is the wider operating loss described in items A through E. No income tax expense or benefit was recorded in either year because a full valuation allowance is maintained against our net deferred tax assets (see Note 16).
F. Net Loss from Discontinued Operations
Net loss from discontinued operations was $(3,784), compared to $(179,694) in fiscal 2025, and consists of residual costs of the legacy snacks and beverages business discontinued on June 30, 2025. Liabilities of discontinued operations of $377,788 at June 30, 2026, consist of accounts payable and accrued liabilities that remain to be settled.
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Net Loss
Net loss was $(84,654,946), compared to $(8,115,878) in fiscal 2025, an increase of $76,539,068. The principal components of the increase were:
| (i) | goodwill impairment charges of $63,886,000, compared to $897,542 in fiscal 2025; | |
| (ii) | an increase of $12,176,287 in general and administrative expenses, of which $3,062,838 was non-cash stock-based compensation and stock issued for intellectual property; | |
| (iii) | depreciation and amortization of $3,194,106 and cost of sales of $2,807,691 of the acquired businesses, against $8,127,029 of revenue; and | |
| (iv) | an increase of $3,651,235 in net other expense, principally interest expense and amortization of debt discount; partially offset by | |
| (v) | a $175,910 reduction in the loss from discontinued operations. |
OTHER INCOME (EXPENSE) - NET
| For the Year Ended June 30, | Period Change | |||||||||||||||||
| 2026 | 2025 | $ Change | % Change | Ref | ||||||||||||||
| Interest income | $ | - | $ | 75,119 | $ | (75,119 | ) | (100 | )% | A | ||||||||
| Other income | 50,142 | 9,810 | 40,332 | 411 | % | B | ||||||||||||
| Other expense | (258,723 | ) | - | (258,723 | ) | N/M | C | |||||||||||
| Loss on debt extinguishment | - | (113,955 | ) | 113,955 | 100 | % | D | |||||||||||
| Derivative expense | (1,438,825 | ) | (653,792 | ) | (785,033 | ) | (120 | )% | E | |||||||||
| Loss on settlement of accounts payable - related party | (109,283 | ) | - | (109,283 | ) | N/M | ||||||||||||
| Interest expense (including amortization of debt discount) | (6,291,338 | ) | (1,526,067 | ) | (4,765,271 | ) | (312 | )% | F | |||||||||
| Change in fair value of derivative liabilities | 1,007,680 | (190,102 | ) | 1,197,782 | 630 | % | G | |||||||||||
| Loss on settlement of pre-existing assets | - | (1,490,803 | ) | 1,490,803 | 100 | % | H | |||||||||||
| Gain on debt extinguishment - derivative liabilities | - | 500,678 | (500,678 | ) | (100 | )% | I | |||||||||||
| Total other income (expense) - net | $ | (7,040,347 | ) | $ | (3,389,112 | ) | $ | (3,651,235 | ) | (108 | )% | |||||||
A. Interest Income
Interest income was none, compared to $75,119 in fiscal 2025, which was earned on advances to SWC before its acquisition; the advances were settled at the acquisition on March 31, 2025 (see item H).
B. Other Income
Other income was $50,142, compared to $9,810 in fiscal 2025, and consists of miscellaneous incidental items.
C. Other Expense
Other expense of $258,723 represents the fair value of the warrant to purchase 6,000,000 shares of common stock issued to a material lender in connection with the Equity Purchase Agreement entered into on October 8, 2025. The warrant is accounted for as a derivative liability (see Notes 8 and 11). There was no comparable charge in fiscal 2025.
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D. Loss on Debt Extinguishment
No loss on debt extinguishment was recognized in fiscal 2026. The fiscal 2025 loss of $(113,955) arose from the July 23, 2024 amendment of two (2) convertible notes, which increased the amounts due by 10% and included the issuance of 1,667 shares of Series D Convertible Preferred Stock, and was accounted for as an extinguishment.
E. Derivative Expense
Derivative expense was $(1,438,825), compared to $(653,792) in fiscal 2025. Derivative expense is the amount by which the fair value of the bifurcated conversion features at issuance exceeds the net proceeds of the related convertible notes. The fiscal 2026 charge arose on four (4) of the five (5) convertible notes issued during the year, being the four (4) notes issued to third parties with an aggregate face amount of $4,806,177. The fiscal 2025 charge arose on the convertible notes issued to former vendors and creditors of SWC in connection with that acquisition.
Loss on settlement of accounts payable - related party was $(109,283), compared to $0 in fiscal 2025, and arose on the convertible note issued to our Chief Revenue Officer in settlement of $73,927 of accounts payable (see Note 5).
F. Interest Expense (including amortization of debt discount)
Interest expense was $(6,291,338), compared to $(1,526,067) in fiscal 2025, an increase of $4,765,271, or 312%. Amortization of debt discount was $3,279,129, compared to $332,021, and the balance is contractual and default interest. The increase reflects:
| ● | interest on the mortgage notes payable secured by the two (2) hotels from the acquisition dates, which totaled $19,192,445 at June 30, 2026; | |
| ● | three (3) senior secured convertible notes issued to an institutional investor on October 8, 2025, January 10, 2026 and March 19, 2026 with an aggregate face amount of $4,621,471 and aggregate net proceeds of $3,903,248, each bearing interest at 15% per annum (24% upon default) with the original issue discount stepping up by 3% of the outstanding balance on each anniversary, and a convertible note issued to an accredited investor on June 18, 2026 with a face amount of $184,706; the debt discounts on these notes, which were limited to the face amount of each note, are amortized to interest expense over their one-year terms; | |
| ● | interest at 10% per annum on the related party revolving line of credit entered into on April 5, 2026, on which $3,392,000 was outstanding at June 30, 2026; and | |
| ● | default interest on notes in default, which carried principal of $7,049,557 at June 30, 2026. |
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G. Change in Fair Value of Derivative Liabilities
We recognized a non-cash gain of $1,007,680 from the remeasurement of our derivative liabilities at June 30, 2026, compared to a loss of $(190,102) in fiscal 2025. The derivative liabilities consist of the bifurcated conversion features of our convertible notes and the commitment warrant issued under the Equity Purchase Agreement, which is classified as a liability because the holder may elect cash settlement upon a change of control. The liabilities are measured using the Black-Scholes option pricing model and are highly sensitive to our common stock price and expected volatility. The gain consists of a $1,726,227 decrease in the fair value of the conversion features as our stock price declined, net of a $718,547 increase in the fair value of the warrant, whose exercise price resets to the lowest price at which we sell common stock under the agreement and was $0.02/share at June 30, 2026 with 30,000,000 shares issuable (see Notes 8 and 11). Derivative liabilities were $5,955,393 at June 30, 2026 (of which $472,050 relates to notes held by our Chief Executive Officer as well as a Board Member), compared to $1,102,992 at June 30, 2025. Changes in fair value can produce significant gains or losses in future periods that do not correlate with our operating performance.
H. Loss on Settlement of Pre-existing Assets
The fiscal 2025 loss of $(1,490,803) arose from the settlement, at the acquisition date, of pre-existing contractual advances between SWC and the Company and its subsidiary FHVH, which were accounted for separately from the SWC business combination and measured at the amount by which the advances were unfavorable to us. There was no comparable item in fiscal 2026.
I. Gain on Debt Extinguishment - Derivative Liabilities
The fiscal 2025 gain of $500,678 arose from the extinguishment of a derivative liability on the conversion of principal of a related party convertible note. There was no comparable item in fiscal 2026.
HOTEL OPERATIONS
The Holiday Inn Victorville, California (155 rooms) was acquired on August 27, 2025 for 216,667 shares of Series C Convertible Preferred Stock valued at $39,000,060, with up to 41,667 additional shares issuable as contingent consideration, and the Hilton Garden Inn Rancho Mirage, California (120 rooms) was acquired on September 30, 2025 for 176,167 shares of Series C Convertible Preferred Stock valued at $42,280,080, with up to 20,000 additional shares issuable as contingent consideration. Both hotels are operated by third-party hotel management companies under franchise agreements, and the Victorville property is operating as an independent hotel pending its franchise conversion.
The hotels are in a stabilization period during which occupancy and rate performance is below long-term targets while operating costs, renovation spending and franchise-mandated property improvements remain elevated. As described in item C, results in fiscal 2026 were below the forecasts on which the purchase prices were negotiated, and the completion of the Victorville franchise conversion and the Rancho Mirage guestroom additions has moved into fiscal 2027. Hotel performance is sensitive to transient and group demand in the Victorville and Coachella Valley markets, seasonality, competitive supply, labor, insurance and property tax costs, and our ability to fund the remaining renovation work. The hotels also serve as deployment sites for TechForce service robots.
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LIQUIDITY AND CAPITAL RESOURCES
Going Concern
For the year ended June 30, 2026, we had a net loss of $(84,654,946) and net cash used in operating activities of $(8,051,852). At June 30, 2026, we had:
| ● | an accumulated deficit of $(131,408,790); | |
| ● | a working capital deficit of $(29,761,991) reflecting current liabilities of $31,957,223 in excess of current assets of $2,195,232; | |
| ● | cash of $865,889, with no cash equivalents; and | |
| ● | total stockholders’ equity of $11,795,678, compared to a stockholders’ deficit of $(17,332,174) at June 30, 2025. |
Revenues from the hotels, SWC and RaaS deployments have not been sufficient to fund operations, and our existing cash is not sufficient to fund operations for the twelve (12) months following the issuance of the consolidated financial statements without additional financing. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date the consolidated financial statements are issued. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might result from this uncertainty. Management’s plans include:
| ● | expanding into new and existing markets, with an emphasis on the RaaS model, including the commercialization of the Beverage Bot platform under the Joint Development, Manufacturing and Licensing Agreement with Oncotelic Therapeutics, Inc. and the Supply Agreement with NUWA Robotics Corp. and Hon Hai Precision Industry Co., Ltd.; | |
| ● | improving hotel revenue and operating margins through revenue-management initiatives, cost controls and completion of the renovation and franchise-conversion plans; | |
| ● | obtaining additional debt and equity financing, including sales under the Equity Purchase Agreement, advances under the related party revolving line of credit and mortgage refinancing; | |
| ● | pursuing strategic collaborations and partnerships and selectively evaluating acquisitions; and | |
| ● | completing the reverse stock split and the planned uplisting to a national securities exchange. |
There can be no assurance that these plans will be successful or that financing will be available on acceptable terms, or at all. If we are unable to obtain sufficient financing, we may be required to slow expansion, reduce operating expenditures, sell or restructure assets, or modify our strategic plans.
| 17 |
Debt in Default and Other Liquidity Considerations
At June 30, 2026, convertible notes and notes payable with principal of $7,049,557 were past their maturity dates and in default, accruing interest at default rates of up to 24% per annum. The holders have not exercised acceleration or collateral remedies as of the date of this report, but there can be no assurance that they will not. Total debt, net of discount, was $34,925,868 at June 30, 2026, of which $19,192,445 is mortgage debt on the hotels and $6,688,967 is the current portion of convertible notes payable, net.
On April 5, 2026, we entered into a revolving line of credit with a related party lender providing for advances of up to $10,000,000 at the lender’s sole discretion, bearing interest at 10% per annum, secured by a first priority lien on substantially all of our assets, and expiring April 5, 2027. The lender is a related party because it has significant influence and control over our hotel properties. At June 30, 2026, $3,392,000 was outstanding. The remaining $6,608,000 is not a commitment, the lender may terminate further advances on thirty (30) days’ notice, and an event of default (including a default under other indebtedness exceeding $25,000, a delisting or suspension of trading, or a material adverse change as determined by the lender) permits the lender to accelerate and exercise its rights against the collateral. Our existing defaults on other notes could constitute an event of default under the line.
Under the Equity Purchase Agreement entered into on October 8, 2025, we may sell up to $25,000,000 of common stock to a material lender at our discretion over twenty-four (24) months at prices based on the market price at the time of each sale. During fiscal 2026 we sold 25,257,086 shares for $962,552 in private placements and under the agreement ($0.021/share to $0.04/share). Sales under the agreement, conversions of convertible notes at variable prices at a discount to market, conversion of the Series C and Series D Convertible Preferred Stock and exercise of outstanding options and warrants would dilute existing stockholders, and sales at lower prices reduce the proceeds available to us.
Subsequent to June 30, 2026, we received net proceeds of $531,000 from three (3) convertible notes with an aggregate face amount of $655,295, $500,000 from the sale of 10,000,000 shares of common stock in private placements and $74,030 from sales of 2,981,972 shares under the Equity Purchase Agreement. The convertible notes bear interest at 15% per annum, mature twelve (12) months from issuance and are convertible at a discount to the market price of our common stock. The $2,270,000 senior secured convertible note issued on October 8, 2025 matured on October 8, 2026 and was not repaid; it is in default and bears interest at 24% per annum. See Note 17 to the consolidated financial statements.
On July 22, 2026, our Board of Directors and the holder of a majority of the voting power of our capital stock authorized our Board of Directors to effect a reverse stock split of our common stock at a ratio in the range of 1-for-150 to 1-for-250, to be determined by the Board of Directors based on market conditions and the trading price of our common stock, at any time before July 21, 2027, in connection with a potential listing on a national securities exchange. On September 9, 2026, our Board of Directors determined the ratio to be 1-for-150 and authorized the filing of a Certificate of Change with the Secretary of State of the State of Nevada. The reverse stock split becomes effective on the filing of the Certificate of Change and the completion by the Financial Industry Regulatory Authority of its processing of the corporate action, and had not been declared effective as of the date of this report. Share and per-share amounts in this report have not been adjusted. Our Board of Directors may abandon the reverse stock split, or determine a different ratio within the authorized range, at any time before it becomes effective. On effectiveness, the conversion ratios, conversion prices and exercise prices of outstanding preferred stock, convertible notes, warrants and options will be proportionately adjusted, the number of authorized shares of common stock will remain 900,000,000 and the par value will remain $0.001 per share.
| 18 |
Working Capital
| Period Change | ||||||||||||||||||
| June 30, 2026 | June 30, 2025 | $ Change | % Change | Ref | ||||||||||||||
| Cash | $ | 865,889 | $ | 350,231 | $ | 515,658 | 147 | % | A | |||||||||
| Total Current Assets | 2,195,232 | 777,466 | 1,417,766 | 182 | % | B | ||||||||||||
| Total Current Liabilities | 31,957,223 | 11,466,233 | 20,490,990 | 179 | % | C | ||||||||||||
| Working capital (deficit) | $ | (29,761,991 | ) | $ | (10,688,767 | ) | $ | (19,073,224 | ) | (178 | )% | D | ||||||
Cash increased $515,658 to $865,889 at June 30, 2026, reflecting $7,876,420 of net financing proceeds and $1,269,000 of cash acquired with the hotels, offset by $8,051,852 of cash used in operating activities and $577,910 of capital expenditures. The increase in the working capital deficit of $19,073,224 reflects the current liabilities assumed or incurred with the acquired businesses and the financings described above, including the line of credit - related party of $3,392,000, the current portion of convertible notes payable of $6,688,967, notes payable of $5,198,020, derivative liabilities of $5,955,393 and accounts payable and accrued expenses of $8,919,654, including $4,060,420 due to related parties.
Summary of Cash Flows
| For the Year Ended June 30, | Period Change | |||||||||||||||||
| 2026 | 2025 | $ Change | % Change | Ref | ||||||||||||||
| Net cash used in operating activities | $ | (8,051,852 | ) | $ | (1,634,483 | ) | $ | (6,417,369 | ) | (393 | )% | A | ||||||
| Net cash provided by (used in) investing activities | 691,090 | (602,118 | ) | 1,293,208 | 215 | % | B | |||||||||||
| Net cash provided by financing activities | 7,876,420 | 2,449,172 | 5,427,248 | 222 | % | C | ||||||||||||
| Net increase in cash | $ | 515,658 | $ | 212,571 | $ | 303,087 | 143 | % | ||||||||||
A. Operating Activities
Cash used in operating activities was $(8,051,852), compared to $(1,634,483) in fiscal 2025. The net loss from continuing operations of $(84,651,162) included non-cash charges of $63,886,000 for goodwill impairment, $3,194,106 of depreciation and amortization, $348,502 of amortization of the operating lease right-of-use asset, $3,279,129 of amortization of debt discount, $2,809,438 of stock-based compensation, $1,438,825 of derivative expense, $109,283 of loss on settlement of accounts payable - related party, $258,723 of commitment fee expense, $253,400 of stock issued for intellectual property, $58,769 of bad debt expense and $48,805 of interest added to debt, offset by the $1,007,680 gain on the change in fair value of derivative liabilities. Working capital provided $2,027,011, principally a $3,792,037 increase in accounts payable and accrued expenses due to related parties (accrued compensation and bonuses of officers and directors, accrued interest on related party notes and the related party line of credit and expenses paid on our behalf) and a $54,844 decrease in inventory, offset by a $1,076,645 decrease in trade accounts payable and accrued expenses, a $540,281 increase in prepaids and other and a $172,440 increase in accounts receivable. Discontinued operations used $105,001.
| 19 |
B. Investing Activities
Investing activities provided $691,090, consisting of $1,269,000 of cash acquired with the hotels, offset by $577,910 of purchases of property and equipment, principally robotics units and parts, hotel furniture, fixtures and equipment and renovation costs. The hotels themselves were acquired for Series C Convertible Preferred Stock and are non-cash investing activities. In fiscal 2025, investing activities used $(602,118), consisting of $429,607 of advances to acquisition targets and $200,851 of purchases of property and equipment, offset by $28,340 of cash acquired.
C. Financing Activities
Financing activities provided $7,876,420, compared to $2,449,172 in fiscal 2025, consisting of:
| ● | $4,053,248 of net proceeds from convertible notes payable, including $3,903,248 from the three (3) senior secured convertible notes issued on October 8, 2025, January 10, 2026 and March 19, 2026; | |
| ● | $3,182,000 of cash advances under the related party revolving line of credit; | |
| ● | $962,552 of proceeds from sales of common stock, less $9,571 of direct offering costs; offset by | |
| ● | $291,555 of principal repayments on the hotel mortgage notes and $20,254 of repayments on notes payable. |
Fiscal 2025 financing consisted of $1,547,000 of proceeds from notes payable and $959,650 from a convertible note, less repayments of $57,478. Non-cash financing activities during fiscal 2026 included $1,200,107 of common stock issued on conversion of convertible notes, the issuance of a related party convertible note for $73,927 of accounts payable and the reclassification of $210,000 of accounts payable - related party to the line of credit - related party; see the supplemental cash flow information in the consolidated statements of cash flows.
Contractual Obligations and Off-Balance Sheet Arrangements
Our contractual obligations consist of the debt described in Note 5, including scheduled principal payments on the hotel mortgage notes, the SWC warehouse lease with total remaining payments as set out in Note 15, franchise and management agreements for the hotels, and the contingent consideration and earnout arrangements described in Notes 9 and 15. We have no off-balance sheet arrangements.
| 20 |
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and other assumptions we believe to be reasonable, and actual results may differ materially. Note 2 describes our significant accounting policies. The estimates we consider critical because they involve the greatest degree of judgment and could have the most significant effect on our financial condition and results are:
| ● | Goodwill impairment. Goodwill is tested annually as of June 30, and between annual tests when indicators exist, by comparing the fair value of each reporting unit with its carrying amount. Each hotel is a separate reporting unit. Fair value is estimated using a discounted cash flow model corroborated by a market approach; the significant assumptions are projected occupancy and average daily rates, projected operating expenses, the capital expenditures and timing to complete the renovations and franchise conversion, the discount rate and the terminal capitalization rate, all of which are Level 3 inputs. The fiscal 2026 charges of $63,886,000 reduced the carrying amounts of the hotel and SWC reporting units to approximately their fair values, so any further shortfall against the revised projections could result in additional impairment. | |
| ● | Business combinations. The hotel acquisitions were accounted for under ASC 805. Consideration paid in Series C Convertible Preferred Stock was measured at the quoted market price of the underlying common stock on the acquisition dates, and the purchase prices were allocated to land, buildings and improvements, furniture, fixtures and equipment, identifiable intangible assets and assumed liabilities, including the mortgage notes, based on third-party valuations. Contingent consideration was measured at fair value and classified in equity. The allocations were finalized in fiscal 2026 without measurement period adjustments. | |
| ● | Derivative liabilities. The conversion features of convertible notes whose conversion price varies with the market price of our common stock are bifurcated and carried at fair value using the Black-Scholes option pricing model, with changes in fair value recognized in other income (expense). The principal inputs are our stock price, expected volatility, the expected term and the risk-free rate. At issuance, fair value in excess of net proceeds is recognized as derivative expense and the related debt discount is amortized to interest expense over the term of the note. | |
| ● | Going concern. Management evaluates each reporting period whether conditions raise substantial doubt about our ability to continue as a going concern within one year after the financial statements are issued, and whether management’s plans, considered only to the extent probable of implementation, alleviate that doubt. The evaluation relies on cash flow forecasts and assumptions about available financing. | |
| ● | Stock-based compensation. Options and warrants are valued using the Black-Scholes model with assumptions for volatility, expected term and the risk-free rate, and expense is recognized over the requisite service period. Performance-based warrants under the February 1, 2026 advisory agreement are expensed only when achievement of the milestone is probable, which management assessed as not probable at June 30, 2026. Series C Convertible Preferred Stock issued as compensation is expensed as it vests. | |
| ● | Recoverability of long-lived assets. Each hotel is an asset group tested for recoverability under ASC 360 when indicators exist; undiscounted cash flows exceeded carrying amounts at June 30, 2026 and no impairment was recognized. | |
| ● | Fair value measurements. Our recurring Level 3 measurements are the derivative liabilities described above, and our nonrecurring Level 3 measurements are the fair values of the hotel reporting units used in the goodwill impairment test and of the assets acquired and liabilities assumed in the hotel acquisitions. Each depends on unobservable inputs, and small changes in those inputs can materially change the amounts recognized. | |
| ● | Revenue recognition. Revenue is recognized under ASC 606 when control of goods or services transfers to the customer. The judgments that most affect the amounts recognized are the identification of performance obligations in our RaaS arrangements, where installation, integration and training are not distinct from the ongoing monthly service, the conclusion that we are the principal in our RaaS, foodservice packaging and hotel arrangements, and the timing of hotel revenue, which is recognized as each night of occupancy and each ancillary service is provided. |
There were no changes in our critical accounting policies during the year ended June 30, 2026. See Note 2 for recently issued accounting pronouncements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risks.
Disclosure in response to this Item is not required for a smaller reporting company.
| 21 |
Item 8. Financial Statements and Supplementary Data.
Our consolidated financial statements, the notes thereto, and the report thereon, appear commencing on page F-1 of this Annual Report on Form 10-K, which consolidated financial statements, notes, and report are incorporated herein by reference.
Nightfood Holdings, Inc. and Subsidiaries
DBA TechForce Robotics
| 22 |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Nightfood Holdings, Inc. and Subsidiaries
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of Nightfood Holding, Inc and subsidiaries (the Company) as of June 30, 2026, and the related consolidated statement of operation, statement of changes in temporary equity and stockholders’ equity (deficit), and statements of cash flow for the year ended June 30, 2026, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026, and the results of its operation and its cash flows for the year ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has accumulated losses to date that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. 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 audit to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated 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.
| F-1 |
Business Combinations –Refer to Note 9 to the Consolidated Financial Statements
Critical Audit Matter Description
As discussed in Note 9 to the consolidated financial statements, the Company completed the acquisitions of Victorville Treasure Holdings, LLC on August 27, 2025 and Treasure Mountain Holdings, LLC on September 30, 2025, for total consideration of approximately $93.2 million, including contingent consideration. The transactions resulted in the recognition of significant amounts of goodwill, acquired hotel properties, franchise agreements, mortgage debt, and contingent consideration.
We identified the accounting for these business combinations as a critical audit matter because the recognition and measurement of the assets acquired and liabilities assumed required management to exercise significant judgment in:
| ● | Determining the fair value of consideration transferred, including Series C Convertible Preferred Stock and contingent consideration; | |
| ● | Determining the fair value of acquired land, buildings, furniture, fixtures and equipment, franchise agreements, and other identifiable assets; | |
| ● | Determining the fair value of assumed liabilities, including mortgage notes payable; and | |
| ● | Evaluating the reasonableness of the purchase price allocations in accordance with ASC 805, Business Combinations. |
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the business combinations included, among others, the following:
| ● | Obtained and evaluated the executed purchase and acquisition agreements and other underlying transaction documents. | |
| ● | Assessed management’s conclusion that the transactions qualified as business combinations under ASC 805. | |
| ● | Tested the valuation and recognition of consideration transferred, including the fair value of Series C Convertible Preferred Stock and contingent consideration. | |
| ● | Evaluated management’s purchase price allocations and tested the identification, valuation, and recognition of acquired assets and assumed liabilities. | |
| ● | With the assistance of valuation specialists, evaluated the methodologies, assumptions, and inputs utilized in estimating the fair values of acquired land, buildings, furniture, fixtures and equipment, franchise agreements, and mortgage debt. | |
| ● | Assessed the reasonableness of management’s assumptions and the valuation reports utilized in determining acquisition-date fair values. | |
| ● | Evaluated the adequacy of the Company’s disclosures related to the acquisitions. |
Goodwill Impairment –Refer to Notes 2 and 9 to the Consolidated Financial Statements
Critical Audit Matter Description
As discussed in Notes 2 and 9 to the consolidated financial statements, the Company recorded goodwill impairment charges of approximately $63.9 million during the year ended June 30, 2026, consisting of impairment charges of $29.6 million related to the Victorville reporting unit, $32.0 million related to the Rancho Mirage reporting unit, and $2.3 million related to the SWC reporting unit. Fair value was determined using income and market approaches and represented Level 3 fair value measurements. Significant assumptions included projected occupancy levels, average daily rates, operating expenses, capital expenditures, franchise conversion timing, discount rates, terminal capitalization rates in the projected cash flows and selecting multiples of revenue within the observed range, considering factors specific to the measurement, with inputs consistent with the characteristics market participants would take into account and maximum use of observable inputs.
We identified the goodwill impairment assessment as a critical audit matter because auditing management’s estimates involved especially subjective auditor judgment due to the significant estimation uncertainty associated with forecasting future operating performance and determining the fair values of the reporting units.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the goodwill impairment assessment included, among others, the following:
| ● | Obtained an understanding of management’s goodwill impairment assessment process. | |
| ● | Evaluated management’s identification of reporting units and the allocation of goodwill to those reporting units. | |
| ● | Assessed the appropriateness of the valuation methodologies utilized in estimating reporting unit fair values. |
| F-2 |
| ● | Evaluated the reasonableness of significant assumptions including projected occupancy rates, average daily rates, revenue growth reates, operating margins, capital expenditures, discount rates, terminal capitalization rates, and projected cash flows. | |
| ● | Compared management’s forecasts to historical operating results, acquisition-date projections, and available market information. | |
| ● | With the assistance of internal valuation specialists, evaluated the reasonableness of valuation methodologies and significant assumptions used in the impairment analyses. | |
| ● | Performed sensitivity analyses on key assumptions used in the valuation models. | |
| ● | Tested the mathematical accuracy of the discounted cash flow model and the completeness and accuracy of underlying data | |
| ● | Evaluated the adequacy of the related disclosures in the consolidated financial statements. |
Derivative Liabilities and Convertible Debt Accounting – Refer to Notes 5, 11, and 12 to the Consolidated Financial Statements
Critical Audit Matter Description
As discussed in Notes 5, 11, and 12 to the consolidated financial statements, the Company accounted for certain embedded conversion features associated with convertible debt instruments and a commitment warrant as derivative liabilities under ASC 815. As of June 30, 2026, derivative liabilities totaled approximately $6.0 million. During the year, the Company recognized derivative expense of approximately $1.4 million and a gain from changes in fair value of derivative liabilities of approximately $1.0 million. The derivative liabilities were valued using the Black-Scholes option pricing model and represented Level 3 fair value measurements. Significant assumptions included expected volatility, expected term, risk-free interest rates, stock price, and exercise price.
We identified the accounting for derivative liabilities and convertible debt instruments as a critical audit matter because auditing management’s conclusions required specialized knowledge and significant auditor judgment in evaluating the application of ASC 815 and assessing the valuation methodologies, assumptions, and inputs used in measuring the fair value of derivative liabilities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to derivative liabilities and convertible debt instruments included, among others, the following:
| ● | Obtained and evaluated debt agreements, amendments, warrants, and related financing documents. | |
| ● | Assessed management’s conclusions regarding the application of ASC 815, Derivatives and Hedging, and ASC 470, Debt, and ASC 480, Distinguishing Liabilities from Equity. | |
| ● | Evaluated whether contractual provisions required bifurcation and separate accounting as derivative liabilities. | |
| ● | Tested the completeness and accuracy of debt instruments and related derivative arrangements identified by management. | |
| ● | Evaluated the appropriateness of valuation methodologies used in determining the fair value of derivative liabilities. | |
| ● | Tested significant assumptions and inputs used in the Black-Scholes valuation models, including expected volatility, expected term, risk-free interest rates, stock price, and exercise price. | |
| ● | Tested the mathematical accuracy of the derivative liability calculations and related gains and losses recognized in earnings. | |
| ● | Evaluated the adequacy of the Company’s financial statement disclosures related to derivative liabilities and convertible debt instruments. |
/s/
We have served as the Company’s auditor since 2025.
October 13, 2026
| F-3 |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Nightfood Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Nightfood Holdings, Inc. (“the Company”) as of June 30, 2025, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the year ended June 30, 2025, and the related notes (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 June 30, 2025 and the results of its operations and its cash flows for the year ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has an accumulated deficit, limited available cash resources and does not believe cash on hand will be sufficient to fund operations and growth. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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 audit, 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
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.
| F-4 |
Business Combinations – Refer to Note 9 to the financial statements.
Critical Audit Matter Description
As discussed in Note 9, on March 31, 2025, the Company entered into share exchange agreements whereby the Company agreed to acquire SWC Group, Inc. (“SWC”) and Skytech Automated Solutions, Inc. (“Skytech”) through a share exchange and SWC and Skytech became wholly-owned subsidiaries. We identified the evaluation of these business combinations as a critical audit matter. The recognition and measurement of business combinations require management to exercise significant judgment in:
| ● | Determining whether the transactions meet the definition of a business combination under ASC 805, Business Combinations; | |
| ● | Selecting and applying appropriate valuation methodologies to estimate the acquisition-date fair value of consideration transferred and the fair value of assets acquired and liabilities assumed, including intangible assets and contingent consideration; |
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to evaluating the business combinations included, among others, the following:
| ● | We obtained and read the executed share exchange agreements. | |
| ● | We evaluated whether the acquisitions met the definition of a business combination under ASC 805, including the identified accounting acquirer, acquiree, and acquisition date. | |
| ● | We inspected supporting documents for equity instruments issued and reconciled them to the Company’s stock records. | |
| ● | We tested the valuation and recognition of consideration paid, including assessing the reasonableness of valuation techniques and related inputs on the acquisition date. | |
| ● | We assessed the recognition of identifiable intangible assets, goodwill, and liabilities assumed pursuant to ASC 805. | |
| ● | We evaluated the adequacy and completeness of the Company’s financial statement disclosures regarding the business combinations. |

| We served as the Company’s auditor from 2024 to 2025. |
| October 13, 2025 |
| F-5 |
Nightfood Holdings, Inc. and Subsidiaries
DBA TechForce Robotics
Consolidated Balance Sheets
| June 30, 2026 | June 30, 2025 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable - net | ||||||||
| Inventory | ||||||||
| Prepaids and other | ||||||||
| Total Current Assets | ||||||||
| Property and equipment - net | ||||||||
| Operating lease - right-of-use asset | ||||||||
| Goodwill | ||||||||
| Intangible assets - net | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable and accrued expenses - related parties | ||||||||
| Deferred revenue | ||||||||
| Line of credit - related party | ||||||||
| Convertible notes payable - net | ||||||||
| Convertible notes payable - related parties - net | ||||||||
| Note payable - related party | ||||||||
| Mortgage notes payable | ||||||||
| Derivative liabilities | ||||||||
| Derivative liabilities - related parties | ||||||||
| Notes payable - net | ||||||||
| Operating lease liability | ||||||||
| Liabilities of discontinued operations | ||||||||
| Total Current Liabilities | ||||||||
| Long Term Liabilities | ||||||||
| Convertible notes payable - net | ||||||||
| Convertible notes payable - related parties - net | ||||||||
| Mortgage notes payable | ||||||||
| Notes payable - net | ||||||||
| Line of credit - related party | ||||||||
| Operating lease liability | ||||||||
| Total Long Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Temporary Equity | ||||||||
| Series B, Convertible Preferred stock - $ par value; and shares designated and shares issued and outstanding, respectively | ||||||||
| Series C, Convertible Preferred stock - $ par value; and shares designated and shares issued and outstanding, respectively | ||||||||
| Series D, Convertible Preferred stock - $ par value; and shares designated and shares issued and outstanding, respectively | ||||||||
| Total Temporary Equity | ||||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Preferred stock - $ par value; shares authorized | ||||||||
| Series A Preferred stock - $ par value; shares designated shares issued and outstanding | ||||||||
| Series B, Convertible Preferred stock - $ par value; and shares designated shares issued and outstanding | ||||||||
| Series C, Convertible Preferred stock - $ par value; and shares designated and shares issued and outstanding, respectively | ||||||||
| Series D, Convertible Preferred stock - $ par value; and shares designated and shares issued and outstanding, respectively | ||||||||
| Common stock - $ par value, shares authorized and shares outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Less: subscription receivable ( and shares) | ( | ) | ||||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ||||||
| Total Liabilities, Temporary Equity and Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-6 |
Nightfood Holdings, Inc. and Subsidiaries
DBA TechForce Robotics
Consolidated Statements of Operations
| For the Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues - net | $ | $ | ||||||
| Costs and expenses | ||||||||
| Cost of sales | ||||||||
| Impairment of goodwill | ||||||||
| Depreciation and amortization | ||||||||
| General and administrative expenses | ||||||||
| Total costs and expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Interest income | ||||||||
| Other income | ||||||||
| Other expense | ( | ) | ||||||
| Loss on debt extinguishment | ( | ) | ||||||
| Derivative expense | ( | ) | ( | ) | ||||
| Loss on settlement of accounts payable - related party | ( | ) | ||||||
| Interest expense (including amortization of debt discount) | ( | ) | ( | ) | ||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Loss on settlement of pre-existing assets | ( | ) | ||||||
| Gain on debt extinguishment - derivative liabilities | ||||||||
| Total other income (expense) - net | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Deemed dividend on Series B Preferred Stock | ( | ) | ||||||
| Net loss available to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Loss per share - basic and diluted - continuing operations | $ | ) | $ | ) | ||||
| Loss per share - basic and diluted - discontinued operations | $ | ) | $ | ) | ||||
| Loss per share - basic and diluted | $ | ) | $ | ) | ||||
| Weighted average number of shares - basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-7 |
Nightfood Holdings, Inc. and Subsidiaries
DBA TechForce Robotics
Consolidated Statement of Changes in Temporary Equity and Stockholders’ Equity (Deficit)
For the Year Ended June 30, 2026
| Preferred Stock - Classified as Temporary Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series B - Convertible | Series C - Convertible | Series D - Convertible | Additional | Total | Series A | Series C - Convertible | Series D - Convertible | Additional | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Preferred Stock | Paid-in | Temporary | Preferred Stock | Preferred Stock | Preferred Stock | Common Stock | Paid-in | Accumulated | Subscription | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Equity | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Receivable | (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | | $ | $ | | $ | $ | $ | | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of Rancho Mirage | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of Victorville | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cashless exercise of warrants | - | - | - | - | - | - | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contingent consideration - acquisition of Rancho Mirage | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contingent consideration - acquisition of Victorville | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of accrued interest payable into common stock | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of convertible debt into common stock | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series B preferred stock into common stock | ( | ) | ( | ) | - | - | - | - | ( | ) | ( | ) | - | - | - | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series C preferred stock to common stock | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series D preferred stock into common stock | - | - | - | - | - | - | (1,500 | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forgiveness of pre-existing relationship with target acquiree | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of contingent consideration - Rancho Mirage | - | - | - | - | - | - | ( | ) | ( | ) | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of contingent consideration - Victorville | - | - | - | - | - | - | ( | ) | ( | ) | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of Series C preferred stock from temporary to permanent equity | - | - | ( | ) | ( | ) | - | - | ( | ) | ( | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of Series D preferred stock from temporary to permanent equity | - | - | - | - | ( | ) | ( | ) | ( | ) | ( | ) | - | - | - | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued for cash | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued for cash - subscription receivable | - | - | - | - | - | - | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash paid as direct offering costs | - | - | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued for intellectual property | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued for services - series C preferred stock | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued for services - common stock | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of Series C - convertible preferred stock - issued as compensation | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recognition of stock based compensation - stock options | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| F-8 |
Nightfood Holdings, Inc. and Subsidiaries
Consolidated Statement of Changes in Temporary Equity and Stockholders’ Equity (Deficit)
For the Year Ended June 30, 2025
| Preferred Stock - Classified as Temporary Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series B - Convertible | Series C - Convertible | Series D - Convertible | Additional | Total | Series A | Additional | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Preferred Stock | Paid-in | Temporary | Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Equity | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Series C - convertible preferred stock issued for services | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on debt extinguishment | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Deemed dividend - Series B convertible preferred stock - warrant dilution adjustment | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of SWC | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of Skytech | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of Series C - convertible preferred stock - issued as compensation | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued in connection with conversion of convertible notes payable | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-9 |
Nightfood Holdings, Inc. and Subsidiaries
DBA TechForce Robotics
Consolidated Statements of Cash Flows
| For the Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Less: net loss - discontinued operations | ( | ) | ( | ) | ||||
| Net loss - continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right-of-use asset | ||||||||
| Loss on debt extinguishment | ||||||||
| Loss on settlement of pre-existing assets | ||||||||
| Derivative expense | ||||||||
| Loss on settlement of accounts payable - related party | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Gain on debt extinguishment - derivative liabilities | ( | ) | ||||||
| Amortization of debt discount | ||||||||
| Bad debt expense | ||||||||
| Stock issued for services | ||||||||
| Stock issued for intellectual property | ||||||||
| Vesting of Series C - preferred stock - issued as compensation | ||||||||
| Recognition of stock based compensation - stock options | ||||||||
| Interest expense incurred in connection with increase in debt principal | ||||||||
| Impairment of goodwill | ||||||||
| Recognition of commitment fee expense | ||||||||
| Changes in operating assets and liabilities | ||||||||
| (Increase) decrease in | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Prepaids and other | ( | ) | ||||||
| Increase (decrease) in | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accounts payable and accrued expenses - related party | ( | ) | ||||||
| Deferred revenues | ||||||||
| Operating lease liability | ( | ) | ||||||
| Net cash used in operating activities - continuing operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities - discontinued operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities | ||||||||
| Cash acquired in acquisitions | ||||||||
| Acquisition of property and equipment | ( | ) | ( | ) | ||||
| Advances to future targets - including interest receivable | ( | ) | ||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Financing activities | ||||||||
| Proceeds from common stock issued for cash | ||||||||
| Cash paid as direct offering costs | ( | ) | ||||||
| Proceeds from notes payable | ||||||||
| Repayments on notes payable | ( | ) | ( | ) | ||||
| Proceeds from convertible notes payable | ||||||||
| Repayments on convertible notes payable | ( | ) | ||||||
| Proceeds from line of credit - related party | ||||||||
| Repayments on mortgage notes payable | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash | ||||||||
| Cash - beginning of year | ||||||||
| Cash - end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income tax | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Issuance of Series C - convertible preferred stock in connection with acquisition of Rancho Mirage | $ | $ | ||||||
| Issuance of Series C - convertible preferred stock in connection with acquisition of Victorville | $ | $ | ||||||
| Contingent consideration arrangement - Series C - convertible preferred stock - Victorville | $ | $ | ||||||
| Contingent consideration arrangement - Series C - convertible preferred stock - Rancho Mirage | $ | $ | ||||||
| Forgiveness of pre-existing relationship with target acquiree | $ | $ | ||||||
| Net deficit of Victorville and Rancho Mirage acquisitions | $ | $ | ||||||
| Discounts in connection with issuance of debt and warrants - convertible notes payable | $ | $ | ||||||
| Right-of-use asset obtained in exchange for new operating lease liability | $ | $ | ||||||
| Common stock issued in connection with conversion of convertible notes payable | $ | $ | ||||||
| Cashless exercise of warrants | $ | $ | ||||||
| Conversion of accounts payable into convertible note payable - related party | $ | $ | ||||||
| Conversion of accounts payable into note payable - related party | $ | $ | ||||||
| Common stock issued in exchange for subscription receivable | $ | $ | ||||||
| Reclassification from
accounts payable - related party to line of credit - related party | $ | $ | ||||||
| Issuance of Series C - convertible preferred stock in connection with acquisition of SWC | $ | $ | ||||||
| Issuance of Series C - convertible preferred stock in connection with acquisition of Skytech | $ | $ | ||||||
| Deemed dividend associated with Series B, convertible preferred stock - dilutive warrant adjustments | $ | $ | ||||||
| Net equity of SWC acquired | $ | $ | ||||||
| Net equity of Skytech acquired | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-10 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Note 1 - Organization and Nature of Operations
Organization and Nature of Operations
Nightfood Holdings, Inc. and its subsidiaries (“Nightfood,” “NGTF,” “we,” “our,” or the “Company”) is a service robotics and hospitality technology company. The Company develops, deploys, and commercializes AI-powered autonomous robots for the hospitality, foodservice, and facilities-management industries.
The Company also has acquired and operates hotel properties, which serve both as hospitality operations and as deployment sites for its robotics solutions.
The Company’s subsidiary SWC Group, Inc. (d/b/a CarryOutSupplies.com) distributes disposable foodservice packaging and provides logistics and supply-chain support to the Company’s other operations.
The Company’s operations are organized into three (3) principal business segments, with a fourth legacy line presented as discontinued operations:
| 1. | Foodservice Packaging: |
Through its wholly owned subsidiary SWC Group, Inc. (d/b/a CarryOutSupplies.com) (“SWC”), the Company operates as a business-to-business (“B2B”) enterprise focused on the wholesale distribution of disposable foodservice packaging products.
Product offerings include printed paper cups, plastic cups, food containers, bags, and related consumables for restaurants, cafés, and other foodservice establishments. Operations are conducted primarily through the Company’s e-commerce platform, www.carryoutsupplies.com, which serves customers across the United States.
Activities include product design, sourcing from domestic and international manufacturers, quality control, warehousing, and fulfillment. Customers are primarily small to mid-sized businesses in the hospitality and foodservice industries, with no material dependence on any single customer or supplier.
This segment began operations in connection with the acquisition of SWC Group, Inc. on March 31, 2025.
| F-11 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| 2. | Robotics-as-a-Service (RaaS): |
Through its subsidiaries, TechForce Robotics, Inc. (formerly Skytech Automated Solutions, Inc.) (“TechForce”) and Future Hospitality Ventures Holdings, Inc. (“FHVH”), the Company develops and delivers automation solutions that perform routine and repetitive tasks in foodservice and hospitality operations.
On February 2, 2024, FHVH began operating under the trade name RoboOp365.
On September 2, 2025, Skytech Automated Solutions, Inc. changed its name to TechForce Robotics, Inc.
Business Model
The Company offers its automation solutions under a Robotics-as-a-Service (RaaS) model, generally structured as multi-year lease and service agreements following an initial pilot and site-preparation period. Under these arrangements, customers pay a recurring monthly fee for deployed equipment and related services. Fees may vary depending on the scale of deployment, number of units, and customer-specific requirements. The Company recognizes revenue on a monthly basis as services are rendered.
| 3. | Hospitality Asset Ownership: |
The Company acquires, owns, and operates hotel properties, which serve both as hospitality operations and as deployment sites for the Company’s automation technologies. The hospitality segment became active in the fiscal year ended June 30, 2026 with the acquisitions of two (2) hotel properties described in Note 9.
Franchise Operations
The Company owns and operates its hotels under long-term franchise agreements with established national hotel brands. These arrangements grant the Company the right to operate its hotels using the brand’s trademarks, systems, reservation channels, and operating standards in exchange for various franchise-related fees, which generally include:
| ● | Royalty fees, typically calculated as a percentage of room revenue; |
| F-12 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Marketing, loyalty, and reservation assessments supporting brand-wide advertising and distribution systems; and | |
| ● | System fees associated with participation in required brand programs and technology platforms. |
Under each franchise agreement, the Company is required to comply with the brand’s operating manuals, service standards, and property-level specifications, including ongoing maintenance, periodic upgrades, and compliance with brand-mandated property improvement plans (“PIPs”). Failure to meet these requirements may result in financial penalties or loss of franchise rights. Franchise agreements generally have initial terms of 10 to 20 years and include renewal options subject to the franchisor’s approval. Transfers, encumbrances, or material modifications of a franchised hotel typically require prior franchisor consent.
The Company engages third-party hotel management companies to operate the hotel properties, as required under applicable franchise agreements. While day-to-day operations are managed by third-party operators, the Company retains responsibility for capital expenditures, compliance with franchise brand standards, and oversight of financial and operating performance.
The hotel acquisitions have been accounted for as business combinations under ASC 805, Business Combinations. See Note 9.
| 4. | Snack and Beverages (Discontinued Operations): |
The Company previously operated a small legacy business selling snacks and beverages, which was discontinued on June 30, 2025 and is presented as discontinued operations. See Note 14.
Fiscal Year
The Company’s fiscal year end is June 30.
| F-13 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Organizational Structure
| Company Name | Incorporation Date | State of Incorporation | ||||||
| Nightfood Holdings, Inc. (“NGTF”) DBA TechForce Robotics | ||||||||
| Nightfood, Inc. (“Nightfood”) | 2 | |||||||
| Future Hospitality Ventures Holdings, Inc. (“FHVH”) DBA RoboOp365 | ||||||||
| SWC Group, Inc. (“SWC”) DBA CarryoutSupplies.com | 1 | |||||||
| TechForce Robotics, Inc. FKA Skytech Automated Solutions, Inc. (“Skytech”) | 1 | |||||||
| Victorville Treasure Holdings, LLC DBA Holiday Inn (“VV”) | 3 | |||||||
| Treasure Mountain Holdings, LLC DBA Hilton Garden Inn (“RM”) | 4 | |||||||
1 Acquired on March 31, 2025.
2 Discontinued operations effective June 30, 2025.
3 Acquired August 27, 2025.
4 Acquired September 30, 2025.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Liquidity and Going Concern
As reflected in the accompanying consolidated financial statements, for the year ended June 30, 2026, the Company had:
| ● | Net
loss attributable to common stockholders of $ |
| ● | Net
cash used in operating activities was $ |
Additionally, at June 30, 2026, the Company had:
| ● | Accumulated
deficit of $ |
| ● | Working
capital deficit of $ |
| ● | Cash
on hand of $ |
Following the acquisitions of SWC Group, Inc. and TechForce Robotics, Inc. (formerly Skytech Automated Solutions, Inc.) during the fiscal year ended June 30, 2025, the Company initiated early customer deployments under its Robotics-as-a-Service (“RaaS”) model and commenced revenue-generating activities. While these deployments represent an important step toward building recurring revenue, revenues to date have not been sufficient to fund ongoing operations.
Similarly, following the acquisitions of the Victorville and Rancho Mirage hotel properties during the fiscal year ended June 30, 2026, the Company began generating revenue within its hospitality segment. Although these hotels provide recurring operating revenue from lodging and related guest services, current levels of hotel revenue are also insufficient to support the Company’s ongoing operating and development activities.
| F-14 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Liquidity Outlook
Based on current operating levels and cash usage forecasts, the Company’s existing cash resources are not sufficient to fund operations for the twelve months following the issuance of these consolidated financial statements without obtaining additional financing.
Historically, the Company has relied on both third-party and related-party debt financing to fund operations. There can be no assurance that additional financing will be available on commercially acceptable terms, or at all. Further, there is no assurance that any financing obtained will be sufficient to enable the Company to complete its strategic initiatives or achieve profitable operations.
If the Company is unable to secure sufficient capital, it may be required to slow expansion efforts, reduce operating expenditures, or modify its strategic plans.
Going Concern
These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.
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 ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Management’s plans to address these matters include the following:
| ● | Expanding into new and existing markets, with an emphasis on the RaaS model; | |
| ● | Obtaining additional debt and/or equity financing to support working capital and growth; | |
| ● | Pursuing strategic collaborations and partnerships; and | |
| ● | Selectively evaluating acquisitions that enhance or complement the Company’s business model. |
| F-15 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Note 2 - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. The Company consolidates entities where it has a controlling financial interest, as defined by ASC 810, “Consolidation”.
In accordance with ASC 810-10, consolidation applies to:
| ● | Entities with more than 50% voting interest, unless control is not with the Company; and | |
| ● | Variable Interest Entities (VIEs), where the Company is the primary beneficiary, possessing both (i) power over significant activities and (ii) the obligation to absorb losses or receive benefits. |
All intercompany transactions and balances are eliminated in consolidation. The Company continuously evaluates its investments and relationships to assess consolidation requirements.
Business Combinations and Asset Acquisitions
The Company accounts for acquisitions in accordance with ASC 805, Business Combinations. Transactions that meet the definition of a business are accounted for using the acquisition method of accounting. Transactions that do not meet the definition of a business are accounted for as asset acquisitions under ASC 805-50. The Company also evaluates whether a transaction should be accounted for as a reverse acquisition under ASC 805-40.
Business Combinations
For transactions classified as business combinations, the Company:
| ● | Recognizes and measures identifiable assets acquired, liabilities assumed, and noncontrolling interests at their fair values at the acquisition. | |
| ● | Records goodwill as the excess of the fair value of consideration transferred over the fair value of net assets acquired, including any previously held equity interests. | |
| ● | Expenses acquisition-related costs as incurred. | |
| ● | Measures the assets acquired and liabilities assumed at fair value at the acquisition date, with adjustments permitted within the measurement period (not exceeding one year) and adjustments beyond the measurement period recorded in earnings. The allocations for the Victorville and Rancho Mirage acquisitions were final at June 30, 2026 and no measurement period adjustments were recorded. |
| F-16 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Significant judgments in fair value determinations include:
| ● | Intangible asset valuations, based on estimates of future cash flows and discount rates. | |
| ● | Useful life assessments, impacting amortization and financial results. |
Asset Acquisitions
For transactions classified as asset acquisitions under ASC 805-50, the Company:
| ● | Applies the “screen test” to determine whether substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or group of similar assets. | |
| ● | Allocates the purchase price using a cost accumulation model, assigning costs to acquired assets based on their relative fair values. | |
| ● | Capitalizes direct acquisition costs as part of the asset’s cost, unlike business combinations where such costs are expensed. |
Acquisition of BIM-E Intellectual Property and Technology Assets
On February 17, 2026, the Company acquired intellectual property and technology assets (the “BIM-E Assets”) relating to an autonomous beverage dispensing robotics platform from an individual seller (the “Seller”) pursuant to an Asset Purchase and IP Assignment Agreement. The BIM-E Assets consist of patents and patent applications, software, artificial intelligence and machine learning models and datasets, trade secrets, trademarks and related domain names and code repositories. No liabilities of the Seller were assumed.
Concurrently, the Company entered into an Employment Agreement engaging the Seller as Chief Mechatronics Architect and an Incentive Award Agreement providing for performance-based warrants tied to revenue milestones of the BIM-E platform.
| F-17 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The transaction does not constitute a business combination because substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset group, and it has been accounted for as an asset acquisition under ASC 805-50.
Consideration
consisted of fully vested, non-forfeitable shares of the Company’s common stock issued to the Seller on February 17,
2026 at a fair value of $/share, the closing market price on that date, or $
The
BIM-E Assets are in-process research and development with no alternative future use. In accordance with ASC 730-10-25-2(c), the $
The
Employment Agreement provides the Seller an annual base salary of $
The Earn-Out Warrants are performance-based awards under ASC 718. Compensation cost is recognized when achievement of the revenue condition becomes probable. As of June 30, 2026, no revenue milestone was probable of achievement and no compensation cost has been recognized.
Warrant Classification. The Company evaluated the Earn-Out Warrants under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity, and ASC 480, Distinguishing Liabilities from Equity. The cashless exercise feature results in a fixed-for-fixed settlement in the Company’s own shares, and the warrants contain only standard anti-dilution adjustments that do not preclude equity classification. Accordingly, the Earn-Out Warrants are indexed to the Company’s own stock and meet the conditions for equity classification under ASC 815-40-25. If and when issued, the warrants are expected to be classified within stockholders’ equity.
| F-18 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Goodwill and Impairment
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but is reviewed for impairment at least annually, as of June 30, or more frequently if events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.
For impairment testing purposes, goodwill is assigned to the reporting unit(s) expected to benefit from the synergies of the acquisition. The Company performs either a qualitative assessment (“Step 0”) to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, or a quantitative assessment when required.
| ● | If the qualitative assessment indicates potential impairment, the Company estimates the fair value of the reporting unit and compares it with its carrying amount, including goodwill. | |
| ● | If the carrying amount exceeds fair value, an impairment charge is recognized for the difference, not to exceed the carrying value of goodwill. |
Significant judgments in goodwill impairment testing include:
| ● | Determining the appropriate reporting units and assigning assets and liabilities to those reporting units. | |
| ● | Forecasting future cash flows. | |
| ● | Selecting appropriate discount rates and market multiples. | |
| ● | Assessing macroeconomic factors, industry trends, and Company-specific performance. |
Impairment Charges
Fiscal Year End June 30, 2026
For
the year ended June 30, 2026, the Company recorded goodwill impairment charges of $
Fiscal Year End June 30, 2025
The
Company recorded a goodwill impairment charge of $
| F-19 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The 2025 impairment charge relates to goodwill arising from the acquisition of FHVH recorded during the fiscal year ended June 30, 2024, which was determined to be not recoverable based on the Company’s annual impairment testing under ASC 350, Intangibles - Goodwill and Other.
Business Segments and Expense Disclosure
An operating segment is a component of a public entity that:
| ● | Engages in business activities from which it may earn revenues and incur expenses; | |
| ● | Has operating results that are regularly reviewed by the Chief Operating Decision Maker (“CODM,” which is our Chief Executive Officer) to make decisions about resource allocation and performance assessment; and | |
| ● | Has discrete financial information available. |
Following the acquisition of SWC Group, Inc. (d/b/a CarryOutSupplies.com) on March 31, 2025, the commencement of commercial activities under the Robotics-as-a-Service (“RaaS”) model, and the acquisitions of two hotel properties during the fiscal year ended June 30, 2026, management determined that the Company operates in three (3) reportable segments: Foodservice Packaging Distribution, RaaS, and Hotel Operations. See Note 13.
Discontinued Operations
The Company’s legacy Snacks and Beverages activity has been discontinued. The results of this activity are presented separately from continuing operations.
Segment Expense Disclosure
Effective July 1, 2024, the Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amended guidance requires enhanced disclosures about reportable segment expenses, including:
| ● | Significant segment expenses that are regularly provided to and reviewed by the CODM | |
| ● | The measure of segment profit or loss used by the CODM | |
| ● | A description of other segment items included in that measure | |
| ● | How expense amounts are allocated among segments |
The Company’s chief operating decision maker (CODM) is its Chief Executive Officer. The CODM evaluates segment performance based on segment revenues, segment costs and expenses, segment other income (expense) - net, segment operating income (loss) and segment net income (loss), each as presented in Note 13. The CODM is not provided with, nor does he review, further disaggregated expense information below those measures, other than expenses reported as Other Corporate Overhead in Note 13, which are not allocated to the operating segments.
Accordingly, the Company’s disclosures include the segment revenues, costs and expenses, other income (expense) - net, operating income (loss) and net income (loss) reviewed by the CODM, as well as “other segment items” necessary to reconcile segment profit (loss) to consolidated loss before income taxes. No additional segment-level expense categories are required to be presented under ASU 2023-07 because no such detailed expense information is provided to or used by the CODM in assessing segment performance.
| F-20 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Use of Estimates and Assumptions
The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the recognition of revenues and expenses during the reporting period. Actual results may differ from those estimates, and such differences may be material.
Estimates and assumptions are evaluated on an ongoing basis and are based on historical experience, current economic conditions, industry trends, and other relevant quantitative and qualitative factors. Changes in estimates are recorded in the period in which they become known and are accounted for prospectively.
Significant estimates for the years ended June 30, 2026 and 2025, include:
| ● | Allowance for expected credit losses on accounts receivable and other receivables; |
| ● | Inventory valuation and obsolescence reserves; |
| ● | Fair value measurements related to business combinations under ASC 805, including: |
| Purchase price consideration, including the fair value of Series C Convertible | |
| Preferred Stock issued as acquisition consideration; |
| ● | Fair value of identifiable intangible assets; | |
| ● | Fair value of property and equipment; | |
| ● | Fair value of contingent consideration; and | |
| ● | Allocation of purchase price to identifiable assets and liabilities, including the resulting goodwill; |
| ● | Impairment assessment of goodwill and indefinite-lived intangible assets; |
| ● | Impairment assessment of long-lived assets, including finite-lived intangible assets and property and equipment; |
| ● | Fair value of derivative liabilities; |
| ● | Classification of convertible preferred stock between temporary equity and permanent equity; |
| ● | Valuation of stock-based compensation; |
| F-21 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Estimated useful lives of property and equipment and finite-lived intangible assets; |
| ● | Assessment of the Company’s ability to continue as a going concern; |
| ● | Valuation of loss contingencies; and |
| ● | Valuation allowance on deferred tax assets and assessment of uncertain tax positions. |
Risks, Uncertainties and Concentrations
The Company is exposed to risks arising from the use of estimates and from concentrations that could significantly affect the amounts reported in the near term, which it discloses in accordance with ASC 275, Risks and Uncertainties.
Revenue and Asset Concentration
Substantially all hospitality segment revenue is generated by two (2) hotel properties located in Victorville and Rancho Mirage, California, which also represent a significant portion of the Company’s total assets. A decline in performance at either property could have a material adverse effect on the Company’s consolidated financial position and results of operations, including a decline resulting from:
| ● | local economic conditions; | |
| ● | competitive pressures; | |
| ● | natural disasters; or | |
| ● | loss of franchise rights. |
Geographic Concentration
The Company’s hotel operations, robotics deployment activities and warehouse and distribution facilities are concentrated in the State of California. As a result, the Company is disproportionately exposed to conditions specific to that state, including:
| ● | regulatory changes; | |
| ● | economic conditions; | |
| ● | natural disasters; and | |
| ● | labor market conditions. |
Franchise Concentration
The hotel properties operate under franchise agreements with national hotel brands. Hospitality revenue depends on continued compliance with brand standards, including:
| ● | property maintenance requirements; |
| F-22 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | periodic property upgrades; and | |
| ● | participation in brand programs. |
Loss of either franchise agreement could materially impair the Company’s hospitality operations and the carrying value of the related assets.
Customer Concentration
For
the fiscal year ended June 30, 2026, no single customer accounted for
Supplier Concentration
The Company sources robotics components and hardware from a limited number of domestic and international suppliers. Alternative sources of supply are available for the Company’s robotic units and components, and the Company is not dependent on any single supplier. Management has concluded that no concentration of suppliers existed at June 30, 2026 or 2025 that would make the Company vulnerable to the risk of a near-term severe impact. Deployments could nevertheless be delayed and RaaS operations adversely affected by:
| ● | an interruption in supply; | |
| ● | quality issues; or | |
| ● | changes in supplier pricing or availability. |
The Foodservice Packaging Distribution segment sources products from multiple domestic and international manufacturers with no material dependence on any single supplier.
Key Personnel
The
Company depends on the continued services of its Chief Executive Officer, who holds all
Fair Value of Financial Instruments
The Company accounts for financial instruments in accordance with Financial Accounting Standards Board (FASB) ASC 820, Fair Value Measurements, which establishes a framework for measuring fair value and requires related disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the Company’s principal market or, if none exists, the most advantageous market for the asset or liability.
| F-23 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Fair Value Hierarchy
ASC 820 requires the use of observable inputs whenever available and establishes a three-tier hierarchy for measuring fair value:
| ● | Level 1 - Quoted market prices (unadjusted) for identical assets or liabilities in active markets. | |
| ● | Level 2 - Observable inputs other than quoted prices in active markets, such as quoted prices for similar assets and liabilities or inputs that are directly or indirectly observable. | |
| ● | Level 3 - Unobservable inputs that require significant judgment, including management assumptions and estimates based on available market data. |
The classification of an asset or liability within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Level 3 valuations generally require more judgment and complexity, often involving a combination of cost, market, or income approaches, as well as assumptions about market conditions, pricing, and other factors.
Financial Instruments Carried at Historical Cost
The Company’s financial instruments carried at historical cost include cash, accounts receivable, accounts payable and accrued expenses (including related party balances), and certain debt instruments. As of June 30, 2026 and 2025, the carrying amounts of these instruments approximated their fair values due to their short-term maturities.
Cash and Cash Equivalents and Concentration of Credit Risk
For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.
At
June 30, 2026 and 2025, the Company did
The
Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent
account balances exceed the amount insured by the FDIC, which is $
| F-24 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
At June 30, 2026 and 2025, the Company did not experience any losses on cash balances in excess of FDIC insured limits.
Accounts Receivable
The Company accounts for accounts receivable in accordance with ASC 310, Receivables. Accounts receivable are stated at their net realizable value, which represents the amounts expected to be collected from customers.
Trade receivables primarily arise from:
| ● | Foodservice Packaging Distribution - invoiced product sales | |
| ● | RaaS - monthly service fees billed in arrears | |
| ● | Hotel Operations - | |
| ● | Guest ledger receivables, representing charges incurred by in-house guests prior to settlement at check-out | |
| ● | City ledger receivables, representing amounts due from corporate accounts, groups, travel agencies, and other third-party billing arrangements |
The Company does not require collateral and does not accrue interest on past-due balances.
Allowance for Expected Credit Losses
The Company evaluates the collectability of accounts receivable and records an allowance for expected credit losses in accordance with ASC 326, Financial Instruments - Credit Losses (“CECL”). The allowance is estimated using a provision matrix approach based on:
| ● | historical loss experience by revenue stream, | |
| ● | customer aging and payment trends, | |
| ● | current economic conditions, and | |
| ● | reasonable and supportable forecasts. |
Guest ledger balances generally have short settlement periods and historically low loss experience, while city ledger balances and trade receivables are evaluated based on aging, customer credit quality, and historical write-offs.
Amounts determined to be uncollectible are written off against the allowance when collection efforts have been exhausted.
Allowance
for expected credit losses was $
| F-25 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The following is a summary of the Company’s accounts receivable at June 30, 2026 and 2025:
| June 30, 2026 | June 30, 2025 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ||||||||
| Accounts receivable - net | $ | $ | ||||||
Bad Debt Expense
For the years ended June 30, 2026 and 2025, bad debt was as follows:
| Year Ended June 30, | ||||||
| 2026 | 2025 | |||||
| $ | $ | |||||
Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying consolidated statements of operations.
Inventory
The Company accounts for inventory in accordance with ASC 330, Inventory. Inventory is stated at the lower of cost or net realizable value (“LCNRV”) using the first-in, first-out (FIFO) method. Inventory consists of items held for sale or use in the ordinary course of business across the Company’s operating segments.
Continuing Operations
As of June 30, 2026 and 2025, inventory consisted primarily of:
| ● | Foodservice Packaging Distribution: |
Finished goods including paper cups, plastic cups, food containers, bags, and other disposable consumables.
| ● | Robotics-as-a-Service (RaaS): |
None. Inventory used in RaaS deployments (e.g., spare parts, components) is expensed as incurred and not carried as inventory.
| F-26 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Hotel Operations: |
Food and beverage inventory and retail/minibar items held for sale. Hotel operating supplies not held for sale - such as guest amenities, linens, and cleaning supplies - are expensed as incurred and excluded from inventory.
Inventory Valuation and Reserves
Management evaluates inventory at each reporting date to determine whether reserves are required for slow-moving, obsolete or impaired items or for items whose net realizable value is below cost. In performing this assessment, management considers:
| ● | aging and turnover trends; | |
| ● | expected future demand; | |
| ● | historical usage and spoilage (particularly for perishable hotel F&B items); | |
| ● | current market and pricing conditions; and | |
| ● | estimated net realizable value. |
Adjustments to inventory reserves are recorded within cost of revenues in the period identified.
At June 30, 2026 and 2025, inventory was as follows:
| Classification | June 30, 2026 | June 30, 2025 | ||||||
| Packaging and supplies | $ | $ | ||||||
| Food and beverage | ||||||||
| Total Inventory | $ | $ | ||||||
Inventory at June 30, 2025 included $
Property and Equipment
Property and equipment are recorded at cost, net of accumulated depreciation, in accordance with ASC 360, “Property, Plant, and Equipment.” Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.
Repairs and maintenance expenditures that do not materially extend the useful life of an asset are expensed as incurred. Significant improvements or upgrades that increase the asset’s productivity, efficiency, or useful life are capitalized.
| F-27 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Property Improvement Plans (“PIPs”)
In connection with operating franchised hotel properties, the Company is periodically required under its franchise agreements to complete Property Improvement Plans (“PIPs”), which generally include renovations, replacements, and upgrades to guestrooms, public areas, building systems, and other components of the hotels.
PIP-related expenditures are evaluated under ASC 360 to determine whether they should be capitalized or expensed:
| ● | Capitalized PIP costs |
PIP costs are capitalized when they represent betterments or improvements that:
| ● | extend the useful life of the asset; | |
| ● | increase the asset’s capacity or efficiency; | |
| ● | materially upgrade the property to meet current brand standards; or | |
| ● | replace major components of the hotel. |
Capitalized PIP costs are recorded as part of buildings and improvements or FF&E and depreciated over their estimated useful lives.
| ● | Expensed as incurred |
Routine repairs, maintenance, cosmetic refreshes, and other PIP activities that do not extend useful life or enhance the asset’s functionality are expensed as incurred.
The determination of whether a PIP expenditure should be capitalized or expensed requires judgment and is based on the nature of the work performed, the condition of the underlying assets, and the extent to which the PIP activity enhances or extends the property’s utility.
Each hotel property, including its land, building and improvements, furniture, fixtures and equipment, and identifiable intangible assets, is the asset group at which recoverability is evaluated under ASC 360-10, and each hotel property is a separate reporting unit for goodwill impairment testing under ASC 350. See Note 9.
Disposals
Upon disposal or sale of property and equipment, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the statement of operations.
| F-28 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Impairment of Long-lived Assets
The Company evaluates the recoverability of long-lived assets, including identifiable intangible assets, in accordance with FASB ASC 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
An impairment review is triggered when events or circumstances indicate that the carrying value of an asset group may not be recoverable. Factors considered include, but are not limited to:
| ● | Significant changes in expected performance compared to prior forecasts, | |
| ● | Changes in asset utilization, including discontinued or modified use, | |
| ● | Negative industry or economic trends that impact asset value, and | |
| ● | Strategic shifts in the Company’s business operations. |
Impairment Assessment Process
When impairment indicators exist, the Company performs a recoverability test by comparing the undiscounted future cash flows expected to be generated from the use and ultimate disposition of the asset group to its carrying amount.
| ● | If the undiscounted cash flows exceed the carrying amount, no impairment is recognized. | |
| ● | If the undiscounted cash flows are less than the carrying amount, an impairment loss is recognized, measured as the excess of the carrying amount over the fair value of the asset. |
Impairment Results
For
the years ended June 30, 2026 and 2025, the Company did
Derivative Liabilities
The Company evaluates financial instruments containing characteristics of both liabilities and equity in accordance with FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging.
| F-29 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Accounting for Derivative Liabilities
Derivative liabilities are revalued at fair value at each reporting period, with changes in fair value recognized in the results of operations as a gain or loss on derivative remeasurement. The Company uses a Black-Scholes option pricing model to determine the fair value of these instruments.
Conversion and Extinguishment of Derivative Liabilities
When a debt instrument with an embedded conversion option (e.g., convertible debt or warrants) is converted into shares of common stock or repaid, the Company:
| ● | Records the shares issued at the carrying amount of the debt, accrued interest and unamortized discount derecognized when the instrument is converted in accordance with its original terms; | |
| ● | Derecognizes all related debt, derivative liabilities, and unamortized debt discounts; and | |
| ● | Recognizes
a gain or loss only where the instrument is settled other than in accordance with its original terms or the conversion is induced.
No gain or loss was recognized on the conversion of the notes during the
years ended June 30, 2026 and 2025, each of which was made at the contractual conversion price. In fiscal 2025, the derivative liability
related to a converted related party note was extinguished, resulting in a gain of $ |
For equity-based derivative liabilities (e.g., warrants) that are extinguished, any remaining liability balance is reclassified to additional paid-in capital.
Reclassification of Equity Instruments to Liabilities
Equity instruments initially classified as equity may be reclassified as liabilities if they no longer meet equity classification criteria. In such cases, they are remeasured at fair value on the date of reclassification, with changes recognized in the consolidated statements of operations.
Derivative Liability Balances
As
of June 30, 2026 and 2025, the Company had derivative liabilities of $
Included
in these totals are amounts to related parties of $
See Notes 11 and 12.
Original Issue Discounts and Other Debt Discounts
The Company accounts for original issue discounts (OID) and other debt discounts in accordance with FASB ASC 835-30, Interest - Imputation of Interest. These discounts are recorded as a reduction of the carrying amount of the related debt and are amortized to interest expense over the term of the debt using the effective interest method.
| F-30 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Stock and Other Equity Issued with Debt
The Company may issue common stock or other equity instruments in connection with debt issuance. When common stock or other equity instruments are issued, they are recorded at fair value and treated as a debt discount, reducing the carrying amount of the note. These discounts are amortized to interest expense over the life of the debt.
The combined debt discounts, including OID and stock-related discounts, cannot exceed the face amount of the debt.
Debt Issuance Costs
Debt issuance costs, including fees paid to lenders or third parties, are capitalized as a debt discount and amortized to interest expense over the life of the debt. These costs are presented as a direct deduction from the carrying amount of the debt liability rather than as a separate asset.
Right of Use Assets and Lease Obligations
The Company accounts for right-of-use (ROU) assets and lease liabilities in accordance with FASB ASC 842, Leases. These amounts reflect the present value of the Company’s estimated future minimum lease payments over the lease term, including any reasonably certain renewal options, discounted using a collateralized incremental borrowing rate.
The Company classifies its leases as either operating or finance leases. The Company’s leases primarily consist of operating leases, which are included as Right-of-Use Assets and Operating Lease Liabilities on the consolidated balance sheets.
Short-Term Leases
The Company has elected the short-term lease exemption, whereby leases with a term of 12 months or less are not recorded on the balance sheet. Instead, lease payments are expensed on a straight-line basis over the lease term.
Lease Term and Renewal Options
In determining the lease term, the Company evaluates whether renewal options are reasonably certain to be exercised. Factors considered include:
| ● | The useful life of leasehold improvements relative to the lease term, | |
| ● | The economic performance of the business at the leased location, | |
| ● | The comparative cost of renewal rates versus market rates, and | |
| ● | The presence of any significant economic penalties for non-renewal. |
| F-31 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
If a renewal option is deemed reasonably certain to be exercised, the ROU asset and lease liability reflect those additional future lease payments. The Company’s operating leases contain renewal options with no residual value guarantees. Currently, management does not expect to exercise any renewal options, which are therefore excluded in the measurement of lease obligations.
Discount Rate and Lease Liability Measurement
Since the implicit rate in the leases is not readily determinable, the Company applies an incremental borrowing rate that represents the rate it would incur to borrow on a collateralized basis over a similar term and currency environment.
Lease Impairment
The
Company evaluates ROU assets for impairment indicators whenever events or changes in circumstances suggest the carrying amount may not
be recoverable.
See Note 15.
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), when control of the promised goods or services transfers to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company applies the following five (5) steps to each customer contract:
| ● | identify the contract with the customer; | |
| ● | identify the performance obligations in the contract; | |
| ● | determine the transaction price; | |
| ● | allocate the transaction price to the performance obligations; and | |
| ● | recognize revenue when, or as, each performance obligation is satisfied. |
The Company derives revenue from three (3) revenue streams, which correspond to its three (3) reportable segments (Note 13):
| ● | foodservice packaging distribution; | |
| ● | Robotics as a Service (“RaaS”); and | |
| ● | hotel operations. |
| F-32 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The Company previously generated revenue from the sale of packaged snack and beverage products; that activity was discontinued as of June 30, 2025 and is presented as discontinued operations (Note 14). The performance obligation, timing of recognition and consideration for each revenue stream are summarized in the following table and described below.
| Revenue Stream | Performance Obligation | Timing of Recognition | Consideration | |||
| Foodservice packaging distribution (SWC Group) | Delivery of the packaging products ordered by the customer | Point in time, upon shipment when control transfers | Fixed price per order based on contract or list pricing, paid at the time of order | |||
| Robotics as a Service (TechForce Robotics and FHVH) | A single performance obligation comprising access to robotics equipment, automation and monitoring software, installation, maintenance and support over the contract term | Over time, ratably each month over the thirty-six (36) month non-cancellable term beginning at go-live | Fixed monthly service fee, invoiced monthly in arrears | |||
| Hotel operations (Victorville Treasure Holdings, LLC and Treasure Mountain Holdings, LLC) | Rooms, food and beverage, event and banquet services, and other ancillary guest services, each a distinct performance obligation | Rooms daily as each night of occupancy occurs; food, beverage and ancillary services when provided; events when the event occurs | Fixed room rates, menu prices and event contract prices, settled at check-out or at the point of sale |
A. Foodservice Packaging Distribution
SWC Group distributes disposable foodservice packaging products, including custom-printed and stock paper cups, plastic cups, food containers, bags and related consumable items, exclusively to business customers on a wholesale basis through the Company’s e-commerce platform and direct sales channels.
| ● | Performance obligation: each order contains a single performance obligation, the delivery of the ordered products. | |
| ● | Timing: revenue is recognized at a point in time when control of the products transfers to the customer upon shipment. Custom-printed orders are also recognized upon shipment because the customer may cancel before shipment and the Company does not have an enforceable right to payment for work in process. | |
| ● | Transaction price: the fixed consideration stated in the order based on contract or list pricing. Products may be returned only if damaged or shipped in error, and the arrangements do not provide volume rebates, allowances or other variable consideration. | |
| ● | Payment: customers pay at the time of order, and amounts received before shipment are recorded as deferred revenue until the products ship. | |
| ● | Principal: the Company sources and controls the products, sets prices and bears inventory risk prior to transfer, and revenue is recognized on a gross basis. |
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NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
B. Robotics as a Service
TechForce Robotics and FHVH provide automation solutions to customers in the foodservice and hospitality industries under service agreements.
| ● | Contract term: non-cancellable, except for breach, for an initial term of thirty-six (36) months, renewing automatically for successive one (1) year periods unless terminated. Renewals are accounted for as new contracts. | |
| ● | Pilot period: each arrangement begins with a pilot and site-preparation period during which the Company installs and integrates the robotic systems and trains the customer’s staff. No fee is charged during that period, and the contract term and monthly billing commence when the systems go live. | |
| ● | Performance obligation: access to the robotic equipment, automation and monitoring software, maintenance, software updates and remote technical support together constitute a single performance obligation that is a series of distinct daily services. Installation, integration and training are not distinct. The customer cannot benefit from those activities on their own or together with other resources readily available to it, because the robotic systems are proprietary and the Company does not sell those activities separately (ASC 606-10-25-19(a)). They are also not separately identifiable within the context of the contract, because the Company provides a significant integration service that combines the equipment, software, installation, integration and training into the combined output the customer contracted for, and they are highly interdependent with the ongoing service (ASC 606-10-25-19(b) and 25-21). | |
| ● | Transaction price: a fixed recurring monthly service fee, which is the only charge under the agreements. The contracts do not contain variable consideration. | |
| ● | Timing: revenue is recognized over time, ratably each month, because the customer simultaneously receives and consumes the benefit of the service as it is performed. | |
| ● | Billing: customers are invoiced monthly in arrears. The monthly fee is fixed and the Company’s performance is the same each month, so revenue is recognized ratably as the service is provided. No consideration is received before performance. | |
| ● | Equipment: the Company owns and deploys all robotic equipment, which is included in property and equipment and depreciated over its estimated useful life (Note 3). The Company directs how and when the robotic systems perform their tasks through proprietary software, determines operating parameters and scheduling, performs all servicing, maintenance and software updates, and retains the right to substitute units at its discretion without customer approval. Because the customer does not obtain the right to control the use of the equipment, the arrangements do not contain a lease under ASC 842, Leases, and the entire arrangement is accounted for under ASC 606. | |
| ● | Principal: the Company controls the equipment and services throughout the contract term, is primarily responsible for performance, bears the inventory and deployment risk and has discretion in establishing the monthly fee charged to the customer, and revenue is recognized on a gross basis. |
C. Hotel Operations
Victorville Treasure Holdings, LLC and Treasure Mountain Holdings, LLC own and operate the Holiday Inn Victorville and the Hilton Garden Inn Rancho Mirage, respectively, under franchise agreements with the brand owners and management agreements with a third-party hotel management company. Hotel revenue consists of the following:
| ● | Rooms: each night of occupancy is a distinct performance obligation, and rooms revenue is recognized daily at the contracted room rate as each night of occupancy occurs. Payment is settled at check-out. |
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NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Food and beverage: restaurant, bar, catering and banquet sales are recognized at the point in time the goods or services are provided to the guest. | |
| ● | Events and banquets: each event is a single performance obligation recognized when the event occurs. | |
| ● | Other ancillary services: meeting and event space rentals, parking, resort fees and other guest services are recognized when the service is rendered or the rental period has elapsed. |
Other hotel policies:
| ● | Transaction price: the fixed room rates, menu prices and event contract prices, including any discounts or promotional rates offered to the guest. | |
| ● | Advance deposits: billing and payment coincide with the satisfaction of the performance obligations. Advance deposits for group bookings and events are recorded as deferred revenue until the stay or event occurs and were not significant at June 30, 2026. | |
| ● | Principal: the Company owns the properties, controls the rooms and services before they are transferred to the guest, sets prices and bears the operating risk of the hotels; the franchisors and the hotel manager do not transfer goods or services to the guest. Revenue is recognized on a gross basis. | |
| ● | Franchise and management fees: franchise royalty, marketing, loyalty and system fees and fees paid to the hotel management company are expensed as incurred and included in hotel operating expenses, which also consist of rooms, food and beverage, property operations and maintenance, utilities, property taxes, insurance and other direct costs of operating the hotel properties. Corporate overhead is included in general and administrative expenses. |
D. Practical Expedients and Policy Elections
The Company has elected the following practical expedients and accounting policies, which apply to all revenue streams:
| ● | Sales, use, occupancy and other taxes collected from customers and remitted to government authorities are excluded from revenue. | |
| ● | Shipping and handling activities performed after control of a product transfers to the customer are accounted for as fulfillment activities rather than as separate performance obligations, and the related costs are included in cost of revenue. | |
| ● | The transaction price is not adjusted for the effects of a significant financing component when the period between the transfer of the goods or services and payment is one (1) year or less. |
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NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Incremental costs of obtaining a contract are expensed as incurred when the amortization period would have been one (1) year or less. The Company had no capitalized contract costs at June 30, 2026 or June 30, 2025. | |
| ● | The Company does not disclose the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one (1) year or less. |
E. Contract Liabilities (Deferred Revenue)
Deferred
revenue represents consideration received in advance of performance and consists of foodservice packaging orders paid by customers before
shipment, which are recognized as revenue when the products ship. Deferred revenue was $
F. Disaggregation of Revenue
Revenue by revenue stream, which is also the Company’s reportable segment, for the years ended June 30, 2026 and 2025 is presented in the following table. Hotel operations revenue for the year ended June 30, 2026 is included from the acquisition dates of August 27, 2025 for Victorville and September 30, 2025 for Rancho Mirage (Note 9). Revenue from the discontinued snack and beverage operations is presented in discontinued operations (Note 14).
The following represents the Company’s disaggregation of revenues for the years ended June 30, 2026 and 2025:
| Year Ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Revenue | % of Revenues | Revenue | % of Revenues | |||||||||||||
| Foodservice Packaging | $ | % | $ | % | ||||||||||||
| Robotics as a Service (RaaS) | % | % | ||||||||||||||
| Hotels | % | % | ||||||||||||||
| Total revenues - net | $ | % | $ | % | ||||||||||||
Revenue is disaggregated by primary revenue stream, consistent with the Company’s reportable segments and the nature, timing, and uncertainty of revenue recognition described herein.
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NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Revenues from discontinued snack and beverage operations are presented separately. See Note 14.
Cost of Sales
Cost of sales consists of the direct costs of generating revenue in each of the Company’s three (3) revenue streams, as described below. Cost of sales of the discontinued snack and beverage business is presented within discontinued operations (Note 14).
Foodservice Packaging Distribution
Cost of sales consists of the cost of the packaging products sold, which is relieved from inventory when the products ship, and the direct costs of storing and delivering them:
| ● | Purchased products: packaging products sourced from third-party manufacturers and suppliers. | |
| ● | Freight and distribution: outbound shipping, warehouse handling and fuel surcharges. | |
| ● | Warehousing and logistics: facility, labor and utility costs of storage and inventory management. |
Robotics as a Service
Cost of sales consists of the direct costs of deploying and operating the robotic systems at customer sites, which are expensed as incurred:
| ● | Equipment depreciation: depreciation of the robotic units deployed at customer sites over their estimated useful lives (Note 3). | |
| ● | Installation and training: setup, integration and training performed during the pilot period. | |
| ● | Maintenance and support: technical support, repairs and software updates. | |
| ● | Hosting and connectivity: cloud infrastructure and communication costs for remote monitoring and operation of the robots. |
Hotel Operations
Cost of sales consists of the direct costs of providing lodging, food and beverage and related guest services, which are expensed as incurred:
| ● | Rooms: housekeeping, front office, laundry, linens, guest amenities and utilities of guest accommodations. |
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NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Food and beverage: cost of food, beverages and consumables used in restaurant, bar and banquet operations. | |
| ● | Departmental labor: wages, benefits and payroll taxes of rooms, food and beverage and other guest service personnel. | |
| ● | Franchise and management fees: franchise royalty, marketing, loyalty and system fees and fees paid to the third-party hotel management company. | |
| ● | Property costs: property operations and maintenance, property taxes and insurance. | |
| ● | Other direct costs: contract services, credit card commissions and minor operating equipment. |
Depreciation of hotel buildings, furnishings and equipment is excluded from cost of sales and presented in depreciation and amortization within operating expenses.
Income Taxes
The Company accounts for income taxes using the asset and liability method prescribed by FASB ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. These deferred amounts are measured using enacted tax rates expected to apply in the periods when the temporary differences are expected to reverse.
The effect of a change in tax law or tax rates on deferred tax balances is recognized in the period in which the change is enacted.
All deferred tax assets and liabilities are presented as noncurrent in the Company’s consolidated balance sheet, regardless of the classification of the related asset or liability for financial reporting purposes.
Uncertain Tax Positions
The Company evaluates uncertain tax positions, which requires that a tax position be recognized in the financial statements only if it is more likely than not (greater than 50% likelihood) to be sustained upon examination by tax authorities.
As of June 30, 2026 and 2025, the Company had no uncertain tax positions that qualified for recognition or disclosure in the consolidated financial statements.
The Company also recognizes interest and penalties related to uncertain tax positions in other expense in the consolidated statement of operations. No interest and penalties were recorded for the years ended June 30, 2026 and 2025, respectively. Federal and state income tax returns for Nightfood Holdings, Inc. and its subsidiaries for the fiscal years ended June 30, 2016 through June 30, 2025 have not been filed as of the date these consolidated financial statements were issued. Management does not believe the unfiled returns result in an unrecognized tax benefit because the Company has reported losses in each of those years, and no liability for uncertain tax positions has been recorded.
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NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Valuation of Deferred Tax Assets
The Company’s deferred tax assets include certain future tax benefits, such as net operating losses (NOLs), tax credits, and deductible temporary differences. A valuation allowance is required if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
The Company reviews the realizability of deferred tax assets on a quarterly basis, or more frequently if circumstances warrant, considering both positive and negative evidence.
Factors Considered in Valuation Allowance Assessment
The Company evaluates multiple factors in determining whether a valuation allowance is necessary, including:
| ● | Historical earnings trends (cumulative pre-tax income or losses in the most recent three-year period) | |
| ● | Future financial projections, including expected taxable income based on long-term estimates of business performance and market conditions | |
| ● | Statutory carryforward periods for net operating losses and other deferred tax assets | |
| ● | Prudent and feasible tax planning strategies that could impact the realization of deferred tax assets | |
| ● | Nature and predictability of temporary differences and the timing of their reversal | |
| ● | Sensitivity of financial forecasts to external factors such as commodity prices, market demand, and operational risks |
While cumulative three-year losses are a strong indicator that a valuation allowance may be needed, a valuation allowance determination is not solely based on past losses - all available positive and negative evidence must be considered.
Valuation Allowance Determination
At June 30, 2026 and 2025, the Company recorded a full valuation allowance against its deferred tax assets, resulting in a net carrying amount of $. This determination was based on cumulative losses in recent years and the lack of sufficient positive evidence to support the realization of deferred tax assets in the near term.
The Company will continue to evaluate its valuation allowance each reporting period and will recognize deferred tax assets in the future if sufficient positive evidence emerges to support their realization.
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NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Advertising Costs
Advertising costs are expensed as incurred and are classified within general and administrative expenses in the consolidated statements of operations.
The Company recognized marketing and advertising costs during the years ended June 30, 2026 and 2025, respectively as follows:
| Year Ended June 30, | ||||||
| 2026 | 2025 | |||||
| $ | $ | |||||
The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation,” using the fair value-based method. Under this guidance, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the requisite service period, typically the vesting period.
The Company applies the fair value method for equity instruments granted to both employees and non-employees, aligning non-employee share-based payment accounting with that of employees. The fair value of stock-based compensation is determined as of the grant date or the measurement date (i.e., when the performance obligation is completed) and is recognized over the vesting period.
The Company determines the fair value of stock options using the Black-Scholes option pricing model, considering the following key assumptions:
| ● | Exercise price - The agreed-upon price at which the option can be exercised. | |
| ● | Expected dividends - The anticipated dividend yield over the expected life of the option. | |
| ● | Expected volatility - Based on historical stock price fluctuations. | |
| ● | Risk-free interest rate - Derived from U.S. Treasury securities with similar maturities. | |
| ● | Expected life of the option - Estimated based on historical exercise patterns and contractual terms. |
Additionally, the Company follows the guidance under ASU 2016-09, which introduced amendments to simplify certain accounting aspects of share-based compensation, including:
| ● | The treatment of tax benefits and tax deficiencies in income tax reporting. | |
| ● | The option to recognize forfeitures as they occur rather than estimating them upfront. |
| F-40 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Cash flow classification for certain tax-related transactions. |
The Company continues to evaluate and apply the latest Accounting Standards Updates (ASUs) and interpretive releases related to stock-based compensation to ensure compliance with evolving financial reporting requirements.
Stock Warrants
In connection with certain financing transactions (debt or equity), consulting arrangements, or strategic partnerships, the Company may issue warrants to purchase shares of its common stock. These standalone warrants are not puttable or mandatorily redeemable by the holder and are classified as equity instruments in accordance with ASC 480, “Distinguishing Liabilities from Equity.”
The fair value of warrants issued for compensation purposes is measured using the Black-Scholes option pricing model.
Accounting Treatment of Warrants
| ● | Warrants issued in conjunction with common stock issuance are initially recorded at fair value as a reduction in Additional Paid-In Capital (APIC), | |
| ● | Warrants issued for services are recorded at fair value and expensed over the requisite service period or immediately upon issuance if no service period exists; and | |
| ● | Warrants classified as liabilities due to settlement features or pricing adjustments are remeasured at fair value each reporting period, with changes recognized in earnings. |
The Company computes net loss per share in accordance with ASC 260, Earnings Per Share. Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period.
During all periods presented, the Company reported a net loss. Accordingly, all potentially dilutive common stock equivalents were excluded from the computation of diluted net loss per share because their inclusion would have been anti-dilutive. As a result, diluted net loss per share is equal to basic net loss per share for all periods presented.
| F-41 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Anti-Dilutive Securities
| June 30, 2026 | June 30, 2025 | |||||||
| Convertible debt | ||||||||
| Series B, convertible preferred stock (8,366:1) | ||||||||
| Series C, convertible preferred stock (6,000:1) | ||||||||
| Series D, convertible preferred stock (6,000:1) | ||||||||
| Warrants | ||||||||
| Stock options | ||||||||
| Total common stock equivalents | ||||||||
All financial instruments listed above included as common stock equivalents represent those that are fully vested and exercisable.
Shares of Series C Convertible Preferred Stock and shares issuable on conversion of convertible notes payable subject to contractual lock-up provisions are excluded from the anti-dilutive securities table above and from the Company’s authorized share sufficiency analysis while the lock-up remains in effect. The lock-up provisions, the classification of the Company’s convertible preferred stock, and its reclassification from temporary equity to permanent equity effective November 19, 2025 are described in Note 8.
Related Parties
The Company defines related parties in accordance with ASC 850, Related Party Disclosures. Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.
Related parties include, but are not limited to:
| ● | Principal owners of the Company. | |
| ● | Members of management (including directors, executive officers, and key employees). | |
| ● | Immediate family members of principal owners and members of management. | |
| ● | Entities affiliated with principal owners or management through direct or indirect ownership. | |
| ● | Entities with which the Company has significant transactions, where one party has the ability to exercise control or significant influence over the management or operating policies of the other. |
A party is considered related if it has the ability to control or significantly influence the management or operating policies of the Company in a manner that could prevent either party from fully pursuing its own separate economic interests.
| F-42 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The Company discloses all material related party transactions, including:
| ● | The nature of the relationship between the parties. | |
| ● | A description of the transaction(s), including terms and amounts involved. | |
| ● | Any amounts due to or from related parties as of the reporting date. | |
| ● | Any other elements necessary for a clear understanding of the transactions’ effects on the financial statements. |
Related party disclosures include the nature of the relationship, a description of the transactions and their terms and amounts, and amounts due to or from related parties at the reporting date.
The
Company’s related parties are its Chief Executive Officer, who also serves as Chief Financial Officer, holds all
Balances with related parties are presented separately on the consolidated balance sheets as accounts payable and accrued expenses - related parties, line of credit - related party, convertible notes payable - related parties and derivative liabilities - related parties. See Notes 4, 5, 8 and 11.
Recent Accounting Standards
Recently Adopted Accounting Standards
The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, effective July 1, 2024. See Note 13.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances disclosure requirements for income tax rate reconciliation (including disaggregation into specified categories) and income taxes paid by jurisdiction. The Company adopted ASU 2023-09. The expanded rate reconciliation and income taxes paid disclosures are reflected in Note 16.
Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement, Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses, as subsequently clarified by ASU 2025-01 issued in January 2025, which requires expanded disclosure of certain expense categories. The standard is effective for the Company’s annual period ending June 30, 2028 and interim periods beginning in fiscal year 2029. As the standard is disclosure-only, adoption will not affect the Company’s financial position, results of operations, or cash flows. The Company is evaluating the enhanced disclosure requirements.
| F-43 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
In November 2024, the FASB issued ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20), which clarifies the requirements for determining whether settlements of convertible debt instruments should be accounted for as induced conversions. The standard is effective for the Company’s fiscal year beginning July 1, 2026. The Company is evaluating the impact, which is not expected to be material.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments, Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that allows entities to assume current economic conditions persist over the forecast period when estimating expected credit losses on current accounts receivable and contract assets within the scope of ASC 606. The standard is effective for the Company’s fiscal year beginning July 1, 2026. The Company plans to adopt ASU 2025-05 in fiscal 2027 and does not expect a material impact.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes the project-stage framework for capitalizing internal-use software costs. The standard is effective for the Company’s fiscal year beginning July 1, 2028. The Company is evaluating the effect on its robotics and artificial intelligence software development costs.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which excludes certain non-exchange-traded contracts with underlyings based on operations or activities specific to one of the parties from derivative accounting. The standard is effective for the Company’s fiscal year beginning July 1, 2027. The Company is evaluating the effect on its bifurcated conversion features.
Other Accounting Standards Updates
The FASB has issued other technical corrections and narrow-scope amendments across various accounting topics. These updates are not expected to have a material impact on the Company’s consolidated financial statements.
| F-44 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Reclassifications
Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no material impact on the Company’s consolidated results of operations, stockholders’ equity (deficit), or cash flows.
As a result of the classification of the Company’s Snacks and Beverages segment as discontinued operations, the related results of operations, cash flows, and disclosures have been reclassified and presented separately from continuing operations for all periods presented.
Note 3 - Property and Equipment
Property and equipment consisted of the following:
| Estimated Useful | ||||||||||
| June 30, 2026 | June 30, 2025 | Lives (Years) | ||||||||
| Building and Improvements | $ | |||||||||
| Land | N/A | |||||||||
| Furniture, fixtures and equipment | ||||||||||
| Machinery and equipment | ||||||||||
| Vehicles | ||||||||||
| Accumulated Depreciation | ( | ) | ( | ) | ||||||
| Total property and equipment - net | $ | $ | ||||||||
Assets Acquired in Business Combinations
During fiscal years 2026 and 2025, the Company completed several acquisitions in connection with its expansion into robotics and hospitality operations. See Note 9.
Fiscal Year Ended June 30, 2026
On
August 27, 2025, and September 30, 2025, the Company acquired Victorville and Rancho Mirage, respectively, obtaining land, buildings
and improvements, and furniture and equipment with an aggregate fair value of approximately $
Fiscal Year Ended June 30, 2025
On
March 31, 2025, the Company acquired SWC and Skytech, obtaining property and equipment with an aggregate fair value of approximately
$
| F-45 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The Company measured all acquired property and equipment at fair value as of each acquisition date. Fair values were determined using a combination of market comparable and replacement cost approaches, depending on asset type. Any difference between the fair value of the assets acquired and their historical carrying amounts was recognized as part of the purchase price allocation, and the excess of purchase consideration over the fair value of net identifiable assets was recorded as goodwill.
Depreciation expense for the years ended June 30, 2026 and 2025 was as follows. See Note 10 for amortization expense related to finite-lived intangible assets, which is also included in the “Depreciation and amortization” line on the consolidated statements of operations. Operating lease cost is recognized as a single lease cost on a straight-line basis within general and administrative expenses and is not included in depreciation and amortization (Note 15).
| Year Ended June 30, | ||||||
| 2026 | 2025 | |||||
| $ | $ | |||||
Note 4 - Accounts Payable and Accrued Liabilities including Related Parties
Accounts payable and accrued liabilities consist of amounts due to vendors and service providers for goods and services received and not yet paid, accrued interest on notes payable including default interest on notes in default, accrued director fees, and other operating accruals for expenses incurred and not yet invoiced at the balance sheet date.
Accounts payable and accrued liabilities - related parties consist of amounts due to the Company’s officers and directors and a related party lender for accrued compensation and bonuses, accrued interest on related party notes payable and the related party line of credit, and expenses paid on the Company’s behalf. During the year ended June 30, 2026, certain related party payables were settled through the issuance of notes payable. See Note 5.
| F-46 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Accounts payable and accrued liabilities were as follows:
| June 30, 2026 | June 30, 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Accrued director fees | ||||||||
| Accrued interest payable | ||||||||
| Total accounts payable and accrued liabilities | $ | $ | ||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Accounts Payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Accrued director fees | ||||||||
| Accrued Interest payable | ||||||||
| Accrued bonuses | ||||||||
| Total accounts payable and accrued liabilities - related parties | $ | $ | ||||||
Accrued liabilities of $
Accrued liabilities - related parties of $
Note 5 - Debt
Debt consists of convertible notes payable, notes payable, convertible notes payable – related parties, note payable - related party, mortgage notes payable secured by the Company’s two hotel properties, and a revolving line of credit - related party.
The following table summarizes the Company’s debt obligations as of June 30, 2026 and 2025:
| June 30, 2026 | June 30, 2025 | |||||||
| Convertible notes payable - net | $ | $ | ||||||
| Convertible notes payable - related parties - net | ||||||||
| Notes payable - net | ||||||||
| Note payable - related party - net | ||||||||
| Mortgage notes payable - net | ||||||||
| Line of credit - related party | ||||||||
| Total debt - net | ||||||||
| Less: current portion | ||||||||
| Long-term debt - net | $ | $ | ||||||
| F-47 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| Issue Date | Maturity Date | Interest Rate | Default Interest Rate | Collateral | Related Party | Conversion Price | Equivalent Shares | Debt Type | ||||||||||||||||||
| Loan #1 | % | % | No | $ | ||||||||||||||||||||||
| Loan #2 | % | % | No | $ | ||||||||||||||||||||||
| Loan #3 | % | % | No | $ | ||||||||||||||||||||||
| Loan #4 | % | % | No | $ | ||||||||||||||||||||||
| Loan #5 | % | % | No | $ | ||||||||||||||||||||||
| Loan #6 | % | % | No | $ | ||||||||||||||||||||||
| Loan #7 | % | % | No | $ | ||||||||||||||||||||||
| Loan #8 | % | % | No | $ | ||||||||||||||||||||||
| Loan #9 | % | % | No | $ | ||||||||||||||||||||||
| Loan #10 | % | % | No | $ | ||||||||||||||||||||||
| Loan #11 | % | % | No | $ | ||||||||||||||||||||||
| Loan #12 | % | % | No | $ | ||||||||||||||||||||||
| Loan #13 | % | % | No | $ | ||||||||||||||||||||||
| Loan #14 | % | % | No | $ | ||||||||||||||||||||||
| Loan #15 | % | % | No | $ | ||||||||||||||||||||||
| Loan #16 | % | % | No | $ | ||||||||||||||||||||||
| Loan #17 | % | % | No | $ | ||||||||||||||||||||||
| Loan #18 | % | %/month | No | $ | ||||||||||||||||||||||
| Loan #19 | % | % | Yes | $ | ||||||||||||||||||||||
| Loan #20 | % | % | No | $ | ||||||||||||||||||||||
| Loan #21 | % | % | No | $ | ||||||||||||||||||||||
| Loan #22 | % | % | No | $ | ||||||||||||||||||||||
| Loan #23 | % | % | No | $ | ||||||||||||||||||||||
| Loan #24 | % | % | No | $ | ||||||||||||||||||||||
| Loan #25 | % | % | No | $ | ||||||||||||||||||||||
| Loan #26 | % | % | No | $ | ||||||||||||||||||||||
| Loan #27 | % | % | No | $ | ||||||||||||||||||||||
| Loan #28 | % | % | Yes | $ | ||||||||||||||||||||||
| Loan #29 | % | % | No | $ | ||||||||||||||||||||||
| Loan #30 | % | % | No | $ | ||||||||||||||||||||||
| Loan #31 | % | % | No | $ | ||||||||||||||||||||||
| Loan #32 | % | % | No | $ | ||||||||||||||||||||||
| Loan #33 | % | % | No | $ | ||||||||||||||||||||||
| Loan #34 | % | % | No | $ | | |||||||||||||||||||||
| Loan #35 | % | % | No | $ | | |||||||||||||||||||||
| Loan #36 | % | % | No | $ | ||||||||||||||||||||||
| Loan #37 | % | % | No | $ | ||||||||||||||||||||||
| Loan #38 | % | % | No | $ | ||||||||||||||||||||||
| Loan #39 | % | % | No | $ | | |||||||||||||||||||||
| Loan #40 | % | % | No | $ | | |||||||||||||||||||||
| Loan #41 | % | % | No | $ | | |||||||||||||||||||||
| Loan #42 | % | % | Yes | $ | ||||||||||||||||||||||
| Loan #43 | % | % | No | $ | ||||||||||||||||||||||
| Loan #44 | % | % | Yes | $ | ||||||||||||||||||||||
| Loan #45 | % | % | Yes | $ | ||||||||||||||||||||||
Loans
#1 through #14, #29, #37 and #38 were in default at June 30, 2026, with principal in default totaling $
The common stock equivalents above include shares issuable on conversion of Loans #13, #14, #15, #39, #40 and #41 that are subject to contractual lock-up provisions and are not currently eligible for conversion. These shares are excluded from the anti-dilutive securities table in Note 2. The equivalent shares in the table above total , of which are subject to the lock-up, leaving included as convertible debt in the anti-dilutive securities table in Note 2. See Note 8.
| F-48 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Convertible Notes Payable
The Company’s convertible notes payable are summarized as follows:
| June 30, 2024 | $ | |||
| Advances | ||||
| Debt Discount | ( | ) | ||
| Amortization of debt discount | ||||
| Conversions of debt to equity | ( | ) | ||
| Non-cash increase of principal | ||||
| Debt acquired in acquisition - SWC | ||||
| June 30, 2025 | ||||
| Advances | ||||
| Debt Discount | ( | ) | ||
| Amortization of debt discount | ||||
| Conversions of debt to equity | ( | ) | ||
| Non-cash increase of principal | ||||
| June 30, 2026 | $ |
The Company’s convertible notes payable are detailed as follows:
| Convertible Notes Payable | ||||||||||||||||||||||||||||||||||||||||||
| Note # | June 30, 2024 | Face amount of note | Non-cash increase of principal |
Acquired in acquisitions | Debtdiscounts | Amortization of debt discount |
Conversion of debt to common stock | June 30, 2025 | In Default | Unamortized Debt Discount | ||||||||||||||||||||||||||||||||
| Note #1 | A | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Note #2 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #3 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #4 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #5 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #6 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #7 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #8 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #9 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #10 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #11 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #12 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #13 | A | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #14 | A | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #15 | A | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #16 | A | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #17 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #20 | B | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #21 | B | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #22 | B | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #23 | B | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #24 | B | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #25 | B | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| Short Term | $ | |||||||||||||||||||||||||||||||||||||||||
| Long Term | $ | |||||||||||||||||||||||||||||||||||||||||
| F-49 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| Convertible Notes Payable | ||||||||||||||||||||||||||||||||||||||||||
| Note # | June 30, 2025 | Face amount of note | Non-cash increase of principal | Acquired in acquisitions | Debt discounts | Amortization of debt discount | Conversion of debt to common stock | June 30, 2026 | In Default | Unamortized Debt Discount | ||||||||||||||||||||||||||||||||
| Note #1 | A | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||
| Note #2 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #3 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #4 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #5 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #6 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #7 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #8 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #9 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #10 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #11 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #12 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #13 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #14 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #15 | A | |||||||||||||||||||||||||||||||||||||||||
| Note #16 | A | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #17 | A | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #20 | B | |||||||||||||||||||||||||||||||||||||||||
| Note #21 | B | |||||||||||||||||||||||||||||||||||||||||
| Note #22 | B | |||||||||||||||||||||||||||||||||||||||||
| Note #23 | B | |||||||||||||||||||||||||||||||||||||||||
| Note #24 | B | |||||||||||||||||||||||||||||||||||||||||
| Note #25 | B | |||||||||||||||||||||||||||||||||||||||||
| Note #39 | C | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #40 | C | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #41 | C | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Note #43 | D | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| Short Term | $ | |||||||||||||||||||||||||||||||||||||||||
| Long Term | $ | |||||||||||||||||||||||||||||||||||||||||
The conversion price of each note is determined under one of four (4) structures:
| Conversion | Look Back | Discount to | Conversion Feature | |||||||
| Structure | Conversion Price | Period | Market | Bifurcated | ||||||
| A | Fixed
conversion price ($ | Not applicable | None | No | ||||||
| B | Lowest trading price | % | Yes | |||||||
| C | Lower
of fixed price ($ | % | Yes | |||||||
| D | Lower
of fixed price ($ | % | Yes | |||||||
Structure A adjusts only for stock splits, stock dividends, reclassifications and similar transactions. Because the conversion price under Structures B, C and D contains a variable component that can result in settlement in a variable number of shares, the embedded conversion feature in each of those notes is not indexed to the Company’s own stock and was bifurcated from the host instrument and recorded as a derivative liability. Each feature was measured at fair value at issuance, and the derivative liabilities are remeasured at fair value at each reporting date with changes recognized in other income (expense) - net. The conversion features under Structure A were not bifurcated. See Notes 11 and 12.
| F-50 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Fiscal Year Ended June 30, 2026
The Company issued three (3) senior secured convertible notes to an institutional investor under separate Securities Purchase Agreements (Loans #39, #40 and #41), the same lender that holds Loans #1 through #15, and issued one convertible note to an accredited investor (Loan #43).
The stated rate on Loans #39, #40 and #41 decreases to 5% per annum during periods when the Company’s common stock is listed for trading on a national securities exchange. The original issue discount on each Note increases by 3% of the total outstanding balance on each anniversary of the issuance date until the applicable Note is no longer outstanding.
| Note # | Issuance Date | Maturity Date | Principal | Original Issue Discount | Net Proceeds | |||||||||||
| 39 | $ | $ | $ | |||||||||||||
| 40 | ||||||||||||||||
| 41 | ||||||||||||||||
| 43 | ||||||||||||||||
| $ | $ | $ | ||||||||||||||
Because the conversion price contains a variable component that can result in settlement in a variable number of shares, the Company determined that the embedded conversion feature in each Note requires bifurcation from the host debt instrument as a derivative liability.
The derivative liabilities are remeasured at fair value at each reporting date, with changes recognized in the consolidated statements of operations as a component of other income (expense), net. See Notes 11 and 12.
| F-51 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
At the issuance date of each Note, the Company measured the bifurcated conversion feature at fair value. The resulting debt discount, together with the original issue discount, was limited to the face amount of the applicable Note, and the excess of the derivative fair value over the net proceeds was recognized as a charge to derivative expense during the year ended June 30, 2026. The aggregate debt discount associated with each Note is being amortized to interest expense over the one-year term of the Note using the effective interest method.
| Initial Derivative | Aggregate | Derivative | ||||||||||||
| Note # | Issuance Date | Fair Value | Debt Discount | Expense | ||||||||||
| 39 | $ | $ | $ | |||||||||||
| 40 | ||||||||||||||
| 41 | ||||||||||||||
| 43 | ||||||||||||||
| $ | $ | $ | ||||||||||||
Fiscal Year Ended June 30, 2025
Convertible Notes Payable - Settlement of SWC Vendor Obligations
In
connection with the acquisition of SWC Group Inc. on March 31, 2025, the Company entered into settlement agreements with certain former
vendors and creditors of SWC under which SWC’s outstanding trade payables were extinguished and replaced with convertible promissory
notes issued by the Company. The notes have an aggregate face value of $
Each note is convertible at the holder’s option into shares of common stock at a conversion price equal to 65% of the lowest trading price during the twenty (20) trading days preceding the conversion date. The conversion right was conditioned on completion of the SWC merger and became exercisable at the closing on March 31, 2025. Because the conversion price is variable and the notes are settleable in an indeterminate number of shares, the conversion features are not indexed to the Company’s own stock and were bifurcated from the host instruments and accounted for as derivative liabilities under ASC 815-15-25-1 and ASC 815-40-15-7.
The
bifurcated conversion features were measured at an aggregate fair value of $
See Notes 11 and 12.
| F-52 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Loans #16/#17 – Amendments
On July 23, 2024, the Company amended the notes to remove the right to adjust the conversion price. In exchange, the amounts due under the notes were increased by 10% and the Company issued shares of Series D convertible preferred stock. The Company evaluated the amendment under ASC 470-50-40 and concluded the terms were substantially different, resulting in a loss on extinguishment as follows:
| Fair value of debt (10% increase) and Series D, preferred stock on extinguishment date | $ | |||
| Loss on debt extinguishment | $ |
See Note 8 for the Series D convertible preferred stock issued in connection with these extinguishments.
In April 2025, the maturity date of the notes was extended from April 2025 to November 1, 2025 with no additional consideration paid. The Company concluded the extension did not result in a substantially different instrument and accounted for it as a continuation of the existing debt, with no gain or loss recognized.
Debt Conversions
Fiscal Year Ended June 30, 2026
The
Company issued shares of common stock on conversions of three convertible loans (loans #1, #16 and #17) at the fixed contractual
conversion price of $
| Note # | Shares Issued | Principal | Accrued Interest | Default Interest | Fees | Total Converted | ||||||||||||||||||
| 1 | $ | $ | $ | $ | $ | |||||||||||||||||||
| 16 | ||||||||||||||||||||||||
| 17 | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||
| F-53 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Fiscal Year Ended June 30, 2025
The
Company issued shares of common stock on conversions of two convertible loans (loans #2 and #16) at the fixed contractual conversion
price of $
| Note # | Shares Issued | Principal | Accrued Interest | Default Interest | Fees | Total Converted | ||||||||||||||||||
| 2 | $ | $ | $ | $ | $ | |||||||||||||||||||
| 16 | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||
The Company accounted for the conversions as extinguishments. The fair value of the common stock issued equaled the carrying amount of the debt extinguished, and no gain or loss was recognized.
Notes Payable
The following represents a summary of the Company’s notes payable at June 30, 2026 and 2025:
| June 30, 2024 | $ | |||
| Proceeds | ||||
| Repayments | ( | ) | ||
| Debt acquired in acquisition | ||||
| June 30, 2025 | ||||
| Repayments | ( | ) | ||
| Debt acquired in acquisition - net - Victorville | ||||
| Debt acquired in acquisition - net - Rancho Mirage | ||||
| Settlement of pre-existing debt of target acquisition | ( | ) | ||
| Amortization of debt discount | ||||
| June 30, 2026 | $ |
| F-54 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The following represents a detail of the Company’s notes payable at June 30, 2026 and 2025:
| Loans #26 and #27 | Various Loans#18, #29, #30 and #31 | Acquired Debt Loan #36 | Acquired Debt Loan #37 | Acquired Debt Loan #38 | Total | |||||||||||||||||||
| Date of Note | ||||||||||||||||||||||||
| Maturity Date of Note | Demand | |||||||||||||||||||||||
| Interest Rate | ||||||||||||||||||||||||
| Default Interest Rate | ||||||||||||||||||||||||
| In-Default | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Collateral | ||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Settlement of pre-existing debt of target acquisition | ( | ) | ( | ) | ||||||||||||||||||||
| Debt acquired in acquisition - Victorville | ||||||||||||||||||||||||
| Debt discount | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Debt acquired in acquisition - Rancho Mirage | ||||||||||||||||||||||||
| Amortization of debt discount | ||||||||||||||||||||||||
| Repayments | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| June 30, 2026 | ||||||||||||||||||||||||
| Less: short term | ||||||||||||||||||||||||
| Long term | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Proceeds | ||||||||||||||||||||||||
| Debt acquired in acquisition - SWC | ||||||||||||||||||||||||
| Repayments | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| June 30, 2025 | ||||||||||||||||||||||||
| Less: short term | ||||||||||||||||||||||||
| Long term | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Loans #26/#27 - Notes Payable - Vehicles
The Company has two vehicle financing notes, each secured by the vehicle it financed.
Loans #30/#31 - Notes Payable - Victorville Hotel Acquisition
During
April and June 2025, the Company entered into two (2) loan agreements with the seller of the Victorville hotel property. Under these
agreements, the seller advanced the Company an aggregate of $
The
Victorville acquisition closed on August 27, 2025, and the aggregate balance of $
Convertible Notes Payable - Related Parties
The following represents a summary of the Company’s convertible notes payable - related parties at June 30, 2026 and 2025:
| June 30, 2024 | $ | |||
| Debt acquired in acquisition - SWC | ||||
| Debt Discount | ( | ) | ||
| Amortization of debt discount | ||||
| Repayments | ( | ) | ||
| June 30, 2025 | ||||
| Conversion of accounts payable to | ||||
| convertible note payable - related party | ||||
| Amortization of debt discount | ||||
| June 30, 2026 | $ |
| F-55 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The following represents a detail of the Company’s convertible notes payable - related parties at June 30, 2026 and 2025:
| Loan #19 | Loan #28 | Loan #42 | Total | |||||||||||||
| Holder | Chief Executive Officer | * | Board Director | * | Board Director | * | ||||||||||
| Date of Note | ||||||||||||||||
| Maturity Date of Note | ||||||||||||||||
| Interest Rate | ||||||||||||||||
| In-Default | $ | $ | $ | $ | ||||||||||||
| Collateral | ||||||||||||||||
* These convertible notes are convertible at a discount, equal to 65% of the lowest market price over the preceding 20 days.
| June 30, 2025 | $ | $ | $ | $ | ||||||||||||
| Conversion of accounts payable to convertible note payable - related party | ||||||||||||||||
| Amortization of debt discount | ||||||||||||||||
| June 30, 2026 | ||||||||||||||||
| Less: short term | ||||||||||||||||
| Long term | $ | $ | $ | $ | ||||||||||||
| June 30, 2024 | $ | $ | $ | $ | ||||||||||||
| Debt acquired in acquisition - SWC | ||||||||||||||||
| Debt discount | ( | ) | ( | ) | ( | ) | ||||||||||
| Amortization of debt discount | ||||||||||||||||
| Repayments | ( | ) | ( | ) | ||||||||||||
| June 30, 2025 | ||||||||||||||||
| Less: short term | ||||||||||||||||
| Long term | $ | $ | $ | $ |
At
June 30, 2026, unamortized debt discount was $
Loan #42
Convertible Note Payable - Related Party Settlement of Vendor Obligation
On
March 31, 2026, the Company entered into a settlement agreement with a related party to extinguish $
The
note is convertible into shares of the Company’s common stock at a conversion price equal to
| F-56 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
At
the issuance date, the Company measured the bifurcated conversion feature at a fair value of $
The derivative liability is remeasured at fair value at each reporting date, with changes recognized in the consolidated statements of operations as a component of other income (expense), net.
See Notes 11 and 12.
Mortgage Notes Payable
The following represents a summary of the Company’s mortgage notes payable at June 30, 2026 and 2025:
| June 30, 2025 | $ | |||
| Debt acquired in acquisition - Victorville | ||||
| Debt acquired in acquisition - Rancho Mirage | ||||
| Repayments | ( | ) | ||
| June 30, 2026 | $ |
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.
The assumed mortgage notes were recorded at their estimated fair values as of the respective acquisition dates in accordance with ASC 805. The fair value measurements reflected market-based assumptions regarding interest rates and credit spreads for comparable debt instruments at the time of each acquisition.
The
Victorville acquisition resulted in the recognition of an assumed mortgage note with an acquisition-date fair value of $
The assumed mortgage notes are secured by the respective hotel properties and contain customary covenants and repayment terms. See Note 9.
| F-57 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The following table presents a detail of the Company’s mortgage notes payable at June 30, 2026 and 2025:
| Loan #34 | Loan #35 | Total | ||||||||||
| Property Name | Victorville | Rancho Mirage | ||||||||||
| Date of Note | ||||||||||||
| Maturity Date of Note | ||||||||||||
| Interest Rate | * | * | ||||||||||
| In-Default | $ | $ | $ | - | ||||||||
| Collateral | ||||||||||||
| * |
| June 30, 2025 | $ | $ | ||||||||||
| Debt acquired in acquisition | ||||||||||||
| Repayments | ( | ) | ( | ) | ( | ) | ||||||
| June 30, 2026 | ||||||||||||
| Less: short term | ||||||||||||
| Long term | $ | $ | $ |
Note Payable - Related Party (Loan #45)
On
April 16, 2026, the Company entered into a settlement agreement with a related party to extinguish $
Line of Credit - Related Party
On
April 5, 2026, the Company entered into a revolving line of credit agreement with a related party lender providing for advances of
up to $
The
line bears interest at
Proceeds may be used only for working capital and general corporate purposes, and not to redeem or pay distributions on the Company’s equity securities or to fund payments to officers, directors or affiliates without the lender’s consent.
| F-58 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The initial term runs twelve (12) months from April 5, 2026, expiring April 5, 2027, and renews automatically for successive twelve (12) month periods absent written notice of non-renewal from either party at least thirty (30) days before the end of the then current term. The lender may terminate the agreement and any further advances at any time, for any reason, on thirty (30) days’ written notice, and immediately upon an event of default.
The agreement contains customary affirmative and negative covenants, including:
| ● | maintenance of SEC reporting status and a public trading market for the common stock | |
| ● | limitation on additional indebtedness and on liens on the Company’s assets | |
| ● | limitation on dividends, distributions and repurchases of capital stock | |
| ● | limitation on loans, advances and investments involving officers, directors and affiliates | |
| ● | limitation on asset sales, mergers and a change of control |
Events of default include customary payment, bankruptcy and covenant defaults, as well as:
| ● | default
under other indebtedness for borrowed money exceeding $ | |
| ● | deregistration or delisting of the common stock, or suspension of trading for five (5) or more consecutive trading days | |
| ● | a material adverse change in the Company’s business, assets, operations or financial condition as reasonably determined by the lender |
Upon an event of default the lender may declare all obligations immediately due and payable, terminate further advances, and exercise the rights and remedies of a secured party against the collateral.
At
June 30, 2026, $
The outstanding balance is classified as a current liability at June 30, 2026.
The following is a summary of the Company’s line of credit - related party:
| June 30, 2025 | $ | |||
| Advances | ||||
| Reclassification from accounts payable - related party | ||||
| June 30, 2026 | $ |
| F-59 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Debt Maturities
The following table presents future maturities of the Company’s debt arrangements for the years ending June 30. The amounts presented in the annual maturity columns represent gross contractual principal payments, before unamortized debt discount. Unamortized debt discount is presented in a separate column so that the table reconciles to the carrying amounts of debt reported in the consolidated balance sheet. No principal payments are contractually due after June 30, 2029.
| Less: Unamortized | ||||||||||||||||||||||||
| June 30, 2027 | June 30, 2028 | June 30, 2029 | Total | Debt Discount | Total | |||||||||||||||||||
| Convertible Notes Payable | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Convertible Notes Payable - Related Parties | $ | |||||||||||||||||||||||
| Notes Payable | $ | |||||||||||||||||||||||
| Note Payable - Related Party | $ | |||||||||||||||||||||||
| Mortgage Notes Payable | $ | |||||||||||||||||||||||
| Line of Credit - Related Party | $ | |||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Note 6 - Fair Value of Financial Instruments
The Company’s fair value measurement policies, including the three-level hierarchy framework under ASC 820, are described in Note 2. The Company’s mortgage notes payable were recorded at estimated fair value upon acquisition in accordance with ASC 805 and are subsequently carried at amortized cost. The Company believes the carrying amounts approximate fair value as of June 30, 2026 based on the variable interest rate terms of the underlying instruments. See Note 12 for the Company’s recurring fair value measurements of derivative liabilities.
Note 7 - Commitments and Contingencies
Contingencies - Legal Matters
The Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries.
In April 2026, a former placement agent and its affiliates asserted claims against the Company relating to an engagement agreement and certain warrants previously issued by the Company. No legal proceeding has been commenced. The Company believes the claims are without merit and intends to defend itself vigorously. The Company has not recorded a liability for this matter and is unable to estimate the possible loss or range of loss, if any.
Other than the matter described above, as of June 30, 2026, the Company is not aware of any litigation, pending litigation, or other transactions that require accrual or disclosure.
Note 8 - Temporary Equity and Stockholders’ Equity (Deficit)
As of June 30, 2026, the Company had five (5) classes of stock, detailed as follows:
With respect to Series B, C and D convertible preferred stock, see Convertible Preferred Stock Classification and Authorized Share Sufficiency below regarding classification as temporary equity at June 30, 2025, the conversion of the Series B on November 12, 2025 and the reclassification of the Series C and Series D to permanent equity effective November 19, 2025.
| F-60 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Preferred Stock
The Company’s preferred stock is as follows.
| ● | Authorized Shares: | |
| ● | Par Value: $ 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.
Series A, Preferred Stock - Related Party
| ● | Designated Shares: | |
| ● | Issued & Outstanding: shares as of June 30, 2026 and 2025. All shares are owned by the Company’s Chief Executive Officer. | |
| ● | Par Value: $ per share | |
| ● | Stated
Value: | |
| ● | Conversion
Terms: | |
| ● | Dividend
Provisions: | |
| ● | Voting
Rights: | |
| ● | Liquidation
Preference: | |
| ● | Redemption Rights: |
Series B, Convertible Preferred Stock
| ● | Designated Shares: | |
| ● | Issued & Outstanding: and shares as of June 30, 2026 and 2025, respectively | |
| ● | Par Value: $ per share | |
| ● | Stated
Value: | |
| ● | Conversion
Terms: convertible into shares of common stock, as amended October 28, 2025 (original
terms were shares of common stock and warrants with an exercise price of $ | |
| ● | Dividend
Provisions: | |
| ● | Voting
Rights: | |
| ● | Liquidation
Preference: | |
| ● | Redemption Rights: |
| F-61 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Derivative Liability Assessment: |
| ○ | Evaluated under ASC 815 (“Derivatives and Hedging”) | |
| ○ | The Series B Convertible Preferred Stock and the related warrants did 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. |
Deemed Dividends - Series B Convertible Preferred Stock
Deemed dividends arising from reductions in the Series B conversion price were recorded as a reclassification from additional paid-in capital to accumulated deficit and reduced income available to common stockholders for purposes of earnings per share.
During
the fiscal years ended June 30, 2026 and 2025, the Company recorded additional deemed dividends of $
Conversion of Series B, Convertible Preferred Stock
The Company evaluated the amendment under ASC 470-20 and ASC 260-10-S99-2 by comparing the fair value of the securities issuable under the modified terms to the fair value under the original terms at the conversion date and concluded that no deemed dividend arose.
The carrying amount of the Series B Convertible Preferred Stock of $
Series C, Convertible Preferred Stock
| ● | Designated Shares: | |
| ● | Issued & Outstanding: and shares as of June 30, 2026 and 2025, respectively | |
| ● | Par Value: $ per share | |
| ● | Stated
Value: |
| F-62 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| ● | Conversion Terms: convertible into shares of common stock | |
| ● | Dividend
Provisions: | |
| ● | Voting
Rights: | |
| ● | Liquidation
Preference: | |
| ● | Redemption Rights: | |
| ● | 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. |
Increase in Authorized Shares for Designation
The original Certificate of Designation designated shares. On December 3, 2025, the Company filed a Certificate of Amendment with the Nevada Secretary of State increasing the designated shares to to accommodate shares issued as acquisition consideration and compensation.
Lock-Up Provisions
Shares of Series C Convertible Preferred Stock issued as compensation, as acquisition consideration and to a material lender in connection with certain convertible notes payable are subject to contractual lock-up provisions that prohibit conversion until the Company has completed an uplisting to a senior national stock exchange and effected a reverse stock split such that its authorized common shares are sufficient to accommodate conversion of all outstanding convertible securities.
At June 30, 2026, shares of Series C Convertible Preferred Stock were outstanding, convertible into shares of common stock at shares of common stock for each share. Of these, shares ( common shares) are locked up and shares ( common shares) are eligible for conversion. The lock-up is released when the Company has completed an uplisting to a senior national securities exchange and effected a reverse stock split such that its authorized common shares are sufficient to accommodate conversion of all outstanding convertible securities.
The eligible shares are included in the antidilutive securities table in Note 2. The locked-up shares are excluded from that table and from the authorized share sufficiency analysis while the lock-up remains in effect, and will be included when it expires.
Effective March 31, 2026, a material lender agreed to a contractual lock-up on the conversion of Loans #13, #14, #15, #39, #40 and #41 until sufficient authorized shares are made available to effect a related conversion. At June 30, 2026, the principal and accrued interest on these notes were convertible into shares of common stock. These shares are excluded from the anti-dilutive securities table in Note 2 and from the authorized share sufficiency analysis while the lock-up remains in effect, and will be included when it expires.
| F-63 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Convertible Preferred Stock Classification and Authorized Share Sufficiency
Temporary Equity Classification at June 30, 2025
At June 30, 2025, the Company had authorized shares of common stock, and the common shares issuable on conversion or exercise of its Series B, Series C and Series D Convertible Preferred Stock, warrants and convertible notes payable exceeded that amount.
Because share settlement was not within the Company’s control, the Series B, Series C and Series D Convertible Preferred Stock were classified as temporary equity at June 30, 2025 under ASC 480-10-S99-3A and ASC 815-40-25. The shares are not redeemable; the classification arose solely from the insufficiency of authorized shares.
Increase in Authorized Shares
On October 7, 2025, the Board of Directors and the majority voting stockholder approved an increase in authorized common stock from to shares. The amendment to the Articles of Incorporation became effective November 19, 2025, twenty (20) days after the definitive information statement on Schedule 14C was mailed to stockholders, and did not change the shares outstanding or the rights of existing stockholders.
Resolution of Authorized Share Insufficiency and Reclassification to Permanent Equity
On November 19, 2025, the Company’s authorized common stock increased to shares. At that date, the common shares issuable on conversion or exercise of all outstanding convertible notes, warrants and Series C and D Convertible Preferred Stock, other than the shares of Series C Convertible Preferred Stock ( common shares) locked up as described above, were within the authorized.
Effective
November 19, 2025, the Company reclassified its Series C and Series D Convertible Preferred Stock, and the $
| F-64 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Contingent Consideration - Series C Convertible Preferred Stock
In connection with the Victorville and Rancho Mirage acquisitions, the Company agreed to issue up to and additional shares of Series C Convertible Preferred Stock, respectively, on achievement of post-acquisition milestones. At June 30, 2026, no milestone had been achieved and no shares had been issued. Any Series C Convertible Preferred Stock issued on achievement of a milestone is subject to the lock-up described above, which prohibits conversion until the Company has completed an uplisting to a senior national stock exchange and a reverse stock split that provides sufficient authorized common shares. Because the shares cannot be converted while the lock-up is in effect, they are excluded from the authorized share sufficiency analysis in the same manner as the locked-up Series C Convertible Preferred Stock already outstanding, and will be included when the lock-up expires.
The
contingent consideration was measured at acquisition-date fair value under ASC 805 at $
Ongoing Monitoring
The Company reassesses authorized share sufficiency, and the classification of its convertible preferred stock, on expiration of the Series C lock-up, resolution of the contingent consideration, issuance of additional convertible instruments and any change to warrant or conversion terms.
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 shares and 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 fair values of $
See Note 9.
| F-65 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Stock Issued for Services
On
October 22, 2025, the Company issued 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 $/share. Applying the
Conversion of Series C, Convertible Preferred Stock
The Company converted shares of Series C Preferred Stock into 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 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 $/share. Applying the
On
March 25, 2025, the Company granted 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 $/share. Applying the
| 1. | Closing of the acquisitions of both SWC and Skytech - 1/3 vested on March 31, 2025. | |
| 2. | 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. This milestone was achieved on February 23, 2026 upon the filing of the Company’s Form 10-Q reflecting greater than $40,000,000 of positive stockholders equity. | |
| 3. | 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. This milestone has not yet occurred. |
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).
| F-66 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Unvested Series C, Convertible Preferred Stock - Compensation
| Weighted Average | ||||||||
| Number of | Grant Date | |||||||
| Non-Vested Shares | Shares | Fair Value | ||||||
| June 30, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Cancelled/Forfeited | ||||||||
| June 30, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Cancelled/Forfeited | ||||||||
| June 30, 2026 | $ | |||||||
| Unrecognized compensation | $ | |||||||
| Weighted average remaining period (years) | ||||||||
During the years ended June 30, 2026 and 2025, respectively, the Company recognized $ and $ of compensation expense related to vesting. During the year ended June 30, 2026, shares of Series C Convertible Preferred Stock were issued upon vesting under these awards, having an aggregate grant date fair value of $ ($ per share of Series C Convertible Preferred Stock, being $ per common share on an as-converted basis).
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 and shares of Series C Convertible Preferred Stock, respectively, as part of the purchase consideration.
See Note 9 for additional information regarding these acquisitions.
| F-67 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
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 $
| Company Revenue | Restricted Stock Award (% of equity) | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
EBITDA-Based Equity Awards
The
sellers are eligible to receive additional shares of Series C Convertible Preferred Stock with an aggregate maximum value of $
| Company EBITDA | Restricted Stock Award (% of equity) | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
| $ | % | |||||
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 June 30, 2026, none of the revenue or EBITDA milestones have been achieved and no awards have been issued.
| F-68 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
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. On November 12, 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
| ● | Designated Shares: | |
| ● | Issued & Outstanding: and shares as of June 30, 2026 and 2025, respectively | |
| ● | Par Value: $ per share | |
| ● | Stated
Value: | |
| ● | Conversion Terms: convertible into shares of common stock | |
| ● | Dividend
Provisions: | |
| ● | Voting
Rights: | |
| ● | Liquidation
Preference: | |
| ● | Redemption Rights: |
| F-69 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
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. On November 12, 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 shares of common stock upon the conversion of shares of Series D Convertible Preferred
Stock at the
Series D, Convertible Preferred Stock Transactions for the Year Ended June 30, 2025
On July 23, 2024, the Company issued an additional 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 $, based on the as-converted value of the underlying common stock adjusted for a discount for lack of marketability.
See Note 5 for additional discussion regarding debt and related calculation of loss on debt extinguishment.
Common Stock
| ● | Authorized Shares: | |
| ● | Issued & Outstanding: |
| ○ | shares as of June 30, 2026 | |
| ○ | shares as of June 30, 2025 |
| ● | Par Value: $ per share | |
| ● | Voting
Rights: |
| F-70 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Equity Transactions for the Year Ended June 30, 2026
Stock Issued for Cash
The
Company issued shares of common stock for cash proceeds of $
Stock Issued for Cash - Subscription Receivable
The
Company issued shares of common stock under its equity line of credit with a majority lender for $
Cash Paid as Direct Offering Costs
The
Company paid $
Common Stock Issued upon Conversion of Convertible Notes Payable and Related Accrued Interest Payable
The
Company issued shares of common stock to holders of convertible notes upon conversion of $
Stock Issued for Services
The
Company issued shares of common stock to consultants for services rendered, having a fair value of $
Acquisition of BIM-E Intellectual Property and Technology Assets
The
Company issued 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 $
| F-71 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Equity Transactions for the Year Ended June 30, 2025
Stock Issued for Services
The
Company issued shares of common stock to consultants for services rendered, having a fair value of $
Common Stock Issued in connection with Conversion of Convertible Notes Payable and Related Accrued Interest Payable
The
Company issued an aggregate of 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 $
Warrants
Warrant activity for the years ended June 30, 2026 and 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 | $ | $ | ||||||||||||||
| Exercisable - June 30, 2024 | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ||||||||||||||||
| Cancelled/Forfeited | ( | ) | $ | |||||||||||||
| Outstanding - June 30, 2025 | $ | $ | ||||||||||||||
| Exercisable - June 30, 2025 | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ( | ) | $ | |||||||||||||
| Cancelled/Forfeited | ( | ) | $ | |||||||||||||
| Outstanding - June 30, 2026 | $ | $ | ||||||||||||||
| Exercisable - June 30, 2026 | $ | $ | ||||||||||||||
Common Stock Issued Upon Cashless Exercise of Warrants
During the year ended June 30, 2026, holders exercised warrants on a cashless basis, resulting in the issuance of 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 Commitment Fee
On
October 8, 2025, the Company entered into an Equity Purchase Agreement with a material lender under which the Company may sell up to
$
| F-72 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The fair value of the warrant, $
| October 8, 2025 | June 30, 2026 | |||||||
| Exercise price | $ | $ | ||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
| Expected dividends | % | % | ||||||
| Risk free interest rate | % | % | ||||||
The fair value of the warrant at issuance was recognized as commitment
fee expense and is included in other expense in the consolidated statements of operations for the year ended June 30, 2026. The warrant permits the holder to elect cash settlement
upon a change of control. Because net cash settlement could be required in circumstances outside the Company’s control, the warrant
does not qualify for equity classification under ASC 815-40 and is accounted for as a derivative liability, recorded at its fair value
of $
Stock Options
| Weighted | Weighted | |||||||||||||||||||
| Average | Average | |||||||||||||||||||
| Weighted | Remaining | Grant | Aggregate | |||||||||||||||||
| Number of | Average | Contractual | Date | Intrinsic | ||||||||||||||||
| Stock Options | Options | Exercise Price | Term (Years) | Fair Value | Value | |||||||||||||||
| Outstanding - June 30, 2025 | $ | - | $ | |||||||||||||||||
| Granted | $ | |||||||||||||||||||
| Exercised | $ | |||||||||||||||||||
| Cancelled/Forfeited | $ | |||||||||||||||||||
| Outstanding - June 30, 2026 | $ | $ | ||||||||||||||||||
| Vested and Exercisable - June 30, 2026 | $ | $ | ||||||||||||||||||
| Unvested - June 30, 2026 | $ | $ | ||||||||||||||||||
No stock options were outstanding at June 30, 2025, and the Company recognized no stock option expense during the year ended June 30, 2025.
During the year ended June 30, 2026, the Company granted nonstatutory stock options to purchase shares of common stock to employees, consultants and members of its advisory board. The options were granted as standalone awards under individual option agreements approved by the board of directors and not under an equity incentive plan. Each option has an exercise price of $/share.
| F-73 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The
aggregate grant date fair value of the options was $
| Exercise price | $ | |||
| Expected volatility | % - | % | ||
| Expected dividend yield | % | |||
| Expected term in years | - | |||
| Risk-free interest rate | % - | % |
| Weighted Average | ||||||||
| Number of | Grant Date | |||||||
| Non-Vested Stock Options | Options | Fair Value | ||||||
| June 30, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Cancelled/Forfeited | ||||||||
| June 30, 2026 | $ | |||||||
| Unrecognized compensation | $ | |||||||
| Weighted average remaining period (years) | ||||||||
The unvested stock options are scheduled to vest as follows:
| Years ended June 30, | Quantity of Options | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| F-74 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The options vest as follows, subject to the grantee’s continued service through each vesting date. Unvested options are forfeited upon termination of service.
| ● | Options to purchase shares vested % on the grant date. | |
| ● | Options to purchase shares vest % on the grant date, % on December 31, 2026 and % on December 31, 2027. | |
| ● | Options to purchase shares vest % on December 31, 2026, % on December 31, 2027 and % on December 31, 2028. | |
| ● | Options to purchase shares vest % on the grant date and % on December 31, 2026. | |
| ● | Options to purchase shares granted to advisory board members vest % on December 1, 2026 and % on June 1, 2027. |
The following is a detail of the stock options granted during the year ended June 30, 2026:
| Grant Date | Quantity | Vested and Exercisable | Unvested | Fair Value | Compensation Expense | |||||||||||||||||
| Employees | May 1, 2026 | $ | $ | |||||||||||||||||||
| Consultants | May 1, 2026 | |||||||||||||||||||||
| Advisory Board Member | June 1, 2026 | |||||||||||||||||||||
| $ | $ | |||||||||||||||||||||
| Third Party | $ | |||||||||||||||||||||
| Related Party | ||||||||||||||||||||||
| $ | ||||||||||||||||||||||
The Company recognized stock-based compensation expense of $ for the year ended June 30, 2026, which is included in general and administrative expenses in the consolidated statements of operations. No income tax benefit was recognized and no compensation cost was capitalized.
Options to purchase shares of common stock included in the tables above were granted to two (2) consultants who are immediate family members of an officer and director of the Company and are therefore related parties.
The advisory board agreements also provide for options to purchase up to additional shares of common stock in the aggregate that are granted only upon the board of directors determining that specified advisor-sourced robot deployment milestones have been achieved. As of June 30, 2026, the board of directors had not determined that either milestone had been achieved. Accordingly, no grant date has been established, no compensation cost has been recognized and these options are excluded from the tables in this note.
| F-75 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Note 9 - Acquisitions and Unaudited Pro-Forma Financial Information
Fiscal Year Ended June 30, 2026
Acquisition of Victorville
Overview and Date of Acquisition
On
August 27, 2025, the Company completed the acquisition of Victorville Treasure Holdings, LLC (“Victorville”), a California
limited liability company that owns and operates a 155-room hotel located at 15494 Palmdale Road, Victorville, California (the “Property”).
Under the transaction, the Company acquired
Purchase Consideration
As
consideration, the Company issued shares of its Series C Convertible Preferred Stock, having an estimated fair value of $
Primary Reasons for the Acquisition
The Victorville acquisition represents a strategic expansion of the Company’s hospitality portfolio. The Company believes the acquisition will provide several benefits, including:
● Strengthening its presence in key hospitality markets;
● Operational synergies with the Company’s existing hotel platform;
● Immediate revenue contribution from ongoing hotel operations;
● Enhanced scale to support an integrated lodging and guest-services strategy; and
● Access to franchise-branding opportunities following planned renovations.
The acquisition was accounted for in accordance with ASC 805, Business Combinations. The purchase price allocation was finalized during the year ended June 30, 2026 within the one (1) year measurement period.
Contingent Consideration - Victorville
In connection with the acquisition, the Agreement provides for additional contingent consideration payable to the Sellers. Under the terms of the Agreement, the Sellers may earn up to additional shares of Series C Convertible Preferred Stock (the “Earnout Shares”) upon achieving specified post-closing operational and property-level milestones, including:
(i) completion and build-out of a gym facility;
(ii) enrollment of at least fifty (50) active gym members;
(iii) completion of all remaining renovations required to meet prospective franchise brand standards; and
(iv) operation of the property under a major franchise brand for a minimum of thirty (30) days.
| F-76 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Consistent
with the valuation methodology applied to the equity consideration issued at closing, the Earnout Shares and any additional shares issuable
under the purchase price adjustment provisions were measured at fair value ($
In accordance with ASC 805, the contingent consideration was recognized at its acquisition-date fair value as part of the purchase price allocation. Because the Company’s authorized common stock was insufficient at the acquisition date, the contingent consideration was classified as temporary equity under ASC 480-10-S99-3A and was reclassified to stockholders’ equity at its carrying value effective November 19, 2025, when the increase in authorized shares became effective (see Note 8). Contingent consideration classified in equity is not subsequently remeasured; adjustments are recognized only upon resolution of the contingency.
Acquisition-Related Costs
In connection with the acquisition of Victorville, the Company incurred an insignificant amount of transaction costs related to the acquisition. Such costs were expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations.
Forgiveness of Pre-Existing Relationship
In connection with the acquisition of VV, the Company and VV had a pre-existing intercompany note receivable/payable balance. As part of the closing of the transaction, the Company forgave the outstanding intercompany obligation, which resulted in the elimination of the related note payable and note receivable between the entities. In accordance with ASC 805, Business Combinations, the settlement of the pre-existing relationship was accounted for as a capital transaction rather than as an element of consideration transferred or as a gain or loss in the statement of operations.
The
forgiveness of the intercompany balance resulted in a $
| F-77 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Purchase Price Allocation
The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date. Amounts have been rounded. The fair values were derived from an independent third-party valuation report, as follows:
| Consideration | ||||
| Series C - convertible preferred stock - shares | $ | |||
| Series C - contingent consideration - shares | ||||
| Fair value of consideration transferred | $ | |||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
| Cash | ||||
| Accounts receivable | ||||
| Prepaids and other | ||||
| Inventory | ||||
| Land | ||||
| Property and equipment - net | ||||
| Total assets acquired | ||||
| Accounts payable and accrued expenses | ||||
| Notes payable | ||||
| Mortgage note payable | ||||
| Total liabilities assumed | ||||
| Total identifiable net liabilities assumed | ( | ) | ||
| Allocation required for identifiable intangible assets and goodwill | ||||
| Intangible asset (liquor license) | ||||
| Intangible asset (franchise agreement) | ||||
| Total identifiable intangible assets | ||||
| Goodwill (including assembled workforce) | $ | |||
| F-78 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Measurement Period
The Company finalized the purchase price allocation within the one (1) year measurement period permitted under ASC 805, which ended on August 27, 2026. No measurement period adjustments were recorded.
Goodwill is attributable to anticipated synergies, enhanced automation capabilities, and future economic benefits that do not qualify for separate recognition and is deductible for tax purposes.
Acquisition of Rancho Mirage
Overview and Date of Acquisition
On
September 30, 2025, the Company completed the acquisition of Treasure Mountain Holdings, LLC (“Rancho Mirage”), a Delaware
limited liability company that owns and operates the Hilton Garden Inn Palm Springs - Rancho Mirage, a 120-room hotel located at 71700
Highway 111, Rancho Mirage, California (the “Property”). Under the transaction, the Company acquired
Purchase Consideration
As
consideration, the Company issued shares of its Series C Convertible Preferred Stock, having an estimated fair value of $
Primary Reasons for the Acquisition
The Rancho Mirage acquisition represents a strategic expansion of the Company’s hospitality portfolio for the same primary reasons described above for the Victorville acquisition.
The acquisition was accounted for in accordance with ASC 805, Business Combinations. The purchase price allocation was finalized during the year ended June 30, 2026 within the one (1) year measurement period.
Contingent Consideration - Rancho Mirage
In connection with the acquisition, the Agreement provides for additional contingent consideration payable to the Sellers. Under the terms of the Agreement, the Sellers may earn up to additional shares of Series C Convertible Preferred Stock (the “ Earnout Shares”) upon achievement of specified post-closing milestones on or before December 31, 2027, including:
(i) the completion and build-out of five (5) new guestrooms; and
(ii) receipt of a certificate of occupancy and all required permits or approvals for such guestrooms.
| F-79 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Consistent
with the valuation methodology applied to the equity consideration issued at closing, the Earnout Shares and any additional shares issuable
under the purchase price adjustment provisions were measured at fair value ($
In accordance with ASC 805, the contingent consideration was recognized at its acquisition-date fair value as part of the purchase price allocation. Because the Company’s authorized common stock was insufficient at the acquisition date, the contingent consideration was classified as temporary equity under ASC 480-10-S99-3A and was reclassified to stockholders’ equity at its carrying value effective November 19, 2025, when the increase in authorized shares became effective (see Note 8). Contingent consideration classified in equity is not subsequently remeasured; adjustments are recognized only upon resolution of the contingency.
Acquisition-Related Costs
In connection with the acquisition of Rancho Mirage, the Company incurred an insignificant amount of transaction costs related to the acquisition. Such costs were expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations.
Purchase Price Allocation
The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date. Amounts have been rounded. The fair values were derived from an independent third-party valuation report, as follows:
| Consideration | ||||
| Series C - convertible preferred stock - shares | $ | |||
| Series C - contingent consideration - shares | ||||
| Fair value of consideration transferred | $ | |||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
| Cash | ||||
| Accounts receivable | ||||
| Prepaids and other | ||||
| Inventory | ||||
| Land | ||||
| Property and equipment - net | ||||
| Total assets acquired | ||||
| Accounts payable and accrued expenses | ||||
| Accounts payable and accrued expenses - related party | ||||
| Deferred revenue/customer deposits | ||||
| Notes payable | ||||
| Mortgage note payable | ||||
| Total liabilities assumed | ||||
| Total identifiable net assets assumed | ||||
| Allocation required for identifiable intangible assets and goodwill | ||||
| Intangible asset (liquor license) | ||||
| Intangible asset (franchise agreement) | ||||
| Total identifiable intangible assets | ||||
| Goodwill (including assembled workforce) | $ | |||
Measurement Period
The Company finalized the purchase price allocation within the one (1) year measurement period permitted under ASC 805, which ends on September 30, 2026. No measurement period adjustments were recorded.
Goodwill is attributable to anticipated operational synergies and future economic benefits that do not qualify for separate recognition and is deductible for tax purposes.
| F-80 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Supplemental Pro Forma Information (Unaudited)
The following unaudited pro forma information presents the combined revenue and net loss of the Company, Victorville and Rancho Mirage as though both acquisitions had been completed on July 1, 2025 for the fiscal year ended June 30, 2026 and on July 1, 2024 for the fiscal year ended June 30, 2025. The pro forma amounts combine the historical results of the Company with the pre-acquisition results of the two (2) hotels for each period, adjusted to reflect depreciation based on the acquisition-date fair values of the acquired property and equipment, the elimination of intercompany activity between the Company and Victorville, and the reclassification of acquisition-related transaction costs to the fiscal year ended June 30, 2025.
The
goodwill impairment charges of $
The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisitions been completed as of the dates indicated, nor of future results. The pro forma results do not reflect potential cost savings, integration synergies or non-recurring charges that may result from the acquisitions.
Revenue
of $
| Year Ended | Year Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Revenues - net | $ | $ | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share - basic | $ | ( | ) | $ | ( | ) | ||
| Loss per share - diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of shares - basic | ||||||||
| Weighted average number of shares - diluted | ||||||||
| F-81 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Goodwill Impairment (Hotel Properties)
In
connection with the annual impairment test as of June 30, 2026, the Company recognized goodwill impairment losses of $
Goodwill is tested for impairment annually as of June 30 and between annual tests when an event or change in circumstances indicates that the fair value of a reporting unit may be below its carrying amount. Each hotel is a separate reporting unit within the Hotel Operations segment. The Company performs the quantitative test under ASC 350-20, comparing the fair value of each reporting unit with its carrying amount, including goodwill, and recognizes an impairment for the amount by which the carrying amount exceeds fair value, limited to the goodwill allocated to that reporting unit. Before testing goodwill, the Company tested the property and equipment of each reporting unit for recoverability under ASC 360-10 and concluded that the undiscounted cash flows exceeded the carrying amounts; no impairment of long-lived assets was recognized.
The goodwill recognized at acquisition represented the excess of the fair value of the Series C Convertible Preferred Stock issued as consideration, measured at the quoted market price of the underlying common stock on the acquisition dates, over the fair value of the identifiable net assets acquired. The acquisition-date fair values of the assets acquired and liabilities assumed were determined from the facts and circumstances that existed at the acquisition dates, including the operating forecasts on which the purchase prices were negotiated and the third-party valuation reports prepared for each property.
The purchase prices were negotiated on forecasts that assumed each hotel would reach stabilized occupancy and average daily rates within the first year of ownership and that the planned renovations would be completed on the schedule and at the cost contemplated at closing. From the acquisition dates through June 30, 2026, the operating results of both hotels were below those forecasts.
Transient demand in both markets was softer than assumed, and the hotels were unable to hold the rate levels underwritten at acquisition without giving up occupancy. The Rancho Mirage property experienced the seasonal decline in Coachella Valley demand through the summer months more severely than forecast and did not replace lost group and leisure business at the assumed rates. Operating costs at both properties were higher than forecast, principally labor, insurance, utilities and property taxes following the reassessment of the properties at acquisition.
| F-82 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The renovations at both properties took longer and cost more than planned as the scope expanded to address conditions identified after closing, which pushed the expected timing of the franchise conversion at Victorville and the completion of the additional guestrooms at Rancho Mirage into fiscal 2027.
The delays were also attributable to management’s temporary reallocation of available funding and other resources from the hotel buildouts to support the launch of the Company’s robotics business while the Nasdaq uplisting process took longer than anticipated. This reallocation extended the construction timelines at both properties.
In connection with the annual impairment test and the fiscal 2027 budgeting process, which was completed during the fourth quarter of fiscal 2026 and finalized in connection with the preparation of these consolidated financial statements, management revised the projected cash flows of each property to reflect the results achieved since acquisition, a longer period to reach stabilized operations, higher operating costs, and the revised timing and cost of the renovation and franchise-conversion plans. These developments arose after the acquisition dates and did not provide additional information about facts and circumstances that existed at those dates; accordingly, they were not measurement-period adjustments to the purchase price allocations, which were finalized without adjustment.
During the interim periods following the acquisitions, the Company evaluated whether events or changes in circumstances indicated that goodwill might be impaired. Those evaluations considered the short period of ownership, the seasonality of the properties, the status of the renovation plans and the operating results reported through March 31, 2026, and management concluded that the results to that date were consistent with a hotel in the early stage of a renovation and repositioning program and that no interim test was required. The full-year results and the revised forecasts prepared in the fourth quarter of fiscal 2026 were the first indication that the fair value of each reporting unit was below its carrying amount.
The fair value of each reporting unit was estimated with the assistance of a third-party valuation firm using an income approach based on discounted cash flow projections, corroborated by a market approach based on recent sales of comparable hotel properties on a price per room basis. The significant assumptions were the projected occupancy and average daily rates, projected operating expenses, the capital expenditures required to complete the renovations, the timing of the franchise conversion, the discount rate and the terminal capitalization rate. These inputs are unobservable and the measurement is classified within Level 3 of the fair value hierarchy. The Company also compared the aggregate fair value of its reporting units with its market capitalization at June 30, 2026 and concluded that the reporting unit fair values were consistent with market capitalization after consideration of a control premium.
| F-83 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Following the impairment charges, the carrying amounts of the Victorville, Rancho Mirage and SWC reporting units approximate their estimated fair values. Further shortfalls in occupancy or average daily rates against the revised projections, delays in the renovation and franchise-conversion plans, increases in the capital required to complete them, or increases in the discount rate could result in additional impairment in future periods. The goodwill remaining at each reporting unit after the impairment charges is presented in the goodwill summary table below.
Goodwill Summary
| Balance - June 30, 2024 | $ | |||
| Acquisition of SWC | ||||
| Acquisition of Skytech | ||||
| Impairment charge - FHVH | ( | ) | ||
| Balance - June 30, 2025 | ||||
| Acquisition of Victorville | ||||
| Acquisition of Rancho Mirage | ||||
| Impairment charge - Victorville | ( | ) | ||
| Impairment charge - Rancho Mirage | ( | ) | ||
Impairment charge - SWC | ( | ) | ||
| Balance - June 30, 2026 | $ |
Fiscal Year Ended June 30, 2025
Acquisition of SWC
On
March 31, 2025, the Company acquired
| F-84 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
SWC is a provider of customized disposable packaging solutions serving the food service and hospitality industries. The Company expects the acquisition to provide the following strategic benefits:
| ● | Expanded presence across the hospitality value chain; | |
| ● | Operational synergies with Skytech’s automation platform; | |
| ● | Immediate recurring revenue through packaging supply contracts; and | |
| ● | A fully integrated solutions offering for hotels, resorts and food service operators. |
The acquisition was accounted for as a business combination under ASC 805. The purchase price allocation was finalized within the one (1) year measurement period, which ended on March 31, 2026, with no measurement period adjustments. No transaction costs were incurred in connection with the acquisition.
The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date, derived from an independent third-party valuation report:
| Consideration | ||||
| Series C - convertible preferred stock - shares | $ | |||
| Fair value of consideration transferred | ||||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
| Cash | ||||
| Accounts receivable | ||||
| Prepaids and other | ||||
| Inventory | ||||
| Property and equipment - net | ||||
| Operating lease - right - of -use asset | ||||
| Total assets acquired | ||||
| Accounts payable and accrued expenses | ||||
| Notes payable | ||||
| Operating lease liability | ||||
| Total liabilities assumed | ||||
| Total identifiable net liabilities assumed | ( | ) | ||
| Allocation required for identifiable intangible assets and goodwill | ||||
| Trade names/trademarks | ||||
| Customer relationships | ||||
| Total identifiable intangible assets | ||||
| Goodwill (including assembled workforce) | $ | |||
| F-85 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Settlement of Pre-Existing Relationships
In
connection with the acquisition of SWC on March 31, 2025, the Company identified preexisting contractual advances between SWC and the
Company and its subsidiary FHVH that were unrelated to the exchange for the acquiree and were effectively settled as of the acquisition
date. Under ASC 805-10-25-20 and 805-10-25-21(a), the settlement was accounted for separately from the business combination and was excluded
from consideration transferred, the purchase price allocation and goodwill. The Company recognized a loss on settlement of preexisting
relationships of $
Acquisition of Skytech
On
March 31, 2025, the Company acquired
Skytech develops AI-powered service automation for the hospitality industry, including its Laundry Helper robot deployed at hotel properties. The acquisition supports the Company’s integrated business model combining hotel ownership with Robotics-as-a-Service (“RaaS”) solutions. The Company expects the acquisition to:
| ● | Enhance the Company’s proprietary technology capabilities; | |
| ● | Accelerate integration with SWC’s packaging operations; | |
| ● | Improve customer service automation; and | |
| ● | Create cost and labor efficiencies across the Company’s product delivery chain. |
The acquisition was accounted for as a business combination under ASC 805. The purchase price allocation was finalized within the one (1) year measurement period, which ended on March 31, 2026, with no measurement period adjustments. No transaction costs were incurred in connection with the acquisition.
Additional Series C shares issuable to the Skytech sellers upon achievement of revenue and EBITDA milestones are compensation for post-combination services and are excluded from consideration transferred. See Note 8 for the classification and valuation of these awards.
| F-86 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date, derived from an independent third-party valuation report:
| Consideration | ||||
| Series C - convertible preferred stock - shares | $ | |||
| Fair value of consideration transferred | ||||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
| Accounts receivable | ||||
| Property and equipment - net | ||||
| Total assets acquired | ||||
| Accounts payable and accrued expenses | ||||
| Accounts payable and accrued expenses - related parties | ||||
| Total liabilities assumed | ||||
| Total identifiable net liabilities assumed | ( | ) | ||
| Goodwill | $ |
Goodwill is attributable to expected synergies, enhanced automation capabilities and the assembled workforce, and is not deductible for tax purposes.
Note 10 - Intangible Assets
Intangibles consisted of the following at June 30, 2026 and 2025:
| Weighted Average | ||||||||||||||||
| Estimated Useful | Remaining | |||||||||||||||
| Classification | June 30, 2026 | June 30, 2025 | Lives (Years) | Life (Years) | ||||||||||||
| Tradenames/trademarks | $ | $ | N/A | N/A | ||||||||||||
| Customer relationships | ||||||||||||||||
| Franchise agreements | ||||||||||||||||
| Liquor licenses | N/A | |||||||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||||||||
| Intangibles - net | $ | $ | ||||||||||||||
| F-87 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Amortization expense for the years ended June 30, 2026 and 2025 was as follows:
| Year Ended June 30, | ||||||
| 2026 | 2025 | |||||
| $ | $ | |||||
There
were
Estimated amortization expense for each of the five (5) succeeding years and thereafter is as follows:
| For the Years Ended June 30, | ||||
| 2027 | $ | |||
| 2028 | $ | |||
| 2029 | $ | |||
| 2030 | $ | |||
| 2031 | $ | |||
| Thereafter | $ | |||
| Total | $ | |||
| F-88 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Note 11 - Derivative Liabilities
The
convertible notes assumed in the SWC acquisition on March 31, 2025 and certain convertible notes issued during the year ended June 30,
2026 (see Note 5) contain conversion features priced at a discount to the trading price of the Company’s common stock. Because
the conversion price varies with the market price, the features are not indexed to the Company’s own stock and are bifurcated and accounted for as derivative liabilities. The commitment warrant issued under the Equity Purchase Agreement
on October 8, 2025 (see Note 8) permits the holder to elect cash settlement upon a change of control and is also accounted for as a derivative
liability, recorded at its fair value of $
The Company estimated the fair value of the embedded conversion features using the Black-Scholes option pricing model with the following assumptions:
| June 30, 2026 | June 30, 2025 | |||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
| Expected dividends | % | % | ||||||
| Risk free interest rate | % | % | ||||||
The following table presents the changes in derivative liabilities measured at fair value on a recurring basis using Level 3 inputs for the years ended June 30, 2026 and 2025:
| Third Party | Related Party | Total | ||||||||||
| Derivative liabilities – June 30, 2024 | $ | $ | $ | |||||||||
| Fair value at commitment date | ||||||||||||
| Gain on debt extinguishment | ( | ) | ( | ) | ||||||||
| Fair value mark to market adjustment | ( | ) | ||||||||||
| Derivative liabilities – June 30, 2025 | ||||||||||||
| Fair value at commitment date | ||||||||||||
| Fair value mark to market adjustment | ( | ) | ( | ) | ||||||||
| Derivative liabilities – June 30, 2026 | $ | $ | $ | |||||||||
The fair value mark to market adjustment for each year is presented in other income (expense) in the consolidated statements of operations.
During
the year ended June 30, 2025, the conversion of principal on a related party convertible note extinguished the related derivative liability,
resulting in a gain on debt extinguishment of $
During
the year ended June 30, 2026, the fair value of the embedded conversion features at issuance exceeded the net proceeds of the
related notes, and the Company recognized derivative expense of $
Related Party
Derivative
liabilities of $
| F-89 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Derivative Liability Activity
Changes in the fair value of derivative liabilities are recognized in other income (expense) in the consolidated statements of operations.
For the years ended June 30, 2026 and 2025, the Company recorded a change in fair value gain (loss) of its derivative liabilities as follows:
| Year Ended June 30, | ||||||
| 2026 | 2025 | |||||
| $ | ( | ) | $ | |||
For the years ended June 30, 2026 and 2025, the Company recognized derivative expense as follows:
| Year Ended June 30, | ||||||
| 2026 | 2025 | |||||
| $ | $ | |||||
The derivative liabilities recognized during the year ended June 30, 2026 arose from the issuance of five (5) convertible
notes with an aggregate face value of $
See Notes 6 and 12 for additional fair value disclosures.
| F-90 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Note 12 - Fair Value of Financial Instruments
The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made.
Liabilities measured at fair value on a recurring basis consisted of the following at June 30, 2026 and 2025:
| June 30, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| June 30, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Note 13 - Segment Information
General
Operating segments are components of the Company for which discrete financial information is available and whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to allocate resources and assess performance.
Reportable Segments
Beginning
in fiscal 2026, the Company has three (
| 1. | Foodservice Packaging Distribution - distribution of foodservice packaging products, conducted through SWC Group, Inc. (d/b/a CarryOutSupplies.com), established through the acquisition of SWC on March 31, 2025. | |
| 2. | Robotics-as-a-Service (RaaS) - development and deployment of robotics solutions, conducted through TechForceRobotics, Inc. (formerly Skytech Automated Solutions, Inc.) and Future Hospitality Ventures Holdings, Inc. | |
| 3. | Hotel Operations - ownership and operation of hotel properties, including lodging, food and beverage, and related hospitality services, conducted through Victorville Treasure Holdings, LLC and Treasure Mountain Holdings, LLC, the Company’s wholly owned subsidiaries that own the hotel properties. This segment was established following the acquisitions of the Victorville and Rancho Mirage hotel properties during the first quarter of fiscal 2026. |
| F-91 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Corporate overhead represents corporate-level activities and shared services, including public company compliance, executive management, finance and legal. These costs are not included in the CODM’s evaluation of segment performance, are not a reportable segment and are presented as a reconciling item to the consolidated financial statements.
Basis of Measurement
The CODM evaluates segment performance and allocates resources based on segment revenue and operating income (loss), which the CODM uses in the annual budgeting process and in comparing actual results to budget and forecast. The CODM also reviews total assets and total liabilities by segment. Segment information is prepared on the same basis as the consolidated financial statements. There were no material intersegment transactions during the periods presented.
The Company’s legacy Snacks and Beverages operations are presented as discontinued operations and are excluded from the reportable segments. See Note 14.
Segment Results
The
following tables present revenue, costs and expenses, other segment items and operating income (loss) for each reportable segment, with
reconciling items, including corporate overhead, non-operating items and discontinued operations, to the consolidated statements of operations.
Costs and expenses of the Hotel Operations and Foodservice Packaging segments
for the year ended June 30, 2026 include the goodwill impairment charges of $
| For the Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | ||||||||
| Foodservice Packaging | $ | $ | ||||||
| RaaS | ||||||||
| Hotel | ||||||||
| Other Corporate Overhead | ||||||||
| Revenues - continuing operations | ||||||||
| Revenues - discontinued operations | ||||||||
| Total | $ | $ | ||||||
| Costs and expenses | ||||||||
| Foodservice Packaging | $ | $ | ||||||
| RaaS | ||||||||
| Hotel | ||||||||
| Other Corporate Overhead | ||||||||
| Costs and expenses - continuing operations | ||||||||
| Costs and expenses - discontinued operations | ||||||||
| Total | $ | $ | ||||||
| Loss from operations | ||||||||
| Foodservice Packaging | $ | ( | ) | $ | ( | ) | ||
| RaaS | ( | ) | ( | ) | ||||
| Hotel | ( | ) | ||||||
| Other Corporate Overhead | ( | ) | ( | ) | ||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||
| Total | $ | ( | ) | $ | ( | ) | ||
| Other income (expense) - net | ||||||||
| Foodservice Packaging | $ | ( | ) | $ | ( | ) | ||
| RaaS | ( | ) | ( | ) | ||||
| Hotel | ( | ) | ||||||
| Other Corporate Overhead | ( | ) | ( | ) | ||||
| Other expense - continuing operations | ( | ) | ( | ) | ||||
| Other expense - discontinued operations | ( | ) | ( | ) | ||||
| Total | $ | ( | ) | $ | ( | ) | ||
| Net loss | ||||||||
| Foodservice Packaging | $ | ( | ) | $ | ( | ) | ||
| RaaS | ( | ) | ( | ) | ||||
| Hotel | ( | ) | ||||||
| Other Corporate Overhead | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Total | $ | ( | ) | $ | ( | ) | ||
| F-92 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| June 30, 2026 | June 30, 2025 | |||||||
| Total Assets | ||||||||
| Foodservice Packaging | $ | $ | ||||||
| RaaS | ||||||||
| Hotel | ||||||||
| Other Corporate Overhead | ||||||||
| Assets - continuing operations | ||||||||
| Assets - discontinued operations | ||||||||
| Total | $ | $ | ||||||
| Total Liabilities | ||||||||
| Foodservice Packaging | $ | $ | ||||||
| RaaS | ||||||||
| Hotel | ||||||||
| Other Corporate Overhead | ||||||||
| Liabilities - continuing operations | ||||||||
| Liabilities - discontinued operations | ||||||||
| Total | $ | $ | ||||||
Note 14 - Discontinued Operations
On June 30, 2025, management committed to a plan to discontinue the Company’s legacy Snacks and Beverages business, which sold packaged snack products through wholesale and distribution channels, in connection with the Company’s strategic shift toward foodservice packaging distribution, Robotics-as-a-Service and hotel operations. The discontinuation represents a strategic shift with a major effect on the Company’s operations and financial results, and the business is presented as discontinued operations under ASC 205-20 for all periods presented, with prior period amounts reclassified to conform.
At
June 30, 2026 and 2025, the Company had no remaining assets of the discontinued operations. Liabilities of discontinued operations of
$
| F-93 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Results of Discontinued Operations
The following table presents the financial results of discontinued operations for the years ended June 30, 2026 and 2025:
| For the Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues - net | $ | $ | ||||||
| Costs and expenses | ||||||||
| General and administrative expenses | ||||||||
| Total costs and expenses | ||||||||
| Net loss from discontinued operations | $ | ( | ) | $ | ( | ) | ||
Liabilities of Discontinued Operations
The carrying amounts of the liabilities of discontinued operations as of June 30, 2026 and 2025 were as follows:
| June 30, 2026 | June 30, 2025 | |||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Total liabilities | $ | $ | ||||||
Note 15 - Commitments
Manufacturing and Research and Development Advisory Agreement
On February 1, 2026, the Company entered into a Manufacturing and Research and Development Advisory Agreement (the “Advisory Agreement”) with a nonemployee advisor to provide strategic and technical guidance in support of the development and commercialization of the Company’s artificial intelligence robotic technologies. The advisor has no authority to bind the Company, and the Advisory Agreement does not create an employment, partnership, joint venture, or fiduciary relationship. The Advisory Agreement has no fixed term and is terminable by either party upon 30 days’ prior written notice. All intellectual property developed through the collaboration is the sole and exclusive property of the Company.
| F-94 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Onboarding Equity Bonus. Upon execution of the Advisory Agreement, the Company issued shares of common stock to the advisor as a one-time onboarding equity bonus. The shares vested immediately with no service or performance conditions. In accordance with Accounting Standards Codification (ASC) 718, Compensation - Stock Compensation, the Company measured the award at the grant-date closing price of $ per share and recognized stock-based compensation expense of $ in full on February 1, 2026.
Performance-Based Warrants. The Advisory Agreement provides for the issuance of performance-based warrants, each entitling the advisor to purchase one share of common stock at an exercise price of $ per share, with a five-year term and exercisable solely on a cashless basis. The warrants contain standard anti-dilution adjustments for stock splits, reverse stock splits, stock dividends, recapitalizations, and similar transactions. The warrants are earned upon achievement of the following milestones:
| Milestone Category | Trigger | Warrants Earned | ||
| Product Commercialization | ||||
| Product Commercialization | ||||
| Revenue-Based Earn-Out |
Commercialization is defined as commencement of commercial launch with confirmed production. Warrants earned at each revenue milestone are cumulative, and the product commercialization category is not subject to a maximum cap.
| F-95 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The performance-based warrants are subject to performance conditions under ASC 718, and compensation expense is recognized when achievement of the performance condition becomes probable.
As of the grant date and through the current reporting period, the Company assessed the probability of achieving any product commercialization or revenue-based earn-out milestone to be zero. Accordingly, no compensation expense has been recognized, and no warrants have been issued or are outstanding under these provisions. The Company will reassess probability at each reporting date and, upon a milestone becoming probable, will recognize a cumulative catch-up adjustment based on the grant-date fair value of the applicable warrants, with the remaining unrecognized expense recognized over the estimated remaining service period.
Warrant Classification. The Company evaluated the warrants under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity, and ASC 480, Distinguishing Liabilities from Equity. The cashless exercise feature results in a fixed-for-fixed settlement in the Company’s own shares, and the anti-dilution provisions are limited to standard adjustments that do not preclude equity classification. Accordingly, the warrants are indexed to the Company’s own stock and meet the conditions for equity classification under ASC 815-40-25. If and when issued, the warrants will be classified within stockholders’ equity.
Potential Dilution. In addition to the shares issued on February 1, 2026, the advisor is eligible to receive warrants to purchase up to shares under the revenue-based earn-out milestones, plus uncapped additional warrants for each SKU successfully commercialized. Future share issuances and warrant exercises may have a dilutive effect on earnings per share in subsequent periods.
Joint Development, Manufacturing, And Licensing Agreement
On March 31, 2026, TechForce Robotics, Inc. (“TechForce”), a wholly owned subsidiary of the Company, entered into a Joint Development, Manufacturing and Licensing Agreement (the “ Agreement”) with Oncotelic Therapeutics, Inc. (“Oncotelic”) to jointly develop, manufacture and commercialize artificial intelligence enabled, Good Manufacturing Practice compliant robotic systems for pharmaceutical and biopharmaceutical manufacturing (the “ Product”), combining Oncotelic’s PDAOAI artificial intelligence platform with TechForce’s robotic hardware and automation systems. The Agreement includes a non-exclusive license to TechForce of certain Oncotelic intellectual property, including the PDAOAI platform.
Artificial
intelligence developments are owned by Oncotelic, robotic hardware developments created solely by TechForce are owned by TechForce, jointly
developed intellectual property is jointly owned, and data generated from the Product is owned by the Company. During the term and for
twelve (12) months thereafter, TechForce may not license the jointly developed intellectual property to third parties for use in pharmaceutical
or biopharmaceutical manufacturing. Each party’s cumulative liability is capped at the greater of $
| F-96 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Each party funds development under written payment schedules or statements of work to be agreed, with milestone payments due within thirty (30) days of verified achievement of each defined milestone. Revenue sharing, royalty and profit sharing terms will be set in a separate Commercialization and Licensing Agreement (the “CLA”) to be executed before the first commercial sale, and no commercial sales may begin until the CLA is executed. The Agreement has an initial term of one (1) year and renews automatically for successive five (5) year terms unless either party gives sixty (60) days’ notice of non-renewal; either party may terminate for convenience on sixty (60) days’ notice or for uncured material breach on thirty (30) days’ notice.
The Agreement is a collaborative arrangement under ASC 808. As of June 30, 2026, no statement of work or milestone had been agreed and no amounts had been recognized in the consolidated financial statements with respect to the Agreement. The Agreement was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 6, 2026.
Supply Agreement
On April 11, 2026, TechForce entered into a Supply Agreement (the “Supply Agreement”) with NUWA Robotics Corp. (“NUWA”) and Hon Hai Precision Industry Co., Ltd. (“Hon Hai”), effective March 6, 2026, for the development, manufacture and supply of TechForce’s robotic systems (the “Products”). TechForce defines the commercial requirements and retains ownership of all product specifications, designs and related intellectual property; NUWA provides engineering development and system integration and submits purchase orders to Hon Hai as purchaser; and Hon Hai manufactures, tests and delivers the Products. Quantities, pricing, payment terms and delivery schedules are set in individual purchase orders, with 100% of required payments advanced before Hon Hai begins production, and there are no minimum purchase commitments. Hon Hai warrants the Products for twelve (12) months after delivery. The Supply Agreement has an initial term of two (2) years and renews automatically for successive one (1) year terms unless terminated on three (3) months’ notice.
No purchase orders had been placed and no amounts had been recognized in the consolidated financial statements with respect to the Supply Agreement as of June 30, 2026. The Supply Agreement was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 16, 2026.
| F-97 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Right-of-Use Operating Lease
On
September 1, 2025, the Company’s subsidiary, SWC Group, Inc., executed a five-year triple-net lease for
The landlord, 13501 S. Main Holdings, LLC, is a material lender to the Company.
| ● | Lease
term: | |
| ● | Monthly lease payments: |
| ○ | Months
1-4: $ | |
| ○ | Month
5: $ | |
| ○ | Months
6-16: $ | |
| ○ | Months
17-28: $ | |
| ○ | Months
29-40: $ | |
| ○ | Months
41-51: $ | |
| ○ | Months
52-60: $ |
| ● | Total
lease obligation: $ | |
| ● | Renewal option: None | |
| ● | Lease
classification: Operating lease under ASC 842, recorded as a right-of-use asset and lease
liability based on the present value of lease payments ($ | |
| ● | Lease
incentives: Months | |
| ● | Guarantee: The Company | |
| ● | Security
deposit: $ |
The Company recognizes lease expense on a straight-line basis over the lease term.
At June 30, 2026 and 2025, the Company has no financing leases as defined in ASC 842, “ Leases.”
| F-98 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The tables below present information regarding the Company’s operating lease assets and liabilities at June 30, 2026 and 2025.
| June 30, 2026 | June 30, 2025 | |||||||
| Assets | ||||||||
| Operating lease - right-of-use asset - non-current | $ | $ | ||||||
| Liabilities | ||||||||
| Operating lease liability | $ | $ | ||||||
| Weighted-average remaining lease term (years) | - | |||||||
| Weighted-average discount rate | % | - | ||||||
The components of lease expense were as follows:
| June 30, 2026 | June 30, 2025 | |||||||
| Operating lease costs | ||||||||
| Amortization of right-of-use operating lease asset | $ | $ | ||||||
| Lease liability expense in connection with obligation repayment | $ | |||||||
| Total operating lease costs | $ | $ | ||||||
| Supplemental cash flow information related to operating leases was as follows: | ||||||||
| Operating cash outflows from operating lease (obligation payment) | $ | $ | ||||||
| Right-of-use asset obtained in exchange for new operating lease liability | $ | $ | ||||||
Future minimum lease payments required under leases that have initial or remaining non-cancelable lease terms in excess of one (1) year at June 30, 2026 are as follows:
Future minimum lease payments required under leases that have initial or remaining non-cancelable lease terms in excess of one year at June 30:
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Total undiscounted cash flows | ||||
| Less: amount representing interest | ||||
| Present value of operating lease liability | ||||
| Less: current portion of operating lease liability | ||||
| Long-term operating lease liability | $ |
| F-99 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Note 16 – Income Taxes
Loss from continuing operations before income taxes was $
| June 30, 2026 | June 30, 2025 | |||||||
| Current | $ | $ | ||||||
| Deferred | ||||||||
| Federal | ( | ) | ||||||
| State | ( | ) | ||||||
| Total income tax provision (benefit) | ( | ) | ||||||
| Change in valuation allowance | ||||||||
| Income tax provision (benefit) | $ | $ | ||||||
Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities at June 30, 2026 and 2025 were approximately as follows:
| June 30, 2026 | June 30, 2025 | |||||||
| Bad debt | $ | $ | ||||||
| Amortization of debt discount | ||||||||
| Share based payments | ||||||||
| Change in fair value of derivative liabilities | ||||||||
| Net operating loss carryforward | ||||||||
| Goodwill | ||||||||
| Accrued expenses | ||||||||
| Operating lease liabilities | ||||||||
| Total deferred tax assets | ||||||||
| Intangibles | ( | ) | ( | ) | ||||
| Right-of-use asset | ( | ) | ||||||
| Debt discount | ( | ) | ||||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Deferred tax assets - net | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax asset - net | $ | $ | ||||||
A
full valuation allowance was recorded at both dates because the Company has a history of cumulative losses and there is not sufficient
positive evidence that the deferred tax assets will be realized. The valuation allowance increased by $
Rate Reconciliation
A reconciliation of the income tax benefit computed at the U.S. federal statutory rate of 21% to the income tax provision (benefit), in amounts and as a percentage of loss from continuing operations before income taxes, for the years ended June 30, 2026 and 2025 is as follows:
| June 30, 2026 | June 30, 2025 | |||||||||||||||
| Amount | Percent | Amount | Percent | |||||||||||||
| - 21% | $ | ( | ) | % | $ | ( | ) | % | ||||||||
| State income tax benefit, net of federal benefit (California) | ( | ) | % | ( | ) | % | ||||||||||
| California permanent differences | ( | )% | ||||||||||||||
| California net operating loss carryforwards | ( | ) | % | |||||||||||||
| Change in California valuation allowance | ( | )% | ||||||||||||||
| Nontaxable or nondeductible items - other | ( | )% | ( | )% | ||||||||||||
| Nondeductible share-based compensation | ( | )% | ||||||||||||||
| Nondeductible goodwill impairment | ( | )% | ||||||||||||||
| Change in federal valuation allowance | ( | )% | ( | ) | % | |||||||||||
| Income tax provision (benefit) | $ | % | $ | % | ||||||||||||
Net Operating Loss Carryforwards
The Company has not filed its federal and state income tax returns for the fiscal years ended June 30, 2016 through
June 30, 2025. Net operating losses for these years will not be available to reduce future taxable income until the returns are filed.
The Company expects to file delinquent tax returns in the upcoming reporting periods and updated values will be disclosed in these following
reporting periods. Assuming these returns are filed, the Company has net operating loss carryforwards for federal income tax purposes
of approximately $
Valuation Allowance
For financial reporting purposes, the entire amount
of net deferred tax assets has been offset by a valuation allowance, due to uncertainty regarding realization. The net change in the valuation
allowance for the years ended June 30, 2026 and 2025 was an increase of $
Uncertain Tax Positions
The Company follows ASC 740-10-25, which requires a company to evaluate whether a tax position is “more likely than not” to be sustained upon examination. Management has reviewed all filing positions in jurisdictions where the Company is subject to income tax. The Company believes its positions would be sustained upon audit and therefore has not recorded any reserves for uncertain tax positions.
Section 382 Limitations
The Company may not be able to utilize the net operating
loss carryforwards for its US income taxes in future periods should it experience a change in ownership as defined in Section 382 of the
Internal Revenue Code (“IRC”). Under section 382, should the Company experience a more than
As of June 30, 2026 and 2025, the Company had not performed an analysis to determine if the Company was subject to the provisions of Section 382. The Company is subject to U.S. federal income tax including state and local jurisdictions. Currently, no federal or state income tax returns are under examination by the respective taxing jurisdictions.
Tax Returns and Examinations
The Company is subject to U.S. federal and various state income taxes. As of June 30, 2025, no federal or state tax returns are under examination. The Company has not yet filed its federal and state income tax returns for the fiscal years ended June 30, 2016 through 2026. However, because the Company has incurred cumulative losses, management does not expect a material liability. All unfiled and filed years remain open to examination.
Interest and Penalties
The Company’s accounting policy is to record interest and penalties related to uncertain tax positions as
income tax expense.
Note 17 - Subsequent Events
Subsequent to June 30, 2026, the Company had the following transactions:
Convertible Notes Payable
On
July 8, 2026 and September 10, 2026, the Company issued convertible notes to an accredited investor with face amounts of $
The
notes are convertible at the lower of $
| F-100 |
NIGHTFOOD HOLDINGS, INC. AND SUBSIDIARIES
DBA TECHFORCE ROBOTICS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
On
August 27, 2026, the Company issued an unsecured convertible note with a face amount of $
The
note is convertible at the lower of $
Because the conversion price of each of these notes contains a variable component that can result in settlement in a variable number of shares, the embedded conversion features will be bifurcated from the host instruments and recorded as derivative liabilities at fair value on issuance, consistent with the notes described in Notes 5 and 11.
The senior secured convertible note issued on October 8, 2025 (Loan #39), with a face amount of $
Common Stock Issued upon Conversion of Convertible Notes Payable
On
July 1, 2026 and July 24, 2026, the Company issued and shares of common stock, respectively, to a material lender
on conversion of $
Conversion of Series C Convertible Preferred Stock
On
August 12, 2026, a holder converted shares of Series C Convertible Preferred Stock, being the shares not subject to the lock-up
described in Note 8, into shares of common stock at the
Common Stock Issued for Cash - Private Placement
On July 5, 2026, the Company sold
shares of common stock to three (3) accredited investors for cash proceeds of $
Common Stock Issued for Cash - Equity Purchase Agreement
From July 2, 2026 to September 28, 2026, the Company sold an aggregate of shares of common stock to a material
lender in seven (7) sales under the Equity Purchase Agreement described in Note 8 for gross proceeds of $
Common Stock Issued for Services
On August 5, 2026, the Company agreed to issue shares of common stock to a consultant for services under
an agreement expiring February 8, 2027, which had not been issued by the transfer agent as of the date of these consolidated financial
statements, having a fair value of $
On
August 18, 2026, the Company issued shares of common stock to an entity affiliated with a former director as equity earned
for service on the Board of Directors, having a fair value of $
Stock Options
On
August 7, 2026, the Company granted nonstatutory stock options to purchase shares of common stock to each of two (2) independent
directors appointed to the Board of Directors on that date. The options were granted as standalone awards under individual option agreements
approved by the Board of Directors and not under an equity incentive plan. Each option has an exercise price of $/share, vests
The aggregate grant date fair value of the options was $, or $/option, determined using a Black-Scholes option pricing model with the following assumptions, the expected term being based on the simplified method. The grant date fair value will be recognized as compensation expense over the vesting period.
| Exercise price | $ | |||
| Expected term (years) | ||||
| Expected volatility | % | |||
| Expected dividends | % | |||
| Risk free interest rate | % |
Reverse Stock Split (Not Yet Effective)
On July 22, 2026, the Board of Directors and the holder
of the Company’s Series A Super Voting Preferred Stock, representing a majority of the voting power of the Company’s capital
stock, authorized the Board of Directors to effect a reverse stock split of the Company’s common stock at a ratio in the range of
The reverse stock split becomes effective on the filing of the Certificate of Change with the Secretary of State of the State of Nevada, which may not occur earlier than the twentieth (20th) calendar day after the information statement was first mailed, and on the completion by the Financial Industry Regulatory Authority (“FINRA”) of its processing of the corporate action. The Board of Directors may abandon the reverse stock split, or determine a different ratio within the authorized range, at any time before it becomes effective. As of the date these consolidated financial statements were issued, the reverse stock split had not yet been declared effective.
The reverse stock split is a nonrecognized subsequent event, and the share and per-share amounts in the accompanying consolidated financial statements and notes have not been retroactively adjusted.
On effectiveness at a ratio of
The number of authorized shares of common stock will remain and the par value will remain $ per share. Stated capital will be reduced proportionately and additional paid-in capital credited by the same amount, with no effect on total stockholders’ equity. The conversion ratios, conversion prices and exercise prices of the outstanding convertible preferred stock, convertible notes payable, warrants and stock options will be proportionately adjusted, with fractional shares issuable on conversion or exercise rounded up to the next whole share.
Formation of TechForce Advanced Manufacturing, Inc.
On September 17, 2026, the Company formed TechForce Advanced Manufacturing, Inc., a Nevada corporation intended to
be owned
| F-101 |
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
On October 28, 2025, the Board of Directors, acting as the audit committee, dismissed Fruci & Associates II, PLLC (“Fruci”) as the Company’s independent registered public accounting firm and engaged TAAD LLP as the Company’s independent registered public accounting firm for the fiscal year ended June 30, 2026. The change was reported in the Company’s Current Report on Form 8-K filed on November 3, 2025, which included Fruci’s letter dated October 31, 2025 as Exhibit 16.1. Fruci’s reports on the consolidated financial statements for the fiscal years ended June 30, 2025 and 2024 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that each included an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern. During the two most recent fiscal years and through October 28, 2025, there were no disagreements with Fruci on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure and no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K, and there are no matters requiring disclosure under Item 304(b) of Regulation S-K.
Item 9A. Controls and Procedures.
Definition and Purpose of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. These controls also ensure that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer) and other members of management as appropriate, to enable timely decisions regarding required disclosures.
In practice, effective disclosure controls encompass a framework of policies, procedures, reporting calendars, and certifications intended to:
| ● | Capture material financial and non-financial information across business units; | |
| ● | Assess disclosure obligations under SEC rules, including Regulation S-K and Regulation S-X; | |
| ● | Provide management with a reliable basis for making timely judgments regarding disclosure; and | |
| ● | Support certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. |
Definition and Purpose of Internal Control over Financial Reporting
Internal control over financial reporting (“ICFR”) is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management, and other personnel. The objective of ICFR is to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP.
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Key elements of ICFR include:
| ● | Recordkeeping: Maintenance of books and records in reasonable detail to accurately and fairly reflect transactions and asset dispositions; | |
| ● | Authorization: Controls ensuring that receipts and expenditures are made only in accordance with authorizations of management and the Board; | |
| ● | Financial Reporting: Processes that ensure timely, complete, and accurate preparation of financial statements in conformity with U.S. GAAP; and | |
| ● | Asset Protection: Controls designed to prevent or detect unauthorized use, acquisition, or disposition of assets that could materially impact the financial statements. |
Limitations of Controls
Management acknowledges that no system of disclosure controls or ICFR can provide absolute assurance against error or fraud. Limitations include human error, collusion, management override, and cost-benefit constraints. Accordingly, even systems deemed effective can provide only “reasonable assurance” that control objectives are achieved. Furthermore, projections of any evaluation to future periods carry risk, as controls may become inadequate due to changes in conditions, staffing, or compliance.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer, with the participation of management, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026, as required by Rule 13a-15(b) under the Exchange Act. This evaluation considered the design and operational effectiveness of both manual and automated controls intended to ensure the reliability and timeliness of disclosures.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026. The primary deficiencies contributing to this conclusion include:
| ● | Insufficient Personnel: We lack full-time accounting and financial reporting staff with appropriate U.S. GAAP and SEC reporting expertise. This resource constraint limits segregation of duties and reduces independent review over financial close processes. | |
| ● | Over-Reliance on Senior Management: Due to the small size of our finance function, certain control activities rely disproportionately on our Chief Executive Officer, limiting independent checks and balances. | |
| ● | Manual Processes: Our financial reporting systems are heavily dependent on manual entries and reconciliations, increasing the risk of undetected error. | |
| ● | Limited Disclosure Review Process: We do not currently have a robust multi-level disclosure committee structure in place, which constrains our ability to independently challenge and validate disclosure judgments. |
Management’s Plan to Address Deficiencies
Management intends to remediate these deficiencies as financial resources permit by:
| ● | Hiring or contracting additional accounting and financial reporting personnel; | |
| ● | Expanding the use of external consultants to review complex accounting areas and SEC filings; | |
| ● | Enhancing procedures for disclosure review and establishing a formal disclosure committee; and | |
| ● | Investing in systems and tools to reduce reliance on manual processes. |
Until these steps are completed, management cannot conclude that our disclosure controls and procedures are effective.
Management’s Annual Report on Internal Control over Financial Reporting
Responsibility for Internal Control
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”) for the Company, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Management recognizes that a sound system of internal controls requires oversight by the Board of Directors, clear policies and procedures, segregation of duties, independent review, and continuous monitoring. Our system of ICFR is intended to ensure that:
| ● | Records are maintained in sufficient detail to accurately and fairly reflect transactions and dispositions of assets; | |
| ● | Transactions are recorded in conformity with U.S. GAAP to permit the preparation of timely and reliable financial statements; | |
| ● | Receipts and expenditures are made only with appropriate authorization of management and the Board of Directors; and | |
| ● | Unauthorized acquisition, use, or disposition of Company assets that could have a material effect on the financial statements is prevented or detected on a timely basis. |
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Inherent Limitations of Internal Control
Because of inherent limitations, ICFR cannot provide absolute assurance of preventing or detecting misstatements. Limitations include human error, management override, collusion, and the cost of controls relative to expected benefits. Further, conditions may change over time, causing controls to become less effective, and compliance with procedures may deteriorate. Accordingly, even effective ICFR can provide only “reasonable assurance” of achieving its objectives.
Framework and Evaluation Methodology
Management conducted its assessment of the effectiveness of our ICFR as of June 30, 2026, using the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
This framework evaluates internal control across five integrated components:
| 1. | Control Environment – tone at the top, integrity, and governance; | |
| 2. | Risk Assessment – identification and analysis of risks relevant to financial reporting; | |
| 3. | Control Activities – policies and procedures designed to mitigate risks; | |
| 4. | Information and Communication – systems to capture and communicate relevant financial information; and | |
| 5. | Monitoring Activities – ongoing evaluations of the effectiveness of controls. |
Results of Management’s Assessment
Based on this evaluation, management concluded that our ICFR was not effective as of June 30, 2026 due to the existence of material weaknesses, including:
| ● | Insufficient Financial Reporting Personnel: We have a limited number of employees dedicated to accounting and financial reporting. This lack of resources restricts segregation of duties and increases reliance on senior management for multiple review and approval functions. | |
| ● | Complex Financial Instruments: We have issued convertible debt, preferred stock, and derivative instruments requiring complex accounting and valuation. Our reliance on third-party consultants and limited internal expertise creates a heightened risk of misstatement. | |
| ● | Acquisition Accounting and Goodwill Valuation: Recent acquisitions required complex purchase price allocations and valuation of goodwill and intangibles. The subsequent impairment of goodwill shortly (approximately one year for FHVH) after recognition demonstrates deficiencies in due diligence and control activities over acquisition accounting. | |
| ● | Information Technology and Systems Limitations: Our financial reporting systems are not fully automated and rely heavily on manual processes, increasing the risk of error and limiting timely monitoring activities. | |
| ● | Resource Constraints: Our working capital deficit and limited liquidity impair our ability to invest in strengthening our ICFR framework, including recruitment of qualified personnel, implementation of enhanced financial systems, and engagement of external advisors on a recurring basis. |
Because of these material weaknesses, management cannot conclude that our ICFR was effective as of June 30, 2026.
Auditor Attestation
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding ICFR. Management’s assessment of ICFR was not subject to attestation pursuant to rules applicable to issuers that are not “large accelerated filers” or “accelerated filers” under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the fourth fiscal quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III.
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth the name, age and position of each of our executive officers and directors as of the date of this report:
| Name | Age | Position(s) | ||
| Jimmy Chan | 47 | Chief Executive Officer | ||
| Yury Pyatigorsky | 55 |
Chief Financial Officer | ||
| James Steigerwald | 55 | Chairman of the Board of Directors, Chief Operating Officer, Director | ||
| Lei Sonny Wang | 46 |
Chief Revenue Officer | ||
| Christopher Dieterich | 77 | Independent Director | ||
| Darren Kenney | 61 | Independent Director | ||
| Ried Floco | 54 | President, Director | ||
| Ronald J. Stauber | 85 |
Independent Director |
Background of Executive Officers and Directors
Jimmy Chan
Mr. Chan has served as Chief Executive Officer of Nightfood Holdings, Inc. since April 29, 2025. He is an entrepreneur and business leader with over two decades of experience spanning real estate, lending, foodservice packaging, legal cannabis, software development, manufacturing, international trade, and healthcare. As the founder of CarryOutSupplies.com, Mr. Chan brings experience in hospitality operations, supply chain logistics, customer service, and business development. He leads Nightfood Holdings, d/b/a TechForce Robotics, in expanding its AI-enhanced automation and service robotics offerings within the hospitality and foodservice sectors. He is also overseeing the Company’s planned entry into semiconductor automation through TechForce Advanced Manufacturing, with an initial focus on automated optical inspection and wafer-handling systems intended to incorporate AI-assisted image analysis and robotic arms. This initiative remains subject to completion of a proposed intellectual property acquisition, technical validation, and commercialization requirements.
Mr. Chan specializes in preparing private companies for public listing, navigating capital markets, executing mergers and acquisitions, and leading operational transformations. His leadership is defined by innovation, strategic execution, and a relentless commitment to building sustainable, long-term value. Outside of his professional endeavors, Mr. Chan is passionate about family, community leadership, and philanthropy.
Yury Pyatigorsky
Mr. Pyatigorsky, age 55, is a seasoned financial executive with more than 27 years of experience in corporate finance, capital markets, investment management, and strategic advisory roles across public and private companies. Most recently, he has served as an advisor to several large and middle-market organizations.
From 2012 to 2022, Mr. Pyatigorsky held senior leadership positions at Sun West Mortgage Company, Inc., a mortgage lender originating approximately $1 billion per month, serving first as Chief Financial Officer and Controller and subsequently as Chief Investment Officer. Before joining Sun West, he held leadership roles in capital markets, structured finance, corporate development, and corporate finance at prominent non-agency mortgage lenders, including New Century Financial Corporation and Option One Mortgage Corporation. Mr. Pyatigorsky has served as Chief Financial Officer of ResMac, Inc. since October 2023.
Throughout his career, Mr. Pyatigorsky has been responsible for financial reporting and controls, profit-and-loss and balance-sheet management, financial planning and analysis, budgeting and forecasting, risk management and hedging, capital and liquidity management, and the oversight of warehouse and credit facilities. He also has extensive experience structuring and negotiating securitization transactions totaling approximately $3 billion to $4 billion per quarter.
Mr. Pyatigorsky is a CFA charterholder. He earned a Bachelor of Science degree from California State University, Northridge, and a Master of Business Administration from the UCLA Anderson School of Management.
James Steigerwald
Mr. Steigerwald has served as the Chief Operating Officer since March 25, 2025 and a director since January 21, 2025. He is a seasoned entrepreneur with three decades of experience. He served as Chief Marketing Officer of Nug Avenue from January 2021 to February 2022 and as its General Manager from February 2022 to March 2024. Mr. Steigerwald played a key role in Nug Avenue’s growth during the COVID pandemic. Before entering the cannabis industry, Mr. Steigerwald worked in the real estate and mortgage sector, eventually starting his own mortgage brokerage in 2003. However, following the 2008 mortgage crisis, he shifted his focus to consulting and became a principal in various industries, specializing in marketing, sales, and operations. Since July 2012, Mr. Steigerwald has owned SwiftLead, Inc., a sales, business operations, and marketing consulting firm. From July 2017 to March 2020, he owned 3JE, Inc., an AT&T Direct TV and cell phone reseller. From February 2019 to December 2019, he owned ESSRW, Inc., an equestrian equipment manufacturer and repairer. From January 2021 to October 2023, Mr. Steigerwald served as Chief Operating Officer of Sugarmade, Inc., a company formerly quoted on the OTC, which wholly-owned SWC until Nightfood Holdings agreed to acquire SWC under a share exchange agreement dated September 4, 2024, which closed on March 31, 2025. We believe that Mr. Steigerwald’s entrepreneurial, operational and public company experience, including his experience with growth strategy and capital markets, make him well qualified to serve as Chairman and a member of our Board of Directors.
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Lei Sonny Wang
Mr. Wang has served as the Chief Revenue Officer since April 29, 2025 and has served as a director since February 2, 2024. He previously served as the Chief Executive Officer of the Company from February 2, 2024 through April 30, 2025. Mr. Wang founded and has served as chief executive officer of Future Hospitality Ventures Holdings Inc., a service robots distribution company to address operational inefficiencies in the hospitality industry, since October 28, 2023. On October 17, 2017, Mr. Wang established, and acted as executive director of, Intelligent Ventures Group Inc., which specializes in scaling and reviving California’s early-stage and distressed small businesses through turnkey management. On March 1, 2019, Mr. Wang joined Tri Cascade Inc. as the Executive Director of Business Development, an early-stage IoT device manufacturing and smart device development company focusing on deploying Outdoor Air Quality Monitor applications to address high-density urban air population concerns. On March 2, 2020, Mr. Wang joined Komfort IQ as the Chief Revenue Officer, an IoT startup enhancing energy efficiency in commercial office spaces by up to 60%. On January 5, 2022, Mr. Wang joined Retrofitek Inc., a startup distribution company innovating in the HVAC sector with energy-saving coating technologies, as the interim CEO. Mr. Wang studied Political Science at the University of California, Santa Barbara, and obtained degrees in Consumer Behavior and Business Administration from the University of North Texas. Mr. Wang’s history in managing, launching, and growing companies that address critical challenges uniquely positions him as a qualified board member. NGTF believes that Mr. Wang’s strategic vision, combined with his operational experience, will contribute to creative problem-solving, business development, fundraising, and overall management.
Christopher Dieterich
Mr. Dieterich is qualified to serve as a Director by way his extensive legal and business experience. He graduated from Virginia Polytechnic Institute in 1969 (BS Engineering), University of California at Berkeley 1970 (MS Engineering) on full scholarship by Ford Foundation; and the University of California at Los Angeles in 1979 (JD Law/MS Economics), pursuant to grant from Olin Foundation. He operates a law firm that specializes in Securities and Exchange Commission filings and venture capital arrangements, and currently represents 15 reporting public entities. The firm has participated in capital raises for over 50 clients, and hundreds of millions of dollars for those clients. The Board believes Mr. Dieterich will add significant value to not only corporate governance, but also to operational and capital acquisition efficiency.
Mr. Dieterich has served as an independent director since January 2025. We believe that Mr. Dieterich’s legal experience in securities, SEC reporting, corporate finance and public company matters make him well qualified to serve as a member of our Board of Directors.
Darren Kenney
Mr. Kenney, an experienced CPA and licensed Real Estate Broker for the State of California. He has successfully built and sold three accounting practices over the past 30 years. During the late 1980’s in public accounting he consulted with GTE (now Verizon), Saks Fifth Avenue and CalTrans. Mr. Kenney spent most of the 1990’s working closely with his father to build their automotive paint business. He transitioned from the family business to focus back on his tax practice and managerial consulting business in the early 2000’s. He served as a main broker for two mortgage companies from 2007 to 2010. Also starting in 2010, he sat on the board of a local non-profit for 10 years. From 2013 to 2017, he created and operated SYA Consultants Inc, a Florida corporation which helped business clients acquire in excess of $50,000,000 in capital financing. Since 2020, he has operated SCWC Ventures Inc, a financial management company, facilitating bridge capital as well as long term equity for both distressed and growing entities. We believe that Mr. Kenney’s accounting, financial management and capital financing experience make him well qualified to serve as a member of our Board of Directors.
Ried Floco
Mr. Floco has served as our president and director since April 29, 2025. Mr. Floco has over 30 years in the hospitality industry, in all aspects of corporate and property management, which includes acquisitions, development, asset repositioning, dispositions, portfolio performance, project management and oversight of the various entities and Management Teams. His hands-on hospitality experience exceeds more than $3B in asset valuations with more than 200-hotel properties under brands such as Marriott, Hilton, Intercontinental, Wyndham, Choice, AmeriSuites and Starwood Hotels; in the limited-service, extended-stay, full-service and resort market segments. Mr. Floco is the founder of Pierpont Management LLC, served as Chief Operating Officer of Narven Enterprises Inc., Director of Portfolio Management with CNL Hotels & Resorts, Regional Director of Sales & Marketing with Flagstone Hospitality/RFS Inc., District Manager with Prime Hospitality and held General Manager positions with Prime Hospitality, RFS Inc. and Expotel Hospitality. He holds a degree in Hospitality Management from Northern Arizona University. We believe that Mr. Floco’s extensive hospitality experience, including hotel acquisitions, development, asset management and operations, make him well qualified to serve as a member of our Board of Directors.
Ronald J. Stauber
Mr. Stauber is an attorney admitted to the State Bar of California, the United States District Court for the Central District of California, the United States District Court for the Eastern District of California, and the Supreme Court of the United States. He is the principal of the Stauber Law Offices, Beverly Hills, California. He received a Bachelor of Business Administration from the University of Toledo and a Juris Doctor from The Ohio State University College of Law.
Mr. Stauber served in the United States Army, completing his service in the California National Guard and as a Reserve of the U.S. Army. He previously served as Corporations Counsel for the Department of Investment, Division of Corporations, State of California, in Los Angeles. He has been a member of the Beverly Hills, Los Angeles County, Riverside County, and American Bar Associations and has participated in various sections including real estate, business, and corporate law. He has served as Judge Pro Tempore of the Los Angeles County Superior Court and as a Mediator for the Riverside County Superior Court. Mr. Stauber has acted as principal or special counsel in several law firms.
Mr. Stauber is listed in the Martindale-Hubbell Law Directory (AV rating), Marquis Who’s Who in America®, and multiple editions of Who’s Who in American Law. He is recognized in The Bar Register of Preeminent Lawyers, LexisNexis, and the Martindale-Hubbell Register of Most Distinguished Law Practices (2006–present). He is the author of Understanding Corporate Hijacking/Shells and Convertible Debt Financing/Death Spiral, and co-author of Smart Credit Repair.
Mr. Stauber maintains a corporate and business transactional practice advising companies on formation, entity maintenance, compliance, and financing, including private and public securities offerings under the Securities Act of 1933 and the Securities Exchange Act of 1934. His experience includes governance, business combinations, mergers and reverse mergers, divestitures, stakeholder relations, securities transfers, and secured and unsecured debt and related equity financings. We believe that Mr. Stauber’s legal experience in securities, corporate governance, business combinations and regulatory compliance Corporate Governance and Compliance Committee, make him well qualified to serve as a member of our Board of Directors.
Term and Family Relationships
Our directors currently have terms which will end at our next annual meeting of the stockholders or until successors are elected and qualify, subject to their prior death, resignation or removal. Officers serve at the discretion of the Board of Directors.
No family relationships exist among our directors and executive officers. Two (2) consultants are family members of Mr. Floco; see Item 13.
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Legal Proceedings
To the best of our knowledge, no officer, director, or persons nominated for these positions, and no promoter or significant employee of our corporation has been involved in legal proceedings that would be material to an evaluation of our management.
Committees of Our Board of Directors
Our Board of Directors directs the management of our business and affairs, as provided by Nevada law, and conducts its business through meetings of the Board of Directors and its standing committees. We have a standing audit committee, compensation committee and nominating and corporate governance and compliance committee. In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues.
Audit Committee
Our Audit Committee is responsible for, among other things:
| ● | approving and retaining the independent auditors to conduct the annual audit of our financial statements; | |
| ● | reviewing the proposed scope and results of the audit; | |
| ● | reviewing and pre-approving audit and non-audit fees and services; | |
| ● | reviewing accounting and financial controls with the independent auditors and our financial and accounting staff; | |
| ● | reviewing and approving transactions between us and our directors, officers and affiliates; | |
| ● | establishing procedures for complaints received by us regarding accounting matters; | |
| ● | overseeing internal audit functions, if any; and | |
| ● | preparing the report of the audit committee that the rules of the SEC require to be included in our annual meeting proxy statement. |
Our Audit Committee currently consists of Mr. Darren Kenney, Mr. Christopher Dieterich, and Mr. Ronald Stauber, with Mr. Kenney serving as Chair. Our Board of Directors has determined that each of the committee members meet the definition of an “independent director,” as defined under Nasdaq rules, and that they each meet the independence standards under Rule 10A-3 of the Exchange Act. Each member of our audit committee meets the financial literacy requirements of the Nasdaq rules. In addition, our Board of Directors has determined that Mr. Kenney qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. Our Board of Directors has adopted a written charter for the audit committee, which is available on our corporate website at https://www.nightfoodholdings.com/investor-relations/governance.
Compensation Committee
Our Compensation Committee is responsible for, among other things:
| ● | reviewing and recommending the compensation arrangements for executive management; | |
| ● | establishing and reviewing general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals; | |
| ● | preparing the report of the compensation committee that the rules of the SEC require to be included in our annual meeting proxy statement. |
Our Compensation Committee currently consists of Mr. Christopher Dieterich and Mr. Ronald J. Stauber, with Mr. Dieterich serving as Chair. Our Board of Directors has determined that each of the two committee members meet the definition of an “independent director”, as defined under Nasdaq rules. Our Board of Directors has adopted a written charter for the compensation committee, which is available on our corporate website at https://www.nightfoodholdings.com/investor-relations/governance.
Nominating, Corporate Governance and Compliance Committee
Our Nominating Corporate Governance and Compliance Committee, is responsible for, among other things:
| ● | nominating members of the Board of Directors; | |
| ● | developing a set of corporate governance principles applicable to the Company; and | |
| ● | overseeing the evaluation of our Board of Directors. |
Our Nominating, Corporate Governance and Compliance Committee currently consists of Mr. Ronald J. Stauber and Mr. Christopher Dieterich, with Mr. Stauber serving as Chair. Our Board of Directors has determined that each of the two committee members meet the definition of an “independent director”, as defined under Nasdaq rules. Our Board of Directors has adopted a written charter for the Nominating, Corporate Governance and Compliance Committee, which is available on our corporate website at https://www.nightfoodholdings.com/investor-relations/governance.
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Code of Ethics
We recognize the importance of maintaining high ethical standards in the conduct of our business and compliance with applicable laws and regulations. We have not adopted a written code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Board of Directors has deferred adoption until the Company has the accounting and compliance personnel to administer it, and the Company is finalizing a formal written Code of Ethics that will apply to our Chief Executive Officer, Chief Financial Officer, our directors, and all employees.
This Code of Ethics, once formally adopted, will be designed to promote:
| ● | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest; | |
| ● | Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications; | |
| ● | Compliance with applicable governmental laws, rules, and regulations; | |
| ● | Prompt internal reporting of violations of the Code to appropriate persons identified therein; and | |
| ● | Accountability for adherence to the Code. |
We expect to adopt the Code of Ethics in the near term and will make a copy available to stockholders upon request and, if applicable, through our corporate website. Any amendments to or waivers of the Code of Ethics applicable to our Chief Executive Officer or other covered officers will be disclosed promptly as required by SEC rules.
Insider Trading Policy
Our Board of Directors has
The policy is designed to:
| ● | Prohibit trading in the Company’s securities while in possession of material nonpublic information; | |
| ● | Establish trading “blackout periods” and pre-clearance procedures for directors, officers, and designated employees; | |
| ● | Prohibit short sales, hedging, and other speculative transactions in Company securities; and | |
| ● | Provide guidance on recognizing and avoiding unlawful “tipping” of confidential information to others. |
CORPORATE GOVERNANCE
Director Independence
We use the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship, which, in the opinion of the Company’s Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
| ● | The director is, or at any time during the past three years was, an employee of the company; | |
| ● | The director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service); | |
| ● | The director or a family member of the director is, or at any time during the past three years was, an executive officer of the company; | |
| ● | The director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); | |
| ● | The director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or | |
| ● | The director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit. |
The Board has determined that of the current directors, Mr. Dieterich, Mr. Kenney and Mr. Ronald J Stauber would qualify as independent directors as that term is defined in the listing standards of The NASDAQ Capital Market if we were listed on The NASDAQ Capital Market.
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Delinquent Section 16(a) Beneficial Ownership of Reporting
Section 16(a) of the Securities Exchange Act requires officers and directors, and persons who beneficially own more than ten (10%) percent of a class of equity securities registered pursuant to Section 12 of the Exchange Act, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the principal exchange upon which such securities are traded or quoted. Reporting Persons are also required to furnish copies of such reports filed pursuant to Section 16(a) of the Exchange Act to the Company. Based solely on our review of reports filed with the SEC pursuant to Section 16(a) of the Exchange Act, we believe that the following forms were not filed on a timely basis: (a) Form 3 and Form 4 as to two transactions by Mr. Lei Sonny Wang; and (b) Form 3 as to one transaction by Mr. Jimmy Chan.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation earned by our named executive officers for the fiscal years ended June 30, 2026 and 2025, whether or not paid during the year. Amounts paid in cash and amounts remaining accrued and unpaid at June 30, 2026 are stated in the footnotes. Stock awards are reported at their aggregate grant date fair value computed under ASC 718 in the year of grant; the fiscal 2025 amounts reported in our prior annual report reflected only the portion of those awards that vested during that year.
| Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($) (5) | Option awards ($) | All other compensation ($) (6) | Total ($) | |||||||||||||||||||||
| Jimmy Chan, | 2026 | $ | 180,000 | - | - | - | - | $ | 180,000 | |||||||||||||||||||
| Chief Executive Officer (1) | 2025 | $ | 30,000 | - | $ | 612,000 | - | - | $ | 642,000 | ||||||||||||||||||
| Ried Floco, | 2026 | $ | 180,000 | - | - | - | $ | 6,000 | $ | 186,000 | ||||||||||||||||||
| President (2) | 2025 | $ | 30,000 | - | $ | 816,000 | - | - | $ | 846,000 | ||||||||||||||||||
| James Steigerwald, | 2026 | $ | 120,000 | - | - | - | $ | 6,000 | $ | 126,000 | ||||||||||||||||||
| Chairman and Chief Operating Officer (3) | 2025 | $ | 30,000 | - | $ | 428,400 | - | - | $ | 458,400 | ||||||||||||||||||
| Lei Sonny Wang, | 2026 | $ | 120,000 | - | - | - | $ | 6,000 | $ | 126,000 | ||||||||||||||||||
| Chief Revenue Officer (4) | 2025 | $ | 100,000 | - | $ | 612,000 | - | - | $ | 712,000 | ||||||||||||||||||
| Total - fiscal 2026 | $ | 600,000 | - | - | - | $ | 18,000 | $ | 618,000 | |||||||||||||||||||
| Total - fiscal 2025 | $ | 190,000 | - | $ | 2,468,400 | - | - | $ | 2,658,400 | |||||||||||||||||||
| (1) | Mr. Chan was appointed Chief Executive Officer on April 29, 2025 and also served as Chief Financial Officer until August 10, 2026. All of his fiscal 2026 salary was paid in cash. |
| (2) | Mr. Floco was appointed President and a director on April 29, 2025. Of his fiscal 2026 salary, $30,000 was paid in cash and $156,000 remained accrued and unpaid at June 30, 2026. |
| (3) | Mr. Steigerwald was appointed Chief Operating Officer on March 25, 2025 and serves as Chairman of the Board. Of his fiscal 2026 salary, $101,500 was paid in cash and $24,500 remained accrued and unpaid at June 30, 2026. |
| (4) | Mr. Wang served as Chief Executive Officer from February 2, 2024 to April 29, 2025 and has served as Chief Revenue Officer since. He served as a director until August 7, 2026. Of his fiscal 2026 salary, $60,000 was paid in cash and $66,000 remained accrued and unpaid at June 30, 2026. |
| (5) | Stock awards are shares of Series C Convertible Preferred Stock granted on March 25, 2025, each convertible into 6,000 shares of common stock, valued at $0.0068 per common share on the grant date, or $40.80 per Series C share: |
| ● | Mr. Chan - 15,000 shares, $612,000 | |
| ● | Mr. Floco - 20,000 shares, $816,000 | |
| ● | Mr. Steigerwald - 10,500 shares, $428,400 | |
| ● | Mr. Wang - 15,000 shares, $612,000 |
The shares vest in equal monthly installments over twenty (20) months commencing April 1, 2025, subject to acceleration on achievement of specified milestones, and are subject to the lock-up described in Note 8 to the consolidated financial statements. No stock awards were granted to named executive officers during fiscal 2026.
| (6) | Represents director fees of $1,500 per quarter earned for service on the Board of Directors, all of which remained accrued and unpaid at June 30, 2026. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth the unvested stock awards held by our named executive officers at June 30, 2026. No named executive officer holds stock options.
| Name | Series C shares that have not vested (#) | Common share equivalents (#) | Market value of shares that have not vested ($) (1) | |||||||||
| Jimmy Chan | 1,250 | 7,500,000 | $ | 251,250 | ||||||||
| Ried Floco | 1,667 | 10,002,000 | $ | 335,067 | ||||||||
| James Steigerwald | 875 | 5,250,000 | $ | 175,875 | ||||||||
| Lei Sonny Wang | 1,250 | 7,500,000 | $ | 251,250 | ||||||||
| Total | 5,042 | 30,252,000 | $ | 1,013,442 | ||||||||
| (1) | Based on the $0.0335 closing price of our common stock on June 30, 2026 on an as-converted basis. The remaining shares vest monthly through November 30, 2026. |
Stock Options
On May 1, 2026 and June 1, 2026, we granted options to purchase 34,630,305 shares of common stock at $0.033/share to employees, consultants and advisory board members, none of whom is a named executive officer or director. See Note 8 to the consolidated financial statements and Item 13.
Long Term Incentive Plans
We have no pension, retirement or similar benefit plans for directors or executive officers and no material bonus or profit-sharing plans other than the milestone acceleration provisions of the Series C awards described above.
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Director Compensation
We pay our independent directors a cash fee of $1,500 per quarter. No stock awards were granted or earned by our directors during the fiscal year ended June 30, 2026. Directors who are also executive officers are compensated as described in the Summary Compensation Table and receive director fees, which are reported there as all other compensation. The following table sets forth the compensation earned by our non-employee directors for the fiscal year ended June 30, 2026.
| Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | All other compensation ($) | Total ($) | |||||||||||||||
| Christopher Dieterich | $ | 6,000 | - | - | - | $ | 6,000 | |||||||||||||
| Thomas Morse (1) | $ | 6,000 | - | - | - | $ | 6,000 | |||||||||||||
| Total | $ | 12,000 | - | - | - | $ | 12,000 | |||||||||||||
| (1) | Mr. Morse resigned from the Board of Directors on August 7, 2026. Darren Kenney and Ronald J. Stauber were appointed directors on August 7, 2026 and received no compensation for fiscal 2026. Director fees of $99,150 were accrued and unpaid at June 30, 2026, of which $67,150 is included in accounts payable and accrued liabilities and $32,000 in accounts payable and accrued liabilities - related parties (Note 4). |
Employment and Consulting Agreements
Jimmy Chan
On March 25, 2025, the Company entered into an Independent Contractor Agreement with Mr. Chan for consulting services including support for mergers and acquisitions, capital markets initiatives and strategic growth planning, providing for a monthly consulting fee of $15,000 and a grant of 15,000 shares of Series C Convertible Preferred Stock. Effective April 29, 2025, Mr. Chan was appointed Chief Executive Officer and entered into an employment agreement on the same economic terms. On June 12, 2025, the Company and Mr. Chan amended Schedule A of his Restricted Stock Award Agreement to provide for vesting in equal monthly installments over twenty (20) months commencing April 1, 2025, subject to acceleration on achievement of specified milestones. Mr. Chan resigned as Chief Financial Officer on August 10, 2026 and continues as Chief Executive Officer and Secretary.
James Steigerwald
In connection with his appointment as Chief Operating Officer, the Company and Mr. Steigerwald entered into an employment agreement effective March 25, 2025 providing for an annual base salary of $120,000 and a grant of 10,500 shares of Series C Convertible Preferred Stock. On June 12, 2025, the Company and Mr. Steigerwald amended Schedule A of his Restricted Stock Award Agreement to provide for vesting in equal monthly installments over twenty (20) months commencing April 1, 2025, subject to acceleration on achievement of specified milestones.
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Lei Sonny Wang
In connection with his appointment as Chief Executive Officer, the Company entered into an Employment Agreement with Mr. Wang on March 25, 2025 for an initial one (1) year term with automatic one (1) year renewals unless either party gives at least thirty (30) days prior written notice of non-renewal. Effective April 29, 2025, Mr. Wang resigned as Chief Executive Officer and was appointed Chief Revenue Officer; his employment agreement remained in effect with only his title changed and all economic terms unchanged. On June 12, 2025, the Company and Mr. Wang amended Schedule A of his Restricted Stock Award Agreement to provide for vesting in equal monthly installments over twenty (20) months commencing April 1, 2025, subject to acceleration on achievement of specified milestones. Mr. Wang resigned from the Board of Directors on August 7, 2026 and continues as Chief Revenue Officer.
Ried Floco
On March 25, 2025, the Company entered into an Independent Contractor Agreement with Mr. Floco for consulting services including originating mergers and acquisitions, supporting the deployment of service robots, overseeing the TechForce Robotics team and leading strategic growth initiatives. Effective April 29, 2025, Mr. Floco was appointed President and a director. The Company intends to enter into an executive employment agreement with Mr. Floco mirroring the compensation and equity provisions of his March 25, 2025 consulting agreement. On June 12, 2025, the Company and Mr. Floco amended Schedule A of his Restricted Stock Award Agreement to provide for vesting in equal monthly installments over twenty (20) months commencing April 1, 2025, subject to acceleration on achievement of specified milestones.
Yury Pyatigorsky
Mr. Pyatigorsky was appointed Chief Financial Officer on August 10, 2026. Under his August 10, 2026 employment agreement, Mr. Pyatigorsky is an at-will employee with a base salary of $5,000 per month, increasing to $10,000 per month on the listing of our common stock on a national securities exchange. Mr. Pyatigorsky also holds 3,750 shares of Series C Convertible Preferred Stock granted for services on March 25, 2025, of which 3,438 shares had vested at June 30, 2026.
Termination of Employment
Other than as described above, we have no compensatory plan or arrangement with any named executive officer that would result in payments on resignation, retirement or other termination of employment. The agreements described for Messrs. Chan, Floco and Wang contain only equity vesting and claw back provisions on termination.
Board Composition and Director Independence
Our Board of Directors consists of five directors: James Steigerwald (Chairman), Ried Floco, Christopher Dieterich, Darren Kenney and Ronald J. Stauber. Lei Sonny Wang and Thomas Morse resigned from the Board on August 7, 2026, and Mr. Kenney and Mr. Stauber were appointed the same day. The Board has determined that Mr. Dieterich, Mr. Kenney and Mr. Stauber are independent under the listing standards of the Nasdaq Stock Market and has established an audit committee (Mr. Kenney, chair; Mr. Dieterich; Mr. Stauber), a compensation committee (Mr. Dieterich, chair; Mr. Stauber) and a nominating, corporate governance and compliance committee (Mr. Stauber, chair; Mr. Dieterich), each with a written charter.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of October 12, 2026, the beneficial ownership of our voting securities by each director and named executive officer, by all directors and executive officers as a group, and by each person known to us to beneficially own more than 5% of a class of our voting securities. Beneficial ownership is determined under the rules of the SEC and includes voting or investment power over the securities and securities that may be acquired within sixty (60) days. No director or executive officer holds shares of common stock; two (2) directors hold stock options that vest within sixty (60) days, as described in footnote (4). Our Series C and Series D Convertible Preferred Stock do not vote until converted into common stock, and the Series C Convertible Preferred Stock held by our officers and directors is subject to the lock-up described in Note 8 to the consolidated financial statements and is not convertible within sixty (60) days; the underlying common stock is therefore not beneficially owned for purposes of the table, and the Series C Convertible Preferred Stock held by our directors and executive officers is set forth in the second table below. Only our common stock and our Series A Preferred Stock vote. Mr. Chan holds all 1,000 outstanding shares of Series A Preferred Stock, which carry votes equal to the votes of the voting classes plus one (1), or 545,254,602 votes at October 12, 2026, giving him control of our voting power. Percentages are based on 545,254,601 shares of common stock outstanding at October 12, 2026 and the 545,254,602 votes carried by the Series A Preferred Stock, for total voting power of 1,090,509,203 votes. The address of each person is c/o Nightfood Holdings, Inc., 13501 South Main Street, Los Angeles, California 90061.
| Name of beneficial owner | Common stock (#) | Series A Preferred (#) | Series A votes (#) | Percent of total votes | ||||||||||||
| Jimmy Chan, Chief Executive Officer (1) | - | 1,000 | 545,254,602 | 50.0 | % | |||||||||||
| James Steigerwald, Chairman and Chief Operating Officer (2) | - | - | - | - | ||||||||||||
| Ried Floco, President and Director (2) | - | - | - | - | ||||||||||||
| Lei Sonny Wang, Chief Revenue Officer (2) | - | - | - | - | ||||||||||||
| Yury Pyatigorsky, Chief Financial Officer (2) | - | - | - | - | ||||||||||||
| Christopher Dieterich, Director | - | - | - | - | ||||||||||||
| Darren Kenney, Director (4) | 250,000 | - | - | * | ||||||||||||
Ronald J. Stauber, Director (4) | 250,000 | - | - | * | ||||||||||||
| All directors and executive officers as a group (8 persons) | 500,000 | 1,000 | 545,254,602 | 50.0 | % | |||||||||||
| (1) | Mr. Chan holds all 1,000 outstanding shares of Series A Preferred Stock. His Series C Convertible Preferred Stock, including 70,000 shares held by Sugarmade, Inc., an entity he controls, that were received as consideration for SWC Group, Inc., is locked up and non-voting and is set forth in the second table below. |
| (2) | Holds Series C Convertible Preferred Stock, which is non-voting until converted and is locked up, as set forth in the second table below. |
Each share of Series C Convertible Preferred Stock converts into 6,000 shares of common stock when the lock-up expires.
| (3) | No person other than Mr. Chan is known to us to beneficially own more than 5% of a class of our voting securities. SBZ Investment Industry Inc., the lender under our revolving line of credit, held 281,021 shares of Series C Convertible Preferred Stock at October 12, 2026 and its owners held a further 93,005 shares, all of which are locked up and non-voting; see Item 13. The 2,263 shares of Series C Convertible Preferred Stock not subject to the lock-up were converted into 13,578,000 shares of common stock on August 12, 2026 by a holder of less than 5%. |
| (4) | Consists of options to purchase 250,000 shares of common stock at $0.033/share that vest on November 7, 2026, within sixty (60) days of October 12, 2026. Each of Mr. Kenney and Mr. Stauber holds options to purchase 1,000,000 shares of common stock granted on August 7, 2026. |
| * | Less than 1%. |
The following table sets forth, as of October 12, 2026, the Series C Convertible Preferred Stock beneficially owned by each director and named executive officer and by all directors and executive officers as a group. The Series C Convertible Preferred Stock is non-voting and is subject to the lock-up described in Note 8 to the consolidated financial statements. Shares held directly include shares granted for services on March 25, 2025 that vest within sixty (60) days. The shares held indirectly by Mr. Chan are held by Sugarmade, Inc., an entity he controls. Percent of class is based on 543,609 shares of Series C Convertible Preferred Stock outstanding at October 12, 2026.
| Name of beneficial owner | Series C Preferred held directly (#) | Series C Preferred held indirectly (#) | Percent of class | Common stock issuable on conversion (#) | ||||||||||||
| Jimmy Chan, Chief Executive Officer | 15,000 | 70,000 | 15.6 | % | 510,000,000 | |||||||||||
| James Steigerwald, Chairman and Chief Operating Officer | 10,500 | - | 1.9 | % | 63,000,000 | |||||||||||
| Ried Floco, President and Director | 21,000 | - | 3.9 | % | 126,000,000 | |||||||||||
| Lei Sonny Wang, Chief Revenue Officer | 28,333 | - | 5.2 | % | 169,998,000 | |||||||||||
| Yury Pyatigorsky, Chief Financial Officer | 3,750 | - | * | 22,500,000 | ||||||||||||
| Christopher Dieterich, Director | - | - | - | - | ||||||||||||
| Darren Kenney, Director | - | - | - | - | ||||||||||||
| Ronald J. Stauber, Director | - | - | - | - | ||||||||||||
| All directors and executive officers as a group (8 persons) | 78,583 | 70,000 | 27.3 | % | 891,498,000 | |||||||||||
Securities Authorized for Issuance under Equity Compensation Plans
We have no equity compensation plan approved by our stockholders. At June 30, 2026, options to purchase 34,630,305 shares of common stock at a weighted average exercise price of $0.033/share were outstanding under individual option agreements not approved by stockholders, of which options to purchase 12,757,576 shares were exercisable. No shares remain available for future issuance under those agreements.
Changes in Control
Mr. Chan controls our voting power through the Series A Preferred Stock. We are not aware of any other arrangement that may result in a change in control.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
A related person is any director, executive officer, nominee for director, or beneficial owner of more than 5% of a class of our voting securities, and any immediate family member of those persons. Our Board of Directors reviews and approves all transactions with related persons.
Transactions with Related Persons
Since July 1, 2024, we have been party to the following transactions with related persons. The disclosure threshold under Item 404 of Regulation S-K for a smaller reporting company is the lesser of $120,000 or 1% of the average of our total assets at June 30, 2026 and 2025, or $120,000; transactions below that threshold are included for completeness.
| Date | Related person | Relationship | Transaction | Amount ($) | Balance at June 30, 2026 ($) | |||||||||
| March 31, 2025 | Sugarmade, Inc. | Entity controlled by Jimmy Chan, Chief Executive Officer | 83,333 shares of Series C Convertible Preferred Stock issued as consideration for SWC Group, Inc.; 70,000 shares remained outstanding at June 30, 2026 (Note 9) | $ | 4,399,982 | - | ||||||||
| March 31, 2025 | Ried Floco | President and Director | 10,000 shares of Series C Convertible Preferred Stock issued as consideration for Skytech Automated Solutions, Inc. (Note 9) | $ | 528,000 | - | ||||||||
| September 4, 2024 (assumed March 31, 2025) | Jimmy Chan | Chief Executive Officer | Loan #19 - convertible vendor note assumed in the SWC acquisition, 15% interest, maturing September 4, 2027, convertible at 65% of the lowest market price during the preceding twenty (20) trading days (Note 5) | $ | 180,154 | $ | 75,860 | |||||||
| September 4, 2024 (assumed March 31, 2025) | Lei Sonny Wang | Chief Revenue Officer; Director until August 7, 2026 | Loan #28 - convertible vendor note assumed in the SWC acquisition, 15% interest, maturing September 4, 2027 (Note 5) | $ | 49,050 | $ | 24,885 | |||||||
| August 27, 2025 and September 30, 2025 | SBZ Investment Industry Inc. | Holder of more than 5% of the Series C Convertible Preferred Stock | 216,667 and 176,167 shares of Series C Convertible Preferred Stock issued as consideration for Victorville Treasure Holdings, LLC and Treasure Mountain Holdings, LLC, with contingent consideration of up to 41,667 and 20,000 additional shares on achievement of post-acquisition milestones (Notes 8, 9 and 15) | $ | 81,280,140 | - | ||||||||
| March 31, 2026 | Lei Sonny Wang | Chief Revenue Officer; Director until August 7, 2026 | Loan #42 - convertible note issued in settlement of accounts payable, 15% interest, maturing March 31, 2029; the conversion feature was bifurcated at a fair value of $109,283 and recognized as a loss on settlement of accounts payable - related party (Notes 5 and 11) | $ | 73,927 | $ | 73,927 | |||||||
| April 5, 2026 | SBZ Investment Industry Inc. | Holder of more than 5% of the Series C Convertible Preferred Stock | Discretionary revolving line of credit of up to $10,000,000 at 10% interest, secured by a first-priority lien on all of our assets, for an initial term of twelve (12) months renewing annually; advances of $3,182,000 were made and $210,000 of amounts previously advanced to our subsidiaries was reclassified from accounts payable; accrued interest was $75,231 at June 30, 2026 (Notes 5 and 15) | $ | 3,392,000 | $ | 3,392,000 | |||||||
| April 16, 2026 | Lei Sonny Wang | Chief Revenue Officer; Director until August 7, 2026 | Loan #45 - note payable, 16% interest, maturing April 16, 2027 (Note 5) | $ | 10,590 | $ | 10,590 | |||||||
| May 1, 2026 | Meagan Floco and Richard Floco | Family members of Ried Floco, President | Options to purchase 3,030,303 shares of common stock each at $0.033/share with a ten (10) year term, granted for consulting services (Note 8) | $ | 163,657 | - | ||||||||
| Fiscal 2026 | Officers and directors | Accrued compensation, bonuses, director fees, accrued interest on the related party notes described above and expenses paid on our behalf (Note 4) | - | $ | 2,515,660 | |||||||||
| Fiscal 2026 | Officers, directors and service providers | 49,096 shares of Series C Convertible Preferred Stock vested under the March 25, 2025 awards, for which we recognized compensation expense (Note 8 and Item 11) | $ | 2,003,110 | - | |||||||||
Basis of the amounts in the table. Securities issued as consideration or for services are stated at fair value on the date of issuance or grant. Shares of Series C Convertible Preferred Stock are measured on an as-converted basis at the 6,000:1 conversion ratio, using the quoted closing price of our common stock on that date:
| ● | 83,333 shares issued March 31, 2025 for SWC Group, Inc., 499,998,000 common shares at $0.0088/share, or $4,399,982; | |
| ● | 10,000 shares issued March 31, 2025 for Skytech Automated Solutions, Inc., 60,000,000 common shares at $0.0088/share, or $528,000; | |
| ● | 216,667 shares issued August 27, 2025 for Victorville Treasure Holdings, LLC, 1,300,002,000 common shares at $0.03/share, or $39,000,060; | |
| ● | 176,167 shares issued September 30, 2025 for Treasure Mountain Holdings, LLC, 1,057,002,000 common shares at $0.04/share, or $42,280,080, which with the Victorville shares is the $81,280,140 in the table; and | |
| ● | 49,096 shares vested during fiscal 2026 under the March 25, 2025 awards at the grant date fair value of $0.0068/share, or $2,003,110. |
The contingent consideration of up to 41,667 and 20,000 additional shares of Series C Convertible Preferred Stock, measured on the same basis at $7,125,000 and $4,800,000 on the respective acquisition dates, is not included in the $81,280,140. Total consideration for the two hotel acquisitions, including contingent consideration, was $93,205,140 (Note 9).
Stock options are stated at grant date fair value determined using the Black-Scholes option pricing model; the $163,657 is the aggregate for the 6,060,606 options granted to the two consultants. Notes payable, advances and obligations settled are stated at the principal amount of the transaction, and the balances at June 30, 2026 are the carrying amounts reported in Note 5. The balances of Loans #19, #28 and #42 total the $174,672 of convertible notes payable - related parties, net, on the consolidated balance sheets, and the amounts due to officers, directors and their affiliates, including accrued compensation, expenses paid on the Company’s behalf and accrued interest on the related party line of credit, are included in the $4,060,420 of accounts payable and accrued expenses - related parties.
Other than as described above and in Item 11, there were no transactions since July 1, 2024 with related persons required to be disclosed under Item 404 of Regulation S-K.
Director Independence
Our common stock is quoted on the OTCQB Venture Market, which does not require that a listed company have independent directors. Applying the independence standards of the Nasdaq Stock Market, our Board of Directors has determined that Christopher Dieterich, Darren Kenney and Ronald J. Stauber are independent. James Steigerwald and Ried Floco are executive officers and are not independent.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Fees Billed to the Company in fiscal year 2026 and 2025
The following table sets forth the fees billed to us by TAAD LLP (“TAAD”), our principal auditor for the fiscal year ended June 30, 2026, and by Fruci & Associates II, PLLC (“Fruci”), our principal auditor for the fiscal year ended June 30, 2025, for professional services rendered during the fiscal years ended June 30, 2026 and 2025:
| June 30, 2026 | June 30, 2025 | |||||||
Audit fees - TAAD(1) | $ | 293,550 | $ | - | ||||
| Audit fees - Fruci(1) | - | 103,500 | ||||||
| Audit related fees(2) | - | - | ||||||
| Tax fees(3) | - | - | ||||||
| All other fees | - | - | ||||||
| Total fees | $ | 293,550 | $ | 103,500 | ||||
| (1) | Audit Fees — Audit fees consist of fees billed for the audit of our annual financial statements and the review of the interim consolidated financial statements. |
| (2) | Audit-Related Fees — These consisted principally of the aggregate fees related to audits that are not included Audit Fees. |
| (3) | Tax Fees — Tax fees consist of aggregate fees for tax compliance and tax advice, including the review and preparation of our tax returns. |
| (4) | – N/A |
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PART IV.
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
Our financial statements as set forth in the Index to Consolidated Financial Statements attached hereto commencing on page F-1 are hereby incorporated by reference.
(b) Exhibits
The following exhibits, which are numbered in accordance with Item 601 of Regulation S-K, are filed herewith or, as noted, incorporated by reference herein.
EXHIBIT INDEX
| 36 |
| 37 |
| * | Filed herewith |
| ++ | Indicates a management contract or compensatory plan. |
Item 16. Form 10-K Summary
None.
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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.
| NIGHTFOOD HOLDINGS, INC. | ||
| Date: October 13, 2026 | By: | /s/ Jimmy Chan |
| Jimmy Chan | ||
| Chief Executive Officer and Director | ||
| (Principal Executive Officer) | ||
| Date: October 13, 2026 | By: | /s/ Yury Pyatigorsky |
| Yury Pyatigorsky | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Jimmy Chan | Chief Executive Officer | October 13, 2026 | ||
| Jimmy Chan | (Principal Executive Officer) | |||
| /s/ Yury Pyatigorsky | Chief Financial Officer | October 13, 2026 | ||
| Yury Pyatigorsky | (Principal Financial and Accounting Officer) |
|||
| /s/ Ried Floco | President & Director | October 13, 2026 | ||
| Ried Floco | ||||
| /s/ James Steigerwald | Chief Operating Officer & Director | October 13, 2026 | ||
| James Steigerwald | ||||
| /s/ Christopher Dieterich | Director | October 13, 2026 | ||
| Christopher Dieterich | ||||
| /s/ Darren Kenney | Director | October 13, 2026 | ||
Darren Kenney |
||||
| /s/ Ronald J. Stauber | Director | October 13, 2026 | ||
Ronald J. Stauber |
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