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 100% of the issued and outstanding equity interests, and Victorville became a wholly owned subsidiary of the Company upon closing.

Purchase Consideration

As consideration, the Company issued 216,667 shares of its Series C Convertible Preferred Stock, having an estimated fair value of $39,000,060, based on the as-converted value of the underlying common shares using the $0.03 closing stock price on the acquisition date.

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 41,667 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.

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 ($7,125,000) based on the as-converted value of the underlying common stock using the $0.03 closing stock price on the August 27, 2025 acquisition date and a 95% probability of achievement of the milestones.

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 $2,652,671 increase to additional paid-in capital during the period.

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:

 Schedule of Estimated Fair Value of Assets Acquired and Liabilities

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 100% of the issued and outstanding membership interests, and Rancho Mirage became a wholly owned subsidiary of the Company upon closing.

Purchase Consideration

As consideration, the Company issued 176,167 shares of its Series C Convertible Preferred Stock, having an estimated fair value of $42,280,080, based on the as-converted value of the underlying common shares using the $0.04 closing stock price on the acquisition date.

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 20,000 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.

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 ($4,800,000), based on the as-converted value of the underlying common stock using the $0.04 closing stock price on the September 30, 2025 acquisition date.

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:

 Schedule of Estimated Fair Value of Assets Acquired and Liabilities

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.

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 $63,886,000 recognized in the fiscal year ended June 30, 2026 are included in the pro forma net loss for that period and are not included in the pro forma net loss for the fiscal year ended June 30, 2025.

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 $6,455,902 and net loss of $65,782,160 (including the goodwill impairment charges of $61,537,000) of Victorville and Rancho Mirage are included in the consolidated statements of operations from their respective acquisition dates through June 30, 2026 and are presented as the Hotel Operations segment in Note 13. The unaudited pro forma information is as follows:

 Schedule of Supplemental Proforma Information

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 $29,544,000 at the Victorville reporting unit and $31,993,000 at the Rancho Mirage reporting unit, or $61,537,000 in the aggregate, within the Hotel Operations segment. The charges are presented as impairment of goodwill, a separate line item within operating expenses in the consolidated statements of operations. The impairment resulted from operating results at both hotels falling below the expectations and forecasts used at the acquisition dates. 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 charges are final and are not provisional estimates. The Company also recognized a goodwill impairment loss of $2,349,000 at the SWC reporting unit, within the Foodservice Packaging Distribution segment. The impairment resulted from operating results at SWC falling below the expectations and forecasts used at the acquisition date. 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 charge is final and is not a provisional estimate. No impairment was recognized at the Robotics-as-a-Service reporting unit.

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.

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.

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

 Schedule of Goodwill

Fiscal Year Ended June 30, 2025

Acquisition of SWC

On March 31, 2025, the Company acquired 100% of the issued and outstanding equity interests of SWC through a share exchange agreement. As consideration, the Company issued 83,333 shares of Series C Convertible Preferred Stock with a fair value of $4,399,982, based on the as-converted value of the underlying common stock at the closing price on the acquisition date.

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:

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:

 Schedule of Estimated Fair Value of Assets Acquired and Liabilities

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 $1,490,803, measured under ASC 805-10-55-21(b) as the amount by which the advances were unfavorable to the acquirer at the acquisition date, adjusted under ASC 805-10-55-22 for amounts previously recognized. The loss is presented within other income (expense) in the consolidated statements of operations for the year ended June 30, 2025.

Acquisition of Skytech

On March 31, 2025, the Company acquired 100% of the issued and outstanding equity interests of Skytech through a share exchange agreement. As consideration, the Company issued 10,000 shares of Series C Convertible Preferred Stock with a fair value of $528,000, based on the as-converted value of the underlying common stock at the closing price on the acquisition date.

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:

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.

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:

 Schedule of Estimated Fair Value of Assets Acquired and Liabilities

Goodwill is attributable to expected synergies, enhanced automation capabilities and the assembled workforce, and is not deductible for tax purposes.