UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______.

Commission file number: 000-55406

NIGHTFOOD HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Registrant’s Principal Office

520 White Plains Road, Suite 500

Tarrytown, NY 10591

Registrant’s telephone number, including area code:

(866-291-7778)

Securities to be registered under Section 12(b) of the Act: None

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐     No ☒

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes ☐     No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the registrant’s common stock, par value $0.0001 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, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $1,923,511.

The number of shares of the registrant’s Common Stock outstanding as of December 27, 2024 was 128,957,407 shares.

TABLE OF CONTENTS

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.

General Development of Business

Nightfood Holdings, Inc. (“we”, “us”, “NGTF”, “the Company” or “Nightfood”) is a Nevada corporation incorporated on October 16, 2013, to acquire all of the issued and outstanding shares of Nightfood, Inc., a New York corporation from its sole shareholder, Sean Folkson. 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.

On February 2, 2024, the Company closed the acquisition of Future Hospitality Ventures Holdings Inc. (“FHVH” or “Future Hospitality”), a Nevada corporation and a new entrant in the Robots-as-a-Service (RaaS) space from Mr. Lei Sonny Wang, who concurrently became the Chief Executive Officer (“CEO”) of Nightfood and a member of the Company’s board of directors. Under the leadership of Mr. Wang, as of the time of this filing, Future Hospitality has secured distribution agreements with Next Robots, Inc. (formally Botin Innovations, Inc.) and one other U.S.-based global manufacturer which has not yet been named publicly and is in the process of negotiating and exploring additional supplier relationships.

Description of Business

Present Operations

Future Hospitality dba RoboOp365 launched in California shortly before California’s April foodservice and hospitality minimum wage increase which received significant media coverage. Future Hospitality provides artificial intelligence (AI) enabled robotic solutions that we believe deliver critical efficiencies, cost savings, and enhanced consumer experience in hospitality and food service.

Management believes that incorporating Future Hospitality’s advanced AI-enabled robotic solutions positions the Company at the forefront of innovation in the hospitality sector at this critical point in time. We believe our success in this area can open new avenues for growth and efficiency across our portfolio. Our customers can benefit from plug-and-play, AI-enabled automation which integrates easily and seamlessly into traditional restaurants, hotels, health care facilities, school cafeterias and other food service operations. There are exponential benefits for customers with a portfolio of locations, which is the market segment we are initially targeting.

Subsidiary Nightfood, Inc. has encountered quality and logistics challenges with its current copacker. The company is exploring selling other products in other categories and is seeking a new copacker for its cookie business.

Products and Services

Future Hospitality:

Products:

The Company believes it is revolutionizing the hospitality industry with plug-and-play robotics and automation solutions designed to enhance service efficiency and consistency.

Regular national media coverage highlights the ongoing labor crisis in California, which is creating massive upheaval across the industry. With minimum wage increased to $20, many long-standing businesses have been forced to shut down. Others are actively looking to invest in automation solutions that will allow them to remain viable now and into the future.

Future Hospitality offers two key robotics solutions via the Robots-as-a-Service (“RaaS”) business model, which can transform both front-end and back-end operations within the hospitality industry.

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.

The website for Future Hospitality is www.roboop365.com

Market Trends

In an era where the gig economy reshapes labor dynamics, minimum wages rise, and labor disputes intensify, the food service industry stands at a crucial crossroads. Service robots, such as our cutting-edge culinary assistants, are not just a nod to the future—they are a robust solution to today’s burgeoning challenges.

Marketing

The Company is not currently earning significant revenue associated with its operations in the Robots-as-a-Service (RaaS) space.

Competition

Certain companies are manufacturers and distributors of service robotics with distribution in the US which is our current target market.

We face competition from certain manufacturers and distributors and their downline distributors who are our main competition.

Government Regulations

In the United States, the National Institute of Standards and Technology has developed a framework for ensuring the safety and reliability of robotics technology. The framework provides guidelines for developing, deploying, and operating robots in various applications.

The United States has been a leader in the robotics industry for several decades. The country is home to some of the world’s largest and most successful robotics companies, such as Boston Dynamics, iRobot, and Kiva Systems. The US government has also recognized the potential of robotics to drive economic growth and improve efficiency and has implemented policies to support the development of the robotics industry.

One of the most significant initiatives in the US is the National Robotics Initiative (NRI), launched in 2011. The NRI collaborates with several government agencies, including the National Science Foundation and the Department of Defense. It aims to support the development of robotics technology across various industries. The initiative provides funding for research and development in manufacturing, healthcare, and transportation.

In addition to the NRI, the US government has also implemented policies to support the growth of the robotics industry. For example, the Department of Labor has launched the “Robotics Apprenticeship Program” to provide training and education programs for workers in the robotics industry. The program aims to address the skills gap in the industry and ensure that workers have the skills they need to remain competitive in the workforce.

Nightfood, Inc.

Products

We currently market three flavors of Nightfood cookies Prime-Time Chocolate Chip, Date Night Cherry Oat and Snoozerdoodle. Compared to traditional cookies, Nightfood cookies feature less sugar, less fat, fewer calories, more protein, more prebiotic fiber, and contain added inositol and vitamin B6.

The most widely consumed nighttime snacks are cookies, chips, candy, and ice cream. Our goal is to offer consumers sleep-friendly versions of each of those snack formats as well as others.

Subsidiary Nightfood, Inc. has encountered quality and logistics challenges with its current copacker. The company is exploring selling other products in other categories and is seeking a new copacker for its cookie business. 

Market Trends

Research indicates that humans are biologically hard-wired to load up on sweets and fats at night. Loading a surplus of calories (fuel) into the body before the long nightly fast is believed to be an outdated survival mechanism from our hunter-gatherer days. Unfortunately, while modern consumers know this type of consumption isn’t necessary for survival, willpower also weakens at night, so consumers are more likely to succumb to these unhealthy nighttime cravings for excess “survival calories”.

As a result, over 90% of adults report snacking regularly between dinner and bed (according to SleepFoundation.org), resulting in an estimated 1 billion nighttime snack occasions weekly in the United States, and an annual spend on night snacks of over $60 billion. Because of our hard-wired evolutionary preferences at night for calorie-dense foods which increased the odds of short-term survival for our ancestors, the most popular nighttime snacks are ice cream, cookies, chips, and candy. These are all understood to be generally unhealthy. They can also impair sleep quality.

Marketing

Through the fiscal years ended June 30, 2024, and 2023, the Company generated revenues from sales generated in operating subsidiary Nightfood, Inc. and the sale of ice-cream and cookie products to customers and distributors using (i) Nightfood.com on the Shopify eCommerce platform (Direct to Consumer); and (ii) third party distributors. Sales focus in the most recent quarter, ended June 30, 2024, has shifted entirely to direct-to-consumer as the Company is focused on its newly developed cookie products. Wholesale ice-cream production and sales have been discontinued and might resume if and when direct-to-consumer scale is achieved.

The Company considers its performance obligations satisfied upon shipment of the purchased products to the customer with respect to sales processed by third party fulfilment centers and retail locations, and delivery of the product for sales made to distributors or direct to end user via eCommerce portals.

Due to the nature of Nightfood’s products, the Company does not accept returns of its snacks. Refunds to consumers are issued under certain circumstances, but product returns are not typically accepted.

Competition

The nutritional/snack food business is highly competitive and includes such participants as companies like Mondelez, Nestle S.A., Hershey’s, Hormel, Kraft/Heinz, Kellogg’s, Ferrero, Campbell Soup Company, Utz, General Mills, Mars, The Simply Good Foods Company, Wells Enterprises, Froneri, Unilever, Hostess, PepsiCo, Post Holdings, and more. Many of these competitors have well-established names and products.

In 2019, Nestle announced interest in the nighttime snacking space with the introduction of a candy-type product called GoodNight. In 2020, Pepsi announced the launch of a “relaxation” drink called Driftwell. Moreover, in 2021, Unilever announced they had initiated a year-long research study to identify how nutrition could be used to improve sleep, through impact on the gut microbiome. In September 2021, the Chief Medical Officer of Pepsi stated that Pepsi researchers were examining how foods and beverages affect neurochemical pathways, and that the company was interested in how this research could be used to impact sleep. In 2023, Post Holdings, maker of well-known cereals such as Grape Nuts, HoneyComb, and Fruity and Cocoa Pebbles, launched a cereal called Sweet Dreams which targets the nighttime snack occasion.

Government Regulations

United States

Since e-commerce food businesses are not regulated as traditional food manufacturers based on the current Code of Federal Regulations (CFR), these models are regulated under the “honor system.” Companies self-report to their local authorities and, in most cases, are regulated under their local food code jurisdictions.

The U. S. Food and Drug Administration (FDA) publishes the Food Code, a model that assists food control jurisdictions at all levels of government by providing them with a scientifically sound technical and legal basis for regulating the retail and food service segment of the industry (restaurants and grocery stores and institutions such as nursing homes).

FDA regulates all foods and food ingredients introduced into or offered for sale in interstate commerce, with the exception of meat, poultry, and certain processed egg products regulated by the U.S. Department of Agriculture (USDA).

The Human Foods Program (HFP), works with FDA field offices to ensure that the nations’ food supply (except meat, poultry and some egg products, which are regulated by USDA) is safe, sanitary, wholesome, and honestly labeled and that cosmetic products are safe and properly labeled.

Personnel

Nightfood Holdings, Inc. has one employee, Lei Sonny Wang, its CEO.

Nightfood, Inc. has no employees. Sean Folkson has a consulting agreement with the Company. Functions within the company such as sales, marketing, production, distribution, sales, accounting, public relations, and more are primarily conducted through vendor and consultant relationships.

Future Hospitality has no employees. Functions within the company such as business development, supplier partnership development, marketing, public relations, and sales management are overseen by Sonny Wang who is working with independent sales agents specializing in restaurants, senior care facilities, and hotel services.

Should we be successful in executing our business plan, we anticipate hiring additional employees in key roles to assist with various company functions. However, we also expect to continue to strategically outsource when appropriate to enable growth without unnecessary expense and overhead.

Intellectual Property

We own the domain Nightfood.com as well as many other relevant domains such as late-night-snack.com, nighttimesnack.com, and nighttimesnacking.com, as well as Nightfood.us, Nightfood.net, TryNightfood.com, GetNightfood.com, NiteFood.com, TryNightfood.com, and BuyNightfood.com. We also own the toll-free number 888-888-NIGHT.

Nightfood’s formulae and recipes are proprietary, and we have non-disclosure agreements with our suppliers.

The Registrant also owns the domain HalfBaked.com.

Recent Developments

As of November 11, 2024, FHVH onboarded a new customer currently in a 30-day trial phase for its Robot-as-a-Service solution. Following the trial, the customer will transition to a monthly RaaS subscription.

On September 10, 2024, the Company announced the closing of its strategic all-stock acquisition of SWC Group Inc., doing business as CarryoutSupplies.com (“CarryOut” as of September 4, 2024. CarryOut is a leading wholesaler and distributor of custom takeout packaging for the foodservice industry, with traditional, biodegradable and compostable options. Subsequently, on December 10, 2024 the Company, Future Hospitality Ventures Holdings, Inc., SWC Group, Inc., and Sugarmade, Inc. entered into and amendment (the “Amendment”) which modified certain terms of the Share Exchange Agreement dated September 4, 2024 (the “Agreement”).

The Amendment modifies the method for calculating the number of shares to be issued under the Agreement. Under the revised terms, the share issuance will be determined based on the 90-day Volume Weighted Average Price (VWAP) of the Company’s common stock as of December 4, 2024.

As of the date of this report the transaction had not yet closed. This acquisition will mark a significant step in the Company’s growth and Nasdaq-uplist strategy, as previously disclosed in November 2023.

Founded in 2004, CarryOut has served more than 7,000 food services accounts, specializing in providing packaging solutions such as ice cream cups, coffee cups, lids and utensils to small and medium-sized foodservice businesses including restaurants, cafes, ice cream parlors, tea houses and yogurt shops. Despite facing significant challenges during the COVID-19 pandemic, CarryOut rebounded in 2023 with $2 million in revenue and is projecting 20% growth in 2024.

The acquisition of CarryOut offers numerous strategic benefits to the Company, enhancing operational efficiencies, expanding its customer base and bolstering its product offerings. This integration allows for:

Item 1A. Risk Factors

Smaller reporting companies are not required to provide the information required by this item.

Item 1B. Unresolved Staff Comments

None

Item 1C. Cybersecurity

To meet our business objectives, we rely on both internal information technology (IT) systems and networks, and those of third parties and their vendors, to process and store sensitive data, including confidential research, business plans, financial information, intellectual property, and personal data of ours and our customers that may be subject to legal protection, and promote the continuity of our Company’s business operations. In the ordinary course of our business, we receive, process, use, store, and share digitally certain data, including user data as well as confidential, sensitive, proprietary, and personal information.

Maintaining the integrity and availability of our IT systems and this information, as well as appropriate limitations on access and confidentiality of such information, is important to our operations and business strategy. We plan to develop and implement information securities policies and incident response plans to evaluate, identify, and handle material risks associated with cybersecurity threats.

There can be no assurances that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with or are effective in protecting our systems and information.

As of the date of this report, we are not aware of any cybersecurity incidents, that have had a materially adverse effect on our operations, business, results of operations, or financial condition.

Item 2. Properties

Our corporate address is 520 White Plains Road – Suite 500, Tarrytown, New York 10591 and our telephone number is 866-291-7778.

We do not own any real estate.

Future Hospitality Ventures Holdings, Inc. rents office space at 177 E Colorado Blvd Ste 200, Pasadena, CA 91105 and CarryoutSupplies.com leases office and warehouse space at 20529 E. Walnut Drive N., Walnut, CA 91789.

Item 3. Legal Proceedings

There are no current, past, pending or threatened legal proceedings or administrative actions either by or against the issuer that could have a material effect on the issuer’s business, financial condition, or operations.

Item 4. Mine Safety Disclosures

Not applicable.

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 $0.0121 on November 19, 2024.

b) Holders

On June 30, 2024, there are approximately 267 holders of record of our common stock. The number of stockholders of record does not include thousands of 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

No equity compensation plan or agreements under which our common stock is authorized for issuance has been adopted during the fiscal years ended June 30, 2024 and 2023.

e) Recent Sales of Unregistered Securities

During the Fiscal Year ended June 30, 2023:

During the Fiscal Year ended June 30, 2024:

Subsequent to the Fiscal Year ended June 30, 2024

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:

Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:

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.

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with our financial statements, and the notes to those financial statements that are included elsewhere in this Report. All monetary figures are presented in U.S. dollars, unless otherwise indicated.

Certain information contained in this MD&A includes “forward-looking statements.” Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition and results of operations, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including many assumptions regarding future events. In some cases, you can identify forward-looking statements by terminology such as “may,” “will” “should,” “expect,” “intend,” “plan,” anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar terms, variations of such terms or the negative of such terms. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors. Although forward- looking statements, and any assumptions upon which they are based, are made in good faith, and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward- looking statements as a result of various risks, uncertainties and other factors

In light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance that the forward-looking statements contained in this section and elsewhere in this Annual Report on Form 10-K will in fact occur. Potential investors should not place undue reliance on any forward- looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED JUNE 30, 2024 AND 2023

Revenue

For the fiscal years ended June 30, 2024, and 2023 we had gross sales of $89,639 and $182,856, respectively and net revenues (Net Revenues are defined as Gross Sales, less slotting fees, sales discounts, and certain other revenue reductions) of $367 and $49,450, respectively, and incurred operating expenses of $1,077,939 and $2,202,355 respectively. During the nine months ending March 31, 2024, the pivot from ice cream sales to direct-to-consumer sales of our cookies only commenced in the third quarter ending March 31, 2024. As we have shifted from product sales at retail and wholesale to direct to consumer, we do not expect to incur slotting fees in the future, unless we determine to introduce our current product offerings to a retail format.

Costs and expenses

For the fiscal years ended June 30, 2024 and 2023, cost of product sold decreased from $277,843 to $107,395. This is due to a decrease in the number of products sold as we shifted from product sales at retail and wholesale to direct to consumer.

For the fiscal years ended June 30, 2024 and 2023, advertising and promotional expenses decreased from $144,859 (2023) to $56,664 (2024). This decrease is largely due to us pausing advertising and promotional efforts with respect to our discontinued line of ice-cream products during the year. In addition, certain previously booked marketing expenditures during the fiscal year ended June 30, 2023, were reversed in the fiscal year ended June 30, 2024, upon non-provision of services resulting in a reduction to the overall costs in the current fiscal year.

For the fiscal years ended June 30, 2024, and 2023, selling, general, and administrative expenses decreased from $838,413 (2023) to $175,190 (2024). In fact the Company’s expenditures on selling, general and administrative costs was substantially reduced period over period, predominantly as a result of sizeable impairments to inventory of $416,701 during fiscal 2023 as compared to only $4,803 for the year ended June 30, 2024. The Company undertook impairments of its spoiled, damaged or unsaleable inventory in the year ended June 30, 2023 as the Company shifted from ice-cream sales to direct to consumer sales of cookie products.

For the fiscal years ended June 30, 2024, and 2023, professional fees decreased from $941,240 to $738,690. This includes legal fees, marketing consulting, accounting and auditor fees, and other paid consultants. The decrease is largely related to financing activities during the year ending June 30, 2023, including the filing of a registration statement and the fees that tend to accompany such transactions, a significant portion of which do not involve cash expenditures, but are tied to the valuation of shares and warrants issued to consultants, with no comparable expenses in fiscal year 2024.

Total operating expenses include those expenses associated with running the operating portion of our business (such as the manufacturing our snacks, advertising for our product, warehousing, freight, and the like plus the costs and expenses related to our newest acquisition in February 2024 of FVFH). It also includes certain cash and non-cash expenses incurred by us related to activities such as SEC compliance, fundraising activities, and maintaining our public entity in good standing. Our revenues and operations are currently limited, therefore expenses relating to financing and compliance activities make up a larger portion of our total expenses than they might in a larger company.

For the fiscal years ended June 30, 2024 and 2023, the loss from operations decreased from $2,202,355 (2023) to $1,077,939 (2024). As discussed above, the major components of this decrease was the reduction in advertising and marketing spend, a substantial reduction to professional fees and SGA expenses period over period, and a substantial write down of obsolete inventory in the year ended June 30, 2023 with no comparative impairments to inventory in the year ended June 30, 2024.

Other Income (Expense)

For the fiscal years ended June 30, 2024 and 2023, total other expenses decreased to $2,246,839 from $3,999,435. The majority of these expenses are related to accounting treatment applied to financing costs and debt and the amortization of debt discount. During the fiscal year ended June 30, 2024 we recorded amortization of debt discount of $638,194, loss on extinguishment of debt of $111,730, financing costs of $1,082,360. During the fiscal year ended June 30, 2023, we recorded amortization of debt discount of $1,265,893, financing costs of $2,199,273, a loss on extinguishment of debt of $361,500. These are not actual cash expenses but a function of the way certain financing activities are accounted for. Interest expenses totaled $432,154 and $172,769 and interest income was $17,599 and $0 in the fiscal years ended June 30, 2024 and 2023, respectively.

Net Loss

Our net loss in the fiscal year ended June 30, 2024 totaled $3,235,506 as compared to $6,068,384 in the fiscal year ended June 30, 2023. The decrease to the net loss is directly related to a substantial decrease in financing costs and amortization of debt discounts, as well as a decrease to our overall operating costs by approximately one-third.

Deemed Dividend

The Company has never declared dividends, however as set out below, during the fiscal year ended June 30, 2022 and 2021, upon issuance of a total of 335 and 4,665 shares of B Preferred, respectively, the Company recorded a deemed dividend as a result of beneficial conversion feature associated with the transaction.

In connection with certain conversion terms provided for in the designation of the B Preferred, pursuant to which each share of B Preferred is convertible into 5,000 shares of common stock and 5,000 warrants, the Company recognized a beneficial conversion feature upon the conclusion of the transaction in the amount of $4,431,387 through June 30, 2022.  The beneficial conversion feature was treated as a deemed dividend, and fully amortized on the transaction date due to the fact that the issuance of the B Preferred was classified as equity.  

During the years ended June 30, 2024 and June 30, 2023 the Company recorded an additional deemed dividend of $84,106 and $1,136,946 in relation to the B Preferred stock and downward price adjustments to certain warrants.

Customers

During fiscal 2024 our customers consist solely of customers purchasing Nightfood ice cream products, prior to the discontinuation of the line in fiscal 2024, and our current line of cookie products. These product sales are primarily of individual consumers purchasing Nightfood snacks via our website or via third party reseller platforms such as Tik Tok. In fiscal 2023 our customers consisted primarily of wholesale distributors of our ice cream pints for resale to hotels and supermarkets. In FY 2023, we had one customer that accounted for 42% of our Gross Sales. One other customer accounted for 29% and two others each accounted for between 7% and 10%. In the fiscal year ended June 30, 2024, we had no customers which accounted for more than 10% of gross sales.

Vendors

During the year ended June 30, 2024, one vendor accounted for approximately 70% of our cost of goods sold. During the year ended June 30, 2023, three vendors accounted for approximately 72% of our costs of goods sold.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2024, we had cash on hand of $148,294, receivables of $22,337, other current assets of $107,161 and inventory valued at $25,808.

Our cash on hand is not adequate to satisfy our working capital needs. We believe that our current capitalization structure, ongoing merger and acquisition activity, and our access to institutional capital will enable us to successfully secure the required financing to execute our development plans. In addition, we are currently working on acquisitions of additional revenue generating businesses to bolster our growth and strengthen our balance sheet.

As discussed above, the Company has limited available cash resources and we do not believe our cash on hand will be sufficient to fund our operations and growth through the balance of fiscal year 2024 and 2025, or adequate to satisfy our immediate or ongoing working capital needs. The Company is continuing to raise capital through the sale of its securities, including common stock, preferred stock, and debt (including convertible debt) to finance the Company’s operations, of which it can give no assurance of success. In addition, we will receive the proceeds from our outstanding warrants as, if and when such warrants are exercised for cash.

If we are unable to raise cash through the sale of our securities, we may be required to severely restrict or cease our operations.

Even if the Company is successful in raising additional funds, the Company cannot give any assurance that it will, in the future, be able to achieve a level of profitability from the sale of products and services of its subsidiaries to sustain operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on recoverability and reclassification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Subsequent to June 30, 2024, we raised additional gross proceeds, net of original issuance discount, of $402,050 through the issuance of secured notes payable.

Since inception in January 2010 through June 30, 2024, we have generated an accumulated deficit of approximately $38,626,400. This accumulated deficit is not debt, and there is no obligation or liability associated with it. An accumulated deficit reflects a negative balance of retained earnings and an accumulation of historical losses over time, related to both operations and financing activities. It is not unusual for growing companies to have significant accumulated deficit, even after turning profitable. The Company’s accumulated deficit is a function of losses sustained over time, along with the costs associated with raising operating capital.

Assuming we raise additional funds and continue operations, it is expected we may incur additional operating losses during the course of fiscal year 2025 and possibly thereafter. We plan to continue to pay or satisfy existing obligation and commitments and finance our operations, as we have in the past, primarily through the sale of our securities and other forms of external financing until such time that we are able to generate sufficient funds from the sale of our products to finance our operations, of which we can give no assurance.

We anticipate deriving additional revenue from our subsidiaries in fiscal year 2025, but we cannot at this time quantify the amount. During the fiscal year ended June 30, 2024 we were successful in acquiring a new operating subsidiary in the Robots-as-a-Service (RaaS) space and expect to enhance our revenues through these operations in the coming months. In addition, we expect to successfully complete the acquisition of at least two additional operating companies in the first half of fiscal 2025 ending December 31, 2024.

Cash Flow from Operating Activities

During the fiscal year ended June 30, 2023, net cash used in operating activities was $1,203,995 compared to net cash used of $709,990 for the fiscal year ended June 30, 2024. This decrease in net cash used is largely due to the overall reduction in our operating and non-operating activities in the most recently completed fiscal year. During fiscal 2024, we reported increases to accounts payable and related party payables offset by a reduction in other current assets and accounts receivables, however, our non-cash expenses related to financing costs including costs of the issuance of stock and warrants in respect to financings and consulting services, as well as the amortization of debt discounts and inventory impairment charges were substantially reduced as compared to results from the year ended June 30, 2023.

Cash Flow from Investing Activities

During the fiscal year ended June 30, 2024, cash from investing activities included acquired cash from a business combination of $149,990 and prepaid acquisition costs secured by promissory notes of $297,880. There were no cash flows from investing activities in the fiscal year ended June 30, 2023.

Cash Flow from Financing Activities

During the fiscal year ended June 30, 2024, net cash of $1,252,805 was raised through the issuance of debt in the form of convertible notes and secured promissory notes. In the fiscal year ended June 30, 2023, our financing activities provided net cash of $976,467 and consisted of the issuance of debt in the form of convertible notes totaling $1,805,800 offset by repayments to debt of $1,375,128, proceeds from shares sold under our Reg A offering of $229,729, proceeds from the exercise of warrants of $276,066, and proceeds from a loan from a related party of $40,000.

CRITICAL ACCOUNTING POLICIES

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements. 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used in the determination of depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, valuing convertible preferred stock for a “beneficial conversion feature” (“BCF”) and warrants among others.

Inventories

Inventories consisting of packaged food items and supplies are stated at the lower of cost (FIFO) or net realizable value, including provisions for spoilage commensurate with known or estimated exposures which are recorded as a loss on write down of inventory during the period spoilage is incurred as a part of selling, general and administrative expenses. The Company has no minimum purchase commitments with its vendors. During the fiscal year ended June 30, 2024 and 2023 the Company wrote down inventory balances by $4,803 and $416,701, as a result of damage, loss, spoilage, and obsolescence. Expenses related to inventory impairments are included in Selling, General and Administrative expenses on the Company’s statements of profit and loss.

Revenue Recognition

The Company accounts for revenue in accordance with Accounting Standards Updated (“ASU”) ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”). The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.

Through the fiscal years ended June 30, 2024 and 2023, the Company generated revenues from sales generated in operating subsidiary Nightfood, Inc. and the sale of ice-cream and cookie products to customers and distributors using (i) Nightfood.com on the Shopify eCommerce platform (Direct to Consumer); and (ii) third party distributors. Sales focus in the most recent quarter ended June 30, 2024 has shifted entirely to direct-to-consumer as the Company is focused on its newly developed cookie products. Wholesale ice-cream production and sales have been discontinued and might resume if and when direct-to-consumer scale is achieved. The Subsidiary considers its performance obligations satisfied upon shipment of the purchased products to the customer with respect to sales processed by third party fulfilment centers and retail locations, and delivery of the product for sales made to distributors or direct to end user via eCommerce portals. The Subsidiary has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. Due to the nature of Nightfood’s products, the company does not accept returns of its snacks. Refunds to consumers are issued under certain circumstances, but product returns are not typically accepted.

During the years ended June 30, 2024 and 2023, the Company has not earned any revenue associated with its operations in the Robots-as-a-Service (RaaS) space, although product demonstrations have begun and Management believes revenues will begin soon.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company’s accounts receivable consists entirely of invoices issued with respect to the sale of the Company’s snack goods. The Company applies the guidance of ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) (“CECL”). At each reporting period the Company gathers information about its current bad debt reserve and write-off practices and loss methodology, in-scope assets, historical credit losses, and expected changes to business practices under CECL. Accounts receivables are stated at estimated net realizable value from the sale of products to customers. During fiscal 2024 a shift in product sales and customer type occurred when the Company changed its product focus from sales of ice cream products to established customers to sales of snack cookies to individual customers online. Commercial customers comprising the Company’s sales in fiscal 2023 typically were customers contracting with the Company on short-term projects with larger credit limits and overall, larger project sizes, resulting in limited potential for write-offs of receivable balances. The Company’s sales in fiscal 2024 were comprised predominantly of sales to individual customers who pay in advance for snack items.

The Company reviewed methods provided by the guidance and determined to use the loss-rate method in the CECL analysis for trade receivables. This loss-rate method was selected as there is reliable historical information available at each fiscal year end, and this historical information was determined to be representative of the Company’s current customers and billing practices.

Deemed Dividend – Series B Preferred Stock Warrants:

Each share of the Company’s Series B Preferred Stock, par value $0.001 per share (the “B Preferred” or “B Preferred Stock”) has a liquidation preference of $1,000 and has no voting rights except as to matters pertaining to the rights and privileges of the B Preferred. Each share of B Preferred is convertible at the option of the holder thereof into (i) 5,000 shares of the Registrant’s common stock (one share for each $0.20 of liquidation preference) (the “Conversion Shares”) and (ii) 5,000 common stock purchase warrants, expiring April 16, 2026 (the “Warrants”). The Warrants carried an initial exercise price of $0.30 per share. Subsequent financing events and debt extinguishment resulted in adjustments to the exercise price of all warrants created from conversion of B Preferred from $0.30 per share to approximately $0.10416 per share through June 30, 2024. The exercise price of these warrants can continue to adjust as the result of subsequent financing events and stock transactions. These adjustments can result in an exercise price that is either higher, or lower, than the price as of June 30, 2024.

The value of the deemed dividend was approximately $4.4 million as of June 30, 2022. During the year ended June 30, 2023 the Company recorded an additional deemed dividend of approximately $1.1 million in relation to the B Preferred stock and downward price adjustments to certain warrants. During the fiscal year ended June 30, 2024 the Company recorded a further deemed dividend of approximately $84,000 in relation to the B Preferred stock and downward price adjustments to certain warrants.

Stock-Based Compensation

The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period.  Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 718, “Equity Based Payments to Non-Employees”, with respect to options and warrants issued to non-employees.

Fair Value of Financial Instruments

Cash and Equivalents, Receivables, Other Current Assets, Short-Term Debt, Accounts Payable, Accrued and Other Current Liabilities. The carrying amounts of these items approximated fair value.

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. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements).

At June 30, 2024 and June 30, 2023, the Company had no outstanding derivative liabilities.

Recently Adopted Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures related to a public entity’s reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are evaluating the impact of adopting ASU 2023-07on our financial statements.

In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. We are evaluating the impact of adopting ASU 2023-09 on our financial statements.

In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate Related Disclosures for Investors, which requires registrants to disclose climate-related information in registration statements and annual reports. The new rules would be effective for annual reporting periods beginning in fiscal year 2025. However, in April 2024, the SEC exercised its discretion to stay these rules pending the completion of judicial review of certain consolidated petitions with the United States Court of Appeals for the Eighth Circuit in connection with these rules. We are evaluating the impact the adoption of this rule, if any, on our financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risks.

Disclosure in response to this Item is not required for a smaller reporting company. 

Item 8. Financial Statements and Supplementary Data.

The financial statements required by this Item 8 are included in this Annual Report beginning on page F-1.

TABLE OF CONTENTS

Nightfood Holdings, Inc.

Consolidated Financial Statements

For the years ended June 30, 2024 and 2023

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 sheets of NightFood Holdings, Inc. (“the Company”) as of June 30, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended June 30, 2024, 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, 2024 and 2023 and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2024, 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 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 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 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 audits 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 audits provide a reasonable basis for our opinion.

Emphasis of a Matter – Restatement of Previously Issued Financial Statements

As discussed in Note 15 to the financial statements, the Company has restated its previously issued financial statements for the year ended June 30, 2023, to correct a number of transactions that were not previously recognized correctly. Our opinion on the financial statements as of June 30, 2023 and 2024 is not modified with respect to this matter.

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.

Business Combination – Refer to Note 3 to the financial statements.

Critical Audit Matter Description

As discussed in Note 3, in January 2024 the Company entered into a share exchange agreement whereby the Company agreed to acquire Future Hospitality Ventures Holdings, Inc. (FHVH) through a share exchange and FHVH became a wholly-owned subsidiary. We identified that the business combination as a critical audit matter because these valuations require significant judgement of management’s determination of valuation methodology in accordance with generally accepted accounting principles.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to evaluating the business combination included the following, among others:

Fruci & Associates II, PLLC – PCAOB ID #05525

We have served as the Company’s auditor since 2024.

Spokane, Washington

December 27, 2024

Nightfood Holdings, Inc.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial statements.

Nightfood Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial statements.

Nightfood Holdings, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT)

The accompanying notes are an integral part of these consolidated financial statements.

Nightfood Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these consolidated financial statements.

Nightfood Holdings, Inc.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS