i

1

F-1

F-2

F-3

F-4

F-5

F-6

F-7

F-8

F-9

F-10

F-11

5. InventoriesF-12

On February 14, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated February 14, 2019, in the amount of $104,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 14, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $104,000 Notes was calculated using the Black-Scholes pricing model at $90,567, with the following assumptions: risk-free interest rate of 2.53%, expected life of 1 year, volatility of 136%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $104k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note.  As of September 30, 2020, and June 30, 2020, the debt discount was $0 and $0, respectively. $50,000 of the note has been successfully retired via conversion into shares during the year ended June 30, 2020 and $54,000 of the note has been successfully retired via conversion into shares during the three months ended September 30, 2020.The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $4,098 included under line item “Loss on debt extinguishment upon note conversion, net” during 2020 fiscal year and accounted for a loss on conversion of $36,242.F-13

On April 29, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated April 29, 2019, in the amount of $208,000. The lender was Eagle Equities, LLC. The notes have a maturity of April 29, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $208,000 Notes was calculated using the Black-Scholes pricing model at $170,098, with the following assumptions: risk-free interest rate of 2.42%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $208k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of September 30, 2020, and June 30, 2020, the debt discount was $0 and $0, respectively. $208,000 of the note has been successfully retired via conversion into shares during the three months ended September 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $109,561 included under line item “Loss on debt extinguishment upon note conversion, net”.

On June 11, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated June 11, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of June 11, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $240,217, with the following assumptions: risk-free interest rate of 2.05%, expected life of 1 year, volatility of 16%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note.  As of September 30, 2020 and June 30, 2020, the debt discount was $0 and $46,726, respectively. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $42,595 included under line item “Loss on debt extinguishment upon note conversion, net”.

On July 5, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated July 5, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of July 5, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $239,759, with the following assumptions: risk-free interest rate of 1.98%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the 300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $2,627, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021.

On August 8, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 8, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 8, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $254,082, with the following assumptions: risk-free interest rate of 1.79%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021, and June 30, 2020 the debt discount was $0 and $26,452, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021.

On August 29, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 29, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 29, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $234,052, with the following assumptions: risk-free interest rate of 1.75%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300,000 Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021, and June 30, 2020 the debt discount was $0 and $37,833, respectively.  This note has been successfully retired via conversions into shares as of June 30, 2021.

On September 24, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated September 24, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of September 24, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $118,009, with the following assumptions: risk-free interest rate of 1.78%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $27,482, respectively.  This note has been successfully retired via conversions into shares as of June 30, 2021.

On November 7, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated November 7, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of November 7, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $121,875, with the following assumptions: risk-free interest rate of 1.58%, expected life of 1 year, volatility of 122%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $43,074, respectively.  This note has been successfully retired via conversions into shares as of June 30, 2021.

On December 31, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated December 31, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of December 31, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $189,172, with the following assumptions: risk-free interest rate of 1.59%, expected life of 1 year, volatility of 115%, and expected dividend yield of zero. Because the fair value of the note exceed the net proceeds from the $150k Notes, $39,172 was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $75,205, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021.

On February 6, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 6, 2020, in the amount of $200,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $200,000 Notes was calculated using the Black-Scholes pricing model at $156,061, with the following assumptions: risk-free interest rate of 1.51%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero.  As of September 30, 2020 and June 30, 2020, the debt discount was $54,728 and $94,064, respectively.   On February 26, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 26, 2020, in the amount of $187,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC “Derivatives and Hedging.” The fair value of the $200,000 Notes was calculated using the Black-Scholes pricing model at $156,061, with the following assumptions: risk-free interest rate of 1.51%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $94,064, respectively. . This note has been successfully retired via conversions into shares as of June 30, 2021.

On April 30, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated April 30, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of April 30, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $128,369, with the following assumptions: risk-free interest rate of 0.16%, expected life of 1 year, volatility of 106%, and expected dividend yield of zero. This note was settled as part of a debt settlement with Eagle Equities, LLC in conjunction with the Nightfood Holdings, Inc. financing/refinancing in April 2021.

On June 23, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated June 23, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of June 23, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $132,236, with the following assumptions: risk-free interest rate of 0.18%, expected life of 1 year, volatility of 108%, and expected dividend yield of zero. The Company accounted for a loss on refinancing of 25,722 for unamortized of discount included under line item “Loss on debt extinguishment upon note conversion, net”.

This note was settled as part of a debt settlement with Eagle Equities, LLC in conjunction with the Nightfood Holdings, Inc. financing/refinancing in April 2021. 

On August 12, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated August 12, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of August 12, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $126,029, with the following assumptions: risk-free interest rate of 0.13%, expected life of 1 year, volatility of 101%, and expected dividend yield of zero. This note was settled as part of a debt settlement with Eagle Equities, LLC in conjunction with the Nightfood Holdings, Inc. financing/refinancing in April 2021. 

All notes were successfully retired atAmortization related to debt discount expense for the nine months ended March 31, 2022 and 2021, totaled $90,852 and $787,216, respectively and amortization expense for the three months ended March 31, 2022 and 2021, totaled $78,634 and $210,429 respectively.

As of March 31, 2022 and June 30, 2021.2021, the unamortized portion of debt discount was $927,377 and $0, respectively.

Interest expense for the nine months ended March 31, 2022 and 2021, totaled $26,570 and $267,640, respectively, and interest expense for the three months ended SeptemberMarch 31, 2022 and 2021, totaled $21,661 and $72,110, respectively.

As of March 31, 2022 and June 30, 2021, the accrued interest related to convertible notes was $26,570 and 2020 totaled $0, and $322,739, respectively.

9.

9. Derivative Liability

● Due to the variable conversion price associated with some of these convertible promissory notes disclosed in Note 8 above, the Company has determined that the conversion feature is considered a derivative liability for instruments which are convertible and have not yet been settled. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives on the date they are deemed to be derivative liabilities.     ● Below is a reconciliation of the derivative liability as presented on the Company’s balance sheet as of June 30, 2021 and September 30, 2021.March 31, 2022:   Derivative liability as of June 30, 2020   $ 1,590,638   Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2021     512,993   True-up adjustment in debt discount and derivative liability     37,360   Change in derivative liability during the period     (853,329 ) Notes retired due to refinancing     (1,287,662 ) Derivative liability as of June 30, 2021   $ -   Change     -   Balance at March 31, 2022   $ -   Change in derivative liability for the nine months ended March 31, 2022 and 2021, totaled $0 and $777,202, respectively and change in derivative liability for the three months ended March 31, 2022 and 2021, totaled $0 and $1,039,980, respectively.  As of March 31, 2022, and June 30, 2021, the derivative liability related to convertible notes was $0 and $0, respectively.  ●10. Change Capital Stock Activity On October 16, 2013, the Nightfood, Inc. became a wholly-owned subsidiary of Nightfood Holdings, Inc. Accordingly, the stockholders’ equity has been revised to reflect the share exchange on a retroactive basis. Common Stock The Company is authorized to issue Two Hundred Million (200,000,000) shares of $0.001 par value per share Common Stock. Holders of Common Stock are each entitled to cast one vote for each Share held of record on all matters presented to shareholders. Cumulative voting is not allowed, the holders of a majority of the outstanding Common Stock can elect all directors, subject to the rights of the holder of Series A Stock described below. Holders of Common Stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefore and, in derivative liabilitythe event of liquidation, to share pro-rata in any distribution of the Company’s assets after payment of liabilities. The Board of Directors is not obligated to declare a dividend and it is not anticipated that dividends will be paid unless and until the Company is profitable. Holders of Common Stock do not have pre-emptive rights to subscribe to additional shares if issued by the Company. There are no conversion, redemption, sinking fund or similar provisions regarding the Common Stock. All of the outstanding Shares of Common Stock are fully paid and non-assessable and all of the Shares of Common Stock offered thereby will be, upon issuance, fully paid and non-assessable. Holders of Shares of Common Stock will have full rights to vote on all matters brought before shareholders for their approval, subject to preferential rights of holders of any series of Preferred Stock. Holders of the Common Stock will be entitled to receive dividends, if and as declared by the Board of Directors, out of funds legally available, and share pro-rata in any distributions to holders of Common Stock upon liquidation. The holders of Common Stock will have no conversion, pre-emptive or other subscription rights. Upon any liquidation, dissolution or winding-up of the Company, assets, after the payment of debts and liabilities and any liquidation preferences of, and unpaid dividends on, any class of preferred stock then outstanding, will be distributed pro-rata to the holders of the common stock. The holders of the common stock have no right to require the Company to redeem or purchase their shares. Holders of shares of common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the three months ended September 30, 2021election of directors, can elect all of the directors to be elected, if they so choose, and, 2020, totaled $0 and $207,524, respectively.in that event, the holders of the remaining shares will not be able to elect any of our directors.   Derivative liability as of June 30, 2020   $ 1,590,638   Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2021     512,993   True-up adjustment in debt discount and derivative liability     37,360   Change in derivative liability during the period     (853,329 ) Notes retired due to refinancing     (1,287,662 ) Derivative liability as of June 30, 2021   $ -   Change     -   September 30, 2021     -   F-19     10.Capital Stock Activity On October 16, 2013, the Nightfood, Inc. became a wholly-owned subsidiary of Nightfood Holdings, Inc. Accordingly, the stockholders’ equity has been revised to reflect the share exchange on a retroactive basis. Common Stock The Company is authorized to issue Two Hundred Million (200,000,000) shares of $0.001 par value per share Common Stock. Holders of Common Stock are each entitled to cast one vote for each Share held of record on all matters presented to shareholders. Cumulative voting is not allowed; hence, the holders of a majority of the outstanding Common Stock can elect all directors. Holders of Common Stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefore and, in the event of liquidation, to share pro-rata in any distribution of the Company’s assets after payment of liabilities. The Board of Directors is not obligated to declare a dividend and it is not anticipated that dividends will be paid unless and until the Company is profitable. Holders of Common Stock do not have pre-emptive rights to subscribe to additional shares if issued by the Company. There are no conversion, redemption, sinking fund or similar provisions regarding the Common Stock. All of the outstanding Shares of Common Stock are fully paid and non-assessable and all of the Shares of Common Stock offered thereby will be, upon issuance, fully paid and non-assessable. Holders of Shares of Common Stock will have full rights to vote on all matters brought before shareholders for their approval, subject to preferential rights of holders of any series of Preferred Stock. Holders of the Common Stock will be entitled to receive dividends, if and as declared by the Board of Directors, out of funds legally available, and share pro-rata in any distributions to holders of Common Stock upon liquidation. The holders of Common Stock will have no conversion, pre-emptive or other subscription rights. Upon any liquidation, dissolution or winding-up of the Company, assets, after the payment of debts and liabilities and any liquidation preferences of, and unpaid dividends on, any class of preferred stock then outstanding, will be distributed pro-rata to the holders of the common stock. The holders of the common stock have no right to require the Company to redeem or purchase their shares. Holders of shares of common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors. ● The Company had 85,090,98690,932,158 and 80,707,45980,707,467 shares of its $0.001 par value common stock issued and outstanding as of September 30, 2021March 31, 2022, and June 30, 2021, respectively.   ● Common stock issued during the nine months ended March 31, 2022: ●  During the nine months ended March 31, 2022, the Company issued 715,999 shares of common stock for services valued at $191,023. During the nine months ended March 31, 2022, the Company reversed an entry relating to 41,308 shares that had previously been allocated for services but remained unissued.  During the nine months ended March 31, 2022, holders of the Company’s Series B Preferred Stock converted 1,590 shares of Series B Preferred Stock into 7,950,000 shares of its common stock. During the nine months ended March 31, 2022, the Company issued 1,600,000 shares from redemption of warrants. Common stock issued during the nine months ended March 31, 2021: ● During the nine months ended March 31, 2021 the Company issued 16,049,577 shares in regards to debt and interest being converted into stock valued at $1,467,274. During the nine months ended March 31, 2021, the Company issued 836,630 shares for services valued at $131,017. Preferred Stock  Series A Stock On July 9 2018, the Company was authorized to issue 1,000,000 shares of $0.001 par value per share Preferred Stock. Of the 1,000,000shares. 10,000 shares were designated as Series A Preferred Stock (“Series A Stock”). Holders of Series A Stock are each entitled to cast 100,000 votes for each Share held of record on all matters presented to shareholders.   In addition to his ownership of the common stock, Mr. Folkson owns 1,000 shares of the Series A Stock which votes with the common stock and has an aggregate of 100,000,000 votes. The Company had 4,2771,000 and 01,000 shares of its $0.001 par value preferred Series A stock issued and outstanding as of March 31, 2022, and June 30, 2021, respectively. Series B Stock   In April 2021, the Company designated 5,000 shares of its Preferred Stock as Series B Preferred Stock (“B Stock”), each Series B share of which is convertible into 5,000 shares of common stock and 5,000 non-detachable warrants with a strike price of $.30 The Company had 3,410 and 4,665 shares of its $0.001 par value Series B Preferred Stock issued and outstanding as of September 30, 2021March 31, 2022, and June 30, 2021 respectively.   ● During the threenine months ended September 30, 2021, the Company issued an aggregate of 518,519 shares of its $0.001 par value common stock for services valued at $140,000. During the three months ended September 30, 2020, the Company issued an aggregate of 0 shares of its $.001 par value common stock for services valued at $0. ● During the three months ended September 30, 2021,March 31 2022, the Company sold 335 shares of its $0.001 par value Series B Preferred Stock for gross cash proceeds of 335,000 $335,000. These proceeds were used for operating capital. The Series B stock meets the criteria for equity classification and is accounted for as equity transactions. Specifically, among other factors, this qualifies as equity because redemption is not invoked at the option of the holder and the Series B stock does not have to be redeemed on a specified date. ● During the threenine months ended September 30, 2021,March 31, 2022, holders of the Company’s Series B Preferred Stock converted 773converted 1,590 shares of Series B Preferred Stock into 3,865,0007,950,000 shares of its common stockstock. During the three months ended September 30, 2020 the Company issued 2,975,979 shares in regards to debt being converted into stock valued at $347,000, and issued 312,938 shares of common stock valued at $36,478 as part of a loan agreement and payment of interest as part of the debt conversion. Preferred Stock Series A Stock On July 9 2018, the Company was authorized to issue 1,000,000 shares of $0.001 par value per share Preferred Stock. Of the 1,000,000 shares. 10,000 shares were designated as Series A Preferred Stock (“Series A Stock”). Holders of Series A Stock are each entitled to cast 100,000 votes for each Share held of record on all matters presented to shareholders.   F-20     In addition to his ownership of the common stock, Mr. Folkson owns 1,000 shares of the Series A Stock which votes with the common stock and has an aggregate of 100,000,000 votes. The Company had 1,000 and 1,000 shares of its $0.001 par value preferred Series A stock issued and outstanding as of September 30, 2021, and June 30, 2021, respectively. Series B Stock In April 2021, the Company designated 5,000 shares of its Preferred Stock as Series B Preferred Stock (“B Stock”), each Series B share of which is convertible into 5,000 shares of common stock and 5,000 non-detachable warrants with a strike price of $.30. During the three months ended September 2021, the Company issued 335 shares   of B Stock to investors in exchange for invested capital at a price of $1,000 per share. These proceeds were used for operating capital. The Series B stock meets the criteria for equity classification and is accounted for as equity transactions. Specifically, among other factors, this qualifies as equity because redemption is not invoked at the option of the holder and the Series B stock does not have to be redeemed on a specified date. Dividends The Company has never declared dividends, however as set out below, during the three months ended September 30, 2021, upon issuance of a total of 350 shares of Series B Preferred stock 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 Series B Preferred Stock, pursuant to which each share of Series B Preferred Stock 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 $4,375,860. 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 Series B preferred stock was classified as equity. Dividends The Company has never declared dividends, however as set out below, during the nine months ended March 31, 2022, upon issuance of a total of 335 shares of Series B Preferred stock 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 Series B Preferred Stock, pursuant to which each share of Series B Preferred Stock 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 $4,375,860. 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 Series B preferred stock was classified as equity.    11. Warrants ●11. Warrants The following is a summary of the Company’s outstanding common stock purchase warrants.  Of During the 500,000nine months ended March 31, 2022, holders of the Company’s Series B Preferred Stock converted 1,590 shares of Series B Preferred Stock into 7,950,000 shares of its common stock, along with 7,950,000 warrants shown below atissued to those holders with an initial exercise price of $.15, these$.30 per share. During the nine months ended March 31, 2022, 4,000,000 warrants were issued as compensation forto the holder of the convertible notes in conjunction with the notes with an initial exercise price of $.25 per share, and 878,260 warrants issued to the placement agent with an initial exercise price of $.25 per share. The Company valued these warrants using the Black Scholes model utilizing a four-year advisory agreement. 150,000 warrants vested on July 24, 2018, another 150,000 on July 24, 2019, another 150,000 vested on July 24, 2020,143.39% volatility and the remaining 50,000 vested on July 24, 2021. These warrants were all accounted for in Fiscal 2020.a risk-free rate of 1.25%   ● In July, 2020, During the nine months ended March 31, 2022, the Company entered into a warrant agreement with one of the Company’s vendors for 500,000 underlying sharesDirectors issuing 100,000 warrants at a strike price of $0.50$0.2626 having a term of five years. The Company valued these warrants using the Black Scholes model utilizing a 107.93%151.07% volatility a provision for dividends of $0, and a risk-free rate of 0.29%0.79%. During the nine months ended March 31, 2022, the Company entered into an Agreement For Shareholder Lock-Up And Acquisition of Warrants (the “Lock-Up Agreement”), respectively. ● In exchange for the agreement to lock up shares of Nightfood owned by Mr.with its Chairman, CEO and largest shareholder, Sean Folkson Mr. Folkson receivedissuing 400,000 warrants to acquire 400,000 shares of common stock on February 4, 2021, at a strike price of $.30, and with$0.30 having a term of twelve (12) months from the date of that agreement. The warrants include a provision for cashless exercise and will expire if not exercised within the twelve-month term.one year. The Company valued these warrants using the Black Scholes model utilizing a 107.93%80.67% volatility a provision for dividends of $0, and a risk-free rate of 0.50%0.89%. Certain warrants in the above table include dilution protection for the warrant holders, which could cause the exercise price to be reduced as a result of a financing event at a valuation below the exercise price in effect at the time. For example, as a result of the convertible note financing, we completed in December 2021 which would allow the new noteholders to convert their debt to shares of common stock at an exercise price of $.25/share, some of the $.30 warrants outstanding in the table above had their exercise price reduced from $.30 to $.2952. This reduction of less than half a penny in the exercise price of the 25,000,000 warrants associated with our Class B Preferred stock would result in proceeds to the Company of $7,380,000 rather than $7,500,000 should all those warrants be exercised. The result of the warrant exercise price downward adjustment on modification date was treated as a deemed dividend and fully amortized on the transaction date, and the Company recorded $68,722 to additional paid in capital and retained earnings for a null effect on the Company’s balance sheets.   During the three months ended September 30, 2021, holders of the Company’s Series B Preferred Stock converted 773 shares of Series B Preferred Stock into 3,865,000 shares of its common stock, along with that 3,865,000 warrants issued to those holders. F-21     ● The aggregate intrinsic value of the warrants as of September 30, 2021March 31, 2022 is $503,000.$3,750.       Outstanding at               Outstanding at   Exercise Price Exercise Price     June 30, 2021     Issued in Q1 2022     Expired     September 30, 2021   Exercise Price     June 30, 2021     Issued     Repricing     Expired     Redeemed     March 31, 2022   $ 0.01       1,600,000                              -       1,600,000   0.01       1,600,000                               (1,600,000 )     -   $ 0.15       500,000               -       500,000   0.15       500,000                       -               500,000   $ 0.20       2,250,000                       2,250,000   0.20       2,250,000                                       2,250,000   $ 0.30       2,650,000       3,865,000       -       6,515,000   0.25               4,878,260                               4,878,260   $ 0.40       150,000               -       150,000   0.2626               100,000                               100,000   $ 0.50       500,000               -       500,000   0.2952               7,950,000       2,250,000                       10,200,000   $ 0.75       300,000               -       300,000   0.30       2,650,000       400,000       (2,250,000 )     (400,000 )             400,000   $ 1.00       100,000                       100,000   0.40       150,000                       -               150,000   $ 0.50       500,000                       -               500,000   $ 0.75       300,000                       (300,000 )             -   $ 1.00       100,000                       (100,000 )             -         8,050,000       3,865,000       -       11,915,000           8,050,000       13,328,260               (800,000 )     (1,600,000 )     18,978,260     12. Fair Value of Financial Instruments 12. ●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). Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.   Level 1— Valuations based on quoted prices for identical assetsThe Company’s financial instruments, including cash and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assetscash equivalents, accounts payable and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets andaccrued liabilities, are described below:     September 30, 2020 Fair Value Measurements       Level 1     Level 2     Level 3     Total Fair Value   Assets                         Other assets   $        -     $      -     $ -     $      -   Total   $ -     $ -     $ -     $ -   Liabilities                                 Short and long-term debt     $       $ -     $ 2,794,100     $ 2,794,100   Management considers all of its derivative liabilities to be Level 3 liabilities.carried at historical cost. At September 30, 2021March 31, 2022, and June 30, 2021, respectively the Company had outstanding derivative liabilities, including those from related partiescarrying amounts of $-0- and $-0-, respectively.these instruments approximated their fair values because of the short-term nature of these instruments. Derivative instruments are carried at fair value, generally estimated using the Trinomial Tree option pricing formula.   13. Commitments and Contingencies: F-22   13. ●Commitments and Contingencies:   The Company has entered into certain consulting agreements which carry commitments to pay advisors and consultants should certain events occur. An agreement is in place with one Company Advisoradvisor that callscalled for total compensation over the four-year Advisor Agreement of 500,000 warrants with an exercise price of $.15 per share, of which all have vested.   ● CEO Sean Folkson has a twelve-month consulting agreement which went into effect on February 4, 2021,January 1, 2022, which willeffectively served as an extension to, and reset of, his previous twelve-month consulting agreement with minor modifications to the available bonuses. Both contracts had provisions which would reward him with bonuses earned of 1,000,000 warrants at a strike price of $.50 whenshould the Company recordsrecord its first quarter with revenues over $1,000,000, an additional 3,000,000 warrants with a $.50 strike price when the Company records its first quarter with revenues over $3,000,000, and an additional 3,000,0005,000,000 warrants with a $1 strike price when the Company records its first quarter with revenues over $5,000,000. Mr. Folkson will also be awarded 500,000 warrants with a strike price of $.50 should the Company exceed $500,000 in non-traditional retail channel revenue during the term of the agreement, and should the Company enter into a product development or distribution partnership with a multi-national food & beverage conglomerate during the twelve-month term of the Agreement.Agreement, and 1,000,000 Warrants with a $.50 strike price should the Company and its subsidiaries on a consolidated basis generate $1,000,000 or more in Net Revenue through sales of product through “non-traditional” retail channels, such as hotels and college campuses, during the twelve-month term of this agreement. As of September 30, 2021,March 31, 2022, those conditions were not met and therefore nothing was accrued related to this arrangement. Under Mr. Folkson’s consulting agreement, in January of 2023, an analysis will be done of the Company’s consolidated Calendar Year 2022 Gross Sales. Should the Company have achieved consolidated Gross Sales in excess of $3,000,000 in the Calendar Year 2022, Consultant’s monthly consulting rate of $6,000 per month as stated in this agreement shall be adjusted to $12,000 per month, retroactive to January 1, 2022. Litigation: From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company is not aware of any such legal proceedings that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. Litigation: From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company is not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results Coronavirus (COVID-19): On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic which continues to spread throughout the U.S. and the globe. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most U.S. states and many countries have issued policies intended to stop or slow the further spread of the disease such as issuing temporary Executive Orders that, among other stipulations, effectively prohibit in-person work activities for most industries and businesses, having the effect of suspending or severely curtailing operations. COVID-19 and the U.S’s response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. The extent of the ultimate impact of the pandemic on the Company’s operational and financial performance will depend on various developments, including the duration and spread of the outbreak, which cannot be reasonably predicted at this time. Accordingly, while management reasonably expects the COVID-19 outbreak to negatively impact the Company, the related consequences and duration are highly uncertain and cannot be predicted at this time.    14. Related Party Transactions F-23   14. Related Party Transactions   ● On January 20, 2022, the Company entered into an Agreement For Shareholder Lock-Up And Acquisition of Warrants (the “Lock-Up Agreement”), with its Chairman, CEO and largest shareholder, Sean Folkson. For purposes of the Lock-Up Agreement, Mr. Folkson is the direct or indirect owner of 16,776,644 share of the Company’s common stock (the “Shares”), and Mr. Folkson has agreed to not transfer, sell, or otherwise dispose of any Shares through February 4, 2023.The Lock-Up Agreement is substantially similar to, and serves as an extension of, the lock-up agreement currently in place between the Company and Mr. Folkson, which expired in accordance with its terms on February 4, 2022. The Lock-Up Agreement further provides, in exchange for the agreement to lock up the Shares, that Mr. Folkson shall receive warrants to acquire 400,000 shares of Company common stock at an exercise price of $.30 per share, which warrants carry a twelve month term and a cashless provision, and will expire if not exercised within the twelve month term. During the third quarter of Fiscal Year 2015,nine months ending March 31, 2022, and 2021, Mr. Folkson began accruing aaccrued consulting fee of $6,000 per month which the aggregate of $18,000$54,000 is reflected in professional fees for the three-month period ended September 30, 2021general and reflected in accruedadministrative. Accrued expenses – related party with a balance of $0$3,000 and $6,974$3,000 at September 30, 2021March 31, 2022 and June 30, 2021, respectively.  The debit balance of $3,000 at September 30, 2021 is due to Mr. Folkson’s monthly $6,000 consulting fee ACH having been processed by the bank on September 28, 2021 rather than on October 1, 2021.   ● On December 8, 2017, Mr. Folkson purchased Warrants, at a cost of $.15 per Warrant, to acquire up to 80,000 additional shares of Company stock at a strike price of $.20, and with a term of three (3) years from the date of said agreement. This purchase resulted in a reduction in the accrued consulting fees due him by $12,000. Those warrants were not exercised during that timeframe and have expired. During the second quarter 2019 Mr. Folkson purchased 400,000 shares of stock at a price of $0.30 per share, valued at $120,000 which was charged to his accrual. During the three months ended September 30, 2021, Mr. Folkson had been paid $24,000 against  his total accrued balance to date and reflected in accrued expenses – related party with a balance of $0 and $3,000 at September 30, 2021 and June 30, 2021, respectively. The debit balance of $3,000 at September 30, 2021 is due to Mr. Folkson’s monthly $6,000 consulting fee ACH having been processed by the bank on September 28, 2021 rather than on October 1, 2021.   ● In addition, the Company made bonuses available to Mr. Folkson upon such events as the Company hitting certain revenue milestones of $1,000,000 in a quarter, $3,000,000 in a quarter, and $5,000,000 in a quarter.quarter, and other potential bonuses. Achieving thosesuch milestones would earn Mr. Folkson warrants with a $.50 and $1.00$1 strike price which would need to be exercised within 90 days of the respective quarterly or annual filing. As of September 30, 2021,March 31, 2022, those conditions were not met and therefore nothing was accrued related to this arrangementarrangement.   15. Subsequent Events 15. Subsequent Events ● Subsequent to March 31, 2022, the Company issued 100,000 shares of Company common stock to a consultant for services rendered.   ● Subsequent to September 30, 2021,March 31, 2022, holders of ourCompany Series B Preferred Stock converted an aggregate of 300150 Class B Shares into 1,500,000750,000 shares of Company common stock. ● Subsequent to September 30, 2021, an aggregate of 50,500 shares of Company common stock to consultants and influencers for services received.     F-24     ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   FORWARD LOOKING STATEMENT INFORMATION   Certain statements made in this Quarterly Report on Form 10-Q 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. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “should,” “plan,” “project,” “will” and other words of similar meaning. 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 Quarterly Report on Form 10-Q 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 under the headings “Business” and “Risk Factors” within our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, as well as the other information set forth herein.   OVERVIEW   What you eat before bed matters. Nightfood solves the problem of nightdelivers sleep-friendly nighttime snacking.   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. night, so consumers are more likely to succumb to these nighttime cravings for excess “survival calories”. As a result, over 85% of adults report snacking regularly between dinner and bed, resulting in an estimated 700 million nighttime snack occasions weekly, and an annual spend on night snacks of over $50 billion. Because of our hard-wired cravings,evolutionary preferences for calorie-dense choices that increase the odds of short-term survival, the most popular choicesnighttime snacks are ice cream, cookies, chips, and candy. These are all understood to be generally unhealthy. They can also impair sleep quality.   In recent years, billions of dollars of consumer spend have shifted to better-for-you versions of ourconsumers’ favorite snacks. But nonewe do not believe any of those brandsproducts were specifically formulated their products forto nutritionally support better sleep. Nightfood snacks are not only formulated to be better-for-you, but they’re also formulated by sleep experts and nutritionists to provide a better nutritional foundation for sleep   Almost half of all snacking takes place between dinner and bed. Nutrition is an important part of sleep-hygiene because what one eats at night impacts sleep. MostRecent industry surveys indicated that most modern consumers nowhave begun to seek functional benefits from their snacks, and most consumers would also prefer better sleep.    2 As the pioneers of the night snacknighttime snacking category, Nightfood accepts the responsibility to educate consumers and build the awareness required to grow the nighttime segment of the overall snack market. Along with that responsibility comes the opportunity to be the category king. We envision a future where nighttime specific, sleep-friendly snacks comprise a multi-billion dollarmulti-billion-dollar segment of the estimated $120 billion American snack market. Nightfood ice cream was originally manufactured in eight flavors. These are Full Moon Vanilla, Midnight Chocolate, Cold Brew Decaf, After Dinner Mint Chip, Milk & Cookie Dough, Cherry Eclipse, Bed and Breakfast, and Cookies n’ Dreams. Additional flavors have been developed, both dairy, and non-dairy, for future introduction based on retailer and consumer demand. In February of 2020, Nightfood secured the endorsement of the American Pregnancy Association. With ice cream being the most widely reported pregnancy craving, and with pickles being another food notorious for pregnancy cravings, the Company manufactured and launched a ninth flavor, Pickles For Two.   Management believes latent consumer demand exists for better nighttime snacking options, and that a new consumer category, consisting of nighttime specific snacks, willis set to emerge in the coming years. This belief is supported by research from major consumer goods research firms such as IRI Worldwide, and Mintel, who identified nighttime specific foods and beverages as one of the “most compelling and category changing trends” for 2017 and beyond. In recent years, CEO’s and other executives from major consumer goods conglomerates such as Nestle, PepsiCo, Mondelez, and Kellogg’s have commented on consumer nighttime snack habits and alluded to the opportunity that existsmight exist in solving this problem for the marketplace.    Nightfood has established a highly credentialed Scientific Advisory Board consisting of sleep and nutrition experts to drive product formulation decisions and provide consumer confidence in the brand promise. The first member of this advisory board was Dr. Michael Grandner, Director of the Sleep and Health Research Program at the University of Arizona. Dr. Grandner has been conducting research on the link between nutrition and sleep for over tenfifteen years, and he believes improved nighttime nutritional choices can improve sleep, resulting in many short and long-term health benefits. In March of 2018, the Company added Dr. Michael Breus to their Scientific Advisory Board. Dr. Breus, known to millions as The Sleep Doctor™, is believed to be the Nation’s most trusted authority on sleep. He regularly appears in the national media to educate and inform consumers so they can sleep better and lead happier, healthier, more productive lives. In July, 2018, we completed our Scientific Advisory Board with the addition of Lauren Broch, Ph.D, M.S. Dr. Broch is a sleep therapist and former Director of Education & Training at the Sleep-Wake Disorders Center at Weill Cornell Medical College. Dr. Broch also has a master’s degree in human nutrition. This combination allowed her to play an important role in the reformulation of our nutrition bars, and the development of Nightfood ice cream.cream, and formulations of future Nightfood snacks currently in development. These experts work with Company management to ensure Nightfood products deliver on their nighttime-appropriate, and sleep-friendly promises.   Management envisions the Nightfood brand ultimately as a “platform brand”, meaning future snack offerings are expected to be introduced that would not necessarily all remain withinfall outside the ice cream or frozen food category. Possibilities exist to expand the product line into additional snack formats that are popular with consumers at night, including things like cookies, chips, and other formats. Additionally, future reintroductionThe Company currently has some of the Nightfood nutrition bar also remains a possibility.aforementioned snack formats in development.   Compared to regular ice cream, Nightfood is formulated with more tryptophan, more vitamin B6, more calcium, magnesium, and zinc, more protein and more prebiotic fiber. Nightfood also contains less fat, less sugar, and fewer calories than traditional ice cream, and is lactose free.   Each new Nightfood snack format would be expected to deliver sleep-friendly snacking in a way that is most appropriate for that format. For example, Nightfood chips would not necessarily contain significantly more tryptophan than other brands of chips but may be more sleep-friendly in other ways.   In early February of 2019, it was announced that Nightfood had won the 2019 Product of the Year Award in the ice cream category in a Kantar innovation survey of over 40,000 consumers. In June of 2019, it was announced that Nightfood won both the Best New Ice Cream and Best New Dairy Dessert awards at the World Dairy Innovation Awards.   In November of 2021, Nightfood has securedwon the Real California Milk Excelerator Dairy Innovation competition, with a top prize of $150,000 in marketing support. Executives and judges from the California Milk Advisory Board and corporate entities such as Hershey’s, Coca-Cola, and Whole Foods commended the unique problem the Nightfood brand addresses for consumers, and the opportunities and strategic advantages afforded by widespread hotel distribution in divisions of some of the largest supermarket chains in the country, andfor a brand pioneering sleep-friendly nighttime snacking. Nightfood has received media coverage in outlets such as The Today Show, Oprah Magazine, The Rachael Ray Show, Food Network Magazine, The Wall Street Journal, USA Today, The Washington Post, Fox Business News, and many more media outlets.   3     RECENT EVENTS - DEVELOPMENT PLANS   Hotel Distribution In pioneering the nascent sleep-friendly nighttime snacking category, Nightfood is in the process of executing a strategic pivot. The Company is temporarily shifting growth focus away from the crowded, expensive, and highly competitive supermarket vertical while targeting brand, revenue, and category growth through national hotel distribution. According to The American Hotel & Lodging association, there are an estimated 56,000 hotels in the United States (this does not include motels, which are estimated at approximately 34,000 locations). By contrast, Supermarket News recently reported that there are approximately 26,000 traditional supermarkets in the United Sates. The five largest hotel companies combine for over 26,000 hotel locations in the United States. Management believes this significant concentration, and the fact that corporate-level relationships have been established with two of these five global hotel companies, can lead to significant distribution gains in coming months. Management believes Nightfood is uniquely advantaged over other snack brands in the potentially lucrative hospitality vertical due to an inherent and implied obligation that exists for hotels to support better sleep for their guests. Nightfood was invited to participate in a 2021 retail pilot test of Nightfood pints for sale in hotel lobby shops, initiated and conducted by a large and prestigious international hospitality company. That test was declared a success by that international hospitality company in summer of 2021, and Nightfood ice cream pints are currently availablenow in divisionsthe midst of somea national hotel rollout. In April, 2022, the Company received 21 purchase orders from a leading distributor of food and beverages to the hospitality vertical, one for each of their 21 regional distribution centers. The distributor business model is typically to order the smallest amount of inventory needed to fulfill immediate customer demand. As such, the aggregate size of these purchase orders was approximately $45,000, enough to supply a few hundred hotel properties with Nightfood ice cream for a few weeks. Industry norms would dictate that significant increases in the number of retail points of distribution would lead to significant increases in average order size. As of the largest supermarket chainstime of this filing, Nightfood ice cream pints are being introduced nationally in our first hotel chain, a major extended-stay hotel brand with approximately 500 locations in the United States,States. On April 22, 2022, it was announced that the Company had secured “recommended brand” status with Remington Hotels. Remington is a leading hotel management company which manages 121 hotels across 28 states, and representing 25 brands, including Walmart, Albertsons,Marriott, Hilton, Wyndham, Intercontinental, Westin, Wyndham, Doubletree, Courtyard, Crowne Plaza, Four Points, Hyatt Regency, Renaissance, Curio, Embassy Suites, Fairfield Inn, Hampton Inn, Hilton Garden Inn, Holiday Inn, Residence Inn, Springhill Suites, and H-E-B. Currentmore. On April 25, 2022, the Company announced a new corporate-initiated retail pilot test of Nightfood ice cream pints by a second global hotel company, with thousands of locations in the United States. Management believes a successful test could lead to distribution totals approximately 1,500 stores. Management is working to simultaneously securein multiple additional distribution opportunities, while also nurturing revenue growth and consumer growth in our existing pointshotel chains potentially representing thousands of distribution.properties.   The Company also recently completed a pilot testsigned its first agreement with a leading internationalmajor hotel industry group purchasing organization (“GPO”) which placed Nightfood ice cream pints for saleservices over 10,000 hotel properties in select hotel lobby shops in various regions of the United States. The test was declared a success byWe are currently in discussions with other GPOs through our hotel partner, leading to their decision to distribute Nightfood nationally, initially in one or more of their leading banners, and soon thereafter expected to be introduced into several of their additional banners, representing several thousand properties in the U.S.relationship with iDEAL Hospitality Partners.   WeIn September of 2021, the Company had stated the goal of having secured distribution for Nightfood snacks in 7,500 hotels by July 31, 2022. Because of modifications to launch timelines by our initial hotel partner, we have engaged iDEAL Hospitality Partners Group to secure distribution partnerships with additional global hotel brands, oversee hospitality-related business development initiatives, and provide sales and support duringadjusted the national hotel rollout. Ourtiming of that target so that our goal in working with iDEAL is now to secure distribution in 7,500 hotel locationsproperties within nine months of our initial hotel introduction. It remains our goal to have Nightfood established as a de facto hotel industry standard, with distribution approaching 20,000 hotels by the summerend of 2023. In preparing for the projected increase in volume, the Company is in the process of onboarding two new ice cream pint production facilities to replace the contract manufacturer that has produced Nightfood ice cream pints to date. As the majority of Nightfood ice cream pint sales in coming quarters project to be concentrated on the two flavors in hotel distribution (Cookies n’ Dreams and Midnight Chocolate), the Company is engaging a manufacturer with high-speed production lines that can produce double the product daily of our previous manufacturer. The initial production run at that facility is tentatively scheduled for the week of June 6, 2022. The other facility is expected to be used for other pint flavors and ice cream novelties and is expected to come online during July or August. The Company does not expect any disruption to inventory or supply as a result of these planned transitions. The unit economics of hotel distribution project to be materially superior to the economics of operating in the supermarket space. Line items such as slotting fees, advertising, and price promotions (both to consumers and the trade) make the supermarket vertical a much more expensive, and less profitable, place to do business compared to hotels. 4 Based on the results from the 2021 test, we anticipate that distribution of our ice cream pints in approximately 4,000 hotel locations would bring the company to profitability. Should we succeed in securing hotel distribution for additional snack formats, we would expect an increase in hotel revenue per property, meaning fewer properties would be needed to reach break-even.   To take maximum advantage of the opportunity presented by Nightfood’s expected widespread hotel distribution, opportunity, Nightfoodthe Company is developing additional snack formats to supplement ice cream pints.pints in that vertical. These include single-serve ice cream sandwiches as well as snacks in other, non-frozen, formats. Considerations include other popular nighttime snack formats such as chips, candy, cookies popcorn, and more. Thechips. We have already received confirmation of interest from decision makers at a major hotel chain in testing and adding additional these Nightfood snack formats currently under development. It is believed that securing distribution for such additional snack formats in our hotel properties would help the Company has registered the Nightfood brand for federal trademark protectionreach its 2023 revenue target of $10 in those categories.wholesale revenue per hotel per day.   In addition to the opportunity to capture greater revenue and profit contribution,projected profitability resulting from a successful hotel roll-out, we believe that having such additional snack formats available in hotels creates a greater opportunity for consumer visibility, awareness, and trial. Widespread hotel distribution across multiple snack formats projects to accelerate consumer adoption of the nighttime snack category, driving awareness that what one eats at night can impact their sleep quality.   Management expectsWe intend to leverage our national hotel distribution to generate significant incremental salesadvance the narrative to consumers that what you eat, especially at night, can impact your sleep. We further believe that distribution in leading global hotel chains will serve as an economic moat, providing the Nightfood brand with higher grossa measure of insulation against competitors. At the same time, the de facto endorsement from the world’s most trusted hotel brands would translate to credibility for our brand, helping to establish and net margins thanmaintain Nightfood as the supermarket vertical, where slotting, advertising, and trade promotion expenses make profitability more difficult to attain.nighttime snacking “category king”.   Management believes widespreadSupermarket Distribution Nightfood is currently available in approximately 300 supermarkets, including Jewel-Osco (Chicagoland), Rouses Markets (New Orleans & Gulf Coast), Central Market (Dallas, Fort Worth, Austin, San Antonio, Houston), and Metropolitan Market, Market of Choice and Northwest Grocers in the Pacific Northwest. We have shifted our primary focus to hotel distribution would alsoand believe that successful hotel presence will support future supermarket success. We continue to work with our long-term partners at these select supermarket chains to devise and test programs that can drive supermarket growth. SLOTTING FEES Slotting fees are fees occasionally charged by supermarkets and certain retail distributors to add a new product into their product assortment. Accounting standards require exclusion on the brand’s growth in the supermarket vertical, accelerating both the growthincome statement of both the Nightfood brand and the night snack category whichGross Sales made to a customer to whom the Company is pioneering. paying slotting fees and other expenses including promotions, rebates, and coupons. In those situations, the Gross Sales number is reduced, dollar for dollar, by the sum of these fees. These fees do not appear on the income statement as an expense. Rather, they are applied against Gross Sales, resulting in Net Revenue, as shown below. The netting of Gross Sales against the total of these fees, as described and shown below, results in the Net Revenue number at the top of the income statement. This is not a reflection of the amount of product shipped to customers, but rather a function of the way certain sales are accounted for when those sales are made to customers who are charging slotting fees.   Additional supermarket expansion is anticipated anddistribution would likely result in additional future slotting fees. Hotel distribution of Nightfood is not expected to lead to significant slotting fees, either in 2022 or beyond. Retailer slottingif any. Slotting fees are normal and customary in the consumer goods industry and are fees that certain retailers and distributors charge to introduce a new product into their available assortment.   In some cases, slotting fees, also called “new item placement fees” or “new item placement allowances” can be nominal. In other situations, slotting fees for certain retail and distribution partners could run hundreds of thousands of dollars. We do not believe our recent decreases in slotting expense should be viewed as an indication of a trend. Rather, we believe it is simply a function of past slotting arrangements having been paid down and paid off, along with minimal new slotting fees incurred during the current fiscal year. Investors should have the expectation that Nightfood, like any growing food or beverage brand, will continue to incur slotting fees as we add new mainstream supermarket retail accounts.   INFLATION   InflationCurrent and ongoing inflation can be expected to have an impact on our operating costs. ACosts of certain ingredients and packaging have increased recently, and we expect to evaluate a wholesale price increase in the coming months. Furthermore, a prolonged period of inflation could possibly cause a general economic downturn and negatively impact our results.   5   SEASONALITY There is traditionally a significant amount of seasonality in the ice cream industry, with summer months historically delivering the highest consumption, and winter months delivering the lowest consumption.SEASONALITY   As an early-stage and growing brand, the full impact of seasonality on our brand of ice creamCompany might not be fully understood for several additional annual cycles, but early indications point tocycles. Hotels historically have their highest occupancy rates in the existencesummer, and a pattern could develop of a material seasonality impact acrosshigher consumer spend on Nightfood products during the ice cream industry through grocery channels.summer months for the period of time where the majority of the Company’s sales are derived from snacks sold into hotel distribution. Over time, should the Company successfully expand into more distribution verticals and into additional snack formats, it is possible that thesuch potential impacts of seasonality could lessen.   CORONAVIRUS (COVID-19)   TheThere is still potential uncertainty resulting from the outbreak of the novel coronavirus (COVID-19) (the “Pandemic”), including thethose potentially related to measures to reduce its spread, and the impact on the economy, cannot fully be understoodeconomy. Rates of unemployment, recession, inflation, and identified. Indicationsother possible unforeseen factors could also have an impact. From both public statements, and conversations between Nightfood management and current and former executives from certain global food and beverage conglomerates, it has been affirmed to date aremanagement that there are somewhat offsetting factors relatingis increased strategic interest in the nighttime nutrition space as a potential high-growth opportunity, partially due to the impact on our Company. Industry data shows that supermarket sales remain up, with more people spending more time at home. Anecdotally and statistically, snacking activity is also up while consumers are reporting a decreaseongoing declines in consumer sleep quality and sleep satisfaction.increases in at-home nighttime snacking, both trends believed to be accelerated by COVID.   The offsetting factors areCompany has experienced no material issues with supply chain or logistics resulting from COVID. Order processing function has been consistent with historical norms. As stated in Development Plans below, the impactCompany is in the process of the virus on the overall economy,transitioning contract manufacturers to handle increased demand and the impact thatdoes not anticipate any disruption from this transition as a down economic period can have on consumer behavior, including trialresult of new brands. Greater unemployment, recession, andCOVID or any other possible unforeseen factors are shown to have an impact. Research indicates that consumers are less likely to try new brands during economic recession and stress, returning to the legacy brands they’ve known for decades.causes.   With consumers generally making fewer shopping trips, while buying more on those occasions and reverting back to more familiar brands, certain brand-launch marketing tactics, such as in-store displays and in-store product sampling tables, are either impaired or impermissible. So, while overall night snacking demandIt is up, and consumer need/desire for better sleep is also stronger, driving consumer trial and adoption has beenpossible that the fallout from the Pandemic could make it more difficult in the future for the Company to access required growth capital, possibly rendering the Company unable to meet certain debts and expensive during these circumstances.expenses.   COVIDMore directly, the Pandemic has directly impaired Nightfood’sthe Company’s ability to execute certain in-store and out-of-store marketing initiatives.initiatives within the normal course of supermarket business. For example, since the inception of COVID,the Pandemic, the Company was unable to conduct in-store demonstrations and unable to participate in local pregnancy, baby expos, and health expos that were originally intended to be part of our marketing mix.   From both public statements, and conversations between Nightfood Management and current and former executives from certain global food and beverage conglomerates, it has been affirmed to Management that there is increased strategic interest in the nighttime nutrition space as a potential high-growth opportunity, partially due to recent declines in consumer sleep quality and increases in at-home nighttime snacking. We have experienced no major issues with supply chain or logistics. Order processing function has been normal to date, and our manufacturers have assured us that their operations are “business as usual” as of the time of this filing. It is possible that the fallout from the pandemic could make it more difficult in the future for the Company to access required growth capital, possibly rendering us unable to meet certain debts and expenses. Additionally, with more consumers shopping online, both for delivery or at-store pickup, the opportunity for shoppers to learn about new brands at-shelfat the supermarket shelf has been somewhat diminished. Management is working to identify opportunities to build awareness and drive supermarket trial and growth under these new circumstances.circumstances, while simultaneously executing a strategic pivot to focus on hotel distribution for immediate growth. We experienced some Pandemic-related delays to our national hotel rollout. However, hotel sales testing conducted by a leading global hotel brand showed strong sales velocities in hotel lobby shops during early and mid-2021. As the testing itself was conducted during the Pandemic, we are of the belief that strong sales can be expected as the rollout is executed. We do not expect significant hotel shutdowns or reductions in hotel occupancy the likes of which were seen in the early and middle part of 2020, unless the Pandemic again surges through new variants or for other reasons.   It is impossible to know what the future holds with regard to the virus,Pandemic, both for our companythe Company and in the broader sense. There areEmergence of recent variants such as Delta and Omicron have shown us that there remain many uncertainties regarding the current coronavirus pandemic,Pandemic, and the Company is closely monitoring the impact of the pandemicPandemic on all aspects of its business, including how it will impact its customers, vendors, and business partners. It is difficult to know if the pandemicPandemic has materially impacted the results of operations of the Company, and we areit is unable to predict the impact that COVID-19the Pandemic will have on ourits financial position and operating results due to numerous uncertainties. The Company expects to continue to assess the evolving impact of the COVID-19 pandemicPandemic and intends to make adjustments accordingly, if necessary.   6     RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODPERIODS ENDED September 30, 2021 MARCH 31, 2022 and 2020.2021.   For the three months ended SeptemberMarch 31, 2022 and 2021 and 2020 we had Gross Sales of $189,536$176,020 and $319,324$181,172 and Net Revenues (Net Revenues are defined as Gross Sales, less Slotting Fees, Sales Discounts, and certain other revenue reductions) of $114,453$127,173 and $126,983$96,726, respectively, and incurred an operating loss of $833,675$333,473 and $536,043$391,240, respectively. Accounting standards require exclusion on the income statement of Gross Sales made to a customer to whom the Company is paying slotting fees (slotting fees are fees occasionally charged by retailers and distributors to add a new product into their product assortment). In those situations, the Gross Sales number is reduced, dollar for dollar, by the slotting fees, until the total cost of the slotting is covered. These slotting fees do not appear on the income statement as an expense. Rather, Slotting Fees, along with Sales Discounts, are applied against Gross Sales, resulting in Net Revenue, as shown below. The netting of Gross Sales against slotting and sales discounts, as described and shown below, results in the Net Revenue number at the top of the income statement. This is not a reflection of the amount of product shipped to customers, but rather a function of the way certain sales are accounted for when those sales are made to customers who are charging slotting fees.   GROSS SALES   For the three months period ended September 30, 2021     For the three months period ended September 30, 2020     Three Months Ended March 31,     2022     2021   Gross product sales   $ 189,536     $ 319,324     $ 176,020     $ 181,172   Less:                                 Slotting fees     -       (134,222 )   $       $ (4,435 ) Sales discounts, promotions, and other reductions     (75,083 )     (58,119 )     (48,847 )     (80,011 ) Net Revenues   $ 114,453     $ 126,983     $ 127,173     $ 96,726     The decrease in Gross Sales relative to the same period in 2020 was largely attributable to the loss of one significant account, Harris Teeter, which represented 39% of our gross sales inIn the three months ended September 30, 2020. DuringMarch 31, 2022, Grocery Outlet was the Company’s largest customer, with Gross Sales of $50,994, and Walmart, which is not currently an active customer of the Company, was the Company’s second largest customer, with Gross Sales of $44,330. The Company built inventory in early 2021 to prepare for planned expansion, including our national hotel rollout which was originally expected to occur in Summer of 2021. Through the Company’s sales to Grocery Outlet, which buys surplus manufacturer inventory at a discount, some of that excess inventory was relieved. We expect that our Gross Sales attributable to supermarket sales will be lower in the next few quarters due to having been rotated out of Walmart and the fact that Grocery Outlet sales are episodic in nature. However, we expect that anticipated hotel expansion will offset the loss of these sales, resulting in higher gross sales and net revenues in future quarters. To quantify, gross sales to Walmart totaled $44,330 during the three months ended September 30, 2021, no major new accountsMarch 31, 2022. During this time, we were onboarded.in over 900 Walmart our largest account, started carrying Nightfood in April 2021. During the quarter ended June 30, 2021, Walmart filled their pipeline. We ship product to Walmart weekly. Because sales to date are below originally projected velocities, which management believes is largely due to sub-optimal flavor assortments in a majority of our Walmart locations, the weekly shipments are not as large as they would otherwise be, as certain warehouses already have sufficient inventory on hand of certain flavors. Management is suggesting revisions to the flavor assortment carried by Walmart for calendar 2022. This would include a focus on our more traditional flavors, including the flavors that have been selected by our hotel partner for their national rollout, as well as a focusstores. Based on the geographic areas whereresults of the Nightfood brand is experiencing2021 hotel retail pilot test, our projections indicate that new distribution in approximately 200-300 hotel locations would bring an increase in gross sales that would offset the strongest sales. decrease from this reduction in Walmart and supermarket distribution, with significantly stronger gross and net margins.Hotel sales project to be significantly more profitable on a per unit basis, as sales are expected to be conducted at a higher wholesale price, and line items such as slotting, advertising, and pricing promotions project to be greatly reduced or entirely eliminated.   For the three months ended SeptemberMarch 31, 2022 and 2021, Cost of Product Sold increased to $146,766 from $102,922 as we discounted certain product prior to expiration of its code date and executed a write-off of unusable packaging. For the three months ended March 31 2022 and 2021, Selling, General, and Administrative expenses decreased to $313,880 from $374,645. This decrease was largely due to decreases in certain consulting fees related to capital formation and marketing activities. For the three months ended March 31 2022 and 2021, total Operating Expenses decreased to $460,646 from $487,567. This is due largely to the decrease in Selling General, and Administrative expenses mentioned in the previous paragraph. For the three months ended March 31 2022 and 2021, total Other Expenses decreased to $100,295 from $1,548,474. A large component of the other expenses category from 2021 is expenses related to financing events. For the three months ended March 31 2022 and 2021 we incurred net losses of $433,768 and $1,910,613, respectively. This decrease in net losses is due largely the absence in the current quarter of expenses that existed in the previous year related to the financing event in April, 2021. 7 RESULTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED MARCH 31, 2022 and 2021. For the nine months ended March 31, 2022 and 2021 we had Gross Sales of $470,019 and 643,359 and Net Revenues of $321,000 and $270,919, respectively, and incurred an operating loss of $1,645,538 and $1,379,102, respectively.     Nine Months Ended March 31,       2022     2021   Gross product sales   $ 470,019     $ 643,359   Less:                 Slotting fees           $ (190,295 ) Sales discounts, promotions, and other reductions     (147,810 )     (182,145 ) Net Revenues   $ 321,000     $ 270,919   The decrease in Gross Sales, is largely due to the fact that we had fewer traditional supermarket points of distribution ordering product during the nine months ended March 31, 2022 due to being rotated out of Harris Teeter and Shaw’s, as well as decreased promotional activity at the point of purchase. While Nightfood ice cream was available in Walmart stores during the nine months ended March 31, 2022, the majority of product the Company sold to Walmart occurred during the three month period from April 1, 2021 through June 30, 2021, and 2020,is therefore not reflected in either of the nine month periods shown above. We expect that our Gross Sales attributable to supermarket sales will be lower in the next few quarters due to having been rotated out of Walmart and the fact that Grocery Outlet sales are episodic in nature. However, we expect that anticipated hotel expansion will offset the loss of these sales, resulting in higher gross sales and net revenues in future quarters. Furthermore, the hotel sales project to be significantly more profitable on a per unit basis, as sales are expected to be conducted at full wholesale pricing, and line items such as slotting, advertising, and pricing promotions project to be greatly reduced or entirely eliminated. For the nine months ended March 31, 2022, and 2021, Cost of Product Sold decreased to $124,874$359,745 from $229,696. This is the result of$443,083 as commensurate with lower gross sales as a result of a lost account, which brings about lower broker fees, less freight, and other expenses related directly to the generation of sales.   The increaseFor the nine months ended March 31, 2022, and 2021, Selling, General, and Administrative expenses increased to $1,606,793 from $1,206,938. To fully capitalize on the hotel opportunity, we have made certain investments in operating losses is largely the result of increased advertising, promotion, and other marketing expenses as well as a one-time expense under professional fees in conjunction with a perpetual consulting engagement related to category development and design, consulting. Management believes this will deliver strong return-on-investment over time. These increases are reflectedas well as investing in the development of additional snack formats which the Company believes can more rapidly scale revenue and consumer trial. Those investments, along with elevated spending on advertising and promotion during the first two quarters of the current fiscal year, accounts for much of this increase. For the nine months ended March 31, 2022, and 2021, Total Operating Expenses increased to $1,966,538 from $1,650,021. This is due largely to the increase of total operatingin Selling General, and Administrative expenses from $663,026mentioned in the threeprevious paragraph. For the nine months ended September 30, 2020March 31, 2022, and 2021, total Other Expenses decreased to $948,128$402,824 from $2,074.040. A large component of the other expenses category from 2021 is expenses related to financing events. For the nine months ended March 31, 2022, and 2021 we incurred net losses of $2,048,362 and $3,453,142 respectively. This decrease in net losses is due largely the absence in the 3 months ended September 30,current quarter of expenses that existed in the previous year related to the financing event in April, 2021.   Customers   During the threenine months ended September 30, 2021,March 31, 2022, the Company had four customers accounting for over 10% of gross sales. There were two customers each accountingone customer account for approximately 20% of the gross sales and one for 17% and one for 14%. During the three months ended September 30, 2020, one customer accounted for approximately 39%31% of the gross sales. One other customer accounted for approximately 21%24% of gross sales, and twoone other customer accounted for approximately 14% of gross sales. During the nine months ended March 31, 2021, one customer accounted for approximately 45% of the gross sales. During the three months ended March 31, 2022, the Company had one customer account for approximately 44% of the gross sales. During the three months ended March 31, 2021, one customer accounted for approximately 36% of the gross sales while three other customers accounted for over 9%10% of gross sales.    8     LIQUIDITY AND CAPITAL RESOURCES   As of September 30, 2021,March 31, 2022, we had cash on hand of $471,705,$522,057, receivables of $77,429$85,113 and inventory value of $491,603.$291,789. While most of the Company’s internal financial model scenarios project it reaching profitability early in Fiscal 2023, cash on hand does not project to be adequate to satisfy the Company’s mid-range working capital needs to get it both to profitability and also cash flow positive. As a result, the Company anticipates raising capital early in Fiscal 2023.   The Company believes it has sufficient cash on hand to operate until the first quarter of calendar 2022 at which time it will require additional funds for operating capital and the planned hotel rollout ofthat forthcoming business developments along with its products in early 2022. We do not believe our cash on hand will be adequate to satisfy our long-term working capital needs. We believe that our current capitalization structure combined with ongoing increases in distribution, revenues, and market capitalization, will enable usit to successfully secure required financing to continue our growth. its growth in the hotel vertical.   Because the business has limited operating history and sales, no certainty of continuation can be stated. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern will again be dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations long-term.   The Company cannot give any assurance that it will, in the future, be able to achieve a level of profitability from the sale of its products to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.concern for one year from the date the financials are issued. 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.   Since our inception, we have sustained operating losses. During the threenine months ended September 30, 2021,March 31, 2022, we incurred a net loss of $833,675$2,048,362 (comprised of operating loss of $1,645,538 and other expenses of $402,824) compared to $943,824$3,453,142 (comprised of operating loss of $1,389,501 and other expenses of $2,074,040, most of which is comprised of changes in derivative liability and amortization of Beneficial Conversion Features related to convertible note financing and changes in the share price of the common stock) for the threenine months ended September 30, 2020. March 31, 2021. A significant portion of these losses is largely a function of the way certain financing activities are recorded and does not represent actual operating losses. During the threenine months ended September 30, 2021,March 31, 2022, net cash used in operating activities was $878,394$1,728,876 compared to $841,133 for the nine months ended March 31, 2021. The reason for the increase in recorded net cash used of $368,159 forin operating activities is largely due to the three months ended September 30, 2020.fact that more cash was allocated to current assets and current liabilities in the current quarter than in the prior year.   During the threenine months ended September 30, 2021,March 31, 2022, net cash of $0 was used in investing activities, compared to $0 for the threenine months ended September 30, 2020.March 31, 2021.   During the threenine months ended September 30, 2021,March 31, 2022, net cash aggregating $308,200$1,209,034 was provided by financing activities, compared to $178,897$716,692 for the threenine months ended September 30, 2020.March 31, 2021.   From our inception in January 2010 through September 30, 2021,March 31, 2022, we have generated an accumulated deficit of approximately $26,320,481.$27,603,890, compared to $25,196,871 from inception through June 30, 2021. This is not debt, and this is not an amount that needs to be paid out at any point in the future. 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 (also known as negative retained earnings), even after turning profitable. Many large, fast growing, and successful companies have largerecently reported accumulated deficits, such as Warby Parker, The Honest Company, Beyond Meat, Roblox, Robinhood, Sweetgreen, Oatly, Rivian, Celsius Holdings, and Chobani, as well as Tesla and Starbucks.(as recently as their 2020 fiscal year). In our case, itlike many of these others, an 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, we expect to incur additional operating losses during the next twoone to fivethree quarters 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 intend to rely on the sale of stock and the issuance of new debt, to fund our operations. If we are unable to raise cash through the sale of our stock, we may be required to severely restrict our operations. 9   Critical Accounting Policies and Estimates   Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, we evaluate past judgments and our estimates, including those related to allowance for doubtful accounts, allowance for inventory write-downs and write offs, deferred income taxes, provision for contractual obligations and our ability to continue as a going concern. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.   Note 2 to the consolidated financial statements, presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, describe the significant accounting estimates and policies used in preparation of our consolidated financial statements. There were no significant changes in our critical accounting estimates during the three months ended September 30, 2021. OFF BALANCE SHEET ARRANGEMENTS None. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   No report required.   ITEM 4. CONTROLS AND PROCEDURES   Evaluation of Disclosure Controls and Procedures   Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures.   We carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2021.March 31, 2022. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report in part because we did not document our Sarbanes-Oxley Act Section 404 internal controls and procedures.   As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.   Changes in internal controls over financial reporting   There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.   Limitations on the Effectiveness of Controls   A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s management, including its Principal Executive Officer and its Principal Financial Officer, do not expect that the Company’s disclosure controls will prevent or detect all errors and all fraud. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.   10     PART II – OTHER INFORMATION   ITEM 1. LEGAL PROCEEDINGS.   We are not engaged in any litigation at the present time, and management is unaware of any claims or complaints that could result in future litigation. Management will seek to minimize disputes with its customers but recognizes the inevitability of legal action in today’s business environment as an unfortunate price of conducting business.   ITEM 1A. RISK FACTORS.   Not required for smaller reporting companies.   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.   During the three months ended September 30, 2021,March 31, 2022, we issued 518,519114,653 shares of our common stock to directors and a consultant as consideration for services. The securities were issued in a private transactiontransactions in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act, as a transaction not involving any public offering.   During the three months ended September 30, 2021,March 31, 2022, we issued 3,865,0002,125,000 shares of our common stock to existing holders of our Series B Preferred Stock upon conversion of such preferred stock in accordance with its terms. Upon the conversion, the Company also issued warrants to the converting preferred stockholders to purchase 3,865,0002,125,000 shares of the Company’s common stock. The shares and the warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Section 3(a)(9) of the Securities Act.   ITEM 3. DEFAULTS UPON SENIOR SECURITIES.   Not applicable.   ITEM 4. MINE SAFETY DISCLOSURES.   Not applicable.   ITEM 5. OTHER INFORMATION.   None.   ITEM 6. EXHIBITS.   Exhibit Exhibit Description 31.1   Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer 32.1   Section 1350 certification of Chief Executive Officer 101.INS   Inline XBRL Instance Document 101.SCH   Inline XBRL Taxonomy Extension Schema Document 101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document 104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   11     SIGNATURES   In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     Nightfood Holdings, Inc.       Dated: November 22, 2021May 16, 2022 By: /s/ Sean Folkson     Sean Folkson, Chief Executive Officer (Principal Executive, Financial and Accounting Officer)   12 iso4217:USD xbrli:shares