NGTF 10-K & 10-Q changes, risk factors and insider trading
NightFood Holdings, Inc. · OTC · Misc Industrial & Commercial Machinery & Equipment · CIK 1593001 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Smaller reporting companies are not required to provide the information required by this item.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “B. Cost of Sales”
New heading “C. Impairment of Goodwill”
New heading “D. Depreciation and Amortization”
New heading “E. General and Administrative Expenses”
New heading “F. Loss from operations”
New heading “G. Other income (expense) – net”
New heading “H. Loss from Continuing Operations”
New heading “I. Loss from Discontinued Operations”
New heading “Other Income (Expense) – Net”
New heading “Liquidity and Going Concern”
New heading “Summary of Cash Flow Activities”
New heading “Operating Activities”
New heading “Principles of Consolidation”
New heading “Business Combinations and Asset Acquisitions”
New heading “Business Segments and Expense Disclosure”
New heading “Reportable Segments”
New heading “Derivative Liabilities”
New heading “A. Foodservice Packaging Distribution”
New heading “B. Robotics as a Service”
New heading “C. Snacks and Beverages (Discontinued Operations)”
New heading “Related Parties”
New heading “Reclassifications”
Removed heading “Costs and expenses”
Removed heading “Deemed Dividend”
Removed heading “Accounts Receivable and Allowance for Credit Losses”
Removed heading “Deemed Dividend – Series B Preferred Stock Warrants:”
Removed heading “Fair Value of Financial Instruments”
Largest changes
“Subsequent to the impairment, the Company initiated a strategic realignment of its robotics technology initiatives under Skytech, a newly acquired subsidiary focused on integrating advanced automation and sensor systems into its future product roadmap. The goodwill impairment relates solely to historical RaaS operations and does not affect the carrying value of assets or goodwill attributable to Skytech.”see in full comparison
“Net loss was $8,115,878 in fiscal 2025 compared to $3,235,506 in fiscal 2024, an unfavorable change of $4,880,372. The larger net loss primarily reflects the launch of packaging and RaaS operations (including associated start-up losses), the recognition of the goodwill impairment, increased corporate overhead, and higher non-operating expenses. See discussion of all items above.”see in full comparison
“For impairment testing purposes, goodwill is assigned to the reporting unit(s) expected to benefit from the synergies of the acquisition. The Company performs either a qualitative assessment (“Step 0”) to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, or a quantitative assessment when required.”see in full comparison
“In fiscal 2025, the Company recognized a full impairment charge of $897,542 related to goodwill previously assigned to the RaaS (Robotics-as-a-Service) reporting unit. The impairment was triggered by continued operating losses, minimal revenues, and the inability to achieve the planned commercialization milestones for the legacy RaaS platform.”see in full comparison
Full comparison: every changed paragraph (260)
Certain
information information
contained in this MD&A includes “forward-looking statements.” Statements which are not historical reflect
our current
expectations and projections about our future results, performance, liquidity, financial condition and results of operations,
prospects prospects
and opportunities and are based upon information currently available to us and our management and their interpretation of what
is believed
to be significant factors affecting our existing and proposed business, including many assumptions regarding future events.
In some cases,
you can identify forward-looking statements by terminology such as “may,” “will” “should,”
“expect,”
“intend,” “plan,” anticipate,” “believe,” “estimate,” “predict,”
“potential,”
“continue,” or similar terms, variations of such terms or the negative of such terms. These statements
are only predictions
and involve known and unknown risks, uncertainties, and other factors. Although forward- lookingforward-looking statements, and
any assumptions upon
which they are based, are made in good faith, and reflect our current judgment, actual results could differ materially
from those anticipated
in such statements. Actual results, performance, liquidity, financial condition and results of operations, prospects
and opportunities
could differ materially and perhaps substantially from those expressed in, or implied by, these forward- looking statements
as a result
of various risks, uncertainties and other factors
RESULTSResults
of OFOperations OPERATIONS
FORfor THEthe FISCALYears YEARSEnded ENDED JUNEJune 30, 2025 and 2024 AND 2023
RevenueA.
Revenues - net
Revenues were $482,285 in fiscal 2025 compared to no revenues from continuing operations in fiscal 2024. The increase was attributable to (i) the launch of Foodservice Packaging Distribution following its acquisition on March 31, 2025, and (ii) the commencement of initial customer billings under the Robotics-as-a-Service (“RaaS”) segment. The absence of revenues in the prior year fully accounts for the year-over-year increase.
B. Cost of Sales
Cost of sales was $412,503 in fiscal 2025, reflecting direct product sourcing, distribution, and equipment deployment costs associated with the packaging and RaaS businesses. As both segments only commenced near the end of fiscal 2025, no comparable costs were recorded in fiscal 2024.
C. Impairment of Goodwill
In fiscal 2025, the Company recognized a full impairment charge of $897,542 related to goodwill previously assigned to the RaaS (Robotics-as-a-Service) reporting unit. The impairment was triggered by continued operating losses, minimal revenues, and the inability to achieve the planned commercialization milestones for the legacy RaaS platform.
Subsequent to the impairment, the Company initiated a strategic realignment of its robotics technology initiatives under Skytech, a newly acquired subsidiary focused on integrating advanced automation and sensor systems into its future product roadmap. The goodwill impairment relates solely to historical RaaS operations and does not affect the carrying value of assets or goodwill attributable to Skytech.
No goodwill impairment was recorded in fiscal 2024.
D. Depreciation and Amortization
Depreciation and amortization totaled $45,552 in fiscal 2025 compared to none in the prior year. The increase reflects the capitalization of property, equipment, and intangible assets acquired as part of the SWC acquisition, which support both the packaging and RaaS operations.
E. General and Administrative Expenses
General and administrative expenses were $3,673,760 in fiscal 2025, compared to $712,052 in fiscal 2024. The $2,961,708 increase reflects the build-out of corporate infrastructure to support public company compliance and governance, expansion of finance, legal, and IT functions, and personnel costs associated with scaling the RaaS business. The increase also includes nonrecurring start-up costs incurred to establish the foodservice packaging distribution business following its acquisition.
F. Loss from operations
Loss from operations was $4,547,072 in fiscal 2025, compared to $712,052 in fiscal 2024. The increase of $3,789,468 was primarily due to higher general and administrative expenses, recognition of the goodwill impairment charge, and the addition of cost of sales and depreciation related to the newly launched packaging and RaaS operations.
G. Other income (expense) – net
Other expense, net, was $3,389,112 in fiscal 2025 compared to $2,241,410 in fiscal 2024, an unfavorable change of $1,147,702. The increase in expense was driven by higher interest costs associated with financing activities, amortization of debt issuance costs, and fair value losses on financing instruments and derivatives.
H. Loss from Continuing Operations
Loss from continuing operations totaled $7,936,184 in fiscal 2025, compared to $2,953,462 in fiscal 2024. The increase of $4,982,722 reflects the combined impact of the goodwill impairment, increased general and administrative costs, and higher financing and non-operating expenses.
I. Loss from Discontinued Operations
Loss from discontinued operations, which relates to the legacy Snacks and Beverages segment, was $179,694 in fiscal 2025 compared to $282,044 in fiscal 2024. The $102,350 reduction in loss reflects lower exit-related costs as the segment continued to wind down.
J. Net Loss
Net loss was $8,115,878 in fiscal 2025 compared to $3,235,506 in fiscal 2024, an unfavorable change of $4,880,372. The larger net loss primarily reflects the launch of packaging and RaaS operations (including associated start-up losses), the recognition of the goodwill impairment, increased corporate overhead, and higher non-operating expenses. See discussion of all items above.
For the fiscal years ended June 30, 2024, and 2023 we had gross sales
of $89,639 and $182,856, respectively and net revenues (Net Revenues are defined as Gross Sales, less slotting fees, sales discounts,
and certain other revenue reductions) of $367 and $49,450, respectively, and incurred operating expenses of $1,077,939 and $2,202,355
respectively. During the nine months ending March 31, 2024, the pivot from ice cream sales to direct-to-consumer sales of our cookies
only commenced in the third quarter ending March 31, 2024. As we have shifted from product sales at retail and wholesale to direct to
consumer, we do not expect to incur slotting fees in the future, unless we determine to introduce our current product offerings to a retail
format.
Costs and expenses
For the fiscal years ended June 30, 2024 and 2023,
cost of product sold decreased from $277,843 to $107,395. This is due to a decrease in the number of products sold as we shifted from
product sales at retail and wholesale to direct to consumer.
For the fiscal years ended June 30, 2024 and 2023,
advertising and promotional expenses decreased from $144,859 (2023) to $56,664 (2024). This decrease is largely due to us pausing advertising
and promotional efforts with respect to our discontinued line of ice-cream products during the year. In addition, certain previously booked
marketing expenditures during the fiscal year ended June 30, 2023, were reversed in the fiscal year ended June 30, 2024, upon non-provision
of services resulting in a reduction to the overall costs in the current fiscal year.
For the fiscal years ended June 30, 2024, and
2023, selling, general, and administrative expenses decreased from $838,413 (2023) to $175,190 (2024). In fact the Company’s expenditures
on selling, general and administrative costs was substantially reduced period over period, predominantly as a result of sizeable impairments
to inventory of $416,701 during fiscal 2023 as compared to only $4,803 for the year ended June 30, 2024. The Company undertook impairments
of its spoiled, damaged or unsaleable inventory in the year ended June 30, 2023 as the Company shifted from ice-cream sales to direct
to consumer sales of cookie products.
For the fiscal years ended June 30, 2024, and
2023, professional fees decreased from $941,240 to $738,690. This includes legal fees, marketing consulting, accounting and auditor fees,
and other paid consultants. The decrease is largely related to financing activities during the year ending June 30, 2023, including the
filing of a registration statement and the fees that tend to accompany such transactions, a significant portion of which do not involve
cash expenditures, but are tied to the valuation of shares and warrants issued to consultants, with no comparable expenses in fiscal year
2024.
Total operating expenses include those expenses
associated with running the operating portion of our business (such as the manufacturing our snacks, advertising for our product, warehousing,
freight, and the like plus the costs and expenses related to our newest acquisition in February 2024 of FVFH). It also includes certain
cash and non-cash expenses incurred by us related to activities such as SEC compliance, fundraising activities, and maintaining our public
entity in good standing. Our revenues and operations are currently limited, therefore expenses relating to financing and compliance activities
make up a larger portion of our total expenses than they might in a larger company.
For the fiscal years ended June 30, 2024 and 2023,
the loss from operations decreased from $2,202,355 (2023) to $1,077,939 (2024). As discussed above, the major components of this decrease
was the reduction in advertising and marketing spend, a substantial reduction to professional fees and SGA expenses period over period,
and a substantial write down of obsolete inventory in the year ended June 30, 2023 with no comparative impairments to inventory in the
year ended June 30, 2024.
Other Income (Expense) – Net
Other expense, net, was $(3,389,112) in fiscal 2025 compared to $(2,241,410) in fiscal 2024, an unfavorable change of $1,147,702 (51%). The increase in expense was primarily attributable to new acquisition-related derivative items (D and F – SWC notes acquired) and the loss on settlement of pre-existing assets (prior to acquisition of SWC) (G), partially offset by lower interest expense (E) and a gain on debt extinguishment – derivative liabilities (H).
A — Interest income. Increased $57,520, or 327%, to $75,119 in fiscal 2025 compared to $17,599 in fiscal 2024. The increase reflects accrued interest income on a higher loan balance during 2025.
B — Other income. Increased $9,810 in fiscal 2025 due to miscellaneous, non-recurring receipts; there was no comparable item in 2024.
C — Loss on debt extinguishment. Increased slightly by $2,225, to $(113,955) in fiscal 2025 from $(111,730) in fiscal 2024. In both years, this line item reflected one-time non-cash losses related to modifications and settlements of debt instruments.
D — Derivative expense. New non-cash charge of $(653,792) in fiscal 2025, compared to none in 2024. This arose from debt instruments acquired with SWC that became convertible upon closing on March 31, 2025, triggering recognition of an embedded derivative liability at fair value. The excess of the derivative’s initial fair value over proceeds was expensed immediately.
E — Interest expense (including amortization of debt discount). Decreased $621,212, or 29%, to $(1,526,067) in fiscal 2025 from $(2,147,279) in fiscal 2024. The decrease was primarily due to lower non-cash amortization of debt discounts ($332,021 in 2025 versus $638,194 in 2024) and the settlement of higher-cost debt.
F — Change in fair value of derivative liabilities. New non-cash loss of $(190,102) in fiscal 2025, arising from period-end remeasurement of embedded conversion features on SWC-related convertible notes. No comparable item existed in 2024.
G — Loss on settlement of pre-existing assets. New $(1,490,803) non-cash loss in fiscal 2025, recognized upon settlement of intercompany advances among SWC, FHVH, and NGTF, such pre-existing relationships are measured and recognized separately from the business combination.
H — Gain on debt extinguishment – derivative liabilities. New gain of $500,678 in fiscal 2025, resulting from the remeasurement of the derivative liability upon repayment and conversion of principal on a convertible note (Loan #17), consistent with ASC 470-50.
For the fiscal years ended June 30, 2024 and 2023, total other expenses
decreased to $2,246,839 from $3,999,435. The majority of these expenses are related to accounting treatment applied to financing costs
and debt and the amortization of debt discount. During the fiscal year ended June 30, 2024 we recorded amortization of debt discount of
$638,194, loss on extinguishment of debt of $111,730, financing costs of $1,082,360. During the fiscal year ended June 30, 2023, we recorded
amortization of debt discount of $1,265,893, financing costs of $2,199,273, a loss on extinguishment of debt of $361,500. These are not
actual cash expenses but a function of the way certain financing activities are accounted for. Interest expenses totaled $432,154 and
$172,769 and interest income was $17,599 and $0 in the fiscal years ended June 30, 2024 and 2023, respectively.
Net loss for the year ended June 30, 2025, was $8,115,878, compared to a net loss of $3,235,506 for the year ended June 30, 2024. This represents an increase in net loss of $4,880,372, or 151%.
The increase in net loss was primarily the result of:
The majority of the year-over-year increase in net loss reflects the Company’s strategic acquisitions of SWC and Foodservice Packaging and the integration of those businesses, coupled with acquisition-related financing structures. Many of these charges were non-cash and non-recurring in nature but were necessary to position the Company for future growth.
Our net loss in the fiscal year ended June 30, 2024 totaled $3,235,506
as compared to $6,068,384 in the fiscal year ended June 30, 2023. The decrease to the net loss is directly related to a substantial decrease
in financing costs and amortization of debt discounts, as well as a decrease to our overall operating costs by approximately one-third.
Deemed Dividend
The Company has never declared dividends, however as set out below,
during the fiscal year ended June 30, 2022 and 2021, upon issuance of a total of 335 and 4,665 shares of B Preferred,
respectively, the Company recorded a deemed dividend as a result of beneficial conversion feature associated with the transaction.
In connection with certain conversion terms provided
for in the designation of the B Preferred, pursuant to which each share of B Preferred is convertible into 5,000 shares of common
stock and 5,000 warrants, the Company recognized a beneficial conversion feature upon the conclusion of the transaction in the
amount of $4,431,387 through June 30, 2022. The beneficial conversion feature was treated as a deemed dividend, and fully amortized
on the transaction date due to the fact that the issuance of the B Preferred was classified as equity.
During the years ended June 30, 2024 and June
30, 2023 the Company recorded an additional deemed dividend of $84,106 and $1,136,946 in relation to the B Preferred stock and downward
price adjustments to certain warrants.
Customers
During fiscal 2024 our customers consist solely
of customers purchasing Nightfood ice cream products, prior to the discontinuation of the line in fiscal 2024, and our current line of
cookie products. These product sales are primarily of individual consumers purchasing Nightfood snacks via our website or via third party
reseller platforms such as Tik Tok. In fiscal 2023 our customers consisted primarily of wholesale distributors of our ice cream pints
for resale to hotels and supermarkets. In FY 2023, we had one customer that accounted for 42% of our Gross Sales. One other customer accounted
for 29% and two others each accounted for between 7% and 10%. In the fiscal year ended June 30, 2024, we had no customers which accounted
for more than 10% of gross sales.
Vendors
During the year ended June 30, 2024, one vendor
accounted for approximately 70% of our cost of goods sold. During the year ended June 30, 2023, three vendors accounted for approximately
72% of our costs of goods sold.
Liquidity and Going Concern
As reflected in the accompanying consolidated financial statements, for the year ended June 30, 2025, the Company had:
Additionally, at June 30, 2025, the Company had:
Following its recent acquisitions of SWC and Skytech, the Company has initiated early customer deployments under its Robotics-as-a-Service (“RaaS”) model and commenced revenue-generating activities. While these deployments represent an important step toward building recurring revenue, revenues to date are not sufficient to fund ongoing operations. Based on current operating levels and cash usage forecasts, existing cash resources are not sufficient to fund operations for the twelve months following the issuance of these financial statements without additional financing.
Historically, the Company has relied on third-party and related-party debt financing. There is no assurance that additional financing will be available on commercially acceptable terms, or at all. Furthermore, there is no assurance that any funds raised will be sufficient to enable the Company to complete its initiatives or achieve profitable operations.
What changed in the latest 10-Q
Risk Factors
Not required for smaller reporting companies.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025”
New heading “A. Revenues - net”
New heading “B. Cost of Sales”
New heading “C. Depreciation and Amortization”
New heading “D. General and Administrative Expenses”
New heading “Loss from Operations”
New heading “E. Other Income (Expense) - net”
New heading “OTHER INCOME (EXPENSE) - NET”
New heading “Three Months Ended March 31, 2026 and 2025”
New heading “A - Interest Income”
New heading “B - Other Income”
New heading “C - Derivative Expense”
New heading “D - Interest Expense (including amortization of debt discount)”
New heading “E - Change in Fair Value of Derivative Liabilities”
New heading “Total Other Income (Expense) - net”
New heading “RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2026 AND 2025”
New heading “A. Revenues - net”
New heading “B. Cost of Sales”
New heading “C. Depreciation and Amortization”
New heading “D. General and Administrative Expenses”
New heading “E. Loss from Operations”
New heading “Segment Operating Performance”
New heading “F. Other Income (Expense) - net”
New heading “G. Net Loss from Continuing Operations”
New heading “H. Net Loss from Discontinued Operations”
New heading “OTHER INCOME (EXPENSE) - NET”
New heading “Nine Months Ended March 31, 2026 and 2025”
New heading “A - Interest Income”
New heading “B - Other Income”
New heading “C - Loss on Debt Extinguishment”
New heading “D - Derivative Expense”
New heading “E - Interest Expense (including amortization of debt discount)”
New heading “F - Change in Fair Value of Derivative Liabilities”
New heading “Total Other Income (Expense) - net”
New heading “HOTEL OPERATIONS DISCUSSION”
New heading “LIQUIDITY AND CAPITAL RESOURCES”
New heading “Liquidity and Going Concern”
New heading “Summary of Cash Flow Activities”
New heading “Operating Activities”
New heading “Investing Activities”
New heading “Financing Activities”
New heading “Critical Accounting Policies and Estimates”
New heading “Significant estimates for the nine months ended March 31, 2026 and 2025, respectively, include the following:”
Largest changes
“These factors, including recurring losses from continuing operations, limited operating cash flows, and dependence on debt and equity financing, continue to raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of issuance of the accompanying condensed consolidated financial statements. The accompanying financial statements have been prepared on a going-concern basis and do not include any adjustments to the carrying amounts or classifications of assets or liabilities that might result from this uncertainty.”see in full comparison
“In addition to internal development initiatives, the Company actively collaborates with sector-leading operators, manufacturers, technology partners, and enterprise customers to co-develop practical automation solutions tailored to industry-specific use cases. These partnerships allow the Company to design, refine, validate, and deploy technologies within live commercial environments, enabling product development driven by operational requirements, customer feedback, and real-world performance data rather than purely conceptual applications.”see in full comparison
“The three senior secured convertible notes generated aggregate net proceeds of $3,903,248. Each senior secured convertible note bears interest at 15% per annum (24% upon default). The increase in interest expense also reflects accrued default interest on instruments in default and significantly higher non-cash amortization of debt discount of $2,031,240 in the current period compared to $186,318 in the prior-year period.”see in full comparison
“Each of the Company’s senior secured convertible notes bears interest at 15% per annum (24% upon default). The increase in interest expense also reflects accrued default interest on instruments in default and significantly higher non-cash amortization of debt discount on the Company’s outstanding convertible notes.”see in full comparison
Full comparison: every changed paragraph (107)
Nightfood Holdings, Inc., dba TechForce Robotics (“Nightfood,” “NGTF,” “TechForce Robotics,” or the “Company”), operates through five wholly owned subsidiaries (excluding Nightfood, Inc. which is a discontinued operation) that collectively position us to capitalize on the accelerating demand for automation and efficiency in the hospitality and foodservice industries: TechForce Robotics, Inc. (formerly Skytech Automated Solutions Inc.), Future Hospitality Ventures Holdings Inc. (d/b/a RoboOp365), SWC Group, Inc. (d/b/a CarryOutSupplies.com), Victorville Treasure Holdings, LLC and Treasure Mountain Holdings, LLC.
The Company’s operations span Robotics-as-a-Service (“RaaS”), autonomous service robotics, enterprise automation, hospitality technology, supply-chain support, custom engineering, and operational infrastructure designed to support scalable commercial deployments. Through its subsidiaries and strategic relationships, the Company is focused on integrating AI-Enhanced robotics and automation technologies into real-world operating environments to improve labor efficiency, workflow optimization, customer service, and operational consistency.
In addition to internal development initiatives, the Company actively collaborates with sector-leading operators, manufacturers, technology partners, and enterprise customers to co-develop practical automation solutions tailored to industry-specific use cases. These partnerships allow the Company to design, refine, validate, and deploy technologies within live commercial environments, enabling product development driven by operational requirements, customer feedback, and real-world performance data rather than purely conceptual applications.
The Company also continues to pursue strategic acquisitions, distribution relationships, manufacturing collaborations, and vertical integration initiatives intended to expand its technological capabilities, commercialization platform, operational footprint, and long-term market penetration strategy.
On
September 30, 2025, the Company completed the acquisition of RanchoTreasure MirageMountain HiltonHoldings, LLC, the owner of the Hilton Garden Inn Palm Springs
- Rancho Mirage, for total consideration of approximately $42.28 million (excluding contingent consideration of $4.8 million), which
was satisfied through the issuance of 176,167 shares of Series C Convertible Preferred Stock.
The
Company believes that SWC (anddoing itsbusiness commercial used nameas CarryOutSupplies.com) is one of the most recognized names in the custom-printed
foodservice packaging industry, serving as both a revenue-generating subsidiary and a strategic channel for introducing our robotics
and automation solutions to the market. With over 6,000 customers served across the United States since inception, SWC has established
a strong reputation for quality, reliability, and service.
Note
2 to the consolidated financial statements, presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, 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 sixnine months ended DecemberMarch 31, 2025.2026.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
A. Revenues - net
Revenues were $2,709,023 for the three months ended March 31, 2026, compared to $1,264 in the prior-year quarter. Current-quarter continuing-operations revenues by reportable segment were:
The prior-year quarter included only incidental revenues; the hotels had not yet been acquired and SWC was acquired on the last day of that quarter. See “Hotel Operations Discussion” below.
B. Cost of Sales
Cost of sales was $724,361 for the current quarter, compared to none in the prior-year quarter, reflecting property-level operating costs at the two hotels (payroll, utilities, guest supplies, franchise and management fees, and food and beverage costs), product and distribution costs at the foodservice packaging operation, and direct deployment costs in the robotics business. Cost of sales attributable to the legacy snacks and beverages business is presented within the loss from discontinued operations line item for both periods and is therefore not reflected in the continuing-operations cost of sales above.
C. Depreciation and Amortization
Depreciation and amortization expense was $1,063,102 for the current quarter, compared to none in the prior-year quarter. The increase reflects a full quarter of depreciation of the hotel buildings, land improvements, and furniture, fixtures and equipment acquired during the first quarter of fiscal 2026, amortization of acquired franchise, customer relationship, and other intangible assets, and amortization of operating lease right-of-use assets recognized in connection with the hotel and corporate operations.
D. General and Administrative Expenses
General and administrative expenses were $5,091,316 for the current quarter, compared to $1,566,833 in the prior-year quarter, an increase of $3,524,483, or 225%. The principal drivers were:
Loss from Operations
Loss from operations widened to $(4,169,756) for the current quarter from $(1,565,569) in the prior-year quarter, an increase in the operating loss of $2,604,187, or 166%. The hotel properties continue to operate within their stabilization period (during which occupancy and rate levels are typically below long-term targets while operating costs and capital improvement requirements remain elevated), and the Company is absorbing the full cost structure of an expanded multi-segment public company. Current-quarter revenues did not yet cover current-quarter operating costs and depreciation and amortization.
E. Other Income (Expense) - net
Other expense, net, was $(1,250,441) for the current quarter, compared to $(944,204) in the prior-year quarter, an increase in net other expense of $306,237, or 32%. The increase reflects substantially higher interest expense and debt discount amortization on the Company’s expanded debt structure (including hotel mortgage notes and convertible notes payable issued during fiscal 2026), partially offset by a $1,290,823 non-cash gain on the change in fair value of derivative liabilities. See further detail below.
Net Loss
Net loss was $(5,420,684) for the current quarter, compared to $(2,541,552) in the prior-year quarter, an increase of $2,879,132, or 113%. The principal drivers of the increase were:
OTHER INCOME (EXPENSE) - NET
Three Months Ended March 31, 2026 and 2025
A - Interest Income
Interest income was none for the current quarter, compared to $3,811 in the prior-year quarter. The decrease reflects the absence of an interest-bearing acquisition note receivable that was outstanding during the prior-year quarter.
B - Other Income
Other income was $6,101 for the current quarter, with no comparable amount in the prior-year quarter, consisting of miscellaneous incidental items.
C - Derivative Expense
Derivative expense was $(590,630) for the current quarter, compared to $(611,583) in the prior-year quarter, a modest decrease of $20,953. The current-quarter charge reflects the bifurcation of conversion features on the three convertible notes issued during the current quarter:
Derivative expense represents the excess, at issuance, of the fair value of bifurcated conversion features and other embedded derivatives over the net proceeds received on the underlying convertible debt instruments.
D - Interest Expense (including amortization of debt discount)
Interest expense, including amortization of debt discounts, increased $1,620,303, or 482%, to $1,956,735 for the current quarter from $336,432 in the prior-year quarter. The increase reflects substantially higher average outstanding debt during the current quarter, including the hotel mortgage notes payable and the Company’s previously-issued senior secured convertible note and other notes payable outstanding throughout the quarter, together with three additional convertible notes payable issued during the current quarter:
Each of the Company’s senior secured convertible notes bears interest at 15% per annum (24% upon default). The increase in interest expense also reflects accrued default interest on instruments in default and significantly higher non-cash amortization of debt discount on the Company’s outstanding convertible notes.
E - Change in Fair Value of Derivative Liabilities
The Company recognized a non-cash gain of $1,290,823 for the current quarter from the favorable remeasurement of its bifurcated derivative liabilities to fair value at the reporting date. No comparable adjustment was recorded in the prior-year quarter as no instruments with bifurcated derivative liabilities were outstanding during that period. Because the fair value of these instruments is highly sensitive to changes in the Company’s common stock price and expected volatility, the period-over-period change can result in significant gains or losses that may not correlate with the Company’s operating performance.
Total Other Income (Expense) - net
Total net other expense increased to $(1,250,441) for the current quarter from $(944,204) in the prior-year quarter, an increase of $306,237, or 32%, principally driven by the increase in interest expense and amortization of debt discount (item D), partially offset by the non-cash gain on the change in fair value of derivative liabilities (item E).
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2026 AND 2025
A. Revenues - net
Revenues were $5,681,079 for the nine months ended March 31, 2026, compared to $1,681 in the prior-year period. The increase principally reflects the contribution of the two hotel properties acquired during the first quarter of fiscal 2026 (closed August 27, 2025 and September 30, 2025) and a full nine months of contribution from the foodservice packaging operation. Current-period continuing-operations revenues by reportable segment were:
The prior-year period was substantially pre-revenue with respect to continuing operations.
B. Cost of Sales
Cost of sales was $1,974,415 for the current period, compared to none in the prior-year period, reflecting the operating cost categories described in the corresponding three-month section. Prior-period cost of sales attributable to the legacy snacks and beverages business is presented within the loss from discontinued operations line item and is not reflected in the continuing-operations cost of sales above.
C. Depreciation and Amortization
Depreciation and amortization expense was $2,414,226 for the current period, compared to none in the prior-year period, reflecting depreciation of hotel and other acquired property and equipment, amortization of acquired intangible assets, and amortization of operating lease right-of-use assets, all of which were placed in service during the first quarter of fiscal 2026 and accordingly had no prior-year comparable activity within continuing operations.
D. General and Administrative Expenses
General and administrative expenses were $11,143,240 for the current period, compared to $1,977,559 in the prior-year period, an increase of $9,165,681, or 463%. Non-cash stock-based compensation alone accounted for $2,177,560 of current-period expense (including $1,810,840 from the vesting of Series C convertible preferred stock issued as compensation and $366,720 from common stock issued for services), and the Company recognized an additional $253,400 of expense from common stock issued for intellectual property. The remaining increase reflects expanded compensation and headcount across the segments and corporate functions, public company professional fees and compliance costs, integration and start-up expenses, and $58,769 of bad debt expense on receivables from new operations.
E. Loss from Operations
Loss from operations widened to $(9,850,802) for the current period from $(1,975,878) in the prior-year period, an increase in the operating loss of $7,874,924, or 399%. The wider loss reflects partial-period and stabilization-period economics of the hotel properties, the addition of segment-level costs in foodservice packaging and robotics, and the corporate overhead and stock-based compensation of an expanded multi-segment public company. Current-period revenues of $5,681,079 did not yet cover current-period operating costs and depreciation and amortization.
Segment Operating Performance
The consolidated loss from operations of $(9,850,802) reflects performance across the Company’s three reportable segments and corporate-level activities that are not allocated to the segments:
F. Other Income (Expense) - net
Other expense, net, was $(3,550,687) for the current period, compared to $(1,635,837) in the prior-year period, an increase in net other expense of $1,914,850, or 117%. The increase principally reflects significantly higher interest expense and amortization of debt discount and increased non-cash derivative expense, partially offset by a non-cash gain on the change in fair value of derivative liabilities and the absence of a prior-year loss on debt extinguishment. See further detail below.
G. Net Loss from Continuing Operations
Net loss from continuing operations was $(13,401,489) for the current period, compared to $(3,611,715) in the prior-year period, an increase of $9,789,774, or 271%, reflecting the wider operating loss (items A through E) and the increase in net non-operating expense (item F).
H. Net Loss from Discontinued Operations
Net loss from discontinued operations was $(3,050) for the current period, compared to $(174,054) in the prior-year period, a decrease in the loss of $(171,004), or 98%. The improvement reflects the substantial completion of wind-down activities for the legacy snacks and beverages business effective June 30, 2025.
I. Net Loss
NGTF insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 5,000 shares, about $150) and open-market sales in 0 filings. Net open-market shares: 5,000 (purchases minus sales); net value about $150.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-15 | Stauber Ronald J |
Open-market purchase | 5,000 | $0.03 | $150 |
Well-known investors holding NGTF (13F)
None of the 59 investors we track reported a position in their latest 13F.