NGTF 8-K/A
NightFood Holdings, Inc. (NGTF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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| Not applicable | Not applicable | Not applicable |
EXPLANATORY NOTE
Item 9.01 Financial Statements and Exhibits.
The Audited Financial Statements and accompanying notes of Treasure Mountain for year ended December 31,2024 and the year ended December 31, 2023, are filed herewith as Exhibit 99.1 and are incorporated herein by reference.
The Unaudited Financial Statements and accompanying notes of Treasure Mountain Holdings for the nine months ended September 30, 2025, and for the nine months ended September 30, 2024 are filed herewith as Exhibit 99.2 and are incorporated herein by reference.
The Unaudited Pro Forma Condensed Combined Financial Statements and accompanying notes of Treasure Mountain Holdings for the year ended June 30, 2025 and for the three months ended September 30, 2025 are filed herewith as Exhibit 99.3 and are incorporated herein by reference.
(d) Exhibits
| * The schedules and exhibits to the Agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: January 16, 2026
| NIGHTFOOD HOLDINGS, INC. | ||
| By: | /s/ JIMMY CHAN | |
| Name: | Jimmy Chan | |
| Title: | Chief Executive Officer | |
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Exhibit 99.1
Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
| 1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Members of Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage (the “Company”) as of December 31, 2024 and 2023, and the related statements of operations, Members’ deficit, and cash flows for the years ended December 31, 2024 and 2023, and the related notes (collectively referred to as the financial statements).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the period ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America.
Empasis of a Matter - Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred net losses and has an accumulated deficit. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the board of directors and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We did not identify any critical audit matters during the current period audit.
We have served as the Company’s auditor since 2025
Diamond Bar, California
January 16, 2026
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Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Balance Sheets
| December 31, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 73,899 | $ | 88,908 | ||||
| Accounts receivable | 17,156 | 42,054 | ||||||
| Inventory | 4,748 | 6,292 | ||||||
| Prepaids and other | 5,116 | 5,116 | ||||||
| Total Current Assets | 100,919 | 142,370 | ||||||
| Property and equipment - net | 9,727,614 | 10,100,610 | ||||||
| Intangible asset | 16,000 | 16,000 | ||||||
| Total Assets | $ | 9,844,533 | $ | 10,258,980 | ||||
| Liabilities and Members’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 2,067,026 | $ | 1,525,612 | ||||
| Mortgage note payable | 520,119 | 248,245 | ||||||
| Note payable | 750,000 | - | ||||||
| Total Current Liabilities | 3,337,145 | 1,773,857 | ||||||
| Long Term Liabilities | ||||||||
| Mortgage note payable | 9,869,943 | 10,390,062 | ||||||
| Total Long Term Liabilities | 9,869,943 | 10,390,062 | ||||||
| Total Liabilities | 13,207,088 | 12,163,919 | ||||||
| Members’ Deficit | (3,362,555 | ) | (1,904,939 | ) | ||||
| Total Liabilities and Members’ Deficit | $ | 9,844,533 | $ | 10,258,980 | ||||
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Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Statements of Operations
| For the Years Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | 4,229,426 | $ | 4,515,109 | ||||
| Costs and expenses | ||||||||
| Cost of revenues | 1,283,382 | 1,276,391 | ||||||
| General and administrative expenses | 2,334,173 | 2,409,545 | ||||||
| Total costs and expenses | 3,617,555 | 3,685,936 | ||||||
| Income from operations | 611,871 | 829,173 | ||||||
| Other income (expense) | ||||||||
| Other income | 61,724 | 54,919 | ||||||
| Interest expense | (536,060 | ) | (546,594 | ) | ||||
| Other expense | (240,040 | ) | (315,504 | ) | ||||
| Total other income (expense) - net | (714,376 | ) | (807,179 | ) | ||||
| Net income (loss) | $ | (102,505 | ) | $ | 21,994 | |||
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Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Statement of Changes in Members’ Deficit
For the Years Ended December 31, 2024 and 2023
| Members’ | ||||
| Deficit | ||||
| December 31, 2022 | $ | (1,366,072 | ) | |
| Contributions | 3,008,910 | |||
| Distributions | (3,569,771 | ) | ||
| Net income | 21,994 | |||
| December 31, 2023 | (1,904,939 | ) | ||
| Contributions | 2,822,592 | |||
| Distributions | (4,177,703 | ) | ||
| Net loss | (102,505 | ) | ||
| December 31, 2024 | $ | (3,362,555 | ) | |
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Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Statements of Cash Flows
| For the Years Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net income (loss) | $ | (102,505 | ) | $ | 21,994 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||||
| Depreciation | 409,436 | 446,604 | ||||||
| Changes in operating assets and liabilities | ||||||||
| (Increase) decrease in | ||||||||
| Accounts receivable | 24,898 | 13,936 | ||||||
| Inventory | 1,544 | (2,421 | ) | |||||
| Prepaids and other | - | 1,440 | ||||||
| Increase (decrease) in | ||||||||
| Accounts payable and accrued liabilities | 541,414 | 372,238 | ||||||
| Net cash provided by operating activities | 874,787 | 853,791 | ||||||
| Investing activities | ||||||||
| Cash paid for building improvements | (36,440 | ) | (76,536 | ) | ||||
| Net cash used in investing activities | (36,440 | ) | (76,536 | ) | ||||
| Financing activities | ||||||||
| Proceeds from note payable | 750,000 | - | ||||||
| Repayments on mortgage note payable | (248,245 | ) | (231,746 | ) | ||||
| Contributions | 2,822,592 | 3,008,910 | ||||||
| Distributions | (4,177,703 | ) | (3,569,771 | ) | ||||
| Net cash used in financing activities | (853,356 | ) | (792,607 | ) | ||||
| Net decrease in cash | (15,009 | ) | (15,352 | ) | ||||
| Cash - beginning of year | 88,908 | 104,260 | ||||||
| Cash - end of year | $ | 73,899 | $ | 88,908 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 536,060 | $ | 546,594 | ||||
| Cash paid for income tax | $ | - | $ | - | ||||
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Note 1 - Organization and Nature of Operations
Organization and Nature of Operations
Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage (“Rancho Mirage,” “RM,” “we,” “our,” or the “Company”), a California limited liability company formed in 2013, owns and operates the Hilton Garden Inn Palm Springs – Rancho Mirage. The hotel, located at 71700 Highway 111 in Rancho Mirage, California, consists of 120 guest rooms and provides full-service lodging accommodations and amenities to business and leisure travelers (the “Property”).
Acquisition by Nightfood Holdings, Inc.
On September 30, 2025, the Company was acquired by Nightfood Holdings, Inc. through a share exchange agreement under which Nightfood Holdings obtained 100% of the Company’s issued and outstanding equity interests. In exchange, the Company’s equity holders received 176,167 shares of Nightfood Holdings’ Series C Convertible Preferred Stock, valued at approximately $42,280,000. The agreement also provides for additional contingent consideration of up to 20,000 shares of Series C Convertible Preferred Stock, with a potential value of $4,800,000.
Based on the as-converted value of the underlying common shares as of the acquisition date, the total estimated fair value of the consideration was $47,080,000.
Following the completion of the transaction, Rancho Mirage became a wholly owned subsidiary of Nightfood Holdings, Inc. The purchase price allocation and the related accounting for the acquisition will be prepared and reported by Nightfood Holdings, Inc. within its consolidated financial statements.
Additional details regarding the acquisition are provided in the Form 8-K filed with the U.S. Securities and Exchange Commission on October 6, 2025.
Financial Statement Filing Requirements
These financial statements are being presented in accordance with the requirements of Rule 3-05 of Regulation S-X, as they are included to satisfy the SEC’s financial reporting requirements applicable to significant business acquisitions. Accordingly, the accompanying financial statements represent the historical financial information of the Company prior to its acquisition by Nightfood Holdings, Inc.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
The Company’s operations are organized as follows:
Hospitality Operations
The Company owns the underlying real estate, buildings and improvements, equipment, and hotel operating assets necessary to conduct operations at the Property. The Company is responsible for funding working capital requirements, maintaining the physical condition of the Property, and ensuring that hotel operations comply with applicable brand standards, regulatory requirements, and contractual obligations.
Franchise Agreement
The Property is operated under a long-term franchise agreement with Hilton, granting the Company the right to operate the hotel under the Hilton Garden Inn brand. The agreement provides access to Hilton’s trademarks, reservation systems, marketing programs, and brand-standard operating procedures. In exchange, the Company pays various franchise-related fees, including:
| ● | Royalty fees based on a percentage of room revenue; | |
| ● | Marketing, loyalty program, and reservation assessments supporting brand-wide advertising and distribution systems; and | |
| ● | System fees associated with required technology platforms and brand programs. |
The franchise agreement requires the Company to comply with Hilton’s operating standards, brand specifications, and property improvement plan (“PIP”) obligations. Transfers, encumbrances, or material modifications of the franchised hotel generally require the franchisor’s prior written consent.
The Company is currently in compliance with terms of its franchise agreement.
Hotel Management
In accordance with the franchise agreement, the Company has engaged a third-party hotel management company to oversee day-to-day operations of the Property. The management company is responsible for staffing, operating, and administering the hotel in compliance with Hilton’s brand standards. The Company retains responsibility for capital expenditures, compliance with franchisor requirements, and oversight of the Property’s financial and operational performance.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Operating Status
The Property operates as a fully functional hotel and generates recurring revenues through lodging, food and beverage services, and other ancillary hospitality offerings. The Company continues to maintain and invest in the Property to support operating performance and ongoing compliance with brand standards.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”).
Liquidity and Going Concern
As reflected in the accompanying financial statements, for the year ended December 31, 2024, the Company had:
| ● | Net loss of $102,505; and |
| ● | Net cash provided by operations was $874,787 |
Additionally, at December 31, 2024, the Company had:
| ● | Members’ deficit of $3,362,555 |
| ● | Working capital deficit of $3,236,226; and |
| ● | Cash on hand of $73,899 |
The Company generates revenue from the operation of RM; however, current levels of operating cash flows are not sufficient to fully support ongoing operating costs, required property maintenance, franchise obligations, and debt service. While the Property is an established, revenue-generating hotel, its operating performance for the periods presented has not produced positive cash flow adequate to meet the Company’s liquidity needs.
The Company has historically relied on a combination of hotel operating revenues and financing from its members and lenders to fund operations and capital requirements. Future liquidity will depend on the Property’s operating performance, the availability of additional financing, and the timing and magnitude of capital expenditures required to maintain franchise standards.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Liquidity Outlook
Based on current operating results, obligations coming due, and projected cash usage, management believes that the Company’s existing cash resources are not sufficient to fund operations for the twelve months following the issuance of these financial statements without obtaining additional financial support.
There is no assurance that such financing will be available on commercially reasonable terms or in sufficient amounts, and the Company’s ability to meet its obligations as they become due will depend on securing additional capital or improving operating performance beyond currently anticipated levels.
Going Concern
The recurring operating losses, negative operating cash flows, members’ deficit, working capital deficit, and limited cash resources raise substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date these financial statements are issued.
The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty and have been prepared on the basis that the Company will continue as a going concern and realize its assets and discharge its liabilities in the ordinary course of business.
Management’s strategic plans to address these matters include the following:
| ● | Continuing efforts to improve hotel operating performance through revenue management initiatives and cost controls; | |
| ● | Evaluating opportunities to refinance existing indebtedness or obtain supplemental financing; | |
| ● | Seeking additional capital contributions from members, as needed; and | |
| ● | Managing capital expenditures to align with available liquidity while maintaining compliance with franchise standards. |
There can be no assurance that these plans will be successful. Failure to obtain additional financing or achieve improved operating performance may require the Company to modify operations, delay capital projects, or consider other strategic alternatives.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Note 2 - Summary of Significant Accounting Policies
Business Segments and Expense Disclosure
The Company follows ASC 280, Segment Reporting, which requires entities to report financial information based on the way management organizes and evaluates operations.
The Company owns and operates a single hotel property - RM, and its activities consist solely of providing lodging and related guest services. The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and reviews financial information at the entity level for purposes of assessing performance and allocating resources. The CODM is not provided with, nor does he review, discrete financial information for multiple components of the business.
Accordingly, management has determined that the Company operates as one reportable operating segment: Hotel Operations.
Because the Company has a single operating segment, no additional disaggregated segment information is required under ASC 280. The measure of segment profit or loss used by the CODM is the Company’s operating income (loss), which is presented in the accompanying statements of operations.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the recognition of revenues and expenses during the reporting period. Actual results may differ from those estimates, and such differences may be material.
Estimates and assumptions are evaluated on an ongoing basis and are based on historical experience, current economic conditions, industry trends, and other relevant quantitative and qualitative factors. Changes in estimates are recorded in the period in which they become known and are accounted for prospectively.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Significant estimates for the years ended December 31, 2024 and 2023, respectively, include:
| ● | Impairment evaluation of long-lived assets; and | |
| ● | Estimated useful lives of property and equipment. |
Risks and Uncertainties
The Company operates a single hotel property and is subject to various risks and uncertainties that may affect its financial condition, results of operations, and cash flows. In accordance with ASC 275, Risks and Uncertainties, factors that may impact the Company’s operating performance include:
| ● | Hospitality Industry Cycles: Changes in business and leisure travel patterns, seasonality, and local economic conditions may affect occupancy levels and room rates. | |
| ● | Macroeconomic Conditions: Inflation, labor cost pressures, rising interest rates, and changes in consumer spending may impact revenues and operating costs. | |
| ● | Operating Costs: Fluctuations in the cost and availability of labor, utilities, food and beverage products, and other hotel operating supplies may influence margins. | |
| ● | Competition and Market Dynamics: Competitive room pricing, new hotel supply, and changes in local market demand may affect the Property’s performance. | |
| ● | Weather, Natural Events, and Public Health: Adverse weather conditions, natural disasters, or public health concerns may disrupt travel or temporarily impact operations. | |
| ● | Liquidity and Financing: The Company’s ability to fund operations and capital needs depends on adequate liquidity and access to financing. | |
| ● | Regulatory Requirements: The Company is subject to federal, state, and local regulations related to hotel operations, labor, licensing, and franchise standards. |
Actual results could differ from management’s estimates, and the Company continues to monitor these risks and take actions intended to mitigate their potential impact.
Fair Value of Financial Instruments
The Company applies ASC 820, Fair Value Measurements, which defines fair value and establishes a three-level hierarchy based on the observability of inputs used in valuation:
| ● | Level 1 — Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2 — Observable inputs other than quoted Level 1 prices. | |
| ● | Level 3 — Unobservable inputs requiring significant judgment. |
The Company had no assets or liabilities measured at fair value on a recurring basis as of December 31, 2024 or 2023.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued liabilities, and debt obligations. These instruments are recorded at historical cost. The carrying amounts of these financial instruments approximate their fair values due to their short-term nature or because current borrowing rates and terms for similar instruments are readily available.
Nonrecurring fair value measurements use Level 3 inputs when required. No such fair value measurements were recorded during the years ended December 31, 2024 or 2023.
Cash and Cash Equivalents and Concentration of Credit Risk
For purposes of the statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.
At December 31, 2024 and 2023, respectively, the Company did not have any cash equivalents.
The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000.
At December 31, 2024 and 2023, respectively, the Company did not experience any losses on cash balances in excess of FDIC insured limits.
Accounts Receivable
The Company accounts for accounts receivable in accordance with ASC 310, Receivables. Accounts receivable are stated at their net realizable value, representing the amounts expected to be collected from customers.
Trade receivables primarily arise from the Company’s hotel operations and include:
| ● | Guest ledger receivables, representing charges incurred by in-house guests prior to settlement at check-out; and | |
| ● | City ledger receivables, representing amounts due from corporate accounts, groups, travel agencies, and other third-party billing arrangements. |
The Company does not require collateral and does not accrue interest on past-due balances.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Allowance for Expected Credit Losses
The Company evaluates the collectability of accounts receivable and records an allowance for expected credit losses in accordance with ASC 326, Financial Instruments—Credit Losses (CECL). The allowance is estimated using a provision-matrix approach that considers:
| ● | historical loss experience by receivable type, | |
| ● | customer aging and payment trends, | |
| ● | current economic conditions, and | |
| ● | reasonable and supportable forecasts. |
Guest ledger balances generally have short settlement periods and historically low loss experience, while city ledger balances are evaluated based on aging, customer credit quality, and historical write-offs. Receivables with similar risk characteristics are evaluated collectively. Accounts deemed uncollectible are written off against the allowance when collection efforts are exhausted.
The allowance for expected credit losses was $0 as of both December 31, 2024 and 2023.
The following is a summary of the Company’s accounts receivable at December 31, 2024 and 2023:
| December 31, 2024 | December 31, 2023 | |||||||
| Accounts receivable | $ | 17,156 | $ | 42,054 | ||||
| Less: allowance for credit losses | - | - | ||||||
| Accounts receivable - net | $ | 17,156 | $ | 42,054 | ||||
Bad Debt Expense
For the years ended December 31, 2024 and 2023, bad debt was as follows:
For the Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Bad debt expense | $ | - | $ | - | ||||
Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying statements of operations.
Inventory
The Company accounts for inventory in accordance with ASC 330, Inventory. Inventory is stated at the lower of cost or net realizable value (“LCNRV”), using the first-in, first-out (FIFO) method. Inventory consists primarily of food and beverage items and retail/minibar products held for sale in the ordinary course of hotel operations.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Hotel operating supplies not held for sale—such as guest amenities, linens, and cleaning supplies—are expensed as incurred and are not included in inventory.
Inventory Valuation and Reserves
Management evaluates inventory at each reporting date to determine whether adjustments are required for slow-moving, obsolete, or impaired items. In assessing potential LCNRV adjustments, management considers:
| ● | aging and turnover trends; | |
| ● | expected future demand; | |
| ● | historical usage and spoilage of perishable items; | |
| ● | current pricing and market conditions; and | |
| ● | estimated net realizable value. |
Any required adjustments are recorded within cost of revenues in the period identified.
The Company recorded no inventory write-downs or LCNRV adjustments during the periods presented.
At December 31, 2024 and 2023, inventory was as follows:
| Classification | December 31, 2024 | December 31, 2023 | ||||||
| Food and beverage | 4,748 | 6,292 | ||||||
Concentrations
The Company evaluates concentrations of risk in accordance with ASC 275, Risks and Uncertainties. A concentration exists when a single customer, supplier, geographic region, or other external factor represents a significant portion (generally over 10%) of revenues, receivables, or supply chain activity and could have a severe near-term impact on the Company’s financial condition or results of operations.
For all periods presented, the Company reviewed its customer base, supplier relationships, and geographic exposures and determined that no such concentrations exist that meet the threshold for disclosure.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Property and Equipment
Property and equipment are recorded at cost, net of accumulated depreciation, in accordance with ASC 360, “Property, Plant, and Equipment.” Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.
Repairs and maintenance expenditures that do not materially extend the useful life of an asset are expensed as incurred. Significant improvements or upgrades that increase the asset’s productivity, efficiency, or useful life are capitalized.
Property Improvement Plans (“PIPs”)
In connection with operating franchised hotel properties, the Company is periodically required under its franchise agreements to complete Property Improvement Plans (“PIPs”), which generally include renovations, replacements, and upgrades to guestrooms, public areas, building systems, and other components of the hotels.
PIP-related expenditures are evaluated under ASC 360 to determine whether they should be capitalized or expensed:
| ● | Capitalized PIP costs |
PIP costs are capitalized when they represent betterments or improvements that:
| ● | extend the useful life of the asset; | |
| ● | increase the asset’s capacity or efficiency; | |
| ● | materially upgrade the property to meet current brand standards; or | |
| ● | replace major components of the hotel. |
Capitalized PIP costs are recorded as part of buildings and improvements or FF&E and depreciated over their estimated useful lives.
| ● | Expensed as incurred |
Routine repairs, maintenance, cosmetic refreshes, and other PIP activities that do not extend useful life or enhance the asset’s functionality are expensed as incurred.
The determination of whether a PIP expenditure should be capitalized or expensed requires judgment and is based on the nature of the work performed, the condition of the underlying assets, and the extent to which the PIP activity enhances or extends the property’s utility.
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TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Disposals
Upon disposal or sale of property and equipment, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the statement of operations.
Impairment of Long-lived Assets
The Company evaluates the recoverability of long-lived assets, including identifiable intangible assets, in accordance with FASB ASC 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
An impairment review is triggered when events or circumstances indicate that the carrying value of an asset group may not be recoverable. Factors considered include, but are not limited to:
| ● | Significant changes in expected performance compared to prior forecasts, | |
| ● | Changes in asset utilization, including discontinued or modified use, | |
| ● | Negative industry or economic trends that impact asset value, and | |
| ● | Strategic shifts in the Company’s business operations. |
Impairment Assessment Process
When impairment indicators exist, the Company performs a recoverability test by comparing the undiscounted future cash flows expected to be generated from the use and ultimate disposition of the asset group to its carrying amount.
| ● | If the undiscounted cash flows exceed the carrying amount, no impairment is recognized. | |
| ● | If the undiscounted cash flows are less than the carrying amount, an impairment loss is recognized, measured as the excess of the carrying amount over the fair value of the asset. |
Impairment Results
For the years ended December 31, 2024 and 2023, respectively, the Company did not record any impairment losses.
| 17 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services transfers to the customer in an amount that reflects the consideration expected to be received. The Company’s revenues are derived solely from hotel operations at RM, including room rentals, food and beverage sales, and ancillary guest services.
ASC 606 Five-Step Model
The Company applies the five-step revenue recognition model as follows:
| 1. | Identify the contract with a customer – Guest room bookings, restaurant transactions, and event arrangements constitute contracts with defined rights, obligations, and payment terms. Collection is considered probable at inception. | |
| 2. | Identify performance obligations – |
| ○ | Each night of room occupancy is a distinct performance obligation. | |
| ○ | Each food and beverage sale represents a distinct performance obligation. | |
| ○ | Event, banquet, and other services each represent separate performance obligations. |
| 3. | Determine the transaction price – The transaction price consists primarily of fixed consideration stated in room rates, menu pricing, or event agreements. Taxes collected on behalf of governmental authorities are excluded from revenue. | |
| 4. | Allocate the transaction price – Contracts generally contain a single performance obligation; therefore, the full transaction price is allocated to that obligation. | |
| 5. | Recognize revenue when (or as) performance obligations are satisfied – |
| ○ | Room revenues are recognized over time on a daily basis as lodging services are provided. | |
| ○ | Food and beverage revenues are recognized at a point in time when goods or services are delivered. | |
| ○ | Event, banquet, and other ancillary revenues are recognized when the event occurs or the service is provided. | |
| ○ | Advance deposits are recorded as contract liabilities until the related services are performed. |
To provide further clarity on the nature, timing, and recognition of revenue, the Company’s revenue streams are discussed below:
Room Revenues
Room revenue is recognized over time as lodging services are provided. Guests typically settle charges at checkout or via credit card upon completion of the stay. Advance deposits are recorded as deferred revenue until the stay occurs.
| 18 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Food and Beverage Revenues
Food, beverage, and catering revenues are recognized at the point in time the related goods or services are provided. Deposits received in advance for catered events are recorded as deferred revenue until the event takes place.
Ancillary Revenues
Revenues from meeting and event space rentals, retail/minibar sales, and other guest services are recognized at the point in time the services are rendered or the rental period elapses.
Contract Assets and Contract Liabilities
Given the short-term nature of guest transactions and timing of payment, contract assets are not significant. Contract liabilities consist of advance deposits for rooms or events.
The Company had no deferred revenue (contract liabilities) as of December 31, 2024 or 2023.
Principal vs. Agent Consideration
The Company acts as the principal in substantially all hospitality transactions because it controls the goods and services before transfer to customers, sets pricing, and is responsible for fulfillment. Accordingly, revenue is reported on a gross basis.
Taxes Collected from Customers
Sales, occupancy, and similar taxes collected from guests and remitted to governmental authorities are excluded from revenue.
| 19 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Summary of Compliance with ASC 606 and ASU Updates
| Revenue Stream | Performance Obligation | Recognition Timing | Consideration Type | |||
| Hotel Operations | Provision of lodging and related guest services (rooms, food, beverage, and other ancillary services) | Point in time – revenue is recognized when the performance obligation is satisfied, typically upon guest occupancy (for rooms) or at the time goods/services are provided (for food, beverage, and ancillary services). | Fixed transaction price, generally settled at check-out. Prices exclude sales tax. |
The following represents the Company’s disaggregation of revenues for the years ended December 31, 2024 and 2023:
| For the Years Ended December 31, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| Revenue | % of Revenues | Revenue | % of Revenues | |||||||||||||
| Hotel operations | 4,229,426 | 100.00 | % | 4,515,109 | 100.00 | % | ||||||||||
Cost of Revenues
Cost of revenues for hotel operations consists of direct costs incurred to provide lodging, food and beverage, and related guest services. These costs are recognized in the same period as the related revenue.
Cost components primarily include:
● Room Operations – Housekeeping, front office, maintenance, laundry, and utilities directly related to guest accommodations.
● Food and Beverage – Cost of food, beverages, and related consumables used in restaurant, bar, and banquet operations.
● Labor and Benefits – Wages, benefits, and payroll taxes for personnel directly involved in providing guest services.
● Operating Supplies and Guest Amenities – Costs of linens, toiletries, and other consumables provided to guests.
● Other Direct Costs – Contract services, credit card commissions, and minor operating equipment.
Depreciation of hotel buildings, furnishings, and equipment is not included in cost of sales and is presented separately as Depreciation and Amortization within operating expenses.
| 20 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Income Taxes
The Company is a limited liability company and is treated as a pass-through entity for federal and applicable state income tax purposes. As a result, taxable income or loss of the Company is reported by the members on their respective income tax returns, and no provision for federal or state income taxes is included in the accompanying financial statements. The Company may be subject to certain state-level taxes, franchise fees, or other non-income-based taxes, which are recorded as incurred.
ASC 740 – Uncertain Tax Positions
The Company applies the guidance in ASC 740 related to accounting for uncertain tax positions. A tax position is recognized only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority.
As of December 31, 2024 and 2023, the Company had no uncertain tax positions that required recognition or disclosure. The Company also incurred no interest or penalties related to uncertain tax positions during the periods presented.
Advertising Costs
Advertising and marketing costs are expensed as incurred and classified within operating expenses.
Under the Company’s Hilton Franchise License Agreement, the Company is required to pay ongoing marketing and advertising program fees, which are included as part of franchise fees and recorded within general and administrative expenses in the statements of operations.
Accordingly, advertising and marketing costs are not presented as a separate advertising expense line item.
The Company did not recognize separately presented advertising or marketing expenses for the years ended December 31, 2024 and 2023.
| 21 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Related Parties
The Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and SEC Regulation S-X, Rule 4-08(k). Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.
Related parties include, but are not limited to:
| ● | Principal owners of the Company. | |
| ● | Members of management (including directors, executive officers, and key employees). | |
| ● | Immediate family members of principal owners and members of management. | |
| ● | Entities affiliated with principal owners or management through direct or indirect ownership. | |
| ● | Entities with which the Company has significant transactions, where one party has the ability to exercise control or significant influence over the management or operating policies of the other. |
A party is considered related if it has the ability to control or significantly influence the management or operating policies of the Company in a manner that could prevent either party from fully pursuing its own separate economic interests.
The Company discloses all material related party transactions, including:
| ● | The nature of the relationship between the parties. | |
| ● | A description of the transaction(s), including terms and amounts involved. | |
| ● | Any amounts due to or from related parties as of the reporting date. | |
| ● | Any other elements necessary for a clear understanding of the transactions’ effects on the financial statements. |
Related party disclosures are presented in accordance with ASC 850-10-50-1 through 50-6, which require disclosure of the nature, terms, and financial effects of material related party transactions. The Company also complies with SEC Regulation S-X, Rule 4-08(k), which requires disclosure of material related party balances and transactions, including their effect on the Company’s financial position and results of operations.
See Note 7 regarding member contributions and distributions.
| 22 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Recent Accounting Standards
Adopted Accounting Standards
The Company monitors FASB Accounting Standards Updates (“ASUs”) applicable to its financial reporting. During the periods presented, the Company adopted all ASUs that became effective and applicable to its operations. Adoption of these standards did not have a material impact on the Company’s financial statements.
Accounting Standards Issued but Not Yet Adopted
The FASB has issued ASUs that will become effective in future reporting periods. These updates primarily relate to enhanced disclosures for public business entities, including expanded disaggregation of expenses and certain income tax disclosures. Because the Company is a pass-through limited liability company and its operations are limited to hotel activities, the Company does not expect these standards to have a material effect on its financial statements when adopted.
Other Accounting Standards Updates
The FASB has issued other technical corrections and narrow-scope amendments across various accounting topics. These updates are not expected to have a material impact on the Company’s financial statements.
Note 3 – Property and Equipment
Property and equipment consisted of the following:
| Estimated Useful | ||||||||||
| December 31, 2024 | December 31, 2023 | Lives (Years) | ||||||||
| Building and improvements | 12,656,793 | 12,620,353 | 7 - 31.5 | |||||||
| Land | 2,828,800 | 2,828,800 | N/A | |||||||
| Accumulated depreciation | (5,757,979 | ) | (5,348,543 | ) | ||||||
| Total property and equipment - net | $ | 9,727,614 | $ | 10,100,610 | ||||||
Depreciation expense for the years ended December 31, 2024 and 2023, respectively are as follows:
| December 31, 2024 | December 31, 2023 | |||||||
| Depreciation Expense | $ | 409,436 | $ | 446,604 | ||||
Depreciation is included within general and administrative expenses in the accompanying statements of operations.
| 23 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Note 4 – Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of amounts owed to vendors and service providers for goods and services received but not yet paid as of the balance sheet date. These obligations are typically settled within the normal operating cycle.
Accrued liabilities include payroll and related benefits, professional fees, interest, and other routine operating accruals. The Company also records estimates for expenses incurred but not yet invoiced at period end.
Amounts due to related parties, if any, represent reimbursements or other costs incurred in the ordinary course of business.
Management believes that all accounts payable and accrued liabilities are current, and that the carrying amounts approximate fair value due to their short-term nature.
Accounts payable and accrued liabilities were as follows:
| December 31, 2024 | December 31, 2023 | |||||||
| Accounts payable and accrued liabilities | $ | 2,067,026 | $ | 1,525,612 | ||||
Note 5 – Debt
The following represents a summary of the Company’s debt (mortgage note payable and note payable) at December 31, 2024 and 2023:
| Issue Date | Maturity Date | Interest Rate | Default Interest Rate | Collateral | Related Party | Debt Type | ||||||||||||||
| Loan #1 | June 6, 2022 | June 6, 2029 | 5.00 | % | 0.00 | % | Building | No | Mortgage Note Payable | |||||||||||
| Loan #2 | November 15, 2023 | Due on Demand | 1.00 | % | 1.00 | % | Building | No | Note Payable | |||||||||||
| 24 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Mortgage Note Payable
The following represents a summary of the Company’s mortgage note payable at December 31, 2024 and 2023:
| Loan #1 | ||||
| Property Name | Rancho Mirage | |||
| Date of Note | June 6, 2022 | |||
| Maturity Date of Note | June 6, 2029 | |||
| Interest Rate | 5.00 | % | ||
| In-Default | $ | - | ||
| Collateral | Property | |||
| December 31, 2022 | $ | 10,870,053 | ||
| Repayments | (231,746 | ) | ||
| December 31, 2023 | 10,638,307 | |||
| Less: short term | 248,245 | |||
| Long term | $ | 10,390,062 | ||
| December 31, 2023 | $ | 10,638,307 | ||
| Repayments | (248,245 | ) | ||
| December 31, 2024 | 10,390,062 | |||
| Less: short term | 520,119 | |||
| Long term | $ | 9,869,943 | ||
* The interest rate is fixed at 5% for the period from June 2022 – June 2025. Subsequently, the interest rate is variable, equal to the Wall Street Journal prime rate plus 0.25%.
See Note 9.
| 25 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Note Payable
The following represents a summary of the Company’s note payable at December 31, 2024 and 2023:
| Loan #2 | ||||
| Date of Note | November 15, 2023 | |||
| Maturity Date of Note | Due on Demand | |||
| Interest Rate | 1.00 | % | ||
| Default Interest Rate | 1.00 | % | ||
| In-Default | $ | - | ||
| Collateral | Building/Hotel | |||
| December 31, 2023 | $ | - | ||
| Proceeds | 750,000 | |||
| December 31, 2024 | 750,000 | |||
| Less: short term | 750,000 | |||
| Long term | $ | - | ||
In November 2023, the Company executed a note with a third party to borrow up to 3,200,000.
See Note 9.
Debt Maturities
The following represents future maturities of the Company’s various debt arrangements as follows:
| Note | Mortgage | |||||||||||
| For the Year Ended December 31, | Payable | Notes Payable | Total | |||||||||
| 2025 | $ | 750,000 | $ | 520,119 | $ | 1,270,119 | ||||||
| 2026 | - | 233,182 | 233,182 | |||||||||
| 2027 | - | 250,662 | 250,662 | |||||||||
| 2028 | - | 267,473 | 267,473 | |||||||||
| 2029 | - | 9,118,626 | 9,118,626 | |||||||||
| Total | $ | 750,000 | $ | 10,390,062 | $ | 11,140,062 | ||||||
| 26 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
Note 6 – Commitments and Contingencies
Contingencies – Legal Matters
The Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries.
As of December 31, 2024 and 2023, the Company is not aware of any litigation, pending litigation, or other transactions that require accrual or disclosure.
Note 7 –Members’ Deficit
The Company is a limited liability company. As such, equity interests are reflected as members’ capital (deficit) rather than common stock. Profit and loss allocations, contributions, distributions, and voting rights are governed by the Company’s operating agreement.
Members’ Capital Activity
Changes in members’ capital for the years ended December 31, 2024 and 2023 consisted of member contributions, member distributions, and the Company’s net income (loss) for each period.
The Company had contributions of $2,822,592 and $3,008,910 for the years ended December 31, 2024 and 2023, respectively.
The Company had distributions of $4,177,703 and $3,569,771 for the years ended December 31, 2024 and 2023, respectively.
The Company had a members’ deficit as of December 31, 2024 and 2023 due to accumulated operating losses and historical distributions exceeding contributions.
Note 8 – Intangible Asset
The Company’s intangible assets consist solely of an indefinite-lived liquor license used in the operation of the hotel.
The liquor license is carried at cost and is not amortized in accordance with ASC 350, Intangibles—Goodwill and Other, as it has no foreseeable limit to the period over which it is expected to contribute to cash flows.
| 27 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
The liquor license had a carrying value of $16,000 as of December 31, 2024 and 2023.
The Company evaluates the liquor license for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. No impairment losses were recorded for the years ended December 31, 2024 and 2023.
Note 9 – Subsequent Events
Subsequent to December 31, 2024, the Company had the following transactions:
Mortgage Note Payable
Subsequent to December 31, 2024, and through the date the Company was acquired by Nightfood Holdings, Inc., on September 30, 2025, the Company made all of its scheduled principal and interest payments totaling $886,020 on its mortgage note payable. These payments were made in accordance with the loan’s amortization schedule, and the Company remained current on the obligation through the acquisition date.
See Note 5 for additional information on the mortgage note payable.
Note Payable
Subsequent to December 31, 2024, and through the date the Company was acquired by Nightfood Holdings, Inc. on September 30, 2025, the Company received additional loan proceeds totaling approximately $950,000 under this existing note payable.
See Note 5 for additional information on the note payable.
| 28 |
Exhibit 99.2
Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
| 1 |
Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Balance Sheets
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 968,379 | $ | 73,899 | ||||
| Accounts receivable | 1,010 | 17,156 | ||||||
| Inventory | 6,928 | 4,748 | ||||||
| Prepaids and other | 6,815 | 5,116 | ||||||
| Total Current Assets | 983,132 | 100,919 | ||||||
| Property and equipment - net | 10,448,975 | 9,727,614 | ||||||
| Intangible asset | 16,000 | 16,000 | ||||||
| Total Assets | $ | 11,448,107 | $ | 9,844,533 | ||||
| Liabilities and Members’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 2,647,873 | $ | 2,067,026 | ||||
| Mortgage note payable | 198,309 | 520,119 | ||||||
| Note payable | 1,700,000 | 750,000 | ||||||
| Total Current Liabilities | 4,546,182 | 3,337,145 | ||||||
| Long Term Liabilities | ||||||||
| Mortgage notes payable | 9,793,421 | 9,869,943 | ||||||
| Total Long Term Liabilities | 9,793,421 | 9,869,943 | ||||||
| Total Liabilities | 14,339,603 | 13,207,088 | ||||||
| Members’ Deficit | (2,891,496 | ) | (3,362,555 | ) | ||||
| Total Liabilities and Members’ Deficit | $ | 11,448,107 | $ | 9,844,533 | ||||
| 2 |
Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Statements of Operations
(Unaudited)
| For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | 3,265,857 | $ | 3,183,856 | ||||
| Costs and expenses | ||||||||
| Cost of revenues | 1,055,109 | 980,245 | ||||||
| General and administrative expenses | 1,794,872 | 1,794,601 | ||||||
| Total costs and expenses | 2,849,981 | 2,774,846 | ||||||
| Income from operations | 415,876 | 409,010 | ||||||
| Other income (expense) | ||||||||
| Other income | 1,106,280 | 49,700 | ||||||
| Interest expense | (474,653 | ) | (408,906 | ) | ||||
| Other expense | (176,215 | ) | (181,609 | ) | ||||
| Total other income (expense) - net | 455,412 | (540,815 | ) | |||||
| Net income (loss) | $ | 871,288 | $ | (131,805 | ) | |||
| 3 |
Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Statement of Changes in Members’ Deficit
For the Nine Months Ended September 30, 2025
(Unaudited)
| Members’ | ||||
| Deficit | ||||
| December 31, 2023 | $ | (1,904,939 | ) | |
| Contributions | 2,822,592 | |||
| Distributions | (4,177,703 | ) | ||
| Net income | (102,505 | ) | ||
| December 31, 2024 | (3,362,555 | ) | ||
| Distributions | (400,229 | ) | ||
| Net loss | 871,288 | |||
| September 30, 2025 | $ | (2,891,496 | ) | |
| 4 |
Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Statement of Changes in Members’ Deficit
For the Nine Months Ended September 30, 2024
(Unaudited)
| Members’ | ||||
| Deficit | ||||
| December 31, 2022 | $ | (1,366,072 | ) | |
| Contributions | 3,008,910 | |||
| Distributions | (3,569,771 | ) | ||
| Net income | 21,994 | |||
| December 31, 2023 | (1,904,939 | ) | ||
| Contributions | 2,822,592 | |||
| Distributions | (4,105,438 | ) | ||
| Net loss | (131,805 | ) | ||
| September 30, 2024 | $ | (3,319,590 | ) | |
| 5 |
Treasure Mountain Holdings, LLC
DBA Hilton Garden Inn Rancho Mirage
Statements of Cash Flows
(Unaudited)
| For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating activities | ||||||||
| Net income (loss) | $ | 871,288 | $ | (131,805 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||||
| Depreciation | 238,639 | 307,077 | ||||||
| Changes in operating assets and liabilities | ||||||||
| (Increase) decrease in | ||||||||
| Accounts receivable | 16,146 | (361 | ) | |||||
| Inventory | (2,180 | ) | 1,288 | |||||
| Prepaids and other | (1,699 | ) | (33,806 | ) | ||||
| Increase (decrease) in | ||||||||
| Accounts payable and accrued liabilities | 580,847 | 522,807 | ||||||
| Net cash provided by operating activities | 1,703,041 | 665,200 | ||||||
| Investing activities | ||||||||
| Cash paid for building improvements | (960,000 | ) | (6,661 | ) | ||||
| Net cash used in investing activities | (960,000 | ) | (6,661 | ) | ||||
| Financing activities | ||||||||
| Proceeds from note payable | 950,000 | 750,000 | ||||||
| Repayments on mortgage note payable | (398,332 | ) | (160,736 | ) | ||||
| Contributions | - | 2,822,592 | ||||||
| Distributions | (400,229 | ) | (4,105,438 | ) | ||||
| Net cash provided by (used in) financing activities | 151,439 | (693,582 | ) | |||||
| Net increase (decrease) in cash | 894,480 | (35,043 | ) | |||||
| Cash - beginning of period | 73,899 | 88,908 | ||||||
| Cash - end of period | $ | 968,379 | $ | 53,865 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 474,653 | $ | 408,906 | ||||
| Cash paid for income tax | $ | - | $ | - | ||||
| 6 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 1 - Organization and Nature of Operations
Organization and Nature of Operations
Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage (“Rancho Mirage,” “RM,” “we,” “our,” or the “Company”), a California limited liability company formed in 2013, owns and operates the Hilton Garden Inn Palm Springs – Rancho Mirage. The hotel, located at 71700 Highway 111 in Rancho Mirage, California, consists of 120 guest rooms and provides full-service lodging accommodations and amenities to business and leisure travelers (the “Property”).
Acquisition by Nightfood Holdings, Inc.
On September 30, 2025, the Company was acquired by Nightfood Holdings, Inc. through a share exchange agreement under which Nightfood Holdings obtained 100% of the Company’s issued and outstanding equity interests. In exchange, the Company’s equity holders received 176,167 shares of Nightfood Holdings’ Series C Convertible Preferred Stock, valued at approximately $42,280,000. The agreement also provides for additional contingent consideration of up to 20,000 shares of Series C Convertible Preferred Stock, with a potential value of $4,800,000.
Based on the as-converted value of the underlying common shares as of the acquisition date, the total estimated fair value of the consideration was $47,080,000.
Following the completion of the transaction, Rancho Mirage became a wholly owned subsidiary of Nightfood Holdings, Inc. The purchase price allocation and the related accounting for the acquisition will be prepared and reported by Nightfood Holdings, Inc. within its consolidated financial statements.
Additional details regarding the acquisition are provided in the Form 8-K filed with the U.S. Securities and Exchange Commission on October 6, 2025.
Financial Statement Filing Requirements
These financial statements are being presented in accordance with the requirements of Rule 3-05 of Regulation S-X, as they are included to satisfy the SEC’s financial reporting requirements applicable to significant business acquisitions. Accordingly, the accompanying financial statements represent the historical financial information of the Company prior to its acquisition by Nightfood Holdings, Inc.
| 7 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
The Company’s operations are organized as follows:
Hospitality Operations
The Company owns the underlying real estate, buildings and improvements, equipment, and hotel operating assets necessary to conduct operations at the Property. The Company is responsible for funding working capital requirements, maintaining the physical condition of the Property, and ensuring that hotel operations comply with applicable brand standards, regulatory requirements, and contractual obligations.
Franchise Agreement
The Property is operated under a long-term franchise agreement with Hilton, granting the Company the right to operate the hotel under the Hilton Garden Inn brand. The agreement provides access to Hilton’s trademarks, reservation systems, marketing programs, and brand-standard operating procedures. In exchange, the Company pays various franchise-related fees, including:
| ● | Royalty fees based on a percentage of room revenue; | |
| ● | Marketing, loyalty program, and reservation assessments supporting brand-wide advertising and distribution systems; and | |
| ● | System fees associated with required technology platforms and brand programs. |
The franchise agreement requires the Company to comply with Hilton’s operating standards, brand specifications, and property improvement plan (“PIP”) obligations. Transfers, encumbrances, or material modifications of the franchised hotel generally require the franchisor’s prior written consent.
The Company is currently in compliance with terms of its franchise agreement.
Hotel Management
In accordance with the franchise agreement, the Company has engaged a third-party hotel management company to oversee day-to-day operations of the Property. The management company is responsible for staffing, operating, and administering the hotel in compliance with Hilton’s brand standards. The Company retains responsibility for capital expenditures, compliance with franchisor requirements, and oversight of the Property’s financial and operational performance.
| 8 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Operating Status
The Property operates as a fully functional hotel and generates recurring revenues through lodging, food and beverage services, and other ancillary hospitality offerings. The Company continues to maintain and invest in the Property to support operating performance and ongoing compliance with brand standards.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.
In the opinion of the Company’s management, the accompanying unaudited financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2025 and the results of operations and cash flows for the periods presented.
The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full fiscal year or any future period.
These unaudited financial statements should be read in conjunction with the audited financial statements and related notes thereto included in the Form 8-K/A Nightfood Holdings, Inc. (“NGTF”) filed on January 16, 2026 for the years ended December 31, 2024 and 2023.
The Company and NGTF completed a share exchange agreement on September 30, 2025, whereby RM was acquired by NGTF in a business combination.
Liquidity and Going Concern
As reflected in the accompanying financial statements, for the nine months ended September 30, 2025, the Company had:
| ● | Net income of $871,288; and |
| ● | Net cash provided by operations was $1,703,041 |
| 9 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Additionally, at December 31, 2024, the Company had:
| ● | Members’ deficit of $2,891,496 |
| ● | Working capital deficit of $3,563,050; and |
| ● | Cash on hand of $968,379 |
The Company generates revenue from the operation of RM; however, current levels of operating cash flows are not sufficient to fully support ongoing operating costs, required property maintenance, franchise obligations, and debt service. While the Property is an established, revenue-generating hotel, its operating performance for the periods presented has not produced positive cash flow adequate to meet the Company’s liquidity needs.
The Company has historically relied on a combination of hotel operating revenues and financing from its members and lenders to fund operations and capital requirements. Future liquidity will depend on the Property’s operating performance, the availability of additional financing, and the timing and magnitude of capital expenditures required to maintain franchise standards.
Liquidity Outlook
Based on current operating results, obligations coming due, and projected cash usage, management believes that the Company’s existing cash resources are not sufficient to fund operations for the twelve months following the issuance of these financial statements without obtaining additional financial support.
There is no assurance that such financing will be available on commercially reasonable terms or in sufficient amounts, and the Company’s ability to meet its obligations as they become due will depend on securing additional capital or improving operating performance beyond currently anticipated levels.
Going Concern
The recurring operating losses, negative operating cash flows, members’ deficit, working capital deficit, and limited cash resources raise substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date these financial statements are issued.
The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty and have been prepared on the basis that the Company will continue as a going concern and realize its assets and discharge its liabilities in the ordinary course of business.
| 10 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Management’s strategic plans to address these matters include the following:
| ● | Continuing efforts to improve hotel operating performance through revenue management initiatives and cost controls; | |
| ● | Evaluating opportunities to refinance existing indebtedness or obtain supplemental financing; | |
| ● | Seeking additional capital contributions from members, as needed; and | |
| ● | Managing capital expenditures to align with available liquidity while maintaining compliance with franchise standards. |
There can be no assurance that these plans will be successful. Failure to obtain additional financing or achieve improved operating performance may require the Company to modify operations, delay capital projects, or consider other strategic alternatives.
Note 2 - Summary of Significant Accounting Policies
Business Segments and Expense Disclosure
The Company follows ASC 280, Segment Reporting, which requires entities to report financial information based on the way management organizes and evaluates operations.
The Company owns and operates a single hotel property - RM, and its activities consist solely of providing lodging and related guest services. The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and reviews financial information at the entity level for purposes of assessing performance and allocating resources. The CODM is not provided with, nor does he review, discrete financial information for multiple components of the business.
Accordingly, management has determined that the Company operates as one reportable operating segment: Hotel Operations.
Because the Company has a single operating segment, no additional disaggregated segment information is required under ASC 280. The measure of segment profit or loss used by the CODM is the Company’s operating income (loss), which is presented in the accompanying statements of operations.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the recognition of revenues and expenses during the reporting period. Actual results may differ from those estimates, and such differences may be material.
| 11 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Estimates and assumptions are evaluated on an ongoing basis and are based on historical experience, current economic conditions, industry trends, and other relevant quantitative and qualitative factors. Changes in estimates are recorded in the period in which they become known and are accounted for prospectively.
Significant estimates for the nine months ended September 30, 2025 and 2024, respectively, include:
| ● | Impairment evaluation of long-lived assets; and | |
| ● | Estimated useful lives of property and equipment. |
Risks and Uncertainties
The Company operates a single hotel property and is subject to various risks and uncertainties that may affect its financial condition, results of operations, and cash flows. In accordance with ASC 275, Risks and Uncertainties, factors that may impact the Company’s operating performance include:
| ● | Hospitality Industry Cycles: Changes in business and leisure travel patterns, seasonality, and local economic conditions may affect occupancy levels and room rates. | |
| ● | Macroeconomic Conditions: Inflation, labor cost pressures, rising interest rates, and changes in consumer spending may impact revenues and operating costs. | |
| ● | Operating Costs: Fluctuations in the cost and availability of labor, utilities, food and beverage products, and other hotel operating supplies may influence margins. | |
| ● | Competition and Market Dynamics: Competitive room pricing, new hotel supply, and changes in local market demand may affect the Property’s performance. | |
| ● | Weather, Natural Events, and Public Health: Adverse weather conditions, natural disasters, or public health concerns may disrupt travel or temporarily impact operations. | |
| ● | Liquidity and Financing: The Company’s ability to fund operations and capital needs depends on adequate liquidity and access to financing. | |
| ● | Regulatory Requirements: The Company is subject to federal, state, and local regulations related to hotel operations, labor, licensing, and franchise standards. |
Actual results could differ from management’s estimates, and the Company continues to monitor these risks and take actions intended to mitigate their potential impact.
| 12 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Fair Value of Financial Instruments
The Company applies ASC 820, Fair Value Measurements, which defines fair value and establishes a three-level hierarchy based on the observability of inputs used in valuation:
| ● | Level 1 — Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2 — Observable inputs other than quoted Level 1 prices. | |
| ● | Level 3 — Unobservable inputs requiring significant judgment. |
The Company had no assets or liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024.
The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued liabilities, and debt obligations. These instruments are recorded at historical cost. The carrying amounts of these financial instruments approximate their fair values due to their short-term nature or because current borrowing rates and terms for similar instruments are readily available.
Nonrecurring fair value measurements use Level 3 inputs when required. No such fair value measurements were recorded during the nine months ended September 30, 2025 or the year ended December 31, 2024.
Cash and Cash Equivalents and Concentration of Credit Risk
For purposes of the statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.
At September 30, 2025 and December 31, 2024, respectively, the Company did not have any cash equivalents.
The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000.
At September 30, 2025 and December 31, 2024, respectively, the Company did not experience any losses on cash balances in excess of FDIC insured limits.
| 13 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Accounts Receivable
The Company accounts for accounts receivable in accordance with ASC 310, Receivables. Accounts receivable are stated at their net realizable value, representing the amounts expected to be collected from customers.
Trade receivables primarily arise from the Company’s hotel operations and include:
| ● | Guest ledger receivables, representing charges incurred by in-house guests prior to settlement at check-out; and | |
| ● | City ledger receivables, representing amounts due from corporate accounts, groups, travel agencies, and other third-party billing arrangements. |
The Company does not require collateral and does not accrue interest on past-due balances.
Allowance for Expected Credit Losses
The Company evaluates the collectability of accounts receivable and records an allowance for expected credit losses in accordance with ASC 326, Financial Instruments—Credit Losses (CECL). The allowance is estimated using a provision-matrix approach that considers:
| ● | historical loss experience by receivable type, | |
| ● | customer aging and payment trends, | |
| ● | current economic conditions, and | |
| ● | reasonable and supportable forecasts. |
Guest ledger balances generally have short settlement periods and historically low loss experience, while city ledger balances are evaluated based on aging, customer credit quality, and historical write-offs. Receivables with similar risk characteristics are evaluated collectively. Accounts deemed uncollectible are written off against the allowance when collection efforts are exhausted.
The allowance for expected credit losses was $0 as of both September 30, 2025 and December 31, 2024.
| 14 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
The following is a summary of the Company’s accounts receivable at September 30, 2025 and December 31, 2024:
| September 30, 2025 | December 31, 2024 | |||||||
| Accounts receivable | $ | 1,010 | $ | 17,156 | ||||
| Less: allowance for credit losses | - | - | ||||||
| Accounts receivable - net | $ | 1,010 | $ | 17,156 | ||||
Bad Debt Expense
For the nine months ended September 30, 2025 and 2024, bad debt was $0, respectively.
Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying statements of operations.
Inventory
The Company accounts for inventory in accordance with ASC 330, Inventory. Inventory is stated at the lower of cost or net realizable value (“LCNRV”), using the first-in, first-out (FIFO) method. Inventory consists primarily of food and beverage items and retail/minibar products held for sale in the ordinary course of hotel operations.
Hotel operating supplies not held for sale—such as guest amenities, linens, and cleaning supplies—are expensed as incurred and are not included in inventory.
Inventory Valuation and Reserves
Management evaluates inventory at each reporting date to determine whether adjustments are required for slow-moving, obsolete, or impaired items. In assessing potential LCNRV adjustments, management considers:
| ● | aging and turnover trends; | |
| ● | expected future demand; | |
| ● | historical usage and spoilage of perishable items; | |
| ● | current pricing and market conditions; and | |
| ● | estimated net realizable value. |
Any required adjustments are recorded within cost of revenues in the period identified.
| 15 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
The Company recorded no inventory write-downs or LCNRV adjustments during the periods presented.
At September 30, 2025 and December 31, 2024, inventory was as follows:
| Classification | September 30, 2025 | December 31, 2024 | ||||||
| Food and beverage | 6,928 | 4,748 | ||||||
Concentrations
The Company evaluates concentrations of risk in accordance with ASC 275, Risks and Uncertainties. A concentration exists when a single customer, supplier, geographic region, or other external factor represents a significant portion (generally over 10%) of revenues, receivables, or supply chain activity and could have a severe near-term impact on the Company’s financial condition or results of operations.
For all periods presented, the Company reviewed its customer base, supplier relationships, and geographic exposures and determined that no such concentrations exist that meet the threshold for disclosure.
Property and Equipment
Property and equipment are recorded at cost, net of accumulated depreciation, in accordance with ASC 360, “Property, Plant, and Equipment.” Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.
Repairs and maintenance expenditures that do not materially extend the useful life of an asset are expensed as incurred. Significant improvements or upgrades that increase the asset’s productivity, efficiency, or useful life are capitalized.
Property Improvement Plans (“PIPs”)
In connection with operating franchised hotel properties, the Company is periodically required under its franchise agreements to complete Property Improvement Plans (“PIPs”), which generally include renovations, replacements, and upgrades to guestrooms, public areas, building systems, and other components of the hotels.
| 16 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
PIP-related expenditures are evaluated under ASC 360 to determine whether they should be capitalized or expensed:
| ● | Capitalized PIP costs |
PIP costs are capitalized when they represent betterments or improvements that:
| ● | extend the useful life of the asset; | |
| ● | increase the asset’s capacity or efficiency; | |
| ● | materially upgrade the property to meet current brand standards; or | |
| ● | replace major components of the hotel. |
Capitalized PIP costs are recorded as part of buildings and improvements or FF&E and depreciated over their estimated useful lives.
| ● | Expensed as incurred |
Routine repairs, maintenance, cosmetic refreshes, and other PIP activities that do not extend useful life or enhance the asset’s functionality are expensed as incurred.
The determination of whether a PIP expenditure should be capitalized or expensed requires judgment and is based on the nature of the work performed, the condition of the underlying assets, and the extent to which the PIP activity enhances or extends the property’s utility.
Disposals
Upon disposal or sale of property and equipment, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the statement of operations.
Impairment of Long-lived Assets
The Company evaluates the recoverability of long-lived assets, including identifiable intangible assets, in accordance with FASB ASC 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
| 17 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
An impairment review is triggered when events or circumstances indicate that the carrying value of an asset group may not be recoverable. Factors considered include, but are not limited to:
| ● | Significant changes in expected performance compared to prior forecasts, | |
| ● | Changes in asset utilization, including discontinued or modified use, | |
| ● | Negative industry or economic trends that impact asset value, and | |
| ● | Strategic shifts in the Company’s business operations. |
Impairment Assessment Process
When impairment indicators exist, the Company performs a recoverability test by comparing the undiscounted future cash flows expected to be generated from the use and ultimate disposition of the asset group to its carrying amount.
| ● | If the undiscounted cash flows exceed the carrying amount, no impairment is recognized. | |
| ● | If the undiscounted cash flows are less than the carrying amount, an impairment loss is recognized, measured as the excess of the carrying amount over the fair value of the asset. |
Impairment Results
For the nine months ended September 30, 2025 and 2024, respectively, the Company did not record any impairment losses.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services transfers to the customer in an amount that reflects the consideration expected to be received. The Company’s revenues are derived solely from hotel operations at the Hilton Garden Inn Palm Springs – Rancho Mirage, including room rentals, food and beverage sales, and ancillary guest services.
| 18 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
ASC 606 Five-Step Model
The Company applies the five-step revenue recognition model as follows:
| 1. | Identify the contract with a customer – Guest room bookings, restaurant transactions, and event arrangements constitute contracts with defined rights, obligations, and payment terms. Collection is considered probable at inception. | |
| 2. | Identify performance obligations – |
| ○ | Each night of room occupancy is a distinct performance obligation. | |
| ○ | Each food and beverage sale represents a distinct performance obligation. | |
| ○ | Event, banquet, and other services each represent separate performance obligations. |
| 3. | Determine the transaction price – The transaction price consists primarily of fixed consideration stated in room rates, menu pricing, or event agreements. Taxes collected on behalf of governmental authorities are excluded from revenue. | |
| 4. | Allocate the transaction price – Contracts generally contain a single performance obligation; therefore, the full transaction price is allocated to that obligation. | |
| 5. | Recognize revenue when (or as) performance obligations are satisfied – |
| ○ | Room revenues are recognized over time on a daily basis as lodging services are provided. | |
| ○ | Food and beverage revenues are recognized at a point in time when goods or services are delivered. | |
| ○ | Event, banquet, and other ancillary revenues are recognized when the event occurs or the service is provided. | |
| ○ | Advance deposits are recorded as contract liabilities until the related services are performed. |
To provide further clarity on the nature, timing, and recognition of revenue, the Company’s revenue streams are discussed below:
Room Revenues
Room revenue is recognized over time as lodging services are provided. Guests typically settle charges at checkout or via credit card upon completion of the stay. Advance deposits are recorded as deferred revenue until the stay occurs.
Food and Beverage Revenues
Food, beverage, and catering revenues are recognized at the point in time the related goods or services are provided. Deposits received in advance for catered events are recorded as deferred revenue until the event takes place.
| 19 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Ancillary Revenues
Revenues from meeting and event space rentals, retail/minibar sales, and other guest services are recognized at the point in time the services are rendered or the rental period elapses.
Contract Assets and Contract Liabilities
Given the short-term nature of guest transactions and timing of payment, contract assets are not significant. Contract liabilities consist of advance deposits for rooms or events.
The Company had no deferred revenue (contract liabilities) as of September 30, 2025 or December 31, 2024.
Principal vs. Agent Consideration
The Company acts as the principal in substantially all hospitality transactions because it controls the goods and services before transfer to customers, sets pricing, and is responsible for fulfillment. Accordingly, revenue is reported on a gross basis.
Taxes Collected from Customers
Sales, occupancy, and similar taxes collected from guests and remitted to governmental authorities are excluded from revenue.
Summary of Compliance with ASC 606 and ASU Updates
| Revenue Stream | Performance Obligation | Recognition Timing | Consideration Type | |||
| Hotel Operations | Provision of lodging and related guest services (rooms, food, beverage, and other ancillary services) | Point in time – revenue is recognized when the performance obligation is satisfied, typically upon guest occupancy (for rooms) or at the time goods/services are provided (for food, beverage, and ancillary services). | Fixed transaction price, generally settled at check-out. Prices exclude sales tax. |
| 20 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
The following represents the Company’s disaggregation of revenues for the nine months ended September 30, 2025 and 2024:
| For the Nine Months Ended September 30, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Revenue | % of Revenues | Revenue | % of Revenues | |||||||||||||
| Hotel operations | $ | 3,265,857 | 100.00 | % | $ | 3,183,856 | 100.00 | % | ||||||||
Cost of Revenues
Cost of revenues for hotel operations consists of direct costs incurred to provide lodging, food and beverage, and related guest services. These costs are recognized in the same period as the related revenue.
Cost components primarily include:
● Room Operations – Housekeeping, front office, maintenance, laundry, and utilities directly related to guest accommodations.
● Food and Beverage – Cost of food, beverages, and related consumables used in restaurant, bar, and banquet operations.
● Labor and Benefits – Wages, benefits, and payroll taxes for personnel directly involved in providing guest services.
● Operating Supplies and Guest Amenities – Costs of linens, toiletries, and other consumables provided to guests.
● Other Direct Costs – Contract services, credit card commissions, and minor operating equipment.
Depreciation of hotel buildings, furnishings, and equipment is not included in cost of sales and is presented separately as Depreciation and Amortization within operating expenses.
Income Taxes
The Company is a limited liability company and is treated as a pass-through entity for federal and applicable state income tax purposes. As a result, taxable income or loss of the Company is reported by the members on their respective income tax returns, and no provision for federal or state income taxes is included in the accompanying financial statements. The Company may be subject to certain state-level taxes, franchise fees, or other non-income-based taxes, which are recorded as incurred.
| 21 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
ASC 740 – Uncertain Tax Positions
The Company applies the provisions of ASC 740 related to uncertain tax positions. A tax position is recognized only if it is more likely than not to be sustained upon examination by the relevant taxing authority.
As of September 30, 2025 and December 31, 2024, the Company had no uncertain tax positions that required recognition or disclosure. The Company also had no interest or penalties related to uncertain tax positions during the periods presented.
Advertising Costs
Advertising and marketing costs are expensed as incurred and classified within operating expenses.
Under the Company’s Hilton Franchise License Agreement, the Company is required to pay ongoing marketing and advertising program fees, which are included as part of franchise fees and recorded within general and administrative expenses in the statements of operations.
Accordingly, advertising and marketing costs are not presented as a separate advertising expense line item.
The Company did not recognize separately presented advertising or marketing expenses for the nine months ended September 30, 2025 and 2024.
Related Parties
The Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and SEC Regulation S-X, Rule 4-08(k). Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.
Related parties include, but are not limited to:
| ● | Principal owners of the Company. | |
| ● | Members of management (including directors, executive officers, and key employees). | |
| ● | Immediate family members of principal owners and members of management. | |
| ● | Entities affiliated with principal owners or management through direct or indirect ownership. | |
| ● | Entities with which the Company has significant transactions, where one party has the ability to exercise control or significant influence over the management or operating policies of the other. |
| 22 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
A party is considered related if it has the ability to control or significantly influence the management or operating policies of the Company in a manner that could prevent either party from fully pursuing its own separate economic interests.
The Company discloses all material related party transactions, including:
| ● | The nature of the relationship between the parties. | |
| ● | A description of the transaction(s), including terms and amounts involved. | |
| ● | Any amounts due to or from related parties as of the reporting date. | |
| ● | Any other elements necessary for a clear understanding of the transactions’ effects on the financial statements. |
Related party disclosures are presented in accordance with ASC 850-10-50-1 through 50-6, which require disclosure of the nature, terms, and financial effects of material related party transactions. The Company also complies with SEC Regulation S-X, Rule 4-08(k), which requires disclosure of material related party balances and transactions, including their effect on the Company’s financial position and results of operations.
See Note 7 regarding member contributions and distributions.
Recent Accounting Standards
Adopted Accounting Standards
The Company monitors FASB Accounting Standards Updates (“ASUs”) applicable to its financial reporting. During the periods presented, the Company adopted all ASUs that became effective and applicable to its operations. Adoption of these standards did not have a material impact on the Company’s financial statements.
Accounting Standards Issued but Not Yet Adopted
The FASB has issued ASUs that will become effective in future reporting periods. These updates primarily relate to enhanced disclosures for public business entities, including expanded disaggregation of expenses and certain income tax disclosures. Because the Company is a pass-through limited liability company and its operations are limited to hotel activities, the Company does not expect these standards to have a material effect on its financial statements when adopted.
| 23 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Other Accounting Standards Updates
The FASB has issued other technical corrections and narrow-scope amendments across various accounting topics. These updates are not expected to have a material impact on the Company’s financial statements.
Note 3 – Property and Equipment
Property and equipment consisted of the following:
| Estimated Useful | ||||||||||
| September 30, 2025 | December 31, 2024 | Lives (Years) | ||||||||
| Building and improvements | 13,616,793 | 12,656,793 | 7 - 31.5 | |||||||
| Land | 2,828,800 | 2,828,800 | N/A | |||||||
| Accumulated depreciation | (5,996,618 | ) | (5,757,979 | ) | ||||||
| Total property and equipment - net | $ | 10,448,975 | $ | 9,727,614 | ||||||
Depreciation expense for the nine months ended September 30, 2025 and 2024, respectively are as follows:
| September 30, 2025 | September 30, 2024 | |||||||
| Depreciation Expense | $ | 238,639 | $ | 307,077 | ||||
Depreciation is included within general and administrative expenses in the accompanying statements of operations.
Note 4 – Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of amounts owed to vendors and service providers for goods and services received but not yet paid as of the balance sheet date. These obligations are typically settled within the normal operating cycle.
Accrued liabilities include payroll and related benefits, professional fees, interest, taxes, and other routine operating accruals. The Company also records estimates for expenses incurred but not yet invoiced at period end.
Amounts due to related parties, if any, represent reimbursements or other costs incurred in the ordinary course of business.
Management believes that all accounts payable and accrued liabilities are current, and that the carrying amounts approximate fair value due to their short-term nature.
| 24 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Accounts payable and accrued liabilities were as follows:
| September 30, 2025 | December 31, 2024 | |||||||
| Accounts payable and accrued liabilities | $ | 2,647,873 | $ | 2,067,026 | ||||
Note 5 – Debt
The following represents a summary of the Company’s debt (mortgage note payable and note payable) at September 30, 2025 and December 31, 2024:
| Issue Date | Maturity Date | Interest Rate | Default Interest Rate | Collateral | Related Party | Debt Type | ||||||||||||||
| Loan #1 | June 9, 2022 | June 9, 2029 | 7.50 | % | 0.00 | % | Building | No | Mortgage Note Payable | |||||||||||
| Loan #2 | November 15, 2023 | Due on Demand | 1.00 | % | 1.00 | % | Building | No | Note Payable | |||||||||||
Mortgage Note Payable
The following represents a summary of the Company’s mortgage note payable at September 30, 2025 and December 31, 2024:
| Loan #1 | ||||
| Property Name | Rancho Mirage | |||
| Date of Note | June 6, 2022 | |||
| Maturity Date of Note | June 6, 2029 | |||
| Interest Rate | 7.50 | %* | ||
| In-Default | $ | - | ||
| Collateral | Property | |||
| December 31, 2023 | $ | 10,638,307 | ||
| Repayments | (248,245 | ) | ||
| December 31, 2024 | 10,390,062 | |||
| Less: short term | 520,119 | |||
| Long term | $ | 9,869,943 | ||
| December 31, 2024 | $ | 10,390,062 | ||
| Repayments | (398,332 | ) | ||
| September 30, 2025 | 9,991,730 | |||
| Less: short term | 198,309 | |||
| Long term | $ | 9,793,421 | ||
* The interest rate is fixed at 5% for the period from June 2022 – June 2025. Subsequently, the interest rate is variable, equal to the Wall Street Journal prime rate plus 0.25%.
| 25 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note Payable
The following represents a summary of the Company’s note payable at December 31, 2024 and 2023:
| Loan #2 | ||||
| Date of Note | November 15, 2023 | |||
| Maturity Date of Note | Due on Demand | |||
| Interest Rate | 1.00 | % | ||
| Default Interest Rate | 1.00 | % | ||
| In-Default | $ | - | ||
| Collateral | Building/Hotel | |||
| December 31, 2023 | $ | - | ||
| Proceeds | 750,000 | |||
| December 31, 2024 | 750,000 | |||
| Less: short term | 750,000 | |||
| Long term | $ | - | ||
| December 31, 2024 | $ | 750,000 | ||
| Proceeds | 950,000 | |||
| September 30, 2025 | 1,700,000 | |||
| Less: short term | 1,700,000 | |||
| Long term | $ | - | ||
In November 2023, the Company executed a note with a third party to borrow up to $3,200,000.
| 26 |
TREASURE MOUNTAIN HOLDINGS, LLC
DBA HILTON GARDEN INN RANCHO MIRAGE
NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 6 – Commitments and Contingencies
Contingencies – Legal Matters
The Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries.
As of September 30, 2025 and December 31, 2024, the Company is not aware of any litigation, pending litigation, or other transactions that require accrual or disclosure.
Note 7 –Members’ Deficit
The Company is a limited liability company. As such, equity interests are reflected as members’ capital (deficit) rather than common stock. Profit and loss allocations, contributions, distributions, and voting rights are governed by the Company’s operating agreement.
Members’ Capital Activity
Changes in members’ capital for the nine months ended September 30, 2025 and 2024 consisted of member contributions, member distributions, and the Company’s net income (loss) for each period.
The Company had contributions of $0 and $2,822,592 for the nine months ended September 30, 2025 and 2024, respectively.
The Company had distributions of $400,229 and $4,105,438 for the nine months ended September 30, 2025 and 2024, respectively.
The Company had a members’ deficit as of September 30, 2025 and December 31, 2024 due to accumulated operating losses and historical distributions exceeding contributions.
Note 8 – Intangible Asset
The Company’s intangible assets consist solely of an indefinite-lived liquor license used in the operation of the hotel.
The liquor license is carried at cost and is not amortized in accordance with ASC 350, Intangibles—Goodwill and Other, as it has no foreseeable limit to the period over which it is expected to contribute to cash flows.
The liquor license had a carrying value of $16,000 as of September 30, 2025 and December 31, 2024.
The Company evaluates the liquor license for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. No impairment losses were recorded for the nine months ended September 30, 2025 and 2024.
| 27 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction
On September 30, 2025, Nightfood Holdings, Inc. (“NGTF,” the “Registrant,” or the “Company”) DBA Techforce Robotics completed the acquisition of 100% of the issued and outstanding membership interests of Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage (“RM,” “Rancho Mirage,” or the “Target”). Following the transaction, RM became a wholly owned subsidiary of the Company.
Overview of the Acquired Business
Rancho Mirage, a California limited liability company, owns and operates, a 120-room select-service hotel located at 71700 Highway 111, Rancho Mirage, California (the “Property”).
The Property generates recurring revenues from lodging, food and beverage operations, meeting and event services, and other ancillary guest amenities. These activities represent the Target’s ongoing hotel operations, and revenues are recognized as the related goods and services are provided to guests.
In addition to its traditional hospitality operations, the Property also serves as an operating environment in which the Company may deploy, evaluate, and refine elements of its robotics, automation, and workflow technologies. These pilot activities are intended to support potential future enhancements in operating efficiency and scalability across the Company’s broader hospitality platform; however, they do not yet constitute a separate business segment.
Purchase Consideration
As consideration for the acquisition, the Company issued 176,167 shares of its Series C Convertible Preferred Stock, having an estimated fair value of $42,280,000. Fair value was determined based on the as-converted value of the underlying common shares (6,000:1), using the $0.04 closing stock price on the September 30, 2025 acquisition date.
Contingent Consideration
The Agreement includes contingent consideration payable to the sellers. Under the earn-out provisions, the sellers may receive up to 20,000 additional shares of Series C Convertible Preferred Stock (the “Earnout Shares”) upon:
| 1. | Completion and build-out of five additional guestrooms, and | |
| 2. | Receipt of a certificate of occupancy and all required permits or approvals for such guestrooms, on or before December 31, 2027. |
| 1 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Consistent with the valuation methodology applied to the closing equity consideration, the Earnout Shares were measured at an estimated fair value of $4,800,000, based on the as-converted common stock value using the $0.04 closing price on the acquisition date.
In accordance with ASC 805, contingent consideration is included in the preliminary purchase price allocation at estimated fair value and will be remeasured at each reporting date, with changes recognized in earnings until the contingencies are resolved.
Total potential consideration for this acquisition is $47,080,000.
Primary Reasons for the Acquisition
The Company believes the Rancho Mirage acquisition will:
● Strengthen its presence in established hospitality markets;
● Provide immediate revenue contribution from an operating hotel asset;
● Support operational efficiencies within the Company’s hotel platform; and
● Expand the foundation for NGTF’s broader lodging and guest-services strategy.
Anticipated Accounting Treatment
The transaction is accounted for as a business combination under ASC 805, using the acquisition method.
Accordingly:
| (a) | Identifying the Acquirer – NGTF is the legal and accounting acquirer. | |
| (b) | Determining the Acquisition Date – September 30, 2025. | |
| (c) | Measuring Identifiable Assets and Liabilities – Rancho Mirage’s assets and liabilities will be recorded at their estimated fair values as of the acquisition date. | |
| (d) | Recognizing Goodwill and Intangibles – To the extent the fair value of the consideration transferred exceeds the fair value of net assets acquired, NGTF will recognize goodwill. Identifiable intangible assets will be recognized separately if they arise from legal/contractual rights or are otherwise separable. |
The purchase price allocation will be finalized within the measurement period (up to one year from September 30, 2025).
| 2 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Identifiable Intangible Assets
Based on the preliminary assessment of the acquired business and valuation practices commonly applied in hotel acquisitions, the Company expects to recognize identifiable intangible assets that may include:
| ● | Franchise Agreement Intangible – representing the contractual right to operate the Property under the Hilton Garden Inn brand; |
| ● | Trade Name / Branding Rights, to the extent such rights are separable from the franchise agreement; and |
| ● | Licenses and Permits, including an indefinite-lived liquor license that is not subject to amortization. |
Finite-lived intangible assets will be amortized over their estimated useful lives. The final amounts recorded, the classification of intangible assets, and the associated amortization periods will be determined upon completion of third-party valuation analyses and may differ from these preliminary estimates.
Goodwill
Goodwill is expected to arise primarily from:
| ● | The assembled hotel workforce; |
| ● | Anticipated operating improvements and integration efficiencies; |
| ● | The strategic value of adding a branded hospitality asset in a desirable geographic market; and |
| ● | Expected long-term contributions to NGTF’s lodging and automation platform. |
Goodwill recognized in connection with this transaction is not expected to be deductible for U.S. federal income tax purposes, as the acquisition was structured as a purchase of membership interests rather than an asset acquisition that would provide a tax basis step-up. Final conclusions regarding tax deductibility will be determined upon completion of the Company’s tax analyses.
Final tax-deductibility conclusions may change upon completion of tax analyses.
Any indefinite-lived intangible assets will not be amortized but will be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that such assets may be impaired.
Income Tax Considerations
The acquisition was structured as a purchase of membership interests in a limited liability company.
Income tax effects related to the acquisition, if material, will be reflected in the final purchase price allocation and recorded during the measurement period in accordance with ASC 805.
| 3 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Estimated Preliminary Purchase Price Allocation
The preliminary allocation of the total estimated consideration (including contingent consideration) to the fair values of assets acquired and liabilities assumed is as follows:
| Consideration | ||||
| Series C - convertible preferred stock - 176,167 shares | $ | 42,280,000 | ||
| Series C - contingent consideration - 20,000 shares | 4,800,000 | |||
| Fair value of consideration transferred | $ | 47,080,000 | ||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
| Cash | 968,000 | |||
| Accounts receivable | 11,000 | |||
| Prepaids and other | 7,000 | |||
| Inventory | 7,000 | |||
| Land | 2,800,000 | |||
| Property and equipment - net | 12,000,000 | |||
| Total assets acquired | 15,793,000 | |||
| Accounts payable and accrued expenses | 2,376,000 | |||
| Accounts payable and accrued expenses - related party | 240,000 | |||
| Deferred revenue/customer deposits | 12,000 | |||
| Notes payable | 1,710,000 | |||
| Mortgage note payable | 9,992,000 | |||
| Total liabilities assumed | 14,330,000 | |||
| Total identifiable net assets assumed | 1,463,000 | |||
| Allocation required for identifiable intangible assets and goodwill | 45,617,000 | |||
| Intangible asset (liquor license) | 20,000 | |||
| Intangible asset (franchise agreement) | 1,400,000 | |||
| Total identifiable intangible assets | 1,420,000 | |||
| Goodwill (including assembled workforce) | $ | 44,197,000 | ||
The above amounts are preliminary estimates. NGTF will complete a formal valuation of RM’s assets and liabilities and finalize the purchase price allocation within the measurement period (not to exceed one year from the Closing Date), as required under ASC 805.
| 4 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Adjustments may materially affect the allocation between tangible assets, intangible assets, and goodwill.
Transaction Costs
Acquisition-related costs, including legal, accounting, and advisory fees, were immaterial and expensed as incurred.
Relationship Between the Parties
The transaction was not a related-party transaction. Neither NGTF nor RM were under common control prior to closing.
No Change in Control
Although the transaction is accounted for as a business combination under ASC 805, it did not result in a change in control of NGTF. NGTF is both the legal acquirer and the accounting acquirer, and continues as the reporting entity for SEC purposes.
NGTF’s existing shareholders retained their voting and ownership interests in the Parent Company both before and after the acquisition. The acquisition represents the addition of RM as a wholly-owned subsidiary, rather than a reverse acquisition or change in control event.
Accordingly, the historical consolidated financial statements of NGTF will remain those of the registrant, with the results of RM included prospectively from the Closing Date, consistent with Rule 3-05 of Regulation S-X.
Pro Forma Condensed Combined Financial Information
Unaudited pro forma condensed combined financial information has been prepared under Article 11 of Regulation S-X to illustrate the effects of the acquisition.
Balance Sheet Presentation:
As the acquisition of RM was completed on September 30, 2025, NGTF’s historical consolidated balance sheet as of that date already reflects the financial position of the combined company in the Company’s form 10-Q, filed on November 19, 2025. Accordingly, no separate pro forma balance sheet is presented, consistent with Rule 11-02(c)(1) of Regulation S-X and SEC Release No. 33-10786.
| 5 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Statements of Operations Presentation:
The unaudited pro forma condensed combined statements of operations are presented for the:
| ● | Three months ended September 30, 2025; and | |
| ● | Fiscal Year ended June 30, 2025. |
Both periods give effect to the acquisition as if it had occurred on July 1, 2024.
Basis of Presentation
The pro forma financial information has been prepared in accordance with Article 11 of Regulation S-X, as amended by SEC Release No. 33-10786. It is presented for illustrative purposes only and is not necessarily indicative of what NGTF’s consolidated financial position or results of operations would have been had the acquisition occurred on the dates indicated, nor is it indicative of future results.
The pro forma information should be read in conjunction with:
| ● | NGTF’s historical consolidated financial statements, and | |
| ● | RM’s historical financial statements. |
Transaction Accounting Adjustments
The unaudited pro forma condensed combined statements of operations are presented for informational purposes only and combine the historical results of operations of NGTF and RM for the periods presented, as if the acquisition had occurred at the beginning of each period.
The acquisition of RM was completed on September 30, 2025, the last day of the quarterly period. Accordingly, while RM’s assets and liabilities are included in the Company’s historical consolidated balance sheet as of September 30, 2025, RM’s results of operations are not included in the Company’s historical consolidated statements of operations for the periods presented.
The pro forma statements of operations combine the historical results of NGTF and RM. The following transaction accounting adjustments were evaluated and none were required:
| ● | Elimination of intercompany transactions – none existed during the periods presented; | |
| ● | Purchase price allocation impacts – none; and | |
| ● | Acquisition-related transaction costs – expensed as incurred in the historical financial statements and not presented as pro forma adjustments, as such costs are non-recurring in nature and their presentation is not permitted under Article 11 of Regulation S-X |
The unaudited pro forma condensed combined financial information does not reflect any potential synergies, dis-synergies, or integration costs that may result from the acquisition.
Pro Forma Earnings per Share
Pro forma basic and diluted loss per share is calculated using NGTF’s historical weighted-average common shares outstanding. As part of the purchase consideration for the Rancho Mirage acquisition, the Company issued 176,167 shares of its Series C Convertible Preferred Stock, which are considered potential common stock equivalents since they are convertible into shares of NGTF common stock.
However, because NGTF reported a pro forma combined net loss for all periods presented, the inclusion of the 176,167 Series C shares, along with any other potential common stock equivalents, would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share, and the 176,167 Series C Convertible Preferred shares are excluded from the diluted EPS calculation.
Additional Information
The audited financial statements of RM for the years ended December 31, 2024 and 2023, and the unaudited financial statements for the nine months ended September 30, 2025 and 2024, together with the pro forma financial information required under Article 11 of Regulation S-X, are filed as Exhibits to this Form 8-K/A.
The unaudited pro forma condensed combined financial statements are forward-looking and subject to risks and uncertainties. Actual results may differ materially from those presented. See “Caution Regarding Forward-Looking Statements” and “Risk Factors” included elsewhere in this Form 8-K/A.
| 6 |
Pro Forma Condensed Combined Balance Sheet
September 30, 2025
(Unaudited)
September 30, 2025 Registrant Historical Nightfood Holdings, Inc. DBA Techforce Robotics | September 30, 2025 Target/Acquiree Historical Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage |
Transaction Accounting Adjustments | Notes | September 30, 2025 Pro Forma Combined | ||||||||||||||
| Assets | ||||||||||||||||||
| Current Assets | ||||||||||||||||||
| Cash | $ | 147,900 | $ | - | $ | - | $ | 147,900 | ||||||||||
| Accounts receivable - net | 84,550 | - | - | 84,550 | ||||||||||||||
| Inventory | 252,203 | - | - | 252,203 | ||||||||||||||
| Prepaids and other | 126,545 | - | - | 126,545 | ||||||||||||||
| Total Current Assets | 611,198 | - | - | 611,198 | ||||||||||||||
| Advances receivable | 103,474 | - | - | 103,474 | ||||||||||||||
| Property and equipment - net | 95,222 | - | - | 95,222 | ||||||||||||||
| Goodwill | 6,549,979 | - | - | 6,549,979 | ||||||||||||||
| Intangible assets - net | 2,112,965 | - | - | 2,112,965 | ||||||||||||||
| Other | 13,317 | - | - | 13,317 | ||||||||||||||
| Total Assets | $ | 9,486,155 | $ | - | $ | - | $ | 9,486,155 | ||||||||||
| Liabilities and Stockholders’ Deficit | ||||||||||||||||||
| Current Liabilities | ||||||||||||||||||
| Accounts payable and accrued expenses | $ | 4,109,821 | $ | - | $ | - | $ | 4,109,821 | ||||||||||
| Accounts payable and accrued expenses - related parties | 427,450 | - | - | 427,450 | ||||||||||||||
| Convertible notes payable - net | 4,272,411 | - | - | 4,272,411 | ||||||||||||||
| Derivative liabilities | 1,322,309 | - | - | 1,322,309 | ||||||||||||||
| Notes payable - net | 30,000 | - | - | 30,000 | ||||||||||||||
| Other | 14,972 | - | - | 14,972 | ||||||||||||||
| Total Current Liabilities | 10,176,963 | - | - | 10,176,963 | ||||||||||||||
| Long Term Liabilities | ||||||||||||||||||
| Convertible notes payable - net | 390,294 | - | - | 390,294 | ||||||||||||||
| Notes payable - net | 17,262 | - | - | 17,262 | ||||||||||||||
| Total Long Term Liabilities | 407,556 | - | - | 407,556 | ||||||||||||||
| Total Liabilities | 10,584,519 | - | - | 10,584,519 | ||||||||||||||
| Stockholders’ Equity | ||||||||||||||||||
| Preferred stock - $0.001 par value; 1,000,000 shares authorized | ||||||||||||||||||
| Series A Preferred stock - $0.001 par value; 10,000 shares designated 1,000 issued and outstanding, respectively | 1 | - | - | 1 | ||||||||||||||
| Series B, Convertible Preferred stock - $0.001 par value; 5,000 shares designated 1,950 issued and outstanding, respectively | 2 | - | - | 2 | ||||||||||||||
| Series C, Convertible Preferred stock - $0.001 par value; 500,000 shares designated 133,083 and 13,333 issued and outstanding, respectively | 133 | - | - | 133 | ||||||||||||||
| Series D, Convertible Preferred stock - $0.001 par value; 100,000 shares designated 3,334 and 1,667 issued and outstanding, respectively | 3 | - | - | 3 | ||||||||||||||
| Common stock - $0.001 par value, 200,000,000 shares authorized 128,957,407 and 128,907,407 shares outstanding, respectively | 128,957 | - | - | 128,957 | ||||||||||||||
| Additional paid-in capital | 41,196,265 | - | ||||||||||||||||
| Accumulated deficit | (42,423,725 | ) | - | - | (42,423,725 | ) | ||||||||||||
| Total Stockholders’ Deficit | (1,098,364 | ) | - | - | (1,098,364 | ) | ||||||||||||
| Total Liabilities and Stockholders’ Deficit | $ | 9,486,155 | $ | - | $ | - | $ | 9,486,155 | ||||||||||
| 7 |
Pro Forma Condensed Combined Statement of Operations
For the Three Months Ended September 30, 2025
(Unaudited)
September 30, 2025 Registrant Historical Nightfood Holdings, Inc. DBA Techforce Robotics | September 30, 2025 Target/Acquiree Historical Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage | Transaction Accounting Adjustments | Other Transaction Accounting Adjustments | Notes | September 30, 2025 Pro Forma Combined | |||||||||||||||||
| Revenues | $ | 782,027 | $ | 533,523 | $ | - | $ | - | $ | 1,315,550 | ||||||||||||
| Costs and expenses | ||||||||||||||||||||||
| Cost of sales | 475,565 | 305,196 | - | - | 780,761 | |||||||||||||||||
| Depreciation and amortization | 378,109 | 87,086 | - | - | 465,195 | |||||||||||||||||
| General and administrative expenses | 2,094,234 | 425,432 | - | - | 2,519,666 | |||||||||||||||||
| Total costs and expenses | 2,947,908 | 817,714 | - | - | 3,765,622 | |||||||||||||||||
| Income (loss) from operations | (2,165,881 | ) | (284,191 | ) | - | - | (2,450,072 | ) | ||||||||||||||
| Other income (expense) | ||||||||||||||||||||||
| Interest income | 4,925 | - | - | - | 4,925 | |||||||||||||||||
| Other income | 5,001 | 1,057,824 | - | - | 1,062,825 | |||||||||||||||||
| Interest expense (including amortization of debt discount) | (588,074 | ) | (188,920 | ) | - | - | (776,994 | ) | ||||||||||||||
| Other expense | - | (59,502 | ) | - | - | (59,502 | ) | |||||||||||||||
| Change in fair value of derivative liabilities | (950,053 | ) | - | - | - | (950,053 | ) | |||||||||||||||
| Total other income (expense) - net | (1,528,201 | ) | 809,402 | - | - | (718,799 | ) | |||||||||||||||
| Net income (loss) from continuing operations | (3,694,082 | ) | 525,211 | - | - | (3,168,871 | ) | |||||||||||||||
| Net loss from discontinued operations | (1,453 | ) | - | - | - | (1,453 | ) | |||||||||||||||
| Net income (loss) before provision for income taxes | (3,695,535 | ) | 525,211 | - | - | (3,170,324 | ) | |||||||||||||||
| Provision for income taxes | - | - | - | - | 1 | - | ||||||||||||||||
| Net income (loss) | $ | (3,695,535 | ) | $ | 525,211 | $ | - | $ | - | $ | (3,170,324 | ) | ||||||||||
| Loss per share - basic and diluted - continuing operations | $ | (0.03 | ) | $ | (0.02 | ) | ||||||||||||||||
| Loss per share - basic and diluted - discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||||||||||
| Loss per share - basic and diluted | $ | (0.03 | ) | $ | (0.02 | ) | ||||||||||||||||
| Weighted average number of shares - basic and diluted | 143,351,827 | 2 | 143,351,827 | |||||||||||||||||||
1 – Rancho Mirage Hilton, LLC (“RM”) is treated as a pass-through entity for income tax purposes and therefore does not record a provision for income taxes in its historical financial statements. The combined pro forma results reflect a consolidated pre-tax loss; accordingly, no pro forma income tax expense has been recorded because the impact of applying statutory corporate tax rates to RM’s historical income would not change the overall consolidated pro forma loss for the period presented. The unaudited pro forma condensed combined financial information does not reflect deferred tax assets, deferred tax liabilities, or valuation allowances that may result from the final purchase accounting analysis.
2 – The calculation of loss per share excludes the issued and outstanding member units of Rancho Mirage Hilton, LLC, as these units were canceled in connection with the business combination and therefore would not remain outstanding in the pro forma combined presentation. The consideration paid in the form of 176,167 shares of Series C Preferred Stock does not impact the weighted-average common shares outstanding because no shares of the Company’s common stock were issued in connection with the transaction. Accordingly, the weighted-average common shares outstanding used in the pro forma basic and diluted loss per share calculations are consistent with the Company’s historical presentation. The Series C Preferred Stock is also excluded from diluted earnings (loss) per share because the Company reported a pro forma net loss for the period presented and inclusion of such shares would be anti-dilutive. No retroactive adjustment has been made related to the issuance of the Series C Preferred Stock.
| 8 |
Pro Forma Condensed Combined Statement of Operations
For the Three Months Ended September 30, 2025
(Unaudited)
September 30, 2025 Registrant Historical Nightfood Holdings, Inc. DBA Techforce Robotics | September 30, 2025 Target/Acquiree Historical Treasure Mountain Holdings, LLC DBA Hilton Garden Inn Rancho Mirage | Transaction Accounting Adjustments | Other Transaction Accounting Adjustments | Notes | September 30, 2025 Pro Forma Combined | |||||||||||||||||
| Revenues | $ | 482,285 | $ | 4,383,009 | $ | - | $ | - | $ | 4,865,294 | ||||||||||||
| Costs and expenses | ||||||||||||||||||||||
| Cost of sales | 412,503 | 109,176 | - | - | 521,679 | |||||||||||||||||
| Impairment of goodwill | 897,542 | - | - | - | 897,542 | |||||||||||||||||
| Depreciation and amortization | 45,552 | 560,989 | - | - | 606,541 | |||||||||||||||||
| General and administrative expenses | 3,673,760 | 3,413,802 | - | - | 7,087,562 | |||||||||||||||||
| Total costs and expenses | 5,029,357 | 4,083,967 | - | - | 9,113,324 | |||||||||||||||||
| Income (loss) from operations | (4,547,072 | ) | 299,042 | - | - | (4,248,030 | ) | |||||||||||||||
| Other income (expense) | ||||||||||||||||||||||
| Interest income | 75,119 | - | - | - | 75,119 | |||||||||||||||||
| Other income | 9,810 | - | - | - | 9,810 | |||||||||||||||||
| Loss on debt extinguishment | (113,955 | ) | - | - | - | (113,955 | ) | |||||||||||||||
| Derivative expense | (653,792 | ) | - | - | - | (653,792 | ) | |||||||||||||||
| Interest expense (including amortization of debt discount) | (1,526,067 | ) | (434,150 | ) | - | - | (1,960,217 | ) | ||||||||||||||
| Change in fair value of derivative liabilities | (190,102 | ) | - | - | - | (190,102 | ) | |||||||||||||||
| Loss on settlement of pre-existing assets | (1,490,803 | ) | - | - | - | (1,490,803 | ) | |||||||||||||||
| Gain on debt extinguishment - derivative liabilities | 500,678 | - | - | - | 500,678 | |||||||||||||||||
| Total other income (expense) - net | (3,389,112 | ) | (434,150 | ) | - | - | (3,823,262 | ) | ||||||||||||||
| Net income (loss) from continuing operations | (7,936,184 | ) | (135,108 | ) | - | - | (8,071,292 | ) | ||||||||||||||
| Net loss from discontinued operations | (179,694 | ) | - | - | - | (179,694 | ) | |||||||||||||||
| Net income (loss) before provision for income taxes | (8,115,878 | ) | (135,108 | ) | - | - | (8,250,986 | ) | ||||||||||||||
| Provision for income taxes | - | - | - | - | 1 | - | ||||||||||||||||
| Net income (loss) | $ | (8,115,878 | ) | $ | (135,108 | ) | $ | - | $ | - | $ | (8,250,986 | ) | |||||||||
| Deemed Dividend on Series B Preferred Stock | (11,566 | ) | - | - | - | (11,566 | ) | |||||||||||||||
| Net loss available to common stockholders | $ | (8,127,444 | ) | $ | (135,108 | ) | $ | - | $ | - | $ | (8,262,552 | ) | |||||||||
| Loss per share - basic and diluted - continuing operations | $ | (0.06 | ) | $ | (0.06 | ) | ||||||||||||||||
| Loss per share - basic and diluted - discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||||||||||
| Loss per share - basic and diluted | $ | (0.06 | ) | $ | (0.06 | ) | ||||||||||||||||
| Weighted average number of shares - basic and diluted | 130,384,336 | 2 | 130,384,336 | |||||||||||||||||||
1 – Rancho Mirage Hilton, LLC (“RM”) is treated as a pass-through entity for income tax purposes and therefore does not record a provision for income taxes in its historical financial statements. The combined pro forma results reflect a consolidated pre-tax loss; accordingly, no pro forma income tax expense has been recorded because the impact of applying statutory corporate tax rates to RM’s historical income would not change the overall consolidated pro forma loss for the period presented. The unaudited pro forma condensed combined financial information does not reflect deferred tax assets, deferred tax liabilities, or valuation allowances that may result from the final purchase accounting analysis.
2 – The calculation of loss per share excludes the issued and outstanding member units of Rancho Mirage Hilton, LLC, as these units were canceled in connection with the business combination and therefore would not remain outstanding in the pro forma combined presentation. The consideration paid in the form of 176,167 shares of Series C Preferred Stock does not impact the weighted-average common shares outstanding because no shares of the Company’s common stock were issued in connection with the transaction. Accordingly, the weighted-average common shares outstanding used in the pro forma basic and diluted loss per share calculations are consistent with the Company’s historical presentation. The Series C Preferred Stock is also excluded from diluted earnings (loss) per share because the Company reported a pro forma net loss for the period presented and inclusion of such shares would be anti-dilutive. No retroactive adjustment has been made related to the issuance of the Series C Preferred Stock.
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