NightFood Holdings, Inc 10-Q for FY2020 Q3

NightFood Holdings, Inc. (NGTFD)

10-Q 2020-05-20 For: 2020-03-31

Added on April 11, 2026

About this 10-Q

NightFood Holdings, Inc filed this 10-Q on May 20, 2020, covering the quarter ended March 31, 2020 (FY2020 Q3).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $119.48K; down 25.1% from $159.58K a year earlier
Net loss: $1.09M; compared with a net loss of $2.21M a year earlier

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Nevada		46-3885019
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

520 White Plains Road, Suite 500 Tarrytown, New York		10591
(Address of Principal Executive Offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Nightfood Holdings, Inc Common Stock		NGTF		OTCQB

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	8

Item 4.	Controls and Procedures.	8

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	9

Item 1A.	Risk Factors.	9

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	9

Item 3.	Defaults Upon Senior Securities.	9

Item 4.	Mine Safety Disclosures.	9

Item 5.	Other Information.	9

Item 6.	Exhibits.	9

Signatures		10

Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2020 (Unaudited) and June 30, 2019	F-1
Unaudited Condensed Consolidated Statement of Operations for the three months and nine months ended March 31, 2020 and 2019	F-2
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the nine months ended March 31, 2020 and 2019	F-3
Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended March 31, 2020 and 2019	F-4
Notes to Unaudited Condensed Consolidated Financial Statements	F-5 - F-19

	March 31,			June 30,
	2020			2019
	(Unaudited)
ASSETS
Current assets:
Cash	$	110,101		$	30,142
Accounts receivable - net		50,924			45,086
Inventories		285,879			406,439
Other current assets		580,746			1,000
Total current assets		1,027,650			482,667

Total assets	$	1,027,650		$	482,667

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	1,213,649		$	496,809
Accrued expense-related party		9,974			33,974
Short term borrowings – line of credit		5,000			-
Convertible notes payable – net of discount		1,790,578			1,117,741
Fair value of derivative liabilities		1,598,539			1,306,748
Total current liabilities	$	4,617,740			2,955,272

Commitments and contingencies		-			-

Stockholders’ deficit:
Preferred stock, ($0.001 par value, 100,000,000 shares authorized, and 1,000 issued and outstanding as of March 31, 2020 and 1,000 outstanding as of June 30, 2019, respectively)		1			1
Common stock, ($0.001 par value, 200,000,000 shares authorized, and 60,189,966 issued and outstanding as of March 31, 2020 and 53,773,856 outstanding as of June 30, 2019, respectively)		60,190			53,774
Additional paid in capital		12,310,827			10,692,679
Accumulated deficit		(15,961,108	)		(13,219,059	)
Total stockholders’ deficit		(3,590,090	)		(2,472,605	)
Total Liabilities and Stockholders’ Deficit	$	1,027,650		$	482,667

	For the nine months ended March 31, 2020			For the nine months ended March 31, 2019			For the three months ended March 31, 2020			For the three months ended March 31, 2019
Revenues	$	227,257		$	296,434		$	119,475		$	159,575

Operating expenses
Cost of product sold		352,240			129,634			157,265			74,443
Advertising and promotional		673,814			285,700			137,487			105,277
Selling, general and administrative		295,107			432,095			92,423			127,775
Professional fees		366,725			449,554			99,727			146,254
Impairment expense		500,000			-			500,000			-
Total operating expenses		2,187,886			1,296,983			986,902			453,749

Loss from operations		(1,960,629	)		(1,000,549	)		(867,427	)		(294,174	)

Interest expense - shareholder		82,952			89,750			40,616			(100	)
Change in derivative liability		(612,093	)		596,033			(256,468	)		1,377,160
Interest expense - other		1,270,943			1,495,485			439,507			539,532
Other expense		39,618			779			445			-
Total other expense		781,420			2,182,047			224,100			1,916,412

Provision for income tax		-			-			-			-

Net loss	$	(2,742,049	)	$	(3,182,596	)	$	(1,091,527	)	$	(2,210,586	)

Basic and diluted net loss per common share	$	(0.05	)	$	(0.07	)	$	(0.02	)	$	(0.04	)

Weighted average shares of capital outstanding – basic and diluted		56,447,392			46,021,658			58,712,745			49,678,759

	Common Stock						Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Par Value			Capital			Deficit			Deficit
Balance, June 30, 2018		42,608,329		$	42,608		$	5,919,152		$	(8,620,714	)	$	(2,658,954	)
Common stock issued for services		445,598			446			134,266			-			134,711
Common stock issued for interest		44,487			44			6,258			-			6,302
Issuance of common stock for debt		914,982			915			129,085			-			130,000
Net loss		-			-			-			(517,600	)		(517,600	)
Balance, Three Months ended September 30, 2018		44,013,396		$	44,013		$	6,188,761		$	(9,138,314	)	$	(2,905,541	)
Common stock issued for services		134,813			135			26,387			-			26,522
Common stock issued for services		(500,000	)		(500	)		(49,500	)		-			(50,000	)
Common stock issued for interest		130,893			131			12,929			-			13,060
Issuance of common stock for debt		2,134,989			2,135			215,365			-			217,500
Common stock issued for accounts payable		106,957			107			24,493						24,600
Exercise of warrants		400,000			400			119,600						120,000
Derivative liability reclassed upon debt conversion								227,145						227,145

Net loss		-			-			-			(454,411	)		(454,411	)
Balance, Three Months ended December 31, 2018		46,421,048		$	46,421		$	6,765,182		$	(9,592,725	)	$	(2,781,124	)

Common stock issued for services		84,757			85			53,494			-			53,579
Common stock issued for interest		466,485			466			69,921			-			70,387
Issuance of common stock for debt		5,749,264			5,749			870,703			-			876,452
Common stock issued for accounts payable		175,000			175			39,075						39,250
Common stock issued for cash		84,389			84			49,916			-			50,000
Derivative liability reclassed upon debt conversion								2,319,287						2,319,287

Net loss		-			-			-			(2,210,585	)		(2,210,585	)
Balance, Three Months ended March 31, 2019		52,980,943		$	52,981		$	10,167,578		$	(11,803,310	)	$	(1,582,752	)

	Common Stock				Preferred Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Par Value		Shares		Par Value		Capital		Deficit			Deficit
Balance, June 30, 2019		53,773,856	$	53,774		1,000	$	1	$	10,692,679	$	(13,219,059	)	$	(2,472,605	)
Common stock issued for services		122,762		123		-		-		49,274		-			49,397
Common stock issued for interest		110,404		110						26,487		-			26,597
Issuance of common stock for debt conversion		1,409,349		1,409						335,591		-			337,000
Derivative liability reclassed upon debt conversion		-		-						213,739		-			213,739
Net loss		-		-		-		-		-		(513,581	)		(513,581	)
Balance, Three Months ended September 30, 2019		55,416,371	$	55,416		1,000	$	1	$	11,317,770	$	(13,732,640	)	$	(2,359,452	)
Common stock issued for services		85,000		85		-		-		21,415		-			21,500
Common stock issued for interest		107,227		107						15,632		-			15,739
Issuance of common stock for debt conversion		1,500,495		1,500						218,500		-			220,000
Derivative liability reclassed upon debt conversion		-		-						128,605		-			128,605
Net loss		-		-		-		-		-		(1,136,941	)		(1,136,941	)
Balance, Three Months ended December 31, 2019		57,109,093	$	57,109		1,000		1	$	11,701,922	$	(14,869,581	)	$	(3,110,549	)

Common stock issued for interest		320,650		321						40,615		-			40,936
Issuance of common stock for debt conversion		2,760,223		2,760						351,240		-			354,000
Derivative liability reclassed upon debt conversion		-		-						217,050		-			217,050
Net loss		-		-		-		-		-		(1,091,527	)		(1,091,527	)
Balance, Three Months ended March 31, 2020		60,189,966	$	60,190		1,000	$	1	$	12,310,827	$	(15,961,108	)	$	(3,590,090	)

	For the nine months ended March 31, 2020			For the nine months ended March 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,742,049	)	$	(3,182,596	)
Adjustments to reconcile net loss to net cash used in operations activities:
Stock issued for services		70,897			164,812
Stock issued for interest		82,952			89,750
Amortization of debt discount		1,270,943			1,495,334
Deferred financing fees		39,493			-
Change in derivative liability		(612,093	)		596,033
Amortization of intangible assets		500,000			-
Impairment expenses related to intangible assets		500,000			-
Change in operating assets and liabilities
Change in accounts receivable		(5,838	)		(85,604	)
Change in inventory		120,560			(211,757	)
Change in other current assets		(579,746	)		(18,809	)
Change in accounts payable		50,173			132,914
Change in accrued expenses		(24,000	)		(32,000	)
Net cash used in operating activities		(1,328,708	)		(1,051,923	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for purchase of intangible assets		(333,333	)		-
Net cash used in investing activities		(333,333	)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of debt-net		1,737,000			1,094,005
Proceeds from sale of stock		-			50,000
Repayment of short-term debt		-			(1,000	)
Borrowings on line of credit		5,000			-
Repayment of convertible debt		-			(102,076	)
Net cash provided by financing activities		1,742,000			1,040,929

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		79,959			(10,994	)

Cash and cash equivalents, beginning of period		30,142			48,440
Cash and cash equivalents, end of period	$	110,101		$	37,446

Supplemental Disclosure of Cash Flow Information:
Cash Paid For:
Income taxes	$	-		$	-
Summary of Non-Cash Investing and Financing Information:
Initial derivative liability and debt discount accounted	$	1,463,278		$	392,005
Value of embedded derivative liabilities	$	-		$	-
Stock issued for conversion of debt	$	911,000		$	1,223,953
Intangible assets acquired and adjusted in accounts payable balance	$	666,667
Stock Issued for Interest	$	82,952		$	89,750

1.	Description of Business		Nightfood Holdings, Inc. (the “Company”) is a Nevada Corporation organized October 16, 2013 to acquire all of the issued and outstanding shares of Nightfood, Inc., a New York Corporation from its sole shareholder, Sean Folkson. All of its operations are conducted by its two subsidiaries: Nightfood, Inc. (“Nightfood”) and MJ Munchies, Inc. (“Munchies”). Nightfood’s business model is to manufacture and distribute snack products specifically formulated for nighttime snacking to help consumers satisfy nighttime cravings in a better, healthier, more sleep friendly way. Munchies has acquired a portfolio of intellectual property around the brand name Half-Baked, and intends to license said IP to operators in the cannabis edibles space and other related spaces.

		●	The Company’s fiscal year end is June 30.

		●	The Company currently maintains its corporate address in Tarrytown, New York.

Cash and Cash Equivalents	●	The Company classifies as cash and cash equivalents amounts on deposit in the banks and cash temporarily in various instruments with original maturities of three months or less at the time of purchase.

Fair Value of Financial Instruments	●	Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Inventories	●	Inventories consisting of packaged food items and supplies are stated at the lower of cost (FIFO) or net realizable value, including provisions for spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of sales during the period spoilage is incurred. The Company has no minimum purchase commitments with its vendors.

Advertising Costs	●	Advertising costs are expensed when incurred and are included in advertising and promotional expense in the accompanying statements of operations. Although not traditionally thought of by many as “advertising costs”, the Company includes expenses related to graphic design work, package design, website design, domain names, and product samples in the category of “advertising costs”. The Company reported advertising costs of $673,814 and $285,700 for the nine months ended March 31, 2020 and 2019, respectively. The Company reported advertising costs of $119,475 and $105,277 for the three months ended March 31, 2020 and 2019, respectively.

Income Taxes	●	The Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided.

	●	Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB Topic 740, “Accounting for Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.

	●	A valuation allowance has been recorded to fully offset the deferred tax asset even though the Company believes it is more likely than not that the assets will be utilized.

	●	The Company’s effective tax rate differs from the statutory rates associated with taxing jurisdictions because of permanent and temporary timing differences as well as a valuation allowance.

Revenue Recognition	●	The Company generates its revenue by selling its nighttime snack products wholesale and direct to consumer.

		●	All sources of revenue are recorded pursuant to FASB Topic 606 Revenue Recognition, to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, this revenue generation requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

		●	The Company offers sales incentives through various programs, consisting primarily of advertising related credits. The Company records advertising related credits with customers as a reduction to revenue as no identifiable benefit is received in exchange for credits claimed by the customer.

		●	The Company revenue from contracts with customers provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. As this policy election is in line with the Company’s previous accounting practices, the treatment of shipping and handling activities under FASB Topic 606 did not have any impact on the Company’s results of operations, financial condition and/or financial statement disclosures. The adoption of ASC 606 did not result in a change to the accounting for any of the Company’s revenue streams that are within the scope of the amendments. The Company’s services that fall within the scope of ASC 606 are recognized as revenue as the Company satisfies its obligation to the customer.

			Under ASC 606-10-32-27, if the consideration payable to a customer is accounted for as a reduction of the transaction price, “an entity shall recognize the reduction of revenue when (or as) the later of either of the following events occurs:
			a)	The entity recognizes revenue for the transfer of the related goods or services to the customer.
			b)	The entity pays or promises to pay the consideration (even if the payment is conditional on a future event). That promise might be implied by the entity’s customary business practices.”
			Management reviewed each arrangement to determine if each fee paid is for a distinct good or service and should be expensed as incurred or if the Company should recognize the payment as a reduction of revenue.

	As of September 30, 2019
	Previously Reported			Adjustments			As Corrected
Consolidated Balance Sheet
Current assets	$	858,216		$	387,917		$	1,246,133
Current liabilities	$	3,287,252		$	1,151,666		$	4,438,918
Working capital (deficit)	$	(2,429,036	)	$	(763,749	)	$	(3,192,785	)
Total assets	$	858,216		$	1,221,250		$	2,079,466
Total liabilities	$	3,287,252		$	1,151,666		$	4,438,918
Total stockholders' deficit	$	(2,429,036	)	$	69,584		$	(2,359,452	)

	As of December 31, 2019
	Previously Reported			Adjustments			As Corrected
Consolidate Balance Sheet
Current assets	$	577,944		$	408,294		$	986,238
Current liabilities	$	4,514,446		$	249,007		$	4,763,453
Working capital (deficit)	$	(3,936,502	)	$	159,287		$	(3,777,215	)
Total assets	$	1,550,298		$	102,607		$	1,652,905
Total liabilities	$	4,514,446		$	249,007		$	4,763,453
Total stockholders' deficit	$	(2,964,148	)	$	(146,400	)	$	(3,110,548	)

	For the Year Ended June 30, 2019 ^(A)
	Previously Reported			Adjustments			As Corrected
Consolidated Statements of Operations
Revenues	$	352,172		$	-		$	352,172
Operating expenses	$	2,263,722		$	(264,167	)	$	1,999,555
Loss from operations	$	(1,911,550	)	$	264,167		$	(1,647,383	)
Other income (expenses)	$	2,686,793		$	-		$	2,686,793
Net income (loss)	$	(4,598,343	)	$	264,167		$	(4,334,176	)
Basic & diluted EPS	$	(0.09	)	$	-		$	(0.09	)

	For the Three Months Ended September 30, 2019
	Previously Reported			Adjustments			As Corrected
Consolidated Statements of Operations
Revenues	$	206,497		$	(160,000	)	$	46,497
Operating expenses	$	570,858		$	(229,584	)	$	341,274
Loss from operations	$	(364,361	)	$	69,584		$	(294,777	)
Other income (expenses)	$	218,803		$	-		$	218,803
Net income (loss)	$	(583,164	)	$	69,584		$	(513,580	)
Basic & diluted EPS	$	(0.01	)	$	-		$	(0.01	)

		The Company recognizes revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers.

Concentration of Credit Risk	●	Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places its cash deposits only with high credit quality institutions. Management believes the risk of loss is minimal. At March 31, 2020 and June 30, 2019, the Company did not have any uninsured cash deposits.

Beneficial Conversion Feature	●	For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Debt Issue Costs	●	The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount.

Original Issue Discount	●	If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Valuation of Derivative Instruments	●	ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on derivative liability under the line item “change in derivative liability”.

Derivative Financial Instruments	●	The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

		Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities.

Customer Concentration	●	During the nine months ended March 31, 2020, the Company had one customer account for approximately 45% of the gross sales. During the nine months ended March 31, 2019, one customer accounted for approximately 16% of the revenue volume. The reason for this change is that almost all revenue in Fiscal Year 2019 was from sales of Nightfood bars direct to individual consumers, whereas in Fiscal Year 2020, the majority of revenue was from wholesale sales of ice cream direct to supermarkets and wholesalers. As the Company continues to grow its distribution base, it is anticipated that revenue distribution will become less concentrated.

Receivables Concentration	●	As of March 31, 2020, the Company had receivables due from five customers, each accounting for over 10% of the outstanding balance. As of June 30, 2019, the Company had receivables due from five customers, four of which accounted for over 10% of the outstanding balance.

Income Per Share	●	Net income per share data for both the nine-month periods ending March 31, 2020 and 2019, and the three-month periods ending March 31, 2020 are based on net income available to common shareholders divided by the weighted average of the number of common shares outstanding.

Impairment of Long-lived Assets	●	The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During the period ended March 31 2020 and 2019, the Management determined and impaired $500,000 and $-0-, respectively as impairment on intangible asset

Digital Asset Capitalization	●	ASC 350-50-05-01 states “ on accounting for costs incurred to develop a website, including whether to capitalize or expense the following types of costs:
		a)	Costs incurred in the planning stage
		b)	Costs incurred in the website application and infrastructure development stage
		c)	Costs incurred to develop graphics
		d)	Costs incurred to develop content
		e)	Costs incurred in the operating stage.”

		ASC 350-50-25-6 states “Costs incurred to purchase software tools, or costs incurred during the application development stage for internally developed tools, shall be capitalized unless they are used in research and development and meet either of the following conditions:

		a)	They do not have any alternative future uses.
		b)	They are internally developed and represent a pilot project or are being used in a specific research and development project (see paragraph 350-40-15-7).”

		Further, at ASC 350-50-25-7, “Costs to obtain and register an Internet domain shall be capitalized under Section 350-30-25.”

		During the period ended March 31 2020, the Management determined and capitalized $1,000,000 under ASC 350-50 and accounted as an intangible asset and amortize the costs over the life of the relationship.

Recent Accounting Pronouncements		The Company reviews all of the Financial Accounting Standard Board’s updates periodically to ensure the Company’s compliance of its accounting policies and disclosure requirements to the Codification Topics. In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, to establish ASC Topic 606, (ASC 606). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

		The standard became effective for us beginning on July 1, 2018 and did not have a material impact on our financial statements.

		In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurements of Financial Assets and Financial Liabilities. The standard will be effective for us beginning January 1, 2019. We are currently evaluating the impact of this standard on our financial statements, including accounting policies, processes, and systems.

		In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently amended the guidance relating largely to transition considerations under the standard in January 2017, to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.

		The standard became effective for us beginning July 1, 2019. We have reviewed this and have determined that there is no material impact on our financial statements.

		The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements.

3.	Restatement of Prior Financial Information	Subsequent to our external auditor’s periodic review of the Form 10-Q for the Periods Ended September 30, 2019 and December 31, 2019 and, in the process of review, the current Form 10-Q for the Period Ended March 31, 2020, the Company conducted further reviews of the financial statements. Based on such reviews, the following determinations were made:

		Error in Accounting for Slotting and Set-up Fees

		During our review, we determined that the accounting treatment for the recognition of slotting fees and other fees paid or payable by the Company to certain strategic partners was incorrect. Specifically, it has been determined that revenue relating to the slotting fee, which was originally capitalized and amortized into expense over an 18-month period should instead be treated as a reduction in revenue at the later of recognition of revenue for the transfer of the Nightfood product or when the Company pays or promised to pay the slotting fee. In addition, certain fees related to platforms to launch our products and advertising efforts should have been capitalized and recorded as an intangible asset. The Company previously recorded a portion of this fee as an intangible asset – placement fee and expensed the remaining amount as advertising expense in the Period Ended December 31, 2019.

		In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality (“SAB 99”) and Staff Accounting Bulletin 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”), the Company has determined that the impact of adjustments relating to the corrections of this accounting error are not material to previously issued annual audited and unaudited financial statements. Accordingly, these changes are disclosed herein and will be disclosed prospectively.

	As of June 30, 2019 ^(A)
	Previously Reported			Adjustments		As Corrected
Consolidated Balance Sheet
Current assets	$	482,667		$	487,500	$	970,167
Current liabilities	$	2,955,272		$	223,333	$	3,178,605
Working capital (deficit)	$	(2,472,605	)	$	264,167	$	(2,208,438	)
Total assets	$	482,667		$	487,500	$	970,167
Total liabilities	$	2,955,272		$	223,333	$	3,178,605
Total stockholders' deficit	$	(2,472,605	)	$	264,167	$	(2,208,438	)

	For the Six Months Ended December 31, 2019
	Previously Reported			Adjustments			As Corrected
Consolidated Statements of Operations
Revenues	$	379,488		$	(271,706	)	$	107,782
Operating expenses	$	1,326,290		$	(125,306	)	$	1,200,984
Loss from operations	$	(946,802	)	$	(146,400	)	$	(1,093,202	)
Other income (expenses)	$	557,320		$	-		$	557,320
Net income (loss)	$	(1,504,122	)	$	(146,400	)	$	(1,650,522	)
Basic & diluted EPS	$	(0.02	)	$	-		$	(0.02	)

	For the Three Months Ended December 31, 2019
	Previously Reported			Adjustments			As Corrected
Consolidated Statements of Operations
Revenues	$	172,991		$	(111,706	)	$	61,285
Operating expenses	$	755,432		$	104,278		$	859,710
Loss from operations	$	(582,441	)	$	(215,984	)	$	(798,425	)
Other income (expenses)	$	338,517		$	-		$	338,517
Net income (loss)	$	(920,958	)	$	(215,984	)	$	(1,136,942	)
Basic & diluted EPS	$	(0.02	)	$	-		$	(0.02	)

		●	The Company has limited available cash resources and we do not believe our cash on hand will be adequate to satisfy our ongoing working capital needs. The Company is continuing to raise capital through private placement of our common stock and through the use of convertible notes to finance the Company’s operations, of which it can give no assurance of success. However, the Company has a strong ongoing relationship with Eagle Equities and we expect to be able to continue to finance our operations as we have over the previous several quarters, although no assurance can be guaranteed. We believe that our current capitalization structure, combined with ongoing increases in revenues, will enable us to successfully secure required financing to continue our growth. In the short term, the Company plans to continue to take advantage of convertible notes as a financing vehicle, as it allows for today’s operating capital to be either repaid, or converted to equity at future valuations.

			Because the business is new and has limited operating history and sales, no certainty of continuation can be stated. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations.

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

	March 31, 2020		June 30, 2019
Finished goods – bars	$	-	$	30,800
Finished goods - ice cream		265,755		346,229
Raw material – ingredients		12,848		25,477
Packaging		7,276		3,933
TOTAL	$	285,879	$	406,439

	March 31, 2020		June 30, 2019
Prepaid advertising costs	$	580,746	$	-
Vendor deposits – Other	$	-	$	1,000
TOTAL	$	580,46	$	1,000

	March 31,			June 30,
	2020			2019
Intangible assets	$	1,000,000		$	-
Amortization of intangible assets		(500,000	)		-
Impairment of intangible assets		(500,000	)
TOTAL	$	-		$	-

	March 31, 2020		June 30, 2019
Accrued consulting fees – related party	$	9,974	$	33,974
TOTAL	$	9,974	$	33,974

			On July 2, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated July 12, 2018, in the amount of $207,000. The lender was Eagle Equities, LLC. The notes have a maturity of July 12, 2019 and interest rate of 8% per annum and are convertible at a price of 60% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $207,000 Notes was calculated using the Black-Scholes pricing model at $257,842, with the following assumptions: risk-free interest rate of 2.59%, expected life of 1 year, volatility of 183%, and expected dividend yield of zero. Because the fair value of the note exceeded the net proceeds from the $207k Notes, a charge was recorded to “Financing cost” for the excess of the fair value of the note, for a net charge of $50,842.

			This note has been successfully retired via conversion into shares during the three months ended September 30, 2019. The Company fair valued the notes as of conversion date and accounted for a gain on conversion of $5,749 included under line item “change in derivative liability” and also, reclassed the related $139,268 derivative liability balance into additional paid in capital.

			On December 18, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated December 18, 2018, in the amount of $130,000. The lender was Eagle Equities, LLC. The notes have a maturity of December 18, 2019 and interest rate of 8% per annum and are convertible at a price of 65% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $130,000 Notes was calculated using the Black-Scholes pricing model at $128,976, with the following assumptions: risk-free interest rate of 2.64%, expected life of 1 year, volatility of 144%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $130k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $0. This note has been successfully retired via conversion into shares during the three months ended December 31, 2019. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $2,066 included under line item “change in derivative liability” and also, reclassed the related $75,946 derivative liability balance into additional paid in capital.

			On January 28, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated January 28, 2019, in the amount of $234,000. The lender was Eagle Equities, LLC. The notes have a maturity of January 28, 2020 and interest rate of 8% per annum and are convertible at a price of 65% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $234,000 Notes was calculated using the Black-Scholes pricing model at $226,452, with the following assumptions: risk-free interest rate of 2.60%, expected life of 1 year, volatility of 135%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $234k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $0. $90,000 of the note has been successfully retired via conversion into shares during the three months ended December 31, 2019. The Company fair valued the notes as of conversion date and accounted for a gain on conversion of $4,882 included under line item “change in derivative liability” and also, reclassed the related $52,659 derivative liability balance into additional paid in capital. The balance of this note of $144,000 of the note has been successfully retired via conversion into shares during the three months ended March 31, 2020. The Company fair valued the notes as of conversion date and accounted for a gain on conversion of $1,463 included under line item “change in derivative liability” and also, reclassed the related $48,218 derivative liability balance into additional paid in capital.

			On February 14, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated February 14, 2019, in the amount of $104,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 14, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $104,000 Notes was calculated using the Black-Scholes pricing model at $90,567, with the following assumptions: risk-free interest rate of 2.53%, expected life of 1 year, volatility of 136%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $104k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $0.

			On June 11, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated June 11, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of June 11, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $240,217, with the following assumptions: risk-free interest rate of 2.05%, expected life of 1 year, volatility of 16%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $46,727.

			On July 5, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated July 5, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of July 5, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $239,759, with the following assumptions: risk-free interest rate of 1.98%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the 300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $62,403.

			On August 8, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 8, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 8, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $254,082, with the following assumptions: risk-free interest rate of 1.79%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $89,799.

			On August 29, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 29, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 29, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $234,052, with the following assumptions: risk-free interest rate of 1.75%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the 300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $96,186.

			On September 24, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated September 24, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of September 24, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $118,009, with the following assumptions: risk-free interest rate of 1.78%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $56,903.

			On November 7, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated November 7, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of November 7, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $121,875, with the following assumptions: risk-free interest rate of 1.58%, expected life of 1 year, volatility of 122%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $73,459.

			On December 31, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated December 31, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of December 31, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $189,172, with the following assumptions: risk-free interest rate of 1.59%, expected life of 1 year, volatility of 115%, and expected dividend yield of zero. Because the fair value of the note exceed the net proceeds from the $150k Notes, $39,172 was recorded to “Financing cost” for the excess of the fair value of the note. As of March 31, 2020, the debt discount was $112,603.

			On February 6, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 6, 2019, in the amount of $200,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $200,000 Notes was calculated using the Black-Scholes pricing model at $156,061, with the following assumptions: risk-free interest rate of 1.51%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. As of March 31, 2020, the debt discount was $132,973. On February 26, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 26, 2019, in the amount of $187,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $187,000 Notes was calculated using the Black-Scholes pricing model at $150,268, with the following assumptions: risk-free interest rate of 1.18%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. As of March 31, 2020, the debt discount was $136,682.

Convertible notes payable issued as of June 30, 2019	$	1,117,741
Convertible notes payable issued as of March 31, 2020		1,737,000
Unamortized amortization of debt and beneficial conversion feature		(153,163	)
Notes converted into shares of common stock		(911,000	)
Balance at March 31, 2020	$	1,790,578

10.	Derivative Liability	Due to the variable conversion price associated with some of these convertible promissory notes disclosed in Note 8 above, the Company has determined that the conversion feature is considered a derivative liability for instruments which are convertible and have not yet been settled. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives on the date they are deemed to be derivative liabilities.

		During the nine month period ended March 31, 2020, the Company recorded a loss in fair value of derivative $612,093. The Company will measure the fair value of each derivative instrument in future reporting periods and record a gain or loss based on the change in fair value.

		Below is a reconciliation of the derivative liability as presented on the Company’s balance sheet as of March 31, 2020:

Derivative liability as of June 30, 2019	$	1,306,748
Initial derivative liability accounted for convertible notes payable issued during the period ended March 31, 2020		1,463,278
Reclassed to additional paid in capital for notes converted into shares of common stock		(559,394	)
Change in derivative liability during the period		(612,093	)
Balance at March 31, 2020	$	1,598,539

12.	Capital Stock Activity	●	The Company has 60,189,966 and 53,773,856 shares of its $0.001 par value common stock issued and outstanding as of March 31, 2020 and June 30, 2019 respectively.

		●	During the nine months ended March 31, 2020 the Company issued 207,762 shares of common stock for services valued at $70,897, issued 5,670,067 shares in regards to debt being converted into stock valued at $911,000, and issued 538,281 shares of common stock valued at $82,292 as part of a loan agreement and payment of interest as part of the debt conversion.