Going Concern |
3. Going Concern
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The
Company’s financial statements are prepared using generally accepted accounting principles, which contemplate the realization of
assets and liquidation of liabilities in the normal course of business. Because the business is new and has limited operating history
and relatively few sales, no certainty of continuation can be stated. |
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The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. For the fiscal
year ended June 30, 2023, the Company had an operating and net loss of $5,749,722 and cash flow used in operations of $1,173,157 and
an accumulated deficit of $34,988,126. |
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The Company has limited available cash resources
and we do not believe our cash on hand will be sufficient to fund our operations and growth throughout Fiscal 2024 or adequate to satisfy
our immediate or ongoing working capital needs.
The Company is continuing to seek to raise capital
through the sales of its common stock, preferred stock and/or convertible notes, as well as potentially the exercise of outstanding warrants,
to finance the Company’s operations, of which it can give no assurance of success. Management has devoted a significant amount of
time to 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.
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Because
the Company has limited sales, no certainty of continuation can be stated. The Company’s ability to continue as a going concern
is dependent upon raising additional funds through debt and equity financing and generating revenue. In addition, the Company will receive
the proceeds from its outstanding warrants as, if and when such warrants are exercised for cash. There are no assurances the Company
will receive the necessary funding or generate revenue necessary to fund operations. |
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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. |
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From
both public statements observed, and conversations conducted between Nightfood Management and current and former executives from certain
global food and beverage conglomerates, it has been affirmed to Management that there is increased strategic interest in the nighttime
nutrition space as a potential high-growth opportunity, partially due to recent declines in consumer sleep quality and increases in at-home
nighttime snacking. |
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The
Company has experienced no major issues with supply chain or logistics. Order processing function has been normal to date, and its manufacturers
have assured the Company that their operations are “business as usual” as of the time of this filing. |
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