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. |
| ● | The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. For the nine months ended March 31, 2023, the Company had an operating and net
loss of $4,775,478 and cash flow used in operations of $995,623 and an accumulated deficit of $33,997,451. |
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The Company has limited available cash resources
and it does not believe its cash on hand will be adequate to satisfy its ongoing working capital and growth needs throughout Fiscal Year
2023.
The Company is continuing to seek to raise capital through the sales
of its common stock, including pursuant to its Tier 2 offering pursuant to Regulation A (also known as “Regulation A+”) of
units consisting of common stock and warrants, 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 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.
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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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