Nightfood Holdings Inc (NGTF)

[Cylon2win]

Pay to Play SPUD

Page 5 clearly shows the impact of one time slotting fees

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED

September 30, 2020 and 2019.

For the three months ended September 30, 2020 and 2019 we had Net Revenues (Net Revenues are defined as Gross Sales, less Slotting Fees, Sales Discounts, and certain other revenue reductions) of $126,983 and $46,497 respectively and incurred an operating loss of $536,043 and $294,777 respectively.

In the three months ended September 30, 2020, the Company recorded Gross Sales of $319,324, the highest quarterly gross sales in company history. Accounting standards require exclusion on the income statement of Gross Sales made to a customer to whom the Company is paying slotting fees (slotting fees are fees occasionally charged by retailers and distributors to add a new product into their product assortment). In those situations, the Gross Sales number is reduced, dollar for dollar, by the slotting fees, until the total cost of the slotting is covered. These slotting fees do not appear on the income statement as an expense. Rather, Slotting Fees, along with Sales Discounts, are applied against Gross Sales, resulting in Net Revenue, as shown below. The netting of Gross Sales against slotting and sales discounts, as described and shown below, results in the Net Revenue number at the top of the income statement. This is not a reflection of the amount of product shipped to customers, but rather a function of the way certain sales are accounted for when those sales are made to customers who are charging slotting fees.