10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

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☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2023
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________

———————

FARMHOUSE, INC.

(Exact name of registrant as specified in its charter)

———————

NEVADA (NV)	333-238326	46-3321759
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

548 Market Street, Suite 90355, San Francisco, CA  94104

(Address of Principal Executive Office)  (Zip Code)

 (888) 420-6856 

(Registrant’s telephone number, including area code)

  N/A  

(Former name, former address and former fiscal year, if changed since last report)

———————

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [  ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes [  ] No

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer  [ ]
Non-accelerated filer [ ]	Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act),

☐ Yes  [X] No 

The number of shares of the issuer’s Common Stock outstanding as of May 15, 2023 is 17,075,950.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements and information included in this Quarterly Report on Form 10-Q for the three months ended March 31, 2023 (this “Report”) contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. These statements are based upon beliefs of, and information currently available to management as well as estimates and assumptions made by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

CERTAIN TERMS USED IN THIS REPORT

“We,” “us,” “our,” the “Registrant,” the “Company,” and “Farmhouse” are synonymous with Farmhouse, Inc., unless otherwise indicated. WeedClub®, Friends in High Places®, WeedClub Select® and @420® are registered Trademarks of the Company were used throughout this Report.

FARMHOUSE, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

March 31, 2023

INDEX

PART I – FINANCIAL INFORMATION3 

Item 1.Interim condensed consolidated financial statements3 

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

and Results of Operations20 

Item 3.Quantitative and Qualitative Disclosures about Market Risk32 

Item 4.Controls and Procedures32 

PART II – OTHER INFORMATION33 

Item 1.Legal Proceedings33 

Item 1A.Risk Factors34 

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds34 

Item 3.Defaults Upon Senior Securities36 

Item 4.Mine Safety Disclosures36 

Item 5.Other Information36 

Item 6.Exhibits36 

SIGNATURE37 

CERTIFICATIONS38 

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

FARMHOUSE, INC. AND SUBSIDIARY
CONSENSED CONSOLIDATED BALANCE SHEETS
	March 31,		December 31,
	2023		2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	8,678	$	62,063
Accounts receivable		1,069		-
Prepaid expenses		7,980		3,810
Total current assets		17,727		65,873
Property and equipment, net		-		-
Total assets	$	17,727	$	65,873
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	23,795	$	11,181
Accrued legal fees		357,921		348,137
Accrued payroll and payroll taxes		991,644		945,608
Accrued liabilities		168,050		156,050
Accrued interest payable		51,667		48,931
Convertible notes payable		45,000		45,000
Notes payable		50,000		50,000
Due to related parties		26,622		44,882
Total current liabilities		1,714,699		1,649,789
Stockholders’ deficit:
Preferred stock; $0.0001 par value, 5,000,000 shares authorized,  no shares issued and outstanding		-		-
Common stock; $0.0001 par value, 295,000,000 shares authorized, 17,075,950 and 17,075,950 shares issued and  outstanding, respectively		1,708		1,708
Additional paid-in capital		4,217,334		4,159,075
Accumulated deficit		(5,916,014)		(5,744,699)
Total stockholders’ deficit		(1,696,972)		(1,583,916)
Total liabilities and stockholders’ deficit	$	17,727	$	65,873
The accompanying notes are an integral part of these condensed consolidated financial statements

FARMHOUSE, INC. AND SUBSIDIARY

CONSENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31,

(unaudited)

	2023		2022
REVENUES
Revenues	$	1,069	$	-
Costs of revenues		(535)		-
Gross margin		534		-
OPERATING EXPENSES
General and administrative		84,679		92,586
Professional fees		74,650		125,729
Depreciation and amortization		-		94
Total operating expenses		159,329		218,409
LOSS FROM OPERATIONS		(158,795)		(218,409)
OTHER INCOME (EXPENSE):
Interest expense		(12,520)		(15,808)
Total other income (expense)		(12,520)		(15,808)
NET LOSS	$	(171,315)	$	(234,217)
BASIC AND DILUTED NET LOSS PER SHARE	$	(0.01)	$	(0.01)
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER  OF SHARES OUTSTANDING		17,075,950		15,753,092
The accompanying notes are an integral part of these condensed consolidated financial statements

FARMHOUSE, INC. AND SUBSIDIARY

CONSENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

For the three months ended March 31, 2023

(unaudited)

	Common Stock					Accumulated
	Shares	Par Value		Paid-in Capital		Deficit		Total
Balance at December 31, 2022	17,075,950	$	1,708	$	4,159,075	$	(5,744,699)	$	(1,583,916)
Stock-based compensation on RSA's vested	-		-		58,259		-		58,259
Net loss	-		-		-		(171,315)		(171,315)
Balance at March 31, 2023	17,075,950	$	1,708	$	4,217,334	$	(5,916,014)	$	(1,696,972)
The accompanying notes are an integral part of these condensed consolidated financial statements

FARMHOUSE, INC. AND SUBSIDIARY
CONSENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
For the three months ended March 31, 2022
(unaudited)
	Common Stock					Accumulated
	Shares	Par Value		Paid-in Capital		Deficit		Total
Balance at December 31, 2021	15,694,550	$	1,570	$	3,729,104	$	(5,301,917)	$	(1,571,243)
Common stock sold	41,300		4		35,101		-		35,105
Common stock issued for services	100,500		10		69,402		-		69,412
Stock-based compensation on RSA's vested	-		-		25,500		-		25,500
Net loss	-		-		-		(234,217)		(234,217)
Balance at March 31, 2022	15,836,350	$	1,584	$	3,859,107	$	(5,536,134)	$	(1,675,443)
The accompanying notes are an integral part of these condensed consolidated financial statements

FARMHOUSE, INC. AND SUBSIDIARY

CONSENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31,

(unaudited)

	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(171,315)	$	(234,217)
Adjustments to reconcile net income (loss) to net cash  used by operating activities:
Depreciation and amortization		-		94
Stock issued for services		-		69,412
Stock-based compensation on RSA's vested		58,259		25,500
Changes in operating assets and liabilities:
Accounts receivable		(1,069)		-
Prepaid expenses		(4,170)		(3,870)
Accounts payable		12,614		(455)
Accrued legal fees		9,784		28,480
Accrued payroll and payroll taxes		46,036		46,036
Accrued liabilities		12,000		20,254
Accrued interest payable		2,736		3,106
Net cash used in operating activities		(35,125)		(45,660)
CASH FLOWS FROM INVESTING ACTIVITIES:		-		-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock		-		35,105
Borrowings on note payable		-		7,620
Repayment of related party debt and short-term advances		(18,260)		(16)
Net cash provided by financing activities		(18,260)		42,709
NET CHANGE IN CASH		(53,385)		(2,951)
CASH AT BEGINNING OF PERIOD		62,063		3,780
CASH AT END OF PERIOD	$	8,678	$	829
SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION:
Interest	$	-	$	-
Income taxes	$	-	$	-
The accompanying notes are an integral part of these condensed consolidated financial statements

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

NOTE 1 – ORGANIZATION AND OPERATIONS

Organization

The Company was incorporated in June 2013 as Somerset Transition Corporation under the Oklahoma General Corporation Act. The Company was formed to complete a reorganization under Section 1088(g) of the Oklahoma Act, whereby the Company became successor to Transnational Financial Network, Inc., which was originally incorporated in California in 1985. In September 2013, the Company was redomesticated in Maryland and changed its name to Somerset Property, Inc. In July 2017, the Company was redomesticated in Nevada and changed its name to Revival, Inc. In June 2019, the Company changed its name to Farmhouse, Inc. to reflect its new business endeavors.

In August 2019, the Company acquired Farmhouse, Inc., a Washington corporation (“Farmhouse Washington”) as its wholly owned subsidiary (the “Acquisition”). Farmhouse Washington was formed in January 2014 and has developed a social network platform, “The WeedClub® Platform”. At the closing of the Acquisition, all of the issued and outstanding shares of common stock of Farmhouse Washington were exchanged for shares of common stock of the Company on a one-for-one basis. The financial statements of the Company are the continuation of Farmhouse Washington with the adjustment to reflect the capital structure of the Company.

Prior to the Acquisition, in August 2017, Farmhouse Washington formed Farmhouse DTLA, Inc. (“DTLA”) in California as a wholly owned subsidiary. In April 2021, DTLA was awarded a 49% equity interest in a Los Angeles based multi-licensed cannabis retail dispensary, grow, manufacturer and distributor called Los Angeles Farmers, Inc. (“LAFI”). Although ownership percentages over 20% would typically be accounted for using the equity method, the Company is accounting for this investment as an investment in equity securities due to the Company not having significant influence over LAFI. The cost of this investment was expensed during the fiscal year ended December 31, 2017 and, due to uncertainties surrounding the value of LAFI and determining any award of back profits and interest, as well as the pending litigation, no value has been reflected in our unaudited interim condensed consolidated financial statements as of March 31, 2023. See Note 9.

Current Operations

The Company is a technology company with multiple cannabis related divisions and IP, including the WeedClub® Platform, the @420 Twitter handle and a Web3 division. The WeedClub® Platform is a cannabis social network platform that enables industry professionals to connect, discover products and services and scale their businesses. Within the WeedClub® Platform, members utilize an increasing set of technology-based tools for discovering professional connections and information. The Company’s @420 Twitter handle serves as a public platform to engage with cannabis enthusiasts. The Company’s Web3 division, launched in December 2021, facilitates licensing opportunities between established cannabis brands and influential digital collectible holders to launch digital collectible branded products and accessories.

Going Concern and Management’s Plans

The accompanying unaudited interim condensed consolidated financial statements have been presented on the basis that the Company is a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the three months ended March 31, 2023,

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

the Company had a net loss from operations of $158,795 and as of March 31, 2023, the Company had stockholders’ deficit of $1,696,972. In view of these matters, the recoverability of any asset amounts shown in the accompanying unaudited interim condensed consolidated financial statements is dependent upon the Company’s ability to expand operations and achieve profitability from its business. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited interim condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has financed its activities principally from the sale of its common stock and loans from Company officers. The Company intends to finance its future working capital needs from these sources until such time that funds provided by operations are sufficient to fund working capital requirements. Management believes that the current cash on hand, loans from Company officers and funds raised from the sale of its common stock allow the Company sufficient capital for operations and to continue as a going concern.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company’s unaudited interim condensed consolidated financial statements. These accounting policies conform to Generally Accepted Accounting Principles (“GAAP”) and have been consistently applied in the preparation of these unaudited interim condensed consolidated financial statements.

Principals of Consolidation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Farmhouse Washington and DTLA (together the “Company”). All material intercompany accounts, transactions, and earnings have been eliminated in the accompanying unaudited interim condensed consolidated financial statements.

Financial Statement Reclassification

Certain amounts from the prior year’s financial statements have been reclassified in these unaudited interim condensed consolidated financial statements to conform to the current year’s classifications.

Cash and Cash Equivalents

Cash and cash equivalents as of March 31, 2023 included cash in banks. The Company considers all highly liquid instruments with maturity dates within 90 days at the time of issuance to be cash equivalents.

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements contained in this Report have been prepared in accordance with U.S. GAAP and the rules of the Securities and Exchange Commission (“SEC”) for interim financial information and do not include all of the information or disclosures required by U.S. GAAP for annual financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

statements and notes thereto contained in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2022 filed with the Securities and Exchange Commission on April 20, 2023. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.

Use of Estimates

Operating results for interim periods are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Significant estimates include the carrying value of property and equipment, grant date fair value of options, deferred tax assets and any related valuation allowance and related disclosure of contingent assets and liabilities. The Company evaluates its estimates based on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could materially differ from these estimates.

Accounts receivable

Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest. Receivables are presented net of the allowance for doubtful accounts in the accompanying unaudited interim condensed consolidated balance sheets. We evaluate the collectability of our accounts receivable and determine the appropriate allowance for doubtful accounts based on a combination of factors. When we become aware of a customer’s inability to meet its financial obligation, a specific allowance for doubtful accounts is recorded, reducing the receivable to the net amount we reasonably expect to collect.

Revenue Recognition

In accordance with ASC No. 606, Revenue Recognition, the Company recognizes revenue from product sales or services rendered when the following five revenue recognition criteria are met: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.

The Company generates revenue from the following sources:

(1)Subscription fees. Subscription fees related to the WeedClub portal are received at the time of purchase. The Company’s performance obligation is to provide services over a fixed subscription period; accordingly, the Company recognizes revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. 

(2)License revenues. The Company generates revenue from license fees in connection with NFT Art License Agreements, whereby the licensee is granted a limited license from the Company to use one of its licensed NFT’s for the purpose of creating, marketing, and selling branded cannabis and hemp products and accessories. The Company’s performance obligation is met over the term of the license agreement; accordingly, the Company recognizes revenue ratably over the term of the license agreement.  

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

Revenues generated for the three months ended March 31, 2023 and 2022 were as follows:

	2023	2022
Subscription fees	$-	$-
License revenues	1,069	-
	1,069	-
Less: Costs of revenues associated with license revenues	(535)	-
	$534	$-

Earnings (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share – Overall – Other Presentation Matters. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that we incorporated as of the beginning of the first period presented.

All dilutive common stock equivalents are reflected in our net income (loss) per share calculations. Anti-dilutive common stock equivalents are not included in our loss per share calculations. As of March 31, 2023 and December 31, 2022, the Company had one convertible note with a principal value of $45,000. This note is convertible at a conversion price the note holder and the Company agree on and therefore the number of shares it is convertible into is not determinable.

Recently Issued Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company has not yet adopted that they believe are applicable or would have a material impact on the financial statements of the Company.

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following:

	March 31,	December 31,
	2023	2022
	(Unaudited)
Computer equipment	$7,312	$7,312
Less: Accumulated depreciation	(7,312)	(7,312)
	$-	$-

Depreciation is computed using the straight-line method based upon the estimated useful lives of the underlying assets, generally three years. Depreciation expense was zero and $94 for the three months ended March 31, 2023 and 2022, respectively.

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

NOTE 4 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable is comprised of a promissory note to an unrelated individual in the amount of $45,000 as of March 31, 2023 and December 31, 2022, respectively. Principal and interest was originally due in July 2018 and is currently in default. The loan bears interest at 18% per annum, accrued monthly and is unsecured. Interest expense related to the convertible note payable was $1,997 and $1,998 for the three months ended March 31, 2023 and 2022, respectively. Accrued interest on the convertible note payable was $46,292 and $44,295 as of March 31, 2023 and December 31, 2022, respectively.

The conversion feature was not accounted for under derivative accounting guidance because the settlement amount is not determinable by an underlying conversion price. Therefore, no derivative was recorded in these unaudited interim condensed consolidated financial statements as of March 31, 2023 and December 31, 2022.

NOTE 5 – NOTES PAYABLE

In June 2021, the Company entered into a loan agreement, not to exceed $75,000, with an unaffiliated individual (“Lender”) and borrowed $50,000 as a first advance. This loan bears interest at 6% per annum, and is due three months after the first advance, or such an earlier date that the Lender may demand payment, which may not be earlier than 60 days after the first advance (“Maturity Date”). As of March 31, 2023, this loan is in default. Borrowings under this loan agreement shall remain senior with respect to priority lien and right of payment to any indebtedness acquired by the Company. As a condition of the loan agreement, the Company’s Chief Executive Officer personally and unconditionally guarantees the timely repayment of the loan and is liable for any amounts remaining due and owed following the Maturity Date. Interest expense on this borrowing was $739 and $740 for the three months ended March 31, 2023 and 2022, respectively. Accrued interest on this borrowing was $5,375 and $4,636 as of March 31, 2023 and December 31, 2022, respectively.

NOTE 6 – DUE TO RELATED PARTIES

Due to Related Parties totaled $26,622 and $44,882 as of March 31, 2023 and December 31, 2022, respectively. These amounts are comprised of cash advances provided to the Company for operating expenses and direct payment of Company expenses by Company officers. For the three months ended March 31, 2023, Company officers made cash advances of zero and were repaid $18,260. For the three months ended March 31, 2022, Company officers made cash advances of zero and were repaid $16. The cash advances are non-interest bearing and are unsecured.

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

NOTE 7 – STOCKHOLDERS’ DEFICIT

Authorized Capital

The Company’s authorized capital consists of 295,000,000 shares of common stock, $0.0001 par value per share, and 5,000,000 shares of undesignated preferred stock, $0.0001 par value per share. The Board, in its sole discretion, may establish par value, divide the shares of preferred stock into series, and fix and determine the dividend rate, designations, preferences, privileges, and ratify the powers, if any, and determine the restrictions and qualifications of any series of preferred stock as established.

Designation of Series A Preferred stock

The Board has designated 500,000 shares of the Company’s authorized preferred stock as Series A 10% Cumulative Convertible Participating Preferred Stock (the “Series A Preferred”). No shares of Series A Preferred have been issued.

The Series A Preferred bears a 10% cumulative dividend and has a per share liquidation preference equal to $1.00 plus any unpaid dividends (“Liquidation Preference”). Dividends must be declared by the Board to become payable. If cash dividends were to be paid, the Series A Preferred would have preference in payment of dividends over the common stock and any other series of preferred stock later designated. Each dollar of Series A Preferred and any accumulated dividends are initially convertible into five shares of the Company’s common stock, or $.20 per share (the “Conversion Price”). The Conversion Price will be adjusted if there are dilutive issuances. Shares may be converted at any time at the election of the holders. There are no mandatory conversion provisions of the Series A Preferred. Starting one year after issuance, the Series A Preferred may be redeemed by the Company upon 30 days’ notice, subject to prior conversion at any time.

Other attributes of the Series A Preferred are priority of class, anti-dilution protection, right of first refusal to the holders and voting rights on an as converted basis. The Series A Preferred is senior to all other classes of stock of the Company. In the event of liquidation, after the Preference Amount plus accrued dividends have been paid on all outstanding Series A Preferred, any remaining funds and assets of the Company legally available for distribution to the Shareholders will be distributed ratably among the Shareholders in accordance with their holdings on an as converted basis. The Series A Preferred is protected from a dilutive issuance of additional shares of stock at a per share less than the conversion price at the date of such new issuance. The Series A Preferred votes with the shares of common stock on an as-converted basis as a single class on all matters except for matters that affect the rights of the Series A Preferred, in which case the Series A Preferred votes separately as a single class. Holders of Series A Preferred vote as a class to elect a single director out of a maximum of five directors.

Common stock transactions

The Company has 17,075,950 shares of common stock outstanding as of March 31, 2023. There were no common stock transactions for the three months ended March 31, 2023. A summary of common stock transactions for the three months ended March 31, 2022 is as follows:

·The Company sold 41,300 shares of common stock for cash proceeds of $35,105. 

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

·The Company issued 100,500 shares of common stock for services rendered. The Company recorded an expense of $69,412 for the three months ended March 31, 2022 based on the closing price of the Company’s common stock on the OTCQB market. 

As a result of these transactions, the Company had 15,836,350 shares of common stock outstanding as of March 31, 2022.

Shares Reserved

The Company is required to reserve and keep available of its authorized but unissued shares of common stock an amount sufficient to affect shares that could be issued in connection with the conversion of the convertible note payable. See Note 4. This note is convertible at a conversion price that the noteholder and the Company agree upon, therefore the number of shares it is convertible into is not determinable. Accordingly, no shares of common stock are reserved for future issuance as of March 31, 2023 and December 31, 2022.

NOTE 8 – STOCK-BASED COMPENSATION

2021 Omnibus Incentive Plan

In May 2021, the Board approved the Farmhouse, Inc. Omnibus Incentive Plan (the “2021 OIP”). The 2021 OIP permits the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Other Stock-Based Awards and Cash-Based Awards. The maximum number of shares of common stock that may be issued pursuant to Awards under the 2021 OIP is 3,000,000. Stockholders holding a majority of the Company’s common stock outstanding ratified the 2021 OIP by written consent.

Any options to be granted under the 2021 OIP may be either “incentive stock options,” as defined in Section 422A of the Internal Revenue Code, or “non-statutory stock options,” subject to Section 83 of the Internal Revenue Code, at the discretion of the Board and as reflected in the terms of the written option agreement. The option price shall not be less than 100% of the fair market value of the optioned common stock on the date the option is granted. The option price shall not be less than 110% of the fair market value of the optioned common stock for an optionee holding at the time of grant, more than 10% of the total combined voting power of all classes of stock of the Company. Options become exercisable based on the discretion of the Board and must be exercised within ten years from the date of grant (five years from date of grant for Company employees and directors).

Any restricted stock awards to be granted under the 2021 OIP are issued and measured at fair market value on the date of grant and become vested in various monthly or quarterly installments from the date of grant, subject to the recipient remaining in the Company’s service on specified vesting dates. Vesting of restricted stock awards is based solely on time vesting. Stock-based compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital.

Restricted Stock Awards

A summary of the Company’s non-vested restricted stock awards as of March 31, 2023 and changes for the three months then ended is presented below:

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

	Restricted Stock Awards	Weighted Average Grant Date Fair Value
Non-vested restricted stock awards, Dec. 31, 2022	752,000	$0.251
Awarded	-	-
Vested	(192,000)	0.303
Forfeited	-	-
Non-vested restricted stock awards, March 31, 2023	560,000	$0.232

RSA shares are measured at fair market value on the date of grant and stock-based compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital. For the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense of $58,259 and $25,500, respectively. As of March 31, 2023, there was $130,165 of unrecognized stock-based compensation expense on the RSA shares.

NOTE 9 – LITIGATION

In August 2017, the Company’s subsidiary, DTLA. entered into a Strategic Consulting Agreement (the “SCA”) with Absolute Herbal Pain Solutions, Inc., a medical marijuana growing, and retail company based in Los Angeles that now goes by the name Los Angeles Farmers, Inc. (“LAFI”). The SCA provided for DTLA to invest substantial sums of money into LAFI and also to provide management services for LAFI going forward. In exchange, LAFI agreed to provide DTLA with a share in any future profits and a 49% equity stake in LAFI. Following the SCA, in excess of $700,000 was spent by DTLA to stabilize LAFI’s finances and pay critical bills. In addition, DTLA brought in an outside management company with expertise in running grow and retail operations. Subsequent to DTLA providing funding and management resources to LAFI, DTLA and its management team were locked out of the LAFI facility in late October 2017.

In October 2017, DTLA commenced litigation in Los Angeles County Superior Court (Case #BC681251) against LAFI and David and Irina Vayntrub, who were the sole officers, directors, and members of LAFI, seeking to enforce its contract rights under the SCA. In March 2018, the litigation was stayed so that the parties could pursue the claims by way of arbitration at Judicate West. In January 2020, following more than a year of discovery, DTLA entered into a confidential settlement with the Vayntrubs, however, the case continued against LAFI.

In February 2021, a four-day arbitration hearing was held at Judicate West. In April 2021, the Arbitrator overseeing the arbitration hearing issued a judgment in favor of DTLA and against LAFI (the “DLTA Judgment”). The DLTA Judgment awarded 49% of LAFI to DTLA as of the change of control in November 2017, along with a share of any profits from November 2017 to the present and going forward, accrued interest on those profits, and costs of bringing the litigation. The DLTA Judgment also appointed a Monitor, to be supervised by the Arbitrator, to determine how much in past profits and interest DTLA is entitled to be awarded and that DTLA is treated fairly by LAFI on a going forward basis.

Following the issuance of DTLA Judgment, DTLA filed a motion for reimbursement of costs in the amount of $22,382. No objection was filed by LAFI and in June 2021, the amount was confirmed by the

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(Unaudited)

Los Angeles County Superior Court as a Judgment. In July 2021, DTLA received reimbursement costs in the amount of $22,382, which is recorded as other income for the year ended December 31, 2022.

Between July and December 2021, the Monitor undertook a detailed process to determine the value of the 49% of profits and proceeds from 2017 to the present that DTLA is entitled to, in addition to the 10% prejudgment interest. The Monitor’s report was completed in January 2022. Based on the information in the Monitor’s report, DTLA has requested that the Arbitrator issue an award of back profits and interest and order the sale of LAFI to an independent third party in order to allow any judgment to be paid to DTLA. Due to uncertainties, the impact of the DLTA Judgment has not been reflected in the accompanying interim condensed consolidated financial statements as of March 31, 2023.

In August 2022, a receiver was appointed by the Los Angeles County Superior Court to assume control of LAFI. As of May 15, 2022, the date of these unaudited interim condensed consolidated financial statements, the receiver is in the process of selling LAFI. It is not known at this time whether the sale of LAFI, if consummated and approved by the Superior Court, will result in any proceeds of the sale being paid to satisfy the DLTA Judgment.

NOTE 10 – RELATED PARTIES

As discussed in Note 6, cash advances are provided to the Company for operating expenses by Company officers, who were owed $26,622 and $44,882 by the Company as of March 31, 2023 and December 31, 2022, respectively. Company officers own approximately 44.7% of the Company as of the date of this report. The Company has agreed to indemnify Company officers for certain events or occurrences arising from the officer or director serving in such capacity. See Note 11.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

In the normal course of its business, the Company may be subject to certain contractual obligations and litigation. In the management’s opinion, upon consultation with legal counsel, there are no contractual obligations or current litigation that will materially affect the Company’s unaudited interim condensed consolidated financial position or results of operations.

Indemnification Agreements

The Company has agreed to indemnify its officers and directors for certain events or occurrences arising from the officer or director serving in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company believes the estimated fair value of these indemnification agreements is minimal and no liability has been recorded as of March 31, 2023 and December 31, 2022.

NOTE 12 – SUBSEQUENT EVENTS

As of May 15, 2023, the date of these unaudited interim condensed consolidated financial statements, there are no subsequent events that are required to be recorded or disclosed in the accompanying unaudited interim condensed consolidated financial statements.

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion should be read in conjunction with our interim condensed consolidated financial statements and related notes contained elsewhere in this Report, as well as our Annual Report on Form 10-K for the three months ended March 31, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on April 19, 2023. Certain statements made in this discussion are “forward-looking statements” within the meaning of 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based upon beliefs of, and information currently available to management as well as estimates and assumptions made by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of these interim condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our interim condensed consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our interim condensed consolidated financial statements and notes thereto appearing elsewhere in this Report.

Unless otherwise indicated or the context requires otherwise, the words “we,” “us,” “our,” the “Company,” “our Company” or “Farmhouse” refer to Farmhouse Inc., a Nevada corporation, and our wholly owned subsidiaries, Farmhouse, Inc., a Washington corporation (“Farmhouse Washington”) and Farmhouse DTLA, Inc. (“DTLA”), a California corporation.

Corporate Overview

We are a holding company with multiple divisions dedicated to connecting professionals and brands in the legal cannabis industry. We are built on two core competencies–trust and connection. Our divisions provide solutions that leverage our trusted brand and facilitate valuable connections across the cannabis industry. We connect the industry through multiple divisions including the @420 brand and @420

Twitter, and the WeedClub® Platform. Our @420 brand and @420 Twitter serve as trusted, influential properties that enable the Company to connect, promote and advocate for the industry. We will continue to serve as a leading cannabis connection platform and branch its well-known brand into the budding web3 and metaverse.

2022 Business Developments

We began exploring potential acquisitions of cannabis companies to expand our physical footprint in the industry. Acquisitions would improve our ability to leverage our WeedClub® Platform and our @420 Twitter handle to connect with consumers.

We launched a Non-Fungible Token (NFT) division dedicated to connecting the metaverse with cannabis brands. As a leader in technology, we established this division to bring NFTs to cannabis brands to create a symbiotic relationship between two fast-growing industries. Our NFT division explores how cannabis brands can connect with the metaverse through NFTs. It is a natural expansion of our brand and bridges the gap between physical cannabis brands and digital assets. Our NFT division is currently investigating initiatives from creating NFTs with artists, launching an NFT project, and developing NFT IP licensing opportunities with cannabis brands.

Farmhouse Divisions

Each division solves a unique problem within an industry navigating state-by-state regulations and an uncertain federal regulatory landscape. This environment has created a fragmented cannabis market that emphasizes the importance of a trusted facilitator to make value-added connections across the supply chain in our industry.

·@420. Our consumer-facing brand and Twitter handle (with over 100,000 followers) serve as an influential brand that connects us with the greater public. Our Twitter handle enables the NFT division to forge valuable connections in the space and work with established projects.  

·WeedClub®. Weedclub is one of the first social networks for cannabis professionals with over 5,000 members, generating thousands of valuable connections. WeedClub is an established presence in the cannabis industry that people trust to make valuable connections. As we continue to expand our operations, WeedClub members benefit immensely from the added potential connections.  

·Web3 division (“Vault”): Our newest division that connects cannabis brands with licensing opportunities with influential digital collectible holders and communities to develop new brands that appeal to digitally native consumers. 

Current and Future Plan of Operations

The COVID-19 pandemic catalyzed a behavioral shift to digital connection and verifiable trust. This shift thrust blockchain technology and digital collectibles to the forefront as virtual groups transformed into supportive, thriving communities centered around digital collectible brands. The top brands generate immense value (intrinsic and financial) while building highly loyal, engaged communities.

As we transitioned our company online, we started researching and participating in this behavioral shift. Many established brands attempted to enter this space, but few understood the collaborative, accretive culture and failed to gain traction within the community. We positioned our web3 division to leverage our core competencies to drive value for the digital collectible community and our shareholders.

Our web3 (“Vault”) division connects cannabis companies to intellectual property (IP) licensing opportunities from digital collectible holders to launch digitally native cannabis brands. Since our launch of our Vault division in December 2021, we have developed relationships with six digital collectible holders to seed our IP vault with over 25 blue-chip NFTs. These NFTs include Bored Ape Yacht Club, Mutant Ape Yacht Club, Bored Ape Kennel Club, CryptoPunks, CrypToadz, Doodles, Meebits, and Gutter Cat Gang.

Our most notable licensed NFT is Mutant Ape Yacht Club #30000, “Mega Robot”, one of twelve Mega Mutants, the rarest NFTs in the Bored Ape Yacht Club (BAYC) universe. Mega Mutants have sold for over $1,000,000 with the Mega Serum previously selling for $5.8 million.

In July 2022, we launched our first cannabis activation with Oro Blanco (BAYC #2186) and Urbana to debut a branded cannabis strain across three retail stores in San Francisco. The initial results generated encouraging monthly and quarterly sell-through rates and sales which informed us of our decision to further build out our Vault division.

To better understand web3 culture and the overall market, we developed an advisory board of web3-native experts. Our advisory board helps guide our strategy and decision-making across social media, community, art and branding, and product development. Each advisor has built a personal brand and is well-known across the community.

In August 2022, we began developing the concept for a Mega Robot cannabis line with Bronx Extracts. This brand builds on our key learnings from the Oro Blanco launch which highlighted the need for standout packaging paired with curated cannabis. This collaboration pairs the premium IP of Mega Robot with premium cannabis sourced and developed by Bronx Extracts to create a brand that appeals to everyday consumers.

The Mega Robot x Bronx Extracts cannabis line launched in February 2023, and we recognized $1,069 of licensing revenues during the three months ended March 31, 2023. The Mega Robot brand will demonstrate the power of our cannabis network combined with our advisory board to launch a brand that appeals to all consumers, including digitally native ones.

Liquidity and Capital Resources

Until such time we can raise additional capital or generate positive cash flow from operations, we will continue to be funded through short-term advances from the Company officers, borrowings under promissory notes and sales of restricted common stock under various offerings. We estimate we will need $2,500,000 in capital, after satisfying our debt obligations, to cover our ongoing expenses and to successfully market and expand our product offerings. This is only an estimate and may change as we receive feedback from customers and have a better feel for the demand and revenues from our new products. Both factors may change, and we may not be able to raise the necessary capital and if we are able to, that it may not be at favorable rates. We intend to meet our cash requirements for the next 12 months with equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.

For the three months ended March 31, 2023 and 2022, we generated revenues of $1,069 and zero, respectively, and we reported net losses of $171,315 and $234,217, respectively. We had negative cash flow from operating activities of $35,125 and $45,660, respectively. As of March 31, 2023, we had an accumulated deficit of $5,916,014 and total shareholders’ deficit of $1,696,972.

Our auditors have raised substantial doubt regarding our ability to continue as a going concern as a result of our historical recurring losses and negative cash flows from operations as well as our dependence on private equity and financing. We anticipate that we will continue to report losses and negative cash flow. To date, we have financed our activities principally from the sale of common stock and loans from Company officers. We intend to finance our future working capital needs from these sources until such a time that funds provided by our operations are sufficient to fund our working capital requirements. We believe that the current cash on hand, loans from Company officers and funds raised from the sale of our common stock allows us sufficient capital for operations and to continue as a going concern.

Related party matters

The terms of any transaction determined to be with related parties are presented to the board of directors (other than any interested director) for approval and documented in the corporate minutes. Cash advances are commonly provided by our officers for operating expenses and direct payment of Company expenses. Company officers were owed $26,622 and $44,882 as of March 31, 2023 and December 31, 2022, respectively, and is comprised of cash advances provided to the Company for operating expenses and direct payment of Company expenses by Company officers. For the three months ended March 31, 2023, Company officers made cash advances of zero and were repaid $18,260. For the three months ended March 31, 2022, Company officers made cash advances of zero and were repaid $16. The cash advances are non-interest bearing and are unsecured.

Company officers own approximately 44.7% of the Company as of March 31, 2023. We have agreed to indemnify Company officers for certain events or occurrences arising from the officer or director serving in such a capacity. Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of our outstanding shares of common stock has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year.

Litigation developments

In July 2021, we successfully enforced our subsidiary’s, DTLA, contract rights in a multi-licensed cannabis retail dispensary, grow, manufacturer and distributor called Los Angeles Farmers, Inc. (“LAFI”). After four years of litigation, a Final Judgment was filed into the record in the Superior Court of California in the County of Los Angeles for case number BC681251 (the “DLTA Judgment”). The DTLA Judgment awarded 49% of LAFI to DTLA. In addition to equity ownership, the DTLA Judgment awarded DTLA a share of any profits of this dispensary from November 2017 to the present and going forward along with accrued interest on those profits and the costs of bringing litigation. The DLTA Judgment also appointed a Monitor, to be supervised by the Arbitrator, to determine how much in past profits and interest DTLA is entitled to be awarded and that DTLA is treated fairly by LAFI on a going forward basis.

Between July and December 2021, the Monitor undertook a detailed process to determine the value of the 49% of profits and proceeds from 2017 to the present that DTLA is entitled to, in addition to the 10% prejudgment interest. The Monitor’s report was completed in January 2022. Based on the information in the Monitor’s report, DTLA has requested that the Arbitrator issue an award of back profits and interest and order the sale of LAFI to an independent third party in order to allow any judgment to be paid to DTLA.

In August 2022, a receiver was appointed by the Los Angeles County Superior Court to assume control of LAFI. As of May 15, 2022, the date of these interim condensed consolidated financial statements, the receiver is in the process of selling LAFI. It is not known at this time whether the sale of LAFI, if

consummated and approved by the Superior Court, will result in any proceeds of the sale being paid to satisfy the DLTA Judgment.

Under GAAP accounting, ownership percentages over 20% would typically be accounted for using the equity method, the Company is accounting for this investment as an investment in equity securities due to the Company not having significant influence over LAFI. The cost of this investment was expensed during the year ended December 31, 2017 and, due to uncertainties surrounding the value of LAFI and determining any award of back profits and interest, as well as the pending litigation, no value has been reflected in our interim condensed consolidated financial statements as of March 31, 2023.

Results of Operations

We generate revenues from the following sources:

(1)Subscription fees. Subscription fees related to our WeedClub portal are received at the time of purchase. Our performance obligation is to provide services over a fixed subscription period; accordingly, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. 

(2)License revenues. License revenues are generated in connection with NFT Art License Agreements, whereby a licensee is granted a limited license from the Company to use one of our licensed NFTs for the purpose of creating, marketing, and selling branded cannabis and hemp products and accessories. Our performance obligation is met over the term of the license agreement; accordingly, we recognize revenue ratably over the term of the license agreement.  

Three months ended March 31, 2023, compared to the three months ended March 31, 2022 (Unaudited)

Revenues generated for the three months ended March 31, 2023 and 2022 were as follows:

	2023	2022
Subscription fees	$-	$-
License revenues	1,069	-
	1,069	-
Less: Costs of revenues associated with license revenues	(535)	-
	$534	$-

For the three months ended March 31, 2023 and 2022, general and administrative expenses were $84,679 and $92,586, respectively, a decrease of approximately $7,900. Contributing factors to this increase were:

·Outside consulting fees decreased overall by approximately $4,800. We have contracted with two advisors with experience in merger and acquisitions and two advisors to assist in expanding our NFT licensing reach to licensees and California dispensaries. Together their non-cash, stock-based fees were approximately $12,800 for the three months ended March 31, 2023, compared to approximately $17,600 for the three months ended March 31, 2022. In addition, consulting fees include $2,375 of non-cash, stock-based fees to our independent director for vesting of a restricted stock award (“RSA”). 

·Labor-related expenses decreased by approximately $6,000, due to consultant who stopped working for the Company in May 2022. Labor-related expenses included recognizing $9,500 in  

stock-based fees for the three months ended March 31, 2023, compared to $15,540 for the three months ended March 31, 2022.

·Public company-related costs, including OTC filing fees, press releases and transfer agent costs increased by approximately $900. 

·Overall other general and administrative expenses, including website development, dues and subscriptions, rent and office expenses and travel and entertainment increased by approximately $2,000 for the current three-month period. 

For the three months ended March 31, 2023 and 2022, professional fees were $74,650 and $125,729, respectively, a decrease of approximately $51,000. Our professional fees for the three months ended March 31, 2023 and 2022 were comprised of the following:

	Three months ended March 31,
	2023		2022
Legal	$	3,302	$	26,531
Accounting and audit		65,648		61,938
Other professional fees		5,700		37,260
	$	74,650	$	125,729

Legal. Legal expenses decreased by approximately $23,200 for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, all of which is attributable to fees incurred by the Monitor to advance our litigation against LAFI decreased by approximately $23,300 as we no longer require the services of the Monitor. Reference is made to Note 9, Litigation, to the interim condensed consolidated financial statements included under Item 1 in this Report.

Accounting and audit. Accounting and audit expenses increased by approximately $3,700 for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. Contributing factors to this increase were:

·Audit and accounting fees to our independent public accounting firm increased by approximately $10,000 due to the timing of invoicing audit fees related to our annual fiscal year audit. Overall, our audit costs remained consistent between years.  

·Accounting fees for our contracted CFO services decreased by approximately $7,200, which included $30,250 in stock-based fees in the three months ended March 31, 2023 compared to $25,500 of stock-based fees recognized in the three months ended March 31, 2022. In June 2022, our CFO reduced his monthly fees to $4,000; accordingly, our CFO fees were $12,000 in the three months ended March 31, 2023 compared to $24,000 in the three months ended March 31, 2022, for a total decrease of $12,000. All fees to our CFO are accrued and not paid.  

·Accounting fees for our outside bookkeeping services increased by approximately $900.  

Other professional fees. Other professional fees decreased by approximately $31,600 for the three months ended March 31, 2023, compared to the three months ended March 31, 2022 due to a decrease in fees to our contracted software engineers and developers of our software technology platforms. Professional fees included $5,700 in stock-based fees in the three months ended March 31, 2023 compared to $36,260 of stock-based fees recognized in the three months ended March 31, 2022.

Interest expense. Interest expense decreased by approximately $3,300 for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. Approximately $2,900 of the decrease in interest expense was related to our unpaid liability to our predecessor law firm in the

aforementioned litigation. The additional decrease in interest expense of approximately $400 pertains to one of our loans that was paid off in July 2022.

Overall, for the three months ended March 31, 2023, we reported a net loss of $171,849 compared to a net loss of $234,217 for the three months ended March 31, 2022.

Non-GAAP Adjusted Net Loss

The following table reflects the reconciliation of net loss to Adjusted Net Loss for the three months ended March 31, 2023 and 2022. This is a non-GAAP measurement of earnings and considers the stock-related compensation expense for services rendered by consultants and professionals for the comparable years. Management considers this non-GAAP measurement of earnings important to investors and other interested parties to evaluate our performance on a comparable basis.

	Three months ended March 31,
	2023		2022
Net loss as reported	$	171,315	$	234,217
Less: Stock-based fees		(58,259)		(94,912)
Adjusted Net Loss	$	113,056	$	139,305

Adjusted Net Loss should only be viewed in conjunction with our reported financial results or other financial information prepared in accordance with accounting principles generally accepted in the United States, or “GAAP.”

Cash Flows

The following table summarizes the sources and uses of cash for the three months ended March 31, 2023 and 2022, respectively:

	Three months ended March 31,
	2023		2022
Net cash used in operating activities	$	(35,125)		(45,660)
Net cash provided by investing activities		-		-
Net cash provided by (used in) financing activities		(18,260)		42,709
Net change in cash and cash equivalents	$	(53,385)		(2,951)

Three months ended March 31, 2023

Operating activities used $35,125 of cash, primarily resulting from our net loss for the three months ended March 31, 2023 of $171,315, offset by non-cash stock-based compensation for vested restricted stock awards of $58,259. Other uses of cash from operating activities were primarily from increases in accounts payable of $12,614, accrued legal fees of $9,784, accrued payroll and payroll taxes of $46,036 and accrued liabilities of $12,000, offset by an increase in accounts receivable of $1,069 and prepaid expenses of $4,170.

Three months ended March 31, 2022

Operating activities used $45,660 of cash, primarily resulting from our net loss for the three months ended

March 31, 2022 of $234,217, offset by non-cash stock-based compensation expense recorded for services rendered of $69,412, non-cash stock-based compensation expense recorded for vested restricted stock awards of $25,500, and increases in liabilities across most categories: accrued legal fees, accrued payroll and other accrued liabilities. Accounts payable decreased slightly. Financing activities provided $42,709 of cash for the three months ended March 31, 2022, consisting of $35,105 in proceeds from the sale of common stock, $7,620 of borrowings from an unrelated lender, offset by repayments of $16 in short-term advances from officers.

Contractual Obligations

We qualify as a smaller reporting company, as defined by Item 10 of Regulation S-K and, thus, are not required to provide the information required by this Item.

Off Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents were $8,678 and $62,063 as of March 31, 2023 and December 31, 2022, respectively.

Critical Accounting Policies and Estimates

The preparation of our interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our accounting policies that are critical or most important to understanding our financial condition and results of operations and that require management to make the most difficult judgments are described in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on April 20, 2023. There have been no material changes in these critical accounting policies.

Recently Adopted Accounting Pronouncements

Reference is made to Note 2, Summary of Significant Accounting Policies, to the interim condensed consolidated financial statements included under Item 1 in this Report.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting subsequent to March 31, 2023, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations of the Effectiveness of Disclosure Controls and Internal Controls

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II – OTHER INFORMATION

None.

ITEM 1.  LEGAL PROCEEDINGS

From time to time, we may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although we cannot accurately predict the amount of any liability that may

ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.

We are a party to legal proceedings by our Farmhouse DTLA.

In August 2017, our subsidiary, DTLA. entered into a Strategic Consulting Agreement (the “SCA”) with Absolute Herbal Pain Solutions, Inc., a medical marijuana growing and retail company based in Los Angeles that now goes by the name Los Angeles Farmers, Inc. (“LAFI”). The SCA provided for DTLA to invest substantial sums of money into LAFI and also to provide management services for LAFI going forward. In exchange, LAFI agreed to provide DTLA with a share in any future profits and a 49% equity stake in LAFI. Following the SCA, in excess of $700,000 was spent by DTLA to stabilize LAFI’s finances and pay critical bills. In addition, DTLA brought in an outside management company with expertise in running grow and retail operations. Subsequent to DTLA providing funding and management resources to LAFI, DTLA and its management team were locked out of the LAFI facility in late October 2017.

On October 25, 2017, DTLA commenced litigation in Los Angeles County Superior Court (Case #BC681251) against LAFI and David and Irina Vayntrub, who were the sole officers, directors, and members of LAFI, seeking to enforce its contract rights under the SCA. On March 27, 2018, the litigation was stayed so that the parties could pursue the claims by way of arbitration at Judicate West. In January 2020, following more than a year of discovery, DTLA entered into a confidential settlement with the Vayntrubs, however, the case continued against LAFI.

In February 2021, a four-day arbitration hearing was held at Judicate West. On April 8, 2021, the Arbitrator overseeing the arbitration hearing issued a judgment in favor of DTLA and against LAFI (the “DLTA Judgment”). The DLTA Judgment awarded 49% of LAFI to DTLA as of the change of control in November 2017, along with a share of any profits from November 2017 to the present and going forward, accrued interest on those profits, and costs of bringing the litigation. The DLTA Judgment also appointed a Monitor, to be supervised by the Arbitrator, to determine how much in past profits and interest DTLA is entitled to be awarded and that DTLA is treated fairly by LAFI on a going forward basis.

Between July and December 2021, the Monitor undertook a detailed process to determine the value of the 49% of profits and proceeds from 2017 to the present that DTLA is entitled to, in addition to the 10% prejudgment interest. The Monitor’s report was completed in January 2022. Based on the information in the Monitor’s report, DTLA has requested that the Arbitrator issue an award of back profits and interest and order the sale of LAFI to an independent third party in order to allow any judgment to be paid to DTLA. Due to uncertainties, the impact of the DLTA Judgment has not been reflected in the accompanying interim condensed consolidated financial statements as of March 31, 2023, 2022.

In August 2022, a receiver was appointed by the Los Angeles County Superior Court to assume control of LAFI. As of May 15, 2022, the date of these interim condensed consolidated financial statements, the receiver is in the process of selling LAFI. It is not known at this time whether the sale of LAFI, if consummated and approved by the Superior Court, will result in any proceeds of the sale being paid to satisfy the DLTA Judgment.

ITEM 1A.  RISK FACTORS

We qualify as a smaller reporting company, as defined by Item 10 of Regulation S-K and, thus, are not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Common Stock Issuances

The Company has 17,075,950 shares of common stock outstanding as of March 31, 2023. There were no common stock transactions for the three months ended March 31, 2023. A summary of the Company’s common stock transactions for the three months ended March 31, 2022 is as follows:

·The Company sold 41,300 shares of common stock for cash proceeds of $35,105. 

·The Company issued 100,500 shares of common stock for services rendered. The Company recorded an expense of $69,412 for the three months ended March 31, 2022 based on the closing price of the Company’s common stock on the OTCQB market. 

As a result of these transactions, the Company had 15,836,350 shares of common stock outstanding as of March 31, 2022.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES 

There have been no events which are required to be reported under this item.

ITEM 4.MINE SAFETY DISCLOSURES 

Not applicable.

ITEM 5.OTHER INFORMATION 

None.

ITEM 6.EXHIBITS 

The exhibits required to be filed herewith by Item 601 of Regulation S-K, as described in the following index of exhibits, are attached hereto unless otherwise indicated as being incorporated by reference, as follows:

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act. *
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act. *
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, City of San Francisco, State of California, on May 16, 2022.

By:	/s/ Evan Horowitz
	EVAN HOROWITZ
	Chief Executive Officer, Director

Pursuant to the requirements of the Securities Act of 1933, this registrant statement has been signed by the following persons in the capacities and on the dates indicated.

By:	/s/ Evan Horowitz
	EVAN HOROWITZ
	Chief Executive Officer, Director
By:	/s/ Lanny R. Lang
	LANNY R. LANG
	Chief Financial Officer, Chief Accounting Officer
	(Principal Financial and Accounting Officer)
By:	/s/ Michael Landau
	MICHAEL LANDAU
	Chief Technology Officer, Treasurer, Director
By:	/s/ Scott Bostick
	SCOTT BOSTICK
	Director

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT OF 1934

RULE 13a-14(a) OR 15d-14(a)

I, Evan Horowitz, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for Farmhouse, Inc.; 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. 

5.The registrant’s other certifying officer and I have disclosed, based on the most recent evaluation of internal control over financial reporting, to the registrant’s other certifying officer and registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Farmhouse, Inc.

Date: May 16, 2022	By:	/s/ Evan Horowitz
		EVAN HOROWITZ
		Chief Executive Officer, Director
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT OF 1934

RULE 13a-14(a) OR 15d-14(a)

I, Lanny R. Lang, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for Farmhouse, Inc.; 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. 

5.The registrant’s other certifying officer and I have disclosed, based on the most recent evaluation of internal control over financial reporting, to the registrant’s other certifying officer and registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Farmhouse, Inc.

Date: May 16, 2022	By:	/s/ Lanny R. Lang
		LANNY R. LANG
		Chief Financial Officer, Chief Accounting Officer
		(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Chief Executive Officer and Chief Financial Officer of Farmhouse, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the Quarterly Report on Form 10-Q of Farmhouse, Inc. as of March 31, 2023 and for the three months ended March 31, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Farmhouse, Inc.

Farmhouse, Inc.

Date: May 16, 2022	By:	/s/ Evan Horowitz
		EVAN HOROWITZ
		Chief Executive Officer, Director
		(Principal Executive Officer)
Date: May 16, 2022	By:	/s/ Lanny R. Lang
		LANNY R. LANG
		Chief Financial Officer, Chief Accounting Officer
		(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to Farmhouse, Inc. and will be retained by Farmhouse, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 15, 2023
Details
Registrant CIK	0001811999
Fiscal Year End	--12-31
Registrant Name	FARMHOUSE, INC. /NV
SEC Form	10-Q
Period End date	Mar. 31, 2023
Tax Identification Number (TIN)	46-3321759
Number of common stock shares outstanding		17,075,950
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Shell Company	false
Small Business	true
Emerging Growth Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	NV
Entity File Number	333-238326
Entity Address, Address Line One	548 Market Street
Entity Address, Address Line Two	Suite 90355
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94104
City Area Code	888
Local Phone Number	420-6856
Phone Fax Number Description	Registrant’s telephone number
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 8,678	$ 62,063
Accounts receivable	1,069	0
Prepaid expenses	7,980	3,810
Total current assets	17,727	65,873
Property and equipment, net	0	0
Total assets	17,727	65,873
Current liabilities
Accounts payable	23,795	11,181
Accrued legal fees	357,921	348,137
Accrued payroll and payroll taxes	991,644	945,608
Accrued liabilities	168,050	156,050
Accrued interest payable	51,667	48,931
Convertible notes payable	45,000	45,000
Notes payable	50,000	50,000
Due to related parties	26,622	44,882
Total current liabilities	1,714,699	1,649,789
Stockholders' deficit
Preferred Stock, Value	0	0
Common Stock, Value	1,708	1,708
Additional paid-in capital	4,217,334	4,159,075
Accumulated deficit	(5,916,014)	(5,744,699)
Total stockholders' deficit	(1,696,972)	(1,583,916)
Total liabilities and stockholders' deficit	$ 17,727	$ 65,873

XML

Consolidated Balance Sheets - Parenthetical - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Consolidated Balance Sheets
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	295,000,000	295,000,000
Common Stock, Shares, Issued	17,075,950	17,075,950
Common Stock, Shares, Outstanding	17,075,950	17,075,950

XML

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
REVENUES
Revenues	$ 1,069	$ 0
Costs of revenues	(535)	0
Gross margin	534	0
OPERATING EXPENSES
General and administrative	84,679	92,586
Professional fees	74,650	125,729
Depreciation and amortization	0	94
Total operating expenses	159,329	218,409
LOSS FROM OPERATIONS	(158,795)	(218,409)
OTHER INCOME (EXPENSE)
Interest expense	(12,520)	(15,808)
Total other income (expense)	(12,520)	(15,808)
Net Income (Loss)	$ (171,315)	$ (234,217)
BASIC AND DILUTED NET LOSS PER SHARE	$ (0.01)	$ (0.01)
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	17,075,950	15,753,092

XML

Condensed Consolidated Statements of Shareholders' Deficit - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
Equity, Attributable to Parent, Beginning Balance at Dec. 31, 2021	$ 1,570	$ 3,729,104	$ (5,301,917)	$ (1,571,243)
Shares, Outstanding, Beginning Balance at Dec. 31, 2021	15,694,550
Stock-based compensation on RSA's vested	$ 0	25,500	0	25,500
Net Income (Loss)	0	0	(234,217)	(234,217)
Equity, Attributable to Parent, Ending Balance at Mar. 31, 2022	$ 1,584	3,859,107	(5,536,134)	(1,675,443)
Shares, Outstanding, Ending Balance at Mar. 31, 2022	15,836,350
Sale of common stock	$ 4	35,101	0	35,105
Sale of common stock, shares	41,300
Stock issued for services	$ 10	69,402	0	69,412
Stock issued for services, shares	100,500
Equity, Attributable to Parent, Beginning Balance at Dec. 31, 2022	$ 1,708	4,159,075	(5,744,699)	(1,583,916)
Shares, Outstanding, Beginning Balance at Dec. 31, 2022	17,075,950
Stock-based compensation on RSA's vested	$ 0	58,259	0	58,259
Net Income (Loss)	0	0	(171,315)	(171,315)
Equity, Attributable to Parent, Ending Balance at Mar. 31, 2023	$ 1,708	$ 4,217,334	$ (5,916,014)	(1,696,972)
Shares, Outstanding, Ending Balance at Mar. 31, 2023	17,075,950
Sale of common stock				35,105
Sale of common stock, shares	41,300
Stock issued for services				$ 0
Stock issued for services, shares	100,500

XML

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$ (171,315)	$ (234,217)
Adjustments to reconcile net income (loss) to net cash used by operating activities
Depreciation and amortization	0	94
Stock issued for services	0	69,412
Stock-based compensation on RSA's vested	58,259	25,500
Changes in operating assets and liabilities
Accounts receivable	(1,069)	0
Prepaid expenses	(4,170)	(3,870)
Accounts payable	12,614	(455)
Accrued legal fees	9,784	28,480
Accrued payroll and payroll taxes	46,036	46,036
Accrued liabilities	12,000	20,254
Accrued interest payable	2,736	3,106
Net cash used in operating activities	(35,125)	(45,660)
CASH FLOWS FROM INVESTING ACTIVITIES	0	0
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock	0	35,105
Borrowings on note payable	0	7,620
Repayment of related party debt and short-term advances	(18,260)	(16)
Net cash provided by financing activities	(18,260)	42,709
NET CHANGE IN CASH	(53,385)	(2,951)
CASH AT BEGINNING OF PERIOD	62,063	3,780
CASH AT END OF PERIOD	8,678	829
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest	0	0
Income taxes	$ 0	$ 0

XML

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

3 Months Ended

Mar. 31, 2023

Notes

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

The Company was incorporated in June 2013 as Somerset Transition Corporation under the Oklahoma General Corporation Act. The Company was formed to complete a reorganization under Section 1088(g) of the Oklahoma Act, whereby the Company became successor to Transnational Financial Network, Inc., which was originally incorporated in California in 1985. In September 2013, the Company was redomesticated in Maryland and changed its name to Somerset Property, Inc. In July 2017, the Company was redomesticated in Nevada and changed its name to Revival, Inc. In June 2019, the Company changed its name to Farmhouse, Inc. to reflect its new business endeavors.

In August 2019, the Company acquired Farmhouse, Inc., a Washington corporation (“Farmhouse Washington”) as its wholly owned subsidiary (the “Acquisition”). Farmhouse Washington was formed in January 2014 and has developed a social network platform, “The WeedClub® Platform”. At the closing of the Acquisition, all of the issued and outstanding shares of common stock of Farmhouse Washington were exchanged for shares of common stock of the Company on a one-for-one basis. The financial statements of the Company are the continuation of Farmhouse Washington with the adjustment to reflect the capital structure of the Company.

Prior to the Acquisition, in August 2017, Farmhouse Washington formed Farmhouse DTLA, Inc. (“DTLA”) in California as a wholly owned subsidiary. In April 2021, DTLA was awarded a 49% equity interest in a Los Angeles based multi-licensed cannabis retail dispensary, grow, manufacturer and distributor called Los Angeles Farmers, Inc. (“LAFI”). Although ownership percentages over 20% would typically be accounted for using the equity method, the Company is accounting for this investment as an investment in equity securities due to the Company not having significant influence over LAFI. The cost of this investment was expensed during the fiscal year ended December 31, 2017 and, due to uncertainties surrounding the value of LAFI and determining any award of back profits and interest, as well as the pending litigation, no value has been reflected in our unaudited interim condensed consolidated financial statements as of March 31, 2023. See Note 9.

Current Operations

The Company is a technology company with multiple cannabis related divisions and IP, including the WeedClub® Platform, the @420 Twitter handle and a Web3 division. The WeedClub® Platform is a cannabis social network platform that enables industry professionals to connect, discover products and services and scale their businesses. Within the WeedClub® Platform, members utilize an increasing set of technology-based tools for discovering professional connections and information. The Company’s @420 Twitter handle serves as a public platform to engage with cannabis enthusiasts. The Company’s Web3 division, launched in December 2021, facilitates licensing opportunities between established cannabis brands and influential digital collectible holders to launch digital collectible branded products and accessories.

Going Concern and Management’s Plans

The accompanying unaudited interim condensed consolidated financial statements have been presented on the basis that the Company is a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the three months ended March 31, 2023,

the Company had a net loss from operations of $158,795 and as of March 31, 2023, the Company had stockholders’ deficit of $1,696,972. In view of these matters, the recoverability of any asset amounts shown in the accompanying unaudited interim condensed consolidated financial statements is dependent upon the Company’s ability to expand operations and achieve profitability from its business. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited interim condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has financed its activities principally from the sale of its common stock and loans from Company officers. The Company intends to finance its future working capital needs from these sources until such time that funds provided by operations are sufficient to fund working capital requirements. Management believes that the current cash on hand, loans from Company officers and funds raised from the sale of its common stock allow the Company sufficient capital for operations and to continue as a going concern.

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2023

Notes

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company’s unaudited interim condensed consolidated financial statements. These accounting policies conform to Generally Accepted Accounting Principles (“GAAP”) and have been consistently applied in the preparation of these unaudited interim condensed consolidated financial statements.

Principals of Consolidation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Farmhouse Washington and DTLA (together the “Company”). All material intercompany accounts, transactions, and earnings have been eliminated in the accompanying unaudited interim condensed consolidated financial statements.

Financial Statement Reclassification

Certain amounts from the prior year’s financial statements have been reclassified in these unaudited interim condensed consolidated financial statements to conform to the current year’s classifications.

Cash and Cash Equivalents

Cash and cash equivalents as of March 31, 2023 included cash in banks. The Company considers all highly liquid instruments with maturity dates within 90 days at the time of issuance to be cash equivalents.

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements contained in this Report have been prepared in accordance with U.S. GAAP and the rules of the Securities and Exchange Commission (“SEC”) for interim financial information and do not include all of the information or disclosures required by U.S. GAAP for annual financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial

statements and notes thereto contained in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2022 filed with the Securities and Exchange Commission on April 20, 2023. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.

Use of Estimates

Operating results for interim periods are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Significant estimates include the carrying value of property and equipment, grant date fair value of options, deferred tax assets and any related valuation allowance and related disclosure of contingent assets and liabilities. The Company evaluates its estimates based on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could materially differ from these estimates.

Accounts receivable

Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest. Receivables are presented net of the allowance for doubtful accounts in the accompanying unaudited interim condensed consolidated balance sheets. We evaluate the collectability of our accounts receivable and determine the appropriate allowance for doubtful accounts based on a combination of factors. When we become aware of a customer’s inability to meet its financial obligation, a specific allowance for doubtful accounts is recorded, reducing the receivable to the net amount we reasonably expect to collect.

Revenue Recognition

In accordance with ASC No. 606, Revenue Recognition, the Company recognizes revenue from product sales or services rendered when the following five revenue recognition criteria are met: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.

The Company generates revenue from the following sources:

(1)Subscription fees. Subscription fees related to the WeedClub portal are received at the time of purchase. The Company’s performance obligation is to provide services over a fixed subscription period; accordingly, the Company recognizes revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. 

(2)License revenues. The Company generates revenue from license fees in connection with NFT Art License Agreements, whereby the licensee is granted a limited license from the Company to use one of its licensed NFT’s for the purpose of creating, marketing, and selling branded cannabis and hemp products and accessories. The Company’s performance obligation is met over the term of the license agreement; accordingly, the Company recognizes revenue ratably over the term of the license agreement.  

Revenues generated for the three months ended March 31, 2023 and 2022 were as follows:

	2023	2022
Subscription fees	$-	$-
License revenues	1,069	-
	1,069	-
Less: Costs of revenues associated with license revenues	(535)	-
	$534	$-

Earnings (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share – Overall – Other Presentation Matters. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that we incorporated as of the beginning of the first period presented.

All dilutive common stock equivalents are reflected in our net income (loss) per share calculations. Anti-dilutive common stock equivalents are not included in our loss per share calculations. As of March 31, 2023 and December 31, 2022, the Company had one convertible note with a principal value of $45,000. This note is convertible at a conversion price the note holder and the Company agree on and therefore the number of shares it is convertible into is not determinable.

Recently Issued Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company has not yet adopted that they believe are applicable or would have a material impact on the financial statements of the Company.