NOTE 1 – ORGANIZATION AND OPERATIONS

Organization

The Company was incorporated in June 2013 as Somerset Transition Corporation under the Oklahoma General Corporation Act. 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”). The financial statements of the Company are the continuation of Farmhouse Washington with the adjustment to reflect the capital structure of the Company. The consolidated financial statements also include Farmhouse DTLA, Inc., a wholly owned subsidiary of Farmhouse Washington (“DTLA”).

Current Operations

The Company is a technology business with multiple divisions and a portfolio of intellectual property, including the WeedClub® platform, the @420 Twitter handle, and a Web3 division. The Web3 division, launched in December 2021, was intended to facilitate licensing opportunities between established cannabis brands and holders of influential digital collectibles for the launch of branded digital products and accessories. Revenues from this initiative have been limited, and the Company has ceased pursuing this line of business. The Company is now pursuing acquisition opportunities to leverage its public structure and enhance shareholder value.

In line with this strategy, on September 10, 2024, the Company entered into a Share Exchange Agreement (“SEA”) with Thrown, LLC (“Thrown”) and its members. Under the SEA, the Company will acquire all membership interests of Thrown in exchange for 5,130,000 newly issued shares of common stock. This represents approximately 25% of the Company’s total issued and outstanding shares following the closing of the transaction.

As part of the SEA, Thrown’s management team, including key executives, will continue to operate the business under the Company’s ownership. The transaction also includes an Earnout Agreement that provides performance-based incentives, a Voting Agreement that outlines provisions concerning the voting rights related to the Company’s board composition and matters surrounding the SEA, and an Investor Rights and Management Agreement that will govern future operations and establish ongoing governance structures.

The transaction is subject to customary closing conditions, including the Company entering into a financing agreement to raise between $5 million and $10 million. The transaction is structured to qualify as a tax-free exchange under Section 368(a) of the Internal Revenue Code. Completion of the transaction remains subject to various conditions, and there can be no assurance that the SEA will close. As of April 25, 2025, the date of this report, the SEA has not closed, and the Company and Thrown remain in discussions. See Note 3 and 14.

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”) in the United States and have been consistently applied in the preparation of these unaudited interim condensed consolidated financial statements.

NOTE 3 – DEPOSIT ON INVESTMENT

As discussed in Note 1, the Company entered into a Share Exchange Agreement with Thrown and its members for a proposed acquisition of all membership interests of Thrown. Thrown, operating under the brand Nappy Boy Dranks, is a beverage company whose initial product is GamerShot, a nootropic functional esports beverage packaged in 2-ounce servings.

Pursuant to the SEA, the consideration to be provided to Thrown includes: a) an equity deposit of $75,000 in Company shares, subject to lockup and specific return conditions, b) cash compensation contingent on

NOTE 4 – CONVERTIBLE NOTES PAYABLE, IN DEFAULT

Convertible notes payable is comprised of a promissory note issued to an unrelated individual with a principal amount of $45,000 as of both September 30, 2024 and December 31, 2023. Principal and accrued interest were originally due in July 2018, and the note is currently in default. The note bears interest at a rate of 18% per annum, accrues monthly, and is unsecured.

The note, together with all unpaid accrued interest, is automatically convertible in full upon the closing of a qualified financing. A qualified financing is defined as an equity financing resulting in gross proceeds to the Company of at least $750,000 (including the conversion of this note and other debt). Upon a qualified financing, the conversion price would be equal to 100% of the per share price paid by investors in the financing, subject to the following valuation adjustments: (i) if the Company’s valuation associated with the qualified financing is less than $15,000,000, the conversion price shall be based on a $15,000,000 valuation; and (ii) if the valuation exceeds $30,000,000, the conversion price shall be based on a $30,000,000 valuation.

Interest expense related to the convertible note was $6,082 and $6,059 for the nine months ended September 30, 2024 and 2023, respectively, and $2,042 for each of the three months ended September 30, 2024 and 2023, respectively. Accrued interest was $58,476 and $52,394 as of September 30, 2024 and December 31, 2023, respectively.

NOTE 5 – NOTES PAYABLE

In 2021, the Company entered into a loan agreement with an unaffiliated individual (the “Lender”) for borrowings up to $75,000 and received a first advance of $50,000. The loan, which was due nine months after the first advance, remains outstanding and in default as of September 30, 2024. The loan bears interest at a rate of 6% per annum. At the Lender’s sole discretion, the maturity date may be extended. Borrowings under this loan are senior in priority to any other indebtedness of the Company. The Company’s Chief Executive Officer personally and unconditionally guaranteed repayment of the loan.

Interest expense related to this loan was $2,252 and $2,244 for the nine months ended September 30, 2024 and 2023, respectively, and $756 for each of the three months ended September 30, 2024 and 2023, respectively. Accrued interest was $9,888 and $7,636 as of September 30, 2024 and December 31, 2023, respectively.

Each of the notes bears interest at the stated annual rate, calculated based on the actual number of days elapsed over a 365-day year. All notes are unsecured and provide for acceleration of payment upon the occurrence of customary events of default, including non-payment, insolvency, bankruptcy, or a change of control of the Company. The notes have not been registered under the Securities Act of 1933, as amended, and the holders have represented that they are acquiring the notes for investment purposes only and not with a view to distribution. As of April 25, 2025, the date of this report, the notes are in default.

Interest expense related to these notes was $1,005 and $1,367 for the three and nine months ended September 30, 2024, respectively. Accrued interest was $1,367 as of September 30, 2024.

NOTE 6 – NOTES PAYABLE – RELATED PARTY

On August 12, 2024, the Company entered into an unsecured promissory note with the Company’s Chief Executive Officer in the principal amount of $4,500. The note bears interest at a rate of 20% per annum, calculated based on the actual number of days elapsed over a 365-day year. All unpaid principal and accrued but unpaid interest was due and payable in full on February 12, 2025. The note provides for acceleration of payment upon the occurrence of customary events of default, including the Company’s failure to pay amounts due, insolvency, bankruptcy, or a change of control, as defined in the note. Because the note was issued to the Company’s Chief Executive Officer, it is classified as a related party transaction under applicable accounting standards. See Note 12.

Interest expense related to this note was $121 for the three months ended September 30, 2024 and accrued interest was $121 as of September 30, 2024. As of April 25, 2025, the date of this report, the note matured on February 12, 2025, and remains unpaid. Accordingly, the note is in default.

NOTE 7 – DUE TO RELATED PARTIES

Due to related parties totaled $57,978 and $28,958 as of September 30, 2024 and December 31, 2023, respectively. These amounts are comprised of cash advances provided to the Company for operating expenses and direct payments of Company expenses by Company officers. The amounts due to related parties are non-interest bearing and unsecured. See Note 12.

For the nine months ended September 30, 2024, Company officers advanced $30,187 to the Company and were repaid $1,167 through the use of the Company’s credit card. For the comparable nine months ended September 30, 2023, Company officers advanced $2,751 to the Company, were repaid $21,255 in cash and $2,490 through the use of the Company’s credit card.

NOTE 8 – CONVERTIBLE NOTES PAYABLE – LONG-TERM

In May 2023, the Board of Directors authorized an offering of up to $1,000,000 of mandatorily convertible notes, designated as Series 2023 10% Mandatorily Convertible Notes (the “Series 2023 Notes”), to fund Web3 product development activities as well as sales, marketing, and administrative expenses. During the year ended December 31, 2023, the Company raised $34,000 through the issuance of Series 2023 Notes. The Series 2023 Notes mature 36 months from the issue date (which range between June 1, 2026 and October 2, 2026), and bear interest at 10% per annum.

The Series 2023 Notes are mandatorily convertible 30 calendar days after the earliest to occur of: (i) the Company’s common stock achieving a closing price greater than $1.00 for ten consecutive trading days (a “Market Forced Conversion”), or (ii) the Company completing an offering of common stock resulting in gross proceeds of at least $1,000,000 (an “Offering Forced Conversion”). Upon conversion, the Series 2023 Notes will automatically convert into shares of common stock at a conversion price equal to 75.8% of: (i) the closing price of the Company’s common stock on the tenth trading day for a Market Forced Conversion, or (ii) the offering price of the Company’s common stock for an Offering Forced Conversion.

NOTE 9 – 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 of Directors may, in its sole discretion, establish par value, divide the shares of preferred stock into series, and fix and determine the dividend rate, designations, preferences, privileges, and restrictions of any series of preferred stock. As of September 30, 2024, and December 31, 2023, the Company had no shares of preferred stock issued or outstanding.

Common stock transactions

Common stock transactions for the nine months ended September 30, 2024, were as follows:

·On May 17, 2024, the Board granted Restricted Stock Awards (“RSAs”) totaling 340,000 shares of common stock under the 2021 Omnibus Incentive Plan. See Note 10. 

·On May 28, 2024, the Company issued 62,500 shares of common stock to an unrelated third party in connection with a Subscription Agreement, priced at $0.40 per share, for cash proceeds of $25,000. 

·On September 6, 2024, the Board granted an RSA of 10,000 shares of common stock under the 2021 Omnibus Incentive Plan. See Note 10. 

·On July 6, 2024, the Company issued 187,500 shares to Thrown, which were valued at $26,175, measured at the closing price of the Company’s common stock on the OTCQB market on the date of issuance. See Note 3. 

As a result of these issuances, the Company had 17,925,950 shares of common stock outstanding as of September 30, 2024.

There were no common stock transactions during the nine months ended September 30, 2023.

NOTE 10 – STOCK-BASED COMPENSATION AND RESTRICTED STOCK AWARDS

2021 Omnibus Incentive Plan

In May 2021, the Board of Directors 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 outstanding common stock ratified the 2021 OIP by written consent.

Options granted under the 2021 OIP may be either “incentive stock options,” as defined in Section 422 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 of Directors and as set forth in the applicable award agreement. The option exercise price may not be less than 100% of the fair market value of the Company’s common stock on the date of grant (or 110% in the case of a participant who owns more than 10% of the voting power of all classes of the Company’s stock). Options become exercisable at times and on conditions determined by the Board and must be exercised within ten years from the date of grant (or five years for optionees holding more than 10% of the Company’s voting stock).

Restricted stock awards granted under the 2021 OIP are issued and measured at fair market value on the date of grant and typically vest in monthly or quarterly installments, subject to the recipient’s continued service with the Company on the applicable vesting dates. Vesting of restricted stock awards is based solely on continued service. Stock-based compensation expense is recognized on a straight-line basis as awards vest, with a corresponding credit to additional paid-in capital.

NOTE 11 – LITIGATION

In August 2017, the Company’s subsidiary, DTLA, entered into a Strategic Consulting Agreement (the “SCA”) with Los Angeles Farmers, Inc. (“LAFI”), formerly known as a medical marijuana growing and retail company. In October 2017, DTLA filed litigation in Los Angeles County Superior Court (Case No. BC681251) against LAFI and its principals, seeking to enforce its rights under the SCA. Following a confidential settlement with the principals in January 2020 and a judgment in favor of DTLA against LAFI in April 2021, a court-appointed receiver completed the sale of LAFI in April 2024.

As of April 25, 2025, the date of this report, there has been no material activity related to the matter for more than two years. The Company does not expect to recover any proceeds from the sale and is no longer pursuing any remedies. Accordingly, the matter is considered closed.

NOTE 12 – RELATED PARTY TRANSACTIONS

As discussed in Note 6, on August 12, 2024 the Company entered into an unsecured promissory note with its Chief Executive Officer in the principal amount of $4,500. The note bears interest at 20% per annum, matured on February 12, 2025, and remains unpaid as of April 25, 2025. The note is in default and is classified as a related party transaction. As of September 30, 2024 $4,500 in principal and $121 in accrued interest was due to the Chief Executive Officer.

As discussed in Note 7, Officers of the Company have also provided cash advances and paid Company expenses directly to fund operations. Amounts due to related parties totaled $57,978 and $28,958 as of September 30, 2024 and December 31, 2023, respectively. These amounts are unsecured, non-interest bearing, and due on demand.

For the nine months ended September 30, 2024, Company officers advanced $30,187 to the Company and were repaid $1,167 through the use of the Company’s credit card. For the comparable nine months ended September 30, 2023, Company officers advanced $2,751 to the Company and were repaid $21,255 in cash and $2,490 through use of the Company’s credit card.

As of September 30, 2024, Company officers owned approximately 41.7% of the Company’s outstanding common stock. The Company has entered into indemnification agreements with its officers and directors covering certain events arising from their service.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Contingencies

From time to time, the Company may become involved in legal proceedings, claims, or regulatory matters arising in the ordinary course of business. The Company assesses its potential liability in connection with these matters by analyzing potential outcomes, assuming various litigation and settlement strategies, and consulting with legal counsel. As of April 25, 2025, the date of this report, there were no material pending legal proceedings against the Company, and management does not believe the outcome of any current claims or legal proceedings will have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

Indemnification Agreements

The Company has entered into indemnification agreements with its officers and directors, under which it has agreed to indemnify them for certain events or occurrences arising from their service in such capacities. The indemnification period extends for the lifetime of the officer or director. The maximum potential future payments under these agreements are unlimited; however, the Company believes the estimated fair value of any potential obligations is minimal. Accordingly, no liability has been recorded as of September 30, 2024, or December 31, 2023.

NOTE 14 – SUBSEQUENT EVENTS

As of April 25, 2025, the date of this report, the Company evaluated subsequent events and determined that the following events required disclosure in the accompanying unaudited interim condensed consolidated financial statements for the nine months ended September 30, 2024.

Convertible Note Financing

The Company has authorized a Convertible Promissory Note Offering with the following key terms:

·Interest Rate: 10% per annum 

·Maturity: Three years from the date of issuance 

·Automatic Conversion: 

oIf the Company completes a new equity financing of at least $1,000,000, the note will automatically convert into common stock at a price equal to 50% of the offering price. 

oIf the Company’s common stock trades at or above $1.00 per share for ten consecutive trading days, the note will automatically convert at a price equal to 50% of the closing price on the tenth trading day. 

·Prepayment: The Company may prepay the notes at any time without penalty; however, each holder will be given five business days’ prior notice to elect conversion before any such prepayment. 

·Use of Proceeds: Proceeds from the offering are being used for general corporate purposes. 

The following Convertible Notes have been issued under this offering:

·$10,000 issued to an unrelated individual on February 24, 2025. 

·$61,000 issued to an unrelated individual on March 18, 2025, consisting of $35,000 in new cash proceeds and $26,000 converted from a previously accrued liability for services rendered. 

·$25,000 issued to an unrelated individual on April 16, 2025.