NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
Sep. 30, 2024
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”) in the United States 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 consolidation. *Financial Statement Reclassification* Certain amounts in the prior year’s financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on previously reported net loss or stockholders’ equity. *Cash and Cash Equivalents* Cash and cash equivalents as of September 30, 2024, included cash held in banks. The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. *Basis of presentation* The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. They do not include all of the information and footnotes required for complete annual financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on July 11, 2024. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. *Use of Estimates* The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting periods. Significant estimates include those related to convertible debt, deferred tax assets and any related valuation allowances, contingent assets and liabilities, and stock-based compensation. Actual results could materially differ from those estimates. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. *Accounts receivable* Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount. Accounts receivable do not bear interest and are presented net of an allowance for doubtful accounts. The Company evaluates the collectability of its accounts receivable and establishes an allowance based on a combination of factors, including historical collection trends and specific information about customer credit risk. When the Company becomes aware of a customer’s inability to meet its financial obligations, a specific allowance for doubtful accounts is recorded. During the nine months ended September 30, 2024, the Company recognized bad debts of $607 on its accounts receivable. *Revenue Recognition* The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. During the nine months ended September 30, 2024 and 2023, the Company generated revenues of $4,154 and $10,707, respectively. During the three months ended September 30, 2024 and 2023, the Company generated revenues of zero and $5,503, respectively. Revenues were generated from license fees in connection with NFT art license agreements, whereby licensees are granted a limited right to use the Company’s NFTs for the purpose of creating, marketing, and selling branded cannabis and hemp products and accessories. The Company’s performance obligation is met upon granting the licensee access to the NFTs. Revenue is recognized as the licensee sells products, based on a percentage of their gross sales. Fees are due the month after sales occur. One licensee accounted for 100% of license revenues for each of the nine months ended September 30, 2024 and 2023. The corresponding costs of revenues associated with license revenues were $1,874 and $5,006 for the nine months ended September 30, 2024 and 2023, respectively, and zero and $2,404 for the three months ended September 30, 2024 and 2023, respectively. As discussed in Note 1, the Company has ceased pursuing its NFT licensing business and does not expect to generate further licensing revenues. The decision to discontinue this line of business was made as part of a strategic shift to focus on other opportunities, and the Company is no longer actively marketing or entering into new NFT licensing agreements. *Related Party Transactions* The Company identifies and discloses transactions with related parties in accordance with ASC 850, Related Party Disclosures. Related party transactions are recorded on terms that are no more favorable to the related parties than those that would be available in similar transactions with unaffiliated third parties. *Earnings (Loss) per Common Share* Net income (loss) per common share is computed in accordance with ASC 260, Earnings per Share. Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by adjusting the weighted average number of common shares outstanding to include potentially dilutive securities. As of September 30, 2024 and December 31, 2023, the Company had no potentially dilutive securities. *Stock-Based Compensation* Stock-based compensation expense is measured at the grant date based on the estimated fair value of the award and recognized on a straight-line basis over the vesting period. *Recently Issued Accounting Pronouncements* The Company has evaluated all recently issued accounting pronouncements by the Financial Accounting Standards Board (“FASB”), including those not yet effective, and does not expect any of these standards to have a material impact on its unaudited interim condensed consolidated financial statements or related disclosures.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

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”) in the United States 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 consolidation.

Financial Statement Reclassification

Certain amounts in the prior year’s financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on previously reported net loss or stockholders’ equity.

Cash and Cash Equivalents

Cash and cash equivalents as of September 30, 2024, included cash held in banks. The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. They do not include all of the information and footnotes required for complete annual financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on July 11, 2024. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting periods. Significant estimates include those related to convertible debt, deferred tax assets and any related valuation allowances, contingent assets and liabilities, and stock-based compensation. Actual results could materially differ from those estimates. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.

Accounts receivable

Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount. Accounts receivable do not bear interest and are presented net of an allowance for doubtful accounts. The Company evaluates the collectability of its accounts receivable and establishes an allowance based on a combination of factors, including historical collection trends and specific information about customer credit risk. When the Company becomes aware of a customer’s inability to meet its financial obligations, a specific allowance for doubtful accounts is recorded. During the nine months ended September 30, 2024, the Company recognized bad debts of $607 on its accounts receivable.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

During the nine months ended September 30, 2024 and 2023, the Company generated revenues of $4,154 and $10,707, respectively. During the three months ended September 30, 2024 and 2023, the Company generated revenues of zero and $5,503, respectively. Revenues were generated from license fees in connection with NFT art license agreements, whereby licensees are granted a limited right to use the Company’s NFTs for the purpose of creating, marketing, and selling branded cannabis and hemp products and accessories. The Company’s performance obligation is met upon granting the licensee access to the NFTs. Revenue is recognized as the licensee sells products, based on a percentage of their gross sales. Fees are due the month after

sales occur. One licensee accounted for 100% of license revenues for each of the nine months ended September 30, 2024 and 2023.

The corresponding costs of revenues associated with license revenues were $1,874 and $5,006 for the nine months ended September 30, 2024 and 2023, respectively, and zero and $2,404 for the three months ended September 30, 2024 and 2023, respectively.

As discussed in Note 1, the Company has ceased pursuing its NFT licensing business and does not expect to generate further licensing revenues. The decision to discontinue this line of business was made as part of a strategic shift to focus on other opportunities, and the Company is no longer actively marketing or entering into new NFT licensing agreements.

Related Party Transactions

The Company identifies and discloses transactions with related parties in accordance with ASC 850, Related Party Disclosures. Related party transactions are recorded on terms that are no more favorable to the related parties than those that would be available in similar transactions with unaffiliated third parties.

Earnings (Loss) per Common Share

Net income (loss) per common share is computed in accordance with ASC 260, Earnings per Share. Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by adjusting the weighted average number of common shares outstanding to include potentially dilutive securities. As of September 30, 2024 and December 31, 2023, the Company had no potentially dilutive securities.

Stock-Based Compensation

Stock-based compensation expense is measured at the grant date based on the estimated fair value of the award and recognized on a straight-line basis over the vesting period.

Recently Issued Accounting Pronouncements

The Company has evaluated all recently issued accounting pronouncements by the Financial Accounting Standards Board (“FASB”), including those not yet effective, and does not expect any of these standards to have a material impact on its unaudited interim condensed consolidated financial statements or related disclosures.