UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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FORM 10-Q

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FARMHOUSE, INC.

(Exact name of registrant as specified in its charter)

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1355548 Market Street, Suite 48890355, San Francisco, CA  9410394104

(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)

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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]

[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]

[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.

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

☐ Yes  [X][X] No

The number of shares of the issuer’s Common Stock outstanding as of November 19, 2020May 15, 2023 is 14,782,838.17,075,950.

SPECIAL NOTE

CAUTIONARY STATEMENT REGARDING FORWARD LOOKINGFORWARD-LOOKING STATEMENTS

Certain statements and information included in this Quarterly Report on Form 10-Q and other filingsfor the three months ended March 31, 2023 (this “Report”) contain forward-looking statements within the meaning of the Registrant underSection 27A of the Securities Act of 1933, as amended (the “Securities Act”), andSection 21 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements in this Quarterly Report on Form 10-Q, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. SuchThese statements are subjectbased upon beliefs of, and information currently available to certain risks, trendsmanagement as well as estimates and uncertainties that could cause actual resultsassumptions made by management. Readers are cautioned not to differ materially from expected results. Amongplace undue reliance on these risks, trends and uncertainties are the availability of working capital to fund our operations, the competitive market in which we operate, the efficient and uninterrupted operation of our computer and communications systems, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property, the effects of governmental regulation, and other risks identified in the Registrant’s filings with the Securities and Exchange Commission from time to time.

In some cases, forward-looking statements, can be identified by terminology suchwhich are only predictions and speak only as “may,of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “should,“would,” “could,” “expects,“should,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of suchthese 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 comparable terminology. 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 the Registrant believeswe believe that the expectations reflected in the forward-looking statements contained herein are reasonable, the Registrantwe cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neitherExcept as required by applicable law, including the Registrant, nor any other person, assumes responsibility forsecurities laws of the accuracy and completeness of such statements. The Registrant is under no dutyUnited States, we do not intend to update any of the forward-looking statements contained herein afterto conform these statements to actual results.

CERTAIN TERMS USED IN THIS REPORT

“We,” “us,” “our,” the date“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 Quarterly Report on Form 10-Q.Report.

FARMHOUSE, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

SEPTEMBER 30, 2020March 31, 2023

IININDEXDEX

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.

InterestDepreciation is computed using the straight-line method based upon the estimated useful lives of the underlying assets, generally three years. Depreciation expense related to convertible notes for the nine months ended September 30, 2020was zero and 2019 was $6,081 and $6,058, respectively. Interest expense related to convertible notes$94 for the three months ended September 30, 2020March 31, 2023 and 20192022, 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 $2,042originally due in July 2018 and $2,042,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 related toon the outstanding notes at September 30, 2020convertible note payable was $46,292 and $44,295 as of March 31, 2023 and December 31, 2019 was $26,052, and $19,972,2022, respectively.

The conversion feature was not accounted for under derivative accounting as of September 30, 2020 or as of December 31, 2019guidance 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 financial statements.  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

As of September 30, 2020March 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)

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 811 – COMMITMENTS AND CONTINGENCIES

Operating Leases

TheIn the normal course of its business, the Company leases desk space in an incubator in San Francisco, CA atmay be subject to certain contractual obligations and litigation. In the ratemanagement’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 $700 per desk on a month to month basis.  operations.

Indemnification Agreements

The Company has agreed to indemnify its officers and directors for certain events or occurrences arising as a result offrom 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. As a result of no current or expected litigation, theThe Company believes the estimated fair value of these indemnification agreements is minimal and no liability has no liabilitiesbeen recorded for these agreements as of September 30, 2020 or DecemberMarch 31, 2019.

NOTE 9 – STOCKHOLDER’S EQUITY

Preferred Stock

We are authorized to issue up to 5,000,000 shares of preferred stock with a par value of $0.0001 and our board of directors has the right to determine the rights, privileges, and preferences of that preferred stock, which has not yet been done. As of September 30, 20202023 and December 31, 2019, we had no preferred stock issued or outstanding.2022.

Common Stock

We are authorized to issue up to 295,000,000 shares of common stock with a par value of $0.0001.

During the nine months ended September 30, 2020, the Company issued 125,000 shares of its common stock valued at $1.00 per share (the price shares of Common Stock was trading at on the day of purchase) for the acquisition of the website domain blunt.com.  The transaction was valued at $125,000.

During the nine months ended September 30, 2020, the Company issued an aggregate of 105,995 shares of its common stock for services rendered.  The stock was valued at its fair market value or the price shares of common stock was trading at as of each issuance date.  This resulted in an expense of $97,986 and has been recorded in General and Administrative Expense as of September 30, 2020.

During the nine months ended September 30, 2020, the Company sold an aggregate of 50,000 shares of its common stock for proceeds of $37,500.

During the nine months ended September 30, 2019, the Company issued 187,500 shares of its common stock valued at $1.60 per share (the price shares of Common Stock was trading at on the day of purchase) for the acquisition of the website domain Extract.com.  The transaction was valued at $300,000.

During the nine months ended September 30, 2019, the Company sold an aggregate of 76,543 shares of its common stock for proceeds of $117,002, of which $37,001 was recorded as a subscription receivable as funds were received subsequent to September 30, 2019.

During the nine months ended September 30, 2019, the Company issued an aggregate of 35,876 shares of its common stock for services rendered.  The stock was valued at the current fair market value of the stock as calculated by the last price direct equity was sold by the Company.  This resulted in an expense of $58,709 and has been recorded in General and Administrative Expense as of September 30, 2019.

As of September 30, 2020 and December 31, 2019, the Company had 14,778,838 and 14,497,843 shares of common stock issued and outstanding, respectively.

FARMHOUSE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2020

(Unaudited)

NOTE 10 – LITIGATION

On October 25, 2017, the Company’s subsidiary, DTLA, commenced litigation in Los Angeles Superior Court (Case #BC681251) against David Vayntrub of AHPS alleging breach of contract, amongst other things, as a result of DTLA’s agreement with AHPS. Subsequent to Farmhouse filing the lawsuit, AHPS sent a letter to Farmhouse purporting to unilaterally “cancel” the agreement. In December 2017, DTLA filed a Motion to Stay Proceedings and Compel Arbitration which was granted by the Court on March 27, 2018. The arbitration has been in the discovery phase and a trial date has been set for February 2021.  The Company expects a ruling by the second quarter of 2021, although there can be no assurance the proceedings will be completed in this time frame or that the arbitrator will rule in the Company’s favor. The Company is seeking to vigorously enforce its rights under the contract as well as seek damages related to additional claims.  

NOTE 11 – GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred significant cumulative net losses from operations in recent years. As reported in the financial statements, the Company has an accumulated deficit of $3,748,877. At September 30, 2020, the Company had current assets of $863 and current liabilities totaling $1,102,762 and a working capital deficit of $1,101,899.  These factors raise substantial doubt as to the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on its ability to raise adequate capital to fund operating losses until it is able to engage in profitable business operations. To the extent financing is not available, the Company may not be able to, or may be delayed in, developing its services and meeting its obligations. The Company will continue to evaluate its projected expenditures relative to its available cash and to evaluate additional means of financing in order to satisfy its working capital and other cash requirements. The accompanying financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date throughAs of May 15, 2023, the date theof these unaudited interim condensed consolidated financial statements, were issued, and determined that there are no additionalsubsequent events that require disclosure.

On October 12, 2020,are required to be recorded or disclosed in the Company entered into an agreement with an independent contractor to provide consulting services to the Company. The agreement calls for the issuance of 4,000 shares of common stock monthly at a predetermined value of $1.00 per share. The agreement is cancellable by either party at any time. The Company has issued the initial 4,000 shares of common stock on October 12, 2020 in terms with the agreement.accompanying unaudited interim condensed consolidated financial statements.

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

Forward-Looking Statements

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unauditedinterim condensed consolidated financial statements and related notes includedcontained elsewhere in this QuarterlyReport, as well as our Annual Report on Form 10-Q and the audited financial statements and notes thereto as of and10-K for the yearthree months ended DecemberMarch 31, 2019 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Company’s Registration Statement on Form S-1,2023 as filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2020.

Forward-Looking Statements

The informationApril 19, 2023. Certain statements made in this discussion contains forward-looking statements and informationare “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the securitiesSecurities Exchange Act of 1934, as amended, (the “Exchange Act”),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 subject to the “safe harbor” created by those sections. The words “anticipated,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “should,” “could,” “predicts,” potential,” continue,” “would,”only predictions and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements that we make. The forward-looking statements are applicablespeak only as of the date on whichhereof. 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 made,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 assume any obligationintend to update any forward- looking statements. Allof the forward-looking statements in this Form 10-Q are made based on our current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. In evaluatingconform these statements you should specifically consider various factors, uncertainties and risks that could affect our future results or operations. These factors, uncertainties and risks may cause ourto actual results to differ materially from any forward-looking statement set forth in this quarterly report on Form 10-Q. You should carefully consider these risks and uncertainties described and other information contained in the reports we file with or furnish to the SEC before making any investment decision with respect to our securities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.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

The Company, through its wholly owned subsidiary, Farmhouse Washington, providesWe are a technology platformholding 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 forthat 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