FARMHOUSE, INC. /NV
Farmhouse, Inc. (OTCQB: FMHS) is an emerging growth holding company pivoting from Web3 licensing to acquiring casual food & beverage brands. Revenues collapsed from $15.2 K in 2023 to $4.2 K in 2024, while operating expenses remained high at $411 K, leading to a net loss of $464 K. The company en...
Farmhouse, Inc. (OTCQB: FMHS) 2024 10-K Review\n
Welcome to our in-depth analysis of Farmhouse, Inc. (OTCQB: FMHS) and its annual report on Form 10-K for the fiscal year ended December 31, 2024. In this review, we’ll walk through the key takeaways from the 10-K, including:
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• Business overview and corporate history
• Financial performance and results of operations
• Liquidity, capital resources, and going concern
• Major strategic initiatives and acquisitions
• Risk factors and corporate governance
• Investment outlook and final score
1. Business Overview (Item 1)\n
Who is Farmhouse, Inc.?
Farmhouse, Inc. is a Nevada-incorporated holding company operating in the casual food and beverage space. Originally formed in 2013, Farmhouse pivoted from tech and Web3 licensing in the wellness industry into a lifestyle brand acquirer. Its primary activities include:
- Acquisitions of casual food & beverage businesses (e.g., Thrown, LLC share exchange).
- Brand and IP management, holding trademarks and domain portfolios (but no material ongoing royalty streams).
- Emerging growth status under the JOBS Act — smaller reporting company with scaled-down disclosures.
The company works through wholly owned subsidiaries (Farmhouse Washington and Farmhouse DTLA) and has no owned real estate; all personnel are remote. It currently employs two full-time officers and several contractors.
1.1 Corporate History\n- 2013: Incorporated and began technology and brand development in the wellness sector.
- 2019: Rebranded to Farmhouse, Inc. after acquiring Farmhouse Washington.
- 2021–2022: Launched and later wound down a Web3 licensing business focused on NFT deals.
- September 2024: Entered a Share Exchange Agreement (SEA) to acquire Thrown, LLC (Good Game by T-Pain nootropic beverage).
- June 2025: Signed a non-binding term sheet to acquire Ledgewood Holdings, LLC (multi-unit franchise operator, ~$31 M revenue).
2. Financial Performance (Items 7, 8, 7A)\n
Farmhouse is at an early stage with minimal revenues and substantial operating losses. Its financial statements show:
| Year ended Dec 31, 2024 | Year ended Dec 31, 2023 | |
|---|---|---|
| Revenue | $4,154 | $15,227 |
| Costs of revenue | $1,875 | $6,930 |
| Gross profit | $2,279 | $8,297 |
| Operating expenses | $410,668 | $517,843 |
| Interest expense | $55,954 | $51,243 |
| Net loss | $(464,343) | $(560,789) |
2.1 Revenue Breakdown\n- 2024: $4.2 K from expired NFT licensing agreements (company is no longer pursuing NFT revenue).
- 2023: $15.2 K, largely from the same licensing stream.
Farmhouse recognizes revenue under ASC 606: performance obligation satisfied when licensees gain rights to NFTs, with royalties recognized as a percentage of the licensee’s sales.
2.2 Operating Expenses\n- Wages & benefits: $203 K in 2024 (down from $222 K).
- Accounting & professional fees: $124 K (down from $182 K).
- Consulting fees: $6 K (down from $47 K).
- Public company fees & G&A: $29 K + $49 K.
Expense reductions were driven by lower stock-based compensation and consulting costs, reflecting the wind-down of the Web3 division.
2.3 Cash Flow Summary\n|Activity|2024|
|---|---:| | Net cash used in operating activities | $(106,412) | | Net cash provided by financing activities | $106,825 | | Ending cash balance | $413 |
The company raised small loans and equity issuances in 2024 to cover operations, ending the year with a mere $413 in cash and no equivalents.
3. Liquidity, Capital Resources, & Going Concern (Item 7)\n
Farmhouse has a working capital deficit of $2.3 M and has historically financed operations via:
- Related-party advances (officer loans, CFO services)
- Unsecured notes and convertible debt (rates up to 20%)
- Equity issuances (340 K RSAs, 62.5 K shares for $25 K, 187.5 K shares to Thrown, 10 K RSAs)
3.1 Going Concern\nThe auditor’s report and management disclosure note “substantial doubt” about the company’s ability to continue as a going concern due to recurring losses and capital deficiency. Farmhouse acknowledges that it needs significant financing or liquidity events (e.g., closing on its acquisitions) to survive.
4. Strategic Transactions & Acquisitions\n
4.1 Thrown, LLC Share Exchange\n- Agreement date: September 10, 2024.
- Terms: Farmhouse to issue 5,130,000 common shares (~25% post-closing) for all membership units of Thrown.
- Deposit: 187,500 shares (valued at $26,175) recorded as “Deposit on Investment” since closing conditions remain unmet.
- Status: As of June 20, 2025, not closed; discussions ongoing.
4.2 Ledgewood Holdings, LLC Non-Binding Term Sheet\n- Date: June 9, 2025.
- Target: Multi-unit franchise operator with ~$31 M TTM revenue.
- Consideration: Up to 31,000,000 shares; half vesting at close, half over two years with performance vesting, plus 1.5% revenue support fee.
- Status: Non-binding, subject to due diligence, board approval, debt resolution.
No guarantee either transaction will close, and Farmhouse may incur break-up fees or write-offs.
5. Balance Sheet & Debt Profile (Item 8)\n
| Liabilities | Dec 31, 2024 | Dec 31, 2023 |
|---|---|---|
| Accounts payable & accrued expenses | $1,611,168 | $1,371,438 |
| Accrued payroll & payroll taxes | $1,313,896 | $1,129,752 |
| Accrued interest | $79,226 | $61,745 |
| Convertible debt (current + long-term) | $79,000 | $79,000 |
| Notes payable (unrelated lenders) | $85,567 | $50,000 |
| Due to related parties | $292,397 | $198,958 |
| Total liabilities | $2,373,358 | $1,986,441 |
| Stockholders’ deficit | $(2,342,570) | $(1,978,281) |
| Cash | $413 | $0 |
Key points:
- A $2.34 M negative equity position
- Zero permanent capital; $413 cash on hand
- Defaulted notes payable totalling $135 K at 6–20% interest
- Convertible note in default ($45 K, 18% interest)
Farmhouse runs on a shoestring, continually flipping debt into new convertible notes, raising red flags on dilution and solvency.
6. Risk Factors (Item 1A)\n
As a smaller reporting company, Farmhouse is exempt from Item 1A disclosures; however, key risks include:
- Going concern/financing risk: History of operating losses, working capital deficit, reliance on dilutive financing.
- Execution risk on acquisitions: Both Thrown and Ledgewood deals are unclosed or non-binding, with potential deal fatigue or break fees.
- Penny stock illiquidity: <$0.02 share price, high volatility, OTCQB quotation only.
- Management concentration: Limited team, lack of internal controls, critical reliance on two founders and a contracted CFO.
- Dilution: Up to 36 M shares potentially issued in Ledgewood deal, plus future conversions of debt.
7. Corporate Governance & Controls (Items 9, 9A)\n
- Board of Directors: Three directors (Horowitz, Landau, Katz), no formal committees—Board handles audit, compensation, and governance.
- Internal controls: Material weaknesses identified; no COSO framework in place, limited segregation of duties.
- No Code of Ethics adopted yet; planning to roll one out.
Farmhouse combines CEO and Chairman roles, typical for microcaps but increases oversight burden.
8. Executive Compensation (Item 11)\n
Farmhouse does not pay executive salaries in cash; all compensation remains accrued.
| Exec | 2024 Total Comp | 2023 Total Comp |
|---|---|---|
| Horowitz (CEO) | $94,500 | $104,000 |
| Landau (CTO) | $94,500 | $104,000 |
| Lang (CFO) | $70,900 | $118,000 |
Compensation mixes accrued cash fees and vested Restricted Stock Awards under the 2021 Omnibus Incentive Plan. Directors receive RSAs only.
9. Investment Outlook & Score\n
Farmhouse, Inc. faces an uphill battle:
- Microscopic revenues ($4 K in 2024) vs. large operating burn ($411 K).
- Steep working capital deficit and frequent dilutive financings.
- No closed acquisitions yet; pipeline deals remain unguaranteed.
- Penny stock classification, extreme price volatility, OTC illiquidity.
- Significant going concern risk with limited cash runway.
Bottom line: Farmhouse is essentially a shell company with aspirational acquisitions foray into food & beverage, hampered by chronic cash shortages, diluted insider stakes, and questionable execution timelines. Until meaningful, closed revenue-generating deals are on the books, this ticker remains speculative to the extreme.
Investment Score: 1.0 / 10
(1 = no potential; 10 = high conviction)
Net Loss: $(464,343) for the year ended December 31, 2024.
Disclaimer: This blog post is for informational purposes only and does not constitute an investment recommendation. Always conduct your own due diligence and consult with a financial advisor.