S-1/A: FARMHOUSE Pivots to Digital Asset Treasury Amid Going Concern

Farmhouse, Inc. shifts its strategy to a Digital Asset Treasury model, focusing on Bitcoin and Gold, while facing significant financial challenges and relying on a new $20 million equity line.

Summary

• Farmhouse, Inc. (FMHS) is a Nevada-incorporated development-stage digital asset and lifestyle holding company.
• The company has pivoted its strategy from brand licensing (cannabis, NFTs) to a Digital Asset Treasury (DAT) model, aiming to hold Bitcoin and Gold as long-term treasury reserves.
• It plans to leverage its public company platform to acquire profitable digital and financial technology businesses and create a brand ecosystem linking digital asset ownership with lifestyle and consumer brands.
• A wholly-owned subsidiary, Farmhouse Treasury LLC, was formed on September 19, 2025, for digital asset treasury management.
• The company executed a Common Stock Purchase Agreement with GHS Investments, LLC on November 5, 2025, providing the right to sell up to $20 million of common stock over 24 months.
• It issued 500,000 commitment shares to GHS upon execution of the agreement.
• During 2025, the company issued convertible promissory notes aggregating approximately $400,000 in gross proceeds to accredited investors, bearing 10-15% interest and maturing within three years.
• The non-binding term sheet for the acquisition of Ledgewood Holdings, LLC (a multi-unit franchise operator with $31 million in trailing twelve-month revenue) was terminated on October 10, 2025, to concentrate on the DAT initiative.
• The company has incurred recurring losses since inception, with a working capital deficit of approximately $2.1 million and an accumulated deficit of approximately $6.95 million as of September 30, 2025.
• Its independent auditors expressed substantial doubt about its ability to continue as a going concern.
• Common stock trades on the OTC Pink Market under the symbol FMHS, with a closing price of $0.25 per share on January 7, 2026.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, evidenced by recurring losses, a significant accumulated deficit, and an auditor's going concern opinion. While the strategic pivot to digital assets and the GHS financing offer potential, the execution risk is high, and the financing itself is highly dilutive and not guaranteed. The lack of revenue and increasing quarterly net loss further underscore the precarious financial position.

Positives

• Secured an equity financing agreement with GHS Investments, LLC for up to $20 million, providing a potential source of capital.
• Formed Farmhouse Treasury LLC to focus on digital asset treasury management, aligning with a growing market trend.
• Management believes the Digital Asset Treasury model offers potential inflation hedging and capital appreciation.
• The company plans to utilize institutional-grade custody with insurance for digital assets, mitigating self-custody risks.
• The hybrid strategy of combining Bitcoin and Gold offers a unique exposure opportunity for investors.
• Reduced net loss for the nine months ended September 30, 2025, to $174,854, compared to $362,383 for the same period in 2024, primarily due to a gain on extinguishment of debt.
• Working capital deficit improved from $2,334,745 as of December 31, 2024, to $2,046,584 as of September 30, 2025.

Negatives

• Incurred recurring losses and has a working capital deficit of approximately $2.1 million as of September 30, 2025.
• Accumulated deficit of approximately $6.95 million as of September 30, 2025.
• Independent auditors expressed substantial doubt about the company's ability to continue as a going concern.
• Generated zero revenue for the nine months ended September 30, 2025, compared to $4,154 for the same period in 2024, and does not expect future revenue from previous licensing agreements.
• Net loss for the three months ended September 30, 2025, was $110,968, compared to $107,193 for the same period in 2024, indicating an increased loss.
• The GHS Equity Financing Agreement does not provide committed funding and is limited by the trading volume of common stock, which has historically been low.
• Sales of common stock under the GHS facility may adversely affect the stock price and liquidity due to dilution.
• Outstanding convertible notes bear high interest rates (10-15%) and could lead to default or further dilution upon conversion.
• The company has significant related-party debt, including $57,777 in officer advances and $254,000 in accrued but unpaid consulting fees owed to the CFO as of September 30, 2025.
• The company does not anticipate paying dividends in the foreseeable future.
• Common stock trades on the OTC Pink Market, which has limited liquidity and wide bid-ask spreads, and is considered "penny stock" subject to additional trading restrictions.
• Executive officers and directors collectively control approximately 45.9% of outstanding common stock, potentially influencing corporate matters to the detriment of minority shareholders.
• The company does not maintain independent committees (audit, compensation, nominating) as required for exchange-listed companies.
• The company has not filed corporate income tax returns for fiscal years after 2018, potentially exposing it to penalties and limitations on NOLs.

Risks

• Incurred recurring losses and has a working capital deficit, raising substantial doubt about its ability to continue as a going concern.
• Dependence on executive officers for strategic direction and management; loss of key personnel could impede development.
• Operations are in early stages of development, and profitability is not assured.
• Digital Asset Treasury (DAT) strategy is unproven and subject to extreme market volatility.
• Could be deemed an investment company under the Investment Company Act of 1940, requiring fundamental operational changes or additional regulation.
• Reliance on third-party service providers for custody, security, and compliance of digital assets, with potential for loss due to failures.
• Digital-asset activities are subject to an evolving and uncertain regulatory environment, potentially leading to limitations, registration requirements, fines, or penalties.
• Digital assets held could be classified as securities, subjecting the company to additional regulation as an unregistered investment company or broker-dealer.
• Subject to cybersecurity and technology risks inherent in holding digital assets, including hacks, phishing, malware, or loss of private keys.
• Insurance coverage for digital-asset losses is limited and expensive, potentially leading to uninsured losses.
• Energy consumption and environmental concerns related to blockchain operations may lead to regulatory or reputational risks.
• The market for digital assets is nascent and subject to unpredictable technological changes, potentially rendering assets obsolete or impairing their value.
• Safekeeping and accounting of digital assets present complex technical and audit challenges, potentially delaying filings or impacting investor confidence.
• Continued operations depend on external financing, and inability to draw under the GHS facility or secure additional financing could lead to curtailment or cessation of operations.
• Ability to raise capital under the GHS Equity Financing Agreement is limited by the trading volume of common stock.
• The GHS Equity Financing Agreement does not provide committed funding and may not be available when needed.
• Low trading volume may limit the ability to execute the Digital Asset Treasury strategy.
• Sales of common stock under the GHS facility may adversely affect the stock price and liquidity due to increased outstanding shares and downward pressure.
• Equity-line financings of this type have been criticized as potential "death-spiral" arrangements, where GHS's short-term trading interests could differ from long-term investors.
• Inability to raise capital through the GHS facility may require seeking alternative financing on less favorable terms, resulting in increased dilution or higher costs.
• May be unable to satisfy obligations under convertible notes or other indebtedness, leading to default, acceleration, or further dilution.
• Subject to federal and state securities laws and could face enforcement actions for deficient disclosures.
• Internal controls may not be effective, and the lack of a formal audit committee increases the risk of financial-reporting errors.
• May be required to register or license as a money-services business or digital-asset custodian, imposing significant costs and reporting obligations.
• Stock price is volatile and may not reflect fundamental value, with limited liquidity and wide bid-ask spreads on the OTC Pink Market.
• Future sales of restricted or newly issued shares could adversely affect the share price due to increased supply.
• Does not anticipate paying dividends in the foreseeable future.
• Shares are considered "penny stock," subject to additional trading restrictions that may deter investors.
• Executive officers and directors collectively control a significant percentage (45.9%) of voting stock, influencing corporate matters.
• Does not currently maintain independent committees as required for exchange-listed companies, increasing conflict of interest risks.
• Engaged in related-party transactions, which could present conflicts of interest.
• The described risks are not exhaustive, and other unknown or immaterial risks may also impair business operations.

Future Outlook

The company intends to build shareholder value by holding Bitcoin and Gold as long-term treasury reserves, leveraging its public company platform to acquire profitable digital and financial technology businesses, and creating a brand ecosystem linking digital asset ownership with lifestyle and consumer brands. Management believes the Digital Asset Treasury model aligns with corporate balance-sheet allocation to Bitcoin and offers potential inflation hedging and capital appreciation. The company expects to use proceeds from sales to GHS for working capital and investment in digital assets. It anticipates the need for additional financing to support operations and strategic initiatives and is actively exploring financing alternatives.

Management Comments

• "Our strategy is to build shareholder value by (1) holding Bitcoin and Gold as long-term treasury reserves, (2) leveraging our public company platform to acquire profitable digital and financial technology businesses, and (3) creating a brand ecosystem linking digital asset ownership with lifestyle and consumer brands."
• "We believe our Digital Asset Treasury model aligns Farmhouse Treasury with the broader trend of corporate balance-sheet allocation to Bitcoin and offers potential inflation hedging and capital appreciation over time."
• "Management believes that the value of U.S dollars will continue to be affected by debasement via persistent inflation, and that the accumulation of Bitcoin and Gold onto the Farmhouse Treasury balance sheet will benefit shareholders by storing value in assets that may benefit from being alternatives to the U.S. dollar."
• "Farmhouse Treasury will utilize institutional grade custody which includes insurance in order to manage the risk of loss of assets due to self-custody risks such as wallet access and so-called wrench attacks."
• "The combination of Bitcoin and Gold is a strategy that combines two scarce assets into one basket which provides a unique opportunity for investors to gain exposure to Bitcoin and Gold while maintaining the transparency that our audited public company infrastructure adds to the structure."
• "Management monitors the composition of the Company’s assets and activities with the intent of remaining outside the scope of the Investment Company Act, including by maintaining operating activities, overhead, and strategic initiatives beyond passive asset ownership."
• "Management is actively exploring financing alternatives, including equity and debt offerings and potential strategic partnerships."

Industry Context

Farmhouse, Inc.'s pivot to a Digital Asset Treasury (DAT) strategy aligns with a broader trend of corporate balance-sheet allocation to Bitcoin and other digital assets, exemplified by companies like MicroStrategy Incorporated. The company aims to differentiate itself by adopting a hybrid treasury model emphasizing both Bitcoin and tokenized hard assets (like PAXG, tokenized gold), without the operational complexities of mining. This strategy positions Farmhouse within the nascent public-market category of digital-asset treasury companies, competing with larger players like MicroStrategy and diversified digital-asset financial services companies (e.g., Galaxy Digital Holdings Ltd.), as well as smaller-cap entities exploring similar models. The company also acknowledges the increasing involvement of traditional financial institutions in digital assets through custody solutions and tokenization platforms, which indirectly compete or offer partnership opportunities.

Comparison to Industry Standards

• MicroStrategy Incorporated: Farmhouse's DAT model is similar in concept to MicroStrategy's strategy of accumulating Bitcoin as a primary treasury asset. However, MicroStrategy has financed billions in BTC through debt and equity, demonstrating a significantly larger scale and more established capital-market execution. Farmhouse's $20 million equity line is comparatively small.
• Hut 8 Mining Corp., Marathon Digital Holdings, and Riot Platforms: These public mining companies also hold significant Bitcoin, but their core business model involves capital-intensive mining operations, which Farmhouse explicitly avoids, aiming for a "lean cost base" and "focused treasury subsidiary."
• Galaxy Digital Holdings Ltd., CleanSpark, Inc.: These diversified digital-asset financial services companies combine asset accumulation with trading, advisory, or mining. Farmhouse seeks to differentiate with a "pure-play treasury approach" rather than a complex, multi-unit FinTech enterprise.
• Institutional-grade custody: Farmhouse's stated intent to use institutional-grade custody with insurance aligns with best practices in the digital asset space, comparable to services offered by Fidelity Digital Assets, Coinbase Institutional, Bakkt, and Anchorage Digital.
• Corporate Governance: Farmhouse's lack of fully independent audit, compensation, and nominating committees falls short of Nasdaq standards, which larger, more established public companies in the digital asset space (like MicroStrategy) would typically meet. This indicates a lower standard of corporate governance compared to major exchange-listed peers.
• Financial Health: Farmhouse's recurring losses, working capital deficit, and "going concern" doubt are significantly below industry standards for healthy, operating public companies, including those in the digital asset sector.

Corporate Governance

Legal Proceedings

• As of January 16, 2026, the company is not a party to any material pending legal proceedings and is not aware of any such proceedings threatened against it or its property.
• A past litigation involving its subsidiary DTLA against Los Angeles Farmers, Inc. (LAFI) was settled with principals in January 2020, and a court-appointed receiver completed the sale of LAFI in April 2024. The company does not expect to recover any proceeds and considers the matter closed.

Related Party Transactions

• On July 16, 2025, 400,000 shares of common stock were issued to Lang Financial Services, Inc. (LFSI), an entity controlled by CFO Lanny R. Lang, for CFO services, with a grant-date fair value of approximately $4,480.
• As of September 30, 2025, amounts due to related parties totaled $343,462, including $57,777 in non-interest-bearing, unsecured officer advances, $254,000 in accrued but unpaid consulting fees owed to the Chief Financial Officer, a $4,500 related-party promissory note in default (to CEO Evan Horowitz), and $2,185 of accrued interest on related-party notes.
• On April 18, 2025, a Series 2025 10% Mandatorily Convertible Note in the principal amount of $25,000 was issued for cash to the spouse of a Company director. This note was issued on the same terms as those offered to unaffiliated investors and was executed on an arms-length basis.
• Executive officers provide services pursuant to consulting or at-will arrangements, without formal employment agreements.
• All related-party transactions were reviewed and approved by the Board of Directors.

Stakeholder Impact

• Shareholders: Potential for significant dilution from the GHS Equity Financing Agreement (up to 80,500,000 shares registered for resale) and conversion of outstanding convertible notes. The "penny stock" status and OTC Pink Market listing imply limited liquidity and price volatility. The going concern doubt poses a high risk of capital loss.
• Employees: The company has only three executive officers and no full-time employees other than management, relying on contractors. This structure implies limited direct impact on a broad employee base.
• Customers: Currently, the company has no significant customers, as its previous NFT licensing business was discontinued. The new DAT strategy does not directly involve customers in the traditional sense.
• Suppliers: No significant supplier dependencies mentioned. Digital asset custody and trading services will be provided by third-party institutions.
• Creditors: The company has significant outstanding convertible notes and other indebtedness, some of which are in default. The ability to satisfy these obligations is uncertain, raising risk for creditors.

Next Steps

• Generate significant revenues or raise additional capital to address the going concern doubt.
• Execute the Digital Asset Treasury (DAT) strategy, including the purchase and custody of digital assets through Farmhouse Treasury LLC.
• Access capital under the GHS Equity Financing Agreement to fund working capital and digital asset investments.
• Complete all outstanding corporate income tax filings (for fiscal years after 2018).
• Evaluate additional strategic options, including treasury partnerships, digital-asset platforms, and opportunistic acquisitions in financial technology and lifestyle-brand categories.
• Strengthen the balance sheet and expand digital-asset reserves.
• Consider implementing equity-based compensation for directors in future periods.
• Establish formal audit, compensation, and nominating committees composed of independent directors if the company grows and becomes subject to national securities exchange requirements.
• Contract with at least one qualified digital-asset custodian during 2026.

Key Dates

Recommendation

The company presents an extremely high-risk investment profile. The auditor's "going concern" opinion, coupled with recurring losses, a substantial accumulated deficit, and zero revenue from operations, indicates severe financial distress. While the pivot to a Digital Asset Treasury model and the GHS equity line offer a potential path to capital, the GHS facility is highly dilutive, not guaranteed, and subject to market liquidity constraints. The company's stock trades on the illiquid OTC Pink Market and is classified as "penny stock," further increasing risk. Significant related-party transactions and a lack of independent governance committees also raise red flags. Given these fundamental weaknesses and high execution risks, a seasoned investor would likely recommend a strong sell to avoid potential total loss of capital.

Keywords

Digital Asset Treasury, Bitcoin, Gold, Blockchain, FinTech, Equity Financing, S-1/A, OTC Pink Market, Going Concern, Convertible Notes, Risk Factors, Corporate Governance, Emerging Growth Company, FMHS