S-1: Farmhouse Pivots to Digital Assets, Secures $20M Equity Line

Farmhouse, Inc. is repositioning as a digital asset treasury and lifestyle holding company, securing a $20 million equity financing agreement with GHS Investments to fund its new strategy despite ongoing financial challenges.

Summary

• Farmhouse, Inc. (FMHS), incorporated in Nevada in 2014, is transitioning from brand licensing to a digital asset and lifestyle holding company.
• The company's new strategy focuses on building shareholder value by holding Bitcoin and Gold as long-term treasury reserves, acquiring profitable digital and financial technology businesses, and creating a brand ecosystem linking digital asset ownership with lifestyle and consumer brands.
• On September 19, 2025, Farmhouse Treasury LLC was formed as a wholly-owned subsidiary for digital asset treasury management.
• On November 5, 2025, Farmhouse executed an Equity Financing Agreement with GHS Investments, LLC, providing the right to sell up to $20 million of common stock over a 24-month period.
• The company will not receive proceeds from GHS's resale of shares but will receive proceeds from its sales to GHS under the facility, which will be used for working capital and digital asset investments.
• During 2025, Farmhouse issued convertible promissory notes aggregating approximately $400,000 in gross proceeds to accredited investors, bearing 10-15% interest and maturing within three years.
• A 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 Digital Asset Treasury initiative.
• The company has incurred recurring losses and has a working capital deficit of approximately $2.1 million as of September 30, 2025, with an accumulated deficit of approximately $6.95 million.
• Independent auditors have expressed substantial doubt about the company's 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: 3

Explanation: The company faces severe financial distress, including recurring losses and a going concern doubt, with no current revenue. While the strategic pivot to digital assets and the GHS equity line offer potential, the execution risk is high, funding is not guaranteed, and significant dilution is likely. The termination of a large acquisition also indicates a lack of immediate operational revenue.

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.
• Strategic pivot to digital assets (Bitcoin and Gold) offers potential inflation hedging and capital appreciation.
• Management believes the hybrid treasury model (Bitcoin + tokenized gold) provides a unique opportunity for investors to gain exposure to both scarce assets with public company transparency.
• Net loss for the nine months ended September 30, 2025, improved to $174,854 from $362,383 in the same period of 2024, primarily due to a gain on extinguishment of debt and reduced stock-based compensation.
• Working capital deficit improved to $2,046,584 as of September 30, 2025, from $2,334,745 as of December 31, 2024.
• The company has a lean cost base and nimble organizational structure, which could enable rapid decision-making and lower operational overhead.

Negatives

• Incurred recurring losses since inception 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.
• Revenue for the nine months ended September 30, 2025, was zero, a decrease from $4,154 in the same period of 2024, with no expectation of future revenue from previous licensing agreements.
• The GHS Equity Financing Agreement does not provide committed funding and its availability is limited by the trading volume of common stock, which has historically been low.
• Sales under the GHS facility may cause significant dilution to existing stockholders and place downward pressure on the stock price.
• Outstanding convertible notes bear high interest rates (up to 15%) and could lead to default or further dilution upon conversion.
• The company's stock trades on the OTC Pink Market, which has limited liquidity, wide bid-ask spreads, and is considered 'penny stock,' deterring investors.
• Executive officers and directors collectively control approximately 45.9% of voting stock, potentially influencing corporate matters to the detriment of minority shareholders.
• Lack of independent audit, compensation, and nominating committees, which is typical for exchange-listed companies.
• Engaged in related-party transactions, including loans and note conversions, which could present conflicts of interest.
• 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, with auditors expressing substantial doubt about the ability to continue as a going concern.
• Success depends heavily on the continued services of Evan Horowitz (CEO) and Michael Landau (CTO); loss of key personnel could impede development.
• Operations are in early stages of development, particularly the new Digital Asset Treasury (DAT) strategy, with no assurance of profitability.
• Business model depends on holding digital assets like Bitcoin, which are subject to extreme market volatility, potentially reducing asset value and impairing the balance sheet.
• Could be deemed an investment company under the Investment Company Act of 1940, requiring fundamental operational changes or registration.
• Dependence on third parties for digital-asset custody, security, and compliance, with failures potentially leading to loss of assets that may not be insured or recoverable.
• Digital asset activities are subject to rapidly changing and uncertain laws and regulations, potentially limiting operations or resulting in fines.
• If Bitcoin or other holdings are deemed securities, the company could be an unregistered investment company or broker-dealer, requiring costly compliance or rendering the business model impracticable.
• Digital asset networks are vulnerable to exploitation, hacks, phishing, malware, or loss of private keys, leading to permanent loss of assets.
• Insurance for digital asset losses is limited and expensive, with uninsured losses materially affecting financial position.
• Bitcoin mining's energy use may lead to regulatory or reputational risks, depressing digital asset prices.
• Blockchain technology is rapidly evolving, with competing protocols or technical failures potentially impairing asset value.
• Evolving standards for valuing and auditing digital assets could delay filings or result in qualified opinions.
• Continued operations depend on raising additional capital, and inability to draw from the GHS facility or secure other financing could lead to curtailment or cessation of operations.
• Ability to raise capital under the GHS Equity Financing Agreement is limited by low trading volume of common stock, which may not provide sufficient capital.
• The GHS Equity Financing Agreement does not guarantee capital availability when needed, constrained by market conditions, pricing, and regulatory considerations.
• Limited trading liquidity may prevent raising sufficient capital to implement the DAT strategy as planned.
• Issuance of shares under the GHS facility will increase outstanding shares, potentially causing downward pressure on stock price and liquidity.
• GHS may profit from short-term trading, potentially creating downward pressure on the market price and making subsequent financings more dilutive.
• Inability to access GHS facility may force seeking alternative financing on less favorable terms, leading to increased dilution or higher costs.
• May be unable to satisfy obligations under outstanding convertible notes, leading to default, acceleration, or further dilution.
• As a reporting company, subject to SEC disclosure requirements, with misstatements or omissions potentially leading to investigations, fines, or civil liability.
• Limited accounting staff and lack of a formal audit committee increase risk of financial-reporting errors and loss of investor confidence.
• Operations could be deemed money transmission or custody services, requiring costly licensing and additional regulatory obligations.
• Shares trade on the OTC Pink Market, experiencing low liquidity and wide bid-ask spreads, making it difficult for investors to resell shares.
• Substantial sales of shares from the GHS facility or convertible notes could depress prices.
• No dividends are anticipated in the foreseeable future, requiring investors to rely on capital appreciation.
• Shares are considered penny stock, subject to special sales-practice rules that may deter investors and reduce liquidity.
• Executive officers and directors collectively control approximately 45.9% of voting stock, influencing corporate matters.
• Transactions with officers, directors, or affiliates could present conflicts of interest.
• Additional 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 its Digital Asset Treasury model aligns with the broader trend of 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 alternatives.

Management Comments

• "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."
• "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."
• "Management intends to continue strengthening the Company’s balance sheet, expanding its digital-asset reserves, and identifying opportunities where treasury diversification, public-market access, or brand alignment create measurable value for shareholders."

Industry Context

Farmhouse, Inc. is repositioning itself within the emerging Digital Asset Treasury (DAT) sector, aligning with a trend of public companies allocating balance sheets to Bitcoin and other digital assets. This strategy aims to leverage the perceived benefits of scarce assets like Bitcoin and tokenized gold (PAXG) as inflation hedges and sources of capital appreciation, similar to larger players like MicroStrategy. The company seeks to differentiate itself with a hybrid treasury model and a lean operational structure, contrasting with capital-intensive mining companies or diversified FinTech conglomerates. It also positions itself as a public-market access vehicle for private operating companies in FinTech, blockchain, and consumer lifestyle sectors, competing with other small-cap digital asset holding companies and institutional entrants in custody and tokenization.

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, Farmhouse is significantly smaller in scale and has a broader focus on acquiring FinTech/blockchain businesses and lifestyle brands, whereas MicroStrategy is primarily a software company that has aggressively leveraged debt and equity to acquire billions in BTC.
• Hut 8 Mining Corp., Marathon Digital Holdings, and Riot Platforms: These are public mining companies with significant Bitcoin holdings. Farmhouse differentiates itself by focusing on asset accumulation and treasury management without the operational complexity and capital intensity of mining operations.
• Galaxy Digital Holdings Ltd., CleanSpark, Inc., and similar diversified digital-asset financial-services companies: These entities combine asset accumulation with trading, advisory, or mining operations. Farmhouse aims for a more "pure-play" treasury approach with a hybrid allocation (Bitcoin + tokenized gold) rather than a diversified financial services model.
• Institutional-grade custody: Farmhouse states it will utilize institutional-grade custody with insurance, which is a standard practice for larger digital asset holders to manage risk, aligning with best practices in the evolving digital asset sector.
• Corporate Governance: As a smaller reporting company, Farmhouse does not yet maintain fully independent audit, compensation, or nominating committees, which is below the standards required for listing on national exchanges like Nasdaq. This contrasts with larger, more established public companies in the digital asset space that typically adhere to higher governance standards.

Corporate Governance

Legal Proceedings

• As of January 8, 2026, the company is not a party to any material pending legal proceedings and is not aware of any such proceedings threatened against it.
• A past litigation matter involving its subsidiary DTLA and Los Angeles Farmers, Inc. (LAFI) is considered closed, with no expected recovery of proceeds.

Related Party Transactions

• On July 16, 2025, the company issued 400,000 shares of common stock to Lang Financial Services, Inc. (LFSI), an entity controlled by Lanny R. Lang (CFO), for CFO services, valued at 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 CFO, a $4,500 related-party promissory note in default (to CEO), and $2,185 of accrued interest on related-party notes.
• On April 18, 2025, the company issued a Series 2025 10% Mandatorily Convertible Note in the principal amount of $25,000 to the spouse of a company director for cash. This note was issued on the same terms as those offered to unaffiliated investors and was executed on an arms-length basis, but is classified as a related-party transaction.
• Certain accrued liabilities, including legal fees and compensation from related parties, were exchanged for Series 2025 convertible notes during the nine months ended September 30, 2025.
• Executive officers provide services pursuant to consulting or at-will arrangements, not 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 and conversion of outstanding convertible notes. Stock price volatility and limited liquidity on the OTC Pink Market pose risks to investment value. The strategic pivot to digital assets offers potential long-term appreciation but carries high market volatility risks. Management's significant control (45.9%) could influence corporate matters.
• Employees: The company has a lean structure with three executive officers and no other full-time employees, relying on contractors. The strategic pivot and potential acquisitions could lead to future employment opportunities.
• Creditors: The company has substantial outstanding liabilities, including convertible notes with high interest rates, and some notes are in default. The ability to repay these obligations depends on successful capital raises and achieving profitability.
• Customers: The company has discontinued its previous NFT licensing business and currently has no significant customers. The new DAT strategy and potential acquisitions aim to build new revenue streams and customer bases in FinTech, blockchain, and consumer lifestyle sectors.
• Suppliers: No significant supplier dependencies were mentioned. Digital asset custody and trading services will be provided by third-party institutions.

Next Steps

• Sell shares to GHS Investments, LLC under the Equity Financing Agreement to raise capital for working capital and digital asset investments.
• Continue to implement the Digital Asset Treasury (DAT) strategy, including the purchase and custody of digital assets like Bitcoin and Gold.
• Identify and pursue acquisitions of profitable digital and financial technology businesses.
• Develop a brand ecosystem linking digital asset ownership with lifestyle and consumer brands.
• Actively explore additional financing alternatives, including equity and debt offerings and potential strategic partnerships.
• Complete all outstanding corporate income tax filings for fiscal years after 2018.
• Establish formal audit, compensation, and nominating committees composed of independent directors if the company grows and becomes subject to national securities exchange requirements.

Key Dates

Recommendation

Farmhouse, Inc. is a development-stage company with a history of recurring losses, a substantial working capital deficit, and an accumulated deficit of nearly $7 million. Its independent auditors have expressed substantial doubt about its ability to continue as a going concern. The company has no current revenue streams and its new Digital Asset Treasury strategy is unproven and highly susceptible to extreme market volatility in digital assets. While it has secured a $20 million equity financing agreement with GHS Investments, this is not committed funding, is subject to market liquidity, and poses significant dilution risks to existing shareholders, potentially leading to a "death spiral" scenario. The stock trades on the illiquid OTC Pink Market and is considered a penny stock. The high level of related-party transactions and lack of independent governance committees further raise concerns. Given the severe financial distress, high operational and market risks, and the significant potential for dilution without guaranteed funding, the stock represents a highly speculative and unfavorable investment.

Keywords

Digital Asset Treasury, Bitcoin, Gold, Blockchain, FinTech, Equity Financing Agreement, GHS Investments, Convertible Notes, OTC Pink Market, Going Concern, Risk Management, Corporate Governance, SEC Filing, FMHS, Cryptocurrency, Tokenized Assets, Strategic Acquisitions, Share Dilution, Market Volatility