Company: FMHS
Filing Date: 2025-04-25
Form Type: 10-Q
Source: 0001096906-25-000588
Chunk: 4

Company: FARMHOUSE, INC. /NV
Filing Date: 2025-04-25
Form: 10-Q
Item: Part I, Item 1
Chunk 4
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 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 3 - DEPOSIT ON INVESTMENT

As discussed in Note 1, the Company entered into a Share Exchange Agreement with Thrown and its members for a proposed acquisition of all membership interests of Thrown. Thrown, operating under the brand Nappy Boy Dranks, is a beverage company whose initial product is GamerShot, a nootropic functional esports beverage packaged in 2-ounce servings.

Pursuant to the SEA, the consideration to be provided to Thrown includes: a) an equity deposit of $75,000 in Company shares, subject to lockup and specific return conditions, b) cash compensation contingent on

the Company raising $5-$10 million in equity financing, c) equity compensation involving issuance of 5,130,000 shares to Thrown, d) expense reimbursement up to $100,000 for organizational and operating expenses, e) license payment of $50,000 to Nappy Boy Dranks, LLC, and f) additional shares based on sales milestones to be negotiated.

During the three months ended September 30, 2024, the Company and Thrown agreed to a price per share of $0.40 for the Company’s common stock, and the Company issued187,500shares to Thrown as the $75,000 equity deposit required under the SEA. The fair market value of the stock on July 6, 2024, measured at the closing price on the OTCQB market, was $0.1396 per share, or approximately $26,175.

Because the closing conditions had not been satisfied as of September 30, 2024, the Company determined that control of the underlying business had not transferred under ASC 805, Business Combinations. As a result, the share issuance did not qualify for recognition as a completed business combination or as an investment. Accordingly, the Company recorded the fair value of the shares issued as a Deposit for Investment as of September 30, 2024. The deposit represents an advance made in anticipation of completing the acquisition. If the acquisition does not close, the shares will be treated as a break-up fee and charged