NoThe corresponding costs of revenues were incurredassociated with affiliate advertising revenues was $8,000 for the three and six months ended June 30, 2021 and 2020.

March 31, 2021.

Earnings (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share – Overall – Other Presentation Matters. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that we incorporated as of the beginning of the first period presented.

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(Unaudited)

All dilutive common stock equivalents are reflected in our net income (loss) per share calculations. Anti-dilutive common stock equivalents are not included in our loss per share calculations. TheAs of March 31, 2022 and December 31, 2021, the Company had one convertible note with a principal value of $45,000 as of June 30, 2021 and December 31, 2020.$45,000. This note is convertible at a conversion price the note holder and the Company agree and therefore the number of shares it is convertible into is not determinable.

Recently Issued Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company has not yet adopted that they believe are applicable or would have a material impact on the financial statements of the Company.

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following:

Depreciation is computed using the straight-line method based upon the estimated useful lives of the underlying assets, generally three years. Depreciation expense was $589$94 and $1,224$295 for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectfully.

NOTE 4 – CONVERTIBLE NOTENOTES PAYABLE

Convertible note payable is comprised of a sole promissory note in the amount of $45,000 as of June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively. Principal and interest was originally due on July 4, 2018 and 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 $4,016

and $4,038$1,998 for each of the sixthree months ended June 30, 2021March 31, 2022 and 2020, respectively.2021. Accrued interest on the convertible note payable was $32,111$38,192 and $28,095$36,194 as of June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.

The conversion feature was not accounted for under derivative accounting guidance 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 June 30, 2021March 31, 2022 and December 31, 2020.2021.

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Secured Convertible Note OfferingMarch 31, 2022

(Unaudited)

In May 2021, the Board authorized a secured convertible note offering of up to $1,000,000. The Series -A 10% Secured Convertible Notes (“Notes”) will be secured by the proceeds, profits, equity, interest, or monies due, owing, and awarded under the DLTA Judgment. The Notes are convertible into shares of common stock of the Company at $0.51 per share and mandatorily convert 30 calendar days after the Company’s common stock has been listed and open for trading on the OTCQB and has had a closing price of greater than five times the conversion price for ten consecutive days. No Notes have been sold under this offering as of June 30, 2021. Subsequent to June 30, 2021, the Board terminated this Secured Convertible Note Offering.

NOTE 5 – NOTES PAYABLE

Notes payable is comprised of the following:

On June 16, 2021, the Company entered into a loan agreement, not to exceed $75,000.$75,000 with an unaffiliate individual (“Lender”) and borrowed $50,000 as a first advance. TheThis loan bears interest at 6% per annum. The lannum, andoan, together with accrued interest, is due sixnine months after the first advance, or such earlier date that the Lender may demand payment, which may not be earlier than 60 days after the first advance (“Maturity Date”). At Lender’s sole discretion, the Maturity Date may be extended. Interest expense related to this borrowing was $123 for the six months ended June 30, 2021. Accrued interest on this borrowing was $123 as of June 30, 2021.

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 Chief Executive Officer personally and unconditionally guaranteed the timely repayment of the loan and is liable for any amounts remaining due and owed following the Maturity Date. Interest expense related to this borrowing was $740 for the three months ended March 31, 2022. Accrued interest on this borrowing was $2,375 as of March 31, 2022.

On August 27, 2021, the Company borrowed $10,000 from an unrelated individual. On December 15, 2021, the Company borrowed an additional $15,030 from the same individual. These loans bear interest at 6% per annum and are due on April 30, 2022. As of the date of this filing, these loans were in default. On March 2, 2022, the Company borrowed an additional $7,620 from the same individual. This loan bears interest at 6% per annum and is due on September 30, 2022. Interest expense related to these borrowings was $371 for the three months ended March 31, 2022. Accrued interest on these borrowings was $609 as of March 31, 2022.

NOTE 6 – DUE TO RELATED PARTIES

Due to Related Parties totals $174,778totaled $158,175 and $150,365$158,191 as of June 30, 2021March 31, 2022 and December 31, 2020,2021, 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 sixthree months ended June 30,March 31, 2022, Company officers were repaid $16. For the prior three months ended March 31, 2021, Company officers made cash advances of $13,000,$1,750, personally paid Company expenses of $16,436$14,198 and were repaid $5,023. For the six months ended June 30, 2020, Company officers made cash advances of $17,132 and were repaid $5,756.$3,441. The cash advances are non-interest bearing and are unsecured. Company officers own approximately 47.4%44.5% of the Company as of June 30, 2021.the date of this report. The Company has agreed to indemnify Company officers for certain

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(Unaudited)

certain events or occurrences arising as a result of the officer or director serving in such capacity. See Note 10.

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,board of directors, 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.

Common Stock Offering

In April 2021,On February 1, 2022, the Board authorized an offering of up to 1,000,000294,118 shares of restricted common stock at $0.51$0.85 per share, (the “Offering Price”), providing proceeds of up to $510,000 (the “Common Stock Offering”). The Common Stock Offering will$250,000, to be offered and sold only to investors that qualify as “accredited investors” as that term is defined in Regulation D. The Common Stock OfferingFor the three months ended March 31, 2022, the Company sold 41,300 shares of common stock under this offering for proceeds of $35,105. This offering terminated on June 30, 2021, but was extended until August 21, 2020 under the same terms, with the option of the management, with no further action of the Board, to extend for ten (10) days until August 31, 2021, at which time the Private Placement Offering will terminate. In connection with the Common Stock Offering, the Board also approved a one-time, limited anti-dilution protection to certain investors who, in the last 12 months, invested at a per share price higher than the Offering Price.May 1, 2022.

Common stock transactions

A summary of the Company’s common stock transactions for the sixthree months ended June 30,March 31, 2022 is as follows:

·The Company sold 41,300 shares of common stock for cash proceeds of $35,105. 

·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, 2021 based on the closing price of the Company’s common stock on the OTCQB market. 

As a result of these transactions, the Company has 15,836,350 shares of common stock outstanding as of March 31, 2022.

A summary of the Company’s common stock transactions for the three months ended March 31, 2021 is as follows:

·The Company sold 8,000 shares of common stock for cash proceeds of $6,000. 

·The Company issued 179,00058,287 shares of common stock for services rendered. The Company recorded an expense of $150,581$29,868 for the sixthree months ended June 30,March 31, 2021 based on the closing price of the Company’s common stock on the OTC Pink market. 

·The Company sold 49,020 shares of common stock under the Common Stock Offering for proceeds of $25,000 and issued this investor 17,255 shares of common stock for anti-dilution protection under the Offering. See “Common Stock Offering” above. 

·The Company issued 22,589 shares of common stock for anti-dilution protection to five investors who invested at a per share price higher than the Offering Price in the last 12 months. See “Common Stock Offering” above. 

As a result of these transactions, the Company has 15,131,656 shares of common stock outstanding as of June 30, 2021.

A summary of the Company’s common stock transactions for the six months ended June 30, 2020 is as follows:

·The Company sold 50,000 shares of common stock for cash proceeds of $37,500. 

·The Company issued 49,421 shares of common stock for services rendered. The shares of common stock were valued at various prices, based on the closing price of the Company’s common stock on the OTC Pink market, and resulted in an expense of $41,412 for the six months ended June 30, 2020. 

·The Company issued 125,000 shares of common stock for the acquisition of the domain blunt.com. The shares of common stock were valued at $125,000, based on the closing price of the Company’s common stock on the OTC Pink market. 

As a result of these transactions, the Company has 14,722,26414,922,079 shares of common stock outstanding as of June 30, 2020.March 31, 2021.

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(Unaudited)

Subsequent to June 30, 2021,March 31, 2022, there were additional common stock transactions. See Note 11.10.

Shares Reserved

The Company is required to reserve and keep available of its authorized but unissued shares of common stock an amount sufficient to effect shares that could be issued in connection 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 June 30, 2021March 31, 2022 and December 31, 2020.2021.

NOTE 8 – STOCK-BASED COMPENSATION

2021 Omnibus Incentive Plan

On May 12, 2021, the Board and majority shareholders 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 signed a consent authorizing the 2021 OIP.

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 of the Company 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.

No options or restricted stock awards were granted under the 2021 OIP as of June 30, 2021. Subsequent to June 30,Restricted Stock Awards

In August 2021, the Board granted a restrictedRestricted Stock Award (“RSA”) of 200,000 shares of common stock awardunder the 2021 OIP to a Company officer. See Note 11.The RSA shares vest 25,000 shares over each of the following eight fiscal quarters starting September 30, 2021. 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. The Company recognized stock-based compensation expense of $25,500 on vested RSA shares for the three months ended March 31, 2022. Unrecognized stock-based compensation expense on the RSA shares was $127,500 as of March 31, 2022.

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(Unaudited)

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.

On October 25, 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. On March 27, 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. On April 8, 2021, the JudgeArbitrator 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,Monitor, to be supervised by the Judge,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 on June 1, 2021, the amount was confirmed by the 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, 2021.

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. That request is under submission. Accordingly, the impact of the DLTA Judgment has not been reflected in the accompanying unaudited interim condensed consolidated financial statements sinceas of March 31, 2022.

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(Unaudited)

On February 3, 2022, the amountlaw firm representing the Company in this matter advanced $25,000 to pay a portion of the DLTA Judgment has not been determined.ongoing cost of the Monitor on a one-time-basis, to be reimbursed by the Company soon as possible. The Company is also reviewing the accounting treatment going forward.has repaid $7,500 of this advance.

SubsequentNOTE 10 – RELATED PARTIES

As discussed in Note 6, cash advances are provided to June 30,the Company for operating expenses by Company officers, who were owed $158,175 and $158,191 by the Company as of March 31, 2022 and December 31, 2021, respectively. Company officers own approximately 44.5% of the DTLA Judgment was filed intoCompany as of March 31, 2022. The Company has agreed to indemnify Company officers for certain events or occurrences arising as a result of the recordofficer or director serving in the Los Angeles County Superior Court. DTLA was also awarded its costs for reimbursement in the amount of $22,382, which was later received.such capacity. See Note 11.

In February 2021, the Company entered into a CFO Consulting and Advisory Agreement with Lang Financial Services, Inc. (“LFSI”). In August 2021, the Board granted LFSI an RSA of 200,000 shares of common stock. The RSA shares vest 25,000 shares over each of the following eight fiscal quarters starting September 30, 2021. The Company recognized stock-based compensation expense of $25,500 on vested RSA shares for the three months ended March 31, 2022. Unrecognized stock-based compensation expense on the RSA shares was $127,500 as of March 31, 2022.

NOTE 1011 – COMMITMENTS AND CONTINGENCIES

In the normal course of its business, the Company may be subject to certain contractual obligations and litigation. In management’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 operations.

Lease Commitment

The Company leasesleased desk space in an incubator in San Francisco, CA at the rate of $700 per desk. This lease was vacated in October 2021. The Company owes the property owner $8,050 as of March 31, 2022, which is month-to-month with one calendar month written notice to terminate.included in accrued liabilities on the accompanying balance sheet.

Indemnification Agreements

The Company has agreed to indemnify its officers and directors for certain events or occurrences arising as a result of 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. The Company believes the estimated fair value of these indemnification agreements is minimal and no liability has been recorded as of June 30, 2021March 31, 2022 and December 31, 2020.2021.

NOTE 1112 – SUBSEQUENT EVENTS

As of the date of these unaudited interim condensed consolidated financial statements, there are no subsequent events that are required to be recorded or disclosed in the accompanying unaudited interim condensed consolidated financial statements other than those listed below and elsewhere in these

FARMHOUSE, INC. AND SUBSIDIARIES

NOTES TO QUARTERLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(Unaudited)

unaudited interim condensed consolidated financial statements.

Common stock transactions

A summary of the Company’s common stock transactions subsequent to June 30, 2021March 31, 2022 is as follows:

·The Company sold 99,60828,600 shares of common stock under the Offering for cash proceeds of $50,800. See Note 7 “Common Stock Offering.”$24,310. 

·The Company issued 21,50033,500 shares of common stock for services rendered.

·The Board granted a Restricted Stock Award of 200,000 shares of common stock under the 2021 OIP. 

As a result of these transactions, the Company has 15,452,76415,898,450 shares of common stock outstanding as of the date of this Report.

Restricted Stock Awards

On August 16, 2021, the Board granted a Restricted Stock Award (“RSA”) of 200,000 shares of common stock under the 2021 OIP to a Company officer. The RSA shares vest 25,000 shares over each of the following eight fiscal quarters starting September 30, 2021. 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.

Litigation – Recovery of Costs, Court-Appointed Monitor

Following the issuance of DTLA Judgment (see Note 9), DTLA filed a motion for reimbursement of costs in the amount of $22,382. No objection was filed by LAFI and on June 1, 2021, the amount was confirmed by the Los Angeles County Superior Court as a Judgment. In July 2021, DTLA received

reimbursement costs in the amount of $22,382. A court-appointed Monitor is undertaking the process of determining the value of the 49% of profits and proceeds from 2017 forward that DTLA is entitled to, in addition to the 10% prejudgment interest. The Monitor’s report is expected to be completed by the end of Q4 2021.

Engage Special Counsel

On July 28, 2021, the Company engaged Cutler Law Group to represent it in connection with due diligence review, preparation of required representations, drafting and delivery of a legal opinion or series of legal opinions (“144 Legal Opinions”) to the Company’s transfer agent. The 144 Legal Opinions will cover up to approximately 6,000,000 shares of the Company’s common stock held by non-affiliate shareholders who provide proper representation letters and qualify under Rule 144.

Uplist to the OTC-QB

On August 2, 2021, the Company filed an up-listing application to move the Company from trading on the OTC Pink to the OTCQB Venture Market. The OTCQB Venture Market is a US trading platform that is operated by the OTC Markets Group and considered the premier marketplace for entrepreneurial and development stage U.S. and international companies. Companies listed on the OTCQB Venture Market are committed to provide transparency in its information for investors. Management believes the up listing from the OTC Pink to the OTCQB Venture Market will bring greater visibility to the Company and increase the accessibility of its shares to a much larger audience of retail shareholders. The listing of the Company’s common stock on the OTCQB Venture Market will be subject to the approval of the OTCQB and the satisfaction of applicable listing requirements.

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

Forward-Looking Statements

The following discussion should be read in conjunction with theour interim condensed consolidated financial statements and related notes contained elsewhere in this Report, as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 20202021 as filed with the Securities and Exchange Commission (the “SEC”) on April 30, 2021.22, 2022. Certain statements made in this discussion are “forward-looking statements” within the meaning of 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as 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 only predictions and speak only as of the date hereof. 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 subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations and the effects that the COVID-19 outbreak, or similar pandemics, could have on our business. 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.

The full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our interim condensed consolidated financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods. Actual results may differ from these estimates.

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 intend to update any of the forward-looking statements to conform these statements to actual 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 thethese 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

On August 13, 2019,We are a leading connection platform in the Company consummated an Agreement and Plan of Merger with Farmhouse Washington which became a wholly owned subsidiary. On this date, all oflegal cannabis industry. We connect the issued and outstanding shares of common stock of Farmhouse Washington were exchanged for shares of common stock of the Company on a one share for one share basis (the “Acquisition”). Upon consummation of the Acquisition, the financial statements are the continuation of Farmhouse Washington with the adjustment to reflect the capital structure of the Company.

The Company is a holding company dedicated to connecting the cannabis industry through multiple divisions including WeedClub, the @420 brand and @420 Twitter, and the WeedClub® Platform. Our @420 brand and @420 Twitter serve as trusted, influential properties that enable the Company to connect, promote and advocate for the industry. These properties leverage the WeedClub® Platform to drive valuable connections that have generated over $50 million in funding for cannabis startups, supplier connections for retail dispensaries, and more.

We will continue to serve as a leading cannabis connection platform and branch its well-known brand into the budding web3 and metaverse. Every company needs Friends in High Places® and our multiple divisions to provide exactly that.

Recent Business Developments

In July 2021, we successfully enforced DTLA’s contract rights in an operating retail cannabis business in Los Angeles. After four years of litigation, a Final Judgment was filed into the record in the Superior Court of California in the County of Los Angeles for case number BC681251 (the “DTLA Judgment”). See “Farmhouse Divisions” below.

In October 2021, we uplisted from the OTC Pink Sheets to the OTCQB Venture Marketplace and commenced trading under the symbol “FMHS.” This marked a milestone for the Company by being recognized as a fully-reporting cannabis company and increasing its reach to more retail and private investors.

In November 2021, we began exploring potential acquisitions of cannabis companies to expand our physical footprint in the industry. Acquisitions would improve our ability to leverage our WeedClub® Platform and our @420 Twitter handle and a 49% equity interest in a Los Angeles-based multi-licensed cannabis retail dispensary, grow, manufacturer and distributor.to connect with consumers.

Weedclub.  WeedClubIn December 2021, we launched a Non-Fungible Token (NFT) division dedicated to connecting the metaverse with cannabis brands. As a leader in technology, we established this division to bring NFTs to cannabis brands to create a symbiotic relationship between two fast-growing industries. Our NFT division explores how cannabis brands can connect with the metaverse

through NFTs. It is a professional social networking platform fornatural expansion of our brand and bridges the regulatedgap between physical cannabis brands and hemp industries. It was founded in 2014digital assets. Our NFT division is currently investigating initiatives from creating NFTs with artists, launching an NFT project, and has established a trusted brand by providing a private and secure way for members to networkdeveloping NFT IP licensing opportunities with fellow industry stakeholders through the WeedClub platform and in-person and virtual events.cannabis brands.

@420.  Our signature @420 pitch events connect cannabis startups with investors. Since 2014, our events have hosted over 100 startup pitches, led to more than $50M in funding and seen over 10 fully funded startups and exits. In response to the COVID-19 pandemic, we moved our event to a virtual pitch format that garnered over 150 online attendees in March 2020. Farmhouse Divisions

Our @420 brand and Twitter handle (with over 93,000 followers) serve as an influential brand that connects us with the greater public. Our Twitter handle enables the CompanyNFT division to raise awareness, engageforge valuable connections in the space and work with and advertise to cannabis enthusiasts and consumers. With over 90,000 followers, our organic tweets consistently generate engagement rates of at least 2% and upwards of 10% while the industry average 0.07% on Twitter according to Social Insider. In addition, our Twitter handle provides an approved paid advertising channel that many companies lack access to. This exclusive ability enables our members to drive traffic to their websites and deliver increased sales through approved paid advertising campaigns.established projects.

LA Dispensary.  In April 2021,The WeedClub® Platform is a premier networking platform with over 5,000 cannabis professionals and is the Judge overseeing the arbitration hearing in our ongoing lawsuit issued a judgment in favorbackbone of the Company. The judgmentWeedClub® Platform is an established presence in the cannabis industry that people trust to make valuable connections. As we continue to expand our operations, WeedClub members benefit immensely from the added potential connections.

As discussed above, the DTLA Judgment awarded 49% of a downtown Los Angeles retailthis dispensary to the Company.DTLA. In addition to equity ownership, the judgmentDTLA Judgment awarded the CompanyDTLA a share of any profits of this dispensary from November 2017 to the present and going forward along with accrued interest on those profits and the costs of bringing litigation.

The CourtDLTA Judgment also appointed a monitor,Monitor, to be supervised by the Judge,Arbitrator, to determine how much in past profits and interest the CompanyDTLA is entitled to be awarded and to ensure the Companythat DTLA is treated fairly by LAFI on a going forward basis. Between July and December 2021, the counterparty going forward. The impactMonitor undertook a detailed process to determine the value of the Judgment49% 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. That request is under submission.

Although ownership percentages over 20% would typically be accounted for using the equity method, the Company is accounting for this investment as an investment in equity securities due to the Company not having significant influence over LAFI. The cost of this investment was expensed during the fiscal year ended December 31, 2017 and, due to uncertainties surrounding the value of LAFI and determining any award of back profits and interest, as well as the pending litigation, no value has been reflected in our accompanying unaudited interim condensed consolidated financial statements as the amount of the Judgment has not been determined.March 31, 2022. See further discussion under Part II, Item 1. Legal Proceedings in this report.

WeedClub,Current and Future Plan of Operations

Farmhouse is built on connection, brand and trust. These three pillars establish the foundation that drives value for our community across all our divisions. Through technology, we leverage these pillars to connect members to value-add products, services, capital, and consumers. Our commitment to developing cannabis-specific technology solutions firmly established us as a trusted connector in the cannabis industry.

As our industry continues to grow, it faces the same problems due to the lack of federal legalization. For many cannabis brands, the lack of federal legalization leads to increased cost of expansion, lack of access to many proven digital marketing channels and lack of access to capital and banking. We addressed these problems by being early movers by creating the WeedClub® Platform and establishing the @420 brand including our @420 Twitter and @420 pitch events provide essential services that positionhandle with over 93,000 followers.

Over the Companypast year, new technology centered around a decentralized future (web3) has emerged as a trusted brandpotentially more effective solution for all the core problems our industry faces. Decentralization and connector withinweb3 eliminate the walled gardens created by the platform economy that cannabis industry. Our recent awardcompanies lack access to due to the lack of 49% equity ownership in the Los Angeles retail dispensary provides an additional assetfederal legalization. Through web3, cannabis brands can connect directly with their consumers, build community and raise capital through new channels to better position themselves for our holding company. With our strong brand and far-reaching cannabis network, we believe the Company is uniquely positioned to scale in the current political climate and in the event ofpotential federal legalization.

Our principal executive officeThe key feature of this future is located at 1355 Market Street, Suite 488, San Francisco, CA 94103NFTs. What started out as simple digital JPEGs has rapidly evolved in the past year into curated collectible art and the digital proof of ownership that unlocks holder-specific value such as community, product and services discounts, and more.

Just as we were early movers when we created the WeedClub® Platform as a professional social network for the cannabis industry, we launched our phone numberNFT division to connect cannabis brands directly to a community of cannabis and cryptocurrency enthusiasts. The NFT division is (888) 420-6856.an exploration on how we can connect these two similar, rapidly growing industries.

The NFT division is the first step that allows us to leverage our existing foundation to solve the problems of our industry through web3 solutions. As we build this new crypto native, cannabis enthusiast community, we will drive brand awareness and access an entirely new demographic of members of our ecosystem. Not only will this provide new opportunities for cannabis brands to engage with us, it will also expand our reach to younger demographics that care about engaging in a more instantaneous and genuine way.

We believe our entrance into web3 and NFTs adds a new layer to our current foundation and allows us to leverage what we have built to strengthen our ability to provide technological solutions that address the core problems our industry continues to face.

We believe we are uniquely positioned to fill this industry need by scaling its commercial presence. We have established a strong brand based on connection through its social networking platform, @420 Twitter handle, and in-person and virtual events.

Liquidity and Capital Resources

Until such time we can raise additional capital or generate positive cash flow from operations, we will continue to be funded through short-term advances from the Company Officers. We estimate we will need $2,500,000 in capital, after satisfying our debt obligations, to cover our ongoing expenses and to successfully market and expand our product offerings. This is only an estimate and may change as we receive feedback from customers and have a better feel of the

demand and revenues from our new products. Both of these factors may change and we may not be able to raise the necessary capital and if we are able to, that it may not be at favorable rates. We intend to meet our cash requirements for the next 12 months equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.

For the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, we generated revenues of $11,896zero and $2,940,$11,350, respectively, and we reported net losses of $393,492$234,217 and $314,011,$137,325, respectively. We had negative cash flow from operating activities of $87,345$45,660 and $56,018,$8,215, respectively. As of June 30, 2021,March 31, 2022, we had an accumulated deficit of $4,719,830$5,536,134 and a stockholders’ deficit of $1,347,623.$1,675,443.

Our auditors have raised substantial doubt regarding our ability to continue as a going concern as a resultbecause of our historical recurring losses and negative cash flows from operations as well as our dependence on private equity and financings. We anticipate that we will continue to report losses and negative cash flow. To date, we have financed our activities principally from the sale of common stock and loans from Company officers. We intend on financing our future working capital needs from these sources until such time that funds provided by our operations are sufficient to fund our working capital requirements. We believe that the loans from Company officers and funds raised from the sale of our common stock will allow us sufficient capital for operations and to continue as a going concern.

In April 2021, weOn February 1, 2022, the board of directors (“Board”) authorized an offering of up to 1,000,000294,118 shares of common stock at $0.51$0.85 per share, providing proceeds of up to $510,000 (“Common Stock Offering”). The Common Stock

Offering will$250,000, to be offered and sold only to investors that qualify as “accredited investors,”investors” as that term is defined in Regulation D. A totalThrough May 19, 2022, the date of 46,020 shares of common stock have beenthis report, we sold under the Private Placement Offering for proceeds of $25,000 as of June 30, 2020. The Common Stock Offering terminated on June 30, 2021, but was extended until August 21, 2020 under the same terms, with the option of the management, with no further action of the board of directors (“Board”), to extend for ten (10) days until August 31, 2021, at which time the Common Stock Offering will terminate. Subsequent to June 30, 2021, the Company sold 99,60869,900 shares of common stock under the Common Stock Offeringthis offering for proceeds of $50,800.

There is no assurance that we can raise money under the Common Stock Offering, but management believes the full proceeds of this$59,415. This offering will provide sufficient cash for 12 months’ operating expenses.terminated on May 1, 2022.

Results of Operations

We generate five types of revenue: subscription fees consisting of membership dues; affiliate advertising from links within the web properties; ticket sales and sponsorships derived from events; referral fees from strategic business introductions; and consulting fees. Each of the above segments is dependent on leads generated within the Farmhouse ecosystem. Subscription fees were billed based on the types of membership privileges that Members such as being able to communicate privately with dispensary owners and other licensed operators. Affiliate advertising revenue is derived from the placement of web links on WeedClub, @420 Twitter, e-mail and social media primarily. Live events by WeedClub and the @420 pitch by WeedClub, as well as community-building events such as mixers and topical panels, offer the Community unique sponsorship opportunities for signage, tables, and presentations. Sometimes Members require additional help to make professional connections and we charge a flat-rate consulting fee in these special situations. Details regarding when each revenue stream is recognized are listed below:

(6)SixSubscription fees. Subscription fees related to the WeedClub portal are received at the time of purchase. Our performance obligation is to provide services over a fixed subscription  

period; accordingly, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date.

(7)Affiliate advertising. Affiliate advertising revenues result from advertising campaigns and are generally multi-month arrangements. Our performance obligation is met when we run the agreed upon advertisements on its platform, accordingly, we recognize revenue ratably over the campaign period and deferred revenue is recorded for the portion of the campaign period subsequent to each reporting date. 

(8)Event Sales. We collect payment up front for event ticket sales and sponsorships and records these payments as unearned revenue. Our performance obligation is met at the time the event takes place; accordingly, we recognize revenue at the time the event takes place. 

(9)Referral fees. We generate referral fees when a business transaction is consummated between the Company, as referee, and a potential target company. Our performance obligation is met at the time such business transaction is consummated,; accordingly, we recognize revenue at that point. 

(10)Consulting and Other. We generate fees to assist presenting companies with request consulting services in connection with their investment deck and presentation scripts. Such consulting fees are recognized as services are performed. 

We expect to generate revenue from the of non-fungible tokens (NFTs) on marketplaces such as OpenSea and will recognize revenue at the time the event takes place.

Three Months Ended June 30, 2021,March 31, 2022, compared to the sixthree Months Ended June 30, 2020March 31, 2021

For the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, we generated revenues of $11,895zero and $2,940, respectively. We generate five types of revenue, which consists of fees from subscriptions, affiliate advertising, event sales, referrals and consulting. Our revenues for the six months ended June 30, 2021 and 2020 were$11,350 as follows:

In June 2021, we launched a new Membership Benefits Program under the WeedClub® Platform, where subscribers can connect to ‘exclusive deals’ on essential products and services necessary to scale their business. Our special pricing of $149 for an annual subscription makes access to our WeedClub® Platform available to all.Affiliate advertising. Affiliate advertising, through our advertising deal with Twitter, generated $8,850 of revenues for the sixprior three months ended June 30,March 31, 2021. In 2020, we entered intoWe have an advertising deal with Twitter which provides us a revenue stream and growth opportunity due to our ability to post approved hemp social media ads. The corresponding costs of revenues

associated with affiliate advertising revenues was $8,000 for the prior three months ended March 31, 2021.

Referral fees are earned. We generate referral fees when a business transaction is consummated between us and the potential target company. Such business transactions generally arise from the connections with company as a resultpresenters during @420 events of an introduction at one ofwhich none were held during the three months ended March 31, 2022. Accordingly, our @420 events. Event Sales recognized inrevenues from referral fees declined from $2,500 to zero for the prior year comparable period are from our @420 pitch event with investors. In response to the COVID-19 pandemic, we moved our event to a virtual pitch format that garnered over 150 online attendees.three months ended March 31, 2022 and 2021, respectively.

For the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, general and administrative expenses were $169,970$92,586 and $160,586,$65,347, respectively, an overall increase of approximately $9,400. For the six months ended June 30, 2021, marketing and sales expenses$27,200. Contributing factors to this increase were:

·Outside consulting fees increased by approximately $8,900 and general and administrative expenses increased$17,600, all of approximately $5,900. These increases were offset by a decrease in labor-related expenses, including payroll, by approximately $5,400. This included recognizing approximately $34,600which was in stock-based fees in the current six-monththree-month period.

·Labor-related expenses increased by approximately $4,500. Labor-related expenses included recognizing approximately $15,540 in stock-based fees in the current three-month period compared to approximately $11,000 in stock-based fees in the prior three months ended March 31, 2021. 

·Public company related costs, including OTC filing fees, press releases and transfer agent costs increased by approximately $2,400, and 

·Overall other general and administrative expenses increased by approximately $2,700. 

For the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, professional fees were $215,437$125,729 and $116,787,$67,125, respectively, an increase of approximately $98,600.$58,600. Our professional fees for the sixthree months ended June 30,March 31, 2022 and 2021 and 2020 were comprised of the following:

Legal. Legal expenses decreased by approximately $1,100 for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. Contributing factors to this net decrease were:

·Legal fees to our corporate and securities counsel firms decreased by approximately $1,500. 

·Legal fees to our patent and trademark counsel increased by approximately $20,500 for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 due to an increase in legal fees to our current securities counsel fee by approximately $4,900, and legal fees$3,200.  

·Fees incurred by Judicate West, and Planet Depot by approximately $52,500and court reporting related to our litigation against LAFI decreased by approximately $26,100.  

·Our portion of the fees incurred by the Monitor to advance our litigation against LAFI were approximately $23,300 for the three months ended March 31, 2022. In April 2021, the Arbitrator overseeing the arbitration hearing issued a judgment in our favor and against LAFI. This judgment also appointed a Monitor, to be supervised by the Arbitrator, to determine how much in past profits and interest we are entitled to be awarded. The costs of the Monitor are borne equally between the Company and LAFI. Between July and December 2021, the Monitor undertook a detailed forensic examination of LAFI. The Monitor’s report was completed in January 2022. Reference is made to Note 9, Litigation, to the Condensed Consolidated Financial Statementsthese interim condensed consolidated financial statements included under Item 18 in this Report. These increases were offset by a decrease in legal fees to litigation counsel in connection with our litigation against LAFI by approximately $36,900 compared to no litigation-related legal fees incurred inReport for further information on the current six-month period.litigation. 

Accounting and audit. Accounting and audit expenses increased by approximately $36,900$26,000 for the sixthree months ended June 30, 2021March 31, 2022, compared to the sixthree months ended June 30, 2020 dueMarch 31, 2021. Contributing factors to anthis increase inwere:

·Audit and accounting fees to our independent public accounting firm decreased by approximately $6,800 for$3,000 related to our annual fiscal year audit and an increase inaudit. 

·Accounting fees for our contracted CFO services increased by approximately $40,100. This$28,200, which included $35,300$25,500 in stock-based fees in the current six-month period. These increases were offset by a decreasethree months ended March 31, 2022 compared to $15,300 of stock-based fees recognized in the three months ended March 31, 2021.  

·Accounting fees to our outside bookkeeping services increased by approximately $10,000 for the costs of filing our corporate federal income tax returns in the prior year comparable period.$800.  

ProfessionalOther professional fees. Other professional fees increased by approximately $17,300$33,700 for the sixthree months ended June 30, 2021March 31, 2022, compared to the sixthree months ended June 30, 2020March 31, 2021 due to an increase in fees to our contracted software engineers and developers of our software technology platforms. This includedAll professional fees incurred for both the three months ended March 31, 2022 and 2021 were comprised of stock-based fees.

Interest expense increased by approximately $56,700$7,900 for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. Approximately $6,800 of the increase in stock-based feesinterest expense was due to interest accrued on our unpaid liability to our predecessor law firm in the current six-month period.aforementioned litigation. This law firm resigned in April 2021 when we engaged a new “contingency-based” law firm and started accruing interest expense on their unpaid amount. The additional increase in interest expense of approximately $1,100 pertains to our two loan obligations during the three months ended March 31, 2022.

Consulting fees increased $24,000 for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 due to fees to an outside strategic business consultant, which was all stock-based fees in the current six-month period.

For the six months ended June 30, 2021 and 2020 interest expense was $19,392 and $38,354, respectively, a decrease of approximately $18,900 entirely due to a decrease in the interest charged by the Company’s former litigation counsel on their unpaid balance.  

Overall, for the sixthree months ended June 30, 2021,March 31, 2022, we reported a net loss of $393,492$234,217 compared to a net loss of $314,011$137,325 for the sixthree months ended June 30, 2020, an overall increase of approximately $79,500 from the prior year comparable period. Not includingMarch 31, 2021. Without considering stock-based fees recorded for services rendered by consultants and professionals which totaled approximately $150,600 for the sixthree months ended June 30,March 31, 2022 and 2021, asrespectively (as discussed above,above), our net loss actually decreasedincreased by approximately $71,100$31,800 from the prior year comparable period.period, as shown in the following table:

Three Months Ended June 30, 2021, compared to the three Months Ended June 30, 2020

For the three months ended June 30, 2021 and 2020, we generated revenues of $546 and $2,490, respectively. Our revenues for the three months ended June 30, 2021 and 2020 were as follows:

In June 2021, we launched a new Membership Benefits Program under the WeedClub® Platform, where subscribers can connect to ‘exclusive deals’ on essential products and services necessary to scale their business. Our special pricing of $149 for an annual subscription makes access to our WeedClub® Platform available to all. Event Sales recognized in the prior year comparable period are from our @420 pitch event with investors. In response to the COVID-19 pandemic, we moved our event to a virtual pitch format that garnered over 150 online attendees.

For the three months ended June 30, 2021 and 2020, general and administrative expenses were $96,622 and $64,962, respectively, an overall increase of approximately $31,700. For the three months ended June 30, 2021, marketing and sales expenses increased by approximately $8,300, general and administrative expenses increased by approximately $6,300, and labor-related expenses, including payroll, increased by approximately $17,100. This included approximately $23,600 in stock-based fees in the current three-month period.

For the three months ended June 30, 2021 and 2020, professional fees were $148,311 and $53,165, respectively, an increase of approximately $95,100. Our professional fees for the three months ended June 30, 2021 and 2020 were comprised of the following:

Legal expenses increased by approximately $24,800 for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due to an increase in legal fees to our current securities counsel fee by approximately $3,600 and legal fees incurred by Judicate West by approximately $28,400 related to our litigation against LAFI. Reference is made to Note 9, Litigation, to the Condensed Consolidated Financial Statements included under Item 1 in this Report. These increases were offset by a decrease in legal fees to litigation counsel in connection with our litigation against LAFI by approximately $7,200 compared to no litigation-related legal fees incurred in the current three-month period.

Accounting and audit expenses increased by approximately $21,000 for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due to an increase in fees for contracted CFO services by approximately $29,000. This included $20,000 in stock-based fees in the current three-month period. This increase was offset by a decrease in fees to our independent public accounting firm by approximately $6,200 for our annual fiscal year audit and a decrease in other miscellaneous accounting-related costs by approximately $1,800.

Professional fees increased by approximately $25,400 for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due to an increase in fees to our contracted software engineers and developers of our software technology platforms. This included approximately $53,100 in stock-based fees in the current three-month period.

Consulting fees increased $24,000 for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due to fees to an outside strategic business consultant, which was all stock-based fees in the current three-month period.

For the three months ended June 30, 2021 and 2020 interest expense decreased by approximately $300 and represents interest on one convertible note outstanding and interest charged by the Company’s former litigation counsel on their unpaid balance.  

Overall, for the three months ended June 30, 2021, we reported a net loss of $256,167 compared to a net loss of $127,559 for the three months ended June 30, 2020, an overall increase of approximately $128,900 from the prior year comparable period. Not including stock-based fees

recorded for services rendered by consultants and professionals, which totaled approximately $120,700 for the three months ended June 30, 2021, as discussed above, our net loss actually increased approximately $8,200 from the prior year comparable period.

Cash Flows

The following table summarizes the sources and uses of cash for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectively:

Three months Ended March 31, 2022

Operating activities used $87,345$45,660 of cash, primarily resulting from our net loss for the sixthree months ended June 30, 2021March 31, 2022 of $393,492,$234,217, offset by non-cash stock issuedstock-based compensation expense recorded for services rendered of $150,581,$69,412, non-cash stock-based compensation expense recorded for vested restricted stock awards of $25,500, and increases in liabilities across most categories: accrued legal fees, accrued payroll and other accrued liabilities. Accounts payable decreased slightly. Financing activities provided $42,709 of cash for the three months ended March 31, 2022, consisting of $35,105 in proceeds from the sale of common stock, $7,620 of borrowings from an unrelated lender, offset by repayments of $16 in short-term advances from officers.

Three months Ended March 31, 2021

Operating activities used $8,215 of cash, primarily resulting from a net loss of $137,325, offset by non-cash stock-based compensation expense recorded for services rendered of $29,868, and increases in liabilities across all categories: accounts payable, accounts payable – related party, accrued legal fees, accrued payroll and other accrued liabilities. There was no use of cash for investing activities for the six three

months ended June 30,March 31, 2021. Financing activities provided $88,977$4,309 of cash, consisting of $31,000$6,000 in proceeds from the sale of common stock, and  $50,000offset by net repayments of borrowings on a Note Payable.  Borrowings under the Note Payable shall remain senior with respect to priority lien and right of payment to any indebtedness later acquired. As a condition of the loan agreement, a Company officer personally and unconditionally guaranteed the timely repayment of the loan. The Company also received net proceeds of $7,977$1,691 in short-term advances from Company officers.

Contractual Obligations

We qualify as a smaller reporting company, as defined by Item 10 of Regulation S-K and, thus, are not required to provide the information required by this Item.

Off Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents were $5,538$829 and $3,906$3,780 as of June 30,March 31, 2022 and 2021, and December 31, 2020, respectively.

Critical Accounting Policies and Estimates

The preparation of our interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thethese interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our accounting policies that are critical or most important to understanding our financial condition and results of operations and that require management to make the most difficult judgments are described in our Annual Report on Form 10-K for the year ended December 31, 2020,2021 as filed with the SEC on April 30, 2021.22, 2022. There have been no material changes in these critical accounting policies.

Recently Adopted Accounting Pronouncements

Reference is made to Note 2, Summary of Significant Accounting Policies, to the Condensed Consolidated Financial Statementsinterim condensed consolidated financial statements included under Item 1 in this Report.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2021.March 31, 2022.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting subsequent to June

30, 2021,March 31, 2022, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations of the Effectiveness of Disclosure Controls and Internal Controls

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system,

misstatements due to error or fraud may occur and not be detected.

PART II – OTHER INFORMATION