Expect significant share dilution over the next 6-10 months as the note automatically converts. Monitor stock price for triggers: if FMHS stays below $1.00, conversion will occur at 180 days (Nov 2026) or upon a qualified financing. Short sellers may target the stock given the dilutive structure. Watch for the registration statement filing within 90 days, which could enable resale of conversion shares.
Price Chart
Executive Summary
Farmhouse, Inc. issued a $2.22M convertible promissory note to Axiom Holdings Group LLC with a 10% original issue discount, netting $2M in gross proceeds ($1M cash + $1M digital assets). The note carries 15% simple interest, matures in 10 months, and automatically converts into common stock at 75% of the lowest VWAP (floor $0.15, ceiling $0.50), resulting in potentially severe dilution for existing shareholders.
Key Financial Metrics
Key Facts
- Convertible note principal: $2,222,222; funded amount: $2,000,000 (10% OID)
- $1,000,000 cash + $1,000,000 digital asset consideration; net cash proceeds $884,000
- 15% simple interest per annum, payable only upon conversion
- Mandatory conversion upon earliest of: 180 days post-issuance, qualified financing ≥$5M, stock price ≥$1.00 for 20 consecutive days, or underwritten offering/uplisting
- Conversion price = 75% of lowest 20-day VWAP, with floor $0.15 and ceiling $0.50 per share
- Company must reserve 200% of maximum shares issuable at floor price (potential for >14.8M shares based on $2.22M principal alone)
- Registration Rights Agreement requires filing resale registration within 90 days
- Company has ~18.9M shares outstanding as of Dec 31, 2025
Financial Impact
Potential dilution of 75-100%+ based on conversion at floor price of $0.15; $2M gross proceeds with $884K net cash after expenses and prior advance
Risk Factors
- Massive dilution to existing shareholders upon conversion
- High effective interest cost (15% + OID) increases financial burden
- Mandatory conversion removes holder's optionality to receive cash
- Downside risk if stock trades near or below floor price ($0.15)
- Variable rate financing prohibition may limit future capital raising options
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 9 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001096906-26-000724 |
| Document: fmhs_ex10z3.htm | 0001096906-26-000724 |
| Document: fmhs_ex10z2.htm | 0001096906-26-000724 |
| Document: fmhs-20260504_8k.htm | 0001096906-26-000724 |
| Document: fmhs_ex10z4.htm | 0001096906-26-000724 |
| Document: fmhs_ex99z1.htm | 0001096906-26-000724 |
| Document: 0001096906-26-000724-index-headers.html | 0001096906-26-000724 |
| Document: 0001096906-26-000724-index.html | 0001096906-26-000724 |
| Document: 0001096906-26-000724.txt | 0001096906-26-000724 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 16, 2026 11d ago | 8-K | $0.1400 | awaiting T+60 | — | $0.1450 (+3.57%) |
May 6, 2026 24w ago | 8-K | $0.1700 $0.1949 | ▼ −14.65% | ▼ −10.81% | $0.1450 (+14.71%) |
US Market Status
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