Functional Brands Inc.

What they do

The company manufactures and distributes over-the-counter nutraceutical supplements in categories including pain, energy, prenatal, general health, bone and joint, gastro, immunity, cardiac, detox, mental clarity and focus, sleep and urinary. Products are sold through pharmacies, U.S. wholesalers, international distributors and direct-to-consumer channels, and are not FDA-approved. The principal business is the production, marketing, sales and distribution of Kirkman-branded products, shipped throughout the United States and to 35 countries. The company discontinued its hemp-derived Hemptown product line.

Revenue drivers

• Kirkman nutraceutical products — The principal business: production, marketing, sales and distribution of Kirkman supplements sold over the counter into pharmacies, wholesalers and international distributors; these are the products shipped to the United States and 35 countries.
• Direct-to-consumer channel — Management cited increased demand from the direct-to-consumer channel and the Amazon business model transition as a driver of the 2% second-quarter revenue increase and higher gross margin.
• Contract manufacturing — Sales for contract manufacturing were cited alongside direct-to-consumer as the reason net revenue rose $38,016 year over year in the three months ended June 30, 2026.
• International distributors — Products are shipped to 35 countries through international distributors, one of four named end-market channels alongside pharmacies, U.S. wholesalers and direct-to-consumer sales.

Recent performance

Second-quarter 2026 net revenue was $1,870,548, up about 2% from $1,832,532 a year earlier, on higher direct-to-consumer and contract manufacturing demand. Gross profit rose about 16% to $1,120,341 and gross margin expanded roughly 710 basis points to 59.9%. Sales and marketing expenses rose about 106% to $340,384 and general and administrative expenses rose about 119% to $2,100,355, driving an operating loss of $1,320,398 versus $155,437 a year earlier. Net loss widened to $2,630,548 from $226,056, with the company attributing the change to higher G&A and a non-cash change in fair value of derivative liabilities. For the six months ended June 30, 2026, net loss was $9.6 million, including a $6.3 million non-cash charge tied to the first-quarter 2026 preferred stock exchange.

Strategy

Management says its focus is on strengthening the balance sheet, managing the cost structure and executing on the core nutraceutical business. The company raised $8,000,000 gross in a November 2025 private placement of 100,000 Series A Convertible Preferred shares (stated value $10,000,000) plus 80,000 bonus Series B Preferred shares (stated value $8,000,000), and completed a direct listing on Nasdaq on November 5, 2025. It discontinued the hemp-derived Hemptown line and satisfies the remaining Kirkman purchase consideration as of November 2025. The proposed acquisition of blockchain-related intellectual property and assets from BullionFX under a May 11, 2026 letter of intent was terminated on June 29, 2026. The stock has since moved from Nasdaq to OTC Markets under the ticker MEHA.

Risks

• Going-concern doubt — The auditor's report on the 2025 financial statements expresses doubt about the ability to continue as a going concern, citing recurring losses, negative cash flows and accumulated deficit.
• Stockholders' deficit and thin liquidity — At June 30, 2026 total liabilities were $9.4 million against $6.5 million of total assets, producing negative shareholder equity of $3.0 million, with only $352,142 of cash and equivalents.
• Nasdaq delisting — The common stock was delisted from Nasdaq and began trading on OTC Markets under the MEHA ticker, following a June 15, 2026 delisting notice or listing-rule failure disclosure.
• Preferred dividend and conversion overhang — Series A Preferred carries a cash dividend escalating from 5% to 10% to 15% per annum across successive six-month periods and 3% per month thereafter, convertible at prices subject to a $4.00 floor, while Series B holders can require up to 25% of future financing proceeds be used to redeem their shares.

Outlook

Management said the core Kirkman business made real progress in the second quarter, with revenue growth and meaningfully higher gross margin, and called the underlying momentum genuine. The CEO flagged the BullionFX letter-of-intent termination, the move to OTC Markets and higher public-company costs as challenges, and said the focus is on strengthening the balance sheet and managing cost structure. The company's own financial statements state that recurring losses, cash used in operations and stockholders' deficit raise substantial doubt about its ability to continue as a going concern.