Functional Brands Announces Second Quarter 2026 Financial Results
LAKE OSWEGO, Ore., Aug. 17, 2026 (GLOBE NEWSWIRE) -- Functional Brands Inc. (OTC Markets: MEHA), a leading innovator in wellness and performance products, today announced financial results for the second quarter ended June 30, 2026.
Second Quarter 2026 Financial Highlights
Second Quarter Corporate Developments
"Our core Kirkman business continued to make real progress in the second quarter — revenue grew and gross margin expanded meaningfully — and we believe that underlying momentum is genuine," said Eric Gripentrog, CEO of Functional Brands Inc. "At the same time, we want our stockholders to have a clear picture of the challenges we are managing: the termination of the BullionFX letter of intent, our common stock's move to OTC Markets, and the increased costs of operating as a public company all weighed on our results this quarter. Our focus now is on strengthening our balance sheet, managing our cost structure, and executing on the core nutraceutical business that remains the foundation of this Company."
Financial Results for the Three and Six Months Ended June 30, 2026:
Revenue
Net revenue for the three months ended June 30, 2026 was $1,870,548 compared to $1,832,532 for the three months ended June 30, 2025, an increase of approximately 2%. This increase of $38,016 was primarily due to increased demand from the Company's direct-to-consumer sales channel and sales for contract manufacturing. For the six months ended June 30, 2026, net revenue was $3,516,072 compared to $3,422,788 for the same period in 2025, an increase of approximately 3%.
Gross profit
Gross profit for the three months ended June 30, 2026 was $1,120,341 compared to $968,095 for the three months ended June 30, 2025, an increase of approximately 16%. Gross margin increased approximately 710 basis points to 59.9%. For the six months ended June 30, 2026, gross profit was $2,081,474 compared to $1,834,859 for the same period in 2025, and gross margin increased approximately 560 basis points to 59.2%.
Sales and marketing expenses
Sales and marketing expenses for the three months ended June 30, 2026 were $340,384 compared to $165,039 for the three months ended June 30, 2025, an increase of approximately 106%. This increase was primarily due to higher Amazon referral fees, new marketing fees with MPG, and increased advertising and promotional expenses. For the six months ended June 30, 2026, sales and marketing expenses were $604,091 compared to $343,669 for the same period in 2025, an increase of approximately 76%.
General and administrative expenses
General and administrative expenses for the three months ended June 30, 2026 were $2,100,355 compared to $958,493 for the three months ended June 30, 2025, an increase of approximately 119%. This increase was primarily attributable to higher payroll costs, higher professional fees, increased Amazon seller fees, an increase in stock-based compensation, higher insurance premiums, and increased public-company related expenses, partially offset by a decrease in settlement expense. For the six months ended June 30, 2026, general and administrative expenses were $3,480,586 compared to $1,678,727 for the same period in 2025, an increase of approximately 107%.
Other income / (expense)
Other expense for the three months ended June 30, 2026 was $1,310,150 compared to $70,619 for the three months ended June 30, 2025, an increase of approximately 1,755%. This increase was primarily due to a $967,942 non-cash change in the fair value of derivative liabilities, a loss on default of convertible note of $198,705, and a $50,000 increase in other expenses, partially offset by a reduction in interest expense. For the six months ended June 30, 2026, other expense was $7,618,135 compared to $165,301 for the same period in 2025, primarily reflecting a $6,310,464 non-cash loss on the issuance of preferred stock recorded in the first quarter of 2026, together with the change in fair value of derivative liabilities and loss on default of convertible note described above.
Net loss
Net loss for the three months ended June 30, 2026 was $2,630,548, or $(0.06) per basic and diluted share, compared to a net loss of $226,056, or $(0.03) per basic and diluted share, for the three months ended June 30, 2025. For the six months ended June 30, 2026, net loss was $9,621,337, or $(0.31) per basic and diluted share, compared to a net loss of $352,838, or $(0.05) per basic and diluted share, for the same period in 2025.
Liquidity and Going Concern
As of June 30, 2026, the Company had cash of $352,142, a working capital deficit of $2,903,380, and an accumulated deficit of $16,679,712. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management believes that existing cash balances, combined with future capital raises through debt and equity and cash receipts from product sales, will be necessary to fund ongoing operations, and the Company is dependent on its ability to secure additional financing, of which there can be no assurance.
About Functional Brands Inc.
Functional Brands Inc. (OTC Markets: MEHA) is a leading innovator in wellness and performance products dedicated to Making Everyone Healthy Again™. The Company's portfolio includes Kirkman®, one of the most trusted names in nutritional supplements for over 75 years with products available in more than 35 countries; P2i™ by Kirkman® Prenatal Multivitamin & Multimineral, the first prenatal supplement to align with FIGO standards and comply with California SB 646; and Tru2u.health, a consumer-facing telehealth and wellness platform. Functional Brands operates an FDA-registered, cGMP-compliant manufacturing facility in Oregon.
For more information, visit www.functionalbrandsinc.com, www.kirkmangroup.com, or www.tru2u.health.
Cautionary Note Regarding Forward-Looking Statements
This news release and statements of Functional Brands' management in connection with this news release or related events contain or may contain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events and expected future business and financial performance and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "potential," "will," "should," "could," "would," or "may." These forward-looking statements are based on information available to us as of the date of this news release and represent management's current views and assumptions and are not guarantees of future performance, events, or results, and involve significant known and unknown risks, uncertainties, and other factors which may be beyond our control.
Important factors that may cause actual results to differ materially from these forward-looking statements include, without limitation: the Company's ability to continue as a going concern and to obtain additional debt or equity financing on acceptable terms, or at all; the impact of the termination of the BullionFX letter of intent, including the Company's continued reliance on its existing operations, available cash resources, and other strategic alternatives; the effects of the Company's common stock trading on OTC Markets rather than a national securities exchange, including on liquidity and the Company's ability to raise capital; the outcome of pending legal proceedings, including potential appeals of the True Health Medical Center litigation; prevailing economic, market, regulatory, or business conditions; and other risks described in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, available at www.sec.gov. We do not undertake to update our forward-looking statements to reflect events or circumstances arising after the date of this news release, except as required by law.