Functional Brands Announces Third Quarter 2025 Financial Results

Rhea-AI Summary

Functional Brands (NASDAQ: MEHA) reported third quarter 2025 results for the period ended September 30, 2025.

Key highlights: Revenue $1.7M (+21.4% vs Q3 2024); Gross profit +28.1% with margin improving 310 bps to 57.8%; Net income $0.3M or $0.04 per diluted share versus a net loss of $0.3M (−$0.04 per diluted share) in the year-ago quarter. The company completed a direct listing on Nasdaq under MEHA, said it achieved FIGO transparency alignment for P2i by Kirkman and early compliance with California SB 646 QR-code disclosure, and announced a commercial partnership with Market Performance Group to expand Kirkman brand eCommerce reach.

Positive

• Revenue of $1.7M (+21.4% YoY)
• Gross profit +28.1% YoY
• Gross margin improved 310 bps to 57.8%
• Net income of $0.3M (EPS $0.04)
• Completed direct Nasdaq listing (MEHA)

Negative

• None.

Key Figures

Q3 2025 Revenue $1.7 million Third quarter 2025 revenue

Revenue growth 21.4% YoY growth vs Q3 2024

Gross profit margin 57.8% Q3 2025 gross margin after improvement

Gross margin expansion 310 basis points Improvement vs prior-year quarter

Net income $0.3 million Q3 2025 net income vs prior-year net loss

Diluted EPS $0.04 Q3 2025 diluted EPS vs $(0.04) prior year

Market Reality Check

$0.2800 Last Close

Volume Volume 253,422 is only 0.16x the 20-day average of 1,536,073, indicating relatively light trading ahead of/around this report. low

Technical Shares at $0.3888 are trading below the 200-day MA $0.56 and remain 95.14% under the 52-week high of $8.00.

Peers on Argus

No peers with momentum or same-day headlines were recorded, suggesting MEHA’s move around this earnings release was stock-specific rather than part of a broader sector rotation.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 08	Investor conference	Positive	+5.9%	Announcement of participation in Sidoti virtual investor conference with management presentations.
Dec 02	Product standards news	Positive	+3.9%	P2i by Kirkman named first prenatal supplement aligned with FIGO and SB 646 standards.
Nov 24	Shareholder letter	Positive	+10.4%	Letter outlining direct listing, $6.5M net revenue and 1,300 bps gross margin improvement.
Nov 10	Strategic partnership	Positive	+3.3%	Commercial partnership with Market Performance Group to accelerate Kirkman brand growth.

Pattern Detected

Recent company-specific announcements have all been followed by positive price reactions, indicating a pattern of constructive responses to news.

Recent Company History

Over the last few weeks, Functional Brands has highlighted several growth-oriented milestones. A Nov 5, 2025 direct listing and a shareholder letter emphasized consistent $6.5 million net revenue and a 1,300 basis-point gross margin improvement. The company then announced a Market Performance Group partnership and P2i prenatal alignment with FIGO standards and California’s SB 646 law, each met with positive price moves. Participation in the Sidoti conference continued this momentum. Today’s Q3 2025 earnings, showing revenue growth and profitability, build directly on this trajectory.

Market Pulse Summary

This announcement highlights Q3 2025 revenue of $1.7 million, year-over-year growth of 21.4%, and an improved gross margin of 57.8%, resulting in net income of $0.3 million. These results follow a recent direct listing and strategic partnerships aimed at expanding the Kirkman brand. Investors may focus on whether this profitability is sustainable, how growth trends evolve in coming quarters, and how execution on new channels supports margins and scale.

Key Terms

direct listing financial

"we successfully completed our direct listing on the Nasdaq Capital Market"

A direct listing is a way for a company to become publicly available for trading without issuing new shares or raising additional money beforehand. Instead, existing shares are simply made available for purchase on the stock market, allowing current investors and employees to sell their holdings. This process can offer a simpler and faster way for a company to go public, giving investors quicker access to buy and sell shares.

basis points financial

"gross profit margin improved 310 basis points to 57.8%"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

AI-generated analysis. Not financial advice.

Lake Oswego, Oregon--(Newsfile Corp. - December 15, 2025) - Functional Brands Inc. (NASDAQ: MEHA), a leading innovator in wellness and performance products, today announced financial results for the third quarter ended September 30, 2025.

Third Quarter 2025 highlights:

• Revenue of $1.7 million increased 21.4% compared to the third quarter of 2024, primarily due to growth in direct-to-consumer sales
• Gross profit increased 28.1% compared to the prior year period and gross profit margin improved 310 basis points to 57.8% reflecting higher revenue, improved cost control and better terms with vendors
• Net income of $0.3 million or $0.04 per diluted share compared to a net loss of $0.3 million and $(0.04) per diluted share in the prior year period

"We are pleased with our third quarter results as we delivered strong growth on the top and bottom line, reflecting early progress on our key initiatives," said Eric Gripentrog, CEO of Functional Brands Inc. "The past few months have been transformational for Functional Brands, marked by several milestone achievements that position us strongly for accelerated growth. Most notably, we successfully completed our direct listing on the Nasdaq Capital Market under the symbol MEHA, representing a pivotal moment that validates our business model and provides the capital foundation to execute our ambitious expansion plans.

"We also achieved significant strategic breakthroughs that differentiate us in the marketplace. Our P2i by Kirkman prenatal supplement has become the world's first to fully align with FIGO's transparency standards and the first to comply with California's new SB 646 QR-code disclosure law—well ahead of the January 2027 implementation date. Additionally, we forged a high-impact commercial partnership with Market Performance Group to supercharge the growth of our flagship Kirkman brand across eCommerce and digital channels, unlocking new opportunities to reach millions of consumers with our science-based wellness solutions. These accomplishments demonstrate that we are executing on our mission of 'Making Everyone Healthy Again' while building a foundation for sustainable, profitable growth."

About Functional Brands Inc.
Functional Brands Inc. is a health and wellness company focused on acquiring and growing science-based consumer brands. With a portfolio that includes trusted names like Kirkman®, P2i by Kirkman®, Hemptown Naturals, Healthy Assist by Kirkman; Functional Brands is committed to providing high-quality, effective solutions that support healthier lives.

For more information, visit www.functionalbrandsinc.com and www.kirkmangroup.com.

Investor Relations Contact:
FunctionalBrands@icrinc.com

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. In this context, forward-looking statements mean statements (including statements related to the closing, and the anticipated benefits to the Company, of the private placement described herein) related to future events, which may impact our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "potential," "will," "should," "could," "would," "optimistic" or "may" and other words of similar meaning. 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. Forward-looking statements 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.

Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. Potential investors should review Functional Brands' Registration Statement for more complete information, including the risk factors that may affect future results, which are available for review at www.sec.gov. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. We do not undertake to update our forward-looking statements to reflect events or circumstances that may arise after the date of this news release, except as required by law.

FUNCTIONAL BRANDS INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In U.S. dollars, except share data or otherwise noted)

		September 30, 2025			December 31, 2024
Assets
Current assets:
Cash		$	1,005,324		$	211,642
Accounts receivable, net			89,213			303,471
Inventories, net			1,690,733			1,709,458
Prepaid expenses and other current assets			169,070			45,112
Deferred offering costs			1,256,451			588,641
Total current assets			4,210,791			2,858,324
Noncurrent assets:
Property and equipment, net			42,086			49,564
Right-of-use assets, net			1,753,581			2,000,092
Intangible assets, net			1,408,944			1,443,541
Goodwill			818,139			818,139
Total non-current assets			4,022,750			4,311,336
Total assets		$	8,233,541		$	7,169,660
Liabilities and stockholders' equity / (deficit)
Current liabilities:
Accounts payable and accrued liabilities		$	2,425,006		$	1,956,165
Line of credit			21,286			32,235
SBA loan, current			3,547			3,436
Lease liabilities, current			364,505			291,213
Other current liabilities			34,425			35,332
Payable for acquisition, current			2,227,366			2,342,366
Loans payable (related party), current			58,886			370,703
Loans payable			567,497			171,500
Total current liabilities			5,702,518			5,202,950
Non-current liabilities:
Lease liabilities, net of current			1,527,586			1,844,819
SBA loan, net of current			137,780			140,468
Loan payable (related party), net of current			260,992			-
Convertible debenture			-			100,000
Total non-current liabilities			1,926,358			2,085,287
Total liabilities			7,628,876			7,288,237
Stockholders' equity / (deficit)
Series A Preferred stock, par value $0.001, 100,000 shares authorized; 0 shares
issued and outstanding as of September 30, 2025 and December 31, 2024,  respectively			-			-
Series B Preferred stock, par value $0.001, 80,000 shares authorized; 0 shares
issued and outstanding as of September 30, 2025 and December 31, 2024,  respectively			-			-
Common stock, par value $0.00001, 220,000,000 shares authorized; 7,084,769
and 6,694,880 shares issued and outstanding at September 30, 2025 and  December 31, 2024, respectively			71			67
Additional paid-in capital			8,359,361			7,542,286
Accumulated deficit			(7,754,767	)		(7,660,930	)
Total stockholders' equity / (deficit)			604,665			(118,577	)
Total liabilities and stockholders' equity / (deficit)		$	8,233,541		$	7,169,660

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FUNCTIONAL BRANDS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In U.S. dollars, except share data or otherwise noted)

		Three Months Ended September 30,						Nine Months Ended September 30,
		2025			2024			2025			2024
Revenue, net of returns		$	1,694,174		$	1,395,913		$	5,116,963		$	4,886,359
Cost of goods sold			715,824			632,194			2,303,752			2,268,986
Gross profit			978,350			763,719			2,813,211			2,617,373
Operating expenses
Sales and marketing			118,876			156,497			462,545			454,714
General and administrative expenses			937,762			825,993			2,616,489			2,256,004
Total operating expenses			1,056,638			982,490			3,079,034			2,710,718
Operating income / (loss)			(78,288	)		(218,771	)		(265,823	)		(93,345	)
Interest expense			(155,310	)		(69,638	)		(321,417	)		(189,552	)
Other income - ERTC refund			491,801			-			491,801			-
Other income			-			-			112			-
Interest income			798			328			1,490			1,291
Total other income / (expenses)			337,289			(69,310	)		171,986			(188,261	)
Net income / (loss)		$	259,001		$	(288,081	)	$	(93,837	)	$	(281,606	)
Net income (loss) per share of common stock attributable to
common stockholders
Basic		$	0.04		$	(0.04	)	$	(0.01	)	$	(0.04	)
Diluted		$	0.04		$	(0.04	)	$	(0.01	)	$	(0.04	)
Weighted average shares used in computing net loss per
share of common stock
Basic			7,039,144			6,694,493			6,953,265			6,694,493
Diluted			7,197,605			6,694,493			6,953,265			6,694,493

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

FUNCTIONAL BRANDS INC.
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(In U.S. dollars, except share data or otherwise noted)

		Nine Months Ended September 30,
		2025			2024
Cash flows from operating activities:
Net loss		$	(93,837	)	$	(281,606	)
Reconcile net loss to cash provided by operating activities
Allowance for doubtful accounts receivable			(3,796	)		-
Allowance for inventory obsolescence			12,895			-
Depreciation of property and equipment			15,990			40,576
Amortization of right-of-use assets			246,511			227,912
Amortization of intangible assets			34,597			34,597
Financing expense on warrant issuance			45,263			-
Stock-based compensation			598,856			-
Issuance of shares for financing expense			50,630			-
Changes in operating assets and liabilities:
Accounts receivable			218,054			(103,316	)
Inventories			5,830			(59,921	)
Prepaid expenses and other current assets			1,042			1,429
Accounts payable and accrued liabilities			591,172			331,409
Other current liabilities			(908	)		(31,515	)
Lease liabilities			(243,941	)		(213,743	)
Net cash provided by (used in) operating activities			1,478,358			(54,178	)
Cash flows from investing activities:
Purchase of property and equipment			(8,512	)		(1,881	)
Net cash used in investing activities:			(8,512	)		(1,881	)
Cash flows from financing activities:
Deferred offering costs			(667,810	)		(95,625	)
Proceeds from loans			195,277			280,000
Payments for payable for acquisition			(115,000	)		(200,001	)
Proceeds from debt facilities			99,735			86,662
Repayment of loans			(75,106	)		(4,492	)
Line of credit repayment			(110,683	)		(132,329	)
SBA loan repayment			(2,577	)		(2,421	)
Net cash used in financing activities			(676,164	)		(68,206	)
Increase (decrease) in cash			793,682			(124,265	)
Cash beginning of period			211,642			374,435
Cash, end of period		$	1,005,324		$	250,170
Supplemental disclosures of cash flow information
Cash paid for interest		$	241,662		$	187,031
Non-cash investing and financing activities
Common stock issued for convertible note payable and accrued interest		$	122,331		$	-
Loan payable, related party		$	225,000		$	-

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/278078

FAQ

What were Functional Brands (MEHA) Q3 2025 revenue and growth rates?

Functional Brands reported $1.7M revenue in Q3 2025, up 21.4% year-over-year.

How did Functional Brands' gross margin change in Q3 2025 for MEHA?

Gross margin improved by 310 basis points to 57.8% in Q3 2025.

Did MEHA report a profit or loss in Q3 2025 and what was EPS?

MEHA reported a net income of $0.3M, or $0.04 per diluted share in Q3 2025.

When did Functional Brands complete its Nasdaq listing under the ticker MEHA?

The company completed its direct listing on the Nasdaq Capital Market under MEHA prior to the Q3 2025 results announcement.

What regulatory and product milestones did Functional Brands announce for Kirkman P2i?

P2i by Kirkman aligned with FIGO transparency standards and early-complied with California SB 646 QR-code disclosure ahead of 2027.

What commercial partnership did MEHA disclose to expand Kirkman brand sales?

Functional Brands announced a commercial partnership with Market Performance Group to accelerate Kirkman eCommerce and digital growth.