Quick Verdict
Functional Brands Inc. Q2 2026 Earnings were reported with a Q2 2026 loss of $0.06 per share on $1.87 million of revenue, which rose 2% year over year. Gross margin improved sharply to 59.9%, but materially higher operating and non-cash expenses drove a $2.63 million net loss. For investors seeking a concise summary of Functional Brands Inc. Q2 2026 Earnings, MEHA showed after-hours movement was not disclosed.
About Functional Brands Inc.
Functional Brands Inc. (OTC Markets: MEHA) is a Lake Oswego, Oregon-based wellness and nutraceutical-products company. It produces, markets, sells, and distributes nutritional supplements through its Kirkman brand, contract manufacturing activity, direct-to-consumer channels, prenatal products under P2i by Kirkman, and the Tru2uhealth telehealth and wellness platform. The company operates an FDA-registered, cGMP-compliant manufacturing facility in Oregon.
Functional Brands was organized in Delaware in November 2020, although its Kirkman supplement business traces its heritage back more than 75 years. The company changed its name from HT Naturals Inc. to Functional Brands in March 2023. Its shares moved from Nasdaq to the OTC Markets under the MEHA ticker following a June 2026 delisting. Public-market data around the release date indicated an approximately $205,000–$207,000 market capitalization; market-data providers listed no meaningful positive P/E ratio or dividend yield, consistent with the company’s losses. One market-data provider listed 33 employees.
Top Financial Highlights
- Q2 net revenue was $1.87 million, up 2% from $1.83 million in Q2 2025.
- Revenue increased by $38,016, with direct-to-consumer demand and contract-manufacturing sales cited as the key contributors.
- Gross profit increased 16% to $1.12 million, from $968,095 a year earlier.
- Gross margin rose approximately 710 basis points to 59.9%, versus roughly 52.8% in Q2 2025, reflecting greater exposure to higher-margin channels and the Amazon business-model transition.
- Operating expenses reached $2.44 million, up from $1.12 million, an increase of approximately 117%.
- Sales and marketing expense more than doubled to $340,384, up 106%, due principally to Amazon referral fees, MPG marketing fees, and higher advertising and promotions.
- General and administrative expense rose 119% to $2.10 million, driven by payroll, professional fees, seller fees, stock compensation, insurance, and public-company costs.
- Operating loss widened to $1.32 million, compared with $155,437 in Q2 2025.
- Net loss widened to $2.63 million, or $(0.06) per basic and diluted share, from a loss of $226,056, or $(0.03) per share.
- Other expense totaled $1.31 million, including a $967,942 non-cash fair-value change in derivative liabilities and a $198,705 loss on a defaulted convertible note.
- Cash used in operating activities was $943,457 for the first half of 2026, compared with operating cash generation of $647,757 in the comparable 2025 period. The release does not provide standalone quarterly operating cash flow.
- Cash at June 30 was $352,142, down from $2.73 million at December 31, 2025.
- The balance sheet showed a $2.90 million working-capital deficit, $16.68 million accumulated deficit, and $(2.96 million) stockholders’ deficit. Management disclosed substantial doubt about the company’s ability to continue as a going concern.
Functional Brands Inc.Consolidated Balance Sheets
(Source: globenewswire.com)
Beat or Miss?
Functional Brands’ earnings release did not disclose Wall Street consensus forecasts, and available market-data coverage did not identify a published analyst EPS or revenue consensus. Therefore, a conventional earnings “beat” or “miss” cannot be determined.
| Metric | Reported | Difference/Analysis |
| Revenue | $1.87 million | N/A — no consensus revenue estimate disclosed; revenue increased 2% year over year |
| EPS | ($0.06) | N/A — no consensus EPS estimate disclosed; loss per share doubled from $(0.03) |
| Net loss | $(2.63 million) | Loss widened from $(0.23 million), largely due to higher operating costs and non-cash derivative-liability revaluation |
| Gross margin | 59.90% | Improved about 710 basis points year over year, a key operational positive |
| Q3 / FY 2026 guidance | Not provided | The company gave no quantitative outlook |
The operational picture was mixed: revenue growth was modest, but the margin expansion was substantial. The central financial concern is that higher selling, administrative, and other expenses outweighed the gross-profit improvement, while low cash and a working-capital deficit intensified financing risk.
What Leadership Is Saying
“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.”
— Eric Gripentrog, Chief Executive Officer, 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.”
— Eric Gripentrog, Chief Executive Officer, Functional Brands Inc.
Historical Performance
| Category | Q2 2026 | Q2 2025 | Change (%) |
| Revenue | $1.87 million | $1.83 million | 2.10% |
| Gross profit | $1.12 million | $0.97 million | 15.70% |
| Gross margin | 59.90% | 52.80% | +7.1 percentage points |
| Net income / (loss) | $(2.63 million) | $(0.23 million) | Loss widened 1,064% |
| Operating expenses | $2.44 million | $1.12 million | 117.20% |
| Operating income / (loss) | $(1.32 million) | $(0.16 million) | Loss widened 749% |
| Sales and marketing expense | $0.34 million | $0.17 million | 106.20% |
| General and administrative expense | $2.10 million | $0.96 million | 119.10% |
The most favorable comparison was the gross-profit trend: cost of goods sold fell to $750,207 from $864,437 despite modest revenue growth. However, the company’s expense base expanded far faster than sales, producing a significantly wider operating loss.
How the Market Reacted?
The August 17 earnings announcement did not report an immediate share-price reaction, so there is no confirmed after-hours move to attribute to the results. Around the report date, MEHA was quoted near $0.0042–$0.0048 per share, with public sources showing a market capitalization of approximately $205,000–$207,000 and thin OTC-market characteristics.
Investor sentiment is likely to remain cautious rather than decisively bullish. The 59.9% gross margin and continued sales growth support management’s argument that the core Kirkman business is improving; however, the widened loss, sharp cash decline, stockholders’ deficit, disclosed going-concern uncertainty, Nasdaq delisting, and failed BullionFX transaction are significant counterweights.
