Functional Brands(MEHA) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter net income improved to $0.9 million compared to a net loss of $0.3 million in the prior year period[1] - Revenue for the fourth quarter was $1.50 million, a decrease of approximately 11.0% from $1.68 million in the prior year, primarily due to a shift in the Amazon business model[5] - Gross profit for the fourth quarter was $0.67 million, with a gross margin of 44.9%, down 1400 basis points year-over-year[5] - Full-year revenue increased to $6.61 million, reflecting a 0.7% increase from $6.57 million in the prior year[5] - The company reported a gross profit of $3.48 million for the full year, with a gross margin of 52.7%, down 220 basis points year-over-year[5] - Net income for the year ended December 31, 2025, was $758,478, compared to a net loss of $559,356 in 2024[16] Assets and Liabilities - Total assets increased to $9.11 million as of December 31, 2025, compared to $7.17 million in the prior year[12] - Total liabilities rose to $7.57 million from $7.29 million in the previous year[12] - Stockholders' equity improved to $1.54 million from a deficit of $0.12 million in the prior year[12] Cash Flow and Financing - Cash flows from operating activities resulted in a net cash used of $1,271,544, a significant decrease from a net cash provided of $1,990 in the previous year[16] - Total cash at the end of the period increased to $2,726,696 from $211,642 at the beginning of the period[16] - The company recorded a significant financing activity with proceeds from the issuance of preferred stock amounting to $8,000,000[16] - The company incurred a deferred offering cost of $1,721,228, compared to $163,125 in the previous year[16] - Stock-based compensation increased to $543,068 from $414,900 year-over-year[16] - The company reported a loss on the issuance of preferred stock of derivative liabilities totaling $5,294,242[16] - Cash paid for interest increased to $401,411 from $224,428 in the previous year[16] - The company recognized a derivative liability of preferred stock amounting to $13,294,242[17] - Common stock was issued for convertible note payable and accrued interest totaling $122,331[17] Product Development - The company launched Tru2u.health, a digital health platform, in February, integrating various health solutions into a seamless consumer experience[6] - The Kirkman brand portfolio was expanded with two new product bundles, enhancing market offerings[6]