revenue $1.6M, net income -$7.0M. Functional Brands reports material control weaknesses, loss, and dilution deal

Filed May 15, 2026 · Period ending March 31, 2026 · ~1 min read

Key Changes

• high

  Management reports a material weakness, rendering disclosure controls ineffective as of March 31, 2026. Despite this, management asserts the financial statements fairly present the company's condition.

  Controls & Procedures verify on EDGAR →
• high

  Company signed binding LOI for $142.9M acquisition payable in convertible preferred stock. If completed, existing shareholders would be diluted to 1.72% ownership while the seller would own 98.28%, requiring shareholder approval.

  MD&A: Proposed Acquisition verify on EDGAR →
• high

  Q1 2026 net loss ballooned to $7M (vs. $127K prior year) driven by $6.3M non-cash loss on preferred stock issuance. Operating expenses surged 92% to $1.38M, with $300K in professional fees and $200K in payroll increases.

  MD&A: Financial Results verify on EDGAR →