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- 98.28% Dilution Upon Conversion (new) — Existing shareholders face near-total dilution to 1.72% ownership, effectively transferring control and economic value to the seller.
- Must Settle Outstanding Litigation and Buy Out Existing Preferred/debt Holders (new) — Closing conditions reveal the company has unresolved legal issues and a distressed capital structure requiring cleanup before deal can proceed.
- Requires $10m Minimum Equity Raise to Close (new) — Company needs external financing to complete the transaction, suggesting insufficient cash and potential financial distress.
- 2x Liquidation Preference Creates $285.8m Senior Claim (new) — Preferred stock terms ensure seller gets paid first in any liquidation, leaving common shareholders with minimal recovery prospects.
Functional Brands acquiring BullionFX blockchain assets for $142.9M, diluting existing shareholders to 1.72%
Filed May 22, 2026 · Period ending May 22, 2026 · ~1 min read
Key Changes
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Company will issue Series D Preferred Stock worth $142.9M that converts to 98.28% of common stock, diluting current shareholders to just 1.72% ownership—a near-total wipeout of existing equity value.
Item 1.01: Asset Purchase Agreement verify on EDGAR → -
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Acquiring BullionFX's blockchain-based gold ecosystem (Alchemy product) in exchange for preferred stock. Deal represents major strategic pivot from current business into digital gold infrastructure.
Item 1.01: Transaction Details verify on EDGAR → -
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Transaction requires shareholder approval and has numerous closing conditions: settling existing litigation, buying out Series C preferred holders and convertible notes, raising $10M in new equity, and completing due diligence. Expected close Q2-Q3 2026.
Item 1.01: Closing Conditions verify on EDGAR → -
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Series D carries 2x liquidation preference and grants seller board seats plus veto rights over major decisions. In any liquidation, preferred holders get paid first; common may get nothing.
Item 1.01: Preferred Stock Terms verify on EDGAR → -
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Company owes $100K break fee if deal fails due to breach or 90-day deadline miss, rising to $2M if company pursues a superior competing offer. Filing warns deal may not close as expected or at all.
Item 7.01: Risk Factors verify on EDGAR →
Summary
Functional Brands has agreed to acquire BullionFX's blockchain-based gold ecosystem for $142.9 million in newly created preferred stock that will convert into 98.28% of the company's common shares. This represents an extreme dilution event—existing shareholders will own just 1.72% after conversion, effectively wiping out current equity value.
The deal marks a dramatic strategic pivot into digital gold infrastructure, abandoning the company's existing business model. The transaction faces significant execution risk. It requires shareholder approval, settling outstanding litigation, negotiating buyouts of existing preferred stockholders and convertible note holders, and raising at least $10 million in new equity financing.
The Series D Preferred carries a 2x liquidation preference ($285.8 million) and grants the seller board representation and veto rights over major decisions. If the company fails to close within 90 days or breaches the agreement, it owes up to $2 million in break fees. Retail investors should understand this is not a done deal—the filing explicitly warns it may not close as expected or at all. Watch for: (1) the proxy statement detailing shareholder vote timing, (2) announcements about settling existing litigation and capital structure issues, and (3) disclosure of the $10 million equity raise terms, which will reveal additional dilution beyond the already catastrophic 98% figure.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On May 22, 2026, Functional Brands Inc. (the “Company”, “we” and “us”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with BullionFX (the “Seller”) to purchase certain assets and intellectual property of the Seller, including its Alchemy product, a blockchain-based financial ecosystem designed around auditable physical gold (the “BullionFX Assets”), in exchange for 100,000 shares of a newly created series of preferred stock of the Company (the “Series D Preferred Stock”) with an expected value of $142,900,000 (the “Transaction”).
The company is acquiring BullionFX's blockchain-based gold ecosystem assets for $142.9 million worth of newly created Series D Preferred Stock. This represents a major strategic pivot into blockchain and digital gold infrastructure. The transaction is expected to close in Q2 or Q3 2026 subject to multiple closing conditions.
Added in current filing · verify on EDGAR →
The Transaction is expected to close in the second or third quarter of 2026 (the “Closing”), subject to satisfaction of certain closing conditions, including receipt of all requisite consents and approvals, reaching agreement with the holders of the Company’s Series C Convertible Preferred Stock and convertible notes regarding the buyout and/or cancellation of shares of such Series C Convertible Preferred Stock and such convertible notes, settlement of the Company’s outstanding litigation matters, the Company’s completion of due diligence of the BullionFX Assets, the Company’s receipt of a valuation report in respect of the Transaction consideration, the Company’s purchase of a D&O insurance tail policy, the Company’s arrangement for a broker-dealer to conduct a securities offering in a minimum amount of $10 million (the “Equity Financing”), and the Company’s entry into consulting agreements with certain individuals associated with the BullionFX Assets.
The deal has numerous closing conditions including settling existing litigation, negotiating buyouts of Series C preferred stock and convertible notes, completing due diligence, and raising at least $10 million in new equity financing. These conditions create execution risk, and the need to resolve existing capital structure issues and raise new capital suggests the company may be in financial distress.
Event · Item 3.02 — Unregistered Sales of Equity Securities
Company issued 100,000 shares of Series D Preferred Stock in a private placement to an accredited investor under Regulation D exemption.
Added in current filing · verify on EDGAR →
The offer and sale of the 100,000 shares of Series D Preferred Stock to be issued in connection with the Closing and the Conversion Shares issuable upon conversion thereof are intended to be exempt from registration pursuant to Section 4(a) (2) and/or Rule 506 of Regulation D of the Securities Act
The company sold 100,000 shares of a new Series D Preferred Stock class in a private placement that is exempt from SEC registration requirements. These preferred shares can be converted into common stock at some point. The sale was made to an accredited investor under Regulation D rules, meaning no public offering was involved.
Show 1 minor / wording change
Added in current filing · verify on EDGAR →
The securities are subject to transfer restrictions, and the certificates or book entries evidencing the securities will contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom.
The newly issued preferred shares cannot be freely traded or resold. They carry legal restrictions and will be marked with legends indicating they are unregistered securities that can only be sold under specific exemptions or after registration. This limits near-term liquidity for the holder but is standard for private placements.
Event · Item 7.01 — Regulation FD Disclosure
Company announced entry into a Purchase Agreement for an asset acquisition, details furnished via press release under Regulation FD.
Added in current filing · verify on EDGAR →
On May 22, 2026, the Company issued a press release announcing the entry into the Purchase Agreement, which press release is furnished herewith as Exhibit 99.1 and incorporated by reference into this Item 7.01 by reference in its entirety.
The company disclosed it has entered into a Purchase Agreement for an asset acquisition. The announcement was made via press release furnished as an exhibit. This is a Regulation FD disclosure, meaning the information is being publicly shared to ensure fair disclosure to all investors simultaneously.
Added in current filing · verify on EDGAR →
There is no assurance that the Transaction will be consummated on the terms or timeframe currently anticipated, or at all. Although the Company believes that it is basing its expectations and beliefs on reasonable assumptions within the bounds of what is currently known about its business and operations, there can be no assurance that actual results will not differ materially from what the Company expects or believes.
The company explicitly warns that the transaction may not close as anticipated or at all. This disclosure highlights uncertainty around the deal's completion, which depends on various conditions including due diligence, regulatory approvals, and valuation. Investors should understand this is not a completed transaction but rather an agreement subject to multiple contingencies.
Added in current filing · verify on EDGAR →
difficulties and delays in integrating the BullionFX Assets into the Company
The filing reveals the target assets are called "BullionFX Assets," providing the first specific identification of what is being acquired. The company acknowledges potential integration challenges, which is a standard risk disclosure for asset acquisitions but identifies the nature of the business being acquired.
Added in current filing · verify on EDGAR →
the significant dilution to the Company’s stockholder in connection with the Transaction
The company explicitly warns of significant dilution to existing shareholders as a result of this transaction. This suggests the purchase consideration may involve issuing substantial new shares, which would reduce existing shareholders' ownership percentage and potentially impact share price.
Added in current filing · verify on EDGAR →
the ability to obtain any necessary approval by the Company’s stockholders on the expected schedule of the transactions contemplated by the Purchase Agreement
The transaction requires stockholder approval, indicating it is material enough to trigger voting requirements. This gives shareholders a direct say in whether the acquisition proceeds and suggests the deal size or terms meet thresholds requiring shareholder consent under corporate governance rules or exchange listing standards.
Event · Item 9.01 — Financial Statements and Exhibits
Functional Brands Inc. entered into an Asset Purchase Agreement with BullionFX on May 22, 2026.
Added in current filing · verify on EDGAR →
Asset Purchase Agreement, dated May 22, 2026, by and among BullionFX and Functional Brands Inc.
The company has entered into an Asset Purchase Agreement with BullionFX. The 8-K filing lists this agreement as Exhibit 2.1 and includes a press release dated the same day, suggesting this is a material transaction. However, the filing body does not provide details about the assets being purchased, the purchase price, or the strategic rationale.
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Figures/quotes linked to EDGAR · Narrative written by AI · May 25, 2026 · How we verify