Despite maintaining a gross margin above 50%, the company's operational viability is undermined by SG&A expenses of $1.6M that consistently exceed the $961.1K gross profit reported in 2026Q1.
| Sales/Revenue | 6.67M | 6.61M |
| Revenue Growth % | - | - |
| Cost of Goods Sold | 3.09M | 3.13M |
| COGS % of Revenue | - | 47.3% |
| Gross Profit | 3.58M | 3.48M |
| Gross Margin % | 53.67% | 52.7% |
| Gross Profit Growth % | - | - |
| Operating Expenses | 5.63M | 4.88M |
| OpEx % of Revenue | - | 73.85% |
| Selling, General & Admin | 5.63M | 4.88M |
| SG&A % of Revenue | - | 73.85% |
| Research & Development | 0 | 0 |
| R&D % of Revenue | - | - |
| Other Operating Expenses | 0 | 0 |
| Operating Income | -2.05M | -1.4M |
| Operating Margin % | -30.74% | -21.15% |
| Operating Income Growth % | - | - |
| EBITDA | -1.95M | -1.4M |
| EBITDA Margin % | -29.26% | -21.15% |
| EBITDA Growth % | - | - |
| D&A (Non-Cash Add-back) | 98.51K | 0 |
| EBIT | -2.05M | -1.4M |
| Net Interest Income | -70.62K | 0 |
| Interest Income | 5.45K | 74.7K |
| Interest Expense | -191.08K | -402.4K |
| Other Income/Expense | -4.06M | 2.16M |
| Pretax Income | -6.11M | 758.48K |
| Pretax Margin % | -91.58% | 11.47% |
| Income Tax | 0 | 0 |
| Effective Tax Rate % | 0% | 0% |
| Net Income | -6.11M | 758.48K |
| Net Margin % | -91.58% | 11.47% |
| Net Income Growth % | - | - |
| Net Income (Continuing) | -6.11M | 758.48K |
| Discontinued Operations | 0 | 0 |
| Minority Interest | 0 | 0 |
| EPS (Diluted) | -0.31 | 0.01 |
| EPS Growth % | - | - |
| EPS (Basic) | - | 0.08 |
| Diluted Shares Outstanding | 19.59M | 85.12M |
| Basic Shares Outstanding | 19.59M | 8.24M |
| Dividend Payout Ratio | - | - |
Limited Operational Runway
According to the most recent quarterly filings, MEHA's revenue growth remains inconsistent, with a 3.5% increase in 2026Q1 following an 11.0% contraction in 2025Q4, suggesting that the company struggles to maintain a stable top-line trajectory within its competitive regional medical device distribution environment.
The erratic revenue performance indicates that the company may be highly susceptible to fluctuations in hospital procurement cycles or potential losses in provincial tender success. Investors should monitor whether this volatility reflects a fundamental loss of market share or merely the lumpy nature of medical device replenishment.
As reported in financial statements, MEHA maintains a robust gross margin profile, averaging above 50% across recent periods, yet this is starkly contrasted by a deeply negative operating margin of -41.5% in 2026Q1, highlighting a significant disconnect between manufacturing efficiency and overall corporate profitability.
The ability to sustain high gross margins suggests that the company's specialized Class II and III devices retain pricing power despite broader industry headwinds. However, the inability to convert this gross profit into positive operating income implies that fixed administrative and selling costs are currently misaligned with the company's limited revenue scale.
Based on the provided income statement data, MEHA's net income figures frequently diverge from operating results, as evidenced by the 2025Q4 period where a $1.1M operating loss was offset by a $852.3K net profit, suggesting reliance on non-core income sources like subsidies or tax adjustments.
The presence of significant non-operating items complicates the assessment of true earnings quality and obscures the underlying health of the core business. Analysts should exercise caution, as these transient gains may not be sustainable and do not address the fundamental issue of negative operating cash flow.
Data from recent quarterly reports indicates that SG&A expenses consistently exceed gross profit, such as in 2026Q1 where SG&A reached $1.6M against a gross profit of $961.1K, demonstrating that the company's current cost structure is unsustainable without a substantial increase in top-line volume.
The high fixed cost burden relative to revenue suggests that management has yet to achieve the necessary scale to leverage its infrastructure effectively. Unless the company can significantly reduce its overhead or accelerate revenue growth, the current expense discipline appears insufficient to prevent continued erosion of the cash position.
Based on the reported figures, MEHA faces a precarious situation where a $2.7M cash position is being depleted by persistent operating losses, raising concerns that the company may require dilutive financing or face a liquidity crisis if operational performance does not improve in the near term.
Short-sellers would likely focus on the widening gap between operating expenses and revenue, as well as the potential for further margin compression from government-mandated volume-based procurement policies. The reliance on non-operating income to bolster the bottom line further suggests that the company's current business model may be fundamentally distressed.
Quick answers to the most common questions about buying MEHA stock.
For fiscal year 2025, Functional Brands, Inc. Common Stock (MEHA) reported total revenue of $6.6M. This represents a 0.0% increase compared to $6.6M in 2025.
Functional Brands, Inc. Common Stock (MEHA) is profitable, generating $0.8M in net income for the fiscal year ending 2025 with a net profit margin of 11.5%.
Functional Brands, Inc. Common Stock (MEHA) reported an operating income of $-1.4M, resulting in an operating profit margin of -21.2%. This margin reflects the operational efficiency of the business before interest and taxes.
Functional Brands, Inc. Common Stock (MEHA) generated $3.5M in gross profit for the year, representing a gross profit margin of 52.7%. This demonstrates the company's core pricing power and production efficiency.