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INVESTOR UPDATE

January 2024

IPO UPDATE

We continue to work through the second set of questions and comments from the SEC in respect to our S-1 submission. This is our number one priority for our investors and our company. Once it has been updated, we will circulate the S-1 for an internal review before it is resubmitted to the SEC. The SEC will then review the revised S-1, and we expect a fewer number of their questions or comments for our company’s operating subsidiary, Functional Brands Inc. (formerly, “HempTown Naturals Inc.”).

The SEC Form S-1 is the initial registration form for new securities required by the SEC for public companies that are based in the U.S. Any security that meets the criteria must have an S-1 filing before shares can be listed on a national exchange, such as the New York Stock Exchange. Companies usually file SEC Form S-1 in anticipation of their Initial Public Offering (IPO).

Form S-1 requires companies to provide information on the planned use of capital proceeds, detail the current business model and competition, and provide a brief prospectus of the planned security itself, offering price methodology and any dilution that will occur to other listed securities.

SEC Form S-1 is also known as the registration statement under the Securities Act of 1933. Additionally, the SEC requires the disclosure of any material business dealings between the company and its directors and outside counsel.

Our goal is to resubmit the S-1 document this month for another SEC review. We are expecting a few more rounds with the SEC. Once that process is complete, Joseph Gunnar, our investment banker, will conduct a road show in support of the IPO. As progress continues, we will provide updates accordingly.     

BUSINESS UPDATE

Kirkman Brand

Our overall Kirkman brand is +6% vs. full prior year. This growth is being driven in our largest channel, which includes our domestic wholesalers and professional accounts. We’ve solidified our partnership with our Amazon reseller with the expectation to increase our marketing spend to drive more business through Amazon. Our new participation with OANP, Oregon Association of Naturopathic Physicians, has produced new customers and we look to increase our awareness and participation in other Associations and Trade Shows in 2024.

We added 40 items to the Full Script platform, which targets over 70,000 practitioners. We are working with Full Script to determine what kind of marketing activities we can create to bring awareness to our brand through their platform. In addition to Full Script, we are transitioning our current KirkmanGroup.com website from the Magento eCommerce platform to Shopify. We believe this move will enable more marketing actions with Shopify.

We’ve also signed a new licensing agreement to manufacture, market, and sell the only ‘certified’ prenatal supplement in the marketplace. FIGO (The International Federation of Gynecology and Obstetrics) published an article stating that certification of all prenatal vitamins becomes the standard of care. We have an approved formula, label, box, and product insert. We believe the U.S. market size (one-month supply) is over 10 million bottles annually, so we are very excited to have the first certified product in the U.S. market in 2024. We are in the stages of hiring a sales broker to help us take the product to market via big-box retailers and medical professionals.

Hemptown Naturals Brand

In December 2023, we launched D9 Trailer Park Boys (TPB) Drink Enhancers. This two-serving product in three flavors provides additional exposure for HempTown Naturals and the Trailer Park Boys. We now offer 3 different TPB categories: Hemp Stix, D9 gummies, and D9 drink enhancers.

As an incentive to our shareholders, we are offering a special promotion for new D9 Trailer Park Boys Drink Enhancers. Buy 3 or more and receive a $10 discount. Please use the ‘InvestorPromo’ discount code upon check-out at www.hemptownnaturals.com to receive your promotional
incentive.

We will also be participating in two upcoming shows in February, TPE24 (Total Product Expo 2024) and Champs, to help increase awareness and sales of our Hemp-related products. We continue to look for partners to help add to the existing Trailer Park Boys product portfolio. Stay tuned as we expect to add a few more products to the product lineup.

CONCLUSION

We are working diligently to provide the SEC with all the required documentation to approve our S-1. We understand this is taking a little longer than expected, but please know we are doing everything within our control to ensure a successful IPO. We thank you for your patience and understanding throughout this process.

Please feel free to reach out if you have any questions.

Sincerely, 

The Team at Functional Brands Inc.