RanchlandMTX - Chapter 11 Case Summary

Business Description

FuturHealth, Inc. ("FuturHealth" or the "Debtor") is a direct-to-consumer wellness platform focused primarily on weight-management and wellness solutions. Through its digital platform, the Debtor facilitates access to prescription medications, including glucagon-like peptide-1 (GLP-1) medications, as part of broader wellness programs that combine medical support, nutrition planning, exercise resources and other tools. Working with medical service organizations, pharmacies and other third-party service providers, the Debtor offers customers a coordinated digital service that may include medical consultations, prescription fulfillment and delivery, nutrition guidance, fitness content, progress tracking and ongoing customer support.

In 2024, its first full year of operations, FuturHealth generated $86.6 million of GAAP revenue. Despite a $10.7 million operating loss, it was cash-flow positive that year and generated $1.2 million of cash. Since 2023, the Debtor has facilitated more than one million prescriptions and served more than 500,000 subscribers. As of November 1, 2026 (the "Petition Date"), it had approximately 26,000 current customers and 195,000 historical customers.

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Corporate History

Formation and Capitalization

The Debtor's current business began operating in 2023 through FuturHealth, LLC. In November 2023, that entity converted into a Delaware corporation named FuturCo Health Technologies, Inc. In December 2023, the company completed a $5 million seed financing round led by Corazon Capital, and in January 2024 it changed its name to FuturHealth, Inc.

As of September 12, 2026, the Debtor estimated that it had approximately 58 equity security holders, including option and warrant holders. The following were outstanding:

• Preferred stock — 3,121,246 shares held by four holders.
• Common stock — 10,087,540 shares held by six holders.
• Warrants — Rights to purchase 484,913 common shares, held by six holders.
• Options — Rights to purchase 597,440 common shares, granted under the Debtor's equity-based compensation plan.

2026 Leadership and Board Changes

Effective September 9, 2026, Luke Mahoney resigned as Chief Executive Officer and from the Debtor's board of directors (the "Board"). On the same date, John Levan resigned as President, from all other officer positions and from the Board. At the same time, the Board appointed Jon Hambidge, who had served as the Debtor's Chief Financial Officer since 2023, as Chief Executive Officer, and Hambidge and Sabrina Burgi joined the Board. Mary Schroeder also joined the Board as an independent director to provide additional oversight while the Debtor evaluated strategic alternatives and prepared for Chapter 11. On September 18, 2026, the Board formed a special restructuring committee with Schroeder as its sole member (the "Committee") and authorized it to take any action it considered necessary or advisable for the restructuring.

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Operations Overview

Whole Health OS Platform

The Debtor delivers its services mainly through Whole Health OS, its proprietary technology and operating platform. The platform connects to medical, pharmacy and wellness-service providers and reaches customers through mobile and web applications, text messaging, email and other digital channels. It uses data and AI-enabled tools to route each patient's information to an appropriate medical-service organization or treatment pathway, and to deliver personalized nutrition, fitness and educational content during a program.

The Debtor has invested heavily in the platform and in the infrastructure that ties together its customer acquisition, user experience, medical-service relationships, pharmacy supply chain, customer support, payment processing, data and wellness content. According to the First Day Declaration, Whole Health OS is one of the Debtor's most valuable assets. The Debtor also owns a federally registered FuturHealth trademark covering downloadable software and meal-planning services.

Revenue Model

The business depends heavily on recurring customer relationships. The Debtor markets its programs mainly through digital and social-media channels. Marketing spend brings in new customers, while renewals and additional product offerings are meant to generate revenue over the life of each relationship. Programs vary by length, by the services included and, where an independent medical professional prescribes one, by the medication selected. Revenue includes both initial purchases and recurring subscription or renewal revenue. Customer payments are processed mainly through third-party merchant processors, which pass the proceeds on to the Debtor. Because the model relies on marketing spend and renewals, the Debtor's revenue depends directly on its ability to fund customer acquisition, keep existing customers and maintain uninterrupted access to its technology and supply-chain partners.

Workforce and Facilities

After prepetition cost reductions, the Debtor employs approximately 28 full-time employees. The company also relies on approximately 20 independent contractors and staffing-agency personnel. Together they cover engineering, quality assurance, customer experience, medical operations, marketing, finance and administration, with limited backup coverage in several areas. The workforce is remote and spread across multiple states. The Debtor leases office space in San Diego, California, but does not currently use it for operations and expects to reject the lease in the Chapter 11 case.

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Prepetition Obligations

As of the Petition Date, the Debtor estimates approximately $28 million of total liabilities. These include secured debt owed to iHeartMedia + Entertainment, Inc. ("iHeartMedia"), unsecured merchant cash advance (MCA) obligations, unsecured prepetition notes, trade payables and other liabilities incurred in the ordinary course of business.

iHeartMedia Prepetition Facility

In the first quarter of 2025, the Debtor signed an advertising agreement with iHeartMedia worth approximately $13.5 million. At the end of 2025, iHeartMedia agreed to convert the remaining balance owed under that agreement into an approximately $9.1 million secured debt facility (the "Prepetition Facility"). The facility is secured by the Debtor's current and future accounts receivable and all their proceeds, and iHeartMedia's security interest is perfected by UCC financing statements. As of the Petition Date, approximately $7.5 million of principal, interest, fees and other obligations remained outstanding.

Merchant Cash Agreements

During 2026, after it was unable to obtain conventional equity or debt financing, the Debtor entered into three merchant cash agreements: one with Cedar Advance LLC ("Cedar") and two with Velocity Capital Group LLC ("Velocity," and together with Cedar, the "MCA Lenders"). In total, the agreements provided purchase prices of approximately $1.8 million and net proceeds of approximately $1.7 million, in exchange for the purported sale of approximately $2.5 million of future receipts.

Date	MCA Lender	Purchase Price	Fees	Net Proceeds	Purchased Amount
May 12, 2026	Cedar	$725,000	$25,375	$699,625	Up to $986,000
June 12, 2026	Velocity	$725,000	$21,950 (origination)	$703,050	$1,015,000
July 24, 2026	Velocity	$350,000	$21,200 (origination)	$328,800	$504,000

As of October 31, 2026, approximately $1 million remained outstanding under the agreements. The agreements give the MCA Lenders several remedies:

• purported security interests in the Debtor's receivables and certain other assets
• acceleration of all amounts owed upon default
• confessed judgment
• a personal guaranty from Levan

According to the Debtor, none of the MCA Lenders perfected a security interest in any of its assets, or any such interest was not timely perfected and is subject to avoidance. The Debtor lists these obligations among its unsecured liabilities.

Prepetition Notes

In March and April 2026, the Debtor entered into two note and warrant purchase agreements to fund operations while it sought to resolve litigation brought by Goglia Nutrition, LLC ("Goglia Nutrition").

The first agreement authorized up to $1.5 million of promissory notes bearing 18% annual interest and maturing 180 days after the first closing. It came with warrants to purchase up to 427,866 common shares at an exercise price of $6.35 per share. The Debtor issued only approximately $1.3 million of these notes. The buyers included then-current officers and directors of the Debtor, or their affiliates. According to the Debtor, its disinterested director and disinterested stockholders approved the financing after those relationships were disclosed.

The second agreement was with InterAlpen Partners, LLC, an affiliate of a holder of the Debtor's preferred stock. Under the agreement, the Debtor issued a $300,000 promissory note requiring 14 weekly payments totaling approximately $360,000, together with a seven-year warrant to purchase 142,622 common shares at $6.35 per share.

As of the Petition Date, approximately $1.6 million of principal, accrued interest and other obligations remained outstanding under the two agreements.

The Debtor also owes Attivo Partners LLC approximately $174,000 of principal and accrued interest as of October 31, 2026. This debt is under a note issued in connection with consulting, finance, accounting and administrative services Attivo provided to the Debtor.

Trade and General Unsecured Claims

The Debtor's unsecured liabilities consist mainly of aged accounts payable and other trade and operating obligations. The company estimates its general unsecured claims at approximately $10 million.

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Events Leading to Bankruptcy

The Debtor attributes the Chapter 11 filing to a combination of business, litigation and liquidity challenges. According to the Debtor, these steadily limited its ability to invest in customer acquisition, pay obligations as they came due and obtain the financing needed to benefit from what the Declaration describes as the improved unit economics of its reconfigured business model.

iHeartMedia Advertising Agreement

According to the Debtor, its liquidity problems grew worse after it signed the iHeartMedia advertising agreement in the first quarter of 2025. The Declaration describes the arrangement as failing to produce the expected return. It required more than $4 million of cash payments in the first half of 2025. Converting the remaining balance into the Prepetition Facility at the end of 2025 eased the immediate payment burden but left the Debtor with funded debt.

The Debtor cites the timing of that cash drain as especially damaging. Its business model requires advertising spend to replace lost customers and grow the recurring customer base, and cash used for the iHeartMedia obligations was not available for customer acquisition or other operating needs. The Debtor generated approximately $120 million of GAAP revenue in 2025 but ended the year with approximately $3 million less cash than it started with.

Novo Nordisk Litigation and Shift to FDA-Approved Medications

The Declaration cites operational challenges from a rapidly changing regulatory environment for GLP-1 medications. In addition, the Debtor became involved in litigation with Novo Nordisk A/S and Novo Nordisk Inc. concerning the marketing of compounded semaglutide products. The dispute took significant management attention and professional fees while the Debtor was already considering changes to its business model. The Debtor ultimately resolved the litigation through a consensual settlement. The Declaration attributes the decision to move away from compounded GLP-1 medications partly to that dispute.

In August 2025, the Debtor stopped marketing compounded GLP-1 medications in order to focus on medications approved by the U.S. Food and Drug Administration (FDA). The shift required it to cut marketing spend, which slowed the rate at which it gained new customers. The Debtor then had to fund the move to its new operating model while still investing to replace customers it was losing.

Goglia Nutrition Litigation

On September 17, 2025, Goglia Nutrition, an entity owned in part by the Debtor's founders, sued the Debtor, certain current and former officers and other parties. The case, captioned Goglia Nutrition, LLC v. John Levan et al., is in the U.S. District Court for the Central District of California. The amended complaint asserts claims relating to, among other things:

• the Debtor's formation and operation
• technology, data-license and services agreements that Goglia Nutrition and the Debtor entered into in December 2023
• the Debtor's alleged use of intellectual property, confidential information, customer data and business opportunities that Goglia Nutrition claims as its own

The Debtor incurred significant legal expenses, and approximately $920,000 of disputed revenue was placed in escrow in connection with the dispute. According to the Debtor, the more serious effect was that the pending suit materially impaired its ability to raise new equity or conventional debt financing during 2026. The Debtor had expected the case to be sent to arbitration on a schedule that would let it raise more capital.

On August 20, 2026, however, the district court denied the Debtor's motion to compel arbitration. It also denied other defendants' motions to compel arbitration or judicial reference. The ruling did not decide the merits and allowed the litigation to proceed in the district court. On September 8, 2026, the Debtor filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. The Declaration describes the ruling as substantially reducing the chance that the Debtor could resolve the litigation quickly and raise enough capital to fund operations and pay its obligations outside Chapter 11.

2026 Cost Reductions and Payment Burden

Facing lower revenue and limited access to capital, the Debtor cut non-marketing operating expenses by approximately 42% between January and July 2026. The cuts included two reductions in force and other measures meant to preserve cash while keeping the staff and infrastructure needed to serve existing customers. According to the Debtor, the cuts materially lowered its expense base but could not offset falling revenue.

As conventional financing became harder to obtain, the Debtor turned to the merchant cash agreements. Their estimated weekly payments of approximately $77,000, together with the approximately $200,000 monthly payment owed to iHeartMedia, required total payments of approximately $500,000 per month. The Debtor attributes its growing arrears to vendors and other service providers to declining revenue and these scheduled debt payments.

Advisors and Strategic Alternatives

In March 2025, the Debtor hired Centerview Partners LLC ("Centerview") as financial advisor. Together with its advisors, the Debtor evaluated potential acquisitions, strategic investments and other financing options involving some or all of its business and assets. As its financial condition worsened and an out-of-court solution looked less likely, the Debtor looked for an investment banker with distressed-company experience. That banker would explore restructuring options while continuing the investor outreach Centerview had begun.

After briefly retaining another advisor in September 2026 to help with the marketing and sale process, the Debtor replaced it on September 21, 2026 with Hilco Corporate Finance, LLC ("Hilco") as investment banker. Hilco's mandate covers a possible sale of the business or assets, debtor-in-possession (DIP) financing and other ways to raise capital.

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Chapter 11 Filing

On the Petition Date, FuturHealth filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. Its main goal is a court-supervised sale of some or all of its business and assets. The Debtor will run a dual-track process, evaluating at the same time whether a stand-alone reorganization or another strategic transaction would provide more value.

Sale Process

Before the Petition Date, Hilco ran a marketing process for a sale or reorganization of the Debtor's business and assets, and that process will continue under court supervision. The Debtor plans to expand those efforts by soliciting strategic and financial buyers and continuing talks with interested parties. In parallel, Hilco marketed DIP financing to potential lenders. That effort led to a term sheet with Twelve Bridge Capital, LLC ("Twelve Bridge").

DIP Facility

• Lender and term sheet — Twelve Bridge, under a term sheet dated October 14, 2026 and amended on October 30, 2026 after further negotiations.
• Size — Total commitments of up to $5 million.
• Availability — An initial $1.5 million draw would be available once the interim order is entered. Up to an additional $3.5 million would become available after the final order is entered and a qualified stalking horse asset purchase agreement is signed.
• Fees — The October 30 amendment provides more favorable fees if the Debtor obtains an acceptable binding stalking horse bid within 21 days after the Petition Date.
• Priority and liens — Senior secured superpriority financing, with liens and superpriority administrative expense claims sought under sections 364(c) and 364(d).
• Prepetition lender — iHeartMedia has consented to the priming of its liens, subject to receiving adequate protection.
• Use of proceeds — Maintain operations, pay authorized postpetition obligations, preserve the platform and customer relationships, and continue the marketing process.

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First Day Motions

Because of its limited cash on hand, the Debtor limited its first-day requests to matters it describes as needing urgent relief to preserve value, and deferred other requests to a later hearing. In addition to the DIP motion, the Debtor seeks interim and final orders on the following:

• Cash management — Authority to keep operating its cash management system, honor related prepetition obligations and keep its existing business forms, with banks authorized to honor related payment requests.
• Critical vendors — Authority to pay certain prepetition claims of trade claimants and section 503(b)(9) claims, with banks authorized to process related checks and electronic transfers.
• Taxes — Authority to pay certain prepetition taxes and fees, with banks authorized to honor related payment requests.
• Wages — Authority, but not a requirement, to pay prepetition wages, compensation, employee benefits and other workforce obligations, and to continue certain employee benefit programs in the ordinary course, with banks authorized to honor prepetition checks for those obligations.