10-Q: Odyssey Health Reports Q1 2025 Results Amidst Going Concern Uncertainty

Sentiment:

Quarterly Report 16 December 2024 4:03 PM

Odyssey Health reported a net loss of $1.019 million for the quarter ended October 31, 2024, and faces substantial doubt about its ability to continue as a going concern.

Capital raiseThe company's continued existence depends on the success of its efforts to raise additional capital.The company may obtain capital primarily through issuances of debt or equity or entering into collaborative arrangements with corporate partners.There can be no assurance that the company will be successful in completing additional financing or collaboration transactions.

Worse than expectedThe company's net loss increased significantly compared to the same period last year.The company's cash balance is critically low, raising concerns about its ability to continue operations.The company's investment in Oragenics common stock decreased significantly in value.

Summary

Odyssey Health, Inc. reported its financial results for the first quarter of fiscal year 2025, ending October 31, 2024.
The company experienced a net loss of $1,018,906, which is an increase from the $538,035 loss in the same period last year.
The company's cash balance is $53,865, which is insufficient to cover operating expenses through the second quarter of fiscal year 2025.
There is substantial doubt about the company's ability to continue as a going concern due to recurring losses, negative cash flow, and an accumulated deficit of $62,022,052.
The company is not currently selling or marketing any products, as its products are in development and require FDA clearance or approval.
The company's total assets are $341,045, while total liabilities and stockholders' deficit is also $341,045.
The company's investment in Oragenics common stock is valued at $158,505, down from $529,203 at the end of the previous quarter.

Sentiment

Score: 2

Explanation: The document paints a very negative picture of the company's financial health, with a going concern warning, increasing losses, and a critically low cash balance. The company's future is highly uncertain.

Positives

The company secured a $300,000 promissory note from an accredited investor, providing some short-term funding.
Interest expense decreased by 64% compared to the same period last year, due to lower debt levels.

Negatives

The company's net loss increased significantly to $1,018,906 compared to $538,035 in the same quarter last year.
The company's cash balance is critically low at $53,865, raising concerns about its ability to continue operations.
The company has a substantial accumulated deficit of $62,022,052.
The company's investment in Oragenics common stock decreased significantly in value.
The company is not generating any revenue as its products are still in development.
The company has material weaknesses in internal control over financial reporting.

Risks

The company's ability to continue as a going concern is in substantial doubt due to its financial condition.
The company may be required to scale down or cease operations if it cannot secure additional financing.
The company's reliance on debt and equity financing could lead to dilution of current stockholders' equity.
The company's products are still in development and require FDA clearance or approval, which is not guaranteed.
The company has material weaknesses in internal control over financial reporting, which could impact the reliability of its financial statements.
The company's ability to access capital could be affected by market conditions and the perception of its future earnings.

Future Outlook

The company's future depends on its ability to raise additional capital, secure debt or equity financing, or enter into collaborative arrangements. There is no assurance that the company will be successful in these efforts, and if not, it may be required to scale down or cease operations.

Management Comments

Management believes that the expectations underlying our forward-looking statements are reasonable, but these expectations may prove to be incorrect.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
Management concluded that, as of October 31, 2024, as a result of the material weaknesses in internal control over financial reporting, our disclosure controls and procedures were not effective.

Industry Context

Odyssey Health is operating in the medical device and product development sector, which is characterized by high research and development costs, regulatory hurdles, and the need for significant capital investment. The company's financial struggles are not uncommon for early-stage companies in this industry, particularly those that have not yet achieved commercialization of their products.

Comparison to Industry Standards

Odyssey Health's financial performance is significantly below industry standards for companies with similar business models.
Many comparable companies in the medical device sector have achieved revenue generation and have a more stable financial position.
For example, companies like Masimo or Medtronic, which are established players in the medical device industry, have strong revenue streams and positive cash flows.
Early-stage companies like Odyssey Health often face challenges in securing funding and navigating regulatory approvals, but the level of financial distress reported by Odyssey is more severe than many of its peers.
The company's lack of revenue and high operating losses are not sustainable in the long term, and it needs to secure significant funding or achieve product commercialization to improve its financial position.

Related Party Transactions

The company has related party transactions with officers for reimbursement of expenses and unpaid salary and bonus.
The company has promissory notes payable to officers and directors.

Stakeholder Impact

Shareholders face significant risk of losing their investment due to the company's financial instability.
Employees may be impacted by potential layoffs or reduced compensation if the company scales down operations.
Customers and suppliers may be affected by the company's uncertain future and potential inability to deliver products or services.
Creditors face the risk of not being repaid if the company is unable to continue as a going concern.

Next Steps

The company needs to secure additional financing to continue operations.
The company needs to pursue FDA clearance or approval for its products.
The company needs to improve its internal controls over financial reporting.

Key Dates

Date	Description
2021-12-21	Promissory notes issued to directors and officers.
2022-09-29	Amendment No. 3 to Convertible Promissory Note with LGH Investments, LLC.
2022-11-10	LGH converted $300,000 of their outstanding convertible note into common stock.
2022-12-13	Securities Purchase Agreement with Mast Hill Fund, L.P.
2022-12-29	Amendment No. 4 to Convertible Promissory Note with LGH Investments, LLC.
2023-03-31	Amendment No. 5 to Convertible Promissory Note with LGH Investments, LLC.
2023-06-13	Amendment No. 1 to the Securities Purchase Agreement with Mast Hill Fund, L.P.
2023-07-06	Amendment No. 6 to Convertible Promissory Note with LGH Investments, LLC.
2023-08-07	Mast Hill converted their outstanding warrant for 1,610,390 shares of common stock.
2023-08-28	Odyssey paid LGH $30,000 of principal on their note.
2023-10-19	John Gandolfo converted his promissory note into common stock.
2023-12-15	Odyssey paid LGH $50,000 of principal on their note.
2023-12-30	Amendment No. 7 to Convertible Promissory Note with LGH Investments, LLC.
2024-02-13	Promissory note with Jonathan Lutz.
2024-03-13	Amendment No. 2 to the Securities Purchase Agreement with Mast Hill Fund, L.P.
2024-03-14	Mast Hill converted their outstanding warrant for 1,926,713 shares of common stock.
2024-06-30	Amendment No. 8 to Convertible Promissory Note with LGH Investments, LLC.
2024-07-31	Promissory Note Amendments to extend maturity date to January 31, 2025.
2024-08-14	Promissory note with an accredited investor.
2024-08-22	Odyssey received $300,000 from an accredited investor.
2024-10-29	Amendment No. 3 to the Securities Purchase Agreement with Mast Hill Fund, L.P.
2024-10-31	End of the reporting period for the quarterly results.
2024-12-16	Date of report filing.

Keywords

financial results, going concern, net loss, cash balance, debt financing, equity financing, FDA approval, Oragenics, promissory note, internal control

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