Odyssey Health, Inc. 10-Q Analysis & Summary – 3/14/2025

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Odyssey Group Intl Inc.

10-Q

Quarterly report

Filing date:

03/14/2025

TLDR:

ELI5:

Odyssey Health is struggling financially, losing money and relying on loans. There’s a big question mark over whether they can stay in business.

Accession #:

0001683168-25-001617

Published on

March 16, 2025

Analyst Summary

Odyssey Health, Inc. is a development-stage company focused on acquiring and developing medical-related products.
The company has not generated any revenue and is experiencing continued operating losses.
The accumulated deficit continues to grow, reflecting ongoing losses, reaching $(62,242,178).
Total assets decreased significantly, primarily due to a decrease in the value of the Oragenics investment.
Total liabilities increased, indicating increased reliance on debt financing.
Research and development expenses decreased to zero, indicating a halt in development activities.
Management acknowledges the company’s dependence on securing additional funding and achieving regulatory approval for its products.
The auditor’s opinion expresses substantial doubt about the company’s ability to continue as a going concern.
Management identified material weaknesses in internal control over financial reporting, including insufficient resources and inadequate segregation of duties.
The company has pledged shares of Oragenics Preferred Stock as collateral for debt, further limiting its financial flexibility.
The current ratio is extremely low at 0.016, indicating significant liquidity issues.
The company’s stock price is $0.01, which is very low.

Opportunities and Risks

Opportunity: Potential for future revenue generation if the company secures additional funding and achieves regulatory approval for its products.
Risk: Dependence on securing additional funding and achieving regulatory approval for its products.
Risk: Auditor’s going concern opinion raises substantial doubt about the company’s ability to continue as a going concern.
Risk: Material weaknesses in internal control over financial reporting.
Risk: Reliance on debt financing, particularly convertible notes, increases financial risk.
Risk: Pledged assets limit financial flexibility.

Potential Implications

Company Performance

Continued operating losses and reliance on debt financing may hinder the company’s ability to fund future development activities.
The auditor’s going concern opinion may make it more difficult for the company to secure additional funding.
Material weaknesses in internal control over financial reporting may lead to errors in financial reporting and increase the risk of fraud.

Stock Price

The company’s precarious financial position and the auditor’s going concern opinion may negatively impact the stock price.
The company’s low stock price of $0.01 may make it difficult to raise additional capital through equity offerings.

Odyssey Health, Inc. – Form 10-Q Analysis – Q2 2025

Executive Summary

This report analyzes Odyssey Health, Inc.’s Form 10-Q for the quarter ended January 31, 2025. The company is a development-stage entity focused on acquiring and developing medical-related products. Key findings include continued operating losses, a significant accumulated deficit, and reliance on debt financing. The company’s auditor has expressed substantial doubt about its ability to continue as a going concern. While operating expenses have decreased, the lack of revenue and dependence on external financing pose significant risks. Overall Assessment: Sell. The company’s financial position is precarious, and its future is highly dependent on securing additional funding and achieving regulatory approval for its products.

Company Overview

Odyssey Health, Inc. is a medical technology company focused on acquiring and developing medical products. The company’s primary focus is on the CardioMap® heart monitoring device and the Save a Life choking rescue device. The company is currently in the development stage and has not generated any revenue. The company’s business model involves engaging third parties for development, clinical trials, and manufacturing, with a plan to license, improve, and distribute products through various channels.

Detailed Analysis

Financial Statement Analysis

Condensed Consolidated Balance Sheets

	January 31, 2025	July 31, 2024	Change
Cash	$7,187	$2,379	$4,808
Total Assets	$266,866	$586,146	-$319,280
Total Liabilities	$6,729,686	$5,919,895	$809,791
Accumulated Deficit	$(62,242,178)	$(61,003,146)	$(1,239,032)
Total Stockholders’ Deficit	$(6,462,820)	$(5,333,749)	$(1,129,071)

Key Observations:

Cash increased slightly, but remains critically low.
Total assets decreased significantly, primarily due to a decrease in the value of the Oragenics investment.
Total liabilities increased, indicating increased reliance on debt financing.
The accumulated deficit continues to grow, reflecting ongoing losses.

Condensed Consolidated Statements of Operations

	Three Months Ended Jan 31, 2025	Three Months Ended Jan 31, 2024	Six Months Ended Jan 31, 2025	Six Months Ended Jan 31, 2024
Research and Development Expense	$0	$42,765	$0	$65,766
Stock-Based Compensation	$36,131	$677,391	$96,618	$1,000,188
General and Administrative Expense	$120,462	$437,274	$639,402	$938,716
Net Income (Loss)	$(220,126)	$13,277,566	$(1,239,032)	$12,739,531

Key Observations:

No revenue was generated in either period.
Research and development expenses decreased to zero, indicating a halt in development activities.
Stock-based compensation and general and administrative expenses decreased, reflecting cost-cutting measures.
The net loss for the six months ended January 31, 2025, was $(1,239,032) compared to a net income of $12,739,531 for the same period in 2024, which was primarily due to a gain on the sale of assets.

Condensed Consolidated Statements of Cash Flows

	Six Months Ended Jan 31, 2025	Six Months Ended Jan 31, 2024
Net Cash Used in Operating Activities	$(295,192)	$(967,442)
Net Cash Provided by Investing Activities	$0	$1,000,000
Net Cash Provided by Financing Activities	$300,000	$96,717
Increase in Cash	$4,808	$129,275

Key Observations:

Operating activities continue to consume cash.
Investing activities provided cash in 2024 due to the sale of assets, but not in 2025.
Financing activities are the primary source of cash, highlighting the company’s reliance on external funding.

Management’s Discussion and Analysis (MD&A) Insights

Management acknowledges the company’s dependence on securing additional funding and achieving regulatory approval for its products.
The MD&A highlights the recent $300,000 promissory note financing.
Management states that they have suspended research and development activities until market conditions improve.

Red Flags and Uncommon Metrics

Going Concern: The auditor’s opinion expresses substantial doubt about the company’s ability to continue as a going concern.
Material Weaknesses in Internal Control: Management identified material weaknesses in internal control over financial reporting, including insufficient resources and inadequate segregation of duties.
Related Party Transactions: Significant amounts are due to officers for unpaid salary and bonus, raising concerns about financial strain.
Reliance on Debt Financing: The company’s reliance on debt financing, particularly convertible notes, increases financial risk.
Pledged Assets: The company has pledged shares of Oragenics Preferred Stock as collateral for debt, further limiting its financial flexibility.

Conclusion and Actionable Insights

Odyssey Health, Inc. faces significant financial challenges. The company’s lack of revenue, growing accumulated deficit, and reliance on debt financing raise serious concerns about its long-term viability. The auditor’s going concern opinion and the identified material weaknesses in internal control further underscore the company’s precarious financial position. While cost-cutting measures have reduced operating expenses, the company’s future hinges on securing additional funding and achieving regulatory approval for its products, which is highly uncertain.

Recommendation: Sell. Investors should avoid or sell their positions in Odyssey Health, Inc. due to the high level of financial risk and uncertainty surrounding the company’s future.

1. Commentary

Odyssey Health Inc. is facing significant financial challenges, as evidenced by its negative profitability and liquidity metrics. While the company experienced a substantial decrease in operating losses for both the three and six months ended January 31, 2025, compared to the same periods in 2024, this was primarily due to the absence of a gain on the sale of assets that boosted the 2024 figures. The company’s ability to meet its short-term obligations is questionable, and its reliance on debt financing continues to be a concern. Further, the company’s stock price is $0.01, which is very low.

2. Financial Ratio and Metric Analysis

Profitability

Gross Profit Margin

Metric: Not applicable as there is no revenue.

Trend: Not applicable as there is no revenue.

Industry: Not applicable as there is no revenue.

Operating Profit Margin

Metric: Three Months Ended January 31, 2025: N/A (Loss from operations: $(156,593)); Three Months Ended January 31, 2024: N/A (Loss from operations: $(1,157,430)); Six Months Ended January 31, 2025: N/A (Loss from operations: $(736,020)); Six Months Ended January 31, 2024: N/A (Loss from operations: $(2,004,670))

Trend: Three Months Ended January 31, 2025: N/A; Six Months Ended January 31, 2025: N/A

Industry: N/A

Net Profit Margin

Metric: Three Months Ended January 31, 2025: N/A (Net loss: $(220,126)); Three Months Ended January 31, 2024: N/A (Net income: $13,277,566); Six Months Ended January 31, 2025: N/A (Net loss: $(1,239,032)); Six Months Ended January 31, 2024: N/A (Net income: $12,739,531)

Trend: Three Months Ended January 31, 2025: N/A; Six Months Ended January 31, 2025: N/A

Industry: N/A

Return on Assets (ROA)

Metric: Calculated using net income (loss) for the six months ended January 31, 2025 and average total assets. ROA = Net Income / Average Total Assets = (-1,239,032) / ((586,146 + 266,866)/2) = -2.91 or -17.36%

Industry: N/A

Return on Equity (ROE)

Metric: Calculated using net income (loss) for the six months ended January 31, 2025 and average total equity. ROE = Net Income / Average Total Equity = (-1,239,032) / (((-5,333,749) + (-6,462,820))/2) = 0.209 or 20.9%

Industry: N/A

Earnings Per Share (EPS) – Basic and Diluted

Metric: Three Months Ended January 31, 2025: Basic $(0.00), Diluted $(0.00); Three Months Ended January 31, 2024: Basic $0.14, Diluted $0.12; Six Months Ended January 31, 2025: Basic $(0.01), Diluted $(0.01); Six Months Ended January 31, 2024: Basic $0.14, Diluted $0.12

Trend: Three Months Ended January 31, 2025: Basic -100%, Diluted -100%; Six Months Ended January 31, 2025: Basic -107%, Diluted -107%

Industry: N/A

Liquidity

Current Ratio

Metric: Current Assets / Current Liabilities. January 31, 2025: 108,361 / 6,729,686 = 0.016; July 31, 2024: 56,943 / 5,919,895 = 0.0096

Trend: (0.016 – 0.0096) / 0.0096 = 66.67%

Industry: A healthy current ratio is generally considered to be between 1.5 and 2.0. This ratio is extremely low, indicating significant liquidity issues.

Quick Ratio (Acid-Test Ratio)

Metric: (Current Assets – Inventory) / Current Liabilities. Assuming no inventory, Quick Ratio = Current Ratio. January 31, 2025: 0.016; July 31, 2024: 0.0096

Trend: 66.67%

Industry: A quick ratio of 1 or higher is generally considered healthy. This ratio is extremely low, indicating significant liquidity issues.

Cash Ratio

Metric: Cash / Current Liabilities. January 31, 2025: 7,187 / 6,729,686 = 0.0011; July 31, 2024: 2,379 / 5,919,895 = 0.0004

Trend: (0.0011 – 0.0004) / 0.0004 = 175%

Industry: This ratio is very low, indicating a very limited ability to cover current liabilities with available cash.

Solvency/Leverage

Debt-to-Equity Ratio

Metric: Total Liabilities / Total Stockholders’ Equity. January 31, 2025: 6,729,686 / (-6,462,820) = -1.04; July 31, 2024: 5,919,895 / (-5,333,749) = -1.11

Trend: (-1.04 – (-1.11)) / (-1.11) = -6.31%

Industry: The negative equity results in a negative ratio, which is not typical. It indicates the company has significant liabilities compared to its equity.

Debt-to-Assets Ratio

Metric: Total Liabilities / Total Assets. January 31, 2025: 6,729,686 / 266,866 = 25.22; July 31, 2024: 5,919,895 / 586,146 = 10.10

Trend: (25.22 – 10.10) / 10.10 = 149.7%

Industry: A high ratio indicates the company has a significant amount of debt relative to its assets, suggesting higher risk.

Interest Coverage Ratio (Times Interest Earned)

Metric: Earnings Before Interest and Taxes (EBIT) / Interest Expense. Three Months Ended January 31, 2025: EBIT = Loss from operations = $(156,593). Interest Coverage Ratio = $(156,593) / $(63,431) = -2.47; Three Months Ended January 31, 2024: EBIT = Loss from operations = $(1,157,430). Interest Coverage Ratio = $(1,157,430) / $(141,601) = -8.17; Six Months Ended January 31, 2025: EBIT = Loss from operations = $(736,020). Interest Coverage Ratio = $(736,020) / $(132,217) = -5.57; Six Months Ended January 31, 2024: EBIT = Loss from operations = $(2,004,670). Interest Coverage Ratio = $(2,004,670) / $(332,462) = -6.03

Trend: Three Months Ended January 31, 2025: N/A; Six Months Ended January 31, 2025: N/A

Industry: A ratio below 1 indicates the company is not generating enough operating income to cover its interest expense. The negative ratio indicates the company is operating at a loss.

Activity/Efficiency

Inventory Turnover

Metric: Not applicable as there is no inventory.

Trend: Not applicable as there is no inventory.

Industry: Not applicable as there is no inventory.

Days Sales Outstanding (DSO)

Metric: Not applicable as there is no revenue.

Trend: Not applicable as there is no revenue.

Industry: Not applicable as there is no revenue.

Days Payable Outstanding (DPO)

Metric: Not applicable as there is no revenue.

Trend: Not applicable as there is no revenue.

Industry: Not applicable as there is no revenue.

Asset Turnover

Metric: Not applicable as there is no revenue.

Trend: Not applicable as there is no revenue.

Industry: Not applicable as there is no revenue.

Valuation

Price-to-Earnings Ratio (P/E)

Metric: Market Cap / Net Income. Market Cap = Shares Outstanding * Stock Price = 96,709,763 * $0.01 = $967,097.63. Estimated Annual Net Loss = $(1,239,032) * 2 = $(2,478,064). P/E Ratio = 967,097.63 / (-2,478,064) = -0.39

Trend: N/A

Industry: A negative P/E ratio is not meaningful and indicates the company is not profitable.

Price-to-Book Ratio (P/B)

Metric: Market Cap / Book Value of Equity. Market Cap = $967,097.63. Book Value of Equity = $(6,462,820). P/B Ratio = 967,097.63 / (-6,462,820) = -0.15

Trend: N/A

Industry: A negative book value of equity results in a negative P/B ratio, which is not typical and indicates financial distress.

Price-to-Sales Ratio (P/S)

Metric: Not applicable as there is no revenue.

Trend: Not applicable as there is no revenue.

Industry: Not applicable as there is no revenue.

Enterprise Value to EBITDA (EV/EBITDA)

Metric: EV = Market Cap + Total Debt – Cash = 967,097.63 + 1,984,667 – 7,187 = 2,944,577.63. EBITDA = Net Income + Interest Expense + Taxes + Depreciation and Amortization. Assuming no taxes and depreciation, EBITDA = (-1,239,032) + 132,217 = -1,106,815. EV/EBITDA = 2,944,577.63 / (-1,106,815) = -2.66

Trend: N/A

Industry: A negative EV/EBITDA ratio is not typical and indicates financial distress.

Growth Rates

Revenue Growth

Metric: Not applicable as there is no revenue.

Trend: Not applicable as there is no revenue.

Industry: Not applicable as there is no revenue.

Net Income Growth

Metric: ((Net Loss 2025 – Net Income 2024) / Net Income 2024) * 100 = ((-1,239,032) – 12,739,531) / 12,739,531 = -110%

Trend: N/A

Industry: N/A

EPS Growth

Metric: ((EPS 2025 – EPS 2024) / EPS 2024) * 100 = ((-0.01) – 0.14) / 0.14 = -107%

Trend: N/A

Industry: N/A

Other Relevant Metrics

Stock-based compensation

Metric: Stock-based compensation expense. Three Months Ended January 31, 2025: $36,131; Three Months Ended January 31, 2024: $67,391; Six Months Ended January 31, 2025: $96,618; Six Months Ended January 31, 2024: $1,000,188

Trend: The decrease in stock-based compensation expense for both the three and six months ended January 31, 2025, compared to the same periods in 2024, suggests a change in the company’s compensation strategy or a reduction in stock-based awards.

Industry: N/A