0001683168-26-001695
SEC filingOdyssey Health, Inc. reported a net loss of $3.6 million for Q2 FY2026, a significant increase from a $0.22 million loss in the prior-year quarter, driven primarily by $2.6 million in financing costs and a $0.42 million loss from changes in derivative liabilities. The company generated no revenue, with operations resulting in a $0.18 million loss. Cash increased to $0.62 million from $0.02 million at the start of the period, supported by $1.2 million in net financing proceeds, while operating activities used $0.57 million. The balance sheet shows a working capital deficit of $10.6 million, with total assets of $0.72 million against current liabilities of $11.3 million, raising substantial doubt about the company's ability to continue as a going concern. Management indicates sufficient working capital to meet expenses through fiscal year-end 2026, contingent on securing additional funding.
Odyssey Health, Inc. reported a net loss attributable to common shareholders of $3.6 million for the three months ended January 31, 2026 (Q2 FY2026), a substantial increase from a net loss of $0.22 million in the same quarter of the prior fiscal year (Q2 FY2025). This $3.38 million deterioration was primarily driven by $2.57 million in financing costs and a $0.42 million loss from the change in fair value of derivative liabilities, items not present in the prior-year period. General and administrative expense increased by 16.2% to $0.18 million, while interest expense rose significantly to $0.41 million from $0.06 million due to higher debt levels. For the six-month period, the net loss was $4.09 million compared to $1.24 million in the prior year. The company continues to generate no revenue, with operations focused on developing medical technologies.
The company does not currently sell or market any products and therefore recognized zero revenue for the periods presented. All product candidates, including the CardioMap heart monitoring device and the Save-A-Life choking rescue device, are in the research and development stage and have not received regulatory clearance or approval for commercial sale. The company's business model involves developing or acquiring medical-related products and engaging third parties for development and manufacturing. A recent development is the Master Technology and Sub-license Agreement with NeuRX Health, Inc. for exclusive worldwide rights to BreastCheck®, a non-invasive test for breast abnormalities, anticipated to close in Q1 2026. However, this has not yet generated revenue.
With zero revenue, gross margin and gross profit metrics are not applicable. The loss from operations was $0.18 million for Q2 FY2026, consistent with general and administrative expenses as there were no cost of goods sold. The operating margin is therefore negative and not meaningfully calculable as a percentage of revenue. The significant increase in net loss was driven by non-operating items: financing costs of $2.57 million (related to day-one costs on debt agreements) and a $0.42 million loss from changes in derivative liabilities. These financing costs represent discounts and fees associated with recent debt financings, particularly with Mast Hill Fund L.P., and are recorded immediately as expense. Interest expense of $0.41 million also contributed to the bottom-line loss.
Net cash used in operating activities was $0.57 million for the six months ended January 31, 2026, an increase from $0.30 million used in the prior-year period. The net loss of $4.09 million was adjusted primarily by adding back $3.08 million in non-cash financing costs. Net cash provided by financing activities was $1.17 million, primarily from net proceeds on notes payable. This resulted in a net increase in cash of $0.60 million, ending the period with $0.62 million in cash. The balance sheet shows total assets of $0.72 million (almost entirely current assets: $0.62 million cash and $0.10 million prepaid expenses) against total current liabilities of $11.32 million, creating a working capital deficit of $10.60 million. Major liabilities include derivative liabilities of $3.94 million, accounts payable and accrued wages of $1.62 million, accounts payable and accrued wages for officers of $1.86 million, and notes payable (net) of $2.17 million. Stockholders' deficit stands at $10.60 million.
Management has expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses, negative cash flows, an accumulated deficit of $66.83 million, and the significant working capital deficit. The company's continued existence depends on raising additional capital through debt or equity issuances or collaborative arrangements. Management believes current working capital is sufficient to meet operating expenses through the end of fiscal 2026, subject to risks and uncertainties. Strategic priorities include closing the BreastCheck® licensing agreement, continuing development of CardioMap and Save-A-Life devices, and seeking FDA clearance for products. Key risk factors include failure to obtain necessary financing, inability to obtain regulatory approvals, dilution from equity issuances, and reliance on a limited number of financing partners like Mast Hill Fund L.P.