Odyssey Health, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This quarterly report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, included in this report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations underlying our forward-looking statements are reasonable, these expectations may prove to be incorrect, and all of these statements are subject to risks and uncertainties. Therefore, you should not place undue reliance on our forward-looking statements. Many possible events or factors could affect our future financial results and performance and could cause actual results or performance to differ materially from those expressed, including those risks and uncertainties described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended July 31, 2025 (“2025 Annual Report”) and those described from time to time in our future reports filed with the Securities and Exchange Commission (the “SEC”). We believe these risks and uncertainties could cause actual results or events to differ materially from the forward-looking statements that we make. Should one or more of these risks and uncertainties materialize, or should underlying assumptions, projections or expectations prove incorrect, actual results, performance or financial condition may vary materially and adversely from those anticipated, estimated or expected. Our forward-looking statements do not reflect the potential impact of future acquisitions, mergers, dispositions, joint ventures or investments that we may make. We do not assume any obligation to update any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law. In the light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. Overview Our business model is to develop or acquire unique medical-related products, engage third parties to develop and manufacture such products and then distribute the products through various distribution channels, including third parties. We have two different technologies in the research and development stage; the CardioMap heart monitoring and screening device, and the Save-A-Life choking rescue device. To date, none of our product candidates have received regulatory clearance or approval for commercial sale. Upon receiving adequate funding, we plan to license and develop our products and identify other product potentials we can develop or acquire. We will then engage third-party research and development firms that specialize in creating products to assist us, and we will apply for trademarks and patents at appropriate product development advances. Recent Funding $100,000 Promissory Note On October 3, 2025, we entered into a $100,000 promissory note with an effective date of October 1, 2025, with Peter D’Arruda, a non-affiliated accredited investor. The $100,000 was received October 3, 2025. The note has a one-year maturity, becoming due on September 30, 2026, and bears interest at the rate of 18% per annum. In addition, we issued the investor an immediately exercisable warrant to purchase 100,000 shares of our common stock at $0.10 per share that expires September 30, 2030. 17 Mast Hill Fund L.P. August 27, 2025 Securities Purchase Agreement On August 27, 2025, we received net proceeds of $190,500 pursuant to a Securities Purchase Agreement with Mast Hill. See Note 5 of Notes to Condensed Consolidated Financial Statements for additional information. November 13, 2025 Securities Purchase Agreement Tranche On November 13, 2025, we entered into the first tranche of the November 13, 2025, Securities Purchase Agreement with Mast Hill and received net proceeds of $437,500. See Note 5 of Notes to Condensed Consolidated Financial Statements for additional information. December 31, 2025 Securities Purchase Agreement Tranche On December 31, 2025, we entered into the second tranche of the November 13, 2025, Securities Purchase Agreement with Mast Hill and received net proceeds of $437,500. See Note 5 of Notes to Condensed Consolidated Financial Statements for additional information. Going Concern See Note 1 of Notes to Condensed Consolidated Financial Statements. Significant Accounting Policies and Use of Estimates Other than as described in Note 1 of Notes to Condensed Consolidated Financial Statements, during the six months ended January 31, 2026, there were no significant changes to our significant accounting policies and estimates as described in Note 2. Summary of Significant Accounting Policies included in Part II, Item 8. of our Annual Report on Form 10-K for the year ended July 31, 2025, which was filed with the SEC on October 29, 2025. Results of Operations We provide maintenance and related services for a commercial facility pursuant to our Maintenance Agreement with Mast Hill Fund, L.P. beginning November 13, 2025 and ending on the first business day of February 2034. In exchange, Mast Hill pays us service fees which currently total $245,000 per year. We do not currently sell or market any products. We will commence actively marketing products after the products and drugs in development have been FDA cleared or approved, but there can be no assurance, however, that we will be successful in obtaining FDA clearance or approval for our products. Three Months Ended January 31, $ % 2026 2025 Change Change General and administrative expense $ 181,942 $ 156,593 $ 25,349 16.2% Loss from operations (181,942 ) (156,593 ) (25,349 ) 16.2% Interest expense (412,429 ) (63,431 ) (348,998 ) 550.2% Financing costs (2,572,655 ) – (2,572,655 ) 100.0% Change in fair value of derivative liabilities (424,348 ) – (424,348 ) 100.0% Other expense, net (10,249 ) (102 ) (10,147 ) 9,948.0% Net loss and comprehensive loss $ (3,601,623 ) $ (220,126 ) $ (3,381,497 ) 1,536.2% Basic net loss per share $ (0.03 ) $ (0.00 ) $ (0.03 ) nm Diluted loss per share $ (0.03 ) $ (0.00 ) $ (0.03 ) nm nm: Not meaningful 18 Six Months Ended January 31, $ % 2026 2025 Change Change General and administrative expense $ 485,132 $ 736,020 $ (250,888 ) -34.1% Loss from operations (485,132 ) (736,020 ) 250,888 -34.1% Loss from change in fair value of Oragenics, Inc. common stock – (370,698 ) 370,698 -100.0% Interest expense (507,765 ) (132,217 ) (375,548 ) 284.0% Financing costs (3,080,023 ) – (3,080,023 ) 100.0% Change in fair value of derivative liabilities (1,929 ) – (1,929 ) 100.0% Other expense, net (10,221 ) (97 ) (124 ) 10,437.1% Net loss and comprehensive loss $ (4,085,070 ) $ (1,239,032 ) $ (2,846,038 ) 229.7% Basic net loss per share $ (0.04 ) $ (0.01 ) $ (0.03 ) nm Diluted loss per share $ (0.04 ) $ (0.01 ) $ (0.03 ) nm nm: Not meaningful General and Administrative Expense General and administrative expense includes expenses related to salaries and related benefits for employees in finance, accounting, sales, administrative, and research and development activities, as well as stock-based compensation, costs related to maintaining compliance as a public company, and legal and professional fees. The changes in General and administrative expense were due to the following: Three months ended January 31, 2026 compared to three months ended January 31, 2025 Six months ended January 31, 2026 compared to six months ended January 31, 2025 Increase (decrease) in: Public company expense $ 2,544 $ (196,466 ) Wages 3,559 (112,485 ) Stock-based compensation (36,131 ) (96,618 ) Business development and investor relations 61,500 191,500 Legal and professional fees (7,098 ) (14,652 ) Insurance (1,222 ) (5,607 ) Other 2,197 (16,560 ) $ 25,349 $ (250,888 ) The decrease in public company expense for the six months ended January 31, 2026 was due to lower securities filing activity. The increase in wages for the three months ended January 31, 2026 was due to wages paid to our officers. The decrease in wages for the six months ended January 31, 2026, was due to a voluntary decrease in executive salaries. The decreases in stock-based compensation were due to no stock-based compensation in the three and six months of fiscal 2026 due to no equity awards being granted and no unrecognized stock-based compensation. The decreases were offset by increases in business development and investor relations expense primarily related to our agreement with NeuRX Health, Inc. and associated investor relations outreach. See Note 3 of Notes to Condensed Consolidated Financial Statements. 19 Interest Expense Interest expense includes interest on debt outstanding, as well as the amortization of debt discount and debt issuance costs. Certain information regarding debt outstanding was as follows: Three Months Ended January 31, Six Months Ended January 31, 2026 2025 2026 2025 Weighted average debt outstanding $ 4,674,741 $ 1,902,147 $ 3,404,160 $ 1,829,421 Weighted average interest rate 10.3% 10.4% 9.5% 10.8% Loss from Change in Fair Value of Oragenics, Inc. Common Stock Loss from change in fair value of Oragenics, Inc. common stock in the prior year period related to the value of the common stock of Oragenics that was held by us as an investment. All shares were sold during fiscal 2025. Financing Costs Financing costs in the fiscal 2026 periods included the following: Six Months Ended January 31, 2026 Balance at July 31, 2025 $ – August 27, 2025 Mast Hill Securities Purchase Agreement 507,368 Balance at October 31, 2025 507,368 November 13, 2025 Mast Hill Maintenance SPA Convertible Promissory Note 2,242,625 November 13, 2025 Mast Hill SPA Tranche 137,410 December 31, 2025 Mast Hill SPA Tranche 192,620 Balance at January 31, 2026 $ 3,080,023 Change in Fair Value of Derivative Liability Change in fair value of derivative liabilities in the fiscal 2026 periods relates to the value of the variable conversion feature embedded in our August 27, 2025 SPA and November 13, 2025 SPA with Mast Hill. See Notes 4 and 5 of Notes to Condensed Consolidated Financial Statements for additional information. Liquidity and Capital Resources See Recent Funding above for a discussion of our recent financings. The following table sets forth the primary sources and uses of cash: Six Months Ended January 31, 2026 2025 Net cash used in operating activities $ (568,257 ) $ (295,192 ) Net cash provided by financing activities 1,165,500 300,000 To date, we have financed our operations primarily through debt financing and limited sales of our common stock. Our ability to continue to access capital could be affected adversely by various factors, including general market and other economic conditions, interest rates, the perception of our potential future earnings and cash distributions, any unwillingness on the part of lenders to make loans to us, and any deterioration in the financial position of lenders that might make them unable to meet their obligations to us. If these conditions continue and we cannot raise funds through a public or private debt financing, or an equity offering, our ability to grow our business may be negatively affected. In such case, we would suspend research and development activities until market conditions improve. 20 Debt The following notes payable were outstanding: January 31, July 31, 2026 2025 Convertible notes payable, officers and directors $ 100,000 $ 100,000 Notes payable 400,000 300,000 Unamortized debt discount (4,191 ) (512 ) Notes payable, net 395,809 299,488 Convertible notes payable 4,892,247 1,584,667 Unamortized debt discount (3,118,556 ) – Convertible notes payable, net 1,773,691 1,584,667 Total notes payable 5,392,247 1,984,667 Unamortized debt discount (3,122,747 ) (512 ) Total notes payable outstanding, net $ 2,269,500 $ 1,984,155 Inflation Inflation did not have a material impact on our business and results of operations during the periods being reported on. Off Balance Sheet Arrangements We do not have any material off balance sheet arrangements. Item 3. Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company and are not required to provide information under this item.