The accompanying notes are an integral part of these financial statementsstatements.

Odyssey Group International, Inc.

Notes to Financial Statements

(Unaudited)

Note 1.       Basis of Presentation and Nature of Operations

Basis of Presentation

The accompanying financial information of Odyssey Group International, Inc. as ofis unaudited and for the period ended January 31, 2020, has been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) applicable to interim financial information and is unaudited. Accordingly, certain information normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) has been condensed and/or omitted. Theand pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). However, such information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periodperiods. The financial information as of July 31, 2020 is derived from our 2020 Annual Report on Form 10-K. The financial statements included herein should be read in conjunction with the financial statements and the notes thereto included in our 2020 Annual Report on Form 10-K filed with the SEC on November 16, 2020. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. In

Significant Accounting Policies

Our significant accounting policies have not changed during the opinion of management, the accompanying unaudited interim financial statements contain all necessary adjustments, consisting only ofthree months ended October 31, 2020 from those of a recurring nature, and disclosures to present fairlydisclosed in our financial position and the results of our operations and cash flows for the periods presented. These unaudited interim financial statements should be read in conjunction with the financial statements and the related notes thereto included in ourAnnual Report on Form 10-K for the year ended July 31, 2019, filed with2020.

Reclassifications

Certain immaterial reclassifications were made to the SECprior period financial statements to conform to the current period presentation. There was no effect on October 23,2019, as amended by the filingour Statements of Form 10K/A filed with the SecuritiesOperations and Exchange Commission on November 13, 2020.Comprehensive Loss and Statement of Cash Flows.

1. Nature of Operations

The corporate mission is to create or acquire distinct assets, intellectual property, and technologies with an emphasis on acquisition targets that have clinical utility and will generate positive cash flow. Our business model is to develop or acquire medical related products, engage third parties to manufacture such products and then distribute the products through various distribution channels, including third parties. The Company has made significant investmentsWe have product development projects in three different life savinglife-saving technologies; the CardioMap® heart monitoring and screening device, the Save a Life choking rescue device and a unique neurosteroid drug compound intended to treat rare brain disorders. We intend to acquire other technologies and assets and plan to be a trans-disciplinary product development company involved in the discovery, development and commercialization of products and technologies that may be applied over various medical markets.

We plan to license, improve and/orand develop our products and identify and select distribution channels. We intend to establish agreements with distributors to get products to market quickly, as well as to undertake and engage in our own direct marketing efforts. We will determine the most effective method of distribution for each unique product that we include in our portfolio. We will engage third partythird-party research and development firms who specialize in the creation of our products to assist us in the development of our own products and we will apply for trademarks and patents once we have developed proprietary products.

We are not currently selling or marketing any products, as our products are in late-stage development and Food and Drug Administration ("FDA") clearance or approval to market our products will be required in order to sell in the United States.

Note 2.       Restatement for Correction of an ErrorNew Accounting Pronouncements

The Company has determined thatASU 2019-12

In December 2019, the research and developments costs previously capitalized in the intangible assets should be recognized as research and development expenses to be in compliance with Financial Accounting Standards Board (“FASB”) issued Accounting Standards CodificationUpdate (“ASC”ASU”) Topic 730 Research and Development (ASC 730-10-25-2(c)). Pursuant to ASC 730-10-25-2(c)2019-12, “Income Taxes (Topic 740), intangibles purchased from others” which simplifies the accounting for use in particular research and development projects and that have no alternative future use, in research and development or otherwise, represent costs of research and development as acquired, and therefore are expensed when incurred. In the Affected Reports the Company recorded such development cost as intangible assets.

During the year ended July 31, 2019, the Company acquired and capitalized the following intangible assets. The Company acquired the patent relatedincome taxes by removing certain exceptions to the exclusive licensegeneral principles in Topic 740. The amendments also improve consistent application of and distribution rightssimplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the CardioMap®,amendments is permitted, including adoption in any interim period for which is intendedfinancial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. We do not expect the adoption of ASU 2019-12 to be an advanced technology for early non-invasive testing for heart disease. The license to the patent and product distribution rights were being amortized over the lifehave a material effect on our financial position, results of the underlying patent. The acquisition cost was $18.75 million. The Company acquired the patents for an anti-choking, life-saving medical device from Dr. James De Luca, inventor, and Murdock Capital Partners. The asset was valued at $675,400. The Company acquired an interest in the patented chemical compound for a neurosteroid as part of an agreement with Prevacus, Inc. The acquisition cost of $3.73 million was being amortized over the life of the patent. The intellectual property, know-how and patents were being amortized over the life of the patents.operations or cash flows.

The adjustments required to correct the foregoing treatment of such costs for the three and six months ended January 31, 2020 resulted in a non-cash increase in research & development expense and a decrease of intangible assets of $22,032,061, a decrease in contingent liability of $144,000. For the three and six months ended January 31, 2020 and 2019, general and administrative expense decreased $546,845 and $1,092,510, respectively, due to the reduction in amortization expense related to the intangible assets.

In addition to the restatement of the financial statements, certain information within the following notes to the financial statements have been restated to reflect the correction of a misstatement discussed above as well as to add disclosure language as appropriate:

Note 3. Summary of Significant Accounting Policies

Note 5. Intangible Assets

Note 10. Income Taxes

Note 11. Going Concern

Note 12. Related Party Transactions

The financial statement misstatements reflected in the table below did not impact cash flows from operations, investing, or financing activities in the Company’s statements of cash flows for any period previously presented.

Comparison of restated financial statements to financial statements as previously reported

The following tables compare the Company’s previously issued Balance Sheet, Statement of Operations, Statements of Stockholders’ Equity (Deficiency), and Statement of Cash Flows as of January 31, 2020 and for the three months and six months then ended to the corresponding restated financial statements for that period end.

Odyssey Group International, Inc.

Balance Sheets

(Unaudited)

Odyssey Group International, Inc.

Statements of Operations

(Unaudited)

Odyssey Group International, Inc.

Statements of Stockholders’ Equity (Deficiency)

(Unaudited)

Odyssey Group International, Inc.

Statement of Cash Flows

(Unaudited)

3. Summary of Significant Accounting Policies

Use of estimates

The preparation of financial statements in conformity with GAAP generally requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Basis of accounting

The Company has not elected to adopt the option available under GAAP to measure any of its eligible financial instruments or other items at fair value. Accordingly, the Company measures all of its assets and liabilities on the historical cost basis of accounting unless otherwise required by GAAP.

Accounts receivable

Accounts receivable are carried at their estimated collectible value, net of an appropriate allowance for doubtful accounts, which is adjusted as necessary based primarily on management's evaluation of customers' past credit history and known or estimated current financial condition, the Company's relationship with the customer, current economic conditions, the historical results of, and recent trends in, the Company's collection efforts. The Company manages credit risk by evaluating the credit worthiness of significant customers prior to extending credit and thereafter. Accordingly, accounts receivable and the related allowance are evaluated periodically for collectability.

Property and equipment, net

Property and equipment is stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets. For each the six months ended January 31, 2020, and 2019, the Company recognized depreciation expense of $276.

Beneficial Conversion Feature of convertible notes payable

The Beneficial Conversion Feature ("BCF") of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded upon the occurrence of the event.

The BCF of a convertible note is measured by allocating a portion of the note's proceeds to the warrants, if applicable, and as a reduction of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to additional paid-in-capital. The value of the proceeds received from a convertible note is then allocated between the conversion features and warrants on an allocated fair value basis. The allocated fair value is recorded in the financial statements as a debt discount (premium) from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense.

Net loss per shareASU 2020-06

Basic net loss per share is calculated by dividingIn August 2020, the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. No fully diluted loss per share is presented, because it would be anti-dilutive.

Revenue recognition

The Company recognizes revenue when control is transferred to the customer. For products sold through direct sales representatives, control is transferred upon shipment or upon delivery, based on the contract terms and legal requirements. Payment terms vary depending on the country of sale, type of customer, and type of product. If a contract contains more than one performance obligation, the transaction price is allocated to each performance obligation based on relative standalone selling price. Shipping and handling is treated as a fulfillment activity rather than a promised service, and therefore, is not considered a performance obligation. Taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue producing transaction and collected by the Company from customers (for example, sales, use, value added, and some excise taxes) are not included in revenue. For contracts that have an original duration of one year or less, the Company uses the practical expedient applicable to such contracts and does not adjust the transaction price for the time value of money. We are not currently selling or marketing any products, as our products are in late stage development and FDA clearance to market our products will be required in order to sell in the United States.

Research and development expense

Research and development costs are expensed in the period when incurred. For each the six months ended April 30, 2020, and 2019, the Company recognized research and development expense of $10,000 and zero, respectively.

Income taxes

Income taxes are accounted for based upon an asset and liability approach. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

Accounting guidance requires the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company believes its income tax filing positions and deductions will be sustained upon examination and accordingly, no reserves, or related accruals for interest and penalties have been recorded at January 31, 2020 and 2019. The Company recognizes interest and penalties on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense.

On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the “Tax Reform Law”). The Tax Reform Law, effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in significant changes to existing United States tax law, including various provisions that are expected to impact the Company. The Tax Reform Law reduces the federal corporate tax rate from 34% to 21% effective January 1, 2018. The Company analyzed the provisions of the Tax Reform Law to assess the impact on the Company’s financial statements and determined it had no material impact.

4. Impact of New Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”), in the form of Accounting Standards Updates (“ASUs”), to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs.

The FASB issued ASU 2017-11, Earnings Per Share (Topic 260)2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40),” which simplifies the accounting for convertible instruments, reduces complexity for preparers and practitioners and improves the decision usefulness and relevance of the information provided to financial statement users. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 is effective for annual reporting periodsfiscal years beginning after December 15, 2018. The amendments update the change in the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and interim periods, with early adoption permitted. The Company adopted the standard as of August 1, 2019, which did not have a material impact on the Company’s financial statements and disclosures.

The FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, effective for annual reporting periods beginning after December 15, 2017 adopting this standard on its financial statements. The ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications. It does not change the accounting for modifications. The new guidance will be applied prospectively to awards modified on or after the adoption date. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted the standard as of August 1, 2019, which did not have a material impact on the Company’s financial statements and disclosures.

The FASB issued ASU 2016-02, Leases (Topic 842), which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for annual periods beginning after December 15, 2018,2023, including interim periods within those annual periods, with earlyfiscal years. Early adoption permitted. The Company adoptedis permitted, but no earlier than fiscal years beginning after December 15, 2020. We have not yet determined the impact of adoption this standard ason our financial position, results of August 1, 2019, which did not have a material impact on the Company’s financial statements and disclosures.operations or cash flows.

5. Intangible AssetsNote 3.       Fair Value

FASB ASC 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value. That framework provides aThe fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identicalof financial assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are describeddetermined utilizing a three-level framework as follows:

Level 1 – Observable inputs, such as unadjusted quoted prices in active markets, for substantially identical assets and liabilities.

Level 2 – Observable inputs other than quoted prices within Level 1 for similar assets and liabilities. These include quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.  If the asset or liability has a specified or contractual term, the input must be observable for substantially the full term of the asset or liability. 

Level 3 – Unobservable inputs that are supported by little or no market activity, generally requiring a significant amount of judgment by management. The assets or liabilities fair value measurement level within the fair value hierarchy is based on the lowest level.  

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Further, although the Company believes itswe believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

6. Notes Payable

The Company hasWe did not have any transfers of assets or liabilities measured at fair value on a note payable that is subjectrecurring basis to conversion upon an equity financing inor from Level 1, Level 2 or Level 3 during the Company. As of Januarythree months ended October 31, 2020 or the note has a balance of $783,783, and bears interest at 12.5% per annum. Because the conversion feature does not meet the criteria for characterization as a beneficial conversion feature, no portion of the proceeds from the issuance of the note was accounted for as attributable to the conversion feature. This note was amended on February 1, 2018, where the debt holder agreed to convert portions of its loan pari passu with any new investment raise of $500,000 or more. The Company issued the debt holder a common stock warrant for 4 million shares at $0.25 per share which expired onyear ended July 15, 2018.

As of January 31, 2020, the Company has four additional convertible debt notes outstanding with a balance of $210,783. The notes bear interest at 7.0% annually and the entire outstanding principal amount, together with accrued interest shall become due and payable on the date that is one (1) year from the date of issuance, unless before such date, is converted into shares of capital stock of the Company. At the option of the holder, the principal amount of the notes and any accrued interest may be converted into shares of common stock at a conversion price of $1.00 per share or at a 10% discount to the closing price on the day of conversion, but not lower than $0.50 per share. At maturity, and subject to a trickle out agreement, the Company shall have the right to either pay off the loan and any interest accrued or convert the loan amount and any interest into shares of common stock. The debt holders were issued a common stock warrant equal to 10% of the note with a price of $1.50 per share and a term for one year from the investment date. Because the conversion feature met the criteria for characterization as a beneficial conversion feature, a portion of the proceeds, including warrants, of which $151,491 from the issuance of the notes are accounted for as attributable to the conversion feature.

7. Fair Value Measurements2020.

The carrying values of cash, the note receivable,prepaid expenses, accounts payable and notes payableaccrued wages approximate their estimated fair values becausevalue due to their short maturities.

No changes were made to our valuation techniques during the quarter ended October 31, 2020.

Contingent Liability

At October 31, 2020 and July 31, 2020, we had contingent consideration related to the acquisition of intellectual property, know-how and patents for an anti-choking, life-saving medical device in fiscal 2019. According to the agreement, we will make a one-time cash payment totaling $250,000 upon FDA clearance of the short-term naturedevice. The fair value of these instruments.the contingent consideration is reviewed quarterly and determined based on the current status of the project (Level 3). We determined the value was zero at both periods since it is not yet probable that we will file for FDA clearance.

8. Common Stock Fixed-Rate Debt

We have fixed-rate debt that is reported on our Balance Sheets at carrying value less unamortized debt discount and closing costs. The fair value of our fixed rate debt was calculated using a discounted cash flow methodology with estimated current interest rates based on similar risk profile and duration (Level 2). The carrying value, excluding unamortized debt discount and debt issuance costs, and the fair value of our fixed-rate long-term debt was as follows:

Non-Financial Assets

Non-financial assets, such as Property and equipment and Intangible assets, are measured at fair value on a non-recurring basis when events or circumstances indicate that an impairment may have occurred. If we determine these assets to be impaired, they are reported at fair value as calculated during the period. No non-financial assets were recorded at fair value during the three months ended October 31, 2020 or the fiscal year ended July 31, 2020.

Note 4.       Debt

Labrys

On January 9, 2019, Vivakor, Inc.August 14, 2020, we entered into a Securities Purchase Agreement (the “Labrys SPA”) with Labrys Fund, LP (“Vivakor”Labrys”), pursuant to which Labrys purchased a $350,000 (the “Principal Amount”) gave written noticeSelf-Amortization Promissory Note (the “Note”) for $315,000 in cash with an original issuance discount of approximately 10%. In consideration for entering into the Labrys SPA, we issued 420,000 shares (the “Commitment Shares”) of our common stock with a value of $197,400. 350,000 of the Commitment Shares (the “Second Commitment Shares”) will be returned to us if the Note is fully repaid and satisfied on or prior to August 14, 2021 (the “Maturity Date”). The Note bears interest at 12% per year.

Upon the occurrence of any “Event of Default,” the Note is convertible into shares of our common stock at a price per share equal to the Company effectingclosing bid price of the common stock on the trading day immediately preceding the date of conversion (the “Conversion Price”); provided, however, that Labrys may not convert any portion of the Note which would cause Labrys, collectively with its affiliates, to hold more than 4.99% of our issued and outstanding common stock, unless such limit is waived. Labrys may not execute any short sales on any of our common stock at any time while the Note is outstanding.

The Note requires that we reserve from our authorized and unissued common stock a number of shares equal to the greater of: (a) 1,140,000 shares or (b) the sum of (i) the number of shares of common stock issuable upon conversion of $25,314 of convertible debt into 2,531,400 shares of Common Stock of the Company, issued to Vivakoror otherwise pursuant to the Master Revolving Note datedand such additional shares of common stock, if any, as are issuable on account of interest on the Note pursuant to the Labrys SPA issuable upon the full conversion of the Note (assuming no payment of the principal amount or interest) as of January 4, 2017,any issue date multiplied by (ii) one and amended as of February 1, 2018, by and between the Company and Vivakor.a half. We are subject to penalties for failure to timely deliver shares to Labrys following a conversion request.

The Labrys SPA and the Note contain covenants and restrictions common with this type of debt transaction. Furthermore, we are subject to certain negative covenants under the Labrys SPA and the Note, which we believe are customary for transactions of this type. At October 31, 2020, we were in compliance with all covenants and restrictions.

We paid Alliance Group Partners, LLP (“A.G.P.”) as a placement agent a fee of $25,200 and other closing costs of $6,500 for total closing costs of $31,700 which are being amortized over the one-year life of the Note.

Conversion of Convertible Note Payable

On April 17, 2019, the Company enteredAugust 14, 2020, we converted a Convertible Promissory Note with a face value of $100,000 and accrued interest of $7,000 into an agreement for consulting services to be provided through April 2020. The Company granted the consultant 100,000214,000 shares of our common stock as calculated by the Company’sconversion price of the Convertible Promissory Note of $0.50 per share.

Notes Payable

The following notes payable were outstanding:

Note 5.       Stock-Based Compensation

Stock Options

Stock option activity during the quarter ended October 31, 2020 was as follows:

Restricted Stock Units (“RSUs”)

There was no RSU activity during the quarter ended October 31, 2020. At October 31, 2020, there were unvested RSUs outstanding covering 400,000 shares of our common stock.

Unrecognized Compensation Costs

At October 31, 2020, we had unrecognized stock-based compensation of $5,387, which will be recognized over the weighted average remaining vesting period of 0.25 years.

Note 6.       Net Loss Per Share

Basic and diluted net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Potentially dilutive common stock and common stock equivalents, including stock options, RSUs and warrants are excluded as they would be antidilutive.

The following anti-dilutive securities were excluded from the calculations of diluted net loss per share:

Note 7.       Common Stock Issuances

Conversion of Convertible Note Payable

On May 22, 2019,August 14, 2020, we converted a Convertible Promissory Note with a face value of $100,000 and accrued interest of $7,000 into 214,000 shares of our common stock as calculated by the Companyconversion price of the Convertible Promissory Note of $0.50 per share.

Lincoln Park

On August 14, 2020, we entered into employment agreements for two part-time employees. The Company granteda Purchase Agreement (the “LPC Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”). Upon the employees 10,000 shares eachsatisfaction of the Company’s common stock.

On March 22, 2019, April 17, 2019, June 1, 2019, and July 26, 2019,conditions to our right to commence sales under the Company entered into agreements for consulting services forLPC Purchase Agreement, including the next 12 months. The Company granted the consultants a totalregistration of 305,000 shares of our common stock issuable under the Company’sLPC Purchase Agreement in accordance with the RRA (the “Commencement”) and the date of satisfaction of such conditions the “Commencement Date”), we have the right, in our sole discretion, to sell to LPC up to $10,250,000 in shares of our common stock.

stock, from time to time over a 36-month period. In consideration for entering into the LPC Purchase Agreement, we issued 793,802 shares of our common stock to LPC.

On June 27, 2019, Odyssey enteredUpon entering into the LPC Purchase Agreement, we sold 602,422 shares of our common stock to LPC in an initial purchase for a Definitive Agreement with Prevacus to form a Joint Venture relatingtotal purchase price of $250,000. Thereafter, and subject to the developmentconditions of the LPC Purchase Agreement and RRA, on any business day and subject to certain customary conditions, we may direct LPC to purchase to up to 200,000 shares of our common stock (such purchases, “Regular Purchases”). The amount of a neurosteroid for treating two orphan disorders, ALS and Niemann Picks disease. Prevacus will contribute to the JV, the chemical compound and Odyssey will be responsible for funding the JV through Phase One clinical trials. The JV company will own the patents. Each party will own the JV company equally. In addition to the JV, the two companies have entered into a share exchange agreement whereby Prevacus will receive three million shares of Odyssey common stock and Odyssey will receive one million shares of Prevacus stock. The chemical compound for the neurosteroid being developed has issued patents, and as consideration for the patented compound, Odyssey issued Prevacus two million shares of its common stock. As part of the Agreement, Dr. Jacob Vanlandingham Ph.D., CEO of Prevacus, was issued one million shares of the Company’s common stock. The Company allocated 984,000 shares to the acquisition of the patent and 16,000 shares were allocated to Dr. Vanlandingham as a Director of the Company.

On June 27, 2019, Odyssey entered into a Definitive Agreement with Dr. James De Luca, inventor and Murdock Capital Partners, advisors to De Luca, to acquire the intellectual property, know-how and patents for a life-saving medical device currently in development. The Company acquired intellectual property rights, namely, United States Letters Patent No. 7,559,921, entitled “Device for Removing a Lodged Mass” which issued on July 14, 2009 and which was reissued on June 2, 2015 and received U.S. Reissue Patent No. Re 45,535 and United States Patent Number 8,454,624 also entitled “Device for Removing a Lodged Mass” which was issued on June 4, 2013. As consideration for the patent and intellectual property, the Company granted stock options totaling 600,000 shares of the Company’s stock, vesting on certain milestones. The options will be split between De Luca and MCP. The Company also granted De Luca, 20,000 common shares. A onetime cash payment totaling $250,000 will be paid to De Luca and MCP upon FDA clearance of the product. The payment is recorded as a contingent liability and, based upon an independent valuation of the patents, at January 31, 2020, the payment has a fair market value of $144,000.

On December, 1, 2019, the Company entered into a corporate development, investor relations and advisory agreement. The agreement is for twelve (12) months commencing on December 1, 2019 and provides for a monthly cash fee, provided the Company has sufficient funds to pay. Fees accrue until the Company has $250,000, and then all accrued and earned compensationRegular Purchase may increase up to $30,000 will be paid. Upon mutual agreement, the accrued cash fee may be converted into equity at an agreed upon price per share. In addition, the Company will issue 200,000100,000 shares of common stock 50,000 shares vesting quarterly, beginning December 1, 2019.

9. Stock Based Compensation

We have not adopted any equity compensation plans. We have entered into an individual compensation plan for Mr. Redmond, for which Mr. Redmond has been granted stock options of 15 million shares at $0.25 per share. The options vest upon achievingunder certain circumstances based on the following milestones: 5 million options vest upon each milestone, when the Company obtains revenue of $5 million, $10 million and $15 million. Mr. Redmond cannot sell anymarket price of the abovecommon stock. There are no limits on the price per share that LPC may pay to purchase common stock options for two years fromunder the effectiveLPC Purchase Agreement, provided that LPC’s committed obligation under any Regular Purchase shall not exceed $50,000 unless the median aggregate dollar value of the volume of shares of common stock during the 20 consecutive trading day period ending on the date of the employment agreementapplicable Regular Purchase equals or exceeds $100,000, in which case LPC’s committed obligation under such single Regular Purchase shall not exceed $500,000.

In addition, if we have directed LPC to purchase the full amount of common stock available as a Regular Purchase on a given day, we may direct LPC to purchase additional amounts as “accelerated purchases” and “additional accelerated purchases” as set forth in the LPC Purchase Agreement. The purchase price of shares of our common stock will be based on the then prevailing market prices of such shares at the time of sale. The LPC Purchase Agreement limits our sale of shares of common stock to LPC, and LPC’s purchase or acquisition of common stock from us, to an amount of common stock that, when aggregated with all other shares of our common stock then beneficially owned by LPC would result in LPC having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares of our common stock.

The LPC Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification and termination provisions. LPC has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our common stock. The LPC Purchase Agreement does not limit our ability to raise capital from other sources in our sole discretion; provided, however, that we shall not enter into any “Variable Rate Transaction” as defined in the LPC Purchase Agreement, including the issuance of any floating conversion rate or variable priced equity-like securities, but excluding any “At-the-Market” offering with a registered broker-dealer, until the Company reaches $10 millionlater of (i) the 36-month anniversary of the date of the LPC Purchase Agreement, and (ii) the 36-month anniversary of the Commencement Date (if the Commencement has occurred), in annual revenue, whichever occurs first.either case irrespective of any earlier termination of the LPC Purchase Agreement. The stock option vesting acceleratesLPC Purchase Agreement may be terminated by us at any time and becomesat our discretion without any cost to us.

In connection with the LPC transaction, we engaged A.G.P. as a placement agent to help raise capital. A.G.P. introduced us to LPC, for which we agreed to pay A.G.P. a fee of 8% of the amount of the funds received from LPC, which totaled $20,000 in the quarter ended October 31, 2020. A.G.P. will also receive a fee totaling 8% of any additional funds raised pursuant to the LPC Purchase Agreement.

In addition, and in consideration for the service provided in connection with Labrys and LPC, we granted warrants that were immediately exercisable uponfor a total of 550,000 shares of our common stock at $0.50 per share to A.G.P. and two partners of A.G.P. The warrants had a value of $220,000 and expire August 6, 2024. Of the sale, merger or any$220,000, $91,667 was netted against the LPC equity transaction resulting inand $128,333 was recorded as debt closing costs related to the majority (more than 50%)Labrys transaction and is being amortized over the one-year life of the Company stock being obtained. The Company has not recorded any expense, as we have not determined that it is probable that the milestones will be achieved.note.

On August 15, 2019,The following table sets forth the Company amended its agreement with its financial consultantamount of gross proceeds we would receive from additional sales of our stock to included monthly payments of $5,000 and 200,000 stock options to be granted stock in accordance withLPC under the mutual agreement of the Board’s compensation committee. As of January 31, 2020, the stock options have not been issued.LPC Purchase Agreement at varying purchase prices:

On August 20, 2019, the Company entered into a consulting agreement for research and development associated with the CardioMap®. The consultant will receive monthly payments of $5,000 and 2.0 million stock options, vesting upon certain milestone achievements. As of January 31, 2020, the stock options have not been issued.

On August 28, 2019, Mr. Jeff Conroy joined the Board of Odyssey as an independent director. On September 20, 2019, Mr. Jerry Casey joined the Board of Odyssey as an independent director. On October 23, 2019, Mr. John Gandolfo joined the Board of Odyssey as an independent director and has been elected chair of the audit committee. All Directors are compensated with stock in accordance with the mutual agreement of the Board’s compensation committee. As of January 31, 2020, the Company recognized $1,235,187 in board compensation expense.Note 8.        Related Party Transactions

10. Income TaxesDue to Officers and Executives

The following amounts were due to an officer and an executive and were included in Accounts payable on our Balance Sheets:

We file income tax returns in the U.S. federal jurisdiction and the various states in which we operate. The Company registered with the Franchise Tax Board in the State of California in tax year 2020, but was not required to file a tax return for tax year 2019. The Company’s tax returns are currently not under examination for any year. The Company’s deferred tax assets consist of federal net operating loss carryforwards that expire through the year 2035. The deferred tax assets are net of a 100% valuation allowance as it is more likely than not at this time that the deferred tax assets will not be realized within the carryforward period due to substantial uncertainty as to the Company’s ability to continue as a going concern (Note 11).

The following table reconciles the U.S. federal statutory rateamount of salary due to the Company’s effective tax rate:

The Company’s tax provision (benefit)Mr. Redmond for his services was included in Accrued wages on our Balance Sheets and was as follows:

The Company’s net deferred tax asset as of January 31, 2020 and July 31, 2019 is as follows:

As of January 31, 2020, the Company had $1,244,703 of federal net operating loss carry forwards. These carry forwards, if not used, will begin to expire in 2035. Current or future ownership changes, including issuances of common stock under the terms of the Company’s convertible notes payable may severely limit the future realization of these net operating losses.

The Company provides for a valuation allowance when it is more likely than not that they will not realize a portion of the deferred tax assets. The Company has established a valuation allowance against their net deferred tax asset due to the uncertainty that enough taxable income will be generated in those taxing jurisdictions to utilize the assets. Therefore, they have not reflected any benefit of such deferred tax assets in the accompanying financial statements. The Company’s net deferred tax asset and valuation allowance increased by $88,900 for the six months ended January 31, 2020, related to the current year activity.

The Company has reviewed all income tax positions taken or that are expected to be taken for all open years and determined that their income tax positions are appropriately stated and supported for all open years. The Company is subject to U.S. federal income tax examinations by tax authorities for years after 2019 due to unexpired net operating loss carryforwards originating in and subsequent to that year. The Company may be subject to income tax examinations for the various taxing authorities which vary by jurisdiction.

The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statements of operations. As of January 31, 2020, there were no unrecognized tax benefits, or any tax related interest or penalties.

The Company does not have any examinations ongoing. Tax returns for the years 2014 onwards are subject to federal, state or local examinations.

11.Note 9.       Going Concern

We have adid not recognize any revenues for the year ended July 31, 2020 or the quarter ended October 31, 2020 and we had an accumulated deficit of $26,519,430$29,562,242 as of JanuaryOctober 31, 2020. For the foreseeable future, we expect to experience continuing operating losses and negative cash flows from operations as our management executes our current business plan. The cashoperations. Cash available at JanuaryOctober 31, 2020 of $2,759,$292,756 may not provide enough working capital to meet our current operating expenses through March 12, 2021,December 10, 2021.

The operating deficit indicates substantial doubt about our ability to continue as we continue to accrue overhead expenses. We will needa going concern. Our continued existence depends on the success of our efforts to raise additional capital through a debt financing or equity offeringnecessary to meet our operatingobligations as they come due and to obtain sufficient capital needs.to execute our business plan. We may obtain capital primarily through issuances of debt or equity or entering into collaborative arrangements with corporate partners. There can be no assurance however, that we will be successful in completing additional financing or collaboration transactions or, if financing is available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we may be required to further scale down or perhaps even cease operations.

The issuance of additional equity securities could result in a significant dilution in the equity interests of our fundraising efforts or that additional funds willcurrent stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. Our financial statements do not include adjustments that might result from the outcome of this uncertainty.

Additionally, as the novel coronavirus (“COVID-19”) pandemic continues to severely impact the U.S. and global economy, our business may be impacted in a variety of ways. Political, legal or regulatory actions as a result of the COVID-19 pandemic in jurisdictions where we may plan to manufacture, source or distribute products have created supply disruptions which could affect our plans, and may cause additional supply disruptions or shortages in the future. We cannot currently predict the frequency, duration or scope of these governmental actions and supply disruptions. For example, several countries, including India and China, have increased or instituted new restrictions on acceptable terms, if at all.the export of medical or pharmaceutical products that we distribute or use in our business, including key components or raw materials. Governmental authorities in many countries, including the U.S., are enacting legislative or regulatory changes to address the impact of the pandemic, which may restrict or require changes in our operations, increase our costs, or otherwise adversely affect our operations.

If we are unable to raise additional capital by March 12,December 10, 2021, we will adjust our current business plan. Due to the unknown and volatile nature of the stock price and trading volume of our lackcommon stock, is it is difficult to predict the timing and amount of additional committed capital,availability pursuant to our equity line of credit with LPC (see Note 7. above). Given our recurring losses, negative cash flow, and accumulated deficit, and the impact of COVID-19, there is substantial doubt about the Company’sour ability to continue as a going concern.

12. Related Party TransactionsNote 10. Subsequent Event

On December 4, 2020, our registration statement on S-1 that was filed on November 23, 2020, was declared effective by the Securities and Exchange Commission. The Company has a common officer with Green Energy Alternatives, Inc. As of July 31, 2019,final prospectus was filed on December 8, 2020. The registration statement contains one prospectus which is incorporated by reference into this filing and 2018, Green Energy Alternatives, Inc. held 5.3 millionis available in electronic form through the Securities and Exchange Commission EDGAR system. We have not sold any shares ofunder the Company’s common stock.prospectus.

Due to officers

During the three months ended January 31, 2020, officers of the Company incurred $5,000 in accrued expenses and the amount is included in accounts payable at January 31, 2020.

Accounts Payable

Accrued Compensation

It has been determined that Dr. Vanlandingham is considered a related party due to his affiliation with Prevacus, Inc. as its president and his position on the Board of Directors, as a result of the agreement that was entered into in June 2019. At the time of the agreement and appointment to the Board, he was not a considered a related party. The Company allocated 984,000 shares to the acquisition of the patent and 16,000 shares were allocated to Dr. Vanlandingham as a Director of the Company. His affiliation has been disclosed in filings but not as a related party transaction.

13. Subsequent Events

We have evaluated subsequent events and, except for the transactions described below, there were no other events relative to the financial statements that require additional disclosure.

On February 5, 2020, the Company entered into a consulting agreement with the appointment of Mike Contarino as head of Product Development. Mr. Contarino will receive monthly payments of $2,500 and 50,000 restricted stock units vesting over time.

On February 19, 2020, the Company and Prevacus, Inc. amended the Master Agreement for a Joint Venture and Intellectual Property Purchase Agreement, dated June 26, 2019, to extend the timing of the formation of the Joint Venture to April 19, 2020.

On February 19, 2020, February 26, 2020, March 2, 2020 and March 3, 2020, the Company entered into five convertible note payables for a total of $150,000. The notes bear interest at 7.0% annually and mature automatically. The entire outstanding principal amount, together with accrued interest shall become due and payable on the date that is one (1) year from the date of issuance, unless converted into shares of capital stock of the Company at one dollar ($1.00) per share or at a 10% discount to the market price on the date of conversion, but not less than eighty cents ($0.80) per share. Warrants equal to 10% of the shares purchased were issued to the note holders. The price of the warrant is $1.50 per share and the term is for one year from the investment date.

On February 28, 2020, the Company entered into an agreement with Majic LLC, which specializes in Systems Engineering of medical devices integrating software, hardware, regulatory and manufacturing to ensure consistent quality in high volume production. Majic will implement its Systems Engineering approach to assist Odyssey on both CardioMap and Save a Life choking rescue device, to ensure the products are integrated properly and address all regulatory requirements. The agreement calls for fees to be paid on a time and material basis.

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. We have included important

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 the cautionary statements included in this report, particularly the section titledPart I, Item 1A. “Risk Factors” incorporated by reference herein. in our Annual Report on Form 10-K for the year ended July 31, 2020 (“2020 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 medical related products, engage third parties to manufacture such products and then distribute the products through various distribution channels, including third parties. We have made significant investments in three different life saving technologies: the CardioMap® heart monitoring and screening device; the Save a deficit of $26,519,430 as of January 31, 2020. For the foreseeable future, we expectLife choking rescue device; and a unique neurosteroid drug compound intended to experience continuing operating losses and negative cash flows from operations as our management executes our current business plan. The cash of $2,759 available at January 31, 2020, may not provide enough working capital to meet our current operating expenses through March 12, 2021, as we continue to accrue overhead expenses. We will need to raise additional capital through a debt financing or equity offering to meet our operating and capital needs. There can be no assurance, however, that we will be successful in our fundraising efforts or that additional funds will be available on acceptable terms, if at all.treat rare brain disorders.

If we are unableWe intend to raise additional capital by March 12, 2021, we will adjust our current business plan. Dueacquire other technologies and assets and plan to our lack of additional committed capital, recurring losses, negative cash flow and accumulated deficit, there is substantial doubt about the Company’s ability to continue asbe a going concern.

Restatement for Correction of an Error

The Company has determined that the research and developments costs previously capitalizedtrans-disciplinary product development company involved in the intangible assets shoulddiscovery, development and commercialization of products and technologies that may be recognizedapplied over various medical markets. We intend to license, improve and develop our products and identify and select distribution channels. We intend to establish agreements with distributors to get products to market quickly, as well as to undertake and engage in our own direct marketing efforts. We will determine the most effective method of distribution for each unique product that we include in our portfolio. We intend to engage third-party research and development expensesfirms who specialize in the creation of our products to beassist us in compliance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 730 Researchthe development of our own products We intend to apply for trademarks and Development (ASC 730-10-25-2(c)). Pursuant to ASC 730-10-25-2(c), intangibles purchased from others for use in particular research and development projects and thatpatents once we have no alternative future use, in research and development or otherwise, represent costs of research and development as acquired, and therefore are expensed when incurred. In the Affected Reports the Company recorded such development cost as intangible assets.developed proprietary products.

During the year ended July 31, 2019, the Company acquiredWe are not currently selling or marketing any products. Our products are in late-stage development and capitalized the following intangible assets. The Company acquired the patent relatedFood and Drug Administration ("FDA") clearance or approval to the exclusive license and distribution rights of the CardioMap®, which is intendedmarket our products will be required in order to be an advanced technology for early non-invasive testing for heart disease. The license to the patent and product distribution rights were being amortized over the life of the underlying patent. The acquisition cost was $18.75 million. The Company acquired the patents for an anti-choking, life-saving medical device from Dr. James De Luca, inventor, and Murdock Capital Partners. The asset was valued at $675,400. The Company acquired an interestsell them in the patented chemical compoundUnited States.

Recent Funding

In August 2020, we entered into two funding arrangements.

One with Labrys Fund, LP, which provided us with $315,000 of cash in exchange for a neurosteroid as part$350,000 promissory note and 420,000 shares of an agreement with Prevacus, Inc. The acquisition costour common stock. See Note 4. of $3.73 million was being amortized over the life of the patent.Notes to Financial Statements for additional information.

The adjustments requiredsecond arrangement was with Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to correct the foregoing treatmentwhich Lincoln Park agreed to purchase up to $10,250,000 worth of such costsour common stock over a 36-month period in exchange for the three and six months ended January 31, 2020 resulted in793,802 shares of our common stock with a non-cash increase in research & development expense and a decreasevalue of intangible assets$369,118. Lincoln Park made an initial purchase of $22,032,061, a decrease in contingent liability602,422 shares of $144,000. For the three and six months ended January 31, 2020 and 2019, general and administrative expense decreased $546,845 and $1,092,510, respectively, dueour common stock for $250,000. See Note 7. of Notes to the reduction in amortization expense related to the intangible assets.Financial Statements for additional information.

In additionOn December 4, 2020, our registration statement on Form S-1 that was filed on November 23, 2020, was declared effective by the Securities and Exchange Commission. The final prospectus was filed on December 8, 2020. The registration statement contains one prospectus which is incorporated by reference into this filing and is available in electronic form through the Securities and Exchange Commission EDGAR system. We have not sold any shares under the prospectus.

We intend to use the restatementproceeds from both the Labrys and Lincoln Park agreements for general corporate purposes, including for working capital, capital expenditures and for funding additional preclinical development and potentially future clinical development of the financial statements, certain information within the following notes to the financial statements have been restated to reflect the correction of a misstatement discussed above as well as to add disclosure language as appropriate:our pipeline candidates.

Note 3. Summary of Significant Accounting Policies

Note 5. Intangible Assets

Note 10. Income Taxes

Note 11. Going Concern

Note 12. Related Party Transactions

The financial statement misstatements reflected in the table below did not impact cash flows from operations, investing, or financing activities in the Company’s statements of cash flows for any period previously presented.

Going Concern

Substantial doubt exists as to our ability to continue as a going concern based on the factfacts that we domay not have adequate working capital to finance our day-to-day operations. The Company hasoperations and we do not realizedhave any revenues for the quarters ended Januarysources of revenue. We had an accumulated deficit of $29,562,242 as of October 31, 2020 and 2019. The Company has an operating deficitcash of $26,519,430 as of January 31, 2020. The operating deficit indicates substantial uncertainty about the Company’s ability to continue as a going concern.$292,756. Management’s plans include engaging in further research and development and raising additional capital in the short term to fund such activities through sales of its common stock. Management’s ability to implement its plans and continue as a going concern may be dependent upon raising additional capital. Our continued existence depends on the success of our efforts to raise additional capital necessary to meet our obligations as they come due and to obtain sufficient capital to execute our business plan.

We may obtain capital primarily through issuances of debt or equity or entering into collaborative arrangements with corporate partners. There can be no assurance that we will be successful in completing additional financing or collaboration transactions or, if financing is available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we may be required to further scale down or perhaps even cease the operation of our business. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. Our financial statements do not include adjustments that might result from the outcome of this uncertainty.

CriticalFor the foreseeable future, we expect to experience continuing operating losses and negative cash flows from operations as our management executes our current business plan. The cash of $292,756 available at October 31, 2020, may not provide enough working capital to meet our current operating expenses through December 10, 2021.

If we are unable to raise additional capital by December 10, 2021, we will adjust our current business plan. Due to the unknown and volatile nature of the stock price and trading volume of our common stock, is it is difficult to predict the timing and amount of availability pursuant to our equity line of credit with LPC (see Note 7. of Notes to Financial Statements). Given our recurring losses, negative cash flow, accumulated deficit, and the impact of COVID-19, there is substantial doubt about our ability to continue as a going concern.

Impact of COVID-19

The COVID-19 global pandemic has had an unfavorable impact on our business operations. Mandatory closures of businesses imposed by the federal, state and local governments to control the spread of the virus are disrupting the operations of our management, business and finance teams. In addition, the COVID-19 outbreak has adversely affected the U.S. and global economies and financial markets, which may result in a long-term economic downturn that could negatively affect future performance and our ability to secure additional debt or equity funding. 

Significant Accounting Policies and Use of Estimates

There areDuring the three months ended October 31, 2020, there were no criticalsignificant changes to our significant accounting policies orand estimates reflected in the accompanying financial statements. Reference is made to the Company’s significant (but not critical) accounting policies set forthare described in Note 2 to2. Summary of Significant Accounting Policies included in Part II, Item 8. of our Annual Report on Form 10-K for the accompanying financial statements.year ended July 31, 2020, which was filed with the Securities and Exchange Commission on November 16, 2020.

Results of Operations

The Company doesWe do not currently sell or market any products. The Companyproducts and we did not have any revenue in the three-month periods ended October 31, 2020 or 2019. 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.

For

General and Administrative Expense

Our General and administrative expense includes 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 decrease in General and administrative expense was due to a $918,032 decrease in board and stock expense due to the six monthsvesting of restricted stock units in the 2019 period and a $10,000 decrease research and development expense, offset by a $240,000 increase in financing expense and a $93,061 increase in legal and professional fees related to our agreements with Labrys and Lincoln Park, and a $20,393 increase in payroll expense.

Interest Expense

Interest expense includes interest on debt outstanding, as well as the amortization of unamortized debt issuance costs and debt closing costs. Certain information regarding debt outstanding was as follows:

The increase in interest expense for the three-month period ended JanuaryOctober 31, 2020 compared to the same period of 2019 was due to the increased average debt outstanding and 2019,higher average interest rates due to the Company did not have sales. We are not currently selling or marketing any products,issuance of debt to Labrys in August 2020 as our products arediscussed above, as well as an $82,846 increase in late stage developmentamortization of debt discount and FDA clearance or approval to market our products will be requiredclosing costs and an $18,204 increase in order to sellamortization of beneficial conversion feature, offset in part by the conversion of a $100,000 note payable also in August 2020.

Net Loss

Net loss decreased in the United States.three-month period ended October 31, 2020 compared to the same period of 2019 due to the decrease in General and administrative expense, partially offset by the increase in Interest expense as discussed above.

Costs of Goods Sold

Our cost of goods sold consists primarily of the amounts paid to a third-party manufacturer for the products we purchase for resale.

The Company did not have sales for the six months ended January 31, 2020Liquidity and 2019, and accordingly, there were no cost of goods sold for the respective periods.

Gross Profit and Gross Margin

For the six months ended January 31, 2020 and 2019, the Company had no gross profit or gross margin.

Operating Expenses

Our operating expenses consist primarily of general and administrative expenses, which include salaries, stock-based compensation expense and legal and professional fees associated with the costs for services or employees in finance, accounting, sales, administrative activities and the formation and compliance of a public company. 

Overall operating expenses increased $409,991 or 456.8% and $1,680,308 or 1,181.9%, respectively, in the three and six-month periods ended January 31, 2020 compared to the same periods of 2019. The increase in the three and six-months ended was primarily due to $192,911 or 1,978.6% and $325,018 or 1,566.4%, respectively, increase in legal and professional fees, $184,375 or 100% and $1,235,187 or 100%, respectively, increase board stock expense.

Interest expense

Interest expense was $101,191 and $16,709 for the three months ended January 31, 2020 and 2019, and $195,082 and $33,801 for the six-months ended January 31, 2020 and 2019. The increase in interest expense for the three and six-month periods ended January 31, 2020, is attributed to the increased balance of notes payable due and the amortization of debt discounts.

Net Loss

Net loss increased $494,473 or 464.4% and $1,841,589 or 1,046.6%, respectively, in the three and six-month periods ended January 31, 2020 compared to the same periods of 2019, primarily as a result of the increased in operating and interest expense.

Cash FlowsCapital Resources

The following table sets forth the primary sources and uses of cash and cash equivalents for the quarters ended January 31, 2020 and 2019 as presented below:cash:

Liquidity and Capital Resources

To date, we have financed our operations primarily through debt financing and limited sales of our common stock. In 2018 and 2019, we increased our borrowings on notes payable to fund operations. As of January 31, 2020, and July 31, 2019, the notes have a balance of $994,566 and $784,913, respectively. As of January 31, 2020, we had cash of $2,759. We do not believe that such cash is sufficient to sustain operations through the next 12 months. Therefore, we anticipate that we will need to raise additional capital through debt or equity financings.

The Company has a note payable that is subject to conversion upon an equity financing in the Company. As of January 31, 2020, the note has a balance of $783,783, and bears interest at 12.5% per annum. Because the conversion feature does not meet the criteria for characterization as a beneficial conversion feature, no portion of the proceeds from the issuance of the note was accounted for as attributable to the conversion feature. This note was amended on February 1, 2018, where the debt holder agreed to convert portions of its loan pari passu with any new investment raise of $500,000 or more. The Company issued the debt holder a common stock warrant for 4 million shares at $0.25 per share which expired on July 15, 2018.

As of January 31, 2020, the Company has four additional convertible debt notes outstanding with a balance of $210,783. The notes bear interest at 7.0% annually and the entire outstanding principal amount, together with accrued interest shall become due and payable on the date that is one (1) year from the date of issuance, unless before such date, is converted into shares of capital stock of the Company. At the option of the holder, the principal amount of the notes and any accrued interest may be converted into shares of common stock at a conversion price of $1.00 per share or at a 10% discount to the closing price on the day of conversion, but not lower than $0.50 per share. At maturity, and subject to a trickle out agreement, the Company shall have the right to either pay off the loan and any interest accrued or convert the loan amount and any interest into shares of common stock. The debt holders were issued a common stock warrant equal to 10% of the note with a price of $1.50 per share and a term for one year from the investment date. Because the conversion feature met the criteria for characterization as a beneficial conversion feature, a portion of the proceeds, including warrants, of which $151,491 from the issuance of the notes are accounted for as attributable to the conversion feature.

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, our Companywe may need to suspend the creation of new products until market conditions improve.

Convertible Notes

At October 31, 2020, we had 10 convertible notes outstanding with a total principal balance of $345,000, unamortized debt discount of $145,437 and accrued interest of $13,969. The notes bear interest at 7.0% annually and the entire outstanding principal, together with accrued interest are due between February 19, 2021 and May 8, 2021, unless converted before such date. At the option of the holder, the principal amount of the notes and any accrued interest may be converted into shares of our common stock at a conversion price of $1.00 per share, or at a 10% discount to the closing price on the day of conversion, but not lower than $0.80 per share. At maturity, we have the right to either pay off the notes and any accrued interest or convert the notes and any accrued interest into shares of our common stock.

Conversion of Convertible Note Payable

On August 14, 2020, we provided notice to a noteholder that we elected to convert their Convertible Promissory Note at the conversion price of $0.50 per share as determined in accordance with the terms of the related agreement. Accordingly, the number of shares of our common stock was determined by dividing (i) the sum of the outstanding principal and accrued interest on the Note of $100,000 and $7,000, respectively, by (ii) the conversion price of $0.50 per share, resulting in the issuance of 214,000 shares of our common stock.

Labrys Note Payable

On August 14, 2020, we entered into a Securities Purchase Agreement (the “Labrys SPA”) with Labrys Fund, LP (“Labrys”), pursuant to which Labrys purchased a $350,000 (the “Principal Amount”) Self-Amortization Promissory Note (the “Note”) for $315,000 in cash with an original issuance discount of approximately 10%. In consideration for entering into the Labrys SPA, we issued 420,000 shares (the “Commitment Shares”) of our common stock. 350,000 of the Commitment Shares (the “Second Commitment Shares”) will be returned to us if the Note is fully repaid and satisfied on or prior to August 14, 2021 (the “Maturity Date”). The Note bears interest at 12% per year.

Upon the occurrence of any “Event of Default” as defined in the Note, the Note is convertible into shares of our common stock at a price per share equal to the closing bid price of the common stock on the trading day immediately preceding the date of conversion (the “Conversion Price”); provided, however, that Labrys may not convert any portion of the Note which would cause Labrys, collectively with its affiliates, to hold more than 4.99% of our issued and outstanding common stock, unless such limit is waived. Labrys may not execute any short sales on any of our common stock at any time while the Note is outstanding.

The Note requires that we reserve from our authorized and unissued common stock a number of shares equal to the greater of: (a) 1,140,000 shares or (b) the sum of (i) the number of shares of common stock issuable upon conversion of or otherwise pursuant to the Note and such additional shares of common stock, if any, as are issuable on account of interest on the Note pursuant to the Labrys SPA issuable upon the full conversion of the Note (assuming no payment of the principal amount or interest) as of any issue date multiplied by (ii) one and a half. We are subject to penalties for failure to timely deliver shares to Labrys following a conversion request.

The Labrys SPA and the Note contain covenants and restrictions common with this type of debt transaction. Furthermore, we are subject to certain negative covenants under the Labrys SPA and the Note, which we believe are customary for transactions of this type. At October 31, 2020, we were in compliance with all covenants and restrictions.

In connection with the Labrys transaction, we engaged Alliance Group Partners, LLP (“A.G.P.”) as a placement agent. In exchange for their services, we paid A.G.P. $25,200 in cash and we also paid $6,500 in cash for Labrys’ legal fees in connection with the transaction.

PPP Note

On May 8, 2020, we received loan proceeds in the amount of $50,000 under the Paycheck Protection Program (“PPP”).  The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The unforgiven portion of the PPP loan, if any, is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months.  We used the proceeds for purposes consistent with the PPP and anticipate that this PPP Note will be forgiven.

Stock Sale to Lincoln Park

On August 14, 2020, we entered into a Purchase Agreement (the “LPC Purchase Agreement”) and a Registration Rights Agreement (the “RRA”) with Lincoln Park Capital Fund, LLC (“LPC”). Upon the satisfaction of the conditions to our right to commence sales under the LPC Purchase Agreement, including the registration of shares of Common Stock issuable under the LPC Purchase Agreement in accordance with the RRA (the “Commencement”) and the date of satisfaction of such conditions the “Commencement Date”), we have the right, in our sole discretion, to sell to LPC up to $10,250,000 in shares of our common stock, from time to time over a 36-month period. In consideration for entering into the LPC Purchase Agreement, we issued 793,802 shares to LPC.

On December 4, 2020, our registration statement on Form S-1 that was filed on November 23, 2020, was declared effective by the Securities and Exchange Commission. The final prospectus was filed on December 8, 2020. The registration statement contains one prospectus which is incorporated by reference into this filing and is available in electronic form through the Securities and Exchange Commission EDGAR system. We have not sold any shares under the prospectus.

Upon entering into the LPC Purchase Agreement and RRA, we sold 602,422 shares of our common stock to LPC in an initial purchase for a total purchase price of $250,000. Thereafter, and subject to the conditions of the LPC Purchase Agreement and RRA, on any business day and subject to certain customary conditions, we may direct LPC to purchase to up to 200,000 shares of our common stock (such purchases, “Regular Purchases”). The amount of a Regular Purchase may increase up to 100,000 shares of common stock under certain circumstances based on the market price of the common stock. There are no limits on the price per share that LPC may pay to purchase common stock under the LPC Purchase Agreement, provided that LPC’s committed obligation under any Regular Purchase shall not exceed $50,000 unless the median aggregate dollar value of the volume of shares of common stock during the 20 consecutive trading day period ending on the date of the applicable Regular Purchase equals or exceeds $100,000, in which case LPC’s committed obligation under such single Regular Purchase shall not exceed $500,000.

In addition, if we have directed LPC to purchase the full amount of common stock available as a Regular Purchase on a given day, we may direct LPC to purchase additional amounts as “accelerated purchases” and “additional accelerated purchases” as set forth in the LPC Purchase Agreement. The purchase price of shares of our common stock will be based on the then prevailing market prices of such shares at the time of sale. The LPC Purchase Agreement limits our sale of shares of our common stock to LPC, and LPC’s purchase or acquisition of our common stock, to an amount of common stock that, when aggregated with all other shares of our common stock then beneficially owned by LPC would result in LPC having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares of our common stock.

The LPC Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification and termination provisions. LPC has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock. The LPC Purchase Agreement does not limit the Company’s ability to raise capital from other sources at its sole discretion; provided, however, that we shall not enter into any “Variable Rate Transaction” as defined in the LPC Purchase Agreement, including the issuance of any floating conversion rate or variable priced equity-like securities, but excluding any “At-the-Market” offering with a registered broker-dealer, until the later of (i) the 36-month anniversary of the date of the LPC Purchase Agreement, and (ii) the 36-month anniversary of the Commencement Date (if the Commencement has occurred), in either case irrespective of any earlier termination of the LPC Purchase Agreement. The LPC Purchase Agreement may be terminated by us at any time at our discretion without any cost to us.

In connection with the LPC transaction, we engaged A.G.P. as a placement agent to help raise capital. A.G.P. introduced us to LPC, for which we agreed to pay A.G.P. a fee of 8% of the amount of the funds received from LPC, which totaled $20,000 in the quarter ended October 31, 2020. A.G.P. will also receive a fee totaling 8% of any additional funds raised pursuant to the LPC Purchase Agreement.

In addition, and in consideration for the services provided related to both Labrys and LPC, we granted warrants that were immediately exercisable for a total of 550,000 shares of our common stock at $0.50 per share to A.G.P. and two partners of A.G.P. The warrants had a value of $220,000 and expire August 6, 2024. Of the $220,000, $91,667 was netted against the LPC equity transaction and $128,333 was recorded as debt closing costs related to the Labrys transaction and is being amortized over the one-year life of the note.

Inflation

Inflation generally will cause suppliers to increase their rates. In connection with such rate increases, we may or maydid not be able to increasehave a material impact on our pricing to consumers. Inflation could cause both our investmentbusiness and costresults of goods sold to increase, thereby lowering our return on investment and depressing our gross margins.operations during the periods being reported on.

Off Balance Sheet Arrangements

Our company has noWe do not have any material off balance sheet arrangements.

We are a smaller reporting company and are not required to provide information under this item.

Evaluation of Disclosure Controls and Procedures

Under the supervision andManagement, with the participation of our management, including our principal executive officerthe Company’s Chief Executive Officer and the principal financial officer, we have conducted an evaluation ofChief Accounting Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2020. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as of October 31, 2020, our Chief Executive Officer and Chief Accounting Officer concluded that, as of such date, as a result of the end of the period covered by this report.  Based on that evaluation and considering the material weaknessweaknesses in internal control over financial reporting reportedthat are described below in Item 9A of the AnnualManagement's Report on Form 10-K for the year ended July 31, 2019, the Company’s principal executive officer and principal financial officer, concluded that the Company’sInternal Control Over Financial Reporting, our disclosure controls and procedures were not effective as of January 31, 2020.effective.

As previously reported in our Annual Report on Form 10-K for the fiscal year ended July 31, 20192020 management identified the following material weaknesses in internal control over financial reporting:

Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement segregation of duties control procedures.

LackWe are committed to improving our internal control over financial reporting and (1) will continue to use third-party specialists to address shortfalls in staffing and to assist us with accounting and finance responsibilities; (2) will increase the frequency of Audit Committee: We did not have a functioningindependent reconciliations of significant accounts, which will mitigate the lack of segregation of duties until there are sufficient personnel; and (3) may consider appointing additional outside directors and audit committee resulting in lack of independent oversightmembers in the establishment and monitoring of required internal controls and procedures.future.

In light of the material weakness described above, as of January 31, 2020, prior to the filing of this Form 10-Q for the period ended JanuaryOctober 31, 2020, management determined that key quarterly controls were performed timely and also performed additional procedures, including validating the completeness and accuracy of the underlying data used to support the amounts reported in the quarterly financial statements. These control activities and additional procedures have allowed us to conclude that, notwithstanding the material weaknesses, the financial statements in this Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with United States GAAP.

We are committed to improving the internal controls and will (1) continue to use third party specialists to address shortfallsChanges in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts, which will mitigate the lack of segregation of duties until there are sufficient personnel, and (3) we have formed an audit committee, which is in the process of evaluating our system of internal controls.Internal Control Over Financial Reporting

Except as described above, thereThere have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the six months ended January 31, 2020period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1A. Risk Factors 

Our company is not a partyThere have been no material changes during the three-month period ended October 31, 2020 to any legal proceeding.

An investmentthe risk factors discussed in our common stock is highly speculative, involves a high degree of risk and should be made only by investors who can afford a complete loss. You should carefully considerAnnual Report on Form 10-K for the following risk factors, together with the other information in this report, including our financial statements and the related notes, before you decide to buy our common stock.year ended July 31, 2020. If any of the followingidentified risks actually occurs, thenoccur, our business, financial condition orand results of operations could be materially adversely affected, thesuffer. The trading price of our common stock could decline and you may lose all or part of your investment therein.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors”our common stock. The risks and uncertainties described in our Annual Report on Form 10-K for the year ended July 31, 2019, which factors could materially affect our business, financial condition, liquidity or future results. There have been no material changes to the risk factors described in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended July 31, 2019, as so updated. The risks described in our reports on Forms 10-K and 10-Q2020 are not the only risks facing our company.ones we face. Additional risks and uncertaintiesthat we currently do not currently known to usknow about or that we currently deembelieve to be immaterial may also may materially adversely affectimpair our business financial condition, liquidity, future results or prospects.operations.

An investment in our common stock is highly speculative, involves a high degree of risk and should be made only by investors who can afford a complete loss. You should carefully consider the following risk factors, together with the other information in this report, including our financial statements and the related notes, before you decide to buy our common stock. If any of the following risks actually occurs, then our business, financial condition or results of operations could be materially adversely affected, the trading of our common stock could decline, and you may lose all or part of your investment therein.

Risks Relating to our Business

Our success depends on the viability of our business model, which is unproven and may be unfeasible.

Our revenue and income potential are unproven, and the business model of Odyssey is new. Our new business model is based on a variety of assumptions based on a growing trend in the Health Care Systems in the United States and many other countries, where we are seeing a movement towards preventative medicine that is directly decreasing general health care costs. The CardioMap®, through its screening and predictive values, is a tool that might be implemented in this preventative approach. Considering heart disease-caused deaths are still the number one cause of death and one of the most important health care costs factors, the CardioMap® device has potential value in any medical practice. The CardioMap will require a 510k clearance from the FDA. Once FDA cleared, it could be an ideal device allowing insurance companies to cut costs through early diagnostic and preventative care. These assumptions may not reflect the business and market conditions we actually face. As a result, our operating results could differ materially from those projected under our business model, and our business model may prove to be unprofitable.

The Save a Life choking rescue device is in the concept phase. A prototype will be developed and tested. Currently the device is un-proven for commercial use. Further development is required, and the final product will require 510k clearance from the FDA.

The drug compound being developed by Prevacus under the joint venture with the Company is in early stage animal testing. The drug will require extensive testing and clinical trials before it is commercialized. There is no guarantee that the drug will be approved for commercial use.

Our limited operating history creates substantial uncertainty about future results.

We have limited operating history and operations on which to base expectations regarding our future results and performance. To succeed, we must do most, if not all, of the following:

Our business will suffer if we are unable to accomplish these and other important business objectives. We are uncertain as to when, or whether, we will fully implement our contemplated business plan and strategy or become profitable. See Note 10 of the Notes to the Financial Statements.

We may have difficulty raising additional capital, which could deprive us of the resources necessary to implement our business plan, which would adversely affect our business, results of operation and financial condition.Exhibits

We expect to continue devoting significant capital resources to fund research and development and marketing. In order to support the initiatives envisioned in our business plan, we will need to raise additional funds through the sale of assets, public or private debt or equity financing, collaborative relationships or other arrangements. If our operations expand faster or at a higher rate than currently anticipated, we may require additional capital sooner than we expect. We are unable to provide any assurance or guarantee that additional capital will be available when needed by our company or that such capital will be available under terms acceptable to our company or on a timely basis.

Our ability to raise additional financing depends on many factors beyond our control, including the state of capital markets, the market price of our common stock and the development or prospects for development of competitive products by others. Because our common stock is not listed on a major stock market, many investors may not be willing or allowed to purchase it or may demand steep discounts. If additional funds are raised through the issuance of equity, convertible debt or similar securities of our company, the percentage of ownership of our company by our company’s stockholders will be reduced, our company’s stockholders may experience additional dilution upon conversion, and such securities may have rights or preferences senior to those of our common stock. The preferential rights granted to the providers of such additional financing may include preferential rights to payments of dividends, super voting rights, a liquidation preference, protective provisions preventing certain corporate actions without the consent of the fund providers, or a combination thereof. We are unable to provide any assurance that additional financing will be available on terms favorable to us or at all.

If adequate funds are not available or are not available on acceptable terms, our ability to fund our expansion, take advantage of potential opportunities, would be limited significantly. We will also scale back or delay implementation of research and development of new products. Thus, the unavailability of capital could harm substantially our business, results of operations and financial condition.

The capital requirements necessary to implement our business plan initiatives could pose additional risks to our business and stockholders.

We require additional debt or equity financing to implement our business plan and marketing strategy. Since the terms and availability of such financing depend to a large degree on general economic conditions and third parties over which we have no control, we can give no assurance that we will obtain the needed financing or that we will obtain such financing on attractive terms. In addition, our ability to obtain financing depends on a number of other factors, many of which also are beyond our control, such as interest rates and national and local economic conditions. If the cost of obtaining needed financing is too high or the terms of such financing otherwise are unacceptable in relation to the strategic opportunity we are presented with, then we may decide to forego that opportunity. Additional indebtedness could increase our leverage and make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures. Additional equity financing could result in dilution to our stockholders.

Failure to implement our business strategy could adversely affect our operations.

Our financial position, liquidity and results of operations depend on our management’s ability to execute our business strategy. Key factors involved in the execution of the business strategy include:

Our failure or inability to execute any element of our business strategy could materially adversely affect our financial position, liquidity and results of operations. 

Our inability to attract, train and retain additional qualified personnel may harm our business and impede the implementation of our business strategy.

We need to attract, integrate, motivate and retain a significant number of additional personnel in 2019 and beyond. Competition for these individuals in our industry and geographic region is intense, and we may be unable to attract, assimilate or retain such highly qualified personnel in the future. Our business cannot continue to grow if we are unable to attract such qualified personnel. Our failure to attract and retain highly trained personnel that are essential to our business may limit our growth rate, which would harm our business and impede the implementation of our business strategy.

Our failure to defend the Company from infringement litigation.

The Company could be subject to potential infringement actions. The Company's business is "Patent intensive", requiring the Company to constantly search for patented technologies that are not already used by competitors. Any claims for infringement, with or without merit and whether based on allegations that its technology or its intellectual property claims infringe upon the rights of others, could subject the Company to costly litigation and the diversion of financial and human resources, regardless of the ultimate resolution of the claim. If these claims are successful, the Company may be required to modify its products or services and pay financial damages or to attempt to negotiate with third parties for licensing.

Our inability to maintain sufficient product liability insurance.

The Company may incur product liability for products sold through its distribution chain. Consumers may sue if products sold through its distribution chain or are purchased through the Company-operated websites are defective or injure the user. This type of claim could require the Company to spend significant time and money in litigation or to pay significant damages. At this time the Company carries no product liability insurance. As a result, any legal claims, whether or not successful, could seriously damage its reputation and business.

Our products are subject to substantial federal and state regulations.

The Company's research and development activities and the manufacturing and marketing of the Company's products are subject to the laws, regulations, and guidelines and, in some cases, regulatory approvals of governmental authorities in the United States and other countries in which the products are or will be marketed. Specifically, in the United States, the FDA regulates, among other areas, new medical device approvals, prescription drugs and clinical trials of new products and to establish the proper labeling, safety and efficacy of these products and the accuracy of certain marketing claims.

We anticipate significant growth in our business, and any inability to manage such growth could harm our business.

Our success will depend, in part, on our ability to manage effectively our growth and expansion. We plan to expand our business significantly. Any growth in or expansion of our business is likely to continue to place a significant strain on our management and administrative resources, infrastructure and systems. In order to succeed, we will need to continue to implement management information systems and improve our operating, administrative, financial and accounting systems and controls. We also will need to train new employees and maintain close coordination among our executive, accounting, finance and operations organizations. These processes are time consuming and expensive, will increase management responsibilities and will divert management attention. Our inability or failure to manage our growth and expansion effectively could harm substantially our business and adversely affect our operating results and financial condition.

Our inability to retain and properly insure against the loss of the services of our executive officers and other key personnel may harm our business and impede the implementation of our business strategy.

Our future success depends significantly on the skills and efforts of Joseph Michael Redmond, President, CEO and Director and possibly other key personnel. The loss of the services of any of these individuals could harm our business and operations. In addition, we have not obtained key person life insurance on any of our key employees. If any of our executive officers or key employees left or was seriously injured and unable to work and we were unable to find a qualified replacement and/or to obtain adequate compensation for such loss, we may be unable to manage our business, which could harm our operating results and financial condition.

Our inability to attract, train and retain additional qualified personnel may harm our business and impede the implementation of our business strategy.

Once our business begins to grow, we will need to attract, integrate, motivate and retain a significant number of additional administrative and sales personnel. Competition for these individuals in our industry and geographic region is intense, and we may be unable to attract, assimilate or retain such highly qualified personnel in the future. Our business cannot continue to grow if we are unable to attract such qualified personnel. Our failure to attract and retain highly trained personnel that are essential to our business may limit our growth rate, which would harm our business and impede the implementation of our business strategy.

We may indemnify our directors and officers against liability to us and our stockholders, and such indemnification could increase our operating costs.

Our bylaws allow us to indemnify our directors and officers against claims associated with carrying out the duties of their offices. Our bylaws also allow us to reimburse them for the costs of certain legal defenses. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers or control persons, we have been advised by the SEC that such indemnification is against public policy and is therefore unenforceable.

Since our directors and officers are aware that they may be indemnified for carrying out the duties of their offices, they may be less motivated to meet the standards required by law to properly carry out such duties, which could increase our operating costs. Further, if our directors and officers file a claim against us for indemnification, the associated expenses also could increase our operating costs. 

There are substantial inherent risks in attempting to commercialize newly developed products, and, as a result, we may not be able to successfully develop new products.

The Company plans to conduct research and development of products in the health and wellness field. However, commercial feasibility and acceptance of such product candidates are unknown. Scientific research and development requires significant amounts of capital and takes an extremely long time to reach commercial viability, if at all. During the research and development process, we may experience technological barriers that we may be unable to overcome. Because of these uncertainties, it is possible that some of our future product candidates never will be successfully developed. If we are unable to successfully develop new products, we may be unable to generate new revenue sources or build a sustainable or profitable business.

We will need to achieve commercial acceptance of our products to generate revenues and achieve profitability.

Superior competitive products may be introduced, or customer needs may change, which would diminish or extinguish the uses for our products. We cannot predict when significant commercial market acceptance for our products will develop, if at all, and we cannot reliably estimate the projected size of any such potential market. If markets fail to accept our products, then we may not be able to generate revenues from them. Our revenue growth and achievement of profitability will depend substantially on our ability to introduce new products accepted by customers. If we are unable to cost-effectively achieve acceptance of our products by customers, or if our products do not achieve wide market acceptance, then our business will be materially and adversely affected.

We expect to rely on third parties for the worldwide marketing and distribution of our product candidates, who may not be successful in selling our products.

We currently do not have adequate resources to market and distribute any of our products worldwide and expect to engage third party marketing and distribution companies to perform these tasks. While we believe that distribution partners will be available, we cannot assure you that the distribution partners, if any, will succeed in marketing our products on a global basis. We may not be able to maintain satisfactory arrangements with our marketing and distribution partners, who may not devote adequate resources to selling our products. If this happens, we may not be able to successfully market our products, which would decrease or eliminate our ability to generate revenues.

Our products may be displaced by superior products developed by third parties.

The health and wellness industry is constantly undergoing rapid and significant change. Third parties may succeed in developing or marketing products that are more effective than those developed or marketed by us or that would make our products obsolete or non-competitive. Additionally, researchers could develop new procedures and medications that replace or reduce the use of our products. Accordingly, our success will depend, in part, on our ability to respond quickly to medical and technological changes through the development and introduction of new products. We may not have the resources to do this. If our products become obsolete and our efforts to develop new products do not result in commercially successful products, then our sales and revenues will decline.

We may incur material product liability claims, which could increase our costs and harm our financial condition and operating results.

Our products consist of a device to diagnose heart ailments. Our products could malfunction. As a marketer of a medical device used on the human body, we may be subjected to various product liability claims, including that the products contain defective parts, the products include inadequate instructions as to their uses or the products include inadequate warnings concerning side effects and interactions with other substances. It is possible that widespread product liability claims could increase our costs and adversely affect our revenues and operating income. Moreover, liability claims arising from a serious adverse event may increase our costs through higher insurance premiums and deductibles and may make it more difficult to secure adequate insurance coverage in the future. In addition, our product liability insurance may fail to cover future product liability claims, thereby requiring us to pay substantial monetary damages and adversely affecting our business.

We will rely on third parties to manufacture our products.

The Company does not plan to manufacture our products. Manufacturing will be outsourced to third party manufacturers. There is no assurance that these manufacturers will be successful. It is possible to have manufacturing defects or delays.

Risks Relating to Investors

Our management has broad discretion regarding the use proceeds.

We intend to use the proceeds from any offering for general corporate purposes, including working capital, capital expenditures, product enhancements, product development and regulatory filings to the FDA and to begin initial marketing efforts. In any case, we will have broad discretion over how we use these proceeds.

Investors may experience dilution in the value of the shares of common stock.

We anticipate offering common stock or preferred stock in offerings which could cause further dilution.

If our business is unsuccessful, our stockholders may lose their entire investment.