Helio Corp's Q1 Revenue Plunges 65%, Net Loss Widens 306%

Ticker: HLEO · Form: 10-Q · Filed: Mar 30, 2026 · CIK: 0001953988

Sentiment: bearish

Topics: Aerospace, Financial Distress, Going Concern, Revenue Decline, Net Loss, Debt Financing, Dilution

TL;DR

**HLEO is burning cash at an alarming rate with revenue in freefall; avoid this stock until they prove a viable path to profitability and secure long-term funding.**

AI Summary

Helio Corp (HLEO) reported a significant decline in revenue and a substantial increase in net loss for the three months ended January 31, 2026. Total revenue plummeted by 65.3% to $495,550 from $1,427,576 in the prior year, driven by sharp decreases across service fees, engineering fees, and materials. The net loss widened dramatically to $(3,733,728) from $(919,142) in the same period last year, representing a 306.2% increase. This was primarily due to a 305.8% surge in general and administrative expenses to $2,592,256, a new loss on debt extinguishment of $(643,880), and a change in fair value of derivative liability of $(188,792). The company's cash position improved to $282,061 from $7,305 at October 31, 2025, largely due to financing activities, including $559,762 from convertible notes payable. However, HLEO faces substantial doubt about its ability to continue as a going concern, citing historical negative cash flows and recurring net losses, and is actively seeking additional financing.

Why It Matters

Helio Corp's severe revenue contraction and escalating net losses signal deep operational challenges and raise significant red flags for investors. The company's 'going concern' warning, coupled with substantial related-party debt and high-interest notes, indicates a precarious financial position that could lead to further dilution or even bankruptcy. Competitors in the aerospace technology sector, such as established defense contractors or well-funded private space companies, may capitalize on HLEO's struggles. Employees face job insecurity, and customers, including NASA, might reconsider future contracts given the financial instability. The broader market will watch if HLEO can secure critical bridge financing to avoid collapse.

Risk Assessment

Risk Level: high — Helio Corp explicitly states "substantial doubt about the Company's ability to continue as a going concern for one year from the issuance of the condensed consolidated financial statements." This is evidenced by a net loss of $(3,733,728) for the three months ended January 31, 2026, and historical negative cash flows from operations, which were $(290,619) for the current quarter.

Analyst Insight

Investors should exercise extreme caution and consider divesting any existing positions in HLEO. The company's severe financial distress, including a significant net loss and going concern warning, suggests high risk. Wait for concrete evidence of successful, non-dilutive long-term financing and a clear path to profitability before considering any investment.

Financial Highlights

debt To Equity
N/A
revenue
$495,550
operating Margin
N/A
total Assets
$1,141,800
total Debt
$5,028,519
net Income
$(3,733,728)
eps
N/A
gross Margin
50.6%
cash Position
$282,061
revenue Growth
-65.3%

Revenue Breakdown

SegmentRevenueGrowth
Service fees$441,595-41.9%
Engineering fees$14,421-90.7%
Materials$39,534-92.3%

Key Numbers

Key Players & Entities

FAQ

What were Helio Corp's key financial results for the quarter ended January 31, 2026?

Helio Corp reported total revenue of $495,550 for the three months ended January 31, 2026, a significant decrease from $1,427,576 in the prior year. The company's net loss widened substantially to $(3,733,728) compared to $(919,142) in the same period last year.

Why did Helio Corp's net loss increase so dramatically?

The dramatic increase in net loss was primarily driven by a 305.8% surge in general and administrative expenses to $2,592,256, a new loss on debt extinguishment of $(643,880), and a change in fair value of derivative liability of $(188,792) for the three months ended January 31, 2026.

What is Helio Corp's current liquidity situation?

Helio Corp's cash balance improved to $282,061 as of January 31, 2026, from $7,305 at October 31, 2025, largely due to $559,762 in proceeds from convertible notes payable. However, the company has historically experienced negative cash flows from operations and recurring net losses, leading to substantial doubt about its ability to continue as a going concern.

What are the primary risks facing Helio Corp according to the 10-Q filing?

The primary risk is the company's ability to continue as a going concern, explicitly stated due to historical and expected operating losses and net operating cash flow deficits. Additionally, Helio Corp has significant outstanding debt, including $558,178 in related-party notes with $200,000 in default, and notes payable to unrelated parties with interest rates up to 50.00%.

How has Helio Corp's common stock changed recently?

As of January 31, 2026, Helio Corp had 23,182,425 shares of common stock issued and outstanding, a significant increase from 11,371,966 shares as of October 31, 2025. This increase was partly due to the conversion of notes payable and accrued interest into common stock, totaling $1,701,646.

What is Helio Corp's business and what services does its subsidiary Heliospace provide?

Helio Corp is an aerospace technology, engineering, and R&D holding company. Its wholly-owned subsidiary, Heliospace Corporation, specializes in the design, engineering, assembly, and testing of space flight qualified hardware, providing systems engineering, modeling, analysis, integration, and test services for space missions, including work for NASA and the Mars Sample Return program.

Is Helio Corp actively seeking additional financing?

Yes, Helio Corp is currently engaged in negotiations with prospective lenders for potential bridge financing arrangements and potential investors for the purchase of convertible notes or equity investments. The company expects to use these funds to repay outstanding promissory notes and support operational initiatives.

What was the impact of the change in fair value of derivative liability on Helio Corp's financials?

For the three months ended January 31, 2026, Helio Corp recognized a $(188,792) change in the fair value of derivative liability, which contributed to the overall increase in total other expense and consequently, the net loss.

What is the status of Helio Corp's debt to related parties?

As of January 31, 2026, Helio Corp has outstanding unsecured notes to certain related parties totaling $558,178. Of this amount, $358,178 is non-interest bearing and due on demand, while $200,000 is interest-bearing at 9.75% per annum and is currently in default.

How does Helio Corp's current financial performance compare to the previous year?

Helio Corp's financial performance significantly deteriorated compared to the previous year. Revenue decreased by 65.3% from $1,427,576 to $495,550, and the net loss increased by 306.2% from $(919,142) to $(3,733,728) for the three months ended January 31, 2026, compared to the same period in 2025.

Risk Factors

Industry Context

Helio Corp operates in a sector likely involving technology or specialized services, given the revenue breakdown. The current market environment appears challenging, as evidenced by the company's severe revenue decline and increased losses. Competitors may be better capitalized or have more resilient business models, leading to Helio Corp's struggles.

Regulatory Implications

The company's disclosure of substantial doubt about its going concern status is a critical regulatory requirement. Failure to secure financing or improve financial performance could lead to further regulatory scrutiny or delisting if it cannot meet exchange requirements.

What Investors Should Do

  1. Monitor financing efforts closely.
  2. Assess the sustainability of operational improvements.
  3. Evaluate the impact of potential dilution.
  4. Consider the high-risk profile.

Key Dates

Glossary

Going Concern
An accounting assumption that a company will continue to operate for the foreseeable future. If there is substantial doubt about this, it must be disclosed. (Helio Corp faces substantial doubt about its ability to continue as a going concern, highlighting significant financial distress.)
Loss on Debt Extinguishment
A loss recognized when a company repays or retires debt before its scheduled maturity date, often involving fees or penalties. (This new expense of $(643,880) significantly contributed to the increased net loss for the period.)
Fair Value of Derivative Liability
The estimated market price of a derivative instrument (like an option or future contract) that represents a liability for the company. (A change in fair value of $(188,792) negatively impacted net income, indicating unfavorable movements in derivative positions.)
Convertible Notes Payable
Debt instruments that can be converted into shares of the issuing company's stock under certain conditions. (Proceeds of $559,762 from these notes were a key source of cash, but also represent potential future dilution.)
Shareholders' Deficit
Occurs when a company's total liabilities exceed its total assets, resulting in a negative equity position. (Helio Corp has a substantial shareholders' deficit of $(3,886,719), indicating that liabilities outweigh assets.)
Dilution
The reduction in the ownership percentage of a stock that results from the issuance of new shares. (The significant increase in shares outstanding (23,182,425 from 11,371,966) indicates substantial dilution for existing shareholders.)

Year-Over-Year Comparison

Compared to the prior year period, Helio Corp has experienced a severe downturn. Total revenue has plummeted by 65.3%, while net loss has widened by 306.2% to $(3,733,728). This is largely driven by a 305.8% increase in general and administrative expenses and new charges like debt extinguishment. While cash has increased due to financing, the core operations remain unprofitable and cash-consuming, with operating cash flow remaining negative.

Filing Stats: 4,375 words · 18 min read · ~15 pages · Grade level 16.9 · Accepted 2026-03-30 07:06:29

Filing Documents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION 1

Financial Statements

Item 1. Financial Statements 1

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 2

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 11

Controls and Procedures

Item 4. Controls and Procedures 11

—OTHER INFORMATION

PART II—OTHER INFORMATION 13

Legal Proceedings

Item 1. Legal Proceedings 13

Risk Factors

Item 1A. Risk Factors 13

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 13

Other Information

Item 5. Other Information 13

Exhibits

Item 6. Exhibits 16

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS The following unaudited interim condensed consolidated financial statements of Helio Corporation (referred to herein as the "Company,") are included in this Quarterly Report on Form 10-Q (the "Quarterly Report"). The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (the "SEC"), In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. 1 Helio Corporation

Financial Statements for the Three Months Ended

Financial Statements for the Three Months Ended January 31, 2026 Index to the Condensed Consolidated Financial Page No. Condensed Consolidated Balance Sheets at January 31, 2026 (Unaudited) and October 31, 2025 F-2 Condensed Consolidated Statements of Operations for the three months ended January 31, 2026 and 2025 (Unaudited) F-3 Condensed Consolidated Statements of Changes in Shareholders' Deficit for the three months ended January 31, 2026 and 2025 (Unaudited) F-4 Condensed Consolidated Statements of Cash Flows for the three months ended January 31, 2026 and 2025 (Unaudited) F-5 Notes to Condensed Consolidated Financial Statements (Unaudited) F-6 F-1 HELIO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS January 31, October 31, 2026 2025 (Unaudited) (Audited) Assets Current Assets: Cash $ 282,061 $ 7,305 Accounts receivable, net 182,378 489,426 Prepaid expenses and other current assets 57,534 102,143 Total Current Assets 521,973 598,874 Property and equipment, net 59,060 64,726 Security deposits 76,655 76,655 Right-of-use lease asset, net 484,112 566,361 Total Non-current Assets 619,827 707,742 TOTAL ASSETS $ 1,141,800 $ 1,306,616 Liabilities and Shareholders' (Deficit) Equity LIABILITIES Current Liabilities: Accounts payable and accrued expenses $ 284,574 $ 273,936 Accrued compensation 878,175 930,555 Notes Payable - Related Parties 558,178 841,613 Notes payable 1,627,432 1,737,034 Convertible notes payable, net 481,517 197,798 Derivative liability 498,690 39,543 Operating lease obligations, current 441,204 477,956 Total Current Liabilities 4,769,770 4,498,435 Notes payable - Related Parties, less current portion - 495,000 Notes payable, less current portion 100,000 150,000 Operating lease obligations, less current portion 158,749 223,319 Total Non-current Liabilities 258,749 868,319 Total Liabilities 5,028

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