Forward-looking Statements
Except for statements of historical fact, the information presented herein
constitutes forward-looking statements. These forward-looking statements
generally can be identified by phrases such as "anticipates," "believes,"
"estimates," "expects," "forecasts," "foresees," "intends," "plans," or other
words of similar import. Similarly, statements herein that describe our
business strategy, outlook, objectives, plans, intentions or goals also are
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited to, our
ability to: successfully commercialize our technology; generate revenues and
achieve profitability in an intensely competitive industry; compete in products
and prices with substantially larger and better capitalized competitors; secure,
maintain and enforce a strong intellectual property portfolio; attract
additional capital sufficient to finance our working capital requirements, as
well as any investment of plant, property and equipment; develop a sales and
marketing infrastructure; identify and maintain relationships with third party
suppliers who can provide us a reliable source of raw materials; acquire,
develop, or identify for our own use, a manufacturing capability; attract and
retain talented individuals; continue operations during periods of uncertain
general economic or market conditions, and; other events, factors and risks
previously and from time to time disclosed in our filings with the Securities
and Exchange Commission, including, specifically, the "Risk Factors" enumerated
herein. Although we believe the expectations reflected in our forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. You should not place undue reliance on
our forward-looking statements, which speak only as of the date of this report.
Except as required by law, we do not undertake to update or revise any
forward-looking statement, whether as a result of new information, future events
or otherwise.
Overview
We were incorporated in the State of Nevada on June 6, 2007. On August 2, 2010,
we changed our name from Bella Viaggio, Inc. to Kat Gold Holdings
Corp. Effective January 1, 2015, we completed an exchange agreement to purchase
100% of the outstanding interests of REMSleep LLC in exchange for 50,000,000
common shares of REMSleep Holdings, Inc.'s stock, at which time REMSleep LLC
became our wholly-owned subsidiary and adopted their business of developing and
distributing our sleep apnea products. On January 5, 2015, we changed our name
to REMSleep Holdings, Inc. to reflect our new business model.
Our officers have 35 years of sleep-industry experience, including having been
employed at sleep industry companies. Our officers invented our DeltaWave CPAP
interface (the "DeltaWave") as an innovative new device to treat patients with
sleep apnea. The patent-pending DeltaWave product is a nasal-pillows type
interface that will result in better comfort and, therefore, better compliance
since it was specifically designed with unique airflow characteristics to enable
patients with sleep apnea to breathe normally. A survey that appeared in DME
Business found that 89% of patients stated that mask-interface comfort was their
primary concern. The primary issue that we have addressed with the DeltaWave is
the "work of breathing" component. We believe that our DeltaWave is designed to
effectively address the stubborn issues that continue to affect a patient's
ability to comply with treatment, as follows:
? Does not disrupt normal breathing mechanics;
? Is not claustrophobic;
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? Causes zero work of breathing (WOB);
? Minimizes or eliminates drying of the sinuses;
? Uses less driving pressure; and
? Allows users to feel safe and secure while sleeping.
Pending adequate financing, we plan to conduct clinical trials to test product
effectiveness.
On June 28, 2016, we applied for a patent for a new, innovative sleep apnea
product that serves as an interface for the delivery of CPAP therapy and other
respiratory needs. Our goal is to develop sleep products that achieve optimum
compliance and comfort for CPAP patients.
Our website is located at: http://remsleep.com.
Results of Operations
The three months ended June 30, 2022 compared to the three months ended June 30,
2021
We began to sell our ResPlus CPAP system in the second quarter. We recognized
revenue and cost of goods of $119,670 and $89,760, respectively for the three
months ended June 30, 2022.
Professional fees were $59,965 compared to $27,545 for the three months ended
June 30, 2022 and 2021, respectively, an increase of $32,420, or 117.7.%.
Professional fees consist mostly of accounting, audit and legal fees. The
increase is attributed to an increase in legal fees of approximately $28,000.
Compensation expense was $72,000 and $21,000 for the three months ended June 30,
2022 and 2021, respectively, an increase of $51,000, or 242.9%. On April 1,
2022, compensation expense for our CEO and Chairman increased.
Development expense related to our CPAP systems was $38,051 and $0 for the three
months ended June 30, 2022 and 2021, respectively, an increase of $38,051.
Development expense increased over the prior period as we worked to bring our
product to market.
Lease expense was $29,864 and $0 for the three months ended June 30, 2022 and
2021, respectively. During the three months ended June 30, 2022, we began to
incur lease/rent expense for both our corporate office and short term apartment
rental for employees to stay at when in town.
General and administrative expense ("G&A") was $174,673 and $86,541 for the
three months ended June 30, 2022 and 2021, respectively, an increase of $88,132,
or 101.8%. During the current period we incurred additional expense related to
the process of obtaining our 510k for DeltaWave (~$16,500), travel expense of
$14,272 and other compensation expense of $32,450 We also incurred additional
expense involved with moving our corporate headquarters and setting up our
offices.
Total other expense for the three months ended June 30, 2022, was $95,649. Other
expense includes a loss in the change of fair value of $14,995, a loss on
disposal of fixed assets of $28,264 and interest expense of $52,430 (includes
$46,774 amortization of debt discount). Total other expense for the three months
ended June 30, 2021, was $2,228,609. Other expense in the prior period includes
a loss in the change of fair value of $1,890,407, a loss on the issuance of
convertible debt of $99,190, and interest expense of $239,012 (includes $208,072
amortization of debt discount).
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Net Loss
For the three months ended June 30, 2022, we had a net loss of $440,292 as
compared to a loss of $2,363,695 for the three months ended June 30, 2021. Our
net loss decreased due to the decrease in other expense during the period, which
consists mostly of non-cash expense related to our convertible debt.
Our loss from operations increased $209,557 to $344,643 in the current period
from $135,086 in the prior period
The six months ended June 30, 2022 compared to the six months ended June 30,
2021
We began to sell our ResPlus CPAP system in the second quarter. We recognized
revenue and cost of goods of $119,670 and $89,760, respectively for the six
months ended June 30, 2022.
Professional fees were $85,965 compared to $52,143 for the six months ended June
30, 2022 and 2021, respectively, an increase of $33,822, or 64.9.%. Professional
fees consist mostly of accounting, audit and legal fees. The increase is
attributed to an increase in legal fees of approximately $31,000.
Compensation expense was $93,000 and $42,000 for the six months ended June 30,
2022 and 2021, respectively, an increase of $51,000 or 121.4.%. On April 1,
2022, compensation expense for our CEO and Chairman.
Development expense related to our CPAP systems was $63,718 and $0 for the six
months ended June 30, 2022 and 2021, respectively, an increase of $63,718.
Development expense increased over the prior period as we worked to bring our
product to market.
Lease expense was $29,864 and $0 for the six months ended June 30, 2022 and
2021, respectively. During the six months ended June 30, 2022, we began to incur
lease/rent expense for both our corporate office and short term apartment rental
for employees to stay at when in town.
General and administrative expense ("G&A") was $256,564 and $135,207 for the six
months ended June 30, 2022 and 2021, respectively, an increase of $121,357 or
89.8%. During the current period we incurred additional expense related to the
process of obtaining our 510k for DeltaWave (~$30,500), travel expense of
$18,715 and other compensation expense of $32,450 We also incurred additional
expense involved with moving our corporate headquarters and setting up our
offices.
Total other expense for the six months ended June 30, 2022, was $257,390. Other
expense includes a loss in the change of fair value of $3,048, a loss on
disposal of fixed assets of $28,264 and interest expense of $226,078 (includes
$206,157 amortization of debt discount). Total other expense for the six months
ended June 30, 2021, was $2,605,811. Other expense in the prior period includes
a loss in the change of fair value of $1,495,259, a loss on the issuance of
convertible debt of $542,169, a penalty for default on convertible debt of
$162,798 and interest expense of $405,585 (includes $346,694 amortization of
debt discount).
Net Loss
For the six months ended June 30, 2022, we had a net loss of $756,591 as
compared to a loss of $2,835,161 for the six months ended June 30, 2021. Our net
loss decreased due to the decrease in other expense during the period, which
consists mostly of non-cash expense related to our convertible debt.
Our loss from operations increased $269,854 to $499,201 in the current period
from $229,350 in the prior period.
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Liquidity and Capital Resources
Cash flow from operations
Cash used in operating activities for the six months ended June 30, 2022 was
$1,739,810 as compared to $205,224 of cash used in operating activities for the
six months ended June 30, 2021. During the current period the Company used more
cash for activities related to bringing its product to market. Our largest cash
expenditures were for inventory and an advance payment on our new lease.
Cash Flows from Investing
Cash used in investing activities for the purchase of equipment and tooling for
the six months ended June 30, 2022 was $71,462 as compared to $17,773 of cash
used in investing activities for the six months ended June 30, 2021.
Cash Flows from Financing
For the six months ended June 30, 2022, we received $855,000 from the sale of
common stock and repaid a $45,000 loan. For the six months ended June 30, 2021
we received $366,300 from the issuance of convertible loans, $96,000 from the
sale of common stock and we repaid $2,367 on other loans.
As of June 30, 2022, we have we have current assets of $3,685,535, which
includes $2,393,372 of cash and $1,214,637 of recently purchased inventory. As
of June 30, 2022, we no longer have any outstanding convertible notes payable.
Going Concern
As of June 30, 2022, there is substantial doubt regarding our ability to
continue as a going concern as we have not generated sufficient cash flow to
fund our proposed business.
We have suffered recurring losses from operations since our inception. In
addition, we have yet to generate an internal cash flow from our business
operations or successfully raised the financing required to develop our proposed
business. As a result of these and other factors, our independent auditor has
expressed substantial doubt about our ability to continue as a going concern.
Our future success and viability, therefore, are dependent upon our ability to
generate capital financing. The failure to generate sufficient revenues or raise
additional capital may have a material and adverse effect upon us and our
shareholders.
Management's plans with regard to these matters encompass the following actions:
(i) obtaining funding from new investors to alleviate our working capital
deficiency, and (ii) implementing a plan to generate sales. Our continued
existence is dependent upon our ability to resolve our liquidity problems and
increase profitability in our current business operations. However, the outcome
of management's plans cannot be ascertained with any degree of certainty. Our
financial statements do not include any adjustments that might result from the
outcome of these risks and uncertainties.
The industry in which we operate depends heavily upon our ability to obtain raw
material and manufacture our product as well as the overall level of consumer
and business spending. A sustained deterioration in general economic conditions
(including distress in financial markets, turmoil in specific economies around
the world, public health crises, and additional government intervention),
particularly in the United States, may have a negative financial impact to our
Company. Adverse conditions as a result of the global COVID-19 outbreak, will
and may continue to impact our manufacturing processes and ultimately our
ability to sell our product.
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Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors.
Critical Accounting Policies
Refer to Note 2 to the Financial Statements for the six months ended June 30,
2022, for a condensed discussion of our critical accounting policies and our
Form 10-K for the year ended December 31, 2021, for a full discussion of our
critical accounting policies and procedures.
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REMSLEEP HOLDINGS, INC. 
