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;
? 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.
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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 September 30, 2022 compared to the three months ended
September 30, 2021
We began to sell our ResPlus CPAP system in the second quarter. We recognized
revenue and cost of goods of $137,568 and $86,250, respectively for the three
months ended September 30, 2022.
Professional fees were $14,200 compared to $7,500 for the three months ended
September 30, 2022 and 2021, respectively, an increase of $6,700, or 89.3%.
Professional fees consist mostly of accounting, audit and legal fees. The
increase is attributed to an increase in legal fees of approximately $5,700.
Compensation expense was $72,000 and $21,000 for the three months ended
September 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 $121,170 and $16,666 for the
three months ended September 30, 2022 and 2021, respectively, an increase of
$104,504. Development expense increased over the prior period as we continue to
work to bring new products to market.
Lease expense was $21,296 and $0 for the three months ended September 30, 2022
and 2021, respectively. In May 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 $129,156 and $36,697 for the
three months ended September 30, 2022 and 2021, respectively, an increase of
$92,459, or 252%. During the current period we incurred additional expense
related to the process of obtaining our 510k for DeltaWave (~$38,200), OTC fees
of $14,220 and other compensation expense of $27,500 We also incurred additional
expense involved with moving our corporate headquarters and setting up our
offices.
Our loss from operations increased $224,641 to $306,504 in the current period
from $81,863 in the prior period
Total other expense for the three months ended September 30, 2022, was $5,656
for interest expense Total other expense for the three months ended September
30, 2021, was $750,000. Other expense in the prior period includes a loss in the
change of fair value of $438,824, a loss on the issuance of convertible debt of
$70,675, and interest expense of $240,797 (includes $213,037 amortization of
debt discount).
Net Loss
For the three months ended September 30, 2022, we had a net loss of $312,160 as
compared to a net loss of $832,159 for the three months ended September 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.
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The nine months ended September 30, 2022 compared to the nine months ended
September 30, 2021
We began to sell our ResPlus CPAP system in the second quarter. We recognized
revenue and cost of goods of $257,238 and $176,010, respectively for the nine
months ended September 30, 2022.
Professional fees were $100,165 compared to $59,643 for the nine months ended
September 30, 2022 and 2021, respectively, an increase of $40,522, or 67.9.%.
Professional fees consist mostly of accounting, audit and legal fees. The
increase is attributed to an increase in legal fees of approximately $36,700.
Compensation expense was $165,000 and $63,000 for the nine months ended
September 30, 2022 and 2021, respectively, an increase of $102,000 or 161.9.%.
On April 1, 2022, compensation expense for our CEO and Chairman increased.
Development expense related to our CPAP systems was $184,888 and $95,608 for the
nine months ended September 30, 2022 and 2021, respectively, an increase of
$89,280 or 93.4%. Development expense increased over the prior period as we work
to bring our new products to market.
Lease expense was $51,160 and $0 for the nine months ended September 30, 2022
and 2021, respectively. During the nine months ended September 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.
G&A expense was $385,720 and $92,962 for the nine months ended September 30,
2022 and 2021, respectively, an increase of $292,758 or 314.9%. During the
current period we incurred additional expense related to the process of
obtaining our 510k for DeltaWave (~$69,000), travel expense of $24,400 and other
compensation expense of $59,950, We also incurred additional expense involved
with moving our corporate headquarters and setting up our offices.
Our loss from operations increased $494,493 to $805,706 in the current period
from $311,213 in the prior period.
Total other expense for the nine months ended September 30, 2022, was $263,046.
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 $231,734 (includes
$206,157 amortization of debt discount). Total other expense for the nine months
ended September 30, 2021, was $3,356,107. Other expense in the prior period
includes a loss in the change of fair value of $1,934,083, a loss on the
issuance of convertible debt of $612,844, a penalty for default on convertible
debt of $162,798 and interest expense of $646,382 (includes $559,732
amortization of debt discount).
Net Loss
For the nine months ended September 30, 2022, we had a net loss of $1,068,751 as
compared to a net loss of $3,667,320 for the nine months ended September 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.
Liquidity and Capital Resources
Cash flow from operations
Cash used in operating activities for the nine months ended September 30, 2022
was $1,962,684 compared to $269,369 of cash used in operating activities for the
nine months ended September 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, an advance payment on our new lease and
compensation expense.
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Cash Flows from Investing
Cash used in investing activities for the purchase of equipment and tooling for
the nine months ended September 30, 2022 was $71,462 as compared to $38,444 of
cash used in investing activities for the nine months ended September 30, 2021.
Cash Flows from Financing
For the nine months ended September 30, 2022, we received $855,000 from the sale
of common stock and repaid a $45,000 loan. We also received a short term cash
advance from a related party of $1,523 for the payment of expenses. For the nine
months ended September 30, 2021, we received $516,300 from the issuance of
convertible loans, $2,046,000 from the sale of common stock and we repaid $4,770
on other loans.
As of September 30, 2022, 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
September 30, 2022, we no longer have any outstanding convertible notes payable.
Going Concern
As of September 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.
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.
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Critical Accounting Policies
Refer to Note 2 to the Financial Statements for the nine months ended September
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. 
