Overview

We are a Nevada corporation formed on June 6, 2007. Our headquarters are in Clearwater, FL. We have been engaged in our current business model since January 1, 2015.

We are a medical technology company focused on the development and commercialization of innovative and minimally invasive solutions for patients with obstructive sleep apnea. Our officers have 35 years of sleep-industry experience, including having been employed at sleep industry companies. Our goal is to develop sleep products that achieve optimum compliance and comfort for CPAP patients.

In May 2017, we applied for a patent with the US Patent and Trademark Office for our proprietary DeltaWave CPAP interface ("DeltaWave"), a new, innovative sleep apnea product to act as an interface for the delivery of CPAP therapy and other respiratory needs. DeltaWave is a nasal-pillow type interface designed to offer better comfort and, therefore, better compliance since it was specifically designed with unique airflow characteristics to enable patients with sleep apnea to breathe normally.





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Our officers have 35 years of sleep-industry experience, including having been employed at sleep industry companies. Our officers invented the DeltaWave as an innovative new device to treat patients with sleep apnea. The patent-pending DeltaWave device 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.

Pending adequate financing, we plan to conduct clinical trials to test product effectiveness.





Results of Operations

Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021





Revenues

We began to sell our ResPlus CPAP system in the second quarter of 2022. We recognized revenue and cost of goods of $320,719 and $248,426, respectively for the year ended December 31, 2022.





Operating Expenses

Professional fees were $115,135 and $82,043 for the years ended December 31, 2022 and 2021, respectively, an increase of $33,092, or 40.3%. Professional fees consist mostly of accounting, audit and legal fees. The increase is attributed to an increase in legal fees of approximately $27,000.

Development expense related to our DeltaWave CPAP system was $337,003 and $129,311 for the years ended December 31, 2022 and 2021, respectively, an increase of $207,722 or 160.6%. Development expense increased over the prior period as we work to bring our new products to market. Approximately 25% of development expense is related to product testing.

Compensation expense was $231,000 and $84,000 for the years ended December 31, 2022 and 2021, respectively, an increase of $147,000, or 175%. On April 1, 2022, compensation expense for our CEO and Chairman increased. Compensation also increased for our CTO.

Lease expense was $114,702 and $0 for the years ended December 31, 2022 and 2021, respectively. During the year ended December 31, 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 $492,295 and $130,334 for the years ended December 31, 2022 and 2021, respectively, an increase of $361,961 or 277.7%. During the current year we incurred additional expense related to the process of obtaining our 510k for DeltaWave (~$118,000), travel expense of $24,600 and other compensation expense of $59,950, We also incurred additional expense involved with moving our corporate headquarters and setting up our offices.

Total other expense for the year ended December 31, 2022, was $268,702. 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 $237,390 (includes $206,157 amortization of debt discount).

Total other expense for the year ended December 31, 2021, was $3,399,985. Other expense includes a loss in the change of fair value of $1,601,016, a loss on the issuance of convertible debt of $717,592, a penalty for default on convertible debt of $162,798 and interest expense of $918,579 (includes $813,619 amortization of debt discount).





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Net Loss

For the year ended December 31, 2022, we had a net loss of $1,486,574 as compared to a net loss of $3,825,673 for the year ended December 31, 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 year ended December 31, 2022 was $2,234,058 as compared to $349,995 of cash used in operating activities for the year ended December 31, 2021. During the current year 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.





Cash Flows from Investing

Cash used in investing activities for the purchase of equipment and tooling for the year ended December 31, 2022 was $122,262 as compared to $67,252 of cash used in investing activities for the year ended December 31, 2021.

Cash Flows from Financing

For the year ended December 31, 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 $4,740 for the payment of expenses. For the year ended December 31, 2021, we received $591,300 from the issuance of convertible debt and $3,103,500 from the sale of common stock. We repaid $8,212 on our auto loan.





Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $12,414,921 at December 31, 2022, had a net loss of $1,486,574 and net cash used in operating activities of $2,234,058 for the year ended December 31, 2022. The Company's ability to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors over the next twelve months raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.





Critical Accounting Policies

Refer to Note 2 of our financial statements contained elsewhere in this Form 10-K for a summary of our critical accounting policies and recently adopting and issued accounting standards.

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