UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2023
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from to
Commission
file number: 000-53450
REMSLEEP
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
14175
ICOT Blvd, Suite 300, Clearwater, FL33760
(Address
of principal executive offices) (Zip Code)
813-367-3855
(Registrant’s
telephone number)
Securities
registered pursuant to Section 12(b) of the Exchange Act: None.
Securities
registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No
☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No
☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting fi rm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates: $16,771,918 based on 1,458,427,613
non affiliate shares outstanding at $.0115 per share, which is the price at which the common shares were last sold on the last business
day of the registrant’s most recently completed second fiscal quarter.
As
of April 16, 2024, there were 1,461,616,601 shares of the issuer’s common stock outstanding.
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 1
Item 1A. Risk Factors 7
Item 1B. Unresolved Staff Comments 7
Item 1C. Cybersecurity 7
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. Mine Safety Disclosures 8
PART II
Item 6. [Reserved] 9
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 11
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 12
Item 9B. Other Information 13
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 13
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 14
Item 11. Executive Compensation 15
Item 14. Principal Accountant Fees and Services 17
PART IV
Item 15. Exhibits and Financial Statement Schedules 18
Signatures 19
i
PART I
ITEM 1. DESCRIPTION OF BUSINESS
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.
Pending adequate financing, we plan to conduct
clinical trials to test product effectiveness.
1
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.
Industry Background
The market for sleep treatment and equipment was
$7.96 billion in 2011 and continues to increase, with North America accounting for a majority of the market. More than 8 million CPAP
interfaces are sold annually in the U.S., with another 2.5 million globally. There are also an estimated 80 million people with undiagnosed
sleep apnea. Sleep apnea is a condition that affects millions of people in the United States alone. An increasingly sedentary lifestyle
and bad working habits have led to obesity and otherwise poor cardiac and aerobic health. This has led to a fast-growing epidemic of obstructive
sleep apnea (OSA), which greatly reduces the quality of sleep one gets and can ultimately result in hypertension, heart failure, stroke,
and at the least, reduced performance in everyday life. Sleep apnea results in numerous afflictions that affect people’s day-to-day
lives and can eventually contribute to serious health conditions. While people’s knowledge of this affliction has grown strongly
in recent years, and the market is expanding fast nationwide, up to 80% of people with sleep apnea may be undiagnosed1 –
a market of millions of new potential users. Even those who are tested and prescribed a sleep apnea machine often give up after a short
time due to discomfort or what is called the “work of breathing” with traditional machines. In fact, over 50% of patients
give up on using CPAP therapy after 6 months. This is a major waste of resources and a very telling statistic.
A major challenge in the current market is not
only to get more patients diagnosed but to also increase CPAP compliance. According to market analyst Frost & Sullivan, “The
development of finer and ergonomic CPAP devices will help increase patient ability to adhere to sleep therapy. The market is also seeing
a rise in newer technologies that replace elaborate practices, target patient comfort to improve compliance, and help drive acceptance
of sleep monitoring devices.”
A growing knowledge of sleep apnea and its treatment
has helped to increase awareness with the public. In addition to making the use of a CPAP or related device less intimidating, a move
toward affordable and prescription-based technology can greatly expand the market “Evolving technologies will also influence patient
preferences for products, treatment modalities, and diagnostic locations,” states Frost & Sullivan2. “As such,
the global sleep apnea treatment market is expected to shift to home-based diagnostics for early identification and treatment of patients
as well as portable devices that can reduce sleep apnea with minimal inconvenience.”
Sleep apnea causes breathing interruptions of
between 10 to 20 seconds that can occur hundreds of times during a night, disrupting the natural sleep rhythm and depriving people of
the restorative sleep they need to be energetic, mentally sharp, and productive the next day. CPAP can be a very effective method used
to treat sleep apnea, but as noted, noncompliance remains a stubborn issue for both physicians and patients. CPAP technology therefore
is constantly being updated and improved, and the new CPAP devices are lighter, quieter, and more comfortable.
Health care spending continues to grow rapidly
on an annual basis in the United States. Spending was $2.7 trillion in 2011 and, in 2013, it reached over $3.6 trillion. By 2022, spending
was projected to reach $5 trillion, or around 20% of GDP, according to the Centers for Medicare and Medicaid Services3. Growing
alongside this market is the U.S. life science industry, which will grow an estimated 2.2% in 2014 to $93 billion. This includes R&D
spending, with growth primarily from smaller biopharmaceutical innovators and medical device manufacturers.
Within this market, sleep apnea products have
experienced rapid growth. In the past couple of decades there has been a rapid increase in technological developments in the field of
sleep apnea diagnosis and treatment. The result has been strong growth for sleep apnea devices globally. Demand for new and innovative
treatment methodologies is driving growth, helping to provide patients with a healthy lifestyle. “Obstructive sleep apnea is destroying
the health of millions of Americans, and the problem has only gotten worse over the last two decades,” according to American Academy
of Sleep Medicine President Dr. Timothy Morgenthaler4. “The effective treatment of sleep apnea is one of the keys to
success as our nation attempts to reduce health care spending and improve chronic disease management.”
2
Sleep problems are considered a “global
epidemic,” with sleep apnea as a major contributor to the disorder. An estimated 100 million people worldwide have sleep apnea,
though more than 80% of these people are undiagnosed. The market for sleep apnea diagnostic and therapeutic devices on a global level
was $7.96 billion in 2011 and will reach a projected $19.72 billion by 2017, according to a study from Markets & Markets1
Nationwide in the U.S., there are more than 1,600 businesses in the Sleep Disorder Clinics market, according to research firm IBISWorld.
These businesses have combined annual revenue of $7 billion and have maintained a combined annual growth rate (CAGR) of 9.8% from 2008
to 2013. “Sleep clinics have gained exposure during the period due to the rising number of sleep disorders,” states IBISWorld.
“Moreover, health insurance policies are increasingly covering all or at least part of the costs of tests and, as more patients
have been able to gain greater access to specialized sleep clinics, industry revenue grows.”
Sources:
There are also more than 972,000 physicians and
365,000 doctors’ offices, as well as nearly 5,800 hospitals. In addition, the market for U.S. home healthcare is served by about
30,000 businesses with combined annual revenue of $59 billion. The market includes medical and skilled nursing services; medical equipment,
supplies, and medication services; personal care; and therapeutic services (like physical and respiratory therapy).
Marketing
We plan to market the DeltaWave product in the
U.S., as follows:
● Submit manufacture orders to our manufacturer according to market demand
● Negotiate and secure agreements with industry distributor partners
● Secure agreements with Internet retailers for online sales
● Market DeltaWave at respiratory trade shows, social media, press releases
● Attend sleep and healthcare, respiratory industry trade shows
All of the foregoing is contingent upon adequate
financing.
3
Target Market
Our target market includes:
● Sleep product distributors that will distribute our product
● Home care dealers
● Private sleep labs
● Product end users
● Physicians, particularly sleep physicians
● Medical groups
● Hospitals
We expect that most of our revenues will be in
the home care dealers and hospital target market.
Manufacturing
Our product will be manufactured by mold makers.
We presently have molds made in China; however, we are considering relocating the manufacturing of our molds to the United States.
Operations Contingent Upon Adequate Financing
Our entire business plan, including our ability
to conduct manufacturing, marketing, generate sales and further develop products, are entirely dependent upon adequate financing. Should
we fail to obtain adequate financing: (a) our financial condition will be negatively affected; (b) we will be unable to conduct the essential
aspects of our business plan, including marketing as reflected above; (c) investments in our common stock will be negatively impacted;
(d) we will be forced to liquidate our business and file for bankruptcy protection.
Competition
The sleep apnea devices market is highly consolidated,
with primary competitors being:
● ResMed
● Philips Respironics
● Naus Medical
● Fisher & Paykel Healthcare
● DeVilbiss Healthcare
● CareFusion
● InnoMed
● TAP
ResMed is the market leader (45% of market share),
followed by Philips (30%), and Fisher/Paykel (12%). Our competitors offer a full range of sleep products.
Our competitors have greater financial, operational
and personnel resources than we do. We will attempt to overcome our competitors’ competitive advantages by emphasizing the advantages
of our Delta Wave product.
4
Government Regulations
FDA
Our products are subject to extensive regulation
particularly as to safety, efficacy and adherence to FDA Quality System Regulation, and related manufacturing standards. Medical device
products are subject to rigorous FDA and other governmental agency regulations in the United States and similar regulations of foreign
agencies abroad. The FDA regulates the design, development, research, preclinical and clinical testing, introduction, manufacture, advertising,
labeling, packaging, marketing, distribution, import and export, and record keeping for such products, to ensure that medical products
distributed in the United States are safe and effective for their intended use. In addition, the FDA is authorized to establish special
controls to provide reasonable assurance of the safety and effectiveness of most devices. Non-compliance with applicable requirements
can result in import detentions, fines, civil and administrative penalties, injunctions, suspensions or losses of regulatory approvals,
recall or seizure of products, operating restrictions, refusal of the government to approve product export applications or allow us to
enter supply contracts, and criminal prosecution.
Unless an exemption applies, the FDA requires
that a manufacturer introducing a new medical device or a new indication for use of an existing medical device obtain either a Section
510(k) premarket notification clearance or a premarket approval, or PMA, before introducing it into the U.S. market. The type of marketing
authorization is generally linked to the classification of the device. The FDA classifies medical devices into one of three classes (Class
I, II or III) based on the degree of risk the FDA determines to be associated with a device and the level of regulatory control deemed
necessary to ensure the device’s safety and effectiveness.
Our products currently marketed in the United
States are marketed in reliance on 510(k) pre-marketing clearances as either Class I or Class II devices. The process of obtaining a Section
510(k) clearance generally requires the submission of performance data and often clinical data, which in some cases can be extensive,
to demonstrate that the device is “substantially equivalent” to a device that was on the market before 1976 or to a device
that has been found by the FDA to be “substantially equivalent” to such a pre-1976 device, a predecessor device is referred
to as “predicate device.” As a result, FDA clearance requirements may extend the development process for a considerable length
of time. In addition, in some cases, the FDA may require additional review by an advisory panel, which can further lengthen the process.
The PMA process, which is reserved for new devices that are not substantially equivalent to any predicate device and for high-risk devices
or those that are used to support or sustain human life, may take several years and requires the submission of extensive performance and
clinical information.
Medical devices can be marketed only for the indications
for which they are cleared or approved. After a device has received 510(k) clearance for a specific intended use, any change or modification
that significantly affects its safety or effectiveness, such as a significant change in the design, materials, method of manufacture or
intended use, may require a new 510(k) clearance or PMA approval and payment of an FDA user fee. The determination as to whether a modification
could significantly affect the device’s safety or effectiveness is initially left to the manufacturer using available FDA guidance;
however, the FDA may review this determination to evaluate the regulatory status of the modified product at any time and may require the
manufacturer to cease marketing and recall the modified device until 510(k) clearance or PMA approval is obtained. The manufacturer may
also be subject to significant regulatory fines or penalties. The FDA is currently reviewing its guidance describing when it believes
a manufacturer is obligated to submit a new 510(k) for modifications or changes to a previously cleared device. The FDA is expected to
issue revised guidance to assist device manufacturers in making this determination. It is unclear whether the FDA’s approach in
this new guidance will result in substantive changes to existing policy and practice regarding the assessment of whether a new 510(k)
is required for changes or modifications to existing devices.
Any devices we manufacture and distribute pursuant
to clearance or approval by the FDA are subject to pervasive and continuing regulation by the FDA and certain state agencies. These include
product listing and establishment registration requirements, which help facilitate FDA inspections and other regulatory actions. As a
medical device manufacturer, our manufacturing facilities are subject to inspection on a routine basis by the FDA. We are required to
adhere to applicable regulations setting forth detailed cGMP requirements, as set forth in the QSR, which require, manufacturers, including
third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all
phases of the design and manufacturing process. Noncompliance with these standards can result in, among other things, fines, injunctions,
civil penalties, recalls or seizures of products, total or partial suspension of production, refusal of the government to grant 510(k)
clearance or PMA approval of devices, withdrawal of marketing approvals and criminal prosecutions. We believe that our design, manufacturing
and quality control procedures are in compliance with the FDA’s regulatory requirements.
5
We must also comply with post-market surveillance
regulations, including medical device reporting, or MDR, requirements which require that we review and report to the FDA any incident
in which our products may have caused or contributed to a death or serious injury. We must also report any incident in which our product
has malfunctioned if that malfunction would likely cause or contribute to a death or serious injury if it were to recur.
Labeling and promotional activities are subject
to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission. Medical devices approved or cleared by the FDA
may not be promoted for unapproved or un-cleared uses, otherwise known as “off-label” promotion. The FDA and other agencies
actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly
promoted off-label uses may be subject to significant liability, including substantial monetary penalties and criminal prosecution.
Other Healthcare Laws
Even though we do not submit claims or bill governmental
programs and other third-party payers directly for reimbursement for our products sold in the United States, we are still subject to laws
and regulations that may restrict our business practices, including, without limitation, anti-kickback, false claims, physician payment
transparency and data privacy and security laws. The government has interpreted these laws broadly to apply to the marketing and sales
activities of manufacturers and distributors like us.
The federal Anti-Kickback Statute prohibits, among
other things, persons or entities from knowingly and willfully soliciting, receiving, offering or providing remuneration, directly or
indirectly, in cash or in kind, in exchange for or to induce either the referral of an individual for, or the purchase, lease, order or
recommendation of, any good, facility, item or service for which payment may be made, in whole or in part, under federal healthcare programs
such as Medicare and Medicaid. In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback
Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.
The federal civil False Claims Act prohibits,
among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment
or approval to the federal government or knowingly making, using or causing to be made or used a false record or statement material to
a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented
to the U.S. government. The civil False Claims Act also applies to false submissions that cause the government to be paid less than the
amount to which it is entitled, such as a rebate. Intent to deceive is not required to establish liability under the civil False Claims
Act.
The Federal Health Insurance Portability and Accountability
Act of 1996, or HIPAA, created federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting
to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling
or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and
willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in
connection with the delivery of or payment for healthcare benefits, items or services. Like the Anti-Kickback Statute, a person or entity
does not need to have actual knowledge of these statutes or specific intent to violate them to have committed a violation.
Also, many states and countries outside the U.S.
have similar fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items
and services reimbursed under Medicaid and other state programs.
Under HIPAA, the Department of Health and Human
Services, or HHS, has issued regulations to protect the privacy and security of protected health information used or disclosed by covered
entities including health care providers, such as us. HIPAA also regulates standardization of data content, codes and formats used in
health care transactions and standardization of identifiers for health plans and providers. Penalties for violations of HIPAA regulations
include civil and criminal penalties. In addition to federal privacy and security regulations, there are state laws governing confidentiality
and security of health information that are applicable to our business. New laws governing privacy may be adopted in the future as well.
Failure to comply with privacy requirements could result in civil or criminal penalties, which could have a materially adverse effect
on our business.
6
Additionally, there has been a recent trend of
increased federal and state regulation of payments and transfers of value provided to healthcare professionals or entities. The Physician
Payment Sunshine Act was enacted in law as part of PPACA, which imposed new annual reporting requirements on device manufacturers for
payments and other transfers of value provided by them, directly or indirectly, to physicians and teaching hospitals, as well as ownership
and investment interests held by physicians and their family members. A manufacturer’s failure to submit timely, accurately and
completely the required information for all payments, transfers of value or ownership or investment interests may result in civil monetary
penalties. Certain states also mandate implementation of commercial compliance programs, impose restrictions on device manufacturer marketing
practices and/or require the tracking and reporting of gifts, compensation and other remuneration to healthcare professionals and entities.
The shifting commercial compliance environment
and the need to build and maintain robust systems to comply with different compliance or reporting requirements in multiple jurisdictions
increase the possibility that a healthcare company may fail to comply fully with one or more of these requirements. If our operations
are found to be in violation of any of the health regulatory laws described above or any other laws that apply to us, we may be subject
to penalties, including potentially significant criminal and civil and administrative penalties, damages, fines, disgorgement, imprisonment,
exclusion from participation in government healthcare programs, contractual damages, reputational harm, administrative burdens, diminished
profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to
operate our business and our results of operations.
Environmental Regulation
Our operations are not subject to environmental
regulation.
Employees
We have the following employees Thomas J. Wood,
Chief Executive Officer, and John Lane, Chief Technology Officer. All other services are provided by independent contractors who are primarily
paid with stock-based compensation. Personnel will be added on an as-needed basis and based on available funds.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined
by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk
Management and Strategy
We have developed and maintain a cybersecurity
risk management methodology intended to protect the confidentiality, integrity, and availability of our critical systems and information.
Our cybersecurity risk management methodology is integrated into our overall enterprise risk management, and shares common methodologies,
reporting channels and governance processes that apply across the Company to other legal, compliance, strategic, operational, and financial
risk areas. As part of our overall risk management processes and procedures, we have instituted a cybersecurity awareness designed to
identify, assess and manage material risks from cybersecurity threats, including by engaging a third-party cybersecurity service provider,
which communicates directly with our management and compliance personnel. The cyber risk management methodology involves risk assessments,
implementation of security measures and ongoing monitoring of systems and networks, including networks on which we rely. Through our cybersecurity
awareness, the current threat landscape is actively monitored in an effort to identify material risks arising from new and evolving cybersecurity
threats. We may engage external experts, including cybersecurity assessors, consultants and auditors to evaluate cybersecurity measures
and risk management processes as needed. We also depend on and engage various third parties, including suppliers, vendors and service
providers in connection with our operations. Our risk management, legal, and compliance personnel oversee and identify, including through
a third-party cybersecurity service provider, material risks from cybersecurity threats associated with our use of such entities.
7
Our cybersecurity risk management methodology
includes:
We have not identified risks from known cybersecurity
threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business
strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized, are reasonably likely
to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Cybersecurity Governance
Our Board of Directors
oversees our risk management, including our information technology and cybersecurity policies, procedures, and risk assessments. Management
reports to our Board of Directors on information security matters as necessary, regarding any significant cybersecurity incidents, as
well as any incidents with lesser impact potential.
One of the key functions of our Board of Directors
is informed oversight of our various processes for managing risk. An overall review of risk is inherent in our Board of Directors ongoing
consideration of our long-term strategies, transactions and other matters presented to and discussed by the Board of Directors. This includes
a discussion of the likelihood and potential magnitude of various risk.
ITEM 2. PROPERTIES
We do not own any real estate property.
ITEM 3. LEGAL PROCEEDINGS
There are no material claims, actions, suits,
proceedings, or investigations that are currently pending or, to the Company’s knowledge, threatened by or against the Company or
respecting its operations or assets, or by or against any of the Company’s officers, directors, or affiliates.
ITEM 4. MINE SAFETY DISCLOSURES
None.
8
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock, par value $0.001 per share,
is currently listed to trade on the OTC Markets Group, OTCQB tier under the symbol “RMSL”. The range of reported high and
reported low sales prices per share for our common stock for each fiscal quarter during 2023 and 2022, as reported by NASDAQ and the OTC
Markets Group, is set forth below.
Quarterly common stock Price Ranges
Fiscal Year 2023, Quarter Ended: High Low
Fiscal Year 2022, Quarter Ended: High Low
At April 9, 2024 there were approximately 155
holders of record of our common stock, although we believe that there are other persons who are beneficial owners of our common stock
held in street name. The transfer agent and registrar for our common stock is Securities Stock Transfer,
2901 N Dallas Parkway, Suite 380, Plano, TX 75093.
Recent Issuances of Unregistered Securities
None.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.
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.
9
Results
of Operations
Year
Ended December 31, 2023 Compared to the Year Ended December 31, 2022
Revenues
We
began to sell our ResPlus CPAP system in the second quarter of 2022.
We
recognized revenue and cost of goods of $203,718 and $960,457, respectively for the year ended December 31, 2023. Our cost of goods sold
includes impairment expense of $738,113 for the write down of inventory on hand.
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 $116,362 and $115,135 for the years ended December 31, 2023 and 2022, respectively, an increase of $1,227, or 1.1%. Professional
fees consist mostly of accounting, audit and legal fees.
Development
expenses related to our DeltaWave CPAP system was $294,819 and $337,033 for the years ended December 31, 2023 and 2022, respectively,
a decrease of $42,214 or 12.5%. Our development expenses has decreased in the current period as we get closer to completing the development
and testing of our DeltaWave product.
Compensation
expense was $172,000 and $231,000 for the years ended December 31, 2023 and 2022, respectively, a decrease of $59,000, or 25.5%. Effective
June 1, 2023, Mr. Bird, our former Chairman, resigned from all positions with the Company, resulting in a decrease to our compensation
expense.
Lease
expense was $136,320 and $114,702 for the years ended December 31, 2023 and 2022, respectively, an increase of $21,618, or 18.8%. Our
office lease began in May 2022.
General
and administrative expense (“G&A”) were $295,402 and $492,295 for the years
ended December 31, 2023 and 2022, respectively, a decrease of $196,893 or 40%. In the current period
we had decreases in travel expense of approximately $25,000, employee expense of approximately $83,000, web design of $19,300 and promotional
expense of $64,000.
Total
other expense for the year ended December 31, 2023, was $6,196. Other expense includes interest expense of $7,090 and a gain on disposal
of an asset of $894.
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).
Net
Loss
For
the year ended December 31, 2023, we had a net loss of $1,777,838 as compared to a net loss of $1,486,574 for the year ended December
31, 2022.
Liquidity
and Capital Resources
Cash
flow from operations
Cash
used in operating activities for the year ended December 31, 2023 was $791,309 as compared to $2,234,058 of cash used in operating activities
for the year ended December 31, 2022. During the prior year the Company used more cash for activities related to the development and
sale of its products. Our largest cash expenditure in the prior year was for inventory.
10
Cash
Flows from Investing
Cash
used in investing activities for the purchase of equipment and tooling for the year ended December 31, 2023 was $147,648 as compared
to $122,262 of cash used in investing activities for the year ended December 31, 2022.
Cash
Flows from Financing
For
the year ended December 31, 2023, we repaid $183,931 of a related party loan. 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.
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 $14,192,759 at December 31, 2023, had a net
loss of $1,777,838 and net cash used in operating activities of $791,309 for the year ended December 31, 2023. 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.
Item
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information
under this item.
11
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REMSLEEP
HOLDINGS, INC.
Report of Independent Registered Public Accounting Firm (Firm ID # 05525) F-2
Statements of Operations for the Years ended December 31, 2023 and 2022 F-5
Statements of Cash Flows for the Years ended December 31, 2023 and 2022 F-7
Notes to Financial Statements F-8
F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Shareholders of REMSleep Holdings, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of REMSleep Holdings, Inc. (“the Company”) as of December 31, 2023 and 2022,
and the related statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years in the
two-year period ended December 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion,
the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and
2022 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity
with accounting principles generally accepted in the United States of America.
Going
Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
3 to the financial statements, the Company has an accumulated deficit, net losses, and negative cash flows from operations. These factors,
among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard
to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical