Item 1A. Risk Factors 6
Item 1B. Unresolved Staff Comments 7
Item 1C. Cybersecurity 7
Item 2. Properties 7
Item 3. Legal Proceedings 7
Item 4. Mine Safety Disclosures 7
PART II
Item 6. [Reserved] 8
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 10
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 11
Item 9B. Other Information 12
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 12
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 13
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 former CEO invented our DeltaWave CPAP interface
(the “DeltaWave”) as an innovative new device to treat patients with sleep apnea. Our patented 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.
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.
On April 27, 2021, REMSleep was awarded utility
patent 10987481 for its new Deltawave CPAP Pillows Mask for delivery of CPAP therapy and other respiratory needs. On March 5, 2024,
REMSleep was awarded design patent D1,017,025 S. Our goal is to continue to develop sleep products for the treatment of OSA and
capture 10% of the market in the next 12 months.
Our website is located at: http://remsleep.com.
1
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.”
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:
2
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:
● Market to Durable Medical Equipment providers
● Market to sleep physicians and sleep labs
● Secure agreement(s) with hospital distributors for acute care sales
● Secure agreements with Internet retailers for online sales
● Market DeltaWave through multimedia advertisement campaign
● Attend sleep and healthcare, respiratory industry trade shows
All of
the foregoing is contingent upon adequate financing.
Target
Market
Our target market includes:
● Durable Medical Equipment providers
● Hospitals and acute care facilities
● Sleep labs
● Physicians, sleep and neurology
We expect that most of our revenue will be through
durable medical equipment providers 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.
3
Competition
The sleep apnea devices market is highly consolidated,
with primary competitors being:
● ResMed
● Philips Respironics
● Fisher & Paykel Healthcare
● React Health
● Innogen
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.
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.
4
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.
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.
5
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.
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 two employees: Jeffrey Marshall, Chief
Executive Officer, and Anita Michaels, Chief Operating Officer. All other services are provided by independent contractors. 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.
6
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. 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.
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 risks.
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.
7
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, OTCID tier under the symbol “RMSL”.
At April 10, 2026 there were approximately 157
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 Transfer
Corporation, 2901 N Dallas Parkway, Suite 380, Plano, TX 75093.
Recent Issuances
of Unregistered Securities
During Q4, 2025, 1800 Diagonal converted $63,700
and $3,635 of principal and interest, respectively, into 50,586,353 shares of common stock.
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 Blackshear, GA. Our focus is on the development and commercialization of innovative and minimally invasive
solutions for patients with obstructive sleep apnea. Our officers have decades of sleep-industry experience, including having been employed
at sleep industry companies and Durable Medical Equipment Providers. Our goal is to develop sleep products that achieve optimum compliance
and comfort for CPAP patients.
Since December 2025, REMSleep Holdings has achieved
significant milestones to enable full launch of the DeltaWave Nasal Pillow System. In January 2026, we received an updated FDA 510K approval
that significantly broadens DeltaWave's indicated use beyond home-based CPAP therapy to include institutional settings and a wider range
of patient populations. Additionally, we created new configurations and resupply SKUs and were granted coding through Pricing, Data Analysis,
and Coding (PDAC) giving approval for Medicare reimbursement of the entire product line. REMSleep Holdings Inc. announced the commercial
launch of DeltaWave product line on February 24, 2026.
The nationwide sales team is meeting with customers
to introduce the product. The average sales cycle for a Durable Medical Equipment company to onboard a new device is 3 months. The sales
cycle includes sampling of product, training all staff that would deploy the device to patients and incorporating into their ERP their
system. The initial customer reaction is positive, and all activities are underway building a funnel that will enable full success of
DeltaWave and REMSleep Holdings Inc. We expect that we will start to see sales ramping up in Q2 2026. We are in negotiation with a key
hospital distributor to lead the launch of DeltaWave to hospitals and institutions throughout the United States.
DeltaWave is positioned as a rescue mask for patients
at risk of CPAP failure. Clinical evidence shows that approximately 30% of patients underwent a mask switch in the first year of therapy*
Our strategy is to gain acceptance in the clinical community by rescuing more patients from failure. Once we prove our technology then
it will open the new patient start segment. The patented Direct Airflow Technology affects both inhalation by minimizing the “jetting”
feeling making CPAP pressure feel greater to patients, and exhalation with decrease of resistance that eases the feeling of breathing
out against CPAP pressure enabling a more carbon dioxide evacuation. This unique technology differentiates the DeltaWave solution from
all other nasal pillow systems on the market. As sales start to build, we hope to kick off formal clinical user preference trial later
this year.
* Mask Switching & Year-One Change Rates (2025)
8
Results of Operations
Year Ended
December 31, 2025 Compared to the Year Ended December 31, 2024
Revenues
During the year ended December 31, 2025, we recognized
revenue and cost of goods for the sale of the DeltaWave of $16,721 and $12,707 respectively. For the year ended December 31, 2024, we
recognized revenue and cost of goods for the sale of our CPAP machines of $117,185 and $99,147, respectively. In 2025 we stopped selling
our CPAP machines and started selling the DeltaWave.
Operating
Expenses
Professional fees were $84,300 and $114,865 for
the years ended December 31, 2025 and 2024, respectively, a decrease of $30,565, or 26.6%. Professional fees consist mostly of accounting,
audit and legal fees. In the current period we had a decrease of legal fees of $38,570. The decrease in legal fees was offset with a $2,000
and $6,005 increase in accounting and audit fees, respectively.
Compensation expense was $2,269,500 and $143,000
for the years ended December 31, 2025 and 2024, respectively, an increase of $2,126,500. Compensation was paid to our former CEO and was
increased in 2025. In addition, in the current period we issued 1,600,000 and 400,000 shares of Series C preferred stock to our former
CEO and Anita Michaels (COO and chairman and the sister of the former CEO), respectively, for a non-cash expense of $2,160,000.
Development expenses related to our DeltaWave
CPAP system was $0 and $187,445 for the years ended December 31, 2025 and 2024, respectively, a decrease of $187,445. Our development
expenses have decreased in the current period as we have completed the development and testing of our DeltaWave product.
Lease expense was $34,659 and $96,905 for the
years ended December 31, 2025 and 2024, respectively, a decrease of $62,246, or 64.2%. In the current period we have a new, less expensive
lease, in a new location.
General and administrative expense (“G&A”)
were $383,327 and $269,371 for the years ended December 31, 2025 and 2024, respectively, an increase of $113,956 or 42.3%.
Our largest G&A expenses and increases for those expenses in the current period are $35,500 for outside salespeople, $12,136 of computer
related expenses and $83,487 for consulting. These increases are offset by a decrease of investor relations expenses of approximately
$34,000 and depreciation expenses of approximately $38,000.
Other
Income (Expense)
Total other expense for the year ended December
31, 2025, was $252,528, which includes interest expense of $388,129 (includes $369,083 amortization of debt discount) and a loss on the
issuance of convertible debt of $98,281. These expenses were offset by a gain in change in the fair value of derivatives of $233,882.
Total other expense for the year ended December
31, 2024, was $284,449, which includes interest expense of $143,146 (includes $135,315 amortization of debt discount), a loss on disposal
of fixed assets of $159,593, an early payment penalty of $16,574 and a loss on the issuance of convertible debt of $6,473. These expenses
were offset by a $14,270 gain on conversion of debt and a change in the fair value of derivatives of $27,067.
Net
Loss
For the year ended December 31, 2025, we had a
net loss of $3,020,300 as compared to a net loss of $1,077,997 for the year ended December 31, 2024.
9
Liquidity and
Capital Resources
Cash
flow from operations
Cash used in operating activities for the year
ended December 31, 2025 was $502,829 as compared to $683,057 cash used in operating activities for the year ended December 31, 2024.
Cash
Flows from Investing
We did not use or receive any cash for investing
activities for the year ended December 31, 2025. Cash used in investing activities for the purchase of equipment and tooling for the year
ended December 31, 2024 was $124,700.
Cash
Flows from Financing
For the year ended December 31, 2025, we received
$254,000 from convertible notes payable. For the year ended December 31, 2024, we received $225,000 from convertible notes payable and
repaid $93,000. We also received $420,000 from the sale of common stock.
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 $18,291,056 at December 31, 2025, had a net loss of $3,020,300 and net cash used
in operating activities of $502,829 for the year ended December 31, 2025. 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
The Company considers its accounting for the fair
value of financial instruments, revenue recognition, accounts receivable, allowance for doubtful accounts and inventory among its critical
accounting policies. The Company maintains an allowance for doubtful accounts to reflect management’s estimate of the amount of
receivables that will not be collected. This estimate is considered a critical accounting estimate due to the subjectivity involved in
evaluating the collectability of accounts receivable. The fair value measurement of derivative instruments is also one of our critical
accounting estimates due to the complexity and subjectivity involved. These estimates often require the use of valuation models that rely
on unobservable inputs. Refer to Note 2 of our financial statements contained elsewhere in this Form 10-K for a more detail description
of each, and a summary of all our critical accounting policies and recently adopted 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.
10
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, 2025 and 2024 F-5
Statements of Cash Flows for the Years ended December 31, 2025 and 2024 F-7
Notes to Financial Statements F-8
F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board
of Directors and Stockholders 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, 2025 and 2024,
and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period
ended December 31, 2025, 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, 2025, and 2024 and the results of its
operations and its cash flows for each of the years in the two-year period ended December 31, 2025, 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
Audit Matters
The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-2
Revenue
Recognition – Refer to note 2 to the financial statements
Description
of the Critical Audit Matter
The
Company recognizes revenue upon transfer of the promised products to customers in an amount that reflects the consideration the Company
expects to receive in exchange for those products or services. Factors influencing this determination include control over the goods or
services, responsibility for fulfillment, and rights to the revenue generated. Significant judgment may be required by the Company in
determining revenue recognition for these transactions, including satisfaction of the performance obligation and proper recognition of
revenue.
How
the Critical Audit Matter Was Addressed in the Audit.
Our
audit procedures related to revenue recognition were included the followings:
Fruci
& Associates II, PLLC – PCAOB ID #05525
We have served as
the Company’s auditor since 2018.
Spokane,
Washington
April 15, 2026
F-3
REMSLEEP
HOLDINGS, INC.
BALANCE SHEETS
ASSETS
Current assets:
Accounts receivable, net — 2,741
Prepaid – related party — 7,500
Deposit on inventory — 9,050
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Operating lease liability – current portion 18,154 9,136
Long Term Liabilities
Operating lease liability – net of current portion 8,053 —
Commitments and Contingencies — —
STOCKHOLDERS’ EQUITY (DEFICIT):
Total Liabilities and Stockholders’ Equity (Deficit) $ 339,756 $ 591,697
The accompanying notes are an integral part
of these financial statements.
F-4
REMSLEEP
HOLDINGS, INC.
STATEMENTS OF OPERATIONS
For the Years Ended December 31,
Operating Expenses:
Other income (expense):
Loss on disposal of fixed assets — (159,593 )
Gain on conversion — 14,270
Early payment penalty — (16,574 )
Loss on issuance of convertible debt (98,281 ) (6,473 )
Provision for income taxes — —
Net loss per share, basic and diluted $ (0.00 ) $ (0.00 )
The accompanying notes are an integral part
of these financial statements.
F-5
REMSLEEP
HOLDINGS, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024