# RemSleep Holdings Inc.: Form 10-Q for the period ended Sep 30, 2018

- Company: [RemSleep Holdings Inc.](/companies/rmsl.md) (CIK 1412126)
- Form: 10-Q
- Filed: 2018-11-13
- Accepted by EDGAR: Nov 13, 2018, 07:23 ET
- Period: 2018-09-30
- Accession: 0001213900-18-015364
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1412126/000121390018015364/f10q0918_remsleephold.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1412126/000121390018015364/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2018-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2018-07-01 to 2018-09-30 | −$242.9k | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2018-01-01 to 2018-09-30 | −$694.5k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2018-07-01 to 2018-09-30 | $2.1k | us-gaap:InterestExpense |
| Interest expense | 9 months, 2018-01-01 to 2018-09-30 | $3.4k | us-gaap:InterestExpense |
| Net income | 3 months, 2018-07-01 to 2018-09-30 | −$348.9k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2018-01-01 to 2018-09-30 | −$818.7k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2018-07-01 to 2018-09-30 | −$0.06 | us-gaap:EarningsPerShareBasicAndDiluted |
| Diluted EPS | 9 months, 2018-01-01 to 2018-09-30 | −$0.16 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 9 months, 2018-01-01 to 2018-09-30 | −$89.5k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2018-01-01 to 2018-09-30 | $25.6k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2018-09-30 | $41.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2018-09-30 | $52.9k | us-gaap:AssetsCurrent |
| Total assets | at 2018-09-30 | $85.3k | us-gaap:Assets |
| Total liabilities | at 2018-09-30 | $633.3k | us-gaap:Liabilities |
| Shareholders' equity | at 2018-09-30 | −$548.0k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 12,752 characters.

Forward-looking Statements

There are “forward-looking statements” contained in this quarterly report. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this quarterly report to conform forward-looking statements to actual results. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

- Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;
- Our failure to earn revenues or profits;
- Inadequate capital to continue business;
- Volatility or decline of our stock price;
- Potential fluctuation in quarterly results;
- Rapid and significant changes in markets;
- Litigation with or legal claims and allegations by outside parties; and
- Insufficient revenues to cover operating costs.

The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this quarterly report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking statements included in this discussion as a result of various factors.

### Overview

We were incorporated in the State of Nevada on June 6, 2007. On January 5, 2015 the name of the Company was changed to REMSleep Holdings, Inc. and the business model was changed to reflect the new direction of the Company; to develop and distribute products to help people affected by sleep apnea.

Our officers have 35 years of sleep-industry experience, including working at sleep industry companies. Our officers invented our DeltaWave CPAP (continuous positive airway pressure) interface (the “DeltaWave”). We have developed the DeltaWave as an innovative new device to treat patients with sleep apnea. The patent-pending DeltaWave product is a nasal-pillows type interface designed to result in better comfort and, therefore, better compliance. The Delta Wave is 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.

We plan to conduct clinical trials to test product effectiveness.

Our goal is to develop sleep products that achieve optimum compliance and comfort for CPAP patients.

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. This patent is still pending.

Our website is located at: http://www.remsleeptech.com.

### Results of Operations

### The three months ended September 30, 2018 compared to the three months ended September 30, 2017

Professional fees were $5,650 compared to $8,250 for the three months ended September 30, 2018 and 2017, respectively, a decrease of $2,600, or 31.5%. Professional fees consist mostly of accounting, audit and legal fees. The decrease in the current period is due to lower legal and audit expense.

Consulting expense was $220,000 compared to $88,531 for the three months ended September 30, 2018 and 2017, respectively, an increase of $131,469, or 148.5%. In the current period we recognized $220,000 of non-cash stock compensation expense. In the previous period we issued 400,000 shares of common stock to consultants for total non-cash expense of $85,000.

Officer compensation was $9,000 and $6,000 for the three months ended September 30, 2018 and 2017, respectively, an increase of $3,000. The increase is due to an increase in monthly compensation to our CEO.

General and administrative expense was $8,289 and $6,637 for the three months ended September 30, 2018 and 2017, respectively, an increase of $1,652, or 24.8%.

Total other expense for the three months ended September 30, 2018, was $105,980. Other expense includes $14,936 of debt discount amortization, a $47,020 loss on the issuance of convertible debt and a loss in the change of fair value of $41,894. These are all new expenses related to newly issued convertible debt. We also had $2,130 of interest expense compared to $630 in the prior period.

#### Net Loss

For the three months ended September 30, 2018, we had a net loss of $348,919 as compared to a net loss of $110,048 for the three months ended September 30, 2017. Our net loss was higher in the current period primarily due to the expense associated with issuing stock for services and the other non-cash expense from the issuance of convertible debt.

### The nine months ended September 30, 2018 compared to the nine months ended September 30, 2017

Professional fees were $41,750 and $68,462 for the nine months ended September 30, 2018 and 2017, respectively, a decrease of $26,712 or 39.0%. Professional fees consist mostly of accounting, audit and legal fees. The decrease of $26,712 in the current period is attributed to lower legal and audit fees.

Consulting expense was $603,799 and $458,635 for the nine months ended September 30, 2018 and 2017, respectively. In the current period we recognized $603,499 of non-cash stock compensation expense compared to $455,104 of non-cash stock compensation expense in the prior period.

Officer compensation was $27,000 and $18,000 for the nine months ended September 30, 2018 and 2017, respectively, an increase of $9,000. The increase is due to an increase in monthly compensation to our CEO.

General and administrative expense was $21,990 and $21,281 for the nine months ended September 30, 2018 and 2017, respectively, an increase of $709.

Total other expense for the nine months ended September 30, 2018, was $124,114. Other expense includes $14,936 of debt discount amortization, a $47,020 loss on the issuance of convertible debt and a loss in the change of fair value of $58,789. These are mostly new expenses related to newly issued convertible debt. We also had $3,369 of interest expense compared to $1,869 in the prior period.

#### Net Loss

For the nine months ended September 30, 2018, we had a net loss of $818,653 as compared to a net loss of $568,247 for the nine months ended September 30, 2017. Our net loss was higher in the current period primarily due to the expense associated with issuing stock for services and the other non-cash expense from the issuance of convertible debt.

### Going Concern

As of September 30, 2018, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our proposed business.

We have suffered recurring losses from operations since our inception. In addition, we have yet to generate an internal cash flow from our business operations or successfully raised the financing required to develop our proposed business. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern. Our future success and viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues or raise additional capital may have a material and adverse effect upon us and our shareholders.

Management’s plans with regard to these matters encompass the following actions: (i) obtaining funding from new investors to alleviate our working capital deficiency, and (ii) implementing a plan to generate sales. Our continued existence is dependent upon our ability to resolve our liquidity problems and increase profitability in our current business operations. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. Our financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.

### Liquidity and Capital Resources

### Cash flow from operations

Cash used in operating activities for the nine months ended September 30, 2018 was $89,496 as compared to $72,060 cash used in operating activities for the same period ended 2017.

### Cash Flows from Investing

Cash used in investing activities for the nine months ended September 30, 2018 was $25,563 as compared to $0 of cash used in investing activities for the same period ended 2017.

### Cash Flows from Financing

For the nine months ended September 30, 2018, we received $72,000 from the issuance of convertible debt, $90,000 from the sale of common stock and repaid $8,000 of loans. For the nine months ended September 30, 2017, we received $72,115 that was advanced from the Chairman to pay for operating expenses.

### Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

### Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 1 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.

We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

We recognize deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled. Future tax benefits have been fully offset by a 100% valuation allowance as management is unable to determine that it is more likely than not that this deferred tax asset will be realized.

### Recent Accounting Pronouncements

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe that any future adoption of such pronouncements will have a material impact on our financial condition or the results of our operations.

## Controls and procedures

As filed, 1,586 characters.

Disclosure Controls and Procedures

Each of our principal executive and principal financial officer has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a - 15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on their evaluation, each such person concluded that our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting as of September 30, 2018. Such material weaknesses include a lack of segregation of duties and timely and accurate reconciliation of accounts.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Changes in Internal Control over Financial Reporting.

Our management has evaluated whether any change in our internal control over financial reporting occurred during the last fiscal quarter. Based on that evaluation, management concluded that there has been no change in our internal control over financial reporting during the relevant period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Filed Nov 13, 2018.
Source: SEC EDGAR, the filing index for accession 0001213900-18-015364. Last ingested by Listed: Oct 24, 2026, 15:09 ET. No prices; not investment advice.