# RemSleep Holdings Inc.: Form 10-Q for the period ended Mar 31, 2020

- Company: [RemSleep Holdings Inc.](/companies/rmsl.md) (CIK 1412126)
- Form: 10-Q
- Filed: 2020-05-18
- Accepted by EDGAR: May 18, 2020, 06:17 ET
- Period: 2020-03-31
- Accession: 0001213900-20-012723
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1412126/000121390020012723/f10q0320_remsleepholdings.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1412126/000121390020012723/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2020-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2020-01-01 to 2020-03-31 | −$79.4k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2020-01-01 to 2020-03-31 | $14.9k | us-gaap:InterestExpense |
| Net income | 3 months, 2020-01-01 to 2020-03-31 | −$273.5k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2020-01-01 to 2020-03-31 | $0.00 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 3 months, 2020-01-01 to 2020-03-31 | −$77.6k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2020-01-01 to 2020-03-31 | $7.5k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2020-03-31 | $253.7k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2020-03-31 | $262.7k | us-gaap:AssetsCurrent |
| Total assets | at 2020-03-31 | $376.9k | us-gaap:Assets |
| Total liabilities | at 2020-03-31 | $1.4m | us-gaap:Liabilities |
| Shareholders' equity | at 2020-03-31 | −$984.6k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 11,321 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,” and 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 August 26, 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 shares of common stock of RemSleep Holdings, Inc. at which time RemSleep LLC became our wholly-owned subsidiary and we adopted their business of developing and distributing 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.

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://www.remsleeptech.com. The contents of our website are not incorporated by reference into this report.

### Results of Operations

### The three months ended March 31, 2020 compared to the three months ended March 31, 2019

We have not generated revenue in the three months ended March 31, 2020 and 2019.

Professional fees were $9,725 compared to $15,500 for the three months ended March 31, 2020 and 2019, respectively, a decrease of $5,775, or 37.3%. Professional fees consist mostly of accounting, audit and legal fees. The decrease in the current period is due to a decrease in audit fees billed during the first quarter of 2020.

Compensation expense was $21,000 and $18,000 for the three months ended March 31, 2020 and 2019, respectively, an increase of $3,000. The increase is due to an increase in monthly salary to our CEO.

General and administrative expense was $48,667 and $16,369 for the three months ended March 31, 2020 and 2019, respectively, an increase of $32,298, or 197.3%. The increase in the current period can be largely attributed to an increase in depreciation, development and web design expense.

Total other expense for the three months ended March 31, 2020, was $194,130. Other expense includes $145,740 of debt discount amortization, a gain in the change of fair value of $152,875, a loss on the issuance of convertible debt of $186,365 (expenses related to our convertible debt) and interest expense of $14,900. In the prior period we had $43,953 of debt discount amortization, a loss on the issuance of convertible debt of $125,709, a loss in the change of fair value of $361,714 and $10,487 of interest expense.

#### Net Loss

For the three months ended March 31, 2020, we had a net loss of $273,522 as compared to a net loss of $591,732 for the three months ended March 31, 2019. Our net loss was lower in the current period primarily due primarily to the decrease other expenses as a result of the change in fair value of our derivatives.

### Liquidity and Capital Resources

#### Cash flow from operations

Cash used in operating activities for the three months ended March 31, 2020 was $77,589 as compared to $42,026 cash used in operating activities for the three months ended March 31, 2019.

#### Cash Flows from Investing

Cash used in investing activities for the purchase of equipment and tooling for the three months ended March 31, 2020 was $7,500 as compared to $24,490 of cash used in investing activities for the three months ended March 31, 2019.

#### Cash Flows from Financing

For the three months ended March 31, 2020, we received $220,000 from the issuance of convertible debt and repaid $818 on our auto loan. For the three months ended March 31, 2019, we received $95,000 from convertible debt loans and repaid $772 on our auto loan

As of March 31, 2020, we owe $413,600 to our convertible debt holders.

### Going Concern

As of March 31, 2020, 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.

### 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 2 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 other recently issued accounting pronouncements and plan to adopt those that are applicable to us. We do not expect the adoption of any other pronouncements to have an impact on our results of operations or financial position.

## Market risk

As filed, 154 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.

## Controls and procedures

As filed, 1,434 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 as of March 31, 2020 due to a lack of segregation of duties.

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.

## Risk factors

As filed, 154 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.

Filed May 18, 2020.
Source: SEC EDGAR, the filing index for accession 0001213900-20-012723. Last ingested by Listed: Oct 24, 2026, 15:09 ET. No prices; not investment advice.