RemSleep Holdings Inc. - Quarter Report: 2017 June (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]. QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2017
Commission file number: 000-53450
REMSLEEP HOLDINGS, INC.
(Name of registrant as specified in its charter)
Nevada |
| 47-5386867 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
699 Walnut St. Suite 400, Des Moines, Iowa 50309-3962
(Address of principal executive offices) (Zip Code)
515-724-5994
(Registrant’s telephone number, including area code)
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 [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] | Accelerated filer | [ ] |
Non-accelerated filer | [ ] (Do not check if smaller reporting company) | Smaller reporting company | [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of August 15, 2017, there were 3,610,751 shares of common stock outstanding.
1
TABLE OF CONTENTS
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PART I. - FINANCIAL INFORMATION |
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Item 1. |
| Financial Statements. |
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Item 2. |
| Management’s Discussion and Analysis of Financial Condition and Plan of Operations. |
| 11 |
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Item 3. |
| Quantitative and Qualitative Disclosures About Market Risk. |
| 14 |
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Item 4 |
| Controls and Procedures. |
| 14 |
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PART II - OTHER INFORMATION |
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Item 1. |
| Legal Proceedings. |
| 15 |
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Item 1A. |
| Risk Factors. |
| 15 |
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Item 2. |
| Unregistered Sales of Equity Securities and Use of Proceeds. |
| 15 |
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Item 3. |
| Defaults Upon Senior Securities. |
| 15 |
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Item 4. |
| Mine Safety Disclosures |
| 15 |
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Item 5. |
| Other Information. |
| 15 |
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Item 6. |
| Exhibits. |
| 15 |
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Signatures |
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| 15 |
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PART I - FINANCIAL INFORMATION
These unaudited financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. These financial statements and the notes attached hereto should be read in conjunction with the financial statements and notes included in the Company’s 10-K for its fiscal year ended December 31, 2016 as filed with the SEC on April 17, 2017. In the opinion of the Company, all adjustments, including normal recurring adjustments necessary to present fairly the financial position of the Company, as of June 30, 2017 and the results of its operations and cash flows for the three-month periods then ended have been included. The results of operations for the interim period are not necessarily indicative of the results for the full year.
ITEM 1. FINANCIAL STATEMENTS
REMSleep Holdings, Inc. f/ka KAT Gold Holdings Corp. | ||||
CONDENSED BALANCE SHEETS | ||||
(UNAUDITED) | ||||
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| June 30, |
| December 31, |
ASSETS |
| 2017 |
| 2016 |
CURRENT ASSETS: |
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Prepaid Expenses | $ | 7,190 | $ | - |
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PROPERTY AND EQUIPMENT - net |
| 12,387 |
| 12,845 |
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TOTAL ASSETS | $ | 19,577 | $ | 12,845 |
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
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CURRENT LIABILITIES |
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Accounts payable | $ | 226,398 | $ | 226,398 |
Due to shareholder |
| 143,748 |
| 85,287 |
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TOTAL LIABILITIES |
| 370,146 |
| 311,685 |
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STOCKHOLDERS' EQUITY (DEFICIT) |
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Series A preferred stock, no par value, 5,000,000 shares authorized, |
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3,500,000 shares and 5,000,000 shares issued and outstanding at |
| - |
| - |
June 3, 2017 and December 31, 2016, respectively |
| 105,000 |
| 105,000 |
Series B preferred stock, no par value, 5,000,000 shares authorized, |
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0 shares issued at June 30, 2017 and December 31, 2016. |
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Series C preferred stock, no par value, 5,000,000 shares authorized, |
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0 shares issued at June 30, 2017 and December 31, 2016. |
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Common stock, $.001 par value, 1,000,000,000 shares authorized, |
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3,210,611 and 3,273,111 shares issued and outstanding at |
| 3,210 |
| 3,273 |
June 30, 2017 and December 31, 2016, respectively |
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Common stock to be issued, $.001 par value, 188 shares at |
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June 30, 2017 and, December 31, 2016, respectively |
| - |
| - |
Additional paid in capital |
| 720,464 |
| (31,599) |
Deficit |
| (1,179,243) |
| (375,514) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
| (350,569) |
| (298,840) |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 19,577 | $ | 12,845 |
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The accompanying notes are an integral part of these financial statements | ||||
3
REMSleep Holdings, Inc. f/k/a KAT Gold Holdings Corp. | ||||||||
CONDENSED STATEMENTS OF OPERATIONS | ||||||||
(UNAUDITED) | ||||||||
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| For Three Months Ended |
| For Six Months Ended | ||||
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| June 30, | ||||
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| 2016 |
| 2017 |
| 2016 |
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EXPENSES: |
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Accounting and legal | $ | 23,360 | $ | 3,000 | $ | 40,960 | $ | 19,406 |
Office and other expenses |
| 5,016 |
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| 7,850 |
| 2,446 |
Officer compensation |
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| 4,000 |
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Public company costs |
| 360,461 |
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| 750,461 |
| 7,236 |
Depreciation |
| 229 |
| 230 |
| 458 |
| 459 |
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Total expenses |
| 389,066 |
| 3,230 |
| 803,729 |
| 29,547 |
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Loss from operations |
| (389,066) |
| (3,230) |
| (803,729) |
| (29,547) |
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Income (loss) before income taxes |
| (389,066) |
| (3,230) |
| (803,729) |
| (29,547) |
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Provision for income taxes |
| - |
| - |
| - |
| - |
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NET INCOME (LOSS) | $ | (389,066) | $ | (3,230) | $ | (803,729) | $ | (29,547) |
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Basic and fully diluted net income (loss) per share | $ | (0.12) | $ | (0.00) | $ | (0.25) | $ | (0.01) |
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Weighted average common shares outstanding |
| 3,159,375 |
| 3,260,611 |
| 3,241,343 |
| 3,058,111 |
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The accompanying notes are an integral part of these financial statements | ||||||||
4
REMSleep Holdings, Inc. f/ka KAT Gold Holdings Corp. | |||||||||||
STATEMENTS OF STOCKHOLDERS' DEFICIT | |||||||||||
(UNAUDITED) | |||||||||||
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| Series A | Series A |
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| Common | Common |
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| Preferred | Preferred | Preferred |
| Common | Shares | Stock | Additional |
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| Preferred | Stock | Shares | Stock | Common | Stock | to be | to be | Paid-in | Retained |
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| Shares | Amount | to be Issued | Amount | Shares | Amount | Issued | Issued | Capital | Deficit | Total |
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Balance December 31,2015 | 1,500,000 | - | - | - | 61,012,227 | $61,012 | 3,750 | $ 4 | $(177,342) | $(178,421) | $(294,747) |
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Investment January 5 | - | - | - | - | 3,000,000 | 3,000 | - | - | 27,000 | - | 30,000 |
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Common shares issued as compensation Jan. 20 | - | - | - | - | 1,000,000 | 1,000 | - | - | 14,000 | - | 15,000 |
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Common shares issued as compensation Feb. 23 | - | - | - | - | 200,000 | 200 | - | - | 2,800 | - | 3,000 |
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Preferred A shares issued February 25 | 2,000,000 | 60,000 | - | - | - | - | - | - | - | - | 60,000 |
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Preferred A shares issued April 26 | 1,500,000 | 45,000 | - | - | - | - | - | - | - | - | 45,000 |
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Common shares issued as compensation Oct. 5 | - | - | - | - | 250,000 | 250 | - | - | 39,750 | - | 40,000 |
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Net loss for the year ended December 31, 2016 | - | - | - | - | - | - | - | - | - | (197,093) | (197,093) |
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Balance December 31, 2016 | 5,000,000 | 105,000 | - | - | 65,462,227 | $65,462 | 3,750 | $ 4 | $(93,792) | $(375,514) | $(298,840) |
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Common shares issued as compensation Jan. 15 | - | - | - | - | 100,000 | 100 | - | - | 4,900 | - | 5,000 |
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Common shares issued as compensation March 6 | - | - | - | - | 650,000 | 650 | - | - | 389,350 | - | 390,000 |
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Preferred shares cancelled April 4 | (1,500,000) | - | - | - | - | - | - | - | - | - | - |
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Common shares cancelled April 10 | - | - | - | - | (3,000,000) | (3,000) | - | - | - | - | (3,000) |
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Common shares issued as compensation May 25 | - | - | - | - | 1,000,000 | 1,000 | - | - | 359,000 | - | 360,000 |
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Reverse split 1-for - 20 | - | - | - | - | (61,001,616) | (61,002) | (3,562) | (4) | 61,006 | - | - |
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Net loss for the period ended June 30, 2017 | - | - | - | - | - | - | - | - | - | (803,729) | (803,729) |
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Balance June 30, 2017 | 3,500,000 | 105,000 | - | - | 3,210,611 | $3,210 | 188 | $- | $720,464 | $(1,179,243) | $(350,569) |
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The accompanying notes are an integral part of these financial statements | |||||||||||
5
REMSleep Holdings, Inc. f/k/a/ KAT Gold Holdings Corp. | ||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||
(UNAUDITED) | ||||
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| For Six Months Ended | ||
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| June 30, | ||
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| 2017 |
| 2016 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss | $ | (803,729) | $ | (29,547) |
Adjustments to reconcile net loss to net cash (used in) operations: |
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Depreciation |
| 458 |
| 459 |
Stock Issued as compensation |
| 755,000 |
| 3,000 |
Changes in assets: |
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Prepaid expenses |
| (7,190) |
| - |
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NET CASH PROVIDED BY OPERATING ACTIVITIES |
| (55,461) |
| (29,088) |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Surrendered stock |
| (3,000) |
| - |
NET CASH USED BY INVESTING ACTIVITIES |
| (3,000) |
| 3,000 |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from shareholder advances |
| 58,461 |
| 25,992 |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
| 58,461 |
| 25,992 |
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
| - |
| (96) |
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CASH AND CASH EQUIVALENTS, |
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BEGINNING OF THE YEAR |
| - |
| 108 |
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END OF THE PERIOD | $ | - | $ | 12 |
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The accompanying notes are an integral part of these financial statements | ||||
6
REMSleep Holdings, Inc. f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO FINANCIAL STATEMENTS
For the Period Ended June 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity
REMSleep Holdings, Inc., f/k/a/ Kat Gold Holdings Corp. (the “Company”) was incorporated in the State of Nevada on June 6, 2007. Following its acquisition of Handcamp on June 4, 2010, a gold property located in the Province of Newfoundland and Labrador, Canada (“Handcamp”), the Company changed its business model to that of a mineral acquisition, exploration and development company focused primarily on gold properties. On August 26, 2010, the Company’s name was changed from Bella Viaggio, Inc. to Kat Gold Holdings corp. As of this annual report, the Company has not generated any revenues but has incurred expenses related to the drilling and exploration of Handcamp. 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.
On May 30, 2015 REMSleep LLC was formerly merged into REMSleep Holdings, Inc.
Basis of Presentation
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 at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a December 31 fiscal year end.
Use of Estimates
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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents.
Comprehensive Income (Loss)
The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements.
Long-Lived Assets
The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is impaired and is written down to fair market value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the period ended December 31, 2016.
7
REMSleep Holdings, Inc. f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO FINANCIAL STATEMENTS
For the Period Ended June 30, 2017
Risk and Uncertainties
As of January 5,2015, the Company is subject to risks common to manufacturing and health product providers.
Advertising Costs
Advertising costs are expensed as incurred. The Company does not incur any direct-response advertising costs.
Stock-Based Compensation
The company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about stock based compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Fair Value for Financial Assets and Financial Liabilities
The company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("paragraph 820-10-35-37") to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1: Quoted market prices available in active markets for identical assets and liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally observable inputs and not corroborated by the market data.
The carrying amounts of the company's financial assets and liabilities, such as cash, accounts receivable, rent deposit, accounts payable, customer deposits and notes payable approximate their fair values because of the short maturity of these instruments.
There were no assets or liabilities measured at fair value on a nonrecurring basis during the period ended June 30, 2017.
Fair Value of Financial Statements
The Company’s financial instruments consist of cash and security deposits. The carrying amount of these financial instruments approximate fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Loss Per Share
Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of June 30, 2017 and 2016.
8
REMSleep Holdings, Inc. f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO FINANCIAL STATEMENTS
For the Period Ended June 30, 2017
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax basic of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the company's policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of June 30, 2017, there have been no interest or penalties incurred on income taxes.
Recent Accounting Pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will cause a material impact on its financial condition or the results of its operations.
The results for the three months ended June 30, 2017 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10K for the year ended December 31, 2016, filed with the Securities and Exchange Commission.The accompanying condensed financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2017 and for the related periods have been presented.
NOTE 2 - GOING CONCERN AND UNCERTAINTY
The Company has suffered recurring losses from operations since inception. In addition, the Company has yet to generate an internal cash flow from its business operations. These factors raise substantial doubt as to the ability of the Company to continue as a going concern.
NOTE 3 - CAPITAL STOCK
On June 29, 2017, the Company affected a 1 - for - 20 reverse stock split of its common shares.
All Share amounts and related values have been adjusted to reflect the reverse stock split.
On January 5, 2016, the Company issued 150,000 common shares with a fair value of $30,000 to an investor in exchange for a like amount of expenses that the investor paid on behalf of the Company. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date.
On January 20, 2016, the Company issued as compensation for services provided a total of 50,000 common shares with a fair value of $15,000 to a third party. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date.
On February 25, 2016, the Company issued 2 million Class A preferred shares. On April 26, 2016, the Company issued 1.5 million Class A preferred shares. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date for the common shares as the preferred shares have a preference to a 1 to 1 conversion to common stock. The Company recognized compensation expense to officers.
On February 23, 2016, the Company issued as compensation for services provided a total of 10,000 common shares with a fair value of $3,000 to a third party. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date.
On October 5, 2016, the Company issued as compensation for services provided a total of 12,500 common shares with a fair value of $40,000 to a third party. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date.
On January 15, 2017, the Company issued as compensation for services provided a total of 5,000 common shares with a fair value of $5,000 to a third party. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date.
On March 6, 2017, the Company issued as compensation for services provided a total of 32,500 common shares with a fair value of $390,000 to a third party. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date. There is an anti-dilution provision contained in this agreement to ensure that the party remains a 1% owner of all outstanding common shares as of March 8, 2018.
9
REMSleep Holdings, Inc. f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO FINANCIAL STATEMENTS
For the Period Ended June 30, 2017
On April 4, 2017, a former shareholder surrendered 75,000 preferred shares that had been issued to him.
On April 10, 2017, a former shareholder surrendered 1,500,000 common shares that had been issued to him
On May 25, 2017, the Company issued as compensation for services provided a total of 50,000 common shares with a fair value of $360,000 to a third party. The fair value of the shares was based on the price quoted on the OTC bulletin board on the grant date.
The company is currently authorized to issue 5,000,000 Class A preferred shares with $0.001 per value with 1:25 voting rights and a 1:1 conversion into common shares. As of June 30, 2017 and December 31, 2016, there were 3,500,000 and 5,000,000 class A preferred shares issued and outstanding, respectively.
The Company is currently authorized to issue 1,000,000,000 common shares with $.001 par value per share.
NOTE 4 - LOSS PER SHARE
Loss per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Basic and diluted loss per share was ($0.12) and ($.00) for the three-month period ended June 30, 2017 and 2016 and ($0.25) and ($0.01) for the same six-month periods.
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the quarter and six months ended June 30, 2017 and 2016 are summarized as follows:
Cash paid during the periods for interest and income taxes:
|
| 2016 |
| 2017 |
Income Taxes | $ | - | $ | - |
Interest | $ | - | $ | - |
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Certain of the Company’s officers and directors are involved in other related business activities and most likely will become involved in other business activities in the future.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company has received support from parties related through common ownership and directorship. All of the expenses herein have been borne by these individuals on behalf of the Company and the direct vendor payments are treated as capital contributions and shareholder loans in the accompanying financial statements. There are outstanding loans of $143,640 and $108 and $85,179 and $108 at June 30, 2017 and December 31, 2016 and, respectively.
NOTE 8 SUBSEQUENT EVENTS
On August 7, 2017, the Company issued as compensation for services provided a total of 150,000 common stock shares to a third party.
On August 7, 2017, the Company issued as compensation for services to be rendered a total of 250,000 common stock shares to a third party.
The Company evaluated all events or transactions that occurred after June 30, 2017 through the date of this filing. Besides what was disclosed above there were no additional disclosures are required.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS.
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 August 26, 2010, we changed our name from Bella Viaggio, Inc. to Kat Gold Holdings Corp. Effective January 1, 2015, we entered into 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. As a result of the exchange, RemSleep LLC became our wholly-owned subsidiary and constitutes our business and operations and we changed our name to REMSleep Holdings, Inc. to reflect our new business model of developing and distributing sleep apnea products.
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.
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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 website is located at: http://www.remsleeptech.com.
Going Concern
As of June 30, 2017, 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 for the 3 Months Ending June 30, 2017
We had no cash as of June 30, 2017.
Results of Operations for the 3 Months Ending June 30, 2017
For the three months ended June 30, 2017 compared to the three months ended June 30, 2016, total revenues were $0 and $0, respectively, and net losses from operations were $389,066 and $3,230, respectively. The net loss for the 2017 period was primarily attributable to costs of operating as a public company and related professional fees.
Liquidity and Capital Resources for the 6 Months Ending June 30, 2017
We had no cash as of and during the six months ended June 30, 2017.
Cash flow from operations for the 6 Months Ending June 30, 2017
The net cash flow used in operating activities for the six months ended June 30, 2017 were ($55,461) as compared to ($26,088) for the same period ended 2016.
Cash Flows from Investing for the 6 Months Ending June 30, 2017
The net cash flow used in investing activities for the six months ended June 30, 2017 was ($3,000) as compared to $-0- for the same period ended 2016.
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Cash Flows from Financing for the 6 Months Ending June 30, 2017
The net cash flows from financing activities for the six months ended June 30, 2017 were $58,461 as compared to $25,992 for the same period ended 2016.
Results of Operations for the 6 Months Ending June 30, 2017
For the six months ended June 30, 2017 compared to the six months ended June 30, 2016, total revenues were $0 and $0, respectively, and net losses from operations were $803,729 and $29,547, respectively. The net losses were attributable to costs attributable to operating as a public company common stock with a valuation of $390,000 that was issued to an investor relations firm in the first quarter of 2017 and common stock with a valuation of $360,000 issued in the second quarter of 2017.
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
We prepare financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), which requires us to make estimates and assumptions that affect the amounts reported in our combined and consolidated financial statements and related notes. We periodically evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements.
Business Activities.
We have not yet earned any revenue from operations. Accordingly, our activities have been accounted for as those of a “Development Stage Enterprise” as set forth in Financial Accounting Standards Board Statement No. 7, “Accounting and Reporting for Development Stage Enterprises” (“SFAS No. 7”). Among the disclosures required by SFAS No. 7 are that our financial statements be identified as those of a development stage operation, and that the statements of operations, shareholders’ equity and cash flows disclose activity since the date of our inception.
Basis of Presentation.
Our financial statements are presented on the accrual basis of accounting in accordance with GAAP, whereby revenues are recognized in the period earned and expenses when incurred. We follow SFAS No. 7 in preparing our financial statements.
Management’s Use of Estimates.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Comprehensive Income (Loss).
We adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income,” which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to us during the period covered in the financial statements.
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Long-Lived Assets.
In accordance with SFAS No. 144, we review and evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, including those noted above, we compare the assets’ carrying amounts against the estimated undiscounted cash flows to be generated by those assets over their estimated useful lives. If the carrying amounts are greater than the undiscounted cash flows, the fair values of those assets are estimated by discounting the projected cash flows. Any excess of the carrying amounts over the fair values are recorded as impairments in that fiscal period.
Statement of Cash Flows.
For purposes of the statement of cash flows, we consider all highly liquid investments (i.e., investments which, when purchased, have original maturities of three months or less) to be cash equivalents.
Fair Value of Financial Instruments
Our financial instruments consist of cash and cash equivalents. The fair value of cash and cash equivalents approximates the recorded amounts because of the liquidity and short-term nature of these items.
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
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 June 30, 2017. Our management intends, during the 2017 fiscal year, to design and implement processes and procedures that will provide reasonable assurance regarding the reliability of our financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
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.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
On June 15, 2017, we conducted a 1-for-20 reverse stock split of our common stock (the "Reverse Stock Split"), whereby every 20 shares of our old common stock was converted into 1 share of new common stock. The Reverse Stock Split Amendment was filed with the State of Nevada.
ITEM 6. EXHIBITS
(a) Documents furnished as exhibits hereto:
Exhibit No. | Description |
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
|
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Label Linkbase Document |
101.PRE | XBRL Taxonomy Presentation Linkbase Document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| REMSLEEP HOLDINGS CORP. |
|
|
Date: August 21, 2017 | By: /s/Tom Wood |
| Tom Wood |
| Principal Executive Officer/Principal Financial Officer/Director |
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