10-K: REMSleep Holdings Reports Net Loss but Sees Revenue in 2024

REMSleep Holdings, Inc. reports a net loss for 2024 but recognizes revenue from ResPlus CPAP system sales and continues development of its DeltaWave product.

Summary

• REMSleep Holdings, Inc., a medical technology company focused on sleep apnea solutions, filed its annual report on Form 10-K for the fiscal year ended December 31, 2024.
• The company reported a net loss of $1,077,997 for 2024, compared to a net loss of $1,777,838 in 2023.
• Revenue for 2024 was $117,185, generated from sales of the ResPlus CPAP system, while the cost of goods sold was $99,147.
• In 2023, revenue was $203,718 and cost of goods sold was $960,457, which included an impairment expense of $738,113 for inventory write-down.
• Operating expenses decreased from $1,014,903 in 2023 to $811,586 in 2024, with reductions in compensation, development, and lease expenses.
• The company is focused on developing and commercializing its DeltaWave CPAP interface and received FDA 510k approval on July 2, 2024.
• REMSleep's business plan is contingent upon obtaining adequate financing to support manufacturing, marketing, and product development.
• The company acknowledges substantial doubt about its ability to continue as a going concern due to accumulated deficits and cash used in operating activities.

Sentiment

Score: 3

Explanation: The document presents a concerning financial situation with a net loss, accumulated deficit, and a going concern warning. While there are some positive aspects like FDA approval and decreasing operating expenses, the overall sentiment is negative due to the company's financial instability and reliance on future financing.

Positives

• The company began selling its ResPlus CPAP system in the second quarter of 2022 and generated revenue of $117,185 in 2024.
• Operating expenses decreased by $203,317 year-over-year.
• The company received FDA 510k approval for its DeltaWave product on July 2, 2024.
• Development expenses decreased as the company neared completion of the DeltaWave product development.

Negatives

• The company reported a net loss of $1,077,997 for the year ended December 31, 2024.
• The company's revenue decreased from $203,718 in 2023 to $117,185 in 2024.
• The company has an accumulated deficit of $15,270,756 as of December 31, 2024.
• The company's auditor included a going concern paragraph in their opinion.

Risks

• The company's business plan is entirely dependent on obtaining adequate financing.
• Failure to obtain adequate financing could negatively affect the company's financial condition, business plan, and stock investments, potentially leading to liquidation and bankruptcy.
• The company faces intense competition from larger, better-capitalized competitors in the sleep apnea devices market.
• The company acknowledges substantial doubt about its ability to continue as a going concern.
• The company's disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2024.
• The company does not employ the appropriate accounting personnel to ensure proper segregation of duties, timely and accurate transaction entry, proper accounting for complex transactions, and maintenance of accounting records.

Future Outlook

The company expects to have DeltaWave product inventory ready for the market in the second quarter of 2025 and will continue to finance its operations through debt and/or equity financing as needed.

Management Comments

• Our officers have 35 years of sleep-industry experience, including having been employed at sleep industry companies.
• Our goal is to develop sleep products that achieve optimum compliance and comfort for CPAP patients.

Industry Context

The report cites market data indicating a growing market for sleep treatment and equipment, with increasing awareness of sleep apnea and a need for more comfortable and compliant CPAP devices.

Comparison to Industry Standards

• The sleep apnea devices market is highly consolidated, with ResMed, Philips Respironics, and Fisher & Paykel Healthcare being the primary competitors.
• ResMed holds 45% of the market share, followed by Philips (30%) and Fisher/Paykel (12%).
• REMSleep acknowledges that its competitors have greater financial, operational, and personnel resources.

Management Changes

Related Party Transactions

• The company executed an employment agreement with Mr. Wood, compensating him $8,000 per month.
• The company made cash payments to Jonathan Lane, the Chief Technology Officer, of $47,000 and $36,000 in 2024 and 2023, respectively.
• The company paid $31,100 and $19,000 to the CEO's brother for development services in 2024 and 2023, respectively.
• The company entered into an intellectual property assignment agreement with Mr. Wood, issuing him 2,000,000 shares of Series C Preferred Stock.

Stakeholder Impact

• Shareholders face the risk of investment losses due to the company's financial instability and dependence on future financing.
• Employees' job security is uncertain due to the company's going concern warning.
• Customers may be affected by the company's ability to deliver and support its products.
• Suppliers and creditors face the risk of non-payment due to the company's financial difficulties.

Next Steps

• The company expects to have DeltaWave product inventory ready for the market in the second quarter of 2025.
• The company will continue to seek debt and/or equity financing to support its operations.

Key Dates

Keywords

sleep apnea, CPAP, DeltaWave, ResPlus, medical devices, FDA, financing, going concern, REMSleep Holdings