Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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)

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.

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.