NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the Period Ended June 30, 2016
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 Companys 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.
The Company has not yet earned any revenue from operations.
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.
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 considered to be 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 June 30, 2016.
Risk and Uncertainties
The Company is subject to risks common to companies in the mining industry, including, but not limited to, litigation, development of new technological mining innovations and dependence on key personnel. As of January 5, 2015, the Company is subject to risks common to manufacturing and health product providers.
6
REMSleep Holdings, Inc.
f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the Period Ended June 30, 2016
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, 2016.
Fair Value of Financial Statements
The Companys financial instruments consist of cash and security deposits. The carrying amount of these financial instruments approximates 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, 2016 and December 31, 2015.
7
REMSleep Holdings, Inc.
f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the Period Ended June 30, 2016
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, 2016 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.
NOTE 2: DUE TO RELATED PARTY
Due to related parties were $214,026 as of June 30, 2016 and $188,034 as of December 31, 2015. The funds borrowed from the Company's stockholder were to fund the Company's daily operations.
NOTE 3: CAPITAL STOCK
The company is currently authorized to issue 5,000,000 Class A preferred shares with $0.001 per value with 1:25 voting rights.
On February 25, 2016 the company issued 2 million Class A preferred shares. As of June 30, 2016, there were 2 million class A preferred shares issued and outstanding.
On February 23, 2016, the company issued as compensation for services provided a total of 200,000 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 March 26, 2015, a 1:2,000 reverse split was completed.
On April 17, 2013, the company issued as compensation for services provided a total of 3,000,000 common shares with a fair value of $9,900 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 12, 2012, the company signed a subscription agreement to issued 166,667 common shares in exchange of $5,000. As of December 31, 2013, 166,667 common shares to be issued are recorded. These 166,667 common shares were issued on February 13, 2013.
On July 5, 2012, the company issued 333,333 common shares in exchange of $10,000.
On April 18, 2012, the company executed a securities purchase agreement (the "Purchase Agreement") with Global Gold Incorporated, a corporation organized under the laws of the Province of British Columbia ("Global Gold") and the shareholders of Global Gold (the "Sellers"), pursuant to which the company acquired all of the issued and outstanding shares of the capital stock of Global Gold. The consideration (the "Purchase Price") paid by the company to the sellers was an aggregate of one hundred sixty-one million (161,000,000) shares of the company's common stock, par value $0.001 per share ( the "Common Stock"), of which one hundred eighteen million two hundred sixty-three thousand one hundred fifty-eight (118,263,158) shares of common stock payable to Thomas Brookes ("Brookes") and Matthew Sullivan ("Sullivan") were placed in escrow and will be released in accordance with the terms of an Escrow Agreement, described below. The purchase agreement also provided that Brookes and Sullivan will be appointed to the Board of Directors of the Company, and that each of Kenneth Stead, Timothy Stead, Brookes and Sullivan will vote their shares of stock of the company in favor of each other as directors so long as the parties maintain an ownership interest of at least five percent (5%) of the company's outstanding common stock and until the earlier of (i) eighteen (18) months from the date of the closing of the Global Gold transaction if the company has not received revenues of at least One Million Dollars ($1,000,000) from the production of the Ekom Eya mine in Ghana; or (ii) three (3) years from the date of the closing.
8
REMSleep Holdings, Inc.
f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the Period Ended June 30, 2016
On April 12, 2012, the company entered into an Escrow Agreement with Brookes, Sullivan and Gracin & Marlow, LLP, as escrow agent (the "Escrow Agreement"), pursuant to which the parties agreed that one hundred eighteen million two hundred sixty-three thousand one hundred fifty-eight (118,263,158) shares of common stock (the "Escrow Shares') will be released to Brookes and Sullivan if and when the company has received revenues of at least one million dollars ($1,000,000) from the production of the Ekom Eya mine in Ghana (the "Milestone"); provided, however, that if the Milestone is not achieved by the date that is two (2) years from the date of the Escrow Agreement, the escrow agent will release to the company for cancellation all of the Escrow Shares, unless otherwise agreed to by the company and Brookes and Sullivan.
In connection with the purchase agreement, described below, the company will issue to the sellers one hundred sixty-one million (161,000,000) shares of common stock. These securities will be issued in reliance on Section 4(2) of the securities act of 1933, as amended (the "Securities Act"). The issuance will not involve any general solicitation or advertising by us. The sellers acknowledged the existence of transfer restrictions applicable to the securities to be sold by us. Certificates representing the securities to be sold contain a legend stating the restrictions on transfer to which such securities are subject. The shares were recorded at $.10 per share, the price of the stock at the issuance date and date of contract. The $16,100,000 purchase price was immediately written off due to no future realization of cash flows and worthlessness.
On February 27, 2014 the Purchase Agreement is terminated by executed a share exchange agreement (the "agreement") with Global Gold. The agreement provides in part that 118,263,158 shares of our common stock previously issued to Mr. Sullivan and Mr. Brookes be returned to the company and cancelled. In consideration for the delivery of the 118,263,158 shares of Kat Gold common stock, Kat Gold will deliver to Mr. Brookes and Mr. Sullivan all of the issued and outstanding shares of Global Gold owned by Kat Gold. A total of 42,736,842 shares of Kat Gold common stock previously issued to the minority shareholders of Global Gold shall remain issued and outstanding.
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 ($0.01) and ($0.22) for the three months ended June 30, 2016 and 2015 and $(.10) and $(0.42), respectively, for the six months then ended.
NOTE 5 SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the quarter and six months ended June 30, 2016 and 2015 are summarized as follows:
Cash paid during the periods for interest and income taxes:
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2016
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2015
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Income Taxes
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$
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$
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Interest
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$
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$
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NOTE 6 COMMITMENTS AND CONTINGENCIES
Certain of the Companys 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 a party related through common ownership and directorship. All of the expenses herein have been borne by this individual on behalf of the Company and the direct vendor payments are treated as capital contributions and shareholder loans in the accompanying financial statements.
9
REMSleep Holdings, Inc.
f/k/a KAT GOLD HOLDINGS CORP.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the Period Ended June 30, 2016
NOTE 8 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.
Managements plans with regard to these matters encompass the following actions: 1) to raise financing to enable it to continue to locate, explore and develop mineral properties as well as to generate working capital, and 2) to sell mineral properties that it has located, explored and developed by attempting to enter into joint ventures with, or to sell interests in any property it manages to develop to, a major mining company. The Companys continued existence is dependent upon its ability to resolve its lack of liquidity and begin generating profits in its current business operations. However, the outcome of managements plans cannot be ascertained with any degree of certainty. The accompanying financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.
NOTE 9 SUBSEQUENT EVENTS
The Company has evaluated subsequent events from June 30, 2016 through February 21, 2017 the date the financial statements were available to be issued and determined that there have been no subsequent events after June 30, 2016 for which disclosure is required
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