CareView Communications Inc

Previous wording

The following discussion and analysis provide information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. This discussion should be read together with our financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q (the “Report”). This information should also be read in conjunction with the information contained in our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) filed on August 14, 2024. The reported results will not necessarily reflect future results of operations or financial condition.

Current wording

The following discussion and analysis provide information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. This discussion should be read together with our financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q (the “Report”). This information should also be read in conjunction with the information contained in our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2024. The reported results will not necessarily reflect future results of operations or financial condition.

Previous wording

CareView Connect is a platform consisting of several products and applications targeted at improving the level of care and efficiency. CareView built a cohesive and tightly integrated solution that solves several problems that long-term care facilities face. We offer an array of wearable and stationary buttons that allow a resident to summon help either for an emergency or assistance, which can be anything from toileting help to assistance putting on their shoes. We offer a mobile app capable of delivering an alert to the caregiver and allows them to document information around that alert, how long before the alert was handled and, what was the cause of the alert, and if it was not acknowledged in a timely manner then the alert is escalated to another individual or group. This ensures that every alert is responded to timely and is verifiable.

Current wording

CareView Connect is a platform consisting of several products and applications targeted at improving the level of care and efficiency. CareView built a cohesive and tightly integrated solution that solves several problems that long-term care facilities face. We offer an array of wearable and stationary buttons that allow a resident to summon help either for an emergency or assistance, which can be anything from toileting help to assistance putting on their shoes. We offer a mobile app capable of delivering an alert to the caregiver and allows them to document information around that alert, how long before the alert was handled and, what was the cause of the alert, and if it was not acknowledged in a timely manner then the alert is escalated to another individual or group. This ensures that every alert is responded to in a timely manner and is verifiable.

Previous wording

CareView Connect provides a suite of hardware and software that facilitate a data-driven solution for alert management and monitoring. CareView Connect’s solution provides additional context, including location of the resident, which improves response time by the staff. The alert system includes a documentation platform that allows the facility’s staff to classify the reason for alerts and provides metrics around response time. CareView Connect’s solution involves several passive sensors that monitor the resident.

Current wording

CareView Connect provides a suite of hardware and software that facilitates a data-driven solution for alert management and monitoring. CareView Connect’s solution provides additional context, including location of the resident, which improves response time by the staff. The alert system includes a documentation platform that allows the facility’s staff to classify the reason for alerts and provides metrics around response time. CareView Connect’s solution involves several passive sensors that monitor the resident.

Previous wording

Revenue decreased approximately $1,736,000 for the three months ended June 30, 2024, as compared to the same period in 2023. The decrease was attributable to no new customer equipment sales in the second quarter.

Current wording

Revenue decreased approximately $493,000 for the three months ended September 30, 2024, as compared to the same period in 2023. The decrease was attributable to no new customer equipment sales in the third quarter.

Previous wording

Our principal operating costs include the following items as a percentage of total operating expense.

Current wording

Our principal operating costs include the following items as a percentage of total operating expenses.

Previous wording

Operating expenses decreased by a net 21% because of the following items:

Current wording

Operating expenses increased by a net 6% because of the following items:

Previous wording

Human resource related costs (including salaries and benefits and non-cash compensation) decreased approximately $12,000 due to no severance and PTO payouts, along with lower salary of replacement staff during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. Product deployment costs decreased approximately $69,000 due to decrease in cost of sales of hardware and associated installation, training and go-live. Professional and consulting costs decreased approximately $85,000 due to less accounting, marketing and clinical consultants. Travel and entertainment costs decreased approximately $66,000 due to less corporate transportation and airfare costs. For the comparable periods, other expenses decreased approximately $326,000, primarily as a result of public entity costs, advertising and marketing, business insurance and warehouse supplies.

Current wording

Human resource related costs (including salaries and benefits and non-cash compensation) increased approximately $545,000 due to higher payroll with more employees, 2024 stock option awards, and sales commissions during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Product deployment costs decreased approximately $137,000 due to decrease in cost of sales of hardware and associated installation, training and go-live. Professional and consulting costs decreased approximately $89,000 due to having employees vs. consultants. Travel and entertainment costs increased approximately $3,000 due to increase cost of travel. For the comparable periods, other expenses decreased approximately $147,000, primarily as a result of advertising and marketing, R&D, business insurance and patent expenses.

Previous wording

Other non-operating income and expense decreased by approximately $76,000, or 9%, for the three months ended June 30, 2024 in comparison to the same period in 2023, primarily because of no debt restructuring costs while earning higher interest with more cash in bank.

Current wording

Other non-operating income and expense decreased by approximately $40,000, or 5%, for the three months ended September 30, 2024 in comparison to the same period in 2023, primarily because of no debt restructuring costs while earning higher interest with more cash in bank.

Previous wording

As a result of the factors above, our second quarter 2024 net loss of approximately $1,107,000, increased approximately $1,062,000, or 2,371%, as compared to approximately $45,000 net loss for the second quarter of 2023.

Current wording

As a result of the factors above, our third quarter 2024 net loss of approximately $1,470,000, increased approximately $600,000, or 69%, as compared to approximately $870,000 net loss for the third quarter of 2023.

Previous wording

Six months ended June 30, 2024, compared to six months ended June 30, 2023

Current wording

Nine months ended September 30, 2024, compared to nine months ended September 30, 2023

Previous wording

Revenue decreased approximately $1,315,000 for the six months ended June 30, 2024, as compared to the same period in 2023. The decrease was attributable to only one new customer sale in the six-month period.

Current wording

Revenue decreased approximately $1,808,000 for the nine months ended September 30, 2024, as compared to the same period in 2023. The decrease was attributable to only one new customer sale in the nine-month period.

Previous wording

Other, net decreased approximately $118,000 for the six months ended June 30, 2024, as compared to the same period in 2023. The decrease was attributable to the no debt restructuring costs while earning higher interest with more cash in bank.

Current wording

Other, net increased approximately $158,000 for the nine months ended September 30, 2024, as compared to the same period in 2023. The increase was attributable to the no debt restructuring costs while earning higher interest with more cash in bank.

Previous wording

Operating expenses decreased by a net 9% of approximately $460,000. The decrease was attributable to other expenses of approximately $242,000 less than comparable period from no debt-to-equity conversion costs, less warehouse supplies, renegotiated business insurance, less R&D and no Dell financing. The Professional and consulting costs of approximately $200,000 being lower than the comparable period is attributed to not using Centri Business Consulting, Danielle Lewis Marketing Services and converting a 1099 to an employee.

Current wording

Operating expenses decreased by a net 4% of approximately $311,000. The decrease was attributable to other expenses of approximately $389,000 less than comparable period from no debt-to-equity conversion costs, less advertising and marketing, renegotiated business insurance, less R&D and no Dell financing. The Professional and consulting costs of approximately $288,000 lower than the comparable period is attributed to not using Centri Business Consulting, Danielle Lewis Marketing Services and attorneys. Additionally, lower depreciation and amortization and product deployment further netted out the increase in human resource related costs.

Previous wording

Year-To-date 2024 net loss of approximately $2,129,000 increased approximately $738,000 or 53%, as compared to approximately $1,392,000 net loss for the comparable six months of 2023.

Current wording

Year-To-date 2024 net loss of approximately $3,600,000 increased approximately $1,339,000 or 59%, as compared to approximately $2,261,000 net loss for the comparable nine months of 2023.

Previous wording

The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years. As of and for the three months ended June 30, 2024, the Company had an accumulated deficit of $210,014,451, loss from operations of $319,053, net cash provided by operating activities of $749,331, and an ending cash balance of $1,738,994.

Current wording

The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years. As of and for the three months ended September 30, 2024, the Company had an accumulated deficit of $211,485,106, loss from operations of $1,470,655, net cash provided by operating activities of $392,966, and an ending cash balance of $1,400,386.

Previous wording

As of June 30, 2024, the Company had a working capital deficit of $39,291,576 consisting primarily of PDL notes payables including accrued interest. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the condensed consolidated financial statements were issued. While management will look to continue funding operations by increased sales volumes and raising additional capital from sources such as sales of its debt or equity securities or loans to meet operating cash requirements, there is no assurance that management’s plans will be successful.

Current wording

As of September 30, 2024, the Company had a working capital deficit of $40,269,985 consisting primarily of PDL notes payables including accrued interest. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the condensed consolidated financial statements were issued. While management will look to continue funding operations by increased sales volumes and raising additional capital from sources such as sales of its debt or equity securities or loans to meet operating cash requirements, there is no assurance that management’s plans will be successful. The Company’s net losses, cash outflows, and working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern through November 13, 2025.

Previous wording

The Company’s net losses, cash outflows, and working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern through August 13, 2025. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company’s cost structure.

Current wording

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company’s cost structure.

Previous wording

Please refer to our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Commission on March 29, 2024 and incorporated herein by reference, for detailed explanation of our critical accounting estimates, which have not changed significantly during the three and six months ended June 30, 2024.

Current wording

Please refer to our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Commission on March 29, 2024 and incorporated herein by reference, for detailed explanation of our critical accounting estimates, which have not changed significantly during the three and nine months ended September 30, 2024.