CareView Communications Inc
For the period ended Dec 31, 2024. Filed Apr 1, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Apr 1, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-29.
0001999371-24-004190
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-04-01.
0001437749-25-010329
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 38 previous paragraphs and 39 current paragraphs.
19 unchanged; 10 reworded; 10 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
● they involve significant estimation uncertainty.
Current report
● they have had a material impact or are reasonably likely to have a material impact on the financial statements.
Current report
The Company has reviewed its accounting policies and estimates in accordance with Generally Accepted Accounting Principles ("GAAP"). Following this review, management did not identify any critical accounting estimates for the preparation of these financial statements. The accounting estimates applied involve a minimal degree of uncertainty, and any potential adjustments are not expected to have any material effect on the Company’s financial position or results of operations.
Current report
Critical Accounting Policy
Current report
● Hardware packages – We recognize revenue related to the sale of hardware packages when control has been transferred to the customer (“point in time”).
Current report
● Software bundle and related services – We recognize on a straight-line basis over the estimated contracted license period (“over time”).
Current report
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update will improve the transparency and usefulness of income tax disclosures. Investors, lenders, and creditors have indicated that current disclosures do not provide enough detailed information to assess how a company's operations, tax risks, and planning affect its tax rate and future cash flows. The Company will adopt this guidance on its effective date for public business entities, beginning after December 15, 2024.
Current report
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This update will enhance disclosures about public business entity’s expenses, responding to investor requests for more detailed information on components such as inventory purchases, employee compensation, depreciation, amortization, and depletion within commonly presented expense captions (e.g., cost of sales, SG&A, and R&D). These amendments are expected to provide investors with a clearer understanding of an entity’s expenses, helping them assess performance, forecast future expenses, and evaluate cash flow prospects. The Company will adopt this guidance on its effective date for annual reporting periods beginning after December 15, 2026.
Current report
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) : Improvements to Reportable Segment Disclosures. The updated guidance reflects a more detailed approach to reporting financial information by operating segment, based on the internal management structure and the way resources are allocated within the Company. The adoption of this pronouncement did not have a material impact on the Company’s financial position or results of operations but has enhanced the transparency of segment performance. The Company has now presented its operating segment in accordance with the new standard within our Note 15 for the year ended December 31, 2024.
Current report
On March 21, 2025 (the “Effective Date”), CareView Communications, Inc., the Borrower, PDL BioPharma, Inc.("PDL"), the Lender, Steven G. Johnson, President and Chief Executive Officer of the Company, and Dr. James R. Higgins, a director of the Company, entered into a Tenth Amendment to Credit Agreement (the “Tenth Credit Agreement Amendment”), pursuant to which the parties agreed to amend the Credit Agreement to (i) provide that the Maturity Date shall be extended to June 30, 2025.
Removed paragraphs (9)
Previous report
Results of Operations
Previous report
Critical Accounting Estimates and New Accounting Pronouncements
Previous report
● if requires assumptions to be made that were uncertain at the time the estimate was made, and
Previous report
● changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.
Previous report
Income Taxes. As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Our provision for income taxes is determined using the asset and liability approach to account for income taxes. A current liability is recorded for the estimated taxes payable for the current year. Deferred tax assets and liabilities are recorded for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which the timing differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates or tax laws are recognized in the provision for income taxes in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount more-likely-than-not to be realized. Changes in valuation allowances will flow through the statement of operations unless related to deferred tax assets that expire unutilized or are modified through translation, in which case both the deferred tax asset and related valuation allowance are similarly adjusted. Where a valuation allowance was established through purchase accounting for acquired deferred tax assets, any future change will be credited or charged to income tax expense. See NOTE 5 in the accompanying Notes to Consolidated Financial Statements for discussion related to Tax Reform.
Previous report
The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. In the ordinary course of our business, there are transactions and calculations for which the ultimate tax determination is uncertain. Despite our belief that we have appropriate support for all the positions taken on our tax returns, we acknowledge that certain positions may be successfully challenged by the taxing authorities. We determine the tax benefits more likely than not to be recognized with respect to uncertain tax positions. Although we believe our recorded tax assets and liabilities are reasonable, tax laws and regulations are subject to interpretation and inherent uncertainty; therefore, our assessments can involve both a series of complex judgments about future events and rely on estimates and assumptions. Although we believe these estimates and assumptions are reasonable, the final determination could be materially different than that which is reflected in our provision for income taxes and recorded tax assets and liabilities.
Previous report
Impairment of Long-Lived Assets. Carrying values of property and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset group’s carrying value for recoverability. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then a loss is recorded for the difference between the assets’ fair value and respective carrying value. The fair value of the assets is determined using an “income approach” based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include market size and growth, market share, projected selling prices, manufacturing cost and discount rate. Our estimates are based upon historical experience, commercial relationships, market conditions and available external information about future trends.
Previous report
Credit Agreement Amendments: The company has entered into certain credit agreements in which further amendments have been established. At the time of modification, a classification must be made of the credit risk and economical condition to determine whether the respective modification is granted as a Troubled Debt Restructuring (TDR). Each amendment must be assessed and established to direct the appropriate calculations and accounting treatment. Due to the complexity of certain agreements, necessary judgements are encompassed to establish the appropriate calculations based on the associated effective borrowing rates.
Previous report
March 5, 2024, the board of directors approved 29,837,858 stock option grants to sixteen individuals for merit. These stock options are awarded under the newly approved 2024 Stock Options Plan as well as the remainder of the 2015, 2016 and 2020 Stock Options Plans. The stock price on Tuesday, March 5, 2024 was $0.06.
Reworded paragraphs (10)
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 year ended December 31, 2023, the Company had an accumulated deficit of approximately $207,885,000 a loss from operations of approximately $688,000, net cash provided by operating activities of $703,614 and an ending cash balance of $1,145,871.
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 year ended December 31, 2024, the Company had an accumulated deficit of approximately $212,586,000, a loss from operations of approximately $1,577,000, net cash used in operating activities of $(238,652) and an ending cash balance of $759,266.
Previous wording
As of December 31, 2023, the Company hada working capital of $(37,263,645). 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 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 December 31, 2024, the Company had a working capital deficit of $41,138,868. 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 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.
Previous wording
Operating loss was approximately $688,000 and $1,270,000 for the years ended December 31, 2023, and 2022, respectively. Our net loss was approximately $3,952,000 and $6,042,000 for the years ended December 31, 2023, and 2022, respectively.
Current wording
Operating loss was approximately $1,705,000 and $688,000 for the years ended December 31, 2024, and 2023, respectively. Our net loss was approximately $4,755,000 and $3,952,000 for the years ended December 31, 2024, and 2023, respectively.
Previous wording
Net increase in cash during the year ended December 31, 2023 was approximately $626,000. The principal cash provided by operating activities for the year ended December 31, 2023 was primarily related to significantly lower net loss due to sales. The change in cash flows provided by operating activities between 2023 and 2022 of approximately $1,073,000 is primarily a result of cancellation on December 30, 2022 of all non-PDL interest accruals and an increase in deferred revenue. The change in cash flows used in investing activities between 2023 and 2022 of approximately $57,000 is primarily a result of the increase in installation of CareView Patient Systems and the purchases of assets. The change in cash flows used in financing activities between 2023 and 2022 of approximately $251,000 is primarily due to the one-time 2022 board investment.
Current wording
Net decrease in cash during the year ended December 31, 2024 was approximately $387,000. The principal cash provided by operating activities for the year ended December 31, 2024 was primarily related to significantly lower net loss due to sales. The change in cash flows provided by operating activities between 2024 and 2023 of approximately $942,000 is primarily a result of $627,903 increase in net loss. The change in cash flows used in investing activities between 2024 and 2023 of approximately $77,000 is primarily a result of the increase in Patents and Trademarks. The change in cash flows used in financing activities between 2024 and 2023 of approximately $7,000 is primarily due to paying down notes payable of an installation truck.
Previous wording
Revenue increased approximately $1,783,000 for the year ended December 31, 2023 as compared to the same period in 2022. The increase in revenue results from the increase in our sales-based contracts of equipment of $1,969,505 and associated software bundle of $545,681 while subscriptions decreased $731,909.
Current wording
Revenue decreased approximately $1,433,000 for the year ended December 31, 2024 as compared to the same period in 2023. The decrease in revenue results from the decrease in our sales-based contracts of equipment of $2,480,022 and subscriptions of $265,091, while software bundle increased $1,311,710.
Previous wording
Operating expenses increased by approximately $1,201,000 (or 13%) as a result of the following items:
Current wording
Operating expenses decreased by approximately $544,000 (or 5%) as a result of the following items:
Previous wording
Human resource related costs (including salaries and benefits and non-cash compensation) increased approximately $104,000 primarily because of higher employee pay during the twelve months ended December 31, 2023 as compared to the twelve months ended December 31, 2022. Professional and consulting fees increased approximately $78,000, primarily because of higher legal costs for the debt-to-equity conversion. Depreciation and amortization expense decreased by approximately $149,000 due to fully depreciated and amortized assets. Other product development costs increased approximately $457,000 primarily because of increases in cost of sales (installation, training and service as well as freight) costs. Travel and entertainment expense decreased approximately $101,000 with less corporate travel and instead cost of sales during the twelve months ended December 31, 2023 as compared to the same period in 2022. Equipment cost increased by approximately $162,000 due to inventory replenishment. The increase of approximately $650,000 in other expense is due to asset disposable of patents, more advertising and marketing, and higher public entity costs.
Current wording
Human resource related costs (including salaries and benefits and non-cash compensation) increased approximately $961,000 primarily because of stock option grants and higher employee payroll during the twelve months ended December 31, 2024 as compared to the twelve months ended December 31, 2023. Professional and consulting fees decreased approximately $288,000, primarily because of lower legal costs and less contractors. Depreciation and amortization expense decreased by approximately $202,000 due to fully depreciated and amortized assets. Other product development costs increased approximately $170,000 primarily because of increases in cost of sales (installation, training and service as well as freight) of Go Lives. Travel and entertainment expense decreased approximately $139,000 with less corporate travel and instead cost of sales during the twelve months ended December 31, 2024 as compared to the same period in 2023. Equipment cost decreased by approximately $299,000 due to lack of sales. The decrease of approximately $747,000 in other expense is due to no more abandonment of assets, negotiating lower business insurance costs, less advertising and marketing expenses, lower R&D expenses and less office expenses.
Previous wording
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:
Current wording
The preparation of financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:
Previous wording
We base our estimates and judgments on our experience, our current knowledge, our beliefs of what could occur in the future, our observation of trends in the industry, information provided by our customers and information available from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following accounting policies and estimates as those that we believe are most critical to our financial condition and results of operations and that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties: income taxes, impairment of long-lived assets, sales-based revenue recognition and credit agreement amendments.
Current wording
We base our estimates and judgments on our experience, current knowledge, information provided by our customers and information available from other sources. Actual results may differ from these estimates under different assumptions or conditions. Sales-based revenue recognition is our most critical accounting policy to our financial condition and results of operations.
Previous wording
There have been no material changes to our significant accounting policies as summarized in NOTE 2 of our Annual Report on Form 10-K for the year ended December 31, 2023. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our accompanying consolidated financial statements.
Current wording
There have been no material changes to our significant accounting policies as summarized in NOTE 2 of our consolidated financial statements for the year ended December 31, 2024. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our accompanying consolidated financial statements.