CareView Communications Inc

NOTE1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION**

CareView Communications, Inc., a Nevada corporation (“CareView”, the “Company”, “we”, “us” or “our”), was originally formed in California on* July 8, 1997under the name Purpose, Inc., changing our name to Ecogate, Inc. in April 1999,and CareView Communications, Inc. in October 2007.We began our current operation in2003* as a healthcare information technology company with a patented patient monitoring and entertainment system.

Our business consists of a single segment of products and services all of which are sold and provided within the United States.

Description of Business and Products

CareView’s video monitoring solutions include the following:

SitterView® and TeleMedView allow hospital staff to use CareView’s video cameras to observe and communicate with patients remotely. TeleMedView leverages the CareView Mobile Controller’s built-in monitor and can work with the CareView Portable Controller as well.

Our CareView Patient Safety System® suite of video monitoring, guest services, and related applications connect patients, families and healthcare providers. CareView's video monitoring system connects the patient room to a touchscreen monitor at the nursing station or a mobile handheld device allowing the nursing staff to maintain a level of visual contact with each patient. We also provide a suite of services including on-demand movies, Internet access via the patient's television, and video visits with family and friends.

CareView Connect TM Quality of Life System (“CareView Connect”) consists of an emergency assist button, motion sensors, sleep sensor, and event sensor. Resident activity levels, medication administration, sleep patterns, and requests for assistance can be monitored depending on which options are selected. CareView's suite of products are designed for the long-term care market, including Nursing Care, Home Care, Assisted Living and Independent Living.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of CareView and CareView Communications, Inc., a Texas corporation, our wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation.

NOTE2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Trade Accounts Receivable

Trade accounts receivable are customer obligations due under normal trade terms. We provide an allowance for credit losses, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Trade accounts receivable past due more than90 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluations, results of collection efforts, and specific circumstances of the customer. Recoveries of accounts previously written off are recorded as reductions of bad debt expense when received. At* December 31, 2024and2023*, an allowance for credit losses of $0 and $0, respectively, was recorded.

F-7

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation. Maintenance costs, which donot significantly extend the useful lives of the respective assets, and repair costs are charged to operating expense as incurred. We include network equipment in fixed assets upon receipt and begin depreciating such equipment when it passes our incoming inspection and is available for use. We attributeno salvage value to the network equipment and depreciation is computed using the straight-line method based on the estimated useful life ofseven years. Depreciation of office and test equipment, warehouse equipment and furniture is computed using the straight-line method based on the estimated useful lives of the assets, generally three years for office and test equipment, andfive years for warehouse equipment and furniture.

Inventories

Inventory is valued at the lower of cost, determined on afirst-in,first-out (FIFO), or net realizable value. Inventory items are analyzed to determine cost and net realizable value, and appropriate valuation adjustments are then established. See Note6 for more details.

Allowance for System Removal

On occasion, the Company will remove subscription equipment from its larger customer premises due to contract expiration/non-renewal. When the equipment is removed, the costs for removal are calculated and recorded against the allowance. At* December 31, 2024and2023*, an allowance of $54,802 and $54,802, respectively, was recorded in other current liabilities in the accompanying consolidated financial statements.

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. Such events or circumstances include, but arenot limited to:

If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset groups’ carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. 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 asset isnot recoverable, then a loss is recorded for the difference between the assets’ fair value and respective carrying value. The fair value of the asset 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 our past experience, our commercial relationships, market conditions and available external information about future trends. We believe our current assumptions and estimates are reasonable and appropriate; however, unanticipated events and changes in market conditions could affect such estimates resulting in the need for an impairment charge in future periods. For the year ended* December 31, 2023,*$334,358 of intangible patent assets were written off.

F-8

Research and Development

Research and development costs are expensed as incurred. Costs regarding the development of software to be sold, leased or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. We didnot capitalize any such costs during the years ended* December 31, 2024*, and2023.

Intellectual Property

We capitalize certain costs of developing software upon the establishment of technological feasibility and prior to the availability of the product for general release to customers for our CareView Patient Safety System in accordance with GAAP. Capitalized costs are reported at the lower of unamortized cost or net realizable value and are amortized over the estimated useful life of the CareView Patient Safety Systemnot to exceed five years. Additionally, we test our intangible assets for impairment whenever circumstances indicate that their carrying value* may**not* be recoverable. No impairment was recorded during the years ended* December 31, 2024*, and2023.

Patents and Trademarks

We amortize our intangible assets with a finite life on a straight-line basis, over 10 years for trademarks and 20 years for patents. We begin amortization of these costs on the date patents or trademarks are awarded.

Fair Value of Financial Instruments

Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximate our fair value because of the short-term maturity of such instruments, and they are considered Level1 assets under the fair value hierarchy. We have electednot to carry our debt instruments at fair value. The carrying amount of our debt approximates fair value. Interest rates that are currently available to us for issuance of short- and long-term debt with similar terms. Remaining maturities are used to estimate the fair value of our short- and long-term debt and would be considered Level3 inputs under the fair value hierarchy.

We have categorized our assets and liabilities that are valued at fair value on a recurring basis into athree-level fair value hierarchy in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level1) and lowest priority to unobservable inputs (Level3).

Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on a hierarchy of inputs, as follows:

**Level1 **-- Unadjusted quoted prices in active markets for identical assets or liabilities.

**Level2 **-- Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

F-9

**Level3 **-- Unobservable inputs for the asset or liability.

At* December 31, 2024*, and2023, we hadno financial assets and liabilities reported at fair value.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely thannot be realized. In accordance with GAAP, we recognize the effect of uncertain income tax positions only if the positions are more likely thannot of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than50% likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgement occur. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic606 (“ASC606”). For our subscription service contracts, we have employed the practical expedient discussed in ASC606-10-55-18 related to invoicing as we have the right to consideration from our customers in the amount that corresponds directly with the value to the customer of our performance completed to date and therefore, we recognize revenue upon invoicing as further discussed below.

In accordance with ASC606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC606 include afive-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. For those customers for which we are required to collect sales taxes, we record such sales taxes on a net basis which hasno effect on the amount of revenue or expenses recognized as the sales taxes are a flow through to the taxing authority.

We enter into contracts with customers that* mayprovide multiple combinations of our products, software solutions, and other related services, which are generally capable of being distinct and accounted for as separate performance obligations. Performance obligations that arenot* distinct at contract inception are combined.

Customer contract fulfillment typically involves multiple procurement promises, which* may*include various equipment, software subscription, project-related installation and training services, and support. We have implemented formal documentation of customer acceptance for these various performance obligations to help alleviate certain estimates needed to establish specific dates of contract fulfillment. We allocate the transaction price to each performance obligation based on estimated relative standalone selling price. Revenue is then recognized for each performance obligation upon transferring control of the hardware, software, and services to the customer and in an amount that reflects the consideration we expect to receive and the estimated benefit the customer receives over the term of the contract.

Generally, we recognize revenue under each of our performance obligations as follows:

F-10

The Company earns sales-based contract revenue from services rendered under specific agreements, which hinge on athird-party reseller who possesses the exclusive authority to engage directly with veteran-owned hospitals. Evaluating the Company's role in these contracts necessitates assessing whether it functions as the principal or agent, a determination that involves analyzing the extent of control the Company wields over the contracts.

Following its assessment, the Company reports revenue from services provided under such contracts on a gross basis. This decision is justified by the Company's primary responsibility to fulfill the contractual obligations, including delivery and installation of equipment and software, training, and its control over other services within the contract period. Furthermore, the Company directly sets the contract price with its customers based on the services outlined in the statement of work. As the Company is responsible for fulling this promise and maintains control, the Company is acting as the principal.

Disaggregation of Revenue

The following presents gross revenues disaggregated by our business models:

Contract Liabilities

Our subscription-based contracts payment arrangements are required to be paid monthly which are recognized into revenue when received. Some customers choose to pay their subscription fee in advance. Customer payments received in advance of satisfaction of the related performance obligations are deferred as contract liabilities. These amounts are recorded as “deferred revenue” in our consolidated balance sheets and recognized into revenues over time.

Our sales-based contract payment arrangements with our customers typically include an initial equipment payment due upon signing of the contract and subsequent payments when certain performance obligations are completed. Customer payments received in advance of satisfaction of related performance obligations are deferred as contract liabilities. These amounts are recorded as “deferred revenue” in our consolidated balance sheets and recognized into revenues as either a point in time or over time.

During the years ended* December 31, 2024*, and2023, a total of $0 and $21,145, respectively, of subscription-based deferred contract liability was recognized as revenue. The table below details the subscription-based contract liability activity during the years ended* December 31, 2024*, and2023, included in the Other current liabilities.

F-11

During the years ended* December 31, 2024*, and2023, a total of $3,206,487 and $1,894,777, respectively, of sales-based deferred contract liability was recognized as revenue. The table below details the sales-based contract liability activity during the years ended* December 31, 2024and2023*, included in the Other current liabilities.

As of* December 31, 2024*, the aggregate amount of deferred revenue from subscription-based contracts and sales-based contracts allocated to performance obligations that are unsatisfied or partially satisfied is approximately $2,668,399 and will be recognized into revenue over time as follows:

Based on our contracts, except for initial equipment sales, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accounts receivable is recorded when the right to consideration becomes unconditional and are reported accordingly in our consolidated financial statements.

We defer and capitalize all costs associated with the installation of the CareView System into a healthcare facility until the CareView System is fully operational and accepted by the healthcare facility. Installation costs are specifically identifiable based on the amounts we are charged fromthird party installers or directly identifiable labor hours incurred for each installation. Upon acceptance, the associated costs are expensed on a straight-line basis over the life of the contract with the healthcare facility. These costs are included in network operations on the accompanying consolidated statements of operations.

The table below details the activity in these deferred installation costs during the years ended* December 31, 2024*, and2023, included in other assets in the accompanying consolidated balance sheet.

F-12

Significant Judgements When Applying Topic606

Contracts with our customers are typically structured similarly and include various combinations of our products, software solutions, and related services. Determining whether the various contract promises are considered distinct performance obligations that should be accounted for separately versus together* may*require significant judgment.

Contract transaction price is allocated to distinct performance obligations using estimated standalone selling price. We determine standalone selling price maximizing observable inputs such as standalone sales, competitor standalone sales, or substantive renewal prices charged to customers when they exist. In instances where standalone selling price isnot observable, we utilize an estimate of standalone selling price. Such estimates are derived from various methods that include cost plus margin, and historical pricing practices. Judgment* may*be required to determine standalone selling prices for each performance obligation and whether it depicts the amount we expect to receive in exchange for the related good or service.

Contract modifications occur when we and our customers agree to modify existing customer contracts to change the scope or price (or both) of the contract or when a customer terminates some, or all, of the existing services provided by us. When a contract modification occurs, it requires us to exercise judgment to determine if the modification should be accounted for as a separate contract, the termination of the original contract and creation of a new contract, a cumulative catch-up adjustment to the original contract, or a combination.

Contracts with our customers include a limited warranty on our products covering materials, workmanship, or design for the duration of the contract. We donot offer paid additional extended or lifetime warranty packages. We determined the limited warranty in our contract isnot a distinct performance obligation. We donot believe our estimates of warranty costs to be significant to our determination of revenue recognition and, therefore, didnot reserve for warranty costs.

Leases

The Company has an operating lease primarily consisting of office space with a remaining lease term of 8 months. At the lease commencement date, an operating lease liability and related operating lease asset are recognized. The operating lease liabilities are calculated using the present value of lease payments. The discount rate used is either the rate implicit in the lease, when known, or our estimated incremental borrowing rate. Operating lease assets are valued based on the initial operating lease liabilities plus any prepaid rent and direct costs from executing the leases.

Earnings (Loss) Per Share

We calculate earnings per share (“EPS”) in accordance with GAAP, which requires the computation and disclosure oftwo EPS amounts, basic and diluted. Basic EPS is computed based on the weighted average number of common shares outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares outstanding plus all potentially dilutive common shares outstanding during the period under the treasury stock method. Such potential dilutive common shares consist of stock options, warrants to purchase our Common Stock (the “Warrants”) and convertible debt. Potential common shares totaling approximately 73,251,280, and 44,178,422 at* December 31, 2024*, and2023, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to our reported net loss. The 73,251,280 potential common shares consist of 67,556,835 stock options and 5,694,445 warrants.

Stock Based Compensation

We recognize compensation expense for all share-based payments granted and amended based on the grant date fair value estimated in accordance with GAAP. Compensation expense is generally recognized on a straight-line basis over the employee’s requisite service period based on the award’s estimated lives for fixed awards with ratable vesting provisions. In the event that Optionee’s employee or consultant status with the Company or any of its subsidiaries ceases or terminates for any reason whatsoever, including, butnot limited to the death, disability, or voluntary or involuntary cessation or termination, this Option shall terminate with respect to any portion of this Option that hasnot vested prior to the date of cessation or termination of employee or consultant status, as determined in the sole discretion of the Company. Stock option expenses related to terminated awards which havenot vested, are revised and recognized within the applicable reporting period.

F-13

Debt Issuance Costs

Costs incurred with parties who are providing long-term financing, including Warrants issued with the underlying debt, are reflected as a debt discount based on the relative fair value of the debt and Warrants. These discounts are generally amortized over the life of the related debt, using the effective interest rate method or other methods approximating the effective interest method. Additionally, convertible debt issued with a beneficial conversion feature is recorded at a discount based on the difference in the effective conversion price and the fair value of the Company’s stock on the date of issuance, if any. Outstanding debt is presented net of any such discounts on the accompanying consolidated financial statements.

Shipping and Handling Costs

We expense all shipping and handling costs as incurred. These costs are included in network operations on the accompanying consolidated statements of operations.

Advertising Costs

We consider advertising costs as costs associated with the promotion of our products through the various media outlets and trade shows. We expense all advertising costs as incurred. Our advertising expense for the years ended* December 31, 2024*, and2023, totaled approximately $146,000 and $335,000, respectively.

Concentration of Credit Risks and Customer Data

In2024, our revenue was driven significantly byone customer, accounting for 19%, while in2023, our revenue was driven significantly bytwo customers, accounting for 17% and 13% respectively. As of* December 31, 2024*, we hadone customer that accounted for 12% of our accounts receivable.

Use of Estimates

Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results* may*differ from these estimates under different assumptions or conditions.

Recently Issued and Newly Adopted Accounting Pronouncements

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): 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 donot 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.*

In* November 2024,the FASB issued ASU2024*-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40). 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.*

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280) : 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 didnot 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 segments in accordance with the new standard within our Note15 for the year ended* December 31, 2024.*

We donot expect that the adoption of any recent accounting pronouncements will have a material impact on our accompanying consolidated financial statements.

NOTE3 – GOING CONCERN, LIQUIDITY AND MANAGMENTS PLANS

Accounting standards require management to evaluate our ability to continue as a going concern for a period ofone year after the date of the filing of this Form10-K (“evaluation period”). In evaluating the Company’s ability to continue as a going concern, Management considers the conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern for a period oftwelve months after the Company issues its financial statements. For the year ended* December 31, 2024*, Management considers the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, and the Company’s conditional and unconditional obligations due within12 months of the date these financial statements are issued.

The Company is subject to risks like those of healthcare technology companies whereby revenues are generated based on both sales-based and subscription-based models, which assume dependence on key individuals, uncertainty of product development, generation of revenues, positive cash flow, dependence on outside sources of capital, risks associated with research, development, and successful testing of its products, successful protection of intellectual property, ability to maintain and grow its customer base, and susceptibility to infringement on the proprietary rights of others. The attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill the Company’s growth and operating activities and generating a level of revenues adequate to support the Company’s cost structure.

As of the year ended* 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 willnot have sufficient funds to meet its obligations withinone 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 isno assurance that management’s plans will be successful. Based on these factors, management has concluded that there is substantial doubt about the Company's ability to continue as a going concern.

F-14

Management continues to monitor the immediate and future cash flows needs of the company in a variety of ways which include forecasted net cash flows from operations, capital expenditure control, new inventory orders, debt modifications, increases sales outreach, streamlining and controlling general and administrative costs, competitive industry pricing, sale of equities, debt conversions, new product or services offerings, and new business partnerships.

The accompanying 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.

NOTE4 – STOCKHOLDERS’** EQUITY**

Preferred Stock

At* December 31, 2024*, and2023, we had 20,000,000 shares of Preferred Stock, par value $0.001 authorized, andzero shares outstanding, which can be designated by our Board of Directors.

Common Stock

At* December 31, 2024and2023*, we had 800,000,000 and 800,000,000 authorized shares of Common Stock, $0.001 par value, respectively.583,880,748 and 583,880,748 shares of Common Stock are issued and outstanding, respectively. On* May 24, 2023,HealthCor noteholders owning an aggregate of $18,000,000 Replacement Notes, presented Conversion Notices, pursuant to the terms of the Replacement Note, for the conversion of the Replacement Notes into 180,000,000 shares of the Company’s common stock at a conversion price of $0.10 per share. The shares bear a lockup legend that expires December 31, 2023.On March 30, 2023,HealthCor noteholders owning an aggregate of $36,000,000 Replacement Notes, entered into a Replacement Note Conversion Agreement, wherein half, fifty percent, of the HealthCor Replacement Notes were converted into shares of the Company’s common stock at a conversion price of $0.10 per share, resulting in the issuance of an aggregate of 180,000,000 shares. The other related and non-related parties Replacement Notes of $8,200,000 were likewise converted into shares of the Company’s common stock at a conversion price of $0.10 per share, resulting in the issuance of a combined total aggregate of 262,000,000 shares (the “Conversion Shares”). The shares bear a lockup legend that expired December 31, 2023.*

F-15

Warrants to Purchase Common Stock of the Company

We use the Black-Scholes-Merton option pricing model (“Black-Scholes Model”) to determine the fair value of Warrants. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average term of the Warrant.

The risk-free interest rate assumption is based upon observed interest rates onzero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the Warrants and is calculated by using the average daily historical stock prices through the day preceding the grant date. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the expected life of the award. Our estimated volatility is an average of the historical volatility of our stock prices (and that of peer entities whose stock prices were publicly available) over a period equal to the expected life of the awards.

Active Warrant Holders

A summary of our Warrants activity and related information follows:

Stock Options

The Company’s Stock Incentive Plans include the CareView Communications, Inc.’s2007 Stock Incentive Plan (“2007 Plan”),2009 Stock Incentive Plan (the*“2009* Plan”),2015 Stock Option Plan (the*“2015* Plan”),2016 Stock Option Plan (the*“2016* Plan”),2020 Stock Option Plan ( the*“2020* Plan”), and2024 Stock Option Plan (the*"2024* Plan"), pursuant to which 8,000,000,10,000,000,5,000,000,20,000,000,20,000,000, and 30,000,000 shares of Common Stock were reserved for issuance upon the exercise of options, respectively. The Stock Incentive Plans are designed to serve as an incentive for retaining our qualified and competent key employees, officers and directors, and certain consultants and advisors. The Stock Options vest over three years and have an exercise period often years from the date of issuance.

F-16

At* December 31, 2024,Plan Options to purchase 8,000,000 shares of our Common Stock have been issued with zero remaining outstanding under the2007* Plan, Plan Options to purchase 10,000,000 shares have been issued with 56,444 remaining outstanding under the2009 Plan, Plan Options to purchase 5,000,000 shares have been issued with 4,338,555 remaining outstanding under the2015 Plan, Plan Options to purchase 20,000,000 shares have been issued with 19,771,445 remaining outstanding under the2016 Plan, Plan Options to purchase 20,000,000 shares have been issued with 19,649,333 remaining outstanding under the2020 Plan and Plan Options to purchase 23,741,058 shares have been issued with 23,741,058 remaining outstanding under the2024 Plan.

The valuation methodology used to determine the fair value Plan Options (the “Option(s)”) issued was the Black- Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average expected term of the options.

A summary of our stock option activity and related information follows:

Share-based compensation expense for Options charged to our operating results for thetwelve months ended* December 31, 2024*, and2023 were $529,601 and 150,294 respectively. The estimate of forfeitures is to be recorded at the time of grant and revised in subsequent periods if actual forfeitures differ from the estimates. We havenot included an adjustment to our stock-based compensation expense based on the nominal amount of the historical forfeiture rate. We do, however, revise our stock-based compensation expense based on actual forfeitures during each reporting period.

At* December 31, 2024*, total unrecognized estimated compensation expense related to non-vested Options granted was $1,335,017, which is expected to be recognized over a weighted- average period of 2.1 years. No tax benefit was realized due to a continued pattern of operating losses.

NOTE5 – INCOME TAXES

In assessing the realizability of deferred tax asset, including the net operating loss carryforwards (NOLs), the Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize its existing deferred assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period when those temporary differences become deductible. Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their future utilization remains uncertain at this time. During the years ended* December 31, 2024and2023,* the deferred tax valuation allowance (decreased) / increased by $(24,661,909) and $24,114,281, respectively. The (decrease) / increase in the valuation allowance during2024 and2023 was mainly attributable to changes in how the Company calculated its gross deferred tax asset related to its state NOL.

F-17

At* December 31, 2024,the Company had approximately $89,437,000 of U.S. federal net operating tax loss carryforward, some of which begins to expire in2028.* In accordance with Section382 of the Internal Revenue code, the usage of the Company's Federal Carryforwards could be limited in the event of a change in ownership. As of* December 31, 2024,the Company hasnot* completed an analysis as to whether ornot an ownership change has occurred. The Company is currently subject to the generalthree-year statute of limitations for federal tax. Under this general rule, the earliest period subject to potential audit is 2021. For years in which the Company* may*utilize its net operating losses, the IRS has the ability to examine the tax year that generated those losses and propose adjustments up to the amount of losses utilized.

The Company applies the FASB's provisions for uncertain tax positions. The Company utilizes thetwo-step process to determine the amount of recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense.

As of* December 31, 2024,management believes that the company has an uncertain tax position of approximately $16,000, recognized as a reduction of its gross deferred tax asset. The Company will continue to evaluate its uncertain tax positions in future periods to determine if additional measurement and recognition in its financial statements is necessary. The Company doesnot* believe there will be any material changes in its unrecognized tax positions over the next year.

The provision for income taxes consists of the following:

F-18

The components of the deferred tax assets and liabilities are as follows:

NOTE6 – INVENTORY

Inventory is valued at the lower of cost, determined on afirst-in,first-out (FIFO), or net realizable value. Inventory items are analyzed to determine cost and net realizable value and appropriate valuation adjustments are then established.

Inventory consists of the following:

NOTE7 – OTHER CURRENT ASSETS

Other current assets consist of the following:

F-19

NOTE8 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Depreciation expense for the years ended* December 31, 2024*, and2023, was $187,620 and $334,676, respectively.

NOTE9 – OTHER ASSETS

Intangible assets consist of the following:

Amortization expense for the years ended* December 31, 2024*, and2023, was $38,280 and $77,330, respectively. Patent impairment costs for the years ended* December 31, 2024*, and2023, was $0 and $334,358, respectively.

Other assets consist of the following:

F-20

NOTE10 – OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

NOTE11 – COMMITMENTS AND CONTINGENCIES

Debt Maturity

As of* December 31, 2024*, future debt payments due are as follows:

Accrued interest due related parties totaled $554,028 and $445,528, as of* December 31, 2024and2023*, respectively.

NOTE12 – LEASE

Operating Lease

Under ASC Topic842, Leases (“ASC842”), operating lease expense is generally recognized evenly over the term of the lease. The Company has an operating lease primarily consisting of office space with a remaining lease term of 8 months.

On* March 4, 2020**,* we entered into the Fourth Amendment to Commercial Lease Agreement (the “Lease Extension”), wherein we extended the Lease through* August 31, 2025**.* We are currently finalizing afive-year lease renewal agreement.

The Company has further concluded that the Lease Extension hasno effects on the classification of the Lease. Rent expenses for thetwelve months ended* December 31, 2024*, and2023 were $299,183 and $295,223, respectively.

Lease Position

Operating lease asset and liability for our operating lease were recorded in the consolidated balance sheet as follows:

F-21

Undiscounted Cash Flows

Future lease payments included in the measurement of operating lease liability on the consolidated balance sheet as of* December 31, 2024*, for the followingfive fiscal years and thereafter as follows:

Cash Flows

The table below presents certain information related to the cash flows for the Company’s operating lease fortwelve months ending* December 31, 2024*:

NOTE13 –** AGREEMENT WITH PDL BIOPHARMA, INC.**

On* June 26, 2015,we entered into a Credit Agreement (as subsequently amended) with PDL BioPharma, Inc. ("PDL"), as administrative agent and lender ("the Lender") (the "PDL Credit Agreement"). Under the PDL Credit Agreement the Lender made available to us up to $40 million intwo* tranches of $20 million each. Tranche One was funded on* October 8, 2015 (the "Tranche One Loan"). Pursuant to the terms of the PDL Credit Agreement and havingnot* met the Tranche Two Milestones by* July 26, 2017,*the Tranche Two funding was terminated in full.

F-22

On* February 28, 2023,the Company, the Borrower, the Subsidiary Guarantor, the Lender and the Tranche Three Lenders entered into a Twenty-Eighth Amendment to Modification Agreement (the “Twenty-Eighth Modification Agreement Amendment”), pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender mayelect, in the Lender’s sole discretion, to terminate the Modification Period would be July 31, 2018and March 31, 2023 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower’s (i) interest payments that would otherwise be due under the Credit Agreement on December 31, 2018,** March 31, 2019,** June 30, 2019,** September 30, 2019,** December 31, 2019,** March 31, 2020,** June 30, 2020,** September 30, 2020and October 7, 2020and (ii) payments for principal and for any other Obligations then outstanding under the Tranche One Loan and the Tranche Three Loans that would otherwise be due under the Credit Agreement on October 7, 2020,would each be deferred until March 30, 2023 (*the end of the extended Modification Period).

On* March 31, 2023,the Company, the Borrower, the Subsidiary Guarantor, the Lender and the Tranche Three Lenders entered into a Twenty-Ninth Amendment to Modification Agreement (the “Twenty-Ninth Modification Agreement Amendment”), pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender mayelect, in the Lender’s sole discretion, to terminate the Modification Period would be July 31, 2018and April 30, 2023 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower’s (i) interest payments that would otherwise be due under the Credit Agreement on December 31, 2018,** March 31, 2019,** June 30, 2019,** September 30, 2019,** December 31, 2019,** March 31, 2020,** June 30, 2020,** September 30, 2020and October 7, 2020and (ii) payments for principal and for any other Obligations then outstanding under the Tranche One Loan and the Tranche Three Loans that would otherwise be due under the Credit Agreement on October 7, 2020,would each be deferred until April 30, 2023 (the end of the extended Modification Period). Under debt modification/troubled debt guidance, we determined that thefirst* of theeight amendments hadno cash flow impact, and therefore, hadno impact on accounting. Amendmentsnine throughten qualified for modification accounting, while the finalnineteen amendments qualified for troubled debt restructuring accounting. As appropriate, we expensed the legal costs paid tothird parties. For thethree months ended* March 31, 2023and2022,* pursuant to the terms of the PDL Modification Agreement, as amended, $802,125 and $775,000, respectively, was recorded as interest expense on the accompanying unaudited condensed consolidated financial statements.

On* April 29, 2023,the Company, the Borrower, the Subsidiary Guarantor, the Lender and the Tranche Three Lenders entered into a Thirtieth Amendment to Modification Agreement (the “Thirtieth Modification Agreement Amendment”), pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender mayelect, in the Lender’s sole discretion, to terminate the Modification Period would be July 31, 2018and May 31, 2023 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower’s (i) interest payments that would otherwise be due under the Credit Agreement on December 31, 2018,** March 31, 2019,** June 30, 2019,** September 30, 2019,** December 31, 2019,** March 31, 2020,** June 30, 2020,** September 30, 2020and October 7, 2020and (ii) payments for principal and for any other Obligations then outstanding under the Tranche One Loan and the Tranche Three Loans that would otherwise be due under the Credit Agreement on October 7, 2020,would each be deferred until May 31, 2023 (*the end of the extended Modification Period).

On* May 31, 2023 (the “Effective Date”), the Company, the Borrower, 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 Seventh Amendment to Credit Agreement (the “Seventh Credit Agreement Amendment”), pursuant to which the parties agreed to amend the Credit Agreement to, among other things, (i) provide that, after the Effective Date, all accrued but unpaid interest (including interest accrued but unpaid prior to the Effective Date and excluding interest payable on the Maturity Date, in connection with any prepayment, or in the event of an Event of Default, which interest will be payable in cash) accruing on Tranche One Loans and Tranche Three Loans will be paid-in-kind on each Interest Payment Date by being added to the aggregate principal balance of the respective loans in arrears on each Interest Payment Date; (ii) require certain mandatory prepayments of the loans by the Company, including (A) quarterly prepayments in the amount, if any, that the Company’s Excess Cash Flow exceeds $600,000, (B) monthly transfers to the Inventory Reserve Account in the amount, if any, the Company’s cash exceeds $1,200,000, (C) prepayment in the amount, if any, the Company’s Inventory Reserve Account exceeds $600,000, and (D) prepayment in the amount, if any, of 100% of the gross proceeds of any indebtedness incurred by the Company (other than permitted indebtedness); and (iii) extend the Maturity Date to December 31, 2024.*

F-23

On* September 30, 2023 (*the “Effective Date”), the Company, the Borrower, 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 an Eighth Amendment to Credit Agreement (the “Eighth Credit Agreement Amendment”), pursuant to which the parties agreed to amend the Credit Agreement to modify certain texts originating within the Seventh Credit Agreement. Stricken texts include “all accrued but unpaid interest (including interest accrued but unpaid prior to the Effective Date and excluding interest payable on the Maturity Date, in connection with any prepayment, or in the event of an Event of Default, which interest will be payable in cash) accruing on Tranche One Loans and Tranche Three Loans will be paid-in-kind on each Interest Payment Date by being added to the aggregate principal balance of the respective loans in arrears on each Interest Payment Date.” Additional texts include Release of Claims, which “in consideration of the Lender’s and Agent’s agreements contained in this Amendment, each of Holdings, the Borrower and the Subsidiary Guarantor hereby releases and discharges the Lender and the Agent and their affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person”) of and from any and all other claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which Holdings, the Borrower or the Subsidiary Guarantor ever had or now has against the Agent, any Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of the Agent, any Lender or any other Released Person relating to the Credit Agreement or any other Loan Document on or prior to the date hereof.”

On* December 11, 2024 (the “Effective Date”), the Company, the Borrower, 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 Ninth Amendment to Credit Agreement (the “Ninth 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 March 31, 2025.The principal remains unchanged, and interest continues to accrue in2024,* just as it did in2023.

Accounting Treatment

In connection with the PDL Credit Agreement, as amended, we issued the PDL Warrant to the Lender. As of* December 31, 2023,the Amended PDL Warrant hasnot* been exercised.

Due to the PDL Eighth Credit Agreement Amendment, the calculations for the “interest paid-in-kind” and quarterly “prepayment(s)” were removed effective with the year ending on** December 31, 2023.** The Company concluded that the Company is encountering financial hardship and that a concession wasnot granted. As the Lender hasnot granted a concession, the guidance contained in ASC470-50 Modification and Extinguishment was applied. Given the present value of the cash flows under the Eighth Credit Agreement Amendment differed by less than10% from the present value of the remaining cash flows under the terms of the prior debt agreement, the debt was determined to benot substantially different which resulted in modification accounting. The Company didnot have any debt issuance costs, only legal expenses.

During the year ended* December 31, 2024,the Company entered into the Ninth Credit Agreement (as detailed above). Under ASC470*-60-55-10, a concession is deemed to have been granted, and the agreement is to be accounted for as a troubled debt restructuring by debtors (TDR). The Company didnot have any debt restructuring costs and legal costs were expensed, as appropriate.

F-24

NOTE14 – AGREEMENT WITH HEALTHCOR

On* March 30, 2023,HealthCor noteholders owning an aggregate of $36,000,000 Replacement Notes, entered into a Replacement Note Conversion Agreement, wherein half, fifty percent, of the HealthCor Replacement Notes were converted into shares of the Company’s common stock at a conversion price of $0.10 per share, resulting in the issuance of an aggregate of 180,000,000 shares. The other related ($6,394,168) and non-related ($1,805,832) parties Replacement Notes of $8,200,000 were likewise converted into shares of the Company’s common stock at a conversion price of $0.10 per share, resulting in the issuance of a combined total aggregate of 262,000,000 shares (the “Conversion Shares”). The shares bear a lockup legend that expires December 31, 2023.*

On* May 24, 2023,HealthCor noteholders owning an aggregate of $18,000,000 Replacement Notes, presented Conversion Notices, pursuant to the terms of the Replacement Note, for the conversion of the Replacement Notes into 180,000,000 shares of the Company’s common stock at a conversion price of $0.10 per share. As of December 31, 2023,*all notes held by HealthCor have been fully converted to common stock.

F-25

NOTE15 – SEGMENT REPORTING

In* November 2023,the FASB issued ASUNo.* 2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures in which the Company operates asone reportable segment in the United States, focusing on medical facility virtual patient safety technology. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The Company hasone reportable segment as it only reports operating results on an aggregated basis to the Chief Executive Officer who serves as the Chief Operating Decision Maker (CODM). The Company derives revenue and manages the business activities on a consolidated basis. For the years ended* December 31, 2024,and2023,* all revenues from the Company’s external customers were derived, and all long-lived assets were located, in the United States.

The CODM is regularly provided with financial information, including revenue and expenses, in a format consistent with the Company’s Consolidated Statements of Operations. The CODM regularly reviews reported consolidated revenues, significant expenses, and consolidated net loss, in addition to forecasted revenues, significant expenses and net income (loss) amounts for future periods. The CODM considers these measures, as well as other factors, such as an assessment of a new product’s future market potential, when determining how to allocate company-wide resources. The CODM doesnot review assets at a different level or category than those disclosed in the Consolidated Balance Sheets.

Significant expenses are amounts that are regularly provided to the CODM and included in consolidated net income (loss), the Company’s primary measure of its single segment’s profit or loss.

Segment financial information used by the CODM to assess segment performance and make decisions about resource allocation was as follows:

NOTE16 – SUBSEQUENT EVENTS

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.