CareView Communications Inc

Previous wording

Our contracts typically include multiple combinations of our products, software solutions, and related services with multiple payment options. Customers can continue to lease our equipment under our subscription model or can purchase our equipment upfront under our sales-based contract model with an auto-renewal at the end of each contract period. The new sales-based contract offers our customers the flexibility of capitalizing on their investment, which in turn, replenishes our cash reserves. For the three months ended March 31, 2025, and 2024, the Company executed sales-based contracts in approximate aggregated amounts of $965,000 and $1,068,000, respectively.

Current wording

Our contracts typically include multiple combinations of our products, software solutions, and related services with multiple payment options. Customers can continue to lease our equipment under our subscription model or can purchase our equipment upfront under our sales-based contract model with an auto-renewal at the end of each contract period. The new sales-based contract offers our customers the flexibility of capitalizing on their investment, which in turn, replenishes our cash reserves. For the years ended December 31, 2024, and 2023, the Company executed sales-based contracts in approximate aggregated amounts of $761,000 and $8,223,000, respectively.

Previous wording

Revenue increased approximately $36,000 for the three months ended March 31, 2025, as compared to the same period in 2024. The increase was driven by revenues from recurring annual software recognized over time.

Current wording

Revenue increased approximately $405,000 for the three months ended June 30, 2025, as compared to the same period in 2024. The increase was driven by revenues from recurring annual software recognized over time.

Previous wording

Operating expenses decreased by a net 2.6% because of the following items:

Current wording

Operating expenses decreased by a net 4.9% because of the following items:

Previous wording

Human resource related costs (including salaries and benefits and non-cash compensation) increased approximately $33,000 due to stock compensation expense during the three months ended March 31, 2025 as compared to the three months ended March, 31 2024. Product deployment costs decreased approximately $163,000 due to decrease in property taxes, clinical and training, other state taxes and sales commissions. Professional and consulting costs increased approximately $34,000 due to use of independent contractors. Travel and entertainment costs increased approximately $2,000 due to airfare prices. For the comparable periods, other expenses increased approximately $61,000, primarily as a result of attorney fees including King & Spalding, LLP.

Current wording

Human resource related costs (including salaries and benefits and non-cash compensation) decreased approximately $33,000 due to lower payroll taxes and sales commissions ended March 31, 2025 as compared to the three months ended March, 31 2024. Product deployment costs decreased approximately $33,000 due to a decrease in installation and training expenses. Professional and consulting costs decreased approximately $7,000 due to use of independent contractors. Travel and entertainment costs decreased approximately $3,000 due to less airfare. For the comparable periods, other expenses decreased approximately $8,000, primarily as a result of negotiating interest waiver and cellular charges.

Previous wording

Other non-operating income and expense decreased by approximately $3,000, or 0.3%, for the three months ended March 31, 2025 in comparison to the same period in 2024.

Current wording

Other non-operating income and expense decreased by approximately $1,000, or 0.1%, for the three months ended June 30, 2025 in comparison to the same period in 2024.

Previous wording

As a result of the factors above, our first quarter 2025 net loss of approximately $921,000, decreased approximately $101,000, or 9.9%, as compared to approximately $1,022,000 net loss for the first quarter of 2024.

Current wording

As a result of the factors above, our second quarter 2025 net loss of approximately $588,000, decreased approximately $518,000, or 47%, as compared to approximately $1,106,000 net loss for the second quarter of 2024.

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 March 31, 2025, the Company had an accumulated deficit of $213,506,898, net loss from operations of $134,710, net cash provided by operating activities of $286,608, and an ending cash balance of $1,026,065.

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 six months ended June 30, 2025, the Company had an accumulated deficit of $214,095,608, net income from operations of $64,061, net cash provided by operating activities of $1,059,003, and an ending cash balance of $1,762,610.

Previous wording

As of March 31, 2025, the Company had a working capital deficit of $41,672,427 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 May 14, 2026.

Current wording

As of June 30, 2025, the Company had a working capital deficit of $42,166,650 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 August 13, 2026.

Previous wording

Please refer to our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Commission on March 31, 2025 and incorporated herein by reference, for detailed explanation of our critical accounting estimates, which have not changed significantly during the three months ended March 31, 2025.

Current wording

Please refer to our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Commission on March 31, 2025 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, 2025.

Previous wording

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 requirements take effect for public business entities for fiscal years beginning after December 15, 2024. The impact of adopting this standard on the Company’s unaudited Condensed Consolidated Financial Statements is currently being evaluated.

Current wording

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 requirements take effect for public business entities for fiscal years beginning after December 15, 2024. The standard, which is effective for our 2025 annual period, has been adopted.

Previous wording

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 is in the process of evaluating the potential impact of this standard on its unaudited Condensed Consolidated Financial Statements.

Current wording

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 effective date for these amendments, as clarified by ASU 2025-01, are for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The standard can be applied either prospectively or retrospectively. We are currently assessing adoption timing and the effect that the updated standard will have on our financial statement disclosures.

Previous wording

In November 2024, the FASB issued ASU No. 2024-04, “Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments,” which clarifies the criteria for determining when a settlement of convertible debt should be accounted for as an induced conversion. The guidance applies only to conversions involving the full issuance of equity securities as originally specified in the debt terms and includes additional clarifications to aid in application. The amendments are effective for all entities for annual periods beginning after December 15, 2025, including interim periods within those years. Adoption of this standard as of January 1, 2025, had no impact on the Company’s unaudited Condensed Consolidated Financial Statements, as the conversion terms of the Company’s convertible debt were not modified to induce conversion.

Current wording

In November 2024, the FASB issued ASU No. 2024-04, “Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments,” which clarifies the criteria for determining when a settlement of convertible debt should be accounted for as an induced conversion. The guidance applies only to conversions involving the full issuance of equity securities as originally specified in the debt terms and includes additional clarifications to aid in application. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company does not expect any impact on the unaudited Condensed Consolidated Financial Statements upon adoption, considering its current debt instruments.