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, 2025and2024*, an allowance for credit losses of $0 and $0, respectively, was recorded.

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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, 2025and2024*, 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.

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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, 2025*, and2024.

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, 2025*, and2024.

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.

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

At* December 31, 2025*, and2024, we hadno financial assets and liabilities reported at fair value.

Income Taxes

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.

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:

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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.

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During the years ended* December 31, 2025*, and2024, a total of $3,968,834 and $3,206,487, 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, 2025and2024*, included in the Other current liabilities.

As of* December 31, 2025*, 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 $2,648,805 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 deferred installation costs during the years ended* December 31, 2025*, and2024. These costs are capitalized as contract costs in accordance with ASC340-40 and are included in other assets in the accompanying consolidated balance sheet.

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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 of60 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 66,975,835, and 73,251,280 at* December 31, 2025*, and2024, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to our reported net loss. For2025, the 66,975,835 potential common shares consist of 65,725,835 stock options and 1,250,000 warrants, compared to 73,251,280 potential common shares in2024, which consisted 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.

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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, 2025*, and2024, totaled approximately $84,000 and $146,000, respectively.

Concentration of Credit Risks and Customer Data

In2025, our revenue was driven significantly byone customer, accounting for 14.9%, while in2024, one customer accounted for 19% of our revenue. As of* December 31, 2025*, we hadone customer that accounted for 16% 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 Adopted Accounting Pronouncements

In* December 2023,the FASB issued ASUNo.* 2023-08, “Accounting for and Disclosure of Crypto Assets,” which updates and expands disclosure requirements related to crypto assets. The guidance is effective for public business entities for fiscal years beginning after* December 15, 2024,including interim periods within those years. Adoption of this standard as of January 1, 2025,hadno* impact on the Company’s Consolidated Financial Statements, as the Company doesnot hold any crypto assets.

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 requirements take effect for public business entities for fiscal years beginning after* December 15, 2024.The Company adopted this standard in its2025* annual period on a prospective basis. The adoption enhances the Company’s income tax disclosures by increasing detail and transparency, but doesnot affect the Company’s financial position, results of operations, or cash flows.

There wasno impact on our Consolidated Financial Statements from recently adopted accounting standards.

Recently Issued Accounting Pronouncements

In* October 2023,the FASB issued ASUNo.* 2023-06, which incorporates14 of the27 SEC disclosures identified in SEC ReleaseNo. 33-10532 (issued* August 17, 2018).This ASU updates disclosure and presentation requirements across various Codification Topics and applies to all entities within the scope of those Topics, unless specified otherwise. The amendments are to be applied prospectively. For public business entities, each amendment becomes effective when the related SEC disclosure is removed from Regulation S-X or S-K; early adoption isnot* permitted. The Company has evaluated ASUNo. 2023-06 and doesnot expect it to impact its Consolidated Financial Statements.

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 effective date for these amendments, as clarified by ASU2025-01, 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.

In* November 2024,the FASB issued ASUNo.* 2024-04, “Debt with Conversion and Other Options (Subtopic470-20): 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 doesnot* expect any impact on the Consolidated Financial Statements upon adoption, considering its current debt instruments.

In* July 2025,the FASB issued ASU2025*-05, "Financial Instruments—Credit Losses (Topic326): Measurement of Credit Losses for Accounts Receivable and Contract Assets," which amends how entities estimate expected credit losses for current accounts receivable and current contract assets arising from revenue contracts under ASC606. A reduction in the need for extensive forecasting has been established and allows all entities to assume that conditions will persist at balance sheet date for the remaining life of those current assets. The amendments in this update are effective for all entities for annual reporting periods beginning after* December 15, 2025.The Company is currently evaluating the impact of this guidance on its financial statements and related disclosures and doesnot* expect the adoption to have a material impact.

In* September 2025,the FASB issued ASU2025*-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic350-40): Targeted Improvements to the Accounting for Internal-Use Software." The update eliminates all references to "development stages", so entities areno longer required to wait for a specific application development stage before capitalizing costs. Thetwo key criteria for when capitalization of internal-use software costs* maybegin are when Management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the intended function. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2027,*and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Management is currently assessing the potential effects on our financial statements and considering the possibility of early adoption.

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, 2025*, 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, 2025*, the Company's net losses and working capital deficit of $43,481,413 raise substantial doubt about its ability to continue as a going concern. 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.

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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, 2025*, and2024, 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, 2025and2024*, 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.

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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 expected volatility of the stock price, risk-free interest rate, and expected term. The expected volatility is based on the historical volatility of the Company’s stock. The risk-free interest rate was based on U.S. Treasury yields commensurate with the expected term of the warrants. The expected term of the warrants was based on the contractual term and management’s expectations of exercise behavior.

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.

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At* December 31, 2025,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 zero remaining outstanding under the2009 Plan, Plan Options to purchase 5,000,000 shares have been issued with 2,323,296 remaining outstanding under the2015 Plan, Plan Options to purchase 20,000,000 shares have been issued with 19,086,821 remaining outstanding under the2016 Plan, Plan Options to purchase 20,000,000 shares have been issued with 16,126,794 remaining outstanding under the2020 Plan and Plan Options to purchase 23,931,058 shares have been issued with 23,731,058 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, 2025*, and2024 were $620,342 and $529,601 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, 2025*, total unrecognized estimated compensation expense related to non-vested Options granted was $711,981 which is expected to be recognized over a weighted- average period of 1.2 years. No tax benefit was realized due to a continued pattern of operating losses.

NOTE5 – INCOME TAXES

In* December 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023‑09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures, which enhances income tax disclosure requirements related to the effective tax rate reconciliation and income taxes paid.

The Company adopted ASU2023‑09 effective* January 1, 2025and applied the guidance prospectively to all periods presented. The adoption didnot* impact the Company’s accounting for income taxes, financial position, results of operations, or cash flows; however, prior‑period income tax disclosures havenot been revised to conform to the new requirements.

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, 2025and2024,* the deferred tax valuation allowance decreased by 20,092 and 24,376,664 respectively. The decrease in the valuation allowance during2024 was mainly attributable to changes in how the Company calculated its gross deferred tax asset related to its state NOL.

At* December 31, 2025,the Company had approximately $91,439,122 of U.S. federal net operating tax loss carryforward, some of which begins to expire in2027.* 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, 2025,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 2022. 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.

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The provision for income taxes consists of the following:

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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:

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NOTE8 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Depreciation expense for the years ended* December 31, 2025*, and2024, was $82,743 and $187,620, respectively.

NOTE9 – OTHER ASSETS

Intangible assets consist of the following:

Amortization expense for the years ended* December 31, 2025*, and2024, was $56,639 and $38,280, respectively.

Other assets consist of the following:

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NOTE10 – OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

NOTE11 – COMMITMENTS AND CONTINGENCIES

Debt Maturity

As of* December 31, 2025*, future debt payments due are as follows:

Accrued interest due related parties totaled $662,528 and $554,028, as of* December 31, 2025and2024*, 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 60 months.

On* May 8, 2025we entered into the Fifth Amendment to Commercial Lease Agreement, extending the term of the Lease until December 31, 2030 ("New Expiration Date"). We have concluded the Fifth Amendment to Commercial Lease Agreement qualifies as a lease modification (renewal) under ASC842.* As a result of the modification, The Company has remeasured the lease liability and right-of-use (ROU) asset as of the effective date of the amendment. The Company’s weighted average remaining lease term was approximately 3.1 years, and the weighted average discount rate applied in the calculation of the lease liability was approximately 12.5%.

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, 2025*, and2024 were $292,145 and $299,183, respectively.

Lease Position

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

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Future Minimum Lease Payments

Future lease payments included in the measurement of operating lease liability on the consolidated balance sheet as of* December 31, 2025*, 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, 2025*:

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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.

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.*

On* March 21, 2025 (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 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.*

On* June 30, 2025 (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 Eleventh Amendment to Credit Agreement (the “Eleventh 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 September 30, 2025.*

On* September 30, 2025 (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 Twelfth Amendment to Credit Agreement (the “Twelfth 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 December 31, 2025.*

On* December 31, 2025,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 Thirteenth Amendment to Credit Agreement (the “Thirteenth Amendment to Credit Agreement”), pursuant to which the parties agreed to amend the Credit Agreement to (i) provide that the Maturity Date shall be extended to March 31, 2026.The note payable balance of $20,700,000 ($700,000 is due to related parties) as of December**31,* 2025 remains unchanged from prior periods. The associated interest continues to accrue on a straight-line monthly basis.

Accounting Treatment

In connection with the PDL Credit Agreement, as amended, we issued the PDL Warrant to the Lender. The PDL Warrant expired on* June**23rd,* 2025.

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.

On* December**31,* 2025 the Company entered into the Thirteenth 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.

NOTE14 – SEGMENT REPORTING

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, 2025,and2024,* 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:

NOTE15 – SUBSEQUENT EVENTS

On* March 30, 2026 (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 Fourteenth Amendment to Credit Agreement (the “Fourteenth 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,* 2026.