Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 12, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'CareView Communications Inc | ' |
Entity Central Index Key | '0001377149 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 138,753,397 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current Assets: | ' | ' |
Cash and cash equivalents | $5,120,139 | $5,413,848 |
Accounts receivable, net of allowance of $0 and $80,235, respectively | 272,464 | 367,742 |
Other current assets | 298,215 | 194,592 |
Total current assets | 5,690,818 | 5,976,182 |
Property and equipment, net of accumulated depreciation of $3,855,568 and $2,726,234, respectively | 6,775,419 | 7,861,537 |
Other Assets: | ' | ' |
Intellectual property, patents, and trademarks, net of accumulated amortization of $2,790,087 and $2,772,772, respectively | 236,891 | 208,974 |
Other assets | 1,505,059 | 2,019,856 |
[AssetsNoncurrent] | 1,741,950 | 2,228,830 |
Total assets | 14,208,187 | 16,066,549 |
Current Liabilities: | ' | ' |
Accounts payable | 262,868 | 166,373 |
Revolving line of credit | 982,255 | ' |
Notes payable, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 |
Mandatorily redeemable equity in joint venture, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 |
Accrued interest | 110,349 | 59,872 |
Other current liabilities | 863,839 | 802,528 |
Total current liabilities | 3,106,459 | 1,849,945 |
Long-term Liabilities | ' | ' |
Senior secured convertible notes, net of debt discount of $16,588,701 and $17,791,104, respectively | 16,565,132 | 12,439,154 |
Warrant liability | 579,246 | ' |
Lease liability, net of current portion | 12,912 | 25,824 |
Total long-term liabilities | 17,157,290 | 12,464,978 |
Total liabilities | 20,263,749 | 14,314,923 |
Commitments and Contingencies | ' | ' |
Stockholders' Equity (Deficit): | ' | ' |
Preferred stock - par value $0.001; 20,000,000 shares authorized; no shares issued and outstanding | ' | ' |
Common stock - par value $0.001; 300,000,000 shares authorized; 138,753,397 and 132,526,042 issued and outstanding, respectively | 138,753 | 132,526 |
Additional paid in capital | 70,566,505 | 67,224,170 |
Accumulated deficit | -76,381,931 | -65,275,518 |
Total CareView Communications Inc. stockholders' equity (deficit) | -5,676,673 | 2,081,178 |
Noncontrolling interest | -378,889 | -329,552 |
Total stockholders' equity (deficit) | -6,055,562 | 1,751,626 |
Total liabilities and stockholders' equity (deficit) | $14,208,187 | $16,066,549 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Percentage of cash contributed by Rockwell attributed to members equity | ' | ' |
Allowance for Doubtful Accounts | $0 | $80,235 |
Accumulated depreciation of property and equipment | 3,855,568 | 2,726,234 |
Accumulated amortization of intellectual property, patents, and trademarks | 2,790,087 | 2,772,772 |
Debt discount of notes payable, current | 0 | 32,988 |
Debt discount of mandatorily redeemable equity in joint venture, current | 0 | 32,988 |
Debt discount of senior secured convertible notes | $16,588,701 | $17,791,104 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 138,753,397 | 132,526,042 |
Common stock, shares outstanding | 138,753,397 | 132,526,042 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Percentage owned by Rockwell of each Project LLC formed for the Project Hospitals | ' | ' | ' | ' |
Revenues, net | $552,935 | $542,010 | $1,474,352 | $1,371,631 |
Operating expenses: | ' | ' | ' | ' |
Network operations | 608,925 | 480,023 | 1,902,012 | 1,957,468 |
General and administration | 617,723 | 991,609 | 2,219,604 | 3,366,596 |
Sales and marketing | 191,139 | 599,333 | 754,136 | 1,579,845 |
Research and development | 178,547 | 202,032 | 641,863 | 661,314 |
Depreciation and amortization | 379,388 | 532,515 | 1,151,376 | 1,622,783 |
Total operating expense | 1,975,722 | 2,805,512 | 6,668,991 | 9,188,006 |
Operating loss | -1,422,787 | -2,263,502 | -5,194,639 | -7,816,375 |
Other income and (expense): | ' | ' | ' | ' |
Interest expense | -1,984,653 | -1,951,839 | -5,966,713 | -5,703,960 |
Interest income | 671 | 1,343 | 2,007 | 4,378 |
Other income | 342 | 2,768 | 3,595 | 5,406 |
Total other income (expense) | -1,983,640 | -1,947,728 | -5,961,111 | -5,694,176 |
Loss before taxes | -3,406,427 | -4,211,230 | -11,155,750 | -13,510,551 |
Provision for income taxes | ' | ' | ' | ' |
Net loss | -3,406,427 | -4,211,230 | -11,155,750 | -13,510,551 |
Net loss attributable to noncontrolling interest | 2,865 | -52,941 | -49,337 | -136,974 |
Net loss attributable to CareView Communications, Inc. | ($3,409,292) | ($4,158,289) | ($11,106,413) | ($13,373,577) |
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.02) | ($0.03) | ($0.08) | ($0.10) |
Weighted average number of common shares outstanding, basic and diluted | 138,746,042 | 132,086,376 | 136,673,790 | 131,987,615 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance at Dec. 31, 2012 | $132,526 | $67,244,170 | ($65,275,518) | ($329,552) | $1,751,626 |
Beginning balance, shares at Dec. 31, 2012 | 132,526,042 | ' | ' | ' | 132,526,042 |
Options granted as compensation | ' | 127,478 | ' | ' | ' |
Warrants issued for services | ' | 49,091 | ' | ' | ' |
Warrants issued for financing costs (revalued) | ' | 64,286 | ' | ' | 64,286 |
Warrants exercised - cashless | 7 | -7 | ' | ' | ' |
Warrants exercised - cashless, shares | 7,355 | ' | ' | ' | ' |
Beneficial conversion features for senior secured convertible notes | ' | 1,052,487 | ' | ' | 1,052,487 |
Sale of common stock, net of costs | 6,220 | 2,049,000 | ' | ' | ' |
Sale of common stock, net of costs, shares | 6,220,000 | ' | ' | ' | ' |
Net loss | ' | ' | -11,106,413 | -49,337 | -11,155,750 |
Ending balance at Sep. 30, 2013 | $138,753 | $70,566,505 | ($76,381,931) | ($378,889) | ($6,055,562) |
Ending balance, shares at Sep. 30, 2013 | 138,753,397 | ' | ' | ' | 138,753,397 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITES | ' | ' |
Net loss | ($11,155,750) | ($13,510,551) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ' | ' |
Depreciation | 1,134,061 | 1,199,196 |
Amortization of intangible assets | 17,315 | 423,588 |
Amortization of debt discount | 2,320,867 | 2,537,069 |
Amortization of prepaid consulting costs | 76,535 | 369,521 |
Amortization of installation costs | 243,048 | 137,426 |
Amortization of deferred distribution/service costs | ' | 55,334 |
Amortization of deferred debt issuance costs | 427,041 | 394,898 |
Interest incurred and paid in kind | 2,923,574 | 2,533,372 |
Stock based compensation related to options granted | 127,478 | 610,963 |
Stock based costs related to warrants issued | 49,091 | 116,996 |
Change in value of warrant liability | -93,663 | ' |
Loss on disposal of assets | 5,998 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 95,278 | -311,939 |
Other current assets | -103,624 | 83,665 |
Other assets | 89,442 | 129,632 |
Accounts payable | 96,495 | -1,035,963 |
Accrued expenses and other current liabilities | 111,788 | 362,183 |
Other liabilities | -12,912 | ' |
Net cash flows used in operating activities | -3,647,938 | -5,904,610 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Payment for deferred installation costs | -256,982 | -382,815 |
Purchase of property and equipment | -71,765 | -511,136 |
Patent and trademark costs | -40,958 | -28,482 |
Website costs | -4,274 | ' |
Proceeds from insurance claims | 17,824 | ' |
Purchase of computer software | ' | -10,460 |
Net cash flows used in investing activities | -356,155 | -932,893 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from sale of common stock and warrants, net | 2,728,129 | ' |
Proceeds from notes payable and line of credit | 982,255 | 5,000,000 |
Proceeds from exercise of options and warrants | ' | 20,635 |
Repayment of notes payable | ' | -42,252 |
Net cash flows provided by financing activities | 3,710,384 | 4,978,383 |
Decrease in cash | -293,709 | -1,859,120 |
Cash and cash equivalents, beginning of period | 5,413,848 | 8,526,857 |
Cash and cash equivablents, end of period | 5,120,139 | 8,277,166 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ' | ' |
Cash paid for interest | 134,462 | 62,827 |
Cash paid for income taxes | ' | ' |
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: | ' | ' |
Warrants issued for financing costs | 64,286 | ' |
Beneficial conversion features for senior secured convertible notes | $1,052,487 | ' |
BASIS_OF_PRESENTATION_AND_RECE
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2013 | |
Deferred Installation Costs Member | ' |
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ' |
NOTE 1 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
Interim Financial Statements | |
The accompanying unaudited interim condensed consolidated financial statements of CareView Communications, Inc. (“CareView”, the “Company”, “we”, “us” or “our”) have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The balance sheet at December 31, 2012 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the SEC on April 1, 2013. | |
Recently Issued and Newly Adopted Accounting Pronouncements | |
Adoption of New Accounting Standards | |
There have been no material changes to our significant accounting policies as summarized in NOTE 2 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES of our Annual Report on Form 10-K for the year ended December 31, 2012. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our accompanying condensed consolidated financial statements. |
LIQUIDITY_AND_MANAGEMENTS_PLAN
LIQUIDITY AND MANAGEMENT'S PLAN | 9 Months Ended |
Sep. 30, 2013 | |
Liquidity And Managements Plan | ' |
LIQUIDITY AND MANAGEMENT'S PLAN | ' |
NOTE 2 – LIQUIDITY AND MANAGEMENT'S PLAN | |
Our cash position at September 30, 2013 was approximately $5.1 million. We are required to maintain a minimum cash balance $4 million pursuant to existing loan documents. Falling below that balance triggers an immediate default with Comerica Bank and Bridge Bank (see NOTE 14 – AGREEMENT WITH HEALTHCOR and NOTE 15 – LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK for more details). In view of these facts, our continued successful operation is dependent upon us achieving positive cash flow through operations while maintaining adequate liquidity; however, we may be required to obtain additional financing. In order to support current and future operations, we closed a private offering on April 1, 2013 through which we sold an (i) an aggregate of 6,220,000 shares of our Common Stock for $0.495 per share and (ii) Common Stock Purchase Warrants for the purchase of an aggregate of 2,500,000 shares of our Common Stock for $0.01 per share for aggregate proceeds, net of expenses, of $2,728,129. We expect that the proceeds from this private offering, as well as our existing and projected cash flow from billable contracts, will enable us to continue to operate for the next twelve month period. We believe that our sales and marketing plan to attract new business and our ongoing deployment and installation of units under existing hospital agreements, will meet our near-term cash needs and will help us achieve future operating profitability. | |
As more fully described in NOTE 15 – LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK, we have an additional financial resource with the Comerica/Bridge Bank revolving credit line for $20 million ("Revolving Line"). At present, we have sufficient inventory to install and service a select number of large customers, but eventually we will need to address additional capital needs through the Revolving Line under which we can borrow up to $19.0 million by using eligible signed customer contracts as collateral; however, no eligible contracts were available for additional borrowings on the Revolving Line at September 30, 2013 and at the time of this filing. The Revolving Line expires in June 2014 unless mutually extended. | |
We believe that we will achieve operating profitability; however, due to conditions and influences out of our control, including the current state of the national economy, we cannot guarantee that profitability will be achieved or that it will be achieved in the stated time frame, nor is there any assurance that such an operating level can ever be achieved. |
STOCKHOLDERS_EQUITY_DEFICIT
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders Equity Deficit | ' | ||||||||||||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ' | ||||||||||||||||
NOTE 3 – STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||||||||
Private Placement | |||||||||||||||||
On March 27, 2013, we entered into a Securities Purchase Agreement (the "Purchase Agreement") with multiple investors relating to the issuance and sale of our Common Stock in a private offering. On April 1, 2013, the closing date of the Purchase Agreement, we sold (i) an aggregate of 6,220,000 shares of our Common Stock for $0.495 per share and (ii) Common Stock Purchase Warrants for the purchase of an aggregate of 2,500,000 shares for $0.01 per share (the "Private Placement Warrants") for aggregate gross proceeds of approximately $3.1 million. The five-year Private Placement Warrants vested immediately upon issuance, have an exercise price of $0.60 per share and contain provisions for a cashless exercise. | |||||||||||||||||
Pursuant to terms in the Purchase Agreement, the 6,220,000 shares of Common Stock purchased and the 2,500,000 shares available for purchase under the Private Placement Warrants, were registered pursuant to a Form S-1 Registration Statement under the Securities Act of 1933 as filed with the SEC on May 4, 2013 ("Form S-1"). On May 9, 2013, the Form S-1 was deemed effective by the SEC. | |||||||||||||||||
As discussed below, the Private Placement Warrants are classified as liabilities and recorded at fair value at the date of issuance. The total proceeds received from the Private Placement were allocated between the Common Stock issued and the Private Placement Warrants based on the residual method. Accordingly, $672,909 was allocated to the Private Placement Warrants and $2,475,991 was allocated to stockholders’ equity upon issuance. | |||||||||||||||||
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 to purchase shares of our Common Stock (“Warrant(s)”) (except Warrants issued to HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP (the “HealthCor Warrants”) and the Private Placement Warrants). The Black-Scholes Model is an acceptable model in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718-10 Stock Compensation (“ASC 718-10”). 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 fair value of the HealthCor Warrants and the Private Placement Warrants were computed using the Binomial Lattice model, incorporating transaction details such as the price of our Common Stock, contractual terms, maturity and risk free rates, as well as assumptions about future financings, volatility, and holder behavior. Due to the down round provisions associated with the exercise price of the HealthCor Warrants and the Private Placement Warrants, we determined that the Binomial Lattice model was the most appropriate model for valuing these instruments. | |||||||||||||||||
As of September 30, 2013, Warrants outstanding (excluding the HealthCor Warrants and the Private Placement Warrants) covered an aggregate of 22,114,213 shares of our Common Stock with exercise prices ranging from $0.52 to $1.65 per share resulting in a weighted average exercise price of $0.73 per share and a weighted average contractual life of 2.1 years. As of September 30, 2013, unamortized costs associated with capitalized Warrants, excluding the HealthCor Warrants and the Private Placement Warrants, totaled approximately $427,000. | |||||||||||||||||
Warrant Activity during the Nine Months Ended September 30, 2013 | |||||||||||||||||
As discussed hereinabove, during the nine months ended September 30, 2013, the Company issued Private Placement Warrants for the purchase of 2,500,000 shares of our Common Stock. The Private Placement Warrants contain provisions that protect the holders from a decline in the issue price of our Common Stock or “down round” provisions. We have evaluated the following guidance ASC 480-10 Distinguishing Liabilities from Equity and ASC 815-40 Contracts in an Entity’s Own Equity. Based on this guidance, our management concluded these instruments are to be accounted for as liabilities instead of equity due to the down round protection feature available on the exercise price of the Warrants. We recognized these Warrants as liabilities at their fair value and will re-measure them at fair value on each reporting date with the change reported as non-cash costs in general and administration expense. ASC 820 Fair Value Measurement provides requirements for disclosure of liabilities that are measured at fair value on a recurring basis in periods subsequent to the initial recognition. Fair values for Warrants are determined using the Binomial Lattice Model valuation technique. The Binomial Lattice Model valuation model provides for dynamic assumptions regarding volatility and risk-free interest rates within the total period to maturity. Accordingly, within the contractual term, we provided multiple date intervals over which multiple volatilities and risk free interest rates were used. These intervals allow the Binomial Lattice Model valuation to project outcomes along specific paths which consider volatilities and risk free rates that would be more likely in an early exercise scenario. As of April 1, 2013, the date of issuance of the Private Placement Warrants, we recorded the Warrant Liability of $672,909 in the condensed consolidated financial statements. At September 30, 2013, the Private Placement Warrants were re-valued with a fair value of $579,246 and the difference of $93,663 was recorded as a reduction to non-cash costs in the accompanying condensed consolidated financial statements. | |||||||||||||||||
We also amortized certain previously capitalized Warrant costs in the accompanying condensed consolidated financial statements as follows: (i) $76,535 as non-cash costs included in general and administration expense and (ii) $427,041 as interest expense. | |||||||||||||||||
On January 15, 2013, we entered into a Second Amendment to the Revolving Line ("Second Amendment") in which Comerica Bank and Bridge Bank (the “Banks”) agreed to amend the defining term for "Eligible Accounts" and add the defining term for "Verification of Accounts" (see NOTE 15 – LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK for more details). In conjunction with the Second Amendment, the Warrants issued to the Banks were amended to reduce the exercise price from $1.40 to $1.10 per share (subject to adjustment for capital events) and to extend the expiration date from August 8, 2018 to January 15, 2020. All other provisions of the Agreement and the Warrants remained unchanged. The Warrants were revalued in January 2013 resulting in $64,286 increases in fair value and are amortized (over the remain life of the Revolver Line) to interest expense in the accompanying condensed consolidated financial statements using the effective interest method. | |||||||||||||||||
On May 7, 2012, we entered into a 12-month advisory services agreement (the “AS Agreement”) with an unrelated entity, wherein compensation was paid through the issuance of a five-year Warrant to purchase 240,000 shares of our Common Stock (see NOTE 11 – SERVICE AGREEMENTS for further details). During the nine months ended September 30, 2013, we recorded a $23,764 charge to non-cash costs included in general and administration expense in the accompanying condensed consolidated financial statements. The underlying shares vested at the rate of 20,000 shares on the monthly anniversary date of the AS Agreement. The AS Agreement terminated on May 7, 2013. At grant date the Warrant had a fair value of $265,200 at an exercise price of $1.65 per share. Since the Warrant was issued to a non-employee and contained specific vesting requirements, we followed ASC 505-50 Equity Based Payments to Non-Employees (“ASC-505-50”) which requires that the fair value of the Warrant be re-valued at each reporting period and any change in the fair value of the unvested portion of the Warrant recorded as a charge or credit to income. Upon full vesting in May 2013, and after applying ASC 505-50, the fair value of these Warrants totaled $124,720. | |||||||||||||||||
In June 2013, Rockwell Holdings I, LLC extended the due dates on certain indebtedness of the Company. In conjunction with these extensions, we agreed to extend the expiration date of accompanying Warrants to Rockwell from November 16, 2014 to November 16, 2015 (see NOTE 9 – JOINT VENTURE AGREEMENT for further details). All other provisions of the Warrants remained unchanged. The Warrants were amended and revalued in August 2013 resulting in a $25,327 increase in fair value, which has been recorded as non-cash costs included in general and administration expense in the accompanying condensed consolidated financial statements. | |||||||||||||||||
On August 2, 2013, an individual exercised a Warrant to purchase an aggregate of 179,638 shares of our Common Stock. In order to exercise the Warrant pursuant to the cashless provisions contained therein, the individual surrendered his right to receive 172,283 shares, resulting in an issuance of 7,355 shares of Common Stock. | |||||||||||||||||
Warrant Activity during the Nine Months Ended September 30, 2012 | |||||||||||||||||
During the nine months ended September 30, 2012, we issued Warrants to certain unaffiliated parties for services, recording them in the accompanying condensed consolidated financial statements as follows: (i) on April 2, 2012, we issued a five-year Warrant to an entity to purchase 50,000 shares of our Common Stock (with a fair value of $48,200) at an exercise price of $1.52 per share, all of which was recorded as non-cash costs included in general and administration and (ii) on May 31, 2012, we entered into an addendum to a two year sales consulting agreement with an entity, wherein a portion of the compensation was paid through the issuance of a five-year Warrant to purchase 50,000 shares of our Common Stock (with a fair value of $52,300) at an exercise price of $1.55 per share; $17,432 was charged to expense and recorded as non-cash costs included in general and administration in the accompanying condensed consolidated financial statements and $34,868 as prepaid costs included in other assets in the accompanying condensed consolidated financial statements. We also amortized certain previously capitalized Warrant costs in the accompanying condensed consolidated financial statements as follows: (i) $41,499 as distribution/service costs included in network operations, (ii) $486,517 as non-cash costs included in general and administration and (iii) $394,898 as interest expense. | |||||||||||||||||
On January 16, 2012 and February 6, 2012, an unaffiliated entity exercised a Warrant to purchase an aggregate of 400,000 shares of our Common Stock. In order to exercise the Warrant pursuant to the cashless provisions contained therein, the unaffiliated entity surrendered its right to receive 122,191 shares, resulting in an issuance to the entity of 277,809 shares of Common Stock. On January 19, 2012, two unaffiliated entities exercised Warrants to purchase an aggregate of 39,683 shares of our Common Stock at an aggregate exercise price of $20,635. On February 28, 2012, an unaffiliated entity exercised a Warrant to purchase an aggregate of 450,000 shares of our Common Stock. In order to exercise the Warrant pursuant to the cashless provisions contained therein, the unaffiliated entity surrendered its right to receive 138,143 shares, resulting in an issuance of 311,857 shares of Common Stock. On September 28, 2012, Gerald Murphy, one of our directors at the time of the transaction, exercised a Warrant to purchase an aggregate of 439,666 shares of our Common Stock at an aggregate exercise price of $241,816. | |||||||||||||||||
Options to Purchase Common Stock of the Company | |||||||||||||||||
During the nine months ended September 30, 2013, we granted options to purchase 25,000 shares of our Common Stock (“Option(s)”). No Options were granted during the nine months ended September 30, 2012. During the nine month periods ended September 30, 2013 and 2012, Options for the purchase of 287,502 and 380,306 shares, respectively, were cancelled as a result of the resignation or termination of certain employees. During the nine months ended September 30, 2013, Options for the purchase of 49,999 shares expired. No Options expired during the same period in 2012. As of September 30, 2013, 8,781,476 Options remained outstanding. | |||||||||||||||||
A summary of our stock option activity and related information follows: | |||||||||||||||||
Number of Shares Under Options | Weighted Average Exercise Price | Weighted | Aggregate Intrinsic Value | ||||||||||||||
Average | |||||||||||||||||
Remaining | |||||||||||||||||
Contractual | |||||||||||||||||
Life | |||||||||||||||||
Balance at December 31, 2012 | 9,093,977 | $ | 0.66 | 6.6 | $ | 2,376,961 | |||||||||||
Granted | 25,000 | $ | 0.5 | 10 | |||||||||||||
Exercised | — | — | |||||||||||||||
Expired | (49,999 | ) | $ | 1.23 | |||||||||||||
Cancelled | (287,502 | ) | $ | 1.07 | |||||||||||||
Balance at September 30, 2013 | 8,781,476 | $ | 0.62 | 5.8 | $ | 180,546 | |||||||||||
Vested and Exercisable at September 30, 2013 | 7,837,309 | $ | 0.59 | 5.4 | $ | 180,546 | |||||||||||
The valuation methodology used to determine the fair value of the Options issued during the year was the Black-Scholes Model, an acceptable model in accordance with ASC 718-10. 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. | |||||||||||||||||
The assumptions used in the Black-Scholes Model are set forth in the table below. | |||||||||||||||||
Nine | Year | ||||||||||||||||
Months Ended | Ended | ||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Risk-free interest rate | 0.66 | % | 0.34 | % | |||||||||||||
Volatility | 102.64 | % | 101.9 | % | |||||||||||||
Expected life | 3 | 3 | |||||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the expected term of the Option 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 our historical volatility during the available trading period, and is calculated using this blended average over a period equal to the expected life of the awards. | |||||||||||||||||
Share-based compensation expense for Options recognized in our results for the nine months ended September 30, 2013 and 2012 ($127,067 and $610,963, respectively) is based on awards granted, with expected forfeitures at 0%. ASC 718-10 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from the estimates. | |||||||||||||||||
At September 30, 2013, total unrecognized estimated compensation expense related to non-vested Options granted prior to that date was approximately $435,000, which is expected to be recognized over a weighted-average period of 1.8 years. No tax benefit was realized due to a continued pattern of operating losses. |
OTHER_CURRENT_ASSETS
OTHER CURRENT ASSETS | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Current Assets | ' | ||||||||
OTHER CURRENT ASSETS | ' | ||||||||
NOTE 4 – OTHER CURRENT ASSETS | |||||||||
Other current assets consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Prepaid expenses | $ | 221,123 | $ | 130,825 | |||||
Other current assets | 77,092 | 63,767 | |||||||
TOTAL OTHER CURRENT ASSETS | $ | 298,215 | $ | 194,592 |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property And Equipment | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
NOTE 5 – PROPERTY AND EQUIPMENT | |||||||||
Property and equipment consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Network equipment | $ | 10,233,092 | $ | 10,170,480 | |||||
Office equipment | 124,184 | 119,830 | |||||||
Vehicles | 112,332 | 136,082 | |||||||
Furniture | 75,673 | 75,673 | |||||||
Test equipment | 73,719 | 73,719 | |||||||
Warehouse equipment | 6,866 | 6,866 | |||||||
Leasehold improvements | 5,121 | 5,121 | |||||||
10,630,987 | 10,587,771 | ||||||||
Less: accumulated depreciation | (3,855,568 | ) | (2,726,234 | ) | |||||
TOTAL PROPERTY AND EQUIPMENT | $ | 6,775,419 | $ | 7,861,537 | |||||
Depreciation expense for the nine month periods ended September 30, 2013 and 2012 was $1,134,061 and $1,199,196, respectively. | |||||||||
At September 30, 2013, some portion of our network equipment is in excess of current requirements based on the recent level of installations. Management has developed a program to deploy assets over the near term and believes no impairment exists at September 30, 2013. No estimate can be made of a range of amounts of loss that are reasonably possible should we not be successful. |
OTHER_ASSETS
OTHER ASSETS | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Other Assets: | ' | ||||||||||||
OTHER ASSETS | ' | ||||||||||||
NOTE 6 – OTHER ASSETS | |||||||||||||
Intangible assets consist of the following: | |||||||||||||
30-Sep-13 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Patents and trademarks | $ | 223,551 | $ | 11,994 | $ | 211,557 | |||||||
Computer software | 50,494 | 25,160 | 25,334 | ||||||||||
Software development costs | 2,002,933 | 2,002,933 | — | ||||||||||
Other intellectual property | 750,000 | 750,000 | — | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 3,026,978 | $ | 2,790,087 | $ | 236,891 | |||||||
31-Dec-12 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Patents and trademarks | $ | 182,593 | $ | 6,525 | $ | 176,068 | |||||||
Other tangible assets | 46,220 | 13,314 | 32,906 | ||||||||||
Software development costs | 2,002,933 | 2,002,933 | — | ||||||||||
Other intellectual property | 750,000 | 750,000 | — | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 2,981,746 | $ | 2,772,772 | $ | 208,974 | |||||||
Amortization expense for the nine month periods ended September 30, 2013 and 2012 was $17,315 and $423,588, respectively. | |||||||||||||
Other assets consist of the following: | |||||||||||||
30-Sep-13 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Deferred debt issuance costs | $ | 1,600,000 | $ | 1,172,961 | $ | 427,039 | |||||||
Deferred installation costs | 1,061,061 | 457,609 | 603,452 | ||||||||||
Deferred closing costs | 580,241 | 405,144 | 175,097 | ||||||||||
Prepaid license fee | 249,999 | 34,152 | 215,847 | ||||||||||
Security deposit | 83,624 | — | 83,624 | ||||||||||
TOTAL OTHER ASSETS | $ | 3,574,925 | $ | 2,069,866 | $ | 1,505,059 | |||||||
December 31,2012 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Deferred debt issuance costs | $ | 1,535,714 | $ | 745,920 | $ | 789,794 | |||||||
Deferred installation costs | 799,114 | 209,598 | 589,516 | ||||||||||
Deferred closing costs | 516,050 | 247,413 | 268,637 | ||||||||||
Prepaid license fee | 233,606 | 21,857 | 211,749 | ||||||||||
Security deposit | 83,624 | — | 83,624 | ||||||||||
Prepaid consulting | 1,131,300 | 1,054,764 | 76,536 | ||||||||||
TOTAL OTHER ASSETS | $ | 4,299,408 | $ | 2,279,552 | $ | 2,019,856 |
OTHER_CURRENT_LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Current Liabilities | ' | ||||||||
OTHER CURRENT LIABILITIES | ' | ||||||||
NOTE 7 – OTHER CURRENT LIABILITIES | |||||||||
Other current liabilities consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued taxes | $ | 452,055 | $ | 360,587 | |||||
Other accrued liabilities | 411,784 | 441,941 | |||||||
TOTAL OTHER CURRENT LIABILITIES | $ | 863,839 | $ | 802,528 |
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
INCOME TAXES | ' |
NOTE 8 – INCOME TAXES | |
Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We do not expect to pay any significant federal or state income tax for 2013 as a result of the losses recorded during the nine months ended September 30, 2013 and the additional losses expected for the remainder of 2013 and net operating loss carry forwards from prior years. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is "more likely than not" that some component or all of the benefits of deferred tax assets will not be realized. As of September 30, 2013, we maintained a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded. There were no recorded unrecognized tax benefits at the end of the reporting period. |
JOINT_VENTURE_AGREEMENT
JOINT VENTURE AGREEMENT | 9 Months Ended |
Sep. 30, 2013 | |
Joint Venture Agreement | ' |
JOINT VENTURE AGREEMENT | ' |
NOTE 9 – JOINT VENTURE AGREEMENT | |
On November 16, 2009, we entered into a Master Investment Agreement (the "Rockwell Agreement") with Rockwell Holdings I, LLC, a Wisconsin limited liability ("Rockwell"). Under the terms of the Rockwell Agreement, we used funds from Rockwell to fully implement the CareView System™ in Hillcrest Medical Center in Tulsa, Oklahoma ("Hillcrest") and Saline Memorial Hospital in Benton, Arkansas ("Saline") (the "Project Hospital(s)"). CareView-Hillcrest, LLC and CareView-Saline, LLC were created as the operating entities for the Project Hospitals under the Rockwell Agreement (the “Project LLC(s)”). | |
Rockwell and the Company own 50% of each Project LLC. We contributed our intellectual property rights and hospital contract with each Project Hospital and Rockwell contributed cash to be used for the purchase of equipment for the Project LLCs. Rockwell provided $1,151,205 as the initial funding, $575,603 was provided under promissory notes (the “Project Notes”) and $575,602 was provided under an investment interest (“Rockwell's Preferential Return”). We classified Rockwell's Preferential Return as a liability since it represents an unconditional obligation by us and is recorded in mandatorily redeemable equity in joint venture on the accompanying condensed consolidated balance sheet. The Project Notes and Rockwell's Preferential Returns both earn interest at the rate of ten percent (10%) and are secured by a security interest in all of the equipment in the Project Hospitals, intellectual property rights, and the Project Hospital Contract. | |
The Project LLCs were within the scope of the variable interest entities (VIE) subsection of the FASB ASC and we determined the Project LLCs are VIEs based on the fact that the total equity investment at risk was not sufficient to finance the entities activities without additional financial support. We consolidate the Project LLCs as we have the power to direct the activities and an obligation to absorb losses of the VIEs. | |
As additional consideration to Rockwell for providing the funding, we granted Rockwell warrants to purchase 1,151,206 shares of our Common Stock on the date of the Rockwell Agreement, and using the Black-Scholes Model valued the Warrants at $1,124,728 (the "Project Warrant"). The Project Warrant is classified as equity and is included in additional paid-in-capital on the accompanying condensed consolidated financial statements. We allocated the proceeds to the Project Warrant, the Project Notes and Preferential Returns based on the relative fair value. The originally recorded debt discount of $636,752 is being amortized over the life of the debt and recorded as interest expense on the accompanying condensed consolidated financial statements. Amortization expense totaled $65,976 and $147,411 for the nine month periods ended September 30, 2013 and 2012, respectively. | |
Hillcrest notified us of its desire to terminate its hospital agreement effective January 27, 2012. This termination resulted in the loss of monthly revenue totaling approximately $20,000, which revenue was used to make payments on our indebtedness to Rockwell. We incurred de-installation costs of approximately $3,000 for removing our equipment from the hospital premises. | |
As of September 30, 2013, the Project LLCs’ indebtedness to Rockwell totaled approximately $992,000, including principal and interest. The Project Notes and Rockwell's Preferential Returns, previously due in May 2013 (as relates to CareView-Hillcrest, LLC) and August 2013 (as relates to CareView-Saline, LLC), were extended to December 31, 2013. In conjunction with these extensions, the expiration date of the Project Warrant was also extended from November 16, 2014 to November 16, 2015. CareView, as 50% owner of the LLCs, is currently negotiating with Rockwell to settle the debt of the LLCs through the issuance of shares of CareView's Common Stock. Although CareView anticipates that this settlement will be forthcoming in the near future, CareView and the LLCs can give no assurances that a settlement will be negotiated, or if negotiated and settled, that it will be through the issuance of CareView's Common Stock. |
VARIABLE_INTEREST_ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Variable Interest Entities | ' | ||||||||
VARIABLE INTEREST ENTITIES | ' | ||||||||
NOTE 10 – VARIABLE INTEREST ENTITIES | |||||||||
We consolidate VIEs of which we are the primary beneficiary. The liabilities recognized as a result of consolidating these VIEs do not necessarily represent additional claims on our general assets; rather, they represent claims against the specific assets of the consolidated VIEs. Conversely, assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against our general assets. | |||||||||
The total consolidated VIE assets and liabilities reflected on our accompanying condensed consolidated balance sheets at September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Assets | |||||||||
Cash | $ | 3,641 | $ | 956 | |||||
Receivables | 2,431 | 5,221 | |||||||
Total current assets | 6,072 | 6,177 | |||||||
Property, net | 155,657 | 189,003 | |||||||
Total assets | $ | 161,729 | $ | 195,180 | |||||
Liabilities | |||||||||
Accounts payable | $ | 110,507 | $ | 103,217 | |||||
Notes payable, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 | |||||||
Mandatorily redeemable interest, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 | |||||||
Accrued interest | 105,133 | 59,872 | |||||||
Other current liabilities | 40,747 | 53,371 | |||||||
Total current liabilities | 1,143,535 | 1,037,632 | |||||||
Total liabilities | $ | 1,143,535 | $ | 1,037,632 | |||||
The financial performance of the consolidated VIEs reflected on our accompanying condensed consolidated statements of operations for the nine months ended September 30, 2013 and 2012 is as follows: | |||||||||
September 30, | September 30, | ||||||||
2013 | 2012 | ||||||||
Revenue | $ | 21,863 | $ | 61,372 | |||||
Network operations expense | 12,653 | 18,762 | |||||||
General and administrative expense | (19,462 | ) | 31,545 | ||||||
Depreciation | 40,583 | 70,328 | |||||||
Total operating costs | 33,774 | 120,635 | |||||||
Operating loss | (11,911 | ) | (59,263 | ) | |||||
Other income (expense) | (86,764 | ) | (214,687 | ) | |||||
Loss before income taxes | (98,675 | ) | (273,950 | ) | |||||
Provision for income taxes | — | — | |||||||
Net loss | (98,675 | ) | (273,950 | ) | |||||
Net loss attributable to noncontrolling interest | (49,337 | ) | (136,975 | ) | |||||
Net loss attributable to CareView Communications, Inc. | $ | (49,338 | ) | $ | (136,975 | ) | |||
SERVICE_AGREEMENTS
SERVICE AGREEMENTS | 9 Months Ended |
Sep. 30, 2013 | |
Service Agreements | ' |
SERVICE AGREEMENTS | ' |
NOTE 11 – SERVICE AGREEMENTS | |
Advisory Services Agreement | |
On May 7, 2012, we entered into an Advisory Services Agreement (the "Agreement") with an unrelated entity (the “Advisor”) under which the Advisor provided services related to micro-cap market research and investor relations. The Agreement was for a term of 12 months and was terminated on May 7, 2013. Compensation for the Advisor included a retainer of $5,000 per month. In addition, we issued a five-year Warrant for the purchase of 240,000 shares of our Common Stock at an exercise price of $1.65 per share. Vesting of the underlying shares occurred at the rate of 20,000 shares on the monthly anniversary date of the Agreement and all shares became fully vested on May 7, 2013. No Warrants have been exercised as of September 30, 2013. | |
Consulting Agreement | |
On April 29, 2012, as amended on November 13, 2012, we entered into a Consulting Agreement with Heartland Energy Partners ("Heartland" or the “Consultant”) to represent us and our products to the Department of Veteran Affairs. On May 1, 2013, we exercised our right to terminate the Consulting Agreement effective May 31, 2013 (the “Termination Date”). | |
Under the terms of the Consulting Agreement, we paid the Consultant a monthly fee of $10,000, payable beginning immediately after we obtained GSA Approval on October 4, 2012 and continuing through the Termination Date. Aggregated payments to Heartland totaled $80,000. In addition, the Consultant was entitled to earn Warrants to purchase shares of our Common Stock (the “Consulting Warrants”) during each successive ninety (90) day period calculated from the first business day after receipt of GSA approval and continuing for the 12 month period designated as the term of the Consulting Agreement, which would result in the issuance of four (4) Consulting Warrants (totaling a maximum of 1,000,000 shares). On January 2, 2013 and April 2, 2013, our management determined that no Consulting Warrants would be issued for the first and second ninety-day periods ending on January 2, 2013 and April 2, 2013, respectively, and with the termination of the Consulting Agreement, we have no further obligation to issue Consulting Warrants. |
SUBSCRIPTION_AND_INVESTORS_RIG
SUBSCRIPTION AND INVESTORS RIGHTS AGREEMENT | 9 Months Ended |
Sep. 30, 2013 | |
Subscription And Investors Rights Agreement | ' |
SUBSCRIPTION AND INVESTORS RIGHTS AGREEMENT | ' |
NOTE 12 – SUBSCRIPTION AND INVESTOR RIGHTS AGREEMENT | |
In August 2010, in an effort to resolve all past, current and future claims due pursuant to a Subscription and Investor Rights Agreement (the "Subscription Agreement") with T2 Consulting, LLC ("T2"), and its principals, Tommy G. Thompson (“Thompson”), Gerald L. Murphy (“Murphy”), and Dennis Langley (“Langley”), (collectively, the “Parties”) we entered into a Revocation and Substitution Agreement with the Parties (the "Agreement"). In exchange for the revocation of the Subscription Agreement, we agreed to issue a five-year Warrant to purchase 1,000,000 shares of our Common Stock with an exercise price of $1.00 per share to each of Thompson, Murphy, and Langley. As additional consideration for the revocation of the Subscription Agreement, we executed an Agreement Regarding Gross Income Interest (the "GII Agreement") with each of Thompson, Murphy and Langley. The GII Agreements do not have a termination date; however, each provides that we have the right to acquire the Gross Income Interest ("GII") of Thompson, Murphy and Langley from September 1, 2013 until December 31, 2015, and that each of Thompson, Murphy and Langley have the right to require that their respective GII be purchased by us at any time from September 1, 2011 until December 31, 2015. At September 30, 2013, we recorded a liability of $28,000 as the estimated fair value of the aggregated GII of Thompson, Murphy and Langley. On October 31, 2013, we acquired the GII of Thompson, Murphy and Langley for an aggregate purchase price of $28,124 and the GII Agreements terminated. |
AGREEMENT_WITH_HMA
AGREEMENT WITH HMA | 9 Months Ended |
Sep. 30, 2013 | |
AgreementWithHmaAbstract | ' |
AGREEMENT WITH HMA | ' |
NOTE 13 – AGREEMENT WITH HMA | |
On March 8, 2011, we entered into a Master Agreement with Hospital Management Associates, Inc., a Delaware corporation ("HMA"). Terms of the Master Agreement provide for (i) HMA to use the CareView System in each of its 60 hospitals across the U.S. through the execution of a separate Hospital Agreement for each location and (ii) for us to provide the Primary Package of the CareView System and preferential pricing in exchange for the volume provided by HMA. On November 27, 2012, HMA notified us that due to a variety of budgetary concerns (i.e., Patient Protection and Affordable Care Act and other economic concerns specifically, the fiscal cliff), they wanted to reduce their number of billable units to 1,050 from 3,167, a difference of 2,117. At September 30, 2013, we are still billing for 1,050 units and the 2,117 subject units remained installed in HMA hospitals. The contract between HMA and CareView remains in force through December 31, 2014. We continue to work with HMA to explore options to convert the 2,117 subject units to billable unit status as well as provide incremental services that HMA is not taking advantage of today. However, no assurances can be made as to the outcome of the negotiations with HMA. We did not have an accounts receivable balance with HMA at September 30, 2013 as HMA had paid their invoice timely. Billable revenue for HMA for the nine months ended September 30, 2013 and 2012 was approximately $157,000 and $472,000, respectively. |
AGREEMENT_WITH_HEALTHCOR
AGREEMENT WITH HEALTHCOR | 9 Months Ended |
Sep. 30, 2013 | |
AgreementWithHealthcorAbstract | ' |
AGREEMENT WITH HEALTHCOR | ' |
NOTE 14 – AGREEMENT WITH HEALTHCOR | |
On April 21, 2011, we entered into a Note and Warrant Purchase Agreement (the "Purchase Agreement") with HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP (the "Investors"). Pursuant to the Purchase Agreement, we sold Senior Secured Convertible Notes to the Investors in the principal amount of $9,316,000 and $10,684,000, respectively (collectively the "2011 HealthCor Notes"). The 2011 HealthCor Notes have a maturity date of April 20, 2021. We also issued Warrants to the Investors for the purchase of an aggregate of up to 5,488,456 and 6,294,403 shares, respectively, of our Common Stock at an exercise price of $1.40 per share (collectively the “HealthCor Warrants”). | |
So long as no event of default has occurred and is continuing, the outstanding principal balances of the 2011 HealthCor Notes accrue interest from April 21, 2011 through April 20, 2016 (the "First Five Year Note Period"), at the rate of 12.5% per annum, compounding quarterly (the "First Five Year Interest Rate") and from April 21, 2016 to April 20, 2021 (the "Second Five Year Note Period"), at a rate of 10% per annum, compounding quarterly (the "Second Five Year Interest Rate"). Interest accrued during the First Five Year Note Period, shall be added to the outstanding principal balances of the 2011 HealthCor Notes on the last day of each calendar quarter and shall thereafter, as part of such principal balances, accrue interest at the First Five Year Interest Rate and during the Second Five Year Note Period at the Second Five Year Interest Rate. Interest accruing during the Second Five Year Note Period may be paid quarterly in arrears in cash or, at our option, such interest may be added to the outstanding principal balances of the 2011 HealthCor Notes on the last day of each calendar quarter and shall thereafter, as part of such principal balances, accrue interest at the Second Five Year Interest Rate. | |
From and after the date any event of default occurs, the First Five Year Interest Rate or the Second Five Year Interest Rate, whichever is then applicable, shall be increased by five percent (5%) per annum. The Investors have the right, upon an event of default, to declare due and payable any unpaid principal amount of the 2011 HealthCor Notes then outstanding, plus previously accrued but unpaid interest and charges, together with the interest then scheduled to accrue (calculated at the default rate described in the immediately preceding sentence) through the end of the First Five Year Note Period or the Second Five Year Note Period, as applicable. | |
At any time after April 21, 2011, the Investors are entitled to convert any portion of the outstanding and unpaid accrued interest on and principal balances of the 2011 HealthCor Notes into fully paid and non-assessable shares of our Common Stock at a conversion rate of $1.25 per share, subject to adjustment in accordance with anti-dilution provisions set forth in the 2011 HealthCor Notes. As of September 30, 2013, the underlying shares of our Common Stock related to the 2011 HealthCor Notes totaled approximately 21.6 million. | |
Amendment Agreement | |
On December 30, 2011, we entered into a Note and Warrant Amendment Agreement with the Investors (“Amendment Agreement”) agreeing to (a) amend the Purchase Agreement in order to modify the Investors’ right to restrict certain equity issuances; and (b) amend the 2011 HealthCor Notes and the HealthCor Warrants, in order to eliminate certain anti-dilution provisions. | |
Second Amendment | |
On January 31, 2012, we entered into the Second Amendment to Note and Warrant Purchase Agreement with the Investors (the "Second Amendment") amending the Purchase Agreement, and sold Senior Secured Convertible Notes to the Investors in the principal amounts of $2,329,000 and $2,671,000, respectively (collectively the “2012 HealthCor Notes”). As provided by the Second Amendment, the 2012 HealthCor Notes are in substantially the same form as the 2011 HealthCor Notes, with changes to the "Issuance Date," "Maturity Date," "First Five Year Note Period" and other terms to take into account the timing of the issuance of the 2012 HealthCor Notes. The 2012 HealthCor Notes have a maturity date of January 31, 2022. So long as no event of default has occurred and is continuing, the outstanding principal balances of the 2012 HealthCor Notes accrue interest as follows: (i) during years 1-5, interest shall accrue at the rate of 12.5% per annum, compounding quarterly and to be added to the outstanding principal balances of the 2012 HealthCor Notes on the last day of each calendar quarter and shall thereafter, as part of such principal balances, accrue interest accordingly; (ii) during years 6-10, interest shall accrue at the rate of 10.0% per annum, compounding quarterly and may be paid quarterly in arrears in cash or, at our option, such interest may be added to the outstanding principal balances of the 2012 HealthCor Notes on the last day of each calendar quarter and shall thereafter, as part of such principal balances, accrue interest accordingly; and (iii) notwithstanding the foregoing, during the existence of an event of default, the then applicable interest rate will be increased by 5%. In addition, the provisions regarding interest acceleration, optional conversion, negative covenants, and events of default, preemptive rights and registration rights are the same as those of the 2011 HealthCor Notes. | |
At any time after January 31, 2012, the Investors are entitled to convert any portion of the outstanding and unpaid accrued interest on and principal balances of the 2012 HealthCor Notes into fully paid and non-assessable shares of our Common Stock at a conversion rate of $1.25 per share, subject to adjustment in accordance with anti-dilution provisions set forth in the 2012 HealthCor Notes. As of September 30, 2013, the underlying shares of our Common Stock related to the 2012 HealthCor Notes totaled approximately 4.9 million. | |
Third Amendment | |
On August 20, 2013, we entered into a Third Amendment to Note and Warrant Purchase Agreement with the Investors ("Third Amendment") to redefine the Company’s minimum cash balance requirements. Previously the Company was required to maintain a minimum cash balance of $5,000,000 and should the Company drop below that balance, it triggered immediate default. The Third Amendment allows for a reduced minimum cash period, as defined in the agreement, which allows the Company to drop below $5,000,000, but not below $4,000,000. Upon entering the reduced minimum cash period, the Company has 120 days to return their minimum cash balance to the original $5,000,000 or risk default on the note. Additionally the Company is only allowed to enter a reduced minimum cash period once during the term of the agreement. All other terms and conditions of the Purchase Agreement, including all amendments thereto, remain the same. | |
Accounting Treatment | |
When issuing debt or equity securities convertible into common stock at a discount to the fair value of the common stock at the date the debt or equity financing is committed, a company is required to record a beneficial conversion feature ("BCF") charge in accordance with ASC 470-20. We had two separate issuances of equity securities convertible into common stock that qualify under this accounting treatment, (i) the 2011 HealthCor Notes and (ii) the 2012 HealthCor Notes. Because the 2011 HealthCor Notes were originally classified as a liability when issued and reclassified to equity on December 31, 2011, only the accrued interest capitalized as payment in kind (“PIK”) since reclassification qualifies under this accounting treatment. The full amount of the 2012 HealthCor Notes and all accrued PIK interest also qualifies for this accounting treatment. At September 30, 2013, we recorded a BCF of $1,052,487 related to the PIK. At September 30, 2012, we recorded a BCF of $2,712,014 based on the difference between the contractual conversion rate and the current fair value of our shares of Common Stock at the original issuance date. The transaction was recorded as a charge to debt discount and the credit to additional paid in capital, with the debt discount, using the effective interest method, amortized to interest expense over the expected term of the notes (through April 2021 for the 2011 HealthCor Notes and through January 2022 for the 2012 HealthCor Notes). We recorded an aggregate of $472,992 and $331,855 in interest expense for the nine months ended September 30, 2013 and 2012, respectively, related to this discount. The carrying value of the debt with HealthCor at September 30, 2013 approximates fair value as the interest rates used are those currently available to us and would be considered level 3 inputs under the fair value hierarchy. |
LOAN_AND_SECURITY_AGREEMENT_WI
LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK | 9 Months Ended |
Sep. 30, 2013 | |
Loan And Security Agreement With Comerica Bank And Bridge Bank | ' |
LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK | ' |
NOTE 15 – LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK | |
On August 31, 2011, we entered into and closed a Loan and Security Agreement (the "Revolving Line Agreement") with Comerica Bank ("Comerica") and Bridge Bank, National Association ("Bridge Bank") (collectively the "Banks") providing for a $20 million revolving line of credit (expiring in June 2014 unless mutually extended.). The Revolving Line will provide us with capital, among other things, to purchase equipment and perform installations pursuant to newly signed contracts that we may execute in the future with certain healthcare providers. The borrowings under the Revolving Line Agreement bears interest on the outstanding daily balance of the advances at the rate of 3.75% plus the Prime Referenced Rate, which is a rate equal to Comerica’s prime rate but no less than the sum of 30-day LIBOR rate plus 2.5% per annum. Interest shall be paid monthly in arrears on any outstanding principal amount. The interest rate was calculated to be 7% per annum at both September 30, 2013 and September 30, 2012. | |
After the payment of a $200,000 nonrefundable facility fee to be shared equally by the Banks, the Revolving Line Agreement requires us to pay (i) a quarterly unused facility fee equal to one quarter of one percent (0.25%) per annum of the difference between the amount of the Revolving Line and the average outstanding principal balance of the Revolving Line during the applicable quarter and (ii) all reasonable expenses incurred by the Banks in connection with the Revolving Line Agreement, including reasonable attorneys’ fees and expenses. | |
The Revolving Line Agreement requires us to maintain our primary operating accounts with Comerica and Bridge Bank on a 50:50 basis, with no less than 80% of our investment accounts with the Banks or their affiliates, unless our cash falls below $5 million, in which case we must maintain all our cash with the Banks. The Revolving Line Agreement requires us to maintain a fixed charge coverage ratio of at least 5.01 to 1.00 and contains certain customary affirmative covenants that include, among others, payment of taxes and other obligations, maintenance of insurance and reporting requirements, as well as customary negative covenants that limit, among other things, our ability to make dispositions and acquisitions, be acquired, incur debt or pay dividends. | |
The Revolving Line Agreement contains customary events of default including, among other things, non-payment, inaccurate representations and warranties, violation of covenants, events that constitute a material adverse effect and cross-defaults to other indebtedness. Upon an occurrence of an event of default, we are required to pay interest on the outstanding principal balance of five percent (5%) above the otherwise applicable interest rate, and the Banks may accelerate the maturity date. | |
Pursuant to and in connection with the Revolving Line Agreement, we granted the Banks a security interest in all of our assets, including our intellectual property pursuant to an Intellectual Property Security Agreement, and pledged our ownership interests in our subsidiaries and certain joint ventures. We were also required to enter into a Subordination Agreement with our existing convertible note holders, HealthCor Partners Fund, L.P. and HealthCor Hybrid Offshore Master Fund, L.P. | |
During the three and nine months ended September 30, 2013, we borrowed approximately $299,000 and $982,000, respectively, against the $20 million Revolving Line Agreement. At September 30, 2013, approximately $19.0 million was available to us by using eligible customer contracts as collateral; however, no eligible contracts were available for additional borrowings on the Revolving Line Agreement as of September 30, 2013. | |
First Amendment | |
On January 31, 2012, we entered into a First Amendment to the Revolving Line Agreement (the "First Amendment") changing the definition of "HealthCor Debt", a component of "Permitted Indebtedness," to permit the issuance of the additional Senior Convertible Notes to HealthCor (see NOTE 14 – AGREEMENT WITH HEALTHCOR for more details). | |
Second Amendment | |
On January 15, 2013, we entered into a Second Amendment of the Revolving Line Agreement with the Banks (the "Second Amendment") in which the Banks agreed to amend the defining term for "Eligible Accounts" and add the defining term for "Verification of Accounts." Pursuant to the Second Amendment, we also amended the previously issued Warrants to the Banks to reduce the exercise price from $1.40 to $1.10 per share (subject to adjustment for capital events) and to extend the expiration date from August 8, 2018 to January 15, 2020. All other provisions of the Revolving Line Agreement and the Warrants remained unchanged. | |
Third Amendment | |
On August 20, 2013, we entered into a Third Amendment to Revolving Line Agreement with the Banks (the "Third Amendment") to amend and/or restate certain provisions. Previously the Company was required to maintain a minimum cash balance of $5,000,000 and should the Company drop below that balance, it triggered immediate default. The Third Amendment allows for a reduced minimum cash period, as defined in the agreement, which allows the Company to drop below $5,000,000, but not below $4,000,000. Upon entering the reduced minimum cash period, the Company has 120 days to return their minimum cash balance to the original $5,000,000 or risk default on the Revolving Line. During the reduced minimum cash period, the Company is not allowed to have advances from the Revolving Line in an aggregate amount greater than $3,000,000. Additionally the Company is only allowed to enter a reduced minimum cash period once during the term of the agreement. All other terms and conditions of the Revolving Line Agreement, including all amendments thereto, remain the same. In conjunction with the Third Amendment, we also entered into an Affirmation of Subordination with the Banks. | |
Accounting Treatment | |
Pursuant to the Revolving Line Agreement, as amended, we issued Warrants to the Banks to purchase an aggregate of 1,428,572 shares of our Common Stock. The Warrants have an exercise price of $1.10 per share and expire on January 15, 2020. The fair value of the Warrants at issuance was $1,535,714, with an additional $64,286 added pursuant to the Second Amendment, all of which has been recorded as deferred financing costs. The deferred financing costs are amortized to interest expense over the term of the Revolving Line Agreement. The Warrants have not been exercised at September 30, 2013. | |
During the three and nine months ended September 30, 2013, $142,347 and $427,041, respectively, and during the three and nine months ended September 30, 2012, $131,633 and $394,898, respectively, was amortized to interest expense in the accompanying condensed consolidated financial statements. |
CHANGE_IN_OFFICERS
CHANGE IN OFFICERS | 9 Months Ended |
Sep. 30, 2013 | |
Change In Officers | ' |
CHANGE IN OFFICERS | ' |
NOTE 16 – CHANGE IN OFFICERS | |
Resignation of Anthony R. Piccin as Chief Financial Officer, Treasurer and Secretary | |
On September 6, 2013, we accepted the resignation of Anthony P. Piccin as our Chief Financial Officer, Treasurer and Secretary and for the various offices he held in our subsidiaries and LLCs. Our management requested and Mr. Piccin agreed that he would be available to us in an advisory position through October 15, 2013. | |
Appointment of L. Allen Wheeler as Principal Financial Officer and Chief Accounting Officer | |
As of September 6, 2013, L. Allen Wheeler, one of our directors and Chairman of the Audit Committee, agreed to serve as our Principal Financial Officer and Chief Accounting Officer as those positions relate to our annual and quarterly filings with the Commission. | |
Appointment of Steve Johnson as Secretary and Treasurer | |
We are actively pursuing a qualified candidate to serve as Chief Financial Officer, Treasurer and Secretary. Until those positions are filled, Steve Johnson, our President and Chief Operating Officer, will also serve as our Secretary and Treasurer. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 17 – SUBSEQUENT EVENTS | |
Appointment of New Chief Operating Officer | |
Effective November 1, 2013, Sandra K. McRee was appointed as our Chief Operating Officer. Ms. McRee's base annual salary is $210,000 and she was granted a ten-year Option to purchase 3,000,000 shares of our Common Stock at an exercise price of $0.51 per share, vesting equitably annually over three years. | |
Prior to Ms. McRee’s appointment, Steven Johnson was our Chief Operating Officer. Mr. Johnson relinquished that position upon Ms. McRee's hiring; however, he continues to serve as our President, Secretary and Treasurer. |
BASIS_OF_PRESENTATION_AND_RECE1
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Basis Of Presentation And Recently Issued Accounting Pronouncements Policies | ' |
Interim Financial Statements | ' |
Interim Financial Statements | |
The accompanying unaudited interim condensed consolidated financial statements of CareView Communications, Inc. (“CareView”, the “Company”, “we”, “us” or “our”) have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The balance sheet at December 31, 2012 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the SEC on April 1, 2013. | |
Recently Issued and Newly Adopted Accounting Pronouncements | ' |
Recently Issued and Newly Adopted Accounting Pronouncements | |
Adoption of New Accounting Standards | |
There have been no material changes to our significant accounting policies as summarized in NOTE 2 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES of our Annual Report on Form 10-K for the year ended December 31, 2012. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our accompanying condensed consolidated financial statements. |
STOCKHOLDERS_EQUITY_DEFICIT_Ta
STOCKHOLDERS' EQUITY (DEFICIT) (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders Equity Deficit Tables | ' | ||||||||||||||||
Schedule of stock option activity | ' | ||||||||||||||||
A summary of our stock option activity and related information follows: | |||||||||||||||||
Number of Shares Under Options | Weighted Average Exercise Price | Weighted | Aggregate Intrinsic Value | ||||||||||||||
Average | |||||||||||||||||
Remaining | |||||||||||||||||
Contractual | |||||||||||||||||
Life | |||||||||||||||||
Balance at December 31, 2012 | 9,093,977 | $ | 0.66 | 6.6 | $ | 2,376,961 | |||||||||||
Granted | 25,000 | $ | 0.5 | 10 | |||||||||||||
Exercised | — | — | |||||||||||||||
Expired | (49,999 | ) | $ | 1.23 | |||||||||||||
Cancelled | (287,502 | ) | $ | 1.07 | |||||||||||||
Balance at September 30, 2013 | 8,781,476 | $ | 0.62 | 5.8 | $ | 180,546 | |||||||||||
Vested and Exercisable at September 30, 2013 | 7,837,309 | $ | 0.59 | 5.4 | $ | 180,546 | |||||||||||
Schedule of assumptions used in the Black-Scholes Model | ' | ||||||||||||||||
The assumptions used in the Black-Scholes Model are set forth in the table below. | |||||||||||||||||
Nine | Year | ||||||||||||||||
Months Ended | Ended | ||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Risk-free interest rate | 0.66 | % | 0.34 | % | |||||||||||||
Volatility | 102.64 | % | 101.9 | % | |||||||||||||
Expected life | 3 | 3 | |||||||||||||||
Dividend yield | 0 | % | 0 | % |
OTHER_CURRENT_ASSETS_Tables
OTHER CURRENT ASSETS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Current Assets Tables | ' | ||||||||
Schedule of other current assets | ' | ||||||||
Other current assets consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Prepaid expenses | $ | 221,123 | $ | 130,825 | |||||
Other current assets | 77,092 | 63,767 | |||||||
TOTAL OTHER CURRENT ASSETS | $ | 298,215 | $ | 194,592 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property And Equipment Tables | ' | ||||||||
Schedule of fixed assets | ' | ||||||||
Property and equipment consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Network equipment | $ | 10,233,092 | $ | 10,170,480 | |||||
Office equipment | 124,184 | 119,830 | |||||||
Vehicles | 112,332 | 136,082 | |||||||
Furniture | 75,673 | 75,673 | |||||||
Test equipment | 73,719 | 73,719 | |||||||
Warehouse equipment | 6,866 | 6,866 | |||||||
Leasehold improvements | 5,121 | 5,121 | |||||||
10,630,987 | 10,587,771 | ||||||||
Less: accumulated depreciation | (3,855,568 | ) | (2,726,234 | ) | |||||
TOTAL PROPERTY AND EQUIPMENT | $ | 6,775,419 | $ | 7,861,537 |
OTHER_ASSETS_Tables
OTHER ASSETS (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Other Assets Tables | ' | ||||||||||||
Schedule of intangible assets | ' | ||||||||||||
Intangible assets consist of the following: | |||||||||||||
30-Sep-13 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Patents and trademarks | $ | 223,551 | $ | 11,994 | $ | 211,557 | |||||||
Computer software | 50,494 | 25,160 | 25,334 | ||||||||||
Software development costs | 2,002,933 | 2,002,933 | — | ||||||||||
Other intellectual property | 750,000 | 750,000 | — | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 3,026,978 | $ | 2,790,087 | $ | 236,891 | |||||||
31-Dec-12 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Patents and trademarks | $ | 182,593 | $ | 6,525 | $ | 176,068 | |||||||
Other tangible assets | 46,220 | 13,314 | 32,906 | ||||||||||
Software development costs | 2,002,933 | 2,002,933 | — | ||||||||||
Other intellectual property | 750,000 | 750,000 | — | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 2,981,746 | $ | 2,772,772 | $ | 208,974 | |||||||
Schedule of other assets | ' | ||||||||||||
Other assets consist of the following: | |||||||||||||
30-Sep-13 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Deferred debt issuance costs | $ | 1,600,000 | $ | 1,172,961 | $ | 427,039 | |||||||
Deferred installation costs | 1,061,061 | 457,609 | 603,452 | ||||||||||
Deferred closing costs | 580,241 | 405,144 | 175,097 | ||||||||||
Prepaid license fee | 249,999 | 34,152 | 215,847 | ||||||||||
Security deposit | 83,624 | — | 83,624 | ||||||||||
TOTAL OTHER ASSETS | $ | 3,574,925 | $ | 2,069,866 | $ | 1,505,059 | |||||||
December 31,2012 | |||||||||||||
Accumulated Amortization | |||||||||||||
Cost | Net | ||||||||||||
Deferred debt issuance costs | $ | 1,535,714 | $ | 745,920 | $ | 789,794 | |||||||
Deferred installation costs | 799,114 | 209,598 | 589,516 | ||||||||||
Deferred closing costs | 516,050 | 247,413 | 268,637 | ||||||||||
Prepaid license fee | 233,606 | 21,857 | 211,749 | ||||||||||
Security deposit | 83,624 | — | 83,624 | ||||||||||
Prepaid consulting | 1,131,300 | 1,054,764 | 76,536 | ||||||||||
TOTAL OTHER ASSETS | $ | 4,299,408 | $ | 2,279,552 | $ | 2,019,856 |
OTHER_CURRENT_LIABILITIES_Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Current Liabilities Tables | ' | ||||||||
Schedule of other current liabilities | ' | ||||||||
Other current liabilities consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued taxes | $ | 452,055 | $ | 360,587 | |||||
Other accrued liabilities | 411,784 | 441,941 | |||||||
TOTAL OTHER CURRENT LIABILITIES | $ | 863,839 | $ | 802,528 |
VARIABLE_INTEREST_ENTITIES_Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Variable Interest Entities Tables | ' | ||||||||
Schedule of VIE assets and liabilities and results of operations | ' | ||||||||
The total consolidated VIE assets and liabilities reflected on our accompanying condensed consolidated balance sheets at September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Assets | |||||||||
Cash | $ | 3,641 | $ | 956 | |||||
Receivables | 2,431 | 5,221 | |||||||
Total current assets | 6,072 | 6,177 | |||||||
Property, net | 155,657 | 189,003 | |||||||
Total assets | $ | 161,729 | $ | 195,180 | |||||
Liabilities | |||||||||
Accounts payable | $ | 110,507 | $ | 103,217 | |||||
Notes payable, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 | |||||||
Mandatorily redeemable interest, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 | |||||||
Accrued interest | 105,133 | 59,872 | |||||||
Other current liabilities | 40,747 | 53,371 | |||||||
Total current liabilities | 1,143,535 | 1,037,632 | |||||||
Total liabilities | $ | 1,143,535 | $ | 1,037,632 | |||||
The financial performance of the consolidated VIEs reflected on our accompanying condensed consolidated statements of operations for the nine months ended September 30, 2013 and 2012 is as follows: | |||||||||
September 30, | September 30, | ||||||||
2013 | 2012 | ||||||||
Revenue | $ | 21,863 | $ | 61,372 | |||||
Network operations expense | 12,653 | 18,762 | |||||||
General and administrative expense | (19,462 | ) | 31,545 | ||||||
Depreciation | 40,583 | 70,328 | |||||||
Total operating costs | 33,774 | 120,635 | |||||||
Operating loss | (11,911 | ) | (59,263 | ) | |||||
Other income (expense) | (86,764 | ) | (214,687 | ) | |||||
Loss before income taxes | (98,675 | ) | (273,950 | ) | |||||
Provision for income taxes | — | — | |||||||
Net loss | (98,675 | ) | (273,950 | ) | |||||
Net loss attributable to noncontrolling interest | (49,337 | ) | (136,975 | ) | |||||
Net loss attributable to CareView Communications, Inc. | $ | (49,338 | ) | $ | (136,975 | ) | |||
LIQUIDITY_AND_MANAGEMENTS_PLAN1
LIQUIDITY AND MANAGEMENTS PLAN (Details Narrative) (USD $) | 0 Months Ended | 9 Months Ended | ||||
Apr. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 19, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Liquidity And Managements Plan Details Narrative | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | $5,120,139 | $8,277,166 | ' | $5,413,848 | $8,526,857 |
Minimum cash balance required under existing loan documents | ' | 4,000,000 | ' | 5,000,000 | ' | ' |
Private placement, net of fees | 2,728,129 | 2,728,129 | ' | ' | ' | ' |
Private placement, shares | 6,220,000 | ' | ' | ' | ' | ' |
Price per share purchased | $0.50 | ' | ' | ' | ' | ' |
Warrants issued in private placement | 2,500,000 | ' | ' | ' | ' | ' |
Price per warrant issued | 0.01 | ' | ' | ' | ' | ' |
Revolving line of credit maximum borrowing capacity | ' | 20,000,000 | ' | ' | ' | ' |
Line of credit current borrowing capacity | ' | $19,000,000 | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_DEFICIT_De
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) (USD $) | 0 Months Ended | |
Apr. 02, 2013 | Sep. 30, 2013 | |
Private Placement | ' | ' |
Shares issued in private placement, shares | 6,220,000 | ' |
Price per share purchased | $0.50 | ' |
Warrants issued in private placement | 2,500,000 | ' |
Price per warrant issued | 0.01 | ' |
Warrant exercise price | 0.6 | ' |
Cash received for private placement | $3,100,000 | ' |
Warrants | ' | ' |
Private Placement | ' | ' |
Warrants issued in private placement | ' | 22,114,213 |
Warrant exercise price | ' | 0.73 |
Cash received for private placement | 672,909 | ' |
Additional Paid-In Capital | ' | ' |
Private Placement | ' | ' |
Cash received for private placement | $2,475,991 | ' |
STOCKHOLDERS_EQUITY_DEFICIT_De1
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative 1) (USD $) | Apr. 02, 2013 | Sep. 28, 2012 | Aug. 31, 2011 | Aug. 02, 2013 | 31-May-12 | Apr. 02, 2012 | Feb. 28, 2012 | Jan. 19, 2012 | Feb. 06, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 16, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Jan. 16, 2013 | 7-May-12 | Sep. 30, 2013 |
Director | Comerica Bank and Bridge Bank | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants Revalued | Warrants Revalued | Warrants Under AS Agreement | Warrants Under AS Agreement | ||
Comerica Bank and Bridge Bank | Lower Range | Upper Range | Comerica Bank and Bridge Bank | Comerica Bank and Bridge Bank | ||||||||||||||
Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants outstanding | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | 22,114,213 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercise price | 0.6 | ' | ' | ' | ' | ' | ' | ' | ' | 0.73 | ' | 1.4 | 0.52 | 1.65 | ' | 1.1 | ' | ' |
Term of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years 1 month 6 days | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized warrant costs, excluding HealthCor warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | $427,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants at re-value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 579,246 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value adjustment recorded as non-cash costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | 93,663 | ' | ' | ' | ' | ' | ' | ' | ' |
Expensed as non-cash costs in general and administration | ' | ' | ' | ' | 17,432 | ' | ' | ' | ' | 76,535 | 486,517 | ' | ' | ' | ' | ' | ' | ' |
Expensed as Interest Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | 427,041 | 394,898 | ' | ' | ' | ' | ' | ' | ' |
Change in fair value of warrants, amortized to interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,327 | 64,286 | ' | ' |
Noncash service costs related to warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,764 |
Warrants issued for services, shares | ' | ' | ' | ' | 50,000 | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 240,000 | ' |
Warrants issued for services | ' | ' | ' | ' | 52,300 | 48,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 265,200 | ' |
Exercise price of warrants granted | ' | ' | 1.1 | ' | 1.55 | 1.52 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.65 | ' |
Term of warrants granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' |
Vesting terms of warrants granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'vesting of the underlying shares occurs at the rate of 20,000 shares on the monthly anniversary date of the AS Agreement as long as the AS Agreement has not been terminated | ' |
Fair value of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 124,720 |
Expensed as distribution/service costs in network operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 41,499 | ' | ' | ' | ' | ' | ' | ' |
Warrants exercised | ' | 439,666 | ' | 179,638 | ' | ' | 450,000 | 39,683 | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for exercise of warrants | ' | 241,816 | ' | ' | ' | ' | ' | 20,635 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for exercise of warrants, shares | ' | ' | ' | 172,283 | ' | ' | 311,857 | 39,683 | 277,809 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Noncash exercise of warrants, shares forfeited for exercise | ' | ' | ' | 7,355 | ' | ' | 138,143 | ' | 122,191 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Charged to prepaid costs | ' | ' | ' | ' | $34,868 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_DEFICIT_De2
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative 2) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Stock Options | ' | ' |
Expected percentage of forfeited options | 0.00% | ' |
Unrecognized estimated compensation expense | $435,000 | ' |
Period for recognization of unrecognized compensation expense | '1 year 9 months 18 days | ' |
Stock Options | ' | ' |
Stock Options | ' | ' |
Options cancelled | 287,502 | 380,306 |
Share-based compensation expense | $127,067 | $610,963 |
STOCKHOLDERS_EQUITY_DEFICIT_De3
STOCKHOLDERS' EQUITY (DEFICIT) (Details) (Stock Options, USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Stock Options | ' | ' |
Number Options | ' | ' |
Stock Options Outstanding, Beginning | 9,093,977 | ' |
Granted | 25,000 | ' |
Exercised | ' | ' |
Expired | -49,999 | ' |
Cancelled | -287,502 | -380,306 |
Stock Options Outstanding, Ending | 8,781,476 | ' |
Stock Options, vested and exercisable | 7,837,309 | ' |
Weighted Average Exercise Price | ' | ' |
Stock Options Outstanding, Beginning | $0.66 | ' |
Granted | $0.50 | ' |
Exercised | ' | ' |
Expired | $1.23 | ' |
Cancelled | $1.07 | ' |
Stock Options Outstanding, Ending | $0.62 | ' |
Stock Options, vested and exercisable | $0.59 | ' |
Weighted Average Remaining Contractual Life | ' | ' |
Stock Options Outstanding, Beginning | '6 years 7 months 6 days | ' |
Granted | '10 years | ' |
Stock Options Outstanding, Ending | '5 years 9 months 18 days | ' |
Stock Options, vested and exercisable | '5 years 4 months 24 days | ' |
Aggregate Intrinsic Value | ' | ' |
Stock Options Outstanding | $2,376,961 | ' |
Stock Options Outstanding | 180,546 | ' |
Stock Options Outstanding, Vested and exercisable | $180,546 | ' |
STOCKHOLDERS_EQUITY_DEFICIT_De4
STOCKHOLDERS' EQUITY (DEFICIT) (Details 1) (Stock Options) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Stock Options | ' | ' |
Black-Scholes Model: | ' | ' |
Risk-free interest rate | 0.66% | 0.34% |
Volatility | 102.64% | 101.90% |
Expected life | '3 years | '3 years |
Dividend yield | 0.00% | 0.00% |
OTHER_CURRENT_ASSETS_Details
OTHER CURRENT ASSETS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Other Current Assets Details | ' | ' |
Prepaid expenses | $221,123 | $130,825 |
Other current assets | 77,092 | 63,767 |
TOTAL OTHER CURRENT ASSETS | $298,215 | $194,592 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Property And Equipment Details Narrative | ' | ' |
Depreciation expense | $1,134,061 | $1,199,196 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Property and equipment, gross | $10,630,987 | $10,587,771 |
Less: accumulated depreciation | -3,855,568 | -2,726,234 |
Property and equipment, net | 6,775,419 | 7,861,537 |
Network Equipment | ' | ' |
Property and equipment, gross | 10,233,092 | 10,170,480 |
Vehicles | ' | ' |
Property and equipment, gross | 124,184 | 136,082 |
Office Equipment | ' | ' |
Property and equipment, gross | 112,332 | 119,830 |
Furniture | ' | ' |
Property and equipment, gross | 75,673 | 75,673 |
Test Equipment | ' | ' |
Property and equipment, gross | 73,719 | 73,719 |
Warehouse Equipment | ' | ' |
Property and equipment, gross | 6,866 | 6,866 |
Leasehold Improvements | ' | ' |
Property and equipment, gross | $5,121 | $5,121 |
OTHER_ASSETS_Details_Narrative
OTHER ASSETS (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Other Assets Details Narrative | ' | ' |
Amortization expense of intangible assets | $17,315 | $423,588 |
OTHER_ASSETS_Details
OTHER ASSETS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Cost | $3,026,978 | $2,981,746 |
Accumulated Amortization | 2,790,087 | 2,772,772 |
Intangible assets, Net | 236,891 | 208,974 |
Patents and trademarks | ' | ' |
Cost | 223,551 | 182,593 |
Accumulated Amortization | 11,994 | 6,525 |
Intangible assets, Net | 211,557 | 176,068 |
Other Intangible Assets | ' | ' |
Cost | 50,494 | 46,220 |
Accumulated Amortization | 25,160 | 13,314 |
Intangible assets, Net | 25,334 | 32,906 |
Software Development Costs | ' | ' |
Cost | 2,002,933 | 2,002,933 |
Accumulated Amortization | 2,002,933 | 2,002,933 |
Intangible assets, Net | ' | ' |
Other Intellectual Property | ' | ' |
Cost | 750,000 | 750,000 |
Accumulated Amortization | 750,000 | 750,000 |
Intangible assets, Net | ' | ' |
OTHER_ASSETS_Details_1
OTHER ASSETS (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Cost | $3,574,925 | $4,299,408 |
Accumulated Amortization | 2,069,866 | 2,279,552 |
Other assets | 1,505,059 | 2,019,856 |
Deferred Debt Issuance Costs | ' | ' |
Cost | 1,600,000 | 1,535,714 |
Accumulated Amortization | 1,172,961 | 745,920 |
Other assets | 427,039 | 789,794 |
Deferred Installation Costs | ' | ' |
Cost | 1,061,061 | 799,114 |
Accumulated Amortization | 457,609 | 209,598 |
Other assets | 603,452 | 589,516 |
Deferred Closing Costs | ' | ' |
Cost | 580,241 | 516,050 |
Accumulated Amortization | 405,144 | 247,413 |
Other assets | 175,097 | 268,637 |
Prepaid License Fee | ' | ' |
Cost | 249,999 | 233,606 |
Accumulated Amortization | 34,152 | 21,857 |
Other assets | 215,847 | 211,749 |
Security Deposit | ' | ' |
Cost | 83,624 | 83,624 |
Accumulated Amortization | ' | ' |
Other assets | 83,624 | 83,624 |
Prepaid Consulting | ' | ' |
Cost | ' | 1,131,300 |
Accumulated Amortization | ' | 1,054,764 |
Other assets | ' | $76,536 |
OTHER_CURRENT_LIABILITIES_Deta
OTHER CURRENT LIABILITIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
OTHER CURRENT LIABILITIES: | ' | ' |
Accrued taxes | $452,055 | $360,587 |
Other accrued liabilities | 411,784 | 441,941 |
Other current liabilities | $863,839 | $802,528 |
JOINT_VENTURE_AGREEMENT_Detail
JOINT VENTURE AGREEMENT (Details Narrative) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Nov. 16, 2009 | Nov. 16, 2009 | Sep. 30, 2013 | Sep. 30, 2012 | Nov. 16, 2009 | |
Joint Venture - Rockwell | Joint Venture - Rockwell | Joint Venture - Rockwell | Joint Venture - Rockwell | |||||
Warrants | ||||||||
Percentage owned by company of each joint venture | ' | ' | ' | 50.00% | ' | ' | ' | ' |
Funding by Rockwell into the Joint Venture, cash | ' | ' | ' | ' | $1,151,205 | ' | ' | ' |
Promissory notes issued to Rockwell | ' | ' | ' | ' | 575,603 | 992,000 | ' | ' |
Investment Interest issued to Rockwell as Preferential Return | ' | ' | ' | ' | 575,602 | ' | ' | ' |
Interest rate on project notes and preferential returns, per investment agreement | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Warrants issued for financing costs | 64,286 | ' | ' | ' | ' | ' | ' | 1,151,206 |
Fair value of warrants issued to Rockwell for providing funding | ' | ' | ' | ' | ' | ' | ' | 1,124,728 |
Discount on debt recorded | 0 | ' | 32,988 | ' | 636,752 | ' | ' | ' |
Amortization of debt discount | 2,320,867 | 2,537,069 | ' | ' | ' | 65,976 | 147,411 | ' |
Monthly revenue lost due to Hillcrest termination | ' | 20,000 | ' | ' | ' | ' | ' | ' |
De-installation costs incurred | ' | $3,000 | ' | ' | ' | ' | ' | ' |
VARIABLE_INTEREST_ENTITIES_Det
VARIABLE INTEREST ENTITIES (Details Narrative) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Debt discount of notes payable, current | $0 | $32,988 |
Debt discount of mandatorily redeemable equity in joint venture, current | 0 | 32,988 |
Variable Interest Entity | ' | ' |
Debt discount of notes payable, current | 0 | 32,988 |
Debt discount of mandatorily redeemable equity in joint venture, current | $0 | $32,988 |
VARIABLE_INTEREST_ENTITIES_Det1
VARIABLE INTEREST ENTITIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Receivables | $272,464 | $367,742 |
Total current assets | 5,690,818 | 5,976,182 |
Property, net | 6,775,419 | 7,861,537 |
Assets | 14,208,187 | 16,066,549 |
Liabilities | ' | ' |
Accounts payable | 262,868 | 166,373 |
Notes payable, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 |
Mandatorily redeemable equity in joint venture, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 |
Accrued interest | 110,349 | 59,872 |
Other current liabilities | 863,839 | 802,528 |
Total current liabilities | 3,106,459 | 1,849,945 |
Total liabilities | 20,263,749 | 14,314,923 |
Variable Interest Entity | ' | ' |
Assets | ' | ' |
Cash | 3,641 | 956 |
Receivables | 2,431 | 5,221 |
Total current assets | 6,072 | 6,177 |
Property, net | 155,657 | 189,003 |
Assets | 161,729 | 195,180 |
Liabilities | ' | ' |
Accounts payable | 110,507 | 103,217 |
Notes payable, net of debt discount of $0 and $32,988, respectively | 443,574 | 410,586 |
Mandatorily redeemable equity in joint venture, net of debt discount of $0 and $32,988, respectively | 433,574 | 410,586 |
Accrued interest | 105,133 | 59,872 |
Other current liabilities | 40,747 | 53,371 |
Total current liabilities | 1,143,535 | 1,037,632 |
Total liabilities | $1,143,535 | $1,037,632 |
VARIABLE_INTEREST_ENTITIES_Det2
VARIABLE INTEREST ENTITIES (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue | $552,935 | $542,010 | $1,474,352 | $1,371,631 |
Network operations expense | 608,925 | 480,023 | 1,902,012 | 1,957,468 |
General and administrative expense | 617,723 | 991,609 | 2,219,604 | 3,366,596 |
Depreciation | 379,388 | 532,515 | 1,151,376 | 1,622,783 |
Total operating costs | 1,975,722 | 2,805,512 | 6,668,991 | 9,188,006 |
Operating loss | -1,422,787 | -2,263,502 | -5,194,639 | -7,816,375 |
Loss before taxes | -3,406,427 | -4,211,230 | -11,155,750 | -13,510,551 |
Provision for taxes | ' | ' | ' | ' |
Net loss attributable to noncontrolling interest | 2,865 | -52,941 | -49,337 | -136,974 |
Net loss attributable to CareView Communications, Inc. | -3,409,292 | -4,158,289 | -11,106,413 | -13,373,577 |
Variable Interest Entity | ' | ' | ' | ' |
Revenue | ' | ' | 21,863 | 61,372 |
Network operations expense | ' | ' | 12,653 | 18,762 |
General and administrative expense | ' | ' | -19,462 | 31,545 |
Depreciation | ' | ' | 40,583 | 70,328 |
Total operating costs | ' | ' | 33,774 | 120,635 |
Operating loss | ' | ' | -11,911 | -59,263 |
Other income (expense) | ' | ' | -86,764 | -214,687 |
Loss before taxes | ' | ' | -98,675 | -273,950 |
Provision for taxes | ' | ' | ' | ' |
Net loss | ' | ' | -98,675 | -273,950 |
Net loss attributable to noncontrolling interest | ' | ' | -49,337 | -136,975 |
Net loss attributable to CareView Communications, Inc. | ' | ' | ($49,338) | ($136,975) |
SERVICE_AGREEMENTS_Details_Nar
SERVICE AGREEMENTS (Details Narrative) (USD $) | 0 Months Ended | 8 Months Ended | ||
7-May-12 | 7-May-12 | Apr. 29, 2012 | 31-May-13 | |
Warrants Under AS Agreement | Advisory Services Agreement | Heartland Energy Partners Consulting Agreement | Heartland Energy Partners Consulting Agreement | |
Monthly retainer amount | ' | $5,000 | $10,000 | ' |
Warrants issued for services, shares | 240,000 | ' | ' | ' |
Exercise price of warrants granted | 1.65 | ' | ' | ' |
Term of warrants granted | '5 years | ' | '5 years | ' |
Vesting terms of warrants granted | 'vesting of the underlying shares occurs at the rate of 20,000 shares on the monthly anniversary date of the AS Agreement as long as the AS Agreement has not been terminated | ' | ' | ' |
Consulting Expense | ' | ' | ' | $80,000 |
Maximum number of shares consultant is entitled to receive under Warrants | ' | ' | 1,000,000 | ' |
SUBSCRIPTION_AND_INVESTOR_RIGH
SUBSCRIPTION AND INVESTOR RIGHTS AGREEMENT (Details Narrative) (USD $) | 0 Months Ended | 0 Months Ended | |
Oct. 31, 2013 | Sep. 30, 2013 | Aug. 20, 2010 | |
Subscription and Investor Rights Agreement | |||
Warrants issued for contract modifications, warrants | ' | ' | 1,000,000 |
Exercise price of warrants granted | ' | ' | 1 |
Term of warrants granted | ' | ' | '5 years |
GII owner's put liability | ' | $28,000 | ' |
Acquisition of GII | $28,124 | ' | ' |
AGREEMENT_WITH_HMA_Details_Nar
AGREEMENT WITH HMA (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
CareViewUnits | ||||
Number Of HMA Hospitals | ' | ' | '66 hospitals | ' |
Number Of Installations | ' | ' | 3,167 | ' |
Number of installations currently in dispute | ' | ' | 2,117 | ' |
Number of Installations currently being billed | ' | ' | 1,050 | ' |
Revenues, net | $552,935 | $542,010 | $1,474,352 | $1,371,631 |
HMA Group | ' | ' | ' | ' |
Revenues, net | ' | ' | $157,000 | $472,000 |
AGREEMENT_WITH_HEALTHCOR_Detai
AGREEMENT WITH HEALTHCOR (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 60 Months Ended | 9 Months Ended | 49 Months Ended | 60 Months Ended | ||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 19, 2013 | Jan. 31, 2012 | Apr. 21, 2011 | Jan. 31, 2012 | Apr. 21, 2011 | Apr. 21, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Apr. 20, 2021 | Apr. 20, 2016 | Sep. 30, 2013 | Jan. 31, 2022 | Jan. 09, 2017 | |
HealthCor Partners Fund | HealthCor Partners Fund | HealthCor Hybrid Offshore Master Fund | HealthCor Hybrid Offshore Master Fund | HealthCor | HealthCor | HealthCor | HealthCor | HealthCor | HealthCor | HealthCor | HealthCor | HealthCor | ||||||
Senior Convertible Notes | Senior Convertible Notes | Senior Convertible Notes | Senior Convertible Notes - 2012 Issuance | Senior Convertible Notes - 2012 Issuance | Senior Convertible Notes - 2012 Issuance | |||||||||||||
Senior convertible debt | ' | ' | ' | ' | ' | $2,329,000 | $9,316,000 | $2,671,000 | $10,684,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Maturity Date | ' | ' | ' | ' | ' | 31-Jan-22 | 20-Apr-21 | ' | 20-Apr-21 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued for financing costs | ' | ' | 64,286 | ' | ' | ' | 5,488,456 | ' | 6,294,403 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants granted | ' | ' | ' | ' | ' | ' | 1.4 | ' | 1.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, provided no default | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 12.50% | ' | 10.00% | 12.50% |
Increase in interest rate (per annum) should default occur | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Debt conversion rate | ' | ' | ' | ' | ' | ' | ' | $1.25 | ' | $1.25 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares the note may be converted into | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,600,000 | ' | ' | 4,900,000 | ' | ' |
Minimum cash balance required under existing loan documents | 4,000,000 | ' | 4,000,000 | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beneficial conversion features for senior secured convertible notes | ' | ' | 1,052,487 | ' | ' | ' | ' | ' | ' | ' | 1,052,487 | 2,712,014 | ' | ' | ' | ' | ' | ' |
Interest Expense | $1,984,653 | $1,951,839 | $5,966,713 | $5,703,960 | ' | ' | ' | ' | ' | ' | $472,992 | $331,855 | ' | ' | ' | ' | ' | ' |
LOAN_AND_SECURITY_AGREEMENT_WI1
LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 19, 2013 | Apr. 02, 2013 | 31-May-12 | Apr. 02, 2012 | Sep. 30, 2013 | Aug. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 16, 2013 | Jan. 16, 2013 | |
Warrants | Warrants | Warrants | Comerica Bank and Bridge Bank | Comerica Bank and Bridge Bank | Comerica Bank and Bridge Bank | Comerica Bank and Bridge Bank | Comerica Bank and Bridge Bank | Comerica Bank and Bridge Bank | Comerica Bank and Bridge Bank | |||||||
Warrants | Warrants | Warrants | Warrants | Warrants | Warrants Revalued | |||||||||||
Revolving line of credit maximum borrowing capacity | $20,000,000 | ' | $20,000,000 | ' | ' | ' | ' | ' | ' | $20,000,000 | ' | ' | ' | ' | ' | ' |
Terms of interest on revolving line of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'interest on the outstanding daily balance of the advances at the rate of 3.75% plus the Prime Referenced Rate, which is a rate equal to Comerica's prime rate but no less than the 30-day LIBOR rate plus 2.5% per annum | ' | ' | ' | ' | ' | ' |
Interest rate on revolving line of credit | 7.00% | ' | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable Rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' |
Spread on Variable Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.50% | ' | ' | ' | ' | ' | ' |
Available revolving line of credit | 19,000,000 | ' | 19,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum cash balance required under existing loan documents | 4,000,000 | ' | 4,000,000 | ' | 5,000,000 | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' |
Warrants exercise price | ' | ' | ' | ' | ' | 0.6 | ' | ' | 0.73 | ' | ' | ' | ' | ' | 1.4 | 1.1 |
Line of credit facility fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' |
Line of credit facility fee description | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'requires the Company to pay (i) a quarterly unused facility fee equoal to one quarter of one percent (0.25%) per annum of the difference between the amount of the Revolving Line and the average outstanding principal balance of the Revolving Line during the applicable quarter and (ii) all reasonable expenses incurred by the Banks in connection with the Agreement, including reasonable attorneys' fees and expenses. | ' | ' | ' | ' | ' | ' |
Borrowing base as a Percentage of Eligible Accounts | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' | ' |
Terms of maintaining primary operating accounts with Comerica and Bridge Bank as per agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'on a 50:50 basis, with no less than 80% of CareView's investment accounts with the Banks or their affiliates, unless CareView's cash falls below $5 million, in which case it must maintain all its cash with the Banks | ' | ' | ' | ' | ' | ' |
Fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.01 | ' | ' | ' | ' | ' | ' |
Increase in interest rate (per annum) should default occur | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' |
Borrowings from the line of credit | 299,000 | ' | 982,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued for financing costs | ' | ' | 64,286 | ' | ' | ' | ' | ' | ' | 1,535,714 | ' | ' | ' | ' | ' | ' |
Warrants issued for financing costs, warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,428,572 | ' | ' | ' | ' | ' | ' |
Exercise price of warrants granted | ' | ' | ' | ' | ' | ' | 1.55 | 1.52 | ' | 1.1 | ' | ' | ' | ' | ' | ' |
Interest expense | $1,984,653 | $1,951,839 | $5,966,713 | $5,703,960 | ' | ' | ' | ' | ' | ' | $142,347 | $131,633 | $427,041 | $384,898 | ' | ' |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (Sandra McRee, Chief Operating Officer, USD $) | 0 Months Ended |
Nov. 01, 2013 | |
Sandra McRee, Chief Operating Officer | ' |
Annual Salary | $210,000 |
Option term | '10 years |
Options granted | 3,000,000 |
Exercise price of options granted | $0.51 |