Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | CareView Communications Inc | ||
Entity Central Index Key | 1377149 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity shares held by non-affiliates | 90,950,412 | ||
Entity Public Float | $58,208,264 | ||
Entity Common Stock, Shares Outstanding | 139,380,748 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets: | ||
Cash | $2,546,262 | $4,125,180 |
Accounts receivable, net | 680,143 | 305,033 |
Other current assets | 276,910 | 165,531 |
Total current assets | 3,503,315 | 4,595,744 |
Property and equipment, net | 5,344,792 | 6,364,609 |
Other Assets: | ||
Intangible assets, net | 261,283 | 252,989 |
Other assets | 832,930 | 1,224,554 |
[AssetsNoncurrent] | 1,094,213 | 1,477,543 |
Total assets | 9,942,320 | 12,437,896 |
Current Liabilities: | ||
Accounts payable | 244,782 | 414,888 |
Accrued interest | 191,596 | 127,327 |
Other current liabilities | 791,284 | 538,142 |
Revolving line of credit | 982,255 | |
Total current liabilities | 1,227,662 | 2,062,612 |
Long-term Liabilities: | ||
Senior secured convertible notes, net of debt discount of $21,457,970 and $18,983,058, respectively | 22,834,641 | 15,206,834 |
Notes payable | 441,594 | 442,519 |
Mandatorily redeemable equity in joint venture | 441,594 | 442,519 |
Fair value of warrant liability | 301,864 | 370,865 |
Lease liability, net of current portion | 8,607 | |
Total long-term liabilities | 24,019,693 | 16,471,344 |
Total liabilities | 25,247,355 | 18,533,956 |
Commitments and Contingencies | ||
Stockholders' 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; 139,380,748 and 138,753,397 issued and outstanding, respectively | 139,381 | 138,753 |
Additional paid in capital | 76,502,913 | 71,202,451 |
Accumulated deficit | -91,510,720 | -77,058,995 |
Total CareView Communications Inc. stockholders' deficit | -14,868,426 | -5,717,791 |
Noncontrolling interest | -436,609 | -378,269 |
Total stockholders' deficit | -15,305,035 | -6,096,060 |
Total liabilities and stockholders' deficit | $9,942,320 | $12,437,896 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 139,380,748 | 138,753,397 |
Common stock, shares outstanding | 139,380,748 | 138,753,397 |
Senior Secured Convertible Notes [Member] | ||
Debt discount | $21,457,970 | $18,983,058 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
Revenues, net | $3,061,298 | $2,068,771 |
Operating expenses: | ||
Network operations | 3,386,645 | 2,477,430 |
General and administration | 3,282,816 | 3,036,702 |
Sales and marketing | 676,394 | 999,449 |
Research and development | 843,416 | 860,371 |
Depreciation and amortization | 1,651,310 | 1,611,546 |
Total operating expense | 9,840,581 | 8,985,498 |
Operating loss | -6,779,283 | -6,916,727 |
Other income and (expense) | ||
Interest expense | -7,819,340 | -7,070,416 |
Change in fair value of warrant liability | 69,001 | 302,044 |
Interest income | 3,644 | 2,632 |
Other income | 15,913 | 14,556 |
Total other income (expense) | -7,730,782 | -6,751,184 |
Loss before taxes | -14,510,065 | -13,667,911 |
Provision for income taxes | ||
Net loss | -14,510,065 | -13,667,911 |
Net loss attributable to noncontrolling interest | -58,340 | -48,717 |
Net loss attributable to CareView Communications, Inc. | ($14,451,725) | ($13,619,194) |
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.10) | ($0.10) |
Weighted average number of common shares outstanding, basic and diluted | 139,120,996 | 137,197,217 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (USD $) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Dec. 31, 2012 | $132,526 | $67,224,170 | ($63,439,801) | ($329,552) | $3,587,343 |
Beginning balance, shares at Dec. 31, 2012 | 132,526,042 | ||||
Shares issued in private placement, net of costs | 6,220 | 2,696,909 | 2,703,129 | ||
Shares issued in private placement, net of costs, shares | 6,220,000 | ||||
Warrants issued in private placement | 25,000 | 25,000 | |||
Liability associated with warrants issued in private placement | -672,909 | -672,909 | |||
Shares issued for cashless exercise of warrants | 7 | -7 | |||
Shares issued for cashless exercise of warrants, shares | 7,355 | ||||
Options granted as compensation | 390,443 | 390,443 | |||
Warrants issued for services | 49,091 | 49,091 | |||
Warrants issued for financing costs (revalued) | 64,286 | 64,286 | |||
Beneficial conversion features for senior secured convertible notes | 1,425,468 | 1,425,468 | |||
Net loss | -13,619,194 | -48,717 | -13,667,911 | ||
Ending balance at Dec. 31, 2013 | 138,753 | 71,202,451 | -77,058,995 | -378,269 | -6,096,060 |
Ending balance, shares at Dec. 31, 2013 | 138,753,397 | ||||
Warrants issued in private placement | 1,146,732 | 1,146,732 | |||
Shares issued for cashless exercise of warrants | 628 | -628 | |||
Shares issued for cashless exercise of warrants, shares | 627,351 | ||||
Options granted as compensation | 714,123 | 714,123 | |||
Beneficial conversion features for senior secured convertible notes | 3,440,235 | 3,440,235 | |||
Net loss | -14,451,725 | -58,340 | -14,510,065 | ||
Ending balance at Dec. 31, 2014 | $139,381 | $76,502,913 | ($91,510,720) | ($436,609) | ($15,305,035) |
Ending balance, shares at Dec. 31, 2014 | 139,380,748 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Parenthetical) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | |
Private placement costs | $375,771 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITES | ||
Net loss | ($14,510,065) | ($13,667,911) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation | 1,623,723 | 1,587,464 |
Amortization of intangible assets | 27,587 | 24,082 |
Amortization of debt discount | 2,152,055 | 2,135,209 |
Amortization of installation costs | 306,111 | 349,939 |
Amortization of deferred debt issuance costs | 284,692 | 569,388 |
Amortization of prepaid consulting costs | 76,536 | |
Interest incurred and paid in kind | 5,102,719 | 3,959,632 |
Stock based compensation related to options granted | 714,123 | 390,443 |
Change in fair value of warrant liability | -69,001 | -302,044 |
(Gain) loss on disposal of assets | 4,050 | -2,374 |
Stock based costs related to warrants issued | 49,091 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | -375,110 | 62,709 |
Other current assets | -111,379 | 29,061 |
Other assets | 170,624 | 151,906 |
Accounts payable | -170,106 | 248,515 |
Accrued expenses and other current liabilities | 317,411 | -196,931 |
Lease liability | -8,607 | -17,217 |
Net cash flows used in operating activities | -4,541,173 | -4,552,502 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | -602,107 | -105,986 |
Payment for deferred installation costs | -369,803 | -288,181 |
Patent and trademark costs | -24,726 | -63,823 |
Purchase of computer software and website costs | -17,004 | -4,274 |
Proceeds from insurance claims | 17,824 | |
Net cash flows used in investing activities | -1,013,640 | -444,440 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable | 5,000,000 | |
Repayment of revolving line of credit | -982,255 | |
Financing costs | -40,000 | |
Repayment of notes payable | -1,850 | -2,110 |
Proceeds from sale of common stock, net of issuance costs | 2,703,129 | |
Proceeds from revolving line of credit | 982,255 | |
Proceeds from sale of warrants | 25,000 | |
Net cash flows provided by financing activities | 3,975,895 | 3,708,274 |
Decrease in cash | -1,578,918 | -1,288,668 |
Cash, beginning of period | 4,125,180 | 5,413,848 |
Cash, end of period | 2,546,262 | 4,125,180 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 107,298 | 169,663 |
Cash paid for income taxes | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: | ||
Beneficial conversion features for senior secured convertible notes | 3,440,235 | 1,425,468 |
Warrants issued in connection with senior secured convertible notes | 1,146,732 | |
Liability associated with warrants issued in private placement | -672,909 | |
Warrants issued for financing costs (revalued) | $64,286 |
DESCRIPTION_OF_BUSINESS_AND_BA
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Description Of Business And Basis Of Presentation | |||||||||||||||||||||||||
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | ||||||||||||||||||||||||
Description of Business | |||||||||||||||||||||||||
CareView Communications, Inc., a Nevada corporation (“CareView-NV” or the “Company”), was originally formed in California on July 8, 1997 under the name Purpose, Inc., changing our name to Ecogate, Inc. in April 1999, and CareView Communications, Inc. in October 2007. We began our current operation in 2003 as a healthcare information technology company with a patented patient monitoring and entertainment system. CareView developed a suite of products and hardware to help connect patients, families and health care providers through one easy-to-install and simple-to-use data and patient monitoring system (the “CareView System®”). The CareView System runs on each hospital’s coaxial cable television network that provides television signals to patient room; consequently, CareView’s network does not need to run on or through the hospital’s specific IT infrastructure, thereby requiring minimal internet technology involvement on the part of the hospital. The Company’s proprietary, high-speed data network system may be deployed throughout a healthcare facility and will provide the facility with recurring revenue and infrastructure for future applications. Real-time bedside and point-of-care video monitoring and recording improve efficiency while limiting liability, and entertainment packages and patient education enhance the patient’s quality of stay. | |||||||||||||||||||||||||
Throughout these Notes to the Consolidated Financial Statements, the terms “we,” “us,” “our,” “CareView,” or the “Company” refers to CareView-NV, and unless otherwise specified, includes our wholly owned subsidiaries, CareView Communications, Inc., a Texas corporation (“CareView-TX”) and CareView Operations, LLC, a Nevada limited liability company (“CareView Operations”). Also included are CareView-Hillcrest, LLC (“CareView-Hillcrest”) and CareView-Saline, LLC (“CareView-Saline”), collectively, (the “Project LLCs”). We own 50% of CareView-Hillcrest and CareView-Saline, with each determined to be variable interest entities (“VIEs”) in which we exercise control and are deemed the Primary Beneficiary (See NOTE 13 for further details). Our business consists of a single segment of products and services all of which are sold and provided within the United States. | |||||||||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||||||||
The accompanying consolidated financial statements include the accounts of the Company, our wholly owned subsidiaries and our Project LLCs for which we control the operating activities. All material inter-company balances and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||
We report noncontrolling interests in our VIEs as a component of stockholders’ deficit in the Consolidated Balance Sheets and the loss attributable to noncontrolling interests as an adjustment to net loss to arrive at net loss attributable to the Company in the Consolidated Statements of Operations. | |||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
Certain 2013 amounts have been reclassified to conform to current year presentation. | |||||||||||||||||||||||||
Restatement of Prior Period Consolidated Financial Statements and Out-of-Period Adjustments | |||||||||||||||||||||||||
During our review of the 2014 results, we identified a non-cash error that originated in prior periods. The error related to the amortization of debt discounts associated with our convertible debt which was not computed using the effective yield method. The cumulative error related to prior periods was approximately $2,700,000 as of December 31, 2013 resulting in a reduction in both total liabilities and total stockholder’s deficit. We assessed the materiality of this error in accordance with the United States Securities Exchange Commission (the “SEC”) guidance on considering the effects of prior period misstatements based on an analysis of quantitative and qualitative factors. Based on this analysis, we determined that the error was immaterial to the prior reporting periods affected and, therefore, amendments of reports previously filed with the SEC were not required. However, we have concluded that correcting the error in our 2014 financial statements would materially impact our results for the year ended December 31, 2014. Accordingly, we have reflected the correction of this prior period error in the period in which it originated and revised our Consolidated Balance Sheet, Consolidated Statement of Operations, Consolidated Statement of Stockholders’ Deficit and Consolidated Statement of Cash Flows as of and for the year ended December 31, 2013, as presented in this Annual Report on Form 10-K. In addition, a reduction to accumulated deficit of approximately $1,800,000 was reflected as an adjustment to the December 31, 2012 balance on the Consolidated Statement of Stockholders’ Deficit. | |||||||||||||||||||||||||
The effect of the correction of the Consolidated Balance Sheets as of December 31, 2013 is as follows (in thousands): | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
As Reported | As | ||||||||||||||||||||||||
Restated | |||||||||||||||||||||||||
Senior secured convertible notes, net of debt discount of $16,248 and $18,983, respectively | $ | 17,942 | $ | 15,207 | |||||||||||||||||||||
Total long-term liabilities | $ | 18,321 | $ | 15,586 | |||||||||||||||||||||
Total liabilities | $ | 21,269 | $ | 18,534 | |||||||||||||||||||||
Accumulated deficit | $ | (79,794 | ) | $ | (77,059 | ) | |||||||||||||||||||
Total CareView Communications, Inc. stockholder’s deficit | $ | (8,453 | ) | $ | (5,718 | ) | |||||||||||||||||||
Total stockholders’ deficit | $ | (8,831 | ) | $ | (6,096 | ) | |||||||||||||||||||
The effect of the correction on the Consolidated Statement of Operations is as follows (in thousands, except net loss per share): | |||||||||||||||||||||||||
For the Year Ended | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
As | As | ||||||||||||||||||||||||
Reported | Restated | ||||||||||||||||||||||||
(audited) | |||||||||||||||||||||||||
Interest expense | $ | (7,970 | ) | $ | (7,071 | ) | |||||||||||||||||||
Total other income (expense) | $ | (7,952 | ) | $ | (6,751 | ) | |||||||||||||||||||
Loss before taxes | $ | (14,567 | ) | $ | (13,668 | ) | |||||||||||||||||||
Net loss | $ | (14,567 | ) | $ | (13,668 | ) | |||||||||||||||||||
Net loss attributable to CareView Communication | $ | (14,518 | ) | $ | (13,619 | ) | |||||||||||||||||||
Loss per share, basic and diluted: | |||||||||||||||||||||||||
Net loss per share | $ | (0.11 | ) | $ | (0.10 | ) | |||||||||||||||||||
The effect of the error on the 2014 quarterly Consolidated Statements of Operations resulted in a decrease of interest expense and net loss, as reflected below, with no impact on net loss per share. | |||||||||||||||||||||||||
For the three months ended | For the three months ended | For the three months ended | |||||||||||||||||||||||
31-Mar-14 | 30-Jun-14 | 30-Sep-14 | |||||||||||||||||||||||
As Reported | As Restated | As Reported | As Restated | As Reported | As Restated | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||
Interest expense | $ | (2,226 | ) | $ | (1,978 | ) | $ | (2,289 | ) | $ | (2,054 | ) | $ | (2,077 | ) | $ | (1,876 | ) | |||||||
Total other income (expense) | $ | (2,857 | ) | $ | (2,609 | ) | $ | (2,231 | ) | $ | (1,996 | ) | $ | (1,679 | ) | $ | (1,478 | ) | |||||||
Loss before taxes | $ | (4,417 | ) | $ | (4,169 | ) | $ | (3,944 | ) | $ | (3,709 | ) | $ | (3,267 | ) | $ | (3,066 | ) | |||||||
Net loss | $ | (4,417 | ) | $ | (4,169 | ) | $ | (3,944 | ) | $ | (3,709 | ) | $ | (3,267 | ) | $ | (3,066 | ) | |||||||
Net loss attributable to CareView Communications, Inc. | $ | (4,401 | ) | $ | (4,153 | ) | $ | (3,927 | ) | $ | (3,692 | ) | $ | (3,251 | ) | $ | (3,050 | ) | |||||||
Loss per share, basic and diluted: | |||||||||||||||||||||||||
Net loss per share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||
Variable Interest Entities | |||||||||||||||||||
We use a qualitative analysis to determine if we are the primary beneficiary of a VIE. We consider whether the enterprise’s variable interest or interests give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics, among others: (a) the power to direct the activities of a VIE that most significantly impacts the entity’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the entity, that could potentially be significant to the VIE. | |||||||||||||||||||
Cash | |||||||||||||||||||
We maintain cash at financial institutions that at times may exceed federally insured limits. We have never experienced any losses related to these funds. The Company periodically deposits cash with financial institutions in excess of the maximum federal insurance limits (FDIC) of $250,000 per bank. | |||||||||||||||||||
Trade Accounts Receivable | |||||||||||||||||||
Trade accounts receivable are customer obligations due under normal trade terms. We provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Trade accounts receivable past due more than 90 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluations, results of collection efforts, and specific circumstances of the customer. Recoveries of accounts previously written off are recorded as reductions of bad debt expense when received. | |||||||||||||||||||
The following table provides a summary of changes in the allowance for doubtful accounts for the years ended December 31, 2014 and 2013: | |||||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Beginning balance | $ | — | $ | 80,235 | |||||||||||||||
Additions | — | 10,636 | |||||||||||||||||
Reductions | — | (90,871 | ) | ||||||||||||||||
Ending balance | $ | — | $ | — | |||||||||||||||
Property and Equipment | |||||||||||||||||||
Property and equipment is stated at cost, net of accumulated depreciation. Maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs are charged to operating expense as incurred. We include Network Equipment in fixed assets upon receipt, and begin depreciating the Network Equipment when such equipment passes our incoming inspection and is available for use. We attribute no salvage value to the Network Equipment and depreciation is computed using the straight-line method based on the estimated useful life of seven years. Also using the straight-line method, depreciation of office and test equipment, warehouse equipment and furniture is based on the estimated useful lives of the assets, generally three years for office and test equipment, and five years for warehouse equipment and furniture. | |||||||||||||||||||
Allowance for System Removal | |||||||||||||||||||
We would remove the CareView System from customer premises due to a number of factors; including, but not limited to, collection/revenue performance issues and contract expiration/non-renewal. We regularly evaluate the installed CareView Systems for such factors and an allowance is set up based on the estimated cost of removal. As of December 31, 2014 and 2013, an allowance of $277,000 and $56,105, respectively, was recorded. | |||||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||||
Carrying values of property and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include, but are not limited to: | |||||||||||||||||||
• | Significant declines in an asset’s market price; | ||||||||||||||||||
• | Significant deterioration in an asset’s physical condition; | ||||||||||||||||||
• | Significant changes in the nature or extent of an asset’s use or operation; | ||||||||||||||||||
• | Significant adverse changes in the business climate that could impact an asset’s value, including adverse actions or assessments by regulators; | ||||||||||||||||||
• | Accumulation of costs significantly in excess of original expectations related to the acquisition or construction of an asset; | ||||||||||||||||||
• | Current-period operating or cash flow losses combined with a history of such losses or a forecast that demonstrates continuing losses associated with an asset’s use; and | ||||||||||||||||||
• | Expectations that it is more likely than not that an asset will be sold or otherwise disposed of significantly before the end of our previously estimated useful life. | ||||||||||||||||||
If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset groups’ carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then a loss is recorded for the difference between the assets’ fair value and respective carrying value. The fair value of the assets is determined using an “income approach” based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include: market size and growth, market share, projected selling prices, manufacturing cost and discount rate. Our estimates are based upon our historical experience, our commercial relationships, market conditions and available external information about future trends. We believe our current assumptions and estimates are reasonable and appropriate; however, unanticipated events and changes in market conditions could affect such estimates resulting in the need for an impairment charge in future periods. During the years ended December 31, 2014 and 2013, no impairment was recognized. | |||||||||||||||||||
Research and Development | |||||||||||||||||||
Research and development costs are expensed as incurred. Costs regarding the development of software to be sold, leased or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. We did not capitalize any such costs during 2014 or 2013. | |||||||||||||||||||
Intellectual Property | |||||||||||||||||||
We capitalize certain costs of developing software upon the establishment of technological feasibility and prior to the availability of the product for general release to customers for our CareView System in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Capitalized costs are reported at the lower of unamortized cost or net realizable value and are amortized over the estimated useful life of the CareView System not to exceed five years. Additionally, we test our intangible assets for impairment whenever circumstances indicate that their carrying value may not be recoverable. No impairment was recorded for the years ended December 31, 2014 and 2013. | |||||||||||||||||||
Intellectual property is comprised of purchased and internally developed software costs totaling approximately $2,800,000, all of which was capitalized prior to 2008 and was fully amortized at December 31, 2012. During the years ended December 31, 2014 and 2013, we capitalized no additional intellectual property costs. | |||||||||||||||||||
Patents and Trademarks | |||||||||||||||||||
We have capitalized certain costs related to registering trademarks and patent pending technology. In accordance with GAAP, we amortize our intangible assets with a finite life on a straight-line basis, over 10 years for trademarks and 20 years for patents. We begin amortization of these costs on the date patents or trademarks are awarded. | |||||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||||
Derivatives are recorded on the balance sheet at fair value and changes in fair value are recorded in earnings at each reporting date in accordance with GAAP. See Fair Value of Financial Instruments and NOTE 11 for further details regarding derivative activity during the years ended December 31, 2014 and 2013. | |||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||
Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates our fair value because of the short-term maturity of such instruments and they are considered Level 1 assets under the fair value hierarchy. We have elected not to carry our debt instruments at fair value. The carrying amount of our debt approximates fair value. Interest rates that are currently available to us for issuance of short and long-term debt with similar terms and remaining maturities are used to estimate the fair value of the our short and long-term debt and would be considered Level 3 inputs under the fair value hierarchy. | |||||||||||||||||||
We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with GAAP. Accounting Standards Codification (“ASC”) 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). | |||||||||||||||||||
Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on a hierarchy of inputs, as follows: | |||||||||||||||||||
Level 1 -- Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||
Level 2 -- Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. | |||||||||||||||||||
Level 3 -- Unobservable inputs for the asset or liability. | |||||||||||||||||||
The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in NOTE 4. The fair value of this warrant liability is included in long-term liabilities on the accompanying consolidated financial statements. | |||||||||||||||||||
The following table provides the financial assets and liabilities reported at fair value and measured on a recurring basis: | |||||||||||||||||||
Description | Assets/ | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||
(Liabilities) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||
Measured at Fair Value | |||||||||||||||||||
Fair value of warrant liability | |||||||||||||||||||
2014 | $ | (301,864 | ) | $ | — | $ | — | $ | (301,864 | ) | |||||||||
2013 | $ | (370,865 | ) | $ | — | $ | — | $ | (370,865 | ) | |||||||||
The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the year ended December 31, 2014: | |||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||
(Level 3) | |||||||||||||||||||
For the years ended December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Balance, beginning of period | $ | (370,865 | ) | $ | — | ||||||||||||||
Issuances of derivative liabilities | — | (672,909 | ) | ||||||||||||||||
Change in fair value of warrant liability | 69,001 | 302,044 | |||||||||||||||||
Transfers in and/out of Level 3 | — | — | |||||||||||||||||
Balance, end of period | $ | (301,864 | ) | $ | (370,865 | ) | |||||||||||||
The above table of Level 3 liabilities begins with the prior period balance and adjusts the balance for changes that occurred during the current period. The ending balance of the Level 3 financial instrument presented above represent our best estimates and may not be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. | |||||||||||||||||||
Income Taxes | |||||||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with GAAP, we recognize the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. | |||||||||||||||||||
Revenue Recognition | |||||||||||||||||||
Revenue is recognized when persuasive evidence of a sales arrangement exists, when the selling price is fixed or determinable, when installation and official acceptance by the facility occurs, and when collection is probable. Because we consolidate our financial statements, 100% of the revenue generated by the Project LLCs is included in our results with all intra-company accounts and transactions eliminated in consolidation. | |||||||||||||||||||
We offer CareView’s services through a subscription-based contract with each facility for a standard term of three to five years. We begin to bill monthly subscription fees to the facility upon official acceptance of the CareView System by the facility. The contract requires the facility to pay us the subscription fee monthly. During the term of the contract, we provide continuous monitoring of the CareView System and are required to maintain and service all CareView System equipment. If the customer requires additional products or services, the contract is amended accordingly. | |||||||||||||||||||
Earnings Per Share | |||||||||||||||||||
We calculate earnings per share (“EPS”) in accordance with GAAP, which requires the computation and disclosure of two EPS amounts, basic and diluted. Basic EPS is computed based on the weighted average number of common shares outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares outstanding plus all potentially dilutive common shares outstanding during the period under the treasury stock method. Such potential dilutive common shares consist of stock options, warrants to purchase our Common Stock (the “Warrants”) and convertible debt. Potential common shares totaling approximately 94,000,000 and 76,000,000 at December 31, 2014 and 2013, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to our reported net loss. | |||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||
We recognize compensation expense for all share-based payments granted and amended based on the grant date fair value estimated in accordance with GAAP. Compensation expense is generally recognized on a straight-line basis over the employee’s requisite service period based on the award’s estimated lives for fixed awards with ratable vesting provisions. | |||||||||||||||||||
Debt Discount Costs | |||||||||||||||||||
Costs incurred with parties who are providing long-term financing, with Warrants issued with the underlying debt, are reflected as a debt discount based on the relative fair value of the debt and Warrants. These discounts are generally amortized over the life of the related debt, using the effective interest rate method or other methods approximating the effective interest method. Additionally, convertible debt issued with a beneficial conversion feature is recorded at a discount based on the difference in the effective conversion price and the fair value of the Company’s stock on the date of issuance, if any. | |||||||||||||||||||
Deferred Debt Issuance and Financing Costs | |||||||||||||||||||
Costs incurred through the issuance of Warrants to parties who are providing long-term financing availability, which includes revolving credit lines, are reflected as deferred debt issuance based on the fair value of the Warrants issued. Costs incurred with third parties related to issuance of debt are recorded as deferred financing costs. These costs are generally amortized over the life of the financing instrument using the effective interest rate method or other methods approximating the effective interest method. | |||||||||||||||||||
Installation Costs | |||||||||||||||||||
We defer all costs associated with the installation of the CareView System into a particular hospital until the CareView System is fully operational and accepted by the hospital. Upon acceptance, the associated costs are expensed ratably over the life of the hospital contract. These costs are included in network operations on the accompanying consolidated statements of operations. | |||||||||||||||||||
Shipping and Handling Costs | |||||||||||||||||||
We expense all shipping and handling costs as incurred. These costs are included in network operations on the accompanying consolidated financial statements. | |||||||||||||||||||
Advertising Costs | |||||||||||||||||||
We consider advertising costs as costs associated with the promotion of our products through the various media outlets. We expense all advertising costs as incurred. Total advertising expense was $0 and $6,960 for the year ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||
Concentration of Credit Risks and Customer Data | |||||||||||||||||||
We derive all of our revenues from hospitals. For the year ended December 31, 2014, 91 hospitals accounted for all of our revenue. During 2014 IASIS Healthcare Corporation (“IASIS”), Community Health Systems, Inc. (“CHS”) (CHS acquired Health Management Associates, Inc. (“HMA”) in January, 2014) and Tenet Healthsystems Medical, Inc., accounted for 49%, 21% and 12% of our net revenues, respectively. For the year ended December 31, 2013, 68 hospitals accounted for the all of our net revenue. During that period, IASIS and HMA accounted for 53% and 30% of our net revenues, respectively. | |||||||||||||||||||
Use of Estimates | |||||||||||||||||||
Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. | |||||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 – Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes most of the existing guidance on revenue recognition in ASC Topic 605, Revenue Recognition. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In applying the revenue model to contracts within its scope, an entity will need to (i) identify the contract(s) with a customer (ii) identify the performance obligations in the contract (iii) determine the transaction price (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 is effective for public entities for annual and interim periods beginning after December 15, 2016. The ASU allows for either full retrospective adoption, where the standard is applied to all of the periods presented, or modified retrospective adoption, where the standard is applied only to the most current period presented in the financial statements. The Company is currently assessing the impact of this standard to its consolidated financial statements. | |||||||||||||||||||
LIQUIDITY_AND_MANAGEMENTS_PLAN
LIQUIDITY AND MANAGEMENT'S PLAN | 12 Months Ended |
Dec. 31, 2014 | |
Liquidity And Managements Plan | |
LIQUIDITY AND MANAGEMENT'S PLAN | NOTE 3 – LIQUIDITY AND MANAGMENTS PLAN |
Our cash position at December 31, 2014 was approximately $2,500,000. | |
Pursuant to the terms of a Note and Warrant Purchase Agreement dated April 21, 2011 (as subsequently amended) with HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP (“HealthCor”) we are required to maintain a minimum cash balance $5,000,000, however, we have a waiver of the minimum cash balance requirement in place through March 31, 2015. On March 31 2015, HealthCor reduced the minimum cash balance amount to $2,000,000 (See NOTE 15 for further details), and we are in compliance with the minimum cash balance as of the date of this filing. | |
On August 31, 2011, we entered into and closed a Loan and Security Agreement (the “Revolving Line”) with Comerica Bank and Bridge Bank providing for a $20,000,000 revolving line of credit. On July 31, 2014, we allowed the Revolving Line to terminate pursuant to its terms, at which time the outstanding balance of $982,255 was repaid. | |
In view of these facts, our continued successful operation is dependent upon us achieving positive cash flow through operations while maintaining adequate liquidity. We expect that the cash on hand and the $6,000,000 we received in connection with a new debt financing, closed on February 17, 2015 (See NOTE 15 for further details), 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. | |
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 requirements. We are currently in discussions with several entities in an effort to secure a credit facility which will support our projected growth. We expect to close on a credit facility within the next 180 days; however, there are no assurances that we can close on a credit facility on terms acceptable to the Company or that such closing will occur. | |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stockholders' Deficit: | |||||||||||||||||
STOCKHOLDERS' EQUITY | NOTE 4 – STOCKHOLDERS’ EQUITY | ||||||||||||||||
Preferred Stock | |||||||||||||||||
At December 31, 2014 and 2013, we had 20,000,000 shares of Preferred Stock, par value $0.001 authorized and none outstanding, which can be designated by our Board of Directors. | |||||||||||||||||
Common Stock | |||||||||||||||||
At December 31, 2014 and 2013, we had 300,000,000 shares of Common Stock, $0.001 par value authorized, with 139,380,748 and 138,753,397 shares of Common Stock issued and outstanding, respectively. | |||||||||||||||||
Common Stock Issuances During 2014 | |||||||||||||||||
Cashless Warrant Exercise | |||||||||||||||||
During 2014, certain individuals and entities exercised Warrants to purchase an aggregate of 3,554,750 shares of our Common Stock. In order to exercise the Warrants pursuant to the cashless provisions contained therein, they surrendered their right to receive 2,927,399 shares, resulting in an issuance of 627,351 shares of Common Stock. | |||||||||||||||||
Common Stock Issuances During 2013 | |||||||||||||||||
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 $3,100,000. 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 in this NOTE, the Private Placement Warrants are classified as liabilities and recorded at their fair value of $672,909 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 warrant liability and $2,055,220 was allocated to common stock and additional paid in capital on the accompanying consolidated financial statements. | |||||||||||||||||
Cashless Warrant Exercise | |||||||||||||||||
In August 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. | |||||||||||||||||
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 (except certain Warrants issued to HealthCor and the Private Placement Warrants). The Black-Scholes Model is an acceptable model in accordance with the GAAP. 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 above mentioned Warrants issued to HealthCor and the Private Placement Warrants was 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 these Warrants, we determined that the Binomial Lattice model was the most appropriate model for valuing these instruments. | |||||||||||||||||
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 term of the Warrants and is calculated by using the average daily historical stock prices through the day preceding the grant date. | |||||||||||||||||
Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the expected life of the award. Our estimated volatility is an average of the historical volatility of our stock prices (and that of peer entities whose stock prices were publicly available). Our calculation of estimated volatility is based on historical stock prices over a period equal to the expected life of the awards. Where appropriate we used the historical volatility of peer entities due to the lack of sufficient historical data of our stock price during 2007-2009. | |||||||||||||||||
The assumptions used in the Black-Scholes Model during the years ended December 31, 2014 and 2013 are set forth in the table below. | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Risk-free interest rate | 2.86 | % | NA | ||||||||||||||
Volatility | 78.88 | % | NA | ||||||||||||||
Expected life | 10 | NA | |||||||||||||||
Dividend yield | 0 | % | NA | ||||||||||||||
A summary of our Warrants activity and related information follows: | |||||||||||||||||
Number of Shares Under Warrant | Range of | Weighted Average Exercise Price | Weighted | ||||||||||||||
Warrant Price | Average | ||||||||||||||||
Per Share | Remaining | ||||||||||||||||
Contractual | |||||||||||||||||
Life | |||||||||||||||||
Balance at December 31, 2012 | 34,076,710 | $ | 0.52-$1.65 | $ | 0.97 | 4.7 | |||||||||||
Granted | 2,500,000 | $ | 0.6 | $ | 0.6 | 4.3 | |||||||||||
Exercised | (179,638 | ) | |||||||||||||||
Expired | (1,931,250 | ) | |||||||||||||||
Balance at December 31, 2013 | 34,465,822 | $ | 0.52-$1.65 | $ | 0.96 | 4 | |||||||||||
Granted | 4,000,000 | $ | 0.4 | $ | 0.4 | 9 | |||||||||||
Exercised | (3,554,750 | ) | |||||||||||||||
Expired | (312,500 | ) | |||||||||||||||
Balance at December 31, 2014 | 34,598,572 | $ | 0.40-$1.65 | $ | 0.93 | 4.2 | |||||||||||
Vested and Exercisable at December 31, 2014 | 34,598,572 | $ | 0.40-$1.65 | $ | 0.93 | 4.2 | |||||||||||
As of December 31, 2014 and 2013, unamortized costs associated with capitalized Warrants, excluding the HealthCor Warrants and Private Placement Warrants, totaled $0 and $284,692, respectively. | |||||||||||||||||
Warrant Activity During 2014 | |||||||||||||||||
During 2014, certain Warrant holders exercised their rights to purchase 627,351 shares of our Common Stock using the cashless provision provided by their Warrant agreements, resulting in the surrender of their rights to purchase an aggregate of 2,927,399 shares of our Common Stock. Also during this period, Warrants to purchase an aggregate of 312,500 shares of our Common Stock expired. | |||||||||||||||||
On January 16, 2014, we entered into a Fourth Amendment to the Note and Warrant Purchase Agreement dated April 21, 2011 with HealthCor and agreed to sell and issue (i) additional notes in the initial aggregate principal amount of $5,000,000, with a conversion price per share equal to $0.40 (subject to adjustment for standard anti-dilution provisions) and (ii) additional Warrants to purchase an aggregate of up to 4,000,000 shares of our Common Stock at an exercise price per share equal to $0.40 (subject to adjustment for standard anti-dilution provisions). The fair value of the convertible debt was determined to be $5,000,000. Using the Black-Sholes Model, this resulted in a relative fair value of $1,146,732 for the warrants on the date of grant. See NOTE 11 for further details. | |||||||||||||||||
At December 31, 2014, the Private Placement Warrants, discussed above in this NOTE, were re-valued with a fair value determination of $301,864 and the difference of $69,001 was included as change in fair value of warrant liability in the accompanying consolidated financial statements. | |||||||||||||||||
For year ended December 31, 2014, we also amortized $284,692 of previously capitalized Warrant costs as interest expense in the accompanying consolidated financial statements. | |||||||||||||||||
Warrant Activity During 2013 | |||||||||||||||||
As discussed above in this NOTE, during the year ended December 31, 2013, we 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. In accordance with GAAP, 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 other income and expense. GAAP 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 consolidated financial statements. At December 31, 2013, the Private Placement Warrants were re-valued with a fair value of $370,865 and the difference of $302,044 is included in other income and expense in the accompanying consolidated financial statements. | |||||||||||||||||
We also amortized certain previously capitalized Warrant costs in the accompanying consolidated financial statements as follows: (i) $76,536 as non-cash costs included in general and administration expense and (ii) $569,388 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 12 for further 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. This amendment was considered a modification and the additional costs were capitalized. The Warrants were revalued in January 2013 resulting in increases in fair value of $64,286, and are amortized (over the remaining life of the Revolver Line) to interest expense in the accompanying condensed consolidated financial statements using the effective interest method. | |||||||||||||||||
During the year ended December 31, 2013, we recorded a $23,764 charge to general and administration expense in the accompanying consolidated financial statements, related to a 12-month advisory services agreement (the “AS Agreement”) entered into on May 7, 2012, wherein consideration was paid through the issuance of a five-year Warrant to purchase 240,000 shares of our Common Stock. 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. Because the Warrant was issued to a non-employee and contained specific vesting requirements, the fair value of the Warrant is re-valued at each reporting period and any change in the fair value of the unvested portion of the Warrant is recorded as a charge or credit to operations. Upon full vesting in May 2013, 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 13 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 included in general and administration expense in the accompanying consolidated financial statements. | |||||||||||||||||
Stock Options | |||||||||||||||||
Effective December 3, 2007, we established the CareView Communications, Inc. 2007 Stock Incentive Plan (“2007 Plan”) pursuant to which 8,000,000 shares of Common Stock were reserved for issuance upon the exercise of options (“2007 Plan Option(s)”). The 2007 Plan was designed to serve as an incentive for retaining our qualified and competent key employees, officers and directors, and certain consultants and advisors. The 2007 Plan Options vest over three years and have an exercise period of ten years from the date of issuance. At December 31, 2014, 2007 Plan Options to purchase 8,000,000 shares of our Common Stock have been issued with 5,300,920 remaining outstanding. | |||||||||||||||||
On September 30, 2009, we established the CareView Communications, Inc. 2009 Stock Incentive Plan (the “2009 Plan”) pursuant to which 10,000,000 shares of Common Stock was reserved for issuance upon the exercise of options (“2009 Plan Option(s)”). The 2009 Plan was designed to serve as an incentive for retaining our qualified and competent key employees, officers and directors. The 2009 Plan Options vest over three years and have an exercise period of ten years from the date of issuance. As of December 31, 2014, 2009 Plan Options to purchase 9,943,556 shares of our Common Stock have been issued with 8,972,890 remaining outstanding. | |||||||||||||||||
The valuation methodology used to determine the fair value of the 2007 Plan Options and 2009 Plan Options, collectively, (the “Option(s)”) issued during the year was the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average expected term of the options. | |||||||||||||||||
The assumptions used in the Black-Scholes Model during the years ended December 31, 2014 and 2013 are set forth in the table below. | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Risk-free interest rate | 1.59-1.83 | % | 0.61-0.67 | % | |||||||||||||
Volatility | 72.82-75.42 | % | 101.81-102.81 | % | |||||||||||||
Expected life | 6 | 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 stock 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 the historical volatility of peer entities whose stock prices were publicly available. Our calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. Where appropriate we used the historical volatility of peer entities due to the lack of sufficient historical data of our stock price during 2007-2009. | |||||||||||||||||
A summary of our Option activity and related information follows: | |||||||||||||||||
Number of Shares Under Option | 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 | 4,061,000 | $ | 0.51 | ||||||||||||||
Exercised | — | ||||||||||||||||
Expired | (86,665 | ) | |||||||||||||||
Forfeited | (320,836 | ) | |||||||||||||||
Balance at December 31, 2013 | 12,747,476 | $ | 0.59 | 6.9 | $ | — | |||||||||||
Granted | 1,688,000 | $ | 0.42 | ||||||||||||||
Exercised | — | ||||||||||||||||
Expired | (44,999 | ) | |||||||||||||||
Forfeited | (116,667 | ) | |||||||||||||||
Balance at December 31, 2014 | 14,273,810 | $ | 0.54 | 6.3 | $ | — | |||||||||||
Vested and Exercisable at December 31, 2014 | 9,768,463 | $ | 0.61 | 5 | $ | — | |||||||||||
The weighted-average grant date fair value of Options granted during the years ended December 31, 2014 and 2013 was $0.35 and $0.31 per share, respectively. | |||||||||||||||||
Share-based compensation expense for Options charged to our operating results for the years ended December 31, 2014 and 2013 ($714,123 and $390,443, respectively) is based on awards vested. The estimate of forfeitures are to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from the estimates. We have not included an estimate for forfeitures due to our limited history and we revise based on actual forfeitures each period. | |||||||||||||||||
At December 31, 2014, total unrecognized estimated compensation expense related to non-vested Options granted prior to that date was approximately $1,519,000, which is expected to be recognized over a weighted-average period of 1.4 years. No tax benefit was realized due to a continued pattern of operating losses. | |||||||||||||||||
Option Activity During 2014 | |||||||||||||||||
· | In January 2014, we granted 2009 Plan Options to board of director members David White (500,000) and Jason Thompson (150,000) to purchase shares with an exercise price of $0.40 per share, | ||||||||||||||||
· | In April 2014, we granted 2009 Plan Options to board of director members Steven Epstein (500,000) and Dr. James Higgins (150,000) to purchase shares with an exercise price of $0.68 per share, | ||||||||||||||||
· | In July 2014, we granted 2009 Plan Options to purchase 20,000 shares with an exercise price of $0.68 per share to employees, | ||||||||||||||||
· | In August 2014, we granted 2009 Plan Options to purchase 20,000 shares with an exercise price of $0.56 per share to an employee, and | ||||||||||||||||
· | In December 2014, we granted 2009 Plan Options to purchase 348,000 shares with an exercise price of $0.480 per share to employees. | ||||||||||||||||
Options Issued During 2013 | |||||||||||||||||
· | In September 2013, we granted 2009 Plan Options to purchase 25,000 shares with an exercise price of $0.50 per share to employees, | ||||||||||||||||
· | In November 2013, we granted 2009 Plan Options to purchase 3,641,000 shares with an exercise price of $0.51 per share to employees, and | ||||||||||||||||
· | In December 2013, we granted 2009 Plan Options to purchase 395,000 shares with an exercise price of $0.50 per share to employees. | ||||||||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
INCOME TAXES | NOTE 5 – INCOME TAXES | ||||||||
At December 31, 2014, we had approximately $54,700,000 of federal net operating tax loss carry-forward which begins to expire in 2028. We had approximately $10,700,000 of state net operating losses as of December 31, 2014. | |||||||||
The differences between the actual income tax benefit and the amount computed by applying the statutory federal tax rate (35%) to the loss before taxes are as follows: | |||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
As Restated | |||||||||
Expected income tax benefit at statutory rate | $ | (5,078,523 | ) | $ | (4,783,769 | ) | |||
Debt discount amortization | 700,000 | 1,234,835 | |||||||
Permanently disallowed interest | 734,499 | — | |||||||
Other permanent differences | 42,696 | 39,670 | |||||||
State income tax benefit, net of tax effect at state statutory rate | 1,438 | 3,740 | |||||||
Deferred pool true-ups/corrections related to: | |||||||||
Warrants | — | 1,222,954 | |||||||
Amortization | 2,857,686 | 702,183 | |||||||
Net operating losses | (14,579 | ) | (470,016 | ) | |||||
Other | 86,041 | (16,689 | ) | ||||||
Change in valuation account | 670,742 | 2,067,092 | |||||||
Income tax expense (benefit) | $ | — | $ | — | |||||
The components of the deferred tax assets and liabilities are as follows: | |||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred Tax Assets: | |||||||||
Tax benefit of net operating loss carry-forward | $ | 19,138,526 | $ | 16,692,594 | |||||
Accrued interest | 2,837,284 | 1,815,656 | |||||||
Stock based compensation | 1,281,952 | 1,032,009 | |||||||
Amortization of intangible assets | 496,012 | 689,759 | |||||||
Depreciation of fixed assets | 36,318 | 300,237 | |||||||
Accrued expenses | 151,783 | 61,780 | |||||||
Research and development credit carry-forward | 29,084 | 29,084 | |||||||
Donations | 10,541 | 10,541 | |||||||
Total deferred tax assets | 23,981,500 | 20,631,660 | |||||||
Deferred tax liability | (2,679,098 | ) | — | ||||||
Valuation allowance for deferred tax assets | (21,302,402 | ) | (20,631,660 | ) | |||||
Deferred tax assets, net of valuation allowance | $ | — | $ | — | |||||
As a result of certain income tax accounting realization requirements with respect to accounting for share based compensation, the table of deferred tax assets shown above does not include certain deferred tax assets at December 31, 2014 that arose directly from tax deductions related to equity compensation that is greater than the compensation recognized for financial reporting. If such deferred tax assets are subsequently realized, they will be recorded to contributed capital in the amount of approximately $690,000. | |||||||||
In 2014 and 2013, the deferred tax valuation allowance increased by $670,742 and $2,067,092 respectively. The realization of the tax benefits is subject to the sufficiency of taxable income in future years. The combined deferred tax assets represent the amounts expected to be realized before expiration. | |||||||||
We periodically assess the likelihood that we will be able to recover our deferred tax assets. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible profits. | |||||||||
As of December 31, 2014 and 2013, we established valuation allowances equal to the full amount of the net deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. | |||||||||
For the years ended December 31, 2014 and 2013, no amounts have been recognized for uncertain tax positions and no amounts have been assessed or recognized related to interest or penalties related to uncertain tax positions. We have determined that it is not reasonably likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next twelve months. We are currently subject to the general three year statute of limitation for federal tax. Under this general rule, the earliest period subject to potential audit is 2011. For years in which the company may utilize its net operating losses, the IRS the ability to examine the tax year that generated those losses and propose adjustments up to the amount of losses utilized. | |||||||||
OTHER_CURRENT_ASSETS
OTHER CURRENT ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Current Assets | |||||||||
OTHER CURRENT ASSETS | NOTE 6 – OTHER CURRENT ASSETS | ||||||||
Other current assets consist of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Prepaid expenses | $ | 254,998 | $ | 91,923 | |||||
Other current assets | 21,912 | 1,209 | |||||||
Sales tax refund | — | 72,399 | |||||||
TOTAL OTHER CURRENT ASSETS | $ | 276,910 | $ | 165,531 | |||||
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property And Equipment | |||||||||
PROPERTY AND EQUIPMENT | NOTE 7 – PROPERTY AND EQUIPMENT | ||||||||
Property and equipment consist of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Network equipment | $ | 10,753,542 | $ | 10,205,367 | |||||
Office equipment | 160,890 | 140,763 | |||||||
Vehicles | 132,797 | 112,332 | |||||||
Test equipment | 87,059 | 73,719 | |||||||
Furniture | 75,673 | 75,673 | |||||||
Warehouse equipment | 6,867 | 6,867 | |||||||
Leasehold improvements | 5,121 | 5,121 | |||||||
11,221,949 | 10,619,842 | ||||||||
Less: accumulated depreciation | (5,877,157 | ) | (4,255,233 | ) | |||||
TOTAL PROPERTY AND EQUIPMENT | $ | 5,344,792 | $ | 6,364,609 | |||||
Depreciation expense for the years ended December 31, 2014 and 2013 was $1,623,723 and $1,587,464, respectively. | |||||||||
OTHER_ASSETS
OTHER ASSETS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Assets: | |||||||||||||
OTHER ASSETS | NOTE 8 – OTHER ASSETS | ||||||||||||
Intangible assets consist of the following: | |||||||||||||
31-Dec-14 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Patents and trademarks | $ | 271,142 | $ | 26,157 | $ | 244,985 | |||||||
Other intangible assets | 51,464 | 35,166 | 16,298 | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 322,606 | $ | 61,323 | $ | 261,283 | |||||||
December 31,2013 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Patents and trademarks | $ | 246,416 | $ | 14,487 | $ | 231,929 | |||||||
Other intangible assets | 50,494 | 29,434 | 21,060 | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 296,910 | $ | 43,921 | $ | 252,989 | |||||||
Other assets consist of the following: | |||||||||||||
31-Dec-14 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Deferred installation costs | $ | 1,457,098 | $ | 865,647 | $ | 591,451 | |||||||
Deferred debt issuance costs | 1,600,000 | 1,600,000 | — | ||||||||||
Prepaid license fee | 249,999 | 54,644 | 195,355 | ||||||||||
Deferred closing costs | 583,967 | 583,967 | — | ||||||||||
Security deposit | 46,124 | — | 46,124 | ||||||||||
TOTAL OTHER ASSETS | $ | 3,937,188 | $ | 3,104,258 | $ | 832,930 | |||||||
31-Dec-13 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Deferred installation costs | $ | 1,087,295 | $ | 559,537 | $ | 527,758 | |||||||
Deferred debt issuance costs | 1,600,000 | 1,315,308 | 284,692 | ||||||||||
Prepaid license fee | 249,999 | 38,250 | 211,749 | ||||||||||
Deferred closing costs | 580,241 | 463,510 | 116,731 | ||||||||||
Security deposit | 83,624 | — | 83,624 | ||||||||||
Prepaid consulting | 1,131,300 | 1,131,300 | — | ||||||||||
TOTAL OTHER ASSETS | $ | 4,732,459 | $ | 3,507,905 | $ | 1,224,554 | |||||||
OTHER_CURRENT_LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Current Liabilities | |||||||||
OTHER CURRENT LIABILITIES | NOTE 9 – OTHER CURRENT LIABILITIES | ||||||||
Other current liabilities consist of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Allowance for system removal | $ | 277,000 | $ | 56,105 | |||||
Accrued professional services | 204,675 | 73,500 | |||||||
Accrued taxes | 145,183 | 173,938 | |||||||
Accrued paid time off | 87,319 | 148,729 | |||||||
Other accrued liabilities | 77,107 | 85,870 | |||||||
TOTAL OTHER CURRENT LIABILITIES | $ | 791,284 | $ | 538,142 | |||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Commitments And Contingencies | |||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | NOTE 10– COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||
Operating Lease | |||||||||||||||||||
On September 8, 2009, we entered into a Commercial Lease Agreement (the “Lease”) for 10,578 square feet of office and warehouse space expiring on June 30, 2015. On December 8, 2014, we entered into a Lease Extension Agreement (the “Lease Extension”), wherein we extended the Lease through June 30, 2020. The Lease Extension contains a renewal provision under which we may renew the Lease for an additional five year period under the same terms and conditions. Rent expense for the years ended December 31, 2014 and 2013 was $232,927 and $218,476, respectively. | |||||||||||||||||||
A summary of the monthly base rent per the Lease and the Lease Extension follows: | |||||||||||||||||||
Years Ending | |||||||||||||||||||
June 30, | |||||||||||||||||||
2015 | $ | 14,219 | |||||||||||||||||
2016 | $ | 14,188 | |||||||||||||||||
2017 | $ | 16,613 | |||||||||||||||||
2018 | $ | 15,052 | |||||||||||||||||
2019 | $ | 15,503 | |||||||||||||||||
2020 | $ | 15,968 | |||||||||||||||||
As of December 31, 2014, future minimum rental payments are as follows: | |||||||||||||||||||
Years Ending December 31, | |||||||||||||||||||
2015 | $ | 170,438 | |||||||||||||||||
2016 | 184,806 | ||||||||||||||||||
2017 | 189,990 | ||||||||||||||||||
2018 | 183,330 | ||||||||||||||||||
2019 | 188,830 | ||||||||||||||||||
Thereafter | $ | 95,810 | |||||||||||||||||
Total | $ | 1,013,204 | |||||||||||||||||
Debt Maturity | |||||||||||||||||||
As of December 31, 2014, future debt payments due are as follows: | |||||||||||||||||||
Years | Total | Senior Secured Convertible Notes(1) | Notes Payable | Mandatorily Redeemable Equity in Joint Venture | |||||||||||||||
Ending December 31, | |||||||||||||||||||
2015 | $ | — | $ | — | $ | — | $ | — | |||||||||||
2016 | 883,188 | — | 441,594 | 441,594 | |||||||||||||||
2017 | — | — | — | — | |||||||||||||||
2018 | — | — | — | — | |||||||||||||||
2019 | — | — | — | — | |||||||||||||||
Thereafter | 44,292,611 | 44,292,611 | — | — | |||||||||||||||
Total | $ | 45,175,799 | $ | 44,292,611 | $ | 441,594 | $ | 441,594 | |||||||||||
_____________ | |||||||||||||||||||
(1) Senior Secured Convertible Notes are included on the accompanying consolidated financial statements as $22,834,641, which represents this amount less debt discount of $21,457,970. | |||||||||||||||||||
AGREEMENT_WITH_HEALTHCOR
AGREEMENT WITH HEALTHCOR | 12 Months Ended |
Dec. 31, 2014 | |
Agreement With Healthcor | |
AGREEMENT WITH HEALTHCOR | NOTE 11 – AGREEMENT WITH HEALTHCOR |
On April 21, 2011, we entered into a Note and Warrant Purchase Agreement (the “HealthCor Purchase Agreement”) with HealthCor. Pursuant to the HealthCor Purchase Agreement, we sold Senior Secured Convertible Notes to HealthCor 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 HealthCor 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 “2011 HealthCor Warrants”). | |
So long as no event of default has occurred, 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 and shall be added to the outstanding principal balances of the 2011 HealthCor Notes on the last day of each calendar quarter. Interest accruing from April 21, 2016 through April 20, 2021 (the “Second Five Year Note Period”) at a rate of 10% per annum, compounding quarterly, 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. | |
From the date any event of default occurs, the interest rate, then applicable, shall be increased by five percent (5%) per annum. HealthCor has 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, HealthCor is 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 December 31, 2014, the underlying shares of our Common Stock related to the 2011 HealthCor Notes totaled approximately 25 million. | |
On January 31, 2012, we entered into the Second Amendment to the Healthcor Purchase Agreement with HealthCor (the “Second Amendment”) amending the HealthCor Purchase Agreement, and sold Senior Secured Convertible Notes to HealthCor 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 30, 2022. In addition, the provisions regarding interest payments, 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 30, 2012, HealthCor is 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 December 31, 2014, the underlying shares of our Common Stock related to the 2012 HealthCor Notes totaled approximately 6 million. | |
On August 20, 2013, we entered into a Third Amendment to the HealthCor Purchase Agreement with HealthCor (the “Third Amendment”) to redefine our minimum cash balance requirements. Previously we were required to maintain a minimum cash balance of $5,000,000 and should we drop below that balance, it triggered a default. The Third Amendment allowed for a reduced minimum cash period, as defined in the HealthCor Purchase Agreement, which allows us to drop below $5,000,000, but not below $4,000,000. All other terms and conditions of the HealthCor Purchase Agreement, including all amendments thereto, remain the same. Upon entering the reduced minimum cash period (which occurred on October 7, 2013), we had 120 days to return our minimum cash balance to the original $5,000,000. On January 16, 2014, we increased our cash balance to in excess of the original $5,000,000 minimum allowable balance. | |
On January 16, 2014, we entered into a Fourth Amendment to the HealthCor Purchase Agreement with HealthCor (the “Fourth Amendment”) and sold Senior Secured Convertible Notes to HealthCor in the principal amounts of $2,329,000 and $2,671,000 (collectively the ‘‘2014 HealthCor Notes’’). As provided by the Fourth Amendment, the 2014 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 2014 HealthCor Notes. The 2014 HealthCor Notes have a maturity date of January 15, 2024. In addition, the provisions regarding interest payments, 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 16, 2014, HealthCor is entitled to convert any portion of the outstanding and unpaid accrued interest on and principal balances of the 2014 HealthCor Notes into fully paid and non-assessable shares of our Common Stock at a conversion rate of $0.40 per share, subject to adjustment in accordance with anti-dilution provisions set forth in the 2014 HealthCor Notes. Additionally we issued Warrants to HealthCor for the purchase of an aggregate of up to 4,000,000 shares of our Common Stock at an exercise price of $0.40 per share (collectively the “2014 HealthCor Warrants”). As of December 31, 2014, the underlying shares of our Common Stock related to the 2014 HealthCor Notes totaled approximately 14 million. | |
Pursuant to the terms of the HealthCor Purchase Agreement we are required to maintain a minimum cash balance $5,000,000. We have a waiver of the minimum cash balance requirement in place through March 31, 2015. On March 31, 2015, HealthCor reduced the minimum cash balance amount to $2,000,000 (See NOTE 15 for further details). | |
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. We had three separate issuances of equity securities convertible into common stock that qualify under this accounting treatment, (i) the 2011 HealthCor Notes, (ii) the 2012 HealthCor Notes and (iii) the 2014 HealthCor Notes. Because the conversion option and the 2011 HealthCor Warrants on the 2011 HealthCor Notes were originally classified as a liability when issued and, subsequently reclassified to equity on December 31, 2011 when the 2011 HealthCor Notes were amended, only the accrued interest capitalized as payment in kind (‘‘PIK’’) since reclassification qualifies under this accounting treatment. The face amount of the 2012 and 2014 HealthCor Notes and all accrued PIK interest also qualify for this accounting treatment. During 2014 and 2013, we recorded a BCF of $3,440,235 and $1,425,468, respectively. The BCF was recorded as a charge to debt discount and a credit to additional paid in capital, with the debt discount, using the effective interest method, amortized to interest expense over the term of the notes. As Warrants were also issued with the 2014 HealthCor Notes, the proceeds were allocated to the instruments based on relative fair value. The value allocated to the 2014 HealthCor Warrants was $1,146,732 which was recorded as a debt discount with the credit to additional paid in capital. The discount associated with the 2014 HealthCor Warrants is also amortized to interest expense using the effective interest method. | |
We recorded an aggregate of $2,152,055 and $2,135,209 in interest expense for the years ended December 31, 2014 and 2013, respectively, related to this discount. The carrying value of the debt with HealthCor at December 31, 2014 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 | 12 Months Ended |
Dec. 31, 2014 | |
Loan And Security Agreement With Comerica Bank And Bridge Bank | |
LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK | NOTE 12 – 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”) with Comerica Bank (“Comerica”) and Bridge Bank, National Association (“Bridge Bank”) (collectively the “Banks”) providing for a $20,000,000 revolving line of credit. On June 30, 2014, the Revolving Line, previously due on that date was extended to July 31, 2014. On July 31, 2014, we allowed the Revolving Line to terminate pursuant to its terms, at which time the outstanding balance of $982,255 was repaid. | |
Pursuant to the terms Revolving Line, 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 an amendment, all of which has been recorded as deferred financing costs. The deferred financing costs were amortized to interest expense over the term of the Revolving Line and were fully amortized as of June 30, 2014. The Warrants have not been exercised as of December 31, 2014. During the years ended December 31, 2014 and 2013, $284,692 and $569,388, respectively, was amortized to interest expense in the accompanying consolidated financial statements. | |
JOINT_VENTURE_AGREEMENT
JOINT VENTURE AGREEMENT | 12 Months Ended |
Dec. 31, 2014 | |
Joint Venture Agreement | |
JOINT VENTURE AGREEMENT | NOTE 13 – 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 consolidated financial statements. 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. | |
In accordance with GAAP, 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. We have no contractual liability to Rockwell with respect to the repayment obligations of the Project LLCs. | |
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 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 was amortized over the expected life of the debt and was fully amortized at December 31, 2013. Amortization expense totaled $65,976 for the year ended December 31, 2013, and was recorded as interest expense on the accompanying consolidated financial statements | |
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. To date, we have incurred system removal costs of approximately $3,000 for removing our equipment from the hospital premises. We currently have approximately 100 units remaining on site at Hillcrest. Included in other current liabilities in the accompanying consolidated financial statements is an allowance for system removal totaling $10,250 to reserve for the removal of the remaining units. | |
As of December 31, 2014 and 2013, the Project LLCs’ indebtedness to Rockwell, including principal and interest totaled approximately $1,075,000 and $1,012,000, respectively. On March 18, 2014, the Project Notes and Rockwell’s Preferential Returns, previously due on June 30, 2014 (the “June 2014 extensions”), were extended to June 30, 2015. On February 19, 2015, the Project Notes and Rockwell’s Preferential Returns were extended to June 30, 2016. In conjunction with an August 2013 extension of the due dates of the Project Notes and Rockwell’s Preferential Returns to December 31, 2013, the expiration date of the Project Warrant was also extended from November 16, 2014 to November 16, 2015. All other provisions of the Project Warrants remained unchanged. The Project 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 consolidated financial statements. 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 | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Variable Interest Entities | |||||||||
VARIABLE INTEREST ENTITIES | NOTE 14 – VARIABLE INTEREST ENTITIES | ||||||||
The Company consolidates VIEs of which it is 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 consolidated balance sheets at December 31, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
Assets | |||||||||
Cash | $ | 2,770 | $ | 958 | |||||
Receivables | 2,365 | 4,861 | |||||||
Total current assets | 5,135 | 5,819 | |||||||
Property, net | 46,762 | 99,348 | |||||||
Total assets | $ | 51,897 | $ | 105,167 | |||||
Liabilities | |||||||||
Accounts payable | $ | 122,558 | $ | 114,089 | |||||
Notes payable | 441,594 | 442,519 | |||||||
Mandatorily redeemable interest | 441,594 | 442,519 | |||||||
Accrued interest | 191,596 | 121,597 | |||||||
Other current liabilities | 24,889 | 37,731 | |||||||
Total liabilities | $ | 1,222,231 | $ | 1,158,455 | |||||
The financial performance of the consolidated VIEs reflected on our consolidated statements of operations for the years ended December 31, 2014 and 2013 is as follows: | |||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | ||||||||
Revenue, net | $ | 28,452 | $ | 29,154 | |||||
Network operations expense | 16,665 | 16,844 | |||||||
General and administrative expense | (12,089 | ) | (21,165 | ) | |||||
Depreciation | 50,771 | 53,248 | |||||||
Total operating costs | 55,347 | 48,927 | |||||||
Operating income (loss) | (26,895 | ) | (19,773 | ) | |||||
Other income (expense) | (89,785 | ) | (77,661 | ) | |||||
Loss before taxes | 116,680 | (97,434 | ) | ||||||
Provision for taxes | — | — | |||||||
Net loss | 116,680 | (97,434 | ) | ||||||
Net loss attributable to noncontrolling interest | (58,340 | ) | (48,717 | ) | |||||
Net loss attributable to CareView Communications, Inc. | $ | (58,340 | ) | $ | (48,717 | ) | |||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS |
Rockwell Project Notes and Preferential Returns Extensions | |
On February 19, 2015, the due date on the Rockwell Project Notes and Rockwell’s Preferential Returns were extended to June 30, 2016. | |
Fifth Amendment to the Purchase Agreement with HealthCor | |
On February 17, 2015 (the “Closing Date”), we closed on the below described funding transaction in which we received $6,000,000. On December 15, 2014 we entered into a Fifth Amendment to the HealthCor Purchase Agreement (the “Fifth Amendment”) with HealthCor and certain additional investors party thereto (such additional investors, the “New Investors” and, collectively with the HealthCor, the “Investors”) to sell and issue (i) additional notes in the initial aggregate principal amount of $6,000,000 ($5,000,000 from the New Investors and $1,000,000 from HealthCor), with a conversion price per share equal to $0.52 (subject to adjustment as described therein) (the “Fifth Amendment Notes”) and (ii) additional warrants to purchase an aggregate of up to 3,692,308 shares of our Common Stock at an exercise price per share equal to $0.52 (subject to adjustment as described therein) (the “Fifth Amendment Warrants”). The New Investors include, but are not limited to all but one of our current directors and one of our officers. On the Closing Date, each of the Investors severally, not jointly, purchased the Fifth Amendment Notes and the Fifth Amendment Warrants. | |
2015 Stock Option Plan | |
On February 25, 2015, we established the CareView Communications, Inc. 2015 Stock Option Plan (the “2015 Plan”) pursuant to which 5,000,000 shares of Common Stock was reserved for issuance upon the exercise of options (“2015 Plan Option(s)”). The 2015 Plan was designed to serve as an incentive for retaining our qualified and competent key employees, officers and directors. The 2015 Plan Options vest over three years and have an exercise period of ten years from the date of issuance. | |
On February 25, 2015, we granted 1,565,000 options to purchase shares of our Common Stock to employees, including 1,000,000 to Sandra K. McRee, our Chief Operating Officer. This granted included 56,444 from our 2009 Plan (which closed the 2009 Plan) and 1,508,556 from our 2015 Plan. On February 25, 2015 we also granted 2015 Plan Options to the following members of the Board of Directors: (i) Steven G. Johnson, 1,000,000 (Mr. Johnson respectfully declined the grant); (ii) Jeffrey C. Lightcap, 150,000 (Mr. Lightcap respectfully declined the grant); (iii) L. Allen Wheeler, 150,000; and (iv) Steven B. Epstein, 50,000. All February 25, 2015 grants are exercisable at $0.53 per share. | |
Sixth Amendment to the Purchase Agreement with HealthCor | |
On March 31, 2015, we entered into a Sixth Amendment to the HealthCor Purchase Agreement with HealthCor (the “Sixth Amendment”) wherein the requirement to maintain a minimum cash balance of $5,000,000 was reduced to $2,000,000. The Sixth Amendment also includes the issuance of 1,000,000 warrants to purchase our Common Stock with an exercise price of $0.53. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Variable Interest Entities | Variable Interest Entities | ||||||||||||||||||
We use a qualitative analysis to determine if we are the primary beneficiary of a VIE. We consider whether the enterprise’s variable interest or interests give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics, among others: (a) the power to direct the activities of a VIE that most significantly impacts the entity’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the entity, that could potentially be significant to the VIE. | |||||||||||||||||||
Cash | |||||||||||||||||||
Cash | |||||||||||||||||||
We maintain cash at financial institutions that at times may exceed federally insured limits. We have never experienced any losses related to these funds. The Company periodically deposits cash with financial institutions in excess of the maximum federal insurance limits (FDIC) of $250,000 per bank. | |||||||||||||||||||
Trade Accounts Receivable | Trade Accounts Receivable | ||||||||||||||||||
Trade accounts receivable are customer obligations due under normal trade terms. We provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Trade accounts receivable past due more than 90 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluations, results of collection efforts, and specific circumstances of the customer. Recoveries of accounts previously written off are recorded as reductions of bad debt expense when received. | |||||||||||||||||||
The following table provides a summary of changes in the allowance for doubtful accounts for the years ended December 31, 2014 and 2013: | |||||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Beginning balance | $ | — | $ | 80,235 | |||||||||||||||
Additions | — | 10,636 | |||||||||||||||||
Reductions | — | (90,871 | ) | ||||||||||||||||
Ending balance | $ | — | $ | — | |||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||||
Property and equipment is stated at cost, net of accumulated depreciation. Maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs are charged to operating expense as incurred. We include Network Equipment in fixed assets upon receipt, and begin depreciating the Network Equipment when such equipment passes our incoming inspection and is available for use. We attribute no salvage value to the Network Equipment and depreciation is computed using the straight-line method based on the estimated useful life of seven years. Also using the straight-line method, depreciation of office and test equipment, warehouse equipment and furniture is based on the estimated useful lives of the assets, generally three years for office and test equipment, and five years for warehouse equipment and furniture. | |||||||||||||||||||
Allowance for System Removal | Allowance for System Removal | ||||||||||||||||||
We would remove the CareView System from customer premises due to a number of factors; including, but not limited to, collection/revenue performance issues and contract expiration/non-renewal. We regularly evaluate the installed CareView Systems for such factors and an allowance is set up based on the estimated cost of removal. As of December 31, 2014 and 2013, an allowance of $277,000 and $56,105, respectively, was recorded. | |||||||||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||||||||
Carrying values of property and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include, but are not limited to: | |||||||||||||||||||
• | Significant declines in an asset’s market price; | ||||||||||||||||||
• | Significant deterioration in an asset’s physical condition; | ||||||||||||||||||
• | Significant changes in the nature or extent of an asset’s use or operation; | ||||||||||||||||||
• | Significant adverse changes in the business climate that could impact an asset’s value, including adverse actions or assessments by regulators; | ||||||||||||||||||
• | Accumulation of costs significantly in excess of original expectations related to the acquisition or construction of an asset; | ||||||||||||||||||
• | Current-period operating or cash flow losses combined with a history of such losses or a forecast that demonstrates continuing losses associated with an asset’s use; and | ||||||||||||||||||
• | Expectations that it is more likely than not that an asset will be sold or otherwise disposed of significantly before the end of our previously estimated useful life. | ||||||||||||||||||
If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset groups’ carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then a loss is recorded for the difference between the assets’ fair value and respective carrying value. The fair value of the assets is determined using an “income approach” based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include: market size and growth, market share, projected selling prices, manufacturing cost and discount rate. Our estimates are based upon our historical experience, our commercial relationships, market conditions and available external information about future trends. We believe our current assumptions and estimates are reasonable and appropriate; however, unanticipated events and changes in market conditions could affect such estimates resulting in the need for an impairment charge in future periods. During the years ended December 31, 2014 and 2013, no impairment was recognized. | |||||||||||||||||||
Research and Development | Research and Development | ||||||||||||||||||
Research and development costs are expensed as incurred. Costs regarding the development of software to be sold, leased or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. We did not capitalize any such costs during 2014 or 2013. | |||||||||||||||||||
Intellectual Property, Patents and Trademarks | Intellectual Property | ||||||||||||||||||
We capitalize certain costs of developing software upon the establishment of technological feasibility and prior to the availability of the product for general release to customers for our CareView System in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Capitalized costs are reported at the lower of unamortized cost or net realizable value and are amortized over the estimated useful life of the CareView System not to exceed five years. Additionally, we test our intangible assets for impairment whenever circumstances indicate that their carrying value may not be recoverable. No impairment was recorded for the years ended December 31, 2014 and 2013. | |||||||||||||||||||
Intellectual property is comprised of purchased and internally developed software costs totaling approximately $2,800,000, all of which was capitalized prior to 2008 and was fully amortized at December 31, 2012. During the years ended December 31, 2014 and 2013, we capitalized no additional intellectual property costs. | |||||||||||||||||||
Patents and Trademarks | |||||||||||||||||||
We have capitalized certain costs related to registering trademarks and patent pending technology. In accordance with GAAP, we amortize our intangible assets with a finite life on a straight-line basis, over 10 years for trademarks and 20 years for patents. We begin amortization of these costs on the date patents or trademarks are awarded. | |||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments | ||||||||||||||||||
Derivatives are recorded on the balance sheet at fair value and changes in fair value are recorded in earnings at each reporting date in accordance with GAAP. See Fair Value of Financial Instruments and NOTE 11 for further details regarding derivative activity during the years ended December 31, 2014 and 2013. | |||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||||||
Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates our fair value because of the short-term maturity of such instruments and they are considered Level 1 assets under the fair value hierarchy. We have elected not to carry our debt instruments at fair value. The carrying amount of our debt approximates fair value. Interest rates that are currently available to us for issuance of short and long-term debt with similar terms and remaining maturities are used to estimate the fair value of the our short and long-term debt and would be considered Level 3 inputs under the fair value hierarchy. | |||||||||||||||||||
We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with GAAP. Accounting Standards Codification (“ASC”) 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). | |||||||||||||||||||
Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on a hierarchy of inputs, as follows: | |||||||||||||||||||
Level 1 -- Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||
Level 2 -- Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. | |||||||||||||||||||
Level 3 -- Unobservable inputs for the asset or liability. | |||||||||||||||||||
The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in NOTE 4. The fair value of this warrant liability is included in long-term liabilities on the accompanying consolidated financial statements. | |||||||||||||||||||
The following table provides the financial assets and liabilities reported at fair value and measured on a recurring basis: | |||||||||||||||||||
Description | Assets/ | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||
(Liabilities) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||
Measured at Fair Value | |||||||||||||||||||
Fair value of warrant liability | |||||||||||||||||||
2014 | $ | (301,864 | ) | $ | — | $ | — | $ | (301,864 | ) | |||||||||
2013 | $ | (370,865 | ) | $ | — | $ | — | $ | (370,865 | ) | |||||||||
The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the year ended December 31, 2014: | |||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||
(Level 3) | |||||||||||||||||||
For the years ended December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Balance, beginning of period | $ | (370,865 | ) | $ | — | ||||||||||||||
Issuances of derivative liabilities | — | (672,909 | ) | ||||||||||||||||
Change in fair value of warrant liability | 69,001 | 302,044 | |||||||||||||||||
Transfers in and/out of Level 3 | — | — | |||||||||||||||||
Balance, end of period | $ | (301,864 | ) | $ | (370,865 | ) | |||||||||||||
The above table of Level 3 liabilities begins with the prior period balance and adjusts the balance for changes that occurred during the current period. The ending balance of the Level 3 financial instrument presented above represent our best estimates and may not be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. | |||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with GAAP, we recognize the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. | |||||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||||
Revenue is recognized when persuasive evidence of a sales arrangement exists, when the selling price is fixed or determinable, when installation and official acceptance by the facility occurs, and when collection is probable. Because we consolidate our financial statements, 100% of the revenue generated by the Project LLCs is included in our results with all intra-company accounts and transactions eliminated in consolidation. | |||||||||||||||||||
We offer CareView’s services through a subscription-based contract with each facility for a standard term of three to five years. We begin to bill monthly subscription fees to the facility upon official acceptance of the CareView System by the facility. The contract requires the facility to pay us the subscription fee monthly. During the term of the contract, we provide continuous monitoring of the CareView System and are required to maintain and service all CareView System equipment. If the customer requires additional products or services, the contract is amended accordingly. | |||||||||||||||||||
Earnings Per Share | Earnings Per Share | ||||||||||||||||||
We calculate earnings per share (“EPS”) in accordance with GAAP, which requires the computation and disclosure of two EPS amounts, basic and diluted. Basic EPS is computed based on the weighted average number of common shares outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares outstanding plus all potentially dilutive common shares outstanding during the period under the treasury stock method. Such potential dilutive common shares consist of stock options, warrants to purchase our Common Stock (the “Warrants”) and convertible debt. Potential common shares totaling approximately 94,000,000 and 76,000,000 at December 31, 2014 and 2013, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to our reported net loss. | |||||||||||||||||||
Stock Based Compensation | Stock Based Compensation | ||||||||||||||||||
We recognize compensation expense for all share-based payments granted and amended based on the grant date fair value estimated in accordance with GAAP. Compensation expense is generally recognized on a straight-line basis over the employee’s requisite service period based on the award’s estimated lives for fixed awards with ratable vesting provisions. | |||||||||||||||||||
Debt Discount Costs and Deferred Debt Issuance Costs | Debt Discount Costs | ||||||||||||||||||
Costs incurred with parties who are providing long-term financing, with Warrants issued with the underlying debt, are reflected as a debt discount based on the relative fair value of the debt and Warrants. These discounts are generally amortized over the life of the related debt, using the effective interest rate method or other methods approximating the effective interest method. Additionally, convertible debt issued with a beneficial conversion feature is recorded at a discount based on the difference in the effective conversion price and the fair value of the Company’s stock on the date of issuance, if any. | |||||||||||||||||||
Deferred Debt Issuance and Financing Costs | |||||||||||||||||||
Costs incurred through the issuance of Warrants to parties who are providing long-term financing availability, which includes revolving credit lines, are reflected as deferred debt issuance based on the fair value of the Warrants issued. Costs incurred with third parties related to issuance of debt are recorded as deferred financing costs. These costs are generally amortized over the life of the financing instrument using the effective interest rate method or other methods approximating the effective interest method. | |||||||||||||||||||
Installation Costs | Installation Costs | ||||||||||||||||||
We defer all costs associated with the installation of the CareView System into a particular hospital until the CareView System is fully operational and accepted by the hospital. Upon acceptance, the associated costs are expensed ratably over the life of the hospital contract. These costs are included in network operations on the accompanying consolidated statements of operations. | |||||||||||||||||||
Shipping and Handling Costs | Shipping and Handling Costs | ||||||||||||||||||
We expense all shipping and handling costs as incurred. These costs are included in network operations on the accompanying consolidated financial statements. | |||||||||||||||||||
Advertising Costs | Advertising Costs | ||||||||||||||||||
We consider advertising costs as costs associated with the promotion of our products through the various media outlets. We expense all advertising costs as incurred. Total advertising expense was $0 and $6,960 for the year ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||
Concentration of Credit Risks and Customer Data | Concentration of Credit Risks and Customer Data | ||||||||||||||||||
We derive all of our revenues from hospitals. For the year ended December 31, 2014, 91 hospitals accounted for all of our revenue. During 2014 IASIS Healthcare Corporation (“IASIS”), Community Health Systems, Inc. (“CHS”) (CHS acquired Health Management Associates, Inc. (“HMA”) in January, 2014) and Tenet Healthsystems Medical, Inc., accounted for 49%, 21% and 12% of our net revenues, respectively. For the year ended December 31, 2013, 68 hospitals accounted for the all of our net revenue. During that period, IASIS and HMA accounted for 53% and 30% of our net revenues, respectively. | |||||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||||
Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. | |||||||||||||||||||
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements | ||||||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 – Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes most of the existing guidance on revenue recognition in ASC Topic 605, Revenue Recognition. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In applying the revenue model to contracts within its scope, an entity will need to (i) identify the contract(s) with a customer (ii) identify the performance obligations in the contract (iii) determine the transaction price (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 is effective for public entities for annual and interim periods beginning after December 15, 2016. The ASU allows for either full retrospective adoption, where the standard is applied to all of the periods presented, or modified retrospective adoption, where the standard is applied only to the most current period presented in the financial statements. The Company is currently assessing the impact of this standard to its consolidated financial statements. |
DESCRIPTION_OF_BUSINESS_AND_BA1
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Description Of Business And Basis Of Presentation Tables | |||||||||||||||||||||||||
Schedule of the effect of corrections | The effect of the correction of the Consolidated Balance Sheets as of December 31, 2013 is as follows (in thousands): | ||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
As Reported | As | ||||||||||||||||||||||||
Restated | |||||||||||||||||||||||||
Senior secured convertible notes, net of debt discount of $16,248 and $18,983, respectively | $ | 17,942 | $ | 15,207 | |||||||||||||||||||||
Total long-term liabilities | $ | 18,321 | $ | 15,586 | |||||||||||||||||||||
Total liabilities | $ | 21,269 | $ | 18,534 | |||||||||||||||||||||
Accumulated deficit | $ | (79,794 | ) | $ | (77,059 | ) | |||||||||||||||||||
Total CareView Communications, Inc. stockholder’s deficit | $ | (8,453 | ) | $ | (5,718 | ) | |||||||||||||||||||
Total stockholders’ deficit | $ | (8,831 | ) | $ | (6,096 | ) | |||||||||||||||||||
The effect of the correction on the Consolidated Statement of Operations is as follows (in thousands, except net loss per share): | |||||||||||||||||||||||||
For the Year Ended | |||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
As | As | ||||||||||||||||||||||||
Reported | Restated | ||||||||||||||||||||||||
(audited) | |||||||||||||||||||||||||
Interest expense | $ | (7,970 | ) | $ | (7,071 | ) | |||||||||||||||||||
Total other income (expense) | $ | (7,952 | ) | $ | (6,751 | ) | |||||||||||||||||||
Loss before taxes | $ | (14,567 | ) | $ | (13,668 | ) | |||||||||||||||||||
Net loss | $ | (14,567 | ) | $ | (13,668 | ) | |||||||||||||||||||
Net loss attributable to CareView Communication | $ | (14,518 | ) | $ | (13,619 | ) | |||||||||||||||||||
Loss per share, basic and diluted: | |||||||||||||||||||||||||
Net loss per share | $ | (0.11 | ) | $ | (0.10 | ) | |||||||||||||||||||
The effect of the error on the 2014 quarterly Consolidated Statements of Operations resulted in a decrease of interest expense and net loss, as reflected below, with no impact on net loss per share. | |||||||||||||||||||||||||
For the three months ended | For the three months ended | For the three months ended | |||||||||||||||||||||||
31-Mar-14 | 30-Jun-14 | 30-Sep-14 | |||||||||||||||||||||||
As Reported | As Restated | As Reported | As Restated | As Reported | As Restated | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||
Interest expense | $ | (2,226 | ) | $ | (1,978 | ) | $ | (2,289 | ) | $ | (2,054 | ) | $ | (2,077 | ) | $ | (1,876 | ) | |||||||
Total other income (expense) | $ | (2,857 | ) | $ | (2,609 | ) | $ | (2,231 | ) | $ | (1,996 | ) | $ | (1,679 | ) | $ | (1,478 | ) | |||||||
Loss before taxes | $ | (4,417 | ) | $ | (4,169 | ) | $ | (3,944 | ) | $ | (3,709 | ) | $ | (3,267 | ) | $ | (3,066 | ) | |||||||
Net loss | $ | (4,417 | ) | $ | (4,169 | ) | $ | (3,944 | ) | $ | (3,709 | ) | $ | (3,267 | ) | $ | (3,066 | ) | |||||||
Net loss attributable to CareView Communications, Inc. | $ | (4,401 | ) | $ | (4,153 | ) | $ | (3,927 | ) | $ | (3,692 | ) | $ | (3,251 | ) | $ | (3,050 | ) | |||||||
Loss per share, basic and diluted: | |||||||||||||||||||||||||
Net loss per share | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Schedule of changes in allowance for doubtful accounts | The following table provides a summary of changes in the allowance for doubtful accounts for the years ended December 31, 2014 and 2013: | ||||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Beginning balance | $ | — | $ | 80,235 | |||||||||||||||
Additions | — | 10,636 | |||||||||||||||||
Reductions | — | (90,871 | ) | ||||||||||||||||
Ending balance | $ | — | $ | — | |||||||||||||||
Schedule of financial assets and liabilities reported at fair value and measured on a recurring basis | The following table provides the financial assets and liabilities reported at fair value and measured on a recurring basis: | ||||||||||||||||||
Description | Assets/ | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||
(Liabilities) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||
Measured at Fair Value | |||||||||||||||||||
Fair value of warrant liability | |||||||||||||||||||
2014 | $ | (301,864 | ) | $ | — | $ | — | $ | (301,864 | ) | |||||||||
2013 | $ | (370,865 | ) | $ | — | $ | — | $ | (370,865 | ) | |||||||||
Schedule of summary of changes in fair value associated with the Level 3 liabilities | The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the year ended December 31, 2014: | ||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||
(Level 3) | |||||||||||||||||||
For the years ended December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Balance, beginning of period | $ | (370,865 | ) | $ | — | ||||||||||||||
Issuances of derivative liabilities | — | (672,909 | ) | ||||||||||||||||
Change in fair value of warrant liability | 69,001 | 302,044 | |||||||||||||||||
Transfers in and/out of Level 3 | — | — | |||||||||||||||||
Balance, end of period | $ | (301,864 | ) | $ | (370,865 | ) |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stockholders Equity Tables | |||||||||||||||||
Schedule of assumptions used in the Black-Scholes Model - Warrants and Options | The assumptions used in the Black-Scholes Model during the years ended December 31, 2014 and 2013 are set forth in the table below. | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Risk-free interest rate | 2.86 | % | NA | ||||||||||||||
Volatility | 78.88 | % | NA | ||||||||||||||
Expected life | 10 | NA | |||||||||||||||
Dividend yield | 0 | % | NA | ||||||||||||||
The assumptions used in the Black-Scholes Model during the years ended December 31, 2014 and 2013 are set forth in the table below. | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Risk-free interest rate | 1.59-1.83 | % | 0.61-0.67 | % | |||||||||||||
Volatility | 72.82-75.42 | % | 101.81-102.81 | % | |||||||||||||
Expected life | 6 | 3 | |||||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Schedule of warrant activity | A summary of our Warrants activity and related information follows: | ||||||||||||||||
Number of Shares Under Warrant | Range of | Weighted Average Exercise Price | Weighted | ||||||||||||||
Warrant Price | Average | ||||||||||||||||
Per Share | Remaining | ||||||||||||||||
Contractual | |||||||||||||||||
Life | |||||||||||||||||
Balance at December 31, 2012 | 34,076,710 | $ | 0.52-$1.65 | $ | 0.97 | 4.7 | |||||||||||
Granted | 2,500,000 | $ | 0.6 | $ | 0.6 | 4.3 | |||||||||||
Exercised | (179,638 | ) | |||||||||||||||
Expired | (1,931,250 | ) | |||||||||||||||
Balance at December 31, 2013 | 34,465,822 | $ | 0.52-$1.65 | $ | 0.96 | 4 | |||||||||||
Granted | 4,000,000 | $ | 0.4 | $ | 0.4 | 9 | |||||||||||
Exercised | (3,554,750 | ) | |||||||||||||||
Expired | (312,500 | ) | |||||||||||||||
Balance at December 31, 2014 | 34,598,572 | $ | 0.40-$1.65 | $ | 0.93 | 4.2 | |||||||||||
Vested and Exercisable at December 31, 2014 | 34,598,572 | $ | 0.40-$1.65 | $ | 0.93 | 4.2 | |||||||||||
Schedule of stock option activity | A summary of our Option activity and related information follows: | ||||||||||||||||
Number of Shares Under Option | 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 | 4,061,000 | $ | 0.51 | ||||||||||||||
Exercised | — | ||||||||||||||||
Expired | (86,665 | ) | |||||||||||||||
Forfeited | (320,836 | ) | |||||||||||||||
Balance at December 31, 2013 | 12,747,476 | $ | 0.59 | 6.9 | $ | — | |||||||||||
Granted | 1,688,000 | $ | 0.42 | ||||||||||||||
Exercised | — | ||||||||||||||||
Expired | (44,999 | ) | |||||||||||||||
Forfeited | (116,667 | ) | |||||||||||||||
Balance at December 31, 2014 | 14,273,810 | $ | 0.54 | 6.3 | $ | — | |||||||||||
Vested and Exercisable at December 31, 2014 | 9,768,463 | $ | 0.61 | 5 | $ | — | |||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Taxes Tables | |||||||||
Schedule of income tax reconciliation | The differences between the actual income tax benefit and the amount computed by applying the statutory federal tax rate (35%) to the loss before taxes are as follows: | ||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
As Restated | |||||||||
Expected income tax benefit at statutory rate | $ | (5,078,523 | ) | $ | (4,783,769 | ) | |||
Debt discount amortization | 700,000 | 1,234,835 | |||||||
Permanently disallowed interest | 734,499 | — | |||||||
Other permanent differences | 42,696 | 39,670 | |||||||
State income tax benefit, net of tax effect at state statutory rate | 1,438 | 3,740 | |||||||
Deferred pool true-ups/corrections related to: | |||||||||
Warrants | — | 1,222,954 | |||||||
Amortization | 2,857,686 | 702,183 | |||||||
Net operating losses | (14,579 | ) | (470,016 | ) | |||||
Other | 86,041 | (16,689 | ) | ||||||
Change in valuation account | 670,742 | 2,067,092 | |||||||
Income tax expense (benefit) | $ | — | $ | — | |||||
Schedule of components of deferred tax assets | The components of the deferred tax assets and liabilities are as follows: | ||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred Tax Assets: | |||||||||
Tax benefit of net operating loss carry-forward | $ | 19,138,526 | $ | 16,692,594 | |||||
Accrued interest | 2,837,284 | 1,815,656 | |||||||
Stock based compensation | 1,281,952 | 1,032,009 | |||||||
Amortization of intangible assets | 496,012 | 689,759 | |||||||
Depreciation of fixed assets | 36,318 | 300,237 | |||||||
Accrued expenses | 151,783 | 61,780 | |||||||
Research and development credit carry-forward | 29,084 | 29,084 | |||||||
Donations | 10,541 | 10,541 | |||||||
Total deferred tax assets | 23,981,500 | 20,631,660 | |||||||
Deferred tax liability | (2,679,098 | ) | — | ||||||
Valuation allowance for deferred tax assets | (21,302,402 | ) | (20,631,660 | ) | |||||
Deferred tax assets, net of valuation allowance | $ | — | $ | — | |||||
OTHER_CURRENT_ASSETS_Tables
OTHER CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Current Assets Tables | |||||||||
Schedule of other current assets | Other current assets consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Prepaid expenses | $ | 254,998 | $ | 91,923 | |||||
Other current assets | 21,912 | 1,209 | |||||||
Sales tax refund | — | 72,399 | |||||||
TOTAL OTHER CURRENT ASSETS | $ | 276,910 | $ | 165,531 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property And Equipment Tables | |||||||||
Schedule of property and equipment | Property and equipment consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Network equipment | $ | 10,753,542 | $ | 10,205,367 | |||||
Office equipment | 160,890 | 140,763 | |||||||
Vehicles | 132,797 | 112,332 | |||||||
Test equipment | 87,059 | 73,719 | |||||||
Furniture | 75,673 | 75,673 | |||||||
Warehouse equipment | 6,867 | 6,867 | |||||||
Leasehold improvements | 5,121 | 5,121 | |||||||
11,221,949 | 10,619,842 | ||||||||
Less: accumulated depreciation | (5,877,157 | ) | (4,255,233 | ) | |||||
TOTAL PROPERTY AND EQUIPMENT | $ | 5,344,792 | $ | 6,364,609 | |||||
OTHER_ASSETS_Tables
OTHER ASSETS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Assets Tables | |||||||||||||
Schedule of intangible assets | Intangible assets consist of the following: | ||||||||||||
31-Dec-14 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Patents and trademarks | $ | 271,142 | $ | 26,157 | $ | 244,985 | |||||||
Other intangible assets | 51,464 | 35,166 | 16,298 | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 322,606 | $ | 61,323 | $ | 261,283 | |||||||
December 31,2013 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Patents and trademarks | $ | 246,416 | $ | 14,487 | $ | 231,929 | |||||||
Other intangible assets | 50,494 | 29,434 | 21,060 | ||||||||||
TOTAL INTANGIBLE ASSETS | $ | 296,910 | $ | 43,921 | $ | 252,989 | |||||||
Schedule of other assets | Other assets consist of the following: | ||||||||||||
31-Dec-14 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Deferred installation costs | $ | 1,457,098 | $ | 865,647 | $ | 591,451 | |||||||
Deferred debt issuance costs | 1,600,000 | 1,600,000 | — | ||||||||||
Prepaid license fee | 249,999 | 54,644 | 195,355 | ||||||||||
Deferred closing costs | 583,967 | 583,967 | — | ||||||||||
Security deposit | 46,124 | — | 46,124 | ||||||||||
TOTAL OTHER ASSETS | $ | 3,937,188 | $ | 3,104,258 | $ | 832,930 | |||||||
31-Dec-13 | |||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||
Deferred installation costs | $ | 1,087,295 | $ | 559,537 | $ | 527,758 | |||||||
Deferred debt issuance costs | 1,600,000 | 1,315,308 | 284,692 | ||||||||||
Prepaid license fee | 249,999 | 38,250 | 211,749 | ||||||||||
Deferred closing costs | 580,241 | 463,510 | 116,731 | ||||||||||
Security deposit | 83,624 | — | 83,624 | ||||||||||
Prepaid consulting | 1,131,300 | 1,131,300 | — | ||||||||||
TOTAL OTHER ASSETS | $ | 4,732,459 | $ | 3,507,905 | $ | 1,224,554 | |||||||
OTHER_CURRENT_LIABILITIES_Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Current Liabilities Tables | |||||||||
Schedule of other current liabilities | NOTE 9 – OTHER CURRENT LIABILITIES | ||||||||
Other current liabilities consist of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Allowance for system removal | $ | 277,000 | $ | 56,105 | |||||
Accrued professional services | 204,675 | 73,500 | |||||||
Accrued taxes | 145,183 | 173,938 | |||||||
Accrued paid time off | 87,319 | 148,729 | |||||||
Other accrued liabilities | 77,107 | 85,870 | |||||||
TOTAL OTHER CURRENT LIABILITIES | $ | 791,284 | $ | 538,142 | |||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Commitments And Contingencies Tables | |||||||||||||||||||
Schedule of monthly base rent per the Lease and the Lease Extension | A summary of the monthly base rent per the Lease and the Lease Extension follows: | ||||||||||||||||||
Years Ending | |||||||||||||||||||
June 30, | |||||||||||||||||||
2015 | $ | 14,219 | |||||||||||||||||
2016 | $ | 14,188 | |||||||||||||||||
2017 | $ | 16,613 | |||||||||||||||||
2018 | $ | 15,052 | |||||||||||||||||
2019 | $ | 15,503 | |||||||||||||||||
2020 | $ | 15,968 | |||||||||||||||||
Schedule of future minimum rental payments | As of December 31, 2014, future minimum rental payments are as follows: | ||||||||||||||||||
Years Ending December 31, | |||||||||||||||||||
2015 | $ | 170,438 | |||||||||||||||||
2016 | 184,806 | ||||||||||||||||||
2017 | 189,990 | ||||||||||||||||||
2018 | 183,330 | ||||||||||||||||||
2019 | 188,830 | ||||||||||||||||||
Thereafter | $ | 95,810 | |||||||||||||||||
Total | $ | 1,013,204 | |||||||||||||||||
Schedule of future debt payments | As of December 31, 2014, future debt payments due are as follows: | ||||||||||||||||||
Years | Total | Senior Secured Convertible Notes(1) | Notes Payable | Mandatorily Redeemable Equity in Joint Venture | |||||||||||||||
Ending December 31, | |||||||||||||||||||
2015 | $ | — | $ | — | $ | — | $ | — | |||||||||||
2016 | 883,188 | — | 441,594 | 441,594 | |||||||||||||||
2017 | — | — | — | — | |||||||||||||||
2018 | — | — | — | — | |||||||||||||||
2019 | — | — | — | — | |||||||||||||||
Thereafter | 44,292,611 | 44,292,611 | — | — | |||||||||||||||
Total | $ | 45,175,799 | $ | 44,292,611 | $ | 441,594 | $ | 441,594 | |||||||||||
_____________ | |||||||||||||||||||
(1) Senior Secured Convertible Notes are included on the accompanying consolidated financial statements as $22,834,641, which represents this amount less debt discount of $21,457,970. | |||||||||||||||||||
VARIABLE_INTEREST_ENTITIES_Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Variable Interest Entities Tables | |||||||||
Schedule of VIE assets and liabilities and results of operations | The total consolidated VIE assets and liabilities reflected on our consolidated balance sheets at December 31, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | ||||||||
Assets | |||||||||
Cash | $ | 2,770 | $ | 958 | |||||
Receivables | 2,365 | 4,861 | |||||||
Total current assets | 5,135 | 5,819 | |||||||
Property, net | 46,762 | 99,348 | |||||||
Total assets | $ | 51,897 | $ | 105,167 | |||||
Liabilities | |||||||||
Accounts payable | $ | 122,558 | $ | 114,089 | |||||
Notes payable | 441,594 | 442,519 | |||||||
Mandatorily redeemable interest | 441,594 | 442,519 | |||||||
Accrued interest | 191,596 | 121,597 | |||||||
Other current liabilities | 24,889 | 37,731 | |||||||
Total liabilities | $ | 1,222,231 | $ | 1,158,455 | |||||
The financial performance of the consolidated VIEs reflected on our consolidated statements of operations for the years ended December 31, 2014 and 2013 is as follows: | |||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | ||||||||
Revenue, net | $ | 28,452 | $ | 29,154 | |||||
Network operations expense | 16,665 | 16,844 | |||||||
General and administrative expense | (12,089 | ) | (21,165 | ) | |||||
Depreciation | 50,771 | 53,248 | |||||||
Total operating costs | 55,347 | 48,927 | |||||||
Operating income (loss) | (26,895 | ) | (19,773 | ) | |||||
Other income (expense) | (89,785 | ) | (77,661 | ) | |||||
Loss before taxes | 116,680 | (97,434 | ) | ||||||
Provision for taxes | — | — | |||||||
Net loss | 116,680 | (97,434 | ) | ||||||
Net loss attributable to noncontrolling interest | (58,340 | ) | (48,717 | ) | |||||
Net loss attributable to CareView Communications, Inc. | $ | (58,340 | ) | $ | (48,717 | ) | |||
DESCRIPTION_OF_BUSINESS_AND_BA2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Description Of Business And Basis Of Presentation Details Narrative | ||
Percentage owned by company of each joint venture | 50.00% | |
Total amount of cumulative error related to prior periods | $2,700,000 | |
Reduction to accumulated deficit | $1,800,000 |
DESCRIPTION_OF_BUSINESS_AND_BA3
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Senior secured convertible notes, net of debt discount of $16,248 and $17,791, respectively | $22,834,641 | $15,206,834 | |
Total long-term liabilities | 24,019,693 | 16,471,344 | |
Total liabilities | 25,247,355 | 18,533,956 | |
Accumulated deficit | -91,510,720 | -77,058,995 | |
Total CareView Communications Inc. stockholders' deficit | -14,868,426 | -5,717,791 | |
Total stockholders' equity (deficit) | -15,305,035 | -6,096,060 | 3,587,343 |
As Reported [Member] | |||
Senior secured convertible notes, net of debt discount of $16,248 and $17,791, respectively | 17,942,000 | ||
Total long-term liabilities | 18,321,000 | ||
Total liabilities | 21,269,000 | ||
Accumulated deficit | -79,794,000 | ||
Total CareView Communications Inc. stockholders' deficit | -8,453,000 | ||
Total stockholders' equity (deficit) | -8,831,000 | ||
Debt discount | 16,248,000 | ||
As Restated [Member] | |||
Senior secured convertible notes, net of debt discount of $16,248 and $17,791, respectively | 15,207,000 | ||
Total long-term liabilities | 15,586,000 | ||
Total liabilities | 18,534,000 | ||
Accumulated deficit | -77,059,000 | ||
Total CareView Communications Inc. stockholders' deficit | -5,718,000 | ||
Total stockholders' equity (deficit) | -6,096,000 | ||
Debt discount | $18,983,000 |
DESCRIPTION_OF_BUSINESS_AND_BA4
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details 1) (USD $) | 12 Months Ended | 3 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Interest expense | $7,819,340 | $7,070,416 | |||
Total other income (expense) | 7,730,782 | 6,751,184 | |||
Loss before taxes | -14,510,065 | -13,667,911 | |||
Net loss | -14,510,065 | -13,667,911 | |||
Net loss attributable to CareView Communications, Inc. | -14,451,725 | -13,619,194 | |||
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.10) | ($0.10) | |||
As Reported [Member] | |||||
Interest expense | -7,970,000 | -2,077,000 | -2,289,000 | ||
Total other income (expense) | -7,952,000 | -1,679,000 | -2,231,000 | ||
Loss before taxes | -14,567,000 | -3,267,000 | -3,944,000 | ||
Net loss | -14,567,000 | -3,267,000 | -3,944,000 | ||
Net loss attributable to CareView Communications, Inc. | -14,518,000 | -3,251,000 | -3,927,000 | ||
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.11) | ($0.02) | ($0.03) | ||
As Restated [Member] | |||||
Interest expense | -7,071,000 | -1,876,000 | -2,054,000 | -1,978,000 | |
Total other income (expense) | -6,751,000 | -1,478,000 | -1,996,000 | -2,609,000 | |
Loss before taxes | -13,668,000 | -3,066,000 | -3,709,000 | -4,169,000 | |
Net loss | -13,668,000 | -3,066,000 | -3,709,000 | -4,169,000 | |
Net loss attributable to CareView Communications, Inc. | ($13,619,000) | ($3,050,000) | ($3,692,000) | ($4,153,000) | |
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.10) | ($0.02) | ($0.03) | ($0.03) |
DESCRIPTION_OF_BUSINESS_AND_BA5
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Interest expense | $7,819,340 | $7,070,416 | |||
Total other income (expense) | 7,730,782 | 6,751,184 | |||
Loss before taxes | -14,510,065 | -13,667,911 | |||
Net loss | -14,510,065 | -13,667,911 | |||
Net loss attributable to CareView Communications, Inc. | -14,451,725 | -13,619,194 | |||
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.10) | ($0.10) | |||
As Restated [Member] | |||||
Interest expense | -7,071,000 | -1,876,000 | -2,054,000 | -1,978,000 | |
Total other income (expense) | -6,751,000 | -1,478,000 | -1,996,000 | -2,609,000 | |
Loss before taxes | -13,668,000 | -3,066,000 | -3,709,000 | -4,169,000 | |
Net loss | -13,668,000 | -3,066,000 | -3,709,000 | -4,169,000 | |
Net loss attributable to CareView Communications, Inc. | -13,619,000 | -3,050,000 | -3,692,000 | -4,153,000 | |
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.10) | ($0.02) | ($0.03) | ($0.03) | |
As Reported [Member] | |||||
Interest expense | -7,970,000 | -2,077,000 | -2,289,000 | ||
Total other income (expense) | -7,952,000 | -1,679,000 | -2,231,000 | ||
Loss before taxes | -14,567,000 | -3,267,000 | -3,944,000 | ||
Net loss | -14,567,000 | -3,267,000 | -3,944,000 | ||
Net loss attributable to CareView Communications, Inc. | -14,518,000 | -3,251,000 | -3,927,000 | ||
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.11) | ($0.02) | ($0.03) | ||
As Reported [Member] | |||||
Interest expense | -2,226,000 | ||||
Total other income (expense) | -2,857,000 | ||||
Loss before taxes | -4,417,000 | ||||
Net loss | -4,417,000 | ||||
Net loss attributable to CareView Communications, Inc. | ($4,401,000) | ||||
Net loss per share attributable to CareView Communications, Inc. basic and diluted | ($0.03) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for system removal | $277,000 | $56,105 |
Intangible assets, Net | 261,283 | 252,989 |
Anti-dilutive common share equivalents excluded from EPS calculation | 94,000,000 | 76,000,000 |
Concentration [Member] | Revenue [Member] | ||
Number of Hospital clients | 68 | |
Concentration percentage | 100.00% | |
IASIS Healthcare [Member] | Concentration [Member] | Revenue [Member] | ||
Concentration percentage | 49.00% | 53.00% |
HMA Group [Member] | ||
Number of Hospital clients | 91 | |
HMA Group [Member] | Concentration [Member] | Revenue [Member] | ||
Concentration percentage | 21.00% | 30.00% |
Tenet Healthsystems Medical [Member] | Concentration [Member] | Revenue [Member] | ||
Concentration percentage | 12.00% | |
Patents [Member] | ||
Amortization period for intangible assets | 10 years | |
Trademarks [Member] | ||
Amortization period for intangible assets | 20 years | |
Other intangible assets [Member] | ||
Intangible assets, Net | 16,298 | 21,060 |
Purchased and Internally Developed Software Costs [Member] | ||
Intangible assets, Net | 2,800,000 | |
Patents and trademarks [Member] | ||
Intangible assets, Net | $244,985 | $231,929 |
Network Equipment [Member] | ||
Estimated useful life of property and equipment | 7 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of Changes in Allowance for Doubtful Accounts | ||
Allowance for Doubtful Accounts | $80,235 | |
Additions | 10,636 | |
Reductions | -90,871 | |
Allowance for Doubtful Accounts |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 02, 2013 |
Fair value of warrant liability | ($301,864) | ($370,865) | ($672,909) |
Recurring Measurement [Member] | Significant Other Unobservable Inputs (Level 3) [Member] | |||
Fair value of warrant liability | -301,864 | -370,865 | |
Recurring Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair value of warrant liability | |||
Recurring Measurement [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Fair value of warrant liability | |||
Recurring Measurement [Member] | Fair Value [Member] | |||
Fair value of warrant liability | ($301,864) | ($370,865) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Change in Fair Value of Level 3 Liabilities | ||
Balance, beginning of period | ($370,865) | |
Issuances of derivative liabilities | -672,909 | |
Change in fair value of warrant liability | 69,001 | 302,044 |
Transfers in and/out of Level 3 | ||
Balance, end of period | ($301,864) | ($370,865) |
LIQUIDITY_AND_MANAGEMENTS_PLAN1
LIQUIDITY AND MANAGEMENTS PLAN (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2014 | Jan. 16, 2014 | Aug. 19, 2013 | Dec. 31, 2012 | Mar. 15, 2015 | Aug. 31, 2011 | |
Cash and cash equivalents | $2,546,262 | $4,125,180 | $5,413,848 | |||||
Minimum cash balance required under existing loan documents | 4,000,000 | 5,000,000 | 5,000,000 | |||||
Repayments of lines of credit | 982,255 | |||||||
HealthCor [Member] | ||||||||
Minimum cash balance required under existing loan documents | 2,000,000 | |||||||
Senior convertible debt | 2,000,000 | |||||||
Comerica Bank and Bridge Bank [Member] | ||||||||
Minimum cash balance required under existing loan documents | 5,000,000 | |||||||
Revolving line of credit maximum borrowing capacity | 20,000,000 | |||||||
Repayments of lines of credit | $982,255 |
STOCKHOLDERS_EQUITY_Details_Na
STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||
Apr. 02, 2013 | Aug. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Preferred Stock | |||||
Preferred stock, par value | $0.00 | $0.00 | |||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||
Common Stock | |||||
Common stock, par value | $0.00 | $0.00 | |||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |||
Common stock, shares issued | 139,380,748 | 138,753,397 | |||
Common stock, shares outstanding | 139,380,748 | 138,753,397 | |||
Private Placement | |||||
Shares issued in private placement, shares | 6,220,000 | ||||
Price per share purchased | $0.50 | ||||
Warrants outstanding | 2,500,000 | ||||
Price per warrant issued | 0.01 | ||||
Warrant exercise price | $0.60 | ||||
Warrant term | 5 years | ||||
Fair value of warrant liability | $672,909 | $301,864 | $370,865 | ||
Cash received for private placement | 3,100,000 | ||||
Warrants exercised | 3,554,750 | ||||
Noncash exercise of warrants, shares forfeited for exercise | 2,927,399 | ||||
Shares issued for exercise of warrants, shares | 627,351 | ||||
Warrants [Member] | |||||
Private Placement | |||||
Warrants outstanding | 34,598,572 | 34,465,822 | 34,076,710 | ||
Warrant exercise price | $0.93 | $0.96 | $0.97 | ||
Cash received for private placement | 672,909 | ||||
Warrants exercised | 179,638 | -627,351 | -179,638 | ||
Noncash exercise of warrants, shares forfeited for exercise | 172,283 | ||||
Shares issued for exercise of warrants, shares | 7,355 | ||||
Common Stock and Additional Paid-In Capital [Member] | |||||
Private Placement | |||||
Cash received for private placement | $2,728,129 |
STOCKHOLDERS_EQUITY_Details_Na1
STOCKHOLDERS' EQUITY (Details Narrative 1) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||||
Aug. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | 7-May-12 | Apr. 02, 2013 | Aug. 31, 2013 | Jan. 16, 2013 | Dec. 31, 2012 | |
Warrants | ||||||||
Warrant exercise price | $0.60 | |||||||
Comerica Bank and Bridge Bank [Member] | ||||||||
Warrants | ||||||||
Exercise price of warrants granted | 1.1 | |||||||
Fair value of warrants | $1,535,714 | |||||||
Warrants Revalued [Member] | ||||||||
Warrants | ||||||||
Fair value of warrants at re-value | 301,864 | |||||||
Fair value adjustment recorded as non-cash costs | 69,001 | |||||||
Warrants Revalued [Member] | Comerica Bank and Bridge Bank [Member] | ||||||||
Warrants | ||||||||
Change in fair value of warrants, amortized to interest expense | 25,327 | 64,286 | ||||||
Warrants [Member] | ||||||||
Warrants | ||||||||
Unamortized warrant costs, excluding HealthCor warrants | 0 | 284,692 | ||||||
Fair value of warrants at re-value | 370,865 | |||||||
Fair value adjustment recorded as non-cash costs | 76,535 | |||||||
Expensed as non-cash costs in general and administration | 302,044 | |||||||
Expensed as Interest Expense | 284,692 | 569,387 | ||||||
Warrant exercise price | $0.93 | $0.96 | $0.97 | |||||
Warrants issued for services, shares | 312,500 | |||||||
Exercise price of warrants granted | 0.4 | 0.6 | ||||||
Term of warrants granted | 9 years | 4 years 3 months 18 days | ||||||
Warrants [Member] | Advisory Services Agreement [Member] | ||||||||
Warrants | ||||||||
Noncash service costs related to warrants | 23,764 | |||||||
Warrants issued for services, shares | 240,000 | |||||||
Warrants issued for services | 265,200 | |||||||
Term of warrants granted | 12 months | |||||||
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 | |||||||
Fair value of warrants granted | $265,200 |
STOCKHOLDERS_EQUITY_Details_Na2
STOCKHOLDERS' EQUITY (Details Narrative 2) (USD $) | 12 Months Ended | 1 Months Ended | |||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Aug. 31, 2014 | Jul. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Sep. 30, 2013 | Jan. 31, 2014 | Apr. 30, 2014 | Dec. 31, 2012 | Sep. 30, 2009 | Dec. 03, 2007 | |
Stock Options | |||||||||||||
Options granted | 1,688,000 | 4,061,000 | |||||||||||
Options outstanding | 14,273,810 | 12,747,476 | 14,273,810 | 12,747,476 | 9,093,977 | ||||||||
Share-based compensation expense | $714,123 | $390,443 | |||||||||||
Unrecognized estimated compensation expense | $1,519,000 | $1,519,000 | |||||||||||
Period for recognization of unrecognized compensation expense | 1 year 4 months 24 days | ||||||||||||
Exercise price of options granted | $0.42 | $0.51 | |||||||||||
2009 Option Plan [Member] | |||||||||||||
Stock Options | |||||||||||||
Shares reserved for option under the plan | 9,943,556 | 9,943,556 | 10,000,000 | ||||||||||
Options outstanding | 8,972,890 | 8,972,890 | |||||||||||
2007 Option Plan [Member] | |||||||||||||
Stock Options | |||||||||||||
Shares reserved for option under the plan | 8,000,000 | 8,000,000 | 8,000,000 | ||||||||||
Options outstanding | 5,300,920 | 5,300,920 | |||||||||||
Stock Options [Member] | |||||||||||||
Stock Options | |||||||||||||
Options granted | 348,000 | 20,000 | 20,000 | 395,000 | 3,641,000 | 395,000 | |||||||
Exercise price of options granted | $0.48 | $0.56 | $0.68 | $0.50 | $0.51 | $0.50 | |||||||
Stock Options [Member] | David White [Member] | |||||||||||||
Stock Options | |||||||||||||
Options granted | 500,000 | ||||||||||||
Exercise price of options granted | $0.40 | ||||||||||||
Stock Options [Member] | Jason Thompson [Member] | |||||||||||||
Stock Options | |||||||||||||
Options granted | 150,000 | ||||||||||||
Exercise price of options granted | $0.40 | ||||||||||||
Stock Options [Member] | Steven Epstein [Member] | |||||||||||||
Stock Options | |||||||||||||
Options granted | 500,000 | ||||||||||||
Exercise price of options granted | $0.68 | ||||||||||||
Stock Options [Member] | Dr. James Higgins [Member] | |||||||||||||
Stock Options | |||||||||||||
Options granted | 150,000 | ||||||||||||
Exercise price of options granted | $0.68 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options [Member] | ||
Expected life | 6 years | 3 years |
Dividend yield | 0.00% | 0.00% |
Stock Options [Member] | Upper Range [Member] | ||
Risk-free interest rate | 1.59% | |
Volatility | 72.82% | |
Stock Options [Member] | Lower Range [Member] | ||
Risk-free interest rate | 1.83% | |
Volatility | 75.42% | |
Warrants [Member] | ||
Risk-free interest rate | 2.86% | |
Volatility | 78.88% | |
Expected life | 10 years | |
Dividend yield | 0.00% | |
Warrants [Member] | Upper Range [Member] | ||
Risk-free interest rate | 0.61% | |
Volatility | 101.81% | |
Warrants [Member] | Lower Range [Member] | ||
Risk-free interest rate | 0.67% | |
Volatility | 102.81% |
STOCKHOLDERS_EQUITY_Details_1
STOCKHOLDERS' EQUITY (Details 1) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Aug. 31, 2013 | Dec. 31, 2013 | Apr. 02, 2013 | Dec. 31, 2012 | |
Number of shares under warrant | |||||
Warrants outstanding, beginning | 2,500,000 | ||||
Warrants exercised | 3,554,750 | ||||
Warrants outstanding, ending | 2,500,000 | ||||
Weighted Average Exercise Price | |||||
Warrant exercise price, beginning | $0.60 | ||||
Warrant exercise price, ending | $0.60 | ||||
Warrants [Member] | |||||
Number of shares under warrant | |||||
Warrants outstanding, beginning | 34,465,822 | 34,076,710 | |||
Warrants granted | 4,000,000 | 2,500,000 | |||
Warrants exercised | -627,351 | 179,638 | -179,638 | ||
Warrants expired | -312,500 | ||||
Warrants cancelled | -2,927,399 | -1,931,250 | |||
Warrants outstanding, ending | 34,598,572 | 34,465,822 | |||
Vested and Exercisable | 34,598,572 | ||||
Weighted Average Exercise Price | |||||
Warrant exercise price, beginning | 0.96 | $0.97 | |||
Warrants granted | 0.4 | 0.6 | |||
Warrant exercise price, ending | 0.93 | $0.96 | |||
Vested and Exercisable | 0.93 | ||||
Weighted Average Remaining Contractual Life | |||||
Wararnt term, beginning | 4 years | 4 years 8 months 12 days | |||
Warrants granted | 9 years | 4 years 3 months 18 days | |||
Warrant term, ending | 4 years 2 months 12 days | 4 years | |||
Vested and Exercisable | 4 years 2 months 12 days | ||||
Warrants [Member] | Lower Range [Member] | |||||
Weighted Average Exercise Price | |||||
Warrant exercise price, beginning | $0.52 | ||||
Warrant exercise price, ending | 0.4 | $0.52 | $0.52 | ||
Vested and Exercisable | 0.4 | ||||
Warrants [Member] | Upper Range [Member] | |||||
Weighted Average Exercise Price | |||||
Warrant exercise price, beginning | $1.65 | ||||
Warrant exercise price, ending | 1.65 | $1.65 | $1.65 | ||
Vested and Exercisable | 1.65 |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Number Options | ||
Stock Options Outstanding, Beginning | 12,747,476 | 9,093,977 |
Granted | 1,688,000 | 4,061,000 |
Exercised | ||
Expired | -44,999 | -86,665 |
Cancelled | -116,667 | -320,836 |
Stock Options Outstanding, Ending | 14,273,810 | 12,747,476 |
Stock Options, vested and exercisable | 9,768,463 | |
Weighted Average Exercise Price | ||
Stock Options Outstanding, Beginning | $0.59 | $0.66 |
Granted | $0.42 | $0.51 |
Stock Options Outstanding, Ending | $0.57 | $0.59 |
Stock Options, vested and exercisable | $0.61 | |
Weighted Average Remaining Contractual Life | ||
Stock Options Outstanding, Beginning | 6 years 10 months 24 days | 6 years 7 months 6 days |
Stock Options Outstanding, Ending | 6 years 3 months 18 days | 6 years 10 months 24 days |
Stock Options, vested and exercisable | 5 years | |
Aggregate Intrinsic Value | ||
Stock Options Outstanding, Beginning | $2,376,961 | |
Stock Options Outstanding, Ending | ||
Stock Options Outstanding, Vested and exercisable |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||
Statutory federal tax rate | 35.00% | |
Increase in deferred tax valuation allowance | $670,742 | $2,067,092 |
Unrealized deferred tax sharebased compensation | 690,000 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating tax loss-carryforward | 54,700,000 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating tax loss-carryforward | $10,700,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income tax reconciliation | ||
Expected income tax benefit at statutory rate | ($5,078,523) | ($4,783,769) |
Debt discount amortization | 700,000 | 1,234,835 |
Permanently disallowed interest | 734,499 | |
Other permanent differences | 42,696 | 39,670 |
State income tax benefit, net of tax effect at state statutory rate | 1,438 | 3,740 |
Deferred pool true-ups/corrections related to: | ||
Warrants | 1,222,954 | |
Amortization | 2,857,686 | 702,183 |
Net operating losses | -14,579 | -470,016 |
Other | 86,041 | -16,689 |
Change in valuation account | 670,742 | 2,067,092 |
Income tax expense (benefit) |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Tax Assets: | ||
Tax benefit of net operating loss carry-forward | $19,138,526 | $16,692,594 |
Accrued interest | 2,837,284 | 1,815,656 |
Stock based compensation | 1,281,952 | 1,032,009 |
Amortization of intangible assets | 496,012 | 689,759 |
Depreciation of fixed assets | 36,318 | 300,237 |
Accrued expenses | 151,783 | 61,780 |
Research and development credit carry-forward | 29,084 | 29,084 |
Donations | 10,541 | 10,541 |
Total deferred tax assets | 23,981,500 | 20,631,660 |
Deferred tax liability | -2,679,098 | |
Valuation allowance for deferred tax assets | -21,302,402 | -20,631,660 |
Deferred tax assets, net of valuation allowance |
OTHER_CURRENT_ASSETS_Details
OTHER CURRENT ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Other Assets: | ||
Prepaid expenses | $254,998 | $91,923 |
Other current assets | 21,912 | 1,209 |
Sales tax refund | 72,399 | |
TOTAL OTHER CURRENT ASSETS | $276,910 | $165,531 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $1,623,723 | $1,587,464 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $11,221,949 | $10,619,842 |
Less: accumulated depreciation | -5,877,157 | -4,255,233 |
Property and equipment, net | 5,344,792 | 6,364,609 |
Network Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,753,542 | 10,205,367 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 160,890 | 140,763 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 132,797 | 112,332 |
Test Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 87,059 | 73,719 |
Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 75,673 | 75,673 |
Warehouse Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,867 | 6,867 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $5,121 | $5,121 |
OTHER_ASSETS_Details
OTHER ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $322,606 | $296,910 |
Accumulated Amortization | 61,323 | 43,921 |
Intangible assets, Net | 261,283 | 252,989 |
Patents and trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 271,142 | 246,416 |
Accumulated Amortization | 26,157 | 14,487 |
Intangible assets, Net | 244,985 | 231,929 |
Other intangible assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 51,464 | 50,494 |
Accumulated Amortization | 35,166 | 29,434 |
Intangible assets, Net | $16,298 | $21,060 |
OTHER_ASSETS_Details_1
OTHER ASSETS (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Cost | $3,937,188 | $4,732,459 |
Accumulated Amortization | 3,104,258 | 3,507,905 |
Other assets | 832,930 | 1,224,554 |
Deferred installation costs [Member] | ||
Cost | 1,457,098 | 1,087,295 |
Accumulated Amortization | 865,647 | 559,537 |
Other assets | 591,451 | 527,758 |
Deferred debt issuance costs [Member] | ||
Cost | 1,600,000 | 1,600,000 |
Accumulated Amortization | 1,600,000 | 1,315,308 |
Other assets | 284,692 | |
Prepaid license fee [Member] | ||
Cost | 249,999 | 249,999 |
Accumulated Amortization | 54,644 | 38,250 |
Other assets | 195,355 | 211,749 |
Deferred closing costs [Member] | ||
Cost | 583,967 | 580,241 |
Accumulated Amortization | 583,967 | 463,510 |
Other assets | 116,731 | |
Security deposit [Member] | ||
Cost | 46,124 | 83,624 |
Accumulated Amortization | ||
Other assets | 46,124 | 83,624 |
Prepaid Consulting [Member] | ||
Cost | 1,131,300 | |
Accumulated Amortization | 1,131,300 | |
Other assets |
OTHER_CURRENT_LIABILITIES_Deta
OTHER CURRENT LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
OTHER CURRENT LIABILITIES: | ||
Allowance for system removal | $277,000 | $56,105 |
Accrued professional services | 204,675 | 73,500 |
Accrued taxes | 145,183 | 173,938 |
Accrued paid time off | 87,319 | 148,729 |
Other accrued liabilities | 77,107 | 85,870 |
Other current liabilities | $791,284 | $538,142 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Description of lease extension | On December 8, 2014, we entered into a Lease Extension Agreement (the “Lease Extension”), wherein we extended the Lease through June 30, 2020. The Lease Extension contains a renewal provision under which we may renew the Lease for an additional five year period under the same terms and conditions. | |
Rent expense | $232,927 | $218,476 |
Senior secured convertible notes | 22,834,641 | 15,206,834 |
Senior Secured Convertible Notes [Member] | ||
Senior secured convertible notes | 22,834,641 | |
Debt discount | $21,457,970 | $18,983,058 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 31, 2014 |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $14,219 |
2016 | 14,188 |
2017 | 16,613 |
2018 | 15,052 |
2019 | 15,503 |
2020 | $15,968 |
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) (USD $) | Dec. 31, 2014 |
Future minimum rental payments for the years endind December 31, | |
2015 | $170,438 |
2016 | 184,806 |
2017 | 189,990 |
2018 | 183,330 |
2019 | 188,830 |
Thereafter | 95,810 |
Total | $1,013,204 |
COMMITMENTS_AND_CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | Dec. 31, 2014 | |
Future debt payments for the year ending December 31, | ||
2015 | ||
2016 | 883,188 | |
2017 | ||
2018 | ||
2019 | ||
Thereafter | 44,292,611 | |
Total | 45,175,799 | |
Mandatorily Redeemable Equity in Joint Venture [Member] | ||
Future debt payments for the year ending December 31, | ||
2015 | ||
2016 | 441,594 | |
2017 | ||
2018 | ||
2019 | ||
Thereafter | ||
Total | 441,594 | |
Senior Secured Convertible Notes [Member] | ||
Future debt payments for the year ending December 31, | ||
2015 | [1] | |
2016 | [1] | |
2017 | [1] | |
2018 | [1] | |
2019 | [1] | |
Thereafter | 44,292,611 | [1] |
Total | 44,292,611 | [1] |
Notes Payable [Member] | ||
Future debt payments for the year ending December 31, | ||
2015 | ||
2016 | 441,594 | |
2017 | ||
2018 | ||
2019 | ||
Thereafter | ||
Total | $441,594 | |
[1] | Senior Secured Convertible Notes are included on the accompanying consolidated financial statements as $22,834,641, which represents this amount less debt discount of $21,457,970. |
AGREEMENT_WITH_HEALTHCOR_Detai
AGREEMENT WITH HEALTHCOR (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | 60 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Jan. 16, 2014 | Apr. 21, 2011 | Apr. 20, 2021 | Apr. 20, 2016 | Jan. 31, 2012 | Aug. 19, 2013 | Mar. 15, 2015 | |
Senior secured convertible notes | $22,834,641 | $15,206,834 | |||||||
Minimum cash balance required under existing loan documents | 4,000,000 | 5,000,000 | 5,000,000 | ||||||
Beneficial conversion features for senior secured convertible notes | 3,440,235 | 1,425,468 | |||||||
Interest Expense | 7,819,340 | 7,070,416 | |||||||
Senior Secured Convertible Notes [Member] | |||||||||
Senior secured convertible notes | 22,834,641 | ||||||||
HealthCor [Member] | |||||||||
Warrants issued for financing costs, warrants | 4,000,000 | ||||||||
Exercise price of warrants granted | 0.4 | ||||||||
Increase in interest rate (per annum) should default occur | 5.00% | ||||||||
Debt conversion rate | $0.40 | $1.25 | |||||||
Minimum cash balance required under existing loan documents | 2,000,000 | ||||||||
Beneficial conversion features for senior secured convertible notes | 3,480,234 | 1,425,468 | |||||||
Interest Expense | 1,146,732 | ||||||||
HealthCor [Member] | Significant Other Unobservable Inputs (Level 3) [Member] | |||||||||
Interest Expense | 2,152,055 | 2,135,209 | |||||||
HealthCor [Member] | Senior Convertible Notes - 2012 Issuance [Member] | |||||||||
Number of shares the note may be converted into | 6,000,000 | ||||||||
HealthCor [Member] | Senior Convertible Notes - 2014 Issuance [Member] | |||||||||
Number of shares the note may be converted into | 14,000,000 | ||||||||
HealthCor [Member] | Senior Secured Convertible Notes [Member] | |||||||||
Interest rate, provided no default | 10.00% | 12.50% | |||||||
Number of shares the note may be converted into | 25,000,000 | ||||||||
HealthCor Partners Fund [Member] | |||||||||
Senior secured convertible notes | 2,329,000 | 9,316,000 | 2,329,000 | ||||||
Debt Maturity Date | 15-Jan-24 | 20-Apr-21 | 31-Jan-22 | ||||||
Warrants issued for financing costs, warrants | 5,488,456 | ||||||||
Exercise price of warrants granted | 1.4 | ||||||||
HealthCor Hybrid Offshore Master Fund [Member] | |||||||||
Senior secured convertible notes | $2,671,000 | $10,684,000 | $2,671,000 | ||||||
Debt Maturity Date | 15-Jan-24 | 20-Apr-21 | 31-Jan-22 | ||||||
Warrants issued for financing costs, warrants | 6,294,403 | ||||||||
Exercise price of warrants granted | 1.4 | ||||||||
Increase in interest rate (per annum) should default occur | 5.00% | ||||||||
Debt conversion rate | $1.25 |
LOAN_AND_SECURITY_AGREEMENT_WI1
LOAN AND SECURITY AGREEMENT WITH COMERICA BANK AND BRIDGE BANK (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2014 | Aug. 31, 2011 | Jan. 16, 2014 | Aug. 19, 2013 | Apr. 02, 2013 | |
Repayments of lines of credit | $982,255 | ||||||
Minimum cash balance required under existing loan documents | 4,000,000 | 5,000,000 | 5,000,000 | ||||
Borrowings from the line of credit | 982,255 | ||||||
Warrant exercise price | $0.60 | ||||||
Warrants issued for financing costs | 64,286 | ||||||
Interest expense | 7,819,340 | 7,070,416 | |||||
Comerica Bank and Bridge Bank [Member] | |||||||
Revolving line of credit maximum borrowing capacity | 20,000,000 | ||||||
Repayments of lines of credit | 982,255 | ||||||
Minimum cash balance required under existing loan documents | 5,000,000 | ||||||
Warrants issued for financing costs | 64,286 | ||||||
Warrants issued for financing costs, warrants | 1,428,572 | ||||||
Exercise price of warrants granted | 1.1 | ||||||
Interest expense | 284,692 | 569,388 | |||||
Fair value of warrants | $1,535,714 |
JOINT_VENTURE_AGREEMENT_Detail
JOINT VENTURE AGREEMENT (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | ||
Nov. 16, 2009 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
N | ||||
Percentage owned by company of each joint venture | 50.00% | |||
Interest rate on project notes and preferential returns, per investment agreement | 10.00% | |||
Amortization of debt discount | $2,152,055 | $2,135,209 | ||
Other current liabilities | 791,284 | 538,142 | ||
Warrants [Member] | ||||
Fair value adjustment recorded as non-cash costs | 76,535 | |||
Joint Venture - Rockwell [Member] | ||||
Percentage owned by company of each joint venture | 50.00% | |||
Funding by Rockwell into the Joint Venture, cash | 1,151,205 | |||
Promissory note amounts | 575,603 | 1,075,000 | 1,012,000 | |
Investment Interest issued to Rockwell as Preferential Return | 575,602 | |||
Fair value of warrants issued to Rockwell for providing funding | 25,327 | |||
Discount on debt recorded | 636,752 | |||
Amortization of debt discount | 65,976 | |||
Monthly revenue lost due to Hillcrest termination | 20,000 | |||
De-installation costs incurred | 3,000 | |||
Number of units remaining at Hillcrest site | 100 | |||
Other current liabilities | 10,250 | |||
Joint Venture - Rockwell [Member] | Warrants [Member] | ||||
Warrants issued for financing costs, warrants | 1,151,206 | |||
Fair value of warrants issued to Rockwell for providing funding | $1,124,728 |
VARIABLE_INTEREST_ENTITIES_Det
VARIABLE INTEREST ENTITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Assets | ||
Receivables | $680,143 | $305,033 |
Total current assets | 3,503,315 | 4,595,744 |
Property, net | 5,344,792 | 6,364,609 |
Total assets | 9,942,320 | 12,437,896 |
Liabilities | ||
Accounts payable | 244,782 | 414,888 |
Accrued interest | 191,596 | 127,327 |
Other current liabilities | 791,284 | 538,142 |
Total liabilities | 25,247,355 | 18,533,956 |
Variable Interest Entity [Member] | ||
Assets | ||
Cash | 2,770 | 958 |
Receivables | 2,365 | 4,861 |
Total current assets | 5,135 | 5,819 |
Property, net | 46,762 | 99,348 |
Total assets | 51,897 | 105,167 |
Liabilities | ||
Accounts payable | 122,558 | 114,089 |
Notes payable | 441,594 | 442,519 |
Mandatorily redeemable interest | 441,594 | 442,519 |
Accrued interest | 191,596 | 121,597 |
Other current liabilities | 24,889 | 37,731 |
Total liabilities | $1,222,231 | $1,158,455 |
VARIABLE_INTEREST_ENTITIES_Det1
VARIABLE INTEREST ENTITIES (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue, net | $3,061,298 | $2,068,771 |
Network operations expense | 3,386,645 | 2,477,430 |
General and administrative expense | 3,282,816 | 3,036,702 |
Depreciation | 1,651,310 | 1,611,546 |
Total operating expense | 9,840,581 | 8,985,498 |
Operating income (loss) | -6,779,283 | -6,916,727 |
Loss before taxes | -14,510,065 | -13,667,911 |
Provision for taxes | ||
Net loss attributable to noncontrolling interest | -58,340 | -48,717 |
Net loss attributable to CareView Communications, Inc. | -14,451,725 | -13,619,194 |
Variable Interest Entity [Member] | ||
Revenue, net | 28,452 | 29,154 |
Network operations expense | 16,665 | 16,844 |
General and administrative expense | -12,089 | -21,165 |
Depreciation | 50,771 | 53,248 |
Total operating expense | 55,347 | 48,927 |
Operating income (loss) | -26,895 | -19,773 |
Other income (expense) | -89,785 | -77,661 |
Loss before taxes | 116,680 | -97,434 |
Provision for taxes | ||
Net loss | 116,680 | -97,434 |
Net loss attributable to noncontrolling interest | -58,340 | -48,717 |
Net loss attributable to CareView Communications, Inc. | ($58,340) | ($48,717) |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jan. 16, 2014 | Feb. 25, 2015 | Feb. 17, 2015 | Mar. 31, 2015 | Aug. 19, 2013 | Mar. 15, 2015 | Apr. 21, 2011 | |
Senior secured convertible notes | $22,834,641 | $15,206,834 | |||||||
Exercise price of options granted | $0.42 | $0.51 | |||||||
Minimum cash balance required under existing loan documents | 4,000,000 | 5,000,000 | 5,000,000 | ||||||
HealthCor [Member] | |||||||||
Warrants issued for financing costs, warrants | 4,000,000 | ||||||||
Exercise price of warrants granted | 0.4 | ||||||||
Debt conversion rate | $0.40 | $1.25 | |||||||
Minimum cash balance required under existing loan documents | 2,000,000 | ||||||||
Subsequent Event [Member] | 2015 Option Plan [Member] | |||||||||
Shares reserved for option under the plan | 5,000,000 | ||||||||
Subsequent Event [Member] | 2015 Option Plan [Member] | Steven G. Johnson [Member] | |||||||||
Shares reserved for option under the plan | 1,000,000 | ||||||||
Exercise price of options granted | $0.53 | ||||||||
Subsequent Event [Member] | 2015 Option Plan [Member] | Jeffrey C. Lightcap [Member] | |||||||||
Shares reserved for option under the plan | 150,000 | ||||||||
Exercise price of options granted | $0.53 | ||||||||
Subsequent Event [Member] | 2015 Option Plan [Member] | L. Allen Wheeler [Member] | |||||||||
Shares reserved for option under the plan | 150,000 | ||||||||
Exercise price of options granted | $0.53 | ||||||||
Subsequent Event [Member] | 2015 Option Plan [Member] | Steven Epstein [Member] | |||||||||
Shares reserved for option under the plan | 50,000 | ||||||||
Exercise price of options granted | $0.53 | ||||||||
Subsequent Event [Member] | HealthCor [Member] | Senior Convertible Notes - 2015 Issuance [Member] | |||||||||
Senior secured convertible notes | 6,000,000 | ||||||||
Warrants issued for financing costs, warrants | 3,692,308 | ||||||||
Exercise price of warrants granted | 0.52 | ||||||||
Debt conversion rate | $0.52 | ||||||||
Subsequent Event [Member] | HealthCor [Member] | Senior Convertible Notes - 2015 Issuance [Member] | |||||||||
Warrants issued for financing costs, warrants | 1,000,000 | ||||||||
Exercise price of warrants granted | 0.53 | ||||||||
Minimum cash balance required under existing loan documents | $200,000 |