CareView Communications (CRVW) 10-Q 15 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 15, 2018
Document And Entity Information
Entity Registrant Name	CareView Communications Inc
Entity Central Index Key	1,377,149
Document Type	10-Q
Trading Symbol	CRVW
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
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 Common Stock, Shares Outstanding		139,380,748
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 1,739,057	$ 2,066,392
Accounts receivable	1,288,300	1,210,968
Other current assets	1,609,204	585,622
Total current assets	4,636,561	3,862,982
Property and equipment, net	3,014,504	3,321,541
Other Assets:
Restricted cash	2,500,000	2,500,000
Intangible assets, net	702,331	665,918
Other assets	1,663,889	1,767,909
Total other assets	4,866,220	4,933,827
Total assets	12,517,285	12,118,350
Current Liabilities:
Accounts payable	730,206	365,300
Notes payable, current portion	10,250,000	8,533,334
Other current liabilities	708,404	750,056
Total current liabilities	11,688,610	9,648,690
Long-term Liabilities:
Senior secured convertible notes, net of debt discount and debt costs of $17,322,380 and $18,161,723, respectively	57,180,255	52,397,089
Loan payable	10,000,000	11,666,666
Note payable	413,786	513,786
Accrued interest	52,512	43,583
Total long-term liabilities	67,646,553	64,621,124
Total liabilities	79,335,163	74,269,814
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 issued and outstanding	139,381	139,381
Additional paid in capital	83,752,543	83,617,896
Accumulated deficit	(150,709,802)	(145,908,741)
Total stockholders' deficit	(66,817,878)	(62,151,464)
Total liabilities and stockholders' deficit	$ 12,517,285	$ 12,118,350

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Debt discount and debt issuance costs (in dollars)	$ 17,322,380	$ 18,161,723
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	20,000,000	20,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	300,000,000	300,000,000
Common stock, issued	139,380,748	139,380,748
Common stock, outstanding	139,380,748	139,380,748

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenues, net	$ 1,582,514	$ 1,497,693
Operating expenses:
Network operations	985,223	1,153,448
General and administration	891,511	1,083,022
Sales and marketing	155,922	193,722
Research and development	324,098	410,229
Depreciation and amortization	404,422	453,682
Total operating expense	2,761,176	3,294,103
Operating loss	(1,178,662)	(1,796,410)
Other income and (expense)
Interest expense	(3,635,067)	(3,220,762)
Interest income	1,067	3,014
Other income	11,601	6,112
Total other income (expense)	(3,622,399)	(3,211,636)
Loss before taxes	(4,801,061)	(5,008,046)
Provision for income taxes
Net loss	$ (4,801,061)	$ (5,008,046)
Net loss per share (in dollars per share)	$ (0.03)	$ (0.04)
Weighted average number of common shares outstanding, basic and diluted (in shares)	139,380,748	139,380,748

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITES
Net loss	$ (4,801,061)	$ (5,008,046)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation	392,818	443,246
Amortization of debt discount and debt costs	871,127	753,468
Amortization of deferred installation costs	42,801	76,634
Amortization of deferred debt issuance and debt financing costs	75,240	72,771
Amortization of intangible assets	11,604	10,436
Interest incurred and paid in kind	1,893,823	1,701,961
Stock based compensation related to options granted	89,048	120,376
Stock based costs related to warrants issued	13,814	11,512
Loss on disposal of assets	6,725
Changes in operating assets and liabilities:
Accounts receivable	(77,332)	(64,294)
Other current assets	(1,023,582)	(240,785)
Other assets	4,098	4,098
Accounts payable	364,906	141,427
Accrued expenses and other current liabilities	(32,723)	65,845
Net cash flows used in operating activities	(2,168,694)	(1,911,351)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(92,506)	(99,264)
Payment for deferred installation costs	(18,119)	(36,423)
Patent, trademark and other intangible asset costs	(48,016)	(13,888)
Net cash flows used in investing activities	(158,641)	(149,575)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from senior secured convertible promissory notes	2,050,000
Repayment of notes payable	(50,000)	(200,000)
Net cash flows provided by financing activities	2,000,000	(200,000)
Decrease in cash	(327,335)	(2,260,926)
Cash and cash equivalent, beginning of period	2,066,392	10,088,258
Cash and cash equivalents, end of period	1,739,057	7,827,332
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	675,000	676,000
Cash paid for income taxes
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Beneficial conversion features for senior secured convertible notes	31,784	63,586
Revaluation of warrants for modification of loan	$ 13,814

BASIS OF PRESENTATION AND RECEN

BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	NOTE 1 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Interim Financial Statements The accompanying unaudited interim condensed consolidated financial statements of CareView Communications, Inc. (“CareView”, the “Company”, “we”, “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC on March 30, 2018. Revenue Recognition We adopted Accounting Standards Codification (“ASC”) Topic 606 (“606”) on January 1, 2018 using the full retrospective transition method for recognizing revenue. The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of our services to our customers and will provide financial statement readers with enhanced disclosures. Under ASC 606, there were no differences in the timing of our revenue recognition as compared to the requirements under ASC 605. We have employed the practical expedient discussed in ASC 606-10-55-18 related to invoicing as we have the right to consideration from our customers in the amount that corresponds directly with the value to the customer of our performance completed to date and therefore we recognize revenue upon invoicing as further discussed below. Further, for those customers for which we are required to collect sales taxes, we record such sales taxes on a net basis which has no effect on the amount of revenue or expenses recognized as the sales taxes are a flow through to the taxing authority. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. We offer CareView’s services through a subscription-based contract with each healthcare facility for a standard term of three to five years and have determined we have one performance obligation for our services. We begin to bill monthly subscription fees to the healthcare facility upon official acceptance of the CareView System by the healthcare facility which is when the service initiated. When services begin, the customer simultaneously receives the use and benefit of that service and we recognize the revenue over time based on the service completed to date as the amount invoiced each month. The contract requires the healthcare 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 healthcare facility requires additional services, the contract is amended accordingly. The company evaluated the disaggregation criteria of ASC 606 and determine that based on the nature, amount, timing and uncertainty of our service revenues, there were no material differences that merited further disaggregation as compared to the total revenue as reported in the accompanying consolidated statements of operations. We defer and capitalize all costs associated with the installation of the CareView System into a healthcare facility until the CareView System is fully operational and accepted by the healthcare facility. Installation costs are specifically identifiable based on the amounts we are charged from third party installers or directly identifiable labor hours incurred for each installation. Upon acceptance, the associated costs are expensed on a straight-line basis over the life of the contract with the healthcare facility. These costs are included in network operations on the accompanying consolidated statements of operations. The table below details the activity in these deferred installation costs during the three months ended March 31, 2018. Balance, December 31, 2017 $215,548 Additions 18,119 Transfer to revenue (42,801) Balance, March 31, 2018 $190,866 From time to time, we enter into contracts with healthcare facilities wherein full payment of the contractual obligation is paid in advance (“PIA Contracts”). The transaction is recorded as a contract liability in our consolidated financial statements, with revenue recorded and the contract liability reduced as services are provided under the contract. The table below details this activity during the three months ended March 31, 2018. Balance, December 31, 2017 $17,430 Additions 87,062 Transfer to revenue (37,409) Balance, March 31, 2018 $67,083 Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, except in the case of PIA Contracts as detailed above, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional and are reported accordingly on our consolidated financial statements. 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 shares of common stock 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 and convertible debt. Potential common shares totaling approximately 174,000,000 and 124,000,000 at March 31, 2018 and 2017, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to our reported net loss. Recently Issued and Newly Adopted Accounting Pronouncements I Statement of Cash Flows (Topic 230) Aside from the change noted in Revenue Recognition NOTE 2

GOING CONCERN, LIQUIDITY AND MA

GOING CONCERN, LIQUIDITY AND MANAGEMENT'S PLAN	3 Months Ended
	Mar. 31, 2018
Going Concern Liquidity And Managements Plan
GOING CONCERN, LIQUIDITY AND MANAGEMENT'S PLAN	NOTE 2 – GOING CONCERN, LIQUIDITY AND MANAGEMENT’S PLAN Our cash position at March 31, 2018 was approximately $1,739,000. At March 31, 2018, we also had $2,500,000 included in restricted cash in other assets on the condensed consolidated balance sheet. 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 $2,000,000 (see NOTE 10 Accounting standards require management to evaluate our ability to continue as a going concern for a period of one year subsequent to the date of the filing of this Form 10-Q (“evaluation period”). As such, we have evaluated if cash and cash equivalents on hand and cash generated through operating activities would be sufficient to sustain projected operating activities through May 15, 2019. We anticipate that our current resources, along with cash generated from operations, will not be sufficient to meet our cash requirements throughout the evaluation period, including funding anticipated losses and scheduled debt maturities. We expect to seek additional funds from a combination of dilutive and/or non-dilutive financings in the future. Because such transactions have not been finalized, receipt of additional funding is not considered probable under current accounting standards. If we do not generate sufficient cash flows from operations and obtain sufficient funds when needed, we expect that we would scale back our operating plan by deferring or limiting some, or all, of our capital spending, reducing our spending on travel, and/or eliminating planned headcount additions, as well as other cost reductions to be determined. Because such contingency plans have not been finalized (the specifics would depend on the situation at the time), such actions also are not considered probable for purposes of current accounting standards. Because, under current accounting standards, neither future cash generated from operating activities, nor management’s contingency plans to mitigate the risk and extend cash resources through the evaluation period, are considered probable, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern. As we continue to incur losses, our transition to profitability is dependent upon achieving a level of revenues adequate to support its cost structure. We may never achieve profitability, and unless and until doing so, we intend to fund future operations through additional dilutive or non-dilutive financings. There can be no assurances, however, that additional funding will be available on terms acceptable to us, if at all.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITY	NOTE 3 – STOCKHOLDERS’ EQUITY Warrants to Purchase Common Stock of the Company We use the Black-Scholes-Merton option pricing model (“Black-Scholes Model”) to determine the fair value of warrants to purchase Common Stock of the Company (“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 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. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the expected life of the award. Our estimated volatility is an average of the historical volatility of our stock prices (and that of peer entities whose stock prices were publicly available) over a period equal to the expected life of the awards. 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. Warrant Activity during the Three Months Ended March 31, 2018 On February 23, 2018, we issued an aggregate of 487,500 ten-year Warrants (with a fair value of $10,237) at an exercise price of $0.05 per share to certain directors and officers and 25,000 ten-year Warrants (with a fair value of $525) at an exercise price of $0.05 per share to an entity. On March 31, 2018, 2,500,000 Warrants issued in connection with a private placement completed in April 2013 expired and the fair value of $11,157 was written off and recorded as expense on the accompanying condensed consolidated financial statements. Warrant Activity during the Three Months Ended March 31, 2017 During the three months ended March 31, 2017, no Warrants were issued and none were exercised or expired. On March 31, 2017 we had recorded a warrant liability of $629 in our condensed consolidated financial statements related to warrants issued in connection with a private placement completed in April 2013. Options to Purchase Common Stock of the Company During the three months ended March 31, 2018, no options to purchase our Common Stock (the “Option(s)”) were granted. During the same three-month period, 597,998 Options were canceled. A summary of our stock option activity and related information follows: Number of Shares Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2017 22,660,459 $ 0.27 8.1 $ — Granted — $ — — $ — Canceled (597,998 ) Balance at March 31, 2018 22,062,461 $ 0.27 7.9 $ — Vested and Exercisable at March 31, 2018 11,442,165 $ 0.43 6.5 $ — The valuation methodology used to determine the fair value of the Options issued was the Black-Scholes Model. The assumptions used in the Black-Scholes Model are set forth in the table below. Three Months Ended March 31, 2018 Year Ended December 31, 2017 Risk-free interest rate —% 1.17-2.15% Volatility —% 78.40-89.93% Expected life in years 6 6 Dividend yield 0.00 % 0.00 % The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the expected term of the Option and is calculated by using the average daily historical stock prices through the day preceding the grant date. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the expected life of the award. Our estimated volatility is an average of the historical volatility of our stock prices. Our calculation of estimated volatility is based on historical stock prices over a period equal to the expected life of the awards. Share-based compensation expense for Options charged to our operating results for the three months ended March 31, 2018 and 2017 ($89,048 and $120,376, respectively) is based on awards vested. The estimate of forfeitures are to be recorded at the time of grant and revised in subsequent periods if actual forfeitures differ from the estimates. We have not included an adjustment to our stock-based compensation expense based on the nominal amount of the historical forfeiture rate. We do, however, revise our stock-based compensation expense based on actual forfeitures during each reporting period. At March 31, 2018, total unrecognized estimated compensation expense related to non-vested Options granted prior to that date was approximately $451,000, which is expected to be recognized over a weighted-average period of 2.1 years. No tax benefit was realized due to a continued pattern of operating losses.

OTHER CURRENT ASSETS

OTHER CURRENT ASSETS	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
OTHER CURRENT ASSETS	NOTE 4 – OTHER CURRENT ASSETS Other current assets consist of the following: March 31, 2018 December 31, 2017 Prepaid equipment $ 1,342,390 $ 465,847 Prepaid expenses 248,710 98,659 Other current assets 18,104 21,119 TOTAL OTHER CURRENT ASSETS $ 1,609,204 $ 585,622

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment consist of the following: March 31, 2018 December 31, 2017 Network equipment $ 13,641,064 $ 13,610,280 Office equipment 291,003 291,003 Vehicles 217,004 217,004 Test equipment 175,148 177,386 Furniture 90,827 90,827 Warehouse equipment 9,524 9,524 Leasehold improvements 5,121 5,121 14,429,691 14,401,145 Less: accumulated depreciation (11,415,188 ) (11,079,604 ) TOTAL PROPERTY AND EQUIPMENT $ 3,014,504 $ 3,321,541 Depreciation expense for the three months ended March 31, 2018 and 2017 was $392,818 and $443,246, respectively.

OTHER ASSETS

OTHER ASSETS	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
OTHER ASSETS	NOTE 6 – OTHER ASSETS Intangible assets consist of the following: March 31, 2018 Cost Accumulated Amortization Net Patents and trademarks $ 849,909 $ 157,539 $ 692,370 Other intangible assets 63,509 53,548 9,961 TOTAL INTANGIBLE ASSETS $ 913,418 $ 211,087 $ 702,331 December 31, 2017 Cost Accumulated Amortization Net Patents and trademarks $ 806,279 $ 146,246 $ 660,033 Other intangible assets 59,122 53,237 5,885 TOTAL INTANGIBLE ASSETS $ 865,401 $ 199,483 $ 665,918 Other assets consist of the following: March 31, 2018 Cost Accumulated Amortization Net Deferred debt issuance costs $ 1,302,223 $ 498,607 $ 803,616 Prepaid financing costs 805,918 324,712 481,206 Deferred installation costs 1,766,937 1,576,071 190,866 Prepaid license fee 249,999 107,922 142,077 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 4,171,201 $ 2,507,312 $ 1,663,889 Other assets consist of the following: December 31, 2017 Cost Accumulated Amortization Net Deferred debt issuance costs $ 1,257,778 $ 451,216 $ 806,562 Deferred financing costs 850,363 296,863 533,500 Deferred installation costs 1,748,818 1,533,270 215,548 Prepaid license fee 249,999 103,824 146,175 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 4,153,082 $ 2,385,173 $ 1,767,909

OTHER CURRENT LIABILITIES

OTHER CURRENT LIABILITIES	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
OTHER CURRENT LIABILITIES	NOTE 7 – OTHER CURRENT LIABILITIES Other current liabilities consist of the following: March 31, 2018 December 31, 2017 Allowance for system removal $ 218,250 $ 176,750 Accrued insurance 133,935 — Accrued rent expense 101,008 120,433 Other accrued liabilities 67,922 58,623 Deferred revenue 67,083 17,430 Accrued paid time off 60,038 112,577 Accrued taxes 60,168 127,225 Accrued professional services — 137,018 TOTAL OTHER CURRENT LIABILITIES $ 708,404 $ 750,056

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 8 – INCOME TAXES Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We do not expect to pay any significant federal or state income tax for 2018 as a result of the losses recorded during the three months ended March 31, 2018 and the additional losses expected for the remainder of 2018 and net operating loss carry forwards from prior years. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As of March 31, 2018, we maintained a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded. There were no recorded unrecognized tax benefits at the end of the reporting period. The Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017. Among its numerous changes to the Internal Revenue Code, the Act reduces U.S. corporate rates from 35% to 21%. Additionally, the Act limits the use of net operating loss carry backs, however any future net operating losses will instead be carried forward indefinitely. Only 80% of current income will be able to be offset with a net operating loss carryforward, with the remainder of the net operating loss continuing to carry forward. Based on an initial assessment of the Act, the Company believes that the most significant impact on the Company’s consolidated financial statements will be reduction of deferred tax assets related to net operating losses and research and development tax credits. Such reduction is expected to be largely offset by changes to the Company’s valuation allowance.

AGREEMENT WITH PDL BIOPHARMA, I

AGREEMENT WITH PDL BIOPHARMA, INC.	3 Months Ended
	Mar. 31, 2018
Agreement With Pdl Biopharma Inc.
AGREEMENT WITH PDL BIOPHARMA, INC.	NOTE 9 – AGREEMENT WITH PDL BIOPHARMA, INC. On June 26, 2015, we entered into a Credit Agreement with PDL BioPharma, Inc. (“PDL”), as administrative agent and lender (“the Lender”) (the “PDL Credit Agreement”). Under the PDL Credit Agreement the Lender made available to us up to $40 million in two tranches of $20 million each. Tranche One was funded on October 8, 2015 (the “Tranche One Loan’). Pursuant to the terms of the PDL Credit Agreement and having not met the Tranche Two Milestones by July 26, 2017, the Tranche Two funding was terminated in full. Outstanding borrowings under the Tranche One Loan bears interest at the rate of 13.5% per annum, payable quarterly in arrears. The PDL Credit Agreement, as modified, includes a minimum cash balance requirement of $2,500,000, which has been recorded as restricted cash on the condensed consolidated balance sheet at March 31, 2018, and should we drop below $2,500,000, it will trigger a default. On October 7, 2015, we entered into a First Amendment to the PDL Credit Agreement (the “First Amendment”). The First Amendment modified the conditions precedent to the funding of each tranche, such that, among other things, we no longer need to attain a specified milestone relating to the placement of our products in order for the Lender to fund us the Tranche One Loan. Contemporaneously with the execution of the First Amendment we borrowed the Tranche One Loan and issued to the Lender a term note in the principal amount of $20 million (the “Tranche One Term Note”), payable in accordance with the terms of the PDL Credit Agreement, as amended. On December 28, 2017, the Company and PDL Investment Holdings, LLC (as assignee of PDL) (“PDL Investment”) entered into a Binding Forbearance Term Sheet (the “Forbearance Term Sheet”) in order to modify certain provisions of the PDL Credit Agreement to prevent any Events of Default from occurring on December 31, 2017. This Forbearance Term Sheet was the governing document until February 2, 2018, at which time, the Company and PDL Investment entered into a Modification Agreement (the “PDL Modification Agreement”), effective December 28, 2017, with respect to the PDL Credit Agreement which reiterated the terms included in the Forbearance Term Sheet and effective February 2, 2018, entered into certain consents and amendments with respect to other existing agreements. In accordance with GAAP, we accounted for this transaction as a debt modification, wherein consideration given to PDL was recorded as deferred closing costs and all third-party payments were considered an expense and record as such on the accompanying condensed consolidated financial statements. Details of the PDL Modification Agreement are included in our Form 10-K filed with the SEC on March 30, 2018. In accordance with the PDL Credit Agreement, as amended, interest only payments of $675,000 for each of the first nine interest payment dates (December 31, 2015, March 31, June 30, September 30, and December 31, 2016, March 31, June 30, September 30, 2017 and December 31, 2017) were made timely. Pursuant to the terms of the PDL Modification Agreement, the first principal payment on the Tranche One Loan due on December 31, 2017 in the amount of $1,666,667, and similar principal payments due on March 31, 2018, June 30, 2018 and September 30, 2018 have been delayed and are included in the payment due on December 31, 2018. Quarterly payments under the PDL Credit Agreement subsequent to the PDL Modification Agreement will be due as detailed in the PDL Credit Agreement. We may elect to prepay the Loans at any time without any premium or penalty, subject to certain conditions. The obligations under the PDL Credit Agreement are secured by a pledge of substantially all of the assets of the Company and certain of its domestic subsidiaries. We executed a Subordination and Intercreditor Agreement (the “Subordination and Intercreditor Agreement”), with the Lender, HealthCor and the 2015 and 2018 Investors (as defined in NOTE 10 The PDL Credit Agreement contains customary affirmative covenants for transactions of this type and other affirmative covenants agreed to by the Company and the Lender, including, among others, the provision of annual and quarterly reports, maintenance of property, insurance, compliance with laws and contractual obligations and payment of taxes. The PDL Credit Agreement contains customary negative covenants for transactions of this type and other negative covenants agreed to by the Company and the Lender, including, among others, restrictions on the incurrence of indebtedness, the granting of liens, making restricted payments and investments, entering into affiliate transactions and transferring assets. The PDL Credit Agreement also provides for a number of customary events of default, including payment, bankruptcy, covenant, representation and warranty and judgment defaults. In addition, contemporaneously with the execution of the PDL Credit Agreement the Company and the Lender executed (i) a Registration Rights Agreement (as amended in the PDL Modification Agreement as discussed above) pursuant to which we agreed to provide the Lender with certain registration rights with respect to the shares of Common Stock issuable upon exercise of the PDL Warrant (the “PDL RRA”), (ii) a Guarantee and Collateral Agreement (the “Guarantee and Collateral Agreement”) pursuant to which certain of our subsidiaries guaranteed the performance of our obligations under the PDL Credit Agreement and granted the Lender a security interest in such subsidiaries’ tangible and intangible assets securing our performance of the same, and (iii) a Patent Security Agreement and a Trademark Security Agreement pursuant to which we granted the Lender a security interest in a certain subsidiary’s tangible and intangible assets securing the performance of our obligations under the PDL Credit Agreement. Accounting Treatment In connection with the PDL Credit Agreement, we issued the PDL Warrant to the Lender. The fair value of the PDL Warrant at issuance was $1,257,778, which has been recorded as deferred issuance costs in the accompanying condensed consolidated financial statements. The deferred debt issuance costs associated with the PDL Credit Agreement are recorded as assets in accordance with the accounting standards as the PDL Credit Agreement is considered to be a credit facility and the warrants were payment for the facility and not the drawdowns. These costs are amortized to interest expense using the straight-line method over the term of the PDL Credit Agreement. Upon amendment of the PDL Warrant (the “Amended Warrant”), we evaluated whether there was an increase in fair value which would require recognition of additional costs. No such increase in fair value was noted and no adjustment to the PDL Warrant valuation was necessary. The Second Amendment to the PDL Warrant resulted in an increase in fair value of $44,445, which was recorded as additional deferred financing costs in the accompanying condensed consolidated financial statements. For the three-month periods ended March 31, 2018 and 2017, $47,391 and $44,922, respectively, was amortized to interest expense. As of March 31, 2018, the PDL Warrant has not been exercised. We also incurred certain closing costs related to the PDL Credit Agreement totaling $805,917 in the accompanying condensed consolidated financial statements. These costs have been recorded as deferred closing costs and are being amortized to interest expense over the term of the PDL Credit Agreement. For both three month-periods ended March 31, 2018 and 2017, $27,849 was amortized to interest expense.

AGREEMENT WITH HEALTHCOR

AGREEMENT WITH HEALTHCOR	3 Months Ended
	Mar. 31, 2018
Agreement With Healthcor
AGREEMENT WITH HEALTHCOR	NOTE 10 – AGREEMENT WITH HEALTHCOR On April 21, 2011, we entered into a Note and Warrant Purchase Agreement (as subsequently amended) (the “HealthCor Purchase Agreement”) with HealthCor. Pursuant to the terms 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 quarter. For the period from April 21, 2016 through March 31, 2018 interest has been added to the outstanding principal balance. 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 March 31, 2018, the underlying shares of our Common Stock related to the 2011 HealthCor Notes totaled approximately 36,000,000. 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. For the period from January 31, 2017 through March 31, 2018 interest has been added to the outstanding principal balance. As of March 31, 2018, the underlying shares of our Common Stock related to the 2012 HealthCor Notes totaled approximately 8,000,000. 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 allowed 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 March 31, 2018, the underlying shares of our Common Stock related to the 2014 HealthCor Notes totaled approximately 21,000,000. On December 4, 2014, we entered into a Fifth Amendment to the HealthCor Purchase Agreement (the “Fifth Amendment”) with HealthCor and certain additional investors (such additional investors, the “2015 Investors” and, collectively with HealthCor Partners Fund, LP, the “Investors”) and agreed to sell and issue (i) additional notes in the initial aggregate principal amount of $6,000,000,with a conversion price per share of $0.52 (subject to adjustment as described therein) (the “Fifth Amendment Notes”) and (ii) additional Warrants for an aggregate of up to 3,692,308 shares of our Common Stock at an exercise price per share of $0.52 (subject to adjustment as described therein) (the “Fifth Amendment Warrants”). As provided by the Fifth Amendment, the Fifth Amendment 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 Fifth Amendment Notes. The Fifth Amendment Notes have a maturity date of February 16, 2025. 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. The 2015 Investors are composed of all but one of our current directors and one of our officers. On February 17, 2015, the Company and the Investors closed on the transactions contemplated by the Fifth Amendment. In connection with this closing, the Company and the Investors entered into an Amended and Restated Pledge and Security Agreement (the “Amended Security Agreement”), amending and restating that certain Pledge and Security Agreement dated as of April 20, 2011, and an Amended and Restated Intellectual Property Security Agreement (the “Amended IP Security Agreement”), amending and restating that certain Intellectual Property Security Agreement dated as of April 20, 2011. As of March 31, 2018, the underlying shares of our Common Stock related to the Fifth Amendment Notes totaled approximately 3,000,000 to HealthCor and 14,000,000 to the 2015 Investors. On March 31, 2015, we entered into the Sixth Amendment to the HealthCor Purchase Agreement (the “Sixth Amendment”) pursuant to which, among other things, (i) the requirement to maintain a minimum cash balance of $5,000,000 was reduced to a minimum cash balance of $2,000,000 and (ii) the amendment provision was revised to permit the HealthCor Purchase Agreement to be amended by the Company and the holders of the majority of the Common Stock underlying the outstanding notes and warrants to purchase shares of our Common Stock sold pursuant to the HealthCor Purchase Agreement. On March 31, 2015, we also issued a warrant to HealthCor to purchase up to an aggregate of 1,000,000 shares of our Common Stock in consideration for certain prior waivers of the minimum cash balance requirement in the HealthCor Purchase Agreement (the “Sixth Amendment Warrant”). The Sixth Amendment Warrant has an exercise price per share of $0.53 (subject to adjustment as described therein) and an expiration date of March 31, 2025. On June 26, 2015, we (i) entered into a Seventh Amendment to the HealthCor Purchase Agreement (the “Seventh Amendment”) pursuant to which the HealthCor Purchase Agreement was amended to permit the Company to enter into and perform its obligations under the PDL Credit Agreement (as detailed in NOTE 9 On February 23, 2018, we entered into a Fifth Amendment to the HealthCor Purchase Agreement (the “Eighth Amendment”) with HealthCor and certain additional investors (such additional investors, the “2018 Investors” and, collectively with HealthCor Partners Fund, LP, the “Investors”) and agreed to sell and issue (i) additional notes in the initial aggregate principal amount of $2,050,000,with a conversion price per share of $0.05 (subject to adjustment as described therein) (the “Eighth Amendment Notes”) and (ii) additional Warrants for an aggregate of up to 512,500 shares of our Common Stock at an exercise price per share of $0.05 (subject to adjustment as described therein) (the “Eighth Amendment Warrants”). As provided by the Eighth Amendment, the Eighth Amendment 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 Fifth Amendment Notes. The Eighth Amendment Notes have a maturity date of February 22, 2028. 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. The 2018 Investors are composed of all but one of our current directors, one of our officers and an entity. As of March 31, 2018, the underlying shares of our Common Stock related to the Eighth Amendment Notes totaled approximately 42,000,000 to the 2018 Investors. 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 due to the down round provision and the removal of the provision requiring liability treatment, 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. We recorded an aggregate of $849,827 and $733,240 in interest for the three months ended March 31, 2018 and 2017, respectively, related to these transactions. The face amount of the 2012 HealthCor Notes, 2014 HealthCor Notes, the Fifth Amendment Notes and the Eighth Amendment Notes and all accrued PIK interest also qualify for BCF treatment as discussed above. During the three months ended March 31, 2018 and 2017, we recorded a BCF of $31,784 and $63,585, 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 issued with the Fifth Amendment Notes, the proceeds were allocated to the instruments based on relative fair value as the warrants did not contain any features requiring liability treatment and therefore were classified as equity. The value allocated to the Fifth Amendment Warrants was $1,093,105, which was recorded as debt discount with the credit to additional paid in capital. We recorded an aggregate of $6,849, and $5,776 in interest for the three months ended March 31, 2018 and 2017, respectively, related to the Fifth Amendment Notes and Fifth Amendment Warrants. The carrying value of the Fifth Amendment Notes at March 31, 2018 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. The Warrants issued with the Sixth Amendment also did not contain features requiring liability accounting and were recorded at fair value on the date of issuance with the offsetting credit recorded in equity. The value allocated to the Sixth Amendment Warrant was $378,000, which was recorded as debt costs with the credit to additional paid in capital. We recorded an aggregate of $14,451 in interest for both three month-periods ended March 31, 2018 and 2017. As Warrants were issued with the Eighth Amendment Notes, the proceeds were allocated to the instruments based on relative fair value as the warrants did not contain any features requiring liability treatment and therefore were classified as equity. The value allocated to the Eighth Amendment Warrants was $10,707 and was recorded as interest expense with the credit to additional paid in capital. The carrying value of the Eighth Amendment Notes at March 31, 2018 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.

JOINT VENTURE AGREEMENT

JOINT VENTURE AGREEMENT	3 Months Ended
	Mar. 31, 2018
Equity Method Investments and Joint Ventures [Abstract]
JOINT VENTURE AGREEMENT	NOTE 11 – 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) “). On January 31, 2017, under the terms of the Rockwell Agreement, wherein we had the option to purchase Rockwell’s interest in the Project LLCs, we exercised that right by entering into a Settlement and LLC Interest Purchase Agreement with Rockwell (the “Settlement Agreement). Pursuant to the terms of the Settlement Agreement, we paid Rockwell the aggregate amount of $1,213,786 by the issuance of a promissory note to Rockwell for $1,113,786 (the “Rockwell Note”) and a cash payment of $100,000. Pursuant to the terms of the Rockwell Note, we were to make quarterly principal payments of $100,000, with each payment being made on the last day of each calendar quarter beginning with the first payment date of March 31, 2017 and continuing on the last business day of each subsequent quarter through September 30, 2019 with the final payment of $13,786, representing the remaining principal balance plus all accrued and unpaid interest, due on December 31, 2019. On February 2, 2018, pursuant to the terms of PDL Modification Agreement, we entered into an amendment to the Rockwell Note wherein the quarterly payments under the Rockwell Note were reduced to $50,000 per quarter during the term of the PDL Modification Agreement, which ends December 31, 2018, at which time the payments will revert back to $100,000 per quarter starting March 31, 2019 through September 30, 2019 with the final payment of $307,538, representing the remaining principal balance plus all accrued and unpaid interest, due on December 31, 2019. We were not in default of any conditions under the Settlement Agreement as of March 31, 2018. As additional consideration to Rockwell for entering into the Rockwell Agreement, 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”), which amount was fully amortized at December 31, 2015. Pursuant to the terms of the Settlement Agreement, the expiration date of the Project Warrant was extended from November 16, 2017 to November 16, 2022. All other provisions of the Project Warrant remained unchanged. At the time of the extension, the Project Warrant were revalued resulting in a $11,512 increase in fair value, which has been recorded as non-cash costs included in general and administration expense in the accompanying consolidated financial statements. Effective February 2, 2018, pursuant to the terms of the PDL Modification Agreement, we entered into an amendment to the Project Warrant wherein the Project Warrant’s exercise price was changed from $0.52 to $0.05, resulting in a $13,814 increase in fair value, which was recorded as non-cash costs included in general and administration expense in the consolidated financial statements for the year ended December 31, 2017.

BASIS OF PRESENTATION AND REC17

BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies)	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interim Financial Statements	Interim Financial Statements The accompanying unaudited interim condensed consolidated financial statements of CareView Communications, Inc. (“CareView”, the “Company”, “we”, “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC on March 30, 2018.
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 shares of common stock 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 and convertible debt. Potential common shares totaling approximately 174,000,000 and 124,000,000 at March 31, 2018 and 2017, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to our reported net loss.
Recently Issued and Newly Adopted Accounting Pronouncements	Recently Issued and Newly Adopted Accounting Pronouncements There have been no material changes to our significant accounting policies as summarized in NOTE 2

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
Schedule of stock option activity	A summary of our stock option activity and related information follows: Number of Shares Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2017 22,660,459 $ 0.27 8.1 $ — Granted — $ — — $ — Canceled (597,998 ) Balance at March 31, 2018 22,062,461 $ 0.27 7.9 $ — Vested and Exercisable at March 31, 2018 11,442,165 $ 0.43 6.5 $ —
Schedule of assumptions used in the Black-Scholes Model - stock options	The assumptions used in the Black-Scholes Model are set forth in the table below. Three Months Ended March 31, 2018 Year Ended December 31, 2017 Risk-free interest rate —% 1.17-2.15% Volatility —% 78.40-89.93% Expected life in years 6 6 Dividend yield 0.00 % 0.00 %

OTHER CURRENT ASSETS (Tables)

OTHER CURRENT ASSETS (Tables)	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of other current assets	Other current assets consist of the following: March 31, 2018 December 31, 2017 Prepaid equipment $ 1,342,390 $ 465,847 Prepaid expenses 248,710 98,659 Other current assets 18,104 21,119 TOTAL OTHER CURRENT ASSETS $ 1,609,204 $ 585,622

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	Property and equipment consist of the following: March 31, 2018 December 31, 2017 Network equipment $ 13,641,064 $ 13,610,280 Office equipment 291,003 291,003 Vehicles 217,004 217,004 Test equipment 175,148 177,386 Furniture 90,827 90,827 Warehouse equipment 9,524 9,524 Leasehold improvements 5,121 5,121 14,429,691 14,401,145 Less: accumulated depreciation (11,415,188 ) (11,079,604 ) TOTAL PROPERTY AND EQUIPMENT $ 3,014,504 $ 3,321,541

OTHER ASSETS (Tables)

OTHER ASSETS (Tables)	3 Months Ended
	Mar. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of intangible assets	Intangible assets consist of the following: March 31, 2018 Cost Accumulated Amortization Net Patents and trademarks $ 849,909 $ 157,539 $ 692,370 Other intangible assets 63,509 53,548 9,961 TOTAL INTANGIBLE ASSETS $ 913,418 $ 211,087 $ 702,331 December 31, 2017 Cost Accumulated Amortization Net Patents and trademarks $ 806,279 $ 146,246 $ 660,033 Other intangible assets 59,122 53,237 5,885 TOTAL INTANGIBLE ASSETS $ 865,401 $ 199,483 $ 665,918
Schedule of other assets	Other assets consist of the following: March 31, 2018 Cost Accumulated Amortization Net Deferred debt issuance costs $ 1,302,223 $ 498,607 $ 803,616 Prepaid financing costs 805,918 324,712 481,206 Deferred installation costs 1,766,937 1,576,071 190,866 Prepaid license fee 249,999 107,922 142,077 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 4,171,201 $ 2,507,312 $ 1,663,889 Other assets consist of the following: December 31, 2017 Cost Accumulated Amortization Net Deferred debt issuance costs $ 1,257,778 $ 451,216 $ 806,562 Deferred financing costs 850,363 296,863 533,500 Deferred installation costs 1,748,818 1,533,270 215,548 Prepaid license fee 249,999 103,824 146,175 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 4,153,082 $ 2,385,173 $ 1,767,909

OTHER CURRENT LIABILITIES (Tabl

OTHER CURRENT LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Schedule of other current liabilities	Other current liabilities consist of the following: March 31, 2018 December 31, 2017 Allowance for system removal $ 218,250 $ 176,750 Accrued insurance 133,935 — Accrued rent expense 101,008 120,433 Other accrued liabilities 67,922 58,623 Deferred revenue 67,083 17,430 Accrued paid time off 60,038 112,577 Accrued taxes 60,168 127,225 Accrued professional services — 137,018 TOTAL OTHER CURRENT LIABILITIES $ 708,404 $ 750,056

BASIS OF PRESENTATION AND REC23

BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Anti-dilutive common share equivalents excluded from EPS calculation	174,000,000	124,000,000

GOING CONCERN, LIQUIDITY AND 24

GOING CONCERN, LIQUIDITY AND MANAGEMENT'S PLAN (Details Narrative) - USD ($)	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016	Apr. 21, 2011
Cash and cash equivalents	$ 1,739,057	$ 2,066,392	$ 7,827,332	$ 10,088,258
Restricted cash	$ 2,500,000	$ 2,500,000
HealthCor Purchase Agreement [Member]
Minimum cash balance required under existing loan documents					$ 2,000,000

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Number Options
Stock Options Outstanding, Beginning	22,660,459
Canceled	(597,998)
Stock Options Outstanding, Ending	22,062,461
Stock Options, vested and exercisable	11,442,165
Weighted Average Exercise Price
Stock Options Outstanding, Beginning | $ / shares	$ 0.27
Stock Options Outstanding, Ending | $ / shares	0.27
Stock Options, vested and exercisable | $ / shares	$ 0.43
Weighted Average Remaining Contractual Life
Stock Options Outstanding, Beginning	8 years 1 month 6 days
Stock Options Outstanding, Ending	7 years 10 months 24 days
Stock Options, vested and exercisable	6 years 6 months

STOCKHOLDERS' EQUITY (Details 1

STOCKHOLDERS' EQUITY (Details 1) - Stock Options [Member]	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Black-Scholes Model:
Expected life	6 years	6 years
Dividend yield	0.00%	0.00%
Lower Range [Member]
Black-Scholes Model:
Risk-free interest rate	0.00%	1.70%
Volatility	0.00%	78.40%
Upper Range [Member]
Black-Scholes Model:
Risk-free interest rate	0.00%	2.15%
Volatility	0.00%	89.93%

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Feb. 23, 2018
Warrant activity
Fair value of warrant liability		$ 629
Number of warrant issued	2,500,000		487,500
Written off warrant	$ 11,157
Warrant exercise price (in dollars per share)			$ 0.05
Fair value of the warrants			$ 10,237
Option activity
Options canceled	597,998
Share-based compensation expense	$ 89,048	$ 120,376
Unrecognized estimated compensation expense	$ 451,000
Period for recognition of unrecognized compensation expense	2 years 1 month 6 days
Directors And Officers [Member]
Warrant activity
Number of warrant issued			25,000
Warrant exercise price (in dollars per share)			$ 0.05
Fair value of the warrants			$ 525

OTHER CURRENT ASSETS (Details)

OTHER CURRENT ASSETS (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid equipment	$ 1,342,390	$ 465,847
Prepaid expenses	248,710	98,659
Other current assets	18,104	21,119
TOTAL OTHER CURRENT ASSETS	$ 1,609,204	$ 585,622

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 14,429,691	$ 14,401,145
Less: accumulated depreciation	(11,415,188)	(11,079,604)
Property and equipment, net	3,014,504	3,321,541
Network Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	13,641,064	13,610,280
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	291,003	291,003
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	217,004	217,004
Test Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	175,148	177,386
Furniture [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	90,827	90,827
Warehouse Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,524	9,524
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 5,121	$ 5,121

PROPERTY AND EQUIPMENT (Detai30

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 392,818	$ 443,246

OTHER ASSETS (Details)

OTHER ASSETS (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Cost	$ 913,418	$ 865,401
Accumulated Amortization	211,087	199,483
Intangible assets, Net	702,331	665,918
Patents and Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	849,909	806,279
Accumulated Amortization	157,539	146,246
Intangible assets, Net	692,370	660,033
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	63,509	59,122
Accumulated Amortization	53,548	53,237
Intangible assets, Net	$ 9,961	$ 5,885

OTHER ASSETS (Details 1)

OTHER ASSETS (Details 1) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Cost	$ 4,171,201	$ 4,153,082
Accumulated Amortization	2,507,312	2,385,173
Other assets	1,663,889	1,767,909
Deferred Debt Issuance Costs [Member]
Cost	1,302,223	1,257,778
Accumulated Amortization	498,607	451,216
Other assets	803,616	806,562
Deferred Financing Costs [Member]
Cost	805,918	850,363
Accumulated Amortization	324,712	296,863
Other assets	481,206	533,500
Deferred Installation Costs [Member]
Cost	1,766,937	1,748,818
Accumulated Amortization	1,576,071	1,533,270
Other assets	190,866	215,548
Prepaid License Fee [Member]
Cost	249,999	249,999
Accumulated Amortization	107,922	103,824
Other assets	142,077	146,175
Security Deposit [Member]
Cost	46,124	46,124
Other assets	$ 46,124	$ 46,124

OTHER CURRENT LIABILITIES (Deta

OTHER CURRENT LIABILITIES (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
OTHER CURRENT LIABILITIES:
Allowance for system removal	$ 218,250	$ 176,750
Accrued insurance	133,935
Accrued rent expense	101,008	120,433
Other accrued liabilities	67,922	58,623
Deferred revenue	67,083	17,430
Accrued paid time off	60,038	112,577
Accrued taxes	60,168	127,225
Accrued professional services		137,018
TOTAL OTHER CURRENT LIABILITIES	$ 708,404	$ 750,056

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative)	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Statutory federal tax rate (in percent)	21.00%
Previously Statutory federal tax rate (in percent)	35.00%

AGREEMENT WITH PDL BIOPHARMA,35

AGREEMENT WITH PDL BIOPHARMA, INC. (Details Narrative) - USD ($)	Dec. 28, 2018	Jun. 26, 2015	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 28, 2017	Oct. 08, 2015
Restricted cash			$ 2,500,000		$ 2,500,000
Amortization of issuance costs			47,391	$ 44,922
Amortization of financing costs			27,849	$ 27,849
PDL Credit Agreement [Member]
Amount available under credit agreement		$ 40,000,000
Minimum cash balance required under existing loan documents		2,500,000
Restricted cash		2,500,000
Interest only quarterly payments		675,000
Deferred financing costs			$ 805,917
PDL Credit Agreement [Member] | Purchase Agreement Warrants [Member]
Deferred issuance costs		1,257,778				$ 44,445
Tranche One Term Note [Member]
Debt face amount							$ 20,000,000
Principal payments	$ 1,666,667
PDL Credit Agreement - Tranche One Debt [Member]
Amount available under credit agreement		$ 20,000,000
Interest rate		13.50%
PDL Credit Agreement - Tranche Two Debt [Member]
Amount available under credit agreement		$ 20,000,000

AGREEMENT WITH HEALTHCOR (Detai

AGREEMENT WITH HEALTHCOR (Details Narrative)	Jan. 31, 2012USD ($)$ / shares	Apr. 21, 2011USD ($)$ / sharesshares	Mar. 31, 2018Number	Feb. 23, 2018$ / shares
Exercise price of warrants				$ 0.05
HealthCor Purchase Agreement [Member] | 2011 Senior Secured Convertible Note#1 [Member]
Note amount | $		$ 9,316,000
Debt Maturity Date		Apr. 20, 2021
Issuance of warrants | shares		5,488,456
Exercise price of warrants		$ 1.40
HealthCor Purchase Agreement [Member] | 2011 Senior Secured Convertible Note#2 [Member]
Note amount | $		$ 10,684,000
Debt Maturity Date		Apr. 20, 2021
Issuance of warrants | shares		6,294,403
Exercise price of warrants		$ 1.40
HealthCor Purchase Agreement [Member] | 2011 Senior Secured Convertible Notes [Member]
Increase in interest rate (per annum) should default occur		5.00%
Debt conversion price		$ 1.25
Number of shares the note may be converted into | Number			36,000,000
HealthCor Purchase Agreement [Member] | 2011 Senior Secured Convertible Notes [Member] | First Five Year Note Period [Member]
Interest rate, provided no default		12.50%
HealthCor Purchase Agreement [Member] | 2011 Senior Secured Convertible Notes [Member] | Second Five Year Note Period [Member]
Interest rate, provided no default		10.00%
HealthCor Second Amendment Purchase Agreement [Member] | 2012 Senior Secured Convertible Note#1 [Member]
Note amount | $	$ 2,329,000
Debt Maturity Date	Jan. 30, 2022
HealthCor Second Amendment Purchase Agreement [Member] | 2012 Senior Secured Convertible Note#2 [Member]
Note amount | $	$ 2,671,000
Debt Maturity Date	Jan. 30, 2022
HealthCor Second Amendment Purchase Agreement [Member] | 2012 Senior Secured Convertible Notes [Member]
Debt conversion price	$ 1.25
Number of shares the note may be converted into | Number			8,000,000

AGREEMENT WITH HEALTHCOR (Det37

AGREEMENT WITH HEALTHCOR (Details Narrative 1)	Feb. 23, 2018USD ($)$ / sharesshares	Mar. 31, 2015USD ($)$ / sharesshares	Dec. 04, 2014USD ($)$ / sharesshares	Jan. 16, 2014USD ($)$ / sharesshares	Mar. 31, 2018USD ($)Number	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)	Aug. 20, 2013USD ($)	Apr. 21, 2011USD ($)
Exercise price of warrants | $ / shares	$ 0.05
Beneficial conversion features for senior secured convertible notes					$ 31,784	$ 63,586
Debt discount					17,322,380		$ 18,161,723
Interest Expense					$ 3,635,067	3,220,762
HealthCor Third Amendment Purchase Agreement [Member]
Minimum cash balance required under existing loan documents								$ 5,000,000
HealthCor Third Amendment Purchase Agreement [Member] | Lower Range [Member]
Minimum cash balance required under existing loan documents								4,000,000
HealthCor Third Amendment Purchase Agreement [Member] | Upper Range [Member]
Minimum cash balance required under existing loan documents								$ 5,000,000
HealthCor Fourth Amendment Purchase Agreement [Member] | 2014 Senior Secured Convertible Note#1 [Member]
Note amount				$ 2,329,000
Debt Maturity Date				Jan. 15, 2024
HealthCor Fourth Amendment Purchase Agreement [Member] | 2014 Senior Secured Convertible Note#2 [Member]
Note amount				$ 2,671,000
Debt Maturity Date				Jan. 15, 2024
HealthCor Fourth Amendment Purchase Agreement [Member] | 2014 Senior Secured Convertible Notes [Member]
Issuance of warrants | shares				4,000,000
Exercise price of warrants | $ / shares				$ 0.40
Debt conversion price | $ / shares				$ 0.40
Number of shares the note may be converted into | Number					21,000,000
HealthCor Fifth Amendment Purchase Agreement [Member]
Note amount			$ 6,000,000
Debt Maturity Date			Feb. 16, 2025
Issuance of warrants | shares			3,692,308
Exercise price of warrants | $ / shares			$ 0.52
Debt conversion price | $ / shares			$ 0.52
Debt discount			$ 1,093,105
Interest Expense					$ 6,849	5,776
HealthCor Fifth Amendment Purchase Agreement [Member] | HealthCor Partners Fund [Member]
Number of shares the note may be converted into | Number					3,000,000
HealthCor Fifth Amendment Purchase Agreement [Member] | New Investors [Member]
Number of shares the note may be converted into | Number					14,000,000
HealthCor Eighth Amendment Purchase Agreement [Member]
Note amount	$ 2,050,000
Debt Maturity Date	Feb. 22, 2028
Issuance of warrants | shares	512,500
Exercise price of warrants | $ / shares	$ 0.05
Debt conversion price | $ / shares	$ 0.05
Debt discount	$ 10,707
Interest Expense						63,585
HealthCor Eighth Amendment Purchase Agreement [Member] | New Investors [Member]
Number of shares the note may be converted into | Number					42,000,000
HealthCor Sixth Amendment Purchase Agreement [Member]
Debt Maturity Date		Mar. 31, 2025
Issuance of warrants | shares		1,000,000
Exercise price of warrants | $ / shares		$ 0.53
Minimum cash balance required under existing loan documents		$ 5,000,000
Debt discount		378,000
HealthCor Sixth Amendment Purchase Agreement [Member] | Lower Range [Member]
Minimum cash balance required under existing loan documents		$ 2,000,000
HealthCor Sixth Amendment Purchase Agreement [Member]
Interest Expense					$ 14,451
HealthCor Purchase Agreement [Member]
Minimum cash balance required under existing loan documents									$ 2,000,000
Beneficial conversion features for senior secured convertible notes					31,784	14,451
Interest Expense					$ 849,827	$ 733,240

JOINT VENTURE AGREEMENT (Detail

JOINT VENTURE AGREEMENT (Details Narrative) - USD ($)	Feb. 02, 2018	Jan. 31, 2017	Nov. 16, 2009	Feb. 23, 2018	Dec. 31, 2017
Exercise price of warrants				$ 0.05
Joint Venture - Rockwell [Member]
Total cost to acquire remaining interest in joint venture		$ 1,213,786
Promissory note issued to acquire interest in joint venture		1,113,786
Cash payment to acquire remaining interest in joint venture		100,000
Balloon payment to be paid		13,786
Joint Venture - Rockwell [Member] | PDL Modification Agreement [Member]
Cash payment to acquire remaining interest in joint venture	$ 50,000
Balloon payment to be paid					$ 13,786
Increase fair value of warrant	$ 13,814
Exercise price of warrants	$ 0.05				$ 0.52
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
Fair value adjustment of warrants		$ 11,512