Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-54090 | |
Entity Registrant Name | CAREVIEW COMMUNICATIONS, INC. | |
Entity Central Index Key | 0001377149 | |
Entity Tax Identification Number | 95-4659068 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 405 State Highway 121 | |
Entity Address, Address Line Two | Suite B-240 | |
Entity Address, City or Town | Lewisville | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75067 | |
City Area Code | (972) | |
Local Phone Number | 943-6050 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 139,380,748 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 288,828 | $ 659,228 |
Accounts receivable | 864,136 | 933,200 |
Inventory | 389,176 | 349,216 |
Other current assets | 69,789 | 235,521 |
Total current assets | 1,611,929 | 2,177,165 |
Property and equipment, net | 768,213 | 1,138,891 |
Other Assets: | ||
Intangible assets, net | 928,560 | 910,398 |
Operating lease asset | 466,312 | 555,150 |
Other assets | 243,347 | 299,563 |
Total other assets | 1,638,219 | 1,765,111 |
Total assets | 4,018,361 | 5,081,167 |
Current Liabilities: | ||
Accounts payable | 875,555 | 414,333 |
Notes payable | 20,000,000 | 20,013,786 |
Notes payable - related parties | 700,000 | 700,000 |
Senior secured notes - related parties, net of debt discount and debt costs | 56,429,455 | 56,302,303 |
Operating lease liability | 172,291 | 162,470 |
Other current liabilities | 13,718,464 | 11,740,218 |
Total current liabilities | 91,895,765 | 89,333,110 |
Long-term Liabilities: | ||
Senior secured convertible notes - related parties, net of debt discount and debt costs | 24,936,287 | 24,302,135 |
Senior secured convertible notes, net of debt discount and debt costs | 3,760,551 | 3,661,617 |
Operating lease liability | 342,716 | 445,033 |
Other long-term liabilities | 27,003 | 37,570 |
Total long-term liabilities | 29,066,557 | 28,446,355 |
Total liabilities | 120,962,322 | 117,779,465 |
Stockholders’ Deficit: | ||
Preferred stock - par value $0.001; 20,000,000 shares authorized; no shares issued and outstanding | ||
Common stock - par value $0.001; 500,000,000 shares authorized; 139,380,748 issued and outstanding | 139,381 | 139,381 |
Additional paid in capital | 87,132,695 | 85,052,367 |
Accumulated deficit | (204,216,037) | (197,890,046) |
Total stockholders’ deficit | (116,943,961) | (112,698,298) |
Total Liabilities and Equity | $ 4,018,361 | $ 5,081,167 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
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 | 500,000,000 | 500,000,000 |
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 | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 1,967,624 | $ 2,211,951 | $ 5,983,389 | $ 6,078,167 |
Operating expenses: | ||||
Network operations | 740,619 | 555,489 | 2,205,199 | 1,948,850 |
General and administration | 861,089 | 771,313 | 2,677,329 | 2,398,305 |
Sales and marketing | 168,097 | 163,809 | 499,065 | 400,143 |
Research and development | 399,406 | 392,574 | 1,346,950 | 1,179,908 |
Depreciation and amortization | 130,743 | 187,341 | 443,695 | 512,555 |
Total operating expenses | 2,299,954 | 2,070,526 | 7,172,238 | 6,439,761 |
Operating income (loss) | (332,330) | 141,425 | (1,188,849) | (361,594) |
Other income and (expense) | ||||
Interest expense | (1,146,820) | (2,041,748) | (5,137,272) | (7,045,049) |
Interest income | 76 | 8 | 130 | 114 |
Other expense | ||||
Other income | (1,063) | |||
Total other income (expense) | (1,146,744) | (2,041,740) | (5,137,142) | (7,045,998) |
Loss before taxes | (1,479,074) | (1,900,315) | (6,325,991) | (7,407,592) |
Provision for income taxes | ||||
Net loss | $ (1,479,074) | $ (1,900,315) | $ (6,325,991) | $ (7,407,592) |
Net loss per share, basic | $ (0.01) | $ (0.01) | $ (0.05) | $ (0.05) |
Net loss per share, diluted | $ (0.01) | $ (0.01) | $ (0.05) | $ (0.05) |
Weighted average number of common shares outstanding, basic | 139,380,748 | 139,380,748 | 139,380,748 | 139,380,748 |
Weighted average number of common shares outstanding, diluted | 139,380,748 | 139,380,748 | 139,380,748 | 139,380,748 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 139,381 | $ 84,409,372 | $ (187,809,683) | $ (103,260,930) |
Beginning balance (in shares) at Dec. 31, 2020 | 139,380,748 | |||
Options granted as compensation | 52,878 | 52,878 | ||
Net loss | (2,487,251) | (2,487,251) | ||
Ending balance, value at Mar. 31, 2021 | $ 139,381 | 84,462,250 | (190,296,938) | (105,695,307) |
Ending balance (in shares) at Mar. 31, 2021 | 139,380,748 | |||
Options granted as compensation | 54,605 | 54,605 | ||
Issuance of warrants to purchase common stock | 420,000 | 420,000 | ||
Net loss | (3,020,025) | (3,020,025) | ||
Ending balance, value at Jun. 30, 2021 | $ 139,381 | 84,936,855 | (193,316,963) | (108,240,727) |
Ending balance (in shares) at Jun. 30, 2021 | 139,380,748 | |||
Options granted as compensation | 53,474 | 53,474 | ||
Net loss | (1,900,315) | (1,900,315) | ||
Ending balance, value at Sep. 30, 2021 | $ 139,381 | 84,990,329 | (195,217,275) | (110,087,565) |
Ending balance (in shares) at Sep. 30, 2021 | 139,380,748 | |||
Beginning balance, value at Dec. 31, 2021 | $ 139,381 | 85,052,367 | (197,890,046) | (112,698,298) |
Beginning balance (in shares) at Dec. 31, 2021 | 139,380,748 | |||
Options granted as compensation | 55,847 | 55,847 | ||
Issuance of warrants to purchase common stock | 240,000 | 240,000 | ||
Net loss | (2,345,008) | (2,345,008) | ||
Ending balance, value at Mar. 31, 2022 | $ 139,381 | 85,348,214 | (200,235,054) | (114,747,459) |
Ending balance (in shares) at Mar. 31, 2022 | 139,380,748 | |||
Options granted as compensation | 58,363 | 58,363 | ||
Net loss | (2,501,909) | (2,501,909) | ||
Ending balance, value at Jun. 30, 2022 | $ 139,381 | 85,406,577 | (202,736,963) | (117,191,005) |
Ending balance (in shares) at Jun. 30, 2022 | 139,380,748 | |||
Options granted as compensation | 58,858 | 58,858 | ||
Related party forgiveness of interest | 1,667,260 | 1,667,260 | ||
Net loss | (1,479,074) | (1,479,074) | ||
Ending balance, value at Sep. 30, 2022 | $ 139,381 | $ 87,132,695 | $ (204,216,037) | $ (116,943,961) |
Ending balance (in shares) at Sep. 30, 2022 | 139,380,748 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (6,325,991) | $ (7,407,592) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 375,867 | 437,859 |
Amortization of intangible assets | 40,098 | 41,820 |
Amortization of deferred installation costs | 27,730 | 32,876 |
Amortization of debt discount | 860,239 | 1,963,203 |
Amortization of deferred debt issuance and debt financing costs | 10,970 | |
Non-cash lease expense, net | 88,838 | 76,505 |
Interest incurred and paid in kind | 2,222,714 | |
Stock based compensation related to options and warrants granted | 2,080,328 | 580,957 |
Changes in operating assets and liabilities | ||
Accounts receivable | 69,064 | (325,185) |
Inventory | (39,960) | 15,860 |
Other current assets | 165,732 | (102,930) |
Patent license | 12,295 | 12,296 |
Accounts payable | 461,222 | (45,412) |
Accrued interest | 2,219,923 | 2,429,662 |
Other current liabilities | (225,486) | 426,594 |
Operating Lease Liability | (92,497) | (75,634) |
Net cash provided by (used in) operating Activities | (282,598) | 294,563 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (5,189) | (82,885) |
Payment for deferred installation costs | (59,312) | |
Patent, trademark, and other intangible assets costs | (58,260) | (88,075) |
Net cash used in investing activities | (63,449) | (230,272) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayment of notes payable | (13,786) | (150,000) |
Repayment of other long term liabilities | (10,567) | (1,174) |
Net cash used in financing Activities | (24,353) | (151,174) |
Decrease in cash | (370,400) | (86,883) |
Cash, cash equivalents and restricted cash, beginning of period | 659,228 | 357,950 |
Cash, cash equivalents and restricted cash, end of period | 288,828 | 271,067 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 114,291 | |
Cash paid for income taxes | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: | ||
Capital expenditures funded by term loan | $ 1,667,260 |
BASIS OF PRESENTATION AND RECEN
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [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, 2021 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, 2021, as filed with the SEC on March 31, 2022. Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”). For our subscription service contracts, 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. 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. 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. We enter into contracts with customers that may provide multiple combinations of our products, software solutions, and other related services which are generally capable of being distinct and accounted for as separate performance obligations. Performance obligations that are not distinct at contract inception are combined. Customer contract fulfillment typically involves multiple procurement promises which may include various equipment, software subscription, project-related installation and training services, and support. We allocate the transaction price to each performance obligations based on estimated relative standalone selling price. Revenue is then recognized for each performance obligation upon transferring control of the hardware, software, and services to the customer an in an amount that reflects the consideration we expect to receive and the estimated benefit the customer receives over the term of the contract. Generally, we recognize revenue under each of our performance obligations as follows: ● Subscription services – We recognize subscription revenues monthly over the contracted license period. ● Equipment packages related to sales-based contracts – We recognize equipment revenues when control of the devices has transferred to the client (“point in time”). ● Software bundle and related services related to sales-based contracts – We recognize our software subscription, installation, training, and other services on a straight-line basis over the estimated contracted license period (“over time”). Disaggregation of Revenue The following presents gross revenues disaggregated by our business models: Three Months Ended September 30, 2022 2021 Sales-based contract revenue Equipment package (point in time) $ 314,495 $ 707,209 Software bundle (over time) 329,411 143,343 Total sales-based contract revenue 643,906 850,552 Subscription-based lease revenue (over time) 1,323,718 1,361,399 Gross revenue $ 1,967,624 $ 2,211,951 Nine Months Ended September 30, 2022 2021 Sales-based contract revenue Equipment package (point in time) $ 1,121,817 $ 1,678,166 Software bundle (over time) 796,815 336,819 Total sales-based contract revenue 1,918,632 2,014,985 Subscription-based lease revenue (over time) 4,064,757 4,063,182 Gross revenue $ 5,983,389 $ 6,078,167 Contract Liabilities Our subscription-based contracts payment arrangements are required to be paid monthly which are recognized into revenue when received. Some customers chose to pay their subscription fee in advance. Customer payments received in advance of satisfaction of the related performance obligations are deferred as contract liabilities. These amounts are recorded as “Deferred revenue” in our condensed consolidated balance sheet and recognized into revenues over time. Our sales-based contract payment arrangements with our customers typically include an initial equipment payment due upon signing of the contract and subsequent payments when certain performance obligations are completed. Customer payments received in advance of satisfaction of related performance obligations are deferred as contract liabilities. These amounts are recorded as “Deferred revenue” in our condensed consolidated balance sheet and recognized into revenues as either a point in time or over time. During the nine months ended September 30, 2022 and 2021, a total of $ 208,155 149,863 The table below details the subscription-based contract liability activity during the nine months ended September 30, 2022, and 2021. Nine Months Ended 2022 2021 Balance, beginning of period $ 231,140 $ 238,263 Additions 30,306 220,696 Transfer to revenue (210,681 ) (220,375 ) Balance, end of period $ 50,765 $ 238,584 During the nine months ended September 30, 2022 and 2021, a total of $ 673,643 221,312 Nine Months Ended 2022 2021 Balance, beginning of period $ 752,526 $ 226,861 Additions 2,000,051 2,419,328 Transfer to revenue (1,829,720 ) (2,112,043 ) Balance, end of period $ 922,857 $ 534,146 As of September 30, 2022, the aggregate amount of deferred revenue from subscription-based contracts and sales-based contracts allocated to performance obligations that are unsatisfied or partially satisfied is approximately $ 973,000 Years Ending December 31, Amount 2022 $ 292,334 2023 376,529 Thereafter 304,758 $ 973,622 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 nine months ended September 30, 2022 and 2021, included in other assets in the accompanying consolidated balance sheet. Nine Months Ended 2022 2021 Balance, beginning of period $ 68,901 $ 54,003 Additions — 59,312 Transfer to expense (27,731 ) (32,877 ) Balance, end of period $ 41,170 $ 80,438 Significant Judgements When Applying Topic 606 Contracts with our customers are typically structured similarly and include various combinations of our products, software solutions, and related services. Determining whether the various contract promises are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Contract transaction price is allocated to distinct performance obligations using estimated standalone selling price. We determine standalone selling price maximizing observable inputs such as standalone sales, competitor standalone sales, or substantive renewal prices charged to customers when they exist. In instances where standalone selling price is not observable, we utilize an estimate of standalone selling price. Such estimates are derived from various methods that include cost plus margin, and historical pricing practices. Judgment may be required to determine standalone selling prices for each performance obligation and whether it depicts the amount we expect to receive in exchange for the related good or service. Contract modifications occur when we and our customers agree to modify existing customer contracts to change the scope or price (or both) of the contract or when a customer terminates some, or all, of the existing services provided by us. When a contract modification occurs, it requires us to exercise judgment to determine if the modification should be accounted for as a separate contract, the termination of the original contract and creation of a new contract, a cumulative catch-up adjustment to the original contract, or a combination. Contracts with our customers include a limited warranty on our products covering materials, workmanship, or design for the duration of contract. We do not offer paid additional extended or lifetime warranty packages. We determined the limited warranty in our contract is not a distinct performance obligation. We do not believe our estimates of warranty costs to be significant to our determination of revenue recognition and, therefore, did not reserve for warranty costs. Leases The Company has an operating lease primarily consisting of office space with a remaining lease term of 35 months. At the least commence date, an operating lease liability and related operating lease asset are recognized. The operating lease liability are calculated using the present value of lease payments. The discount rate used is either the rate implicit in the lease, when known, or our estimated incremental borrowing rate. Operating lease assets are valued based on the initial operating lease liability plus an prepare rent and direct costs from executing the leases. 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 230,280,000 222,000,000 |
GOING CONCERN, LIQUIDITY AND MA
GOING CONCERN, LIQUIDITY AND MANAGEMENT’S PLAN | 9 Months Ended |
Sep. 30, 2022 | |
Going Concern Liquidity And Managements Plan | |
GOING CONCERN, LIQUIDITY AND MANAGEMENT’S PLAN | NOTE 2 – GOING CONCERN, LIQUIDITY AND MANAGEMENT’S PLAN Accounting standards require management to evaluate whether the Company can continue as a going concern for a period of one year after the date of the filing of this Form 10-Q (“evaluation period”). In evaluating the Company’s ability to continue as a going concern, Management considers the conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months after the Company issues its financial statements. For the period ended September 30, 2022, Management considers the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, and the Company’s conditional and unconditional obligations due within 12 months of the date these financial statements are issued. The Company is subject to risks like those of healthcare technology companies whereby revenues are generated based on both on a sales-based and subscription-based business model such as dependence on key individuals, uncertainty of product development, generation of revenues, positive cash flow, dependence on outside sources of capital, risks associated with research, development, and successful testing of its products, successful protection of intellectual property, ability to maintain and grow its customer base, and susceptibility to infringement on the proprietary rights of others. The attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill the Company’s growth and operating activities and generating a level of revenues adequate to support the Company’s cost structure. The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years. As of and for the nine months ended September 30, 2022, the Company had an accumulated deficit of $ 204,216,037 1,188,849 282,598 288,828 As of September 30, 2022, the Company had an operating net working capital of $ 377,757 As of March 8, 2022, the Company extended HealthCor 2011 and 2012 notes through April 20, 2023, by entering Allonge No. 4 and we issued warrants to purchase an aggregate of 3,000,000 0.09 On June 23, 2022, we agreed with the PDL Investment Holdings, LLC along with Steven G. Johnson and Dr. James R. Higgins in their collective capacity as the Tranche Three Lender to extend the due date from June 30, 2022 until December 31, 2022. Management continues to monitor the immediate and future cash flows needs of the company in a variety of ways which include forecasted net cash flows from operations, capital expenditure control, new inventory orders, debt modifications, increases sales outreach, streamlining and controlling general and administrative costs, competitive industry pricing, sale of equities, debt conversions, new product or services offerings, and new business partnerships. The Company’s net losses and cash outflows raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company’s cost structure. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [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 (except Warrants issued to HealthCor in 2011 (the “2011 HealthCor Warrants”) as discussed in NOTE 11 and the warrants issued in connection with a private placement completed in April 2013 (“Private Placement Warrants”). The Black-Scholes Model requires the use of several assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average term of the Warrants. 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) 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. On April 20, 2021, we issued 931,600 1,068,400 0.23 On March 8, 2022, we agreed with the HealthCor Parties to (i) amend the 2011 HealthCor Notes to extend the maturity date of the 2011 HealthCor Notes from April 20, 2022 to April 20, 2023 by entering into Allonge No. 4 to the 2011 HealthCor Notes (the “Fourth 2011 Note Allonges”) and (ii) amend the 2012 HealthCor Notes to extend the maturity date of the 2012 HealthCor Notes from April 20, 2022 to April 20, 2023 by entering into Allonge No. 4 to the 2012 HealthCor Notes (the “Fourth 2012 Note Allonges”) (such amendments to the 2011 HealthCor Notes and 2012 HealthCor Notes together, the “2022 HealthCor Note Extensions”). In connection with the 2022 HealthCor Note Extensions, we issued warrants to purchase an aggregate of 3,000,000 0.09 Also on March 8, 2022, in connection with the 2022 HealthCor Note Extensions and the issuance of the 2022 HealthCor Warrants, we entered into a Consent and Agreement Pursuant to Note and Warrant Purchase Agreement (the “NWPA Consent”) with the HealthCor Parties and certain additional Existing Investors (in their capacity as Majority Holders acting together with the HealthCor Parties), pursuant to which, among other things, (i) the Majority Holders consented to the 2022 HealthCor Note Extensions, (ii) the Majority Holders consented to the issuance of the 2022 HealthCor Warrants and (iii) the parties agreed that the holders of the 2022 HealthCor Warrants would have registration rights for the shares of Common Stock issuable upon exercise of the 2022 HealthCor Warrants under the Registration Rights Agreement dated as of April 20, 2011, as amended June 30, 2015, by and among the Company, the HealthCor Parties and the additional investors party thereto (the “Registration Rights Agreement”). A summary of our Warrants activity and related information follows: Number of Range of Weighted Average Exercise Price Weighted Balance at December 31, 2021 18,050,458 $ .01 .53 $ 0.74 4.2 Granted 3,000,000 $ 0.08 $ 0.08 9.7 Expired — Canceled — Balance at September 30, 2022 21,050,458 $ .01 .53 $ 0.49 4.1 Options to Purchase Common Stock of the Company During the nine months ended September 30, 2022, 738,500 61,920 0.07 0.12 235,000 A summary of our stock option activity and related information follows: Number of Weighted Average Exercise Price Weighted Aggregate Intrinsic Value Balance at December 31, 2021 40,625,477 0.12 6.7 1,283,975 Granted 738,500 Expired (235,000 ) Canceled — Balance at September 30, 2022 41,128,977 0.12 6.0 523,925 Vested and Exercisable at September 30, 2022 33,204,477 0.14 5.5 523,925 Share-based compensation expense for Options charged to our operating results for the three and nine months ended September 30, 2022 and 2021 $ 59,844 53,474 173,068 160,957 As of September 30, 2022, total unrecognized estimated compensation expense related to non-vested Options granted prior to that date was approximately $ 254,023 1.3 |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | NOTE 4 – OTHER CURRENT ASSETS Other current assets consist of the following: September 30, December 31, Prepaid expenses $ 69,789 $ 235,521 TOTAL OTHER CURRENT ASSETS $ 69,789 $ 235,521 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 5 – INVENTORY Inventory is valued at the lower of cost, determined on a first-in, first-out (FIFO), or net realizable value. Inventory items are analyzed to determine cost and net realizable value and appropriate valuation adjustments are then established. Inventory consists of the following: September 30, December 31, Inventory assets (finished goods) $ 389,176 $ 349,216 TOTAL INVENTORY $ 389,176 $ 349,216 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment consist of the following: September 30, December 31, Network equipment $ 12,620,258 $ 12,620,258 Office equipment 234,429 229,240 Vehicles 232,411 232,411 Test Equipment 230,365 204,455 Furniture 92,846 92,846 Warehouse equipment 9,524 9,524 Leasehold improvements 5,121 5,121 TOTAL PROPERTY AND EQUIPMENT 13,424,954 13,393,855 Less: accumulated depreciation (12,656,741 ) (12,254,964 ) TOTAL PROPERTY AND EQUIPMENT, NET $ 768,213 $ 1,138,891 Depreciation expense for the three and nine months ended September 30, 2022 and 2021 was $ 111,761 and 144,764 375,867 437,859 |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | NOTE 7 – OTHER ASSETS Intangible assets consist of the following: September 30, 2022 Cost Accumulated Amortization Net Patents and trademarks $ 1,310,436 $ 381,876 $ 928,560 Other intangible assets — — — TOTAL INTANGIBLE ASSETS $ 1,310,436 $ 381,876 $ 928,560 December 31, 2021 Cost Accumulated Amortization Net Patents and trademarks $ 1,254,327 $ 343,929 $ 910,398 Other intangible assets 83,745 83,745 — TOTAL INTANGIBLE ASSETS $ 1,338,072 427,674 $ 910,398 Other assets consist of the following: September 30, 2022 Cost Accumulated Amortization Net Deferred installation costs $ 1,352,041 $ 1,310,871 $ 41,170 Deferred sales commission 147,177 59,430 87,747 Prepaid license fee 249,999 181,693 68,306 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 1,795,341 $ 1,551,994 $ 243,347 December 31, 2021 Cost Accumulated Amortization Net Deferred installation costs $ 1,352,041 $ 1,283,140 $ 68,901 Deferred sales commission 122,778 18,841 103,937 Prepaid license fee 249,999 169,398 80,601 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 1,770,942 $ 1,471,379 $ 299,563 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 8 – OTHER CURRENT LIABILITIES Other current liabilities consist of the following: September 30, December 31, Accrued interest $ 12,167,653 $ 9,947,730 Accrued interest, related parties 228,528 228,528 Allowance for system removal 54,802 54,802 Accrued paid time off 145,392 173,904 Deferred officer compensation (1) 139,041 139,041 Deferred revenue 973,622 983,667 Accrued taxes (other than income taxes) 9,426 38,367 Insurance premium financing — 103,792 Other accrued liabilities — 70,388 TOTAL OTHER CURRENT LIABILITIES $ 13,718,464 $ 11,740,218 (1) Salary for Steve Johnson, CEO, between February 15, 2018, and September 30, 2020. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 – 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 2021 because of the losses recorded during the nine months ended September 30, 2022, 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 the benefits of deferred tax assets will not be realized. As of September 30, 2022, 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 21 80 80 The effective tax rate for the nine months ended September 30, 2022, was different from the federal statutory rate due primarily to change in the valuation allowance and nondeductible interest and amortization expense. |
AGREEMENT WITH PDL BIOPHARMA, I
AGREEMENT WITH PDL BIOPHARMA, INC. | 9 Months Ended |
Sep. 30, 2022 | |
Agreement With Pdl Biopharma Inc. | |
AGREEMENT WITH PDL BIOPHARMA, INC. | NOTE 10 – AGREEMENT WITH PDL BIOPHARMA, INC. On June 26, 2015, we entered into a Credit Agreement (as subsequently amended) with PDL BioPharma, Inc. (“PDL”), as administrative agent and lender (“the Lender”) (the “PDL Credit Agreement”). Under the PDL Credit Agreement the Lender made available to us up to $ 40 20 From October 8, 2015, through May 14, 2019, the outstanding borrowings under the Tranche One Loan bore interest at the rate of 13.5 15.5 750,000 0 On January 31, 2021, the Company, the Borrower, the Subsidiary Guarantor, the Lender and the Tranche Three Lenders entered into a Twenty-Third Amendment to Modification Agreement (the “Twenty-Third Modification Agreement Amendment”), pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender may elect, in the Lender’s sole discretion, to terminate the Modification Period would be July 31, 2018 and January 31, 2021 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower’s (i) interest payments that would otherwise be due under the Credit Agreement on December 31, 2018, March 31, 2019, June 30, 2019, September 30, 2019, December 31, 2019, March 31, 2020, June 30, 2020, September 30, 2020, and October 7, 2020 and (ii) payments for principal and for any other Obligations then outstanding under the Tranche One Loan and the Tranche Three Loans that would otherwise be due under the Credit Agreement on October 7, 2020, would each be deferred until May 31, 2021 (the end of the extended Modification Period) and that such deferrals would be a Covered Event. The Company has evaluated the Twenty-Third Modification Agreement Amendment and as the effective borrowing rate under the restructured agreement is less than the effective borrowing rate on the old agreement, a concession is deemed to have been granted under ASC 470-60-55-10. As a concession has been granted, the agreement was accounted for as a troubled debt restructuring by debtors (TDR) under ASC 470-60. On May 25, 2021, the Company, the Borrower, the Subsidiary Guarantor, the Lender and the Tranche Three Lenders entered into a Twenty-Fourth Amendment to Modification Agreement (the “Twenty-Fourth Modification Agreement Amendment”), pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender may elect, in the Lender’s sole discretion, to terminate the Modification Period would be July 31, 2018 and November 30, 2021 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower’s (i) interest payments that would otherwise be due under the Credit Agreement on December 31, 2018, March 31, 2019, June 30, 2019, September 30, 2019, December 31, 2019, March 31, 2020, June 30, 2020, September 30, 2020, October 7, 2020, and (ii) payments for principal and for any other Obligations then outstanding under the Tranche One Loan and the Tranche Three Loans that would otherwise be due under the Credit Agreement on October 7, 2020, would each be deferred until November 30, 2021 (the end of the extended Modification) and that such deferrals would be a Covered Event. The Company has evaluated the Twenty-Fourth Modification Agreement Amendment and as the effective borrowing rate under the restructured agreement is less than the effective borrowing rate on the old agreement, a concession is deemed to have been granted under ASC 470-60-55-10. As a concession has been granted, the agreement is to be accounted for as a troubled debt restructuring by debtors (TDR) under ASC 470-60. On November 29, 2021, the Company, the Borrower, the Subsidiary Guarantor, the Lender and the Tranche Three Lenders entered into a Twenty-Fifth Amendment to Modification Agreement (the “Twenty-Fifth Modification Agreement Amendment”), pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender may elect, in the Lender’s sole discretion, to terminate the Modification Period would be July 31, 2018 and June 30, 2022 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower’s (i) interest payments that would otherwise be due under the Credit Agreement on December 31, 2018, March 31, 2019, June 30, 2019, September 30, 2019, December 31, 2019, March 31, 2020, June 30, 2020, September 30, 2020 and October 7, 2020 and (ii) payments for principal and for any other Obligations then outstanding under the Tranche One Loan and the Tranche Three Loans that would otherwise be due under the Credit Agreement on October 7, 2020, would each be deferred until June 30, 2022 (the end of the extended Modification) and that such deferrals would be a covered event. The Company has evaluated the Twenty-Fifth Modification Agreement Amendment and as the effective borrowing rate under the restructured agreement is less than the effective borrowing rate on the old agreement, a concession is deemed to have been granted under ASC 470-60-55-10. As a concession has been granted, the agreement is to be accounted for as a troubled debt restructuring by debtors (TDR) under ASC 470-60. On June 23, 2022, the Company, the Borrower, the Subsidiary Guarantor, the Lender and the Tranche Three Lenders entered into a Twenty-Sixth Amendment to Modification Agreement (the “Twenty-Sixth Modification Agreement Amendment”), pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender may elect, in the Lender’s sole discretion, to terminate the Modification Period would be July 31, 2018 and June 30, 2022 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower’s (i) interest payments that would otherwise be due under the Credit Agreement on December 31, 2018, March 31, 2019, June 30, 2019, September 30, 2019, December 31, 2019, March 31, 2020, June 30, 2020, September 30, 2020, October 7, 2020 and June 30, 2022 and (ii) payments for principal and for any other Obligations then outstanding under the Tranche One Loan and the Tranche Three Loans that would otherwise be due under the Credit Agreement on June 30, 2022, would each be deferred until December 31, 2022 (the end of the extended Modification) and that such deferrals would be a covered event. The Company has evaluated the Twenty-Sixth Modification Agreement Amendment and as the effective borrowing rate under the restructured agreement is less than the effective borrowing rate on the old agreement, a concession is deemed to have been granted under ASC 470-60-55-10. As a concession has been granted, the agreement is to be accounted for as a troubled debt restructuring by debtors (TDR) under ASC 470-60. Accounting Treatment In connection with the PDL Credit Agreement, as amended, we issued the PDL Warrant to the Lender. The fair value of the PDL Warrant at issuance was $ 1,600,000 As of September 30, 2022, the Company and Lender had entered into twenty-six amendments to the PDL Modification Agreement (as detailed above), resulting in restructuring of the PDL Credit Agreement and the accounting treatment of the related costs. Under debt modification/troubled debt guidance, we determined that the first of the eight amendments had no cash flow impact, and therefore, had no impact on accounting. Amendments nine through ten qualified for modification accounting, while the final fourteen amendments qualified for troubled debt restructuring accounting. As appropriate, we expensed the legal costs paid to third parties. For the nine months ended September 30, 2022 and 2021, pursuant to the terms of the PDL Modification Agreement, as amended, $ 2,325,000 2,325,000 |
AGREEMENT WITH HEALTHCOR
AGREEMENT WITH HEALTHCOR | 9 Months Ended |
Sep. 30, 2022 | |
Agreement With Healthcor | |
AGREEMENT WITH HEALTHCOR | NOTE 11 – AGREEMENT WITH HEALTHCOR On April 21, 2011, we entered into a Note and Warrant Purchase Agreement (as subsequently amended) with HealthCor Partners Fund, LP (“HealthCor Partners”) and HealthCor Hybrid Offshore Master Fund, LP (“HealthCor Hybrid” and, together with HealthCor Partners, “HealthCor”) (the “HealthCor Purchase Agreement”). Pursuant to the terms of the HealthCor Purchase Agreement, we sold and issued Senior Secured Convertible Notes to HealthCor in the principal amount of $ 9,316,000 10,684,000 5,488,456 6,294,403 1.40 12.5 10 5 On April 20, 2021, we agreed with the HealthCor Parties to (i) amend the 2011 HealthCor Notes to extend the maturity date of the 2011 HealthCor Notes from April 20, 2021 April 20, 2022 January 30, 2022 April 20, 2022 2,000,000 0.23 April 20, 2031 Also on April 20, 2021, in connection with the HealthCor Note Extensions and the issuance of the 2021 HealthCor Warrants, we entered into a Consent and Agreement Pursuant to Note and Warrant Purchase Agreement (the “2021 NWPA Consent”) with the HealthCor Parties and certain additional Existing Investors (in their capacity as Majority Holders acting together with the HealthCor Parties), pursuant to which, among other things, (i) the Majority Holders consented to the HealthCor Note Extensions, (ii) the Majority Holders consented to the issuance of the 2021 HealthCor Warrants and (iii) the parties agreed that the holders of the 2021 HealthCor Warrants would have registration rights for the shares of Common Stock issuable upon exercise of the 2021 HealthCor Warrants under the Registration Rights Agreement dated as of April 20, 2011, as amended June 30, 2015, by and among the Company, the HealthCor Parties and the additional investors party thereto (the “Registration Rights Agreement”). On March 08, 2022, we agreed with the HealthCor Parties to (i) amend the 2011 HealthCor Notes to extend the maturity date of the 2011 HealthCor Notes from April 20, 2022 April 20, 2023 3,000,000 0.09 March 08, 2032 Also on March 08, 2022, in connection with the HealthCor Note Extensions and the issuance of the 2021 HealthCor Warrants, we entered into a Consent and Agreement Pursuant to Note and Warrant Purchase Agreement (the “2022 NWPA Consent”) with the HealthCor Parties and certain additional Existing Investors (in their capacity as Majority Holders acting together with the HealthCor Parties), pursuant to which, among other things, (i) the Majority Holders consented to the HealthCor Note Extensions, (ii) the Majority Holders consented to the issuance of the 2021 HealthCor Warrants and (iii) the parties agreed that the holders of the 2021 HealthCor Warrants would have registration rights for the shares of Common Stock issuable upon exercise of the 2021 HealthCor Warrants under the Registration Rights Agreement dated as of April 20, 2011, as amended June 30, 2015, by and among the Company, the HealthCor Parties and the additional investors party thereto (the “Registration Rights Agreement”). Below is a summary of the total underlying shares of common stock related to HealthCor and related investors: Investor Group Underlying Shares of Common Stock 2014 HealthCor Notes 30,977,654 2015 Investors 21,401,384 2015 HealthCor Notes 4,280,279 February 2018 Investors 65,862,518 July 2018 Investors 30,638,384 2019 Investor 2,302,972 February 2020 Investor 12,637,716 TOTAL 168,100,907 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 $ 0 2,366,220 0 2,222,714 Warrants were issued with the Fourth, Fifth, Eighth, Ninth, and Allonge 3 Amendment Notes and 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. At each amendment date, the warrants were recorded as debt discount, as a reduction of the net carrying amount of the debt. The debt discounts are amortized into interest expense each period under the effective interest method. The value allocated to the Ninth Amendment Warrants was $ 378,000 420,000 Warrants were issued with Allonge 4 Amendment Notes and the proceeds were allocated to the instruments based on relative fair value as the warrants did not contain any features requiring lia0bility treatment and therefore were classified as equity. At each amendment date, the warrants were recorded as debt discount, as a reduction of the net carrying amount of the debt. The debt discounts are amortized into interest expense each period under the effective interest method. The value allocated to the Allonge 4 Amendment Warrants was $ 240,000 |
JOINT VENTURE AGREEMENT
JOINT VENTURE AGREEMENT | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
JOINT VENTURE AGREEMENT | NOTE 12 – JOINT VENTURE AGREEMENT On December 31, 2019, the Company and Rockwell entered into a Second Amendment to the Rockwell Note (the “Second Rockwell Note Amendment”) pursuant to which Rockwell agreed to extend the term of the Rockwell Note by one year, to December 31, 2020 December 31, 2019 January 31, 2020 On January 31, 2020, the Company and Rockwell entered into a Third Amendment to the Rockwell Note (the “Third Rockwell Note Amendment”), pursuant to which Rockwell agreed to extend the time to make the quarterly payment that would otherwise be due on January 31, 2020 February 10, 2020 Effective as of March 31, 2020, the Company and Rockwell entered into a Fourth Amendment to the Rockwell Note (the “Fourth Rockwell Note Amendment”), pursuant to which Rockwell agreed to extend the time to make the quarterly payment that would otherwise be due on March 31, 2020 April 16, 2020 On December 31, 2020, the Company and Rockwell entered a Fifth Amendment to the Rockwell Note (the “Fifth Rockwell Note Amendment”), pursuant to which Rockwell agreed (i) to extend the term of the Promissory Note by one ( 1 September 30, 2021 December 31, 2021 On November 30, 2021, the Company and Rockwell entered into a Sixth Amendment to the Rockwell Note (the “Sixth Rockwell Note Amendment”), pursuant to which Rockwell agreed to extend the term of the Rockwell Note by three months, to March 31, 2022 December 31, 2021 March 31, 2022 As of March 31, 2022, the Rockwell Note was paid off. |
LEASE
LEASE | 9 Months Ended |
Sep. 30, 2022 | |
Lease | |
LEASE | NOTE 13 – LEASE Under ASC Topic 842, Leases (“ASC 842”), operating lease expense is generally recognized evenly over the term of the lease. The Company has an operating lease primarily consisting of office space with remaining lease term of 38 August 31, 2025 On September 8, 2009, we entered into a Commercial Lease Agreement (the “Lease”) for 10,578 June 30, 2015 August 31, 2025 The Company has further concluded that the Lease Extension has no effects on the classification of the Lease. Rent expense for the three and nine months ended September 30, 2022 and 2021 was $ 71,906 72,684 226,108 213,674 Undiscounted Cash Flows Future lease payments included in the measurement of operating lease liability on the condensed consolidated balance sheet as of September 30, 2022, for the following five fiscal years and thereafter as follows: Quarter ending Operating Remaining 2022 $ 52,865 2023 214,631 2024 221,069 2025 150,679 Total minimum lease payments 639,244 Less effects of discounting (124,237 ) Present value of future minimum lease payments $ 515,007 |
INTEREST SUSPENSION
INTEREST SUSPENSION | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
INTEREST SUSPENSION | NOTE 15 – INTEREST SUSPENSION On July 1, 2022, we entered into amendments to the 2014 HealthCor Notes, 2015 Supplemental Notes, Eighth Amendment Supplemental Closing Notes, Tenth Amendment Supplemental Closing Notes, Twelfth Amendment Supplemental Closing Note and Thirteenth Amendment Supplemental Closing Note (collectively, the “2022 Allonges”) to suspend the accrual of interest on the 2014 HealthCor Notes as to 100 100 100 100 100 100 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through November 21, 2022, the date of filing of this Form 10-Q. |
BASIS OF PRESENTATION AND REC_2
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [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, 2021 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, 2021, as filed with the SEC on March 31, 2022. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”). For our subscription service contracts, 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. 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. 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. We enter into contracts with customers that may provide multiple combinations of our products, software solutions, and other related services which are generally capable of being distinct and accounted for as separate performance obligations. Performance obligations that are not distinct at contract inception are combined. Customer contract fulfillment typically involves multiple procurement promises which may include various equipment, software subscription, project-related installation and training services, and support. We allocate the transaction price to each performance obligations based on estimated relative standalone selling price. Revenue is then recognized for each performance obligation upon transferring control of the hardware, software, and services to the customer an in an amount that reflects the consideration we expect to receive and the estimated benefit the customer receives over the term of the contract. Generally, we recognize revenue under each of our performance obligations as follows: ● Subscription services – We recognize subscription revenues monthly over the contracted license period. ● Equipment packages related to sales-based contracts – We recognize equipment revenues when control of the devices has transferred to the client (“point in time”). ● Software bundle and related services related to sales-based contracts – We recognize our software subscription, installation, training, and other services on a straight-line basis over the estimated contracted license period (“over time”). Disaggregation of Revenue The following presents gross revenues disaggregated by our business models: Three Months Ended September 30, 2022 2021 Sales-based contract revenue Equipment package (point in time) $ 314,495 $ 707,209 Software bundle (over time) 329,411 143,343 Total sales-based contract revenue 643,906 850,552 Subscription-based lease revenue (over time) 1,323,718 1,361,399 Gross revenue $ 1,967,624 $ 2,211,951 Nine Months Ended September 30, 2022 2021 Sales-based contract revenue Equipment package (point in time) $ 1,121,817 $ 1,678,166 Software bundle (over time) 796,815 336,819 Total sales-based contract revenue 1,918,632 2,014,985 Subscription-based lease revenue (over time) 4,064,757 4,063,182 Gross revenue $ 5,983,389 $ 6,078,167 Contract Liabilities Our subscription-based contracts payment arrangements are required to be paid monthly which are recognized into revenue when received. Some customers chose to pay their subscription fee in advance. Customer payments received in advance of satisfaction of the related performance obligations are deferred as contract liabilities. These amounts are recorded as “Deferred revenue” in our condensed consolidated balance sheet and recognized into revenues over time. Our sales-based contract payment arrangements with our customers typically include an initial equipment payment due upon signing of the contract and subsequent payments when certain performance obligations are completed. Customer payments received in advance of satisfaction of related performance obligations are deferred as contract liabilities. These amounts are recorded as “Deferred revenue” in our condensed consolidated balance sheet and recognized into revenues as either a point in time or over time. During the nine months ended September 30, 2022 and 2021, a total of $ 208,155 149,863 The table below details the subscription-based contract liability activity during the nine months ended September 30, 2022, and 2021. Nine Months Ended 2022 2021 Balance, beginning of period $ 231,140 $ 238,263 Additions 30,306 220,696 Transfer to revenue (210,681 ) (220,375 ) Balance, end of period $ 50,765 $ 238,584 During the nine months ended September 30, 2022 and 2021, a total of $ 673,643 221,312 Nine Months Ended 2022 2021 Balance, beginning of period $ 752,526 $ 226,861 Additions 2,000,051 2,419,328 Transfer to revenue (1,829,720 ) (2,112,043 ) Balance, end of period $ 922,857 $ 534,146 As of September 30, 2022, the aggregate amount of deferred revenue from subscription-based contracts and sales-based contracts allocated to performance obligations that are unsatisfied or partially satisfied is approximately $ 973,000 Years Ending December 31, Amount 2022 $ 292,334 2023 376,529 Thereafter 304,758 $ 973,622 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 nine months ended September 30, 2022 and 2021, included in other assets in the accompanying consolidated balance sheet. Nine Months Ended 2022 2021 Balance, beginning of period $ 68,901 $ 54,003 Additions — 59,312 Transfer to expense (27,731 ) (32,877 ) Balance, end of period $ 41,170 $ 80,438 Significant Judgements When Applying Topic 606 Contracts with our customers are typically structured similarly and include various combinations of our products, software solutions, and related services. Determining whether the various contract promises are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Contract transaction price is allocated to distinct performance obligations using estimated standalone selling price. We determine standalone selling price maximizing observable inputs such as standalone sales, competitor standalone sales, or substantive renewal prices charged to customers when they exist. In instances where standalone selling price is not observable, we utilize an estimate of standalone selling price. Such estimates are derived from various methods that include cost plus margin, and historical pricing practices. Judgment may be required to determine standalone selling prices for each performance obligation and whether it depicts the amount we expect to receive in exchange for the related good or service. Contract modifications occur when we and our customers agree to modify existing customer contracts to change the scope or price (or both) of the contract or when a customer terminates some, or all, of the existing services provided by us. When a contract modification occurs, it requires us to exercise judgment to determine if the modification should be accounted for as a separate contract, the termination of the original contract and creation of a new contract, a cumulative catch-up adjustment to the original contract, or a combination. Contracts with our customers include a limited warranty on our products covering materials, workmanship, or design for the duration of contract. We do not offer paid additional extended or lifetime warranty packages. We determined the limited warranty in our contract is not a distinct performance obligation. We do not believe our estimates of warranty costs to be significant to our determination of revenue recognition and, therefore, did not reserve for warranty costs. |
Leases | Leases The Company has an operating lease primarily consisting of office space with a remaining lease term of 35 months. At the least commence date, an operating lease liability and related operating lease asset are recognized. The operating lease liability are calculated using the present value of lease payments. The discount rate used is either the rate implicit in the lease, when known, or our estimated incremental borrowing rate. Operating lease assets are valued based on the initial operating lease liability plus an prepare rent and direct costs from executing the leases. |
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 230,280,000 222,000,000 |
BASIS OF PRESENTATION AND REC_3
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
The following presents gross revenues disaggregated by our business models: | The following presents gross revenues disaggregated by our business models: Three Months Ended September 30, 2022 2021 Sales-based contract revenue Equipment package (point in time) $ 314,495 $ 707,209 Software bundle (over time) 329,411 143,343 Total sales-based contract revenue 643,906 850,552 Subscription-based lease revenue (over time) 1,323,718 1,361,399 Gross revenue $ 1,967,624 $ 2,211,951 Nine Months Ended September 30, 2022 2021 Sales-based contract revenue Equipment package (point in time) $ 1,121,817 $ 1,678,166 Software bundle (over time) 796,815 336,819 Total sales-based contract revenue 1,918,632 2,014,985 Subscription-based lease revenue (over time) 4,064,757 4,063,182 Gross revenue $ 5,983,389 $ 6,078,167 |
The table below details the subscription-based contract liability activity during the nine months ended September 30, 2022, and 2021. | During the nine months ended September 30, 2022 and 2021, a total of $ 208,155 149,863 The table below details the subscription-based contract liability activity during the nine months ended September 30, 2022, and 2021. Nine Months Ended 2022 2021 Balance, beginning of period $ 231,140 $ 238,263 Additions 30,306 220,696 Transfer to revenue (210,681 ) (220,375 ) Balance, end of period $ 50,765 $ 238,584 During the nine months ended September 30, 2022 and 2021, a total of $ 673,643 221,312 Nine Months Ended 2022 2021 Balance, beginning of period $ 752,526 $ 226,861 Additions 2,000,051 2,419,328 Transfer to revenue (1,829,720 ) (2,112,043 ) Balance, end of period $ 922,857 $ 534,146 |
As of September 30, 2022, the aggregate amount of deferred revenue from subscription-based contracts and sales-based contracts allocated to performance obligations that are unsatisfied or partially satisfied is approximately $973,000 | As of September 30, 2022, the aggregate amount of deferred revenue from subscription-based contracts and sales-based contracts allocated to performance obligations that are unsatisfied or partially satisfied is approximately $ 973,000 Years Ending December 31, Amount 2022 $ 292,334 2023 376,529 Thereafter 304,758 $ 973,622 |
The table below details the activity in these deferred installation costs during the nine months ended September 30, 2022 and 2021, included in other assets in the accompanying consolidated balance sheet. | The table below details the activity in these deferred installation costs during the nine months ended September 30, 2022 and 2021, included in other assets in the accompanying consolidated balance sheet. Nine Months Ended 2022 2021 Balance, beginning of period $ 68,901 $ 54,003 Additions — 59,312 Transfer to expense (27,731 ) (32,877 ) Balance, end of period $ 41,170 $ 80,438 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
A summary of our Warrants activity and related information follows: | A summary of our Warrants activity and related information follows: Number of Range of Weighted Average Exercise Price Weighted Balance at December 31, 2021 18,050,458 $ .01 .53 $ 0.74 4.2 Granted 3,000,000 $ 0.08 $ 0.08 9.7 Expired — Canceled — Balance at September 30, 2022 21,050,458 $ .01 .53 $ 0.49 4.1 |
A summary of our stock option activity and related information follows: | A summary of our stock option activity and related information follows: Number of Weighted Average Exercise Price Weighted Aggregate Intrinsic Value Balance at December 31, 2021 40,625,477 0.12 6.7 1,283,975 Granted 738,500 Expired (235,000 ) Canceled — Balance at September 30, 2022 41,128,977 0.12 6.0 523,925 Vested and Exercisable at September 30, 2022 33,204,477 0.14 5.5 523,925 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other current assets consist of the following: | Other current assets consist of the following: September 30, December 31, Prepaid expenses $ 69,789 $ 235,521 TOTAL OTHER CURRENT ASSETS $ 69,789 $ 235,521 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory consists of the following: | Inventory consists of the following: September 30, December 31, Inventory assets (finished goods) $ 389,176 $ 349,216 TOTAL INVENTORY $ 389,176 $ 349,216 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment consist of the following: | Property and equipment consist of the following: September 30, December 31, Network equipment $ 12,620,258 $ 12,620,258 Office equipment 234,429 229,240 Vehicles 232,411 232,411 Test Equipment 230,365 204,455 Furniture 92,846 92,846 Warehouse equipment 9,524 9,524 Leasehold improvements 5,121 5,121 TOTAL PROPERTY AND EQUIPMENT 13,424,954 13,393,855 Less: accumulated depreciation (12,656,741 ) (12,254,964 ) TOTAL PROPERTY AND EQUIPMENT, NET $ 768,213 $ 1,138,891 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Intangible assets consist of the following: | Intangible assets consist of the following: September 30, 2022 Cost Accumulated Amortization Net Patents and trademarks $ 1,310,436 $ 381,876 $ 928,560 Other intangible assets — — — TOTAL INTANGIBLE ASSETS $ 1,310,436 $ 381,876 $ 928,560 December 31, 2021 Cost Accumulated Amortization Net Patents and trademarks $ 1,254,327 $ 343,929 $ 910,398 Other intangible assets 83,745 83,745 — TOTAL INTANGIBLE ASSETS $ 1,338,072 427,674 $ 910,398 |
Other assets consist of the following: | Other assets consist of the following: September 30, 2022 Cost Accumulated Amortization Net Deferred installation costs $ 1,352,041 $ 1,310,871 $ 41,170 Deferred sales commission 147,177 59,430 87,747 Prepaid license fee 249,999 181,693 68,306 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 1,795,341 $ 1,551,994 $ 243,347 December 31, 2021 Cost Accumulated Amortization Net Deferred installation costs $ 1,352,041 $ 1,283,140 $ 68,901 Deferred sales commission 122,778 18,841 103,937 Prepaid license fee 249,999 169,398 80,601 Security deposit 46,124 — 46,124 TOTAL OTHER ASSETS $ 1,770,942 $ 1,471,379 $ 299,563 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Other current liabilities consist of the following: | Other current liabilities consist of the following: September 30, December 31, Accrued interest $ 12,167,653 $ 9,947,730 Accrued interest, related parties 228,528 228,528 Allowance for system removal 54,802 54,802 Accrued paid time off 145,392 173,904 Deferred officer compensation (1) 139,041 139,041 Deferred revenue 973,622 983,667 Accrued taxes (other than income taxes) 9,426 38,367 Insurance premium financing — 103,792 Other accrued liabilities — 70,388 TOTAL OTHER CURRENT LIABILITIES $ 13,718,464 $ 11,740,218 (1) Salary for Steve Johnson, CEO, between February 15, 2018, and September 30, 2020. |
AGREEMENT WITH HEALTHCOR (Table
AGREEMENT WITH HEALTHCOR (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Agreement With Healthcor | |
Below is a summary of the total underlying shares of common stock related to HealthCor and related investors: | Below is a summary of the total underlying shares of common stock related to HealthCor and related investors: Investor Group Underlying Shares of Common Stock 2014 HealthCor Notes 30,977,654 2015 Investors 21,401,384 2015 HealthCor Notes 4,280,279 February 2018 Investors 65,862,518 July 2018 Investors 30,638,384 2019 Investor 2,302,972 February 2020 Investor 12,637,716 TOTAL 168,100,907 |
LEASE (Tables)
LEASE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Lease | |
Future lease payments included in the measurement of operating lease liability on the condensed consolidated balance sheet as of September 30, 2022, for the following five fiscal years and thereafter as follows: | Future lease payments included in the measurement of operating lease liability on the condensed consolidated balance sheet as of September 30, 2022, for the following five fiscal years and thereafter as follows: Quarter ending Operating Remaining 2022 $ 52,865 2023 214,631 2024 221,069 2025 150,679 Total minimum lease payments 639,244 Less effects of discounting (124,237 ) Present value of future minimum lease payments $ 515,007 |
The following presents gross re
The following presents gross revenues disaggregated by our business models: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Gross revenue | $ 1,967,624 | $ 2,211,951 | $ 5,983,389 | $ 6,078,167 |
Sales-based equipment package revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenue | 314,495 | 707,209 | 1,121,817 | 1,678,166 |
Sales-based software bundle revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenue | 329,411 | 143,343 | 796,815 | 336,819 |
Sales-based contract revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenue | 643,906 | 850,552 | 1,918,632 | 2,014,985 |
Subscription-based lease revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenue | $ 1,323,718 | $ 1,361,399 | $ 4,064,757 | $ 4,063,182 |
BASIS OF PRESENTATION AND REC_4
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Performance obligations | $ 973,622 | |
Anti-dilutive common share equivalents excluded from EPS calculation | 230,280,000 | 222,000,000 |
Subscription-Based Contract Liability [Member] | ||
Contract liability recognized as revenue | $ 208,155 | $ 149,863 |
Sales Based Contract Liability [Member] | ||
Contract liability recognized as revenue | $ 673,643 | $ 221,312 |
The table below details the sub
The table below details the subscription-based contract liability activity during the nine months ended September 30, 2022, and 2021. (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Subscription-Based Contract Liability [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Balance, beginning of period | $ 231,140 | $ 238,263 |
Additions | 30,306 | 220,696 |
Transfer to revenue | (210,681) | (220,375) |
Balance, end of period | 50,765 | 238,584 |
Sales Based Contract Liability [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Balance, beginning of period | 752,526 | 226,861 |
Additions | 2,000,051 | 2,419,328 |
Transfer to revenue | (1,829,720) | (2,112,043) |
Balance, end of period | $ 922,857 | $ 534,146 |
As of September 30, 2022, the a
As of September 30, 2022, the aggregate amount of deferred revenue from subscription-based contracts and sales-based contracts allocated to performance obligations that are unsatisfied or partially satisfied is approximately $973,000 (Details) | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 973,622 |
2022 [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 292,334 |
2023 [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | 376,529 |
Thereafter [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 304,758 |
The table below details the act
The table below details the activity in these deferred installation costs during the nine months ended September 30, 2022 and 2021, included in other assets in the accompanying consolidated balance sheet. (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||
Balance, beginning of period | $ 68,901 | $ 54,003 |
Additions | 59,312 | |
Transfer to expense | (27,731) | (32,877) |
Balance, end of period | $ 41,170 | $ 80,438 |
GOING CONCERN, LIQUIDITY AND _2
GOING CONCERN, LIQUIDITY AND MANAGEMENT’S PLAN (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 08, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated deficit | $ 204,216,037 | $ 204,216,037 | $ 197,890,046 | ||||
Operating loss | 332,330 | $ (141,425) | 1,188,849 | $ 361,594 | |||
Net cash provided by operating activities | 282,598 | (294,563) | |||||
Cash balance | 288,828 | $ 271,067 | 288,828 | $ 271,067 | $ 659,228 | $ 357,950 | |
Working capital net | $ 377,757 | $ 377,757 | |||||
HealthCor Allonge No.4 Warrants [Member] | |||||||
Number of warrants issued | 3,000,000 | ||||||
Warrant exercise price (in dollars per share) | $ 0.09 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 08, 2022 | Apr. 20, 2021 | |
Class of Stock [Line Items] | ||||||
Options granted | 738,500 | |||||
Options granted, fair value | $ 61,920 | |||||
Option exercise prices, minimum | $ 0.07 | |||||
Option exercise prices, maximum | $ 0.12 | |||||
Options expired | 235,000 | |||||
Share-based compensation expense | $ 59,844 | $ 53,474 | $ 173,068 | $ 160,957 | ||
Unrecognized estimated compensation expense | $ 254,023 | $ 254,023 | ||||
Period for recognition of unrecognized compensation expense | 1 year 3 months 18 days | |||||
HealthCor Partners Warrants [Member] | ||||||
Class of Stock [Line Items] | ||||||
Number of warrants issued | 3,000,000 | 931,600 | ||||
HealthCor Hybrid Warrants [Member] | ||||||
Class of Stock [Line Items] | ||||||
Number of warrants issued | 1,068,400 | |||||
HealthCor Warrants [Member] | ||||||
Class of Stock [Line Items] | ||||||
Warrant exercise price (in dollars per share) | $ 0.09 | $ 0.23 |
A summary of our Warrants activ
A summary of our Warrants activity and related information follows: (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding, beginning | shares | 18,050,458 |
Weighted average exercise price, beginning | $ 0.74 |
Warrant term, beginning | 4 years 2 months 12 days |
Warrants granted | shares | 3,000,000 |
Warrant price granted | $ 0.08 |
Weighted average exercise price, granted | $ 0.08 |
Warrant term, granted | 9 years 8 months 12 days |
Warrants outstanding, ending | shares | 21,050,458 |
Weighted average exercise price, ending | $ 0.49 |
Warrant term, ending | 4 years 1 month 6 days |
Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant price, beginning | $ 0.01 |
Warrant price, ending | 0.01 |
Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant price, beginning | 0.53 |
Warrant price, ending | $ 0.53 |
A summary of our stock option a
A summary of our stock option activity and related information follows: (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Equity [Abstract] | |
Stock Options Outstanding, Beginning | 40,625,477 |
Stock Options Outstanding, Weighted Average Exercise Price, Beginning | $ / shares | $ 0.12 |
Stock Options Outstanding, Weighted Average Remaining Contractual Life, Beginning | 6 years 8 months 12 days |
Stock Options Outstanding, Aggregate Intrinsic Value, Beginning | $ | $ 1,283,975 |
Stock Options Outstanding, Granted | 738,500 |
Stock Options Outstanding, Expired | (235,000) |
Stock Options Outstanding, Ending | 41,128,977 |
Stock Options Outstanding, Weighted Average Exercise Price, Ending | $ / shares | $ 0.12 |
Stock Options Outstanding, Weighted Average Remaining Contractual Life, Ending | 6 years |
Stock Options Outstanding, Aggregate Intrinsic Value, Ending | $ | $ 523,925 |
Stock Options Vested and Exercisable | 33,204,477 |
Stock Options Vested and Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.14 |
Stock Options Vested and Exercisable, Weighted Average Remaining Contractual Life | 5 years 6 months |
Stock Options Vested and Exercisable, Aggregate Intrinsic Value | $ | $ 523,925 |
Other current assets consist of
Other current assets consist of the following: (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 69,789 | $ 235,521 |
TOTAL OTHER CURRENT ASSETS | $ 69,789 | $ 235,521 |
Inventory consists of the follo
Inventory consists of the following: (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Inventory assets (finished goods) | $ 389,176 | $ 349,216 |
TOTAL INVENTORY | $ 389,176 | $ 349,216 |
Property and equipment consist
Property and equipment consist of the following: (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | $ 13,424,954 | $ 13,393,855 |
Less: accumulated depreciation | (12,656,741) | (12,254,964) |
TOTAL PROPERTY AND EQUIPMENT, NET | 768,213 | 1,138,891 |
Network Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | 12,620,258 | 12,620,258 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | 234,429 | 229,240 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | 232,411 | 232,411 |
Test Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | 230,365 | 204,455 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | 92,846 | 92,846 |
Warehouse Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | 9,524 | 9,524 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL PROPERTY AND EQUIPMENT | $ 5,121 | $ 5,121 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 111,761 | $ 144,764 | $ 375,867 | $ 437,859 |
Intangible assets consist of th
Intangible assets consist of the following: (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,310,436 | $ 1,338,072 |
Accumulated Amortization | 381,876 | 427,674 |
Net | 928,560 | 910,398 |
Patents and Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,310,436 | 1,254,327 |
Accumulated Amortization | 381,876 | 343,929 |
Net | 928,560 | 910,398 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 83,745 | |
Accumulated Amortization | 83,745 | |
Net |
Other assets consist of the fol
Other assets consist of the following: (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Cost | $ 1,795,341 | $ 1,770,942 |
Accumulated Amortization | 1,551,994 | 1,471,379 |
Net | 243,347 | 299,563 |
Deferred Installation Costs [Member] | ||
Cost | 1,352,041 | 1,352,041 |
Accumulated Amortization | 1,310,871 | 1,283,140 |
Net | 41,170 | 68,901 |
Deferred Sales Commissions [Member] | ||
Cost | 147,177 | 122,778 |
Accumulated Amortization | 59,430 | 18,841 |
Net | 87,747 | 103,937 |
Prepaid License Fee [Member] | ||
Cost | 249,999 | 249,999 |
Accumulated Amortization | 181,693 | 169,398 |
Net | 68,306 | 80,601 |
Security Deposit [Member] | ||
Cost | 46,124 | 46,124 |
Accumulated Amortization | ||
Net | $ 46,124 | $ 46,124 |
Other current liabilities consi
Other current liabilities consist of the following: (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |||
Accrued interest | $ 12,167,653 | $ 9,947,730 | |
Accrued interest, related parties | 228,528 | 228,528 | |
Allowance for system removal | 54,802 | 54,802 | |
Accrued paid time off | 145,392 | 173,904 | |
Deferred officer compensation | [1] | 139,041 | 139,041 |
Deferred revenue | 973,622 | 983,667 | |
Accrued taxes (other than income taxes) | 9,426 | 38,367 | |
Insurance premium financing | 103,792 | ||
Other accrued liabilities | 70,388 | ||
TOTAL OTHER CURRENT LIABILITIES | $ 13,718,464 | $ 11,740,218 | |
[1]Salary for Steve Johnson, CEO, between February 15, 2018, and September 30, 2020. |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - Internal Revenue Service (IRS) [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 02, 2018 | |
Percentage of corporate tax rate | 21% | 35% | |
Percentage of operating loss carryforwards limitation | 80% |
AGREEMENT WITH PDL BIOPHARMA,_2
AGREEMENT WITH PDL BIOPHARMA, INC. (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 43 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 13, 2019 | May 15, 2019 | Jun. 26, 2015 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Interest Expense | $ 1,146,820 | $ 2,041,748 | $ 5,137,272 | $ 7,045,049 | |||
PDL Modification Agreement [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Interest Expense | 2,325,000 | $ 2,325,000 | |||||
PDL BioPharma, Inc. [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Amount available under credit agreement | $ 40,000,000 | ||||||
PDL BioPharma, Inc. [Member] | Warrant Purchase Agreement [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Deferred issuance costs | $ 1,600,000 | $ 1,600,000 | |||||
PDL BioPharma, Inc. [Member] | Tranche One [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Amount available under credit agreement | $ 20,000,000 | ||||||
Interest rate during period | 13.50% | ||||||
Debt instrument interest rate | 15.50% | ||||||
Minimum cash balance required before modification | $ 750,000 | ||||||
Minimum cash balance required | $ 0 |
AGREEMENT WITH HEALTHCOR (Detai
AGREEMENT WITH HEALTHCOR (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Mar. 08, 2022 | Mar. 06, 2022 | Apr. 20, 2021 | Apr. 18, 2021 | Apr. 21, 2011 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Interest Expense | $ 1,146,820 | $ 2,041,748 | $ 5,137,272 | $ 7,045,049 | |||||
HealthCor Ninth Amendment Warrants [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Debt discount | 378,000 | 378,000 | |||||||
HealthCor Allonge No.3 Warrants [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Debt discount | 420,000 | 420,000 | |||||||
HealthCor Allonge No.4 Warrants [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Exercise price of warrants | $ 0.09 | ||||||||
Debt discount | $ 240,000 | 240,000 | |||||||
2011 Notes [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Interest Expense | 0 | 2,366,220 | |||||||
HealthCor Purchase Agreement [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Interest Expense | $ 0 | $ 2,222,714 | |||||||
HealthCor Purchase Agreement [Member] | Convertible Debt [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Loan amount | $ 9,316,000 | ||||||||
Issuance of warrants | 5,488,456 | ||||||||
Exercise price of warrants | $ 1.40 | ||||||||
Increase in interest rate (per annum) should default occur | 5% | ||||||||
HealthCor Purchase Agreement [Member] | Convertible Debt [Member] | First Five Year Note Period [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Interest rate | 12.50% | ||||||||
HealthCor Purchase Agreement [Member] | Convertible Debt [Member] | Second Five Year Note Period [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Interest rate | 10% | ||||||||
HealthCor Purchase Agreement [Member] | 2011 Senior Secured Convertible Note#2 [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Loan amount | $ 10,684,000 | ||||||||
Issuance of warrants | 6,294,403 | ||||||||
HealthCor Note Extensions [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Issuance of warrants | 3,000,000 | 2,000,000 | |||||||
Exercise price of warrants | $ 0.09 | $ 0.23 | |||||||
Warrants expiration date | Mar. 08, 2032 | Apr. 20, 2031 | |||||||
HealthCor Note Extensions [Member] | 2011 Notes [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Debt maturity date | Apr. 20, 2023 | Apr. 20, 2022 | Apr. 20, 2022 | Apr. 20, 2021 | |||||
HealthCor Note Extensions [Member] | 2012 Notes [Member] | |||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||
Debt maturity date | Apr. 20, 2022 | Jan. 30, 2022 |
Below is a summary of the total
Below is a summary of the total underlying shares of common stock related to HealthCor and related investors: (Details) | Sep. 30, 2022 shares |
Outstanding notes and warrants to purchase common shares | 168,100,907 |
2014 HealthCor Notes [Member] | |
Outstanding notes and warrants to purchase common shares | 30,977,654 |
2015 Investors [Member] | |
Outstanding notes and warrants to purchase common shares | 21,401,384 |
2015 HealthCor Notes [Member] | |
Outstanding notes and warrants to purchase common shares | 4,280,279 |
February 2018 Investors [Member] | |
Outstanding notes and warrants to purchase common shares | 65,862,518 |
July 2018 Investors [Member] | |
Outstanding notes and warrants to purchase common shares | 30,638,384 |
2019 Investor [Member] | |
Outstanding notes and warrants to purchase common shares | 2,302,972 |
February 2020 Investor [Member] | |
Outstanding notes and warrants to purchase common shares | 12,637,716 |
JOINT VENTURE AGREEMENT (Detail
JOINT VENTURE AGREEMENT (Details Narrative) - Rockwell [Member - Rockwell Note [Member] | Nov. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019 |
Second Rockwell Note Amendment [Member] | |||||
Debt maturity date | Dec. 31, 2020 | ||||
Debt previous payment due date | Dec. 31, 2019 | ||||
Debt revised payment due date | Jan. 31, 2020 | ||||
Third Rockwell Note Amendment [Member] | |||||
Debt previous payment due date | Jan. 31, 2020 | ||||
Debt revised payment due date | Feb. 10, 2020 | ||||
Fourth Rockwell Note Amendment [Member] | |||||
Debt previous payment due date | Mar. 31, 2020 | ||||
Debt revised payment due date | Apr. 16, 2020 | ||||
Fifth Rockwell Note Amendment [Member] | |||||
Debt maturity date | Dec. 31, 2021 | ||||
Term extension period | 1 year | ||||
Debt date of final required quarterly payment | Sep. 30, 2021 | ||||
Sixth Rockwell Note Amendment [Member] | |||||
Debt maturity date | Mar. 31, 2022 | ||||
Debt previous payment due date | Dec. 31, 2021 | ||||
Debt revised payment due date | Mar. 31, 2022 |
Future lease payments included
Future lease payments included in the measurement of operating lease liability on the condensed consolidated balance sheet as of September 30, 2022, for the following five fiscal years and thereafter as follows: (Details) | Sep. 30, 2022 USD ($) |
Lease | |
Remaining 2022 | $ 52,865 |
2023 | 214,631 |
2024 | 221,069 |
2025 | 150,679 |
Total minimum lease payments | 639,244 |
Less effects of discounting | (124,237) |
Present value of future minimum lease payments | $ 515,007 |
LEASE (Details Narrative)
LEASE (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||
Mar. 04, 2020 | Sep. 08, 2009 ft² | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Lease | ||||||
Remaining lease term | 38 months | 38 months | ||||
Expiration of lease | Aug. 31, 2025 | Jun. 30, 2015 | Aug. 31, 2025 | |||
Area of lease | ft² | 10,578 | |||||
Rent expense | $ | $ 71,906 | $ 72,684 | $ 226,108 | $ 213,674 |
INTEREST SUSPENSION (Details Na
INTEREST SUSPENSION (Details Narrative) | Jul. 02, 2022 |
2014 HealthCor Notes [Member] | |
Debt Instrument [Line Items] | |
Percentage of interest accrual suspended | 100% |
2015 HealthCor Notes [Member] | |
Debt Instrument [Line Items] | |
Percentage of interest accrual suspended | 100% |
Eightth Amendment [Member] | |
Debt Instrument [Line Items] | |
Percentage of interest accrual suspended | 100% |
Tenth Amendment [Member] | |
Debt Instrument [Line Items] | |
Percentage of interest accrual suspended | 100% |
Twelfth Amendement [Member] | |
Debt Instrument [Line Items] | |
Percentage of interest accrual suspended | 100% |
Thirteenth Amendment [Member] | |
Debt Instrument [Line Items] | |
Percentage of interest accrual suspended | 100% |