CRVW 10-K & 10-Q changes, risk factors and insider trading

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 year ended December 31, 2024,2025, the Company had an accumulated deficit of approximately $212,586,000,$215,786,000, a loss from operations of approximately $1,577,000,$3,194,000, net cash usedprovided inby operating activities of $(238,652)$805,184 and an ending cash balance of $759,266.$1,546,883.

As of December 31, 2024,2025, the Company had a working capital deficit of $41,138,868.$43,481,413. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the consolidated financial statements were issued. While management will look to continue funding operations by increased sales volumes and raising additional capital from sources such as sales of its debt or equity securities or loans to meet operating cash requirements, there is no assurance that management’s plans will be successful. The Company’s net losses, cash outflows, and working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s net losses, cash outflows,losses and working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern 12 months from the date the financial statement was issued. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company’s cost structure.

Net decreaseincrease in cash during the year ended December 31, 20242025 was approximately $387,000.$788,000. The principalincrease in cash provided by operating activities for the year ended December 31, 20242025, was primarily relateddriven toby significantlyan lowerapproximately net$1,110,000 loss due to sales. The changeimprovement in operating cash flows provided by operating activities betweenfrom 2024 to 2025, resulting from increased sales and 2023reduced of approximately $942,000 is primarily a result of $627,903 increase in net loss.expenses. The change in cash flows used in investing activities between 20242025 and 20232024 of approximately $77,000$57,000 is primarily a result of the increasedecrease in Patentspurchases andof Trademarks.equipment. The change in cash flows used in financing activities between 20242025 and 20232024 of approximately $7,000$8,000 is primarilythe due to paying down notes payableresult of annot installationhaving truck.a vehicle loan.

Revenue decreasedincreased approximately $1,433,000$765,000 for the year ended December 31, 20242025 as compared to the same period in 2023.2024. The decreaseincrease in revenue results from the decreaseincrease in our sales-based contracts of equipment of $2,480,022 and subscriptions of $265,091, whilerecurring software bundle increased $1,311,710.revenue.

Human resource related costs (including salaries and benefits and non-cash compensation) increaseddecreased approximately $961,000$437,000 primarily because of stocktermination optionof grantsemployees andalong higherwith employeereplacements payrollwith lower salary during the twelve months ended December 31, 20242025 as compared to the twelve months ended December 31, 2023.2024. Professional and consulting fees decreasedincreased approximately $288,000,$12,000, primarily because of lowerHITRUST legalregulatory costs and less contractors.compliance. Depreciation and amortization expense decreased by approximately $202,000$108,000 due to fully depreciated and amortized assets. Other product development costs increaseddecreased approximately $170,000$198,000 primarily because of increasesdecreases in commissions and cost of sales (installation, training and service as well as freight) of Go Lives. Travel and entertainment expense decreasedincreased approximately $139,000$1,000 with lesshigher corporate travelair and instead cost of salesfares during the twelve months ended December 31, 20242025 as compared to the same period in 2023.2024. Equipment cost decreasedincreased by approximately $299,000$51,000 due to lackmore sales of sales.portable and mobile equipment. The decrease of approximately $747,000$78,000 in other expense is due to no more abandonment of assets, negotiating lower business insurance costs, less advertising and marketing expenses, lowerreconciling R&Dproperty taxes, management of patent maintenance expenses and lessnegotiating officelower expenses.business insurance costs.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This update will enhance disclosures about public business entity’s expenses, responding to investor requests for more detailed information on components such as inventory purchases, employee compensation, depreciation, amortization, and depletion within commonly presented expense captions (e.g., cost of sales, SG&A, and R&D). These amendments are expected to provide investors with a clearer understanding of an entity’s expenses, helping them assess performance, forecast future expenses, and evaluate cash flow prospects. The Company will adopt this guidance on its effective date for these amendments, as clarified by ASU 2025-01, are for annual reporting periods beginning after December 15, 2026.2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The standard can be applied either prospectively or retrospectively. We are currently assessing adoption timing and the effect that the updated standard will have on our financial statement disclosures.

On March 21,30, 20252026 (the “Effective Date”), CareView Communications, Inc., the Borrower, PDL BioPharma, Inc.("PDL"), the Lender, Steven G. Johnson, President and Chief Executive Officer of the Company, and Dr. James R. Higgins, a director of the Company, entered into a TenthFourteenth Amendment to Credit Agreement (the “TenthFourteenth Credit Agreement Amendment”), pursuant to which the parties agreed to amend the Credit Agreement to (i) provide that the Maturity Date shall be extended to June 30, 2025.2026.

Three months ended MarchJune 31,30, 2026, compared to three months ended MarchJune 31,30, 2025

Revenue decreasedincreased approximately $48,000$467,000 for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The decreaseincrease was driven by lowernew firstcustomer year software bundle revenue recognition.sales.

Operating expenses decreasedincreased by a net 9%7% because of the following items:

Human resource related costs (including salaries and benefits and non-cash compensation) decreased approximately $92,000$38,000 due to lessemployee employeesturnovers for the quarter ended MarchJune 31,30, 2026 as compared to the three months ending MarchJune 31,30, 2025. Depreciation and amortization costs decreased by approximately $15,000$11,000 due to assets becoming fully depreciated and amortized. Product deployment costs decreasedincreased approximately $43,000$132,000 due to decreaseincrease in installation and training expenses.inventory. Professional and consulting costs decreased by approximately $98,000,$55,000, primarily due to theprofessional cancellationfees ofbeing two 1099 contractor agreements.current. Travel and entertainment costs decreasedremained approximately $1,000 due to less corporate travel.flat. Other expenses increased by approximately $36,000,$131,000, primarily due to R&D costs associated with the new Gen 6 software licenses and related research and development activities.activities along with costs of insurance, particularly cyber.

Other non-operating income and expense increased by approximately $1,000,$3,000, or 0.1%,0.4%, for the three months ended MarchJune 31,30, 2026 in comparison to the same period in 2025 due to lower money market interest rate.

As a result of the factors above, our firstsecond quarter 2026 net loss of approximately $756,000,$283,000, decreased approximately $165,000,$305,000, or 18%,52%, as compared to approximately $921,000$588,000 net loss for the firstsecond quarter of 2025.

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 MarchJune 31,30, 2026, 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 before MayAugust 12, 2027.

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 threesix months ended MarchJune 31,30, 2026, the Company had an accumulated deficit of $216,542,751,$216,826,414, income from operations of $30,843,$537,811, net cash usedprovided inby operating activities of $126,166$403,623 and an ending cash balance of $1,411,435.$1,919,758.

As of MarchJune 31,30, 2026, the Company had a working capital deficit of $44,037,450$44,287,693 consisting primarily of PDL notes payables, including accrued interest. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the Condensed Consolidated Financial Statements were issued. While management will look to continue funding operations by increased sales volumes and raising additional capital from sources such as sales of its debt or equity securities or loans to meet operating cash requirements, there is no assurance that management’s plans will be successful. The Company’s net losses and working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern through MayAugust 12, 2027.

Please refer to our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Commission on March 30, 2026 and incorporated herein by reference, for detailed explanation of our critical accounting estimates, which have not changed significantly during the three and six months ended MarchJune 31,30, 2026.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update will improve the transparency and usefulness of income tax disclosures. Investors, lenders, and creditors have indicated that current disclosures do not provide enough detailed information to assess how a company's operations, tax risks, and planning affect its tax rate and future cash flows. The requirements take effect for public business entities for fiscal years beginning after December 15, 2024. The Company adopted this standardguidance inon itsJanuary 20251, annual period2025, on a prospective basis. The adoption enhancesenhanced the Company’s income tax disclosures by increasing the level of detail and transparency,transparency but did not affect the Company’s financial position, results of operations, or cash flows.

In November 2024, the FASB issued ASU No. 2024-04, “Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments,” which clarifies the criteria for determining when a settlement of convertible debt should be accounted for as an induced conversion. The guidance applies only to conversions involving the full issuance of equity securities as originally specified in the debt terms and includes additional clarifications to aid in application. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this standard on January 1, 2026. The adoption of this guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements,Statements asbecause the Company hashad no outstanding convertible debt instruments.instruments upon adoption.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets," which amends how entities estimate expected credit losses for current accounts receivable and current contract assets arising from revenue contracts under ASC 606. AThe reductionamendments insimplify the needmeasurement of expected credit losses for extensivecurrent forecastingaccounts has been establishedreceivable and allowscurrent allcontract assets by permitting entities to assume that current conditions willas persistof atthe balance sheet date forpersist throughout the remaining lifecontractual term of those currentassets, assets.thereby reducing the need for complex forecasting. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. UponThe adoption,Company theadopted standardthis guidance on January 1, 2026. The adoption did not have a material impact on the Company's financialCondensed statements.Consolidated Financial Statements.

In October 2023, the FASB issued ASU No. 2023-06, which incorporates 14 of the 27 SEC disclosures identified in SEC Release No. 33-10532 (issued August 17, 2018). This ASU updates disclosure and presentation requirements across various Codification Topics and applies to all entities within the scope of those Topics, unless specified otherwise. The amendments are to be applied prospectively. For public business entities, each amendment becomes effective when the related SEC disclosure is removed from Regulation S-X or S-K; early adoption is not permitted. The Company hasis evaluatedcurrently evaluating ASU No. 2023-06 and does not expect it to impact its Condensed Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This update will enhanceenhances disclosures about public business entity’s expenses, responding to investor requests for more detailed information on components such as inventory purchases, employee compensation, depreciation, amortization, and depletion within commonly presented expense captions (e.g., cost of sales, SG&A, and R&D). These amendments are expected to provide investors with a clearer understanding of an entity’s expenses, helping them assess performance, forecast future expenses, and evaluate cash flow prospects. The effective date for these amendments, as clarified by ASU 2025-01, areis for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The standard can be applied either prospectively or retrospectively. We are currently assessing adoption timing and the effect that the updated standard will have on our financial statement disclosures.

There have been no material changes to our significant accounting policies as summarized in NOTE 21 of our Condensed Consolidated Financial Statements for the period ended MarchJune 31,30, 2026. We do not expect that the adoption of anyrecently recentissued accounting pronouncementsstandards willto have a material impacteffect on our accompanying Condensed Consolidated Financial Statements.