x
|
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended:
December 31, 2011
|
|
¨
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from________ to ___________
|
Nevada
|
95-4659068
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
Securities registered pursuant to Section 12(g) of the Exchange Act:
|
Common Stock, Par Value $0.001
|
|
(Title of class)
|
3
|
|||
28
|
|||
39
|
|||
39
|
|||
39
|
|||
39
|
|||
40
|
|||
56
|
|||
57
|
|||
71
|
|||
71
|
|||
71
|
|||
71
|
|||
73
|
|||
74
|
|||
85
|
|||
92
|
|||
95
|
|||
97
|
|||
98
|
·
|
Head-End: This collection of server and networking equipment facilitates the CareView network in the hospital and serves as the aggregation point for all real-time video and patient data. The head-end is typically located in the server room of the hospital and one head-end is typically required per campus.
|
|
·
|
Nursing Station: The CareView System™ provides nurses an all-in-one touch-screen computer for viewing real-time video and clinical monitoring of patients.
|
|
·
|
Room Control Platform: One RCP is deployed per patient bed. The RCP is a microprocessor-based system consisting of a hard disk drive, cable modem, NTSC infrared camera and related controls, microphone, USB ports, wireless keyboard and wireless remote control. The complementary suite of software applications on the RCP are designed to streamline workflow and improve value-added services offered.
|
·
|
Servers: The CareView System™ employs two servers: the video gateway and the application server. Both are identical servers with each being able to provide the services of the other in the case of a failure. The servers we deploy are a mid-level enterprise server positioned for low power usage and high performance. These servers are typically two rack unit servers with moderate storage capabilities with the processing power to handle hundreds of RCPs and dozens of web-based clients (located at nursing stations or other areas in the hospital). CareView installs the servers in a CareView provided rolling rack, or if requested, can install them in the hospital’s existing data rack.
|
·
|
Cable Modem Termination System (CMTS): The CMTS acts as a network bridge between the Ethernet network (which all of the servers, nursing stations and end users are connected to) and the hybrid fiber/coaxial (HFC) cable network (which extends into each room to provide cable TV). The CMTS allows the RCPs, with their embedded cable modems, to communicate on the data network over the television cable in patient rooms. The CMTS resides near the cable demarcation point, or must have cable run to connect the demarcation point with a sufficiently cooled room which houses the CMTS. Typically, one hospital installation requires only one CMTS; however, occasionally a hospital will have an additional campus connected with a high-speed private data network, allowing implementation using an additional CMTS, but with no additional servers.
|
|
·
|
Firewall: The firewall provides the CareView System™ with secure Internet connectivity and resides in the server room. The CareView System™ uses this Internet connectivity to remotely manage all hospital installations through the firewall, to provide remote software upgrade service, and to provide services for NetView
®
and PatientView
®
, as more fully described herein.
|
|
·
|
Switch: The Ethernet switch provides network connectivity between the servers, CMTS, firewall, and hospital data network. CareView deploys one switch in the hospital server room.
|
|
·
|
Uninterruptible Power Supply (UPS): If the hospital’s server room does not provide adequate room-level backup power, CareView will deploy one UPS for the hospital’s server room.
|
·
|
Doctors, nurses and other healthcare providers with the ability to more efficiently and cost-effectively monitor, treat and visit their patients.
|
|
·
|
Family members and friends with the ability to use the Internet to monitor, correspond with, and visit with their loved ones in hospitals and nursing homes.
|
|
·
|
Patients and their visitors with direct access to on-demand high-speed Internet and other digital entertainment products and services in their rooms.
|
|
·
|
Facilities with the ability to implement audit tools to insure quality standards are being adhered to, safety measures are being complied with and both can be used to further educate caregivers to continually enhance quality and safety.
|
|
·
|
A patent-pending fall prevention system.
|
|
·
|
Innovative mobile technology to improve patient safety.
|
·
|
Offers comprehensive patient attention with documentation and recording of all in-room activity.
|
|
·
|
Provides risk managers with a “Video Incident Report.”
|
|
·
|
Provides a thorough recorded documentation of patient care which will eliminate the need to fund frivolous claims.
|
|
·
|
Documents and records the provision of care, administration of drugs, nursing visits, housekeeping service, dietary delivery and patient movements.
|
|
·
|
Provides enhanced patient safety.
|
|
·
|
Provides a record of “Best Practice.”
1
|
·
|
Provides a continual observation and monitoring system for nurses.
|
|
·
|
Provides a room security system.
|
|
·
|
Provides a documentation system of patient care.
|
|
·
|
Provides constant visual contact and reduces unnecessary trips to a patient’s room.
|
|
·
|
Uses infrared cameras to allow night viewing without disturbing the patient.
|
·
|
Provides the patient and their family with comfort by knowing that a trained medical professional is always watching.
|
|
·
|
Provides remote monitoring features that enhance patient care by:
|
·
|
Alerting nurses to patient movement thereby protecting an unsecured patient.
|
|
·
|
Giving nurses visual confirmation that bed rails are in their proper position.
|
|
·
|
Creating a team nursing concept – one nurse stays at the nursing station to monitor rooms while another provides a rapid response to a patient’s need.
|
·
|
Allows physicians to make video rounds remotely from any computer or PDA.
|
|
·
|
Promotes immediate access to patients when they need it most.
|
|
·
|
Improves the quality and timeliness of patient care.
|
|
·
|
Provides physicians with the capability to leave notes for the patient’s family.
|
|
·
|
Increases physician-to-patient communication.
|
|
·
|
Provides doctors with a reimbursable event.
|
·
|
Alerts nursing staff of potential patient falls.
|
|
·
|
Creates an opportunity for immediate intervention to prevent a fall.
|
|
·
|
Improves safety of patients and saves lives.
|
a.
|
PatientView™ – Allows families and friends to electronically visit loved ones in the patient’s room from anywhere in the world.
|
|
b.
|
NetView™ – Using the CareView System and the hospital television, patients gain high speed Internet access.
|
|
c.
|
MovieView™ – Patients and families can watch first run movies in patient’s rooms.
|
|
d.
|
BabyView™ – Patients can continually have their new baby in sight while the baby is in the nursery or NICU.
|
|
e.
|
Patient Education – Provides and documents pre-procedure and/or condition videos at the bedside and allows medical staff to view images and diagnostic test results at bedside.
|
|
f.
|
Admission Welcome Package – Welcomes the patient, continually informs the patient, allows the patient to complete surveys during their stay and to e-mail hospital departments directly.
|
|
g.
|
Discharge Salutation Package – Provides a discharge process that is more efficient, communicates a more consistent message, and educates the patient about their condition. It also informs patients about the survey they will be asked to complete prior to discharge, solicits their recommendations while their stay is fresh on their mind, and thanks them for their trust in the hospital.
|
·
|
Enhances satisfaction of patients, families and friends.
|
|
·
|
Allows family and friends to monitor the patient’s recovery from any computer.
|
|
·
|
Provides a message board with updated patient condition.
|
|
·
|
Increases safety and security.
|
|
·
|
Provides peace of mind for the patient and family.
|
·
|
Enables Internet access in the patient’s room without the need of a personal laptop computer.
|
|
·
|
Provides a high-speed Internet connection to browse favorite Internet sites.
|
|
·
|
Allows patients to check E-mail and stay in touch with friends and families and with business and personal interests.
|
·
|
Provides a state-of-the-art entertainment system with a wide variety of programming.
|
|
·
|
Allows patients to view first run movies and a variety of programming on demand in the comfort of their hospital room.
|
•
|
A third generation Room Control Platform (the “Generation 3 RCP”): The Generation 3 RCP will incorporate a much higher percentage of proprietary design. The present RCP uses several third party modules which develops a level of dependence on these third party modules and their suppliers. The Generation 3 RCP will incorporate a Comexpress design to eliminate the variances which can be introduced by third party suppliers. The Generation 3 RCP will have a 7-year parts life guarantee by all of the major component manufacturers to ensure consistency in manufacturing for at least that 7-year period. In addition, the Generation 3 RCP will be physically smaller in size which will reduce the cost of the unit. The Generation 3 RCP is tentatively scheduled for production in the third quarter of 2012.
|
|
•
|
Ulcer Management Module: The ulcer management software is presently in beta testing trials and the Company anticipates a commercial roll out in the second half of 2012. This module uses proprietary and patent pending techniques to detect if a patient has moved sufficiently as to relieve pressure areas susceptible to decubitus ulcers. The module works in concert with our Virtual Bed Rails™ system to alert healthcare employees of the need to turn a patient in a timely manner. The algorithms used detect the motion of a patient even while covered with bed linens. The system remains silent if the patient has moved enough to comply with the maximum times established by the industry to prevent bed sores. In the event the patient has not moved to a sufficient degree, the system will alarm the healthcare professional to turn the patient. Additionally, the module will document the procedure through both the data base and video recordings.
|
|
•
|
Device for Chinese Medical Industry to monitor vital signs: In connection with the letter of intent with Weigao Holding, CareView has begun development on a module to monitor and record patients’ blood pressure, pulse, ECG and heart rate. This device will interface with the CareView System™ to deliver this information to a nursing station and will alert nurses in the event a patient’s vitals fall outside of a given set of parameters. This device will be developed specifically for the Chinese market due to high ratio of patients to nurses. The Company has completed the hardware design for the product. The software development to control the device is being designed by outside contractors and no definitive completion date has yet been established. It is anticipated that the software will be ready for beta testing in the third or fourth quarter of 2012.
|
•
|
RFID: Presently CareView has been testing several RFID products from various manufacturers to be used in connection with the CareView System™. It is CareView’s intent to offer its customers a third party RFID solution tied to the CareView System™. As the infrastructure of the CareView System™ will already be in place at each hospital, this approach will allow CareView to provide the service at a greatly reduced price to the hospital versus the hospital contracting directly with other firms in the RFID business. The development of this RFID product has been delayed due to the increased demand for development and deployment of other of the Company’s new products.
|
|
·
|
Virtual Chair Rails™: This new product will place invisible sensors around the perimeter of a chair to protect patients who are at-risk for a fall. When the set boundary is pierced (top, bottom and/or sides) the nurse is immediately alerted. We anticipate that Virtual Chair Rails™ will be ready for deployment in the second quarter 2012.
|
|
·
|
BedView™: This application will provide the hospital with control over the activity and usage of each bed in the hospital. By placing monitors in the admitting, housekeeping, emergency and other service departments, the hospital will continually know the status of each room in real time. The status of each room is clearly noted (i.e., occupied, vacant but awaiting housekeeping, not available due to repair, etc.) on authorized monitors. Effective use of BedView™ will aid in more efficient bed turnover, the ability to monitor the cleaning process, and the ability to see other activity in the room in question. We anticipate that BedView™ will be ready for deployment by the end of the first quarter 2012.
|
·
|
significant and tangible cost savings,
|
|
·
|
reducing Never Events
2
,
|
|
·
|
improved documentation, quality and timeliness of patient care,
|
|
·
|
enhanced safety and security,
|
·
|
support for new technologies,
|
|
·
|
business growth,
|
|
·
|
return on investment (ROI), and
|
|
·
|
enhanced patient satisfaction.
|
·
|
providing a low cost entry, revenue sharing strategy to ultimately position CareView as a profit center for our clients;
|
|
·
|
providing sales ROI analysis tools, training, materials, product demonstrations and account specific support;
|
|
·
|
effectively promoting the CareView System™ through our corporate website, product collateral, articles and white papers;
|
|
·
|
participating in trade shows, keynote speaking engagements, key analyst events, user groups and partner events; and
|
|
·
|
leveraging the vast industry contacts of our Chairman, the Honorable Tommy G. Thompson.
|
(a)
|
During years 1-5, interest will be payable (on a cumulative basis) by the issuance of additional convertible debt (a “
PIK
”) with the same terms as New Senior Convertible Notes, at an interest rate of 12.5%, compounded quarterly.
|
|
(b)
|
During years 6-10, interest may be paid in cash or as a consideration on the cumulative PIK (at the Company’s option), at an annual interest rate of 10.0%, compounded quarterly.
|
|
(c)
|
Interest shall be calculated and payable on a quarterly basis in arrears.
|
|
(d)
|
Notwithstanding the foregoing, during the existence of an event of default, the then applicable interest rate will be increased by 5%.
|
·
|
actual or perceived lack of security of information or privacy protection;
|
|
·
|
possible disruptions, computer viruses or other damage to the Internet servers or to users’ computers; and
|
|
·
|
excessive governmental regulation.
|
·
|
technological innovations by competitors;
|
|
·
|
governmental regulation of our products and services;
|
|
·
|
additions or departures of key personnel;
|
|
·
|
decline in demand for our Common Stock;
|
|
·
|
our ability to integrate operations, technology, products and services;
|
|
·
|
our ability to execute our business plan;
|
|
·
|
operating results below expectations;
|
|
·
|
loss of any strategic relationships;
|
|
·
|
industry developments;
|
|
·
|
lack of funding generated for operations;
|
|
·
|
investor perception of our industry or our prospects;
|
|
·
|
general economic trends and other external factors; and
|
|
·
|
period-to-period fluctuations in our financial results.
|
•
|
our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired;
|
|
•
|
we must use a substantial portion of our cash flow from operations to pay interest and principal on our indebtedness, which will reduce the funds available to us for other purposes such as capital expenditures;
|
|
•
|
we may be limited in our ability to borrow additional funds;
|
|
•
|
we may have a higher level of indebtedness than some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in planning for, or responding to, changing conditions in our industry, including increased competition; and
|
|
•
|
we may be more vulnerable to economic downturns and adverse developments in our business.
|
·
|
Growing and Aging Population – The U.S. Census Bureau predicts that the majority of the U.S. “baby boom” population (28% of the total U.S. population) will begin to turn 65 between 2010 and 2020.
|
|
·
|
Consumer expectations for improved healthcare are increasing.
|
|
·
|
Effects of ObamaCare, which effects have not yet been able to be determined, and may or may not have a negative effect on our business.
|
|
·
|
Reimbursement and coverage of medical expenses by insurance companies and employers are on the decline resulting in patients having to contribute more money
|
|
·
|
Technology is giving rise to new clinical therapies to address an increased number of medical ailments to aid in earlier diagnosis and prevention of diseases.
|
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Quarter Ended
|
High
|
Low
|
||||||
Fiscal Year 2011
|
||||||||
Fourth Quarter
|
$ | 1.60 | $ | 1.35 | ||||
Third Quarter
|
$ | 1.80 | $ | 1.25 | ||||
Second Quarter
|
$ | 2.03 | $ | 1.54 | ||||
First Quarter
|
$ | 2.05 | $ | 1.40 | ||||
Fiscal Year 2010
|
||||||||
Fourth Quarter
|
$ | 1.67 | $ | 1.26 | ||||
Third Quarter
|
$ | 2.18 | $ | 1.60 | ||||
Second Quarter
|
$ | 2.43 | $ | 1.30 | ||||
First Quarter | $ | 1.25 | $ | 0.75 |
Plan Category
|
Number of Securities to be issued upon exercise of outstanding options (a)
|
Weighted-average exercise price of outstanding options (b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c)
|
Equity compensation plans not approved by security holders
|
-0-
|
-0-
|
-0-
|
Equity compensation plan approved by security holders: 2007 Plan
|
5,467,225
|
$.052
|
-0-
|
Equity compensation plan approved by security holders: 2009 Plan
|
3,282,890
|
$0.89
|
6,565,444
|
Total
|
8,750,115
|
$0.66
|
6,565,444
|
December 31,
|
|||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
|||||||||||||||||
(In thousands)
|
|||||||||||||||||||||
Total assets
|
$ | 21,956 | $ | 5,960 | $ | 3,917 | $ | 3,597 | $ | 3,428 | |||||||||||
Total liabilities
|
$ | 6,036 | $ | 868 | $ | 3,995 | $ | 2,013 | $ | 2,092 | |||||||||||
Total stockholders’ equity (deficit)
|
15,920 | 5,092 | (78 | ) | 1,584 | 1,336 | |||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 21,956 | $ | 5,960 | $ | 3,917 | $ | 3,597 | $ | 3,428 |
For years ended December 31,
|
||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||||
(In thousands, except for net loss per share)
|
||||||||||||||||||||
Revenue, net
|
$ | 630 | $ | 326 | $ | 87 | $ | 42 | $ | 44 | ||||||||||
Total operating expense
(1)
|
9,598 | 13,121 | 4,163 | 2,591 | 1,602 | |||||||||||||||
Total other expense, net
(2)
|
7,407 | 6,155 | 2,118 | 625 | 271 | |||||||||||||||
Loss before income taxes
|
(16,375 | ) | (18,950 | ) | (6,194 | ) | (3,174 | ) | (1,829 | ) | ||||||||||
Provision for income taxes
|
-0- | -0- | -0- | -0- | -0- | |||||||||||||||
Net loss
|
(16,375 | ) | (18,950 | ) | (6,194 | ) | (3,174 | ) | (1,829 | ) | ||||||||||
Net loss attributable to noncontrolling interest
|
(111 | ) | (98 | ) | (18 | ) | -0- | -0- | ||||||||||||
Net loss attributable to CareView Communications
|
(16,264 | ) | $ | (18,852 | ) | $ | (6,176 | ) | $ | (3,174 | ) | $ | (1,829 | ) | ||||||
Earnings per share, basic and diluted:
|
||||||||||||||||||||
Net loss per share
|
$ | (0.13 | ) | $ | (0.15 | ) | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.07 | ) | |||||
Weighted average common shares outstanding
|
129,468 | 122,864 | 108,359 | 102,743 | 25,727 |
(1)
|
Includes non-cash compensation costs (in thousands) of $1,364, $8,659, $971, $11, and $0 for the years ended December 31, 2011, 2010, 2009, 2008, and 2007, respectively.
|
(2)
|
Includes non-cash costs (in thousands) of $2,966, $5,842, $1,022, $419, and $52 for the years ended December 31, 2011, 2010, 2009, 2008, and 2007, respectively.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
(000’s) | ||||
At December 31, 2010
|
$ | 27 | ||
At December 31, 2011
|
8,527 | |||
Increase in cash and cash equivalents
|
$ | 8,500 |
(000’s) | ||||
At December 31, 2009
|
$ | 219 | ||
At December 31, 2010
|
27 | |||
Decrease in cash and cash equivalents
|
$ | (192 | ) |
2011
|
2010
|
2009
|
||||||||||
(000’s)
|
||||||||||||
Proceeds from notes payable
|
$ | 20,000 | $ | 30 | $ | 1,584 | ||||||
Proceeds from exercise of stock options
|
1,187 | 83 | -0- | |||||||||
Proceeds, net, from issuance of equity securities
|
-0- | 6,477 | 1,226 | |||||||||
Sources of cash and cash equivalents
|
21,187 | 6,590 | 2,810 | |||||||||
Cash used in operating activities
|
5,739 | 4,131 | 2,651 | |||||||||
Cash used to purchase equipment
|
6,731 | 2,469 | 778 | |||||||||
Repayment of debt
|
168 | 84 | -0- | |||||||||
Cash used in other investing activities
|
49 | 98 | 61 | |||||||||
Uses of cash and cash equivalents
|
12,687 | 6,782 | 3,490 | |||||||||
Increase (decrease) in cash and cash eqivalents
|
$ | 8,500 | $ | (192 | ) | $ | (680 | ) |
December 31,
|
||||||||||||
2011
|
2010
|
Change
|
||||||||||
(000’s)
|
||||||||||||
Current assets
|
$ | 9,245 | $ | 404 | $ | 8,841 | ||||||
Current liabilities
|
1,634 | 290 | 1,344 | |||||||||
Working capital
|
$ | 7,611 | $ | 114 | $ | 7,497 |
Year Ended December 31,
|
||||||||||||
2011
|
2010
|
Change
|
||||||||||
(000’s)
|
||||||||||||
Revenue
|
$ | 630 | $ | 326 | $ | 304 | ||||||
Operating expenses
|
9,598 | 13,122 | (3,524 | ) | ||||||||
Operating loss
|
(8,968 | ) | (12,796 | ) | 3,828 | |||||||
Change in fair value of derivative instruments
|
(2,966 | ) | -0- | (2,966 | ) | |||||||
Other expense, net
|
(4,441 | ) | (6,155 | ) | 1,714 | |||||||
Net loss
|
(16,375 | ) | (18,951 | ) | 2,576 | |||||||
Net loss attributable to noncontrolling interest
|
(111 | ) | (99 | ) | 12 | |||||||
Net loss attributable to CareView
|
$ | (16,264 | ) | $ | (18,852 | ) | $ | 2,588 |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Human resource costs, including benefits
|
36 | % | 22 | % | ||||
Professional fees for legal, accounting and consulting
|
21 | % | 60 | % | ||||
Depreciation and amortization expense
|
16 | % | 5 | % | ||||
Product deployment costs
|
7 | % | 0 | % | ||||
Travel and entertainment
|
5 | % | 2 | % | ||||
Other
|
15 | % | 11 | % |
(000’s) | ||||
Increase in human resource costs
|
$ | 1,020 | ||
Decrease in non-cash compensation
|
(7,295 | ) | ||
Increase in professional and consulting
|
832 | |||
Increase in depreciation and amortization
|
822 | |||
Increase in production deployment costs
|
600 | |||
Increase in travel and entertainment
|
273 | |||
All other
|
224 | |||
$ | (3,524 | ) |
Year Ended December 31,
|
||||||||||||
2010
|
2009
|
Change
|
||||||||||
(000’s)
|
||||||||||||
Revenue
|
$ | 326 | $ | 87 | $ | 239 | ||||||
Operating expenses
|
13,122 | 4,163 | 8,959 | |||||||||
Operating loss
|
(12,796 | ) | (4,076 | ) | (8,720 | ) | ||||||
Other expense, net
|
(6,155 | ) | (2,118 | ) | (4,037 | ) | ||||||
Net loss
|
(18,951 | ) | (6,194 | ) | (12,757 | ) | ||||||
Net loss attributable to noncontrolling interest
|
(99 | ) | (18 | ) | (81 | ) | ||||||
Net loss attributable to CareView
|
$ | (18,852 | ) | $ | (6,176 | ) | $ | (12,676 | ) |
Year Ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Human resource costs, including benefits
|
22 | % | 56 | % | ||||
Professional fees for legal, accounting and consulting
|
60 | % | 12 | % | ||||
Depreciation and amortization expense
|
5 | % | 15 | % | ||||
Travel and entertainment
|
2 | % | 5 | % | ||||
Other
|
11 | % | 15 | % |
(000’s) | ||||
Increase in human resource costs
|
$ | 534 | ||
Increase in professional fees
|
7,453 | |||
Increase in depreciation and amortization
|
102 | |||
Increase in production deployment costs
|
10 | |||
Increase in travel and entertainment
|
45 | |||
All other
|
815 | |||
$ | 8,959 |
·
|
if requires assumptions to be made that were uncertain at the time the estimate was made, and
|
|
·
|
changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.
|
(a)
|
During years 1-5, interest will be payable (on a cumulative basis) by the issuance of additional convertible debt (a “
PIK
”) with the same terms as New Senior Convertible Notes, at an interest rate of 12.5%, compounded quarterly.
|
|
(b)
|
During years 6-10, interest may be paid in cash or as a consideration on the cumulative PIK (at the Company’s option), at an annual interest rate of 10.0%, compounded quarterly.
|
|
(c)
|
Interest shall be calculated and payable on a quarterly basis in arrears.
|
|
(d)
|
Notwithstanding the foregoing, during the existence of an event of default, the then applicable interest rate will be increased by 5%.
|
Years Ending December 31,
|
Total
|
Senior Secured Convertible Notes
|
Notes Payable
|
Mandatorily Redeemable Equity in Joint Venture
|
||||||||||||
2012
|
$ | 273,600 | $ | -0- | $ | 136,800 | $ | 136,800 | ||||||||
2013
|
773,742 | -0- | 386,871 | 386,871 | ||||||||||||
2014
|
-0- | -0- | -0- | -0- | ||||||||||||
2015
|
-0- | -0- | -0- | -0- | ||||||||||||
2016
|
2,562,603 | 2,562,603 | -0- | -0- | ||||||||||||
Thereafter
|
52,960,468 | 52,960,468 | -0- | -0- | ||||||||||||
Total
|
$ | 56,570,413 | $ | 55,523,071 | $ | 523,671 | $ | 523,671 |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
CONTROLS AND PROCEDURES.
|
Name
|
Age
|
Position
|
Date Elected Director
|
Date Appointed Officer
|
Tommy G. Thompson
|
69
|
Chairman of the Board
|
October 26, 2005
|
NA
|
Samuel A. Greco
|
60
|
Chief Executive Officer, Director
|
February 17, 2009
|
September 4, 2007
|
Steven G. Johnson
|
51
|
President, Chief Operating Officer, Director
|
April 11, 2006
|
April 11, 2006
|
Anthony P. Piccin
|
48
|
Chief Financial Officer, Treasurer, Secretary
|
N/A
|
November 7, 2011
|
L. Allen Wheeler
|
78
|
Director
|
January 26, 2006
|
NA
|
Jeffrey C. Lightcap
|
53
|
Director
|
April 21, 2011
|
N/A
|
Gerald A. Murphy
|
72
|
Director
|
June 7, 2011
|
N/A
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($)
|
Option Awards ($)
(1)
|
Non-Equity Incentive Plan Compen-sation ($)
|
Nonquali-fied Deferred Compen-sation Earnings ($)
|
All Other Compen-sation ($)
|
Total ($)
|
|||||||||||||||||
Samuel A. Greco
(2)
(CEO)
|
2011
|
$ | 250,203 | -0- | -0- | -0- | -0- | -0- | $ | 36,781 | $ | 286,984 | ||||||||||||||
2010
|
$ | 251,599 | -0- | -0- | $ | 68,200 | -0- | -0- | $ | 31,916 | $ | 351,715 | ||||||||||||||
2009
|
$ | 266,868 | -0- | -0- | $ | 2,175,216 | -0- | -0- | $ | 29,467 | $ | 2,471,551 | ||||||||||||||
Steven G. Johnson
(3)
(President/COO)
|
2011
|
$ | 250,216 | -0- | -0- | -0- | -0- | -0- | $ | 28,573 | $ | 278,789 | ||||||||||||||
2010
|
$ | 255,371 | -0- | -0- | $ | 68,200 | -0- | -0- | $ | 28,506 | $ | 352,077 | ||||||||||||||
2009
|
$ | 266,868 | -0- | -0- | -0- | -0- | -0- | $ | 25,291 | $ | 292,159 | |||||||||||||||
John R. Bailey
(4)
(Former CFO/Treas./Sec.)
|
2011
|
$ | 157,670 | -0- | -0- | -0- | -0- | -0- | $ | 14,935 | $ | 172,605 | ||||||||||||||
2010
|
$ | 193,370 | -0- | -0- | $ | 68,200 | -0- | -0- | $ | 16,283 | $ | 277,853 | ||||||||||||||
2009
|
$ | 190,819 | -0- | -0- | -0- | -0- | -0- | $ | 14,408 | $ | 203,227 | |||||||||||||||
Anthony P. Piccin (CFO/Treas./Sec.)
(5)
|
2011
|
$ | 62,711 | -0- | -0- | $ | 61,650 | -0- | -0- | $ | 7,251 | $ | 69,963 | |||||||||||||
2010
|
-0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | ||||||||||||||||||
2009
|
-0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
(1)
|
The valuation methodology used to determine the fair value of the options granted during the year was the Black-Scholes-Merton option-pricing model, an acceptable model in accordance with ASC 718-10. The Black-Scholes-Merton model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average expected life of the options. For more detail, see
Note D, Stockholder’s Equity, Stock Options
to the audited consolidated financial statements for year ended December 31, 2010, filed herewith.
|
|
(2)
|
For 2011: All Other Compensation includes $9,000 accrued for car allowance and $27,781 for health insurance premiums paid on Mr. Greco’s behalf. For 2010: (i) Salary includes $1,599 earned but not accrued in 2009 and paid in 2010, (ii) Option Awards includes Options to purchase 100,000 shares of the Company’s Common Stock, and (iii) All Other Compensation includes $9,000 accrued for car allowance and $22,916 for health insurance premiums paid on Mr. Greco’s behalf. For 2009: (i) Salary includes $117,500 paid and $149,368 accrued, (ii) Option Awards includes Options to purchase 3,262,809 shares of the Company’s Common Stock and (iii) All Other Compensation includes $9,000 accrued for car allowance and $20,467 for health insurance premiums paid on Mr. Greco’s behalf.
|
(3)
|
For 2011: All Other Compensation includes $9,000 accrued for car allowance and $19,573 for health insurance premiums paid on Mr. Johnson’s behalf. For 2010: (i) Salary includes $5,371 earned but not accrued in 2009 and paid in 2010, (ii) Option Awards includes Options to purchase 100,000 shares of the Company’s Common Stock, and (iii) All Other Compensation includes $9,000 accrued for car allowance and $19,506 for health insurance premiums paid on Mr. Steve Johnson’s behalf. For 2009: (i) Salary includes $127,500 paid and $139,368 accrued and (ii) All Other Compensation includes $9,000 accrued for car allowance and $16,291 for health insurance premiums paid on Mr. Steve Johnson’s behalf.
|
|
(4)
|
For 2011: All Other Compensation includes $4,500 accrued for car allowance and $10,435 for health insurance premiums paid on Mr. Bailey’s behalf. For 2010: (i) Salary includes $8,370 earned but not accrued in 2009 and paid in 2010, (ii) Option Awards includes Options to purchase 100,000 shares of the Company’s Common Stock, and (iii) All Other Compensation includes $5,400 car allowance and $10,883 for health insurance premiums paid on Mr. Bailey’s behalf during 2011. For 2009: (i) Salary includes $146,250 paid and $43,919 accrued and (ii) All Other Compensation includes $5,400 car allowance (of which $1,350 was paid and $4,050 was accrued) and $9,008 for health insurance premiums paid on Mr. Bailey’s behalf.
|
|
(5)
|
For 2011: (i) Salary includes $62,711 paid for services rendered from July 18, 2011 to December 31, 2011, (ii) Option Awards includes Options to purchase 75,000 shares of the Company’s Common Stock, and (iii) All Other Compensation is for health insurance premiums paid on Mr. Piccin’s behalf.
|
Estimated Future
Payouts Under Non- Equity Incentive Plan Awards |
Estimated Future
Payouts Under Equity Incentive Plan Awards |
All Other
Stock Awards: # of Shares of Stocks or Units (#) |
All Other
Option Awards: # of Secur- ities Under- lying Options (#) |
Exer-
cise or Base Price of Option Award ($/sh) |
Grant
Date Fair Value of Stock and Option Award |
|||||||||||||||||||||||||||||
Name and
Principal Position |
Grant
Date |
Thres-
hold ($) |
Tar-
get ($) |
Maxi-
mum ($) |
Thres-
hold (#) |
Tar-
get (#) |
Maxi-
mum (#) |
|||||||||||||||||||||||||||
Samuel A. Greco (CEO)
|
- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||||||||
Steven G. Johnson
(President/COO) |
- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||||||||
Anthony P. Piccin
(CFO Treas./Sec.) |
07/21/11
|
-0- | -0- | -0- | -0- | -0- | -0- | -0- | 25,000 | $ | 1.69 | $ | 22,000 | |||||||||||||||||||||
12/12/11 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | 50,000 | $ | 1.51 | $ | 39,650 | ||||||||||||||||||||||
John R. Bailey
(Former CFO/Treas./Sec.) |
- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Option Awards
|
Stock Awards
|
||||||||
Name
|
Number of Securities Underlying Unexercised Options
(#) Exercisable
|
Number of Securities Underlying Unexercised Options
(#) Unexercis-able
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
|
Option Exer-cise Price
($)
|
Option Expiry Date
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
|
Equity Incentive Plan Awards: Number of Unearn-ed Shares, Units or Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards Market or Payout Value of Unearn-ed Shares, Units or Other Rights That Have Not Vested ($)
|
Samuel A. Greco,
CEO
|
620,936
(1)
|
-0-
|
-0-
|
$0.44
|
12/02/17
|
-0-
|
-0-
|
-0-
|
-0-
|
500,000
(2)
|
-0-
|
-0-
|
$0.52
|
03/09/19
|
-0-
|
-0-
|
-0-
|
-0-
|
|
1,175,824
(3)
|
587,911
(3)
|
-0-
|
$0.52
|
10/08/19
|
-0-
|
-0-
|
-0-
|
-0-
|
|
50,000
(4)
|
-0-
|
-0-
|
$0.52
|
01/05/20
|
-0-
|
-0-
|
-0-
|
-0-
|
|
50,000
(5)
|
-0-
|
-0-
|
$0.52
|
03/25/20
|
-0-
|
-0-
|
-0-
|
-0-
|
|
Steve G. Johnson,
Pres./
COO
|
50,000
(4)
|
-0-
|
-0-
|
$0.52
|
01/05/20
|
-0-
|
-0-
|
-0-
|
-0-
|
50,000
(5)
|
-0-
|
-0-
|
$0.52
|
03/25/20
|
-0-
|
-0-
|
-0-
|
-0-
|
|
Anthony P. Piccin, CFO/Treas./Sec.
|
-0-
|
25,000
(6)
|
-0-
|
$1.69
|
07/18/21
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
50,000
(7)
|
-0-
|
$1.51
|
12/22/21
|
-0-
|
-0-
|
-0-
|
-0-
|
|
John R. Bailey
(Former CFO/Treas./Sec.)
|
-0-
|
-0-
|
-0-
|
-0-
|
-
|
-0-
|
-0-
|
-0-
|
-0-
|
(1)
|
All 620,936 underlying shares vested on December 3, 2007.
|
(2)
|
All 500,000 underlying shares vested on March 15, 2009.
|
(3)
|
An aggregate of 587,912 underlying shares vested on each of October 9, 2010 and October 9, 2011. An additional 587,911 underlying shares vest on October 9, 2012 respectively.
|
(4)
|
All underlying shares for these Options vested on January 6, 2010.
|
(5)
|
All underlying shares for these Options vested on December 31, 2010.
|
(6)
|
All underlying shares for this Option vests at the rate of one-third of the shares on the first, second, and third anniversary date of the issuance of the Option on July 28, 2011.
|
(7)
|
All underlying shares for this Option vests at the rate of one-third of the shares on the first, second, and third anniversary date of the issuance of the Option on December 22, 2011.
|
Name
(a)
|
Fees earned or paid in cash
($)
(b)
|
Stock awards
($)
(c)
|
Option awards
($)
(d)
|
Non-equity incentive plan com-
pensation
($)
(e)
|
Nonqualified
deferred
com-pensation
earnings
($)
(f)
|
All
other
com-pensation
($)
(g)
|
Total
($)
(h)
|
Tommy G. Thompson
|
-0-
|
-0-
|
$-0-
(1)
|
-0-
|
-0-
|
-0-
|
$-0-
|
Samuel A. Greco
|
-0-
|
-0-
|
$-0-
(2)
|
-0-
|
-0-
|
-0-
|
$-0-
|
Steven G. Johnson
|
-0-
|
-0-
|
$-0-
(3)
|
-0-
|
-0-
|
-0-
|
$-0-
|
Allen Wheeler
|
-0-
|
-0-
|
$-0-
(4)
|
-0-
|
-0-
|
-0-
|
$-0-
|
Jeffrey C. Lightcap
|
-0-
|
-0-
|
$-0-
|
-0-
|
-0-
|
-0-
|
$-0-
|
Gerald A. Murphy
|
-0-
|
-0-
|
$-0-
|
-0-
|
-0-
|
-0-
|
$-0-
|
(1)
|
Based on (i) an Option for 100,000 underlying shares granted in January 2010 for services rendered by Thompson as Chairman in fiscal year 2009 for which all underlying shares vested immediately and (ii) an Option for 100,000 underlying shares granted in March 2010 for services rendered as Chairman in fiscal year 2010 for which all underlying shares vested on December 31, 2010. Does not include a common stock purchase warrant for 1,000,000 underlying shares granted to Thompson on August 20, 2010 for reasons other than his services as Chairman. Through December 31, 2011, Thompson's aggregate outstanding Options related to his services as Chairman totaled 1,922,565 underlying shares.
|
(2)
|
Based on (i) an Option for 50,000 underlying shares granted in January 2010 for services rendered by Greco as a director in fiscal year 2009 for which all underlying shares vested immediately and (ii) an Option for 50,000 underlying shares granted in March 2010 for services rendered as a director in fiscal year 2010 for which all underlying shares vested on December 31, 2010. Does not include Options in the aggregate of 3,883,745 granted to Greco for services rendered as an executive officer. Through December 31, 2011, Greco's outstanding Option related to his services as a director totaled 100,000 underlying shares.
|
(3)
|
Based on (i) an Option for 50,000 underlying shares granted in January 2010 for services rendered by Johnson as a director in fiscal year 2009 for which the underlying shares vested immediately and (ii) an Option for 50,000 underlying shares granted in March 2010 for services rendered as a director in fiscal year 2010 for which all underlying shares vested on December 31, 2010. Through December 31, 2011, Johnson's outstanding Options related to his services as a director totaled 100,000 underlying shares.
|
(4)
|
Based on (i) an Option for 75,000 underlying shares granted in January 2010 for services rendered by Wheeler as a director in fiscal year 2009 for which the underlying shares vested immediately and (ii) an Option for 75,000 underlying shares granted in March 2010 for services rendered as director in fiscal year 2010 for which all underlying shares vested on December 31, 2010. Through December 31, 2011, Wheeler's outstanding Options related to his services as a director totaled 150,000 underlying shares.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Title of Class
|
Name and Address of Beneficial Owner
|
Amount and Nature
of Beneficial
Ownership
(1)
|
Percent
of
Class
|
Common Stock
|
Tommy G. Thompson (Chairman of the Board)
405 State Hwy. 121, Suite B 240, Lewisville, TX 75067
|
7,747,787
(2)
|
5.74%
|
Common Stock
|
Samuel A. Greco (Chief Executive Officer, Director)
405 State Hwy. 121, Suite B 240, Lewisville, TX 7506
|
3,676,083
(3)
|
2.73%
|
Common Stock
|
Steve G. Johnson (President, COO, Director)
405 State Hwy. 121, Suite B 240, Lewisville, TX 75067
|
13,446,823
(4)
|
10.17%
|
Common Stock
|
Anthony P. Piccin (Chief Financial Officer, Treas., Sec.)
405 State Hwy. 121, Suite B 240, Lewisville, TX 75067
|
-0-
|
0%
|
Common Stock
|
L. Allen Wheeler (Director)
405 State Hwy. 121, Suite B 240, Lewisville, TX 75067
|
14,582,224
(5)
|
11.03%
|
Common Stock
|
Jeffrey C. Lightcap (Director)
405 State Hwy. 121, Suite B 240, Lewisville, TX 75067
|
33,207,513
(6)
|
20.09%
|
Common Stock
|
Gerald A. Murphy (Director)
405 State Hwy. 121, Suite B 240, Lewisville, TX 75067
|
6,339,888
(7)
|
4.76%
|
Common Stock
|
All Officers & Directors as a Group (7 persons)
|
79,000,318
(8)
|
45.86%
|
Common Stock
|
Robert J. Smith (Shareholder)
13650 Fiddlesticks Blvd., Suite 202-324,
Ft. Myers, FL 33912
|
9,509,023
(9)
|
6.92%
|
Title of Class
|
Name and Address of Beneficial Owner
|
Amount and Nature
of Beneficial
Ownership
(1)
|
Percent
of
Class
|
Common Stock
|
FMR, LLC (Shareholder)
82 Devonshire St.
Boston, MA 02109
|
10,425,300
(10)
|
7.89%
|
Common Stock
|
Wellington Management Company, LLP
280 Congress Street
Boston, MA 02210
|
14,538,350
(11)
|
11.01%
|
Common Stock
|
Hartford Series Fund, Inc.
500 Bielenberg Drive
Woodbury, MN 55125-1400
|
6,844,000
(12)
|
5.18%
|
Common Stock
|
HealthCor Management, LP et al
Carnegie Hall Tower, 152 West 57
th
Street
New York, NY 10019
|
33,207,513
(6)
|
20.09%
|
(1)
|
Unless otherwise noted, we believe that all shares are beneficially owned and that all persons named in the table have sole voting and investment power with respect to all shares of Common Stock owned by them. Applicable percentage of ownership is based on 132,086,376 shares of Common Stock currently outstanding, as adjusted for each shareholder.
|
(2)
|
This amount includes (i) 4,825,222 shares directly owned by Thompson, (ii) 1,922,565 shares due to Thompson upon exercise of vested Options, and (ii) 1,000,000 shares due to Thompson upon exercise of Warrants. The percentage of class for Thompson is based on 135,008,941 shares which would be outstanding if all of Thompson's Warrants and vested Options were exercised.
|
(3)
|
This amount includes (i) 868,161 shares directly owned by Greco and (ii) 2,807,922 shares due to Greco upon exercise of vested Options. The percentage of class for Greco is based on 134,894,298 shares which would be outstanding if all of Greco's vested Options were exercised.
|
(4)
|
This amount includes (i) 6,957 shares directly owned by Mr. Johnson, (ii) 100,000 shares due to Johnson upon exercise of vested Options and (ii) 13,339,866 shares beneficially owned by SJ Capital, LLC, a company controlled by Johnson. The percentage of class for Johnson is based on 132,186,376 shares which would be outstanding if all of Johnson's vested Options were exercised.
|
(5)
|
This amount includes (i) 365,335 shares directly owned by Wheeler, (ii) 150,000 shares due to Wheeler upon exercise of Options, and (iii) 14,066,889 shares beneficially owned by Dozer Man, LLC, a company controlled by Wheeler. The percentage of class for Wheeler is based on 132,236,376 shares which would be outstanding if all of Wheeler's vested Options were exercised.
|
(
6
)
|
HealthCor Management, LP, HealthCor Associates, LLC, HealthCor Hybrid Offshore Master Fund, LP, HealthCor Hybrid Offshore GP, LLC, HealthCor Group, LLC, HealthCor Partners Management, L.P., HealthCor Partners Management GP, LLC, HealthCor Partners Fund, LP, HealthCor Partners, LP HealthCor Partners GP, LCC, Jeffrey C. Lightcap, Joseph Healey and Arthur Cohen (collectively, the Reporting Persons), beneficially own an aggregate of 33,207,513 shares, respecting (i) 4,000,000 shares that may be acquired upon conversion of the 2012 Notes, (ii) 17,424,654 shares that may be acquired upon conversion of the 2011 Notes (including interest paid in kind through December 31, 2011), and (iii) 11,782,859 shares that may be acquired upon exercise of Warrants. The percentage of class for Reporting Persons is based on 165,293,889 shares which would be ou
tsta
nding if all the 2012 Notes and 2011 Notes were converted and all Warrants were exercised.
|
(7)
|
This amount includes: (i) 5,339,888 shares directly owned by Murphy and (ii) 1,000,000 shares due to Murphy upon exercise of Warrants. The percentage of class for Murphy is based on 133,086,376 shares which would be outstanding if all of Murphy’s Warrants were exercised.
|
(8)
|
This amount includes all shares directly and beneficially owned by all officers and directors and all shares to be issued directly and beneficially upon exercise of vested shares under Options and Warrants and upon conversion of convertible securities. The percentage of class for all officers and directors is based on 172,274,376 shares which would be outstanding if all the aforementioned Options, Warrants and convertible securities were exercised or converted.
|
(9)
|
This amount includes: (i) 1,080,216 shares directly owned by Smith, (ii) 75,000 shares held in trust for Smith's minor children, (iii) 2,512,225 shares beneficially owned by Plato & Associates, LLC, a company controlled by Smith, (iv) 588,273 shares beneficially owned by Energy Capital, LLC, a company controlled by Mr. Smith, (v) 4,253,309 shares due to Smith upon the exercise of Warrants; and (v) 1,000,000 shares due to Plato & Associates, LLC upon the exercise of Warrants. The percentage of class for Smith is based on 137,339,685 shares which would be outstanding if all Warrants owned by Smith and Plato & Associates, LLC were exercised.
|
(10)
|
These shares are beneficially owned by Puritan Fund, an investment company registered under the Investment Company Act of 1940, and an investment company of FMR, LLC. Various persons have the right to vote the shares, receive, or the power to direct the receipt of dividends from, or the proceeds from the sale of these shares.
|
(11)
|
Wellington Management, in its capacity as investment advisor, may be deemed to beneficially own 14,538,350 shares which are held of record by its clients. Those clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such shares. Of those clients, only Hartford Capital Appreciation HLS Fund is known to have such right or power with respect to more than five percent of the shares.
|
(12)
|
Hartford Series Fund, Inc., in its capacity as an investment company registered under Section 8 of the Investment Company Act of 1940, may be deemed to beneficially own 6,844,000 shares on behalf of Hartford Capital Appreciate HLS Fund and has shared power to vote and direct the sale of the shares.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
Exhibit No.
|
Date of Document
|
Name of Document
|
||
2.0
|
09/27/07
|
Securities Exchange Agreement by and between Ecogate, Inc., CareView Communications, Inc. and Shareholders of CareView Communications, Inc.
(1)
|
||
3.0
|
07/08/97
|
Articles of Incorporation filed in State of California under Purpose, Inc.
(1)
|
||
3.1
|
04/30/99
|
Certificate of Amendment filed in State of California (to change name to Ecogate, Inc. and to increase authorized shares to 100,000 shares)
(1)
|
||
3.2
|
04/03/01
|
Certificate of Amendment filed in State of California (to (i) increase the capital stock of the Company to 25,000,000 shares at no par value [20,000,000 authorized common shares and 5,000,000 authorized preferred shares], and (ii) to add provisions for indemnification for officers and directors)
(1)
|
||
3.3
|
08/05/04
|
Certificate of Amendment filed in State of California (to amend Articles of Incorporation to increase the capital stock of the Company to 105,000,000 shares at no par value [100,000,000 authorized common shares and 5,000,000 authorized preferred shares])
(1)
|
||
3.4
|
09/20/07
|
Certificate of Amendment filed in State of California (to amend Articles of Incorporation to increase the capital stock of the Company to 320,000,000 shares at no par value [300,000,000 authorized common shares and 20,000,000 authorized preferred shares])
(1)
|
||
3.5
|
09/25/07
|
Certificate of Amendment filed in State of California (to amend Articles of Incorporation to designate 1,000,000 shares of Series A Preferred
(1)
|
||
3.6
|
09/25/07
|
Certificate of Amendment filed in State of California (to amend Articles of Incorporation to designate 3,000,000 shares of Series B Preferred Stock)
(1)
|
||
3.7
|
10/30/07
|
Certificate of Amendment filed in State of California (to amend Articles of Incorporation to change name to CareView Communications, Inc.)
(1)
|
||
3.8
|
11/06/07
|
Notice of Conversion filed in State of Nevada (to convert CareView Communications, Inc. from a California corporation to a Nevada corporation)
(1)
|
||
3.9
|
11/06/07
|
Articles of Incorporation for CareView Communications, Inc. filed in State of Nevada
(1)
|
||
3.10
|
11/21/07
|
Domestic Stock Corporation Certificate of Election to Wind Up and Dissolve filed in State of California
(1)
|
||
3.11
|
11/21/07
|
Domestic Stock Corporation Certificate of Dissolution filed in State of California
(1)
|
||
3.12
|
n/a
|
Bylaws of CareView Communications, Inc., a Nevada corporation
(1)
|
||
10.00
|
02/28/05
|
Subscription and Investor Rights Agreement
(1)
|
||
10.01
|
n/a
|
Products and Services Agreement (a/k/a Hospital Agreement), form of
(1)
|
||
10.02
|
09/15/06
|
Promissory Note, form of
(1)
|
||
10.03
|
08/16/07
|
Purchase Agreement between the CareView-TX and Cole Investment Hospital Group, LLC (for IP purchase)
(1)
|
||
10.07
|
10/17/07
|
Subordinated Convertible Note, form of
(1)
|
||
10.08
|
10/29/07
|
Assignment and Assumption Agreement and Consent
(1)
|
||
10.09
|
12/03/07
|
CareView Communications, Inc. 2007 Stock Incentive Plan
(1)
|
||
10.10
|
12/03/07
|
Non-Qualified Stock Option, form of
(1)
|
||
10.11
|
12/13/07
|
Audit Committee Charter
(1)
|
||
10.12
|
12/13/07
|
Compensation Committee Charter
(1)
|
||
10.14
|
02/13/08
|
Advisory Board Charter
(1)
|
||
10.15
|
05/20/08
|
Investment Banking Services Agreement with Peak Securities Corporation
(1)
|
||
10.16
|
n/a
|
Stock Purchase Agreement, form of
(1)
|
||
10.17
|
10/01/08
|
Agreement with Develo Financial Group, LLC
(1)
|
||
10.25
|
10/02/08
|
6% Promissory Note, form of
(1)
|
||
10.26
|
10/02/08
|
Common Stock Purchase Warrant, form of
(1)
|
||
10.27
|
10/06/08
|
Investment Banking Services Agreement with William Blair & Company
(1)
|
||
10.29
|
04/28/09
|
Promissory Note to David Webb for $83,333
(1)
|
10.30
|
04/28/09
|
Promissory Note to Allen Wheeler for $83,333
(1)
|
||
10.31
|
05/01/09
|
Agreement with Develo Financial Group, LLC
(1)
|
||
10.32
|
05/29/09
|
Promissory Note to S. J. Capital, LLC for $1,500
(1)
|
||
10.33
|
05/29/09
|
Amendment Agreement with Noteholders of 6% Promissory Notes
(1)
|
||
10.34
|
06/01/09
|
Webb & Webb Retainer Agreement
(1)
|
||
10.35
|
06/03/09
|
Promissory Note to David Webb for $30,000
(1)
|
||
10.36
|
06/03/09
|
Promissory Note to Steve Johnson for $20,000
(1)
|
||
10.37
|
06/16/09
|
Promissory Note to Recap Group, LLC for $20,000
(1)
|
||
10.38
|
07/18/09
|
Cooperative Agreement with Mann Equity, LLC
(1)
|
||
10.39
|
08/25/09
|
Amendment Agreement with Noteholder of 6% Promissory Note
(1)
|
||
10.40
|
09/01/09
|
Consulting Agreement with Develo Financial Group, LLC
(1)
|
||
10.41
|
09/09/09
|
Investment Banking Agreement with National Securities Corporation
(1)
|
||
10.42
|
09/11/09
|
CareView Communications, Inc. 2009 Stock Incentive Plan
(1)
|
||
10.43
|
10/01/09
|
Commercial Lease Agreement (for Lewisville location)
(1)
|
||
10.44
|
11/16/09
|
Rockwell JV – Master Investment Agreement
(1)
|
||
10.45
|
11/16/09
|
Rockwell JV – Project Hospital Contract Assignment, form of
(1)
|
||
10.46
|
11/16/09
|
Rockwell JV – Project Escrow Deposit Agreement, form of
(1)
|
||
10.47
|
11/16/09
|
Rockwell JV – Limited License of Intellectual Property Rights,, form of
(1)
|
||
10.48
|
11/16/09
|
Rockwell JV – Project Note, form of
(1)
|
||
10.49
|
11/16/09
|
Rockwell JV – Amended and Restated Project Note, form of
(1)
|
||
10.50
|
11/16/09
|
Rockwell JV – Project LLC Operating Agreement, form of
(1)
|
||
10.51
|
11/16/09
|
Rockwell JV – Project Security Agreement, form of
(1)
|
||
10.52
|
11/16/09
|
Rockwell JV – Project Services Subcontract Agreement, form of
(1)
|
||
10.53
|
11/16/09
|
Rockwell JV – Project Warrant, form of
(1)
|
||
10.54
|
01/14/10
|
Extension Agreement with Noteholders of Bridge Loans
(1)
|
||
10.55
|
01/29/10
|
Master Lease between the Company and Fountain Fund 2 LP
(1)
|
||
10.56
|
01/09/10
|
Distribution Agreement between the Company and Foundation Medical
(1)
|
||
10.57
|
04/13/10
|
Letter of Intent between the Company and AFH Holding and Advisory, LLC, Discovery Medical Investments, LLC and Mann Equity, LLC
(1)
|
||
10.58
|
04/15/10
|
Addendum to Cooperative Agreement with Mann Equity, LLC
(1)
|
||
10.59
|
05/26/10
|
Letter of Intent between the Company and Weigao Holding
(1)
|
||
10.60
|
07/29/10
|
Amendment Agreement between the Company and AFH Holding and Advisory, LLC, Discovery Medical Investments, LLC and Mann Equity, LLC
(1)
|
||
10.61
|
06/21/10
|
Indemnification Agreement, form of
(1)
|
||
10.62
|
06/29/10
|
First Amendment to Commercial Lease Agreement
(1)
|
||
10.63
|
08/17/10
|
Letter of Waiver from Tommy G. Thompson
(1)
|
||
10.64
|
09/20/10
|
Revocation and Substitution Agreement
(1)
|
||
10.65
|
09/20/10
|
Agreement Regarding Gross Income Interests with Tommy G. Thompson
(1)
|
||
10.66
|
09/20/10
|
Agreement Regarding Gross Income Interests with Gerald L. Murphy
(1)
|
||
10.67
|
09/20/10
|
Agreement Regarding Gross Income Interests with Dennis M. Langley
(1)
|
||
10.68
|
11/01/10
|
Promissory Note with Plato & Associates, LLC
(2)
|
||
10.69
|
12/17/10
|
Consulting Agreement with Gregory Mastroieni
(3)
|
||
10.70
|
12/17/10
|
Common Stock Purchase Warrant to Gregory Mastroieni
(3)
|
||
10.72
|
04/21/11
|
Note and Warrant Purchase Agreement between the Company and HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP
(4)
|
||
10.73
|
04/21/11
|
Senior Secured Convertible Note of the Company payable to HealthCor Partners Fund, LP
(4)
|
||
10.74
|
04/21/11
|
Senior Secured Convertible Note of the Company payable to HealthCor Hybrid Offshore Master Fund, LP
(4)
|
||
10.75
|
04/21/11
|
Warrant to Purchase 5,488,456 shares of the Company issued to HealthCor Partners Fund, LP
(4)
|
||
10.76
|
04/21/11
|
Warrant to Purchase 6,293,403 shares of the Company issued to HealthCor Hybrid Offshore Master Fund, LP
(4)
|
(1)
|
Filed as an exhibit to the Company’s Form 10 filed with the SEC on August 23, 2010.
|
(2)
|
Filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on November 7, 2010, which exhibits may have had a different exhibit number when originally filed.
|
(3)
|
Filed as an exhibit to the Company’s annual report on Form 10-K filed with the SEC on April 15, 2011.
|
(4)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 27, 2011.
|
(5)
|
Filed as an exhibit to the Company’s quarterly report on Form 10-Q filed with the SEC on August 22, 2011, which exhibits may have had a different exhibit number when originally filed.
|
(6)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2011, which exhibits may have had a different exhibit number when originally filed.
|
(7)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2011, which exhibits may have had a different exhibit number when originally filed.
|
(8)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 5, 2012, which exhibits may have had a different exhibit number when originally filed.
|
(9)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 9, 2012, which exhibits may have had a different exhibit number when originally filed.
|
(10)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on February 2, 2012, which exhibits may have had a different exhibit number when originally filed.
|
*
|
Filed herewith.
|
CAREVIEW COMMUNICATIONS, INC.
|
|||
By:
|
/s/ Samuel A. Greco
|
||
Samuel A. Greco
|
|||
Chief Executive Officer
|
|||
By:
|
/s/ Anthony P. Piccin
|
||
Anthony P. Piccin
|
|||
Chief Financial Officer
|
Signature
|
Title
|
Date
|
||
/
s/ Tommy G. Thompson
|
Chairman of the Board
|
March 15, 2012
|
||
Tommy G. Thompson
|
||||
/s/ Steven Johnson
|
President, Chief
|
March 15, 2012
|
||
Steven Johnson
|
Operating Officer, Director
|
|||
/s/ Samuel A. Greco
|
Chief Executive Officer,
|
March 15, 2012
|
||
Samuel A. Greco
|
Director
|
|||
/s/ L. Allen Wheeler
|
Director
|
March 15, 2012
|
||
L. Allen Wheeler
|
||||
/s/ Jeffrey C. Lightcap
|
Director
|
March 15, 2012
|
||
Jeffrey D. Lightcap
|
||||
/s/ Gerald A. Murphy
|
Director
|
March 15, 2012
|
||
Gerald A. Murphy
|
Page
|
||
F-1 to F-3
|
||
F-4
|
||
F-5
|
||
F-6
|
||
F-7
|
||
F-8 to F-50
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 8,526,857 | $ | 26,565 | ||||
Accounts receivable, net of allowance for doubtful accounts of $15,984 and $0, respectively
|
186,850 | 88,390 | ||||||
Other current assets
|
531,385 | 288,934 | ||||||
Total current assets
|
9,245,092 | 403,889 | ||||||
Property and equipment, net of accumulated depreciation of $1,321,216 and $317,872, respectively
|
8,767,459 | 3,811,142 | ||||||
Other Assets:
|
||||||||
Intellectual property, patents, and trademarks, net of accumulated amortization of $2,205,428 and $1,653,525, respectively
|
667,927 | 1,170,544 | ||||||
Other assets
|
3,275,739 | 574,910 | ||||||
3,943,666 | 1,745,454 | |||||||
Total assets
|
$ | 21,956,217 | $ | 5,960,485 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 1,240,347 | $ | 145,800 | ||||
Notes payable, net of debt discount of $32,255 and $60,679, respectively
|
58,602 | 38,647 | ||||||
Mandatorily redeemable equity in joint venture, net of debt discount of $32,255 and $60,679, respectively
|
58,602 | 38,647 | ||||||
Accrued interest
|
1,342 | 25,256 | ||||||
Other current liabilities
|
275,268 | 41,545 | ||||||
Total current liabilities
|
1,634,161 | 289,895 | ||||||
Long-term Liabilities:
|
||||||||
Senior secured convertible notes, net of debt discount
of $17,925,049
|
3,855,769 | - | ||||||
Notes payable, net of current portion and net of debt discount of $100,715 and $159,772, respectively
|
273,128 | 289,448 | ||||||
Mandatorily redeemable equity in joint venture, net of current portion and net of debt discount of $100,715 and $159,772, respectively
|
273,128 | 289,448 | ||||||
Total long-term liabilities
|
4,402,025 | 578,896 | ||||||
Total liabilities
|
6,036,186 | 868,791 | ||||||
Commitments and Contingencies
|
||||||||
Stockholders’ Equity:
|
||||||||
Preferred stock - par value $0.001; 20,000,000 shares authorized; no shares issued and outstanding
|
- | - | ||||||
Common stock - par value $0.001; 300,000,000 shares authorized; 131,455,407 and 127,540,215 issued and outstanding, respectively
|
131,455 | 127,540 | ||||||
Additional paid in capital
|
62,788,134 | 35,588,416 | ||||||
Accumulated deficit
|
(46,772,548 | ) | (30,508,296 | ) | ||||
Total CareView Communications Inc. stockholders’ equity
|
16,147,041 | 5,207,660 | ||||||
Noncontrolling interest
|
(227,010 | ) | (115,966 | ) | ||||
Total stockholders’ equity
|
15,920,031 | 5,091,694 | ||||||
Total liabilities and stockholders’ equity
|
$ | 21,956,217 | $ | 5,960,485 |
Year Ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Revenues, net
|
$ | 630,452 | $ | 325,968 | $ | 87,086 | ||||||
Operating expenses:
|
||||||||||||
Network operations, including non-cash costs of $55,333, $55,333, and $0, respectively
|
2,112,947 | 748,482 | 314,873 | |||||||||
General and administration, including non-cash costs of $1,308,505, $8,603,523, and $971,092, respectively
|
4,194,282 | 10,538,476 | 2,337,026 | |||||||||
Sales and marketing
|
913,859 | 402,719 | 338,644 | |||||||||
Research and development
|
821,868 | 698,282 | 540,440 | |||||||||
Depreciation and amortization
|
1,555,247 | 733,575 | 631,568 | |||||||||
Total operating expense
|
9,598,203 | 13,121,534 | 4,162,551 | |||||||||
Operating loss
|
(8,967,751 | ) | (12,795,566 | ) | (4,075,465 | ) | ||||||
Other income and (expense)
|
||||||||||||
Interest expense
|
(4,443,819 | ) | (324,887 | ) | (1,163,600 | ) | ||||||
Change in fair value of derivatives
|
(2,966,365 | ) | - | - | ||||||||
Amortization of financing costs
|
- | (5,842,370 | ) | (1,021,559 | ) | |||||||
Interest income
|
583 | 509 | 5,406 | |||||||||
Other income
|
2,056 | 12,090 | 61,545 | |||||||||
Total other income (expense)
|
(7,407,545 | ) | (6,154,658 | ) | (2,118,208 | ) | ||||||
Loss before taxes
|
(16,375,296 | ) | (18,950,224 | ) | (6,193,673 | ) | ||||||
Provision for income taxes
|
- | - | - | |||||||||
Net loss
|
(16,375,296 | ) | (18,950,224 | ) | (6,193,673 | ) | ||||||
Net loss attributable to noncontrolling interest
|
(111,044 | ) | (98,466 | ) | (17,500 | ) | ||||||
Net loss attributable to CareView Communications, Inc.
|
$ | (16,264,252 | ) | $ | (18,851,758 | ) | $ | (6,176,173 | ) | |||
Net loss per share attributable to CareView Communications, Inc.
|
$ | (0.13 | ) | $ | (0.15 | ) | $ | (0.06 | ) | |||
Weighted average number of common shares outstanding, basic and diluted
|
129,467,830 | 122,864,474 | 108,359,318 |
Additional
|
||||||||||||||||||||||||
Common Stock
|
Paid in
|
Accumulated
|
Noncontrolling
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Interest
|
Total
|
|||||||||||||||||||
Balance, December 31, 2008
|
106,250,678 | $ | 106,251 | $ | 6,958,234 | $ | (5,480,365 | ) | $ | - | $ | 1,584,120 | ||||||||||||
Shares issued in private placement, net of fees of $69,524
|
2,508,542 | 2,509 | 1,223,207 | - | - | 1,225,716 | ||||||||||||||||||
Shares issued in exchange for debt
|
2,253,464 | 2,253 | 1,165,831 | - | - | 1,168,084 | ||||||||||||||||||
Warrants issued for services
|
- | - | 65,600 | - | - | 65,600 | ||||||||||||||||||
Warrants issued with debt
|
- | - | 684,488 | - | - | 684,488 | ||||||||||||||||||
Warrants issued for loan extension costs
|
- | - | 1,093,500 | - | - | 1,093,500 | ||||||||||||||||||
Options granted as compensation
|
- | - | 905,492 | - | - | 905,492 | ||||||||||||||||||
Net loss
|
- | - | - | (6,176,173 | ) | (17,500 | ) | (6,193,673 | ) | |||||||||||||||
Balance, December 31, 2009
|
111,012,684 | 111,013 | 12,096,352 | (11,656,538 | ) | (17,500 | ) | 533,327 | ||||||||||||||||
Shares issued in private placement, net of fees of $433,687
|
12,173,040 | 12,173 | 6,464,562 | - | - | 6,476,735 | ||||||||||||||||||
Shares issued in exchange for debt, accrued interest and accounts payable
|
4,068,982 | 4,069 | 2,111,800 | - | - | 2,115,869 | ||||||||||||||||||
Shares issued as part of settlement of lawsuit
|
25,000 | 25 | 46,225 | - | - | 46,250 | ||||||||||||||||||
Shares issued for exercise of options
|
160,509 | 160 | 83,031 | - | - | 83,191 | ||||||||||||||||||
Shares issued for services
|
100,000 | 100 | 184,900 | - | - | 185,000 | ||||||||||||||||||
Options granted as compensation
|
- | - | 1,200,753 | - | - | 1,200,753 | ||||||||||||||||||
Warrants issued for contract modifications
|
- | - | 4,080,000 | - | - | 4,080,000 | ||||||||||||||||||
Warrants issued for financing costs
|
- | - | 3,601,564 | - | - | 3,601,564 | ||||||||||||||||||
Warrants issued for loan extension costs
|
- | - | 1,958,647 | - | - | 1,958,647 | ||||||||||||||||||
Warrants issued for services
|
- | - | 570,600 | - | - | 570,600 | ||||||||||||||||||
Re-priced warrants related to compensation
|
- | - | 3,189,982 | - | - | 3,189,982 | ||||||||||||||||||
Net loss
|
- | - | - | (18,851,758 | ) | (98,466 | ) | (18,950,224 | ) | |||||||||||||||
Balance, December 31, 2010
|
127,540,215 | 127,540 | 35,588,416 | (30,508,296 | ) | (115,966 | ) | 5,091,694 | ||||||||||||||||
Shares issued for exercise of options
|
2,321,830 | 2,322 | 445,033 | - | - | 447,355 | ||||||||||||||||||
Shares issued for exercise of warrants
|
1,593,362 | 1,593 | 738,240 | - | - | 739,833 | ||||||||||||||||||
Options granted as compensation
|
- | - | 760,866 | - | - | 760,866 | ||||||||||||||||||
Warrants issued for financing costs
|
- | - | 1,535,714 | - | - | 1,535,714 | ||||||||||||||||||
Warrants issued for services
|
- | - | 753,500 | - | - | 753,500 | ||||||||||||||||||
Reclassification of derivatives from liability to equity
|
- | - | 22,966,365 | - | - | 22,966,365 | ||||||||||||||||||
Net loss
|
- | - | - | (16,264,252 | ) | (111,044 | ) | (16,375,296 | ) | |||||||||||||||
Balance, December 31, 2011
|
131,455,407 | $ | 131,455 | $ | 62,788,134 | $ | (46,772,548 | ) | $ | (227,010 | ) | $ | 15,920,031 |
Accounts Receivable
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Beginning balance
|
$ | 88,390 | $ | 8,267 | $ | -0- | ||||||
Additions
|
630,452 | 325,968 | 87,086 | |||||||||
Reductions
|
(531,992 | ) | (245,845 | ) | 78,819 | |||||||
Ending balance
|
$ | 186,850 | $ | 88,390 | $ | 8,267 |
Allowance for Doubtful Accounts
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Beginning balance
|
$ | -0- | $ | -0- | $ | -0- | ||||||
Additions
|
15,984 | -0- | -0- | |||||||||
Reductions
|
-0- | -0- | -0- | |||||||||
Ending balance
|
$ | 15,984 | $ | -0- | $ | -0- |
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities. | |
Level 2 | Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. | |
Level 3 | Unobservable inputs for the asset or liability. |
Description
|
Assets/ (Liabilities) Measured at Fair Value
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Other Unobservable Inputs (Level3)
|
||||||||||||
2011
|
||||||||||||||||
Accrued Gross Income Interest
|
$ | 10,360 | $ | -0- | $ | -0- | $ | 10,360 | ||||||||
2010
|
||||||||||||||||
Accrued Gross Income Interest
|
$ | 29,511 | $ | -0- | $ | -0- | $ | 29,511 |
Fair Value Measurements Using Significant Unobservable Inputs (Level3)
|
||||||||
2011
|
2010
|
|||||||
Beginning balance
|
$ | 29,511 | $ | -0- | ||||
Issuances of derivative liabilities
|
33,461,512 | -0- | ||||||
Issuance of Accrued Gross Income Interest
|
-0- | 29,511 | ||||||
Settlements of derivative liabilities
|
(22,966,365 | ) | -0- | |||||
Gain recognized on derivative liabilities
|
(10,495,147 | ) | -0- | |||||
Change in fair value of Accrued Gross Income Interest
|
(19,151 | ) | -0- | |||||
Transfers in and/out of Level 3
|
-0- | -0- | ||||||
Ending balance
|
$ | 10,360 | $ | 29,511 |
Years Ending December 31,
|
||||
2012
|
$ | 2,888,157 | ||
2013
|
2,402,909 | |||
2014
|
1,903,098 | |||
2015
|
1,425,116 | |||
2016
|
1,611,030 | |||
Thereafter
|
7,960,679 | |||
Total
|
$ | 18,190,989 |
Month of
Exercise
|
Number of Warrants Exercised
|
Number of Common Shares Issued
|
Exercise Amount
|
|||||||||
April 2011
|
148,000 | 109,520 |
Cashless
|
|||||||||
June 2011
|
179,849 | 124,510 |
Cashless
|
|||||||||
September 2011
|
100,000 | 100,000 | $ | 55,000 | ||||||||
October 2011
|
449,666 | 449,666 | 247,316 | |||||||||
December 2011
|
809,666 | 809,666 | 437,517 | |||||||||
1,687,181 | 1,593,362 | $ | 739,833 |
Number of Shares Under Warrant
|
Exercise Price
|
Exercise Term in Years
|
Fair Value
|
|||||||||||||
Modification of contract (see NOTE U)
|
3,000,000 | $1.00 | 5 | $ | 4,080,000 | |||||||||||
Loan extension (see NOTE H)
|
2,499,975 | $0.52 | 5 | 1,958,647 | ||||||||||||
Loan inducement (see NOTE H)
|
2,300,000 | $1.00 | 5 | 2,852,000 | ||||||||||||
Financing costs (see NOTE R and below)
|
889,683 | $0.52 | 2-10 | 749,564 | ||||||||||||
Services (see below)
|
610,000 | $0.52-$1.25 | 5 | 570,600 | ||||||||||||
9,299,658 | $ | 10,210,811 |
Number of Shares Under Warrant
|
Exercise Price
|
Exercise Term in Years
|
Fair Value
|
|||||||||||||
Loan extension (See NOTE H)
|
3,433,500 | $0.52 | 5 | $ | 1,141,236 | |||||||||||
Financing costs (See below)
|
2,409,498 | $0.52-$0.55 | 2-5 | 1,616,503 | ||||||||||||
Project warrants (See NOTE N)
|
1,151,206 | $.52 | 5 | 1,124,728 | ||||||||||||
Services (See below)
|
200,000 | $0.52 | 5 | 65,600 | ||||||||||||
7,194,204 | $ | 3,948,067 |
2011
|
2010
|
2009
|
||||||||||
Risk-free interest rate
|
0.41-2.14 | % | 0.63-3.66 | % | 0.91-2.69 | % | ||||||
Volatility
|
81.83-89.74 | 79.70-96.33 | % | 72.13-125.67 | % | |||||||
Expected life
|
3-7 | 2-10 | 2-5 | |||||||||
Dividend yield
|
0.00 | % | 0.00 | % | 0.00 | % |
Number of Shares Under Warrants
|
Range of
Warrant Price
Per Share
|
Weighted Average Exercise Price
|
Weighted
Average
Remaining
Contractual
Life
|
|||||||||||||
Balance at December 31, 2008
|
10,228,309 | $ | 0.52-$1.04 | $ | 0.94 | 2.4 | ||||||||||
Granted
|
7,194,204 | 0.52-0.55 | 0.53 | 3.6 | ||||||||||||
Exercised
|
-0- | -0- | -0- | -0- | ||||||||||||
Cancelled
|
-0- | -0- | -0- | -0- | ||||||||||||
Balance at December 31, 2009
|
17,422,513 | 0.52-1.04 | 0.77 | 2.3 | ||||||||||||
Granted
|
9,299,658 | 0.52-1.25 | 0.83 | 4.8 | ||||||||||||
Exercised
|
-0- | -0- | -0- | -0- | ||||||||||||
Expired
|
(4,000,000 | ) | 1.04 | 1.04 | -0- | |||||||||||
Cancelled
|
-0- | -0- | -0- | -0- | ||||||||||||
Balance at December 31, 2010
|
22,722,171 | 0.52-1.25 | 0.65 | 4.4 | ||||||||||||
Granted
|
13,911,431 | 1.40-1.59 | 1.40 | 8.8 | ||||||||||||
Exercised
|
(1,687,181 | ) | 0.52-0.55 | 0.54 | -0- | |||||||||||
Expired
|
(100,000 | ) | 0.52 | 0.52 | -0- | |||||||||||
Cancelled
|
-0- | -0- | -0- | -0- | ||||||||||||
Balance at December 31, 2011
|
34,846,421 | $ | 0.52-$1.25 | $ | 0.95 | 5.7 | ||||||||||
Vested and Exercisable at
December 31, 2011
|
34,846,421 | $ | 0.52-$1.25 | $ | 0.95 | 5.7 |
Month of Grant
|
Number of Options Granted
|
Option
Exercise Price
|
||||||
January 2011
|
225,000 | $ | 1.62 | |||||
February 2011
|
5,000 | $ | 1.53 | |||||
April 2011
|
5,000 | $ | 1.66 | |||||
July 2011
|
32,500 | $ | 1.69 | |||||
August 2011
|
5,000 | $ | 1.40 | |||||
October 2011
|
24,000 | $ | 1.50 | |||||
December 2011
|
680,000 | $ | 1.51 | |||||
976,500 |
Number of Shares Under Option
|
Weighted Average Exercise Price
|
Weighted
Average
Remaining
Contractual
Life
|
Aggregate Intrinsic Value
|
|||||||||||||
Balance at December 31, 2008
|
5,496,265 | $ | 0.40 | 9.8 | ||||||||||||
Granted
|
3,857,809 | 0.52 | ||||||||||||||
Exercised
|
-0- | -0- | $ | 0 | ||||||||||||
Cancelled
|
(10,000 | ) | 0.52 | |||||||||||||
Balance at December 31, 2009
|
9,344,074 | 0.45 | 8.2 | $ | 10,752,333 | |||||||||||
Granted
|
1,103,982 | 0.72 | ||||||||||||||
Exercised
|
(160,509 | ) | 0.52 | $ | 213,750 | |||||||||||
Expired
|
(32,102 | ) | 0.52 | |||||||||||||
Cancelled
|
(5,000 | ) | 0.52 | |||||||||||||
Balance at December 31, 2010
|
10,250,445 | 0.48 | 7.0 | $ | 11,372,288 | |||||||||||
Granted
|
976,500 | 1.54 | ||||||||||||||
Exercised
|
(2,321,830 | ) | 0.19 | $ | 3,221,136 | |||||||||||
Expired
|
(150,000 | ) | 1.00 | |||||||||||||
Cancelled
|
(5,000 | ) | 1.62 | |||||||||||||
Balance at December 31, 2011
|
8,750,115 | $ | 0.66 | 7.2 | $ | 8,047,942 | ||||||||||
Vested and Exercisable at
December 31, 2011
|
6,728,041 | $ | 0.53 | 6.9 | $ | 7,041,713 |
2011
|
2010
|
2009
|
||||||||||
Risk-free interest rate
|
0.35-1.39 | % | 0.78-1.05 | % | 0.91-1.03 | % | ||||||
Volatility
|
80.85-84.78 | % | 92.96-94.34 | % | 94.33-98.45 | % | ||||||
Expected life
|
3 | 2-5 | 2 | |||||||||
Dividend yield
|
0.00 | % | 0.00 | % | 0.00 | % |
Years Ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Expected income tax benefit at statutory rate
|
$ | (5,730,435 | ) | $ | (6,632,579 | ) | $ | (2,167,765 | ) | |||
Nondeductible expense
|
27,199 | -0- | -0- | |||||||||
Nondeductible interest expenses
|
1,905,598 | -0- | -0- | |||||||||
State income tax benefit, net of tax effect at state statutory rate
|
341 | -0- | -0- | |||||||||
Other
|
29,444 | 18,710 | -0- | |||||||||
Change in valuation account
|
3,767,853 | 6,613,869 | 2,167,765 | |||||||||
Income tax expense (benefit)
|
$ | -0- | $ | -0- | $ | -0- |
December 31,
|
||||||||
2011
|
2010
|
|||||||
Deferred Tax Assets:
|
||||||||
Tax benefit of net operating loss carry-forward
|
$ | 9,843,702 | $ | 2,920,548 | ||||
Research and development credit carry-forward
|
29,084 | 10,179 | ||||||
Amortization
|
593,741 | 712,823 | ||||||
Depreciation
|
-0- | 7,718 | ||||||
Financing fees
|
1,356,200 | 2,402,830 | ||||||
Non-cash compensation
|
1,645,279 | 3,679,392 | ||||||
Officer compensation
|
-0- | 216,000 | ||||||
Donations
|
7,706 | -0- | ||||||
Accrued interest
|
582,385 | 56,730 | ||||||
Bad debt allowance
|
5,594 | -0- | ||||||
Total deferred tax assets
|
14,776,620 | 10,006,220 | ||||||
Valuation allowance for deferred tax assets
|
(13,102,798 | ) | (10,006,220 | ) | ||||
Deferred tax assets, net of valuation allowance
|
960,893 | -0- | ||||||
Deferred Tax Liability:
|
||||||||
Depreciation expense
|
(960,893 | ) | -0- | |||||
Total deferred tax liability
|
(960,893 | ) | -0- | |||||
Deferred assets, net of deferred tax liabilities
|
$ | -0- | $ | -0- |
December 31,
|
||||||||
2011
|
2010
|
|||||||
Other receivables-related party
|
$ | 188,823 | $ | 188,823 | ||||
Deferred closing costs
|
172,299 | -0- | ||||||
Prepaid expenses
|
99,651 | 90,960 | ||||||
Legal retainer
|
62,402 | -0- | ||||||
Note receivable-employee
|
6,000 | 6,000 | ||||||
Other receivables
|
2,210 | 3,151 | ||||||
TOTAL OTHER CURRENT ASSETS
|
$ | 531,385 | $ | 288,934 |
December 31,
|
||||||||
2011
|
2010
|
|||||||
Network equipment
|
$ | 9,720,351 | $ | 3,871,785 | ||||
Office equipment and software
|
130,008 | 78,379 | ||||||
Vehicles
|
82,622 | 52,062 | ||||||
Test equipment
|
81,670 | 59,741 | ||||||
Furniture
|
67,157 | 61,560 | ||||||
Warehouse equipment
|
6,866 | 5,487 | ||||||
10,088,674 | 4,129,014 | |||||||
Less: accumulated depreciation
|
(1,321,215 | ) | (317,872 | ) | ||||
TOTAL PROPERTY AND EQUIPMENT
|
$ | 8,767,459 | $ | 3,811,142 |
December 31, 2011
|
||||||||||||
Cost
|
Accumulated Amortization
|
Net
|
||||||||||
Patents and trademarks
|
$ | 120,422 | $ | 3,076 | $ | 117,346 | ||||||
Software development costs
|
2,002,933 | 1,602,352 | 400,581 | |||||||||
Other intellectual property
|
750,000 | 600,000 | 150,000 | |||||||||
TOTAL INTANGIBLE ASSETS
|
$ | 2,873,355 | $ | 2,205,428 | $ | 667,927 |
December 31,2010
|
||||||||||||
Cost
|
Accumulated Amortization
|
Net
|
||||||||||
Patents and trademarks
|
$ | 71,136 | $ | 1,761 | $ | 69,375 | ||||||
Software development costs
|
2,002,933 | 1,201,764 | 801,169 | |||||||||
Other intellectual property
|
750,000 | 450,000 | 300,000 | |||||||||
TOTAL INTANGIBLE ASSETS
|
$ | 2,824,069 | $ | 1,653,525 | $ | 1,170,544 |
December 31, 2011
|
||||||||||||
Cost
|
Accumulated Amortization
|
Net
|
||||||||||
Deferred debt issuance costs
|
$ | 1,535,714 | $ | 219,390 | $ | 1,316,324 | ||||||
Deferred installation costs
|
833,985 | 24,041 | 809,944 | |||||||||
Prepaid consulting
|
1,071,562 | 547,639 | 523,923 | |||||||||
Deferred closing costs
|
258,448 | -0- | 258,448 | |||||||||
Prepaid license fee
|
233,606 | 5,464 | 228,142 | |||||||||
Security deposit
|
83,624 | -0- | 83,624 | |||||||||
Deferred distribution/service costs
|
166,000 | 110,666 | 55,334 | |||||||||
TOTAL OTHER ASSETS
|
$ | 4,182,939 | $ | 907,200 | $ | 3,275,739 |
December 31,2010
|
||||||||||||
Cost
|
Accumulated Amortization
|
Net
|
||||||||||
Prepaid consulting
|
$ | 404,599 | $ | 86,538 | 318,061 | |||||||
Deferred distribution/service costs
|
166,000 | 55,333 | 110,667 | |||||||||
Security deposits
|
83,624 | -0- | 83,624 | |||||||||
Deferred installation costs
|
77,545 | 14,987 | 62,558 | |||||||||
TOTAL OTHER ASSETS
|
$ | 731,768 | $ | 156,858 | $ | 574,910 |
December 31,
|
||||||||
2011
|
2010
|
|||||||
Accrued taxes
|
$ | 261,399 | $ | -0- | ||||
Accrued gross interest income
|
11,908 | 29,511 | ||||||
Insurance financing
|
1,961 | 10,623 | ||||||
Sales tax payable
|
-0- | 1,411 | ||||||
TOTAL OTHER CURRENT LIABILITIES
|
$ | 275,268 | $ | 41,545 |
Years Ending December 31,
|
||||
2012
|
$ | 163,827 | ||
2013
|
168,358 | |||
2014
|
170,624 | |||
2015
|
85,312 | |||
Thereafter
|
-0- | |||
Total
|
$ | 588,121 |
Years
Ending December 31,
|
Total
|
Senior Secured Convertible Notes
|
Notes Payable
|
Mandatorily Redeemable Equity in Joint Venture
|
||||||||||||
2012
|
$ | 273,600 | $ | -0- | $ | 136,800 | $ | 136,800 | ||||||||
2013
|
773,742 | -0- | 386,871 | 386,871 | ||||||||||||
2014
|
-0- | -0- | -0- | -0- | ||||||||||||
2015
|
-0- | -0- | -0- | -0- | ||||||||||||
2016
|
2,562,603 | 2,562,603 | -0- | -0- | ||||||||||||
Thereafter
|
52,960,468 | 52,960,468 | -0- | -0- | ||||||||||||
Total
|
$ | 56,570,413 | $ | 55,523,071 | $ | 523,671 | $ | 523,671 |
2011
|
2010
|
|||||||
Assets
|
||||||||
Cash
|
$ | 4,161 | $ | 22,416 | ||||
Receivables
|
49,835 | 41,812 | ||||||
Total current assets
|
53,996 | 64,228 | ||||||
Property, net
|
277,088 | 380,980 | ||||||
Total assets
|
$ | 331,084 | $ | 445,208 | ||||
Liabilities
|
||||||||
Accounts payable
|
$ | 90,212 | $ | 36,878 | ||||
Notes payable, net of debt discount of $32,255 and $60,679, respectively
|
58,602 | 38,647 | ||||||
Mandatorily redeemable interest, net of debt discount of $32,255 and $60,679, respectively
|
58,602 | 38,647 | ||||||
Accrued interest
|
1,342 | 25,257 | ||||||
Other current liabilities
|
55,417 | -0- | ||||||
Total current liabilities
|
264,175 | 139,429 | ||||||
Notes payable, net of debt discount of $100,715 and $159,772, respectively
|
273,128 | 289,448 | ||||||
Mandatorily redeemable interest, net of debt discount of $100,715 and $159,772, respectively
|
273,128 | 289,448 | ||||||
Total long term liabilities
|
546,256 | 578,896 | ||||||
Total liabilities
|
$ | 810,431 | $ | 718,325 |
Year Ended
December 31, 2011 |
Year Ended
December 31, 2010 |
Inception
(November 16, 2009) to December 31, 2009 |
||||||||||
Revenue
|
$ | 311,971 | $ | 213,217 | $ | 12,076 | ||||||
Operating expense
|
73,257 | 36,878 | -0- | |||||||||
General and administrative expense
|
64,419 | 4,200 | -0- | |||||||||
Depreciation
|
119,747 | 87,525 | 4,766 | |||||||||
Total operating costs
|
257,423 | 128,603 | 4,766 | |||||||||
Operating income
|
54,548 | 84,614 | 7,310 | |||||||||
Amortization of debt discount
|
174,964 | 171,309 | 24,540 | |||||||||
Interest expense
|
101,672 | 110,238 | 17,770 | |||||||||
Total other expense
|
276,636 | 281,547 | 42,310 | |||||||||
Loss before taxes
|
(222,088 | ) | (196,933 | ) | (35,000 | ) | ||||||
Provision for taxes
|
-0- | -0- | -0- | |||||||||
Net loss
|
(222,088 | ) | (196,933 | ) | (35,000 | ) | ||||||
Net loss attributable to noncontrolling interest
|
(111,044 | ) | (98,467 | ) | (17,500 | ) | ||||||
Net loss attributable to CareView Communications, Inc.
|
$ | (111,044 | ) | $ | (98,466 | ) | $ | (17,500 | ) |
2011 Quarters
|
||||||||||||||||
(In thousands, except per share)
|
1
st
|
2
nd
|
3
rd
|
4th
|
||||||||||||
Revenues
|
$ | 109 | $ | 80 | $ | 197 | $ | 244 | ||||||||
Operating expense
|
$ | 1,381 | $ | 2,218 | $ | 2,567 | $ | 3,432 | ||||||||
Operating loss
|
$ | (1,272 | ) | $ | (2,138 | ) | $ | (2,370 | ) | $ | (3,188 | ) | ||||
Change in fair value of derivative liabilities
(1)
|
$ | -0- | $ | (12,235 | ) | $ | 5,268 | $ | 4,001 | |||||||
Net income (loss) attributable to CareView
|
$ | (1,320 | ) | $ | (15,502 | ) | $ | 1,332 | $ | (774 | ) | |||||
Income (loss) per common share, basic and diluted
|
$ | (0.01 | ) | $ | (0.12 | ) | $ | 0.01 | $ | (0.01 | ) |
2010 Quarters
|
||||||||||||||||
(In thousands, except per share)
|
1
st
|
2
nd
|
3
rd
|
4th
|
||||||||||||
Revenues
|
$ | 42 | $ | 67 | $ | 89 | $ | 128 | ||||||||
Operating expense
|
$ | 1,412 | $ | 4,821 | $ | 5,499 | $ | 1,390 | ||||||||
Operating loss
|
$ | (1,370 | ) | $ | (4,754 | ) | $ | (5,410 | ) | $ | (1,262 | ) | ||||
Net loss attributable to CareView
|
$ | (3,511 | ) | $ | (4,845 | ) | $ | (5,557 | ) | $ | (4,939 | ) | ||||
Loss per common share, basic and diluted
|
$ | (0.03 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.04 | ) |
2011 Quarters
|
||||||||
2
nd
|
3
rd
|
|||||||
Change in fair value of derivative liabilities
|
$ | 12,235 | $ | (5,268 | ) | |||
Operating expense
|
$ | 14,453 | $ | (2,701 | ) | |||
Operating income (loss)
|
$ | (14,373 | ) | $ | 2,898 |
(a)
|
During years 1-5, interest will be payable (on a cumulative basis) by the issuance of additional convertible debt (a “
PIK
”) with the same terms as New Senior Convertible Notes, at an interest rate of 12.5%, compounded quarterly.
|
|
(b)
|
During years 6-10, interest may be paid in cash or as a consideration on the cumulative PIK (at the Company’s option), at an annual interest rate of 10.0%, compounded quarterly.
|
|
(c)
|
Interest shall be calculated and payable on a quarterly basis in arrears.
|
|
(d)
|
Notwithstanding the foregoing, during the existence of an event of default, the then applicable interest rate will be increased by 5%.
|
A.
|
Evaluation of existing CareView sites to determine if additional beds are available for installation.
|
|
B.
|
Evaluation of existing CareView sites to determine if additional CareView products are available for sale.
|
|
C.
|
Providing written action plan templates to Hospital Account Representatives .for the identification of both bed and product penetration opportunities.
|
|
D.
|
Attend sales meetings at existing CareView hospitals with the purpose of increasing bed count and/or product penetration. .
|
|
E.
|
Development and documentation of best practice procedures for increasing revenues from existing customers.
|
|
F.
|
Provide monthly reporting of all existing hospital growth in those Designated Hospitals.
|
(a)
|
Solicit, entice, persuade, encourage and otherwise induce any person that was a customer of CareView (whether or not the Consultant provided services for such customer) at any time during the term of this Agreement (i) to refrain from purchasing products manufactured or sold by CareView or any of its affiliates or using the services of CareView or any of its affiliates or (ii) to purchase products and services available from CareView or any of its affiliates from any person or entity other than CareView or any of its affiliates;
|
|
(b)
|
Solicit, entice, persuade, encourage or otherwise induce any employee of CareView (including any of its subsidiaries or affiliates) to terminate such employment or to become employed by any person or entity other than CareView (other than a general public advertisement); or
|
|
(c)
|
Own, manage, control or perform services for or participate in ownership, management or control, or be employed or engaged by or otherwise affiliated or associated with (as an employee, consultant, independent contractor, director, agent, or otherwise) with any other corporation, partnership, proprietorship, firm, association or other business entity in the world that manufactures or sells any product that competes with or is a substitute for any product manufactured or sold by CareView on the date of termination of this Agreement (collectively, “Compete”); provided, however, that the Consultant may own up to one percent (1%) of any class of publicly traded securities of any such entity. Notwithstanding the foregoing, the Consultant may Compete if, and only if, the aggregate annual revenue contributed by all competitive or substitute products to such other entity is not greater than five percent (5%) of such entity’s total annual revenue and the Consultant does not have any direct management responsibility for such competitive or substitute products manufactured or sold by such other entity. For purposes of this Paragraph 14.c, the term “direct management responsibility” means that the management of the manufacture or sale of competitive or substitute products comprises a material part of the Consultant’s duties.
|
To Consultant:
|
To the CareView:
|
||
Donald Shirley
|
Sam Greco, CEO
|
||
Foundation Medical, LLC
|
CareView Communications, Inc.
|
||
1122nLady Street
|
405 State Highway 121 Bypass,
|
||
Suite 910
|
Suite B-240, Lewisville, Texas
|
||
Columbia, SC 29201
|
75067
|
Foundation Medical, LLC
|
CareView Communications, Inc.
|
||||
By:
|
/s/ Donald Shirley
|
By:
|
Sam Greco
|
||
Donald Shirley,
|
Sam Greco, CEO
|
||||
Managing Member
|
|||||
Donald Shirlely
|
|||||
Donald Shirley
|
1
|
HMA-Riverview RMC
|
AL
|
2
|
HMA-Stringfellow Memorial
|
AL
|
3
|
Baptist Health
|
AR
|
4
|
HMA-Summit MC
|
AR
|
5
|
Saline-Saline Memorial Hospital
|
AR
|
6
|
HMA-Sparks RMC
|
AR
|
7
|
HMA-Shands Live Oak
|
FL
|
8
|
HMA-Physicians Regional - Pine Ridge
|
FL
|
9
|
HMA-Venice RMC
|
FL
|
10
|
HMA-Lower Keys MC
|
FL
|
11
|
HMA-Highlands RMC
|
FL
|
12
|
HMA-Santa Rosa MC
|
FL
|
13
|
HMA-Shands Starke
|
FL
|
14
|
HMA-Shands Lake Shore
|
FL
|
15
|
HMA-Peace River RMC
|
FL
|
16
|
HMA-Bartow RMC
|
FL
|
17
|
HMA-Brooksville
|
FL
|
18
|
HMA-Charlotte RMC
|
FL
|
19
|
HMA-Lehigh RMC
|
FL
|
20
|
HMA-Pasco RMC
|
FL
|
21
|
HMA-Sebastian River MC
|
FL
|
22
|
HMA-Spring Hill Regional
|
FL
|
23
|
HMA-St. Cloud RMC
|
FL
|
24
|
HMA-Wuesthoff MC - Melbourne
|
FL
|
25
|
HMA-Wuesthoff MC - Rockledge
|
FL
|
26
|
HMA-Physicians Regional - Collier
|
FL
|
27
|
HMA-Seven Rivers RMC
|
FL
|
28
|
HMA-Heart of Florida RMC
|
FL
|
29
|
HMA-Walton RMC
|
GA
|
30
|
HMA-Barrow RMC
|
GA
|
31
|
HMA-East Georgia RMC
|
GA
|
32
|
HMA-Paul B. Hall RMC
|
KY
|
33
|
HMA-Natchez Community
|
MS
|
34
|
HMA-Northwest MS RMC
|
MS
|
35
|
HMA-Tri-Lakes Medical Center
|
MS
|
36
|
HMA-Biloxi RMC
|
MS
|
37
|
HMA-Central MS MC
|
MS
|
38
|
HMA-Madison River Oaks MC
|
MS
|
39
|
HMA-Gilmore Memorial RMC
|
MS
|
40
|
HMA-Crossgates River Oaks
|
MS
|
41
|
HMA-Woman’s Hospital
|
MS
|
42
|
HMA-River Oaks
|
MS
|
43
|
HMA-Davis RMC
|
NC
|
44
|
HMA-Lake Norman RMC
|
NC
|
45
|
HMA-Sandhills RMC
|
NC
|
46
|
Palmetto Health Baptist Hospital
|
SC
|
47
|
HMA-Chester RMC
|
SC
|
48
|
HMA-Carolina Pines
|
SC
|
49
|
HMA-Jefferson Memorial Hospital
|
TN
|
50
|
HMA-LaFollette Medical Center
|
TN
|
51
|
HMA-St. Mary’s MC of Scott County
|
TN
|
52
|
HMA-Newport Medical Center
|
TN
|
53
|
HMA-Turkey Creek Medical Center
|
TN
|
54
|
HMA-North Knoxville Medical Center
|
TN
|
55
|
HMA-Physicians Regional - Knoxville
|
TN
|
56
|
HMA-Harton RMC
|
TN
|
57
|
HMA-University MC
|
TN
|
58
|
Tenet-St. Francis Hospital
|
TN
|
59
|
HMA-Jamestown RMC
|
TN
|
Year 1
|
10%
|
|
Year 2
|
8%
|
|
Year 3
|
7%
|
|
Year 4
|
5
%
|
|
Year
5
|
3%
|
Year 1
|
6%
|
|
Year 2
|
4%
|
|
Year 3
|
2%
|
Date:
|
|||
Signature
|
|||
Print Name
|
Name:
|
______________________________________________
|
Account Number:
|
______________________________________________
|
Date of Request:
|
______________________________________________
|
Amount or # of Shares:
|
______________________________________________
|
Broker:
|
______________________________________________
|
Signature: _________________________ | Print Name: ________________________ |
Date of Approval: _____________________________
|
|
Signature:_________________________
|
Print Name:_________________________
|
Compliance Officer Approval:______________________________
|
a.
|
violation of any applicable law, rule or regulation that relates to corporate Accounting Standards and financial disclosure;
|
|
b.
|
fraud or deliberate misstatement in the preparation, evaluation, review or audit of any financial statement of the Company;
|
|
c.
|
fraud or deliberate misstatement in the recording and maintaining of financial records of the Company;
|
|
d.
|
deficiencies in or non-compliance with the Company’s internal policies and controls;
|
|
e.
|
misrepresentation or a false statement by or to a director, officer or employee of the Company or any of its subsidiaries respecting a matter contained in the financial records, reports or audit reports;
|
|
f.
|
deviation from full and fair reporting of the Company’s financial condition; and
|
|
g.
|
deficiencies in or non-compliance with the Company’s Code of Conduct.
|
Corporate Secretary
|
·
|
CareView Communications, Inc., a Texas corporation (“CareView-TX”), a wholly owned subsidiary
|
|
·
|
CareView Operations, LLC, a Nevada limited liability company (“CareView Operations”), a wholly owned subsidiary
|
|
·
|
CareView-Hillcrest, LLC, a Wisconsin limited liability company (“CareView-Hillcrest”), a variable interest entity
|
|
·
|
CareView-Saline, LLC, a Wisconsin limited liability company (“CareView-Saline”), a variable interest entity
|
(1)
|
I have reviewed this Annual Report on Form 10-K of CareView Communications, Inc.;
|
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 15, 2012
|
/s/ Samuel A. Greco
|
Samuel A. Greco
|
|
Chief Executive Officer
|
(1)
|
I have reviewed this Annual Report on Form 10-K of CareView Communications, Inc.;
|
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 15, 2012
|
/s/ Anthony P. Piccin
|
Anthony P. Piccin
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/ Samuel A. Greco
|
|
Samuel A. Greco
|
|
Chief Executive Officer
|
|
March 15, 2012
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/Anthony P. Piccin
|
|
Anthony P. Piccin
|
|
Chief Financial Officer
|
|
March 15, 2012
|