Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'SPIN | ' |
Entity Common Stock, Shares Outstanding | ' | 18,715,882 |
Entity Registrant Name | 'Spine Pain Management, Inc | ' |
Entity Central Index Key | '0001066764 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash | $570,199 | $1,017,755 |
Accounts receivable, net | 3,589,635 | 3,209,191 |
Prepaid expenses | 199,359 | 257,684 |
Other assets | 0 | 55,786 |
Total current assets | 4,359,193 | 4,540,416 |
Accounts receivable, net of allowance for doubtful accounts of $150,958 and $52,628 at September 30, 2013 and December 31, 2012, respectively | 3,533,152 | 3,287,552 |
Intangible assets, net | 201,700 | 215,200 |
Other assets | 7,417 | 10,417 |
Total assets | 8,101,462 | 8,053,585 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 168,375 | 183,950 |
Due to related parties | 251,624 | 352,909 |
Current portion of notes payable and long-term debt, net | 482,482 | 371,088 |
Total current liabilities | 902,481 | 907,947 |
Notes payable and long-term debt, net of discount | 984,902 | 1,332,365 |
Total liabilities | 1,887,383 | 2,240,312 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock: $0.001 par value, 50,000,000 shares authorized, 18,715,882 and 18,415,882 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively. | 18,716 | 18,416 |
Additional paid-in capital | 19,138,044 | 18,813,219 |
Accumulated deficit | -12,942,681 | -13,018,362 |
Total stockholders' equity | 6,214,079 | 5,813,273 |
Total liabilities and stockholders’ equity | $8,101,462 | $8,053,585 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts receivable, allowance for doubtful accounts | $150,958 | $52,628 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 18,715,882 | 18,415,882 |
Common stock, shares outstanding | 18,715,882 | 18,415,882 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net revenue | $1,006,569 | $946,614 | $2,917,101 | $3,149,905 |
Cost of providing services | ' | ' | ' | ' |
Third party providers | 165,282 | 110,700 | 506,135 | 616,299 |
Related party providers | 242,556 | 258,596 | 648,472 | 599,897 |
Total cost of providing services | 407,838 | 369,296 | 1,154,607 | 1,216,196 |
Gross profit | 598,731 | 577,318 | 1,762,494 | 1,933,709 |
Operating, general and administrative expenses | 456,619 | 484,082 | 1,424,591 | 1,329,962 |
Income from operations | 142,112 | 93,236 | 337,903 | 603,747 |
Other income (expense): | ' | ' | ' | ' |
Other income | 7,411 | 7,233 | 20,297 | 24,344 |
Litigation settlement expense | 0 | 0 | 0 | -326,650 |
Gain from debt extinguishment | 60,179 | 95,568 | 60,179 | 95,568 |
Interest expense | -78,465 | -91,661 | -342,698 | -197,192 |
Total other income (expense) | -10,875 | 11,140 | -262,222 | -403,930 |
Net income | $131,237 | $104,376 | $75,681 | $199,817 |
Net income per common share | ' | ' | ' | ' |
Basic | $0.01 | $0.01 | $0 | $0.01 |
Diluted | $0.01 | $0.01 | $0 | $0.01 |
Weighted average number of common shares outstanding: | ' | ' | ' | ' |
Basic | 18,484,360 | 18,215,556 | 18,438,959 | 17,814,087 |
Diluted | 18,484,360 | 19,046,500 | 18,438,959 | 18,624,936 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income | $75,681 | $199,817 |
Adjustments to reconcile net income to net cash used in operating activities: | ' | ' |
Provision for bad debts | 180,000 | 180,000 |
Gain from debt extinguishment | -60,179 | -95,568 |
Interest expense related to warrant amortization | 97,823 | 126,126 |
Stock based compensation | 376,166 | 422,680 |
Common stock issued in settlement of litigation | 0 | 326,650 |
Accretion of debt discount on long-term debt | 85,019 | 13,340 |
Depreciation and amortization expense | 16,500 | 5,083 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | -806,044 | -1,311,116 |
Related party receivable | 0 | 163,703 |
Prepaid expenses | -5,841 | -70,475 |
Due to related party | 13,715 | 36,696 |
Accounts payable and accrued liabilities | 44,604 | -396,124 |
Net cash provided by (used in) operating activities | 17,444 | -399,188 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of notes payable and long-term debt | 0 | 1,550,000 |
Proceeds from related party payable | 0 | 261,000 |
Repayments of related party payable | -115,000 | -244,500 |
Repayments of notes payable | -350,000 | 0 |
Net cash (used in) provided by financing activities | -465,000 | 1,566,500 |
Net (decrease) increase in cash and cash equivalents | -447,556 | 1,167,312 |
Cash and cash equivalents at beginning of period | 1,017,755 | 54,582 |
Cash and cash equivalents at end of period | 570,199 | 1,221,894 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest paid | 159,856 | 57,726 |
Supplementary disclosure of non-cash investing and financing activities: | ' | ' |
Common stock issued to acquire Gleric Holdings, Ltd. | 0 | 231,200 |
Issuance of common stock for conversion of related party payable | 0 | 1,020,200 |
Common stock issued for consulting services | $96,000 | $315,000 |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2013 | |
Description Of Business [Abstract] | ' |
DESCRIPTION OF BUSINESS | ' |
NOTE 1. DESCRIPTION OF BUSINESS | |
As used herein, the terms “Company,” “we,” “our,” and “us” refer to Spine Pain Management, Inc. (formerly known as Versa Card, Inc.), a Delaware corporation and its subsidiaries and predecessors, unless the context indicates otherwise. We were incorporated on March 4, 1998. | |
Since inception, we have engaged in and contemplated several ventures and acquisitions, many of which were not consummated. In December 2008, we began moving forward to launch our new business concept of delivering turnkey solutions to spine surgeons, orthopedic surgeons and other healthcare providers for necessary and appropriate treatment of musculo-skeletal spine injuries. Our first spine injury diagnostic center opened in Houston, Texas in August 2009. We currently manage a total of six spine injury diagnostic centers in the United States. We are also evaluating the expansion of our services through additional spine injury diagnostic centers in multiple markets across the country. | |
We are a medical marketing, management, licensing, billing and collection company, facilitating diagnostic services for patients who have sustained spine injuries resulting from traumatic accidents. We deliver turnkey solutions to spine surgeons, orthopedic surgeons and other health care providers for necessary and appropriate treatment of musculo-skeletal spine injuries resulting from automobile and work-related accidents. Our goal is to become a leader in providing financial management services to spine and orthopedic surgeons and other healthcare providers to facilitate proper treatment of their injured clients. By funding diagnostic testing and non-invasive and surgical care, patients are not unnecessarily delayed or prevented from obtaining needed treatment. By providing early treatment, we believe that health conditions can be prevented from escalating and injured victims can be quickly placed on the road to recovery. | |
Through our financial management system, we assist spine surgeons, orthopedic surgeons and other healthcare providers to operate as independent contractors and diagnose and treat patients with musculo-skeletal spine injuries. We assist the centers that provide the spine diagnostic injections and treatment and pay the doctors a fixed rate for the medical procedures they performed. After a patient is billed for the procedures performed, we take control of the patients’ unpaid bill and oversee collection. In most instances, the patient is a plaintiff in an accident case, where the patient is represented by an attorney. Typically, the defendant (and/or the insurance company of the defendant) in the accident case pays the patient’s bill upon settlement or final judgment of the accident case. The payment to us is made through the attorney of the patient. In most cases, we must agree to the settlement price and the patient must sign off on the settlement. Once we are paid, the patient’s attorney can receive payment for his or her legal fee. | |
We currently manage seven spine injury diagnostic centers in the United States, which are located in Texas and Florida (one of the centers opened subsequent to the quarter ended September 30, 2013). We are also currently evaluating the development of additional spine injury diagnostic centers across the United States in major metropolitan cities. We are seeking additional funding for this expansion by way of reasonable debt financing to combine with increased cash flow to accelerate this future development. In connection with this strategy, we plan to open additional diagnostic centers in new market areas that are attractive under our business model, assuming adequate funds are available. | |
In May 2012, we acquired Gleric Holdings, LLC which owns a device and process by which a video recording system is attached to a fluoroscopic x-ray machine, the “four camera technology,” which we believe can attract additional physicians and patients, expedite settlements and provide us with additional revenue streams. During the last half of 2012, through additional research and development, we have refined the technology into the fully commercialized Quad Video Halo System 2.0. Using this technology, diagnostic procedures are recorded from four separate video feeds that capture views from both inside and outside the body, and a video is made which is given to the plaintiff’s attorney to verify the treatment received. We believe the video will expedite the settlement process. Each of our affiliated centers can lease the hardware from us. Additionally, independent medical representatives will sell Quad Video Halo units to outside hospitals and clinics. | |
GOING_CONCERN_CONSIDERATIONS
GOING CONCERN CONSIDERATIONS | 9 Months Ended |
Sep. 30, 2013 | |
Going Concern Considerations [Abstract] | ' |
GOING CONCERN CONSIDERATIONS | ' |
NOTE 2. GOING CONCERN CONSIDERATIONS | |
Since our inception in 1998, until commencement of our spine injury diagnostic operations in August, 2009, our expenses substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit from operations of $15,004,698 as of December 31, 2009. Since that time, we have been able to reduce our deficit, and our accumulated deficit is $12,942,681 as of September 30, 2013. During the nine months ended September 30, 2013, we generated net revenue of $2,917,101 and net income of $75,681. Successful business operations and our transition to positive cash flows from operations are dependent upon obtaining additional financing and achieving a level of collections adequate to support our cost structure. Considering the nature of our business, we are not generating immediate liquidity and sufficient working capital within a reasonable period of time to fund our planned operations and strategic business plan through September 30, 2014. There can be no assurances that there will be adequate financing available to us. The accompanying financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. | |
CRITICAL_ACCOUNTING_POLICIES
CRITICAL ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
CRITICAL ACCOUNTING POLICIES | ' |
NOTE 3. CRITICAL ACCOUNTING POLICIES | |
The following are summarized accounting policies considered to be critical by our management: | |
Basis of Presentation | |
The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations. Nevertheless, we believe that the disclosures are adequate to make the information presented not misleading. These interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2012 Annual Report as filed on Form 10-K. In the opinion of management, all adjustments, including normal recurring adjustments necessary to present fairly our financial position with respect to the interim financial statements and the results of its operations for the interim period ended September 30, 2013, have been included. The results of operations for interim periods are not necessarily indicative of the results for a full year. | |
Accounting Method | |
Our financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations. | |
Revenue Recognition | |
Revenues are recognized in accordance with SEC staff accounting bulletin, Topic 13, Revenue Recognition, which specifies that only when persuasive evidence for an arrangement exists; the fee is fixed or determinable; and collection is reasonably assured can revenue be recognized. | |
Persuasive evidence of an arrangement is obtained prior to services being rendered when the patient completes and signs the medical and financial paperwork. Delivery of services is considered to have occurred when medical diagnostic services are provided to the patient. The price and terms for the services are considered fixed and determinable at the time that the medical services are provided and are based upon the type and extent of the services rendered. Our credit policy has been established based upon extensive experience by management in the industry and has been determined to ensure that collectability is reasonably assured. Payment for services are primarily made to us by a third party and the credit policy includes terms of net 240 days for collections; however, collections occur upon settlement or judgment of cases (see Note 4). | |
Recent Accounting Pronouncements | |
In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This new accounting guidance under ASC 220, Comprehensive Income, provides an improvement on the reporting of reclassifications out of accumulated other comprehensive income by requiring an entity to report the effect of significant reclassifications out of accumulated other comprehensive income by component either on the income statement or in the notes to the financial statements. The guidance will become effective prospectively for fiscal years and interim reporting periods beginning after December 15, 2013. Early adoption is permitted. The adoption of ASU 2013-02 is not expected to have a significant impact on the financial statements. | |
ACCOUNTS_RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended | ||
Sep. 30, 2013 | |||
Accounts Receivable, Net [Abstract] | ' | ||
ACCOUNTS RECEIVABLE | ' | ||
NOTE 4. ACCOUNTS RECEIVABLE | |||
We recognize revenue and accounts receivable in accordance with SEC staff accounting bulletin, Topic 13, “Revenue Recognition”, which requires persuasive evidence that a sales arrangement exists; the fee is fixed or determinable; and collection is reasonably assured before revenue is recognized. We manage certain spine injury diagnostic centers where we engage healthcare providers as our independent contractors to perform medical services for patients. We pay the healthcare providers a fixed rate for medical services performed. The patients are billed based on Current Procedural Terminology (“CPT”) codes for the medical procedure performed. CPT codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services. CPT codes are developed, maintained and copyrighted by the American Medical Association. Patients are billed at the normal billing amount, based on national averages, for a particular CPT code procedure. We take control of the patients’ unpaid bills. | |||
Revenue and corresponding accounts receivable are recognized by reference to “net revenue” and “accounts receivable, net” which is defined as gross amounts billed using CPT codes less account discounts that are expected to result when individual cases are ultimately settled. A discount rate of 52% and 50%, based on settled patient cases, was used to reduce revenue to 48% and 50% of CPT code billings (“gross revenue”) during the three and nine months ended September 30, 2013 and 2012, respectively. | |||
The patients who receive medical services at the diagnostic centers are typically plaintiffs in accident lawsuits. The timing of collection of receivables is dependent on the timing of a settlement or judgment of each individual case associated with these patients. Historical experience, through 2012, demonstrated that the collection period for individual cases may extend for two years or more. Accordingly, we have classified receivables as current or long term based on our experience, which currently indicates that 49% of cases will be subject to a settlement or judgment within one year of a medical procedure. | |||
We take the following steps to establish an arrangement between all parties and facilitate collection upon settlement or final judgment of cases: | |||
· | The patient completed and signed medical and financial paperwork, which included an acknowledgement of the patient’s responsibility of payment for the services provided. Additionally, the paperwork should include an assignment of benefits derived from any settlement or judgment of the patient’s case. | ||
· | The patient’s attorney issued the healthcare provider a Letter of Protection designed to guarantee payment for the medical services provided to the patient from proceeds of any settlement or judgment in the accident case. This Letter of Protection also should preclude any case settlement without providing for payment of the patient’s medical bill. | ||
· | Most of the patients who received medical services at the diagnostic centers have typically been previously referred to a doctor who performed the initial two to four months of conservative treatment. The doctor then typically refers the patient to one of our healthcare providers for an evaluation because of continuing symptoms. Patients are only accepted if the initial referral was from a reputable plaintiff’s attorney with adequate experience in personal injury lawsuits. Before referring a patient, the attorney is expected to have evaluated the patient’s accident case, including the conditions that gave rise to the patient’s injuries and the extent and quality of general liability insurance held by the defendant. The attorney is also responsible for determining that a settlement favorable to the patient/plaintiff is expected. | ||
DUE_TO_RELATED_PARTIES
DUE TO RELATED PARTIES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Due To Related Parties [Abstract] | ' | |||||||
DUE TO RELATED PARTIES | ' | |||||||
NOTE 5. DUE TO RELATED PARTIES | ||||||||
Due to related parties consists of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Due to Northshore Orthopedics Associates | $ | 52,466 | $ | 4,400 | ||||
Due to Chief Executive Officer | 175,699 | 290,699 | ||||||
Due to Spine Injury Physicians | 23,459 | 57,810 | ||||||
(formerly Wellness Works) | ||||||||
$ | 251,624 | $ | 352,909 | |||||
Amounts due to Northshore Orthopedics, Assoc. (“NSO”, a company owned by our Chief Executive Officer) and our Chief Executive Officer are non-interest bearing, due on demand and do not follow any specific repayment schedule. Amounts due to Spine Injury Physicians, LLC (“SIJ”, a company owned by our Chief Technology Officer and formerly known as Wellness Works) are non-interest bearing and are due by the 15th of the month following the month in which they were billed. See Note 7 for further information on the amounts due to SIJ. | ||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
STOCKHOLDERS' EQUITY | ' |
NOTE 6. STOCKHOLDERS’ EQUITY | |
Common Stock | |
In September 2013, we issued 300,000 restricted shares of common stock at $0.32 per share (based on the quoted market price at the date of issuance) totaling $96,000 for consulting services, which was recorded as a prepaid asset to be amortized over the life of the 18 month agreement. In August 2012, we issued 300,000 restricted shares of common stock at $1.05 per share totaling $315,000 for consulting services, which was recorded as a prepaid asset to be amortized over the life of the 18 month agreement. | |
Stock Options | |
We recognized $72,000 and $36,000 in compensation expense in operating, general and administrative expenses in the Statements of Operations for the three months ended September 30, 2013 and 2012, respectively. We recognized $216,000 and $264,000 in compensation expense in operating, general and administrative expenses in the Statements of Operations for the nine months ended September 30, 2013 and 2012, respectively. At September 30, 2013, there was approximately $266,110 of total unrecognized compensation expense related to non-vested stock option awards. The remaining $266,110 in compensation expense will be recognized at $72,000 per quarter with the final $122,110 being recognized in the last three quarters ending December 31, 2014. | |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 7. RELATED PARTY TRANSACTIONS | |
Due to Related Parties | |
We have an agreement with NSO, which is 100% owned by our Chief Executive Officer, William Donovan, M.D., to provide medical services as our independent contractor. As of September 30, 2013 and December 31, 2012, we had balances payable to NSO of $52,466 and $4,400, respectively. This outstanding payable is non-interest bearing, due on demand and does not follow any specific repayment schedule. We do not directly pay Dr. Donovan (in his individual capacity as a physician) any fees in connection with NSO. However, Dr. Donovan is the sole owner of NSO, and we pay NSO under the terms of our agreement. | |
As shown in Note 5, at September 30, 2013 and December 31, 2012, we had balances of $175,699 and $290,699, respectively, due to Dr. Donovan, in his individual capacity, for working capital advances and payments made on our behalf. This outstanding payable is non-interest bearing, due on demand and does not follow any specific repayment schedule. | |
Also, as shown in Note 5, we have an agreement with SIJ, a company 100% owned by Eric Groteke, D.C., our Chief Technology Officer, to provide medical services as our independent contractor in Florida. SIJ is paid for services on a monthly basis dependent upon the services provided. At September 30, 2013 and December 31, 2012, $23,459 and $57,810, respectively, was owed to SIJ. | |
LONGTERM_DEBT
LONG-TERM DEBT | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Debt Disclosure [Abstract] | ' | |||
LONG-TERM DEBT | ' | |||
NOTE 8. LONG-TERM DEBT | ||||
In June 2013, we renewed a 10% debenture totaling $50,000 that was originally due on June 30, 2013 at stated value with a maturity date of June 30, 2015 in exchange for 50,000 warrants at $0.45 per share. Interest is payable quarterly and the full principal amount is due upon maturity. In June 2013, we also extended the maturity date of a note for $50,000 that was originally due March 9, 2015 for two additional years in exchange for warrants to purchase 50,000 shares at $0.45 per share. | ||||
The weighted-average estimated fair value of the warrants issued was $0.21 per share using the Black-Sholes pricing model with the following assumptions: | ||||
Expected volatility | 89.50% | |||
Risk-free interest rate | 0.31% | |||
Expected life | 2 years | |||
Dividend yield | 0% | |||
During the three months ended September 30, 2013 and 2012, we recorded $22,500 and $27,900 in interest expense, respectively, related to the amortization of warrants associated with long term debt. During the nine months ended September 30, 2013 and 2012, we recorded $67,500 and $83,700 in interest expense, respectively related to the amortization of warrants associated with long term debt. | ||||
In June 2013, we repaid debentures totaling $350,000 based on the stated contractual terms. | ||||
INCOME_TAXES
INCOME TAXES | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||||
INCOME TAXES | ' | |||||||||||||
NOTE 9. INCOME TAXES | ||||||||||||||
We have not made provision for income taxes for the nine months ended September 30, 2013 or the year ended December 31, 2012, since we have net operating loss carryforwards to offset current taxable income. | ||||||||||||||
Deferred tax assets consist of the following at September 30, 2013 and December 31, 2012: | ||||||||||||||
September 30, | December 31 | |||||||||||||
2013 | 2012 | |||||||||||||
Benefit from net operating loss carryforwards | $ | 1,975,917 | $ | 2,279,261 | ||||||||||
Allowance for doubtful accounts | 51,325 | - | ||||||||||||
Less: valuation allowance | -2,027,242 | -2,279,261 | ||||||||||||
$ | - | $ | - | |||||||||||
Due to uncertainties surrounding our ability to generate future taxable income to realize these assets, a full valuation has been established to offset the net deferred income tax asset. Based on management’s assessment, we have determined that it is not currently likely that a deferred income tax asset of approximately $1,975,917 and $2,279,261 attributable to the future utilization of the approximate $5,811,521 and $7,043,430 in eligible net operating loss carryforwards (“NOL”) as of September 30, 2013 and December 31, 2012, respectively, will be realized. We will continue to review this valuation allowance and make adjustments as appropriate. The net operating loss carryforwards will begin to expire in varying amounts from year 2018 to 2031. | ||||||||||||||
Current income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, amounts available to offset future taxable income may be limited under Section 382 of the Internal Revenue Code. | ||||||||||||||
Following is a reconciliation of the (provision) benefit for federal income taxes as reported in the accompanying Statements of Operations to the expected amount at the 34% federal statutory rate: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Income tax (provision) benefit at | $ | -44,621 | $ | -35,488 | $ | -25,732 | $ | -67,938 | ||||||
the 34% statutory rate | ||||||||||||||
Effect of state income taxes | -3,937 | -3,132 | -2,270 | -5,995 | ||||||||||
Non-deductible stock-based | -41,464 | -365,932 | -127,055 | -394,500 | ||||||||||
litigation settlement expense, | ||||||||||||||
compensation expense, and | ||||||||||||||
interest expense | ||||||||||||||
Change in available NOL | -89,562 | - | -96,962 | - | ||||||||||
Other | - | -2,021 | - | -7,862 | ||||||||||
Less change in valuation allowance | 179,584 | 406,573 | 252,019 | 476,295 | ||||||||||
Income tax (provision) benefit | $ | - | $ | - | $ | - | $ | - | ||||||
We are subject to taxation in the United States and certain state jurisdictions. Our tax years for 2003 and forward are subject to examination by the United States and applicable state tax authorities due to the carryforwards of unutilized net operating losses and the timing of tax filings. | ||||||||||||||
GAIN_ON_DEBT_EXTINGUISHMENT
GAIN ON DEBT EXTINGUISHMENT | 9 Months Ended |
Sep. 30, 2013 | |
Extinguishment of Debt Disclosures [Abstract] | ' |
GAIN ON DEBT EXTINGUISHMENT | ' |
NOTE 10. GAIN ON DEBT EXTINGUISHMENT | |
During the quarter ended September 30, 2013, we recognized a gain on extinguishment of debt of $60,179. We determined that certain accounts payable balances for legal services would never be paid because they related to a prior business venture, were no longer being pursued for payment and had passed the statute of limitations. | |
During the quarter ended September 30, 2012, we recognized a gain on extinguishment of debt of $95,568. We were able to negotiate an accounts payable balance of $429,521 to a reduced amount of $363,703. As a result, at September 30, 2012, we removed $229,521 in accounts payable and the $163,703 related party note receivable, realizing a gain of $65,818 on extinguishment of debt. We also determined that a certain accounts payable balance for legal services would never be paid because they related to a prior business venture, was no longer being pursued for payment and had passed the statute of limitations. Accordingly, this $29,750 payable was also included in the gain on extinguishment of debt. | |
CRITICAL_ACCOUNTING_POLICIES_P
CRITICAL ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations. Nevertheless, we believe that the disclosures are adequate to make the information presented not misleading. These interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2012 Annual Report as filed on Form 10-K. In the opinion of management, all adjustments, including normal recurring adjustments necessary to present fairly our financial position with respect to the interim financial statements and the results of its operations for the interim period ended September 30, 2013, have been included. The results of operations for interim periods are not necessarily indicative of the results for a full year. | |
Accounting Method | ' |
Accounting Method | |
Our financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations. | |
Revenue Recognition | ' |
Revenue Recognition | |
Revenues are recognized in accordance with SEC staff accounting bulletin, Topic 13, Revenue Recognition, which specifies that only when persuasive evidence for an arrangement exists; the fee is fixed or determinable; and collection is reasonably assured can revenue be recognized. | |
Persuasive evidence of an arrangement is obtained prior to services being rendered when the patient completes and signs the medical and financial paperwork. Delivery of services is considered to have occurred when medical diagnostic services are provided to the patient. The price and terms for the services are considered fixed and determinable at the time that the medical services are provided and are based upon the type and extent of the services rendered. Our credit policy has been established based upon extensive experience by management in the industry and has been determined to ensure that collectability is reasonably assured. Payment for services are primarily made to us by a third party and the credit policy includes terms of net 240 days for collections; however, collections occur upon settlement or judgment of cases (see Note 4). | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This new accounting guidance under ASC 220, Comprehensive Income, provides an improvement on the reporting of reclassifications out of accumulated other comprehensive income by requiring an entity to report the effect of significant reclassifications out of accumulated other comprehensive income by component either on the income statement or in the notes to the financial statements. The guidance will become effective prospectively for fiscal years and interim reporting periods beginning after December 15, 2013. Early adoption is permitted. The adoption of ASU 2013-02 is not expected to have a significant impact on the financial statements. | |
DUE_TO_RELATED_PARTIES_Tables
DUE TO RELATED PARTIES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Due To Related Parties [Abstract] | ' | |||||||
Due to Related Parties | ' | |||||||
Due to related parties consists of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Due to Northshore Orthopedics Associates | $ | 52,466 | $ | 4,400 | ||||
Due to Chief Executive Officer | 175,699 | 290,699 | ||||||
Due to Spine Injury Physicians | 23,459 | 57,810 | ||||||
(formerly Wellness Works) | ||||||||
$ | 251,624 | $ | 352,909 | |||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Stock Warrants [Abstract] | ' | |||
Weighted Average Estimated Fair Value of Warrant Issued | ' | |||
The weighted-average estimated fair value of the warrants issued was $0.21 per share using the Black-Sholes pricing model with the following assumptions: | ||||
Expected volatility | 89.50% | |||
Risk-free interest rate | 0.31% | |||
Expected life | 2 years | |||
Dividend yield | 0% | |||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||||
Components of Deferred Tax Assets | ' | |||||||||||||
Deferred tax assets consist of the following at September 30, 2013 and December 31, 2012: | ||||||||||||||
September 30, | December 31 | |||||||||||||
2013 | 2012 | |||||||||||||
Benefit from net operating loss carryforwards | $ | 1,975,917 | $ | 2,279,261 | ||||||||||
Allowance for doubtful accounts | 51,325 | - | ||||||||||||
Less: valuation allowance | -2,027,242 | -2,279,261 | ||||||||||||
$ | - | $ | - | |||||||||||
Reconciliation of (Provision) Benefit for Federal Income Taxes as Reported in Accompanying Statements of Operations | ' | |||||||||||||
Following is a reconciliation of the (provision) benefit for federal income taxes as reported in the accompanying Statements of Operations to the expected amount at the 34% federal statutory rate: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Income tax (provision) benefit at | $ | -44,621 | $ | -35,488 | $ | -25,732 | $ | -67,938 | ||||||
the 34% statutory rate | ||||||||||||||
Effect of state income taxes | -3,937 | -3,132 | -2,270 | -5,995 | ||||||||||
Non-deductible stock-based | -41,464 | -365,932 | -127,055 | -394,500 | ||||||||||
litigation settlement expense, | ||||||||||||||
compensation expense, and | ||||||||||||||
interest expense | ||||||||||||||
Change in available NOL | -89,562 | - | -96,962 | - | ||||||||||
Other | - | -2,021 | - | -7,862 | ||||||||||
Less change in valuation allowance | 179,584 | 406,573 | 252,019 | 476,295 | ||||||||||
Income tax (provision) benefit | $ | - | $ | - | $ | - | $ | - | ||||||
GOING_CONCERN_CONSIDERATIONS_A
GOING CONCERN CONSIDERATIONS - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2009 | |
Accumulated deficit | ($12,942,681) | ' | ($12,942,681) | ' | ($13,018,362) | $15,004,698 |
Net revenue | 1,006,569 | 946,614 | 2,917,101 | 3,149,905 | ' | ' |
Net income | $131,237 | $104,376 | $75,681 | $199,817 | ' | ' |
CRITICAL_ACCOUNTING_POLICIES_A
CRITICAL ACCOUNTING POLICIES - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Credit policy terms | '240 days |
ACCOUNTS_RECEIVABLE_Additional
ACCOUNTS RECEIVABLE - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Discount rate used for recognition of revenue | 52.00% | 50.00% | 52.00% | 50.00% |
Net revenue recognized as percent of CPT code billings | 48.00% | 50.00% | 48.00% | 50.00% |
Collection period for receivables | ' | ' | '1 year | ' |
Percentage of cases subject to a settlement with in one year | ' | ' | 49.00% | ' |
Minimum | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Collection period for receivables | ' | ' | '2 years | ' |
Conservative treatment period performed by doctor | ' | ' | '2 months | ' |
Maximum | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Conservative treatment period performed by doctor | ' | ' | '4 months | ' |
Due_to_Related_Parties_Detail
Due to Related Parties (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | ' | ' |
Due to related parties | $251,624 | $352,909 |
Chief Executive Officer | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Due to related parties | 175,699 | 290,699 |
Northshore Orthopedics Associates | Chief Executive Officer | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Due to related parties | 52,466 | 4,400 |
Spine Injury Physicians (formerly Wellness Works) | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Due to related parties | $23,459 | $57,810 |
STOCKHOLDERS_EQUITY_Additional
STOCKHOLDERS' EQUITY - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Aug. 31, 2012 | Sep. 30, 2013 | |
Business Development Consultant | Business Development Consultant | ||||||
Stockholders Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | $0.00 | ' | $0.00 | ' | $0.00 | $1.05 | $0.32 |
Restricted shares of common stock | ' | ' | ' | ' | ' | 300,000 | 300,000 |
Common stock issued for consulting services | ' | ' | $96,000 | $315,000 | ' | $315,000 | $96,000 |
Prepaid asset amortization period | ' | ' | ' | ' | ' | '18 months | '18 months |
Compensation expense | 72,000 | 36,000 | 216,000 | 264,000 | ' | ' | ' |
Unrecognized compensation expense related to non-vested stock option awards | 266,110 | ' | 266,110 | ' | ' | ' | ' |
Compensation expense recognized per quarter | 72,000 | ' | 72,000 | ' | ' | ' | ' |
Compensation expense recognized in last quarter | $122,110 | ' | $122,110 | ' | ' | ' | ' |
Compensation expense recognized last date | ' | ' | 31-Dec-14 | ' | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_Add
RELATED PARTY TRANSACTIONS - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | $251,624 | $352,909 |
Spine Injury Physicians (formerly Wellness Works) | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | 23,459 | 57,810 |
Chief Executive Officer | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | 175,699 | 290,699 |
Chief Executive Officer | Northshore Orthopedics Associates | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Percentage of ownership interest | 100.00% | ' |
Due to related parties | 52,466 | 4,400 |
Chief Technology Officer | Spine Injury Physicians (formerly Wellness Works) | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Percentage of ownership interest | 100.00% | ' |
Due to related parties | $23,459 | $57,810 |
LONGTERM_DEBT_Additional_Infor
LONG-TERM DEBT - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |
Short-term Debt [Line Items] | ' | ' | ' | ' | ' |
Debt instrument, interest rate, stated percentage | ' | ' | 10.00% | ' | ' |
Long-term Debt, Gross | ' | ' | $50,000 | ' | ' |
Debt instrument, interest rate, stated percentage | ' | ' | 30-Jun-15 | ' | ' |
Exchange number of warrants | ' | ' | 50,000 | ' | ' |
Class of warrant or right, exercise price of warrants or rights | ' | ' | 0.45 | ' | ' |
Common Stock issued in exchange of convertible debt, per share | $0.21 | ' | ' | $0.21 | ' |
Interest expense, long-term debt and capital securities, total | 22,500 | 27,900 | ' | 67,500 | 83,700 |
Repayments of debt | ' | ' | 350,000 | ' | ' |
Notes Payable | ' | ' | ' | ' | ' |
Short-term Debt [Line Items] | ' | ' | ' | ' | ' |
Debt instrument, interest rate, stated percentage | ' | ' | 9-Mar-15 | ' | ' |
Debt instrument, payment terms | ' | ' | 'Interest is payable quarterly and the full principal amount is due upon maturity | ' | ' |
Debt instrument, face amount | ' | ' | $50,000 | ' | ' |
Warrants issued to purchase shares of common stock | ' | ' | 50,000 | ' | ' |
Share Price | ' | ' | $0.45 | ' | ' |
Summary_of_WeightedAverage_Est
Summary of Weighted-Average Estimated Fair Value of Warrant Issued With Convertible Note (Detail) (Warrant Issue Price 0.21 Per Share) | 9 Months Ended |
Sep. 30, 2013 | |
Warrant Issue Price 0.21 Per Share | ' |
Disclosure Weighted Average Estimated Fair Value Of Warrant Issued With Convertible Note [Line Items] | ' |
Expected volatility | 89.50% |
Risk-free interest rate | 0.31% |
Expected life | '2 years |
Dividend yield | 0.00% |
INCOME_TAXES_Additional_Inform
INCOME TAXES - Additional Information (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Income Taxes [Line Items] | ' | ' |
Effective combined tax rate for federal and state taxes | 34.00% | ' |
Deferred tax assets valuation allowance | $1,975,917 | $2,279,261 |
Net operating loss carryforwards | $5,811,521 | $7,043,430 |
Minimum | ' | ' |
Income Taxes [Line Items] | ' | ' |
Net operating loss carryforwards beginning expiration year | '2018 | ' |
Maximum | ' | ' |
Income Taxes [Line Items] | ' | ' |
Net operating loss carryforwards beginning expiration year | '2031 | ' |
Components_of_Deferred_Tax_Ass
Components of Deferred Tax Assets (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ' | ' |
Benefit from net operating loss carryforwards | $1,975,917 | $2,279,261 |
Allowance for doubtful accounts | 51,325 | 0 |
Less: valuation allowance | -2,027,242 | -2,279,261 |
Deferred tax assets, net of valuation allowance, total | $0 | $0 |
Reconciliation_of_Provision_Be
Reconciliation of (Provision) Benefit for Federal Income Taxes as Reported in Accompanying Statements of Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Reconciliation of Provision of Income Taxes [Line Items] | ' | ' | ' | ' |
Income tax (provision) benefit at the 34% statutory rate | ($44,621) | ($35,488) | ($25,732) | ($67,938) |
Effect of state income taxes | -3,937 | -3,132 | -2,270 | -5,995 |
Non-deductible stock-based litigation settlement expense, compensation expense, and interest expense | -41,464 | -365,932 | -127,055 | -394,500 |
Change in available NOL | -89,562 | 0 | -96,962 | 0 |
Other | 0 | -2,021 | 0 | -7,862 |
Less change in valuation allowance | 179,584 | 406,573 | 252,019 | 476,295 |
Income tax (provision) benefit | $0 | $0 | $0 | $0 |
Reconciliation_of_Provision_Be1
Reconciliation of (Provision) Benefit for Federal Income Taxes as Reported in Accompanying Statements of Operations (Parenthetical) (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Reconciliation of Provision of Income Taxes [Line Items] | ' | ' | ' | ' |
Income tax (provision) benefit, statutory rate | 34.00% | 34.00% | 34.00% | 34.00% |
GAIN_ON_DEBT_EXTINGUISHMENT_Ad
GAIN ON DEBT EXTINGUISHMENT - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Extinguishment of Debt [Line Items] | ' | ' | ' | ' |
Gain from debt extinguishment | $60,179 | $95,568 | $60,179 | $95,568 |
Preconfirmation, Accounts Payable | 429,521 | ' | 429,521 | ' |
Postconfirmation, Accounts Payable | 363,703 | ' | 363,703 | ' |
Accounts Payable | ' | ' | ' | ' |
Extinguishment of Debt [Line Items] | ' | ' | ' | ' |
Extinguishment of Debt, Amount | ' | ' | 229,521 | ' |
Accounts Payable Notes And Receivable | ' | ' | ' | ' |
Extinguishment of Debt [Line Items] | ' | ' | ' | ' |
Gain from debt extinguishment | ' | ' | 65,818 | ' |
Payable For Legal Services | ' | ' | ' | ' |
Extinguishment of Debt [Line Items] | ' | ' | ' | ' |
Gain from debt extinguishment | ' | ' | 29,750 | ' |
Notes Receivable | ' | ' | ' | ' |
Extinguishment of Debt [Line Items] | ' | ' | ' | ' |
Extinguishment of Debt, Amount | ' | ' | $163,703 | ' |