Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 14, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Spine Pain Management, Inc. | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 18,715,882 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001066764 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $388,740 | $687,549 |
Accounts receivable, net | 2,627,892 | 2,663,652 |
Prepaid expenses | 73,583 | 116,314 |
Total current assets | 3,090,215 | 3,467,515 |
Accounts receivable, net of allowance for doubtful accounts of $422,970 and $352,615 at June 30, 2014 and December 31, 2013, respectively | 3,518,868 | 3,642,864 |
Intangible assets, net | 188,200 | 197,200 |
Other assets | 17,763 | 15,770 |
Total assets | 6,815,046 | 7,323,349 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 90,483 | 76,381 |
Due to related parties | 74,667 | 164,293 |
Current portion of notes payable and long-term debt, net | 550,000 | 500,000 |
Total current liabilities | 715,150 | 740,674 |
Notes payable and long-term debt, net of discount | 993,921 | 995,723 |
Total liabilities | 1,709,071 | 1,736,397 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock: $0.001 par value, 50,000,000 shares authorized, 18,715,882 shares issued and outstanding at June 30, 2014 and December 31, 2013 | 18,716 | 18,716 |
Additional paid-in capital | 19,365,224 | 19,212,669 |
Accumulated deficit | -14,277,965 | -13,644,433 |
Total stockholders' equity | 5,105,975 | 5,586,952 |
Total liabilities and stockholders’ equity | $6,815,046 | $7,323,349 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts (in Dollars) | $422,970 | $352,615 |
Common stock: par value (in Dollars per share) | $0.00 | $0.00 |
Common stock: shares authorized | 50,000,000 | 50,000,000 |
Common stock: shares issued | 18,715,882 | 18,715,882 |
Common stock: shares outstanding | 18,715,882 | 18,715,882 |
UNAUDITED_CONSOLIDATED_CONDENS
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net revenue | $859,860 | $867,331 | $1,194,548 | $1,910,532 |
Cost of providing services | ' | ' | ' | ' |
Third party providers | 338,994 | 129,782 | 439,883 | 374,076 |
Related party providers | 84,657 | 230,226 | 128,920 | 372,693 |
Total cost of providing services | 423,651 | 360,008 | 568,803 | 746,769 |
Gross profit | 436,209 | 507,323 | 625,745 | 1,163,763 |
Operating, general and administrative expenses | 532,958 | 477,280 | 1,112,031 | 967,972 |
(Loss) income from operations | -96,749 | 30,043 | -486,286 | 195,791 |
Other income and (expense): | ' | ' | ' | ' |
Other income | 7,648 | 5,794 | 14,396 | 12,886 |
Interest expense | -64,144 | -137,362 | -161,642 | -264,233 |
Total other income and (expense) | -56,496 | -131,568 | -147,246 | -251,347 |
Net loss | ($153,245) | ($101,525) | ($633,532) | ($55,556) |
Net loss per common share | ' | ' | ' | ' |
Basic (in Dollars per share) | ($0.01) | ($0.01) | ($0.03) | $0 |
Diluted (in Dollars per share) | ($0.01) | ($0.01) | ($0.03) | $0 |
Weighted average number of common shares outstanding: | ' | ' | ' | ' |
Basic (in Shares) | 18,715,822 | 18,415,822 | 18,715,822 | 18,415,822 |
Diluted (in Shares) | 18,715,822 | 18,415,822 | 18,715,822 | 18,415,822 |
UNAUDITED_CONSOLIDATED_CONDENS1
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($633,532) | ($55,556) |
Adjustments to reconcile net income to net cash used in operating activities: | ' | ' |
Provision for bad debts | 120,000 | 120,000 |
Interest expense related to warrant amortization | 18,445 | 95,198 |
Stock based compensation | 192,359 | 249,000 |
Accretion of debt discount on long-term debt | 48,199 | 56,678 |
Depreciation and amortization expense | 11,800 | 11,000 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | 39,756 | -748,283 |
Prepaid expenses and other assets | -15,519 | 676 |
Due to related party | 374 | -3,942 |
Accounts payable and accrued liabilities | 14,102 | -19,481 |
Net cash used in operating activities | -204,016 | -294,710 |
Cash flows from investing activities | ' | ' |
Purchase of equipment | -4,793 | 0 |
Net cash used in investing activities | -4,793 | 0 |
Cash flows from financing activities: | ' | ' |
Payment of related party payable | -90,000 | -85,000 |
Payment of notes payable | 0 | -350,000 |
Net cash used in financing activities | -90,000 | -435,000 |
Net decrease in cash and cash equivalents | -298,809 | -729,710 |
Cash and cash equivalents at beginning of period | 687,549 | 1,017,755 |
Cash and cash equivalents at end of period | 388,740 | 288,045 |
Supplementary cash flow information: | ' | ' |
Interest paid | 95,000 | 103,750 |
Taxes paid | $0 | $0 |
NOTE_1_DESCRIPTION_OF_BUSINESS
NOTE 1. DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2014 | |
Disclosure Text Block [Abstract] | ' |
Nature of Operations [Text Block] | ' |
NOTE 1. DESCRIPTION OF BUSINESS | |
Spine Pain Management, Inc. (formerly known as Versa Card, Inc.) was incorporated under the laws of Delaware 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 affiliated spine injury diagnostic center opened in Houston, Texas in August 2009. Through contractual relationships, we currently are affiliated with a total of three 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. | |
During the six months ended June 30, 2014 we created a wholly owned subsidiary Quad Video Halo, Inc. The purpose of this entity is to hold certain Company assets affiliated with the Quad Video Halo units. As of June 30, 2014 the subsidiary held no assets or liabilities. | |
Spine Pain Management, Inc. | |
We are a technology, marketing, management, 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 healthcare 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 management services to spine and orthopedic surgeons and other healthcare providers to facilitate proper treatment of their injured clients. By pre-funding the providers accounts receivable, which includes diagnostic testing and non-invasive and surgical care, patients are not unnecessarily delayed or prevented from obtaining needed treatment. By providing early treatment through affiliated doctors, we believe that health conditions can be prevented from escalating and injured victims can be quickly placed on the road to recovery. Through our affiliate system, we facilitate spine surgeons, orthopedic surgeons and other healthcare providers to provide reasonable, necessary, and appropriate treatments to patients with musculo-skeletal spine injuries. We assist the centers that provide the spine diagnostic injections and treatment and pay the doctors a fee 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 are affiliated with three spine injury diagnostic centers in the United States, which are located in Houston, Odessa, and San Antonio, Texas. In January 2014 we made the decision to discontinue doing business in Florida and McAllen, Texas (see Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below). We are seeking additional funding for expansion by way of reasonable debt financing 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, however, opening of new centers is contingent upon the availiability of funds. | |
We own a device and process by which a video recording system is attached to a fluoroscopic x-ray machine, the “four camera technology,” that we believe can attract additional physicians and patients, expedite settlements and provide us with additional revenue streams. During 2013 and continuing in 2014, we have refined the technology, through further research and development resulting in a fully commercialized Quad Video Halo System 3.0. 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 patient’s representative 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, with regulatory approval (if necessary) we anticipate independent medical representatives will sell Quad Video Halo units to outside hospitals and clinics. | |
NOTE_2_GOING_CONCERN_CONSIDERA
NOTE 2. GOING CONCERN CONSIDERATIONS | 6 Months Ended |
Jun. 30, 2014 | |
Going Concern Disclosure [Abstract] | ' |
Going Concern Disclosure [Text Block] | '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 $14,277,965 as of June 30, 2014. During the six months ended June 30, 2014, we realized net revenue of $1,194,548 and a net loss of $633,532. 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 June 30, 2014. There can be no assurances that there will be adequate financing available to us. The accompanying consolidated 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 consolidated 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. | |
NOTE_3_CRITICAL_ACCOUNTING_POL
NOTE 3. CRITICAL ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
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 consolidated 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 consolidated 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 consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2013 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 consolidated financial statements and the results of its operations for the interim period ended June 30, 2014, have been included. The results of operations for interim periods are not necessarily indicative of the results for a full year. | |
Basis of Consolidation | |
The accompanying unaudited condensed consolidated financial statements include accounts of Spine Pain Management, Inc. and its wholly owned subsidiary, Quad Video Halo, Inc. All material intercompany balances of transactions have been eliminated upon consolidation. | |
Accounting Method | |
Our consolidated 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 consolidated 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 consolidated 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 consolidated 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 Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This new accounting guidance under Accounting Standards Codification ("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 did not have a significant impact on the consolidated financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is designed to create greater comparability for financial statement users across industries and jurisdictions. The provisions of ASU No. 2014-09 include a five-step process by which entities will recognize revenue to depict the transfer of good or services to customers in amounts that reflect the payment to which an entity expects to be entitled in exchange for those goods or services. The standard also will require enhanced disclosures, provide more comprehensive guidance for transactions such as service revenue and contract modifications, and enhance guidance for multiple-element arrangements. ASU No. 2014-09 will be effective for U.S. public companies for annual reporting periods beginning after December 15, 2016, including interim reporting periods (January 1, 2017 for us). Early adoption is not permitted. We are currently reviewing the effect of ASU No. 2014-09 on our revenue recognition. | |
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period. This new accounting guidance under ASC 718, Compensation – Stock Compensation, provides explicit guidance on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award. The guidance will become effective prospectively for fiscal years and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of ASU 2014-12 is not expected to have a significant impact on the consolidated financial statements. | |
NOTE_4_ACCOUNTS_RECEIVABLE
NOTE 4. ACCOUNTS RECEIVABLE | 6 Months Ended | ||
Jun. 30, 2014 | |||
Receivables [Abstract] | ' | ||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' | ||
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 are affiliated with certain spine injury diagnostic centers where healthcare providers are engaged as independent contractors to perform medical services for patients. We pay the healthcare providers a fee 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%, based on settled patient cases, was used to reduce revenue to 48% of CPT code billings (“gross revenue”) during the six months ended June 30, 2014 and 2013. | |||
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 2013, 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 indicates that as of June 30, 2014 and 2013 that 40% and 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 from a plaintiff’s attorney, 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. | ||
NOTE_5_DUE_TO_RELATED_PARTIES
NOTE 5. DUE TO RELATED PARTIES | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt Disclosure [Text Block] | ' | ||||||||
NOTE 5. DUE TO RELATED PARTIES | |||||||||
Due to related parties consists of the following: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Due to Northshore Orthopedics Associates | $ | 28,968 | $ | 10,406 | |||||
Due to Chief Executive Officer | 45,699 | 135,699 | |||||||
Due to Spine Injury Physicians | - | 18,188 | |||||||
$ | 74,667 | $ | 164,293 | ||||||
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 (“SIP,” a company owned by our Chief Technology Officer) 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 SIP. | |||||||||
NOTE_6_STOCKHOLDERS_EQUITY
NOTE 6. STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | 'NOTE 6. STOCKHOLDERS’ EQUITY |
Stock Options | |
We recognized $62,110 and $72,000 in compensation expense, associated with stock options, in operating, general and administrative expenses in the Statements of Operations for the three months ended June 30, 2014 and 2013, respectively. For the six months ended June 30, 2014 and 2013 we recognized $134,110 and $144,000 in compensation expense associated with stock options. At June 30, 2014, there was approximately $60,000 of total unrecognized compensation expense related to non-vested stock option awards which will be recognized in the last two quarters ending December 31, 2014. | |
NOTE_7_RELATED_PARTY_TRANSACTI
NOTE 7. RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
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 June 30, 2014 and December 31, 2013, we had balances payable to NSO of $28,968 and $10,406, 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 June 30, 2014 and December 31, 2013, we had balances of $45,699 and $135,699, 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 had an agreement with SIP, a company 100% owned by Eric Groteke, D.C., who became our Chief Technology Officer on May 9, 2012, to provide medical services as our independent contractor in Florida. SIP is paid for services on a monthly basis dependent upon the services provided. We discontinued this agreement at the end of 2013. At June 30, 2014 and December 31, 2013, $0 and $18,188, respectively, was owed to SIP. | |
NOTE_8_LONGTERM_DEBT
NOTE 8. LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2014 | |
Disclosure Text Block [Abstract] | ' |
Long-term Debt [Text Block] | ' |
NOTE 8. LONG-TERM DEBT | |
During the three and six months ended June 30, 2014 we recorded $16,645 and $66,644 in interest expense, respectively, related to the amortization of warrants associated with long term debt compared to the three and six month totals for the six months ended June 30, 2013 of $53,369 and $96,091, respectively. In June 2013 we repaid debentures totaling $350,000 based on the stated contractual terms. | |
NOTE_9_INCOME_TAXES
NOTE 9. INCOME TAXES | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||
NOTE 9. INCOME TAXES | |||||||||
We have not made provision for income taxes for the six months ended June 30, 2014 or the year ended December 31, 2013, since we have net operating loss carryforwards to offset current taxable income. | |||||||||
Deferred tax assets consist of the following at June 30, 2014 and December 31, 2013: | |||||||||
June 30, | 31-Dec | ||||||||
2014 | 2013 | ||||||||
Benefit from net operating loss carryforwards | $ | 2,162,900 | $ | 2,041,083 | |||||
Allowance from doubtful accounts | 143,809 | 119,889 | |||||||
Less: valuation allowance | (2,306,709 | ) | (2,160,972 | ) | |||||
$ | - | $ | - | ||||||
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, utilizing an effective combined tax rate for federal and state taxes of approximately 34%, we have determined that it is not currently likely that a deferred income tax asset of approximately $2,306,709 and $2,160,972 attributable to the future utilization of the approximate $6,361,470 and $6,003,185 in eligible net operating loss carryforwards as of June 30, 2014 and December 31, 2013, 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: | |||||||||
Six Months Ended June 30, | |||||||||
2014 | 2013 | ||||||||
Income tax benefit (provision) at the 34% statutory rate | $ | 215,401 | $ | 163,298 | |||||
Non-deductible interest expense | (66,643 | ) | (41,480 | ) | |||||
Other | (3,021 | ) | (2,436 | ) | |||||
Less change in valuation allowance | (145,737 | ) | (119,382 | ) | |||||
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. | |||||||||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation | |
The accompanying unaudited condensed consolidated 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 consolidated 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 consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2013 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 consolidated financial statements and the results of its operations for the interim period ended June 30, 2014, have been included. The results of operations for interim periods are not necessarily indicative of the results for a full year. | |
Consolidation, Policy [Policy Text Block] | ' |
Basis of Consolidation | |
The accompanying unaudited condensed consolidated financial statements include accounts of Spine Pain Management, Inc. and its wholly owned subsidiary, Quad Video Halo, Inc. All material intercompany balances of transactions have been eliminated upon consolidation. | |
Accounting Method, Policy [Policy Text Block] | ' |
Accounting Method | |
Our consolidated 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, Policy [Policy Text Block] | ' |
Use of Estimates | |
The preparation of consolidated 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 consolidated 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 consolidated 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, Policy [Policy Text Block] | ' |
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). | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recent Accounting Pronouncements | |
In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This new accounting guidance under Accounting Standards Codification ("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 did not have a significant impact on the consolidated financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is designed to create greater comparability for financial statement users across industries and jurisdictions. The provisions of ASU No. 2014-09 include a five-step process by which entities will recognize revenue to depict the transfer of good or services to customers in amounts that reflect the payment to which an entity expects to be entitled in exchange for those goods or services. The standard also will require enhanced disclosures, provide more comprehensive guidance for transactions such as service revenue and contract modifications, and enhance guidance for multiple-element arrangements. ASU No. 2014-09 will be effective for U.S. public companies for annual reporting periods beginning after December 15, 2016, including interim reporting periods (January 1, 2017 for us). Early adoption is not permitted. We are currently reviewing the effect of ASU No. 2014-09 on our revenue recognition. | |
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period. This new accounting guidance under ASC 718, Compensation – Stock Compensation, provides explicit guidance on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award. The guidance will become effective prospectively for fiscal years and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of ASU 2014-12 is not expected to have a significant impact on the consolidated financial statements. |
NOTE_5_DUE_TO_RELATED_PARTIES_
NOTE 5. DUE TO RELATED PARTIES (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Related Party Transactions [Table Text Block] | 'Due to related parties consists of the following: | ||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Due to Northshore Orthopedics Associates | $ | 28,968 | $ | 10,406 | |||||
Due to Chief Executive Officer | 45,699 | 135,699 | |||||||
Due to Spine Injury Physicians | - | 18,188 | |||||||
$ | 74,667 | $ | 164,293 |
NOTE_9_INCOME_TAXES_Tables
NOTE 9. INCOME TAXES (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 'Deferred tax assets consist of the following at June 30, 2014 and December 31, 2013: | ||||||||
June 30, | 31-Dec | ||||||||
2014 | 2013 | ||||||||
Benefit from net operating loss carryforwards | $ | 2,162,900 | $ | 2,041,083 | |||||
Allowance from doubtful accounts | 143,809 | 119,889 | |||||||
Less: valuation allowance | (2,306,709 | ) | (2,160,972 | ) | |||||
$ | - | $ | - | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | '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: | ||||||||
Six Months Ended June 30, | |||||||||
2014 | 2013 | ||||||||
Income tax benefit (provision) at the 34% statutory rate | $ | 215,401 | $ | 163,298 | |||||
Non-deductible interest expense | (66,643 | ) | (41,480 | ) | |||||
Other | (3,021 | ) | (2,436 | ) | |||||
Less change in valuation allowance | (145,737 | ) | (119,382 | ) | |||||
Income tax (provision) benefit | $ | - | $ | - |
NOTE_2_GOING_CONCERN_CONSIDERA1
NOTE 2. GOING CONCERN CONSIDERATIONS (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2009 | |
Going Concern Disclosure [Abstract] | ' | ' | ' | ' | ' | ' |
Retained Earnings (Accumulated Deficit) | ($14,277,965) | ' | ($14,277,965) | ' | ($13,644,433) | ($15,004,698) |
Sales Revenue, Services, Net | 859,860 | 867,331 | 1,194,548 | 1,910,532 | ' | ' |
Net Income (Loss) Attributable to Parent | ($153,245) | ($101,525) | ($633,532) | ($55,556) | ' | ' |
NOTE_3_CRITICAL_ACCOUNTING_POL1
NOTE 3. CRITICAL ACCOUNTING POLICIES (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Credit policy terms | '240 days |
NOTE_4_ACCOUNTS_RECEIVABLE_Det
NOTE 4. ACCOUNTS RECEIVABLE (Details) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
NOTE 4. ACCOUNTS RECEIVABLE (Details) [Line Items] | ' | ' |
Discount rate used for recognition of revenue | 52.00% | 6.00% |
Net revenue recognized as percent of CPT code billings | 48.00% | 48.00% |
Collection period for receivables | '1 year | '1 year |
Percentage of cases subject to a settlement within one year | 40.00% | 49.00% |
Minimum [Member] | ' | ' |
NOTE 4. ACCOUNTS RECEIVABLE (Details) [Line Items] | ' | ' |
Collection period for receivables | '2 years | ' |
NOTE_5_DUE_TO_RELATED_PARTIES_1
NOTE 5. DUE TO RELATED PARTIES (Details) - Schedule of Related Party Transactions (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | $74,667 | $164,293 |
Northshore Orthopedics Associates [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | 28,968 | 10,406 |
Chief Executive Officer [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | 45,699 | 135,699 |
Spine Injury Physicians [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | $0 | $18,188 |
NOTE_6_STOCKHOLDERS_EQUITY_Det
NOTE 6. STOCKHOLDERS' EQUITY (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Stockholders' Equity Note [Abstract] | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | $72,000 | $62,110 | $134,110 | $144,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $60,000 | ' | $60,000 | ' |
Compensation expense reconized last date | ' | ' | 31-Dec-14 | ' |
NOTE_7_RELATED_PARTY_TRANSACTI1
NOTE 7. RELATED PARTY TRANSACTIONS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Northshore Orthopedics Associates [Member] | ' | ' |
NOTE 7. RELATED PARTY TRANSACTIONS (Details) [Line Items] | ' | ' |
Equity Method Investment, Ownership Percentage | 100.00% | ' |
Due to Related Parties | $28,968 | $10,406 |
Chief Executive Officer [Member] | ' | ' |
NOTE 7. RELATED PARTY TRANSACTIONS (Details) [Line Items] | ' | ' |
Due to Related Parties | 45,699 | 135,699 |
Spine Injury Physicians [Member] | ' | ' |
NOTE 7. RELATED PARTY TRANSACTIONS (Details) [Line Items] | ' | ' |
Equity Method Investment, Ownership Percentage | 100.00% | ' |
Due to Related Parties | $0 | $18,188 |
NOTE_8_LONGTERM_DEBT_Details
NOTE 8. LONG-TERM DEBT (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Disclosure Text Block [Abstract] | ' | ' | ' | ' | ' |
Interest Expense, Debt | ' | $16,645 | $53,369 | $66,644 | $96,091 |
Repayments of Debt | $350,000 | ' | ' | ' | ' |
NOTE_9_INCOME_TAXES_Details
NOTE 9. INCOME TAXES (Details) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
NOTE 9. INCOME TAXES (Details) [Line Items] | ' | ' | ' |
Effective Income Tax Rate Reconciliation, Percent | 34.00% | ' | ' |
Deferred Tax Assets, Gross | $2,306,709 | ' | $2,160,972 |
Operating Loss Carryforwards | $6,361,470 | ' | $6,003,185 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% | ' |
Minimum [Member] | ' | ' | ' |
NOTE 9. INCOME TAXES (Details) [Line Items] | ' | ' | ' |
Net operating loss carryforwards expiration year | '2018 | ' | ' |
Maximum [Member] | ' | ' | ' |
NOTE 9. INCOME TAXES (Details) [Line Items] | ' | ' | ' |
Net operating loss carryforwards expiration year | '2031 | ' | ' |
NOTE_9_INCOME_TAXES_Details_Sc
NOTE 9. INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Schedule of Deferred Tax Assets and Liabilities [Abstract] | ' | ' |
Benefit from net operating loss carryforwards | $2,162,900 | $2,041,083 |
Allowance from doubtful accounts | 143,809 | 119,889 |
Less: valuation allowance | -2,306,709 | -2,160,972 |
$0 | $0 |
NOTE_9_INCOME_TAXES_Details_Sc1
NOTE 9. INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ' | ' |
Income tax benefit (provision) at the 34% statutory rate | $215,401 | $163,298 |
Non-deductible interest expense | -66,643 | -41,480 |
Other | -3,021 | -2,436 |
Less change in valuation allowance | -145,737 | -119,382 |
Income tax (provision) benefit | $0 | $0 |
NOTE_9_INCOME_TAXES_Details_Sc2
NOTE 9. INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (Parentheticals) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ' | ' |
Statutory rate | 34.00% | 34.00% |