Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 14, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Spine Injury Solutions, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 20,135,882 | |
Amendment Flag | false | |
Entity Central Index Key | 1,066,764 | |
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 | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 130,139 | $ 173,647 |
Accounts receivable, net | 1,536,008 | 1,301,124 |
Prepaid expenses | 18,500 | 159,250 |
Inventories | 148,419 | 75,460 |
Total current assets | 1,833,066 | 1,709,481 |
Accounts receivable, net of allowance for doubtful accounts of $663,439 and $503,477 at September 30, 2016 and December 31, 2015 | 2,920,581 | 3,399,896 |
Property and equipment, net | 78,061 | 78,937 |
Intangible assets and goodwill, net | 170,200 | 170,200 |
Total assets | 5,001,908 | 5,358,514 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 82,154 | 100,457 |
Due to related parties | 42,827 | 29,400 |
Line of credit | 1,325,000 | 0 |
Notes payable | 300,000 | 500,000 |
Total current liabilities | 1,749,981 | 629,857 |
Line of credit | 0 | 1,145,000 |
Notes payable and long-term debt | 0 | 50,000 |
Total liabilities | 1,749,981 | 1,824,857 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock: $0.001 par value, 50,000,000 shares authorized, 20,135,882 and 19,780,882 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 20,136 | 19,781 |
Additional paid-in capital | 19,843,715 | 19,908,571 |
Accumulated deficit | (16,611,924) | (16,394,695) |
Total stockholders’ equity | 3,251,927 | 3,533,657 |
Total liabilities and stockholders’ equity | $ 5,001,908 | $ 5,358,514 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts (in Dollars) | $ 663,439 | $ 503,477 |
Common stock: par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock: shares authorized | 50,000,000 | 50,000,000 |
Common stock: shares issued | 20,135,882 | 19,780,882 |
Common stock: shares outstanding | 20,135,882 | 19,780,882 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net revenue | $ 458,958 | $ 512,763 | $ 1,661,006 | $ 1,497,234 |
Cost of providing services: | ||||
Third party providers | 15,556 | 27,618 | 129,793 | 168,806 |
Related party providers | 130,758 | 193,939 | 429,620 | 466,258 |
Total cost of providing services | 146,314 | 221,557 | 559,413 | 635,064 |
Gross profit | 312,644 | 291,206 | 1,101,593 | 862,170 |
Research and development expenses | 18,862 | 89,512 | 38,709 | 265,510 |
Operating, general and administrative expenses | 459,126 | 409,532 | 1,240,058 | 1,370,781 |
Loss from operations | (165,344) | (207,838) | (177,174) | (774,121) |
Other income and (expense): | ||||
Other income | 1,484 | 2,284 | 5,113 | 8,772 |
Interest expense | (14,541) | (14,120) | (45,168) | (50,375) |
Total other income and (expense) | (13,057) | (11,836) | (40,055) | (41,603) |
Net loss | $ (178,401) | $ (219,674) | $ (217,229) | $ (815,724) |
Net loss per common share: | ||||
Basic (in Dollars per share) | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.04) |
Diluted (in Dollars per share) | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.04) |
Weighted average number of common shares outstanding: | ||||
Basic (in Shares) | 20,120,882 | 19,672,132 | 19,900,048 | 19,548,382 |
Diluted (in Shares) | 20,120,882 | 19,672,132 | 19,900,048 | 19,548,382 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (217,229) | $ (815,724) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Provision for bad debt | 183,338 | 180,000 |
Stock based compensation | 85,500 | 136,233 |
Depreciation and amortization expense | 15,969 | 17,883 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 61,093 | 168,302 |
Inventories | (88,053) | (61,816) |
Prepaid expenses | (9,250) | 14,590 |
Related party receivables/payables | 13,427 | 13,918 |
Accounts payable and accrued liabilities | (18,303) | (48,923) |
Net cash provided by (used in) operating activities | 26,492 | (395,537) |
Cash flows from investing activities: | ||
Purchase of equipment | 0 | (13,025) |
Net cash used in investing activities | 0 | (13,025) |
Cash flows from financing activities: | ||
Payment of notes payable and long-term debt | (250,000) | (350,000) |
Net proceeds from line of credit | 180,000 | 600,000 |
Net cash (used in) provided by financing activities | (70,000) | 250,000 |
Net decrease in cash and cash equivalents | (43,508) | (158,562) |
Cash and cash equivalents at beginning of period | 173,647 | 358,052 |
Cash and cash equivalents at end of period | 130,139 | 199,490 |
Non-cash financing activities: | ||
Transfer of inventory to property and equipment | 15,093 | 0 |
Supplemental cash flow information: | ||
Interest paid | 44,499 | 49,492 |
Taxes paid | $ 0 | $ 0 |
NOTE 1. DESCRIPTION OF BUSINESS
NOTE 1. DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Nature of Operations [Text Block] | NOTE 1. DESCRIPTION OF BUSINESS Spine Injury Solutions Inc. (the “Company”, “we” or “us”) was incorporated under the laws of Delaware on March 4, 1998. We changed our name to Spine Injury Solutions Inc. on September 1, 2015. We have two wholly-owned subsidiaries, Quad Video Halo, Inc. which holds certain assets associated with our Quad Video Halo (“QVH”) business, and Gleric Holdings, LLC which holds certain intangible assets. We are a technology, marketing, billing, and collection company facilitating diagnostic services for patients who have sustained spine injuries. In addition, we are developing QVH programs to assist surgeons and other healthcare providers with treatment documentation in specialized areas, such as spine injuries and regenerative medicine. We deliver turnkey solutions to spine surgeons, orthopedic surgeons and other healthcare providers who treat spine injuries. Our goal is to become a leader in providing technology and monetizing services to spine and orthopedic surgeons and other healthcare providers. By monetizing the providers’ accounts receivable, patients are not unnecessarily delayed or prevented from obtaining needed treatment. After a patient is billed for the procedures performed we oversee collection. We currently are providing technology and/or collection services to five spine injury diagnostic centers in the United States, which are located in Houston, Texas; Odessa, Texas; Tyler, Texas; El Paso, Texas and Dallas, Texas. We are seeking additional funding for expansion by way of reasonable financing to accelerate future development. In connection with this strategy, we plan to offer our technology to additional diagnostic centers in new market areas that are attractive under our business model, assuming adequate funds are available. We own a patented 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, and provide us with additional revenue streams with our new programs designed to assist in treatment documentation. We have refined the technology, through research and development, resulting in a fully commercialized Quad Video Halo System 3.0. Using this technology, diagnostic and treatment 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. Additionally, we anticipate independent medical representatives will sell Quad Video Halo units to additional hospitals and clinics. |
NOTE 2. GOING CONCERN CONSIDERA
NOTE 2. GOING CONCERN CONSIDERATIONS | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern [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, our accumulated deficit has increased $1,607,226 to $16,611,924 as of September 30, 2016. We plan to increase our operating expenses as we increase our service development, marketing efforts and brand building activities. We also plan to increase our general and administrative functions to support our growing operations. We will need to generate significant revenues to achieve our business plan. Our continued existence is dependent upon our ability to successfully execute our business plan, as well as our ability to increase revenue from services and obtain additional capital from borrowing and selling securities, as needed, to fund our operations. There is no assurance that additional capital can be obtained or that it can be obtained on terms that are favorable to us and our existing stockholders. Any expectation of future profitability is dependent upon our ability to expand and develop our healthcare services business, of which there can be no assurances. |
NOTE 3. CRITICAL ACCOUNTING POL
NOTE 3. CRITICAL ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
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 (“U.S. GAAP”) 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 consolidated financial statements and notes thereto included in our 2015 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 condensed consolidated financial statements and the results of our operations for the interim period ended September 30, 2016, 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 the accounts of Spine Injury Solutions, Inc. and its wholly owned subsidiaries, Quad Video Halo, Inc. and Gleric Holdings, LLC. All material intercompany balances of transactions have been eliminated upon consolidation. Accounting Method Our financial statements are prepared using the accrual basis of accounting in accordance with U.S. GAAP. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP 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 of 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). Fair Value of Financial Instruments Cash, accounts receivable, accounts payable and accrued liabilities, and notes payable as reflected in the condensed consolidated financial statements, approximates fair value. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. Cash and Cash Equivalents Cash and cash equivalents consist of liquid investments with original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. We maintain cash and cash equivalents in banks which at times may exceed federally insured limits. We have not experienced any losses on these deposits. Intangible Assets and Goodwill Intangible assets acquired are initially recognized at cost. Intangible assets acquired in a business combination are recognized at their estimated fair value at the date of acquisition. Intangibles with a finite life are amortized, ratably, based on the contractual terms of the associated agreements. Goodwill recognized in a business combination is subjective and represents the value of the excess amount given to the acquired company above the estimated fair market value of the identifiable net assets on the acquisition date. Each year, during the fourth quarter, the goodwill amount is reviewed to determine if any impairment has occurred. Impairment occurs when the original amount of goodwill exceeds the value of the expected future net cash flows from the business acquired. As of September 30, 2016 and December 31, 2015, no impairment to the asset was determined to have occurred. Long-Lived Assets We periodically review and evaluate long-lived assets such as intangible assets, when events and circumstances indicate that the carrying amount of these assets may not be recoverable. In performing our review for recoverability, we estimate the future cash flows expected to result from the use of such assets and its eventual disposition. If the sum of the expected undiscounted future operating cash flows is less than the carrying amount of the related assets, an impairment loss is recognized in the condensed consolidated statements of operations. Measurement of the impairment loss is based on the excess of the carrying amount of such assets over the fair value calculated using discounted expected future cash flows. At September 30, 2016 and December 31, 2015, no impairment of the long-lived assets was determined to have occurred. Concentrations of Credit Risk Assets that expose us to credit risk consist primarily of cash and accounts receivable. Our accounts receivable are from a diversified customer base and, therefore, we believe the concentration of credit risk is minimal. We evaluate the creditworthiness of customers before any services are provided. We record a discount based on the nature of our business, collection trends, and an assessment of our ability to fully realize amounts billed for services. Additionally, we have established an allowance for doubtful accounts in the amount of $663,439 and $503,477, at September 30, 2016 and December 31, 2015, respectively. Stock Based Compensation We account for the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors and consultants, including employee stock options, based on estimated fair values. Under authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), companies are required to estimate the fair value or calculated value of share-based payment awards on the date of grant using an option-pricing model. The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our condensed consolidated statements of operations. We use the Black-Scholes Option Pricing Model to determine the fair value of stock-based awards. During the nine months ended September 30, 2016 and 2015, we recognized compensation expense related to our stock options of $6,200 and $0, respectively. We also recognized compensation and consulting expense for issuances of our common stock in exchange for services of $79,300 and $136,233 during the nine months ended September 30, 2016 and 2015, respectively, and $9,800 and $37,500 for the three months ended September 30, 2016 and 2015, respectively. Income Taxes We account for income taxes in accordance with the liability method. Under the liability method, deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis. We establish a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. Uncertain Tax Positions Accounting Standards Codification “ASC” Topic 740-10-25 defines the minimum threshold a tax position is required to meet before being recognized in the financial statements as “more likely than not” (i.e., a likelihood of occurrence greater than fifty percent). Under ASC Topic 740-10-25, the recognition threshold is met when an entity concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination by the relevant taxing authority. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard, or are resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained. We are subject to ongoing tax exposures, examinations and assessments in various jurisdictions. Accordingly, we may incur additional tax expense based upon the outcomes of such matters. In addition, when applicable, we will adjust tax expense to reflect our ongoing assessments of such matters which require judgment and can materially increase or decrease our effective rate as well as impact operating results. Under ASC Topic 740-10-25, only the portion of the liability that is expected to be paid within one year is classified as a current liability. As a result, liabilities expected to be resolved without the payment of cash (e.g. resolution due to the expiration of the statute of limitations) or are not expected to be paid within one year are not classified as current. We record estimated interest and penalties as income tax expense and tax credits as a reduction in income tax expense. For the three and nine months ended September 30, 2016 and 2015, we recognized no estimated interest or penalties as income tax expense. With few exceptions, we are no longer subject to federal or state income tax examinations for years before 2012. Legal Costs and Contingencies In the normal course of business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received. If a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable. As of September 30, 2016 and December 31, 2015, we recognized no estimated or contingent losses. Net Loss per Share Basic and diluted net loss per common share is presented in accordance with ASC Topic 260, “Earnings per Share,” for all periods presented. During the three and nine months ended September 30, 2016 and 2015, common stock equivalents from outstanding stock options, warrants and convertible debt have been excluded from the calculation of the diluted loss per share in the condensed consolidated statements of operations, because all such securities were anti-dilutive. The net loss per share is calculated by dividing the net loss by the weighted average number of shares outstanding during the periods. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). 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. Compensation – Stock Compensation In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern. In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplified Income Statement Presentation by Eliminating the Concept of Extraordinary Items. Subtopic 225-20 Income statement – Extraordinary and Unusual Items, In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In February 2016, the FASB issued ASU No. 2016-02, Leases |
NOTE 4. ACCOUNTS RECEIVABLE
NOTE 4. ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2016 | |
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. The patients are billed by the healthcare provider 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. 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. While we do collect 100% of the accounts on some patients, our historical collection rate is used to calculate the carrying balance of the accounts receivable and the estimated revenue to be recorded. A discount rate of 48%, based on payment history, was used to reduce revenue to 52% of CPT code billings (“gross revenue”) during the three and nine months ended September 30, 2016. The discount rate was 52% for the three and nine months ended September 30, 2015, which reduced revenue to 48% of gross revenue. The patients who receive medical services at the diagnostic centers are typically patients involved in auto accidents or work injuries. The patient completes and signs medical and financial paperwork, which includes an acknowledgement of the patient’s responsibility of payment for the services provided. Additionally, the paperwork should include an assignment of benefits. The timing of collection of receivables varies depending on patient sources of payment. Historical experience, through 2015, 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 September 30, 2016 and December 31, 2015 that 30% and 25%, respectively, of cases will be collected within one year of a medical procedure. |
NOTE 5. STOCKHOLDERS' EQUITY
NOTE 5. STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 5. STOCKHOLDERS’ EQUITY Common Stock During the nine months ended September 30, 2016, we issued an aggregate 300,000 shares of common stock, valued at $0.30 per share, in connection with a financing agreement with a director of the Company for his assistance in obtaining a line of credit. The 300,000 shares issued during the nine months ended September 30, 2016, includes 100,000 shares that vested during the fourth quarter of 2015. Accordingly, the associated expense of $30,000 was expensed during 2015. During the nine months ended September 30, 2016, we expensed the remaining $60,000 related to the financing agreement pursuant to the agreement’s vesting schedule, which is included in operating, general and administrative expenses in the accompanying condensed consolidated statements of operations. For the three months ended September 30, 2016, there were no issuances of stock related to this agreement. As of September 30, 2016, there was no unrecognized expense associated with the financing agreement. During the three and nine months ended September 30, 2016, we issued 30,000 and 55,000 shares of common stock, respectively, valued at $0.33 and $0.35 per share, respectively, in connection with employment agreements and consulting agreements. During the three and nine months ended September 30, 2016, we expensed $9,800 and $19,300, respectively, in connection with these agreements which is included in operating, general and administrative expenses in the accompanying condensed consolidated statements of operations. As of September 30, 2016, there was no unrecognized expense associated with these agreements. Stock Options During the three and nine months ended September 30, 2016 and 2015, we recognized $6,200 and $0, respectively, in compensation expense associated with stock options, which is included in operating, general and administrative expenses in the accompanying condensed consolidated statements of operations. As of September 30, 2016, there was no additional unamortized stock option compensation expense. |
NOTE 6. RELATED PARTY TRANSACTI
NOTE 6. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 6. RELATED PARTY TRANSACTIONS 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 at the Houston and Odessa spine injury diagnostic centers. For the quarter ended September 30, 2016 and 2015, we expensed $130,758 and $193,939 related to services provided by NSO. For the nine months ended September 30, 2016 and 2015, we expensed $429,620 and $466,258, respectively. As of September 30, 2016 and December 31, 2015, we had a balance due to NSO of $42,827 and $29,400, respectively. 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. During the nine months ended September 30, 2016, we issued 300,000 shares of our common stock to Peter Dalrymple, our director, under the terms of a financing agreement to assist us in obtaining a line of credit. We recognized consulting expense of $0 and $60,000 during the three and nine months ended September 30, 2016 in connection with the agreement. |
NOTE 7. NOTES PAYABLE
NOTE 7. NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 7. NOTES PAYABLE On August 29, 2012, we issued Peter Dalrymple, a director of the Company, a $1,000,000 three-year secured promissory note bearing interest at 12% per year. This promissory note is secured by $3,000,000 in gross accounts receivable. On the maturity date, one balloon payment of the entire outstanding principal amount plus any accrued and unpaid interest is due. On August 20, 2014, in connection with a financing agreement with Mr. Dalrymple, the promissory note was amended to extend the term by one year to mature on August 29, 2016 and the interest rate was reduced to 6%. To date, a total of $750,000 of advances under the line of credit with Wells Fargo (as described below) has been used as payment on the promissory note. In August 2016, the note was amended to extend the maturity date to August 29, 2017. As of September 30, 2016, the note has a principal balance of $250,000. For the nine months ended September 30, 2016 and 2015, we recorded interest expense of $21,250 and $22,500, respectively, related to the note. For the three months ended September 30, 2016 and 2015, we recorded interest expense of $6,250 and $7,500, respectively, related to the note. In June 2013, we extended the maturity date of a $50,000 third party note originally due March 9, 2015 to a maturity date of March 9, 2017 in exchange for warrants to purchase 50,000 shares at $0.45 per share. For the nine months ended September 30, 2016 and 2015, we recorded $3,750, each period, in interest expense related to this note. For the three months ended September 30, 2016 and 2015, we recorded $1,250, each period, in interest expense related to this note. Line of Credit On September 3, 2014, we entered into a $2,000,000 revolving line of credit agreement with Wells Fargo Bank, N.A. Outstanding principal on the line of credit bears interest at the 30 day London Interbank Offered Rate (“LIBOR”) plus 2%, resulting in an effective rate of 2.50% at September 30, 2016. The line of credit matures on August 31, 2017 and is personally guaranteed by Peter Dalrymple, a director of the Company. As of September 30, 2016 and December 31, 2015, outstanding borrowings under the line of credit totaled $1,325,000 and $1,145,000, respectively. For the nine months ended September 30, 2016 and 2015, we recorded interest expense of $20,168 and $12,575, respectively. For the three months ended September 30, 2016 and 2015, we recorded interest expense of $7,041 and $5,370, respectively. |
NOTE 8. INCOME TAXES
NOTE 8. INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 8. INCOME TAXES We have not made a provision for income taxes for the three and nine months ended September 30, 2016 and 2015, which reflects our valuation allowance established against our benefits from net operating loss carryforwards. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Spine Injury Solutions, Inc. and its wholly owned subsidiaries, Quad Video Halo, Inc. and Gleric Holdings, LLC. All material intercompany balances of transactions have been eliminated upon consolidation. |
Basis of Accounting, Policy [Policy Text Block] | Accounting Method Our financial statements are prepared using the accrual basis of accounting in accordance with U.S. GAAP. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP 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 of 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). |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments Cash, accounts receivable, accounts payable and accrued liabilities, and notes payable as reflected in the condensed consolidated financial statements, approximates fair value. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash and cash equivalents consist of liquid investments with original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. We maintain cash and cash equivalents in banks which at times may exceed federally insured limits. We have not experienced any losses on these deposits. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets and Goodwill Intangible assets acquired are initially recognized at cost. Intangible assets acquired in a business combination are recognized at their estimated fair value at the date of acquisition. Intangibles with a finite life are amortized, ratably, based on the contractual terms of the associated agreements. Goodwill recognized in a business combination is subjective and represents the value of the excess amount given to the acquired company above the estimated fair market value of the identifiable net assets on the acquisition date. Each year, during the fourth quarter, the goodwill amount is reviewed to determine if any impairment has occurred. Impairment occurs when the original amount of goodwill exceeds the value of the expected future net cash flows from the business acquired. As of September 30, 2016 and December 31, 2015, no impairment to the asset was determined to have occurred. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets We periodically review and evaluate long-lived assets such as intangible assets, when events and circumstances indicate that the carrying amount of these assets may not be recoverable. In performing our review for recoverability, we estimate the future cash flows expected to result from the use of such assets and its eventual disposition. If the sum of the expected undiscounted future operating cash flows is less than the carrying amount of the related assets, an impairment loss is recognized in the condensed consolidated statements of operations. Measurement of the impairment loss is based on the excess of the carrying amount of such assets over the fair value calculated using discounted expected future cash flows. At September 30, 2016 and December 31, 2015, no impairment of the long-lived assets was determined to have occurred. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Credit Risk Assets that expose us to credit risk consist primarily of cash and accounts receivable. Our accounts receivable are from a diversified customer base and, therefore, we believe the concentration of credit risk is minimal. We evaluate the creditworthiness of customers before any services are provided. We record a discount based on the nature of our business, collection trends, and an assessment of our ability to fully realize amounts billed for services. Additionally, we have established an allowance for doubtful accounts in the amount of $663,439 and $503,477, at September 30, 2016 and December 31, 2015, respectively. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock Based Compensation We account for the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors and consultants, including employee stock options, based on estimated fair values. Under authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), companies are required to estimate the fair value or calculated value of share-based payment awards on the date of grant using an option-pricing model. The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our condensed consolidated statements of operations. We use the Black-Scholes Option Pricing Model to determine the fair value of stock-based awards. During the nine months ended September 30, 2016 and 2015, we recognized compensation expense related to our stock options of $6,200 and $0, respectively. We also recognized compensation and consulting expense for issuances of our common stock in exchange for services of $79,300 and $136,233 during the nine months ended September 30, 2016 and 2015, respectively, and $9,800 and $37,500 for the three months ended September 30, 2016 and 2015, respectively. |
Income Tax, Policy [Policy Text Block] | Income Taxes We account for income taxes in accordance with the liability method. Under the liability method, deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis. We establish a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. |
Income Tax Uncertainties, Policy [Policy Text Block] | Uncertain Tax Positions Accounting Standards Codification “ASC” Topic 740-10-25 defines the minimum threshold a tax position is required to meet before being recognized in the financial statements as “more likely than not” (i.e., a likelihood of occurrence greater than fifty percent). Under ASC Topic 740-10-25, the recognition threshold is met when an entity concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination by the relevant taxing authority. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard, or are resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained. We are subject to ongoing tax exposures, examinations and assessments in various jurisdictions. Accordingly, we may incur additional tax expense based upon the outcomes of such matters. In addition, when applicable, we will adjust tax expense to reflect our ongoing assessments of such matters which require judgment and can materially increase or decrease our effective rate as well as impact operating results. Under ASC Topic 740-10-25, only the portion of the liability that is expected to be paid within one year is classified as a current liability. As a result, liabilities expected to be resolved without the payment of cash (e.g. resolution due to the expiration of the statute of limitations) or are not expected to be paid within one year are not classified as current. We record estimated interest and penalties as income tax expense and tax credits as a reduction in income tax expense. For the three and nine months ended September 30, 2016 and 2015, we recognized no estimated interest or penalties as income tax expense. With few exceptions, we are no longer subject to federal or state income tax examinations for years before 2012. |
Legal Costs, Policy [Policy Text Block] | Legal Costs and Contingencies In the normal course of business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received. If a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable. |
Earnings Per Share, Policy [Policy Text Block] | Net Loss per Share Basic and diluted net loss per common share is presented in accordance with ASC Topic 260, “Earnings per Share,” for all periods presented. During the three and nine months ended September 30, 2016 and 2015, common stock equivalents from outstanding stock options, warrants and convertible debt have been excluded from the calculation of the diluted loss per share in the condensed consolidated statements of operations, because all such securities were anti-dilutive. The net loss per share is calculated by dividing the net loss by the weighted average number of shares outstanding during the periods. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). 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. Compensation – Stock Compensation In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern. In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplified Income Statement Presentation by Eliminating the Concept of Extraordinary Items. Subtopic 225-20 Income statement – Extraordinary and Unusual Items, In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In February 2016, the FASB issued ASU No. 2016-02, Leases |
NOTE 1. DESCRIPTION OF BUSINE15
NOTE 1. DESCRIPTION OF BUSINESS (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Number of Wholly-Owned Subsidiaries | 2 |
NOTE 2. GOING CONCERN CONSIDE16
NOTE 2. GOING CONCERN CONSIDERATIONS (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2009 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Retained Earnings (Accumulated Deficit) | $ (16,611,924) | $ (16,394,695) | $ (15,004,698) |
Cumulative Effect on Retained Earnings, Net of Tax | $ (1,607,226) |
NOTE 3. CRITICAL ACCOUNTING P17
NOTE 3. CRITICAL ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
NOTE 3. CRITICAL ACCOUNTING POLICIES (Details) [Line Items] | |||||
Accounts Receivable, Collection Period | 240 days | ||||
Goodwill, Impairment Loss | $ 0 | $ 0 | |||
Allowance for Doubtful Accounts Receivable | $ 663,439 | 663,439 | $ 503,477 | ||
Share-based Compensation | 85,500 | $ 136,233 | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 0 | $ 0 | 0 | 0 | |
Employee Stock Option [Member] | |||||
NOTE 3. CRITICAL ACCOUNTING POLICIES (Details) [Line Items] | |||||
Share-based Compensation | 6,200 | 0 | |||
Common Stock for Services [Member] | |||||
NOTE 3. CRITICAL ACCOUNTING POLICIES (Details) [Line Items] | |||||
Share-based Compensation | $ 9,800 | $ 37,500 | $ 79,300 | $ 136,233 |
NOTE 4. ACCOUNTS RECEIVABLE (De
NOTE 4. ACCOUNTS RECEIVABLE (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Receivables [Abstract] | |||||
Account Receivable, Discount Rate | 48.00% | 48.00% | |||
Account Receivable, Percentage of Gross Revenue | 52.00% | 52.00% | 52.00% | 52.00% | |
Accounts Receivable, Additional Narrative Disclosure | Historical experience, through 2015, demonstrated that the collection period for individual cases may extend for two years or more. | ||||
Accounts Receivable, Litigation Settlement, Percent | 30.00% | 25.00% |
NOTE 5. STOCKHOLDERS' EQUITY (D
NOTE 5. STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
NOTE 5. STOCKHOLDERS' EQUITY (Details) [Line Items] | |||||
Share-based Compensation | $ 85,500 | $ 136,233 | |||
Common Stock for Services [Member] | |||||
NOTE 5. STOCKHOLDERS' EQUITY (Details) [Line Items] | |||||
Shares Issued, Price Per Share (in Dollars per share) | $ 0.35 | $ 0.35 | |||
Share-based Compensation | $ 9,800 | $ 37,500 | $ 79,300 | 136,233 | |
Stock Issued During Period, Shares, Issued for Services (in Shares) | 55,000 | ||||
Stock Issued During Period, Value, Issued for Services | $ 19,300 | ||||
Employment Agreement [Member] | |||||
NOTE 5. STOCKHOLDERS' EQUITY (Details) [Line Items] | |||||
Shares Issued, Price Per Share (in Dollars per share) | $ 0.33 | $ 0.33 | |||
Stock Issued During Period, Shares, Issued for Services (in Shares) | 30,000 | ||||
Stock Issued During Period, Value, Issued for Services | $ 9,800 | ||||
Employee Stock Option [Member] | |||||
NOTE 5. STOCKHOLDERS' EQUITY (Details) [Line Items] | |||||
Share-based Compensation | $ 6,200 | $ 0 | |||
Director [Member] | Common Stock for Services [Member] | |||||
NOTE 5. STOCKHOLDERS' EQUITY (Details) [Line Items] | |||||
Stock Issued During Period, Shares, New Issues (in Shares) | 300,000 | ||||
Shares Issued, Price Per Share (in Dollars per share) | $ 0.30 | $ 0.30 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in Shares) | 100,000 | ||||
Stock Issued During Period, Value, New Issues | $ 30,000 | ||||
Share-based Compensation | $ 0 | $ 60,000 |
NOTE 6. RELATED PARTY TRANSAC20
NOTE 6. RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
NOTE 6. RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||
Due to Related Parties, Current | $ 42,827 | $ 42,827 | $ 29,400 | ||
Share-based Compensation | 85,500 | $ 136,233 | |||
Affiliated Entity [Member] | |||||
NOTE 6. RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | 130,758 | $ 193,939 | 429,620 | 466,258 | |
Due to Related Parties, Current | 42,827 | 42,827 | $ 29,400 | ||
Common Stock for Services [Member] | |||||
NOTE 6. RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||
Share-based Compensation | 9,800 | $ 37,500 | $ 79,300 | $ 136,233 | |
Common Stock for Services [Member] | Director [Member] | |||||
NOTE 6. RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||
Stock Issued During Period, Shares, New Issues (in Shares) | 300,000 | ||||
Share-based Compensation | $ 0 | $ 60,000 |
NOTE 7. NOTES PAYABLE (Details)
NOTE 7. NOTES PAYABLE (Details) - USD ($) | Sep. 03, 2014 | Aug. 20, 2014 | Aug. 29, 2012 | Jun. 30, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
NOTE 7. NOTES PAYABLE (Details) [Line Items] | |||||||||
Long-term Line of Credit | $ 1,325,000 | $ 1,325,000 | $ 1,145,000 | ||||||
Notes Payable, Other Payables [Member] | |||||||||
NOTE 7. NOTES PAYABLE (Details) [Line Items] | |||||||||
Debt Instrument, Face Amount | $ 50,000 | ||||||||
Debt Instrument, Maturity Date | Mar. 9, 2017 | ||||||||
Interest Expense, Debt | 1,250 | $ 1,250 | 3,750 | $ 3,750 | |||||
Class of Warrant or Rights, Granted (in Shares) | 50,000 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 0.45 | ||||||||
Director [Member] | Notes Payable, Other Payables [Member] | |||||||||
NOTE 7. NOTES PAYABLE (Details) [Line Items] | |||||||||
Debt Instrument, Face Amount | $ 1,000,000 | ||||||||
Debt Instrument, Term | 1 year | 3 years | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 12.00% | |||||||
Debt Instrument, Collateral Amount | $ 3,000,000 | ||||||||
Debt Instrument, Payment Terms | On the maturity date, one balloon payment of the entire outstanding principal amount plus any accrued and unpaid interest is due. | ||||||||
Debt Instrument, Maturity Date | Aug. 29, 2016 | ||||||||
Repayments of Debt | $ 750,000 | ||||||||
Notes Payable | 250,000 | 250,000 | |||||||
Interest Expense, Debt | 6,250 | 7,500 | 21,250 | 22,500 | |||||
Line of Credit [Member] | |||||||||
NOTE 7. NOTES PAYABLE (Details) [Line Items] | |||||||||
Interest Expense, Debt | $ 7,041 | $ 5,370 | $ 20,168 | $ 12,575 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,000,000 | ||||||||
Line of Credit Facility, Interest Rate at Period End | 2.50% | 2.50% | |||||||
Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
NOTE 7. NOTES PAYABLE (Details) [Line Items] | |||||||||
Debt Instrument, Description of Variable Rate Basis | 30 day London Interbank Offered Rate (“LIBOR”) | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% |