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EX-21.1 - EX-21.1 - Spine Injury Solutions, Incex21-1.htm
EX-31.1 - EX-31.1 - Spine Injury Solutions, Incex31-1.htm
EX-32.2 - EX-32.2 - Spine Injury Solutions, Incex32-2.htm
EX-31.2 - EX-31.2 - Spine Injury Solutions, Incex31-2.htm
EX-32.1 - EX-32.1 - Spine Injury Solutions, Incex32-1.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 10-K

 
(Mark One)
 
x Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the fiscal year ended December 31, 2015.
 
o Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee required)
 
For the transition period from _______ to _______.
 
Commission file number: 000-27407
 
SPINE INJURY SOLUTIONS, INC.
(Name of Registrant in Its Charter)
 
Delaware
98-0187705
(State or Other Jurisdiction of Incorporation or
(I.R.S. Employer Identification No.)
Organization)
 

5225 Katy Freeway
Suite 600
Houston, Texas   77007
(Address of Principal Executive Offices)

(713) 521-4220
(Issuer's Telephone Number, Including Area Code)

Spine Pain Management, Inc.
(Former name of Registrant)

Securities registered under Section 12(g) of the Exchange Act:
Common Stock ($0.001 Par Value)
(Title of Each Class)

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.    Yes o    No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes o    No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer  o Accelerated filer  o
Non-accelerated filer  o   Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x
 
The aggregate market value of the registrant’s common stock outstanding held by non-affiliates (computed at a price of $0.53 per share, the price at which the registrant’s common stock was last sold as of, June 30, 2015, the last business day of the registrant’s most recently completed second fiscal quarter) was $5,959,892.
 
At March 23, 2016, there were 19,880,882 shares of the registrant’s common stock outstanding (the only class of voting common stock).
 
DOCUMENTS INCORPORATED BY REFERENCE

None.
 
 
NOTE ABOUT FORWARD-LOOKING STATEMENTS
 
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. Forward-looking statements may appear throughout this report, including without limitation, the following sections: Item 1 “Business,” Item 1A “Risk Factors,” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form 10-K, and in particular, the risks discussed under the caption “Risk Factors” in Item 1A and those discussed in other documents we file with the Securities and Exchange Commission (“SEC”). Important factors that in our view could cause material adverse effects on our financial condition and results of operations include, but are not limited to, risks associated with the company's ability to obtain additional capital in the future to fund planned expansion, service demands and acceptance, our ability to expand, changes in healthcare practices, changes in technology, economic conditions, the impact of competition and pricing, government regulation and approvals in the healthcare industry and other risks and uncertainties set forth below and in the “Risk Factors” section below. We undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, the “Company,” “we,” “our,” and similar terms include Spine Injury Solutions, Inc. and its subsidiaries and predecessors, unless the context indicates otherwise.
 
 
 

 
 
TABLE OF CONTENTS

PART I
     
Item 1.
4
Item 1A.
7
Item 1B.
11
Item 2.
12
Item 3.
12
Item 4.
12
     
 PART II
     
Item 5.
13
Item 6.
14
Item 7.
14
Item 7A.
16
Item 8.
16
Item 9.
34
Item 9A.
34
Item 9B.
35
     
 PART III
     
Item 10.
36
Item 11.
37
Item 12.
39
Item 13.
40
Item 14.
41
     
PART IV
     
Item 15.
42
     
 
43

 
PART I

ITEM 1.  BUSINESS

Spine Injury Solutions Inc. was incorporated under the laws of Delaware on March 4, 1998.  We changed our name from Spine Pain Management Inc. to Spine Injury Solutions on October 1, 2015.

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 surgical care, patients are not unnecessarily delayed or prevented from obtaining needed treatment.  By facilitating 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 by the affiliated doctor, 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 four spine injury diagnostic centers in the United States, which are located in Houston, Texas; Odessa, Texas; Tyler, Texas; 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 future development.  In connection with this strategy, we plan to open additional diagnostic centers in new market areas that are attractive under our business model, assuming adequate funds are available.

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 2014 and 2015, we refined the technology, through further research and development, resulting in a fully commercialized Quad Video Halo System 3.0 (the “QVH”).  Using this technology, diagnostic procedures are recorded from four separate video feeds that capture views from both inside and outside the body, and an audio/video is produced which is given to the patient’s representative to verify the treatment received.  We believe the video will expedite the settlement process. We received notice on December 30, 2015 from Professional Testing (EMI), Inc. of successful completion of compliance testing of the Quad Video HALO System to meet EN 60601-1 safety standard for medical equipment.  The system also passed the IEC 60601-1-2 electromagnetic compatibility standard in September 2015.  This testing addresses the requirement of the EU Low Voltage Directive (2006/95/EC) for the CE mark. 

In September 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 QVH units.  
 
Billing and Operations

We work with independent medical contractors who perform the medical services for patients and bill a fixed fee for the services.  We fund certain spine injury diagnostic centers where we engage healthcare providers as independent contractors to perform medical services for patients. We pay the healthcare providers 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.

The clinic facilities where our spine injury diagnostic centers operate are owned or leased by a medical affiliate or third party.  We have no ownership interest in these clinic facilities, nor do we have any responsibilities towards building or operating the clinic facilities. In certain states, we can own and operate a medical facility with salaried doctor employees, and presently we are exploring several states. 

Marketing
 
Direct contact with key spine surgeons, orthopedic surgeons and other healthcare providers who are highly visible in their communities is an important step in targeting appropriate referral sources. Additional marketing to spine surgeons is done at national medical meetings and trade shows.   We intend to continue expanding our spine injury diagnostic business operations to additional areas across the United States, of which there can be no assurance.
 
Governmental Regulation
 
All of the medical diagnostic procedures offered at the clinics are performed by independent medical contractors, who are subject to regulation by a number of governmental entities at the federal, state, and local levels. We are subject to laws and regulations relating to business corporations in general. In recent years, Congress and state legislatures have introduced an increasing number of proposals to make significant changes in the healthcare system. Changes in law and regulatory interpretations could reduce our revenue and profitability.
 
Corporate Practice of Medicine and Other Laws
 
We are not licensed to practice medicine. Every state in which our business operates or in which we anticipate it will operate limits the practice of medicine to licensed individuals or professional organizations comprised of licensed individuals. Business corporations generally may not exercise control over the medical decisions of physicians. Many states also limit the scope of business relationships between business entities and medical professionals, particularly with respect to fee splitting. Most state fee-splitting laws only prohibit a physician from sharing medical fees with a referral source, but some states have interpreted certain management agreements between business entities and physicians as unlawful fee-splitting. Statutes and regulations relating to the practice of medicine, fee-splitting, and similar issues vary widely from state to state. Because these laws are often vague, their application is frequently dependent on court rulings and attorney general opinions. There are many states that permit the corporate practice of medicine, and we are exploring opportunities in these states.
 
Under the affiliate doctor agreements, the doctors retain sole responsibility for all medical decisions, developing operating policies and procedures, implementing professional standards and controls, and maintaining malpractice insurance. We attempt to structure all our health services operations, including arrangements with our doctors, to comply with applicable state statutes regarding corporate practice of medicine, fee-splitting, and similar issues. However, there can be no assurance:
 
 
that private parties, courts or governmental officials with the power to interpret or enforce these laws and regulations, will not assert that we are in violation of such laws and regulations;
 
that future interpretations of such laws and regulations will not require us to modify the structure and organization of our business; or
 
that any such enforcement action, which could subject us and our affiliated professional groups to penalties or restructuring or reorganization of our business, will not adversely affect our business or results of operations.
 
HIPAA Administrative Simplification Provisions—Patient Privacy and Security
 
The Health Insurance Portability and Accountability Act of 1996, commonly known as “HIPAA,” requires the adoption of standards for the exchange of health information in an effort to encourage overall administrative simplification and to enhance the effectiveness and efficiency of the healthcare industry. Pursuant to HIPAA, the Secretary of the Department of Health and Human Services has issued final rules concerning the privacy and security of health information, the establishment of standard transactions and code sets, and the adoption of a unique employer identifier and a national provider identifier.  Noncompliance with the administrative simplification provisions can result in civil monetary penalties up to $100 per violation as well as criminal penalties that include fines and imprisonment. The Department of Health and Human Services Office of Civil Rights is charged with implementing and enforcing the privacy standards, while the Centers for Medicare and Medicaid Services are responsible for implementing and enforcing the security standards, the transactions and code sets standards, and the other HIPAA administrative simplification provisions.
 
The HIPAA requirements only apply to “covered entities,” such as health plans, healthcare clearinghouses, and healthcare providers, which transmit any health information in electronic form. Our business is likely considered a “covered entity” under HIPAA.
 
 
Of the HIPAA requirements, the privacy standards and the security standards have the most significant impact on our business operations. The privacy standards require covered entities to implement certain procedures to govern the use and disclosure of protected health information and to safeguard such information from inappropriate access, use, or disclosure. Protected health information includes individually identifiable health information, such as an individual’s medical records, transmitted or maintained in any format, including paper and electronic records. The privacy standards establish the different levels of individual permission that are required before a covered entity may use or disclose an individual’s protected health information, and establish new rights for the individual with respect to his or her protected health information.
 
The final security rule establishes security standards that apply to covered entities. The security standards are designed to protect health information against reasonably anticipated threats or hazards to the security or integrity of the information, and to protect the information against unauthorized use or disclosure. The security standards establish a national standard for protecting the security and integrity of medical records when they are kept in electronic form.
 
The administrative simplification provisions of HIPAA require the use of uniform electronic data transmission standards for healthcare claims and payment transactions submitted or received electronically. We believe that we are in substantial compliance with the transaction and code set standards. The transaction standards require us to use standard code sets when we transmit health information in connection with certain transactions, including health claims, health payments and remittance advices.
 
In addition, the Secretary of the Department of Health and Human Services issued a final rule that requires each healthcare provider to adopt a standard unique health identifier, the National Provider Identifier (“NPI”). The NPI will identify healthcare providers in the electronic transactions for which the Secretary has already adopted standards (the “standard transactions”). These transactions include claims, eligibility inquiries and responses, claim status inquiries and responses, referrals, and remittance advices. All health plans and all healthcare clearinghouses must accept and use NPIs in standard transactions.
 
Other Privacy and Confidentiality Laws
 
In addition to the HIPAA requirements described above, numerous other state and federal laws regulate the privacy of an individual’s health information. These laws specify how an individual’s health information may be used internally, the persons to whom health information may be disclosed, and the conditions under which such uses and disclosures may occur. Many states have requirements relating to an individual’s right to access his or her own medical records, as well as requirements relating to the use and content of consent or authorization forms. Also, because of employers’ economic interests in paying medical bills for injured employees and in the timing of the injured employees’ return to work, many states have enacted special confidentiality laws relating to disclosures of medical information in workers’ compensation claims. These laws limit employer access to such information. Many states have also passed laws that regulate the notification process to individuals when a security breach involving an individual’s personally identifiable information, such as social security number or date of birth, occurs. To the extent that state law affords greater protection of an individual’s health information than that provided under HIPAA, the state law will control.
 
We anticipate that there will be more regulation in the areas of privacy and confidentiality, particularly with respect to medical information. We regularly monitor the privacy and confidentiality requirements that relate to our business, and we anticipate that we may have to modify our operating practices and procedures in order to comply with these requirements.
 
Environmental
 
Although we currently contract with independent contractor medical providers, who are responsible for compliance with environmental laws, our operations may be subject to various federal, state, and local laws and regulations relating to the protection of human health and the environment, including those governing the management and disposal of infectious medical waste and other waste generated and the cleanup of contamination. If an environmental regulatory agency finds any of our facilities to be in violation of environmental laws, penalties and fines may be imposed for each day of violation and the affected facility could be forced to cease operations. The responsible party could also incur other significant costs, such as cleanup costs or claims by third parties, as a result of violations of, or liabilities under, environmental laws. Although we believe that our independent medical providers’ environmental practices, including waste handling and disposal practices, will be in material compliance with applicable laws, future claims or violations, or changes in environmental laws, could have an adverse effect on our business.
 
Competition
 
The market to provide healthcare pain diagnostic services is highly competitive and fragmented.  Our primary competitors are typically independent physicians, chiropractors, hospital emergency departments, and hospital-owned or hospital-affiliated medical facilities.  As managed care techniques continue to gain acceptance in the automobile accident marketplace, we believe that our competitors will increasingly consist of nationally-focused care management service companies providing their service to insurance companies and litigation defense experts.
 
 
Because the barriers to entry in our geographic markets have a low threshold and our diagnostic centers’ patients have the flexibility to move easily to new healthcare service providers, the addition of new competitors may occur relatively quickly.  Some of our affiliated physicians and other healthcare providers may elect to compete with us by offering their own products and services to patients.  If competition within our industry intensifies, our ability to assist patients or associated physicians, or maintain or increase our revenue growth, price flexibility and control over medical costs, trends, and marketing expenses, may be compromised.
 
In order to mitigate the effects of intensifying competition, we will make careful study of population trends and demographic growth patterns in determining the best locations to compete.  Moreover, we will endeavor to have all of our physicians under strict contract to avoid unnecessary attrition and loss of skilled personnel.
 
Research and Development

During the years ended December 31, 2015 and 2014, we spent $261,776 and $50,169, respectively in design and testing fees for our Quad Video Halo system.  These costs do not reflect the marketing and other associated costs with the development of the Quad Video Halo system.
 
Employees
 
We currently have five full time employees, including two officers and three other employees at our corporate headquarters.  We expect to continue to use independent contractors, consultants, attorneys and accountants as necessary, to complement services rendered by our employees.
 
ITEM 1A.  RISK FACTORS

Our future operating results are highly uncertain. Before deciding to invest in us or to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this annual report. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment.

Risks Related to Our Company

Our limited history in the healthcare services business makes an evaluation of us and our future extremely difficult, and profits are not assured.

We have a limited operating history, having begun development of our healthcare services business at the end of December 2008 and having opened our first spine injury diagnostic center in August 2009.  There can be no assurance that we will be profitable in the future or that investors’ investments in us will be returned to them in full, or at all, over time.  In view of our limited history in the healthcare industry, an investor must consider our business and prospects in light of the risks, expenses and difficulties frequently encountered by companies in their early stages.  There can be no assurance that we will be successful in undertaking any or all of the activities required for successful commercial operations.  Our failure to successfully undertake such activities could materially and adversely affect our business, prospects, financial condition and results of operations.  There can be no assurance that our business operations will generate significant revenues, that we will generate additional positive cash flow from our operations or that we will be able to achieve or sustain profitability in any future period.  Additionally, we have expended a great deal of resources developing, testing, and marketing the Quad Video Halo, but we have no assurances that the market will accept this product.

Our auditor has indicated that certain factors raise substantial doubt about our ability to continue as a going concern, and our continued existence is dependent upon our ability to successfully execute our business plan.

The financial statements included with this report are presented under the assumption that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. Our auditor has indicated that certain factors raise substantial doubt about our ability to continue as a going concern, including our net loss of $1,057,604 for the year ended December 31, 2015 and our accumulated deficit of $16,394,695 at year-end.  We are not generating sufficient operating cash flows to support continuing operations.  Our ability to continue as a going concern is dependent upon our ability to successfully execute our business plan, obtain additional financing and achieve a level of cash flows from operations adequate to support our cost structure. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
We are dependent on key personnel.

We depend to a large extent on the services of certain key management personnel, including our executive officers and other key consultants, the loss of any of which could have a material adverse effect on our operations.  Specifically, we rely on William Donovan, M.D., Director, Chief Executive Officer and President, to maintain our strategic direction.  Although Dr. Donovan serves under an employment agreement, there is no assurance that he will continue to be employed by us.  We do currently maintain $1,000,000 in key-man life insurance with respect to Dr. Donovan.

We may experience potential fluctuations in results of operations.
 
Our future revenues may be affected by a variety of factors, many of which are outside our control, including the success of implementing our healthcare management services business and trends and changes in the healthcare industry. We have no control on how long it takes cases to settle, making it difficult to forecast cash flow.  As a result of our limited operating history and the emerging nature of our business plan, it is difficult to forecast revenues or earnings accurately, which may fluctuate significantly from quarter to quarter.
 
We had a history of significant operating losses prior to the opening of our first diagnostic center in August, 2009.
 
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 $1,389,997 to $16,394,695 as of December 31, 2015. 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.
 
If we are unable to manage growth, we may be unable to achieve our expansion strategy.
 
The success of our business strategy depends in part on our ability to expand our operations in the future. Our growth has placed, and will continue to place, increased demands on our management, our operational and financial information systems, and other resources. Further expansion of our operations will require substantial financial resources and management attention. To accommodate our past and anticipated future growth, and to compete effectively, we will need to continue to improve our management, to implement our operational and financial information systems, and to expand, train, manage, and motivate our workforce. Our personnel, systems, procedures, or controls may not be adequate to support our operations in the future. Further, focusing our financial resources and diverting management’s attention to the expansion of our operations may negatively impact our financial results. Any failure to improve our management, to implement our operational and financial information systems, or to expand, train, manage, or motivate our workforce may reduce or prevent our growth.
 
We may incur significant expenses as a result of being a publically traded company, which may negatively impact our financial performance.
 
We may incur significant legal, accounting and other expenses as a result of being a publically traded company. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the SEC, has required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in the future, which would negatively impact our financial performance and could have a material adverse effect on our results of operations and financial condition.
 
Our internal control over financial reporting may not be considered effective, which could result in a loss of investor confidence in our financial reports and in turn could have an adverse effect on our stock price.
 
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, with our annual reports, we are required to furnish a report by our management on our internal control over financial reporting. Such report will contain, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of the year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management.  If we are unable to assert that our internal control is effective, investors could be adversely affected.
 
 
Our healthcare services business model is unproven.

Our healthcare services business model depends upon our ability to implement and successfully execute our business and marketing strategy, which includes our ability to find and form relationships with spine surgeons, orthopedic surgeons and other healthcare providers, from whom we may obtain referrals for injured patients.  If we are unable to find and form relationships with such healthcare providers, our business will likely fail.
 
If competition increases, our growth and profits, if any, may decline.
 
The market to provide healthcare services and solutions is highly fragmented and competitive. Currently, we believe the management solutions that we can provide to spine surgeons, orthopedic surgeons and other healthcare providers for necessary, reasonable and appropriate treatment for musculo-skeletal spine injuries resulting from automobile and work-related accidents, are somewhat unique in most geographic markets.  However, if we achieve our goal of becoming a leader in providing care management services to spine surgeons, orthopedic surgeons and other healthcare providers to facilitate proper treatment of their injured clients, we believe that competition for our business model will substantially increase.  Further, there are many alternatives to the care management services we can provide, that are currently available to surgeons and their injured patients. We can make no assurances that we will be able to effectively compete with the various care management services that are currently available or may become available in the future.
 
Because the barriers to entry in our geographic markets are not substantial and customers have the flexibility to move easily to new care management service providers, we believe that the addition of new competitors may occur relatively quickly. Some physicians and other healthcare providers may elect to compete with us by offering their own products and services to their clients and patients. In addition, significant merger and acquisition activity has occurred in our industry as well as in industries that will supply products to us, such as the hospital, physician, pharmaceutical, medical device, and health information systems industries. If competition within our industry intensifies, our ability to affiliate with new doctors and/or obtain physician referrals, or maintain or increase our revenue growth, pricing flexibility, control over medical cost trends, and marketing expenses may be compromised.
 
Future acquisitions and joint ventures may use significant resources or be unsuccessful.
 
As part of our business strategy, we may pursue acquisitions of companies providing services that are similar or complementary to those that we provide or plan to provide in our business, and we may enter into joint ventures to provide services at certain facilities. These acquisitions and joint venture activities may involve:
 
 
significant cash expenditures;
 
additional debt incurrence;
 
additional operating losses;
 
increases in intangible assets relating to goodwill of acquired companies; and
 
significant acquisition and joint venture related expenses,
 
any of which could have a material adverse effect on our financial condition and results of operations.
 
Additionally, a strategy of growth by acquisitions and joint ventures involves numerous risks, including:
 
 
difficulties integrating acquired personnel and harmonizing distinct corporate cultures into our current businesses;
 
diversion of our management’s time from existing operations; and
 
potential losses of key employees or customers of acquired companies.
 
We cannot assure you that we will be able to identify suitable candidates or negotiate and consummate suitable acquisitions or joint ventures. Also, we cannot assure you that we will succeed in obtaining financing for any future acquisitions or joint ventures at a reasonable cost, or that such financing will not contain restrictive covenants that limit our operating flexibility or other unfavorable terms. Even if we are successful in consummating acquisitions or joint ventures, we may not succeed in developing and achieving satisfactory operating results for the acquired businesses or integrating them into our existing operations.
 
If lawsuits are brought against us and are successful, we may incur significant liabilities.
 
Although we are not a medical service provider, spine surgeons, orthopedic surgeons and other healthcare providers with whom we form relationships are involved in the delivery of healthcare and related services to the public. In providing these services, the physicians and other licensed providers in our affiliated professional groups are exposed to the risk of professional liability claims. Further, plaintiffs have proposed expanded theories of liability against managed care companies as well as against employers who use managed care in many cases that, if established and successful, could expose us to liability from such claims, and could adversely affect our operations.
 
 
Regulatory authorities or other parties may assert that, in conducting our business, we may be engaged in unlawful fee splitting or the corporate practice of medicine.
 
The laws of many states prohibit physicians from splitting professional fees with non-physicians and prohibit non-physician entities, such as us, from practicing medicine, self-referral and from employing physicians to practice medicine. The laws in most states regarding the corporate practice of medicine have been subjected to limited judicial and regulatory interpretation. We believe our current and planned activities do not constitute fee-splitting or the unlawful corporate practice of medicine as contemplated by these laws. There can be no assurance, however, that future interpretations of such laws will not require structural and organizational modification of our existing relationships with the practices. In addition, statutes in some states in which we do not currently operate could require us to modify our affiliation structure. If a court, payer or regulatory body determines that we have violated these laws, we could be subject to civil or criminal penalties, our contracts could be found legally invalid and unenforceable (in whole or in part), or we could be required to restructure our arrangements with our contracted physicians and other licensed providers.
 
We operate in an industry that is subject to extensive federal, state, and local regulation, and changes in law and regulatory interpretations could reduce our revenue and profitability.
 
The healthcare industry is subject to extensive federal, state, and local laws, rules, and regulations relating to, among other things:
 
 
payment for services;
 
conduct of operations, including fraud and abuse, anti-kickback, physician self-referral, and false claims prohibitions;
 
operation of provider networks and provision of case management services;
 
protection of patient information;
 
business, facility, and professional licensure, including surveys, certification, and recertification requirements;
 
corporate practice of medicine and fee splitting prohibitions;
 
ERISA health benefit plans; and
 
medical waste disposal and environmental protection.
 
In recent years, both federal and state government agencies have increased civil and criminal enforcement efforts relating to the healthcare industry. This heightened enforcement activity increases our potential exposure to damaging lawsuits, investigations, and other enforcement actions. Any such action could distract our management and adversely affect our business reputation and profitability.
 
In the future, different interpretations or enforcement of laws, rules, and regulations governing the healthcare industry could subject our current business practices to allegations of impropriety, self-referral or illegality or could require us to make changes in our facilities, equipment, personnel, services, and capital expenditure programs, increase our operating expenses, and distract our management. If we fail to comply with these extensive laws and government regulations, we could suffer civil and criminal penalties, or be required to make significant changes to our operations. In addition, we could be forced to expend considerable resources to respond to an investigation or other enforcement action under these laws or regulations.
 
Changes in laws, rules, and regulations, including those governing the corporate practice of medicine, fee splitting, workers’ compensation, and insurance, may affect our ability to expand our operations into other states and, therefore, may reduce our profitability.
 
State laws, rules, and regulations relating to our business vary widely from state to state, and courts and regulatory agencies have seldom interpreted them in a way that provides guidance with respect to our business operations. Changes in these laws, rules, and regulations may adversely affect our profitability. In addition, the application of these laws, rules, and regulations may affect our ability to expand our operations into new markets.
 
Most states limit the practice of medicine to licensed individuals or professional organizations comprised of licensed individuals. Many states also limit the scope of business relationships between business entities like ours and licensed professionals and professional organizations, particularly with respect to fee splitting between a licensed professional or professional organization and an unlicensed person or entity. We operate our business by maintaining long-term administrative and management agreements with affiliated professional doctors. Through these agreements, we perform only non-medical administrative services. All control over medical matters is retained by the affiliated physicians or professional groups. Although we believe that our arrangements with physicians and the other affiliated licensed providers comply with applicable laws, regulatory authorities or other third parties may assert that we are engaged in the corporate practice of medicine or that our arrangements with the physicians or affiliated professional groups constitute fee-splitting or self-referral, or new laws may be introduced that would render our arrangements illegal. If this were to occur, we and/or the affiliated professional groups could be subject to civil or criminal penalties and/or we could be required to restructure these arrangements, all of which may result in significant cost to us and affect our profitability.
 
 
Confidentiality laws and regulations may increase the cost of our business, limit our service offerings, or create a risk of liability.
 
The confidentiality of individually identifiable health information, and the conditions under which such information may be maintained, that is included in our databases, used internally, or disclosed to third parties are subject to substantial governmental regulation. Legislation governing the possession, use, and dissemination of such protected health information and other personally identifiable information has been proposed or adopted at both the federal and state levels. Such laws and regulations may require us to implement new security measures. These measures may require substantial expenditures of resources or may limit our ability to offer some of our products or services, thereby negatively impacting the business opportunities available to us. If we are found to be responsible for any violation of applicable laws, regulations, or duties related to the use, privacy, or security of protected health information or other individually identifiable information, we could be subject to civil or criminal liability.
 
Risks Related to Our Common Stock

We may issue shares of common stock in the future, which could cause further dilution to all stockholders.

We may seek to raise equity or equity-related capital in the future.  Any issuance of shares of our common stock will dilute the percentage ownership interest of all stockholders and may further dilute the book value per share of our common stock.

We do not anticipate paying any cash dividends.

We have never paid cash dividends on our common stock and do not anticipate doing so for the foreseeable future.  The payment of dividends, if any, is within the discretion of our board of directors and is dependent on our revenues and earnings, if any, capital requirements, general financial condition, and other relevant factors.  We presently intend to retain all earnings, if any, to implement our business strategy.

The market for our stock is limited and our stock price may be volatile.
 
There is a limited market for our common stock and a stockholder may not be able to liquidate his or her shares regardless of the necessity of doing so.  The prices of our shares are highly volatile. This could have an adverse effect on developing and sustaining the market for our securities.  We cannot assure you that the market price of our common stock will not fluctuate or decline significantly.  In addition, the stock markets in general can experience considerable price and volume fluctuations.

The trading price of our common stock entails additional regulatory requirements, which may negatively affect such trading price.

Generally, the Securities and Exchange Commission defines a “penny stock” as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share.  The trading price of our common stock is below $5.00 per share.  As a result of this price level, our common stock is considered a penny stock and trading in our common stock is subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934.  These rules require additional disclosure by broker-dealers in connection with any trades generally involving penny stocks subject to certain exceptions.  Such rules require the delivery, before any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith, and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions).  For these types of transactions, the broker-dealer must determine the suitability of the penny stock for the purchaser and receive the purchaser's written consent to the transaction before sale.  The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock.  As a consequence, the market liquidity of our common stock could be severely affected or limited by these regulatory requirements.
 
ITEM 1B.  UNRESOLVED STAFF COMMENTS

Not Applicable.
 
 
ITEM 2.  PROPERTIES

We currently maintain our executive offices at 5225 Katy Freeway, Suite 600, Houston, Texas 77007.  This office space encompasses approximately 1,948 square feet and was provided to us in 2014 at $6,000 per month by Northshore Orthopedics, Assoc. (“NSO”), a company owned by William Donovan, M.D., our Director and Chief Executive Officer. The rent includes the use of the telephone system, computer server, and copy machines.  

In September 2014, we leased a 2,400 square foot warehouse/office in Clear Lake Shores, Texas where we assemble, develop, test, and market the Quad Video Halo.  The lease is month to month with a monthly rent of $1,950.

ITEM 3.  LEGAL PROCEEDINGS

None.
 
ITEM 4.  MINE SAFETY DISCLOSURES
 
Not Applicable.
 
 
 
 
PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
Our common stock is quoted on the Over-the-Counter Bulletin Board under the symbol, “SPIN.”  Trading in our common stock in the over-the-counter market has been limited and sporadic and the quotations set forth below are not necessarily indicative of actual market conditions.  The high and low sales prices for the common stock for each quarter of the fiscal years ended December 31, 2015 and 2014, according to Nasdaq.com, were as follows:
 
Quarter
Ended
 
High
   
Low
 
3/31/15
 
$
0.40
   
$
0.20
 
6/30/15
 
$
0.58
   
$
0.21
 
9/30/15
 
$
0.59
   
$
0.35
 
12/31/15
 
$
0.62
   
$
0.32
 
3/31/14
 
$
0.54
   
$
0.33
 
6/30/14
 
$
0.45
   
$
0.16
 
9/30/14
 
$
0.70
   
$
0.28
 
12/31/14
 
$
0.65
   
$
0.12
 

Record Holders

As of March 23, 2016, there were approximately 72 stockholders of record of our common stock, and we estimate that there were approximately 654 additional beneficial stockholders who hold their shares in “street name” through a brokerage firm or other institution. As of March 23, 2016, we have a total of 19,880,882 shares of common stock issued and outstanding.  The holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.

Dividends

We have not declared any cash dividends since inception and do not anticipate paying any dividends in the foreseeable future. The payment of dividends is within the discretion of the board of directors and will depend on our earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit our ability to pay dividends on our common stock other than those generally imposed by applicable state law.

Equity Compensation Plan Information

As of December 31, 2015, we do not have any compensation plans under which our equity securities are authorized for issuance.

Sales of Unregistered Securities

All equity securities that we have sold during the period covered by this report that were not registered under the Securities Act have previously been disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K except for the following:

In November 2015, we issued 25,000 restricted shares of common stock to a new board member, Jeffrey Cronk, D.C., as director compensation.  The securities were issued under the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 and the rules and regulations promulgated thereunder.  The issuance of securities did not involve a “public offering” based upon the following factors: (i) the issuance of securities was an isolated private transaction; (ii) a limited number of securities were issued to a single purchaser; (iii) there were no public solicitations; (iv) the investment intent of the purchaser; and (v) the restriction on transferability of the securities issued.

In November 2015 we issued 50,000 warrants to an advisor as consideration for services.  The warrants have a term of one year and an exercise price of $0.50 per share.  The securities were issued under the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 and the rules and regulations promulgated thereunder.  The issuance of securities did not involve a “public offering” based upon the following factors: (i) the issuance of securities was an isolated private transaction; (ii) a limited number of securities were issued to a single purchaser; (iii) there were no public solicitations; (iv) the investment intent of the purchaser; and (v) the restriction on transferability of the securities issued.
 

ITEM 6.  SELECTED FINANCIAL DATA

Not Applicable.
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the audited financial statements and the related notes to the financial statements included in this Form 10-K.

Management Overview

At the end of 2008, we launched our new business concept of medical services and technology that delivers turnkey solutions to spine surgeons, orthopedic surgeons and other healthcare providers for necessary, reasonable and appropriate treatment for musculo-skeletal spine injuries. Moving forward, our main focus will be on the expansion and development of spine injury diagnostic centers across the nation.
 
Results of Operations

For the year ended December 31, 2015 versus 2014:

We recorded $2,192,181 in net revenues with $849,756 in costs of services and gross profit of $1,342,425 for the year ended December 31, 2015.  For the year ended December 31, 2014, we recorded $2,046,977 in net revenues with $980,811 in costs of services and gross profit of $1,066,166.  Revenue for 2015 was up due to a higher collection percentage experienced for our Texas affiliates.

We recognize revenue by reference to “net revenue,” which is gross amounts billed using CPT codes less account discounts that are expected to result when individual cases are ultimately settled.  A discount rate of a 48% and 52%, based on settled patient cases, was used to determine net revenue during 2015 and 2014, respectively. Accordingly, we had gross revenues of $4,384,362 with net revenues of $2,192,181 for the year ended December 31, 2015, versus gross revenues of $4,239,164 with net revenues of $2,046,977 for the year ended December 31, 2014.

Expenses

For the year ended December 31, 2015 versus 2014:

Operating, general and administrative expenses for the year ended December 31, 2015 were $2,085,986 as compared to $2,443,386 for the year ended December 31, 2014. The decrease in operating expenses was primarily the result of fewer legal costs, consulting costs, and marketing costs.

Bad debt expense, included in operating, general and administrative expenses, totaled $467,600 and $300,000, respectively, for the years ended December 31, 2015 and 2014. The increase in bad debt expense is primarily attributable to our decision to discontinue doing business in Florida in 2014, which has resulted in limited personnel and affiliates in the region to assist in collection efforts. We increased the allowance related to Florida to reflect collection trends in Florida.

Other income (expense) for the year ended December 31, 2015 was an expense of $52,267 as compared to expense of $265,269 for the year ended December 31, 2014. For the twelve months ended December 31, 2015, other income of $10,234 offset by expenses of $62,501.  For the year ended December 31, 2014, other income was $23,219 offset by expenses of $288,488. Included in the 2014 expenses was a non-cash charge of $56,078 for the restructuring charge of the Peter Dalrymple debt as described in Note 8. The decrease in expense 2015 versus 2014, is primarily attributable to the restructuring of our debt from high interest notes to our line of credit with Wells Fargo which bears interest at the 30 day London Interbank Offered Rate (“LIBOR”) plus 2%, resulting in an effective rate of 2.42% at December 31, 2015.
 
Net Income or Loss

For the year ended December 31, 2015 versus 2014:

Net loss for the year ended December 31, 2015 was $1,057,604 compared to net loss of $1,692,658 for the year ended December 31, 2014. Higher revenues,  lower operating expenses, coupled with reduced interest costs, and lower personnel costs to develop and market the Quad Video Halo, resulted in net loss decreasing in 2015 from 2014.
 

Liquidity and Capital Resources

For the year ended December 31, 2015 versus 2014:

During 2015, cash used in operating activities was $429,297 as compared to $57,285 of cash generated in 2014.  The decrease in cash generated in operations was mainly due to a decrease in collections from our spine injury diagnostic centers, coupled with our cash requirements for our Odessa affiliate. Clinics do not start collecting any funds until settlements are reached in lawsuits, which can be over twelve months. Our settlement collections totaled $2,193,094 in 2015 compared to $2,909,184 in 2014.  Settlement collections for the three months ended December 31, 2015 and 2014 were $523,264 and $1,128,821, respectively.

During the year ended December 31, 2015, we purchased Quad Video Halo equipment totaling $50,108 versus a purchase of similar equipment of $51,083 in 2014, resulting in cash used in investing activities.

Cash flows generated by financing activities totaled $295,000 for the year ended December 31, 2015, consisting of a payment of long- term debt of $350,000, and $645,000 of draws on our line of credit. For the year ended December 31, 2014, cash flows used in financing activities totaled $335,699, consisting of a payment of long- term debt of $700,000, draws of $500,000 on the line of credit and repayments on related party notes payable of $135,699. 

We have a debt of $500,000 that is due in August 2016 to our director Peter Dalrymple.  We anticipate using the line of credit to cover this payment as we continue to seek new business or we will attempt to restructure the note.
 
Capital Expenditures

We purchased components for a Quad Video Halo system and other assets for the warehouse at a cost of $50,108 in the year ended December 31, 2015.  During the year ended December 31, 2014, we purchased a Quad Video camera system at a cost of $51,083.  

Impact of Inflation

Management believes that inflation may have a negligible effect on future operations. Management also believes that it may be able to offset inflationary increases in the cost of sales by increasing sales and improving operating efficiencies.

Income Tax Expense (Benefit)

We have experienced losses and as a result have net operating loss carryforwards available to offset future taxable income.

Critical Accounting Policies

In Note 3 to the audited consolidated financial statements for the years ended December 31, 2015 and 2014 included in this Form 10-K, we discuss those accounting policies that are considered to be significant in determining the results of operations and our financial position. The following critical accounting policies and estimates are important in the preparation of our financial statements:

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires our management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an ongoing basis, we evaluate estimates. We base our estimates on historical experience and other facts and circumstances that we believe to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions.
 
 
Revenue Recognition

We conform to the guidance provided by SEC Staff Accounting Bulletin, Topic 13, “Revenue Recognition.”  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.
 
Accounting Standards Updates

In Note 3 to the audited consolidated financial statements for the years ended December 31, 2015 and 2014 included in this Form 10-K, we discuss those recent accounting pronouncements that may be considered to be significant in determining the results of operations and our financial position.

Going Concern

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 $1,389,997 to $16,394,695 as of December 31, 2015. During the year ended December 31, 2015, we realized net revenue of $2,192,181 and a net loss of $1,057,604. Successful business operations and our transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue adequate to support our cost structure. Considering the nature of the 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 December 31, 2016. There can be no assurances that there will be adequate financing available to us. The accompanying financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
 
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our financial statements for the fiscal years ended December 31, 2015 and 2014 are attached hereto.
 
 
TABLE OF CONTENTS
 


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Stockholders and Board of Directors of Spine Injury Solutions, Inc.:

We have audited the accompanying consolidated balance sheets of Spine Injury Solutions, Inc. (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Spine Injury Solutions, Inc. as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements referred to above have been prepared assuming that the Company will continue as a going concern.  As more fully described in Note 2, the Company has an accumulated deficit of $16,394,695 and a net loss of $1,057,604 as of and for the year ended December 31, 2015.  Additionally, the Company is not generating sufficient cash flows to meet its regular working capital requirements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans as to these matters are also described in Note 2.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We were not engaged to examine management's assertion about the effectiveness of Spine Injury Solutions, Inc.'s internal control over financial reporting as of December 31, 2015 and 2014 and, accordingly, we do not express an opinion thereon.
 
 
/s/ Ham, Langston & Brezina, LLP
 
Houston, Texas 
March 29, 2016
 
 
SPINE INJURY SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2015 and 2014
 
ASSETS
 
2015
   
2014
 
             
Current assets:
           
Cash
 
$
173,647
   
$
358,052
 
Accounts receivable, net
   
1,301,124
     
1,288,315
 
Prepaid expenses
   
159,250
     
336,996
 
Inventories
   
75,460
     
15,393
 
                 
Total current assets
   
1,709,481
     
1,998,756
 
                 
Accounts receivable, net of allowance for doubtful accounts
of $503,477 and $342,084, respectively
   
3,399,896
     
3,864,944
 
Property and equipment, net
   
78,937
     
43,944
 
Intangible assets and goodwill, net
   
170,200
     
179,200
 
                 
Total assets
 
$
5,358,514
   
$
6,086,844
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
Accounts payable and accrued liabilities
 
$
100,457
   
$
129,995
 
Due to related parties
   
29,400
     
-
 
Current portion of long-term debt, net
   
500,000
     
350,000
 
                 
Total current liabilities
   
629,857
     
479,995
 
                 
                 
 Line of credit
   
1,145,000
     
500,000
 
 Long-term debt, including
convertible note payable and secured note payable, net
   
50,000
     
550,000
 
                 
Total liabilities
   
1,824,857
     
1,529,995
 
                 
Commitments and contingencies
               
                 
Stockholders' equity:
               
Common stock: $0.001 par value, 50,000,000 shares authorized;
19,780,882 and 19,340,882 shares issued and outstanding
at December 31, 2015 and 2014, respectively
   
19,781
     
19,341
 
Additional paid-in capital
   
19,908,571
     
19,874,599
 
Accumulated deficit
   
(16,394,695
)
   
(15,337,091
)
                 
Total stockholders’ equity
   
3,533,657
     
4,556,849
 
                 
Total liabilities and stockholders' equity
 
$
5,358,514
   
$
6,086,844
 
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
SPINE INJURY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2015 and 2014
 
   
2015
   
2014
 
             
Net revenue
 
$
2,192,181
   
$
2,046,977
 
                 
Cost of providing services, including amounts billed by a related
party of $612,337 and $373,914 during the years ended
December 31, 2015 and 2014, respectively
   
849,756
     
980,811
 
                 
Gross profit
   
1,342,425
     
1,066,166
 
                 
                 
Research and Development
   
261,776
     
50,169
 
Operating, general and administrative expenses
   
2,085,986
     
2,443,386
 
                 
Income from operations
   
(1,005,337
)
   
(1,427,389
)
                 
Other income and (expense):
               
Other income
   
10,234
     
23,219
 
Loss from debt extinguishment
   
-
     
(56,078
Interest expense
   
 (62,501
)
   
(232,410
)
                 
Total other income and (expense)
   
(52,267
)
   
(265,269
)
                 
Net loss
 
$
(1,057,604
)
 
$
(1,692,658
)
                 
Net loss per common share:
               
Basic
 
$
(0.05
)
 
$
(0.09
)
Diluted
 
$
(0.05
)
 
$
(0.09
)
                 
Shares used in loss per common share:
               
Basic
   
19,632,832
     
18,507,936
 
Diluted
   
19,632,832
     
18,507,936
 
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
SPINE INJURY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Years Ended December 31, 2015 and 2014
 
 
Common Stock
   
Additional
   
Accumulated
   
Total
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Deficit
   
Equity
 
Balances, December 31, 2013
   
18,715,882
   
 $
18,716
   
$
19,212,669
   
$
(13,644,433
)
 
 $
5,586,952
 
                                         
Issuance of common stock options for compensation of officers
   
-
     
-
     
171,110
     
-
     
171,110
 
Issuance of common stock for debt restructuring with an officer
   
400,000
     
400
     
299,600
     
-
     
300,000
 
Issuance of common stock for consulting services
   
225,000
     
225
     
172,775
     
-
     
173,000
 
Detachable warrants issued with convertible debt
   
-
     
-
     
18,445
             
18,445
 
Net loss
   
-
     
-
     
-
     
(1,692,658
)
   
 (1,692,658
)
                                         
Balances, December 31, 2014
   
19,340,882
     
19,341
     
19,874,599
     
(15,337,091
)
   
4,556,849
 
                                         
Issuance of common stock options for compensation of officers
   
-
     
-
     
12,012
     
-
     
12,012
 
Issuance of common stock for debt restructuring with an officer
   
300,000
     
300
     
        (300
)
   
-
     
-
 
Issuance of common stock for consulting services
   
115,000
     
115
     
10,285
     
-
     
10,400
 
Issuance of common stock to directors
   
       25,000
     
            25
     
11,975
             
                       12,000
 
Net loss
   
-
     
-
     
-
     
(1,057,604
)
   
    (1,057,604
)
                                         
Balances, December 31, 2015
   
19,780,882
   
$
19,781
   
$
19,908,571
   
$
(16,394,695
)
 
$
3,533,657
 
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
SPINE INJURY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2015 and 2014
 
   
2015
   
2014
 
Cash flows from operating activities:
           
Net loss
 
$
(1,057,604
)
 
$
(1,692,658
)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
               
Provision for bad debts
   
467,600
     
300,000
 
Loss from debt extinguishment
   
-
     
56,078
 
Interest expense related to warrant amortization
   
-
     
18,445
 
Accretion of debt discount on long term debt
   
-
     
48,199
 
Stock based compensation
   
190,245
     
351,610
 
Depreciation and amortization expense
   
24,115
     
40,909
 
Changes in operating assets and liabilities:
               
Accounts receivable, net
   
(15,361
)
   
853,257
 
Prepaid expenses
   
21,913
     
71,638
 
Inventories
   
(60,067
)
   
  (15,213
)
Due to related party
   
29,400
     
(28,594
)
Accounts payable and accrued liabilities
   
(29,538
)
   
53,614
 
                 
Net cash (used in) provided by operating activities
   
(429,297
)
   
57,285
 
                 
Cash flows from investing activities:
               
Purchase of equipment
   
(50,108
)
   
(51,083
)
                 
Net cash used in investing activities
   
(50,108
)
   
(51,083
)
                 
Cash flows from financing activities:
               
Repayments on long-term debt
   
(350,000
)
   
(700,000
)
Proceeds from draws on line of credit
   
 645,000
     
500,000
 
Repayments on related party payable
   
-
     
(135,699
)
                 
Net cash provided by (used in) financing activities
   
295,000
     
(335,699
)
                 
Net decrease  in cash and cash equivalents
   
(184,405
)
   
(329,497
)
                 
Cash and cash equivalents at beginning of period
   
358,052
     
687,549
 
                 
Cash and cash equivalents at end of period
 
$
173,647
   
$
358,052
 
                 
Supplementary disclosure of cash flow information:
               
Interest paid
 
$
61,335
   
$
164,835
 
Taxes paid
 
$
-
   
$
-
 
                 
Supplementary disclosure of non-cash investing and financing activities:
               
Common stock issued to restructure debt
 
$
-
   
$
180,000
 
Common stock issued for prepaid services
 
$
-
   
$
112,500
 
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
NOTE 1.  DESCRIPTION OF BUSINESS

Spine Injury Solutions, Inc., (the “Company,” “we” or “us”), was incorporated in Delaware on March 4, 1998 to acquire interests in various business operations and assist in their development.

At the end of 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. We currently have three affiliated spine injury diagnostic centers within the United States, which are located in Houston, Texas; Odessa, Texas; Tyler, Texas; and San Antonio, Texas.

We are a medical services and technology 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 that provide necessary and appropriate treatment of musculo-skeletal spine injuries resulting from automobile and work-related accidents. Our  management services help reduce the financial burden on healthcare providers that provide patients with early-stage diagnostic testing and non-invasive surgical care, preventing many patients from being unnecessarily delayed or inhibited from obtaining needed treatment.

Through our management system, we affiliate with spine surgeons, orthopedic surgeons and other healthcare providers who diagnose and treat patients with musculo-skeletal spine injuries. We assist the centers that provide the spine diagnostic injections and treatment and the doctors are paid a fixed rate for the medical procedures they performed. After a patient is billed for the procedures performed, we take control of the patients’ unpaid bill and oversee collection. In most instances, the patient is a plaintiff in an accident case, where the patient is represented by an attorney. Typically, the defendant (and/or the insurance company of the defendant) in the accident case pays the patient’s bill upon settlement or final judgment of the accident case. The payment to us is made through the attorney of the patient. In most cases, we must agree to the settlement price and the patient must sign off on the settlement. Once we are paid, the patient’s attorney can receive payment for his or her legal fee.

The clinic facilities where the spine injury diagnostic centers operate are owned or leased by third parties. We have no ownership interest in these clinic facilities and have no responsibilities towards building or operating the clinic facilities.
 
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 $1,389,997 to $16,394,695 as of December 31, 2015.  During the year ended December 31, 2015, we realized net revenue of $2,192,181 and a net loss of $1,057,604. Successful business operations and our transition to sustained 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 December 31, 2016. 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.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Spine Injury Solutions and its wholly owned subsidiary, Quad Video Halo, Inc. All material intercompany 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 (“U.S. GAAP”).
 
 
Use of Estimates
 
The preparation of 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 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 Securities and Exchange Commission’s (“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 6).
 
Fair Value of Financial Instruments
 
Cash, accounts receivable, accounts payable and accrued liabilities, and notes payable as reflected in the 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 the 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.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method, whereas market is based on the net realizable value. All inventories at December 31, 2015 and 2014 are classified as finished-goods and consist of our Quad Video Halo.

Property and Equipment

Property and equipment are carried at cost.  When retired or otherwise disposed of, the related carrying cost and accumulated depreciation are removed from the respective accounts, and the net difference, less any amount realized from the disposition, is recorded in operations.  Maintenance and repairs are charged to operating expenses as incurred. Costs of significant improvements and renewals are capitalized.

Property and equipment consists of computers and equipment and are depreciated over their estimated useful lives of three to five years, using the straight-line method.
 
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.  At December 31, 2015 and 2014, 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 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 December 31, 2015 and 2014, 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 $495,877 and $342,084, at December 31, 2015 and 2014, respectively.
  
Stock Based Compensation
 
We account for the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, 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 consolidated statements of operations.  We use the Black-Scholes Option Pricing Model to determine the fair-value of stock-based awards.  During the years ended December 31, 2015 and 2014, we recognized compensation expense related to our stock options of $12,012 and $171,110, respectively. We also recognized compensation expense for issuances of our common stock in exchange for services of $178,233 and $180,500 during the years ended December 31, 2015 and 2014, 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 have recently adopted a policy of recording estimated interest and penalties as income tax expense and tax credits as a reduction in income tax expense. As of and for the years ended December 31, 2015 and 2014, we recognized no estimated interest or penalties as income tax expense.
 
We have not made any provisions for federal and state income tax liabilities or interest and penalties that may result from the uncertainty that arose as a result of filing our U.S. federal and applicable state tax returns in 2010 related to tax years 2004 to 2009. The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdictions include the United States and various states.
 
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.
 
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 years ended December 31, 2015 and 2014, 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 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 Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.   Early adoption is not permitted.  We are currently reviewing the effect of ASU No. 2014-09 on our revenue recognition.  In July 2015, the FASB announced that public companies will apply the new standards effective for annual reporting periods after December 15, 2017 (January 1, 2018 for us). 

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 non-vesting 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 Company’s consolidated financial position, results of operations or disclosures.

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. The amendments in ASU 2014-15 are intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosure. Under U.S. GAAP, financial statements are prepared under the presumption that the reporting entity will continue to operate as a going concern, except in limited circumstances. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, U.S. GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern or to provide related footnote disclosures. This ASU provides guidance to an entity’s management with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by entities today in the financial statement footnotes. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. The adoption of ASU 2014-15 is not expected to have a significant impact on the Company’s consolidated financial position, results of operations or disclosures.
 

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. This ASU eliminates from U.S. GAAP the concept of extraordinary items. Subtopic 225-20, Income statement – Extraordinary and Unusual Items, requires that an entity separately classify, present and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. ASU No. 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments of ASU No. 2015-01 can be applied prospectively or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The adoption of ASU No. 2015-01 is not expected to have a significant impact on the Company’s consolidated financial position, results of operations or disclosures.

In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in ASU 2015-03 are intended to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. ASU No. 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of ASU 2015-03 is not expected to have a significant impact on the Company’s consolidated financial position, results of operations or disclosures.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which is intended to converge U.S. GAAP on this topic with IFRS. ASU No. 2015-11 focuses on the premeasurement of inventory measured using any method other than LIFO, for example, average cost. Inventory within the scope of ASU No. 2015-11 is required to be measured at the lower of cost and net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. That loss may be required, for example, due to damage, physical deterioration, obsolescence, changes in price levels, or other causes. For public business entities, the amendments in ASU No. 2015-11 are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Management is currently evaluating the future impact of ASU No. 2015-11 on the Company’s consolidated financial position, results of operations and disclosures.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The new guidance will be effective for fiscal years beginning after December 15, 2017 and early adoption is permitted.  The adoption of ASU 2015-17 is not expected to have a significant impact on the Company’s consolidated financial position, results of operations or disclosures.

NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 2015 and 2014:

   
2015
   
2014
 
             
Computers and equipment
 
$
96,398
   
$
46,290
 
Less: accumulated depreciation
   
(17,461
)
   
(2,346
   
$
78,937
   
$
43,944
 

Depreciation expense totaling $15,115 and $22,909, respectively, was charged to operating, general and administrative expenses during the years ended December 31, 2015 and 2014.

NOTE 5.  INTANGIBLE ASSETS AND GOODWILL

Intangible assets consist of non-compete agreements with a cost of $54,000 that expired in 2015. During both the years ended December 31, 2015 and 2014, we recorded amortization expense of $9,000 and $18,000, respectively, related to the non-compete agreements resulting in a remaining balance of $0 and $9,000, respectively. At December 31, 2015 and 2014, goodwill totaled $170,200.
 
 
NOTE 6.  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 assist certain spine injury diagnostic centers where affiliated  healthcare providers perform medical services for patients. Healthcare providers are paid a fixed rate for medical services performed. The patients are billed based on Current Procedural Terminology (“CPT”) codes for the medical procedure performed. CPT codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services. CPT codes are developed, maintained and copyrighted by the American Medical Association. The patients are billed 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 48% and 52% based on settled patient cases was used to reduce revenue to 52% and 48% of CPT code billings (“gross revenue”) during 2015 and 2014, respectively.
 
The patients who receive medical services at the diagnostic centers are typically plaintiffs in accident lawsuits. The timing of collection of receivables is dependent on the timing of a settlement or judgment of each individual case associated with these patients. The allowance for doubtful accounts was established to cover any cases where a shortfall may happen and the expected outcome is not what we had previously recorded. Historical experience, through 2014, 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 December 31, 2015 and 2014 that 25% 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 among all parties and facilitate collection upon settlement or final judgment of cases:

·
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 derived from any settlement or judgment of the patient’s case.

·
The patient's attorney issues 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 receive medical services at the affiliated diagnostic centers have already received two to four months of conservative treatment. The treating doctor then typically refers the patient to one of our affiliated healthcare providers for an evaluation of continuing symptoms.  Appropriate, reasonable, and necessary treatment programs are ordered by the affiliate doctor.
 
NOTE 7.  DUE TO RELATED PARTIES

As of December 31, 2015, we owed $29,400 to Northshore Orthopedics, Assoc. (“NSO”), a company owned by our Chief Executive Officer. Amounts owed are non-interest bearing, due on demand and do not follow any specific repayment schedule. We used the amounts received to meet our working capital requirements. No amounts were due to related parties as of December 31, 2014.
 
NOTE 8.  NOTES PAYABLE AND LONG TERM DEBT

Debentures and third party note payable

In June 2013, we renewed a $50,000, 10% debenture originally due June 30, 2013 to a maturity date of June 30, 2015 in exchange for warrants to purchase 50,000 shares at $0.45 per share. In June 2015, we repaid this debenture based on the stated contractual terms.

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.
 

The weighted-average estimated fair value of the 100,000 warrants issued was $0.21 per share using the Black-Sholes pricing model with the following assumptions:

Expected volatility
   
89.5
%
Risk-free interest rate
   
0.31
%
Expected life
 
2 years
 
Dividend yield
   
0
%
 
During the years ended December 31, 2015 and 2014, we recorded $0 and $18,445 in interest expense, respectively, related to the amortization of warrants associated with the debenture and third party note.  
 
Convertible and secured notes payable

On June 27, 2012, we issued a $500,000 convertible promissory note bearing interest at 12% per year which was to originally mature on March 27, 2014. This note was extended for one year on February 6, 2014 with the same provisions for quarterly interest payments with the principal due upon maturity as extended, March 27, 2015.  As consideration for the extension, we issued an additional 69,445 warrants to purchase our common stock for $0.43 that expire on February 6, 2015. The holder of the note also has the right to convert into common stock, at $1.50 per share, up to 50% of the principal amount after twelve months and up to 100% of the principal amount for the twelve months following the extension date. In December 2014, we paid $200,000 principal on this note with the remaining $300,000 paid in March 2015. The warrants expired unexercised during 2015.

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, with thirty-five monthly payments of interest commencing on September 29, 2013, and continuing thereafter on the 29th day of each successive month throughout the term of the promissory note.  Under the terms of the secured promissory note, the holder received a detachable warrant to purchase 333,333 shares of our common stock at the price of $1.60 per share that was to expire on August 29, 2015—see below regarding the extension of this note.  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, we entered into a Financing Agreement with Mr. Dalrymple whereby, he agreed to assist us in obtaining financing in the form of a $2,000,000 revolving line of credit (see Line of Credit below) from a commercial lender and provide a personal guaranty of the line of credit. Under the terms of the Financing Agreement, upon finalization of the line of credit with Wells Fargo Bank on September 8, 2014, we (i) extended the term of the $1,000,000 promissory note, discussed above, by one year to mature on August 29, 2016, (ii) reduced the interest rate on the promissory note to 6%, (iii) extended the expiration date on the warrants issued in connection with the promissory note by one year to an expiration date of August 29, 2016 and (iv) used $500,000 of advances under the line of credit as payment of principal and interest on the promissory note.

Upon our consideration of this change in terms of the $1,000,000 promissory note with Mr. Dalrymple, we determined the terms significantly changed.  Based on ASC-470-50-40-10, we determined the discounted cash flows using the original effective interest rate of 24% of the revised cash flows amounted to a change greater than 10% of the carrying amount of the debt. As a result, the transaction was determined to be an extinguishment of debt resulting in the Company recording a loss on debt extinguishment of $56,078 during the year ended December 31, 2014.

Additionally, as consideration for agreeing to extend the promissory note and reduce the interest rate, we issued to Mr. Dalrymple 200,000 unvested and restricted shares of common stock that vested upon finalization of the line of credit with Wells Fargo Bank on September 8, 2014

In accordance with ASC 470-20, Debt with Conversion and Other Options, the proceeds received from the convertible note issued in June 2012 were allocated between the convertible note and the detachable warrant based on the fair value of the convertible note without the warrant and the warrant.  The portion of the proceeds allocated to the warrant was recognized as additional paid-in capital and a debt discount.  The debt discount related to the warrant is accreted into interest expense through the maturity of the convertible note. The effective conversion price of the common stock did not exceed the stated conversion rate; therefore, there is no beneficial conversion feature associated with the convertible note.  Similarly, the proceeds received from the secured note were allocated between the secured note and the detachable warrant based on the fair value of the secured note without the warrant and the warrant.  The portion of the proceeds allocated to the warrant was recognized as additional paid-in capital and a debt discount.  The debt discounts related to the warrants are accreted into interest expense over the lives of the notes.
 

The weighted-average estimated fair value of the 69,445 and 333,333 warrants issued with the convertible and secured notes, respectively, was $0.62 and $0.81 per share, respectively, using the Black-Sholes pricing model with the following assumptions:

   
Convertible
   
Secured
 
Description
 
Note
   
Note
 
             
Expected volatility
   
128
%
   
133
%
Risk-free interest rate
   
0.31
%
   
0.36
%
Expected life
 
2 years
   
3 years
 
Dividend yield
   
0
%
   
0
%
 
During the year ended December 31, 2014, we recognized the remaining $11,679 of discount on the convertible note and $36,520 of discount on the secured note as interest expense. Also, during the year ended December 31, 2014, the $56,078 of unamortized discount on the secured note at the date of restructuring was recognized as a loss on extinguishment of debt, as previously discussed.  We did not recognize any interest expense related to discounts for the year ended December 31, 2015.

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 2.42% at December 31, 2015.  The line of credit matures on August 31, 2017 and is personally guaranteed by Mr. Dalrymple. As of December 31, 2015 and 2014, outstanding borrowings under the line of credit totaled $1,145,000 and $500,000, respectively.

Under the terms of the financing agreement previously discussed, we also granted 800,000 unvested and restricted shares of common stock to Mr. Dalrymple with 100,000 shares vesting upon finalization of the line of credit agreement on September 8, 2014, and the remaining shares vesting, in 100,000 share increments, quarterly so long as the revolving credit remains in effect. During the years ended December 31, 2015 and 2014, we recorded $90,000 and $60,000, respectively, as compensation expense related to this stock issuance.

The following table provides a listing of the future contractual maturities of long-term debt at December 31, 2015.  
 
Year
     
2016
   
500,000
 
2017
   
1,195,000
 
   Total
 
$
1,695,000
 
 
NOTE 9. STOCKHOLDERS’ EQUITY

Common Stock

During the years ended December 31, 2015 and 2014, we issued common stock to compensate officers, employees, directors and outside professionals. The stock issuances were valued based on the quoted market price of our common stock on the respective measurement dates. Following is an analysis of common stock issuances during the years ended December 31, 2015 and 2014:

On August 20, 2014, we entered into a Financing Agreement with Peter Dalrymple, our director, which provides for Mr. Dalrymple to assist us in obtaining financing in the form of a $2,000,000 revolving line of credit from a commercial lender, including providing a personal guaranty on the line of credit.
 
Under the terms of the financing agreement discussed in Note 8, we granted 800,000 unvested and restricted shares of common stock to Mr. Dalrymple. The stock vested as follows: (i) upon finalization of the line of credit with Wells Fargo on September 8, 2014, 100,000 shares vested, and (ii) thereafter, so long as the revolving line of credit remains in effect, 100,000 shares will vest at the end of each subsequent three-month period.  Additionally, as consideration for agreeing to extend the promissory note and reduce the interest rate, we issued to Mr. Dalrymple 200,000 unvested and restricted shares of common stock, which stock also vested upon finalization of the line of credit with Wells Fargo on September 8, 2014.  All shares are valued at $0.30 per share totaling $300,000.
 

All together, we granted Mr. Dalrymple 1,000,000 shares of stock of which 300,000 shares vested and were issued during 2015 and 400,000 shares vested and were issued in 2014.  During the years ended December 31, 2015 and 2014, we recognized compensation expense of $120,000 and $120,000, respectively, related to these share grants. At December 31, 2015, unrecognized compensation expense was $60,000 and will be recognized as expense as the shares vest in 2016.

In November 2015, we issued 25,000 restricted shares of common stock to a director, valued at $0.48 per share, totaling $12,000, which was recognized as compensation expense during 2015.

In September 2014, we entered into an agreement with a consultant to assist us with the development of our Quad Video Halo. We granted him 400,000 unvested shares valued at $0.30 per share, totaling $120,000, with the shares to be vested and issued quarterly with 25,000 shares the first four quarters, 50,000 shares the following four quarters, and 25,000 shares the final four quarters ended September 2017. During the years ended December 31, 2015 and 2014, we recognized compensation expense of $22,500 and $7,500 related to these share grants. At December 31, 2015, unrecognized compensation expense was $90,000 and will be recognized as the shares vest.

In December 2014, we issued an aggregate of 200,000 restricted shares of common stock, valued at $0.27 per share, totaling $53,000, which was recognized as compensation expense during 2014, in connection with an engagement of a business consultant.

Warrants

During 2012, as described in Note 8, we issued 333,333 warrants in conjunction with the secured note payable. The warrants have an exercise price of $0.43 per share and expire in August 2016.
 
A summary of the warrant activity for the years ended December 31, 2015 and 2014 follows:
 
             
Weighted-
     
         
Weighted-
 
Average
 
Aggregate
 
   
Shares
   
Average
 
Remaining
 
Intrinsic
 
   
Underlying
   
Exercise
 
Contractual
 
Value
 
Description
 
Warrants
   
Price
 
Term (in years)
 
(In-the-Money)
 
                     
                     
Outstanding and exercisable at  December 31, 2013
   
902,778
   
$
1.85
 
1.0
       
                           
Warrants expired (Series D)
   
(200,000
)
                 
                           
Outstanding and exercisable at  December 31, 2014
   
702,778
     
1.85
 
1.0
       
                           
Warrants expired (Loan extension and Series D)
   
(300,000
)
   
0.82
           
                           
Warrants issued
    50,000                    
                           
Warrants expired (Convertible note warrants)
   
(69,445
)
 
 
0.43 
           
                           
 Outstanding and exercisable at December 31, 2015
   
383,333 
   
 $
1.80 
 
0 .6
       
 
The weighted-average estimated fair value of the 50,000 warrants issued was $0.24 per share using the Black-Sholes pricing model with the following assumptions:

Expected volatility
   
137.8
%
Risk-free interest rate
   
0.50
%
Expected life
 
1 year
 
Dividend yield
   
0
%

Stock Options

We recognize compensation expense related to stock options in accordance with the FASB standard regarding share-based payments, and as such, have measured the share-based compensation expense for stock options granted during the years ended December 31, 2015 and 2014 based upon the estimated fair value of the award on the date of grant and recognizes the compensation expense over the award’s requisite service period. The weighted average fair values were calculated using the Black Scholes option pricing model.
 
 
Details of stock option activity for the years ended December 31, 2015 and 2014 follows:
 
             
Weighted-
   
             
Average
 
Aggregate
 
   
Shares
   
Weighted
 
Remaining
 
Intrinsic
 
   
Underlying
   
Average
 
Contractual
 
Value
 
Description
 
Options
   
Exercise Price
 
Term (Years)
 
(In-the-Money)
 
                     
                           
Outstanding at December 31, 2013
   
1,400,000
   
$
0.71
 
1.8
   
-
 
Options expired
   
(50,000
)
                 
Options granted
   
-
     
-
 
-
   
-
 
Options forfeited
   
(50,000
)
   
-
 
-
   
-
 
Outstanding at December 31, 2014
   
     1,300,000
     
           0.71
 
1.1
   
-
 
Options expired
   
(150,000
)
                 
Outstanding at December 31, 2015
   
1,150,000
   
$
0.65
 
1.1
   
-
 

The following summarizes outstanding stock options and their respective exercise prices at December 31, 2015:
 
 
 
Shares
           
Remaining
 
   
Underlying
   
Exercise
 
Dates of
 
Contractual
 
Description
 
Options
   
Price
 
Expiration
 
Term (in years)
 
                     
Officers Options
    600,000     $ 0.77  
Jun 2016
    0.4  
Officers Options
    550,000     $ 0.54  
Dec 2017
    1.9  
                           
      1,150,000                    
 
For the year ended December 31, 2015, 150,000 director options expired. For the year ended December 31, 2014, 50,000 director options expired and 50,000 employee options were forfeited due to resignation. We recorded $12,012 and $171,110 in compensation expense in operating, general and administrative expenses in the accompanying consolidated statements of operations for the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015, all unrecognized compensation expense related to non-vested stock option awards has been recognized.
 
NOTE 10. 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. As of December 31, 2015 and 2014, we had balances payable to NSO of $29,400 and $0, 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 further described in Note 8, during 2012 we borrowed $1,000,000 from Peter Dalrymple, a director of the Company, under a secured promissory note. The outstanding balance of the note was $500,000 at both December 31, 2015 and 2014.
 
 
NOTE 11.  INCOME TAXES

We have not made provision for income taxes for the years ended December 31, 2014 or 2013, since we have net operating loss carryforwards to offset current taxable income.

Deferred tax assets consist of the following at December 31:

   
2015
 
2014
 
             
Benefit from net operating loss carryforwards
 
$
2,819,965
   
$
2,516,117
 
                 
Allowance for doubtful accounts
   
168,598
     
116,309
 
                 
Less:  valuation allowance
   
(2,988,563
)
   
(2,632,426
)
                 
   
$
-
   
$
-
 
 
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 more likely than not that we will realize our deferred income tax assets of approximately $2,988,563 and $2,632,426 attributable predominantly to the future utilization of the approximate $8,294,000 and $7,400,000 in eligible net operating loss carryforwards, and the allowance for doubtful accounts, as of December 31, 2015 and December 31, 2014, respectively. 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 2035.
 
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 consolidated statements of operations, to the expected amount at the 34% federal statutory rate:

   
2015
   
2014
 
             
Income tax benefit at the 34% statutory rate
 
$
 359,585
   
$
575,503
 
                 
Effect of state income taxes
   
   31,728
     
50,780
 
Non-deductible interest expense
   
     -
     
(22,659
)
Non-deductible wage expense
   
(8,164
)
   
(58,177
)
Loss on extinguishment of debt
   
        -
     
(19,070
)
Expiration and adjustment of net operating loss carryforwards available
   
      (14,523
)
   
(42,725
)
Non-deductible meals and entertainment
   
(12,489
)
   
(12,198
)
Change in valuation allowance
   
(356,137
)
   
(471,454
)
                 
Income tax (provision) benefit
 
$
-
   
$
-
 
 
NOTE 12. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases office space under an operating lease expiring in 2017. Future minimum lease payments at December 31, 2015 are as follows:

Year ending December 31,
   
       
2016
   
72,000
 
2017
   
6,000
 
         
   
$
78,000
 
 
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

William Donovan, M.D., our President and Chief Executive Officer, is our principal executive officer and John Bergeron, our Chief Financial Officer, is our principal financial officer.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2015.  Based on this evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our principal executive officer and principal financial officer, in a manner that allowed for timely decisions regarding disclosure.

Management’s Annual Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Our internal control over financial reporting includes those policies and procedures that:
 
 
(i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
 
(ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements; and
 
(iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized transactions.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
 
In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework and Internal Control over Financial Reporting – Guidance for Smaller Public Companies.

Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2015.  Based on this evaluation, our management concluded that, as of December 31, 2015, we maintained effective internal control over financial reporting.
 
 
Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the year ended December 31, 2015 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Our management, including our principal executive officer and principal financial officer, does not expect that its disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
 
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management’s override of the control.  The design of any systems of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.  Individual persons perform multiple tasks which normally would be allocated to separate persons and therefore extra diligence must be exercised during the period these tasks are combined.

ITEM 9B.  OTHER INFORMATION

None.


PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our directors and executive officers are as follows:

Name
 
Age
 
Position(s) and Office(s)
William Donovan, M.D.
  73  
Chief Executive Officer, President and Director
John Bergeron
  59  
Chief  Financial Officer and Director
Peter Dalrymple
  72  
Director
Jerry Bratton
  63  
Director
Jeffrey Cronk
  54  
Director

William F. Donovan, M.D. – Dr. Donovan has served as our Chief Executive Officer since January 2009 and as our President since May 2010. He has served as one of our directors since April 2008. He is a Board Certified Orthopedic Surgeon, and has been involved with venture funding and management for over 25 years. He was the co-founder of DRCA (later known as I.O.I) and became Chairman of this company that went from the pink sheets, to NASDAQ and then to the AMEX before being acquired by a subsidiary of the Bass Family. He was a founder of “I Need A Doc,” later changed to IP2M that was acquired by Dialog Group, a publicly traded company. He was the Chairman of House of Brussels, an international chocolate company and president of ChocoMed, a specialized confectionery company combining Nutraceuticals with chocolate bars. Dr. Donovan has been practicing as a physician in Houston, Texas since l975. Throughout his career as a physician, he has been involved in projects with both public and private enterprises. He received his Orthopedic training at Northwestern University in Chicago. He was a Major in the USAF for 2 years at Wright Patterson Air Force base in Dayton, Ohio. He established Northshore Orthopedics in 1975 and continues in active practice in Houston, specializing in Orthopedic Surgery.
 
John Bergeron, CPA – Mr. Bergeron has served as our Chief Financial Officer since October 2011 and as one of our directors since July 2010. From May 2008 through September 2014, he served as President of Jolpeg Inc., a private firm that consults on financial matters in service industries. From May 2002 until May 2008, Mr. Bergeron served as Divisional Controller of Able Manufacturing, a division of NCI Group, Inc, where his responsibilities included financial reporting, budgeting and Sarbanes-Oxley Act compliance. Prior to that, Mr. Bergeron worked as controller of different internet companies and as an accounting manager for several other private firms. He has also worked as an auditor for Arthur Andersen. Mr. Bergeron has more than thirty years experience in financial management and corporate development of manufacturing and service industry companies. He has extensive experience in financial reporting of public companies, risk management, business process re-engineering, structuring and implementing accounting procedures and internal control programs for Sarbanes-Oxley Act compliance. Mr. Bergeron is a Certified Public Accountant. He received a Bachelor of Business Administration in Accounting from Lamar University in 1979. He is also currently the President of the Montgomery County MUD #83.

Jerry Bratton, J.D., MBA – Mr. Bratton has served as one of our directors since July 2010. He has served as President of Bratton Steel, L.P. since 2006 and previously with Bratton Steel, Inc. (its predecessor) since 1991. Bratton Steel is a structural steel fabricating company. As President, Mr. Bratton has grown the company from a startup to a company that employs up to approximately 75 employees. He has significant experience in overseeing sales, estimating, project management and contracting. Mr. Bratton served as President of the Texas Structure Steel Institute from 2007 to 2008. He is also a member of the American Institute of Steel Construction. Mr. Bratton has business and investment background in medical software, personal medical information records storage, RFID security products and energy ventures. Mr. Bratton is a licensed attorney in the State of Texas and previously served as an assistant general counsel in the construction industry. Mr. Bratton earned Juris Doctorate and Master of Business Administration degrees from Texas Tech University in 1977.

Peter L. Dalrymple – Mr. Dalrymple joined our Board of Directors in August 2014.  Since July 2012, he has served as General Partner of LPD Investments Ltd. and Manager of DLD Oil & Gas LLC.  Prior to that, he was one of the co-founders and owners of the Royal Purple Synthetic Lubricants Company, which at the time of its sale in 2012, was one of the largest synthetic lubricants companies in North America. While with Royal Purple, he was in charge of Sales and Marketing. After the company was sold to Calumet Specialty Products Partner, a New York Stock Exchange company, in July of 2012, Mr. Dalrymple became a very active investor in several companies.  He is also a trustee of Norwich University, from which he holds a Bachelor of Science Degree in Engineering Management. He previously served as a Lieutenant with the United States Army Corp. of Engineers.
 
Jeffrey A. Cronk, D.C. – Dr. Cronk joined our Board of Directors in November 2015.  Since 2010 he has been the CEO and owner of American Spinal Injury and Impairment Consultants, which provides spinal injury and impairment educational programs and spinal expert review/witness services.  From 2010 to 2015, he was the Director of Education for Spinal Kinetics LLC, a company that provides assessment services of spinal soft-tissue injuries.  Prior to this, he was the owner of National Injury Diagnostics from 2005 to 2010.  Dr. Cronk graduated from Palmer College of Chiropractic with a Bachelor’s Degree in General Sciences and a Doctorate Degree in Chiropractic in 1988. That same year he became a Licensed Doctor of Chiropractic.  In 2013 he completed his law degree with a special emphasis on personal injury law.
 
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own beneficially more than ten percent of our common stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission. Based solely upon a review of Forms 3, 4 and 5 furnished to us during the fiscal year ended December 31, 2015, we believe that the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31, 2015, except for a Form 3 and Form 4 that were filed late by Jeffrey Cronk, a director.

Code of Ethics

We have adopted a code of ethics that applies to our directors, principal executive officers, principal financial officers, principal accounting officer or controller, and persons performing similar functions.  The Code of Ethics for Directors and Executive Officers can be found on our website at www.spinepaininc.com/investor-information.  Further, we undertake to provide by mail to any person without charge, upon request, a copy of such code of ethics if we receive the request in writing by mail to: Spine Injury Solutions, Inc., 5225 Katy Freeway, Suite 600, Houston, Texas 77007.

Procedures for Stockholders to Recommend Nominees to the Board

There have been no material changes to the procedures by which stockholders may recommend nominees to our Board of Directors since we last provided disclosure regarding this process in the proxy statement material we sent to stockholders on or around October 9, 2015 for our Annual Meeting held November 10, 2015.

Audit Committee
 
We have established a separately-designated standing audit committee.  The Audit Committee consists of our two independent Directors, Jerry Bratton and Jeffrey Cronk, and Peter Dalrymple, who is not deemed to be independent.  Mr. Bratton is the Chairman of the Audit Committee, and the Board of Directors has determined that he is an audit committee financial expert as defined in Item 5(d)(5) of Regulation S-K.  The Audit Committee reviews, acts on and reports to the Board of Directors with respect to various auditing and accounting matters, including the recommendations and performance of independent auditors, the scope of the annual audits, fees to be paid to the independent auditors, and internal accounting and financial control policies and procedures.
 
ITEM 11. EXECUTIVE COMPENSATION

The following table provides summary information for the years 2015 and 2014 concerning cash and non-cash compensation paid or accrued to or on behalf of certain executive officers (“named executive officers”).

Summary Executive Compensation Table

Name and
Principal
Position
     
Salary
($)
   
Bonus
($)
   
Stock
Awards ($)
   
Option
Awards
($)
   
Non-Equity
Incentive
Plan
Compensation
($)
   
Change in
Pension
Value
and
Nonqualified
Deferred
Compensation
($)
   
All Other
Compensation
($)
   
Total
($)
 
William Donovan, M.D.
 
2015
  $ 120,000     $ -     $ -     $ -     $ -     $ -     $ -     $ 120,000  
CEO and President
 
2014
    102,461       -       -       62,110 (1)     -       -       -       164,571  
                                                                     
John Bergeron
 
2015
    110,000       -               -       -       -               110,000  
CFO
 
2014
    88,988       8,509               44,000 (2)     -                       132,988  
 
(1)
On June 6, 2011, we granted Dr. Donovan stock options to purchase 600,000 shares of common stock at an exercise price of $0.77 per share.  We granted the options as consideration for his employment as Chief Executive Officer and President.  The options vest and become exercisable in twelve quarterly periods for the first three years of the five-year life of the options.  The fair value of the options was $432,000, of which $62,110 and $144,000 in compensation expense was recognized in the Statement of Operations for the years ended December 31, 2014 and December 31, 2013, respectively.
   
(2)
On November 30, 2012 we granted to Mr. Bergeron 200,000 unvested stock options to purchase shares of common stock at an exercise price of $0.54 per share.  The stock options will expire on December 1, 2017, and 50,000 of the stock options will vest and become exercisable every six months during the term of the agreement.  If at any time during the term of the agreement Mr. Bergeron’s employment with us should end, all unvested stock options will be relinquished. The fair market value of the options was $95,833, of which $44,000 and $48,000 in compensation expense was recognized in the Statement of Operations for the years ended December 31, 2014 and December 31, 2013, respectively.
 

Employment Agreements

On September 16, 2014, we entered into a three year employment agreement with our President and Chief Executive Officer, William F. Donovan, M.D.   The contract provides that we will pay Dr. Donovan an annual base salary of $120,000. The agreement also provides that we may grant Dr. Donovan performance bonuses from time to time at the discretion of the Board of Directors.  The agreement has a confidentiality provision and provides that Dr. Donovan cannot compete with us for a period upon termination of the agreement.

Mr. Bergeron’s employment contract expired on November 30, 2014.

Outstanding Equity Awards at Fiscal Year End 

The following table details all outstanding equity awards held by our named executive officers at December 31, 2015:
 
   
Option Awards
 
 
Name
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
   
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
   
Equity
Incentive
Plan Awards: Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
   
Option
Exercise
Price
($)
   
Option
Expiration
Date
 
William F. Donovan, M.D.
   
550,000
(1)
   
-
  
   
-
  
   
0.77
  
   
06/06/2016
  
John R. Bergeron (3)
   
200,000
(2)
   
-
  
   
-
  
   
0.54
  
   
12/01/2017
 

(1)
On June 6, 2011, we granted Dr. Donovan stock options to purchase 600,000 shares of common stock at an exercise price of $0.77 per share.  We granted the options as consideration for his employment as Chief Executive Officer and President.  The options vested and became exercisable in twelve quarterly periods for the first three years of the five-year life of the options.  Dr. Donovan exercised 50,000 of the options on September 9, 2012.
(2)
On November 30, 2012, we granted Mr. Bergeron stock options to purchase 200,000 shares of common stock at an exercise price of $0.54 per share.  We granted the options as consideration for his employment as Chief Financial Officer.  The options vested and became exercisable in four six month periods for the first two years of the five-year life of the options.
 
Compensation of Directors

Currently, Board members are not compensated for attending meetings nor do they receive any other form of compensation in their capacity as Board members, except as set forth below.  We anticipate the Board may revisit the issue of Board member compensation at a later date.  Compensation to directors during the year ended December 31, 2015 was as follows:
 
Summary Director Compensation Table

Name
 
Fees Earned or Paid in Cash
($)
   
Stock Awards
($)
   
Option Awards
($)
   
Non-Equity Incentive Plan Compensation
($)
   
Nonqualified Deferred Compensation Earnings
($)
   
All Other Compensation
($)
   
Total
($)
 
John Bergeron
   
-
     
-
     
-
     
-
     
-
     
-
     
0
 
Jerry Bratton     -       -       -       -       -       -       -  
William Donovan, M.D.
   
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Jeffrey Cronk, D.C.
    -     $
12,000
(1)     
-
     
-
     
-
     
-
    $
12,000
 
Peter Dalrymple
   
-
     
-
     
-
     
-
     
-
     
-
     
-
 
 
(1)
In November 2015, we issued 25,000 restricted shares of common stock to Dr. Cronk, valued at $0.48 per share, totaling $12,000, which was recognized as compensation expense during 2015.  The stock was issued as consideration for joining the Board.
 
 
Compensation Policies and Practices as they Relate to Risk Management

We attempt to make our compensation programs discretionary, balanced and focused on the long term.  We believe goals and objectives of our compensation programs reflect a balanced mix of quantitative and qualitative performance measures to avoid excessive weight on a single performance measure. Our approach to compensation practices and policies applicable to employees and consultants is consistent with that followed for its executives.  Based on these factors, we believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of March 23, 2016, concerning, except as indicated by the footnotes below, (i) each person whom we know beneficially owns more than 5% of our common stock, (ii) each of our directors, (iii) each of our named executive officers and (iv) all of our directors and executive officers as a group.  We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws. Applicable percentage ownership is based on 19,880,882 shares of common stock outstanding at March 23, 2016. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to stock options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 23, 2016. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise noted, stock options and warrants referenced in the footnotes below are currently fully vested and exercisable.

Name and Address of Beneficial Owner
 
Number of Common Shares
Beneficially Owned
   
Percent of Class
 
William F. Donovan, M.D. (1)
   
4,357,427
(2)
   
21.33%
 
Jeffrey Cronk, D.C.
   
25,000
     
0.13%
 
John Bergeron (1)
   
360,000
(3)
   
1.79%
 
Jerry Bratton (1)
   
1,556,100
(4)
   
7.83%
 
Peter L. Dalrymple (1)
   
3,120,609
(5)
   
15.44%
 
All Directors and named executive officers as a group (5 persons)
   
9,419,136
     
44.93%
 
 
(1) 
The named individual is one of our executive officers or directors.  His address is c/o Spine Injury Solutions, Inc., 5225 Katy Freeway, Suite 600, Houston, Texas 77007.

(2) 
Includes 557,486 shares of common stock held indirectly through NorthShore Orthopedics, Assoc. (of which Dr. Donovan is the sole shareholder and has voting and investment authority) and 3,249,941 shares held directly by Dr. Donovan.  Also includes 550,000 shares of common stock issuable upon exercise of options that are fully vested and exercisable.
 
(3) 
Includes 160,000 shares of common stock and 200,000 shares of common stock issuable upon exercise of options that are fully vested and exercisable.

(4) 
Includes 1,556,100 shares of common stock held by Mr. Bratton, of which Mr. Bratton has sole voting and investment authority of 320,000 shares and shared voting and investment authority with his spouse of 1,236,100 shares.  

(5) 
Includes (a) securities held individually by Peter L. Dalrymple, including (i) 800,000 shares of common stock, and (ii) warrants that are exercisable into 333,333 shares of common stock; and (b) 1,987,276 shares of common stock held by LPD Investments Ltd. (“LPD”).  Mr. Dalrymple is General Partner of LPD and has voting and investment authority over shares held by it. He is also a Limited Partner of LPD with the other Limited Partners being his wife and three trusts, of which he is trustee and his children are beneficiaries.

 
Securities Authorized for Issuance under Equity Compensation Plans

The following table summarizes our equity compensation plan information as of December 31, 2014:
 
 
Plan Category
  
(a)
Common Shares to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
   
(b)
Weighted-average
Exercise Price of
Outstanding Options,
Warrants and
Rights  ($)
 
  
(c)
Common Shares Available
for Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a))
 
Equity compensation plans approved by our stockholders
  
 
--
     
--
  
  
 
--
 
Equity compensation plans not approved by our stockholders (1)
  
 
550,000
50,000
550,000
     
 0.77
0.50
0.54
  
  
 
--
  
Total
  
 
1,150,000
  
   
0.65
  
  
 
--
  
 
(1)
Consists of common shares to be issued upon exercise of outstanding stock options as follows:
 
·                 In June 2011, we granted our CEO stock options to purchase a total of 600,000 shares of common stock at an exercise price of $0.77 per share.  The options vest and become exercisable in twelve quarterly periods for the first three years of the five-year life of the options.  A total of 550,000 of these options remain outstanding and unexercised.
·                 In November 2015, we granted one of our consultants stock options to purchase a total of 50,000 shares of common stock at an exercise price of $.50 per share. The one-year options vested and became exercisable immediately.
·                 In November 2012, we granted three of our employees stock options to purchase 600,000 shares of common stock at an exercise price of $.54 per share.  The five year options vest every six months at 50,000 options per period.  One employee left the company and lost his 50,000 of his options which did not vest.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have an agreement with Northshore Orthopedics, Assoc. ("NSO"), which is 100% owned by our Chief Executive Officer, William Donovan, M.D., to provide medical services as our independent contractor. As of December 31, 2015 and 2014, we had balances payable to NSO of $29,400 and $0 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.

On August 29, 2012, we issued Peter Dalrymple a $1,000,000 three-year secured promissory note bearing interest at 12% per year, with thirty-five monthly payments of interest commencing on September 29, 2013, and continuing thereafter on the 29th day of each successive month throughout the term of the promissory note.  Under the terms of the secured promissory note, the holder received a detachable warrant to purchase 333,333 shares of our common stock at the price of $1.60 per share that expires on August 29, 2015.  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, we entered into a Financing Agreement with Mr. Dalrymple whereby he agreed to assist us in obtaining financing in the form of a $2,000,000 revolving line of credit (see line of credit below) from a commercial lender and personally guaranty the line of credit. Under the terms of the Financing Agreement, upon finalization of the line of credit with Wells Fargo Bank on September 8, 2014, we (i) extended the term of the $1,000,000 promissory note by one year to mature on August 29, 2016, (ii) reduced the interest rate on the promissory note to 6%, (iii) extended the expiration date on the warrants issued in connection with the promissory note by one year to an expiration date of August 29, 2016 and (iv) used $500,000 of advances under the line of credit as payment of principal and interest on the promissory note.
 
Additionally, as consideration for agreeing to extend the promissory note and reduce the interest rate, we issued to Mr. Dalrymple 200,000 unvested and restricted shares of common stock, which stock vested upon finalization of the line of credit with Wells Fargo Bank on September 8, 2014.
 

On September 3, 2014, we entered into a $2,000,000 revolving line of credit agreement with Wells Fargo Bank that is personally guaranteed by Mr. Dalrymple. Under the terms of the financing agreement previously discussed, we granted 800,000 unvested and restricted shares of common stock to Mr. Dalrymple with 100,000 shares vesting upon finalization of the line of credit agreement on September 8, 2014, and the remaining shares vesting, in 100,000 share increments, quarterly so long as the revolving credit remains in effect.

Director Independence

We currently have two independent Directors on our Board, Jerry Bratton and Jeffrey Cronk, D.C.  The definition of “independent” used herein is arbitrarily based on the independence standards of The NASDAQ Stock Market LLC.  The Board performed a review to determine the independence of Jeffrey Cronk. and Jerry Bratton and made a subjective determination as to each of these Directors that no transactions, relationships or arrangements exist that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director of Spine Injury Solutions, Inc.  In making these determinations, the Board reviewed information provided by these Directors with regard to each Director’s business and personal activities as they may relate to us and our management.
 
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the fees paid or accrued by us for the audit and other services provided or to be provided by our principal independent accountants during the years ended December 31, 2015 and 2014.  
 
   
2015
   
2014
 
Audit Fees(1)
 
$
64,000
   
$
56,210
 
Audit Related Fees(2)
   
-
     
-
 
Tax Fees(3)
   
-
     
-
 
All Other Fees
   
-
     
-
 
Total Fees
 
$
64,000
   
$
56,210
 
 
(1)
Audit Fees: This category represents the aggregate fees billed for professional services rendered by the principal independent accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years.

(2)
Audit Related Fees: This category consists of the aggregate fees billed for assurance and related services by the principal independent accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”

(3)
Tax Fees: This category consists of the aggregate fees billed for professional services rendered by the principal independent accountant for tax compliance, tax advice, and tax planning.

Pre-Approval of Audit and Non-Audit Services

All above audit services, audit-related services and tax services, for the fiscal years ended December 31, 2015 and 2014, were pre-approved by our Audit Committee, which concluded that the provision of such services was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee’s outside auditor independence policy provides for pre-approval of all services performed by the outside auditors.
 

PART IV

ITEM 15. EXHIBITS
 
Exhibit No.
 
Description
3.1
 
Articles of Incorporation dated March 4, 1998. (Incorporated by reference from Form 10-KSB filed with the SEC on January 5, 2000.) *
     
3.2
 
Amended Articles of Incorporation dated April 23, 1998. (Incorporated by reference from Form 10-KSB filed with the SEC on January 5, 2000.) *
     
3.3
 
Amended Articles of Incorporation dated January 4, 2002. (Incorporated by reference from Form 10KSB filed with the SEC on May 21, 2003.) *
     
3.4
 
Amended Articles of Incorporation dated December 19, 2003. (Incorporated by reference from Form 10-KSB filed with the SEC on May 20, 2004.) *
     
3.5
 
Amended Articles of Incorporation dated November 4, 2004. (Incorporated by reference from Form 10-KSB filed with the SEC on April 15, 2005) *
     
3.6
 
Amended Articles of Incorporation dated September 7, 2005. (Incorporated by reference from Form 10-QSB filed with the SEC on November 16, 2005) *
     
3.7  
Certificate of Amendment to Certificate of Incorporation (Incorporated by reference from Form 8-K filed with the SEC on October 7, 2015.) *
     
3.8
 
By-Laws dated April 23, 1998. (Incorporated by reference from Form 10K-SB filed with the SEC on January 5, 2000.) *
     
10.1
 
Employment Agreement with William F. Donovan, M.D. dated September 18, 2014 (Incorporated by reference from Form 8-K filed with the SEC on September 22, 2014) *
     
10.2
 
Employment Agreement with John Bergeron dated November 30, 2012 (Incorporated by reference from Form 8-K filed with the SEC on December 13, 2013) *
     
10.3
 
Financing Agreement with Peter Dalrymple (Incorporated by reference from Form 8-K filed with the SEC on August 26, 2014) *
     
10.4
 
Wells Fargo Loan Documentation (Incorporated by reference from Form 10-Q filed with the SEC on May 13, 2015) *
     
14.1
 
Code of Ethics (Incorporated by reference from our website.  It can be found at: www.spinepaininc.com/investor-information) *
     
21.1
 
     
31.1
 
     
31.2
 
     
32.1
 
     
32.2
 
     
101.INS
 
XBRL Instance Document
     
101.SCH
 
XBRL Taxonomy Extension Schema
     
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase
     
101.DEF
 
XBRL Taxonomy Extension Definitions Linkbase
     
101.LAB
 
XBRL Taxonomy Extension Label Linkbase
     
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase
 
* Incorporated by reference from our previous filings with the SEC
 
 

In accordance with the requirements of Section 13 of 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 29, 2016.
 
 
Spine Injury Solutions, Inc.
   
 
/s/ William F. Donovan, M.D.
 
By: William F. Donovan, M.D.
 
Chief Executive Officer
 
Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons in the capacities and on the dates indicated:
 
Signature
 
Title
 
Date
         
/s/ William F. Donovan, M.D.
     
March 29, 2016
William F. Donovan, M.D.
 
Chief Executive Officer (Principal Executive Officer), President and Director
   
         
/s/ John Bergeron
     
March 29, 2016
John Bergeron
 
Chief Financial Officer (Principal Financial and Accounting Officer) and Director
   
         
/s/ Jerry Bratton
     
March 29, 2016
Jerry Bratton
 
Director
   
         
/s/ Jeffrey Cronk, D.C.
     
March 29, 2016
Jeffrey Cronk, D.C.
 
Director
   
         
/s/ Peter Dalrymple
     
March 29, 2016
Peter Dalrymple
 
Director
   

 
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