##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the quarterly period ended June 30, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from  to
 Commission File Number: 000-30326
 FIRST PHYSICIANS CAPITAL GROUP, INC.
  DELAWARE
    
    77-0557617(State or other jurisdiction 
of incorporation or organization)
    
    (I.R.S. Employer
Identification No.)433 North Camden Drive #810Beverly Hills, California
    
    90210(Address of principal executive offices)
    
    (Zip Code)
 (310) 860-2501  (Registrants Telephone Number, Including Area Code)
 N/A  (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o Yes o No
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o Yes þ No
 Number of shares of common stock outstanding as of August 16, 2010
    
    15,049,507




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##### 



TABLE OF CONTENTS
 PAGEPART I FINANCIAL INFORMATION
    
    
    3Item 1. FINANCIAL STATEMENTS (UNAUDITED)
    
    
    3Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    17Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    24Item 4. CONTROLS AND PROCEDURES
    
    
    24PART II OTHER INFORMATION
    
    
    24Item 1. LEGAL PROCEEDINGS
    
    
    24Item 1A. RISK FACTORS
    
    
    24Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    25Item 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    25Item 4. [REMOVED AND RESERVED]
    
    
    25Item 5. OTHER INFORMATION
    
    
    25Item 6. EXHIBITS
    
    
    26SIGNATURES
    
    
    32EXHIBIT INDEX
    
    
    33Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 FIRST PHYSICIANS CAPITAL GROUP, INC.
 June 30,
    
    
    September 30,2010
    
    
    2009(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,778
    
    
    $
    2,324Restricted cash
    
    
    
    
    
    
    1,523Accounts receivable, net of allowance for uncollectible accounts
    
    
    5,017
    
    
    
    4,891Prepaid expenses
    
    
    414
    
    
    
    111Other current assets
    
    
    1,137
    
    
    
    1,772Total current assets
    
    
    8,346
    
    
    
    10,621Property and equipment, net
    
    
    17,878
    
    
    
    17,033Goodwill
    
    
    759
    
    
    
    759Other assets
    
    
    1,088
    
    
    
    1,078Total assets
    
    $
    28,071
    
    
    $
    29,491LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS DEFICITCurrent Liabilities:Accounts payable
    
    $
    4,147
    
    
    $
    3,598Accrued expenses
    
    
    3,698
    
    
    
    3,515Notes payable
    
    
    
    
    
    
    4,309Current maturities of long-term debt
    
    
    1,345
    
    
    
    1,028Total current liabilities
    
    
    9,190
    
    
    
    12,450Long-term debt, net of current portion
    
    
    17,390
    
    
    
    12,441Deferred gain
    
    
    1,727
    
    
    
    Commitments and contingencies
   3




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##### Table of Contents



FIRST PHYSICIANS CAPITAL GROUP, INC.
 June 30,
    
    
    September 30,2010
    
    
    2009(Unaudited)Non-redeemable Preferred Stock:Preferred stock Series 1-A ($0.01 par value, 67,600 shares
authorized; 67,600 shares issued and outstanding as of June 30,
2010 and September 30, 2009)
    
    
    166
    
    
    
    166Preferred stock Series 2-A ($0.01 par value, 3,900 shares
authorized; 3,900 shares issued and outstanding as of June 30,
2010 and September 30, 2009)
    
    
    25
    
    
    
    25Total non-redeemable preferred stock
    
    
    191
    
    
    
    191Redeemable preferred stock:Preferred stock Series 5-A ($0.01 par value, 9,000 shares
authorized; 9,000 and 8,987 shares issued and outstanding as of
June 30, 2010 and September 30, 2009, respectively)
    
    
    7,832
    
    
    
    7,819Preferred stock Series 6-A ($0.01 par value, 5,000 shares
authorized; 4,875 and 4,957 shares issued and outstanding as of
June 30, 2010 and September 30, 2009, respectively)
    
    
    4,381
    
    
    
    4,463Total redeemable preferred stock
    
    
    12,213
    
    
    
    12,282Common stock ($0.01 par value, 100,000,000 shares authorized;
15,049,507 and 13,448,683 shares issued and outstanding as of
June 30, 2010 and September 30, 2009, respectively)
    
    
    152
    
    
    
    136Additional paid-in capital
    
    
    78,951
    
    
    
    77,109Accumulated deficit
    
    
    (93,038
    )
    
    
    (86,122
    )Treasury stock, at cost (149,744 shares as of June 30, 2010 and
93,494 as of September 30, 2009)
    
    
    (104
    )
    
    
    (79
    )Total First Physicians Capital Group shareholders deficit
    
    
    (14,039
    )
    
    
    (8,956
    )Noncontrolling interests
    
    
    1,399
    
    
    
    1,083Total shareholders deficit
    
    
    (12,640
    )
    
    
    (7,873
    )Total liabilities, preferred stock and shareholders deficit
    
    $
    28,071
    
    
    $
    29,491
   4




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##### Table of Contents



FIRST PHYSICIANS CAPITAL GROUP, INC.
 Three Months Ended
    
    
    Nine Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenue from services
    
    $
    10,354
    
    
    $
    9,195
    
    
    $
    30,286
    
    
    $
    30,196Costs and expenses:Selling, general and administrative expenses
    
    
    9,534
    
    
    
    9,962
    
    
    
    29,092
    
    
    
    29,534Provision for doubtful accounts
    
    
    1,662
    
    
    
    1,199
    
    
    
    4,367
    
    
    
    3,364Amortization of stock-based compensation
    
    
    248
    
    
    
    471
    
    
    
    794
    
    
    
    988Depreciation and amortization
    
    
    353
    
    
    
    286
    
    
    
    1,023
    
    
    
    788Total costs and expenses
    
    
    11,797
    
    
    
    11,918
    
    
    
    35,276
    
    
    
    34,674Operating loss
    
    
    (1,443
    )
    
    
    (2,723
    )
    
    
    (4,990
    )
    
    
    (4,478
    )Other income (expense)
    
    
    22
    
    
    
    131
    
    
    
    476
    
    
    
    (52
    )Interest expense
    
    
    (379
    )
    
    
    (837
    )
    
    
    (1,600
    )
    
    
    (1,449
    )Net loss from operations before taxation and non-cash beneficial conversion feature
    
    
    (1,800
    )
    
    
    (3,429
    )
    
    
    (6,114
    )
    
    
    (5,979
    )Taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (1,800
    )
    
    $
    (3,429
    )
    
    $
    (6,114
    )
    
    $
    (5,979
    )Net income (loss) attributable to noncontrolling interest
    
    
    (258
    )
    
    
    37
    
    
    
    (754
    )
    
    
    (199
    )Net loss attributable to First Physicians Capital Group
    
    
    (2,058
    )
    
    
    (3,392
    )
    
    
    (6,868
    )
    
    
    (6,178
    )Non-cash beneficial conversion feature preferred dividend
    
    
    
    
    
    
    (317
    )
    
    
    (48
    )
    
    
    (317
    )Net loss attributable to First Physicians Capital Group common shareholders
    
    $
    (2,058
    )
    
    $
    (3,709
    )
    
    $
    (6,916
    )
    
    $
    (6,495
    )Net loss per common share:Basic
    
    $
    (0.14
    )
    
    $
    (0.35
    )
    
    $
    (0.47
    )
    
    $
    (0.62
    )Diluted
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
   5




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FIRST PHYSICIANS CAPITAL GROUP, INC.
 Nine months endedJune 30,
    
    
    June 30,2010
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (6,868
    )
    
    $
    (6,178
    )Adjustments to reconcile net loss to net cash used in operating activities:Noncontrolling interest
    
    
    754
    
    
    
    199Depreciation and amortization
    
    
    1,023
    
    
    
    788Amortization of stock based compensation
    
    
    794
    
    
    
    988Amortization of debt discount
    
    
    521
    
    
    
    556Amortization of deferred gain on sale of assets
    
    
    (33
    )
    
    
    Bad debt provision
    
    
    4,367
    
    
    
    3,364Loss from sale of investments
    
    
    
    
    
    
    281Changes in working capital components:Accounts receivable
    
    
    (4,493
    )
    
    
    (2,810
    )Accounts payable and accrued expenses
    
    
    732
    
    
    
    972Others
    
    
    321
    
    
    
    (885
    )Net cash provided by (used in) operating activities
    
    
    (2,882
    )
    
    
    (2,725
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (1,868
    )
    
    
    (4,014
    )Purchase of equity interest in consolidated affiliate
    
    
    
    
    
    
    (35
    )Deferred gain from sale of property and equipment
    
    
    1,760
    
    
    
    Acquisition of subsidiaries, net of cash acquired
    
    
    
    
    
    
    (50
    )Proceeds from sale of equity interests in consolidated affiliates
    
    
    
    
    
    
    325Decrease (Increase) in restricted cash
    
    
    1,523
    
    
    
    (9
    )Net cash provided by (used in) investing activities
    
    
    1,415
    
    
    
    (3,783
    )Cash flows from financing activities:Drawdown on convertible loans
    
    
    
    
    
    
    2,200Repayment of notes payable
    
    
    (4,643
    )
    
    
    (5,488
    )Proceeds from long-term debt
    
    
    5,368
    
    
    
    8,902Distributions to noncontrolling interests
    
    
    (438
    )
    
    
    (80
    )Proceeds from exercise of stock warrants
    
    
    503
    
    
    
    233Purchase of treasury stock
    
    
    (25
    )Issuance of common stock
    
    
    100
    
    
    
    Issuance of preferred stock Series 5-A, net of costs
    
    
    13
    
    
    
    Issuance of preferred stock Series 6-A, net of costs
    
    
    43
    
    
    
    350Net cash provided by financing activities
    
    
    921
    
    
    
    6,117Net decrease in cash and cash equivalents
    
    
    (546
    )
    
    
    (391
    )Cash and cash equivalents at beginning of period
    
    
    2,324
    
    
    
    2,970Cash and cash equivalents at end of period
    
    $
    1,778
    
    
    $
    2,579Cash paid for interest
    
    $
    959
    
    
    $
    893
     6




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##### Table of Contents



1. Summary of Significant Accounting Policies
 Basis of Presentation
 Company we us our Form 10-K SEC Fiscal Year Ended September 30, 2009
    Name Change
  Future Funding
    Del Mar Ambulatory Surgical Center
   7




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Reclassifications
  Critical Accounting Policies
  Recent Accounting Pronouncements
 FASB
  Fair Value of Financial Instruments
  2. Net Loss Per Share
 Three Months ended
    
    
    Nine Months ended(in thousands)
    
    
    (in thousands)June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Numerator for basic and
diluted loss per share:Net loss attributable to
common shareholders
    
    $
    (2,058
    )
    
    $
    (3,709
    )
    
    $
    (6,916
    )
    
    $
    (6,495
    )Denominator for basic
(loss)/profit per share
 weighted average
shares
    
    
    15,046,375
    
    
    
    10,581,885
    
    
    
    14,741,694
    
    
    
    10,409,248Effect of dilutive sharesEmployee stock options
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/APreferred stock
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/AWarrants
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ANet (loss)/profit per
common share:Basic and diluted
    
    $
    (0.14
    )
    
    $
    (0.35
    )
    
    $
    (0.47
    )
    
    $
    (0.62
    )
   8




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##### Table of Contents



3. Accounts Receivable
  June 30,
    
    
    September 30,2010
    
    
    2009Gross patient accounts receivable
    
    $
    26,592
    
    
    $
    18,470Reserves for bad debt
    
    
    (6,684
    )
    
    
    (3,842
    )Reserves for contractual allowances
    
    
    (14,891
    )
    
    
    (9,737
    )Patient accounts receivable, net
    
    $
    5,017
    
    
    $
    4,891
 4. Other Current Assets
  June 30,
    
    
    September 30,2010
    
    
    2009Deposits
    
    $
    120
    
    
    $
    120Medical supplies
    
    
    507
    
    
    
    510Other receivables
    
    
    510
    
    
    
    1,142Total other current assets
    
    $
    1,137
    
    
    $
    1,772
 5. Property and Equipment
  June 30,
    
    
    September 30,2010
    
    
    2009Computer hardware
    
    $
    95
    
    
    $
    92Furniture, fixtures and medical equipment
    
    
    4,560
    
    
    
    4,458Land
    
    
    1,029
    
    
    
    834Buildings
    
    
    14,796
    
    
    
    13,340Construction in progress
    
    
    
    
    
    
    124Leasehold improvements
    
    
    944
    
    
    
    944Accumulated depreciation
    
    
    (3,546
    )
    
    
    (2,759
    )Property and equipment, net
    
    $
    17,878
    
    
    $
    17,033
 6. Bridge Financing and Unregistered Sales of Equity Securities
 Bridge Financing SMP Ciabattoni Bridge
Notes Bridge Lender Bridge Lenders
  9




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Common Stock
     Second Bridge Notes Second Bridge Lender Second Bridge Lenders
    10




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##### Table of Contents



Darras Darras Note SFV SFV Note Katz Katz Note Third Bridge Notes Third Bridge Lender Third Bridge Lenders
      11




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##### Table of Contents



Unregistered Sales of Equity Securities
 Warrant Exercise Shares Securities Act
 7. Long-term Debt
  June 30,
    
    
    September 30,2010
    
    
    2009Note payable, secured by equipment, $4,558 payable monthly,
including 8.25% interest through September 2011
    
    $
    50
    
    
    $
    898% Notes payable to prior shareholders for stock repurchases,
six notes outstanding at June 30, 2010, unsecured, maturity
dates ranging from 2010 through 2017
    
    
    229
    
    
    
    260Note payable, secured by real estate, $36,736 payable
monthly, including interest based on Wall Street Journal
prime plus 2% adjusted quarterly, floor of 7%, rate is
currently 7%, matures January 2030
    
    
    4,655
    
    
    
    Note payable, secured by equipment, $2,825 payable monthly,
including 13.6% interest through April 2010
    
    
    
    
    
    
    14Note payable secured by real estate, $27,513 payable monthly,
including interest based on Wall Street Journal prime plus 2%
adjusted quarterly, floor of 7%, rate is currently 7%,
matures November 2028
    
    
    3,387
    
    
    
    3,453Note payable secured by real estate, $34,144 payable monthly,
including interest based on Wall Street Journal prime plus 2%
adjusted quarterly, floor of 7%, rate is currently 7%,
matures November 2024
    
    
    3,390
    
    
    
    3,513Note payable secured by real estate, $9,327 payable monthly,
including interest based on Wall Street Journal prime plus 2%
adjusted quarterly, floor of 7%, rate is currently 7%,
matures November 2028
    
    
    1,148
    
    
    
    1,164Note payable, secured by equipment, $2,660 payable monthly
including 5.3% interest through March 2013
    
    
    79
    
    
    
    99Note payable, 5% interest payable quarterly, unsecured,
matures on or before December 11, 2011
    
    
    1,500
    
    
    
    1,500Capitalized lease obligations  six (6) leases for buildings
and medical equipment with imputed interest rates ranging
from 4% to 17.2%, maturing at various dates through 2013
    
    
    231
    
    
    
    300Note payable, secured by equipment, $2,413 payable monthly,
including 7.04% interest through March 2011
    
    
    19
    
    
    
    39Note payable, secured by equipment, $7,530 payable monthly,
including 6.75% interest through June 15, 2013
    
    
    243
    
    
    
    298Notes payable, two (2) notes, secured by equipment, $5,116
payable monthly, including 7.05% interest through March, 2011
    
    
    40
    
    
    
    83
  12




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June 30,
    
    
    September 30,2010
    
    
    2009Notes payable, 16% interest, unsecured, face value
$1.5 million less beneficial conversion feature and debt
discount of $84,000 at September 30, 2009
    
    $
    
    
    
    $
    1,416Notes payable five (5), unsecured 10% interest, mature at
various dates in August 2011 and September 2011,
    
    
    850
    
    
    
    Notes payable nine (9), unsecured 10% interest, mature at
various dates February 2013 through April 2013
    
    
    1,350
    
    
    
    Note payable, unsecured, non-interest bearing purchase
obligation, annual payments of $50,000, August 2010, $33,333,
August 2011, $33,333, August 2012 and $33,334, August 2013
    
    
    150
    
    
    
    150Note payable, unsecured, 11.25% interest, matures October 2012
    
    
    837
    
    
    
    1,027Note payable, unsecured 11.25% interest, matures March 2013
    
    
    525
    
    
    
    Note payable, secured by equipment, $1,567 payable monthly,
including 6.75% interest through July 2013
    
    
    52
    
    
    
    64Total
    
    
    18,735
    
    
    
    13,469Less current maturities of long-term debt
    
    
    (1,345
    )
    
    
    (1,028
    )Total long-term debt
    
    $
    17,390
    
    
    $
    12,441
  June 30,
    
    Payments2011
    
    $
    1,3452012
    
    
    3,6272013
    
    
    2,3122014
    
    
    6282015
    
    
    578Thereafter
    
    
    10,245Total
    
    $
    18,735
 8. Noncontrolling Interests
 SPA
  13




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9. Warrants
  Remaining
    
    
    ExerciseDescription
    
    Life
    
    
    Price
    
    
    WarrantsSeptember 30, 2007 Preferred Stock Series 5-A warrants
issued to investor
    
    2 years
    
    $
    0.45
    
    
    
    50,000September 30, 2008 warrants issued in connection with
notes payable
    
    4 months
    
    
    0.31
    
    
    
    1,980,000September 30, 2008 warrants issued in connection with
notes payable
    
    4 months
    
    
    0.50
    
    
    
    1,237,500September 30, 2008 Preferred Stock Series 6-A warrants
issued to investor
    
    2 months
    
    
    0.50
    
    
    
    67,200September 30, 2008 Preferred Stock Series 5-A warrants
issued to placement agent
    
    3 years
    
    
    0.50
    
    
    
    436,250February 6, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.50
    
    
    
    1,125,000February 6, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.75
    
    
    
    750,000March 3, 2009 warrants issued in connection with notes
payable
    
    2 years
    
    
    0.50
    
    
    
    375,000March 3, 2009 warrants issued in connection with notes
payable
    
    2 years
    
    
    0.75
    
    
    
    250,000March 16, 2009 warrants issued to advisory board
    
    2 years
    
    
    0.63
    
    
    
    125,000March 31, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.50
    
    
    
    112,500March 31, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.75
    
    
    
    75,000April 14, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.50
    
    
    
    37,500April 14, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.75
    
    
    
    25,000June 8, 2009 Preferred Stock Series 6-A warrants
issued to investor
    
    2 years
    
    
    0.50
    
    
    
    210,000June 10, 2009 warrants issued to Medical Advisory Board
    
    2 years
    
    
    0.63
    
    
    
    150,000October 19, 2009 Preferred Stock Series 5-A warrants
issued to investor
    
    2 years
    
    
    0.50
    
    
    
    25,800October 19, 2009 Preferred Stock Series 6-A warrants
issued to investor
    
    2 years
    
    
    0.50
    
    
    
    4,200November 6, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.50
    
    
    
    375,000November 6, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.75
    
    
    
    250,000December 3, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.50
    
    
    
    125,000December 3, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.75
    
    
    
    83,331December 2, 2009 warrants issued in connection with
issuance of common stock
    
    2 years
    
    
    0.50
    
    
    
    60,000December 14, 2009 Preferred Stock Series 6-A warrants
issued to investor
    
    2 years
    
    
    0.50
    
    
    
    3,600December 31, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.50
    
    
    
    37,500December 31, 2009 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.75
    
    
    
    24,999January 14, 2010 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.50
    
    
    
    12,500January 14, 2010 warrants issued in connection with
notes payable
    
    2 years
    
    
    0.75
    
    
    
    8,3338,016,213
  14




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##### Table of Contents



Weighted-AverageNumber of Shares of Common Stock
    
    
    Exercise Price Per ShareNine months
    
    
    
    
    
    
    Nine monthsended
    
    
    Year ended
    
    
    ended
    
    
    Year endedJune 30,
    
    
    September 30,
    
    
    June 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Warrants
outstanding at
beginning of the
period
    
    
    14,405,435
    
    
    
    11,795,035
    
    
    $
    0.49
    
    
    $
    0.46Issued
    
    
    1,010,263
    
    
    
    3,235,000
    
    
    
    0.59
    
    
    
    0.60Reinstated
    
    
    
    
    
    
    166,400
    
    
    
    
    
    
    
    0.48Exercised
    
    
    (1,105,685
    )
    
    
    (525,000
    )
    
    
    0.46
    
    
    
    0.50Cancelled or expired
    
    
    (6,293,800
    )
    
    
    (266,000
    )
    
    
    0.50
    
    
    
    0.48Warrants
outstanding at end
of the period
    
    
    8,016,213
    
    
    
    14,405,435
    
    
    $
    0.50
    
    
    $
    0.49
  10. Stock Options
   Weighted-AverageNumber of Options
    
    
    Exercise Price Per ShareJune 30,
    
    
    September 30,
    
    
    June 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Options outstanding at
beginning of the period
    
    
    8,249,002
    
    
    
    7,333,750
    
    
    $
    0.62
    
    
    $
    0.59Granted at above fair market value
    
    
    500,000
    
    
    
    1,839,390
    
    
    
    0.63
    
    
    
    0.63 at fair market value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
     at below fair market value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancelled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (235,207
    )
    
    
    (924,138
    )
    
    
    0.63
    
    
    
    0.40Options outstanding at end
of the period
    
    
    8,513,795
    
    
    
    8,249,002
    
    
    $
    0.62
    
    
    $
    0.62Options vested/exercisable
at end of the period
    
    
    2,425,703
    
    
    
    2,037,613
    
    
    $
    0.59
    
    
    $
    0.59
  15




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##### Table of Contents



11. SPMC Sale/Leaseback
 SPMC
      16




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##### Table of Contents



Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
             OPERATIONS
 Form
10-Q
 FORWARD LOOKING STATEMENTS
 Series 5-A Preferred
Stock SEC
 OVERVIEW
 www.firstphysicianscapitalgroup.com
    CURRENT OPERATIONS
  RHA Del Mar Ambulatory Surgical Center
  17




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##### Table of Contents



STRATEGY
   SPMC
    RECENT DEVELOPMENTS
 Exercise of Warrants
 Common Stock Securities Act
  18




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##### Table of Contents



Bridge Financing
 Bridge Financing SMP Ciabattoni Bridge
Notes Bridge Lender Bridge Lenders
      Second Bridge Notes Second Bridge Lender Second Bridge Lenders
   19




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##### Table of Contents



Darras Darras Note SFV SFV Note Katz Katz Note Third Bridge Notes Third Bridge Lender Third Bridge Lenders
      20




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##### Table of Contents



RESULTS OF OPERATIONS
 MATERIAL CHANGES IN RESULTS OF OPERATIONS
  The Chandler
Clinic
         21




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##### Table of Contents



MATERIAL CHANGES IN FINANCIAL CONDITION  AT JUNE 30, 2010, COMPARED TO SEPTEMBER 30, 2009:
              22




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
       OFF-BALANCE SHEET ARRANGEMENTS
   23




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##### Table of Contents



Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
 
 PART II
OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 1A. RISK FACTORS
  We cannot predict the effect that health care reform and other changes in government
programs may have on our business, financial condition, results of operations or cash flows.
 PPACA
   24




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##### Table of Contents



Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Exercise of Warrants
  
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. [REMOVED AND RESERVED]
  
 Item 5. OTHER INFORMATION
   25




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##### Table of Contents



Item 6. EXHIBITS
  Exhibit No.
    
    Description2.1
    *
    
    Membership Interest Purchase Agreement (filed as Exhibit 2.1 to the Form 8-K, as filed with the SEC on
November 5, 2007)3.1
    *
    
    Certificate of Incorporation (filed as Exhibit 3.1 to the Form 8-K, as filed with the SEC on November 14,
2000)3.2
    *
    
    Amended and Restated Bylaws dated October 25, 2002 (filed as Exhibit 3.2 to the Form 8-K, as filed with
the SEC on October 28, 2002)3.3
    *
    
    Certificate of Designation of Rights and Preferences of Series 2-A Convertible Preferred Stock filed
November 8, 2000 (filed as Exhibit 4.1 to the Form 8-K, as filed with the SEC on November 14, 2000)3.4
    *
    
    Certificate of Merger filed November 8, 2000, merging Vsource, Inc. (a Nevada corporation) with and into
the Vsource, Inc. (a Delaware corporation) (filed as Exhibit 4.2 to the Form 8-K, as filed with the SEC on
November 14, 2000)3.5
    *
    
    Agreement and Plan of Merger dated as of December 14, 2000, among the Registrant, OTT Acquisition Corp.,
Online Transaction Technologies, Inc. and its Shareholders (filed as Exhibit 10.11 to the Form 10-Q, as
filed with the SEC on December 15, 2000)3.6
    *
    
    Certificate of Designation of Rights and Preferences of Series 3-A Convertible Preferred Stock filed June
20, 2001 (filed as Exhibit 4.1 to the Form 8-K, as filed with the SEC on July 2, 2001)3.7
    *
    
    Amendment to Certificate of Incorporation, dated January 16, 2002 (filed as Exhibit 3.3 to the Form 8-K,
as filed with the SEC on January 23, 2002)3.8
    *
    
    Certificate of Designation of Rights and Preferences of Series 4-A Convertible Preferred Stock (filed as
Exhibit 3.1 to the Form 8-K, as filed with the SEC on October 28, 2002)3.9
    *
    
    Amendment to Certificate of Incorporation, dated November 20, 2002 (filed as Exhibit 3.1 to the Form 10-Q
for the period ending October 31, 2002, as filed with the SEC on December 5, 2002)3.10
    *
    
    Certificate of Designation of Rights and Preferences of Series 5-A Convertible Preferred Stock (filed as
Exhibit 3.1 to the Form 8-K, as filed with the SEC on July 21, 2005)3.11
    *
    
    Amendment to Certificate of Incorporation, dated December 16, 2005 (filed as Exhibit 3.5 to the Form 10-Q
for the period ending October 31, 2005, as filed with the SEC on December 20, 2005)3.12
    *
    
    Certificate of Amendment to the Certificate of Designation of Rights and Preferences Series 5-A
Convertible Preferred Stock filed January 10, 2008 (filed as Exhibit B to the Form of Series 5-A Preferred
Stock and Warrant Purchase Agreement, filed as Exhibit 10.52 herein)3.13
    *
    
    Certificate of Designation of Rights and Preferences of Series 6-A Convertible Preferred Stock filed April
2, 2008 (filed as Exhibit 3.1 to the Form 8-K, as filed with the SEC on April 3, 2008)3.14
    *
    
    Certificate of Amendment to the Certificate of Designation of Rights and Preferences of Series 5-A
Convertible Preferred Stock filed May 15, 2008 (filed as Exhibit 4.2 to the Form 10-Q, as filed with the
SEC on May 20, 2008)
  26




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##### Table of Contents



Exhibit No.
    
    Description3.15
    *
    
    Certificate of Amendment to the Certificate of Designation of Rights and Preferences of Series 6-A
Convertible Preferred Stock filed May 15, 2008 (filed as Exhibit B to the Form of Series 6-A Preferred
Stock and Warrant Purchase Agreement, filed as Exhibit 10.54 herein)3.16
    *
    
    Amendment to Certificate of Incorporation, dated September 29, 2009 (filed as Exhibit 3.1 to the Form 8-K,
as filed with the SEC on October 1, 2009)3.17
    *
    
    Certificate of Decrease of Shares Designated as Series 7-A Convertible Preferred Stock, dated and filed
January 22, 2010 (filed as Exhibit 3.1 to the Form 8-K, as filed with the SEC on January 28, 2010)4.1
    *
    
    Certificate of Decrease of Shares Designated as Series 1-A Convertible Preferred Stock (filed as Exhibit
4.1 to the Form 8-K, as filed with the SEC on July 13, 2005)4.2
    *
    
    Certificate of Decrease of Shares Designated as Series 2-A Convertible Preferred Stock (filed as Exhibit
4.2 to the Form 8-K, as filed with the SEC on July 13, 2005)4.3
    *
    
    Certificate of Decrease of Shares Designated as Series 3-A Convertible Preferred Stock (filed as Exhibit
4.3 to the Form 8-K, as filed with the SEC on July 13, 2005)4.4
    *
    
    Certificate of Decrease of Shares Designated as Series 4-A Convertible Preferred Stock (filed as Exhibit
4.4 to the Form 8-K, as filed with the SEC on July 13, 2005)4.5
    *
    
    Series 5-A Preferred Stock and Warrant Purchase Agreement, dated as of July 7, 2005, by and among Vsource,
Inc. and the investors listed therein (filed as Exhibit 4.1 to the Form 8-K, as filed with the SEC on July
21, 2005)4.6
    *
    
    Form of Warrant (filed as Exhibit 4.2 to Form 8-K, filed with the SEC on July 21, 2005)4.7
    *
    
    Form of Warrant (filed as Exhibit 4.2 to Form 8-K, filed with the SEC on August 23, 2005)4.8
    *
    
    Series 5-A Preferred Stock and Warrant Purchase Agreement, dated as of September, 18, 2006, by and among
First Physicians Capital Group, Inc. and certain Series 5-A Preferred Stock Investors (filed as Exhibit
4.1 to the Form 8-K, as filed with the SEC on September 22, 2006)4.9
    *
    
    Form of Warrant (filed as Exhibit 4.2 to Form 8-K, filed with the SEC on September 22, 2006)4.10
    *
    
    Amended and Restated Articles of Organization of Rural Hospital Acquisition LLC (filed as Exhibit 4.1 to
the Form 8-K, as filed with the SEC on November 5, 2007)4.11
    *
    
    Amended and Restated Operating Agreement Rural Hospital Acquisition LLC (filed as Exhibit 4.2 to the Form
8-K, as filed with the SEC on November 5, 2007)4.12
    *
    
    Form of Extension of Warrant, dated July 18, 2007 (filed as Exhibit 4.1 to Form 8-K as filed with the SEC
on December 18, 2008)10.1
    *
    
    Form of First Group Notes (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on November 2,
2007)10.2
    *
    
    Form of Second Group Notes (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on November 2,
2007)10.3
    *
    
    Form of First Group Warrants (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on November 2,
2007)10.4
    *
    
    Form of Second Group Warrants (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on November 2,
2007)
  27




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##### Table of Contents



Exhibit No.
    
    Description10.5
    *
    
    Form of Limited Guaranty by Tri-Isthmus Group, Inc. (filed as Exhibit 10.1 to the Form 8-K, as filed with
the SEC on November 5, 2007)10.6
    *
    
    Employment Agreement of Dennis M. Smith, dated effective as of October 10, 2007 (filed as Exhibit 10.1 to
the Form 8-K, as filed with the SEC on December 21, 2007)10.7
    *
    
    Option Agreement of Dennis M. Smith, dated effective as of October 10, 2007 (filed as Exhibit 10.2 to the
Form 8-K, as filed with the SEC on December 21, 2007)10.8
    *
    
    Series 5-A Preferred Stock and Warrant Purchase Agreement, dated January 14, 2008 (filed as Exhibit 10.1
to the Form 8-K, as filed with the SEC on January 22, 2008)10.9
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on January 22, 2008)10.10
    *
    
    Form of Warrant issued to SMP Investments I, LLC (filed as Exhibit 10.1 to the Form 8-K, as filed with the
SEC on March 26, 2008)10.11
    *
    
    Series 6-A Preferred Stock and Warrant Purchase Agreement, dated March 31, 2008 (filed as Exhibit 10.1 to
the Form 8-K, as filed with the SEC on April 3, 2008)10.12
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on April 3, 2008)10.13
    *
    
    Form of Waveland Warrant (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on April 3, 2008)10.14
    *
    
    Agreement and Plan of Merger, dated April 24, 2008 (filed as Exhibit 10.1 to the Form 8-K, as filed with
the SEC on April 30, 2008)10.15
    *
    
    Form of Series 5-A Preferred Stock and Warrant Purchase Agreement (filed as Exhibit 10.1 to the Form 8-K,
as filed with the SEC on May 7, 2008)10.16
    *
    
    Form of Warrant issued to each of SMP Investments I, LLC and Ciabattoni Living Trust dated August 17, 2000
(filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on May 7, 2008)10.17
    *
    
    Form of Letter Agreement for the issuance of shares of Series 6-A Convertible Preferred Stock in complete
satisfaction of that certain convertible promissory note dated as of October 29, 2007 between Tri-Isthmus
Group, Inc., Surgical Center Acquisition Holdings, Inc., Del Mar Acquisition, Inc., Del Mar GenPar, Inc.,
Point Loma Acquisition, Inc., and Point Loma GenPar, Inc. (filed as Exhibit 10.3 to the Form 8-K, as filed
with the SEC on May 7, 2008)10.18
    *
    
    Series 6-A Preferred Stock and Warrant Purchase Agreement, dated May 29, 2008 (filed as Exhibit 10.1 to
the Form 8-K, as filed with the SEC on June 4, 2008)10.19
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on June 4, 2008)10.20
    *
    

Employment Agreement of David Hirschhorn, dated as of July 1, 2008 (filed as Exhibit 10.1 to the Form 8-K,
as filed with the SEC on July 7, 2008)10.21
    *
    
    Form of Option Grant Agreement of David Hirschhorn, dated as of July 1, 2008 (filed as Exhibit 10.2 to the
Form 8-K, as filed with the SEC on July 7, 2008)10.22
    *
    
    Series 6-A Preferred Stock and Warrant Purchase Agreement, dated September 8, 2008 (filed as Exhibit 10.1
to the Form 8-K, as filed with the SEC on September 12, 2008)
  28




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Exhibit No.
    
    Description10.23
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on September 12,
2008)10.24
    *
    
    Employment Agreement of Thomas Rice, dated effective as of November 10, 2008 (filed as Exhibit 10.1 to the
Form 8-K, as filed with the SEC on November 14, 2008)10.25
    *
    
    Option Grant Agreement of Thomas Rice, dated effective as of November 10, 2008 (filed as Exhibit 10.2 to
the Form 8-K, as filed with the SEC on November 14, 2008)10.26
    *
    
    Form of Loan Agreement, effective November 6, 2008, among RHA Anadarko, LLC, Tri-Isthmus Group, Inc.,
Rural Hospital Acquisition, LLC, First Physicians Community Healthcare Services, Inc., RHA Stroud, LLC,
RHA Tishomingo, LLC, TSG Physicians Group, LLC, and Canadian State Bank (filed as Exhibit 10.2 to the Form
8-K, as filed with the SEC on December 17, 2008)10.27
    *
    
    Form of Loan Agreement, effective November 6, 2008, among RHA Stroud, LLC, Tri-Isthmus Group, Inc., Rural
Hospital Acquisition, LLC, First Physicians Community Healthcare Services, Inc., RHA Anadarko, LLC, RHA
Tishomingo, LLC, TSG Physicians Group, LLC, and Valliance Bank (filed as Exhibit 10.3 to the Form 8-K, as
filed with the SEC on December 17, 2008)10.28
    *
    
    Form of Loan Agreement, effective November 6, 2008, among RHA Tishomingo, LLC, Tri-Isthmus Group, Inc.,
Rural Hospital Acquisition, LLC, First Physicians Community Healthcare Services, Inc., RHA Stroud, LLC,
RHA Anadarko, LLC, TSG Physicians Group, LLC, and Canadian State Bank (filed as Exhibit 10.4 to the Form
8-K, as filed with the SEC on December 17, 2008)10.29
    *
    
    Form of Promissory Note, effective November 6, 2008, by RHA Anadarko, LLC, in favor of Canadian State Bank
(filed as Exhibit 10.5 to the Form 8-K, as filed with the SEC on December 17, 2008)10.30
    *
    
    Form of Promissory Note, effective November 6, 2008, by RHA Stroud, LLC, in favor of Valliance Bank (filed
as Exhibit 10.6 to the Form 8-K, as filed with the SEC on December 17, 2008)10.31
    *
    
    Form of Promissory Note, effective November 6, 2008, by RHA Tishomingo, LLC, in favor of Canadian State
Bank (filed as Exhibit 10.7 to the Form 8-K, as filed with the SEC on December 17, 2008)10.32
    *
    
    USDA Guaranty Agreement, effective November 6, 2008, by RHA Anadarko, LLC, in favor of Canadian State Bank
(filed as Exhibit 10.8 to the Form 8-K, as filed with the SEC on December 17, 2008)10.33
    *
    
    USDA Guaranty Agreement, effective November 6, 2008, by RHA Stroud, LLC, in favor of Valliance Bank (filed
as Exhibit 10.9 to the Form 8-K, as filed with the SEC on December 17, 2008)10.34
    *
    
    USDA Guaranty Agreement, effective November 6, 2008, by RHA Anadarko, LLC, in favor of Canadian State Bank
(filed as Exhibit 10.10 to the Form 8-K, as filed with the SEC on December 17, 2008)10.35
    *
    
    Form of Promissory Note, dated December 11, 2008, by Rural Hospital Acquisition, LLC, in favor of Carol
Schuster (filed as Exhibit 10.11 to the Form 8-K, as filed with the SEC on December 17, 2008)10.36
    *
    
    Form of Guaranty of Tri-Isthmus Group, Inc., dated December 11, 2008, in favor of Carol Schuster (filed as
Exhibit 10.12 to the Form 8-K, as filed with the SEC on December 17, 2008)10.37
    *
    
    Form of Convertible Promissory Note Issued in Favor of SMP Investments I, LLC (filed as Exhibit 10.1 to
the Form 8-K, as filed with the SEC on February 13, 2009)10.38
    *
    
    Form of Convertible Promissory Note Issued in Favor of Anthony J. Ciabattoni, Trustee of the Ciabattoni
Living Trust dated August 17, 2000 (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on
February 13, 2009)
  29




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Exhibit No.
    
    Description10.39
    *
    
    Form of Warrant No. 108 (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on February 13, 2009)10.40
    *
    
    Form of Warrant No. 109 (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on February 13, 2009)10.41
    *
    
    Form of Warrant No. 110 (filed as Exhibit 10.5 to the Form 8-K, as filed with the SEC on February 13, 2009)10.42
    *
    
    Form of Warrant No. 111 (filed as Exhibit 10.6 to the Form 8-K, as filed with the SEC on February 13, 2009)10.43
    *
    
    Form of Convertible Promissory Note (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on March
5, 2009)10.44
    *
    
    Form of Warrant (exercisable at $0.50 per share) issued to each of Michael Ciabattoni, Scott Casey, Jean
Heaton, Stephanie Heaton, Jennifer Heaton, Cobea Associates, LLC, William Wallace, Trustee of the Wallace
Family Revocable Trust dated April 23, 2001, Otto J. Claricurzio, and Phillip J. Ciabattoni (filed as
Exhibit 10.2 to the Form 8-K, as filed with the SEC on March 5, 2009)10.45
    *
    
    Form of Warrant (exercisable at $0.75 per share) issued to each of Michael Ciabattoni, Scott Casey, Jean
Heaton, Stephanie Heaton, Jennifer Heaton, Cobea Associates, LLC, William Wallace, Trustee of the Wallace
Family Revocable Trust dated April 23, 2001, Otto J. Claricurzio, and Phillip J. Ciabatton (filed as
Exhibit 10.3 to the Form 8-K, as filed with the SEC on March 5, 2009)10.46
    *
    
    Form of Convertible Promissory Note issued to each of Frank Darras, Trustee of the Darras Family Trust,
SFV, Incorporated, NFS LLC/FMTC Rol IRA FBO Neal Katz A/C LMG-001902 (filed as Exhibit 10.1 to the Form
8-K, as filed with the SEC on April 20, 2009)10.47
    *
    
    Form of Warrant (exercisable at $0.50 per share) Frank Darras, Trustee of the Darras Family Trust, SFV,
Incorporated, NFS LLC/FMTC Rol IRA FBO Neal Katz A/C LMG-001902 (filed as Exhibit 10.2 to the Form 8-K, as
filed with the SEC on April 20, 2009)10.48
    *
    
    Form of Warrant (exercisable at $0.75 per share) Frank Darras, Trustee of the Darras Family Trust, SFV,
Incorporated, NFS LLC/FMTC Rol IRA FBO Neal Katz A/C LMG-001902 (filed as Exhibit 10.3 to the Form 8-K, as
filed with the SEC on April 20, 2009)10.49
    *
    
    Form of Series 6-A Preferred Stock and Warrant Purchase Agreement (filed as Exhibit 10.1 to the Form 8-K,
as filed with the SEC on June 12, 2009)10.50
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on June 12, 2009)10.51
    *
    
    Form of Medical Advisory Board Warrant (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on
June 12, 2009)10.52
    *
    
    Form of Series 5-A Preferred Stock and Warrant Purchase Agreement, dated October 19, 2009 (filed as
Exhibit 10.1 to the Form 8-K, as filed with the SEC on October 23, 2009)10.53
    *
    
    Form of Warrant issued in connection with 5-A (filed as Exhibit 10.2 to the Form 8-K, as filed with the
SEC on October 23, 2009)10.54
    *
    
    Form of Series 6-A Preferred Stock and Warrant Purchase Agreement, dated October 19, 2009 (filed as
Exhibit 10.3 to the Form 8-K, as filed with the SEC on October 23, 2009)10.55
    *
    
    Form of Warrant issued in connection with 6-A (filed as Exhibit 10.4 to the Form 8-K, as filed with the
SEC on October 23, 2009)
  30




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Exhibit No.
    
    Description10.56
    *
    
    Form Subscription Agreement, dated December 3, 2009 (filed as Exhibit 10.1 to the Form 8-K, as filed with
the SEC on December 14, 2009)10.57
    *
    
    Form of Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on December 14, 2009)10.58
    *
    
    Real Property Purchase and Sale Agreement, by and between Southern Plains Associates, LLC and Southern
Plains Medical Center, Inc., dated December 16, 2009 (filed as Exhibit 10.1 to the Form 8-K, as filed with
the SEC on January 20, 2010)10.59
    *
    
    Form of USDA Loan Guaranty (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on January 20,
2010)10.60
    *
    
    USDA Loan Agreement, by and among FB S. Plains Financing, LLC, James B. Swickey, David W. Durrett, Capital
Investors of Oklahoma, LLC, First Physicians Realty Group, LLC, Rural Hospital Acquisition, LLC, Southern
Plains Associates, L.L.C. and First Liberty Bank, dated January 13, 2010 (filed as Exhibit 10.3 to the
Form 8-K, as filed with the SEC on January 20, 2010)10.61
    *
    
    First Amended and Restated Promissory Note, by and between FB S. Plains Financing, LLC and First Liberty
Bank, dated January 13, 2010 (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on January 20,
2010)14.1
    *
    
    Corporate Code of Business Conduct and Ethics for Directors, Executive Officers, and Employees, dated
effective as of April 22, 2008 (filed as Exhibit 14.1 to the Form 10-K, as filed with the SEC on January
13, 2009)21.1
    *
    
    Subsidiaries of First Physicians Capital Group, Inc. (f/k/a Tri-Isthmus Group, Inc.)31.1
    
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193431.2
    
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193432.1
    
    
    Certification Pursuant to 18 U.S.C. 135032.2
    
    
    Certification Pursuant to 18 U.S.C. 1350
 *
    
    Previously filed with the SEC as indicated, and hereby incorporated herein by reference.
    
    Certain portions of these documents have been omitted based on a request for confidential treatment submitted to the SEC. The non-public information that has been omitted from
these documents has been separately filed with the SEC. Each redacted portion of these documents is indicated by a [*] and is subject to the request for confidential treatment
submitted to the SEC. The redacted information is confidential information of the Registrant.  31




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##### Table of Contents



SIGNATURES
  Date: August 20, 2010
    First Physicians Capital Group, Inc.
(Registrant)By:
    /s/ David HirschhornDavid HirschhornChief Executive Officer
(Principal Executive Officer)Date: August 20, 2010
    
    /s/ Donald C. ParkersonDonald C. ParkersonChief Financial Officer
(Principal Financial Officer)  32




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description2.1
    *
    
    Membership Interest Purchase Agreement (filed as
Exhibit 2.1 to the Form 8-K, as filed with the
SEC on November 5, 2007)3.1
    *
    
    Certificate of Incorporation (filed as Exhibit
3.1 to the Form 8-K, as filed with the SEC on
November 14, 2000)3.2
    *
    
    Amended and Restated Bylaws dated October 25,
2002 (filed as Exhibit 3.2 to the Form 8-K, as
filed with the SEC on October 28, 2002)3.3
    *
    
    Certificate of Designation of Rights and
Preferences of Series 2-A Convertible Preferred
Stock filed November 8, 2000 (filed as Exhibit
4.1 to the Form 8-K, as filed with the SEC on
November 14, 2000)3.4
    *
    
    Certificate of Merger filed November 8, 2000,
merging Vsource, Inc. (a Nevada corporation) with
and into the Vsource, Inc. (a Delaware
corporation) (filed as Exhibit 4.2 to the Form
8-K, as filed with the SEC on November 14, 2000)3.5
    *
    
    Agreement and Plan of Merger dated as of December
14, 2000, among the Registrant, OTT Acquisition
Corp., Online Transaction Technologies, Inc. and
its Shareholders (filed as Exhibit 10.11 to the
Form 10-Q, as filed with the SEC on December 15,
2000)3.6
    *
    
    Certificate of Designation of Rights and
Preferences of Series 3-A Convertible Preferred
Stock filed June 20, 2001 (filed as Exhibit 4.1
to the Form 8-K, as filed with the SEC on July 2,
2001)3.7
    *
    
    Amendment to Certificate of Incorporation, dated
January 16, 2002 (filed as Exhibit 3.3 to the
Form 8-K, as filed with the SEC on January 23,
2002)3.8
    *
    
    Certificate of Designation of Rights and
Preferences of Series 4-A Convertible Preferred
Stock (filed as Exhibit 3.1 to the Form 8-K, as
filed with the SEC on October 28, 2002)3.9
    *
    
    Amendment to Certificate of Incorporation, dated
November 20, 2002 (filed as Exhibit 3.1 to the
Form 10-Q for the period ending October 31, 2002,
as filed with the SEC on December 5, 2002)3.10
    *
    
    Certificate of Designation of Rights and
Preferences of Series 5-A Convertible Preferred
Stock (filed as Exhibit 3.1 to the Form 8-K, as
filed with the SEC on July 21, 2005)3.11
    *
    
    Amendment to Certificate of Incorporation, dated
December 16, 2005 (filed as Exhibit 3.5 to the
Form 10-Q for the period ending October 31, 2005,
as filed with the SEC on December 20, 2005)3.12
    *
    
    Certificate of Amendment to the Certificate of
Designation of Rights and Preferences Series 5-A
Convertible Preferred Stock filed January 10,
2008 (filed as Exhibit B to the Form of Series
5-A Preferred Stock and Warrant Purchase
Agreement, filed as Exhibit 10.52 herein)3.13
    *
    
    Certificate of Designation of Rights and
Preferences of Series 6-A Convertible Preferred
Stock filed April 2, 2008 (filed as Exhibit 3.1
to the Form 8-K, as filed with the SEC on April
3, 2008)3.14
    *
    
    Certificate of Amendment to the Certificate of
Designation of Rights and Preferences of Series
5-A Convertible Preferred Stock filed May 15,
2008 (filed as Exhibit 4.2 to the Form 10-Q, as
filed with the SEC on May 20, 2008)
  33




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##### Table of Contents



Exhibit No.
    
    Description3.15
    *
    
    Certificate of Amendment to the Certificate of Designation of Rights and Preferences of Series 6-A Convertible Preferred Stock filed May 15, 2008 (filed as
Exhibit B to the Form of Series 6-A Preferred Stock and Warrant Purchase Agreement, filed as Exhibit 10.54 herein)3.16
    *
    
    Amendment to Certificate of Incorporation, dated September 29, 2009 (filed as Exhibit 3.1 to the Form 8-K, as filed with the SEC on October 1, 2009)3.17
    *
    
    Certificate of Decrease of Shares Designated as Series 7-A Convertible Preferred Stock, dated and filed January 22, 2010 (filed as Exhibit 3.1 to the Form
8-K, as filed with the SEC on January 28, 2010)4.1
    *
    
    Certificate of Decrease of Shares Designated as Series 1-A Convertible Preferred Stock (filed as Exhibit 4.1 to the Form 8-K, as filed with the SEC on July
13, 2005)4.2
    *
    
    Certificate of Decrease of Shares Designated as Series 2-A Convertible Preferred Stock (filed as Exhibit 4.2 to the Form 8-K, as filed with the SEC on July
13, 2005)4.3
    *
    
    Certificate of Decrease of Shares Designated as Series 3-A Convertible Preferred Stock (filed as Exhibit 4.3 to the Form 8-K, as filed with the SEC on July
13, 2005)4.4
    *
    
    Certificate of Decrease of Shares Designated as Series 4-A Convertible Preferred Stock (filed as Exhibit 4.4 to the Form 8-K, as filed with the SEC on July
13, 2005)4.5
    *
    
    Series 5-A Preferred Stock and Warrant Purchase Agreement, dated as of July 7, 2005, by and among Vsource, Inc. and the investors listed therein (filed as
Exhibit 4.1 to the Form 8-K, as filed with the SEC on July 21, 2005)4.6
    *
    
    Form of Warrant (filed as Exhibit 4.2 to Form 8-K, filed with the SEC on July 21, 2005)4.7
    *
    
    Form of Warrant (filed as Exhibit 4.2 to Form 8-K, filed with the SEC on August 23, 2005)4.8
    *
    
    Series 5-A Preferred Stock and Warrant Purchase Agreement, dated as of September, 18, 2006, by and among First Physicians Capital Group, Inc. and certain
Series 5-A Preferred Stock Investors (filed as Exhibit 4.1 to the Form 8-K, as filed with the SEC on September 22, 2006)4.9
    *
    
    Form of Warrant (filed as Exhibit 4.2 to Form 8-K, filed with the SEC on September 22, 2006)4.10
    *
    
    Amended and Restated Articles of Organization of Rural Hospital Acquisition LLC (filed as Exhibit 4.1 to the Form 8-K, as filed with the SEC on November 5,
2007)4.11
    *
    
    Amended and Restated Operating Agreement Rural Hospital Acquisition LLC (filed as Exhibit 4.2 to the Form 8-K, as filed with the SEC on November 5, 2007)4.12
    *
    
    Form of Extension of Warrant, dated July 18, 2007 (filed as Exhibit 4.1 to Form 8-K as filed with the SEC on December 18, 2008)10.1
    *
    
    Form of First Group Notes (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on November 2, 2007)10.2
    *
    
    Form of Second Group Notes (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on November 2, 2007)10.3
    *
    
    Form of First Group Warrants (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on November 2, 2007)
  34




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##### Table of Contents



Exhibit No.
    
    Description10.4
    *
    
    Form of Second Group Warrants (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on November 2, 2007)10.5
    *
    
    Form of Limited Guaranty by Tri-Isthmus Group, Inc. (filed as Exhibit 10.1 to the Form 8-K, as filed
with the SEC on November 5, 2007)10.6
    *
    
    Employment Agreement of Dennis M. Smith, dated effective as of October 10, 2007 (filed as Exhibit 10.1
to the Form 8-K, as filed with the SEC on December 21, 2007)10.7
    *
    
    Option Agreement of Dennis M. Smith, dated effective as of October 10, 2007 (filed as Exhibit 10.2 to
the Form 8-K, as filed with the SEC on December 21, 2007)10.8
    *
    
    Series 5-A Preferred Stock and Warrant Purchase Agreement, dated January 14, 2008 (filed as Exhibit
10.1 to the Form 8-K, as filed with the SEC on January 22, 2008)10.9
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on January 22,
2008)10.10
    *
    
    Form of Warrant issued to SMP Investments I, LLC (filed as Exhibit 10.1 to the Form 8-K, as filed with
the SEC on March 26, 2008)10.11
    *
    
    Series 6-A Preferred Stock and Warrant Purchase Agreement, dated March 31, 2008 (filed as Exhibit 10.1
to the Form 8-K, as filed with the SEC on April 3, 2008)10.12
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on April 3, 2008)10.13
    *
    
    Form of Waveland Warrant (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on April 3, 2008)10.14
    *
    
    Agreement and Plan of Merger, dated April 24, 2008 (filed as Exhibit 10.1 to the Form 8-K, as filed
with the SEC on April 30, 2008)10.15
    *
    
    Form of Series 5-A Preferred Stock and Warrant Purchase Agreement (filed as Exhibit 10.1 to the Form
8-K, as filed with the SEC on May 7, 2008)10.16
    *
    
    Form of Warrant issued to each of SMP Investments I, LLC and Ciabattoni Living Trust dated August 17,
2000 (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on May 7, 2008)10.17
    *
    
    Form of Letter Agreement for the issuance of shares of Series 6-A Convertible Preferred Stock in
complete satisfaction of that certain convertible promissory note dated as of October 29, 2007 between
Tri-Isthmus Group, Inc., Surgical Center Acquisition Holdings, Inc., Del Mar Acquisition, Inc., Del Mar
GenPar, Inc., Point Loma Acquisition, Inc., and Point Loma GenPar, Inc. (filed as Exhibit 10.3 to the
Form 8-K, as filed with the SEC on May 7, 2008)10.18
    *
    
    Series 6-A Preferred Stock and Warrant Purchase Agreement, dated May 29, 2008 (filed as Exhibit 10.1 to
the Form 8-K, as filed with the SEC on June 4, 2008)10.19
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on June 4, 2008)10.20
    *
    
    Employment Agreement of David Hirschhorn, dated as of July 1, 2008 (filed as Exhibit 10.1 to the Form
8-K, as filed with the SEC on July 7, 2008)10.21
    *
    
    Form of Option Grant Agreement of David Hirschhorn, dated as of July 1, 2008 (filed as Exhibit 10.2 to
the Form 8-K, as filed with the SEC on July 7, 2008)
  35




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##### Table of Contents



Exhibit No.
    
    Description10.22
    *
    
    Series 6-A Preferred Stock and Warrant Purchase Agreement, dated September 8, 2008 (filed as Exhibit 10.1 to the Form 8-K, as filed
with the SEC on September 12, 2008)10.23
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on September 12, 2008)10.24
    *
    
    Employment Agreement of Thomas Rice, dated effective as of November 10, 2008 (filed as Exhibit 10.1 to the Form 8-K, as filed with
the SEC on November 14, 2008)10.25
    *
    
    Option Grant Agreement of Thomas Rice, dated effective as of November 10, 2008 (filed as Exhibit 10.2 to the Form 8-K, as filed
with the SEC on November 14, 2008)10.26
    *
    
    Form of Loan Agreement, effective November 6, 2008, among RHA Anadarko, LLC, Tri-Isthmus Group, Inc., Rural Hospital Acquisition,
LLC, First Physicians Community Healthcare Services, Inc., RHA Stroud, LLC, RHA Tishomingo, LLC, TSG Physicians Group, LLC, and
Canadian State Bank (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on December 17, 2008)10.27
    *
    
    Form of Loan Agreement, effective November 6, 2008, among RHA Stroud, LLC, Tri-Isthmus Group, Inc., Rural Hospital Acquisition,
LLC, First Physicians Community Healthcare Services, Inc., RHA Anadarko, LLC, RHA Tishomingo, LLC, TSG Physicians Group, LLC, and
Valliance Bank (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on December 17, 2008)10.28
    *
    
    Form of Loan Agreement, effective November 6, 2008, among RHA Tishomingo, LLC, Tri-Isthmus Group, Inc., Rural Hospital Acquisition,
LLC, First Physicians Community Healthcare Services, Inc., RHA Stroud, LLC, RHA Anadarko, LLC, TSG Physicians Group, LLC, and
Canadian State Bank (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on December 17, 2008)10.29
    *
    
    Form of Promissory Note, effective November 6, 2008, by RHA Anadarko, LLC, in favor of Canadian State Bank (filed as Exhibit 10.5
to the Form 8-K, as filed with the SEC on December 17, 2008)10.30
    *
    
    Form of Promissory Note, effective November 6, 2008, by RHA Stroud, LLC, in favor of Valliance Bank (filed as Exhibit 10.6 to the
Form 8-K, as filed with the SEC on December 17, 2008)10.31
    *
    
    Form of Promissory Note, effective November 6, 2008, by RHA Tishomingo, LLC, in favor of Canadian State Bank (filed as Exhibit 10.7
to the Form 8-K, as filed with the SEC on December 17, 2008)10.32
    *
    
    USDA Guaranty Agreement, effective November 6, 2008, by RHA Anadarko, LLC, in favor of Canadian State Bank (filed as Exhibit 10.8
to the Form 8-K, as filed with the SEC on December 17, 2008)10.33
    *
    
    USDA Guaranty Agreement, effective November 6, 2008, by RHA Stroud, LLC, in favor of Valliance Bank (filed as Exhibit 10.9 to the
Form 8-K, as filed with the SEC on December 17, 2008)10.34
    *
    
    USDA Guaranty Agreement, effective November 6, 2008, by RHA Anadarko, LLC, in favor of Canadian State Bank (filed as Exhibit 10.10
to the Form 8-K, as filed with the SEC on December 17, 2008)10.35
    *
    
    Form of Promissory Note, dated December 11, 2008, by Rural Hospital Acquisition, LLC, in favor of Carol Schuster (filed as Exhibit
10.11 to the Form 8-K, as filed with the SEC on December 17, 2008)10.36
    *
    
    Form of Guaranty of Tri-Isthmus Group, Inc., dated December 11, 2008, in favor of Carol Schuster (filed as Exhibit 10.12 to the
Form 8-K, as filed with the SEC on December 17, 2008)
  36




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##### Table of Contents



Exhibit No.
    
    Description10.37
    *
    
    Form of Convertible Promissory Note Issued in Favor of SMP Investments I, LLC (filed as Exhibit 10.1 to
the Form 8-K, as filed with the SEC on February 13, 2009)10.38
    *
    
    Form of Convertible Promissory Note Issued in Favor of Anthony J. Ciabattoni, Trustee of the Ciabattoni
Living Trust dated August 17, 2000 (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on
February 13, 2009)10.39
    *
    
    Form of Warrant No. 108 (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on February 13,
2009)10.40
    *
    
    Form of Warrant No. 109 (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on February 13,
2009)10.41
    *
    
    Form of Warrant No. 110 (filed as Exhibit 10.5 to the Form 8-K, as filed with the SEC on February 13,
2009)10.42
    *
    
    Form of Warrant No. 111 (filed as Exhibit 10.6 to the Form 8-K, as filed with the SEC on February 13,
2009)10.43
    *
    
    Form of Convertible Promissory Note (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on
March 5, 2009)10.44
    *
    
    Form of Warrant (exercisable at $0.50 per share) issued to each of Michael Ciabattoni, Scott Casey,
Jean Heaton, Stephanie Heaton, Jennifer Heaton, Cobea Associates, LLC, William Wallace, Trustee of the
Wallace Family Revocable Trust dated April 23, 2001, Otto J. Claricurzio, and Phillip J. Ciabattoni
(filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on March 5, 2009)10.45
    *
    
    Form of Warrant (exercisable at $0.75 per share) issued to each of Michael Ciabattoni, Scott Casey,
Jean Heaton, Stephanie Heaton, Jennifer Heaton, Cobea Associates, LLC, William Wallace, Trustee of the
Wallace Family Revocable Trust dated April 23, 2001, Otto J. Claricurzio, and Phillip J. Ciabatton
(filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on March 5, 2009)10.46
    *
    
    Form of Convertible Promissory Note issued to each of Frank Darras, Trustee of the Darras Family Trust,
SFV, Incorporated, NFS LLC/FMTC Rol IRA FBO Neal Katz A/C LMG-001902 (filed as Exhibit 10.1 to the Form
8-K, as filed with the SEC on April 20, 2009)10.47
    *
    
    Form of Warrant (exercisable at $0.50 per share) Frank Darras, Trustee of the Darras Family Trust, SFV,
Incorporated, NFS LLC/FMTC Rol IRA FBO Neal Katz A/C LMG-001902 (filed as Exhibit 10.2 to the Form 8-K,
as filed with the SEC on April 20, 2009)10.48
    *
    
    Form of Warrant (exercisable at $0.75 per share) Frank Darras, Trustee of the Darras Family Trust, SFV,
Incorporated, NFS LLC/FMTC Rol IRA FBO Neal Katz A/C LMG-001902 (filed as Exhibit 10.3 to the Form 8-K,
as filed with the SEC on April 20, 2009)10.49
    *
    
    Form of Series 6-A Preferred Stock and Warrant Purchase Agreement (filed as Exhibit 10.1 to the Form
8-K, as filed with the SEC on June 12, 2009)10.50
    *
    
    Form of Investor Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on June 12, 2009)10.51
    *
    
    Form of Medical Advisory Board Warrant (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on
June 12, 2009)10.52
    *
    
    Form of Series 5-A Preferred Stock and Warrant Purchase Agreement, dated October 19, 2009 (filed as
Exhibit 10.1 to the Form 8-K, as filed with the SEC on October 23, 2009)
  37




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##### Table of Contents



Exhibit No.
    
    Description10.53
    *
    
    Form of Warrant issued in connection with 5-A (filed as Exhibit 10.2 to the Form 8-K, as filed with the
SEC on October 23, 2009)10.54
    *
    
    Form of Series 6-A Preferred Stock and Warrant Purchase Agreement, dated October 19, 2009 (filed as
Exhibit 10.3 to the Form 8-K, as filed with the SEC on October 23, 2009)10.55
    *
    
    Form of Warrant issued in connection with 6-A (filed as Exhibit 10.4 to the Form 8-K, as filed with the
SEC on October 23, 2009)10.56
    *
    
    Form Subscription Agreement, dated December 3, 2009 (filed as Exhibit 10.1 to the Form 8-K, as filed
with the SEC on December 14, 2009)10.57
    *
    
    Form of Warrant (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on December 14, 2009)10.58
    *
    
    Real Property Purchase and Sale Agreement, by and between Southern Plains Associates, LLC and Southern
Plains Medical Center, Inc., dated December 16, 2009 (filed as Exhibit 10.1 to the Form 8-K, as filed
with the SEC on January 20, 2010)10.59
    *
    
    Form of USDA Loan Guaranty (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on January 20,
2010)10.60
    *
    
    USDA Loan Agreement, by and among FB S. Plains Financing, LLC, James B. Swickey, David W. Durrett,
Capital Investors of Oklahoma, LLC, First Physicians Realty Group, LLC, Rural Hospital Acquisition,
LLC, Southern Plains Associates, L.L.C. and First Liberty Bank, dated January 13, 2010 (filed as
Exhibit 10.3 to the Form 8-K, as filed with the SEC on January 20, 2010)10.61
    *
    
    First Amended and Restated Promissory Note, by and between FB S. Plains Financing, LLC and First
Liberty Bank, dated January 13, 2010 (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on
January 20, 2010)14.1
    *
    
    Corporate Code of Business Conduct and Ethics for Directors, Executive Officers, and Employees, dated
effective as of April 22, 2008 (filed as Exhibit 14.1 to the Form 10-K, as filed with the SEC on
January 13, 2009)21.1
    *
    
    Subsidiaries of First Physicians Capital Group, Inc. (f/k/a Tri-Isthmus Group, Inc.)31.1
    
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193431.2
    
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193432.1
    
    
    Certification Pursuant to 18 U.S.C. 135032.2
    
    
    Certification Pursuant to 18 U.S.C. 1350
 *
    
    Previously filed with the SEC as indicated, and hereby incorporated herein by reference.
    
    Certain portions of these documents have been omitted based on a request for confidential treatment submitted to the SEC. The non-public information that has been omitted from these
documents has been separately filed with the SEC. Each redacted portion of these documents is indicated by a [*] and is subject to the request for confidential treatment submitted to
the SEC. The redacted information is confidential information of the Registrant.  38