##### 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 March 31, 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
 N/A
 þ Yes o No
 o Yes o No
  Large accelerated filero
    
    Accelerated filero
    
    Non-accelerated filero
    
    Smaller reporting companyþ(Do not check if a smaller reporting company)
 o Yes þ No
 Number of shares of common stock outstanding as of May 13, 2010
    
    
    15,045,757




---



##### 



TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets 
March 31, 2010 (Unaudited) and September 30, 2009
    
    
    3Condensed Consolidated Statements of Operations (Unaudited) 
Three and Six months ended March 31, 2010 and March 31, 2009
    
    
    5Condensed Consolidated Statements of Cash Flows (Unaudited) 
Six months ended March 31, 2010 and March 31, 2009
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T. Controls and Procedures
    
    
    23PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3. Defaults upon Senior Securities
    
    
    24Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 5. Other Information
    
    
    24Item 6. Exhibits
    
    
    24Signatures
    
    
    30Exhibit Index
    
    
    31Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




---



##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 FIRST PHYSICIANS CAPITAL GROUP, INC.
 
   March 31,
    
    
    September 30,2010
    
    
    2009(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,704
    
    
    $
    2,324Restricted cash
    
    
    
    
    
    
    1,523Accounts receivable, net of allowance for uncollectible accounts
    
    
    4,678
    
    
    
    4,891Prepaid expenses
    
    
    496
    
    
    
    111Other current assets
    
    
    1,871
    
    
    
    1,772Total current assets
    
    
    9,749
    
    
    
    10,621Property and equipment, net
    
    
    18,227
    
    
    
    17,033Goodwill
    
    
    759
    
    
    
    759Other assets
    
    
    1,207
    
    
    
    1,078Total assets
    
    $
    29,942
    
    
    $
    29,491LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS DEFICITCurrent Liabilities:Accounts payable
    
    $
    4,419
    
    
    $
    3,598Accrued expenses
    
    
    3,237
    
    
    
    3,515Notes payable
    
    
    
    
    
    
    4,309Current maturities of long-term debt
    
    
    1,339
    
    
    
    1,028Total current liabilities
    
    
    8,995
    
    
    
    12,450Long-term debt, net of current portion
    
    
    17,691
    
    
    
    12,441Deferred gain
    
    
    1,749
    
    
    
    Commitments and contingencies
   3




---



##### Table of Contents



FIRST PHYSICIANS CAPITAL GROUP, INC.
 March 31,
    
    
    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 March 31,
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 March 31,
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
March 31, 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
March 31, 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;
15,045,757 and 13,448,683 shares issued and outstanding as of
March 31, 2010 and September 30, 2009, respectively)
    
    
    152
    
    
    
    136Additional paid-in capital
    
    
    78,673
    
    
    
    77,109Accumulated deficit
    
    
    (90,980
    )
    
    
    (86,122
    )Treasury stock, at cost (93,494 shares as of March 31, 2010 and
September 30, 2009)
    
    
    (79
    )
    
    
    (79
    )Total First Physicians Capital Group shareholders deficit
    
    
    (12,234
    )
    
    
    (8,956
    )Noncontrolling interests
    
    
    1,337
    
    
    
    1,083Total shareholders deficit
    
    
    (10,897
    )
    
    
    (7,873
    )Total liabilities, preferred stock and shareholders deficit
    
    $
    29,942
    
    
    $
    29,491
   4




---



##### Table of Contents



FIRST PHYSICIANS CAPITAL GROUP, INC.
 
    Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    

    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenue from services
    
    $
    9,605
    
    
    $
    10,180
    
    
    $
    19,932
    
    
    $
    21,001Costs and expenses:Selling, general and administrative expenses
    
    
    9,844
    
    
    
    9,637
    
    
    
    19,557
    
    
    
    19,573Provision for doubtful accounts
    
    
    1,022
    
    
    
    1,128
    
    
    
    2,705
    
    
    
    2,165Amortization of stock-based compensation
    
    
    267
    
    
    
    208
    
    
    
    546
    
    
    
    516Depreciation and amortization
    
    
    351
    
    
    
    271
    
    
    
    671
    
    
    
    502Total costs and expenses
    
    
    11,484
    
    
    
    11,244
    
    
    
    23,479
    
    
    
    22,756Operating loss
    
    
    (1,879
    )
    
    
    (1,064
    )
    
    
    (3,547
    )
    
    
    (1,755
    )Other income (expense)
    
    
    18
    
    
    
    (221
    )
    
    
    454
    
    
    
    (183
    )Interest expense
    
    
    (516
    )
    
    
    (440
    )
    
    
    (1,222
    )
    
    
    (612
    )Net loss from operations before taxation and non-cash beneficial
conversion feature
    
    
    (2,377
    )
    
    
    (1,725
    )
    
    
    (4,315
    )
    
    
    (2,550
    )Taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (2,377
    )
    
    $
    (1,725
    )
    
    $
    (4,315
    )
    
    $
    (2,550
    )Net income attributable to Noncontrolling interest
    
    
    (316
    )
    
    
    (142
    )
    
    
    (496
    )
    
    
    (236
    )Net loss attributable to First Physicians Capital Group
    
    
    (2,693
    )
    
    
    (1,867
    )
    
    
    (4,811
    )
    
    
    (2,786
    )Non-cash beneficial conversion feature preferred dividend
    
    
    (1
    )
    
    
    
    
    
    
    (47
    )
    
    
    Net loss attributable to First Physicians Capital Group common
shareholders
    
    $
    (2,694
    )
    
    $
    (1,867
    )
    
    $
    (4,858
    )
    
    $
    (2,786
    )Net loss per common share:Basic
    
    $
    (0.18
    )
    
    $
    (0.18
    )
    
    $
    (0.33
    )
    
    $
    (0.27
    )Diluted
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
   5




---



##### Table of Contents



FIRST PHYSICIANS CAPITAL GROUP, INC.
 
    Six months endedMarch 31,
    
    
    March 31,2010
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (4,811
    )
    
    $
    (2,786
    )Adjustments to reconcile net loss to net cash used in operating activities:Noncontrolling interest
    
    
    496
    
    
    
    236Depreciation and amortization
    
    
    671
    
    
    
    502Amortization of stock based compensation
    
    
    546
    
    
    
    516Amortization of debt discount
    
    
    522
    
    
    
    166Bad debt provision
    
    
    2,705
    
    
    
    2,165Loss from sale of investments
    
    
    
    
    
    
    281Changes in working capital components:Accounts receivable
    
    
    (2,492
    )
    
    
    (2,615
    )Accounts payable and accrued expenses
    
    
    543
    
    
    
    333Others
    
    
    (613
    )
    
    
    (1,104
    )Net cash provided by (used in) operating activities
    
    
    (2,433
    )
    
    
    (2,306
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (1,865
    )
    
    
    (3,744
    )Deferred gain from sale of property and equipment
    
    
    1,749
    
    
    
    Acquisition of subsidiaries, net of cash acquired
    
    
    
    
    
    
    (50
    )Proceeds from sale of equity interests in consolidated affiliates
    
    
    
    
    
    
    60Decrease (Increase) in restricted cash
    
    
    1,523
    
    
    
    (8
    )Net cash provided by (used in) investing activities
    
    
    1,407
    
    
    
    (3,742
    )Cash flows from financing activities:Drawdown on convertible loans
    
    
    
    
    
    
    2,150Repayment of notes payable
    
    
    (4,348
    )
    
    
    (5,182
    )Proceeds from long-term debt
    
    
    5,368
    
    
    
    8,559Distributions to noncontrolling interests
    
    
    (243
    )
    
    
    (31
    )Proceeds from exercise of stock warrants
    
    
    473
    
    
    
    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
    
    
    
    Net cash provided by financing activities
    
    
    1,406
    
    
    
    5,496Net increase (decrease) in cash and cash equivalents
    
    
    380
    
    
    
    (552
    )Cash and cash equivalents at beginning of period
    
    
    2,324
    
    
    
    2,970Cash and cash equivalents at end of period
    
    $
    2,704
    
    
    $
    2,418Cash paid for interest
    
    $
    628
    
    
    $
    587
     6




---



##### Table of Contents



1. Summary of Significant Accounting Policies
 Basis of Presentation
 Company we us our Form 10-K SEC
    Name Change
 RHA
  Future Funding
    Del Mar Ambulatory Surgical Center
   7




---



##### Table of Contents



Reclassifications
  Critical Accounting Policies
 Fiscal Year Ended September 30, 2009
 Recent Accounting Pronouncements
   Fair Value of Financial Instruments
  2. Net Loss Per Share
 Three Months ended
    
    
    Six Months ended(in thousands)
    
    
    (in thousands)March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Numerator for basic and
diluted loss per share:Net loss attributable to common shareholders
    
    $
    (2,694
    )
    
    $
    (1,867
    )
    
    $
    (4,858
    )
    
    $
    (2,786
    )Denominator for basic
(loss)/profit per share  weighted
average shares
    
    
    15,005,446
    
    
    
    10,322,929
    
    
    
    14,589,354
    
    
    
    10,322,929Effect 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
    
    $
    (0.18
    )
    
    $
    (0.18
    )
    
    $
    (0.33
    )
    
    $
    (0.27
    )
   8




---



##### Table of Contents



3. Accounts Receivable
  March 31,
    
    
    September 30,2010
    
    
    2009Gross patient accounts receivable
    
    $
    23,343
    
    
    $
    18,470Reserves for bad debt
    
    
    (6,111
    )
    
    
    (3,842
    )Reserves for contractual allowances
    
    
    (12,554
    )
    
    
    (9,737
    )Patient accounts receivable, net
    
    $
    4,678
    
    
    $
    4,891
 4. Other Current Assets
  March 31,
    
    
    September 30,2010
    
    
    2009Deposits
    
    $
    120
    
    
    $
    120Medical supplies
    
    
    505
    
    
    
    510Other receivables
    
    
    1,246
    
    
    
    1,142Total other current assets
    
    $
    1,871
    
    
    $
    1,772
 5. Property and Equipment
 Property and equipment consisted of the following (in thousands):
 March 31,
    
    
    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
    
    
    (3,197
    )
    
    
    (2,759
    )Property and equipment, net
    
    $
    18,227
    
    
    $
    17,033
 6. Acquisitions
 Membership
Interest Purchase Agreement
 7. Bridge Financing and Unregistered Sales of Equity Securities
 Bridge Financing SMP Ciabattoni Bridge
Notes Bridge Lender Bridge Lenders
  9




---



##### Table of Contents



Common Stock
 Bridge Financing
Maturity Date
    Second Bridge Notes Second Bridge Lender Second Bridge Lenders
 Second Bridge
Maturity Date
   10




---



##### Table of Contents



Darras Darras Note SFV SFV Note Katz Katz Note Third Bridge Notes Third Bridge Lender Third Bridge Lenders
 Third Bridge Maturity
Dates
    Unregistered Sales of Equity Securities
   11




---



##### Table of Contents



8. Long-term Debt
  March 31,
    
    
    September 30,2010
    
    
    2009Note payable, secured by equipment, $4,558 payable monthly, including 8.25% interest through September 2011
    
    $
    63
    
    
    $
    898% Notes payable to prior shareholders for stock repurchases, six notes outstanding at March 31, 2010, unsecured,
maturity dates ranging from 2010 through 2017
    
    
    238
    
    
    
    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
    
    
    4,682
    
    
    
    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
    
    
    3,408
    
    
    
    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
    
    
    3,431
    
    
    
    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
    
    
    1,155
    
    
    
    1,164Note payable, secured by equipment, $2,660 payable monthly including 5.3% interest through March 2013
    
    
    86
    
    
    
    99Note payable, 5% interest payable quarterly, unsecured, matures on or before December 11, 2011
    
    
    1,500
    
    
    
    1,500Capitalized lease obligations  five leases for buildings and medical equipment with imputed interest rates ranging
from 4% to 17.2%, maturing at various dates through 2013
    
    
    255
    
    
    
    300Note payable, secured by equipment, $2,413 payable monthly, including 7.04% interest through March 2011
    
    
    26
    
    
    
    39Note payable, secured by equipment, $7,530 payable monthly, including 6.75% interest through June 15, 2013
    
    
    262
    
    
    
    298Notes payable, two (2) notes, secured by equipment, $5,116 payable monthly, including 7.05% interest through March, 2011
    
    
    55
    
    
    
    83Note payable, 10% interest, unsecured, matures on or before December 3, 2012, face value $1.5 million less beneficial
conversion feature and debt discount of $84,000 at September 30, 2009
    
    
    1,500
    
    
    
    1,416Notes payable, 16% interest, unsecured, matures on or before December 31, 2011, face value $.7 million less beneficial
conversion feature and debt discount of $1,000 at March 31, 2010
    
    
    699
    
    
    
    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
    
    
    931
    
    
    
    1,027Note payable, unsecured 11.25% interest, matures March 2013
    
    
    533
    
    
    
    Note payable, secured by equipment, $1,567 payable monthly, including 6.75% interest through July 2013
    
    
    56
    
    
    
    64Total
    
    
    19,030
    
    
    
    13,469Less current maturities of long-term debt
    
    
    (1,339
    )
    
    
    (1,028
    )Total long-term debt
    
    $
    17,691
    
    
    $
    12,441
  12




---



##### Table of Contents



March 31,
    
    Payments2011
    
    $
    1,3392012
    
    
    3,9602013
    
    
    2,1702014
    
    
    5992015
    
    
    572Thereafter
    
    
    10,390Total
    
    $
    19,030
 9. Noncontrolling Interests
 SPA
  10. Warrants
  Remaining
    
    
    ExerciseDescription
    
    Life
    
    
    Price
    
    
    WarrantsSeptember 30, 2007 Preferred Stock Series 5-A warrants issued
to investor
    
    1 year
    
    $
    0.50
    
    
    
    150,000September 30, 2008 warrants issued in connection with notes
payable
    
    1 year
    
    
    0.31
    
    
    
    1,980,000September 30, 2008 warrants issued in connection with notes
payable
    
    1year
    
    
    0.50
    
    
    
    1,237,500September 30, 2008 Preferred Stock Series 5-A warrants issued
to investor and placement agent
    
    1 year
    
    
    0.50
    
    
    
    2,736,000September 30, 2008 Preferred Stock Series 6-A warrants issued
to investor
    
    1 year
    
    
    0.50
    
    
    
    3,589,200September 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
    
    
    
    375,000
  13




---



##### Table of Contents



Remaining
    
    
    ExerciseDescription
    
    Life
    
    
    Price
    
    
    WarrantsMarch 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
    
    3 years
    
    
    0.50
    
    
    
    210,000June 10, 2009 warrants issued to Medical Advisory Board
    
    3 years
    
    
    0.63
    
    
    
    50,000October 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
    
    3 years
    
    
    0.50
    
    
    
    375,000November 6, 2009 warrants issued in connection with notes
payable
    
    3 years
    
    
    0.75
    
    
    
    250,000December 3, 2009 warrants issued in connection with notes
payable
    
    3 years
    
    
    0.50
    
    
    
    125,000December 3, 2009 warrants issued in connection with notes
payable
    
    3 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
    
    3 years
    
    
    0.50
    
    
    
    37,500December 31, 2009 warrants issued in connection with notes
payable
    
    3 years
    
    
    0.75
    
    
    
    24,999January 14, 2010 warrants issued in connection with notes
payable
    
    3 years
    
    
    0.50
    
    
    
    12,500January 14, 2010 warrants issued in connection with notes
payable
    
    3 years
    
    
    0.75
    
    
    
    8,33314,274,213
  Weighted-AverageNumber of Shares of Common Stock
    
    
    Exercise Price Per ShareSix months
    
    
    
    
    
    
    Six monthsended
    
    
    Year ended
    
    
    ended
    
    
    Year endedMarch 31,
    
    
    September 30,
    
    
    March 31,
    
    
    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
    
    
    (1,045,685
    )
    
    
    (525,000
    )
    
    
    0.45
    
    
    
    0.50Cancelled or expired
    
    
    
    
    
    
    (266,000
    )
    
    
    
    
    
    
    0.48Warrants
outstanding at end
of the period
    
    
    14,370,013
    
    
    
    14,405,435
    
    
    $
    0.50
    
    
    $
    0.49
  14




---



##### Table of Contents



11. Stock Options
   Weighted-AverageNumber of Options
    
    
    Exercise Price Per ShareMarch 31,
    
    
    September 30,
    
    
    March 31,
    
    
    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
    
    
    (161,322
    )
    
    
    (924,138
    )
    
    
    0.63
    
    
    
    0.40Options outstanding at
end of the period
    
    
    8,587,680
    
    
    
    8,249,002
    
    
    $
    0.62
    
    
    $
    0.62Options
vested/exercisable at end of
the period
    
    
    2,222,793
    
    
    
    2,037,613
    
    
    $
    0.59
    
    
    $
    0.59
 12. SPMC Sale/Leaseback
 SPMC
      15




---



##### Table of Contents



13. Subsequent Events
 Exercise of Warrants
 Warrant Exercise Shares Securities Act
 Bridge Financing
  
 Item 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD LOOKING STATEMENTS
 SEC
 OVERVIEW
 www.firstphysicianscapitalgroup.com
     16




---



##### Table of Contents



CURRENT OPERATIONS
  RHA Del Mar Ambulatory Surgical Center
 STRATEGY
   SPMC
     17




---



##### Table of Contents



RECENT DEVELOPMENTS
 Exercise of Warrants
 First Warrant Exercise Shares Securities Act
 Second Warrant Exercise Shares
 Bridge Financing
 Bridge Financing SMP Ciabattoni Bridge
Notes Bridge Lender Bridge Lenders
 Common Stock
 Bridge Financing
Maturity Date
    18




---



##### Table of Contents



Second Bridge Notes Second Bridge Lenders Second Bridge Maturity Date
  Darras Darras Note SFV SFV Note Katz Katz Note Third Bridge Notes Third Bridge Lender Third Bridge Lenders Third Bridge Maturity Dates
   19




---



##### Table of Contents



Decrease of Series 7-A Convertible Preferred Stock
  SPMC Sale/Leaseback
 SPMC SPA
      20




---



##### Table of Contents



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




---



##### Table of Contents



MATERIAL CHANGES IN FINANCIAL CONDITION  AT MARCH 31, 2010, COMPARED TO SEPTEMBER 30, 2009:
                 LIQUIDITY AND CAPITAL RESOURCES
    22




---



##### Table of Contents



OFF-BALANCE SHEET FINANCING
  
 Item 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 Item 4T.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting
 
 PART II
OTHER INFORMATION
 
 Item 1.
    
    LEGAL PROCEEDINGS
  
 Item 1A.
    
    RISK FACTORS
    23




---



##### Table of Contents



PPACA
  
 Item 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5.
    
    OTHER INFORMATION
  
 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)
  24




---



##### Table of Contents



Exhibit No.
    
    Description3.7
    *
    
    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)3.15
    *
    
    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)
  25




---



##### Table of Contents



Exhibit No.
    
    Description4.8
    *
    
    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)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)
  26




---



##### Table of Contents



Exhibit No.
    
    Description10.15
    *
    
    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)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)
  27




---



##### Table of Contents



Exhibit No.
    
    Description10.30
    *
    
    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)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)
  28




---



##### Table of Contents



Exhibit No.
    
    Description10.45
    *
    
    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)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)
  29




---



##### Table of Contents



Exhibit No.
    
    Description10.61
    *
    
    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. 
 SIGNATURES
  Date: May 21, 2010
    First Physicians Capital Group, Inc.
(Registrant)By:
    /s/ David HirschhornDavid HirschhornChief Executive Officer
(Principal Executive Officer)Date: May 21, 2010
    /s/ Donald C. ParkersonDonald C. ParkersonChief Financial Officer
(Principal Financial Officer)  30




---



##### 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)
  31




---



##### 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)
  32




---



##### 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)
  33




---



##### 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)
  34




---



##### 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)
  35




---



##### 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.  36