UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




Washington,
D.C. 20549




FORM
10-Q


(Mark
One)




x Quarterly report under
Section 13 or 15(d) of the Securities Exchange Act of 1934


For the
Quarter Ended September 30,
2010.




o Transition report under
Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee
required)


For the
transition period from _______ to _______.




Commission file number: 000-27407




SPINE
PAIN MANAGEMENT, INC.


(Name of
Registrant in Its Charter)




Delaware
            98-0187705(State
      or Other Jurisdiction of Incorporation or
            (I.R.S.
      Employer Identification No.)Organization)




5225
Katy Freeway


Suite
600


Houston,
Texas   77007


(Address
of Principal Executive Offices)




(713)
521-4220


(Issuer's
Telephone Number, Including Area Code)




Securities
registered under Section 12(g) of the Exchange Act:




Title of Each
Class


Common
Stock ($0.001 Par Value)




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




Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):




Large
accelerated filer   ̈    Accelerated
filer   ̈




Non-accelerated
filer   ̈    Smaller
reporting company  x




Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes   ̈    No  x




As of
November 3, 2010, the registrant had 17,378,396 shares of common stock, $0.001
par value (the only class of voting stock), issued and outstanding.












SPINE
PAIN MANAGEMENT, INC.


(Formerly “VERSA
CARD, INC.”)





FORM
10-Q





TABLE OF
CONTENTS





PART
      I
            
            FINANCIAL
      INFORMATION
            
            
            F-1Item
      1.
            
            Financial
      StatementsBalance
      Sheets as of September 30, 2010 (Unaudited) and December 31,
      2009
            
            
            F-1Statements
      of Operations for the three and nine months ended September 30, 2010 and
      2009 (Unaudited)
            
            
            F-2Statements
      of Cash Flows for the nine months ended September 30, 2010 and 2009
      (Unaudited)
            
            
            F-3Notes
      to Financial Statements (Unaudited)
            
            
            F-4Item
      2.
            
            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
            
            
            3Item
      4.
            
            Controls
      and Procedures
            
            
            5PART
      II
            
            OTHER
      INFORMATION
            
            
            5Item
      1.
            
            Legal
      Proceedings
            
            
            5Item
      2.
            
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            
            
            7Item
      3.
            
            Defaults
      Upon Senior Securities
            
            
            7Item
      6.
            
            Exhibits
            
            
            8Signatures
            
            
            10




2




PART I




SPINE
      PAIN MANAGEMENT, INC. (FORMERLY "VERSA CARD, INC.")BALANCE
      SHEETSSeptember
      30,
              
              
              December
      31,ASSETS
              
              2010
              
              
              2009(Unaudited)CURRENT
      ASSETSCash
              
              $
              -
              
              
              $
              32,789Accounts
      receivable, net
              
              
              2,632,011
              
              
              
              508,499Prepaid
      expenses
              
              
              182,958
              
              
              
              -Total
      current assets
              
              
              2,814,969
              
              
              
              541,288TOTAL
      ASSETS
              
              $
              2,814,969
              
              
              $
              541,288LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
      LIABILITIESBook
      overdraft
              
              $
              8,909
              
              
              $
              -Accounts
      payable and accrued liabilities
              
              
              367,461
              
              
              
              475,138Notes
      payable
              
              
              -
              
              
              
              11,317Due
      to former officers and directors
              
              
              -
              
              
              
              56,016Due
      to related party
              
              
              965,999
              
              
              
              269,295Total
      current liabilities
              
              
              1,342,369
              
              
              
              811,766COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock: $0.001 par value, 50,000,000 sharesauthorized;
      17,378,396 and 16,867,682 shares issued and outstandingat
      September 30,  2010 and December 31, 2009,
      respectively
              
              
              17,378
              
              
              
              16,868Additional
      paid-in capital
              
              
              15,566,674
              
              
              
              14,717,352Accumulated
      deficit
              
              
              (14,111,452
              )
              
              
              (15,004,698
              )Total
      stockholders’ equity (deficit)
              
              
              1,472,600
              
              
              
              (270,478
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
              
              $
              2,814,969
              
              
              $
              541,288








F-1




SPINE
      PAIN MANAGEMENT, INC. (FORMERLY "VERSA CARD, INC.")UNAUDITED
      STATEMENTS OF OPERATIONSFOR
      THE THREE MONTHS ENDED SEPTEMBER 30,
              
              
              FOR
      THE NINE MONTHS ENDED SEPTEMBER 30,2010
              
              
              2009
              
              
              2010
              
              
              2009REVENUE
              
              $
              1,606,757
              
              
              $
              230,000
              
              
              $
              4,791,016
              
              
              $
              230,000Less
      allowance for discount
              
              
              750,660
              
              
              
              12,000
              
              
              
              2,245,276
              
              
              
              12,000Net
      Revenue
              
              
              856,097
              
              
              
              218,000
              
              
              
              2,545,740
              
              
              
              218,000COST
      OF SALESService
      costs
              
              
              108,600
              
              
              
              -
              
              
              
              154,800
              
              
              
              -Service
      costs - related party
              
              
              197,400
              
              
              
              64,900
              
              
              
              838,300
              
              
              
              64,900Total
      Service costs
              
              
              306,000
              
              
              
              64,900
              
              
              
              993,100
              
              
              
              64,900GROSS
      PROFIT
              
              
              550,097
              
              
              
              153,100
              
              
              
              1,552,640
              
              
              
              153,100OPERATING
      EXPENSESGeneral
      and administrative expenses
              
              
              282,414
              
              
              
              33,458
              
              
              
              664,592
              
              
              
              1,084,361Total
      Operating Expenses
              
              
              282,414
              
              
              
              33,458
              
              
              
              664,592
              
              
              
              1,084,361NET
      INCOME (LOSS) FROM OPERATIONS
              
              
              267,683
              
              
              
              119,642
              
              
              
              888,048
              
              
              
              (931,261
              )Other
      income
              
              
              208
              
              
              
              -
              
              
              
              5,198
              
              
              
              -NET
      INCOME (LOSS)
              
              $
              267,891
              
              
              $
              119,642
              
              
              $
              893,246
              
              
              $
              (931,261
              )NET
      INCOME (LOSS) PER SHARE:Basic
      and Diluted
              
              $
              0.02
              
              
              $
              0.01
              
              
              $
              0.05
              
              
              $
              (0.06
              )WEIGHTED-AVERAGE
      SHARES:Basic
      and Diluted
              
              
              17,252,853
              
              
              
              16,317,682
              
              
              
              17,081,078
              
              
              
              15,680,319








F-2




SPINE
      PAIN MANAGEMENT, INC. (FORMERLY "VERSA CARD, INC.")UNAUDITED
      STATEMENTS OF CASH FLOWSFOR
      THE NINE MONTHS ENDED SEPTEMBER 30,2010
              
              
              2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
              
              $
              893,246
              
              
              $
              (931,261
              )Adjustments
      to reconcile net income (loss) to net cash used in operating
      activities:Stock
      based compensation
              
              
              582,500
              
              
              
              769,000Changes
      in assets and liabilities:Accounts
      receivable
              
              
              (2,123,512
              )
              
              
              (218,000
              )Prepaid
      expenses
              
              
              (182,958
              )
              
              
              -Accounts
      payable and accrued liabilities
              
              
              (107,677
              )
              
              
              108,389Net
      cash used in operating activities
              
              
              (938,401
              )
              
              
              (271,872
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Book
      overdraft
              
              
              8,909
              
              
              
              -Issuance
      of common stock for repayment of debt
              
              
              199,999
              
              
              
              -Proceeds
      from related party
              
              
              696,704
              
              
              
              272,756Net
      cash provided by financing activities
              
              
              905,612
              
              
              
              272,756NET
      (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              (32,789
              )
              
              
              884BEGINNING
      OF PERIOD
              
              
              32,789
              
              
              
              -END
      OF PERIOD
              
              $
              -
              
              
              $
              884Supplementary
      disclosure of non-cash investing and financingactivities:Contribution
      to additional paid-in capital of amounts due to former related
      parties
              
              $
              67,333
              
              
              $
              -Acquisition
      of intangible assets with issuance of stock
              
              $
              -
              
              
              $
              (230,697
              )Asset
      impairment loss
              
              $
              -
              
              
              $
              230,697


See
accompanying notes the condensed financial statements
  F-3




SPINE PAIN MANAGEMENT,
INC.





NOTES TO THE FINANCIAL
STATEMENTS (Unaudited)





NOTE
1.  DESCRIPTION OF BUSINESS





Spine
Pain Management, Inc., formerly known as Versa Card, Inc., Intrepid Global
Imaging 3D, Inc., MangaPets, Inc. and Newmark Ventures, Inc. (the
“Company”),  was incorporated in Delaware on March 4, 1998 to acquire
interests in various business operations and assist in their development. On
November 12, 2009, the Company changed its name from Versa Card, Inc. to Spine
Pain Management, Inc. The Company commenced commercial operations in August,
2009 and is no longer considered a development stage company.  Since
inception, the Company had engaged in and contemplated several ventures and
acquisitions, many of which were not consummated.





At the
end of December 2008, the Company began moving forward to launch its new
business concept of delivering turnkey solutions to spine surgeons, orthopedic
surgeons and other healthcare providers for necessary and appropriate treatment
of musculo-skeletal spine injuries. In connection with this business plan, in
February, 2009, the Company acquired the website and propriety methodologies of
One Source Plaintiff Funding, Inc. (“One Source”), a Florida corporation, which
the Company planned to use in the business of “lawsuit
funding”.  Based on several factors, however, the Company decided in
July 2009 not to enter the business of lawsuit funding (as described in more
detail below in Note 2, “Change in Business”), and focus solely on assisting
healthcare providers in providing necessary and appropriate treatment for
patients with spine injuries.





In August
2009, the Company opened its first spine injury treatment center in Houston,
Texas.  On June 19, 2010, the Company opened a new spine injury
treatment center in McAllen, Texas. This new center facilitates medical spine
injection procedures to patients from the lower Rio Grand Valley, including the
cities of Harlingen, Brownsville and Edinburg, Texas.  Like the
Company’s Houston facility, the McAllen center uses a fellowship trained pain
doctor to provide spine diagnostic injections, with assistance from Emergency
Medical Transit and specialized radiological personnel. The Company is also
currently evaluating the development of additional spine injury treatment
centers in Texas and across the United States.




The
Company is a medical marketing, management and billing and collection company
facilitating treatment for patients who have sustained spine injuries resulting
from automobile and work-related accidents. The Company’s mission is to deliver
turnkey solutions to spine surgeons, orthopedic surgeons and other health care
providers for necessary and appropriate treatment for spine related injuries.
The goal of the Company is to become a leader in providing care management
services to spine surgeons and orthopedic surgeons to facilitate proper
treatment of their injured clients. By providing early treatment, the Company
believes that spine injuries can be managed, and injured victims can be quickly
placed on the road to recovery. The Company believes its advocacy will be
rewarding to patients who obtain needed relief from painful conditions. The
Company provides a care management program that advocates for the injured
victims by moving treatment forward to conclusion without the delay and
hindrance of the legal process.




The
Company engages an independent contractor to perform medical services for
patients.  The Company then pays the independent contractor a fixed
fee for the services.  Subsequently, the Company bills the patient for
the medical services provided by the independent contractor.  In most
instances, the patient is a plaintiff in an accident case, where the patient is
represented by an attorney.  Typically, the defendant (and/or the
insurance company of the defendant) in the accident case pays the patient’s
bill, upon settlement or final judgment of the accident case.  The
payment to the Company is made through the attorney of the
patient.  In certain instances, the Company may bill the patient’s
health insurance company if the patient has adequate health insurance
coverage.






F-4




The
clinic facilities where the Company’s spine injury treatment centers operate are
owned or leased by the Company’s independent contractor or a third
party.  The Company has no ownership interest in these clinic
facilities, nor does the Company have any responsibilities towards building or
operating the clinic facilities.  Each of the Company’s independent
contractors performs services for the Company (in the form of providing medical
treatment for patients) pursuant to a medical services agreement.




GOING
CONCERN




The
Company has a history of recurring losses from operations and has an accumulated
deficit of approximately $14.0 million as of September 30,
2010.  Successful business operations and its transition to attaining
profitability are dependent upon obtaining additional financing and achieving a
level of revenue adequate to support its cost structure. Considering the nature
of the business, the Company is not generating immediate liquidity and
sufficient working capital within a reasonable period of time to fund its
planned operations and strategic business plan through March 31, 2011;
therefore, it is actively seeking additional debt or equity financing. There can
be no assurances that there will be adequate financing available to the Company.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. This basis of accounting contemplates
the recovery of the Company’s assets and the satisfaction of liabilities in the
normal course of business. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.





NOTE
2.  CHANGE IN BUSINESS





At the
end of 2008, the Company launched its new business concept of spine pain
management.  The Company’s goal is to engage in the delivery of
turnkey solutions to spine surgeons, orthopedic surgeons and other healthcare
providers for necessary and appropriate treatment of musculo-skeletal spine
injuries. With the new business plan, the Company has reevaluated MangaPet's
business of developing a web portal containing games, merchandizing, and other
entertainment activities to determine the viability of that business
concept.  It has been determined that this business segment is no
longer appropriate to pursue given the Company’s current business
plan.





On
February 28, 2009, in connection with the launch of its new spine pain injury
treatment business segment, the Company entered into an agreement with Brian
Koslow and David Waltzer to acquire the website and proprietary methodologies of
One Source Plaintiff Funding, Inc., a Florida corporation (“One Source”). The
agreement provided for the Company to acquire the website and proprietary
methodologies of One Source in exchange for 900,000 shares of the Company’s
common stock. One Source’s website and proprietary methodologies were designed
for the business of "lawsuit funding" for plaintiff personal injury
cases.  In connection with the One Source transaction, the Company
entered into employment agreements with Mr. Koslow and Mr. Waltzer, the founders
of One Source, with Mr. Koslow being appointed as Executive Vice President of
Business Development of the Company.  With the assistance of Messrs.
Koslow and Waltzer, the Company planned to further develop One Source’s website
and proprietary methodologies so that the Company could enter the business of
lawsuit funding.  In July 2009, however, Mr. Koslow and Mr. Waltzer
unexpectedly resigned from the Company.  With the resignations of
Messrs. Koslow and Waltzer, the Company realized it would be unable to use the
proprietary methodology of One Source and has decided not to enter the business
of lawsuit funding, focusing instead on its spine pain injury treatment
business.  Accordingly, the Company will have no use for the website
and proprietary methodologies of One Source.  Upon an evaluation of
the expected life of the acquired One Source assets in the amount of
approximately $231,000, it was decided at December 31, 2009 that these assets
had no value, and the acquired cost of the impaired assets have been written off
and recorded in the Company’s statement of operations for the year ended
December 31, 2009.  The Company also filed a lawsuit against Messrs.
Koslow and Waltzer, which was resolved through a settlement agreement and
dismissed.




On
November 12, 2009, the Company changed its name from "Versa Card, Inc." to
"Spine Pain Management, Inc." and has changed its trading symbol from "IGLB" to
"SPIN." The name change was effected legally with the Delaware Secretary of
State on November 12, 2009 and was effected in the market on November 27, 2009.
OTC Bulletin Board: SPIN.




F-5




NOTE
3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




The
following are summarized accounting policies considered to be significant by the
Company’s management:




Basis
of Presentation





The
accompanying unaudited condensed financial statements of Spine Pain Management,
Inc. (the "Company") have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission (the "SEC”). Certain information and
footnote disclosures, normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such SEC rules and
regulations. Nevertheless, the Company believes that the disclosures are
adequate to make the information presented not misleading. These interim
condensed financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's 2009 Annual
Report as filed on Form 10K. In the opinion of management, all adjustments,
including normal recurring adjustments necessary to present fairly the financial
position of the Company with respect to the interim financial statements and the
results of its operations for the interim period ended September 30, 2010, have
been included. The results of operations for interim periods are not necessarily
indicative of the results for a full year.




Accounting
Method




The
Company’s financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America and have been consistently applied in the preparation
of the financial statements.




Use
of Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities known to exist as of the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Uncertainties with respect to such estimates and
assumptions are inherent in the preparation of the Company’s financial
statements; accordingly, it is possible that the actual results could differ
from these estimates and assumptions and could have a material effect on the
reported amounts of the Company’s financial position and results of
operations.




Revenue
Recognition




Revenues
are recognized in accordance with SEC staff accounting bulletin, Topic 13,
Revenue Recognition, which specifies that only when persuasive evidence for an
arrangement exists; the fee is fixed or determinable; and collection is
reasonably assured can revenue be recognized.




Persuasive
evidence of an arrangement is obtained prior to services being rendered when the
patient completes and signs the medical and financial paperwork.  Delivery
of services is considered to have occurred when treatment(s) are provided to the
patient.  The price and terms for the services are considered fixed and
determinable at the time that the treatments are provided and are based upon the
type and extent of the services rendered.  The Company’s credit policy has
been established based upon extensive experience by management in the industry
and has been determined to ensure that collectability is reasonably
assured.  Payments for services are primarily made to the Company by a
third party. Due to the Company’s relatively recent entry into this area of
operations, collection is averaging over 220 days. However, management believes
that the number of days outstanding on the collections will be reduced in the
near future.




F-6





The
Company’s Statements of Operations reflect gross revenues less an allowance for
estimated discounts that the Company may ultimately provide patients in
connection with the resolution of their accident lawsuits with
defendants.  The Company believes this revenue recognition criteria is
consistent with ASC Topic 954-605-25-3 and ASC Topic
954-605-25-4.  The Company has currently estimated the average
discount on all current cases will be 45% based on historical case resolution
experience, which is reviewed on a continual basis. The Company anticipates this
allowance for estimated discounts will remain relatively consistent as a
percentage of gross revenue at established rates.  The Company will
adjust the discount rate from its current level, as needed, based on future case
resolution experience.





The
Company expects that actual bad debts will be rare as, typically, the parties
ultimately responsible for payment are established insurance companies.
Substantially all patients that are treated are represented by an attorney that
is pursuing a general liability case against a defendant represented by an
insurance company. The success of the resolution of these cases is considered in
the historical experience on which the Company’s allowance for discounts is
calculated. The Company monitors each receivable through discussions with the
patient’s attorneys.




Income
Taxes




The
Company accounts for income taxes in accordance with the liability method. Under
the liability method, deferred assets and liabilities are recognized based upon
anticipated future tax consequences attributable to differences between
financial statement carrying amounts of assets and liabilities and their
respective tax bases. The Company establishes a valuation allowance to the
extent that it is more likely than not that deferred tax assets will not be
utilized against future taxable income.




Uncertain
tax positions




In July
2006, the Financial Accounting Standards Board (“FASB”) issued guidance codified
in Accounting Standards Codification (“ASC”) Topic 740-10-25 “Accounting for
Uncertainty in Income Taxes”. ASC Topic 740-10-25 supersedes guidance codified
in ASC Topic 450, “Accounting for Contingencies”, as it relates to income tax
liabilities and lowers the minimum threshold a tax position is required to meet
before being recognized in the financial statements from “probable” to “more
likely than not” (i.e., a likelihood of occurrence greater than fifty percent).
Under ASC Topic 740-10-25, the recognition threshold is met when an entity
concludes that a tax position, based solely on its technical merits, is more
likely than not to be sustained upon examination by the relevant taxing
authority. Those tax positions failing to qualify for initial recognition are
recognized in the first interim period in which they meet the more likely than
not standard, or are resolved through negotiation or litigation with the taxing
authority, or upon expiration of the statute of limitations. De-recognition of a
tax position that was previously recognized occurs when an entity subsequently
determines that a tax position no longer meets the more likely than not
threshold of being sustained.




The
Company is subject to ongoing tax exposures, examinations and assessments in
various jurisdictions. Accordingly, the Company may incur additional tax expense
based upon the outcomes of such matters. In addition, when applicable, the
Company will adjust tax expense to reflect the Company’s ongoing assessments of
such matters which require judgment and can materially increase or decrease its
effective rate as well as impact operating results.




Under ASC
Topic 740-10-25, only the portion of the liability that is expected to be paid
within one year is classified as a current liability. As a result, liabilities
expected to be resolved without the payment of cash (e.g. resolution due to the
expiration of the statute of limitations) or are not expected to be paid within
one year are not classified as current. The Company has recently adopted a
policy of recording estimated interest and penalties as income tax expense and
tax credits as a reduction in income tax expense.




F-7




The
Company is current in its income tax return filings and the filings did not have
any significant impact on the Company’s financial position, its results of
operations and cash flows considering its Net Operating Loss (“NOL”)
carryforward to offset current tax liabilities.




Although
the Company has net income from operations of approximately $888,000 for the
nine months ended September 30, 2010, management believes that no provision for
federal and state income taxes is considered necessary for the nine months ended
September 30, 2010, as the company has the benefit of significant net operating
losses carried forward from prior years. Management also determined that any
amounts payable in the form of federal and state income tax liabilities
including resultant penalties and interest, will not have a material impact on
the Company’s financial position, its results of operations and its cash
flows.




The
number of years with open tax audits varies depending on the tax jurisdiction.
The Company’s major taxing jurisdictions include the United States (including
applicable states).





Reclassification





Certain
items in the 2009 statement of operations for the three and nine month periods
ended September 30, 2009 have been reclassified to conform to the 2010
presentation. Such reclassifications had no effect on the net income (loss) for
such periods.





Accounting
Standard Updates





In
October 2009, the FASB issued Accounting Standard Updates (“ASU”) No. 2009-13,
“Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements,”
which addresses the accounting for multiple-deliverable arrangements to enable
vendors to account for products or services (deliverables) separately rather
than as a combined unit. Specifically, this guidance amends the criteria in
Subtopic 605-25, “Revenue Recognition-Multiple-Element Arrangements,” for
separating consideration in multiple-deliverable arrangements. This guidance
establishes a selling price hierarchy for determining the selling price of a
deliverable, which is based on: (a) vendor-specific objective evidence; (b)
third-party evidence; or (c) estimates. This guidance also eliminates the
residual method of allocation and requires that arrangement consideration be
allocated at the inception of the arrangement to all deliverables using the
relative selling price method and also requires expanded disclosures. The
guidance in this update is effective prospectively for revenue arrangements
entered into or materially modified in fiscal years beginning on or after June
15, 2010. Early adoption is permitted. The adoption of this standard is not
expected to have a material impact on the Company’s financial position and
results of operations.





In April
2010, the FASB issued ASU No. 2010-12, “Income Taxes” (Topic 740). ASU No.
2010-12 amends FASB ASU subtopic 740-10 “Income Taxes” to include paragraph
740-10-S99-4. FASB Codification Topic 740, Income Taxes, requires the
measurement of current and deferred tax liabilities and assets to be based on
provisions of enacted tax law. The effects of future changes in tax laws are not
anticipated. Therefore, the different enactment dates of the Act and
reconciliation measure may affect registrants with a period-end that falls
between March 23, 2010 (enactment date of the Act), and March 30, 2010
(enactment date of the reconciliation measure). However, the announcement states
that the SEC would not object if such registrants were to account for the
enactment of both the Act and the reconciliation measure in a period ending on
or after March 23, 2010, but notes that the SEC staff “does not believe that it
would be appropriate for registrants to analogize to this view in any other fact
patterns.” The adoption of this guidance is not expected to have a material
impact on the Company’s consolidated financial statements.





In April
2010, the FASB issued ASU No. 2010-17, “Revenue Recognition-Milestone Method”
(Topic 605). ASU No. 2010-17 provides guidance on defining a milestone and
determining when it may be appropriate to apply the milestone method of revenue
recognition for research or development transactions. An entity often recognizes
these milestone payments as revenue in their entirety upon achieving a specific
result from the research or development efforts. A vendor can recognize
consideration that is contingent upon achievement of a milestone in its entirety
as revenue in the period in which the milestone is achieved only if the
milestone meets all criteria to be considered substantive. Determining whether a
milestone is substantive is a matter of judgment made at the inception of the
arrangement. The ASU is effective for fiscal years and interim periods within
those fiscal years beginning on or after June 15, 2010. Early application is
permitted. Entities can apply this guidance prospectively to milestones achieved
after adoption. However, retrospective application to all prior periods is also
permitted. The adoption of this guidance is not expected to have a material
impact on the Company’s consolidated financial statements.




F-8





Other
ASUs that are effective after June 30, 2010, are not expected to have a
significant effect on the Company’s financial position or results of
operations.




NOTE 4.  NOTES
PAYABLE




Notes
payable consist of the following:





September
      30,
            
            
            December
      31,2010
            
            
            2009Note
      payable to an individual
            
            $
            -
            
            
            $
            9,334Note
      payable to a company
            
            
            -
            
            
            
            1,983Total
            
            $
            -
            
            
            $
            11,317





On
September 9, 2010, the Company’s Board of Directors voted in favor of writing
off outstanding payables that were over five years old and could not be
confirmed. Accordingly, certain notes payable totaling $11,317 as of December
31, 2009 are no longer reflected in the Company’s financial statements as of
September 30, 2010.





NOTE 5. DUE TO FORMER OFFICERS AND
DIRECTORS





Due to
former officers and directors consists of:





September
      30,
            
            
            December
      31,2010
            
            
            2009Due
      to former Chief Executive Officer
            
            $
            -
            
            
            $
            4,237Due
      to former Chief Accounting Officer
            
            
            -
            
            
            
            51,779Total
            
            $
            -
            
            
            $
            56,016





On
September 9, 2010, the Company’s Board of Directors voted in favor of writing
off outstanding amounts due to former officers and directors that were over five
years old and could not be confirmed. Accordingly, certain amounts due to former
officers and directors totaling $56,016 as of December 31, 2009 are no longer
reflected in the Company’s financial statements as of September 30,
2010.





F-9





NOTE  6.  DUE TO
RELATED PARTIES





Due to
related parties consists of:





September
      30,
            
            
            December
      31,2010
            
            
            2009Due
      to Northshore Orthopedics Assoc.
            
            $
            638,300
            
            
            
            -Due
      to Chief Executive Officer
            
            
            327,699
            
            
            
            269,295Total
            
            $
            965,999
            
            
            $
            269,295





Amounts
due to Northshore Orthopedics Assoc. and the Chief Executive Officer are
non-interest bearing, due on demand and do not follow any specific repayment
schedule. The Company used the amount financed for meeting its working capital
requirements.





NOTE  7.
RELATED PARTY TRANSACTIONS





Medical
Services Agreement





In August
2009, the Company entered into a medical services agreement with Northshore
Orthopedics Assoc. ("NSO") to open its first spine injury treatment center in
Houston, Texas. Pursuant to the terms of the agreement, NSO will operate as an
independent contractor for the Company to provide medical diagnostic services
for evaluation and treatment of patients with spine injuries.  NSO
charges the Company a fixed per-patient fee (which is predetermined and
prenegotiated) as compensation for these services, pursuant to the
agreement.  NSO’s business relationship with the Company is that of an
independent contractor.  Accordingly, the Company does not have any
commitments or obligations to pay for any of the clinic’s costs, such as rent,
utilities, etc.  NSO is responsible for its own taxes associated with
its performance of the services and receipt of payments pursuant to this
agreement.  NSO is the sole operator of the clinic that treats the
patients.  The medical services agreement has a term of three years,
and thereafter will automatically renew for another three years at the
discretion of involved parties.





As of
September 30, 2010, the Company had a balance of $638,300 payable towards NSO’s
costs incurred by the Company’s Chief Executive Officer, William Donovan, M.D.,
which is included as cost of sales in the accompanying statements of
operations.NSO is owned
by Dr. Donovan.  The Company does not directly pay Dr. Donovan (in his
individual capacity) any fees in connection with NSO’s
services.  Because Dr. Donovan is the sole owner of NSO, however, on
December 28, 2009, the Company issued 500,000 restricted shares of common stock
to Dr. Donovan for the conversion of $349,400 of outstanding debt owed by the
Company to NSO, and on May 25, 2010, the Company issued 285,714 restricted
shares of common stock to Dr. Donovan for the conversion of $200,000 of
outstanding debt owed by the Company to NSO.




NOTE  8.
COMMON STOCK




Stock Issuances




On May
11, 2010, the Company issued 50,000 restricted shares of common stock to John
Talamas for his employment agreement.


On May
13, 2010, the Company issued 250,000 restricted shares of common stock valued at
$225,000 to Richard Specht, a Director of the Company, as consideration for
serving on the Board of Directors.




On May
25, 2010, the Company issued 285,714 restricted shares of common stock to
William Donovan, M.D., the Company’s Chief Executive Officer, for the conversion
of $200,000 of outstanding debt owed by the Company to NSO.




F-10




On August
11, 2010, the Company issued 50,000 restricted shares of common stock, each to
Jerry Bratton, Franklin A. Rose, and John Bergeron, valued at a total of
$97,500, as consideration for serving on the Board of Directors.




On August
24, 2010, the Company received and cancelled a total of 625,000 shares of common
stock, previously issued to Brian Koslow and David Waltzer, in settlement of a
lawsuit.




On
September 30, 2010, the Company issued 400,000 shares of common stock as payment
for professional  services.




NOTE  9.  INCOME
TAXES




The
Company has not made provision for income taxes for the nine-month period ended
September 30, 2010, since the Company has a net operating loss carryforward to
offset current  net operating incomes.




Deferred
income tax assets consist of:




September 30,
      2010
            
            
            December
      31, 2009Net
      operating loss carryforwards
            
            $
            2,119,994
            
            
            $
            2,675,400Less
      valuation allowance
            
            $
            (2,119,994
            )
            
            $
            (2,675,400
            )Deferred
      income tax assets, net
            
            $
            -
            
            
            $
            -




Due to
uncertainties surrounding the Company’s ability to generate future taxable
income to realize these assets, a full valuation has been established to offset
the net deferred income tax asset.  Based on management’s assessment,
utilizing an effective combined tax rate for federal and state taxes of
approximately 39%, the Company has determined it to be more likely than not that
a deferred income tax asset of approximately $2,119,994 and $2,675,400
attributable to the future utilization of the approximate $5,435,960 and
$6,860,000 in eligible net operating loss carryforwards as of September 30, 2010
and December 31, 2009, respectively, will not be realized. The Company will
continue to review this valuation allowance and make adjustments as appropriate.
The net operating loss carryforwards will begin to expire in varying amounts
from year 2018 to 2029.




Current
income tax laws limit the amount of loss available to be offset against future
taxable income when a substantial change in ownership occurs. Therefore, amounts
available to offset future taxable income may be limited.




The
Company is current in its income tax return filings and the filings did not have
any significant impact on the Company’s financial position, its results of
operations and cash flows considering its net operating loss
carryforward.




The
Company is subject to taxation in the United States and certain state
jurisdictions. The Company’s tax years for 2002 and forward are subject to
examination by the United States and applicable state tax authorities due to the
carry forward of unutilized net operating losses.




NOTE
10.  COMMITMENTS AND CONTINGENCIES




On June
22, 2010, the Company filed a lawsuit against HSC Holdings, LLC (“HSC”) and
Ilona Alexis Mandelbaum in the United States District Court for the Southern
District of Texas.  The Company had previously executed certain
consulting agreements with HSC providing for the Company to engage HSC as a
consultant to provide certain business services.  In August 2010, the
parties entered into a definitive settlement agreement, and the case was
dismissed from District Court.




F-11




On
January 19, 2010, James McKay and Celebrity Foods, Inc. (“CFI”) filed a lawsuit
against the Company and Dr. William Donovan, M.D., individually, in the United
States District Court, Eastern District of Pennsylvania.  Based on the
lawsuit, in March 2009, Plaintiffs contacted the Company’s transfer agent to
have restrictive legends removed on shares the plaintiffs had previously
obtained from the Company in connection with a stock purchase
agreement.  The Company subsequently requested that the transfer agent
place a stop transfer order on the shares.  Plaintiffs allege the
Company’s actions constitute a breach of contract, fraud and/or unjust
enrichment.  They are seeking monetary and punitive damages,
attorneys’ fees and costs, as well as a divestment of all shares and a
rescission of the stock purchase agreement.  The Company filed a
motion to dismiss on April 16, 2010.  In October 2010, the motion was
granted in part and denied in part.  The Court denied the Company’s
motions to dismiss for lack of personal jurisdiction and improper venue/forum
non conveniens, but granted the Company’s other motions and dismissed 1) the
Plaintiffs’ counts alleging fraud, 2) the Plaintiffs’ count alleging the
individual liability of Dr. Donovan, and 3) the Plaintiffs’ claim for punitive
damages.  The case is still pending in District Court.  We
believe the case is without merit and will continue to vigorously fight the
lawsuit. There can be, however, no assurance that the ultimate outcome of this
case will be favorable to the Company.




In
November 2009, the Company filed a lawsuit against Brian Koslow and David
Waltzer in Harris County District Court.  The lawsuit was removed to
the District Court for the Southern District of Texas.  The lawsuit
relates to the transactions the Company entered into with Messrs. Koslow and
Waltzer to acquire the website and proprietary methodologies of One Source
Plaintiff Funding, Inc.  In August 2010, the parties entered into a
definitive settlement agreement, and subsequently the case was dismissed from
District Court.




On
October 27, 2009, William R. Dunavant and William R. Dunavant Family Holdings,
Inc. filed suit in the 55th Judicial District Court of Harris County, Texas,
against the Company, William Donovan, M.D., Richard Specht, Rene Hamouth and
Signature Stock Transfer, Inc.  Plaintiffs claim that the Company
issued 2,000,000 shares of stock as compensation for work performed on behalf of
the Company.  On December 31, 2008, and again in early 2009,
Plaintiffs sold some of their shares.  However, on February 10, 2009,
the Company issued a stop transfer resolution preventing Plaintiffs from selling
any of the remaining shares.  Plaintiffs claim the following causes of
action: 1) breach of contract, stating that Defendants agreed to compensate
Plaintiffs by tendering 2,000,000 shares of stock free and clear; 2) conversion,
claiming Defendants wrongfully and without authority converted the common stock
owned by Plaintiffs; 3) fraud and fraudulent inducement, claiming Defendants’
conduct constitutes legal fraud and deceit; 4) breach of fiduciary duty,
claiming Defendants had a fiduciary relationship with Plaintiffs and owed them
the utmost duty of good faith, fair dealing, loyalty and candor; 5) intentional
Infliction of emotional distress, claiming Defendants’ conduct was extreme,
outrageous, deliberate and intentional; 6) unjust enrichment, claiming that
Defendants had no right to prevent Plaintiffs from selling the stock; and 7)
declaratory judgment, seeking the Court to declare the common stock was proper
and authorized.  Plaintiffs seek exemplary and punitive damages, as
well as attorney fees.  The case is currently scheduled to go to trial
in January 2011.  We believe the case is without merit and are
vigorously fighting the lawsuit. There can be no assurance, however, that the
outcome of this case will be favorable to the Company.




In March
2008, Kent Carasquero, Leslie Lounsbury, Riverside Manitoba, Inc. and Tyeee
Capital Consultants, Inc. filed suit against the Company, Richard Specht, Rene
Hamouth, Hamouth Family Trust, William R. Dunavant, and William R. Dunavant
Family Holdings, Inc. The suit was filed in The United States District Court,
Middle District of Florida and requests damages in an unspecified amount and
injunctive relief for various breaches of contract and securities violations. A
default judgment was entered against the defendants on July 20, 2008. The
default judgment was set aside and the case reopened on November 7, 2008. The
Company believes all claims against it are without merit, and it will continue
to vigorously defend itself against such claims. There is no assurance, however,
that the matter can be settled on terms favorable to the Company.




NOTE  11.  SUBSEQUENT
EVENTS




In
October 2010, two investors subscribed to purchase an aggregate of $150,000 in
debentures and warrants of the Company.  The debentures have an
aggregate principal face amount of $150,000 and bear interest at the rate of 10%
per annum.  The entire principal amount of the debentures is due in
one lump sum in June 2013.  The warrants include three different sets
as follows: (i) two year Series A Warrants to purchase an aggregate of 75,000
shares of common stock at the price of $1.50 per share, (ii) three year Series B
Warrants to purchase an aggregate of 37,500 shares of common stock at the price
of $3.00 per share, and (iii) three year Series C Warrants to purchase an
aggregate of 37,500 shares of common stock at the price of $5.00 per
share.


F-12




ITEM
2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS




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





FORWARD
LOOKING STATEMENT AND INFORMATION





We are
including the following cautionary statement in this Form 10-Q to make
applicable and take advantage of the safe harbor provision of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements made
by us or on behalf of us. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance
and underlying assumptions and other statements, which are other than statements
of historical facts. Certain statements in this Form 10-Q are forward-looking
statements. Words such as "expects," "believes," "anticipates," "may," and
"estimates" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. Such risks and
uncertainties are set forth below. Our expectations, beliefs and projections are
expressed in good faith and we believe that they have a reasonable basis,
including without limitation, our examination of historical operating trends,
data contained in our records and other data available from third parties. There
can be no assurance that our expectations, beliefs or projections will result,
be achieved, or be accomplished.




Management
Overview




At the
end of 2008, the Company launched its new business concept of delivering turnkey
solutions to spine surgeons, orthopedic surgeons and other healthcare providers
for necessary, reasonable and appropriate treatment for musculo-skeletal spine
injuries. Moving forward, the Company’s main focus will be on the expansion and
development of spine testing centers and/or business relationships with
contractors owning such facilities as needed by spine surgeons, orthopedic
surgeons and other healthcare providers across the nation.




Results
of Operations




The
unaudited financial statements as of September 30, 2010 and for the three and
nine months ended September 30, 2010 and 2009 have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with instructions to Form 10-Q. In the opinion of
management, the unaudited financial statements have been prepared on the same
basis as the annual financial statements and reflect all adjustments, which
include only normal recurring adjustments,necessary to present
fairly the financial position as of September 30, 2010 and the results of
operations and cash flows for the periods ended September 30, 2010 and 2009. The
financial data and other information disclosed in these notes to the interim
financial statements related to these periods are unaudited. The results for the
three and nine months ended September 30, 2010 are not necessarily indicative of
the results to be expected for any subsequent quarter or of the entire year
ending December 31, 2010.




3




Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to the Securities and
Exchange Commission’s rules and regulations. These unaudited financial
statements should be read in conjunction with our audited financial statements
and notes thereto for the year ended December 31, 2009 as included in our report
on Form 10-K.




Comparison
of the three month period ended September 30, 2010 with the three month period
ended September 30, 2009.




The
Company recorded approximately $1.6 million in gross service revenues for the
three months ended September 30, 2010, offset in part by approximately $751,000
of standard allowance for discount, resulting in net revenue of approximately
$856,000. For the same period in 2009, gross revenue was approximately $230,000,
offset in part by approximately $12,000 of standard allowance for discount,
resulting in net revenue of approximately $218,000. This increase is
attributable to revenues generated from the Company’s spine injury treatment
centers in Houston and McAllen, Texas.  During the three month period
ended September 30, 2009, the Company’s operations were limited and only
reflects about one month’s revenue, since the center was newly opened. The
Company’s spine injury treatment center in Houston opened in August 2009, and
its center in McAllen opened in June 2010.




Service
cost was approximately $306,000 for the three months ended September 30, 2010
compared to $64,900 for the same period in 2009. During the three months ended
September 30, 2010, the Company incurred approximately $282,000 of general and
administration expenses as compared to approximately $33,000 for the same period
in 2009.




As a
result of the foregoing, the Company had net income of approximately $268,000
for the three months ended September 30, 2010, compared to approximately
$120,000 for the three months ended September 30, 2009, resulting in an increase
of approximately $148,000 or 123.3%.





Comparison
of the nine month period ended September 30, 2010 with the nine month period
ended September 30, 2009.




The
Company recorded approximately $4.8 million in gross service revenues for the
nine months ended September 30, 2010, offset in part by approximately $2.2
million of standard allowance for discount, resulting in net revenue of
approximately $2.5 million. For the same period in 2009, gross revenue was
approximately $230,000. This increase is attributable to revenues generated from
the Company’s spine injury treatment centers in Houston and McAllen, Texas.
During the nine month period ended September 30, 2009, the Company’s operations
were limited and only reflect about one month’s revenue, since the center was
newly opened.




Service
cost was approximately $993,000 for the nine months ended September 30, 2010
compared to approximately $65,000 for the same period in 2009.




During
the nine months ended September 30, 2010, the Company incurred approximately
$665,000 of general and administration expenses as compared to approximately
$1.1 million for the same period in 2009. For the nine months ended September
30, 2010, there was approximately $583,000 of stock based compensation recorded
as well as other expenses included in general and administrative expenses. For
the nine months ended September 30, 2009, there was approximately $769,000 of
stock based compensation recorded as well as other expenses included as general
and administrative expenses.




As a
result of the foregoing, the Company had net income of approximately $893,000
for the nine months ended September 30, 2010, compared to a net loss of
approximately $931,000 for the nine months ended September 30, 2009, resulting
in an increase of approximately $1,824,000 or 196.0%.




Liquidity
and Capital Resources




4




For the
nine months ended September 30, 2010, cash used in operations was approximately
$938,000, which primarily included an increase in accounts receivable of
approximately $2,124,000 and issuance of common stock for consulting services
and stock based compensation of approximately $583,000 and net income from
operations of approximately $893,000.  For the same period in 2009,
net cash used in operating activities was approximately $272,000, which
primarily included stock based compensation in the amount of approximately
$769,000 and a net loss from operations of approximately $931,000.




For the
nine months ended September 30, 2010, cash provided by financing activities was
approximately $906,000, which was primarily proceeds from a related party. For
the same period in 2009, cash provided by financing activities was approximately
$273,000, which was from proceeds from related parties.




There was
no cash provided or used in investing activities for the nine months ended
September 30, 2010 or 2009.




ITEM
4.   CONTROLS AND PROCEDURES





Our
principal executive officer and principal financial officer are responsible for
establishing and maintaining disclosure controls and procedures for the Company.
Such officers have concluded (based upon their evaluation of these controls and
procedures as of the end of the period covered by this report) that our
disclosure controls and procedures are effective to ensure that information
required to be disclosed by us in this report is accumulated and communicated to
management, including our principal executive and principal financial officer as
appropriate, to allow timely decisions regarding required
disclosure.





Our
principal executive officer and principal financial officer have also indicated
that, upon evaluation, there were no changes in our internal control over
financial reporting or other factors during the period covered by this report
that have materially affected, or are reasonably likely to materially affect,
the Company’s internal control over financial reporting.




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




PART
II   OTHER INFORMATION




ITEM
1.  LEGAL PROCEEDINGS




On June
22, 2010, the Company filed a lawsuit against HSC Holdings, LLC (“HSC”) and
Ilona Alexis Mandelbaum in the United States District Court for the Southern
District of Texas.  The Company had previously executed certain
consulting agreements with HSC providing for the Company to engage HSC as a
consultant to provide certain business services.  In August 2010, the
parties entered into a definitive settlement agreement, and the case was
dismissed from District Court.




5




On
January 19, 2010, James McKay and Celebrity Foods, Inc. (“CFI”) filed a lawsuit
against the Company and Dr. William Donovan, M.D., individually, in the United
States District Court, Eastern District of Pennsylvania.  Based on the
lawsuit, in March 2009, Plaintiffs contacted the Company’s transfer agent to
have restrictive legends removed on shares the plaintiffs had previously
obtained from the Company in connection with a stock purchase
agreement.  The Company subsequently requested that the transfer agent
place a stop transfer order on the shares.  Plaintiffs allege the
Company’s actions constitute a breach of contract, fraud and/or unjust
enrichment.  They are seeking monetary and punitive damages,
attorneys’ fees and costs, as well as a divestment of all shares and a
rescission of the stock purchase agreement.  The Company filed a
motion to dismiss on April 16, 2010.  In October 2010, the motion was
granted in part and denied in part.  The Court denied the Company’s
motions to dismiss for lack of personal jurisdiction and improper venue/forum
non conveniens, but granted the Company’s other motions and dismissed 1) the
Plaintiffs’ counts alleging fraud, 2) the Plaintiffs’ count alleging the
individual liability of Dr. Donovan, and 3) the Plaintiffs’ claim for punitive
damages.  The case is still pending in District Court.  We
believe the case is without merit and will continue to vigorously fight the
lawsuit. There can be, however, no assurance that the ultimate outcome of this
case will be favorable to the Company.




In
November 2009, the Company filed a lawsuit against Brian Koslow and David
Waltzer in Harris County District Court.  The lawsuit was removed to
the District Court for the Southern District of Texas.  The lawsuit
relates to the transactions the Company entered into with Messrs. Koslow and
Waltzer to acquire the website and proprietary methodologies of One Source
Plaintiff Funding, Inc.  In August 2010, the parties entered into a
definitive settlement agreement, and subsequently the case was dismissed from
District Court.




On
October 27, 2009, William R. Dunavant and William R. Dunavant Family Holdings,
Inc. filed suit in the 55th Judicial District Court of Harris County, Texas,
against the Company, William Donovan, M.D., Richard Specht, Rene Hamouth and
Signature Stock Transfer, Inc.  Plaintiffs claim that the Company
issued 2,000,000 shares of stock as compensation for work performed on behalf of
the Company.  On December 31, 2008, and again in early 2009,
Plaintiffs sold some of their shares.  However, on February 10, 2009,
the Company issued a stop transfer resolution preventing Plaintiffs from selling
any of the remaining shares.  Plaintiffs claim the following causes of
action: 1) breach of contract, stating that Defendants agreed to compensate
Plaintiffs by tendering 2,000,000 shares of stock free and clear; 2) conversion,
claiming Defendants wrongfully and without authority converted the common stock
owned by Plaintiffs; 3) fraud and fraudulent inducement, claiming Defendants’
conduct constitutes legal fraud and deceit; 4) breach of fiduciary duty,
claiming Defendants had a fiduciary relationship with Plaintiffs and owed them
the utmost duty of good faith, fair dealing, loyalty and candor; 5) intentional
Infliction of emotional distress, claiming Defendants’ conduct was extreme,
outrageous, deliberate and intentional; 6) unjust enrichment, claiming that
Defendants had no right to prevent Plaintiffs from selling the stock; and 7)
declaratory judgment, seeking the Court to declare the common stock was proper
and authorized.  Plaintiffs seek exemplary and punitive damages, as
well as attorney fees.  The case is currently scheduled to go to trial
in January 2011.  We believe the case is without merit and are
vigorously fighting the lawsuit. There can be no assurance, however, that the
outcome of this case will be favorable to the Company.




In March 2008, Kent Carasquero, Leslie
Lounsbury, Riverside Manitoba, Inc. and Tyeee Capital Consultants, Inc. filed
suit against the Company, Richard Specht, Rene Hamouth, -Hamouth Family Trust,
William R. Dunavant, and William R. Dunavant Family Holdings, Inc. The suit was
filed in The United States District Court, Middle District of Florida and
requests damages in an unspecified amount and injunctive relief for various
breaches of contract and securities violations. A default judgment was entered
against the defendants on July 20, 2008. The default judgment was set aside and
the case reopened on November 7, 2008. The Company believes all claims against
it are without merit, and it will continue to vigorously defend itself against
such claims. There is no assurance, however, that the matter can be settled on
terms favorable to the Company.




6




ITEM
2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS




On August
11, 2010, the Company issued 50,000 restricted shares of common stock to each of
the new members elected to the Board of Directors on July 13, 2010, including
Franklin A. Rose, M.D., John Bergeron and Jerry Bratton, for an aggregate of
150,000 shares.  The Company issued the shares as consideration for
serving on the Board of Directors.  The shares were issued under the
exemption from registration provided by Section 4(2) of the Securities Act of
1933 and the rules and regulations promulgated thereunder.  The offer
and sale of the shares was made exclusively to “accredited investors” (as such
term is defined in Rule 501(a) of Regulation D) in an offer and sale not
involving a public offering.  The holders of the shares acquired the
securities for their own accounts and not with a view towards or for resale.
There was no general solicitation or advertising conducted in connection with
the issuance of the securities.




On
September 30, 2010, the Company issued an aggregate of 400,000 restricted shares
of common stock as payment for professional services.  Of the 400,000
shares, 100,000 were issued as payment for legal services and 300,000 shares
were issued as payment for investment banking services.  The
shares were issued under the exemption from registration provided by Section
4(2) of the Securities Act of 1933 and the rules and regulations promulgated
thereunder.  The offer and sale of the shares was made exclusively to
“accredited investors” (as such term is defined in Rule 501(a) of Regulation D)
in an offer and sale not involving a public offering.  The holders of
the shares acquired the securities for their own accounts and not with a view
towards or for resale. There was no general solicitation or advertising
conducted in connection with the issuance of the securities.




ITEM
3.   DEFAULTS UPON SENIOR SECURITIES




None.




7




ITEM 6. EXHIBITS




INDEX
TO EXHIBITS




ExhibitNo.
            
            Description3(i)(a)
            
            Articles
      of Incorporation dated March 4, 1998. (Incorporated by reference from Form
      10K-SB filed with the SEC on January 5, 2000.) *3(i)(b)
            
            Amended
      Articles of Incorporation dated April 23,1998. (Incorporated by reference
      from Form 10K-SB filed with the SEC on January 5, 2000.)
  *3(i)(c)
            
            Amended
      Articles of Incorporation dated January 4, 2002. (Incorporated by
      reference from Form 10KSB filed with the SEC on May 21, 2003.)
      *3(i)(d)
            
            Amended
      Articles of Incorporation dated December 19, 2003. (Incorporated by
      reference from Form 10KSB filed with the SEC on May 20, 2004.)
      *3(i)(e)
            
            Amended
      Articles of Incorporation dated November 4, 2004. (Incorporated by
      reference from Form 10KSB filed with the SEC on April 15, 2005)
      *3(i)(f)
            
            Amended
      Articles of Incorporation dated September 7, 2005. (Incorporated by
      reference from Form 10QSB filed with the SEC on November 16, 2005)
      *3(ii)
            
            By-Laws
      dated April 23, 1998. (Incorporated by reference from Form 10K-SB filed
      with the SEC on January 5, 2000.) *10(i)
            
            The
      2003 Benefit Plan of Delta Capital Technologies, Inc. dated August 20,
      2003 (Incorporated by reference from Form S-8 filed with the SEC on August
      26, 2003) *10(ii)
            
            Employee
      Agreement dated April 30, 2004 between the Company and Kent Carasquero.
      (Incorporated by reference from Form 10KSB filed with the SEC on May 20,
      2004) *10(iii)
            
            Employee
      Agreement dated April 30, 2004 between the Company and Martin Tutschek.
      (Incorporated by reference from Form 10KSB filed with the SEC on May 20,
      2004)  *10(iv)
            
            Employee
      Agreement dated October 1, 2004 between the Company and Roderick Shand
      (Incorporated by reference from Form 10KSB filed with the SEC on April 15,
      2005) *10(v)
            
            Employee
      Agreement dated October 1, 2004 between the Company and Mr. Paul Bains
      (Incorporated by reference from Form 10KSB filed with the SEC on April 15,
      2005) *10(vi)
            
            Consulting
      Agreement dated October 1, 2004 between the Company and Kent Carasquero.
      (Incorporated by reference from Form 10KSB filed with the SEC on April 15,
      2005) *10(vii)
            
            Portal
      Development Agreement dated July 15, 2005 between the Company and Sygenics
      Interactive Inc. (Incorporated by reference from Form 8-K filed with the
      SEC on August 9, 2005) *10(viii)
            
            Debt
      Settlement Agreement dated August 3, 2005 between the Company and Rajesh
      Vadavia and Sygenics Interactive, Inc. (Incorporated by reference from
      Form 10KSB filed with the SEC on April 17, 2006) *10(ix)
            
            Debt
      Settlement Agreement dated September 30, 2005 between the Company and
      Leslie Lounsbury.  (Incorporated by reference from Form 10QSB
      filed with the SEC on November 16, 2005) *10(x)
            
            Debt
      Settlement Agreement dated November 9, 2005 between the Company and
      Roderick Shand. (Incorporated by reference from Form 10KSB filed on April
      17, 2006) *10(xi)
            
            Debt
      Settlement Agreement dated November 9, 2005 between the Company and Paul
      Bains. (Incorporated by reference from Form 10KSB filed on April 17, 2006)
      *10(xii)
            
            Agreement
      and Plan of Merger between MangaPets Inc. and Intrepid World
      Communications Corporation dated January 29, 2007. (Incorporated by
      reference from Form 8-K filed on January 29, 2007) *10(xiii)
            
            Merger
      Agreement dated November 21, 2007 between the Company and First Versatile
      Smartcard Solutions Corporation (Incorporated by reference from Form 8-K
      filed on April 22, 2008) *10(xiv)
            
            Stock
      Purchase Agreement dated April 28, 2008 between the Company, First
      Versatile Smartcard Solutions Corporation and MacKay Group,
      Ltd. (Incorporated by reference from Form 10-K filed on April 15,
      2009)*10(xv)
            
            Mutual
      Release and Settlement Agreement dated December 30, 2008 between the
      Company, James MacKay, MacKay Group, Ltd., Celebrity Foods, Inc. and
      Michael Cimino. (Incorporated by reference from Form 10-K filed on April
      15, 2009)*10(xvi)
            
            Employment
      Agreement dated February 21, 2009 between the Company and William Donovan,
      M.D. (Incorporated by reference from Form 10-K filed on April 15,
      2009)*10(xvii)
            
            Employment
      Agreement dated February 25, 2009 between the Company and John Talamas
      (Incorporated by reference from Form 10-K filed on April 15,
      2009)*




8




10(xviii)
            
            Employment
      Agreement dated February 21, 2009 between the Company and Brian Koslow
      (Incorporated by reference from Form 10-K filed on April 15,
      2009)*14
            
            Code
      of Ethics (Incorporated by reference from Form 10KSB filed with the SEC on
      April 15, 2005) *31(i)
            
            Certification
      of principal executive officer required by Rule 13a – 14(1) or Rule 15d –
      14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.31(ii)
            
            Certification
      of principal financial officer required by Rule 13a – 14(1) or Rule 15d –
      14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32(i)
            
            Certification
      of principal executive officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C.
    63.32(ii)
            
            Certification
      of principal financial officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C.
    63.




*
Incorporated by reference from previous filings of the Company




9




SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.




Spine
      Pain Management, Inc.Date: November 15, 2010
            /s/
      William F. Donovan, M.D.By:
      William F. Donovan, M.D.Chief
      Executive Officer and Principal Financial Officer




10