UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q


(Mark
One)




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


For the
fiscal year ended March 31,
2010.




 ̈ 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.


(Formerly “VERSA
CARD, 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
April 15, 2010, the registrant had 17,067,682 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
      INFORMATIONItem
      1.
              Financial
      StatementsBalance
      Sheets as of March 31, 2010 and December 31, 2009
              F-3Statements
      of Operations for the three months ended March 31, 2010 and
      2009
              F-4Statements
      of Cash Flows for the three months ended March 31, 2010 and
      2009
              F-7Notes
      to Financial Statements
              6Item
      2.
              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
              15Item
      4.
              Controls
      and Procedures
              17PART
      II
              OTHER
      INFORMATIONItem
      1.
              Legal
      Proceedings
              17Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              19Item
      3.
              Defaults
      Upon Senior Securities
              19Item
      6.
              Exhibits
              20Signatures
              21




2




SPINE
PAIN MANAGEMENT, INC. (FORMERLY "VERSA CARD, INC.")


BALANCE
SHEETS





March 31,
                          
                          
                          December 31,2010
                          
                          
                          2009(Unaudited)
                          
                          
                          (Audited)ASSETSCURRENT
      ASSETS:Cash
                          
                          $
                          21,837
                          
                          
                          $
                          32,789Account
      receivable, net
                          
                          
                          1,210,678
                          
                          
                          
                          508,499Total
      current assets
                          
                          
                          1,232,515
                          
                          
                          
                          541,288TOTAL
      ASSETS
                          
                          $
                          1,232,515
                          
                          
                          $
                          541,288LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
                          
                          $
                          762,838
                          
                          
                          $
                          475,138Notes
      payable
                          
                          
                          11,317
                          
                          
                          
                          11,317Due
      to former officers and directors
                          
                          
                          56,016
                          
                          
                          
                          56,016Due
      to related party
                          
                          
                          317,699
                          
                          
                          
                          269,295Total
      current liabilities
                          
                          
                          1,147,870
                          
                          
                          
                          811,766COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock: $0.001 par value, 50,000,000 sharesauthorized;
      16,867,682 and 16,867,682 shares issued and outstandingat
      March 31, 2010 and December 31, 2009, respectively
                          
                          
                          16,868
                          
                          
                          
                          16,868Additional
      paid-in capital
                          
                          
                          14,717,352
                          
                          
                          
                          14,717,352Accumulated
      deficit
                          
                          
                          (14,649,575
                          )
                          
                          
                          (15,004,698
                          )Total
      stockholders’ equity (deficit)
                          
                          
                          84,645
                          
                          
                          
                          (270,478
                          )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                          
                          $
                          1,232,515
                          
                          
                          $
                          541,288





The
accompanying notes are an integral part of the financial
statements


F-3




SPINE
PAIN MANAGEMENT, INC. (FORMERLY "VERSA CARD, INC.")


UNAUDITED
STATEMENTS OF OPERATIONS





FOR THE THREE MONTHS ENDED MARCH 31,2010
                      
                      
                      2009REVENUE
                      
                      $
                      1,452,133
                      
                      
                      $
                      -COST
      OF SALESService
      costs
                      
                      
                      318,700
                      
                      
                      
                      -GROSS
      PROFIT
                      
                      
                      1,133,433
                      
                      
                      
                      -OPERATING
      EXPENSESGeneral
      and administrative expenses
                      
                      
                      231,487
                      
                      
                      
                      656,874Allownace
      for doubtful accounts
                      
                      
                      548,323
                      
                      
                      
                      -Total
      Operating Expenses
                      
                      
                      779,810
                      
                      
                      
                      656,874NET
      INCOME (LOSS) FROM OPERATIONS
                      
                      
                      353,623
                      
                      
                      
                      (656,874
                      )Other
      income
                      
                      
                      1,500
                      
                      
                      
                      -NET
      INCOME (LOSS)
                      
                      $
                      355,123
                      
                      
                      $
                      (656,874
                      )NET
      INCOME (LOSS) PER SHARE:Basic
      and Diluted
                      
                      $
                      0.02
                      
                      
                      $
                      (0.05
                      )WEIGHTED-AVERAGE
      SHARES:Basic
      and Diluted
                      
                      
                      16,867,682
                      
                      
                      
                      14,384,349





The
accompanying notes are an integral part of the financial
statements


F-4




SPINE
PAIN MANAGEMENT, INC. (FORMERLY "VERSA CARD, INC.")


UNAUDITED
STATEMENTS OF CASH FLOWS





FOR THE THREE MONTHS ENDED MARCH 31,2010
                    
                    
                    2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                    
                    $
                    355,123
                    
                    
                    $
                    (656,874
                    )Adjustments
      to reconcile net income (loss) to net cash used in operating
      activities:Allowance
      for doubtful accounts
                    
                    
                    548,323
                    
                    
                    
                    -Issuance
      of common stock for consulting services and stock based
      compensation
                    
                    
                    -
                    
                    
                    
                    538,303Changes
      in assets and liabilities:Accounts
      receivable
                    
                    
                    (1,250,502
                    )
                    
                    
                    -Accounts
      payable and accrued liabilities
                    
                    
                    287,700
                    
                    
                    
                    66,048Net
      cash used in operating activities
                    
                    
                    (59,356
                    )
                    
                    
                    (52,523
                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Net
      cash used in investing activities
                    
                    
                    -
                    
                    
                    
                    -CASH
      FLOWS FROM FINANCING ACTIVITIES:Due
      to  related parties
                    
                    
                    48,404
                    
                    
                    
                    52,523Net
      cash provided by financing activities
                    
                    
                    48,404
                    
                    
                    
                    52,523NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                    
                    
                    (10,952
                    )
                    
                    
                    -BEGINNING
      OF PERIOD
                    
                    
                    32,789
                    
                    
                    
                    10,198END
      OF PERIOD
                    
                    $
                    21,837
                    
                    
                    $
                    10,198Acquisition
      of intangible assets with issuance of stock
                    
                    $
                    -
                    
                    
                    $
                    (230,697
                    )Asset
      impairment loss
                    
                    
                    -
                    
                    
                    
                    230,697$
                    -
                    
                    
                    $
                    -





The
accompanying notes are an integral part of the financial statements




F-5




PART
I




SPINE PAIN MANAGEMENT, INC.,
(Formerly “Versa Card, Inc.”)





NOTES
TO THE FINANCIAL STATEMENTS





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. In April 2005, the Company
began focusing on the development of the “MangaPets” interactive web portal and
acquiring other ventures in the technology sector. The Company entered into a
Portal Development Agreement in July 2005, with Sygenics Interactive Inc.
(“Sygenics”), a developer of advanced information management technology, located
in Montreal, Quebec, Canada, and an authorized licensee of Sygenics Inc. The
agreement provided for the design, development and deployment of an online
virtual pet portal/website. However, in 2006, prior to Sygenics’ completion of
the first stage of the portal, a dispute arose between the Company and Sygenics
that resulted in work being halted. Since that time, the Company has attempted
to develop the web portal or form another strategic relationship with a
different developer to complete development of the web portal.  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.




During
2006, in addition to developing the Manga themed web portal, the Company
expended resources toward establishing a United Kingdom based subsidiary company
to pursue acquisitions in the gaming sector. On the advice of counsel, and
unfavorable events in the United States pertaining to on-line gaming, the
Company decided not to pursue on-line gaming ventures.




During
the fourth quarter of 2007 and into the fourth quarter of 2008, the Company
focused on consummating a transaction with a smartcard / e-purse company, First
Versatile Smartcard Solutions Corporation (“FVS”), and put on hold the
development of its web portal for the Company’s MangaPets business. In November
2007, the Company entered into an agreement to merge with FVS, and subsequently
in April 2008, the transaction was restructured as a stock purchase
agreement.   Based on various factors, the acquisition of FVS did
not meet the expectations of the Company or FVS, and on December 30, 2008 the
Company entered into a Mutual Release and Settlement Agreement to effectively
rescind the transactions effected by the FVS acquisition
agreements.




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 of 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.  The Company is
also currently evaluating the development of additional spine injury treatment
centers in Texas and across the United States.


6




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 resulting from automobile and work-related accidents.
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.




GOING
CONCERN




The
Company has a history of recurring losses from operations and has an accumulated
deficit of approximately $14.6 million as of March 31,
2010.  Additionally, the Company will require additional funding to
execute its strategic business plan for 2010. Successful business operations and
its transition to attaining profitability is dependent upon obtaining additional
financing and achieving a level of revenue adequate to support its cost
structure. The Company does not have sufficient working capital to fund its
planned operations through December 31, 2010; 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 SPMI
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 has also filed a lawsuit against
Messrs. Koslow and Waltzer, as described below in Note 12, “Commitments and
Contingencies.”


7




On Nov.
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.




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 March 31, 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.




Change
from Development Stage




Pursuant
to FASB ASC 915, “Development Stage Entities”, the Company was considered to be
a development stage entity from March 4, 1998 to December 31, 2008. Among other
provisions, FASB ASC 915 stipulates the reporting of inception to date results
of operations, cash flows and other financial information. Since August 2009,
the Company began generating revenues from planned commercial operations.
Although the Company’s management expects to focus a significant amount of
resources to business development and expansion type activities over the next 2
to 3 years, the Company has been generating revenues that originate from planned
principle operations relative to new business concept of spine pain
management.  Consequently, these financial statements are reported in
accordance with accounting principles for an operating company and do not
reflect inception to date information.




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.  Payment for services are primarily made to the Company by a third
party and the credit policy includes terms of net 180 days for
collections.


8




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.




The
Company did not file federal and applicable state income tax returns for the
years ended December 31, 2009 and 2008, respectively, and prior. Although the
Company is incurring losses since its inception, the Company is obligated to
file income tax returns for compliance with IRS regulations and that of
applicable state jurisdictions. Management believes that the Company will not
incur significant penalty and interest for non-filing of federal and state
income tax returns, as well as, federal and state income tax liabilities, as
applicable, for the years ended December 31, 2009 and 2008, respectively, and
prior considering its loss making history since inception. The Company is still
in the process of determining the amount of net taxable operating losses
eligible to be carried forward for federal and applicable state income tax
purposes for the years ended December 31, 2009 and 2008, respectively, and
prior. The Company has not made any provision for federal and state income tax
liabilities that may result from this uncertainty as of December 31, 2009 and
2008, respectively. Management believes that this will not have a material
adverse 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).


9




Reclassification





Certain
reclassifications have been made to conform with prior period’s financial
information to the current presentation.





Accounting
Standard Updates




In June
2009, the Financial Accounting Standards Board (FASB) amended its accounting
guidance on the consolidation of variable interest entities (VIE). Among other
things, the new guidance requires a qualitative rather than a quantitative
assessment to determine the primary beneficiary of a VIE based on whether the
entity (1) has the power to direct matters that most significantly impact
the activities of the VIE and (2) has the obligation to absorb losses or
the right to receive benefits of the VIE that could potentially be significant
to the VIE. In addition, the amended guidance requires an ongoing
reconsideration of the primary beneficiary. The provisions of this new guidance
were effective as of the beginning of our 2010 fiscal year, and the adoption did
not have a material impact on our financial statements.





In
October 2009, the FASB issued updated guidance on multiple-deliverable
revenue arrangements. Specifically, the guidance amends the existing criteria
for separating consideration received in multiple-deliverable arrangements,
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. The guidance also
establishes a hierarchy for determining the selling price of a deliverable,
which is based on vendor-specific objective evidence; third-party evidence; or
management estimates. Expanded disclosures related to multiple-deliverable
revenue arrangements will also be required. The new guidance is effective for
revenue arrangements entered into or materially modified on and after
January 1, 2011. The Company does not expect the application of this new
standard to have a significant impact on its consolidated financial
statements.





Consolidations:  In
December 2009, the FASB issued ASU No. 2009-17 (formerly Statement No. 167),
“Consolidations (Topic 810) – Improvements to Financial Reporting for
Enterprises involved with Variable Interest Entities”. ASU 2009-17 amends the
consolidation guidance applicable to variable interest entities. The amendments
to the consolidation guidance affect all entities, as well as qualifying
special-purpose entities (QSPEs) that are currently excluded from previous
consolidation guidance. ASU 2009-17 was effective as of the beginning of the
first annual reporting period that begins after November 15, 2009. ASU 2009-17
did not have an impact on our financial condition, results of operations, or
disclosures.





Accounting
for Transfers of Financial Assets:  In December 2009, the FASB issued
ASU No. 2009-16 (formerly Statement No. 166), “Transfers and Servicing (Topic
860) – Accounting for Transfers of Financial Assets”. ASU 2009-16 amends the
derecognition accounting and disclosure guidance. ASU 2009-16 eliminates the
exemption from consolidation for QSPEs and also requires a transferor to
evaluate all existing QSPEs to determine whether they must be consolidated. ASU
2009-16 was effective as of the beginning of the first annual reporting period
that begins after November 15, 2009. ASU 2009-16 did not have an impact on our
financial condition, results of operations, or disclosures.





In
January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06
which is intended to improve disclosures about fair value measurements. The
guidance requires entities to disclose significant transfers in and out of fair
value hierarchy levels, the reasons for the transfers and to present information
about purchases, sales, issuances and settlements separately in the
reconciliation of fair value measurements using significant unobservable inputs
(Level 3). Additionally, the guidance clarifies that a reporting entity should
provide fair value measurements for each class of assets and liabilities and
disclose the inputs and valuation techniques used for fair value measurements
using significant other observable inputs (Level 2) and significant unobservable
inputs (Level 3). The Company has applied the new disclosure requirements as of
January 1, 2010, except for the disclosures about purchases, sales,
issuances and settlements in the Level 3 reconciliation, which will be effective
for interim and annual periods beginning after December 15, 2010. The
adoption of this guidance has not had and is not expected to have a material
impact on the Company’s consolidated financial statements.


10





In
February 2010, the FASB issued ASU 2010-09 which requires that an SEC
filer, as defined, evaluate subsequent events through the date that the
financial statements are issued. The update also removed the requirement for an
SEC filer to disclose the date through which subsequent events have been
evaluated in originally issued and revised financial statements. The adoption of
this guidance on January 1, 2010 did not have a material effect on the
Company’s consolidated financial statements.




NOTE 4.  RECEIVABLE FROM
FORMER RELATED PARTY




During
the year ended December 31, 2007, the Company made advances totaling $17,169 to
its former chief executive officer. This receivable was non-interest bearing and
due on demand. This receivable was considered uncollectible for the year ended
December 31, 2009. The entire amount had been written down and reflected in the
statement of operations as part of the write off of accounts payable for the
year ended December 31, 2009.




NOTE
5.  ACCOUNTS PAYABLE




During
the year ended December 31, 2009, the Company determined and analyzed that
certain balances in accounts payable were older than five years, with no direct
contact with respective vendors to whom the Company owed approximately $374,000.
For the year ended December 31, 2009, the Company had written back $374,000 as
other income towards old liabilities no longer payable through a resolution of
the board of directors. This adjustment to accounts payable was reflected in the
statements of operations as other income for the year ended December 31,
2009.




NOTE 6.  NOTES
PAYABLE




Notes
payable consist of:





March 31,
                  
                  
                  December 31,2010
                  
                  
                  2009Note
      payable to an individual, due on demand,secured
      byall
      assets and revenues of the Company
                  
                  $
                  9,334
                  
                  
                  $
                  9,334Note
      payable to a company, due on demand,secured
      byall
      assets and revenues of the Company
                  
                  
                  1,983
                  
                  
                  
                  1,983Total
                  
                  $
                  11,317
                  
                  
                  $
                  11,317




NOTE 7.  DUE TO FORMER
OFFICERS AND DIRECTORS





Due to
former related parties consists of:





March 31,
                  
                  
                  December 31,2010
                  
                  
                  2009Due
      to former chief executive officer,non-interest
      bearing, due on demand
                  
                  $
                  4,237
                  
                  
                  $
                  4,237Due
      to former chief accounting officer,non-interest
      bearing, due on demand
                  
                  
                  51,779
                  
                  
                  
                  51,779Total
                  
                  $
                  56,016
                  
                  
                  $
                  56,016





11





NOTE 8.  DUE TO RELATED
PARTIES




Due to
related parties consists of:





March 31,
                    
                    
                    December 31,2010
                    
                    
                    2009Due
      to chief executive officer,  non-interest bearing, due on demand,
      used in working capital
                    
                    $
                    317,699
                    
                    
                    $
                    269,295Total
                    
                    $
                    317,699
                    
                    
                    $
                    269,295





NOTE
9. RELATED PARTY TRANSACTIONS





Medical
Services Agreement





In August
2009, the Company entered into a medical services agreement (the “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
at pre-determined and pre-negotiated rate per patient.  NSO will be
deemed for all purposes an independent contractor and not an employee, agent,
joint venturer or partner of the Company.  NSO will be responsible for
its own taxes associated with its performance of the services and receipt of
payments pursuant to this Agreement. The Agreement has a term of three years,
and thereafter will automatically renew for another three years at the
discretion of involved parties.  During the three months ended March
31, 2010, the Company had a balance of $318,700 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.




In-kind
Contributions




Since
August, 2009; the Company maintains its office at: 5225 Katy Freeway, Suite 600,
Houston, Texas 77007.  This office space encompasses approximately 450
square feet and is currently provided to the Company at no cost by Dr. William
Donovan, the Company’s Director and Chief Executive Officer. As a result, the
Company has recognized in-kind contributions of $1,500 as other income and
related rental expense of $1,500 as general and administration expenses in the
accompanying statement of operations for the quarter ending March 31, 2010 (none
in same quarter ended in 2009).




NOTE
10. COMMON STOCK




Stock Issuances




The
Company did not have any stock issuances for the quarter ending March 31,
2010.




In
February, 2009, the Company issued 2,100,000 shares of Company common stock
to various individuals, including certain directors, officers and stockholders,
for services and compensation valued at approximately $544,000.




Pursuant
to a Stock Exchange Agreement dated February, 2009, the Company acquired the
website and proprietary methodologies of One Source Plaintiff Funding, Inc. in
exchange for 900,000 shares of its common stock valued at $225,000.




12




On
December 28, 2009, the Company issued 500,000 restricted shares of common stock
to William Donovan, M.D., the Company’s Chief Executive Officer, for the
conversion of $349,400 of outstanding debt owed by the Company to Dr.
Donovan.




NOTE
11.  INCOME TAXES




The
Company has not made provision for income taxes for the three month period ended
March 31, 2010 and in the years ended December 31, 2009 and 2008, respectively,
since the Company has incurred net operating losses in these
periods.




Deferred
income tax assets consist of:




March 31,
                      2010
                    
                    
                    December 31,
                      2009Net
      operating loss carryforwards
                    
                    $
                    2,627,400
                    
                    
                    $
                    2,765,900Less
      valuation allowance
                    
                    
                    (2,627,400
                    )
                    
                    
                    (2,765,900
                    )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 $2,627,400 and $2,765,900 attributable to the future
utilization of the approximately $6,737,000 and $7,092,000 in eligible net
operating loss carryforwards as of March 31, 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.




As the
Company has not filed federal and applicable state income tax returns for the
years ending December 31, 2009 and 2008, respectively, and prior, it is not
practicable to determine amounts of interest and/or penalties related to income
tax matters that will be due as of December 31, 2009 and 2008, respectively.
Accordingly, the Company had no accrual for interest or penalties on the
Company’s balance sheets at December 31, 2009 and 2008, respectively, and
has not recognized interest and/or penalties in the accompanying statements of
operations for the years ended December 31, 2009 and 2008, respectively.
However, management of the Company believes that non-filing of federal and
applicable state income tax returns will not have a significant impact on the
Company’s financial position,  its results of
operations  and cash flows considering continued operating losses
since inception.




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 12.COMMITMENTS
AND CONTINGENCIES




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.  This case is still
pending in District Court.  We believe the case is without merit and
are vigorously fighting the lawsuit. We anticipate filing a motion to have the
case dismissed.  There can be, however, no assurance that the outcome
of this case will be favorable to the Company.




13




In
December 2009, the Company reached a settlement in the case of Martin Nathan, a
former attorney for the Company, who filed suit against the Company. In his
petition, Mr. Nathan asserted that he performed certain legal services for the
Company and was never compensated. On November 14, 2007, the Company failed to
appear for a preliminary hearing held before the 295th Judicial District Court
of Harris County, and the Court entered an interlocutory default judgment
against the Company. On January 16, 2008, the Court entered a final judgment
against the Company, finding the Company liable for Mr. Nathan’s damages, for a
total amount of $90,456. Subsequently, the Company filed a motion for new trial.
In April 2009, the parties reached an agreement on terms of a settlement
providing for the issuance of Company stock to Mr. Nathan; however, a definitive
agreement was never executed, and stock was never issued to Mr.
Nathan.  In December 2009, the parties agreed on different terms and
executed a settlement agreement providing for the Company to pay Mr. Nathan ten
monthly payments of $8,000 for aggregate consideration of $80,000, with the
final payment due in September 2010.




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, as
described in more detail in “Item 1” of this report.  In the suit, the
Company alleges that Messrs. Koslow and Waltzer (a) breached an agreement to
rescind the One Source acquisition, (b) made fraudulent representations to the
Company to induce them to enter into the One Source acquisition, (c) will be
unjustly enriched if the One Source acquisition is not rescinded, and (d)
breached a fiduciary duty owed to the Company.  Messrs. Koslow and
Waltzer answered the Original Petition and asserted counterclaims against the
Company for breach of contract and fraud.  The parties mediated the
lawsuit on April 16, 2010.  During the mediation, the parties entered
into a hand-written agreement for settlement of the
lawsuit.  This agreement provides that (1) the Company will transfer
to Messrs. Koslow and Waltzer the 1,000 shares of common stock of One Source
Plaintiff Funding, Inc. and an aggregate of 200,000 options to purchase common
stock of the Company at an exercise price of $1.00 per share for a term of three
years, (2) Messrs Koslow and Waltzer will transfer to the Company an aggregate
of 625,000 shares of common stock of the Company (thereby Messrs Koslow and
Waltzer will retain an aggregate of 375,000 shares of common stock), (3) Messrs.
Koslow and Waltzer will enter into a Lock Up/Leak Out Agreement whereby they can
sell no more than an aggregate of 11,250 shares of common stock of the Company
during any calendar month, and (4) all parties to the lawsuit will mutually
release each other from all claims of liability.  The parties are
currently in the process of drafting and finalizing documentation reflecting the
agreed settlement.




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.  We believe the case is without merit and are
vigorously fighting the lawsuit. We anticipate filing a motion to have the case
dismissed.  There can be no assurance, however, that the outcome of
this case will be favorable to the Company.




14




In March
2008, Kent Caraquero, 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  13.SUBSEQUENT
EVENTS




None.




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
subcontractors owning such facilities as needed by spine surgeons, orthopedic
surgeons and other healthcare providers across the nation.




15




Results
of Operations




The
Company recorded approximately $1,450,000 in service revenues for the quarter
ended March 31, 2010 and no revenue in the same period in 2009.  This
increase is attributable to revenues generated from the Company’s spine injury
treatment center in Houston, Texas, which center was not open in the quarter
ended March 31, 2009.  The Company’s spine injury treatment center in
Houston opened in August 2009.




Service
cost was approximately $319,000 for the quarter ended March 31, 1010 compared to
none in the same period in 2009.  This increase is also attributable
to revenues generated from the Company’s spine injury treatment center in
Houston, Texas.




During
the three month period ended March 31, 2010, the Company’s operations focused on
developing its spine injury treatment management business and operating its
spine injury treatment center in Houston, Texas.  Alternatively,
during the three month period ended March 31, 2009, the Company’s operations
were limited to initial planning of the Company’s current business and
preparation for the opening of its first spine injury treatment
center.




Expenses




Operating
expenses for the three months ended March 31, 2010, were approximately $780,000
as compared to approximately $657,000 for the same period in 2009. The increase
in operating expenses was primarily the result of the increase in filing costs,
legal and professional fees, and allowance for doubtful accounts for the quarter
ended March 31, 2010.




During
the three months ended March 31, 2010, the Company incurred approximately
$231,000 of general and administration expenses as compared to approximately
$657,000 for the same period in 2009.  The $231,000 of general and
administrative expenses incurred during the three months ended March 31, 2010
includes direct charge offs of uncollectable accounts of approximately
$147,000.  There was no direct charge off expense recorded in the same
period in 2009.  In the three months ended March 31, 2010, allowance
for doubtful accounts of approximately $548,000 was recorded. There was no
allowance for doubtful accounts recorded in the same period in
2009.  For the three months ended March 31, 2009, there was
approximately $519,000 of stock based compensation recorded as general and
administrative expenses.  There was no stock based compensation
recorded for the three months ended March 31, 2010.




Net
Income / (Loss)




Net
Income for the three months ended March 31, 2010 was approximately $355,000
compared to a net loss of approximately $657,000 for the same period in 2009, an
improvement of approximately $1.0 million. For the three months ended March 31,
2010, we had additional non-cash expense of approximately $548,000 towards
allowance for doubtful debts and bad debts write-off of approximately $147,000.
There was no allowance for doubtful debts or bad debts write-off in the same
period of 2009.




Liquidity
and Capital Resources (Revise based on 2009 cash flows)




For the
three months ended March 31, 2010, cash used in operations was approximately
$59,000, which primarily included an increase in accounts receivable of
approximately $1.3 million, partially offset by a reserve for uncollectible
accounts receivable of approximately $548,000, net income of approximately
$355,000 from operations, and the increase to accounts payable and accrued
liabilities of approximately $288,000.  For the same period in 2009,
cash used in operations was approximately $53,000, which primarily included a
net loss of approximately $657,000, offset in part by an increase in accounts
payable and accrued liabilities of approximately $66,000 and the issuance of
common stock for consulting services and stock based compensation of
approximately $538,000.




There was
no cash provided or used in investing activities for the quarters ended March
31, 2010 and 2009.




16




Cash
provided by financing activities totaled approximately $48,000 for the quarter
ended March 31, 2010, representing the amounts advanced by a related party. For
the same period in 2009, cash provided by financing activities totaled
approximately $53,000, also representing advances by a related
party.




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 there were no changes in our internal controls over financial reporting or
other factors that could significantly affect such controls during the period
covered by this report, and there were no corrective actions with regard to
significant deficiencies and material weaknesses.




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
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.  This case is still
pending in District Court.  We believe the case is without merit and
are vigorously fighting the lawsuit. We anticipate filing a motion to have the
case dismissed.  There can be, however, no assurance that the outcome
of this case will be favorable to the Company.





In
December 2009, the Company reached a settlement in the case of Martin Nathan, a
former attorney for the Company, who filed suit against the Company. In his
petition, Mr. Nathan asserted that he performed certain legal services for the
Company and was never compensated. On November 14, 2007, the Company failed to
appear for a preliminary hearing held before the 295th Judicial District Court
of Harris County, and the Court entered an interlocutory default judgment
against the Company. On January 16, 2008, the Court entered a final judgment
against the Company, finding the Company liable for Mr. Nathan’s damages, for a
total amount of $90,456. Subsequently, the Company filed a motion for new trial.
In April 2009, the parties reached an agreement on terms of a settlement
providing for the issuance of Company stock to Mr. Nathan; however, a definitive
agreement was never executed, and stock was never issued to Mr.
Nathan.  In December 2009, the parties agreed on different terms and
executed a settlement agreement providing for the Company to pay Mr. Nathan ten
monthly payments of $8,000 for aggregate consideration of $80,000, with the
final payment due in September 2010.


17




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, as
described in more detail in “Item 1” of this report.  In the suit, the
Company alleges that Messrs. Koslow and Waltzer (a) breached an agreement to
rescind the One Source acquisition, (b) made fraudulent representations to the
Company to induce them to enter into the One Source acquisition, (c) will be
unjustly enriched if the One Source acquisition is not rescinded, and (d)
breached a fiduciary duty owed to the Company.  Messrs. Koslow and
Waltzer answered the Original Petition and asserted counterclaims against the
Company for breach of contract and fraud.  The parties mediated the
lawsuit on April 16, 2010.  During the mediation, the parties entered
into a hand-written agreement for settlement of the
lawsuit.  This agreement provides that (1) the Company will transfer
to Messrs. Koslow and Waltzer the 1,000 shares of common stock of One Source
Plaintiff Funding, Inc. and an aggregate of 200,000 options to purchase common
stock of the Company at an exercise price of $1.00 per share for a term of three
years, (2) Messrs Koslow and Waltzer will transfer to the Company an aggregate
of 625,000 shares of common stock of the Company (thereby Messrs Koslow and
Waltzer will retain an aggregate of 375,000 shares of common stock), (3) Messrs.
Koslow and Waltzer will enter into a Lock Up/Leak Out Agreement whereby they can
sell no more than an aggregate of 11,250 shares of common stock of the Company
during any calendar month, and (4) all parties to the lawsuit will mutually
release each other from all claims of liability.  The parties are
currently in the process of drafting and finalizing documentation reflecting the
agreed settlement.





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.  We believe the case is without merit and are
vigorously fighting the lawsuit. We anticipate filing a motion to have the case
dismissed.  There can be no assurance, however, that the outcome of
this case will be favorable to the Company.





In March
2008, Kent Caraquero, 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.


18




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




None.




ITEM
3.   DEFAULTS UPON SENIOR SECURITIES




None.




19




ITEM
6. EXHIBITS




INDEX
TO EXHIBITS




Exhibit
                No.
              
              Description3(i)(a)
              
              Articles
      of Incorporation dated March 4, 1998. (Incorporated by reference from Form
      10SB filed with the SEC on January 5, 2000.) *3(i)(b)
              
              Amended
      Articles of Incorporation dated April 23,1998. (Incorporated by reference
      from Form 10SB 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 10SB 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 8k 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)*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




20


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: May 12, 2010
                /s/ William F. Donovan,
  M.D.By:
      William F. Donovan, M.D.Chief
      Executive Officer and Principal Accounting
                  Officer




21