The Spine Injury Solutions business model offers compelling economics. Spine Injury Solutions underwrites attending physicians and surgeons once the procedures have been completed at a fixed rate. From this point forward, Spine Injury Solutions has to wait until settlement to receive all or some portion of its invoiced amount at the time of final settlement. On average, settlement occurs within 12-18 months.
Typically, for every $1 invested by Spine Injury Solutions, $5 is generated in gross billings.
Typically, for every $1 invested (funded to physicians) by Spine Injury Solutions, $5 is generated in gross billings and $2.50 in recognized revenue. The Company’s gross margins average approximately 60%. In 2011, operating costs averaged 34% of recognized revenue, with net operating margins of approximately 25%. Since inception through June 30, 2012 over 2500 cases and a total of 4,400 procedures have been underwritten by Spine Injury Solutions. During this period, a total of 618 cases have reached conclusion totaling $3.74 million in settlement. 42 cases out of the 618 have failed to collect, representing a total of $80,000 in write-offs. Spine Injury Solutions has established an allowance for doubtful accounts to account for similar potential losses.
Net Revenue 100%
Net Operating Margin 25%
Currently the Spine Injury Solutions business model is in practice in Texas and Florida. With our clinics in Florida, we have the opportunity of providing service to approximately 40% of Florida’s population. Spine Injury Solutions estimates that each of these centers has the current capacity to treat 50 cases per month. Historically, new centers achieve approximately 25% of operating capacity within the first 6 months of operation and 50% within 12 months, reaching full capacity in the second year of operation.