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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ending September 30, 2007

OR

For the transition period from              to             

Commission file number: 333-132913

MSC–Medical Services Company

(Exact name of registrant as specified in its charter)

(904) 646-0199

(Registrant’s telephone number, including area code)

The registrant has no securities registered pursuant to Sections 12(b) or 12(g). The registrant files periodic reports under the Securities Exchange Act of 1934 solely to comply with requirements under that certain Indenture and Supplemental Indenture related to its Senior Secured Floating Rate Notes due 2011. The original Indenture and form of note are filed with the Securities and Exchange Commission as part of the registrant’s Registration Statement on Form S-4, amended as of May 17, 2006; the Supplemental Indenture was filed with the Securities and Exchange Commission on August 3, 2007 via a Current Report on Form 8-K dated July 24, 2007.

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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

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FORWARD-LOOKING STATEMENTS

Management may from time-to-time make written or oral forward-looking statements with respect to the Company’s annual or long-term goals, including statements contained in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K, and our Current Reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”), and our press releases and other communications. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical earnings and those currently anticipated or projected. Management cautions readers not to place undue reliance on any of the Company’s forward-looking statements, which speak only as of the date made.

Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “could,” and similar expressions identify forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q that involve risks and uncertainties include, without limitation:

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, management is identifying important factors that could affect the Company’s financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company’s future results could be adversely affected by a variety of factors, including:

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In addition, all forward-looking statements are qualified by and should be read in conjunction with the risks described or referred to under the heading “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.

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Part I – Financial Information

Item 1 – Financial Statements

MSC-Medical Services Company

Consolidated Balance Sheets

(Dollars in thousands)

See notes to unaudited consolidated financial statements.

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MSC-Medical Services Company

Consolidated Balance Sheets – Continued

(Dollars in thousands)

See notes to unaudited consolidated financial statements.

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MSC-Medical Services Company

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2007 and 2006

(Unaudited)

(Dollars in thousands)

See notes to unaudited consolidated financial statements.

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MSC-Medical Services Company

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2007 and 2006

(Unaudited)

(Dollars in thousands)

The Company financed the purchase of certain leasehold improvements of $1 million through the lessor of the leased property.

See notes to unaudited consolidated financial statements.

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

1. Summary of Significant Accounting Policies

Description of Business

MSC-Medical Services Company (the “Company” or “MSC”) is a provider of healthcare products and services for the workers’ compensation industry in the United States. The Company provides workers’ compensation payors, such as insurers and third party administrators, with a quality alternative to the costly and time-consuming process of coordinating the logistics for the delivery of non-acute care needs to their claimants. MSC currently manages relationships with over 7,000 vendors, enabling it to provide over 20,000 healthcare products and services to workers’ compensation patients throughout the United States.

Basis of Presentation

The accompanying consolidated unaudited interim financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted pursuant to the SEC rules and regulations for interim reporting. The financial statements reflect, in the opinion of management, all adjustments necessary to present fairly the financial position and results of operations for the periods indicated. All such adjustments are of a normal, recurring nature. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Operating results for the interim period reported are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

The consolidated balance sheet at December 31, 2006 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying fiscal year to date 2007 consolidated financial statements contained in this Quarterly Report on Form 10-Q include the activities of the Company’s new wholly owned subsidiary, MSC Billing, Inc., as discussed below. All intercompany transactions have been eliminated in consolidation.

In July 2007, the Company formed a new wholly-owned subsidiary, MSC Billing, Inc., incorporated and operated in the State of Florida. The purpose of the subsidiary is to act as the Company’s billing agent for certain clients which receive various services and products from the Company. The Company utilizes the billing agent in order to bill the different types of products and services under separate employer tax identification numbers (which clearly distinguishes the amounts payable for such differentiated products in our clients payables’ systems).

For further information, refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC.

Allowance for Doubtful Accounts

Additions to the allowance for doubtful accounts are made by means of the provision for bad debts which is based upon management’s assessment of historical and expected collections and other collection indicators. The provision for bad debts includes reserves for specific high-collection risk customer accounts and reserves for other customer collection risks. Such reserves and estimation factors are reviewed and updated periodically as uncollectible accounts are deducted from the allowance, and subsequent recoveries are added.

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

Included in the allowance for doubtful accounts are provisions for sales allowances totaling $0.6 million at September 30, 2007 and $0.7 million at September 30, 2006.

Bad debt expense for the nine months ended September 30, 2007 and 2006 was approximately $6.3 million and $6.0 million, respectively.

Impairment of Long-Lived Assets

Goodwill represents the excess purchase price paid over net assets acquired resulting from the application of the purchase method of accounting. Goodwill is tested annually for impairment.

Under Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed at least annually for impairment. The Company performed its annual impairment review of goodwill and trademarks as of the measurement date, October 31, for fiscal year 2006, which indicated no impairment charge was required.

The Company evaluates its long-lived assets for impairment whenever circumstances indicate that the carrying amount of the asset may not be recoverable from estimated future cash flows, in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. There were no impairment losses recognized in the nine months ended September 30, 2007 nor in the years ended December 31, 2006 and December 31, 2005.

On March 6, 2007, MSC was provided with notice by Liberty Mutual of their intent to terminate the Liberty Mutual Pharmacy Benefit Management (“PBM”) Agreement dated as of April 1, 2003 between the Company and Liberty Mutual. The effective date of the termination of the Liberty Mutual PBM Agreement was June 4, 2007. MSC’s contracts with Liberty Mutual for Home Health Services and Durable Medical Equipment are unaffected. Liberty Mutual represented approximately 19% of the Company’s total billings for the year ended December 31, 2006. Gross billings before sales adjustments from the Liberty Mutual PBM Agreement totaled approximately $42.8 million in 2006. Liberty Mutual also represented 13.9%, or $11.4 million of gross accounts receivable at December 31, 2006 before reduction for allowance for doubtful accounts. In the first quarter of 2007, the Company tested the valuation of goodwill and other intangible assets in accordance with guidance included in SFAS No. 142, Goodwill and Other Intangible Assets. As a result of this review, the Company concluded that no impairment had occurred as a result of the termination of the Liberty Mutual PBM Agreement.

Recently Issued Accounting Standards

In June 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 155 Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140, SFAS No. 156 Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140 and FSP FIN 46(R)-6—Determining the Variability to be Considered in Applying FASB Interpretation No. 46(R). The Company has completed its evaluation of the SFAS pronouncements staff position and concluded that they will not impact the Company’s consolidated financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 and subsequently, on May 2, 2007, the FASB also issued FASB Staff Position (“FSP”) No. FIN 48-1 “Definition of Settlement in FASB Interpretation No. 48”. This Interpretation and FSP provide guidance for recognizing and measuring tax positions taken or expected to be taken in a tax return that directly or indirectly affect amounts reported in financial statements, as well as provide accounting guidance for the related income tax effects of tax positions that do not meet the recognition threshold specified in this Interpretation. This Interpretation is effective for fiscal years beginning after December 15, 2006. The provisions of the FSP are effective upon the initial adoption of FIN 48. The Company adopted the provisions of these pronouncements effective January 1, 2007 as discussed in further detail in Note 5 of Notes to Unaudited Consolidated Financial Statements in this report.

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company has not completed its evaluation of the impact of adopting this pronouncement.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This pronouncement would permit entities to elect to measure financial instruments and certain other items at fair value at specified election dates. Subsequent unrealized gains and losses on items for which the fair value option has been elected would be reported in earnings. This statement is effective for fiscal periods beginning after November 15, 2007; early adoption is only permitted for companies that have also elected to apply the provisions of SFAS No. 157, “Fair Value Measurements” as discussed above. The Company has not completed its evaluation of the impact of adopting this pronouncement.

2. Stock Based Compensation

Effective January 1, 2006, the Company adopted SFAS No. 123(R), “Share-Based Payment,” (SFAS No. 123(R)) applying the modified prospective method. SFAS No. 123(R) requires all equity-based payments to employees, including grants of employee stock options, to be recognized in the statement of earnings based on the grant date fair value of the award. Under the modified prospective method, the Company is required to record equity-based compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards outstanding as of the date of adoption. The fair values of stock options granted during 2005 and after the Company adopted SFAS No. 123(R) were determined using a Black-Scholes valuation model.

In adopting SFAS No. 123(R), the Company did not modify the terms of any previously granted options.

The fair value of restricted shares is determined by the number of shares granted and the grant date fair value of the Company’s Common Shares. The compensation expense recognized for all equity-based awards is net of estimated forfeitures and is recognized over the awards’ service period. In accordance with Staff Accounting Bulletin (“SAB”) No. 107, the Company classified equity-based compensation within operating expenses to correspond with the same line item as the majority of the cash compensation paid to employees.

The impact of the equity-based compensation is reflected in cash flow from operations on the Unaudited Consolidated Statement of Cash Flows.

Activity relative to the Company’s common stock options is as follows:

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

Two-thirds of options granted vest over a three-year period, with an exercise price ranging from $1.00 to $3.00. The remaining one-third vest only upon change in control and also have exercise prices ranging from $1.00 to $3.00. Any portion of the stock options not then vested shall immediately vest. The 15.5 million vested options at September 30, 2007 have exercise prices between $0.29 and $3.00.

The fair value of options granted during the first quarter of 2007 was approximately $0.2 million and is expected to be expensed over a period of 36 months. There were no options granted in the second quarter of 2007. The fair value of options granted during the third quarter of 2007 was approximately $0.1 million and is expected to be expensed over a period of 36 months.

The estimated fair value of each option granted after January 1, 2006 is calculated using the Black-Scholes option pricing model. The assumptions used for calculating fair value of grants issued during the first nine months of 2007 varied in range as follows: expected life of 2.5 to 3.0 years, risk-free interest rate of 4.5% – 4.8%, expected volatility of 20.5% – 26.3% and no expected dividend yield.

An estimated expected life of 3 years before exercise was used for the grants during the nine months ended September 30, 2007, based on the typical investment holding period of the shareholder with a controlling interest in MSC. A targeted holding period range of three to six years is cited in Monitor Clipper Equity Partners II, L.P. Private Placement Memorandum at which time all shares would be expected to be vested and then exercised. Implicit in this assumption is that option-holders would not likely exercise before a transaction date as they would become the holders of minority interest shares subject to marketability discounts should they wish to sell their shares. The expected change in control will likely provide a liquidity event for option-holders.

In order to calculate volatility, the Company analyzed the publicly traded stock options of guideline companies with respect to implied volatility. Implied volatilities were calculated using an average of the 10-day trailing 720-day term to expiration on “at the money” options as of the valuation date. The Company relied exclusively on the median implied volatility as a proxy for expected volatility in the Black-Scholes model as the Company believes it provides the best indication of expected volatility over the expected lives of the options.

Activity relative to the Company’s restricted stock is as follows:

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

The restricted shares issued prior to 2007 were issued at a purchase price of $0.001 per share with one-third of the shares vesting on February 14 of each of 2007, 2008 and 2009. The restricted shares issued during 2007 were issued at a purchase price of $0.001 per share with one-third of the shares vesting in March of each of 2008, 2009 and 2010.

3. Comprehensive Income

Comprehensive income represents all changes in equity of the enterprise that results from recognized transactions and other economic events during the period. Other comprehensive (loss) income refers to revenues, expenses, gains, and losses that under GAAP are included in comprehensive income but excluded from net income, such as the unrealized gain or loss on the Company’s interest rate swap. The following table details the components of comprehensive income (loss) for the periods presented.

4. Commitments and Contingencies

In conjunction with the sale of the Company in March 2005, an escrow account was established with Wells Fargo Bank as the escrow agent and $15.0 million of the purchase price was deposited in the escrow account to be used as security for and to satisfy claims arising out of the transaction. On May 26, 2006, the parent delivered to the stockholder representative for the sellers of the Company an indemnification claim against the escrow balance. A $12.4 million settlement was reached on May 30, 2007 by and between the Company and the sellers as part of a settlement agreement that included a cash settlement to the Company paid out from the escrow account of $9 million and forfeiture of $3.4 million of unpaid tax benefits due to the seller. Consistent with applicable accounting standards and SEC guidance, this transaction has been accounted for as an adjustment to results of operations in the second quarter of 2007, accordingly, the effect of this transaction is included in the accompanying unaudited consolidated results of operations for the nine months ended September 30, 2007. See also Note 7.

5. Income Taxes

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (“FIN 48”). This Interpretation and related guidance prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transitions.

Effective January 1, 2007, the Company adopted the provisions of FIN 48 and related guidance. As of January 1, 2007, the unrecognized tax benefit amount recorded was $0.2 million of which $0.1 million would affect income tax expense if recognized. There were no significant changes to this amount during the first nine months of 2007.

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption and as of September 30, 2007, the Company did not have accrued interest or penalties associated with any unrecognized tax benefits, nor were any interest or penalties recognized during the first nine months of 2007.

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

Our evaluation was based on the federal and state income tax years we believe remain open for examination, 2002 through 2006, and 1999 through 2006, respectively. The Internal Revenue Service (IRS) is currently challenging $1.4 million of tax benefits recognized related to certain transaction costs deducted in prior years. The Company believes that its income tax filing positions will be sustained and does not anticipate any adjustments that will result in a material change to its financial positions, however it is reasonably possible that an adjustment of $1.4 million of previously recognized tax benefits will occur within the next twelve months. If the position is not sustained, the impact would not affect net income as the tax effect of the deduction relates to goodwill from a prior acquisition.

Income tax expense for the nine month period ended September 30, 2007 differed from our normal effective tax rate, as the litigation settlement gain recognized during the second quarter of 2007 is non-taxable. Excluding the impact of this non-taxable gain, the Company’s effective tax rate remained consistent with the prior year.

6. Debt

On July 23, 2007, the Company repaid $3.5 million of borrowings under the revolving credit facility, which reduced the outstanding short-term debt to $16.6 million.

In September 2007, the Company commenced occupation of a new leased facility (See Note 7). In order to occupy the new premises certain costs were incurred by the lessor to convert the space to “general office use,” and additional costs were incurred to meet the specifications of the Company. The approximate $1 million incurred to meet Company specifications were paid for by the lessor in exchange for an obligation under the lease to repay such amounts and interest (at a rate of 8%) over the term of the lease (94 months). The related leasehold improvements were capitalized and are being depreciated over the term of the lease.

7. Leases

Effective December 4, 2006, the Company entered into a full service lease agreement with South Shore Group Partners, LLC for new corporate headquarters office space of approximately 100,000 square feet located at 841 Prudential Drive, Jacksonville, FL 32207. The lease has a 94 month term which commenced in September 2007. The lease provides for an option to renew and extend the lease for two terms of five years each, commencing at the expiration of the initial term of the lease. The Company also has the option to contract 24,415 square feet of the space through calendar year 2008.

In accordance with SFAS No. 13”Accounting for Leases,” rent expense is being recognized in the accompanying financial statements on a straight-line basis over the lease term, excluding extension periods, commencing September 2007. In accordance with FASB Technical Bulletin No. 88-1 “Issues Relating to Accounting for Leases,” lease incentives totaling $450 thousand and ten months of abated rent granted to us by the lessor pursuant to the lease are being accounted for on a straight-line basis over the life of the lease excluding the extension periods.

Pursuant to the terms of the Company’s prior facility lease, the Company recorded a $339 thousand non-cash charge to expense relative to lease termination costs in the third quarter of 2007; which such amount is expected to be paid out during the next nine months.

8. Guarantor Financial Statements (unaudited)

The Company’s senior secured floating rate notes are guaranteed by the Parent (also referred to as the “Guarantor”) on a

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

senior secured basis. The notes are the Company’s and the Guarantor’s senior secured obligation and will rank equally in right of payment with all of the Company’s and Guarantor’s existing and future unsubordinated indebtedness. The notes are effectively junior to the Company’s and Guarantor’s indebtedness under the Company’s senior secured revolving credit facility to the extent of the value of the assets securing such facility. The notes are secured by a second priority lien on substantially all of the Company’s and Guarantor’s existing and future assets, as well as capital stock. The senior secured revolving credit facility is secured by a first priority lien on all such assets.

The Company has not presented separate financial statements for the Guarantor because it has deemed that such financial statements would not provide investors with any material additional information. Included in the tables below are the consolidating balance sheet as of September 30, 2007 and December 31, 2006, the consolidating statement of operations for the three and nine months ended September 30, 2007 and 2006, and consolidating statement of cash flows for the nine months ended September 30, 2007 and 2006 of: (a) the Parent (Guarantor); (b) the Company (Subsidiary), (c) elimination entries necessary to consolidate the Parent with the Company; and (d) the consolidated company, MCP–MSC Acquisition, Inc.

MCP-MSC Acquisition, Inc.

Condensed Consolidating Balance Sheets

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

MCP-MSC Acquisition, Inc.

Condensed Consolidating Balance Sheets - continued

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MSC-Medical Services Company

Notes to Unaudited Consolidated Financial Statements – continued

September 30, 2007

(Dollar amounts in thousands except per share data, unless otherwise stated)

MCP – MSC Acquisition, Inc.

Condensed Consolidating Statement of Operations

For the three months ended