IMAC - IMAC Holdings Reports Second Quarter 2020 Financial Results

August, 14 2020 09:00 AM IMAC Holdings Inc.

BRENTWOOD, Tenn., Aug. 14, 2020 (GLOBE NEWSWIRE) -- IMAC Holdings, Inc. (Nasdaq: IMAC) (“IMAC” or the “Company”), a provider of innovative medical advancements and care, specializing in regenerative rehabilitation treatments without the use of surgery or opioids, today announces its financial results for its second quarter ended June 30, 2020.

Recent Financial and Select Corporate Highlights:

Completed a $2.65 million offering of common stock
Received more than $2.1 million in financial aid from the US Department of Health and Human Services and Small Business Administration
Announced results from an internal analysis of treatment outcomes for musculoskeletal conditions showing over 80% of IMAC patients reported improvement in movement
Wellness Membership subscribers increased 30% during the quarter to 637 members
Headcount was 133 employees at June 30, down 16% for the year
On July 24, 2020, sold real estate in Lexington, Kentucky in a sale-leaseback transaction for a sale price of $1,300,000, eliminating $1,232,000 of liabilities, while entering into a five-year lease of the property with the purchaser
Received U.S. Food and Drug Administration authorization to initiate a clinical study of its umbilical cord-derived allogenic mesenchymal stem cells for the treatment of bradykinesia due to Parkinson’s disease

“The COVID-19 pandemic impacted on our day-to-day business, as reflected in decreases in key financial measurements compared to the previous quarter and the same period during 2019. While there was a decrease in patient visits and revenue, our implementation of advanced telemedicine therapy, acceleration of expense synergies, and utilization of government-sponsored aid helped us avoid a catastrophic reduction in business. We have already witnessed a recovery in business as evidenced in same-store visit growth of 7% in June 2020 as compared to June 2019,” noted Jeffrey Ervin, IMAC’s Chief Executive Officer.

“In addition, we received clearance to initiate a Phase 1 clinical trial of our umbilical cord-derived allogenic mesenchymal stem cells to improve movement for Parkinson’s disease patients. We appreciate the FDA for authorizing the trial to be conducted in IMAC clinics and our medical doctors are excited to be part of the process, which will significantly reduce trial costs. We are working to combine our already established movement and balance services with proprietary neurological services to expand our patient profile and competitive advantage beyond traditional rehabilitation centers. Furthermore, we believe our stem cell product could provide us with revenue expansion opportunities if our trial is successful.”

Results of Operations for the Three and Six Months Ended June 30, 2020

Patient service revenues decreased 32% to $2.6 million for the three months ended June 30, 2020, compared to $3.8 million for the three months ended June 30, 2019. This decrease was primarily due to the impact of COVID-19. Patient service revenues decreased 10% to $5.9 million for the six months ended June 30, 2020, compared to $6.5 million for the six months ended June 30, 2019. This decrease is attributable to the IMAC Chicago and IMAC Florida acquisitions that occurred in April 2019 and January 2020, respectively, along with the impact of COVID-19.

Net cash provided by financing activities during the six months ended June 30, 2020 was $5.9 million, including proceeds from notes payable, net of related fees and payments, which totaled $2.1 million, and proceeds from the issuance of common stock of $3.8 million. Net cash provided by financing activities during the six months ended June 30, 2019 was $4.1 million, including proceeds from our initial public offering, net of related fees.

About IMAC Holdings, Inc.

IMAC Holdings was created in March 2015 to expand on the footprint of the original IMAC Regeneration Center, which opened in Kentucky in August 2000. IMAC Regeneration Centers combine life science advancements with traditional medical care for movement-restricting diseases and conditions. It owns or manages 15 outpatient clinics that provide regenerative, orthopedic and minimally invasive procedures and therapies. It has partnered with several active and former professional athletes, opening two Ozzie Smith IMAC Regeneration Centers, two David Price IMAC Regeneration Centers, one Tony Delk IMAC Regeneration Center, and three IMAC Regeneration Centers sponsored by Mike Ditka. IMAC’s outpatient medical clinics emphasize its focus around treating sports and orthopedic injuries without surgery or opioids. More information about IMAC Holdings, Inc. is available at www.imacregeneration.com

Safe Harbor Statement

This press release contains forward-looking statements. These forward-looking statements, and terms such as “anticipate,” “expect,” “believe,” “may,” “will,” “should” or other comparable terms, are based largely on IMAC's expectations and are subject to a number of risks and uncertainties, certain of which are beyond IMAC's control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the skills and experience necessary to meet customers’ requirements, and its ability to protect its intellectual property. IMAC encourages you to review other factors that may affect its future results in its registration statement and in its other filings with the Securities and Exchange Commission. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this press release will in fact occur.

IMAC Press Contact:
Laura Fristoe
lfristoe@imacrc.com

Investors:
Bret Shapiro
(516) 222-2560
brets@coreir.com

IMAC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)



June 30, 2020


December 31, 2019

ASSETS








Current assets:








Cash

$
2,802,769


$
373,689

Accounts receivable, net


1,489,872



1,258,325

Deferred compensation, current portion


263,859



312,258

Other assets


336,958



633,303

Total current assets


4,893,458



2,577,575










Property and equipment, net


3,293,992



3,692,009










Other assets:








Goodwill


2,040,696



2,040,696

Intangible assets, net


7,081,218



7,169,072

Deferred equity costs


143,655



170,274

Deferred compensation, net of current portion


356,085



549,563

Security deposits


451,284



499,488

Right of use asset


3,600,198



3,719,401

Total other assets


13,673,136



14,148,494










Total assets

$
21,860,586


$
20,418,078










LIABILITIES AND STOCKHOLDERS’ EQUITY

















Current liabilities:








Accounts payable and accrued expenses

$
2,543,165


$
2,909,666

Patient deposits


351,142



189,691

Notes payable, current portion, net of deferred loan costs


4,471,874



1,422,554

Finance lease obligation, current portion


17,853



17,473

Line of credit


79,961



79,961

Liability to issue common stock, current portion


326,356



421,044

Operating lease liability, current portion


980,967



1,025,247

Total current liabilities


8,771,318



6,065,636










Long-term liabilities:








Notes payable, net of current portion


1,232,677



2,109,065

Finance lease obligation, net of current portion


57,542



66,565

Liability to issue common stock, net of current portion


362,979



578,866

Operating lease liability, net of current portion


3,482,242



3,660,654

Other non-current liabilities


30,000



-










Total liabilities


13,936,758



12,480,786










Stockholders’ equity:








Preferred stock - $0.001 par value, 5,000,000 authorized, nil issued and outstanding at June 30, 2020 and December 31, 2019


-



-

Common stock - $0.001 par value, 30,000,000 authorized, 11,839,973 and 8,913,258 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively


11,834



8,907

Additional paid-in capital


24,079,504



20,050,634

Accumulated deficit


(13,806,283
)


(10,042,050
)
Non-controlling interest


(2,361,227
)


(2,080,199
)
Total stockholders’ equity


7,923,828



7,937,292










Total liabilities and stockholders’ equity

$
21,860,586


$
20,418,078

See accompanying notes to the unaudited condensed consolidated financial statements.

IMAC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)



Three Months Ended June 30,


Six Months Ended June 30,



2020


2019


2020


2019














Patient revenues, net

$
2,572,580


$
3,756,755


$
5,881,649


$
6,526,583

Management fees


-



-



12,487



-

Total revenue


2,572,580



3,756,755



5,894,136



6,526,583


















Operating expenses:
















Patient expenses


405,367



927,778



785,184



1,363,907

Salaries and benefits


2,334,249



2,593,209



5,260,399



4,657,832

Share-based compensation


121,945



171,590



203,029



175,339

Advertising and marketing


174,350



349,328



416,167



696,344

Grant funds


(415,978
)


-



(415,978
)


-

General and administrative


1,208,457



1,429,822



2,444,595



2,407,191

Depreciation and amortization


453,651



396,989



904,146



682,556

Total operating expenses


4,282,041



5,868,716



9,597,542



9,983,169


















Operating loss


(1,709,461
)


(2,111,961
)


(3,703,406
)


(3,456,586
)

















Other income (expense):
















Interest income


39



5



39



5

Other income (expenses)


-



665



-



(15,290
)
Beneficial conversion interest expense


-



-



-



(639,159
)
Loss on extinguishment of debt


(109,544
)


-



(109,544
)


-

Loss on disposal of assets


(21,225
)


-



(21,225
)


-

Interest expense


(134,921
)


(85,210
)


(211,125
)


(115,881
)
Total other (expenses)


(265,651
)


(84,540
)


(341,855
)


(770,325
)

















Net loss before income taxes


(1,975,112
)


(2,196,501
)


(4,045,261
)


(4,226,911
)

















Income taxes


-



-



-



-


















Net loss


(1,975,112
)


(2,196,501
)


(4,045,261
)


(4,226,911
)

















Net loss (income) attributable to the non-controlling interest


(55,576
)


295,733



281,028



726,956


















Net loss attributable to IMAC Holdings, Inc.

$
(2,030,688
)

$
(1,900,768
)

$
(3,764,233
)

$
(3,499,955
)

















Net loss per share attributable to common stockholders
















Basic and diluted

$
(0.20
)

$
(0.23
)

$
(0.38
)

$
(0.50
)

















Weighted average common shares outstanding
















Basic and diluted


10,184,294



8,106,177



9,897,773



7,018,559

See accompanying notes to the unaudited condensed consolidated financial statements.

IMAC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)



Common Stock


Additional


Non-









Number of Shares


Par


Paid-In- Capital


Controlling Interest


Accumulated Deficit


Total




















Balance, December 31, 2018


4,553,623


$
4,534


$
1,233,966


$
(1,625,840
)

$
(3,544,820
)

$
(3,932,160
)
Common stock issued for initial public offering proceeds, net of related fees


850,000



850



3,503,314



-



-



3,504,164

Issuance of common stock in connection with convertible notes


449,217



449



2,245,636



-



-



2,246,085

Issuance of common stock in connection with acquisitions


1,410,183



1,410



7,247,798



-



-



7,249,208

Exercise of warrants


9,900



10



49,490



-



-



49,500

Net loss


-



-



-



(431,223
)


(1,599,187
)


(2,030,410
)
Balance, March 31, 2019


7,252,923



7,253



14,280,204



(2,057,063
)


(5,144,007
)


7,086,387

Issuance of common stock in connection with acquisitions


1,002,306



1,002



4,072,436



-



-



4,073,438

Exercise of warrants


61,569



62



307,783



-



-



307,845

Issuance of employee stock options


-



-



16,216



-



-



16,216

Net loss


-



-



-



(295,733
)


(1,900,768
)


(2,351,875
)
Balance, June 30, 2019


8,316,798


$
8,317


$
18,676,639


$
(2,352,796
)

$
(7,044,775
)

$
9,287,385



Common Stock


Additional


Non-









Number of Shares


Par


Paid-In- Capital


Controlling Interest


Accumulated Deficit


Total




















Balance, December 31, 2019


8,913,258


$
8,907


$
20,050,634


$
(2,080,199
)

$
(10,042,050
)

$
7,937,292

Issuance of common stock


1,095,840



1,096



1,376,122



-



-



1,377,218

Issuance of employee stock options


-



-



38,359



-



-



38,359

Net loss


-



-



-



(336,604
)


(1,733,545
)


(2,070,149
)
Balance, March 31, 2020


10,009,098



10,003



21,465,115



(2,416,803
)


(11,775,595
)


7,282,720

Issuance of common stock


1,830,875



1,831



2,576,820



-



-



2,578,651

Issuance of employee stock options


-



-



37,569



-



-



37,569

Net income (loss)


-



-



-



55,576



(2,030,688
)


(1,975,112
)
Balance, June 30, 2020


11,839,973


$
11,834


$
24,079,504


$
(2,361,227
)

$
(13,806,283
)

$
7,923,828

See accompanying notes to unaudited condensed consolidated financial statements.

IMAC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)



Six Months Ended June 30,



2020


2019

Cash flows from operating activities:








Net loss

$
(4,045,261
)

$
(4,226,911
)
Adjustments to reconcile net loss to net cash used in operating activities:








Depreciation and amortization


904,146



682,556

Beneficial conversion interest expense


-



639,159

Share based compensation


203,030



175,339

Loss on disposition of assets


(16,577
)


-

(Increase) decrease in operating assets:








Accounts receivable, net


(210,707
)


(259,712
)
Other assets


299,721



(98,685
)
Security deposits


48,204



(70,773
)
Increase (decrease) in operating liabilities:








Accounts payable and accrued expenses


(329,056
)


675,820

Patient deposits


161,451



861,409

Lease incentive obligation


-



(57,262
)
Net cash used in operating activities


(2,985,049
)


(1,679,060
)









Cash flows from investing activities:








Purchase of property and equipment


(10,511
)


(389,469
)
Purchase of license fee


(243,750
)


-

Acquisition of IMAC Florida (Note 6)


(200,000
)


-

Net cash used in investing activities


(454,261
)


(389,469
)









Cash flows from financing activities:








Proceeds from initial public offering, net of related fees


-



3,839,482

Proceeds from warrants exercised


-



357,345

Proceeds from issuance of common stock


3,774,617



-

Proceeds from notes payable


2,891,520



100,000

Payments on notes payable


(719,104
)


(54,377
)
Payments of debt issuance costs


(70,000
)


-

Proceeds from line of credit


-



20,000

Payments on line of credit


-



(150,000
)
Payments on finance lease obligation


(8,643
)


(6,835
)
Net cash provided by financing activities


5,868,390



4,105,615










Net increase in cash


2,429,080



2,037,086










Cash, beginning of period


373,689



194,316










Cash, end of period

$
2,802,769


$
2,231,402










Supplemental cash flow information:








Interest paid

$
56,058


$
30,671

Non cash financing and investing:








Debt discount notes payable

$
115,000


$
-

Business acquisition via stock issuance

$
-


$
3,771,978

See accompanying notes to the unaudited condensed consolidated financial statements.

Company Name:	IMAC Holdings Inc.
Stock Symbol:	IMAC
Market:	NYSE

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