IMAC - IMAC Holdings Reports Third Quarter 2020 Financial Results
Financial performance improves sequentially with record billable patient visits and highlights strong operational and fiscal management despite continued COVID-19 impact
BRENTWOOD, Tenn., Nov. 12, 2020 (GLOBE NEWSWIRE) -- IMAC Holdings, Inc. (Nasdaq: IMAC) (“IMAC” or the “Company”), a provider of innovative medical advancements and care specializing in regenerative rehabilitation orthopedic treatments without the use of surgery or opioids, today announces its financial results for its third quarter ended September 30, 2020.
Third Quarter Highlights and Recent Developments :
- Announced the opening of enrollment in early November in its Phase 1 clinical study of umbilical cord-derived mesenchymal stem cells for the treatment of bradykinesia due to Parkinson’s Disease
- Announced the addition of three new highly qualified independent directors – Maurice “Mo” Evans, Michael Pruitt, and Cary Sucoff – to its board of directors
- Sold its Lexington, Ky. property for $1.3 million in a sale-leaseback transaction
- Reduced general and administrative expenses by 27% year-over-year and 20% quarter-over-quarter to $961,521 in the third quarter of 2020 with positive impacts from the realization of expense synergies from centralized purchasing, improved ordering, inventory control, and expense management, most notably from lower travel expenses given the coronavirus pandemic
- Recognized record billable patient volume of 37,992 visits in the third quarter of 2020, up 8% year-over-year
- Patient expenses declined 55% to $428,615 in the third quarter of 2020 from $950,517 in same period in 2019 due to improvements in supply management and a shift in service mix from knee care to spinal patients, who have a lower associated cost of therapy, reflecting behavioral adjustments associated with COVID-19-based activity restrictions
- Wellness Membership subscribers increased 20% sequentially during the quarter to 762 members
“We are at an exciting time in the Company’s development, with the recent launch of its Phase 1 clinical trial for IMAC’s umbilical cord-derived mesenchymal stem cell treatment for bradykinesia due to Parkinson’s disease. This is a complement to IMAC’s evolution as a regenerative rehabilitation company. These proprietary advancements give IMAC the potential to dramatically improve the non-opioid treatment landscape for a variety of physical ailments and derive asset value beyond its brick and mortar locations. This focus, along with the addition of three deeply experienced, growth-oriented professionals to IMAC’s board of directors, should help IMAC capitalize on timely opportunities,” commented Jeffrey Ervin, IMAC’s Chief Executive Officer.
“While the COVID-19 pandemic has continued to negatively impact IMAC’s revenue on a year-over-year basis, the Company has been extremely diligent and focused on continuing what it began prior to the pandemic to ensure that it is wisely allocating capital, strategically reducing expenses, and prudently managing operations. All of this is being done with an eye toward continuing to expand both in the markets where IMAC has a foothold and in creating new and adjacent market opportunities through acquisition and partnerships. Even in this challenging environment, IMAC’s third quarter results exhibited a marked improvement from the second quarter of 2020 with net patient revenue of $3.5 million in the third quarter, up 35% sequentially from $2.6 million in the second quarter. Additionally, G&A costs decreased by 20 percent sequentially from the second quarter, which, when coupled with the sequential revenue increase, led to a 23% improvement in operating loss over the same period.
“Looking at how that translates to patient care, patient visits increased 44% quarter-over-quarter while patient expenses decreased 55%. IMAC’s patient service mix shifted in the quarter to a higher concentration of spine patients, rather than knee patients, which lowered both IMAC’s average charge per visit as well as its patient treatment expense, driving quarter-over-quarter improvement. Lastly, IMAC remains committed to improving its balance sheet and operations, reducing its notes payable in the quarter by approximately $1.2 million to a balance of $4.5 million, with nearly $1.7 million of this amount in the form of a Small Business Administration Paycheck Protection Program loan that we anticipate will achieve at least partial forgiveness” concluded Mr. Ervin.
Results of Operations for the Three and Nine Months Ended September 30, 2020
Net patient service revenues decreased 20% to $3.5 million for the three months ended September 30, 2020, compared to $4.4 million for the three months ended September 30, 2019. This decrease was due to the continued impact of COVID-19 and a change in the procedure mix. Patient service revenue decreased 14% to $9.4 million for the nine months ended September 30, 2020, compared to $10.9 million for the nine months ended September 30, 2019. This decrease is attributable to the IMAC’s acquisitions of clinics in Chicago and Florida in April 2019 and January 2020, respectively, along with the impacts of COVID-19.
The Company reported a net loss per share for the quarter ending September 30, 2020 of $0.12 vs. a loss per share of $0.19 for the comparable year-ago period. For the nine-month period ending September 30, 2020, the Company reported a net loss per share of $0.49 vs a loss per share of $0.68 for the nine months ended September 30, 2019.
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. IMAC 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, as well as Mike Ditka IMAC Regeneration Centers and a Tony Delk IMAC Regeneration Center. 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)
| September 30, 2020 |
| December 31, 2019 |
| ASSETS |
| Current assets: |
| Cash |
| $ |
| 1,664,304 |
| $ |
| 373,689 |
| Accounts receivable, net |
| 1,433,457 |
| 1,258,325 |
| Deferred compensation, current portion |
| 241,946 |
| 312,258 |
| Other assets |
| 452,741 |
| 633,303 |
| Total current assets |
| 3,792,448 |
| 2,577,575 |
| Property and equipment, net |
| 1,861,879 |
| 3,692,009 |
| Other assets: |
| Goodwill |
| 2,040,696 |
| 2,040,696 |
| Intangible assets, net |
| 6,846,385 |
| 7,169,072 |
| Deferred equity costs |
| 143,655 |
| 170,274 |
| Deferred compensation, net of current portion |
| 310,006 |
| 549,563 |
| Security deposits |
| 413,407 |
| 499,488 |
| Right of use asset |
| 3,965,755 |
| 3,719,401 |
| Total other assets |
| 13,719,904 |
| 14,148,494 |
| Total assets |
| $ |
| 19,374,231 |
| $ |
| 20,418,078 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Current liabilities: |
| Accounts payable and accrued expenses |
| $ |
| 2,367,438 |
| $ |
| 2,909,666 |
| Patient deposits |
| 373,678 |
| 189,691 |
| Notes payable, current portion, net of deferred loan costs |
| 1,839,306 |
| 1,422,554 |
| Finance lease obligation, current portion |
| 18,047 |
| 17,473 |
| Line of credit |
| 79,961 |
| 79,961 |
| Liability to issue common stock, current portion |
| 310,575 |
| 421,044 |
| Operating lease liability, current portion |
| 1,051,964 |
| 1,025,247 |
| Total current liabilities |
| 6,040,969 |
| 6,065,636 |
| Long-term liabilities: |
| Notes payable, net of current portion |
| 2,671,333 |
| 2,109,065 |
| Finance lease obligation, net of current portion |
| 52,957 |
| 66,565 |
| Liability to issue common stock, net of current portion |
| 378,760 |
| 578,866 |
| Operating lease liability, net of current portion |
| 3,723,398 |
| 3,660,654 |
| Other non-current liabilities |
| 15,000 |
| - |
| Total liabilities |
| 12,882,417 |
| 12,480,786 |
| Stockholders’ equity: |
| Preferred stock - $0.001 par value, 5,000,000 authorized, nil issued and outstanding at September 30, 2020 and December 31, 2019, respectively |
| - |
| - |
| Common stock - $0.001 par value, 30,000,000 authorized, 11,839,972 and 8,913,258 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively |
| 11,834 |
| 8,907 |
| Additional paid-in capital |
| 24,119,889 |
| 20,050,634 |
| Accumulated deficit |
| (15,235,941 |
| ) |
| (10,042,050 |
| ) |
| Non-controlling interest |
| (2,403,968 |
| ) |
| (2,080,199 |
| ) |
| Total stockholders’ equity |
| 6,491,814 |
| 7,937,292 |
| Total liabilities and stockholders’ equity |
| $ |
| 19,374,231 |
| $ |
| 20,418,078 |
IMAC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| 2020 |
| 2019 |
| 2020 |
| 2019 |
| Patient revenues, net |
| $ |
| 3,477,841 |
| $ |
| 4,355,904 |
| $ |
| 9,359,490 |
| $ |
| 10,882,487 |
| Management fees |
| - |
| - |
| 12,487 |
| - |
| Total revenue |
| 3,477,841 |
| 4,355,904 |
| 9,371,977 |
| 10,882,487 |
| Operating expenses: |
| Patient expenses |
| 428,615 |
| 950,517 |
| 1,213,799 |
| 2,314,424 |
| Salaries and benefits |
| 2,622,266 |
| 2,878,391 |
| 7,882,665 |
| 7,536,223 |
| Share-based compensation |
| 108,377 |
| 112,959 |
| 311,406 |
| 288,298 |
| Advertising and marketing |
| 234,694 |
| 317,800 |
| 650,861 |
| 1,014,144 |
| Grant funds |
| - |
| - |
| (415,978 |
| ) |
| - |
| General and administrative |
| 961,521 |
| 1,311,315 |
| 3,406,116 |
| 3,718,506 |
| Depreciation and amortization |
| 430,121 |
| 422,405 |
| 1,334,267 |
| 1,104,961 |
| Total operating expenses |
| 4,785,594 |
| 5,993,387 |
| 14,383,136 |
| 15,976,556 |
| Operating loss |
| (1,307,753 |
| ) |
| (1,637,483 |
| ) |
| (5,011,159 |
| ) |
| (5,094,069 |
| ) |
| Other income (expense): |
| Interest income |
| 6,028 |
| 120 |
| 6,067 |
| 125 |
| Other income (expenses) |
| 6 |
| (94 |
| ) |
| 6 |
| (15,384 |
| ) |
| Beneficial conversion interest expense |
| - |
| - |
| - |
| (639,159 |
| ) |
| Gain (loss) on extinguishment of debt |
| 9,783 |
| - |
| (99,761 |
| ) |
| - |
| Loss on disposal of assets |
| (39,047 |
| ) |
| - |
| (60,272 |
| ) |
| - |
| Interest expense |
| (141,416 |
| ) |
| (74,456 |
| ) |
| (352,541 |
| ) |
| (190,337 |
| ) |
| Total other (expenses) |
| (164,646 |
| ) |
| (74,430 |
| ) |
| (506,501 |
| ) |
| (844,755 |
| ) |
| Net loss before income taxes |
| (1,472,399 |
| ) |
| (1,711,913 |
| ) |
| (5,517,660 |
| ) |
| (5,938,824 |
| ) |
| Income taxes |
| - |
| - |
| - |
| - |
| Net loss |
| (1,472,399 |
| ) |
| (1,711,913 |
| ) |
| (5,517,660 |
| ) |
| (5,938,824 |
| ) |
| Net loss attributable to the non-controlling interest |
| 42,741 |
| 162,951 |
| 323,769 |
| 889,907 |
| Net loss attributable to IMAC Holdings, Inc. |
| $ |
| (1,429,658 |
| ) |
| $ |
| (1,548,962 |
| ) |
| $ |
| (5,193,891 |
| ) |
| $ |
| (5,048,917 |
| ) |
| Net loss per share attributable to common stockholders |
| Basic and diluted |
| $ |
| (0.12 |
| ) |
| $ |
| (0.19 |
| ) |
| $ |
| (0.49 |
| ) |
| $ |
| (0.68 |
| ) |
| Weighted average common shares outstanding |
| Basic and diluted |
| 11,839,972 |
| 8,366,287 |
| 10,549,899 |
| 7,472,738 |
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 |
| 4,533,623 |
| $ |
| 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 |
| ) |
| (2,196,501 |
| ) |
| Balance, June 30, 2019 |
| 8,316,798 |
| 8,317 |
| 18,676,639 |
| (2,352,796 |
| ) |
| (7,044,775 |
| ) |
| 9,287,385 |
| Issuance of common stock |
| 133,297 |
| 133 |
| 150,652 |
| - |
| - |
| 150,785 |
| Issuance of employee stock options |
| - |
| - |
| 35,963 |
| - |
| - |
| 35,963 |
| Net loss |
| - |
| - |
| - |
| (162,951 |
| ) |
| (1,548,962 |
| ) |
| (1,711,913 |
| ) |
| Balance, September 30, 2019 |
| 8,450,095 |
| $ |
| 8,450 |
| $ |
| 18,863,254 |
| $ |
| (2,515,747 |
| ) |
| $ |
| (8,593,737 |
| ) |
| $ |
| 7,762,220 |
| Common Stock |
| Additional |
| Non- |
| Number of Shares |
| Par |
| Paid-In- Capital |
| Controlling Interest |
| Accumulated Deficit |
| Total |
| Balance, December 31, 2019 |
| 8,913,257 |
| $ |
| 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 |
| 10,009,097 |
| 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 |
| 11,839,972 |
| 11,834 |
| 24,079,504 |
| (2,361,227 |
| ) |
| (13,806,283 |
| ) |
| 7,923,828 |
| Issuance of employee stock options |
| - |
| - |
| 40,385 |
| - |
| - |
| 40,385 |
| Net loss |
| - |
| - |
| - |
| (42,741 |
| ) |
| (1,429,658 |
| ) |
| (1,472,399 |
| ) |
| Balance, September 30, 2020 |
| 11,839,972 |
| $ |
| 11,834 |
| $ |
| 24,119,889 |
| $ |
| (2,403,968 |
| ) |
| $ |
| (15,235,941 |
| ) |
| $ |
| 6,491,814 |
IMAC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, |
| 2020 |
| 2019 |
| Cash flows from operating activities: |
| Net loss |
| $ |
| (5,517,660 |
| ) |
| $ |
| (5,938,824 |
| ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
| Depreciation and amortization |
| 1,334,267 |
| 1,104,961 |
| Beneficial conversion interest expense |
| - |
| 639,159 |
| Share based compensation |
| 311,406 |
| 288,298 |
| Loss on disposition of assets |
| 1,959 |
| - |
| Non cash expense |
| - |
| 150,785 |
| (Increase) decrease in operating assets: |
| Accounts receivable, net |
| (154,292 |
| ) |
| 64,046 |
| Other assets |
| 251,976 |
| (53,450 |
| ) |
| Security deposits |
| 86,081 |
| (59,966 |
| ) |
| Increase (decrease) in operating liabilities: |
| Accounts payable and accrued expenses |
| (518,074 |
| ) |
| 736,704 |
| Patient deposits |
| 183,987 |
| 358,906 |
| Lease incentive obligation |
| - |
| (85,894 |
| ) |
| Net cash used in operating activities |
| (4,020,350 |
| ) |
| (2,795,275 |
| ) |
| Cash flows from investing activities: |
| Purchase of property and equipment |
| (52,626 |
| ) |
| (688,312 |
| ) |
| Purchase of license fee |
| (243,750 |
| ) |
| - |
| Acquisition of IMAC Florida (Note 6) |
| (200,000 |
| ) |
| - |
| Net cash used in investing activities |
| (496,376 |
| ) |
| (688,312 |
| ) |
| 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 |
| 3,736,613 |
| - |
| Proceeds from notes payable |
| 2,891,520 |
| 212,800 |
| Payments on notes payable |
| (737,758 |
| ) |
| (86,958 |
| ) |
| Payments of debt issuance costs |
| (70,000 |
| ) |
| - |
| Proceeds from line of credit |
| - |
| 20,000 |
| Payments on line of credit |
| - |
| (300,000 |
| ) |
| Payments on finance lease obligation |
| (13,034 |
| ) |
| (12,487 |
| ) |
| Net cash provided by financing activities |
| 5,807,341 |
| 4,030,182 |
| Net increase in cash |
| 1,290,615 |
| 546,595 |
| Cash, beginning of period |
| 373,689 |
| 194,316 |
| Cash, end of period |
| $ |
| 1,664,304 |
| $ |
| 740,911 |
| Supplemental cash flow information: |
| Interest paid |
| $ |
| 63,152 |
| $ |
| 97,147 |
| Taxes paid |
| - |
| $ |
| 18,533 |
| Non cash financing and investing: |
| Debt discount notes payable |
| $ |
| 115,000 |
| $ |
| - |
| Debt payment by sale of property and equipment |
| $ |
| 1,232,500 |
| $ |
| - |
| Business acquisition via stock issuance |
| $ |
| - |
| $ |
| 3,771,978 |