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| 8-K - IMAC Holdings, Inc. | form8-k.htm |
Exhibit 99.1
IMAC Holdings Reports Second Quarter 2020 Financial Results
BRENTWOOD, Tenn., August 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.