IMAC Holdings, Inc. (NASDAQ:BACK) was a provider of movement and orthopedic therapies and minimally invasive procedures performed through its regenerative and rehabilitative medical treatments to improve the physical health of its patients at its chain of IMAC Regeneration Centers and BackSpace clinics. However, IMAC Holdings has faced significant challenges in recent years, leading to the closure or sale of all its locations by the end of 2023.

Business Overview

IMAC Holdings, Inc. was a holding company for IMAC Regeneration Centers, The BackSpace retail stores, and its Investigational New Drug division. Through its consolidated and equity-owned entities, IMAC Holdings' outpatient medical clinics provided conservative, non-invasive medical treatments to help patients with back pain, knee pain, joint pain, ligament and tendon damage, and other related soft tissue conditions. IMAC Holdings delivered sports medicine treatments without opioids. The BackSpace operated healthcare centers specializing in chiropractic and spinal care services inside Walmart retail locations. IMAC Holdings' Investigational New Drug division conducted a clinical trial for its investigational compound utilizing umbilical cord-derived allogenic mesenchymal stem cells for the treatment of bradykinesia due to Parkinson's disease.

Financials

For the full year 2023, IMAC Holdings reported annual revenue of $5,197,000, a significant decrease from the prior year. IMAC Holdings' annual net income was -$8,182,700, and its annual operating cash flow and free cash flow were both -$2,790,151. These financial results reflect the challenges IMAC Holdings faced in 2023, leading to the closure or sale of all its locations.

In the first quarter of 2024, IMAC Holdings' revenue from discontinued operations was $0, compared to $2,100,000 in the same period of 2023. The decrease in revenue was due to the closure or sale of all IMAC Holdings' locations. Operating expenses for the first quarter of 2024 were $408,630, down from $1,296,018 in the same period of 2023, primarily due to the reduction in salaries and benefits, advertising and marketing, and general and administrative expenses.

Liquidity

As of March 31, 2024, IMAC Holdings had $17,535 in cash and a working capital deficit of $1,239,231. IMAC Holdings' current liabilities of $2,150,078 included accounts payable, accrued expenses, and liabilities from discontinued operations. IMAC Holdings' accumulated deficit as of March 31, 2024, was $56,345,544.

IMAC Holdings' management has determined that its financial condition raises substantial doubt about its ability to continue as a going concern. IMAC Holdings has been actively exploring various strategic alternatives, including a potential merger with Theralink Technologies, Inc., in an effort to support its operations in 2024 and beyond.

Recent Developments

On April 10, 2024, IMAC Holdings entered into a series of transactions, including the exchange of its outstanding Series B-1 Convertible Preferred Stock and Series B-2 Convertible Preferred Stock for new Series C-1 Convertible Preferred Stock and the sale of new Series C-2 Convertible Preferred Stock and warrants for aggregate cash proceeds of $900,000.

Additionally, on April 11, 2024, IMAC Holdings entered into a credit agreement with Theralink, pursuant to which Theralink may borrow up to $1,000,000 from IMAC Holdings, with an initial borrowing of $350,000. The loan is secured by Theralink's assets.

On April 30, 2024, IMAC Holdings entered into securities purchase agreements with holders of Theralink's senior secured convertible debentures for the sale of shares of IMAC Holdings' newly created Series D Convertible Preferred Stock. The consideration paid by the note holders will be in the form of the Theralink notes, which have an aggregate principal amount outstanding of $16,221,873.89.

Furthermore, on May 1, 2024, IMAC Holdings entered into a Settlement and Release Agreement with Theralink, pursuant to which the parties agreed to a settlement of Theralink's default under the previously announced credit agreement. The settlement consists of the transfer of all of Theralink's assets, other than certain excluded assets, and certain liabilities, to IMAC Holdings in exchange for the forgiveness of the outstanding amounts due under the Theralink notes and the issuance of IMAC Holdings' newly created Series E Convertible Preferred Stock.

Risks and Challenges

IMAC Holdings faces several risks and challenges, including the ability to obtain additional financing, attract competent medical and sales personnel, and control its operating expenses. IMAC Holdings' ability to consummate the proposed merger with Theralink Technologies and whether it will prove beneficial to IMAC Holdings and its stockholders is also a significant risk factor.

Additionally, IMAC Holdings' product in clinical development may be limited in use if it does not maintain or gain required regulatory approvals. IMAC Holdings could also face competition from other technologies and products, which could impact its profitability. IMAC Holdings' use of hazardous materials in its business also subjects it to environmental laws and regulations, which can be expensive to comply with.

Outlook

IMAC Holdings, Inc. has faced significant challenges in recent years, leading to the closure or sale of all its locations by the end of 2023. IMAC Holdings' financial performance has been weak, with declining revenue, net losses, and negative cash flows. IMAC Holdings is actively exploring strategic alternatives, including a potential merger with Theralink Technologies, in an effort to support its operations in 2024 and beyond. However, IMAC Holdings' ability to continue as a going concern remains in doubt, and it faces numerous risks and challenges that could further impact its future prospects.