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 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
