IMAC Holdings Reports 2018 Financial Results; Significant Revenue Growth Reflects Addition of Five Clinics During the Year


BRENTWOOD, Tenn., April 17, 2019 (GLOBE NEWSWIRE) -- IMAC Holdings, Inc. (Nasdaq: IMAC), a provider of Innovative Medical Advancements and Care, specializing in regenerative rehabilitation orthopedic treatments without the use of surgery or opioids, announces financial results for the 12 months ended December 31, 2018. Financial results for 2018 reflect the acquisitions of IMAC Regeneration Center of Kentucky, IMAC Regeneration Center of St. Louis, and Advantage Therapy beginning in June, bringing the total number of IMAC locations to 11, compared with two locations in 2017.

Highlights of 2018 include the following (all financial comparisons are with IMAC Holdings, Inc. for 2017, unless otherwise indicated):

  • Net revenues were $6.7 million, up 753%
  • Net loss was $3.1 million, compared with $0.1 million
  • Acquired full ownership interest in the Ozzie Smith IMAC Regeneration Centers in Chesterfield and St. Peters, Missouri in June 2018
  • Took over management of the IMAC Regeneration Center in Paducah and Murray, Kentucky in July 2018
  • Launched the Tony Delk IMAC Regeneration Center in Lexington, Kentucky in July 2018
  • Acquired full ownership of four Advantage Therapy clinics in Springfield, Missouri in August 2018
  • Acquired a majority interest in BioFirma, LLC to support the Company’s proprietary regenerative medicine developments
  • Pro forma 2018 net revenues, which refer to the IMAC Group predecessor company, were $10.5 million, compared with pro forma net revenues for 2017 of $9.5 million, an increase of 9.3%

Additional highlights since the close of 2018 include:

  • Engaged legendary NFL Coach Mike Ditka as brand ambassador for the Company’s expansion into Chicago, and entered into a definitive agreement to acquire three clinics in the Chicago suburbs
  • Completed an underwritten initial public offering (IPO) of common stock and warrants, raising gross proceeds of $4.3 million

Management Commentary

“We are proud of our many significant accomplishments during 2018, which was an exceptionally active year as we acquired full ownership and/or took over management of eight clinics in three geographies. In parallel, we prepared for and completed our IPO with plans to utilize the proceeds to fund further expansion,” said Jeff Ervin, IMAC’s chief executive officer. “Given our rapid growth and numerous new centers, it is difficult to compare year-over-year financial results. Yet when viewed against prior-year facility revenue, we are pleased with the growth in pro forma net patient revenues of 9.3%. In addition, as previously announced, we believe growth in pro forma patient visits and procedures during the fourth quarter of 21.8% and 23.0%, respectively, bodes well for our success in 2019 and beyond.”

“Looking forward to 2019, our immediate priority is to close on the announced acquisition of the Chicago clinics which we expect this week. We are pleased that the transaction generated several inquiries from similar clinics which we believe will lead us to opportunities for favorable partnerships,” Mr. Ervin concluded.

2018 Financial Results

Net revenues for 2018 were $6.7 million, compared with $0.8 million in 2017, a gain of 753%. Patient service revenues increased to $6.6 million, from $0.7 million during 2017.

Cost of revenues were $0.9 million in 2018 compared to $0.1 million in 2017, with the increase in costs primarily attributable to the Company’s 2018 acquisitions and an increase in supply costs associated with a full year of service for IMAC of Tennessee.

Salaries and benefit expense were $4.7 million and $1.0 million in 2018 and 2017, respectively. The increase is attributable to acquisitions, a full year of staff expense at IMAC of Tennessee and the costs related to the preparation of the Company’s IPO. Acquisition salaries and benefit expense was $2.5 million in 2018, with no acquisition-related salaries and benefit expense in 2017. Advertising and marketing expense was $0.9 million and $0.1 million in 2018 and 2017, respectively. Advertising for acquisitions was $0.3 million and $0 in 2018 and 2017, respectively. General and administrative expense was $3.1 million and $0.5 million in 2018 and 2017, respectively, with $1.1 million of this increase due to acquisitions.

Depreciation and amortization expense was $0.7 million and $0.1 million in 2018 and 2017, respectively. The increase was due to amortization costs associated with the acquisitions of IMAC of Kentucky, IMAC Regeneration Center of St. Louis, and Advantage Therapy, and a full year of depreciation expense related to IMAC of Tennessee and the assets of the acquired companies.

Earnings Gain (Loss) before equity of non-consolidated affiliates was ($3.7) million and ($0.9) million in 2018 and 2017, respectively. Acquisitions accounted for $0.1 million of the increase while the loss for new facilities decreased by $0.3 million in 2018, compared with 2017.

The Company had cash and cash equivalents of $0.2 million as of December 31, 2018. Forty-five days after the end of the year, the Company raised $4.3 million in gross proceeds from its Initial Public Offering.

Pro forma Information

IMAC Group represents IMAC Holdings, Inc. on a pro forma basis after consummation of business transactions involving companies owning or managing IMAC Regeneration Centers and the related issuance of shares of common stock, debt and/or cash payments in such transactions, which were completed between June and August 2018. The business transactions refer to the following five transactions with entities for which IMAC Holdings had either no ownership or control, or varying degrees of ownership or control: Integrated Medicine and Chiropractic Regeneration Center PSC, IMAC Regeneration Center of St. Louis, LLC, Advantage Hand Therapy and Orthopedic Rehabilitation, LLC, and BioFirma LLC. A fifth acquisition relates to the buyout of the minority ownership of other parties of IMAC Regeneration Management of Nashville, LLC.

The table below contains select consolidated financial and other data that has been derived from unaudited consolidated financial statements for 2018 and 2017. The timing of acquisitions completed during the years presented affects the comparability of the selected financial data. The following table covers periods both prior to and subsequent to the transactions. The following selected consolidated financial and other data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this report. The results presented below are not necessarily indicative of future results:

  Year Ended December 31, 
  2018  2017 
  (unaudited) 
Procedures  291,571   258,300 
growth %  12.88%    
Visits  111,939   96,326 
growth %  16.21%    
         
Statements of Operations Data:        
Gross revenue $27,455,352  $25,812,212 
Contractual adjustments  (16,964,446)  (16,215,897)
Net revenues  10,490,906   9,596,315 
Other revenue  -   - 
Total revenue $10,490,906  $9,596,315 
         
Net (loss) attributable to IMAC Holdings, Inc. $(3,747,007) $(1,328,513)

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 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, 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.

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.

More information about IMAC Holdings, Inc. is available at www.imacregeneration.com

IMAC Press Contact:
Laura Fristoe 
lfristoe@imacrc.com

Investors
LHA Investor Relations
Kim Sutton Golodetz
(212) 838-3777
kgolodetz@lhai.com

(Tables to follow)

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IMAC Holdings, Inc.
Consolidated Balance Sheets
December 31, 2018 and 2017


  December 31, 
  2018  2017 
ASSETS      
Current assets:        
Cash $194,316  $127,788 
Accounts receivable, net  303,630   138,981 
Due from related parties  -   347,648 
Other assets  170,169   94,045 
Total current assets  668,115   708,463 
         
Property and equipment, net  3,333,638   542,791 
         
Other assets:        
Goodwill  2,042,125   - 
Intangible assets, net  4,257,434   - 
Deferred IPO Costs  335,318   - 
Security deposits  438,163   27,828 
Total other assets  7,073,040   27,828 
         
Total assets $11,074,793  $1,279,082 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
         
Current liabilities:        
Accounts payable and accrued expenses $1,261,582  $56,665 
Acquisition liabilities  7,259,208   - 
Patient deposits  454,380   130,906 
Due to related parties  -   95,501 
Notes payable, current portion  4,459,302   157,932 
Capital lease obligation, current portion  16,740   7,820 
Line of credit  379,961   25,000 
Total current liabilities  13,831,173   473,824 
         
Long-term liabilities:        
Notes payable, net of current portion  317,291   456,152 
Capital Lease Obligation, net of current portion  84,038   52,494 
Deferred Rent  197,991   64,753 
Lease Incentive Obligation  576,454   60,428 
         
Total liabilities  15,006,947   1,107,651 
         
Committments and contingencies        
         
Stockholders’ equity (deficit):        
Preferred stock - $0.001 par value, 5,000,000 authorized, nil issued and outstanding        
Common stock; $0.001 par value, 30,000,000 authorized, 6,582,737 shares issued and outstanding  6,583   6,583 
         
Additional paid-in capital  1,231,917   1,231,917 
Accumulated deficit  (3,544,820)  (491,076)
Non-controlling interest  (1,625,840)  (575,994)
Total stockholders’ equity (deficit)  (3,932,160)  171,430 
         
Total liabilities and stockholders’ equity (deficit) $11,074,787  $1,279,081 


IMAC Holdings, Inc.
Consolidated Statements of Operations
For the Years Ended
December 31, 2018 and 2017

  2018  2017 
       
Patient revenues $16,135,967  $1,378,313 
Contractual adjustments  (9,498,896)  (723,688)
Total patient revenue, net  6,637,071   654,625 
         
Management fees  64,000   131,400 
Total revenue  6,701,071   786,025 
         
Operating expenses:        
Patient expenses  933,907   63,216 
Salaries and benefits  4,730,035   967,627 
Share-based compensation  14,998   18,747 
Advertising and marketing  859,191   119,867 
General and administrative  3,063,270   465,740 
Depreciation and amortization  651,066   65,895 
Total operating expenses  10,252,467   1,701,092 
         
Operating loss  (3,551,396)  (915,067)
         
Other income (expense):        
Interest income  7,541   14,821 
Other income (loss)  18,356   (2,744)
Interest expense  (153,824)  (27,151)
Total other income (expenses)  (127,927)  (15,074)
         
Loss before equity in earnings (loss) of non-consolidated affiliate  (3,679,323)  (930,141)
         
Equity in earnings (loss) of non-consolidated affiliate  (105,550)  13,609 
         
Net loss before income taxes  (3,784,873)  (916,532)
         
Income taxes  -   - 
         
Net loss  (3,784,873)  (916,532)
         
Net loss attributable to the noncontrolling interest  731,130   859,351 
         
Net loss attributable to IMAC Holdings, Inc. $(3,053,743) $(57,181)
         
Net loss per share attributable to common stockholders        
Basic and diluted $(0.46) $(0.01)
         
Weighted average common shares outstanding        
Basic and diluted  6,582,737   6,552,679