S-1: IMAC Holdings Eyes $20 Million Capital Raise to Fuel Precision Medicine Expansion

IMAC Holdings is seeking to raise capital through a public offering of common stock and warrants to support its strategic shift towards precision medicine with its Theralink technology.

Summary

• IMAC Holdings, Inc. has filed a registration statement for a proposed public offering.
• The offering includes shares of common stock, pre-funded warrants, and common warrants.
• The company intends to raise up to $20 million through this offering.
• The funds will be used for general corporate purposes, including working capital, operating expenses, and capital expenditures.
• IMAC Holdings recently acquired Theralink Technologies, a precision medicine company focused on oncology treatment decisions.
• The company plans to launch the Theralink Pan-Tumor Assay 1.0 in 2024 and expand it further in 2025-2026.
• The offering is underwritten on a firm commitment basis, and the price per share will be determined at the time of pricing.
• The company's common stock is listed on The Nasdaq Capital Market under the symbol BACK.
• As of June 10, 2024, the last reported sale price of the common stock was $2.51 per share.
• The company is an emerging growth company and has elected to comply with certain reduced public disclosure requirements.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company is pursuing a promising strategic shift towards precision medicine and has secured some early reimbursement, it also faces significant financial challenges and risks associated with its operations and capital structure.

Positives

• The acquisition of Theralink provides IMAC Holdings with a proprietary technology platform in the high-growth field of precision medicine.
• The Theralink Assay for Breast Cancer is already being utilized and reimbursed by Medicare and certain third-party payors.
• The company has a portfolio of eight patents derived from licensing agreements with the US Public Health Service, George Mason University, and Vanderbilt University.
• The company has plans to expand the Theralink product line to include additional cancer types in the near future.
• The company believes it is in compliance with the Nasdaq Listing Rules by satisfying compliance with the Minimum Equity Rule.

Negatives

• The company has a history of net losses and a going concern qualification.
• The company may not be able to sustain or increase profitability on a quarterly or annual basis in the future.
• The company will need additional funding to achieve its goals and may be unable to raise additional capital when needed.
• The company is still in the process of integrating the assets acquired from Theralink.
• The company's stock price is volatile and an investment could decline in value.

Risks

• The company's future operations may not result in net income.
• The company may not be able to attract and retain qualified personnel.
• The company may not realize the benefits of strategic alliances.
• The company is susceptible to adverse effects from changes in the law, economic conditions, consumer tastes, competition and other contingencies or events beyond its control.
• The company's independent registered public accounting firm has indicated that its financial condition raises substantial doubt as to its ability to continue as a going concern.
• The company may fail to achieve and sustain commercial success for its services.
• The company's product in clinical development may be limited in use if it does not maintain or gain required regulatory approvals.
• The company relies on Contract Research Organizations (CROs) to conduct its preclinical studies and clinical trials.
• The company has no experience as a company in bringing a drug to regulatory approval.
• The company may be subject, directly or indirectly, to foreign, federal and state healthcare laws, including applicable anti-kickback, fraud and abuse and other healthcare laws and regulations.
• Any significant disruption in the company's computer systems or those of third parties that it utilizes in its operations could result in a loss or degradation of service and could adversely impact its business.
• The company's reputation and relationships with customers would be harmed if its customers data, particularly personally identifying data, were to be subject to a cyber-attack or otherwise accessed by unauthorized persons.
• Changes to operating rules could increase the company's operating expenses and adversely affect its business and results of operations.
• If Theralink products were to become the subject of concerns related to its efficacy, safety, or otherwise, the company's ability to generate revenues from the Theralink products could be seriously harmed.
• Adoption of Theralink products for the analysis of patients with either early stage or advanced cancer may be slow or limited for a variety of reasons, including competing therapies and perceived difficulties in the treatment process or delays in obtaining reimbursement.
• The company is competing in a dynamic market with risk of technological change.
• Failure to retain key personnel could impede the company's ability to develop its technology and to obtain new collaborations or other sources of funding.
• As the company pursues successful commercialization of Theralink products, it will need to hire sales and marketing, and operations executive management staff in order to ensure its organizational success.
• The company must rely on relationships with third-party suppliers to supply necessary resources used in its technology.
• The company's prospective revenues will be diminished if payors do not adequately cover or reimburse its services.
• Regulatory changes, such as proposed government regulation of Laboratory Developed Tests, could require the company to conduct additional clinical trials or result in delays, increased costs, or the failure to obtain necessary regulatory approvals, which could harm its business.
• The company uses hazardous materials in its business and must comply with environmental laws and regulations, which can be expensive.
• If the company is unable to safeguard against security breaches with respect to its information systems, its business may be adversely affected.
• The company is exposed to potential product liability claims, and insurance against these claims may not be adequate and may not be available to it at a reasonable rate in the future.
• The company has exposure to general uncertainty and complex legal matters regarding the patents it licenses.
• If the company is unable to protect the proprietary rights it licenses or to defend against infringement claims, it may not be able to compete effectively or operate profitably.
• Obtaining and maintaining the company's patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and its patent protection could be reduced or eliminated for non-compliance with these requirements.
• The company may not be able to protect its intellectual property rights throughout the world.
• The company's management has identified material weaknesses in its internal controls over its financial reporting.
• The company's ability to utilize its net operating loss carryforwards and certain other tax attributes may be limited.
• Global health threats have adversely affected, and may continue to adversely affect, the company's business.
• The company's stock price is volatile and an investment could decline in value.
• Anti-takeover provisions in the company's charter documents could discourage, delay or prevent a change in control of the company and may affect the trading price of its common stock.
• The company does not expect to pay any dividends on its common stock for the foreseeable future.
• The company may issue additional shares of common stock, warrants or other securities to finance its growth.
• The company's issuance of preferred stock could adversely affect holders of Common Stock.
• There can be no assurance that the company will ever provide liquidity to its investors through a sale of the company.
• The company is an emerging growth company and its election to delay adoption of new or revised accounting standards applicable to public companies may result in its consolidated financial statements not being comparable to those of some other public companies.
• The company will have broad discretion with respect to the use of the proceeds of this offering.
• There is no public market for the Common Warrants or Pre-Funded Warrants being offered in this offering.
• Holders of the company's Common Warrants and Pre-Funded Warrants will have no rights as holders of Common Stock until such warrants are exercised.
• The Common Warrants may not have any value.

Future Outlook

The company expects to expend substantial resources for the foreseeable future to continue the development and commercialization of its technology. The currently available Theralink Assay for Breast Cancer will be followed by the Theralink Pan-Tumor Assay 1.0, expected to launch in 2024 to include ovarian, endometrial, and head & neck cancers. The test is expected to expand further in 2025-2026 to the Theralink Pan-Tumor Assay 2.0 to support the treatment of colorectal, prostate, pancreatic, lung, and other solid tumor cancer indications.

Management Comments

• Our Board has also approved the creation of the Ignite Compassionate Care program to enable those without private insurance or private funds to access our Ignite Proteomics test when needed until we are credentialed and thereafter for those without access to any form of insurance.

Industry Context

The announcement reflects a strategic shift towards precision medicine, aligning with the growing trend of personalized cancer treatment. The company's focus on protein signaling and biomarker analysis positions it within a competitive but rapidly expanding market.

Comparison to Industry Standards

• The Theralink RPPA technology competes with other proteomic and genomic testing methods used in oncology.
• Companies like Genomic Health (now Exact Sciences) and Foundation Medicine offer genomic profiling services for cancer treatment decisions.
• Theralink's focus on protein signaling provides a different approach compared to genomic-focused companies, potentially offering complementary information for oncologists.
• The success of Theralink will depend on its ability to demonstrate clinical utility and secure reimbursement compared to established competitors.

Management Changes

Stakeholder Impact

• Shareholders: Potential dilution from the offering, but also potential upside from the company's strategic shift.
• Employees: Integration of Theralink may lead to changes in roles and responsibilities.
• Customers (Oncologists and Patients): Access to new precision medicine tools for cancer treatment decisions.
• Creditors: Potential impact on the company's ability to repay debt.
• Suppliers: Potential changes in supply chain relationships due to the acquisition of Theralink.

Next Steps

• Complete the public offering of common stock and warrants.
• Integrate Theralink's assets and operations.
• Obtain credentials for reimbursement for the Theralink test by Medicare and certain third-party payors.
• Launch the Theralink Pan-Tumor Assay 1.0 in 2024 and expand it further in 2025-2026.
• Obtain Stockholder Approval to provide antidilution protection for issuances below the conversion price then in effect in subsequent placements.

Key Dates

Keywords

public offering, common stock, warrants, Theralink, precision medicine, oncology, capital raise, biomarkers, RPPA, diagnostics