10-K/A: IMAC Holdings Pivots to Oncology Proteomics Amidst Financial Restatement and Nasdaq Delisting

Sentiment:

Annual Report Amendment 30 June 2025 5:30 PM

IMAC Holdings, Inc. has undergone a significant strategic shift, divesting its previous patient care operations to focus entirely on oncology proteomics, while simultaneously addressing a financial restatement and navigating a delisting from Nasdaq.

Capital raiseIn 2024, the company sold various series of preferred stock (Series C-2, D, E, F, G) for aggregate gross proceeds of $5.09 million.Approximately $2.2 million of the Series G preferred stock proceeds were used to repay outstanding promissory notes.In connection with the 2024 preferred stock sales, the company issued 5.7 million common stock purchase warrants valued at $11.5 million.In 2025, the company issued additional unsecured promissory notes totaling $809,902 in principal amount, for cash proceeds of $608,502, maturing by November 18, 2025, or earlier upon a $1 million+ securities offering.

Worse than expectedThe company reported a substantial net loss of $9.0 million for 2024 and a net loss available to common stockholders of $12.18 million, indicating continued unprofitability.A significant working capital deficit of $(6.5) million and an accumulated deficit of $65.0 million as of December 31, 2024, demonstrate severe financial distress.The auditors issued a 'going concern' qualification, highlighting substantial doubt about the company's ability to continue operations.The company's common stock was delisted from Nasdaq due to non-compliance with listing rules, moving to a less liquid market (OTC Pink Market).

Summary

IMAC Holdings, Inc. has transitioned its core business from providing movement and orthopedic therapies to specializing in proteomic products for oncology clinical treatment decisions and biopharmaceutical drug development.
As of December 31, 2023, the company sold or discontinued all its previous patient care locations, including IMAC Regeneration Centers and The BackSpace retail stores.
In May 2024, IMAC Holdings acquired certain assets and rights of Theralink Technologies, Inc., including a nationally CLIA-certified, CAP-accredited, and New York State Clinical Laboratory Evaluation Program (NYS-CLEP) certified laboratory in Golden, Colorado.
A new wholly-owned subsidiary, Ignite Proteomics LLC, was formed on May 30, 2024, to operate the acquired medical lab and deliver proteomic services under licenses from Vanderbilt University and George Mason University.
The company's previously issued financial statements for the year ended December 31, 2024, require restatement due to an error in the accounting for preferred dividends.
IMAC Holdings reported a net loss of $9.0 million for the year ended December 31, 2024, compared to $9.4 million in 2023.
Net loss from continuing operations was $6.3 million in 2024, and from discontinued operations was $2.7 million, which included a $2.7 million reserve for a Medicare audit payment request related to the Progressive Health matter.
The company's common stock was suspended from trading on Nasdaq and subsequently delisted on March 26, 2025, due to non-compliance with the Minimum Equity Rule, and now trades on the OTC Pink Market under the symbol BACK.
As of December 31, 2024, the company had a working capital deficit of $(6.5) million and an accumulated deficit of $65.0 million, raising substantial doubt about its ability to continue as a going concern.

Sentiment

Score: 2

Explanation: The company is in severe financial distress, evidenced by significant losses, a large accumulated deficit, and a 'going concern' qualification. The delisting from Nasdaq further exacerbates liquidity and investor confidence issues. While the strategic pivot to oncology proteomics offers long-term potential, the immediate financial health and operational challenges present a highly negative outlook.

Positives

The company has successfully acquired a nationally certified laboratory and intellectual property licenses from Vanderbilt University and George Mason University, establishing a new focus on high-margin oncology proteomics.
Ignite Proteomics has obtained credentials to bill Medicare for its proteomics test and is in the process of obtaining credentials for other third-party payors, indicating progress towards revenue generation.
The company's patented RPPA technology platform offers a unique approach to quantifying protein signaling, which is critical for oncology treatment decisions and biopharmaceutical drug development.
Initial clinical data supports the utility of the Ignite RPPA Assay for Breast Cancer, with specific biomarkers (phosphorylated AKT, HER2 combinations, MHC-II) showing potential for NCCN guideline inclusion.
Management has approved the Ignite Compassionate Care program to provide access to the Ignite test for uninsured or privately funded patients, demonstrating a commitment to patient access.

Negatives

The company reported a significant net loss of $9.0 million for the year ended December 31, 2024, and a net loss available to common stockholders of $12.18 million, indicating ongoing unprofitability.
A working capital deficit of $(6.5) million and an accumulated deficit of $65.0 million as of December 31, 2024, highlight severe liquidity issues and a negative equity position.
The company received a 'going concern' qualification from its auditors, indicating substantial doubt about its ability to continue operations without additional funding.
IMAC Holdings' common stock was delisted from Nasdaq on March 26, 2025, due to non-compliance with listing rules, resulting in trading on the less liquid OTC Pink Market.
The financial statements for the year ended December 31, 2024, required restatement due to an error in preferred dividends accounting, indicating internal control weaknesses.
The company faces significant liabilities from discontinued operations, including a $2.7 million reserve for a Medicare audit payment request related to Progressive Health, which is currently under appeal in U.S. District Court.

Risks

There is substantial doubt about the company's ability to continue as a going concern due to recurring losses, net cash used in operations, and a net capital deficiency.
The company requires additional funding and may be unable to raise capital when needed or on favorable terms, which could force delays, reductions, or elimination of product development and commercialization efforts.
Failure to successfully integrate the acquired Theralink assets, obtain Medicare and other third-party payor credentials, or secure additional license agreement assignments could adversely affect financial results.
The company faces intense competition in the cancer information field from competitors with greater research, development, processing, marketing, financial, and managerial resources.
Regulatory changes, particularly new FDA rules concerning Laboratory Developed Tests (LDTs), could require additional clinical trials, result in delays, increase costs, or prevent necessary regulatory approvals.
The company is exposed to potential product liability claims, and current insurance coverage may not be adequate or available at reasonable rates in the future.
Uncertainty and complexity surround the company's licensed patent rights, which may be challenged, invalidated, or circumvented, potentially limiting protection against competitors.
Material weaknesses in internal controls over financial reporting, including insufficient in-house accounting personnel and lack of separation of duties, could lead to material misstatements and affect stock price or listing compliance.
The company's ability to utilize its significant net operating loss carryforwards ($59.7 million federal and state as of December 31, 2024) may be limited by future ownership changes or expiration dates.
Liabilities from discontinued operations, including ongoing government audits and legal proceedings, could adversely affect financial results and operations.

Future Outlook

The company anticipates expanding its product portfolio with the launch of the Ignite RPPA Pan-Tumor Assay 1.0 in 2025, covering ovarian, endometrial, and head & neck cancers, and further expanding to Pan-Tumor Assay 2.0 in 2026 for colorectal, prostate, pancreatic, lung, and other solid tumors. International expansion opportunities will be explored once sufficient funding and operational resources are secured.

Management Comments

"Management believes ongoing clinical data, guideline endorsements, and expanded research collaborations will position Ignite as a premier resource for next-generation proteomic diagnostics in oncology."
"Management plans to raise additional capital through the issuance of financial instruments including both debt and equity to mitigate the conditions and events that raise substantial doubt."
"We anticipate expanding our accounting functions with dedicated staff and improving our internal accounting procedures and separation of duties when we can absorb the costs of such expansion and improvement with additional capital resources."

Industry Context

IMAC Holdings' pivot from traditional orthopedic and regenerative medicine to precision oncology diagnostics aligns with a broader industry trend towards personalized medicine and targeted therapies in cancer treatment. The focus on protein signaling, rather than just genes, positions the company in a niche that directly addresses the targets of most FDA-approved cancer therapeutics. However, the cancer information and diagnostic field is highly competitive and characterized by rapid advancements, with many established players possessing significantly greater resources.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chief Executive Officer	Jeffrey S. Ervin	Faith Zaslavsky	2024-05-23	Jeffrey S. Ervin resigned; Faith Zaslavsky joined the company.
Director	Jeffrey Busch		2025-05-31	Resignation.
Director		Jason Lobel	2025-06-02	Appointment.
Director		Saundra Pelletier	2025-06-02	Appointment.
Director		Peter Beitsch, MD	2024-06-01	Appointment.
Director		Matthew Schwartz, MD	2024-06-01	Appointment.
Director	Cary W. Sucoff		2024-09-09	Resignation.
Director	Matthew Wallis		2024-05-23	Resignation.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Weaknesses	Identified material weaknesses in internal controls over financial reporting, specifically the absence of in-house accounting personnel with expertise in complex transactions and a lack of separation of duties. This led to the restatement of financial statements.	2024-12-31	Likely to adversely affect the company's ability to record, process, summarize, and report financial information accurately and timely, potentially impacting stock price and listing compliance.
Board Committee Composition	The Audit Committee was composed of Messrs. Pruitt (Chairman), Evans, and Busch. The Nominating and Governance Committee was composed of Messrs. Busch (Chairman), Beitsch, and Schwartz. Note: Jeffrey Busch resigned from the Board effective May 31, 2025, which would necessitate changes to these committees.	2024-12-31	The stated committee compositions are based on the fiscal year-end; subsequent management changes (Busch's resignation) will require updates to ensure compliance with independence rules and effective oversight.
Authorized Common Stock Increase	Shareholders approved an increase in the number of authorized shares of common stock to 120,000,000 from 60,000,000 shares.	2025-03-26	Increases flexibility for future capital raises but also enables potential significant dilution for existing shareholders.
Incentive Compensation Plan Amendment	The 2018 Incentive Compensation Plan was amended to increase the number of shares authorized for issuance from 66,667 to 566,667 shares.	2024-08-30	Allows for greater equity-based compensation to attract and retain personnel, but also introduces potential dilution.

Legal Proceedings

Lincoln Gardens Partners, LLC d/b/a Twin Lakes Office Park filed a complaint on March 14, 2025, alleging default in a foreclosure action related to the company's former clinic lease in Tampa, Florida, seeking approximately $0.15 million for accelerated lease payments, commissions, tenant improvements, and interest. Discussions for a potential settlement are ongoing.
The company is subject to ongoing audits by the Centers for Medicare & Medicaid Services (CMS) related to its discontinued regenerative medicine business.
A CMS contractor recommended a $2.7 million overpayment for Progressive Health & Rehabilitation, Ltd. for periods July 2017 to November 2020. The company's appeals have been denied, and it plans to seek relief from a U.S. District Court, having reserved the full amount.
A CMS contractor recommended a $0.5 million overpayment for Advantage Therapy for periods starting May 2022. A reconsideration was partially favorable, and the company is awaiting a response from an Administrative Law Judge after a February 2024 hearing.
A CMS contractor estimated a $1.1 million overpayment for IMAC St. Louis for periods between February 26, 2020, through January 2, 2024.

Related Party Transactions

On February 14, 2025, the company issued a promissory note to Jeffrey Busch, Chairman of the Board of Directors, in the principal amount of $22,000 for a purchase price of $20,000.
On March 13, 2025, the company issued a promissory note to Jeffrey Busch in the principal amount of $27,500 for a purchase price of $25,000.
On March 19, 2025, the company issued a promissory note to Jeffrey Busch in the principal amount of $16,500 for a purchase price of $15,000.

Stakeholder Impact

**Shareholders**: Significant negative impact due to Nasdaq delisting, resulting in reduced liquidity and potential further depression of the stock price on the OTC Pink Market. Substantial dilution risk from ongoing and future capital raises (preferred stock, warrants, increased authorized common stock). Recurring net losses and a 'going concern' qualification threaten the value of their investment.
**Employees**: Potential impact on morale and retention due to financial instability, management changes, and the business pivot. The company plans to expand accounting functions with dedicated staff, which could create new opportunities.
**Customers (Oncologists/Biopharmaceutical Clients)**: The strategic pivot to proteomics aims to provide valuable diagnostic tools and research collaborations, potentially improving cancer treatment decisions and drug development. The 'Ignite Compassionate Care program' aims to ensure patient access regardless of insurance status.
**Suppliers/Creditors**: Increased risk due to the company's significant working capital deficit and 'going concern' qualification. Accounts payable increased significantly in 2024, indicating potential payment delays or difficulties.

Next Steps

Establish adoption of Ignite Proteomics products within the United States.
Launch Ignite RPPA Pan-Tumor Assay 1.0 in 2025 to include ovarian, endometrial, and head & neck cancers.
Expand to Ignite RPPA Pan-Tumor Assay 2.0 in 2026 to support treatment of colorectal, prostate, pancreatic, lung, and other solid tumor cancer indications.
Explore international opportunities for product expansion once sufficient funding and operational resources are available.
Comply fully with new FDA rules concerning LDT regulation.
Remediate material weaknesses in internal controls over financial reporting by expanding accounting functions with dedicated staff and improving procedures when additional capital resources are available.
Continue appeals process for the $2.7 million Medicare audit overpayment request related to Progressive Health in U.S. District Court.
Await response from Administrative Law Judge regarding the $0.5 million Medicare audit overpayment request related to Advantage Therapy.

Key Dates

Date	Description
2000-08-01	Company organized as a Kentucky professional service corporation.
2006-09-15	Original License Agreement between George Mason Intellectual Properties (GMIP) and Theranostics Health, LLC.
2015-03-01	IMAC Holdings, LLC, a Kentucky limited liability company, was organized.
2018-05-23	IMAC Holdings, LLC converted into a Delaware corporation and changed its name to IMAC Holdings, Inc. (Corporate Conversion).
2018-05-01	2018 Incentive Compensation Plan adopted by the board and stockholders.
2019-02-13	Common stock and warrants began trading on the Nasdaq Capital Market.
2019-03-01	Employment agreement with Jeffrey Ervin became effective.
2021-10-01	Company received notification from Covent Bridge Group regarding a recommended $2.7 million overpayment related to Progressive Health & Rehabilitation, Ltd.
2022-05-01	Company received notification from Covent Bridge Group regarding a recommended $0.5 million overpayment related to Advantage Therapy.
2022-08-08	Company changed its Nasdaq ticker symbol from IMAC to BACK.
2023-03-14	License between Vanderbilt and Theralink Technologies, Inc. dated.
2023-05-19	Company granted 10,000 RSUs to Board members.
2023-05-23	Jeffrey S. Ervin resigned as Chief Executive Officer and from the Board of Directors; Merger Agreement between Theralink Technologies, Inc. and the Company dated.
2023-07-25	Company entered into a definitive securities purchase agreement for the sale of preferred stock and warrants, raising $4.3 million gross proceeds.
2023-09-07	Effective date of 1-for-30 reverse stock split.
2023-12-20	Company entered into a letter agreement for an additional $250,000 of convertible preferred stock and exchanged Series A-1 and A-2 for Series B-1 and B-2 preferred stock.
2023-12-27	Company issued 10,000 common shares for Board members.
2023-12-31	Company sold or discontinued patient care at all its locations.
2024-01-31	Publicly traded warrants expired.
2024-04-10	Board adopted resolution to create Series C-1 and C-2 Convertible Preferred Stock.
2024-04-15	Original Annual Report on Form 10-K for the year ended December 31, 2024, originally filed with the SEC.
2024-04-30	Board adopted resolution to create Series D and E Convertible Preferred Stock; Compensation Committee approved adjustment to 2018 Incentive Compensation Plan shares.
2024-05-01	Company acquired certain assets and rights of Theralink Technologies, Inc. pursuant to a Settlement and Release Agreement.
2024-05-06	U.S. Food and Drug Administration (FDA) published new rules concerning LDT regulation.
2024-05-10	Board adopted resolution to create Series F Convertible Preferred Stock.
2024-05-15	Vanderbilt License assigned to IMAC Holdings.
2024-05-20	Audit Committee determined previously issued financial statements for FYE 2024 should no longer be relied upon and require restatement.
2024-05-23	GMU License assigned to IMAC Holdings.
2024-05-24	Consulting Agreement dated between IMAC Holdings, Inc. and Jeffrey S. Ervin.
2024-05-30	Ignite Proteomics LLC was formed as a wholly-owned subsidiary.
2024-05-31	Jeffrey Busch resigned from the Board of Directors.
2024-06-02	Jason Lobel and Saundra Pelletier appointed as members of the Board of Directors.
2024-06-18	Form of Promissory Note dated.
2024-06-26	Salberg & Company, P.A. was terminated as independent registered public accounting firm; Marcum, LLP was appointed.
2024-08-29	Company amended its 2018 Incentive Compensation Plan to increase authorized shares.
2024-09-09	Cary Sucoff resigned as a Board member; granted 3,333 RSUs and 10,000 stock options.
2024-09-12	Form of Promissory Note dated.
2024-09-27	Form of Promissory Note dated.
2024-10-18	Form of Promissory Note dated.
2024-10-30	Form of Promissory Note dated.
2024-11-11	Board adopted resolution to create Series G Convertible Preferred Stock.
2024-11-12	Securities Purchase Agreement and Registration Rights Agreement dated.
2024-11-22	Form 8-K/A filed with SEC.
2024-12-31	Fiscal year ended.
2025-01-21	Company received Nasdaq notice of non-compliance with Minimum Equity Rule.
2025-02-14	Company issued a promissory note to Jeffrey Busch for $22,000.
2025-02-27	Form of First Amendment to Promissory Note dated; Form of Promissory Note dated.
2025-03-04	Company appealed Nasdaq delisting notice at a hearing.
2025-03-06	Form of Promissory Note dated.
2025-03-13	Company issued a promissory note to Jeffrey Busch for $27,500; Form of Promissory Note dated.
2025-03-14	Lincoln Gardens Partners, LLC filed a complaint against the Company.
2025-03-19	Company issued a promissory note to Jeffrey Busch for $16,500.
2025-03-24	Nasdaq denied the company's delisting appeal.
2025-03-26	Company's securities suspended from Nasdaq trading and began trading on the OTC Pink Market; shareholders approved increase in authorized common stock to 120,000,000 shares.
2025-03-31	Number of outstanding common shares was 3,784,966.
2025-11-18	Maturity date for promissory notes issued in 2025.
2026-01-01	Expected launch of Ignite RPPA Pan-Tumor Assay 2.0.
2031-12-31	State operating loss carryforwards begin to expire.

Recommendation

strong sell

Keywords

Oncology, Proteomics, Cancer Diagnostics, Biomarkers, RPPA, Theralink, Ignite Proteomics, SEC Filing, 10-K/A, Financial Restatement, Nasdaq Delisting, Going Concern, Healthcare, Biopharmaceutical, Clinical Trials, Intellectual Property

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