8-K: IMAC Holdings Secures $210K Senior Secured Note

IMAC Holdings, Inc. has issued a $210,000 senior secured promissory note for a purchase price of $150,000, maturing in February 2026.

Summary

• IMAC Holdings, Inc. (the Company) issued a senior secured promissory note (the Note) on November 14, 2025.
• The Note has an aggregate principal amount of $210,000.
• The purchase price paid by the lender for the Note was $150,000.
• The Note matures on February 13, 2026.
• The Company may prepay any portion of the outstanding principal at any time without penalty or premium.
• The Note is secured by a Guaranty, Security and Pledge Agreement and an Intellectual Property Security Agreement.
• No interest accrues on the unpaid principal balance unless an Event of Default occurs, in which case interest will be 14% per annum.
• Events of Default include failure to pay, bankruptcy or insolvency proceedings, and material breaches of representations, warranties, or covenants.
• The Note contains negative covenants restricting the Company from amending its charter/bylaws in a materially adverse way, engaging in reorganizations/mergers, incurring new indebtedness or liens, or making dividends/distributions without the Holder's prior written consent.
• All payments due under this Note rank senior to all other indebtedness of the Company and its Subsidiaries.
• The Note has not been registered under the Securities Act of 1933 or any state securities laws.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the highly unfavorable terms of the debt, including a significant discount on the principal amount received and strict covenants. This suggests the Company is in a distressed financial position, requiring capital under adverse conditions.

Positives

• The Company successfully secured $150,000 in financing.
• The Company retains the flexibility to prepay the outstanding principal at any time without incurring penalties or premiums.

Negatives

• The Company received only $150,000 for a $210,000 principal note, representing a significant discount of approximately 28.57% ($60,000).
• A high interest rate of 14% per annum will be charged upon the occurrence of an Event of Default, indicating potential financial strain if covenants are breached.
• The Note includes strict negative covenants that limit the Company's ability to undertake certain corporate actions, such as incurring additional indebtedness, creating new liens, or making dividend payments, without the lender's consent.
• The debt ranks senior to all other indebtedness of the Company and its Subsidiaries, increasing risk for other creditors and equity holders.

Risks

• Failure by the Company or any Subsidiary to pay principal or other amounts when due, or to comply with other obligations under the Note or related security agreements, constitutes an Event of Default.
• Bankruptcy, insolvency, reorganization, or liquidation proceedings against the Company or any Subsidiary could trigger an Event of Default and accelerate the Note's maturity.
• Breach of any material representation or warranty in the Note or related security agreements could lead to an Event of Default.
• The Company's ability to amend its certificate of incorporation or bylaws, engage in reorganizations, mergers, or issue/sell securities is restricted without the Holder's consent if it could materially adversely affect the Holder.
• The Company is restricted from incurring new indebtedness or liens on its assets without the Holder's prior written consent.
• The Company is restricted from making payments, dividends, or distributions on its equity securities or other indebtedness without the Holder's prior written consent.
• The Holder has no duty of confidentiality regarding any material, non-public information provided by the Company unless a specific written non-disclosure agreement is in place, allowing the Holder to trade on such information.

Future Outlook

The filing primarily details a debt financing transaction and does not provide explicit forward-looking statements or guidance on the Company's operational or financial performance beyond the terms of the note. The financing suggests an intent to continue operations, but the terms imply a need for immediate capital.

Management Comments

• Faith Zaslavsky, President and CEO, signed the 8-K report on behalf of IMAC Holdings, Inc.

Industry Context

This financing event is specific to IMAC Holdings, Inc. and does not provide broad industry trends. However, securing debt at a significant discount and with strict covenants can be indicative of challenges in accessing more favorable capital markets, which might be a broader concern for smaller companies in certain sectors.

Comparison to Industry Standards

• NA

Corporate Governance

Stakeholder Impact

• Shareholders: The senior secured nature of this debt places it ahead of equity holders in a liquidation scenario. The strict negative covenants, particularly those restricting dividends and further capital raises/liens, could limit future shareholder returns and strategic flexibility. The unfavorable terms of the financing may also signal increased financial risk for equity investors.
• Creditors: This Note ranks senior to all other indebtedness, potentially subordinating other creditors and increasing their risk exposure.

Next Steps

• The Company is required to file a Current Report on Form 8-K describing the terms of the transaction on or prior to the first business day after the Note's date (which it has done).
• The Company must make information described in Treasury Regulation 1.1275-3(b)(1)(i) available to the Holder upon request, beginning ten days after the issuance date.

Key Dates

Recommendation

The terms of this senior secured note, including the substantial discount on the principal received ($150,000 for a $210,000 note) and the high default interest rate of 14%, strongly indicate that IMAC Holdings, Inc. is in a financially distressed position. The strict negative covenants severely limit the company's operational and financial flexibility, restricting actions such as incurring additional debt, creating liens, or paying dividends without the lender's consent. Furthermore, the senior ranking of this debt significantly increases the risk for existing equity holders and other creditors. These factors collectively point to a deteriorating financial outlook and heightened risk for investors, warranting a strong sell recommendation.

Keywords

Senior Secured Note, Promissory Note, Debt Financing, SEC Filing, Corporate Debt, IMAC Holdings, Capital Raise, Secured Debt, Maturity Date, Default Interest