8-K: IMAC Holdings Secures $7.5M Debt with Senior Secured Notes

IMAC Holdings, Inc. has entered into a Securities Purchase Agreement to issue $7.5 million in senior secured notes, backed by substantially all company assets, maturing January 31, 2026.

Summary

• IMAC Holdings, Inc. (the Company) entered into a Securities Purchase Agreement on December 19, 2025, to issue senior secured notes (the Notes) with an aggregate original principal amount of $7,530,929.74.
• The Notes were issued with an original issue discount (OID), with an aggregate purchase price of approximately $6,332,901.16.
• The purchase price was paid through a combination of cash payments and the repayment and cancellation of existing indebtedness owed to certain buyers.
• The Notes do not bear interest unless an Event of Default occurs, in which case they will bear interest at 14% per annum.
• The Notes mature on January 31, 2026, indicating a very short-term financing arrangement.
• The Notes rank senior to all outstanding and future indebtedness of the Company and its subsidiaries.
• The Company and certain subsidiaries granted a continuing first priority security interest in substantially all of their assets to the Collateral Agent for the benefit of the Buyers.
• Several subsidiaries jointly and severally guaranteed the punctual payment and performance of all obligations under the agreement.

Sentiment

Score: 2

Explanation: The issuance of highly secured, short-term debt with a significant original issue discount, pledging substantially all assets, and a high default interest rate, points to severe financial distress and significant liquidity challenges for the company. This is a highly unfavorable financing arrangement.

Positives

• Secured immediate financing of approximately $6.33 million, addressing short-term liquidity needs.
• Ability to prepay all or any portion of the outstanding principal at any time without penalty or premium.

Negatives

• The Notes were issued with an original issue discount (OID), meaning the company received less cash ($6.33M) than the principal amount it must repay ($7.53M).
• A very short maturity date of January 31, 2026, creates significant near-term refinancing or repayment pressure.
• The Notes rank senior to all other indebtedness, potentially complicating future financing or restructuring efforts.
• Substantially all assets of the Company and its subsidiaries are pledged as collateral, limiting financial flexibility and increasing risk for unsecured creditors.
• A high default interest rate of 14% per annum applies upon an Event of Default.

Risks

• **Liquidity Risk:** The extremely short maturity date of January 31, 2026, poses a significant liquidity risk, requiring the Company to secure funds for repayment or refinancing within a very tight timeframe.
• **Default Risk:** Failure to pay principal or other amounts when due, bankruptcy, or invalidity of security documents could trigger an Event of Default, leading to a 14% interest rate and potential acceleration of obligations.
• **Asset Encumbrance:** Substantially all assets of the Company and its subsidiaries are pledged as first-priority collateral, which could severely limit the Company's ability to raise additional capital or dispose of assets.
• **Subordination of Other Debt:** The senior ranking of these Notes means any existing or future unsecured creditors would be subordinate, increasing their risk and potentially making it harder for the Company to obtain further unsecured financing.
• **Going Concern Risk:** The need for such short-term, secured, and discounted debt often indicates underlying financial distress or significant going concern issues.

Future Outlook

The immediate future outlook is dominated by the need to repay or refinance the $7.53 million in senior secured notes by January 31, 2026, a very short timeframe that will test the company's liquidity and financial management capabilities.

Management Comments

• The 8-K filing was signed by Faith Zaslavsky, Chief Executive Officer, on December 30, 2025.

Industry Context

This debt issuance suggests IMAC Holdings, operating in the healthcare services sector (implied by 'Regeneration Center', 'Hand Therapy', 'Orthopaedic & Sports Rehab'), is facing significant short-term liquidity challenges. The terms of the debt, including a substantial original issue discount, senior secured status, and extremely short maturity, are indicative of a company struggling to access conventional financing, which could be a red flag in an industry that often requires stable capital for expansion and operations.

Comparison to Industry Standards

• The terms of this financing, particularly the significant original issue discount (OID) and the extremely short maturity date of just over a month, are highly unfavorable compared to typical corporate debt issuances in the healthcare services industry.
• Companies with strong financial health usually secure longer-term debt at lower effective interest rates and without pledging substantially all assets. For instance, larger, more stable healthcare providers like HCA Healthcare or Tenet Healthcare typically access multi-year credit facilities or issue bonds with maturities ranging from 5 to 10+ years at much more competitive rates.
• The OID implies an effective interest rate significantly higher than the stated 0% (or 14% default rate), reflecting a high-risk premium demanded by the lenders. This type of financing is often a last resort for companies facing severe liquidity constraints, contrasting sharply with the more robust capital structures seen in industry leaders.

Stakeholder Impact

• **Shareholders:** Increased financial risk due to significant, short-term, highly secured debt. Potential for further dilution if equity is used for future refinancing, or severe value impairment if the company defaults.
• **Creditors (unsecured):** Their claims are now subordinate to the new senior secured notes, increasing their risk of recovery in case of insolvency.
• **Employees/Customers/Suppliers:** While not directly impacted by this specific debt issuance, the underlying financial distress implied by these terms could eventually affect operational stability, job security, and business relationships.

Next Steps

• Repayment or refinancing of the $7,530,929.74 principal amount of senior secured notes by the maturity date of January 31, 2026.
• Compliance with covenants outlined in the Security Agreement, including maintenance and protection of collateral and restrictions on additional liens.

Key Dates

Recommendation

The terms of this debt issuance are highly indicative of a company in severe financial distress. The significant original issue discount, the extremely short maturity date of just over a month, and the pledging of substantially all company assets as first-priority collateral suggest that IMAC Holdings is struggling to secure conventional financing. This raises serious concerns about the company's ability to meet its obligations in the very near future and its long-term viability. The high risk of default and the unfavorable terms make the stock a strong sell, as the company faces an immediate and critical liquidity challenge that could lead to significant shareholder value destruction.

Keywords

IMAC Holdings, Senior Secured Notes, Debt Financing, Securities Purchase Agreement, Original Issue Discount, Corporate Debt, Collateral, Guaranty, 8-K Filing, Private Placement