IMAC Holdings(BACK) - 2024 Q4 - Annual Report

PART I Item 1. Business IMAC Holdings shifted to oncology proteomic products via Ignite Proteomics, facing Nasdaq delisting and evolving LDT regulations - IMAC Holdings, Inc. transitioned its business focus to proteomic products for oncology clinical treatment and biopharmaceutical drug development, effective May 2024[17][18][19] - The company acquired assets and rights from Theralink Technologies, Inc., including a CLIA-certified, CAP-accredited, and NYS-CLEP certified laboratory, and licenses for proteomics technology[19][20] - A new wholly-owned subsidiary, Ignite Proteomics LLC, was formed to operate the acquired medical lab and deliver proteomic services, with credentials to bill Medicare and other third-party payors[20] - The core product is a patented RPPA technology platform quantifying protein signaling for oncology treatment decisions and drug development, initially for breast cancer with plans to expand to pan-tumor assays in 2025-2026[31][35] - The company's common stock was delisted from Nasdaq on March 26, 2025, due to non-compliance with the Minimum Equity Rule and now trades on the OTC Pink Market[42][43][44] - As a smaller reporting company, IMAC Holdings benefits from scaled disclosures, including presenting only two years of audited financial statements and reduced executive compensation disclosures[45] - The company is subject to evolving government regulations regarding Laboratory Developed Tests (LDTs) by the FDA, which could lead to increased regulatory burdens and costs[47][48][49] Overview This section provides a general introduction to IMAC Holdings' business transformation and current operational status Intellectual Property The company's intellectual property includes patented proteomics technology licensed from Vanderbilt University and George Mason University Strategy The company's strategy focuses on commercializing its proteomic platform for oncology, expanding test offerings, and securing payor coverage Product Portfolio The product portfolio centers on the RPPA technology platform for breast cancer, with plans for broader oncology applications Corporate Information This section details the company's legal structure and operational headquarters Listing of Company Securities Information regarding the trading status of the company's common stock, including its delisting from Nasdaq Implications of Being a Smaller Reporting Company This section outlines the reduced disclosure requirements and other benefits afforded to smaller reporting companies Government Regulation The company operates under various government regulations, particularly those impacting Laboratory Developed Tests (LDTs) Employees and Human Capital Management This section provides information on the company's workforce and human resources strategies Available Information Details on where to access the company's public filings and other relevant information Item 1A. Risk Factors The company faces recurring losses, going concern issues, integration challenges, intense competition, LDT regulatory uncertainty, internal control weaknesses, and reduced liquidity post-Nasdaq delisting - The company recorded a net loss of approximately $6.3 million from continuing operations for the year ended December 31, 2024, and has a going concern qualification, indicating substantial doubt about its ability to continue operations without additional funding[57][58] - Successful integration of assets acquired from Theralink, obtaining Medicare and third-party payor credentials, and securing additional funding are critical for revenue generation and financial stability[60][61] - Competition in the cancer information field is intense, with larger competitors possessing greater R&D, marketing, and financial resources, posing a risk to the commercial success of the company's services[65][66][68] - Regulatory changes, particularly concerning Laboratory Developed Tests (LDTs) by the FDA, could impose additional clinical trials, delays, increased costs, or failure to obtain necessary approvals[73][75][76] - The company has identified material weaknesses in internal controls over financial reporting, including insufficient accounting personnel for complex transactions and lack of segregation of duties, which could lead to material misstatements and affect stock price[98][99] - The company's common stock was suspended from trading on Nasdaq and now trades on the OTC Pink Market, which may adversely affect liquidity and the ability to raise capital[108][109][110][111][112][114] Risks Relating to Our Business This section details operational and financial risks specific to the company's business model and market Risks Related to Our Securities This section outlines risks associated with the company's common stock, including liquidity and capital raising challenges General Risk Factors This section covers broader risks that could impact the company's overall operations and financial performance Item 1B. Unresolved Staff Comments The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[124] Item 1C. Cybersecurity IMAC Holdings has established processes for assessing, identifying, and managing material cybersecurity risks, integrating them into overall risk management - The company has established processes for assessing, identifying, and managing material cybersecurity threats, integrated into its overall risk management systems[125] - Periodic risk assessments are conducted to identify threats, evaluate potential damage, and assess the sufficiency of existing safeguards, with an IT consultant reporting to the CEO[126][127] - The Board is periodically informed of risk management processes, including cybersecurity threats, with the CEO and CFO primarily responsible for oversight[131][132] - The company has not encountered cybersecurity challenges that have materially impaired its operations or financial standing[130] Risk Management and Strategy This section describes the company's approach to identifying, assessing, and mitigating cybersecurity risks Governance This section outlines the oversight structure for cybersecurity risks, including roles of management and the Board of Directors Item 2. Properties IMAC Holdings operates from a principal executive office in Franklin, Tennessee, and a laboratory in Golden, Colorado, both on month-to-month leases - The company's principal executive office is in Franklin, Tennessee, and its laboratory is in Golden, Colorado[133] - Both the executive office and laboratory leases are on a month-to-month basis[133] Rent Expense | Year | Rent Expense | | :--- | :--- | | 2024 | $0.1 million | Item 3. Legal Proceedings IMAC Holdings is involved in a legal proceeding regarding an alleged lease default for a former clinic location in Tampa, Florida, with the landlord claiming approximately $0.15 million - A complaint was filed against the company for an alleged default in a foreclosure action related to a former clinic lease in Tampa, Florida[135] Alleged Lease Default Amount | Item | Amount | | :--- | :--- | | Alleged Lease Payments, Commissions, Costs, and Interest | ~$0.15 million | - The company is in discussions with the landlord for a potential settlement[135] - Management is not aware of any other legal proceedings or claims that would have a material adverse effect[136] Item 4. Mine Safety Disclosures This item is not applicable to IMAC Holdings, Inc PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purch