IMAC Holdings(BACK) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited Q1 2025 financials show a $2.2 million net loss and $7.6 million stockholders' deficit, following a business shift Condensed Consolidated Balance Sheets Total assets decreased to $1.14 million by March 2025, liabilities increased to $8.77 million, and stockholders' deficit worsened to $7.63 million Condensed Consolidated Balance Sheet Summary | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $30,880 | $504,189 | | Total Current Assets | $287,643 | $684,341 | | Total Assets | $1,140,130 | $1,589,021 | | Liabilities & Stockholders' Deficit | | | | Total Current Liabilities | $8,772,592 | $7,227,546 | | Total Stockholders' Deficit | $(7,632,462) | $(5,638,525) | | Total Liabilities and Stockholders' Deficit | $1,140,130 | $1,589,021 | Condensed Consolidated Statements of Operations Q1 2025 reported minimal revenue, a $0.1 million gross loss, $2.09 million operating expenses, and a $3.41 million net loss or $(1.08) per share Q1 2025 vs. Q1 2024 Statement of Operations | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues, net | $1,500 | $- | | Gross loss | $(101,687) | $- | | Operating expenses | $2,087,214 | $408,630 | | Operating loss | $(2,188,901) | $(408,630) | | Net loss from continuing operations | $(2,200,182) | $(448,899) | | Net loss available to common stockholders | $(3,414,205) | $(616,584) | | Net loss per share – Basic and diluted | $(1.08) | $(0.35) | Condensed Consolidated Statements of Cash Flows Q1 2025 net cash used in operations increased to $1.03 million, financing provided $0.56 million, resulting in a $0.47 million cash decrease, ending at $30,880 Q1 2025 vs. Q1 2024 Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,033,309) | $(202,252) | | Net cash provided by financing activities | $560,000 | $(1,724) | | Net decrease in cash | $(473,309) | $(203,976) | | Cash, end of period | $30,880 | $17,535 | Notes to Condensed Consolidated Financial Statements Notes detail the company's shift to precision medicine, express substantial doubt about going concern, and highlight new promissory notes and significant Medicare liabilities - The company's continuing operations are focused on precision medicine in cancer treatment, leveraging technology from Theralink Technologies, Inc. Previous operations, including IMAC Regeneration Centers, are now classified as discontinued[21][22][24] - Management has concluded there is substantial doubt about the company's ability to continue as a going concern for the next twelve months due to historical operating losses and cash outflows. The company plans to raise additional capital to mitigate this risk[30] - The company is appealing an alleged Medicare overpayment of approximately $2.7 million related to its discontinued Progressive Health operations and has reserved this amount. A lawsuit was filed in federal court in May 2025 after an unfavorable appeal result[40][43] - Subsequent to the quarter's end, the company issued additional promissory notes for an aggregate principal amount of $1.7 million to raise $1.2 million in cash[50] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the operational shift to Ignite Proteomics, highlighting a $2.2 million net loss, $8.5 million working capital deficit, and substantial doubt about going concern Results of Operations Q1 2025 saw minimal revenue, $0.1 million in cost of revenues, and $2.1 million in operating expenses, primarily driven by salaries, legal, and professional fees - Operating expenses for Q1 2025 totaled $2.1 million, primarily composed of salaries and benefits ($0.8 million), legal fees ($0.5 million), and professional/consulting fees ($0.5 million)[61] - Cost of revenues in Q1 2025 was $0.1 million, split between $0.05 million for laboratory supplies and $0.05 million for depreciation expense[60] Liquidity and Capital Resources Liquidity deteriorated with cash at $0.03 million and working capital deficit widening to $(8.5) million, raising substantial doubt about going concern Working Capital and Cash Position | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $0.03 million | $0.5 million | | Working Capital | $(8.5) million | $(7.3) million | - Current liabilities stood at approximately $8.8 million, including $3.8 million to vendors, $0.4 million in dividends payable, $0.5 million in notes payable, and $4.0 million for liabilities of discontinued operations[63] - Management has concluded that the company's financial condition raises substantial doubt about its ability to continue as a going concern and anticipates the need to raise additional capital to fund future operations[64] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is not applicable to the company - This item is not applicable to the company[68] Item 4. Controls and Procedures Disclosure controls and procedures were ineffective as of March 31, 2025, due to material weaknesses including insufficient accounting resources and lack of segregation of duties - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting[70] - Identified material weaknesses include: 1. Insufficient resources in the accounting department, hindering timely and proper financial reporting 2. Lack of segregation of conflicting duties due to the company's small size[74] - No changes were made to the internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[75] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently aware of any legal proceedings with a material adverse effect on its business - The company is not currently aware of any legal proceedings that are believed to have a material adverse effect on the business[77] Item 1A. Risk Factors No material changes to Risk Factors from the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have been made to the Risk Factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[78] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - None reported[79] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate documents and officer certifications - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002[84]