IMAC Holdings, Inc. (NASDAQ:BACK), a specialty outpatient facilities provider, today announced measures taken to regain compliance with Nasdaq's minimum stockholders’ equity requirement. The Delaware-incorporated company, with headquarters in Franklin, Tennessee, has been under scrutiny since receiving a non-compliance notice from Nasdaq on May 31, 2023, for falling short of the $2.5 million equity threshold.
The company's path to compliance involved a series of strategic decisions, including the abandonment of a proposed merger with Theralink Technologies, Inc., a precision medicine company. The merger, initially set to combine the two entities, was called off on May 6, 2024, following Theralink's inability to meet the terms of its debt. Consequently, the merger agreement was terminated, and the associated SEC Registration Statement was withdrawn the following day.
IMAC Holdings then shifted its approach, acquiring certain Theralink assets through a settlement of defaulted indebtedness. This move, effective April 30, 2024, saw IMAC acquiring approximately 74.01% of Theralink's outstanding senior secured convertible debentures in exchange for its own Series D Convertible Preferred Stock. The transaction involved the issuance of 17,364 shares of Series D Preferred Stock, based on a valuation of Theralink's assets.
Further solidifying its position, IMAC Holdings entered into a Settlement and Release Agreement with Theralink on May 1, 2024. This agreement led to the transfer of additional Theralink assets and certain liabilities to IMAC in exchange for forgiveness of the outstanding amounts due under the acquired notes and the issuance of 22,067 shares of IMAC's newly created Series E Convertible Preferred Stock to Theralink.
Beyond asset acquisition, IMAC Holdings also secured essential licenses from George Mason University and Vanderbilt University, which were critical to operating the acquired proteomics business. The company hired key former Theralink employees and expanded its business model through additional international licenses from George Mason University.
While Nasdaq will continue to monitor IMAC Holdings for ongoing compliance, the company's proactive measures have put it back in line with Nasdaq's Equity Rule. If compliance is not demonstrated in IMAC's next Quarterly Report on Form 10-Q, there remains a risk of delisting. This news is based on a press release statement.
In other recent news, IMAC Holdings, a specialty outpatient medical services provider, has made noteworthy changes to its leadership team and accounting practices. The company expanded its Board of Directors from three to five, appointing Dr. Peter Beitsch and Dr. Matthew Schwartz as new directors. Both bring a wealth of knowledge in the medical field, with Dr. Beitsch specializing in melanoma and breast cancer and Dr. Schwartz having significant experience in oncology and biotechnology.
In a recent development, IMAC Holdings also changed its independent registered public accounting firm. The company has engaged Marcum, LLP, replacing Salberg & Company, P.A. This switch occurred after the fiscal year ended December 31, 2023, with no disagreements or reportable events with Salberg that would have influenced their audit report.
InvestingPro Insights
In light of IMAC Holdings, Inc.'s recent strategic moves to regain compliance with Nasdaq's requirements, real-time data from InvestingPro offers a snapshot of the company's current financial state. With a market capitalization of just $2.07 million, the company is navigating through a challenging financial landscape. The InvestingPro data indicates a negative P/E ratio of -0.34, which reflects the company's lack of profitability in the last twelve months as of Q1 2024. Additionally, the gross profit for the same period sits at a deficit of $0.86 million, underscoring the company's struggle to generate sufficient margins.
InvestingPro Tips reveal that analysts are not optimistic about the company's profitability in the near term, which is consistent with the reported negative earnings per share of -5.01 USD. Moreover, the stock has experienced a significant downturn, with a 30.5% drop in price total return over the last month. This trend aligns with the company's performance challenges, as it does not pay dividends to shareholders, potentially limiting its appeal to income-focused investors.
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