Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 10, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | IMAC Holdings, Inc. | |
Entity Central Index Key | 0001729944 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 8,316,797 | |
Trading Symbol | IMAC | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 3,065,553 | $ 194,316 |
Accounts receivable, net | 665,080 | 303,630 |
Due from related parties | ||
Other assets | 400,959 | 170,163 |
Total current assets | 4,131,592 | 668,109 |
Property and equipment, net | 3,221,183 | 3,333,638 |
Other assets: | ||
Goodwill | 2,042,125 | 2,042,125 |
Intangible assets, net | 4,126,748 | 4,257,434 |
Deferred IPO Costs | 335,318 | |
Security deposits | 441,473 | 438,163 |
Right of use asset | 4,027,124 | |
Total other assets | 10,637,470 | 7,073,040 |
Total assets | 17,990,245 | 11,074,787 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,548,220 | 1,261,582 |
Acquisition liabilities | 10,000 | 7,259,208 |
Patient deposits | 939,772 | 454,380 |
Due to related parties | ||
Notes payable, current portion | 3,032,686 | 4,459,302 |
Capital lease obligation, current portion | 16,920 | 16,740 |
Line of credit | 229,961 | 379,961 |
Operating lease | 724,587 | |
Total current liabilities | 6,502,146 | 13,831,173 |
Long-term liabilities: | ||
Notes payable, net of current portion | 276,854 | 317,291 |
Capital Lease Obligation, net of current portion | 79,740 | 84,038 |
Deferred Rent | 185,022 | 197,991 |
Lease Incentive Obligation | 549,695 | 576,454 |
Operating lease, net of current portion | 3,310,403 | |
Total liabilities | 10,903,860 | 15,006,947 |
Stockholders' equity (deficit): | ||
Preferred stock - $0.001 par value, 5,000,000 authorized, nil issued and outstanding | ||
Common stock; $0.001 par value, 30,000,000 authorized, 7,252,923 and 4,533,623 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 7,253 | 4,534 |
Additional paid-in capital | 14,280,204 | 1,233,966 |
Accumulated deficit | (5,144,009) | (3,544,820) |
Non-controlling interest | (2,057,063) | (1,625,840) |
Total stockholders' equity (deficit) | 7,086,385 | (3,932,160) |
Total liabilities and stockholders' equity (deficit) | $ 17,990,245 | $ 11,074,787 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 7,252,923 | 4,533,623 |
Common stock, shares outstanding | 7,252,923 | 4,533,623 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total patient revenue, net | $ 2,769,828 | $ 234,253 |
Total revenue | 2,769,828 | 267,853 |
Operating expenses: | ||
Patient expenses | 436,129 | 37,134 |
Salaries and benefits | 2,064,623 | 446,796 |
Share-based compensation | 3,749 | 3,749 |
Advertising and marketing | 347,016 | 93,178 |
General and administrative | 977,369 | 239,692 |
Depreciation and amortization | 285,567 | 31,268 |
Total operating expenses | 4,114,453 | 851,817 |
Operating loss | (1,344,626) | (583,964) |
Other income (expense): | ||
Interest income | 3,312 | |
Other (loss) | (15,955) | |
Beneficial conversion interest expense | (639,159) | |
Interest expense | (30,671) | (23,552) |
Total other (expenses) | (685,785) | (20,240) |
Loss before equity in (loss) of non-consolidated affiliate | (2,030,410) | (604,204) |
Equity in (loss) of non-consolidated affiliate | (85,651) | |
Net loss before income taxes | (2,030,410) | (689,855) |
Income taxes | ||
Net loss | (2,030,410) | (689,855) |
Net loss attributable to the non-controlling interest | 431,223 | 285,191 |
Net loss attributable to IMAC Holdings, Inc. | $ (1,599,187) | $ (404,664) |
Net loss per share attributable to common stockholders Basic and diluted | $ (0.27) | $ (0.09) |
Weighted average common shares outstanding Basic and diluted | 5,919,856 | 4,533,623 |
Patient Revenues [Member] | ||
Total patient revenue, net | $ 7,289,022 | $ 532,872 |
Contractual Adjustments [Member] | ||
Total patient revenue, net | (4,519,194) | (298,619) |
Management Fees [Member] | ||
Total revenue | $ 33,600 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - 3 months ended Mar. 31, 2019 - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Noncontrolling Interest [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 4,534 | $ 1,233,966 | $ (1,625,840) | $ (3,544,820) | $ (3,932,160) |
Balance, shares at Dec. 31, 2018 | 4,533,623 | ||||
Common stock issued for initial public offering proceeds, net of related fees | $ 850 | 3,503,314 | 3,504,164 | ||
Common stock issued for initial public offering proceeds, net of related fees, shares | 850,000 | ||||
Issuance of common stock in connection with convertible notes | $ 449 | 2,245,636 | 2,246,085 | ||
Issuance of common stock in connection with convertible notes, shares | 449,217 | ||||
Issuance of common stock in connection with acquisitions | $ 1,410 | 7,247,798 | 7,249,208 | ||
Issuance of common stock in connection with acquisitions, shares | 1,410,183 | ||||
Exercise of warrants | $ 10 | 49,490 | 49,500 | ||
Exercise of warrants, shares | 9,900 | ||||
Net loss | (431,223) | (1,599,187) | (2,030,410) | ||
Balance at Mar. 31, 2019 | $ 7,253 | $ 14,280,204 | $ (2,057,063) | $ (5,144,007) | $ 7,086,385 |
Balance, shares at Mar. 31, 2019 | 7,252,923 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (2,030,410) | $ (689,855) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 285,567 | 31,268 |
Beneficial conversion interest expense | 639,159 | |
Deferred rent | (12,969) | 2,408 |
Equity in loss of non-consolidated affiliate | 85,651 | |
(Increase) decrease in operating assets: | ||
Accounts receivable, net | (361,450) | (503) |
Due from related parties | ||
Other assets | (230,796) | (118,410) |
Security deposits | (3,310) | |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued expenses | 361,428 | 136,685 |
Patient deposits | 485,392 | (22,249) |
Lease incentive obligation | (26,759) | (1,536) |
Net cash (used in) operating activities | (894,149) | (576,541) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (42,426) | (1,191,620) |
Investment in and advances go IMAC St Louis LLC | (124,106) | |
Net cash (used in) investing activities | (42,426) | (1,315,726) |
Cash flows from financing activities: | ||
Proceeds from initial public offering | 3,839,482 | |
Proceeds from warrants exercised | 49,500 | |
Proceeds from notes payable | 100,000 | 2,262,500 |
Payments on notes payable | (27,053) | (20,590) |
Proceeds from line of credit | 75,000 | |
Payments on line of credit | (150,000) | |
Payments on capital lease obligation | (4,118) | (1,922) |
Net cash provided by financing activities | 3,807,811 | 2,314,988 |
Net increase in cash | 2,871,237 | 422,721 |
Cash, beginning of period | 194,316 | 127,788 |
Cash, end of period | 3,065,553 | 550,509 |
Supplemental cash flow information: | ||
Interest paid | $ 30,671 | $ 23,552 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1 – Description of Business IMAC Holdings, Inc. and its affiliates (collectively, the “Company”) provide orthopedic therapies through its chain of IMAC Regeneration Centers. Through its consolidated and equity owned entities, its outpatient medical clinics provide conservative, non-invasive medical treatments to help patients with back pain, knee pain, joint pain, ligament and tendon damage, and other related soft tissue conditions. The Company had opened two (2) medical clinics located in Tennessee and opened or acquired through management service agreements nine (9) medical clinics located in Kentucky and Missouri at March 31, 2019. The Company has partnered with several well-known sports stars such as Ozzie Davis and David Price in opening its medical clinics, with a focus around treating sports injuries. Effective June 1, 2018, the Company converted from IMAC Holdings, LLC a Kentucky limited liability company to IMAC Holdings, Inc. a Delaware corporation, followed by a reverse stock split in February 2019. These accounting changes have been given retrospective treatment in the condensed consolidated financial statements. During February 2019, the Company completed an initial public offering (“IPO”) of securities. See Note 13. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (“U.S.”) as promulgated by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and with the rules and regulations of the U.S Securities and Exchange Commission (“SEC”). In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year. Therefore, the interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K. The accompanying condensed consolidated financial statements include the accounts of IMAC Holdings, Inc. (“IMAC Holdings”) and the following entities which are consolidated due to direct ownership of a controlling voting interest or other rights granted to us as the sole general partner or managing member of the entity: IMAC Management Services, LLC (“IMAC Management”), IMAC Regeneration Management, LLC (“IMAC Texas”) and IMAC Regeneration Management of Nashville, LLC (“IMAC Nashville”); the following entity which is consolidated with IMAC Regeneration Management of Nashville, LLC due to control by contract: IMAC Regeneration Center of Nashville, PC (“IMAC Nashville PC”); and the following entity which prior to June 1, 2018 was held as a minority interest, IMAC Regeneration Center of St. Louis, LLC (“IMAC St. Louis”). In June 2018, the Company consummated certain transactions resulting in the acquisition of the outstanding equity interests in IMAC St. Louis and Clinic Management Associates of KY, LLC (“CMA of KY”), an entity which is consolidated with Integrated Medical and Chiropractic Regeneration Center, PSC (“IMAC Kentucky”) due to control by contract. These entities are included in the consolidated financial statements from the date of acquisition. In August 2018, the Company acquired 100% of Advantage Hand Therapy and Orthopedic Rehabilitation, LLC (“Advantage Therapy”) and 70% of BioFirma LLC (“BioFirma”). Both companies are consolidated due to direct ownership of a controlling voting interest or other rights granted to us as the sole general partner or managing member of the entity. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses at the date and for the periods that the condensed consolidated financial statements are prepared. On an ongoing basis, the Company evaluates its estimates, including those related to insurance adjustments and provisions for doubtful accounts. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from those estimates. Revenue Recognition The Company’s patient service revenue is derived from non-surgical procedures performed at our outpatient medical clinics and patient visits to physicians. The fees for such services are billed either to the patient or a third- party payer, including Medicare. We recognize patient service revenue, net of contractual allowances, which we estimate based on the historical trend of our cash collections and contractual write-offs. Other management service fees are derived from management services where the Company provides billings and collections support to the clinics and where management services are provided based on state specific regulations known as the corporate practice of medicine (“CPM”). Under the CPM, a business corporation is precluded from practicing medicine or employing a physician to provide professional medical services. In these circumstances, the Company provides all administrative support to the physician-owned PC through an LLC. The PC is consolidated due to control by contract (an “MSA” – Management Services Agreement). The fees we derive from these management arrangements are either based on a predetermined percentage of the revenue of each clinic or a percentage mark up on the costs of the LLC. We recognize other management service revenue in the period in which services are rendered. These revenues are earned by IMAC Nashville and IMAC Management and are eliminated in consolidation to the extent owned. Patient Deposits Patient deposits are derived from patient payments in advance of services delivered. Our service lines include traditional and regenerative medicine. Regenerative medicine procedures are not paid by insurance carriers; therefore, the Company typically requires up-front payment from the patient for regenerative services and any co-pays and deductibles as required by the patient specific insurance carrier. For some patients, credit is provided through an outside vendor. In this case, the Company is paid from the credit card company and the risk is transferred to the credit card company for collection from the patient. These funds are accounted for as patient deposits until the procedures are performed at which point the patient deposit is recognized as patient service revenue. Fair Value of Financial Instruments The carrying amount of accounts receivable, accounts payable and acquisition liabilities approximate their respective fair values due to the short- term nature. The carrying amount of the line of credit and note payable approximates fair values due to their market interest rates. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents. Accounts Receivable Accounts receivable primarily consists of amounts due from third-party payers (non-governmental), governmental payers and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s condensed consolidated financial statements are recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimation of net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies’ denial of claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients. The Company’s accounts receivable from third-party payers are recorded net of estimated contractual adjustments and allowances from third-party payers, which are estimated based on the historical trend of the Company’s facilities’ cash collections and contractual write- offs, accounts receivable aging, established fee schedules, relationships with payers and procedure statistics. While changes in estimated reimbursement from third-party payers remain a possibility, the Company expects that any such changes would be minimal and, therefore, would not have a material effect on the Company’s financial condition or results of operations. The Company’s collection policies and procedures are based on the type of payer, size of claim and estimated collection percentage for each patient account. The operating systems used to manage the Company’s patient accounts provide for an aging schedule in 30-day increments, by payer, physician and patient. The Company analyzes accounts receivable at each of the facilities to ensure the proper collection and aged category. The operating systems generate reports that assist in the collection efforts by prioritizing patient accounts. Collection efforts include direct contact with insurance carriers or patients and written correspondence. Allowance for Doubtful Accounts, Contractual and Other Discounts Management estimates the allowance for contractual and other discounts based on its historical collection experience and contracted relationship with the payers. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account may be written-off only after the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are made. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Additions and improvements to property and equipment are capitalized at cost. Depreciation of owned assets and amortization of leasehold improvements are computed using the straight-line method over the shorter of the estimated useful lives of the related assets or the lease term. The cost of assets sold or retired, and the related accumulated depreciation are removed from the accounts and any resulting gains or losses are reflected in other income (expense) for the year. Expenditures for maintenance and repairs are charged to expense as incurred. Intangible Assets The Company capitalizes the fair value of intangible assets acquired in business combinations. The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of each acquired business to its respective net tangible and intangible assets. Acquired intangible assets include trade names, non-compete agreements, customer relationships and contractual agreements. Goodwill The Company tests goodwill for impairment on an annual basis, or when events or circumstances indicate the fair value of a reporting unit is below its carrying value. Our goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in business combinations. The goodwill generated from the business combinations is primarily related to the value placed on the employee workforce and expected synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others, a significant decline in expected future cash flows, a significant adverse change in the business climate, and unforeseen competition. There was no goodwill impairment for the years presented. Long-Lived Assets Long-lived assets such as property and equipment and intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no impairments of long lived assets for the years presented. Advertising and Marketing The Company uses advertising and marketing to promote its services. Advertising and marketing costs are expensed as incurred. Advertising and marketing expense was $347,016 and $93,178 for the three months ended March 31, 2019 and 2018, respectively (unaudited). Net Loss Per Share Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of the conversion option embedded in convertible debt. The weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would have an anti-dilutive effect. Income Taxes IMAC Management, IMAC Texas, and IMAC Nashville are limited liability companies and are taxed as partnerships. IMAC Holdings was taxed as a partnership through May 31, 2018. As a result, income tax liabilities are passed through to the individual members. Accordingly, no provision for income taxes were reflected in the condensed consolidated financial statements for periods prior to May 31, 2018 at which time IMAC Holdings converted from a limited liability company to a Delaware corporation. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. Interest and penalties related to income tax matters, if any, would be recognized as a component of income tax expense. For the three months ended March 31, 2019 and 2018, the Company had no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. Currently, the tax years subsequent to 2016 are open and subject to examination by the taxing authorities. Recently Issued Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04 “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. This update simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases” which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. The ASU was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We recognized a right of use asset and related obligation on our condensed consolidated financial statements. |
Capital Requirements, Liquidity
Capital Requirements, Liquidity and Going Concern Considerations | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Capital Requirements, Liquidity and Going Concern Considerations | Note 3 – Capital Requirements, Liquidity and Going Concern Considerations The Company’s condensed consolidated financial statements are prepared in accordance with GAAP including the assumption of a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as shown in the accompanying condensed consolidated financial statements, the Company has sustained substantial losses from operations since inception and has a deficiency in working capital of approximately $13.1 million and $2.4 million at December 31, 2018 and March 31, 2019, respectively. The Company had a net loss of approximately $2.0 million and $0.7 million at March 31, 2019 and 2018, respectively, and used cash of $0.8 million and $0.6 million at March 31, 2019 and 2018, respectively, in its operations. The Company expects to continue to incur significant expenditures to develop and expand its owned and managed outpatient medical clinics. Management recognizes that the Company must obtain additional resources to successfully integrate its acquired and managed clinics and implement its business plans. Through December 31, 2018, the Company had received funding in the form of indebtedness. Subsequent to December 31, 2018, the Company completed an initial public offering of 850,000 units, in which the Company received aggregate gross proceeds of approximately $4.3 million and extinguished liabilities of approximately $7.2 million. Management plans to continue to raise funds and/or refinance the Company’s indebtedness to support its operations in 2019 and beyond. However, no assurances can be given that the Company will be successful. If management is not able to timely and successfully raise additional capital and/or refinance indebtedness, the implementation of the Company’s business plan, financial condition and results of operations will be materially affected. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Concentration of Credit Risks
Concentration of Credit Risks | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risks | Note 4 – Concentration of Credit Risks Cash The Company maintains its cash in accounts at financial institutions, which may, at times, exceed federally-insured limits of $250,000. As of March 31, 2019 and December 31, 2018, the Company had $2,536,458 and $0, respectively, of cash in excess of federally insured limits. The Company has not experienced any losses on such accounts and does not feel it is exposed to any significant risk with respect to cash. Revenue and Accounts Receivable The Company had the following revenue and accounts receivable concentrations: March 31, 2019 2018 % of Revenue % of Accounts Receivable % of Revenue % of Accounts Receivable (unaudited) Patient payment 54 % 54 % 64 % 64 % Medicare payment 22 % 22 % 13 % 13 % Insurance payment 24 % 24 % 23 % 23 % Total 100 % 100 % 100 % 100 % |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | Note 5 – Accounts Receivable Accounts receivable consisted of the following at March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 (unaudited) Gross accounts receivable $ 727,976 $ 314,185 Less: allowance for doubtful accounts and contractual adjustments (62,896 ) (10,555 ) Accounts receivable, net $ 665,080 $ 303,630 |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | Note 6 – Business Acquisitions During June 2018, the Company acquired CMA of Kentucky and IMAC St. Louis for aggregate consideration of approximately $6.1 million to be paid in equity. The operating results of these two companies have been included in the Company’s consolidated financial statements from their dates of acquisition. The Company accounted for the transactions as business combinations, and has allocated the purchase consideration to the net assets acquired based on estimated fair values. In addition, during June 2018, the Company acquired the non-controlling interest held in its majority-owned subsidiary IMAC Nashville for $300,000 to be paid in equity. During August 2018, the Company acquired Advantage Therapy and BioFirma for aggregate consideration of approximately $900,000 to be paid in cash and equity. The operating results of these two companies have been included in the Company’s consolidated financial statements from their dates of acquisition. The Company accounted for the transactions as business combinations, and has allocated the purchase consideration to the net assets acquired based on estimated fair values. IMAC Kentucky On June 29, 2018, IMAC Management completed a merger of CMA of KY into IMAC Management. Pursuant to this merger, IMAC Management has a long-term MSA to provide exclusive comprehensive management and related administrative services to IMAC Kentucky, an entity engaged in the practice of medicine through physicians and nurse practitioners. Under the IMAC Kentucky MSA, the Company receives service fees based on the cost of the services provided, plus a specified markup percentage, and a discretionary annual bonus. The Company has included the consolidated financial results of IMAC Kentucky in its consolidated financial statements from the date of acquisition. IMAC St. Louis On June 1, 2018, the Company acquired the remaining 64% membership interest in IMAC St. Louis not already owned by it pursuant to a Unit Purchase Agreement, increasing the Company’s ownership to 100%. IMAC St. Louis operates two (2) Ozzie Smith Centers in Missouri. Pursuant to the terms of the Unit Purchase Agreement, the Company agreed to pay the current owners, upon the closing of the Company’s initial public offering, an amount equal to 1.05 times the total collections from payments at the IMAC St. Louis centers on account of regeneration-related services and associated products from the period from June 1, 2017 to May 31, 2018, or $1,490,632. The purchase consideration will be payable in the form of shares of our common stock based on the price per share of the Company’s common stock in the Company’s initial public offering. See Note 13. The Company has included the financial results of IMAC St. Louis in its consolidated financial statements from June 1, 2018, the date of acquisition. IMAC Nashville Also on June 1, 2018, the Company acquired the remaining 25% of the outstanding units of the limited liability company membership interests not already owned by the Company in IMAC Nashville for $300,000 which was paid in shares of our common stock based on the price per share of the Company’s common stock in the Company’s initial public offering. See Note 13. Advantage Therapy On August 1, 2018, the Company entered into an agreement to purchase all outstanding membership units of Advantage Therapy. The purchase price for the interests was equal to the dollar amount represented by 0.7 times the total collections from payments for service in Advantage Therapy’s account from June 1, 2017 to May 31, 2018, or approximately $892,000, of which $870,000 and $22,000 and were payable in equity and cash, respectively. See Note 13. The Company has included the financial results of Advantage Therapy in its consolidated financial statements from August 1, 2018, the date of acquisition. BioFirma On August 1, 2018, the Company entered into an agreement to purchase 70% of all outstanding membership units of BioFirma LLC. The purchase price for the interests was $1,000 paid in cash. BioFirma owns a trademark on NeoCyte, an umbilical cord-derived mononuclear cell product following FDA cGMP regulations. The Company has committed to further research and development of NeoCyte and other regenerative medicine products. The Company has included the financial results of BioFirma in its consolidated financial statements from August 1, 2018, the date of acquisition. The following table summarizes the fair value of consideration paid and the allocation of purchase price to the fair value of net assets acquired for the business acquisitions: IMAC Kentucky IMAC St. Louis Advantage Therapy BioFirma Property & equipment $ 607,257 $ - $ 18,647 $ - Intangible Assets 4,224,113 264,000 37,000 1,429 Goodwill - 1,327,507 713,189 - Other assets 5,521 - 255,018 - Current liabilities (119,902 ) - (50,948 ) - Noncurrent liabilities (118,413 ) - (79,975 ) - Non-controlling interest - - - (429 ) $ 4,598,576 $ 1,591,507 $ 892,931 $ 1,000 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 7 – Property and Equipment The Company’s property and equipment consisted of the following: Estimated March 31, December 31, Useful Life in Years 2019 2018 Land and Building 40 $ 1,175,000 $ 1,175,000 Leasehold improvements Shorter of asset or lease term 1,614,778 1,427,828 Equipment 1.5 - 7 1,557,646 1,180,093 Total property and equipment 4,347,424 3,782,921 Less: accumulated depreciation (1,126,241 ) (449,283 ) Total property and equipment, net $ 3,221,183 $ 3,333,638 In March 2018, the Company purchased real estate in Lexington, Kentucky for the development of an IMAC facility for approximately $1.2 million. The Company funded the purchase with a note payable. See Note 11. Depreciation was $154,881 and $31,268 for the three months ended March 31, 2019 and 2018, respectively. |
Intangibles Assets and Goodwill
Intangibles Assets and Goodwill | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles Assets and Goodwill | Note 8 – Intangibles Assets and Goodwill The Company’s intangible assets that were acquired in connection with the business acquisition transactions (Note 6) during 2018 were as follows: December 31, 2018 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreement 10 years $ 4,224,113 $ (211,206 ) $ 4,012,907 Non-compete agreements 301,000 (56,473 ) 244,527 Definite lived assets 3 years 4,525,113 (267,679 ) 4,257,434 Goodwill 2,042,125 - 2,042,125 Total intangible assets and goodwill $ 6,567,238 $ (267,679 ) $ 6,299,559 March 31, 2019 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreement 10 years $ 4,224,113 $ (316,808 ) $ 3,907,305 Non-compete agreements 301,000 (81,557 ) 219,443 Definite lived assets 3 years 4,525,113 (398,365 ) 4,126,748 Goodwill 2,042,125 - 2,042,125 Total intangible assets and goodwill $ 6,567,238 $ (398,365 ) $ 6,168,873 The Company’s estimated future amortization of intangible assets was as follows: Years Ending December 31, 2019 (nine months) $ 392,058 2020 522,744 2021 466,273 2022 422,411 2023 422,411 Thereafter 1,900,851 $ 4,126,748 |
Operating Leases
Operating Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Operating Leases | Note 9 – Operating Leases Adoption of ASC Topic 842, Leases On January 1, 2019, the Company adopted Topic 842 using the modified retrospective method applied to leases that were in place as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840. The Company’s leases consists of operating leases that relate to real estate rental agreements. All of the value of the Company’s lease portfolio relates to a real estate lease agreements that were entered into starting March 2017. Practical Expedients and Elections The Company elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We also elected the short-term lease recognition exemption for all leases that qualify. Discount Rate Applied to Property Operating Lease To determine the present value of minimum future lease payments for operating leases at January 1, 2019, the Company was required to estimate a rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment (the “incremental borrowing rate” or “IBR”). The Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the ten year mortgage interest rate. Right of Use Assets Right of use assets are included in the unaudited condensed consolidated Balance Sheet as follows: Non-current assets Right of use assets, net of amortization $ 4,027,124 Total operating lease cost Individual components of the total lease cost incurred by the Company is as follows: Three Months Ended March 31, 2019 Operating lease expense $ 208,912 Minimum rental payments under operating leases are recognized on a straight light basis over the term of the lease. Maturity of operating leases The amount of future minimum lease payments under operating are as follows: Operating Lease Undiscounted future minimum lease payments: 2019 (remainder of year) $ 637,733 2020 794,101 2021 643,082 2022 641,947 2023 611,158 Thereafter 1,100,783 Total 4,428,803 Amount representing imputed interest (393,813 ) Total operating lease liability 4,034,990 Current portion of operating lease liability (724,587 ) Operating lease liability, non-current $ 3,310,403 |
Lines of Credit
Lines of Credit | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Lines of Credit | Note 10 – Lines of Credit IMAC Nashville had a $150,000 line of credit with a financial institution that matured on October 15, 2018. The line bore interest at 6.50% per annum. The line is secured by substantially all of the Company’s assets and personally guaranteed by the members. The LOC had a $150,000 balance at December 31, 2018. The line of credit was repaid in February 2019. IMAC Kentucky has a $150,000 line of credit with a financial institution that matured on August 1, 2018. The line bears interest at 4.25% per annum. The line was secured by substantially all of the IMAC Kentucky’s assets and personally guaranteed by the members. The LOC had a $150,000 balance at December 31, 2018 and $150,000 (unaudited) at March 31, 2019. Advantage Therapy has a $100,000 line of credit with a financial institution that matures on November 20, 2020. The line bears interest at a variable rate which is currently 6.0% per annum. The line is secured by substantially all of IMAC Holding’s assets. The LOC had a $79,975 balance at December 31, 2018 and $79,961 at March 31, 2019. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 11-Notes Payable March 31, 2019 December 31, 2018 Note payable to The Edward S. Bredniak Trust in the amount of up to $2,000,000. An existing note payable with this entity in the amount of $379,676 has been combined into the new note payable. The note carries an interest rate of 10% per annum and all outstanding balances are due and payable December 31, 2019. $ 1,684,426 $ 1,584,426 Note payable to a financial institution in the amount of $200,000 dated November 15, 2017. The note requires 66 consecutive monthly installments of $2,652 including principal and interest at 5%, with a balloon payment of $60,000 which was paid on June 15, 2018. The note matures on May 15, 2023, and is secured by the personal guarantees of the Company’s management. 119,259 125,670 Convertible notes issued to various investors, which accrued interest at 4%, and converted to common stock in connection with the closing of the Company’s initial public offering. See Note 13. The notes were convertible to equity at or prior to maturity at a 20% discount to the per share price of a sale of equity securities. At the time of issuance of the convertible notes, the Company was unable to calculate the amount of a beneficial conversion (“BCF”) and related discount to be recorded until the occurrence of a qualified financing by the Company. Upon the closing of the Company’s initial public offering, the Company recognized the BCF and related interest charge associated with the discount, and the BCF has been classified as a liability to the extent it met the conditions for derivative treatment at the time of recognition. - 1,540,000 $1.2 million mortgage loan with a financial institution. The loan agreement is for 6-months and carries an interest rate 3.35%. The loan matured in 2018 and was extended to 2019. It is currently interest only and is now on a month to month basis. 1,232,500 1,232,500 Note payable to a financial institution in the amount of $131,400 dated August 1, 2016. The note requires 120 monthly installments of $1,394 including principal and interest at 5%. The note matures on July 1, 2026 and is secured by a letter of credit. 102,498 105,374 Note payable to a financial institution in the amount of $200,000 dated May 4, 2016. The note requires 60 monthly installments of $3,881 including principal and interest at 4.25%. The note matures on May 4, 2021 and is secured by the equipment and personal guarantees of the Company’s management. 96,232 106,778 Note payable to an employee in the amount of $101,906 dated March 8, 2017. The note requires 5 annual installments of $23,350 including principal and interest at 5%. The note matures on December 31, 2021 and is unsecured. 60,000 60,000 Note payable to a financial institution in the amount of $133,555 dated September 17, 2014. The note requires 60 monthly installments of $2,475 including principal and interest at 4.25%. The note matures on September 17, 2019. 14,625 21,845 3,309,540 4,776,593 Less: current portion: (3,032,686 ) (4,459,302 ) $ 276,854 $ 317,291 Principal maturities of the Company’s notes payable are as follows: Years Ending December 31, Amount 2019 (nine months) $ 3,012,357 2020 104,435 2021 80,968 2022 43,935 2023 27,404 Thereafter 40,441 Total $ 3,309,540 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 – Related Party Transactions From time to time, the Company advances funds to, and receives funds from, entities with common ownership. At December 31, 2018 and March 31, 2019, the amount owed to related parties was $0. The Company contracted with SpeakLife to provide staff training and patient advocacy services for $99,000 per year. SpeakLife is owned by the Company’s Executive Vice President of Clinical Operations. This contract was terminated on June 30, 2018. The Company contracted with UCI to provide marketing services to chiropractic practitioners and sources opportunities to expand chiropractic practices into regenerative medicine for $144,000 per year. UCI is owned by the spouse of the Company’s Chief Operations Officer. This contract was terminated on June 30, 2018. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Note 13 – Shareholders’ Equity Prior to the Company’s conversion to a corporation, the Company had 400 member units authorized with 365 units issued and outstanding. On June 1, 2018, the Company converted its 365 outstanding member units into 6,582,737 shares of common stock with a $0.001 par value pursuant to the Company’s conversion from a limited liability company to a corporation. The conversion has been given retrospective treatment. On February 12, 2019, the Company reverse split its 6,582,737 shares of common stock outstanding to 4,533,623 shares of common stock outstanding pursuant to an amendment of the Company’s certificate of incorporation. The reverse split has been given retrospective treatment. During February 2019, the Company completed an initial public offering of securities and issued 850,000 shares of its common stock, along with 1,700,000 warrants to purchase common stock and an option to purchase 34,000 shares of common stock for gross proceeds of $4,356,815. The Company also issued 449,217 shares of common stock for the conversion of its 4% convertible notes and 1,410,183 shares to satisfy deferred acquisition consideration payable in connection with its 2018 business acquisitions. |
Retirement Plan
Retirement Plan | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Note 14 – Retirement Plan The Company offers a 401(k) plan that covers eligible employees. The plan provides for voluntary salary deferrals for eligible employees. Additionally, the Company is required to make matching contributions of 50% of up to 6 % of total compensation for those employees making salary deferrals. The Company made contributions of $7,407 and $0 during the three months ended March 31, 2019 and 2018, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15 – Income Taxes The Company’s provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows: Deferred tax benefit at the federal statutory rate 21 % Valuation allowance -21 % 0 % At March 31, 2019, the Company has a net operating loss carryforward of approximately $3.7 million for federal and state purposes. This loss will be available to offset future taxable income. If not used, this carryforward will begin to expire in 2029. The deferred tax asset relating to the operating loss carryforward has been fully reserved at March 31, 2019. The principal differences between the operating loss for income tax purposes and reporting purposes are shares issued for services and share-based compensation and a temporary difference in depreciation expense. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16 – Commitments and Contingencies The Company is subject to extensive regulation, including health insurance regulations directed at ascertaining the appropriateness of reimbursement, preventing fraud and abuse and otherwise regulating reimbursement. To ensure compliance, various insurance providers often conduct audits and request patient records and other documents to support claims submitted by the Company for payment of services rendered to customers. In the event that an audit results in discrepancies in the records provided, insurance providers may be entitled to extrapolate the results of the audit to make overpayment demands based on a wider population of claims than those examined in the audit. The Company is subject to threatened and asserted various legal proceedings in the ordinary course of business. The outcome of any legal proceeding is not within the Company’s complete control, it is often difficult to predict and is resolved over very long periods of time. Estimating probable losses associated with any legal proceedings or other loss contingencies are very complex and require the analysis of many factors including assumptions about potential actions by third parties. Loss contingencies are disclosed when there is at least a reasonable possibility that a loss has been incurred and are recorded as liabilities in the condensed consolidated financial statements when it is both (1) probable or known that a liability has been incurred and (2) the amount of the loss is reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. If a loss contingency is not probable or cannot be reasonably estimated, a liability is not recorded in the financial statements. In February 2019, the Company was made aware of a lawsuit involving a contract dispute with BioFirma. Management believes the ultimate resolution of this matter will not have a material impact on the Company’s financial condition or results of operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 – Subsequent Events On April 1, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) for the acquisition of a practice management group that manages three clinics in the Chicago, Illinois area. On April 19, 2019, the Company entered into an Amendment to the Merger Agreement (the “Amendment”), effective as of April 19, 2019 at 12:05 a.m., with IMAC Management of Illinois, LLC, an Illinois limited liability company (“Merger Sub”), ISDI Holdings, Inc., an Illinois corporation (“ISDI Holdings I”), ISDI Holdings II, Inc., an Illinois corporation (“ISDI Holdings II”), PHR Holdings, Inc., an Illinois corporation (“PHR Holdings”), and Jason Hui, sole shareholder of each of ISDI Holdings II and PHR Holdings (the “Shareholder”), in order to amend the Agreement, executed on April 1, 2019 by and among the Company, Merger Sub, ISDI Holdings I and the Shareholder, to remove ISDI Holdings I as a party to the Agreement and, in its place, add ISDI Holdings II and PHR Holdings as parties to the Agreement and provide for the merger of each of ISDI Holdings II and PHR Holdings with and into Merger Sub (the “Merger”) on the terms and conditions set forth in the Agreement. The Merger was completed on April 19, 2019, with Merger Sub remaining as the surviving entity. Pursuant to the Agreement, as amended by the Amendment, at the effective time of the Merger (the “Effective Time”), each of ISDI Holdings II and PHR Holdings’ issued and outstanding shares of common stock were cancelled and were converted automatically into the right of the Shareholder to receive 1,002,306 restricted shares of the Company’s common stock (the “Merger Consideration”). The Merger Consideration was issued to the Shareholder and a trust designated by the Shareholder on April 22, 2019. Representations were made to the Company regarding such share recipients’ knowledge and experience, ability to bear economic risk and investment purpose with respect to the restricted shares they received. The Merger Consideration was issued in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act as a private offering. Such issuance did not involve a public offering, and was made without general solicitation or advertising. In connection with the completion of the Merger, the Company also entered into an employment agreement with Dr. Jason Hui, which was effective as of April 19, 2019 and extends for a term expiring on March 31, 2022. Pursuant to his employment agreement, Dr. Hui has agreed to devote substantially all of his business time, attention and ability, to the Company as our Executive Vice President of Development. The employment agreement provides that Dr. Hui will receive a base salary at a rate of $350,000 per year through March 31, 2020, a base salary at a rate of $355,000 per year from April 1, 2020 through March 31, 2021 and a base salary at a rate of $360,000 per year for the period of April 1, 2021 through March 31, 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (“U.S.”) as promulgated by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and with the rules and regulations of the U.S Securities and Exchange Commission (“SEC”). In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year. Therefore, the interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K. The accompanying condensed consolidated financial statements include the accounts of IMAC Holdings, Inc. (“IMAC Holdings”) and the following entities which are consolidated due to direct ownership of a controlling voting interest or other rights granted to us as the sole general partner or managing member of the entity: IMAC Management Services, LLC (“IMAC Management”), IMAC Regeneration Management, LLC (“IMAC Texas”) and IMAC Regeneration Management of Nashville, LLC (“IMAC Nashville”); the following entity which is consolidated with IMAC Regeneration Management of Nashville, LLC due to control by contract: IMAC Regeneration Center of Nashville, PC (“IMAC Nashville PC”); and the following entity which prior to June 1, 2018 was held as a minority interest, IMAC Regeneration Center of St. Louis, LLC (“IMAC St. Louis”). In June 2018, the Company consummated certain transactions resulting in the acquisition of the outstanding equity interests in IMAC St. Louis and Clinic Management Associates of KY, LLC (“CMA of KY”), an entity which is consolidated with Integrated Medical and Chiropractic Regeneration Center, PSC (“IMAC Kentucky”) due to control by contract. These entities are included in the consolidated financial statements from the date of acquisition. In August 2018, the Company acquired 100% of Advantage Hand Therapy and Orthopedic Rehabilitation, LLC (“Advantage Therapy”) and 70% of BioFirma LLC (“BioFirma”). Both companies are consolidated due to direct ownership of a controlling voting interest or other rights granted to us as the sole general partner or managing member of the entity. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses at the date and for the periods that the condensed consolidated financial statements are prepared. On an ongoing basis, the Company evaluates its estimates, including those related to insurance adjustments and provisions for doubtful accounts. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company’s patient service revenue is derived from non-surgical procedures performed at our outpatient medical clinics and patient visits to physicians. The fees for such services are billed either to the patient or a third- party payer, including Medicare. We recognize patient service revenue, net of contractual allowances, which we estimate based on the historical trend of our cash collections and contractual write-offs. Other management service fees are derived from management services where the Company provides billings and collections support to the clinics and where management services are provided based on state specific regulations known as the corporate practice of medicine (“CPM”). Under the CPM, a business corporation is precluded from practicing medicine or employing a physician to provide professional medical services. In these circumstances, the Company provides all administrative support to the physician-owned PC through an LLC. The PC is consolidated due to control by contract (an “MSA” – Management Services Agreement). The fees we derive from these management arrangements are either based on a predetermined percentage of the revenue of each clinic or a percentage mark up on the costs of the LLC. We recognize other management service revenue in the period in which services are rendered. These revenues are earned by IMAC Nashville and IMAC Management and are eliminated in consolidation to the extent owned. |
Patient Deposits | Patient Deposits Patient deposits are derived from patient payments in advance of services delivered. Our service lines include traditional and regenerative medicine. Regenerative medicine procedures are not paid by insurance carriers; therefore, the Company typically requires up-front payment from the patient for regenerative services and any co-pays and deductibles as required by the patient specific insurance carrier. For some patients, credit is provided through an outside vendor. In this case, the Company is paid from the credit card company and the risk is transferred to the credit card company for collection from the patient. These funds are accounted for as patient deposits until the procedures are performed at which point the patient deposit is recognized as patient service revenue. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amount of accounts receivable, accounts payable and acquisition liabilities approximate their respective fair values due to the short- term nature. The carrying amount of the line of credit and note payable approximates fair values due to their market interest rates. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable primarily consists of amounts due from third-party payers (non-governmental), governmental payers and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s condensed consolidated financial statements are recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimation of net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies’ denial of claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients. The Company’s accounts receivable from third-party payers are recorded net of estimated contractual adjustments and allowances from third-party payers, which are estimated based on the historical trend of the Company’s facilities’ cash collections and contractual write- offs, accounts receivable aging, established fee schedules, relationships with payers and procedure statistics. While changes in estimated reimbursement from third-party payers remain a possibility, the Company expects that any such changes would be minimal and, therefore, would not have a material effect on the Company’s financial condition or results of operations. The Company’s collection policies and procedures are based on the type of payer, size of claim and estimated collection percentage for each patient account. The operating systems used to manage the Company’s patient accounts provide for an aging schedule in 30-day increments, by payer, physician and patient. The Company analyzes accounts receivable at each of the facilities to ensure the proper collection and aged category. The operating systems generate reports that assist in the collection efforts by prioritizing patient accounts. Collection efforts include direct contact with insurance carriers or patients and written correspondence. |
Allowance for Doubtful Accounts, Contractual and Other Discounts | Allowance for Doubtful Accounts, Contractual and Other Discounts Management estimates the allowance for contractual and other discounts based on its historical collection experience and contracted relationship with the payers. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account may be written-off only after the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are made. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Additions and improvements to property and equipment are capitalized at cost. Depreciation of owned assets and amortization of leasehold improvements are computed using the straight-line method over the shorter of the estimated useful lives of the related assets or the lease term. The cost of assets sold or retired, and the related accumulated depreciation are removed from the accounts and any resulting gains or losses are reflected in other income (expense) for the year. Expenditures for maintenance and repairs are charged to expense as incurred. |
Intangible Assets | Intangible Assets The Company capitalizes the fair value of intangible assets acquired in business combinations. The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of each acquired business to its respective net tangible and intangible assets. Acquired intangible assets include trade names, non-compete agreements, customer relationships and contractual agreements. |
Goodwill | Goodwill The Company tests goodwill for impairment on an annual basis, or when events or circumstances indicate the fair value of a reporting unit is below its carrying value. Our goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in business combinations. The goodwill generated from the business combinations is primarily related to the value placed on the employee workforce and expected synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others, a significant decline in expected future cash flows, a significant adverse change in the business climate, and unforeseen competition. There was no goodwill impairment for the years presented. |
Long-Lived Assets | Long-Lived Assets Long-lived assets such as property and equipment and intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no impairments of long lived assets for the years presented. |
Advertising and Marketing | Advertising and Marketing The Company uses advertising and marketing to promote its services. Advertising and marketing costs are expensed as incurred. Advertising and marketing expense was $347,016 and $93,178 for the three months ended March 31, 2019 and 2018, respectively (unaudited). |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of the conversion option embedded in convertible debt. The weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would have an anti-dilutive effect. |
Income Taxes | Income Taxes IMAC Management, IMAC Texas, and IMAC Nashville are limited liability companies and are taxed as partnerships. IMAC Holdings was taxed as a partnership through May 31, 2018. As a result, income tax liabilities are passed through to the individual members. Accordingly, no provision for income taxes were reflected in the condensed consolidated financial statements for periods prior to May 31, 2018 at which time IMAC Holdings converted from a limited liability company to a Delaware corporation. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. Interest and penalties related to income tax matters, if any, would be recognized as a component of income tax expense. For the three months ended March 31, 2019 and 2018, the Company had no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. Currently, the tax years subsequent to 2016 are open and subject to examination by the taxing authorities. |
Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04 “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. This update simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases” which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. The ASU was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We recognized a right of use asset and related obligation on our condensed consolidated financial statements. |
Concentration of Credit Risks (
Concentration of Credit Risks (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of Concentration Risk | The Company had the following revenue and accounts receivable concentrations: March 31, 2019 2018 % of Revenue % of Accounts Receivable % of Revenue % of Accounts Receivable (unaudited) Patient payment 54 % 54 % 64 % 64 % Medicare payment 22 % 22 % 13 % 13 % Insurance payment 24 % 24 % 23 % 23 % Total 100 % 100 % 100 % 100 % |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following at March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 (unaudited) Gross accounts receivable $ 727,976 $ 314,185 Less: allowance for doubtful accounts and contractual adjustments (62,896 ) (10,555 ) Accounts receivable, net $ 665,080 $ 303,630 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of consideration paid and the allocation of purchase price to the fair value of net assets acquired for the business acquisitions: IMAC Kentucky IMAC St. Louis Advantage Therapy BioFirma Property & equipment $ 607,257 $ - $ 18,647 $ - Intangible Assets 4,224,113 264,000 37,000 1,429 Goodwill - 1,327,507 713,189 - Other assets 5,521 - 255,018 - Current liabilities (119,902 ) - (50,948 ) - Noncurrent liabilities (118,413 ) - (79,975 ) - Non-controlling interest - - - (429 ) $ 4,598,576 $ 1,591,507 $ 892,931 $ 1,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The Company’s property and equipment consisted of the following: Estimated March 31, December 31, Useful Life in Years 2019 2018 Land and Building 40 $ 1,175,000 $ 1,175,000 Leasehold improvements Shorter of asset or lease term 1,614,778 1,427,828 Equipment 1.5 - 7 1,557,646 1,180,093 Total property and equipment 4,347,424 3,782,921 Less: accumulated depreciation (1,126,241 ) (449,283 ) Total property and equipment, net $ 3,221,183 $ 3,333,638 |
Intangibles Assets and Goodwi_2
Intangibles Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets that were acquired in connection with the business acquisition transactions (Note 6) during 2018 were as follows: December 31, 2018 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreement 10 years $ 4,224,113 $ (211,206 ) $ 4,012,907 Non-compete agreements 301,000 (56,473 ) 244,527 Definite lived assets 3 years 4,525,113 (267,679 ) 4,257,434 Goodwill 2,042,125 - 2,042,125 Total intangible assets and goodwill $ 6,567,238 $ (267,679 ) $ 6,299,559 March 31, 2019 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreement 10 years $ 4,224,113 $ (316,808 ) $ 3,907,305 Non-compete agreements 301,000 (81,557 ) 219,443 Definite lived assets 3 years 4,525,113 (398,365 ) 4,126,748 Goodwill 2,042,125 - 2,042,125 Total intangible assets and goodwill $ 6,567,238 $ (398,365 ) $ 6,168,873 |
Schedule of Future Amortization of Intangible Assets | The Company’s estimated future amortization of intangible assets was as follows: Years Ending December 31, 2019 (nine months) $ 392,058 2020 522,744 2021 466,273 2022 422,411 2023 422,411 Thereafter 1,900,851 $ 4,126,748 |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Operating Lease Right of Use Assets | Right of use assets are included in the unaudited condensed consolidated Balance Sheet as follows: Non-current assets Right of use assets, net of amortization $ 4,027,124 Total operating lease cost |
Schedule of Operating Lease Cost | Individual components of the total lease cost incurred by the Company is as follows: Three Months Ended March 31, 2019 Operating lease expense $ 208,912 Minimum rental payments under operating leases are recognized on a straight light basis over the term of the lease. Maturity of operating leases |
Schedule of Future Minimum Lease Payments | The amount of future minimum lease payments under operating are as follows: Operating Lease Undiscounted future minimum lease payments: 2019 (remainder of year) $ 637,733 2020 794,101 2021 643,082 2022 641,947 2023 611,158 Thereafter 1,100,783 Total 4,428,803 Amount representing imputed interest (393,813 ) Total operating lease liability 4,034,990 Current portion of operating lease liability (724,587 ) Operating lease liability, non-current $ 3,310,403 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | March 31, 2019 December 31, 2018 Note payable to The Edward S. Bredniak Trust in the amount of up to $2,000,000. An existing note payable with this entity in the amount of $379,676 has been combined into the new note payable. The note carries an interest rate of 10% per annum and all outstanding balances are due and payable December 31, 2019. $ 1,684,426 $ 1,584,426 Note payable to a financial institution in the amount of $200,000 dated November 15, 2017. The note requires 66 consecutive monthly installments of $2,652 including principal and interest at 5%, with a balloon payment of $60,000 which was paid on June 15, 2018. The note matures on May 15, 2023, and is secured by the personal guarantees of the Company’s management. 119,259 125,670 Convertible notes issued to various investors, which accrued interest at 4%, and converted to common stock in connection with the closing of the Company’s initial public offering. See Note 13. The notes were convertible to equity at or prior to maturity at a 20% discount to the per share price of a sale of equity securities. At the time of issuance of the convertible notes, the Company was unable to calculate the amount of a beneficial conversion (“BCF”) and related discount to be recorded until the occurrence of a qualified financing by the Company. Upon the closing of the Company’s initial public offering, the Company recognized the BCF and related interest charge associated with the discount, and the BCF has been classified as a liability to the extent it met the conditions for derivative treatment at the time of recognition. - 1,540,000 $1.2 million mortgage loan with a financial institution. The loan agreement is for 6-months and carries an interest rate 3.35%. The loan matured in 2018 and was extended to 2019. It is currently interest only and is now on a month to month basis. 1,232,500 1,232,500 Note payable to a financial institution in the amount of $131,400 dated August 1, 2016. The note requires 120 monthly installments of $1,394 including principal and interest at 5%. The note matures on July 1, 2026 and is secured by a letter of credit. 102,498 105,374 Note payable to a financial institution in the amount of $200,000 dated May 4, 2016. The note requires 60 monthly installments of $3,881 including principal and interest at 4.25%. The note matures on May 4, 2021 and is secured by the equipment and personal guarantees of the Company’s management. 96,232 106,778 Note payable to an employee in the amount of $101,906 dated March 8, 2017. The note requires 5 annual installments of $23,350 including principal and interest at 5%. The note matures on December 31, 2021 and is unsecured. 60,000 60,000 Note payable to a financial institution in the amount of $133,555 dated September 17, 2014. The note requires 60 monthly installments of $2,475 including principal and interest at 4.25%. The note matures on September 17, 2019. 14,625 21,845 3,309,540 4,776,593 Less: current portion: (3,032,686 ) (4,459,302 ) $ 276,854 $ 317,291 |
Schedule of Principal Maturities of Notes Payable | Principal maturities of the Company’s notes payable are as follows: Years Ending December 31, Amount 2019 (nine months) $ 3,012,357 2020 104,435 2021 80,968 2022 43,935 2023 27,404 Thereafter 40,441 Total $ 3,309,540 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Statutory Federal Income Tax Rate | The sources and tax effects of the differences are as follows: Deferred tax benefit at the federal statutory rate 21 % Valuation allowance -21 % 0 % |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Aug. 31, 2018 | |
Cash equivalents | ||||
Impairments of long lived assets | ||||
Advertising and marketing expense | $ 347,016 | $ 93,178 | ||
Advantage Hand Therapy and Orthopedic Rehabilitation, LLC [Member] | ||||
Percentage of voting interest acquired | 100.00% | |||
BioFirma LLC [Member] | ||||
Percentage of voting interest acquired | 70.00% |
Capital Requirements, Liquidi_2
Capital Requirements, Liquidity and Going Concern Considerations (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Working capital | $ 2,400,000 | $ 13,100,000 | ||
Net loss | (1,599,187) | $ (404,664) | ||
Net cash (used in) operating activities | (894,149) | (576,541) | ||
Proceeds from initial public offering, net of related fees | $ 4,356,815 | 3,839,482 | ||
Extinguished liabilities | $ 7,200,000 | |||
Common Stock [Member] | ||||
Common stock issued for initial public offering | 850,000 | |||
Proceeds from initial public offering, net of related fees | $ 4,300,000 |
Concentration of Credit Risks_2
Concentration of Credit Risks (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Risks and Uncertainties [Abstract] | ||
FDIC insured amount | $ 250,000 | |
Cash and cash equivalents in excess of FDIC | $ 2,536,458 | $ 0 |
Concentration of Credit Risks -
Concentration of Credit Risks - Schedule of Concentration Risk (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue [Member] | ||
Concentration of credit risk, percentage | 100.00% | 100.00% |
Revenue [Member] | Patient Payment [Member] | ||
Concentration of credit risk, percentage | 54.00% | 64.00% |
Revenue [Member] | Medicare Payment [Member] | ||
Concentration of credit risk, percentage | 22.00% | 13.00% |
Revenue [Member] | Insurance Payment [Member] | ||
Concentration of credit risk, percentage | 24.00% | 23.00% |
Accounts Receivable [Member] | ||
Concentration of credit risk, percentage | 100.00% | 100.00% |
Accounts Receivable [Member] | Patient Payment [Member] | ||
Concentration of credit risk, percentage | 54.00% | 64.00% |
Accounts Receivable [Member] | Medicare Payment [Member] | ||
Concentration of credit risk, percentage | 22.00% | 13.00% |
Accounts Receivable [Member] | Insurance Payment [Member] | ||
Concentration of credit risk, percentage | 24.00% | 23.00% |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Gross accounts receivable | $ 727,976 | $ 314,185 |
Less: allowance for doubtful accounts and contractual adjustments | (62,896) | (10,555) |
Accounts receivable, net | $ 665,080 | $ 303,630 |
Business Acquisitions (Details
Business Acquisitions (Details Narrative) - USD ($) | Aug. 31, 2018 | Aug. 01, 2018 | Jun. 01, 2018 | Jun. 30, 2018 | Mar. 31, 2019 |
CMA of Kentucky and IMAC St. Louis [Member] | |||||
Business acquisition, consideration amount | $ 6,100,000 | ||||
IMAC Nashville [Member] | |||||
Business acquisition, consideration amount | $ 300,000 | ||||
Business acquisition, non-controlling interest | $ 300,000 | ||||
Membership interest percentage | 25.00% | ||||
Advantage Therapy and BioFirma [Member] | |||||
Consideration amount payable in cash | $ 900,000 | ||||
IMAC of St. Louis, LLC [Member] | |||||
Business acquisition, consideration amount | $ 1,490,632 | ||||
Membership interest percentage | 64.00% | ||||
Ownership percentage | 100.00% | ||||
Advantage Hand Therapy and Orthopedic Rehabilitation, LLC [Member] | |||||
Business acquisition, non-controlling interest | |||||
Membership interest percentage | 100.00% | ||||
Estimated purchase price of membership units | $ 892,000 | ||||
Advantage Hand Therapy and Orthopedic Rehabilitation, LLC [Member] | Cash [Member] | |||||
Estimated purchase price of membership units | 22,000 | ||||
Advantage Hand Therapy and Orthopedic Rehabilitation, LLC [Member] | Equity [Member] | |||||
Estimated purchase price of membership units | $ 870,000 | ||||
BioFirma LLC [Member] | |||||
Business acquisition, non-controlling interest | $ 429 | ||||
Membership interest percentage | 70.00% | ||||
Percentage of outstanding membership units | 70.00% | ||||
Payments to acquire business gross | $ 1,000 |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill | $ 2,042,125 | $ 2,042,125 |
IMAC Kentucky [Member] | ||
Property & equipment | 607,257 | |
Intangible Assets | 4,224,113 | |
Goodwill | ||
Other assets | 5,521 | |
Current liabilities | (119,902) | |
Noncurrent liabilities | (118,413) | |
Non-controlling interest | ||
Net Assets Acquired | 4,598,576 | |
IMAC St. Louis [Member] | ||
Property & equipment | ||
Intangible Assets | 264,000 | |
Goodwill | 1,327,507 | |
Other assets | ||
Current liabilities | ||
Noncurrent liabilities | ||
Non-controlling interest | ||
Net Assets Acquired | 1,591,507 | |
Advantage Hand Therapy and Orthopedic Rehabilitation, LLC [Member] | ||
Property & equipment | 18,647 | |
Intangible Assets | 37,000 | |
Goodwill | 713,189 | |
Other assets | 255,018 | |
Current liabilities | (50,948) | |
Noncurrent liabilities | (79,975) | |
Non-controlling interest | ||
Net Assets Acquired | 892,931 | |
BioFirma LLC [Member] | ||
Property & equipment | ||
Intangible Assets | 1,429 | |
Goodwill | ||
Other assets | ||
Current liabilities | ||
Noncurrent liabilities | ||
Non-controlling interest | (429) | |
Net Assets Acquired | $ 1,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Depreciation | $ 154,881 | $ 31,268 | |
Lexington Kentucky [Member] | |||
Payments to acquire real estate | $ 1,200,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Total property and equipment | $ 4,347,424 | $ 3,782,921 |
Less: accumulated depreciation | (1,126,241) | (449,283) |
Total property and equipment, net | $ 3,221,183 | 3,333,638 |
Land and Building [Member] | ||
Estimated Useful Life in Years | 40 years | |
Total property and equipment | $ 1,175,000 | 1,175,000 |
Leasehold Improvements [Member] | ||
Estimated Useful Life | Shorter of asset or lease term | |
Total property and equipment | $ 1,614,778 | 1,427,828 |
Equipment [Member] | ||
Total property and equipment | $ 1,557,646 | $ 1,180,093 |
Equipment [Member] | Minimum [Member] | ||
Estimated Useful Life in Years | 1 year 6 months | |
Equipment [Member] | Maximum [Member] | ||
Estimated Useful Life in Years | 7 years |
Intangibles Assets - Schedule o
Intangibles Assets - Schedule of Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Intangible assets, cost | $ 3,907,305 | $ 4,525,113 |
Intangible assets, Accumulated Amortization | (398,365) | (267,679) |
Intangible assets, net | 4,126,748 | 4,257,434 |
Intangible assets, including goodwill, cost | 6,567,238 | 6,567,238 |
Goodwill | 2,042,125 | 2,042,125 |
Total intangible assets and goodwill | $ 6,168,873 | $ 6,299,559 |
Definite Lived Assets [Member] | ||
Intangible assets, estimated useful life | 3 years | 3 years |
Intangible assets, cost | $ 4,525,113 | $ 4,525,113 |
Intangible assets, Accumulated Amortization | (398,365) | (267,679) |
Intangible assets, net | $ 4,126,748 | $ 4,257,434 |
Management Service Agreement [Member] | ||
Intangible assets, estimated useful life | 10 years | 10 years |
Intangible assets, cost | $ 4,224,113 | $ 4,224,113 |
Intangible assets, Accumulated Amortization | (316,808) | (211,206) |
Intangible assets, net | 3,907,305 | 4,012,907 |
Non Compete Agreement [Member] | ||
Intangible assets, cost | 301,000 | 301,000 |
Intangible assets, Accumulated Amortization | (81,557) | (56,473) |
Intangible assets, net | $ 219,443 | $ 244,527 |
Intangibles Assets - Schedule_2
Intangibles Assets - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 (nine months) | $ 392,058 | |
2020 | 522,744 | |
2021 | 466,273 | |
2022 | 422,411 | |
2023 | 422,411 | |
Thereafter | 1,900,851 | |
Total | $ 4,126,748 | $ 4,257,434 |
Operating Leases - Summary of R
Operating Leases - Summary of Right of Use Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Right of use assets, net of amortization | $ 4,027,124 |
Operating Leases - Summary of I
Operating Leases - Summary of Individual Components of Total Lease Cost (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 208,912 |
Operating Leases - Schedule of
Operating Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2019 (remainder of year) | $ 637,733 | |
2020 | 794,101 | |
2021 | 643,082 | |
2022 | 641,947 | |
2023 | 611,158 | |
Thereafter | 1,100,783 | |
Total | 4,428,803 | |
Amount representing imputed interest | (393,813) | |
Total operating lease liability | 4,034,990 | |
Current portion of operating lease liability | (724,587) | |
Operating lease liability, non-current | $ 3,310,403 |
Lines of Credit (Details Narrat
Lines of Credit (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Line of credit | $ 229,961 | $ 379,961 |
IMAC Regeneration Center of Nashville, P.C [Member] | ||
Line of credit | $ 150,000 | |
Line of credit, maturity date | Oct. 15, 2018 | |
Line of credit, interest rate | 6.50% | |
Line of credit, repayment date | 2019-02 | |
IMAC Regeneration Center of Nashville, P.C [Member] | Line of Credit [Member] | ||
Line of credit | $ 150,000 | |
IMAC Regeneration Center of Kentucky [Member] | ||
Line of credit, maturity date | Aug. 1, 2018 | |
Line of credit, interest rate | 4.25% | |
IMAC Regeneration Center of Kentucky [Member] | Line of Credit [Member] | ||
Line of credit | $ 150,000 | 150,000 |
Advantage Theraphy [Member] | ||
Line of credit | $ 100,000 | |
Line of credit, maturity date | Nov. 20, 2020 | |
Line of credit, interest rate | 6.00% | |
Advantage Theraphy [Member] | Line of Credit [Member] | ||
Line of credit | $ 79,961 | $ 79,975 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Notes payable | $ 3,309,540 | $ 4,776,593 |
Less: current portion | (3,032,686) | (4,459,302) |
Notes payable, net of current portion | 276,854 | 317,291 |
Notes Payable [Member] | ||
Notes payable | 1,684,426 | 1,584,426 |
Notes Payable One [Member] | ||
Notes payable | 119,259 | 125,670 |
Notes Payable Two [Member] | ||
Notes payable | 1,540,000 | |
Notes Payable Three [Member] | ||
Notes payable | 1,232,500 | 1,232,500 |
Notes Payable Four [Member] | ||
Notes payable | 102,498 | 105,374 |
Notes Payable Five [Member] | ||
Notes payable | 96,232 | 106,778 |
Notes Payable Six [Member] | ||
Notes payable | 60,000 | 60,000 |
Notes Payable Seven [Member] | ||
Notes payable | $ 14,625 | $ 21,845 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) | Jun. 01, 2018USD ($) | Nov. 15, 2017USD ($)Integer | Mar. 08, 2017USD ($)Integer | Aug. 01, 2016USD ($)Integer | May 04, 2016USD ($)Integer | Sep. 17, 2014USD ($)Integer | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 15, 2018USD ($) | Mar. 31, 2018USD ($) | Jan. 31, 2018 |
Notes payable | $ 3,309,540 | $ 4,776,593 | |||||||||
Notes Payable [Member] | |||||||||||
Debt instrument face amount | $ 2,000,000 | ||||||||||
Notes payable | $ 379,676 | ||||||||||
Debt instrument interest rate | 10.00% | ||||||||||
Debt instrument maturity date | Dec. 31, 2019 | ||||||||||
Notes Payable One [Member] | |||||||||||
Notes payable | $ 200,000 | ||||||||||
Debt instrument interest rate | 5.00% | ||||||||||
Debt instrument maturity date | May 15, 2023 | ||||||||||
Number of installments | Integer | 66 | ||||||||||
Debt instrument, periodic payment | $ 2,652 | ||||||||||
Debt instrument balloon payment | $ 60,000 | ||||||||||
Notes Payable Two [Member] | |||||||||||
Debt instrument interest rate | 4.00% | ||||||||||
Debt instrument discount, percentage | 20.00% | ||||||||||
Notes Payable Three [Member] | |||||||||||
Debt instrument face amount | $ 1,200,000 | ||||||||||
Debt instrument interest rate | 3.35% | ||||||||||
Notes Payable Four [Member] | |||||||||||
Notes payable | $ 131,400 | ||||||||||
Debt instrument interest rate | 5.00% | ||||||||||
Debt instrument maturity date | Jul. 1, 2026 | ||||||||||
Number of installments | Integer | 120 | ||||||||||
Debt instrument, periodic payment | $ 1,394 | ||||||||||
Notes Payable Five [Member] | |||||||||||
Notes payable | $ 200,000 | ||||||||||
Debt instrument interest rate | 4.25% | ||||||||||
Debt instrument maturity date | May 4, 2021 | ||||||||||
Number of installments | Integer | 60 | ||||||||||
Debt instrument, periodic payment | $ 3,881 | ||||||||||
Notes Payable Six [Member] | |||||||||||
Notes payable | $ 101,906 | ||||||||||
Debt instrument interest rate | 5.00% | ||||||||||
Debt instrument maturity date | Dec. 31, 2021 | ||||||||||
Number of installments | Integer | 5 | ||||||||||
Debt instrument, periodic payment | $ 23,350 | ||||||||||
Notes Payable Seven [Member] | |||||||||||
Notes payable | $ 133,555 | ||||||||||
Debt instrument interest rate | 4.25% | ||||||||||
Debt instrument maturity date | Sep. 17, 2019 | ||||||||||
Number of installments | Integer | 60 | ||||||||||
Debt instrument, periodic payment | $ 2,475 |
Notes Payable - Schedule of Pri
Notes Payable - Schedule of Principal Maturities of Notes Payable (Details) | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2019 (nine months) | $ 3,012,357 |
2020 | 104,435 |
2021 | 80,968 |
2022 | 43,935 |
2023 | 27,404 |
Thereafter | 40,441 |
Total | $ 3,309,540 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Due to related party | |||
SpeakLife [Member] | |||
Services fee | $ 99,000 | ||
UCI [Member] | |||
Services fee | $ 144,000 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | Feb. 12, 2019 | Jun. 01, 2018 | Feb. 28, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Number of units authorized | 400 | ||||
Number of units issued | 365 | ||||
Number of units outstanding | 365 | ||||
Conversion of units into shares, shares | 6,582,737 | ||||
Shares issued price per share | $ 0.001 | ||||
Reverse split of common stock outstanding | 4,533,623 | ||||
Gross proceeds from initial public offering | $ 4,356,815 | $ 3,839,482 | |||
2018 Business Acquisitions [Member] | |||||
Stock issued during period, acquisitions | 1,410,183 | ||||
4% Convertible Notes [Member] | |||||
Stock issued during period, conversion of securities | 449,217 | ||||
Debt instrument, interest rate | 4.00% | ||||
Common Stock [Member] | |||||
Number of shares issued during period, shares | 850,000 | ||||
Gross proceeds from initial public offering | $ 4,300,000 | ||||
Stock issued during period, conversion of securities | 449,217 | ||||
Stock issued during period, acquisitions | 1,410,183 | ||||
Initial Public Offering [Member] | Common Stock [Member] | |||||
Number of shares issued during period, shares | 850,000 | ||||
Initial Public Offering [Member] | Warrants to Purchase Common Stock [Member] | |||||
Number of shares issued during period, shares | 1,700,000 | ||||
Initial Public Offering [Member] | Stock Options [Member] | |||||
Number of shares issued during period, shares | 34,000 |
Retirement Plan (Details Narrat
Retirement Plan (Details Narrative) - 401(k) Plan [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Matching contributions, percentage of match | 50.00% | 50.00% |
Matching contributions, percent of employees' gross pay | 6.00% | 6.00% |
Matching contributions, amount | $ 7,407 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating loss carryforward, net | $ 3,700,000 |
Operating loss carryforward, description | If not used, this carryforward will begin to expire in 2029. The deferred tax asset relating to the operating loss carryforward has been fully reserved at March 31, 2019. |
Income Taxes - Schedule of Stat
Income Taxes - Schedule of Statutory Federal Income Tax Rate (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Deferred tax benefit at the federal statutory rate | 21.00% |
Valuation allowance | (21.00%) |
Statutory federal income tax rate |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Apr. 22, 2019 | Apr. 19, 2019 |
Dr. Jason Hui [Member] | March 31, 2020 [Member] | ||
Subsequent Event [Line Items] | ||
Base salary | $ 350,000 | |
Dr. Jason Hui [Member] | April 1, 2020 through March 31, 2021 [Member] | ||
Subsequent Event [Line Items] | ||
Base salary | 355,000 | |
Dr. Jason Hui [Member] | April 1, 2021 through March 31, 2022 [Member] | ||
Subsequent Event [Line Items] | ||
Base salary | $ 360,000 | |
Merger Agreement [Member] | Restricted Stock [Member] | ||
Subsequent Event [Line Items] | ||
Stock issued during period, conversion of securities | 1,002,306 |