IMAC Holdings, Inc. (NASDAQ:IMAC), a Delaware-based outpatient medical facilities provider, has entered into a securities purchase agreement with accredited investors, securing $3.74 million through a private investment in public equity (PIPE) financing. The transaction, finalized on November 12, 2024, involves the sale of Series G convertible preferred stock and accompanying warrants.
The company issued 4,675 shares of Series G preferred stock, each coupled with a warrant, at a purchase price of $800 per unit. The proceeds have been partly used to repay $2.24 million of the company's outstanding promissory notes, with the remaining funds earmarked for general corporate purposes.
Series G preferred stockholders are entitled to a 10% annual dividend, payable in common stock shares, subject to certain conditions. If these conditions are not met, dividends will be capitalized by increasing the stock's stated value. The preferred stock is convertible into common stock at a fixed price of $1.57 per share, subject to adjustments.
Additionally, IMAC Holdings has signed a Common Stock Purchase Agreement with an equity line investor, granting the company the right to sell up to $60 million in common stock shares to the investor. The agreement is contingent upon SEC approval and other conditions, including the filing of a registration statement for the resale of the shares.
The investor, in turn, is obligated to purchase the shares, with the company controlling the timing and amount of any sales. The company has also committed to using 25% of any proceeds from the sale to redeem certain outstanding preferred stock at a premium.
In connection with these financing arrangements, IMAC Holdings has entered into an amendment with holders of its existing preferred stock and related warrants. This amendment removes the requirement for stockholder approval for below-market issuances and eliminates certain adjustment rights previously granted to holders.
The securities and shares were offered and sold under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D, which exempts transactions by an issuer not involving any public offering.
This report is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information presented is for informational purposes only and does not represent investment advice.
In other recent news, IMAC Holdings has announced significant developments. The company welcomed Jeffrey Busch to its Board of Directors, following the acquisition of certain assets from Theralink Technologies. Busch, who has an extensive background in medical and pharmaceutical investments, is expected to bring valuable insights to IMAC Holdings.
The company also amended its 2018 Incentive Compensation Plan, increasing the number of shares authorized for issuance. This move was approved by stockholders, along with the election of five board-nominated directors and the ratification of Marcum LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024.
IMAC Holdings has also regained compliance with Nasdaq's minimum stockholders’ equity requirement, following strategic measures including the acquisition of assets from Theralink Technologies. However, the company will be under a one-year monitoring period by Nasdaq to ensure ongoing compliance.
In addition to Busch's appointment, the company expanded its Board of Directors with the appointment of Dr. Peter Beitsch and Dr. Matthew Schwartz, both experts in the oncology field. These developments are part of IMAC Holdings' ongoing efforts to strengthen its governance and financial oversight.
InvestingPro Insights
IMAC Holdings' recent PIPE financing and equity line agreement come at a critical time for the company, as revealed by InvestingPro data. The company's market capitalization stands at a modest $1.93 million, reflecting its current financial challenges. InvestingPro Tips highlight that IMAC suffers from weak gross profit margins and is not profitable over the last twelve months, with a negative gross profit of $0.86 million for the same period.
The company's financial strain is further evidenced by its short-term obligations exceeding liquid assets, as noted in another InvestingPro Tip. This context underscores the importance of the recent $3.74 million financing and the potential $60 million equity line for IMAC's liquidity and operational needs.
Investors should note that IMAC's stock has taken a significant hit over the last six months, with a price total return of -63.76%. This decline aligns with the company's financial struggles and may have influenced the terms of the recent financing agreements.
For those considering IMAC Holdings, it's worth noting that InvestingPro offers 6 additional tips that could provide further insights into the company's financial health and prospects. These additional tips, available with an InvestingPro subscription, could be valuable for investors assessing the potential impact of IMAC's recent financing moves on its future performance.
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