Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 14, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | IMAC Holdings, Inc. | |
Entity Central Index Key | 0001729944 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,839,973 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 2,802,769 | $ 373,689 |
Accounts receivable, net | 1,489,872 | 1,258,325 |
Deferred compensation, current portion | 263,859 | 312,258 |
Other assets | 336,958 | 633,303 |
Total current assets | 4,893,458 | 2,577,575 |
Property and equipment, net | 3,293,992 | 3,692,009 |
Other assets: | ||
Goodwill | 2,040,696 | 2,040,696 |
Intangible assets, net | 7,081,218 | 7,169,072 |
Deferred equity costs | 143,655 | 170,274 |
Deferred compensation, net of current portion | 356,085 | 549,563 |
Security deposits | 451,284 | 499,488 |
Right of use asset | 3,600,198 | 3,719,401 |
Total other assets | 13,673,136 | 14,148,494 |
Total assets | 21,860,586 | 20,418,078 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,543,165 | 2,909,666 |
Patient deposits | 351,142 | 189,691 |
Notes payable, current portion, net of deferred loan costs | 4,471,874 | 1,422,554 |
Finance lease obligation, current portion | 17,853 | 17,473 |
Line of credit | 79,961 | 79,961 |
Liability to issue common stock, current portion | 326,356 | 421,044 |
Operating lease liability, current portion | 980,967 | 1,025,247 |
Total current liabilities | 8,771,318 | 6,065,636 |
Long-term liabilities: | ||
Notes payable, net of current portion | 1,232,677 | 2,109,065 |
Finance lease obligation, net of current portion | 57,542 | 66,565 |
Liability to issue common stock, net of current portion | 362,979 | 578,866 |
Operating lease liability, net of current portion | 3,482,242 | 3,660,654 |
Other non-current liabilities | 30,000 | |
Total liabilities | 13,936,758 | 12,480,786 |
Stockholders' equity: | ||
Preferred stock - $0.001 par value, 5,000,000 authorized, nil issued and outstanding at June 30, 2020 and December 31, 2019 | ||
Common stock - $0.001 par value, 30,000,000 authorized, 11,839,973 and 8,913,258 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 11,834 | 8,907 |
Additional paid-in capital | 24,079,504 | 20,050,634 |
Accumulated deficit | (13,806,283) | (10,042,050) |
Non-controlling interest | (2,361,227) | (2,080,199) |
Total stockholders' equity | 7,923,828 | 7,937,292 |
Total liabilities and stockholders' equity | $ 21,860,586 | $ 20,418,078 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
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 | 11,839,973 | 8,913,258 |
Common stock, shares outstanding | 11,839,973 | 8,913,258 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Total revenue | $ 2,572,580 | $ 3,756,755 | $ 5,894,136 | $ 6,526,583 |
Operating expenses: | ||||
Patient expenses | 405,367 | 927,778 | 785,184 | 1,363,907 |
Salaries and benefits | 2,334,249 | 2,593,209 | 5,260,399 | 4,657,832 |
Share-based compensation | 121,945 | 171,590 | 203,029 | 175,339 |
Advertising and marketing | 174,350 | 349,328 | 416,167 | 696,344 |
Grant funds | (415,978) | (415,978) | ||
General and administrative | 1,208,457 | 1,429,822 | 2,444,595 | 2,407,191 |
Depreciation and amortization | 453,651 | 396,989 | 904,146 | 682,556 |
Total operating expenses | 4,282,041 | 5,868,716 | 9,597,542 | 9,983,169 |
Operating loss | (1,709,461) | (2,111,961) | (3,703,406) | (3,456,586) |
Other income (expense): | ||||
Interest income | 39 | 5 | 39 | 5 |
Other income (expenses) | 665 | (15,290) | ||
Beneficial conversion interest expense | (639,159) | |||
Loss on extinguishment of debt | (109,544) | (109,544) | ||
Loss on disposal of assets | (21,225) | (21,225) | ||
Interest expense | (134,921) | (85,210) | (211,125) | (115,881) |
Total other (expenses) | (265,651) | (84,540) | (341,855) | (770,325) |
Net loss before income taxes | (1,975,112) | (2,196,501) | (4,045,261) | (4,226,911) |
Income taxes | ||||
Net loss | (1,975,112) | (2,196,501) | (4,045,261) | (4,226,911) |
Net loss (income) attributable to the non-controlling interest | (55,576) | 295,733 | 281,028 | 726,956 |
Net loss attributable to IMAC Holdings, Inc. | $ (2,030,688) | $ (1,900,768) | $ (3,764,233) | $ (3,499,955) |
Net loss per share attributable to common stockholders Basic and diluted | $ (0.20) | $ (0.23) | $ (0.38) | $ (0.50) |
Weighted average common shares outstanding Basic and diluted | 10,184,294 | 8,106,177 | 9,897,773 | 7,018,559 |
Patient Revenues, Net [Member] | ||||
Total revenue | $ 2,572,580 | $ 3,756,755 | $ 5,881,649 | $ 6,526,583 |
Management Fees [Member] | ||||
Total revenue | $ 12,487 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Non-Controlling 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 | 4,553,623 | ||||
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 income (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) | 7,086,387 |
Balance, shares at Mar. 31, 2019 | 7,252,923 | ||||
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 | 4,553,623 | ||||
Net income (loss) | (4,226,911) | ||||
Balance at Jun. 30, 2019 | $ 8,317 | 18,676,639 | (2,352,796) | (7,044,775) | 9,287,385 |
Balance, shares at Jun. 30, 2019 | 8,316,798 | ||||
Balance at Mar. 31, 2019 | $ 7,253 | 14,280,204 | (2,057,063) | (5,144,007) | 7,086,387 |
Balance, shares at Mar. 31, 2019 | 7,252,923 | ||||
Issuance of common stock in connection with acquisitions | $ 1,002 | 4,072,436 | 4,073,438 | ||
Issuance of common stock in connection with acquisitions, shares | 1,002,306 | ||||
Exercise of warrants | $ 62 | 307,783 | 307,845 | ||
Exercise of warrants, shares | 61,569 | ||||
Issuance of employee stock options | 16,216 | 16,216 | |||
Net income (loss) | (295,733) | (1,900,768) | (2,196,501) | ||
Balance at Jun. 30, 2019 | $ 8,317 | 18,676,639 | (2,352,796) | (7,044,775) | 9,287,385 |
Balance, shares at Jun. 30, 2019 | 8,316,798 | ||||
Balance at Dec. 31, 2019 | $ 8,907 | 20,050,634 | (2,080,199) | (10,042,050) | 7,937,292 |
Balance, shares at Dec. 31, 2019 | 8,913,258 | ||||
Issuance of common stock | $ 1,096 | 1,376,122 | 1,377,218 | ||
Issuance of common stock, shares | 1,095,840 | ||||
Issuance of employee stock options | 38,359 | 38,359 | |||
Net income (loss) | (336,604) | (1,733,545) | (2,070,149) | ||
Balance at Mar. 31, 2020 | $ 10,003 | 21,465,115 | (2,416,803) | (11,775,595) | 7,282,720 |
Balance, shares at Mar. 31, 2020 | 10,009,098 | ||||
Balance at Dec. 31, 2019 | $ 8,907 | 20,050,634 | (2,080,199) | (10,042,050) | 7,937,292 |
Balance, shares at Dec. 31, 2019 | 8,913,258 | ||||
Net income (loss) | (4,045,261) | ||||
Balance at Jun. 30, 2020 | $ 11,834 | 24,079,504 | (2,361,227) | (13,806,283) | 7,923,828 |
Balance, shares at Jun. 30, 2020 | 11,839,973 | ||||
Balance at Mar. 31, 2020 | $ 10,003 | 21,465,115 | (2,416,803) | (11,775,595) | 7,282,720 |
Balance, shares at Mar. 31, 2020 | 10,009,098 | ||||
Issuance of common stock | $ 1,831 | 2,576,820 | 2,578,651 | ||
Issuance of common stock, shares | 1,830,875 | ||||
Issuance of employee stock options | 37,569 | 37,569 | |||
Net income (loss) | 55,576 | (2,030,688) | (1,975,112) | ||
Balance at Jun. 30, 2020 | $ 11,834 | $ 24,079,504 | $ (2,361,227) | $ (13,806,283) | $ 7,923,828 |
Balance, shares at Jun. 30, 2020 | 11,839,973 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (4,045,261) | $ (4,226,911) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 904,146 | 682,556 |
Beneficial conversion interest expense | 639,159 | |
Share based compensation | 203,029 | 175,339 |
Loss on disposition of assets | (16,577) | |
(Increase) decrease in operating assets: | ||
Accounts receivable, net | (210,707) | (259,712) |
Other assets | 299,721 | (98,685) |
Security deposits | 48,204 | (70,773) |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued expenses | (329,056) | 675,820 |
Patient deposits | 161,451 | 861,409 |
Lease incentive obligation | (57,262) | |
Net cash used in operating activities | (2,985,049) | (1,679,060) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (10,511) | (389,469) |
Purchase of license fee | (243,750) | |
Acquisition of IMAC Florida (Note 6) | (200,000) | |
Net cash used in investing activities | (454,261) | (389,469) |
Cash flows from financing activities: | ||
Proceeds from initial public offering, net of related fees | 3,839,482 | |
Proceeds from warrants exercised | 357,345 | |
Proceeds from issuance of common stock | 3,774,617 | |
Proceeds from notes payable | 2,891,520 | 100,000 |
Payments on notes payable | (719,104) | (54,377) |
Payments of debt issuance costs | (70,000) | |
Proceeds from line of credit | 20,000 | |
Payments on line of credit | (150,000) | |
Payments on finance lease obligation | (8,643) | (6,835) |
Net cash provided by financing activities | 5,868,390 | 4,105,615 |
Net increase in cash | 2,429,080 | 2,037,086 |
Cash, beginning of period | 373,689 | 194,316 |
Cash, end of period | 2,802,769 | 2,231,402 |
Supplemental cash flow information: | ||
Interest paid | 56,058 | 30,671 |
Non cash financing and investing: | ||
Debt discount notes payable | 115,000 | |
Business acquisition via stock issuance | $ 3,771,978 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2020 | |
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 open two (2) medical clinics located in Tennessee and opened or acquired through management service agreements thirteen (13) medical clinics located in Kentucky, Missouri, Illinois and Florida at June 30, 2020. The Company has partnered with several well-known sports stars such as Ozzie Smith, David Price, Tony Delk and Mike Ditka 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 12 – Stockholder’s Equity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Principles of Consolidation The accompanying 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” or the “Commission”). The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2020. 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”), IMAC Regeneration Management of Nashville, LLC (“IMAC Nashville”), IMAC Management of Illinois, LLC (“IMAC Illinois”) and IMAC Management of Florida, LLC (“IMAC Florida”); 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 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 consolidates Integrated Medical and Chiropractic Regeneration Center, PSC (“IMAC Kentucky”) due to control by contract. These entities are included in the condensed 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. On October 1, 2019, the Company acquired the 30% of BioFirma’s membership interests which were not previously held by the Company, resulting in the Company owning 100% of the membership interests of BioFirma. Substantially all the assets of BioFirma were sold effective December 31, 2019; however as of June 30, 2020, the acquirer of the assets had not paid the purchase price and the Company had established a bad debt reserve of 100% of the purchase price. In April 2019, the Company consummated certain transactions resulting in the acquisition of the outstanding equity interest in ISDI Holdings II, Inc., an Illinois corporation (“ISDI Holdings II”), and PHR Holdings, Inc., an Illinois corporation (“PHR Holdings”), entities which consolidate the results of Progressive Health and Rehabilitation, Ltd (“Progressive”) and Illinois Spine and Disc Institute, Ltd (“ISDI”) due to control by contract. These entities are included in the condensed consolidated financial statements from the date of acquisition. In November 2019, IMAC Illinois entered into a management agreement for an occupational and physical therapy practice in Rockford, Illinois. This entity is included in the condensed consolidated financial statements due to control by contract from the date of entry into the management agreement. In January 2020, the Company consummated an agreement for the acquisition of Chiropractic Health of Southwest Florida, Inc. (“CHSF”) in Bonita Springs, Florida. This entity is included in the condensed consolidated financial statements from the date of acquisition. 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. COVID-19 Pandemic On January 30, 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spread globally beyond the point of origin. On March 20, 2020 the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of these condensed consolidated financial statements. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s combined financial condition, liquidity and future results of operations. Management is actively monitoring the impact of the global situation on its consolidated financial condition, liquidity, operations, suppliers, industry and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020 beyond the results presented in these condensed consolidated financial statements and this quarterly report. CARES Act The Company is continuing to closely monitor legislative actions at the federal, state and local levels including the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and other governmental assistance that might be available in response to the COVID-19 pandemic. As part of the CARES Act, the United States government initially announced that it would offer $100 billion of relief to eligible health care providers. On April 7, 2020, Centers for Medicare and Medicaid Services ("CMS") officials indicated they would distribute $30 billion of direct grants to hospitals, ASCs and other health care providers based on how much they bill Medicare. Payments received from these grants are not required to be repaid provided the recipients attest to and comply with certain terms and conditions, including limitations on balance billing and not using funds received from the grants to reimburse expenses or losses that other sources are obligated to reimburse. The Company received approximately $416,000 of the grant funds distributed under the CARES Act Provider Relief Fund program during the six months ended June 30, 2020. Based on an analysis of the compliance and reporting requirements and the impact of the COVID-19 pandemic on our operating results through the end of the second quarter, these funds were recognized as a reduction in operating expenses under the caption Grant funds in the condensed consolidated statements of operations for the three- and six- months ended June 30, 2020. The recognition of amounts received is conditioned upon certification that payment will be used to prevent, prepare for and respond to the COVID-19 pandemic and shall reimburse the recipient only for healthcare related expenses or lost revenues that are attributable to the COVID-19 pandemic. Amounts are recognized as a reduction to operating costs and expenses only to the extent the Company is reasonably assured that underlying conditions are met. 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. Starting in January 2020, the Company implemented wellness maintenance programs on a subscription basis. There are three membership plans offered with different levels of service for each plan. The Company recognizes service revenues based upon the estimated amounts the Company expects to be entitled to receive from patients and third-party payers. Estimates of contractual adjustments are based upon the payment terms specified in the related contractual agreements. The Company also records estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record these revenues at the estimated amounts expected to be collected. 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. The company recognize other management service revenue in the period in which services are rendered. These revenues are earned by IMAC Nashville, IMAC Management and IMAC Illinois and are eliminated in consolidation to the extent owned. The Company’s patient revenue consisted of the following for the three and six months ended June 30, 2020 and June 30, 2019: Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Patient revenues $ 5,595,279 $ 8,887,819 $ 12,747,221 $ 16,176,841 Contractual adjustments (3,022,699 ) (5,131,064 ) (6,865,572 ) (9,650,258 ) Patient revenue, net $ 2,572,580 $ 3,756,755 $ 5,881,649 $ 6,526,583 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 rarely 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 and accounts payable 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 at June 30, 2020 and December 31, 2019. 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 is 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 payor, 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. Intangible assets are amortized on a straight-line basis over their estimated economic useful lives, generally the contract term. 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 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. The Company tests goodwill for impairment on an annual basis, and when events or circumstances indicate the fair value of a reporting unit may be below its carrying value. 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 $174,350 and $349,328 for the three months ended June 30, 2020 and 2019, respectively and was $416,167 and $696,344 for the six months ended June 30, 2020 and 2019, respectively. 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 Following the Company’s conversion to a Delaware corporation in 2018, IMAC Nashville, IMAC Texas, IMAC St. Louis continued as single-member limited liability companies (wholly owned by the Company) that are disregarded entities for tax purposes and do not file separate returns. Their activity is included as part of IMAC Holdings Inc. Advantage Therapy, IMAC Illinois and IMAC Florida are also disregarded entities for tax purposes. BioFirma was a limited liability company taxed as a partnership. Effective October 1, 2019, BioFirma became wholly owned by IMAC Holdings and is a disregarded entity for tax purposes. IMAC Management is a C-corporation and is included in the consolidated return of IMAC Holdings as a subsidiary. Any future benefit arising from losses have been offset by a valuation allowance. Accordingly, no provision for income taxes is reflected in the condensed consolidated financial statements. 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. At June 30, 2020 and December 31, 2019, 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 2017 are open and subject to examination by the taxing authorities. |
Capital Requirements, Liquidity
Capital Requirements, Liquidity and Going Concern Considerations | 6 Months Ended |
Jun. 30, 2020 | |
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 had a deficiency in working capital of approximately $3.9 million and $3.5 million at June 30, 2020 and December 31, 2019. The Company had a net loss of approximately $3.8 million and $3.5 million at June 30, 2020 and 2019, respectively, and used cash in operations of approximately $3.0 million and $1.7 million at June 30, 2020 and 2019, respectively. 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 June 30, 2020, the Company has received funding in the form of indebtedness and the issuance of common stock. Management plans to continue to raise funds and/or refinance our indebtedness to support our operations in 2020 and beyond. However, no assurances can be given that we 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 | 6 Months Ended |
Jun. 30, 2020 | |
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. The Company had approximately $1,724,713 of cash in excess of federally insured limits. Revenue and Accounts Receivable As of June 30, 2020 and December 31, 2019, the Company had the following revenue and accounts receivable concentrations: June 30, 2020 December 31, 2019 % of Revenue % of Accounts Receivable % of Revenue % of Accounts Receivable (Unaudited) Patient payment 33 % 29 % 47 % 40 % Medicare payment 41 % 28 % 27 % 26 % Insurance payment 26 % 43 % 26 % 34 % |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | Note 5 – Accounts Receivable As of June 30, 2020 and December 31, 2019, the Company’s accounts receivable consisted of the following: June 30, December 31, (Unaudited) Gross accounts receivable $ 1,518,854 $ 1,285,228 Less: allowance for doubtful accounts (28,982 ) (26,903 ) Accounts receivable, net $ 1,489,872 $ 1,258,325 |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business Acquisitions | Note 6 – Business Acquisitions 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. The Company has included the financial results of BioFirma in the condensed consolidated financial statements from August 1, 2018, the date of acquisition. On October 1, 2019, the holder of the 30% of the membership interests of BioFirma and the Company entered into an Assignment and Assumption of Interests of BioFirma LLC, pursuant to which the Company acquired the 30% of BioFirma’s membership interests which were not previously held by the Company, resulting in the Company owning 100% of the membership interests of BioFirma. On December 31, 2019, the Company and BioFirma consummated the sale of substantially all of BioFirma’s assets pursuant to an asset purchase agreement with Self Care Regeneration LLC for a purchase price of $320,800, plus the assumption of certain of BioFirma’s liabilities, all of which were due to be paid to us no later than March 30, 2020. On March 31, 2020, the due date for the payment of the asset sale purchase price was extended to June 30, 2020. As of June 30, 2020, the acquirer of the assets had not paid the purchase price and the Company had established a bad debt reserve of 100% of the purchase price. IMAC Illinois On April 1, 2019, the Company and its wholly owned subsidiary IMAC Illinois 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. The acquisition was completed on April 19, 2019. Pursuant to the Merger Agreement, the Company issued 1,002,306 restricted shares of the Company’s common stock (the “Merger Consideration”) valued at approximately $4.1 million. The Company has included the financial results of IMAC Illinois, which controls the three Chicago-area clinics, from April 19, 2019, the date of acquisition. IMAC Florida On January 13, 2020, the Company and its wholly owned subsidiary IMAC Florida consummated the acquisition of CHSF, a chiropractic practice in Bonita Springs, Florida. The transaction was completed as a purchase of the practice for $200,000. The Company has included the financial results of IMAC Florida, which controls CHSF, from January 13, 2020, 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 acquisition of the IMAC Florida business: Florida Property & equipment $ 50,358 Customer lists 128,802 Other assets 20,840 $ 200,000 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 7 – Property and Equipment The Company’s property and equipment consisted of the following at June 30, 2020 and December 31, 2019: Estimated June 30, December 31, Land and building 40 (Building) $ 1,175,000 $ 1,175,000 Leasehold improvements Shorter of asset or lease term 2,249,673 2,262,398 Equipment 1.5 - 7 1,980,871 1,948,347 Total property and equipment 5,405,544 5,385,745 Less: accumulated depreciation (2,114,820 ) (1,693,736 ) 3,290,724 3,692,009 Construction in progress 3,268 - Total property and equipment, net $ 3,293,992 $ 3,692,009 Depreciation was $218,818 and $173,394 for the three months ended June 30, 2020 and 2019, respectively and $437,661 and $328,276 for the six months ended June 30, 2020 and 2019, respectively. |
Intangibles Assets and Goodwill
Intangibles Assets and Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles Assets and Goodwill | Note 8 – Intangibles Assets and Goodwill The Company’s intangible assets and goodwill consisted of the following at June 30, 2020 and December 31, 2019: June 30, 2020 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreements 10 years $ 7,940,398 $ (1,309,360 ) $ 6,631,038 Non-compete agreements 3 years 301,000 (206,972 ) 94,028 Customer lists 3 years 134,882 (22,480 ) 112,402 Definite lived assets 8,376,280 (1,538,812 ) 6,837,468 Research and development 243,750 - 243,750 Goodwill 2,040,696 - 2,040,696 Total intangible assets and goodwill $ 10,660,726 $ (1,538,812 ) $ 9,121,914 December 31, 2019 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreements 10 years $ 8,019,199 $ (994,321 ) $ 7,024,878 Non-compete agreements 3 years 301,000 (156,806 ) 144,194 Definite lived assets 8,320,199 (1,151,127 ) 7,169,072 Goodwill 2,040,696 - 2,040,696 Total intangible assets and goodwill $ 10,360,895 $ (1,151,127 ) $ 9,209,768 Amortization was $234,833 and $223,595 for the three months ended June 30, 2020 and 2019, respectively, and $466,485 and $354,280 for the six months ended June 30, 2020 and 2019, respectively. The Company’s estimated future amortization of intangible assets was as follows: Years Ending December 31, 2020 (six months) $ 469,666 2021 882,861 2022 839,000 2023 794,040 2024 794,040 Thereafter 3,057,861 $ 6,837,468 |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Operating Leases | Note 9 – Operating Leases On January 1, 2019, the Company adopted ASC 842 using the modified retrospective method applied to leases that were in place at January 1, 2019. Results for operating periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 840. The Company’s leases consist of operating leases that mostly relate to real estate rental agreements. Most of the value of the Company’s lease portfolio relates to real estate lease agreements that were entered into starting March 2017. Discount Rate Applied to Operating Leases 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 included in the Company’s condensed consolidated balance sheet were as follows: June 30, December 31, Non-current assets Right of use assets, net of amortization $ 3,600,198 $ 3,719,401 Total operating lease cost Individual components of the total lease cost incurred by the Company were as follows: Six Months June 30, 2020 Six Months June 30, 2019 Operating lease expense $ 618,508 $ 456,772 Minimum rental payments under operating leases are recognized on a straight light basis over the term of the lease. Maturity of operating leases The Company’s amount of future minimum lease payments under operating leases are as follows: Operating Undiscounted future minimum lease payments: 2020 (six months) $ 577,124 2021 1,035,714 2022 1,030,098 2023 939,971 2024 601,468 Thereafter 588,246 Total 4,772,621 Amount representing imputed interest (309,412 ) Total operating lease liability 4,463,209 Current portion of operating lease liability (980,967 ) Operating lease liability, non-current $ 3,482,242 |
Line of Credit
Line of Credit | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 10 – Line of Credit Advantage Therapy has a $100,000 line of credit with a financial institution that matures on November 20, 2020. The line accrues interest at a variable rate which is currently 6.0% per annum. The line is secured by substantially all of IMAC Holding’s assets. This line of credit had a balance of $79,961 at June 30, 2020 and December 31, 2019. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 11 – Notes Payable On March 25, 2020, the Company entered into a note purchase agreement with Iliad Research & Trading, L.P. (the “Holder”), pursuant to which the Company agreed to issue and sell to the Holder a secured promissory note (the “Note”) in an aggregate initial principal amount of $1,115,000 (the “Initial Principal Amount”), which is payable on or before the date that is 18 months from the issuance date (the “Maturity Date”). The Initial Principal Amount includes an original issue discount of $100,000 and $15,000 that the Company agreed to pay to the Holder to cover the Holder’s legal fees, accounting costs, due diligence and other transaction costs. In exchange for the Note, the Holder paid an aggregate purchase price of $1,000,000. Interest on the Note accrues at a rate of 10% per annum and is payable on the Maturity Date or otherwise in accordance with the Note. The Note may be prepaid by the Company (with the payment of a premium), may be required by the Holder to be redeemed by the Company for up to $200,000 per month after the six-month anniversary of the issuance of the Note (subject to certain deferral rights), and is subject to customary event of default (with a default interest rate of up to 22%). The Note transaction documents also give the Holder a right of first refusal to future debt issuances and a right to the first $250,000 of every $1 million of proceeds from future sales of equity by the Company. The Note is secured by the assets of the Company, other that the Company’s owned real property, intellectual property and accounts receivable, pursuant to a security agreement. On April 16, 2020, the Company entered into a loan with Pinnacle Bank as the lender (“Lender”) in an aggregate principal amount of $1,691,520 (the “Loan”) pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Loan is evidenced by a promissory note (the “PPP Note”) dated April 16, 2020 and matures on April 16, 2022. The PPP Note bears interest at a rate of 1.000% per annum, with the first six months of payments deferred. Principal and interest are payable monthly commencing on November 16, 2020 and may be prepaid by the Company at any time prior to maturity with no prepayment penalties. In order to be entitled to forgiveness, funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent utilities, and interest on other debt obligations under the terms and conditions outlined by the PPP. The Company intends to use all or a significant majority of the Loan amount for the qualifying expenses. The Loan will not be deemed restricted issuance pursuant to the terms of the note purchase agreement entered into by the Company and Iliad Research & Trading, L.P. on March 25, 2020. Set forth below is a summary of the Company’s outstanding debt as of June 30, 2020 and December 31, 2019: June 30, December 31, 2020 2019 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 which carries an interest rate of 10% per annum. The Note was amended in June 2019 and all outstanding balances are due January 5, 2021. $ 1,750,000 $ 1,750,000 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 certain Company executives. 86,107 99,628 $1.2 million mortgage loan with a financial institution. The loan agreement was originally for 6-months and carries an interest rate 3.35%. The loan matured in 2019. As of June 30, 2020, it was due on demand, with interest being paid monthly. This mortgage was repaid on July 24, 2020 (see Note 16 below). 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. 87,568 93,652 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 certain Company executives. 41,788 63,913 Note payable to an employee in the amount of $101,906 dated March 8, 2017. The note requires payment of five annual installments of $23,350, including principal and interest at 5%. The note matures on December 31, 2021, and is unsecured. 40,000 60,000 $112,800 payable to a landlord of Advantage Therapy, LLC pursuant to a lease dated March 1, 2019. The debt is payable in 60 monthly installments of $2,129, including principal and interest at 5%. The debt matures on June 1, 2024. 92,433 102,744 Note payable to a financial institution in the amount of $140,000, dated September 25, 2019. The note requires 36 consecutive monthly installments of $4,225 including principal and interest at 5.39%. The note matures on September 19, 2022 and is secured by a personal guarantee of the Vice President of Business Development of the Company. 107,119 129,182 Note payable to a financial institution in the amount of $1,691,520 dated April 16, 2020. The note requires 18 consecutive monthly installments, commencing on November 16, 2020, of $95,193 including principal and interest at 1.00%. The note matures on April 16, 2022. 1,691,520 - Note payable in the amount of $1,115,000, dated March 25, 2020. The note is payable on or before September 25, 2021. The interest on the note accrues at a rate of 10% per annum and is payable on the maturity date or otherwise in accordance with the note. 690,000 - Unamortized debt issuance costs (114,484 ) - 5,704,551 3,531,619 Less: current portion: (4,471,874 ) (1,422,554 ) $ 1,232,677 $ 2,109,065 Principal maturities of the Company’s notes payable are as follows: Years Ending December 31, Amount 2020 (six months) $ 2,083,113 2021 3,032,557 2022 484,184 2023 51,657 2024 27,631 Thereafter 25,409 Total $ 5,704,551 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 12 – Stockholders’ 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. On February 12, 2019, the Company completed a reverse split of its 6,582,737 shares of common stock 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. On April 19, 2019, the Company consummated the Merger Agreement and issued 1,002,306 shares of its common stock in Merger Consideration. On July 15, 2019, the Company signed a $10 million share purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), an Illinois limited liability company. In consideration for entering into the $10 million agreement, the Company issued to Lincoln Park 60,006 shares of Company common stock as a commitment fee. The Purchase Agreement limits our sales of shares of common stock to Lincoln Park to 1,669,359 shares of common stock, representing 19.99% of the shares of common stock outstanding on the date of the Purchase Agreement unless (a) stockholder approval is obtained to issue more than such amount or (b) the average price of all applicable sales of our common stock to Lincoln Park under the Purchase Agreement equals or exceeds the lower of (i) the closing price of our common stock on the Nasdaq Capital Market immediately preceding July 15, 2019 or (ii) the average of the closing price of our common stock on the Nasdaq Capital Market for the five business days immediately preceding July 15, 2019. As of June 30, 2020, pursuant to the Purchase Agreement, the Company sold an aggregate of 1,602,294 shares of common stock of the Company to Lincoln Park for aggregate proceeds to the Company of $2,424,053 (excluding the 60,006 shares issued to Lincoln Park as a commitment fee). On June 18, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with institutional accredited investors (the “Purchasers”) pursuant to which the Company offered for sale to the Purchasers an aggregate of 1,764,000 shares (the “Shares”) of its common stock, in a registered direct offering (the “Registered Direct Offering”). The Shares were offered by the Company pursuant to its shelf registration statement on Form S-3 (File No. 333-237455) originally filed with the SEC on March 27, 2020 (as amended, the “Registration Statement”), which was declared effective on April 3, 2020. The purchase price for one Share in the Registered Direct Offering was $1.50, and closing of the Registered Direct Offering occurred on June 22, 2020. The Company received $2.644 million in gross proceeds from the Registered Direct Offering. The Company used approximately $0.5 million of the gross proceeds for the repayment of certain indebtedness, and the remaining proceeds to the Company will be used to finance the costs of developing and acquiring additional outpatient medical clinics as part of the Company’s growth and expansion strategy and for working capital. 2018 Incentive Compensation Plan The Company’s board of directors and holders of a majority of outstanding shares approved and adopted the Company’s 2018 Incentive Compensation Plan (“2018 Plan”) in May 2018, reserving the issuance of up to 1,000,000 shares of common stock (subject to certain adjustments) upon exercise of stock options and grants of other equity awards. The 2018 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, other forms of equity compensation and performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to the Company’s non-employee directors and consultants, and affiliates. Stock Options As of June 30, 2020, the Company had issued stock options to purchase 452,872 shares of its common stock as non-qualified stock options to various employees of the Company. These options vest over a period of four years, with 25% vesting after one year and the remaining 75% vesting in equal monthly installments over the following 36 months and are exercisable for a period of ten years. Stock based compensation for stock options is estimated at the grant date based on the fair value calculated using the Black-Scholes method. The per-share fair values of these options is calculated based on the Black-Scholes-Merton pricing model with the following assumptions: a volatility rate of 32.2%, risk free rate of 2.4% and the expected term of 10 years. Restricted Stock Units On May 21, 2019, the Company granted an aggregate of 277,500 Restricted Stock Units (“RSUs”) to certain employees, executives and directors of the Company, the terms of which vest over various periods between the date of grant and May 21, 2023. On August 13, 2019, 30,000 shares of common stock were issued pursuant to previously granted RSUs which had vested as of such date. On May 21, 2020, the Company granted 10,000 RSUs to a director of the Company, which vested immediately. On June 30, 2020, 66,875 shares of common stock were issued pursuant to previously granted RSUs which had vested as of such date. |
Retirement Plan
Retirement Plan | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Note 13 – 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 $20,105 and $13,354 during the three months ended June 30, 2020 and 2019, respectively, and $39,795 and $20,761 during the six months ended June 30, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14 – Income Taxes The 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 June 30, 2020, the Company had 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 June 30, 2020. 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 | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 – 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. From time to time the Company may become subject to threatened and/or asserted claims arising in the ordinary course of our business. Management is not aware of any matters, either individually or in the aggregate, that are reasonably likely to have a material impact on the Company’s financial condition, results of operations or liquidity. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 - Subsequent Events On July 27, 2020, the Company sold real estate located in Lexington, Kentucky in a sale-leaseback transaction for a sale price of $1,300,000. The proceeds from the sale were used to repay a $1,232,000 mortgage owed by the Company. Simultaneous with the sale, the Company also entered a five-year leaseback of the sold property. In August 2020, the United States Food and Drug Administration (the “FDA”) approved its investigational new drug application. The Company plans to initiate enrollment for a Phase 1 clinical trial, to be conducted over a 12-month period. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying 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” or the “Commission”). The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2020. 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”), IMAC Regeneration Management of Nashville, LLC (“IMAC Nashville”), IMAC Management of Illinois, LLC (“IMAC Illinois”) and IMAC Management of Florida, LLC (“IMAC Florida”); 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 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 consolidates Integrated Medical and Chiropractic Regeneration Center, PSC (“IMAC Kentucky”) due to control by contract. These entities are included in the condensed 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. On October 1, 2019, the Company acquired the 30% of BioFirma’s membership interests which were not previously held by the Company, resulting in the Company owning 100% of the membership interests of BioFirma. Substantially all the assets of BioFirma were sold effective December 31, 2019; however as of June 30, 2020, the acquirer of the assets had not paid the purchase price and the Company had established a bad debt reserve of 100% of the purchase price. In April 2019, the Company consummated certain transactions resulting in the acquisition of the outstanding equity interest in ISDI Holdings II, Inc., an Illinois corporation (“ISDI Holdings II”), and PHR Holdings, Inc., an Illinois corporation (“PHR Holdings”), entities which consolidate the results of Progressive Health and Rehabilitation, Ltd (“Progressive”) and Illinois Spine and Disc Institute, Ltd (“ISDI”) due to control by contract. These entities are included in the condensed consolidated financial statements from the date of acquisition. In November 2019, IMAC Illinois entered into a management agreement for an occupational and physical therapy practice in Rockford, Illinois. This entity is included in the condensed consolidated financial statements due to control by contract from the date of entry into the management agreement. In January 2020, the Company consummated an agreement for the acquisition of Chiropractic Health of Southwest Florida, Inc. (“CHSF”) in Bonita Springs, Florida. This entity is included in the condensed consolidated financial statements from the date of acquisition. 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. |
COVID-19 Pandemic | COVID-19 Pandemic On January 30, 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spread globally beyond the point of origin. On March 20, 2020 the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of these condensed consolidated financial statements. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s combined financial condition, liquidity and future results of operations. Management is actively monitoring the impact of the global situation on its consolidated financial condition, liquidity, operations, suppliers, industry and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020 beyond the results presented in these condensed consolidated financial statements and this quarterly report. CARES Act The Company is continuing to closely monitor legislative actions at the federal, state and local levels including the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and other governmental assistance that might be available in response to the COVID-19 pandemic. As part of the CARES Act, the United States government initially announced that it would offer $100 billion of relief to eligible health care providers. On April 7, 2020, Centers for Medicare and Medicaid Services ("CMS") officials indicated they would distribute $30 billion of direct grants to hospitals, ASCs and other health care providers based on how much they bill Medicare. Payments received from these grants are not required to be repaid provided the recipients attest to and comply with certain terms and conditions, including limitations on balance billing and not using funds received from the grants to reimburse expenses or losses that other sources are obligated to reimburse. The Company received approximately $416,000 of the grant funds distributed under the CARES Act Provider Relief Fund program during the six months ended June 30, 2020. Based on an analysis of the compliance and reporting requirements and the impact of the COVID-19 pandemic on our operating results through the end of the second quarter, these funds were recognized as a reduction in operating expenses under the caption Grant funds in the condensed consolidated statements of operations for the three- and six- months ended June 30, 2020. The recognition of amounts received is conditioned upon certification that payment will be used to prevent, prepare for and respond to the COVID-19 pandemic and shall reimburse the recipient only for healthcare related expenses or lost revenues that are attributable to the COVID-19 pandemic. Amounts are recognized as a reduction to operating costs and expenses only to the extent the Company is reasonably assured that underlying conditions are met. |
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. Starting in January 2020, the Company implemented wellness maintenance programs on a subscription basis. There are three membership plans offered with different levels of service for each plan. The Company recognizes service revenues based upon the estimated amounts the Company expects to be entitled to receive from patients and third-party payers. Estimates of contractual adjustments are based upon the payment terms specified in the related contractual agreements. The Company also records estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record these revenues at the estimated amounts expected to be collected. 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. The company recognize other management service revenue in the period in which services are rendered. These revenues are earned by IMAC Nashville, IMAC Management and IMAC Illinois and are eliminated in consolidation to the extent owned. The Company’s patient revenue consisted of the following for the three and six months ended June 30, 2020 and June 30, 2019: Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Patient revenues $ 5,595,279 $ 8,887,819 $ 12,747,221 $ 16,176,841 Contractual adjustments (3,022,699 ) (5,131,064 ) (6,865,572 ) (9,650,258 ) Patient revenue, net $ 2,572,580 $ 3,756,755 $ 5,881,649 $ 6,526,583 |
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 rarely 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 and accounts payable 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 at June 30, 2020 and December 31, 2019. |
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 is 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 payor, 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. Intangible assets are amortized on a straight-line basis over their estimated economic useful lives, generally the contract term. 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 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. The Company tests goodwill for impairment on an annual basis, and when events or circumstances indicate the fair value of a reporting unit may be below its carrying value. |
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 $174,350 and $349,328 for the three months ended June 30, 2020 and 2019, respectively and was $416,167 and $696,344 for the six months ended June 30, 2020 and 2019, respectively. |
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 Following the Company’s conversion to a Delaware corporation in 2018, IMAC Nashville, IMAC Texas, IMAC St. Louis continued as single-member limited liability companies (wholly owned by the Company) that are disregarded entities for tax purposes and do not file separate returns. Their activity is included as part of IMAC Holdings Inc. Advantage Therapy, IMAC Illinois and IMAC Florida are also disregarded entities for tax purposes. BioFirma was a limited liability company taxed as a partnership. Effective October 1, 2019, BioFirma became wholly owned by IMAC Holdings and is a disregarded entity for tax purposes. IMAC Management is a C-corporation and is included in the consolidated return of IMAC Holdings as a subsidiary. Any future benefit arising from losses have been offset by a valuation allowance. Accordingly, no provision for income taxes is reflected in the condensed consolidated financial statements. 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. At June 30, 2020 and December 31, 2019, 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 2017 are open and subject to examination by the taxing authorities. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Patient Revenue, Net | The Company’s patient revenue consisted of the following for the three and six months ended June 30, 2020 and June 30, 2019: Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Patient revenues $ 5,595,279 $ 8,887,819 $ 12,747,221 $ 16,176,841 Contractual adjustments (3,022,699 ) (5,131,064 ) (6,865,572 ) (9,650,258 ) Patient revenue, net $ 2,572,580 $ 3,756,755 $ 5,881,649 $ 6,526,583 |
Concentration of Credit Risks (
Concentration of Credit Risks (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of Concentration Risk | As of June 30, 2020 and December 31, 2019, the Company had the following revenue and accounts receivable concentrations: June 30, 2020 December 31, 2019 % of Revenue % of Accounts Receivable % of Revenue % of Accounts Receivable (Unaudited) Patient payment 33 % 29 % 47 % 40 % Medicare payment 41 % 28 % 27 % 26 % Insurance payment 26 % 43 % 26 % 34 % |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | As of June 30, 2020 and December 31, 2019, the Company’s accounts receivable consisted of the following: June 30, December 31, (Unaudited) Gross accounts receivable $ 1,518,854 $ 1,285,228 Less: allowance for doubtful accounts (28,982 ) (26,903 ) Accounts receivable, net $ 1,489,872 $ 1,258,325 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 acquisition of the IMAC Florida business: Florida Property & equipment $ 50,358 Customer lists 128,802 Other assets 20,840 $ 200,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The Company’s property and equipment consisted of the following at June 30, 2020 and December 31, 2019: Estimated June 30, December 31, Land and building 40 (Building) $ 1,175,000 $ 1,175,000 Leasehold improvements Shorter of asset or lease term 2,249,673 2,262,398 Equipment 1.5 - 7 1,980,871 1,948,347 Total property and equipment 5,405,544 5,385,745 Less: accumulated depreciation (2,114,820 ) (1,693,736 ) 3,290,724 3,692,009 Construction in progress 3,268 - Total property and equipment, net $ 3,293,992 $ 3,692,009 |
Intangibles Assets and Goodwi_2
Intangibles Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets and goodwill consisted of the following at June 30, 2020 and December 31, 2019: June 30, 2020 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreements 10 years $ 7,940,398 $ (1,309,360 ) $ 6,631,038 Non-compete agreements 3 years 301,000 (206,972 ) 94,028 Customer lists 3 years 134,882 (22,480 ) 112,402 Definite lived assets 8,376,280 (1,538,812 ) 6,837,468 Research and development 243,750 - 243,750 Goodwill 2,040,696 - 2,040,696 Total intangible assets and goodwill $ 10,660,726 $ (1,538,812 ) $ 9,121,914 December 31, 2019 Estimated Accumulated Useful Life Cost Amortization Net Intangible assets: Management service agreements 10 years $ 8,019,199 $ (994,321 ) $ 7,024,878 Non-compete agreements 3 years 301,000 (156,806 ) 144,194 Definite lived assets 8,320,199 (1,151,127 ) 7,169,072 Goodwill 2,040,696 - 2,040,696 Total intangible assets and goodwill $ 10,360,895 $ (1,151,127 ) $ 9,209,768 |
Schedule of Future Amortization of Intangible Assets | The Company’s estimated future amortization of intangible assets was as follows: Years Ending December 31, 2020 (six months) $ 469,666 2021 882,861 2022 839,000 2023 794,040 2024 794,040 Thereafter 3,057,861 $ 6,837,468 |
Operating Leases (Tables)
Operating Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Operating Lease Right of Use Assets | Right of use assets included in the Company’s condensed consolidated balance sheet were as follows: June 30, December 31, Non-current assets Right of use assets, net of amortization $ 3,600,198 $ 3,719,401 |
Schedule of Operating Lease Cost | Individual components of the total lease cost incurred by the Company were as follows: Six Months June 30, 2020 Six Months June 30, 2019 Operating lease expense $ 618,508 $ 456,772 |
Schedule of Future Minimum Lease Payments | The Company’s amount of future minimum lease payments under operating leases are as follows: Operating Undiscounted future minimum lease payments: 2020 (six months) $ 577,124 2021 1,035,714 2022 1,030,098 2023 939,971 2024 601,468 Thereafter 588,246 Total 4,772,621 Amount representing imputed interest (309,412 ) Total operating lease liability 4,463,209 Current portion of operating lease liability (980,967 ) Operating lease liability, non-current $ 3,482,242 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Set forth below is a summary of the Company’s outstanding debt as of June 30, 2020 and December 31, 2019: June 30, December 31, 2020 2019 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 which carries an interest rate of 10% per annum. The Note was amended in June 2019 and all outstanding balances are due January 5, 2021. $ 1,750,000 $ 1,750,000 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 certain Company executives. 86,107 99,628 $1.2 million mortgage loan with a financial institution. The loan agreement was originally for 6-months and carries an interest rate 3.35%. The loan matured in 2019. As of June 30, 2020, it was due on demand, with interest being paid monthly. This mortgage was repaid on July 24, 2020 (see Note 16 below). 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. 87,568 93,652 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 certain Company executives. 41,788 63,913 Note payable to an employee in the amount of $101,906 dated March 8, 2017. The note requires payment of five annual installments of $23,350, including principal and interest at 5%. The note matures on December 31, 2021, and is unsecured. 40,000 60,000 $112,800 payable to a landlord of Advantage Therapy, LLC pursuant to a lease dated March 1, 2019. The debt is payable in 60 monthly installments of $2,129, including principal and interest at 5%. The debt matures on June 1, 2024. 92,433 102,744 Note payable to a financial institution in the amount of $140,000, dated September 25, 2019. The note requires 36 consecutive monthly installments of $4,225 including principal and interest at 5.39%. The note matures on September 19, 2022 and is secured by a personal guarantee of the Vice President of Business Development of the Company. 107,119 129,182 Note payable to a financial institution in the amount of $1,691,520 dated April 16, 2020. The note requires 18 consecutive monthly installments, commencing on November 16, 2020, of $95,193 including principal and interest at 1.00%. The note matures on April 16, 2022. 1,691,520 - Note payable in the amount of $1,115,000, dated March 25, 2020. The note is payable on or before September 25, 2021. The interest on the note accrues at a rate of 10% per annum and is payable on the maturity date or otherwise in accordance with the note. 690,000 - Unamortized debt issuance costs (114,484 ) - 5,704,551 3,531,619 Less: current portion: (4,471,874 ) (1,422,554 ) $ 1,232,677 $ 2,109,065 |
Schedule of Principal Maturities of Notes Payable | Principal maturities of the Company’s notes payable are as follows: Years Ending December 31, Amount 2020 (six months) $ 2,083,113 2021 3,032,557 2022 484,184 2023 51,657 2024 27,631 Thereafter 25,409 Total $ 5,704,551 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Statutory Federal Income Tax Rate | The 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 % |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Apr. 07, 2020 | Apr. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Oct. 01, 2019 | Aug. 31, 2018 |
Purchase price of debt reserve, percentage | 100.00% | ||||||||
Grant funds | $ (415,978) | $ (415,978) | |||||||
Cash equivalents | |||||||||
Advertising and marketing expense | 174,350 | $ 349,328 | 416,167 | $ 696,344 | |||||
Uncertain tax positions | |||||||||
CARES Act Provider Relief Fund [Member] | Centers for Medicare and Medicaid Services [Member] | |||||||||
Releif fund received | $ 30,000,000,000 | ||||||||
CARES Act Provider Relief Fund [Member] | Eligible Health Care Providers [Member] | |||||||||
Releif fund received | $ 100,000,000,000 | ||||||||
Advantage Hand Therapy and Orthopedic Rehabilitation, LLC [Member] | |||||||||
Percentage of voting interest acquired | 100.00% | ||||||||
BioFirma LLC [Member] | |||||||||
Percentage of voting interest acquired | 100.00% | 30.00% | 70.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Patient Revenue, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Patient revenue, net | $ 2,572,580 | $ 3,756,755 | $ 5,881,649 | $ 6,526,583 |
Patient Revenues, Net [Member] | ||||
Patient revenue, net | 5,595,279 | 8,887,819 | 12,747,221 | 16,176,841 |
Contractual Adjustments [Member] | ||||
Patient revenue, net | $ (3,022,699) | $ (5,131,064) | $ (6,865,572) | $ (9,650,258) |
Capital Requirements, Liquidi_2
Capital Requirements, Liquidity and Going Concern Considerations (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Working capital | $ 3,900,000 | $ 3,900,000 | $ 3,500,000 | ||
Net loss | $ (2,030,688) | $ (1,900,768) | (3,764,233) | $ (3,499,955) | |
Net cash (used in) operating activities | $ (2,985,049) | $ (1,679,060) |
Concentration of Credit Risks_2
Concentration of Credit Risks (Details Narrative) | Jun. 30, 2020USD ($) |
Risks and Uncertainties [Abstract] | |
FDIC insured amount | $ 250,000 |
Cash and cash equivalents in excess of FDIC | $ 1,724,713 |
Concentration of Credit Risks -
Concentration of Credit Risks - Schedule of Concentration Risk (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Revenue [Member] | Patient Payment [Member] | ||
Concentration of credit risk, percentage | 33.00% | 47.00% |
Revenue [Member] | Medicare Payment [Member] | ||
Concentration of credit risk, percentage | 26.00% | 27.00% |
Revenue [Member] | Insurance Payment [Member] | ||
Concentration of credit risk, percentage | 28.00% | 26.00% |
Accounts Receivable [Member] | Patient Payment [Member] | ||
Concentration of credit risk, percentage | 41.00% | 40.00% |
Accounts Receivable [Member] | Medicare Payment [Member] | ||
Concentration of credit risk, percentage | 29.00% | 26.00% |
Accounts Receivable [Member] | Insurance Payment [Member] | ||
Concentration of credit risk, percentage | 43.00% | 34.00% |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Gross accounts receivable | $ 1,518,854 | $ 1,285,228 |
Less: allowance for doubtful accounts | (28,982) | (26,903) |
Accounts receivable, net | $ 1,489,872 | $ 1,258,325 |
Business Acquisitions (Details
Business Acquisitions (Details Narrative) - USD ($) | Oct. 01, 2019 | Apr. 19, 2019 | Aug. 02, 2018 | Jun. 30, 2020 | Jan. 13, 2020 | Dec. 31, 2019 |
Purchase price of debt reserve, percentage | 100.00% | |||||
BioFirma [Member] | ||||||
Membership interests description | On October 1, 2019, the holder of the 30% of the membership interests of BioFirma and the Company entered into an Assignment and Assumption of Interests of BioFirma LLC, pursuant to which the Company acquired the 30% of BioFirms' membership interests which were not previously held by the Company, resulting in the Company owning 100% of the membership interests of BioFirma. | |||||
Self Care Regeneration LLC [Member] | Asset Purchase Agreement [Member] | ||||||
Business acquisition, purchase price | $ 320,800 | |||||
BioFirma LLC [Member] | ||||||
Percentage of outstanding membership units | 70.00% | |||||
Payments to acquire business gross | $ 1,000 | |||||
IMAC Management of Illinois, LLC [Member] | ||||||
Number of restricted stock issued, shares | 1,002,306 | |||||
Number of restricted stock issued, value | $ 4,100,000 | |||||
IMAC Management of Florida, LLC [Member] | ||||||
Purchase price of acquisition | $ 200,000 |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - Florida [Member] | Jun. 30, 2020USD ($) |
Property & equipment | $ 50,358 |
Customer lists | 128,802 |
Other assets | 20,840 |
Net Assets Acquired | $ 200,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 218,818 | $ 173,394 | $ 437,661 | $ 328,276 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Total property and equipment, gross | $ 5,405,544 | $ 5,385,745 |
Less: accumulated depreciation | (2,114,820) | (1,693,736) |
Property and equipment | 3,290,724 | 3,692,009 |
Construction in progress | 3,268 | |
Total property and equipment, net | $ 3,293,992 | 3,692,009 |
Land and Building [Member] | ||
Estimated Useful Life in Years | 40 years | |
Total property and equipment, gross | $ 1,175,000 | 1,175,000 |
Leasehold Improvements [Member] | ||
Estimated Useful Life | Shorter of asset or lease term | |
Total property and equipment, gross | $ 2,249,673 | 2,262,398 |
Equipment [Member] | ||
Total property and equipment, gross | $ 1,980,871 | $ 1,948,347 |
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 and Goodwi_3
Intangibles Assets and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 234,833 | $ 223,595 | $ 466,485 | $ 354,280 |
Intangibles Assets and Goodwi_4
Intangibles Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Intangible assets, net | $ 6,837,468 | |
Intangible assets, including goodwill, cost | 10,660,726 | $ 10,360,895 |
Goodwill | 2,040,696 | 2,040,696 |
Total intangible assets and goodwill | $ 9,121,914 | 9,209,768 |
Customer Lists [Member] | ||
Intangible assets, estimated useful life | 3 years | |
Intangible assets, cost | $ 134,882 | |
Intangible assets, Accumulated Amortization | (22,480) | |
Intangible assets, net | 112,402 | |
Definite Lived Assets [Member] | ||
Intangible assets, cost | 8,376,280 | 8,320,199 |
Intangible assets, Accumulated Amortization | (1,538,812) | (1,151,127) |
Intangible assets, net | 6,837,468 | $ 7,169,072 |
Research and Development [Member] | ||
Intangible assets, cost | 243,750 | |
Intangible assets, Accumulated Amortization | ||
Intangible assets, net | $ 243,750 | |
Management Service Agreement [Member] | ||
Intangible assets, estimated useful life | 10 years | 10 years |
Intangible assets, cost | $ 7,940,398 | $ 8,019,199 |
Intangible assets, Accumulated Amortization | (1,309,360) | (994,321) |
Intangible assets, net | $ 6,631,038 | $ 7,024,878 |
Non-Compete Agreement [Member] | ||
Intangible assets, estimated useful life | 3 years | 3 years |
Intangible assets, cost | $ 301,000 | $ 301,000 |
Intangible assets, Accumulated Amortization | (206,972) | (156,806) |
Intangible assets, net | $ 94,028 | $ 144,194 |
Intangibles Assets and Goodwi_5
Intangibles Assets and Goodwill - Schedule of Future Amortization of Intangible Assets (Details) | Jun. 30, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 (six months) | $ 469,666 |
2021 | 882,861 |
2022 | 839,000 |
2023 | 794,040 |
2024 | 794,040 |
Thereafter | 3,057,861 |
Total | $ 6,837,468 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Mortgage interest rate term | 10 years |
Operating Leases - Schedule of
Operating Leases - Schedule of Operating Lease Right of Use Assets (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right of use assets, net of amortization | $ 3,600,198 | $ 3,719,401 |
Operating Leases - Schedule o_2
Operating Leases - Schedule of Operating Lease Cost (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 618,508 | $ 456,772 |
Operating Leases - Schedule o_3
Operating Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (six months) | $ 577,124 | |
2021 | 1,035,714 | |
2022 | 1,030,098 | |
2023 | 939,971 | |
2024 | 601,468 | |
Thereafter | 588,246 | |
Total | 4,772,621 | |
Amount representing imputed interest | (309,412) | |
Total operating lease liability | 4,463,209 | |
Current portion of operating lease liability | (980,967) | $ (1,025,247) |
Operating lease liability, non-current | $ 3,482,242 | $ 3,660,654 |
Lines of Credit (Details Narrat
Lines of Credit (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Line of credit | $ 79,961 | $ 79,961 |
Advantage Theraphy [Member] | ||
Line of credit | $ 100,000 | |
Line of credit, maturity date | Nov. 20, 2020 | |
Line of credit, interest rate | 6.00% | |
Line of credit balance | $ 79,961 | $ 79,961 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Apr. 16, 2020 | Mar. 25, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Repayments of notes payable | $ 719,104 | $ 54,377 | ||
Iliad Research & Trading, L.P [Member] | Secured Promissory Note [Member] | ||||
Initial principal amount | $ 1,115,000 | |||
Debt maturity term | 18 months | |||
Original issue discount | $ 100,000 | |||
Repayments of notes payable | 15,000 | |||
Purchase price of notes | $ 1,000,000 | |||
Note interest rate | 10.00% | |||
Debt issuances cost | $ 250,000 | |||
Proceeds from future sales of equity | 1,000,000 | |||
Iliad Research & Trading, L.P [Member] | Secured Promissory Note [Member] | Maximum [Member] | ||||
Prepayment of redemption premium | $ 200,000 | |||
Default interest rate | 22.00% | |||
Pinnacle Bank [Member] | Paycheck Protection Program Note [Member] | ||||
Note interest rate | 1.00% | |||
Loans payable principal amount | $ 1,691,520 | |||
Loan maturity date | Apr. 16, 2022 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Jun. 30, 2020 | Apr. 16, 2020 | Mar. 25, 2020 | Dec. 31, 2019 |
Notes payable | $ 5,704,551 | $ 3,531,619 | ||
Unamortized debt issuance costs | (114,484) | |||
Less: current portion | (4,471,874) | (1,422,554) | ||
Notes payable, net of current portion | 1,232,677 | 2,109,065 | ||
Notes Payable [Member] | ||||
Notes payable | 1,750,000 | 1,750,000 | ||
Notes Payable One [Member] | ||||
Notes payable | 86,107 | 99,628 | ||
Notes Payable Two [Member] | ||||
Notes payable | 1,232,500 | 1,232,500 | ||
Notes Payable Three [Member] | ||||
Notes payable | 87,568 | 93,652 | ||
Notes Payable Four [Member] | ||||
Notes payable | 41,788 | 63,913 | ||
Notes Payable Five [Member] | ||||
Notes payable | 40,000 | 60,000 | ||
Notes Payable Six [Member] | ||||
Notes payable | 92,433 | 102,744 | ||
Notes Payable Seven [Member] | ||||
Notes payable | 107,119 | 129,182 | ||
Notes Payable Eight [Member] | ||||
Notes payable | 1,691,520 | $ 1,691,520 | ||
Notes Payable Nine [Member] | ||||
Notes payable | $ 690,000 | $ 1,115,000 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) | Apr. 16, 2020USD ($)Integer | Mar. 25, 2020USD ($) | Sep. 25, 2019USD ($)Integer | Mar. 01, 2019USD ($)Integer | Nov. 15, 2017USD ($)Integer | Mar. 08, 2017USD ($)Integer | Aug. 01, 2016USD ($)Integer | May 04, 2016USD ($)Integer | Jun. 30, 2019 | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Notes payable | $ 5,704,551 | $ 3,531,619 | |||||||||
Notes Payable [Member] | |||||||||||
Notes payable | 1,750,000 | 1,750,000 | |||||||||
Notes Payable One [Member] | |||||||||||
Notes payable | 86,107 | 99,628 | |||||||||
Notes Payable One [Member] | Financial Institution [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] | |||||||||||
Notes payable | 1,232,500 | 1,232,500 | |||||||||
Notes Payable Two [Member] | Financial Institution [Member] | |||||||||||
Debt instrument face amount | $ 1,200,000 | ||||||||||
Debt instrument interest rate | 3.35% | ||||||||||
Debt instrument maturity date | Jul. 24, 2020 | ||||||||||
Debt instrument maturity date, description | The loan matured in 2019 | ||||||||||
Notes Payable Three [Member] | |||||||||||
Notes payable | $ 87,568 | 93,652 | |||||||||
Notes Payable Three [Member] | Financial Institution [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 Four [Member] | |||||||||||
Notes payable | 41,788 | 63,913 | |||||||||
Notes Payable Four [Member] | Financial Institution [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 Five [Member] | |||||||||||
Notes payable | 40,000 | 60,000 | |||||||||
Notes Payable Six [Member] | |||||||||||
Notes payable | 92,433 | 102,744 | |||||||||
Notes Payable Six [Member] | Advantage Therapy, LLC [Member] | |||||||||||
Notes payable | $ 112,800 | ||||||||||
Debt instrument interest rate | 5.00% | ||||||||||
Debt instrument maturity date | Jun. 1, 2024 | ||||||||||
Number of installments | Integer | 60 | ||||||||||
Debt instrument, periodic payment | $ 2,129 | ||||||||||
Notes Payable Seven [Member] | |||||||||||
Notes payable | 107,119 | 129,182 | |||||||||
Notes Payable Seven [Member] | Financial Institution [Member] | |||||||||||
Notes payable | $ 140,000 | ||||||||||
Debt instrument interest rate | 5.39% | ||||||||||
Debt instrument maturity date | Sep. 19, 2022 | ||||||||||
Number of installments | Integer | 36 | ||||||||||
Debt instrument, periodic payment | $ 4,225 | ||||||||||
Notes Payable Eight [Member] | |||||||||||
Notes payable | $ 1,691,520 | 1,691,520 | |||||||||
Debt instrument interest rate | 1.00% | ||||||||||
Debt instrument maturity date | Apr. 16, 2022 | ||||||||||
Number of installments | Integer | 18 | ||||||||||
Debt instrument, periodic payment | $ 95,193 | ||||||||||
Notes Payable Nine [Member] | |||||||||||
Notes payable | $ 1,115,000 | 690,000 | |||||||||
Debt instrument interest rate | 10.00% | ||||||||||
Debt instrument maturity date | Sep. 25, 2021 | ||||||||||
Edward S. Bredniak [Member] | Notes Payable [Member] | |||||||||||
Debt instrument face amount | 2,000,000 | ||||||||||
Notes payable | $ 379,676 | ||||||||||
Debt instrument interest rate | 10.00% | ||||||||||
Debt instrument maturity date | Jan. 5, 2021 | ||||||||||
Employee [Member] | Notes Payable Five [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 - Schedule of Pri
Notes Payable - Schedule of Principal Maturities of Notes Payable (Details) | Jun. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
2020 (six months) | $ 2,083,113 |
2021 | 3,032,557 |
2022 | 484,184 |
2023 | 51,657 |
2024 | 27,631 |
Thereafter | 25,409 |
Total | $ 5,704,551 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jun. 18, 2020 | Aug. 13, 2019 | Jul. 15, 2019 | May 21, 2019 | Apr. 19, 2019 | Feb. 12, 2019 | Jun. 01, 2018 | Feb. 28, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | May 31, 2018 |
Number of units authorized | 400 | 400 | |||||||||||||
Number of units issued | 365 | 365 | |||||||||||||
Number of units outstanding | 365 | 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 | |||||||||||||
Payment in purchase agreement | $ 200,000 | ||||||||||||||
Share issued pursuant to previous grand RSUs | 66,875 | ||||||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||||
Outstanding restricted stock of its common stock | $ 277,500 | ||||||||||||||
Number of shares vested | 30,000 | 10,000 | |||||||||||||
Non-Qualified Stock Options [Member] | Various Employees [Member] | |||||||||||||||
Outstanding stock options to purchase stock | 452,872 | ||||||||||||||
Vesting period | 4 years | ||||||||||||||
Vesting percentage | 25.00% | ||||||||||||||
Vesting description | These options vest over a period of four years, with 25% vesting after one year and the remaining 75% vesting in equal monthly installments over the following 36 months and are exercisable for a period of ten years. Stock based compensation for stock options is estimated at the grant date based on the fair value calculated using the Black-Scholes method. | ||||||||||||||
Volatility rate | 32.20% | ||||||||||||||
Risk free rate | 2.40% | ||||||||||||||
Expected term | 10 years | ||||||||||||||
2018 Incentive Compensation Plan [Member] | |||||||||||||||
Reserving for issuance | 1,000,000 | ||||||||||||||
Merger Agreement [Member] | |||||||||||||||
Number of shares issued during period, shares | 1,002,306 | ||||||||||||||
Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | |||||||||||||||
Payment in purchase agreement | $ 10,000,000 | ||||||||||||||
Value of common stock as commitment fee | $ 10,000,000 | ||||||||||||||
Number of shares of common stock of commitment fee | 60,006 | ||||||||||||||
Sale of shares | 1,669,359 | 1,602,294 | |||||||||||||
Outstanding shares percentage | 19.99% | ||||||||||||||
Number of common stock share sold, value | $ 2,424,053 | ||||||||||||||
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 | 1,830,875 | 1,095,840 | |||||||||||||
Stock issued during period, conversion of securities | 449,217 | ||||||||||||||
Stock issued during period, acquisitions | 1,002,306 | 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 | ||||||||||||||
Registered Direct Offering [Member] | Securities Purchase Agreement [Member] | |||||||||||||||
Shares issued price per share | $ 1.50 | ||||||||||||||
Number of shares issued during period, shares | 1,764,000 | ||||||||||||||
Gross proceeds from initial public offering | $ 2,644,000 | ||||||||||||||
Payment for indebteness | $ 500,000 |
Retirement Plan (Details Narrat
Retirement Plan (Details Narrative) - 401(k) Plan [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Matching contributions, percentage of match | 50.00% | |||
Matching contributions, percent of employees' gross pay | 6.00% | |||
Matching contributions, amount | $ 20,105 | $ 13,354 | $ 39,795 | $ 20,761 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
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 June 30, 2020. |
Income Taxes - Schedule of Stat
Income Taxes - Schedule of Statutory Federal Income Tax Rate (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Deferred tax benefit at the federal statutory rate | 21.00% |
Valuation allowance | (21.00%) |
Statutory federal income tax rate | 0.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Lexington, Kentucky [Member] | Jul. 27, 2020USD ($) |
Proceeds from sale of real estate | $ 1,300,000 |
Payment of mortgage | $ 1,232,000 |