What’s Up with IMAC Regeneration Centers?

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Last year I reviewed a regenerative medicine clinic chain that was selling stock called IMAC Regeneration Centers. At the time I found many problems but was also interested to see how this company would fare. I picked up on several new press releases this week and it’s time for an update as from what I can tell, the venture is moving in the direction I feared.

What is IMAC Regeneration Centers?

IMAC is unique as it’s a publically traded chiropractic stem cell company who owns several clinics in the Midwest. From speaking to local medical providers and reviewing online information, the clinic chain was begun by chiropractors and uses many of the same aggressive sales tactics as many chiropractic clinics offering regenerative medicine. It’s also unique for entering into business partnerships with local sports stars to use their names on each clinic.

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My Prior Deep Dive into IMAC

You could summarize my prior deep dive into IMAC Regeneration Centers as follows:

  • These were chiropractic run clinics who were using mid-level providers to perform the initial evaluation of the patients and then physicians to perform the injections
  • The stock offering was a type that required less reported information, which I felt could be a problem for the average Joe investor
  • The medical director was a neurosurgeon who had past serious drug addiction issues
  • The chief scientific officer, Dr. Ian White, had significantly buffed his CV. For example, he listed several academic positions at the University of Miami and affiliated institutions that I was unable to verify.

What Happened to IMAC Regeneration Centers Over the Last Year?

IMAC used to have a market cap (how much the company is worth) of about 70 million USD and now that’s down to about 18M. This is the performance of the stock for the last 6 months:

So from the stock’s high of about 5 bucks, it’s down to around 2 bucks. While I’m no financial advisor, or as Dr. McCoy used to say, “Damit Jim, I’m just a doctor…”, it’s my understanding that this type of financial performance risks getting the company delisted from the NASDAQ exchange. 

Financial Growth is in the Eye of the Beholder…

Looking at the financials just filed for the company, on the one hand, the organization reports growth in total revenues of about 1/3 and reports an impressive more than 70% jump in net revenues. However, total net loss increased and the cash on hand is only 700,000 USD. For a company operating many clinics, this is a dangerously low cash reserve in my opinion. For example, at a cash burn of about 1.5 million a year (meaning that’s how much the company is losing) that’s only 6-months of cash on hand. In addition, the company admits that this growth came at a cost, meaning it was realized through the acquisition of other clinics. From the press release, “These increases were primarily due to the 2019 acquisitions of ISDI Holdings II and PHR Holdings (collectively “IMAC of Illinois”) and 2018 acquisitions of IMAC of Kentucky, IMAC of Missouri and Advantage Therapy. ” 

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The Company Sacks Ian White, Ph.D.

In my last review, I was VERY concerned that what the company said about Ian White’s credentials in their SEC-regulated investor slide deck and what could be independently verified were VERY different. Now it looks like the company has decided to part ways with Ian. Basically, it will purchase a discounted supply of Ian’s amniotic product and there will be some exchange of money back and forth. Near as I can tell, Ian’s new company is called Self Care Regeneration LLC. All I could find about that company is that it just filed for a trademark for a product called “Amniosomes”.

The upshot? First, I am not a financial planner but a doctor. However, my sense is that this first publicly traded, chiropractic “stem cell” clinic chain is not doing well financially. Its growth is mainly through the acquisition of other clinics. At some point, the people selling those clinics need a stock price and daily sales volume high enough to be able to realize some cash for what they sold. In addition, all of these local sports stars will expect the same in exchange for using their names. So will this venture be the next Google, Genzyme, or Healthsouth? Or will be it be the next micro-cap stock to disappear into the night? My bet, based on what I see and solely my opinion, is that it looks highly likely to be the latter.

Chris Centeno, MD is a specialist in regenerative medicine and the new field of Interventional Orthopedics. Centeno pioneered orthopedic stem cell procedures in 2005 and is responsible for a large amount of the published research on stem cell use for orthopedic applications. View Profile

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