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IMAC Regeneration IPO prices with modest target and broader aims
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CEO Jeff Ervin

Updated April 2, 2019: IMAC entered the Chicago market with acquisition, rebranding as Mike Ditka IMAC Regeneration Centers.-Ed.

BRENTWOOD-based IMAC Holdings (NASDAQ: IMAC + SEC filings) this morning announced pricing of its IPO in a step meant to fulfill the 4-year-old company's capital-raising goal of roughly $4.3MM in gross proceeds and $3.7MM or greater net proceeds, while advancing its other strategic objectives.

Led by CEO Jeff Ervin, IMAC Regeneration Centers is a provider of regenerative rehabilitation orthopedic treatments that do not involve use of surgery or opioid medications.

In a brief Venture Nashville interview this morning, Ervin said the company now operates 11 outpatient clinics.

It has 119 employees, plus 17 part-time or contract employees at clinics in Kentucky, Tennessee and Missouri. Its SEC filings indicate the company is likely to expand into Illinois, Kansas, Oklahoma and Texas.

Ervin, a 41-year-old native of Columbus, Ohio, said that while the target for the IPO is relatively modest, he is confident that today's public listing serves existing shareholder interests, by building value and limiting dilution; and, demonstrates the company's commitment to discipline in the conduct as a public business.

Passing muster with the SEC, gaining the NASDAQ listing and then executing today's offering also creates the potential of receiving additional paid-in capital should warrants be exercised, thereby furthering the company's efforts to return to and establish sustained profitability.

IMAC reported that it realized $3.4MM in net patient revenues after adjustments in the nine months ending Sept. 30, 2018, reporting a $2.1MM loss for the same period. IMAC's SEC filings are here. Check the stock here.

He said the listing should also send meaningful signals to elite athletes with whom IMAC seeks to partner in branding its individual centers; to owners of potential acquisition targets; and, to potential institutional and corporate partners with interest in a very salient sector of the healthcare space, with special emphasis on treating sports and orthopedic injuries.

He said the company has substantial M&A prospects, declining to elaborate.

Ervin declined to describe its investor base in detail for publication in this story, but noted that the numbers are heavy with individual investors, as well as a trio of institutional investors based in New York and Illinois.

The CEO said he also expects listed status to be helpful in the company's ongoing conversations with potential debt providers.

Personally, he said, his dedication to the IMAC concept was heightened by his early experience as a finance executive and analyst with the formerly Franklin-based BH1 Investments private equity firm, and his awareness of issues facing senior citizens and others who could use IMAC services.

VNC research shows BH1 was oriented toward buyouts in eldercare and related segments.

Ervin also worked several years with then-Nashville-based Medicare.com, which was then owned by serial entrepreneur Bill Kimberlin, now based in California.

Ervin said that prior to today's offering he had no investors based in traditionally healthcare services-oriented Nashville.

In its press release this morning, IMAC explained the company "was created in March 2015 to expand on the footprint of the original IMAC Regeneration Center, which opened in Kentucky in August 2000. .. [The company] owns or manages outpatient clinics that provide regenerative, orthopedic and minimally invasive procedures and therapies."

Its partnerships with professional athletes have led to opening centers in association with legendary former St. Louis Cardinals shortstop Ozzie Smith; Murfreesboro native and Boston Red Sox Pitcher David Price; and, pro-basketball standout Tony Delk, who also played for an NCAA Champion, the University of Kentucky.

In its press release this morning, the company said it was offering 850,000 units, each unit comprising one share of common stock and two warrants each to purchase one share of common stock, at a combined initial public offering price of $5.125 per unit.

Quoting part of today's release:

The Company expects to receive aggregate gross proceeds of $4,356,250 from this offering, before deducting underwriting discounts, commissions and other related expenses. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 127,500 shares of common stock and 255,000 warrants at the public offering price, less underwriting discounts and commissions.

Proceeds from the offering will be used for financing the costs of leasing, developing and acquiring new clinic locations, funding research and new product development activities, and for working capital and general corporate purposes.

The company also explained that the exercise price of the warrants is $5.00 per warrant, adding: "The units will immediately and automatically separate upon issuance, and the common stock and warrants will begin trading today on The NASDAQ Capital Market under the ticker symbols 'IMAC' and 'IMACW', respectively."

The new stock's SEC notice of effectiveness came yesterday at the market close. The company said it expects the offering announced today to close on Friday, Feb. 15, 2019.

Ervin earned his bachelor's in finance at the University of Miami and his MBA at Vanderbilt's Owen Graduate School of Management, according to his LinkedIn.

Dawson James Securities (Boca Raton, owned by Ark Financial Services) acted as the book running manager and Axiom Capital Management acted as a co-manager for the offering, according to the release. IMAC's S-1A shows counsel to the underwriter as Schiff Hardin (Washington, D.C.)

Ervin told VNC that he has relied on attorneys with Olshan Frome Wolosky (New York City) and Bass Berry Sims, Nashville. His company's accounting is with South Florida-based Daszkal Bolton.

The IMAC release posted on the NASDAQ website shows as contacts IMAC Director of Investor Relations & Communications Laura Fristoe and LHA Investor Relations (NYC). VNC

. last edited 0949 2 March 2019

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Tags: Axiom Capital Management, Bass Berry Sims, Dawson James Securities, Dazskal Bolton, IMAC Holdings, IMAC Regeneration, Jeff Ervin, Laura Fristoe, LHA Investor Relations, NASDAQ, Olshan Frome Wolosky, Owen Graduate School of Management, Schiff Hardin

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