Quarterly Report for Quarter Ending SEPTEMBER 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Information

The following discussion and analysis of the results of operations and financial condition as of September 30, 2025 and 2024 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words "may," "will," "expect," "believe," "anticipate," "project," "plan," "intend," "estimate," and "continue," and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Factors that may affect our results include, but are not limited to, the risks and uncertainties set forth under Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as discussed elsewhere in this Quarterly Report, particularly in Part II, Item IA - Risk Factors.

Any one or more of these uncertainties, risks and other influences, could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. Except as required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

References in this MD&A to "we," "us," "our," "our company," "our business" and "IMAC Holdings" are to IMAC Holdings, Inc., a Delaware corporation and prior to the Corporate Conversion (defined below), IMAC Holdings, LLC, a Kentucky limited liability company, 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: Ignite Proteomics, LLC, IMAC Regeneration Center of St. Louis, LLC ("IMAC St. Louis"), 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"), Advantage Hand Therapy and Orthopedic Rehabilitation, LLC ("Advantage Therapy"), IMAC Management of Florida, LLC ("IMAC Florida"), Louisiana Orthopaedic & Sports Rehab ("IMAC Louisiana") and The Back Space, LLC ("BackSpace"); 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"); the following entities which are consolidated with IMAC Management of Illinois, LLC due to control by contract: Progressive Health and Rehabilitation, Ltd., Illinois Spine and Disc Institute, Ltd. and Ricardo Knight, P.C.; the following entities which is consolidated with IMAC Management Services, LLC due to control by contract: Integrated Medicine and Chiropractic Regeneration Center PSC ("Kentucky PC") and IMAC Medical of Kentucky PSC ("Kentucky PSC"); the following entities which are consolidated with IMAC Florida due to control by contract: Willmitch Chiropractic, P.A. and IMAC Medical of Florida, P.A.; the following entity which is consolidated with Louisiana Orthopaedic & Sports Rehab due to control by contract: IMAC Medical of Louisiana, a Medical Corporation; and the following entities which are consolidated with BackSpace due to control by contract: ChiroMart LLC, ChiroMart Florida LLC, and ChiroMart Missouri LLC.

Overview

IMAC Holdings, Inc. operates primarily through its wholly owned subsidiary, Ignite Proteomics, LLC (Ignite), that utilizes a unique and patented RPPA technology platform, which can quantify protein signaling to support oncology clinical treatment decisions and biopharmaceutical drug development.

For the three months ended September 30, 2025, the Company had:

	●	$0.02 million in net revenue
	●	net loss of $3.1 million comprised of ($3.1 million) from our continuing operations and $0.01 million from our discontinued operations; and
	●	one-time expense of $0.75 million in impairment loss related to the write-off of property and equipment.

For the nine months ended September 30, 2025, the Company had:

	●	$0.02 million in net revenue;
	●	net loss of $7.4 million comprised of ($7.4 million) from our continuing operations and $0.01 million from our discontinued operations;
	●	one-time expense of $0.75 million in impairment loss related to the write-off of property and equipment; and
	●	legal fees of $0.6 million in legal fees.

Matters that May or Are Currently Affecting Our Business

We believe that the growth of our business and our future success depend on various opportunities, challenges, trends and other factors, including the following:

	●	Our ability to obtain additional financing for the projected costs associated with the growth of our recently acquired laboratory; and
	●	Our ability to attract competent, skilled laboratory and sales personnel for our operations at acceptable prices to manage our overhead.

Critical Accounting Estimates

We prepare our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above.

For a detailed discussion of our significant accounting policies and related judgments, see Note 2 of the Notes to Condensed Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this report.

Results of Operations for the Three and Nine Months Ended September 30, 2025 Compared to the Three and Nine Months Ended September 30, 2024

Cost of Revenues

Cost of revenues consisted of laboratory supplies of $0.07 million and depreciation expense of $0.05 million for the three months ended September 30, 2025, as compared to laboratory supplies of $0.07 million and depreciation expense of $0.05 million for the three months ended September 30, 2024. The increase in expenses is directly attributable to costs incurred in the operation of the laboratory that was acquired in May 2024.

Cost of revenues consisted of laboratory supplies of $0.2 million and depreciation expense of $0.2 million for the nine months ended September 30, 2025, as compared to laboratory supplies of $0.1 million and depreciation expense of $0.09 million for the nine months ended September 30, 2024. The increase in expenses is directly attributable to costs incurred in the operation of the laboratory that was acquired in May 2024.

Operating expenses

Operating expenses were $2.5 million for the three months ended September 30, 2025, as compared to $1.9 million for the three months ended September 30, 2024. They consisted of $1.2 million for salaries and benefits, $0.7 million in loss on impairment of property and equipment, $0.02 million in legal fees, $0.4 million in professional fees and consulting, $0.1 million in insurance, $0.1 million for occupancy and $0.03 million for other expenses for the three months ended September 30, 2025 and $0.6 million for salaries and benefits, $0.4 million in legal fees, $0.8 million in professional fees and consulting, $0.1 million in insurance, $0.1 for occupancy and $0.04 million for other expenses for the three months ended September 20, 2024. The increase in expenses is directly attributable to costs incurred in the operation of the laboratory that was acquired in May 2024.

Operating expenses were $6.4 million for the nine months ended September 30, 2025, as compared to $3.7 million for the nine months ended September 30, 2024. They consisted of $3.1 million for salaries and benefits, $0.7 million in loss on impairment of property and equipment, $0.6 million in legal fees, $1.2 million in professional fees and consulting, $0.2 million in insurance, $0.2 million for occupancy and $0.3 million for other expenses for the nine months ended September 30, 2025 and $1.1 million for salaries and benefits, $0.9 million in legal fees, $1.3 million in professional fees and consulting, $0.2 million in insurance, $0.1 million for occupancy and $0.1 million for other expenses for the nine months ended September 30, 2024. The increase in expenses is directly attributable to costs incurred in the operation of the laboratory that was acquired in May 2024.

Other expenses

Other expenses consisted of interest expense of $0.5 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively.

Other expenses consisted of interest expense of $0.6 million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

As of September 30, 2025, we had $0.05 million in cash and a working capital deficit of $(13.0) million. As of December 31, 2024, we had cash of $0.5 million and working capital of $(6.5) million. The decrease in working capital was primarily due to a $2.2 million increase in accounts payable and an increase of $3.8 million in notes payable.

The Company estimates its capital needs for the next 12 months to be approximately $5.0 million consisting of $0.7 million for laboratory supplies and licenses, $0.3 million for rent and utilities, $0.4 million for insurance and $3.6 million for employees and related expenses and contractors. Over the next 5 years, the Company estimates its capital needs to be approximately $87 million with $77 million coming from cash flow from operations and $10 million from outside resources. The capital needs consists of $22.4 million for laboratory supplies and licenses, $1.2 million for rent and utilities, $2.6 million for insurance and $33.0 million for employees and related expenses and contractors.

As of September 30, 2025, we had approximately $13.3 million in current liabilities. Approximately $4.9 million of our current liabilities outstanding were to our vendors, $0.5 million were dividends payable to our preferred shareholders, $3.8 were notes payable and $4.0 million for liabilities of discontinued operations. Of the discontinued operations liabilities, $2.7 million relates to the reserve for the Medicare audit and $0.5 million are for operating leases.

As of September 30, 2025, we had an accumulated deficit of $72.4 million. We anticipate that we will need to raise additional capital to fund future operations. However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our development or acquisition activity. Failure to receive additional funding could also cause us to cease operations, in part or in full. Furthermore, even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations. Our management team has determined that our financial condition raises substantial doubt as to our ability to continue as a going concern.

Cash Flows

The primary source of our operating cash flow is the collection of accounts receivable from patients, private insurance companies, government programs, self-insured employers and other payers.

During the nine months ended September 30, 2025, net cash used in operations increased to $3.8 million compared to $2.0 million for the nine months ended September 30, 2024. This increase was primarily attributable to our increase in accounts payable of $2.2 million and the loss on impairment of $0.7 million.

Net cash provided by financing activities during the nine months ended September 30, 2025 was $3.3 million, which was primarily proceeds from the sale of common stock and issuance of promissory notes. Net cash provided by financing activities during the nine months ended September 30, 2024 was $2.4 million.

Impact of Inflation

We believe that inflation had a material impact on our results of operations for the nine months ended September 30, 2025. Inflation was evident in staffing and supply costs related to the delivery of patient care. There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition.