IMAC HOLDINGS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

The following discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including those set forth previously under the caption "Risk Factors." This
Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with our audited consolidated financial
statements and related notes included elsewhere in this report.

The results of operations for the periods reflected herein are not necessarily
indicative of results that may be expected for future periods.

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: 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 entity which is
consolidated with IMAC Management Services, LLC due to control by contract:
Integrated Medicine and Chiropractic Regeneration Center PSC (Kentucky PC); 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

We are a provider of movement and orthopedic therapies and minimally invasive
procedures performed through our regenerative and rehabilitative medical
treatments to improve the physical health of our patients at our chain of IMAC
Regeneration Centers and BackSpace clinics which we own or manage. Our
outpatient medical clinics provide conservative, minimally invasive medical
treatments to help patients with back pain, knee pain, joint pain, ligament and
tendon damage, and other related soft tissue conditions. Our licensed healthcare
professionals evaluate each patient and provide a custom treatment plan that
integrates traditional medical procedures and innovative regenerative medicine
procedures in combination with physical medicine. We do not use or offer
opioid-based prescriptions as part of our treatment options in order to help our
patients avoid the dangers of opioid abuse and addiction. The original IMAC
Regeneration Center opened in Kentucky in August 2000 and remains the flagship
location of our current business, which was formally organized in March 2015. To
date, we have seventeen outpatient medical clinics in Florida, Illinois,
Kentucky, Louisiana, Missouri and Tennessee, and plan to further expand the
reach of our facilities to other strategic locations throughout the United
States. We have four BackSpace locations opened in Tennessee and Missouri with 6
more clinics scheduled to open during the first quarter of 2022 in Tennessee and
Florida. We have partnered with several active and former professional athletes,
including Ozzie Smith, David Price, Tony Delk and Mike Ditka, in the branding of
our IMAC Regeneration Centers. Our outpatient medical clinics emphasize our
focus around treating sports and orthopedic injuries as an alternative to
traditional surgeries for repair or joint replacement.

We own our medical clinics directly or have entered into long-term management
services agreements to operate and control certain of our medical clinics by
contract. Our preference is to own the clinics; however, some state laws
restrict the corporate practice of medicine and require a licensed medical
practitioner to own the clinic. Accordingly, our managed clinics are owned
exclusively by a medical professional within a professional service corporation
(formed as a limited liability company or corporation) and are under common
control with us in order to comply with state laws regulating the ownership of
medical practices. We are compensated under management services agreements
through service fees based on the cost of the services provided, plus a
specified markup percentage, and a discretionary annual bonus determined in the
sole discretion of each professional service corporation.

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Corporate Conversion

Prior to June 1, 2018, we were a Kentucky limited liability company named IMAC
Holdings, LLC. Effective June 1, 2018, we converted into a Delaware corporation
pursuant to a statutory merger (the "Corporate Conversion") and changed our name
to IMAC Holdings, Inc. All of our outstanding membership interests were
exchanged on a proportional basis into shares of common stock of IMAC Holdings,
Inc.

Following the Corporate Conversion, IMAC Holdings, Inc. continues to hold all of
the property and assets of IMAC Holdings, LLC and all of the debts and
obligations of IMAC Holdings, LLC continue as the debts and obligations of IMAC
Holdings, Inc. The purpose of the Corporate Conversion was to reorganize our
corporate structure so that the top tier entity in our corporate structure is a
corporation rather than a limited liability company and so that our existing
owners own shares of our common stock rather than membership interests in a
limited liability company. Except as otherwise noted herein, the consolidated
financial statements included herein are those of IMAC Holdings, Inc. and its
consolidated subsidiaries.

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Significant financial metrics

Our significant financial metrics of the Company for the year ended December 31,
2021 are set forth in the bullets below.

? Net loss of $10.5 million in the year ended 2021 compared to a net loss of

$5.5 million in the year ended 2020.

? Adjusted EBITDA1 of ($7.7 million) for the year ended December 31, 2021

compared to ($4.4) for the year ended December 31, 2020.

? The Company incurred $593,000 in FDA related expenses for the year ended

December 31, 2021 compared to $209,000 for the year ended December 31, 2020.

? The Company paid $4.4 million of principal and interest in 2021.

? Operating expenses increased $2.2 million related to the five IMAC clinics

      acquired in 2021.

  ?   The BackSpace incurred initial opening expenses of $69,000

? The Company had one-time expenses of $441,000, consisting of: $108,000 in

earnout post-acquisition, $90,000 in share based compensation due to a

change in the vesting schedule, $97,000 in one-time consulting fees, $63,000

in legal and $51,000 in recruiting.

(1) Adjusted EBITDA is a non-GAAP financial measure most closely comparable to

the GAAP measure of net loss. See “Reconciliation of Non-GAAP Financial

Matters” below for a full reconciliation of the GAAP and non-GAAP measures.

Impacts of and Response to COVID-19 Outbreak

In March 2020, federal, state and local government authorities issued orders and
guidance in order to combat the spread of the COVID-19 outbreak. These actions
have required or encouraged our patients to remain at home except for essential
activities and may reduce patient visits to our clinics. For example, the
governor of Kentucky ordered all chiropractic facilities in the state of
Kentucky to close effective March 20, 2020, which caused us to close our
Kentucky chiropractic facilities until such order was lifted on May 4, 2020. The
full extent and duration of such actions and their impacts over the longer term
remain uncertain and dependent on future developments that cannot be accurately
predicted at this time, such as the severity and transmission rate of the
COVID-19 outbreak and the extent and effectiveness of containment actions taken.

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Our response plan has multiple facets and continues to evolve as the pandemic
unfolds. As a precautionary measure, we have taken steps to enhance our
operational and financial flexibility to react to the risks the COVID-19
outbreak presents to our business, including the following:

? Launched telemedicine communications for remote patient engagement;

? Suspended operations in three Kentucky clinics to comply with government

orders until we were allowed to resume operations on May 4, 2020; and

? Suspended operations at one clinic located in Cook County, Illinois to comply

with government orders until such order is lifted. The lease for this clinic

expired June 30, 2020 and was not renewed.



The COVID-19 outbreak appears likely to cause significant economic harm across
the United States, and the negative economic conditions that may result in
reduced patient demand in our industry. We may experience a material loss of
patients, revenue and market share as a result of the suspension of any
operations. Initiatives to implement telehealth engagement with patients may not
be adopted by existing and new patients. Patient habits may also be altered in
the medium to long term. Negative economic conditions, a decrease in our revenue
and consequent longer term trends harmful to our business may all exert pressure
on our company during the pendency of emergency restrictions on our operations
and beyond. Due to such conditions, beginning in the month of March 2020 we
began to terminate or furlough employees to reduce costs associated with
non-essential personnel, which resulted in a 27% reduction in workforce.

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We cannot predict with certainty when public health and economic conditions will
return to normal. A decline in patient visits and/or the possible suspension of
operations mandated in response to the COVID-19 outbreak, and the consequent
loss of revenue and cash flow during this period may make it difficult for us to
obtain capital necessary to fund our operations. Due to the impacts of COVID-19
we have seen an increase in recruiting and labor costs as well as delays in
supply chain.

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 identify, contract with, install equipment and operate a large

number of outpatient medical clinics and attract new patients to them;

? Our need to hire additional healthcare professionals in order to operate the

large number of clinics we intend to open;

? Our ability to enhance revenue at each facility on an ongoing basis through

additional patient volume and new services;

? Our ability to obtain additional financing for the projected costs associated

with the acquisition, management and development of new clinics, and the

personnel involved, if and when needed;

? Our ability to attract competent, skilled medical and sales personnel for our

operations at acceptable prices to manage our overhead; and

? Our ability to control our operating expenses as we expand our organization

into neighboring states.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States 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 consolidated financial statements are prepared. On an ongoing basis, we
evaluate our estimates, including those related to insurance adjustments and
provisions for doubtful accounts, useful lives of intangibles, property and
equipment, and valuation of goodwill. We base our 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.

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We believe that, of the significant accounting policies discussed in our Notes
to the Consolidated Financial Statements, the following accounting policies
require our most difficult, subjective or complex judgments in the preparation
of our financial statements.

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. Intangible assets are subject
to annual impairment tests and no impairments were recorded for the years
presented.

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.

The goodwill test is performed at least annually, or more frequently if events
or changes in circumstances indicate that the asset might be impaired. The
annual impairment test includes an option to perform a qualitative assessment of
whether it is more likely than not that a reporting unit's fair value is less
than its carrying value; the qualitative test may be performed prior to, or as
an alternative to, performing a quantitative goodwill impairment test. If, after
assessing the totality of events or circumstances, the Company determines that
it is more likely than not that the fair value of a reporting unit is less than
its carrying value, then the Company is required to perform the quantitative
goodwill impairment test. Otherwise, no further analysis is required. There was
no goodwill impairment for the years presented.

Revenue Recognition

The Company’s patient service revenue is derived from non-surgical procedures
performed at our outpatient medical clinics. The fees for such services are
billed either to the patient or a third-party payer, including Medicare.

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. Such estimates are subject to revisions which may be
material.

Starting in January 2020, the Company implemented wellness maintenance programs
on a subscription basis. There are five membership plans offered with different
levels of service for each plan. The Company recognizes membership revenue on a
monthly basis. Enrollment in the wellness maintenance program can occur at any
time during the month and can be cancelled at any time.

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 recognizes other
management service revenue in the period in which services are rendered. These
revenues are earned by IMAC Nashville, IMAC Management, IMAC Illinois, IMAC
Florida and IMAC Louisiana and are eliminated in consolidation to the extent
owned.

Starting in June 2021, the Company began offering outpatient chiropractic and
spinal care services as well as memberships services in Walmart retail locations
as part of Back Space. The fees for such services are paid and recognized as
incurred.

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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. Our ability
to collect outstanding receivables is critical to our results of operations and
cash flows. Accordingly, accounts receivable reported in our consolidated
financial statements are recorded at the net amount expected to be received. Our
primary collection risks are (i) the risk of overestimation of net revenues at
the time of billing that may result in our 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 us when the commercial insurance company pays
out-of-network claims directly to the patient, (iv) resource and capacity
constraints that may prevent us from handling the volume of billing and
collection issues in a timely manner, (v) the risk that patients do not pay us
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.

Our 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 our 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, we expect that any
such changes would be minimal and, therefore, would not have a material effect
on our financial condition or results of operations. Our 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 our patient accounts provide for an aging schedule in 30-day increments,
by payer, physician and patient. We analyze 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.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

Deferred tax assets are required to be reduced by a valuation allowance to the
extent that, based on the weight of available evidence, it is more likely than
not that the deferred tax assets will not be realized. These are based on
estimates of future taxable income which are highly subjective and subject

to
changes.

49

Results of Operations for the Twelve Months Ended December 31, 2021 Compared to
the Twelve Months Ended December 31, 2020

We own our medical clinics directly or have entered into long-term management
services agreements to operate and control these medical clinics by contract.
Our preference is to own the clinics; however, some state laws restrict the
corporate practice of medicine and require a licensed medical practitioner to
own the clinic. Accordingly, our managed clinics are owned exclusively by a
medical professional within a professional service corporation (formed as a
limited liability company or corporation) under common control with us or
eligible members of our company in order to comply with state laws regulating
the ownership of medical practices. We are compensated under management services
agreements through service fees based on the cost of the services provided, plus
a specified markup percentage, and a discretionary annual bonus determined in
the sole discretion of each professional service corporation.See Note 15 for
previously reported financial information that has been revised.

Revenues

Our revenue mix is diversified between medical treatments and physiological
treatments. Our medical treatments are further segmented into traditional
medical and regenerative medicine practices. We are an in-network provider for
traditional physical medical treatments, such as physical therapy, chiropractic
services and medical evaluations, with most private health insurance carriers.
Regenerative medical treatments are typically not covered by insurance, but paid
by the patient. For more information on our revenue recognition policies, see
"Critical Accounting Policies and Estimates - Revenue Recognition."

Revenues for the years ended December 31, 2021 and 2020 were as follows:

                                    Year Ended
                                   December 31,
                                 2021         2020
                                  (in thousands)
Revenues:
Outpatient facility services   $ 13,475     $ 12,414
Memberships                         656          409
Retail clinics                       33            -
Total revenues                 $ 14,164     $ 12,823



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See the table below for more information regarding our revenue breakdown by
service type.

                        Year Ended December 31,
                        2021              2020

Revenues:
Medical treatments          67.0 %            66.1 %
Physical therapy            28.1 %            30.4 %
Chiropractic care            2.8 %             2.1 %
Memberships                  2.1 %             1.4 %
                             100 %             100 %



Visits to our clinics are an indication of business activity. The following
table is a breakdown of visits by type for the year ended December 31, 2021 and
2020.

                       Year Ended December 31,
                         2021             2020

Visits:
Physical therapy           56,261          48,553
Chiropractic care          20,265          15,644
Medical treatments         39,036          38,002
Other                         262             230
Membership                 52,684          33,059
                          168,508         135,488



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Consolidated Results

Total revenues increased $1.3 million due to acquisitions, continued same-store
growth, opening of retail clinics and improvements from the negative impact

of
COVID-19 on 2020.

IMAC Clinics

The total revenue increase of $1.3 million is attributed to the increase of
revenues for IMAC Clinics. Same-store revenues decreased $202,000 overall from
2020 to 2021. This decrease was driven by the closure of two clinics in Illinois
and Tennessee resulting in a decrease of $595,000 however the remaining same
stores increased $393,000. New clinics attributed to $1.5 million of the overall
increase.

Retail Clinics

The Company began opening retail clinics in Walmart in June 2021 and as of
December 31, 2021 had four clinics opened in Tennessee and Missouri. The company
has scheduled 6 additional locations to open during the first quarter of 2022.
The retail clinics provides outpatient chiropractic and spinal care services.
For the year ended December 31, 2021, the retail clinics had 1,038 visits.

Memberships

A wellness membership program was implemented at IMAC Clinics in January 2020
and this wellness program has different plan levels that include services for
chiropractic care and medical treatments on a monthly subscription basis.
Therefore, memberships could have multiple visits in one month, however only one
payment is received for these visits. IMAC Clinics had 1,189 and 849 active
members for the years ended in December 31, 2021 and 2020, respectively.
BackSpace also has a membership plan for chiropractic care on a monthly
subscription basis. As of December 31, 2021, 76% of the BackSpace revenue was
related to memberships.

Operating Expenses

Operating expenses consist of patient expenses, salaries and benefits, share
based compensation, advertising and marketing, general and administrative
expenses and depreciation expenses.

Patient expenses consist of medical supplies for services rendered.

                                                                              Percent
                                                          Change from       Change from
   Patient Expenses         2021            2020          Prior Year        Prior Year

Year Ended December 31   $ 1,628,000     $ 1,624,000     $       4,000               0.2 %



Cost of revenues (patient expense) stayed relatively consistent for the year
ended December 31, 2021 as compared to December 31, 2020 although patient
revenue increased 10%. This is attributed to improvements in supply management
as the Company centralized medical ordering for all clinics and the
implementation of supply discounts related to volume purchases. The rotation of
service mix also reduced supply costs, for example cell therapy visits decreased
20% which is a higher cost procedure.

Salaries and benefits consist of payroll, benefits and related party contracts.

                                                                               Percent
                                                           Change from       Change from
Salaries and Benefits        2021             2020          Prior Year       Prior Year

Year Ended December 31   $ 12,739,000     $ 10,495,000     $  2,244,000                21 %



Salaries and benefits expenses for the year ended December 31, 2021, as compared
to the year ended December 31, 2020, increased by 21%. An increase would have
been expected considering the Company added five IMAC locations in 2021, one
clinic opened at the end of 2020 with a full year in 2021 and opened four
BackSpace locations during 2021. These new clinics attributed to $1.6 million of
the increase. $320,000 of the increase is a result of the executive compensation
adjustments approved by the compensation committee in 2021.

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Share-based compensation consists of the value of equity incentive grants issued
to employees, directors and board members which have vested during the period.

                                                                            Percent
                                                        Change from       Change from
Share-based Compensation     2021          2020         Prior Year        Prior Year

Year Ended December 31     $ 571,000     $ 392,000     $     179,000                46 %



Share-based compensation increased due to the amended vesting schedule of the
RSUs awarded to the board in 2020. This change reflected an increase of $90,000
in share-based compensation compared to what was expected with the original
schedule. The Company also awarded RSUs in January 2021 that vest in January
2022 as well as RSUs awarded in December 2021 that vested immediately, this
attributed to $40,000 of the increase.

Advertising and marketing consist of marketing, business promotion and brand
recognition.

                                                                               Percent
                                                           Change from       Change from
Advertising and Marketing      2021           2020         Prior Year        Prior Year

Year Ended December 31      $ 1,325,000     $ 933,000     $     392,000                42 %



Advertising and marketing expenses increased $392,000 for the year ended
December 31, 2021, as compared to the year ended December 31, 2020. During 2020
the Company reduced marketing spending as a result of the impact of the COVID-19
outbreak however marketing efforts were fully implemented for 2021 along with
marketing for new clinics. There was a similar increase in online and website
advertising for 2021 as compared to 2020. $256,000 of the total increase was
attributed to online and website advertising. Patient visits increased in 2021
that coincides with our increase in marketing in all of our locations as well as
adding advertising for new locations.

General and administrative expense ("G&A") consist of all other costs than
advertising and marketing, salaries and benefits, patient expenses and
depreciation.

                                                                                 Percent
                                                             Change from       Change from
General and Administrative      2021            2020          Prior Year       Prior Year

Year Ended December 31       $ 6,423,000     $ 4,557,000     $  1,866,000                41 %



G&A increased in the year ended December 31, 2021 as compared to the year ended
December 31, 2020. The opening of the five IMAC clinics and the BackSpace
clinics in 2021 attributed $745,000 of the increase for 2021. There was an
additional of $122,000 in billing services due to the increase in collections
from same-store clinics in 2021. $50,000 of the increase is attributed to an
increase in travel as 2020 was impacted by pandemic. See FDA impact below.

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FDA Clinical Trial

In August 2020, the United States Food and Drug Administration (the "FDA")
approved the Company's investigational new drug application. The Company has
begun Phase 1 of the clinical trial, which will be conducted over a 12-month
period. The Company incurred $574,000 in expenses related to consultants,
supplies, software and travel for the clinical trial during 2021, which is
included in the G&A totals above. This is compared to $209,000 that was incurred
for the trial in 2020.

Depreciation is related to our property and equipment purchases to use in the
course of our business activities. Amortization is related to our business
acquisitions.

                                                                                        Percent
                                                                    Change from       Change from

 Depreciation and Amortization        2021            2020          Prior

Year Prior Year

Year Ended December 31             $ 1,649,000     $ 1,722,000     $     (73,000 )              (4 )%



Depreciation and amortization decreased for the year ended December 31, 2021
compared to the year ended December 31, 2020. This decrease is attributed to
non-competes and fixed assets that were fully amortized and depreciated during
2021.

Analysis of 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 year ended December 31, 2021, net cash used in operations increased
to $7.6 million compared to $6.0 million for the year ended December 31, 2020.
This increase was primarily attributable to our net loss and the $1.5 million
gain on extinguishment of debt in 2020 from the Paycheck Protection Program
("PPP") loan forgiveness.

Net cash used in investing activities during the years ended December 31, 2021
and 2020 was $2.5 million and $0.6 million, respectively. This was primarily
driven by the acquisitions made in 2021, which attributed to $3.2 million of the
change.

Net cash provided by financing activities during the year ended December 31,
2021 was $14.5 million, including proceeds from the sale of common stock, net of
related fees, which totaled $20.2 million, reduced by principal repayments of
$4.4 million. Net cash provided by financing activities during the year ended
December 31, 2020 was $8.8 million, including proceeds from the sale of common
stock, net of related fees, which totaled $5.2 million and issuances of notes
payable of $5.4 million, reduced by principal repayments of $1.5 million.

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Reconciliation of Non-GAAP Financial Measures

This report contains certain non-GAAP financial measures, including non-GAAP net
income and adjusted EBITDA, which are used by management in analyzing our
financial results and ongoing operational performance.

In order to better assess the Company's financial results, management believes
that net income before interest, income taxes, stock based compensation, and
depreciation and amortization ("adjusted EBITDA") is a useful measure for
evaluating the operating performance of the Company because adjusted EBITDA
reflects net income adjusted for certain non-cash and/or non-operating items. We
also believe that adjusted EBITDA is useful to many investors to assess the
Company's ongoing results from current operations. Adjusted EBITDA is a non-GAAP
financial measure and should not be considered a measure of financial
performance under GAAP. Because adjusted EBITDA is not a measurement determined
in accordance with GAAP, such non-GAAP financial measures are susceptible to
varying calculations. Accordingly, adjusted EBITDA, as presented, may not be
comparable to other similarly titled measures of other companies.

This non-GAAP financial measure should not be considered as a substitute for, or
superior to, measures of financial performance which are prepared in accordance
with US GAAP and may be different from non-GAAP financial measures used by other
companies and have limitations as analytical tools.

A reconciliation of adjusted EBITDA to the most directly comparable GAAP
measures is set forth below.

                                                    2021              2020
GAAP loss attributable to IMAC Holdings, Inc.   $ (10,542,000 )   $ (5,542,000 )
Interest income                                        (3,000 )         (6,000 )
Interest expense                                      504,000          563,000
Share-based compensation expense                      571,000          392,000
Loss on disposal of assets                            149,000           64,000
Other income                                          (57,000 )              -
Gain on extinguishment of debt                              -       (1,551,000 )
Depreciation and amortization                       1,649,000        1,722,000
Adjusted EBITDA                                 $  (7,729,000 )   $ (4,358,000 )



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Liquidity and Capital Resources

As of December 31, 2021, we had $7.1 million in cash and working capital of $4.1
million. As of December 31, 2020, we had cash of $2.6 million and deficiency in
working capital of $1.2 million. The decrease in working capital deficiency was
primarily due to the increase in current assets as cash increased by $4.5
million.

We believe our cash at December 31, 2021 will be sufficient to meet our cash,
operational and liquidity requirements for at least 12 months after the filing
of this Annual Report.

As of December 31, 2021, we had approximately $4.9 million in current
liabilities. Approximately $2.5 million of our current liabilities outstanding
were to our vendors, which we have historically paid down in the normal course
of our business, and accrued payroll. Patient deposits accounted for
approximately $321,000 of our current liabilities. The current portion of notes
payable by us accounted for approximately $254,000 of our current liabilities.
The current portion of our finance lease obligations accounted for approximately
$19,000 of our current liabilities. The current portion of our liability to
issue common stock accounted for approximately $338,000 of our current
liabilities. The current portion of our operating lease liability accounted for
approximately $1.5 million of our current liabilities.

As of December 31, 2021, we had an accumulated deficit of $28.2 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 or 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 of
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.

56





Registered Direct Offering

On June 18, 2020, the Company entered into the Securities Purchase Agreement
with institutional accredited investors pursuant to which the Company offered
for sale to the Purchasers an aggregate of 1,764,000 shares of its common stock
in a 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 and 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.

At-the-Market Offering

On October 5, 2020, the Company launched an at-the-market offering (the
"Offering") of up to $5,000,000 worth of shares of the Company's common stock,
par value $0.001 per share, pursuant to an At-The-Market Issuance Sales
Agreement, dated October 5, 2020, by and between the Company and Ascendiant
Capital Markets, LLC. Since the launch and as of December 31, 2021, pursuant to
the Agreement, the Company had sold 1,541,758 shares of common stock through
Ascendiant Capital Markets for aggregate proceeds to the Company of $2.9
million.

Iliad Note

On October 29, 2020, the Company entered into the Note Purchase Agreement with
Iliad pursuant to which the Company agreed to issue and sell to Iliad a secured
promissory note in an initial principal amount of $2,690,000, which is payable
on or before April 29, 2022. The October Principal Amount includes an original
discount of $175,000 and $15,000 that the Company agreed to pay to Iliad to
cover legal fees, accounting costs, due diligence and other transaction costs.
In exchange for the October Note, Iliad paid a purchase price of $2,500,000. The
October Purchase Agreement also provides for indemnification of Iliad and its
affiliates in the event that they incur loss or damage related to, amount other
things, breach by the Company of any of its representations, warranties or
covenants under the October Purchase Agreement. In connection with the October
Purchase Agreement and the October Note, the Company entered into a Security
Agreement with Iliad, pursuant to which the obligations of the Company is
secured by all of the assets of the Company, excluding the Company's accounts
receivable and intellectual property. Upon an event of default under the October
Note, the October Security Agreement entitles the Holder to take possession of
such collateral; provided that Iliad's security interest and remedies with
respect to the collateral are junior in priority to the security interest
previously granted by the Company to Iliad in connection with a separate
financing entered into by them on March 25, 2020, for which Iliad holds a
senior, first-priority security interest in the same collateral. The Company
repaid the note in January 2022.


Public Offering



On March 26, 2021, the Company completed a public offering by issuing 10,625,000
shares of common stock for gross proceeds of $17 million. The Company used
approximately $1.8 million for the repayment of certain indebtedness and is
using the remaining proceeds for the repayment of certain other indebtedness, to
finance the costs of developing and acquiring additional outpatient medical
clinics and healthcare centers as part of the Company's growth and expansion
strategy and for working capital.



On April 7, 2021 the Company closed on the sale of an additional 1,193,750
shares of common stock at the then public offering price of $1.60 per share,
pursuant to the 15% over-allotment option exercised in full by the underwriters
in connection with its public offering that closed March 2021.


57





Contractual Obligations

The following table summarizes our contractual obligations by period as of
December 31, 2021:

                                                         Payments Due by Period
                                                Less Than                                      More Than
                                  Total          1 Year         1-3 Years      4-5 Years        5 Years

Short-term obligations         $   266,418     $   266,418     $         -     $        -     $         -
Long-term obligations,
including interest                 111,498               -         101,748          9,750               -
Finance lease obligations,
including interest                  53,615          21,806          31,809              -               -
Operating lease obligations,
including interest               6,112,578       1,711,748       3,705,414        613,725          81,691
                               $ 6,544,109     $ 1,999,972     $ 3,838,971     $  623,475     $    81,691



Impact of Inflation

We believe that inflation has not had a material impact on our results of
operations for the years ended December 31, 2021 and 2020. We cannot assure you
that future inflation will not have an adverse impact on our operating results
and financial condition.

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