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What changed in JOINT Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of JOINT Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+278 added−277 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-14)

Top changes in JOINT Corp's 2025 10-K

278 paragraphs added · 277 removed · 216 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

82 edited+24 added−33 removed101 unchanged
Biggest changeEach patient’s records are digitally updated for retrieval in our proprietary data storage system by our chiropractors in compliance with all applicable medical records security and privacy regulations. The adjustment process, administered by a licensed chiropractor, takes approximately 15 - 20 minutes on average for a new patient and 5 - 7 minutes on average for a returning patient.
Biggest changeThe patient is then escorted to our open adjustment area, where they are required to remove only their outerwear to receive their adjustment. Each patient’s records are digitally updated for retrieval in our proprietary data storage system by our chiropractors in compliance with all applicable medical records security and privacy regulations.
The Cleveland Clinic has stated that chiropractors are established members of the mainstream medical team with chiropractic adjustments being an effective treatment option for all ages and is the most common alternative treatment option in the United States. The chiropractic industry in the United States is large and highly fragmented.
The Cleveland Clinic has stated that chiropractors are established members of the mainstream medical team with chiropractic adjustments being an effective treatment option for all ages and the most common alternative treatment option in the United States. The chiropractic industry in the United States is large and highly fragmented.
While chiropractors typically accept cash payment in addition to insurance, Medicare and Medicaid, they continue to incur overhead expenses associated with maintaining the capability to process third-party reimbursement. We believe that most chiropractors who use this third-party reimbursement model would find it economically difficult to discount the prices they charge for their services to levels comparable with our pricing.
While chiropractors typically accept cash payment in addition to insurance, Medicare and Medicaid, they continue to incur overhead expenses associated with maintaining the capability to process third-party reimbursement. We believe that most chiropractors who use this third-party reimbursement model would find it economically difficult to discount the prices they charge for their services to levels comparable to our pricing.
We strive to make The Joint Chiropractic the career path of choice for chiropractors, with opportunities for our chiropractors to grow and develop in their careers, supported by competitive compensation and benefits, and with our simple business model that allows our chiropractors to focus on patient care.
We strive to make The Joint the career path of choice for chiropractors, with opportunities for our chiropractors to grow and develop in their careers, supported by competitive compensation and benefits, and with our simple business model that allows our chiropractors to focus on patient care.
ITEM 1. BUSINESS " Our mission is to improve quality of life through routine and affordable chiropractic care." Overview We are a rapidly growing franchisor and operator of chiropractic clinics that uses a private pay, non-insurance, cash-based model.
ITEM 1. BUSINESS " Our mission is to improve quality of life through routine and affordable chiropractic care." Overview We are a growing franchisor and operator of chiropractic clinics that uses a private pay, non-insurance, cash-based model.
In support of our mission to offer quality, affordable and convenient care to our patients, our clinics offer a variety of customizable membership and wellness treatment plans, which provide additional value pricing as compared with our single-visit pricing schedules.
In support of our mission to offer quality, affordable and convenient care to our patients, our clinics offer a variety of customizable membership and wellness treatment plans and packages, which provide additional value pricing as compared with our single-visit pricing schedules.
We are operating under exemptions from registration in several states based on our qualifications for exemption as set forth in those states’ laws. As of December 31, 2024, we were registered to sell franchises in every state (where registrations are required) except for Wyoming, North and South Dakota and could sell franchises in 47 of all 50 states.
We are operating under exemptions from registration in several states based on our qualifications for exemption as set forth in those states’ laws. As of December 31, 2025, we were registered to sell franchises in every state (where registrations are required) except for Wyoming, North and South Dakota and could sell franchises in 47 of all 50 states.
Our Growth Strategy Our goal is not only to capture a significant share of the existing market but also to expand the market for chiropractic care. We are accomplishing this through the rapid geographic expansion of our affordable franchising program and the continued support of our robust regional developer network.
Our Growth Strategy Our goal is not only to capture a significant share of the existing market but also to expand the market for chiropractic care. We are accomplishing this through the geographic expansion of our affordable franchising program and the continued support of our regional developer network.
While it has not done so to date, we cannot assure you that the New York Attorney General will not similarly choose to challenge our contractual relationships with our affiliated PCs in New York and, in 8 Table of Contents particular, to question whether use of The Joint trademark by our affiliated PCs misleads consumers, causing them to incorrectly conclude that we are the provider of chiropractic treatment.
While it has not done so to date, we cannot assure you that the New York Attorney General will not similarly choose to challenge our contractual relationships with our affiliated PCs in New York and, in particular, to question whether use of The Joint trademark by our affiliated PCs misleads consumers, causing them to incorrectly conclude that we are the provider of chiropractic treatment.
As of January 1, 2024, the minimum wage increased in a number of states, the District of Columbia and local municipalities, with many of these wage increases triggered automatically by increases in the cost of living due to high inflation.
As of January 1, 2026, the minimum wage increased in a number of states, the District of Columbia and local municipalities, with many of these wage increases triggered automatically by increases in the cost of living due to high inflation.
While we have had no further communications with the Board since that time, we have also received no assurance that changes to the agreement satisfied all of its concerns, and thus we cannot assure you that similar claims will not be made in the future, either against us or our affiliated PCs.
While we have had no further communications with the Kansas Healing Arts Board since that time, we have also received no assurance that changes to the agreement satisfied all of its concerns, and thus we cannot assure you that similar claims will not be made in the future, either against us or our affiliated PCs.
The imposition of any requirement that we or our franchisees provide health insurance benefits to our or their employees that are more extensive than the health insurance benefits that we currently provide to our employees or that franchisees may or may not provide, or the imposition of additional employer paid employment taxes on income earned by our employees, could have an adverse effect on our results of 9 Table of Contents operations and financial position.
The imposition of any requirement that we or our franchisees provide health insurance benefits to our or their employees that are more extensive than the health insurance benefits that we currently provide to our employees or that franchisees may or may not provide, or the imposition of additional employer paid employment taxes on income earned by our employees, could have an adverse effect on our results of operations and financial position.
Furthermore, it may be easier for our franchisees’ employees to organize into unions, require us to participate in collective bargaining with those employees, provide those employees and their union representatives with bargaining power to request that we have our franchisees raise wages, and make it more expensive and less profitable to operate a franchised clinic. California AB-5.
Furthermore, it may be easier for our franchisees’ employees to organize into unions, require us to participate in collective bargaining with those employees, provide those employees and their union representatives with bargaining power to request that we have our franchisees raise wages, and make it more expensive and less profitable to operate a franchised clinic.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected leaders through the granting of stock-based compensation awards. Our benefit offerings include comprehensive medical coverage, paid time off, a retirement savings plan, free family wellness membership at our clinics and flexible work schedules.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected leaders through the granting of stock-based compensation awards. Our benefit offerings include comprehensive medical coverage, paid time off, a retirement savings plan and free family wellness membership at our clinics.
Comp Sales includes the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
Comp Sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
We provide our doctors one-on-one training, as well as ongoing coaching and mentoring.
We provide our doctors with one-on-one training, as well as ongoing coaching and mentoring.
The National Center for Complementary & Alternative Medicine of the National Institutes of Health has stated that spinal manipulation appears to benefit some people with low-back pain and also may be helpful for headaches, neck pain, upper- and lower-extremity joint conditions and whiplash-associated disorders.
The National Center for Complementary and Integrative Health of the National Institutes of Health has stated that spinal manipulation appears to benefit some people with low-back pain and also may be helpful for headaches, neck pain, upper- and lower-extremity joint conditions and whiplash-associated disorders.
Our clinic leases generally have an initial term of five years, include one to two options to renew for terms of five years, and require us to pay a proportionate share of real estate taxes, insurance, common area maintenance charges and other operating costs.
Our clinic leases generally have an initial term of five years, include one to two options to renew the term for five years each, and require us to pay a proportionate share of real estate taxes, insurance, common area maintenance charges and other operating costs.
Regulatory Environment HIPAA and State Privacy and Breach Notification Rules Numerous federal and state laws, regulations, standards and other legal obligations govern the collection, dissemination, use, access to, confidentiality, security and processing of personal information, including cybersecurity breach notification and targeted 6 Table of Contents advertising.
Regulatory Environment HIPAA and State Privacy and Breach Notification Rules Numerous federal and state laws, regulations, standards and other legal obligations govern the collection, dissemination, use, access to, confidentiality, security and processing of personal information, including cybersecurity breach notification and targeted advertising.
Instead, we refer those with severe or acute symptoms to alternate healthcare providers, including traditional chiropractors. Our Industry Chiropractic care is widely accepted among individuals with a variety of medical conditions, particularly back pain.
Instead, we refer those with severe or acute symptoms to alternate healthcare providers, including traditional chiropractors. 2 Table of Contents Our Industry Chiropractic care is widely accepted among individuals with a variety of medical conditions, particularly back pain.
Americans with Disabilities Act We are required to comply with the accessibility standards mandated by the Americans with Disabilities Act of 1990 and related federal and state statutes, which generally prohibit discrimination on the basis of disability in places of public accommodation.
Americans with Disabilities Act 10 Table of Contents We are required to comply with the accessibility standards mandated by the Americans with Disabilities Act of 1990 and related federal and state statutes, which generally prohibit discrimination on the basis of disability in places of public accommodation.
The CPRA also creates a new California data protection agency to implement and enforce the CCPA and the CPRA, which could result in increased privacy and information security enforcement. The CCPA has prompted a number of proposals for new privacy legislation.
The CPRA also creates a new California data protection agency to implement and enforce the CCPA and the CPRA, which could result in increased privacy and information 7 Table of Contents security enforcement. The CCPA has prompted a number of proposals for new privacy legislation.
Please see the risk factor in Item 1A for additional discussion of the “Risks Related to State Regulations on the Corporate Practice of Chiropractic” as they relate to our business model. Regulation Relating to Franchising We are subject to the rules and regulations of the FTC and various state laws regulating the offer and sale of franchises.
Please see the risk factor in Item 1A for additional discussion of the “Risks Related to State Regulation of the Corporate Practice of Chiropractic” as they relate to our business model. 9 Table of Contents Regulation Relating to Franchising We are subject to the rules and regulations of the FTC and various state laws regulating the offer and sale of franchises.
At the time, we and the franchisee had several communications with the Kansas Board with respect to modifying the management agreement to address its concerns.
At the time, we and the franchisee had several communications with the Kansas Healing Arts Board with respect to modifying the management agreement to address its concerns.
December 2015 4871809 THE JOINT April 2015 4723892 THE JOINT… THE CHIROPRACTIC PLACE (STYLIZED) April 2013 4323810 THE JOINT… THE CHIROPRACTIC PLACE February 2011 3922558 Our registered trademarks include the following in Canada: THE JOINT July 2019 TMA1044029 THE JOINT CHIROPRACTIC July 2019 TMA1044040 THE JOINT CHIROPRACTIC and Design July 2019 TMA1044026 Corporate Information We are a Delaware corporation.
December 2015 4871809 THE JOINT April 2015 4723892 12 Table of Contents THE JOINT… THE CHIROPRACTIC PLACE (STYLIZED) April 2013 4323810 THE JOINT… THE CHIROPRACTIC PLACE February 2011 3922558 Our registered trademarks include the following in Canada: THE JOINT July 2019 TMA1044029 THE JOINT CHIROPRACTIC July 2019 TMA1044040 THE JOINT CHIROPRACTIC and Design July 2019 TMA1044026 Corporate Information We are a Delaware corporation.
Market leading position with significant nationwide scale . We are the largest chiropractic franchisor in the United States with over 967 clinics operating across the United States. Our chiropractic brand is approximately six times larger than the next largest chiropractic chain, as of December 2024.
Market leading position with significant nationwide scale . We are the largest chiropractic franchisor in the United States with over 960 clinics operating across the United States. Our chiropractic brand is approximately six times larger than the next largest chiropractic chain, as of December 2025.
Quality, empathetic service . Across our system we have a community of more than 2,662 fully licensed chiropractic doctors, who performed approximately 14.7 million adjustments in 2024 alone. Our doctors provide personal and intuitive patient care focused on pain relief and ongoing wellness to promote healthy, active lifestyles.
Quality, empathetic service . Across our system we have a community of more than 2,500 fully licensed chiropractic doctors, who performed approximately 14.4 million adjustments in 2025 alone. Our doctors provide personal and intuitive patient care focused on pain relief and ongoing wellness to promote healthy, active lifestyles.
Workforce As of December 31, 2024, we and our consolidated VIEs employed approximately 443 persons on a full-time basis and approximately 293 persons on a part-time basis. None of our employees are members of unions or participate in other collective bargaining arrangements. Recruitment We believe our employees are among our most valuable resources and are critical to our continued success.
Workforce As of December 31, 2025, we and our consolidated VIEs employed approximately 202 persons on a full-time basis and approximately 128 persons on a part-time basis. None of our employees are members of unions or participate in other collective bargaining arrangements. Recruitment We believe our employees are among our most valuable resources and are critical to our continued success.
Our doctors continually refine their skills, as our clinics see an average of 301 patient visits per week (for clinics open for the full 12 months of 2024), as compared to the most recent chiropractic industry average of 113 patients per week for non-multidisciplinary or integrated practices, according to the same 2024 Chiropractic Economics survey referred to above.
Our doctors continually refine their skills, as our clinics see an average of 291 patient visits per week (for clinics open for the full 12 months of 2025), as compared to the most recent chiropractic industry average of 138 patients per week for non-multidisciplinary or integrated practices, according to the same 2025 Chiropractic Economics survey referred to above.
We have identified six competitors who are attempting to duplicate our cash-only, low cost, appointment-free model. Based on publicly available information, five of these competitors each operate fewer than 15 clinics as franchises, and the largest competitor operated 34 clinics as franchises as of December 31, 2024.
We have identified six competitors who are attempting to duplicate our cash-only, low-cost, appointment-free model. Based on publicly available information, five of these competitors each operate fewer than 16 clinics as franchises, and the largest competitor operated 24 clinics as franchises as of December 31, 2025.
We attracted an average of 992 new patients per clinic (for all clinics open for the full 12 months of 2024) during the year ended December 31, 2024, as compared to the most recent chiropractic industry average of 468 new patients per year for traditional insurance-based non-multidisciplinary or integrated practices, according to a 2024 Chiropractic Economics survey (published in June of 2023).
We attracted an average of 827 new patients per clinic (for all clinics open for the full 12 months of 2025) during the year ended December 31, 2025, as compared to the most recent chiropractic industry average of 364 new patients per year for traditional insurance-based non-multidisciplinary or integrated practices, according to a 2025 Chiropractic Economics survey (published in June 2025).
Accordingly, our long-term growth tactics include: • the continued growth of system sales through the increased attraction and retention of patients; • the increase in royalty income through the acceleration of the opening of clinics already in development and the sale of additional franchises; and • improving operational margins and expanding additional revenue streams within our clinics.
Accordingly, our long-term growth tactics include: • the continued growth of system sales through the increased attraction and retention of patients; • the increase in royalty income through the acceleration of the opening of clinics already in development, the sale of additional franchises and the refranchising of our remaining company-owned or managed clinics; and • improving operational margins and expanding additional revenue streams within our clinics.
According to the American Chiropractic Association, 2 Table of Contents 80% of Americans experience back pain at least once in their lifetime.
According to the American Chiropractic Association, 80% of Americans experience back pain at least once in their lifetime.
August 2022 6810062 THE JOINT CHIROPRACTIC December 2016 5095943 THE JOINT CHIROPRACTIC (STYLIZED-BLACK BOX) April 2021 6331815 12 Table of Contents THE JOINT CHIROPRACTIC (STYLIZED-HORIZ LOGO) April 2021 6331917 THE JOINT CHIROPRACTIC (STYLIZED-STCKD LOGO) April 2021 6331918 YOU'RE BACK, BABY.
August 2022 6810062 THE JOINT CHIROPRACTIC December 2016 5095943 THE JOINT CHIROPRACTIC (STYLIZED-BLACK BOX) April 2021 6331815 THE JOINT CHIROPRACTIC (STYLIZED-HORIZ LOGO) April 2021 6331917 THE JOINT CHIROPRACTIC (STYLIZED-STCKD LOGO) April 2021 6331918 YOU'RE BACK, BABY.
Our distributors and suppliers also may be affected by higher minimum wage and benefit standards, which could result in higher costs for goods and services supplied to us. Joint Employer Rules Background.
Our distributors and suppliers also may be affected by higher minimum wage and benefit standards, which could result in higher costs for goods and services supplied to us. Joint Employer Rules Significance of Joint Employer Rules for our Business Model.
In addition, Mr. Razdan served in various positions at the public company, Yum! Brands, Inc., from June 1995 to October 2014, including most recently as the Country General Manager for India from October 2011 to October 2014. Mr. Razdan’s executive leadership team includes the following individuals: Jake Singleton has served as our Chief Financial Officer since November 2018. Mr.
In addition, Mr. Razdan served in various positions at the public company, Yum! Brands, Inc., from June 1995 to October 2014, including most recently as the Country General Manager for India from October 2011 to October 2014. Mr. Razdan’s executive leadership team includes the following individuals: Scott J. Bowman has served as our Chief Financial Officer since June 2025. Mr.
We are obligated under one additional lease for facilities in which we have ceased clinic operations. Our corporate headquarters are located at 16767 N. Perimeter Center Drive, Suite 110, Scottsdale, Arizona 85260. The term of our lease for this location expires on December 31, 2025.
We are obligated under three additional leases for facilities in which we have ceased clinic operations. Our corporate headquarters are located at 16767 N. Perimeter Center Drive, Suite 110, Scottsdale, Arizona 85260. The term of our lease for this location expires on May 31, 2031.
We believe that to secure leadership in our industry and to maximize our opportunities in our markets, it is important to gain brand equity and consumer awareness as rapidly as possible, consistent with a disciplined approach to opening clinics.
Selling Additional Franchises We will continue to sell franchises. We believe that to secure leadership in our industry and to maximize our opportunities in our markets, it is important to gain brand equity and consumer awareness as rapidly as possible, consistent with a disciplined approach to opening clinics.
As of December 31, 2024, we had 967 franchised or company-owned or managed clinics in operation in 41 states and the District of Columbia. All of our locations are leased. Intellectual Property Trademarks, Trade Names and Service Marks Our registered trademarks include the following in the United States: Trademark Registration Date Registration Number DON'T DO PAIN. DO YOU.
As of December 31, 2025, we had 960 franchised or company-owned or managed clinics in operation in 43 states. All of our locations are leased. Intellectual Property Trademarks, Trade Names and Service Marks Our registered trademarks include the following in the United States: Trademark Registration Date Registration Number DON'T DO PAIN. DO YOU.
Since acquiring the predecessor to our company in March 2010, we have grown our enterprise from eight to 967 clinics in operation as of December 31, 2024, with an additional 92 franchise licenses sold but not yet developed across our network, and 53 letters of intent for 53 future clinic licenses.
Since acquiring the predecessor to our company in March 2010, we have grown our enterprise from eight to 960 clinics in operation as of December 31, 2025, with an additional 82 franchise licenses sold but not yet developed across our network, and 57 letters of intent for 57 future clinic licenses.
Opening Clinics in Development In addition to our 967 operating clinics as of December 31, 2024, we have granted franchises, either directly or with our regional developers’ support, for an additional 92 clinics that we believe will be developed in the future and executed letters-of-intent for 53 future clinic licenses.
Opening Clinics in Development In addition to our 960 operating clinics as of December 31, 2025, we have granted franchises, either directly or with our regional developers’ support, for an additional 82 clinics that we believe will be developed in the future and executed letters of intent for 57 future clinic licenses.
Our competitive employment program for chiropractors includes (i) full time and flexible hours, with full benefits and paid time off, (ii) part time and flexible hours with some benefits, (iii) company-paid malpractice insurance, (iv) tuition reimbursement, sign-on and referral bonuses in certain circumstances, and (v) a competitive starting base salary.
Our competitive employment program for chiropractors includes (i) full time and flexible hours, with full benefits and paid time off, (ii) part time and flexible hours with some benefits, (iii) company-paid malpractice insurance, (iv) tuition reimbursement, sign-on and referral bonuses in certain circumstances, and (v) a competitive starting base salary. We continue to fine-tune and re-strategize our search for chiropractors.
While there is significant variation in results in our system, and the results of our top-performing clinics are not representative of our system overall, we believe it is worth noting that in January 2012, the highest-performing clinic in our system was a franchised clinic which had monthly sales of approximately $45,000, and in December 2024, the highest performing clinic in our system was a franchised clinic which had monthly sales of approximately $183,371.
While there is significant variation in results in our system, and the results of our top-performing clinics are not representative of our system overall, we believe it is worth noting that in January 2012, the highest-performing clinic in our system was a franchised clinic that had monthly sales of approximately $45 thousand and in December 2025, the highest performing clinic in our system was a franchised clinic that had monthly sales of approximately $165 thousand.
As of December 31, 2024, our franchisees owned or managed 842 clinics, and we owned or managed 125 clinics. Our future growth strategy will focus on accelerating the development of our franchise base through the sale of additional franchises and through the continued support of our robust regional developer network.
As of December 31, 2025, our franchisees owned or managed 885 clinics, and we owned or managed 75 clinics. Our future growth strategy will focus on accelerating the development of our franchise base through the sale of additional franchises and through the continued support of our regional developer network.
From January 2012 through December 31, 2024, we have increased the annual system-wide sales from $22.3 million to $530.3 million (which is a non-GAAP measure for the year ended December 31, 2024). During this period, we increased the number of clinics in operation from 33 to 967.
From January 2012 through December 31, 2025, we have increased the annual system-wide sales from $22.3 million to $532.4 million (which is a non-GAAP financial measure for the year ended December 31, 2025). During this period, we increased the number of clinics in operation from 33 to 960.
We seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry. We delivered over 14.7 million patient visits in 2024, up from 13.6 million patient visits in 2023, generating over $530.3 million and $488 million of system-wide sales, respectively, across our highly franchised network.
We seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry. We delivered over 14.4 million patient visits in 2025, down from 14.7 million patient visits in 2024, generating over $532.4 million and $530.3 million of system-wide sales, respectively, across our highly franchised network.
Significance of Joint Employer Rules for our Business Model. The replacement or withdrawal of the NLRA and FLSA rules or new standards under federal and state discrimination statue (such as Title VII), which include or reinstate expansive definitions of “joint employer,” have implications for our business model.
The replacement or withdrawal of the National Labor Relations Act (the “NLRA”) and FLSA rules or new standards under federal and state discrimination statue (such as Title VII), which include or reinstate expansive definitions of “joint employer,” have implications for our business model.
Facilities We lease the property for our corporate headquarters and all of the properties on which we own or manage clinics. As of December 31, 2024, we leased 129 facilities in which we currently operate or manage, with our corporate headquarters being the only leased property that will remain after the completion of our refranchising strategy.
Facilities We lease the property for our corporate headquarters and all of the properties for our company-owned or managed clinics. As of December 31, 2025, we leased 80 facilities in which we currently operate or manage, with our corporate headquarters being the only leased property that will remain after the completion of our refranchising strategy.
According to a report issued by IBIS World Chiropractors Market Research in September 2024, expenditures for chiropractic services in the U.S. are approximately $20.6 billion annually. The United States Bureau of Labor Statistics expects employment of chiropractors to grow ten percent from 2023 to 2033, much faster than the average for all occupations.
According to a report issued by IBIS World Chiropractors Market Research in October 2025, expenditures for chiropractic services in the U.S. are approximately $21.9 billion annually. The United States Bureau of Labor Statistics expects employment of chiropractors to grow 10% from 2023 to 2033, much faster than the average for all occupations.
These clinics receive management services from our franchisees that are not owned by chiropractors. The notices contained allegations of fee-splitting, specifically targeting a provision in our Franchise Disclosure Document (“FDD”) providing for the payment of royalty fees based on revenue derived from the furnishing of chiropractic care. The notices appeared to question our business model.
The notices contained allegations of fee-splitting, specifically targeting a provision in our Franchise Disclosure Document (“FDD”) providing for the payment of royalty fees based on revenue derived from the furnishing of chiropractic care. The notices appeared to question our business model.
We plan to lengthen the time patients stay engaged with The Joint and to reactivate lapsed patients by leveraging new content, automated messaging, and enticing promotions. Additionally, we intend to employ new media campaigns to increase our new patient leads.
We plan to lengthen the time patients stay engaged with The Joint and to reactivate lapsed patients by leveraging new content, automated messaging, and enticing promotions.
The Joint Service Offering Single Visit Package(s) Membership(s) Price per adjustment $55 $21—$35 $17—$22 Proven track record of opening clinics and growing revenue at the clinic level. We have grown our clinic revenue base consistently.
Our price per adjustment as of December 31, 2025 averaged approximately $37 across all three groups. The Joint Service Offering Single Visit Package(s) Membership(s) Price per adjustment $55 $21—$37 $17—$25 Proven track record of opening clinics and growing revenue at the clinic level. We have grown our clinic revenue base consistently.
Talent Management and Development Our employees’ personal and professional growth is critical for the success of our business. Our approach to performance and development is designed to motivate our employees to develop, leverage their strengths, and support a coaching and feedback culture. We offer numerous online courses and encourage our employees to attend conferences, training courses, and continuing education classes.
Our approach to performance and development is designed to motivate our employees to develop, leverage their strengths, and support a coaching and feedback culture. 11 Table of Contents We offer numerous online courses and encourage our employees to attend conferences, training courses, and continuing education classes.
We offer a welcoming, consumer-friendly experience that attempts to redefine the chiropractic doctor/patient relationship. Our clinics are open longer hours than many of our competitors, including weekend days, and our patients do not need appointments. We accept cash or major credit cards in return for our services. We do not accept insurance and do not provide Medicare covered services.
Our clinics are open longer hours than many of our competitors, including weekend days, and our patients do not need appointments. We accept cash or major credit cards in return for our services. We do not accept insurance and do not provide Medicare covered services.
In addition, we continue to expand and strengthen our relationship with chiropractic colleges to increase engagement with students and to increase the applicant flow of qualified candidates. 11 Table of Contents In order to ensure that we are meeting our human capital objectives, we will continue to utilize engagement surveys to understand the perception of our brand as an employer and the effectiveness of our employee and compensation programs and to learn where we can improve across the company.
In order to ensure that we are meeting our human capital objectives, we will continue to utilize engagement surveys to understand the perception of our brand as an employer and the effectiveness of our employee and compensation programs and to learn where we can improve across our company.
According to the September 2024 IBIS market research report, the Top 50 largest industry practices accounted for only 4% of total industry revenue. We believe these characteristics are evidence of an underserved market with potential consumer demand that is favorable for an efficient, low-cost, consumer-oriented provider. Most chiropractic practices are set up to accept and to process insurance-based reimbursement.
According to the October 2025 IBIS market research report, no single company accounts for more than 5% of the total industry market share. We believe these characteristics are evidence of an underserved market with potential consumer demand that is favorable for an efficient, low-cost, consumer-oriented provider. Most chiropractic practices are set up to accept and to process insurance-based reimbursement.
With the over-allotment option exercise, we received aggregate net proceeds of approximately $13.3 million. We deliver convenient, appointment-free chiropractic adjustments in an inviting, open bay environment at prices that are approximately 52% lower than the average industry cost for comparable procedures offered by traditional chiropractors, according to 2024 industry data from Chiropractic Economics.
We deliver convenient, appointment-free chiropractic adjustments in an inviting, open bay environment at prices that are approximately 51% lower than the average industry cost for comparable procedures offered by traditional chiropractors, according to 2025 industry data from Chiropractic Economics.
We will continue the rapid and franchise focused expansion of chiropractic clinics in key markets throughout North America and potentially abroad. We strive to accomplish our mission by making quality care readily available and affordable in a retail setting.
We will continue the franchise-focused expansion of chiropractic clinics in key markets throughout North America and potentially abroad. We strive to accomplish our mission by making quality care readily available and affordable in a retail setting. We have created a growing network of modern, consumer-friendly chiropractic clinics operated or managed by franchisees and by us that employ licensed chiropractors.
Executing Strategic Divestitures We intend to transition to a pure-play franchisor business from our historical operations of both franchisor and operator of chiropractic clinics. We are focused on growing our franchise business through the strategic divestitures of all of our company-owned or managed clinics. We completed five clinic divestitures during the year ended December 31, 2024.
We are focused on growing our franchise business through the strategic divestitures of all of our company-owned or managed clinics. During the year ended December 31, 2024, we completed five clinic divestitures.
On December 30, 2015, our underwriters exercised their over-allotment option to purchase an additional 340,909 shares of common stock at a price of $5.50 per share. After giving effect to the over-allotment exercise, the total number of shares offered and sold in our follow-on public offering increased to 2,613,636 shares.
Our underwriters exercised their option to purchase 340,909 additional shares of common stock to cover over-allotments on December 30, 2015. After giving effect to the over-allotment exercise, the total number of shares offered and sold in our follow-on public offering was 2,613,636 shares and we received aggregate net proceeds of $13.3 million.
The map below shows the states in which we or our franchisees manage or operate clinics and the number of clinics open in each state or district as of December 31, 2024. 1 Table of Contents Our retail locations have been selected to be visible, accessible and convenient.
The map below shows the states in which we or our franchisees manage or operate clinics and the number of clinics open in each state as of December 31, 2025. Our retail locations have been selected to be visible, accessible and convenient. We offer a welcoming, consumer-friendly experience that attempts to redefine the chiropractic doctor/patient relationship.
Among these are: • People, most notably Millennials – the largest portion of our patient base – have increasingly active lifestyles and are expected to live longer, requiring more medical, maintenance and preventative support; • People are increasingly open to alternative, non-pharmacological types of care; • Utilization of more conveniently situated, local-sited urgent-care or “mini-care” alternatives to primary care is increasing; and • Popularity of health clubs, massage and other non-drug, non-invasive wellness maintenance providers is growing.
Among these are: • People, most notably Millennials – the largest portion of our patient base – have increasingly active lifestyles and are expected to live longer, requiring more medical, maintenance and preventative support; • As people age, there is increasing focus on longevity and health, with emphasis on mobility cognition, independence and quality of life; • People are increasingly open to alternative, non-pharmacological types of care; • Utilization of more conveniently situated, local-sited urgent-care or “mini-care” alternatives to primary care is increasing; and • Popularity of health clubs, massage and other non-drug, non-invasive wellness maintenance providers is growing. 3 Table of Contents Our Competitive Strengths We believe the following competitive strengths have contributed to our success and will continue to position us for future growth: Retail, consumer-driven approach .
According to the September 2024 IBIS market research report, the Top 50 industry practices accounted for only 4% of total industry revenue. Our competitors include approximately 38,245 independent chiropractic offices currently open throughout the United States, according to a 2024 Kentley Insights market research report, as well as certain multi-unit operators.
According to the October 2025 IBIS market research report, no single company accounts for more than 5% of the total industry market share. Our competitors include approximately 38,500 independent chiropractic offices currently open throughout the United States, according to a 2025 Kentley Insights market research report, as well as certain multi-unit operators.
We and our franchisees that are not owned by chiropractors enter into management services agreements with PCs to provide the PCs on an exclusive basis with all non-clinical administrative services needed by the chiropractic practice. 7 Table of Contents In February 2020, the State of Washington Chiropractic Quality Assurance Commission delivered notices that it was investigating complaints made against three chiropractors who own clinics, or are (or were) employed by clinics, in Washington.
In February 2020, the State of Washington Chiropractic Quality Assurance Commission delivered notices that it was investigating complaints made against three chiropractors who own clinics, or are (or were) employed by clinics, in Washington. These clinics receive management services from our franchisees that are not owned by chiropractors.
We can do this because our clinics do not have the expenses of performing certain diagnostic procedures and processing reimbursement claims. Our model allows us to pass these savings on to our patients. According to Chiropractic Economics, in 2024, the average fee for a chiropractic treatment involving spinal manipulation in a cash-based practice in the United States is approximately $76.
We can do this because our clinics do not have the expenses of performing certain diagnostic procedures and processing reimbursement claims. Our model allows us to pass these savings on to our patients.
On November 14, 2014, we completed our initial public offering (the “IPO”) of 3,000,000 shares of common stock at an initial price to the public of $6.50 per share, and we received net proceeds of approximately $17.1 million.
On November 14, 2014, we completed our initial public offering (the “IPO”) of 3,000,000 shares of common stock at an initial price to the public of $6.50 per share. Our underwriters exercised their option to purchase 450,000 additional shares of common stock to cover over-allotments on November 18, 2014.
Once a patient has joined our system and is returning for treatment, they simply swipe their membership card at a card reader at the reception desk to announce their arrival. The patient is then escorted to our open adjustment area, where they are required to remove only their outerwear to receive their adjustment.
Once a patient has joined our system and is returning for treatment, they simply swipe their membership card at a card reader at the reception desk or check in using the official mobile app to announce their arrival.
Previously, in 2015, the Arkansas Board had questioned whether our business model might violate Arkansas law in its response to an inquiry we made on behalf of one of our franchisees. While the Arkansas Board did not thereafter pursue the matter of a possible violation, it might choose to do so at any time in the future.
Previously, in 2015, the Arkansas 8 Table of Contents Board had questioned whether our business model might violate Arkansas law in its response to an inquiry we made on behalf of one of our franchisees.
We receive an initial franchise fee of $39,900 for each franchise we sell directly and offer a veterans discount, as well as a discount for purchase of multiple location franchises. If a franchisee purchases additional franchise licenses, the initial franchise fee is reduced by $10,000 per additional license.
We receive an initial franchise fee of $39,900 for each franchise we sell directly and offer a veterans discount, as well as a $10,000 per license discount for franchisees who purchase multiple location franchises. For each franchise sold through our network of regional developers, the regional developer typically receives up to 50% of the respective franchise fee.
Abou Habib earned several promotions with increasing responsibility. Prior to SONIC, she worked at CKE Restaurants, Inc. and Eateries, Inc. Charles Nelles joined us as our Chief Technology Officer in January 2022, bringing more than 20 years of technology experience in the healthcare and financial services industries. Prior to working at our company, Mr.
Charles Nelles joined us as our Chief Technology Officer in January 2022, bringing more than 20 years of technology experience in the healthcare and financial services industries. Prior to working at our company, Mr. Nelles held the role of the Vice President of Technology for American Express Global Business Travel.
We have created a growing network of modern, consumer-friendly chiropractic clinics operated or managed by franchisees and by us that employ licensed chiropractors. Our model enables us to price our services below most competitors’ pricing for similar services and below most insurance co-payment levels (i.e., below the patient co-payment required for an insurance-covered service).
Our model enables us to price our services below most competitors’ pricing for similar services and below most insurance co-payment levels (i.e., below the patient co-payment required for an insurance-covered service).
We are also obligated under non-cancellable leases for the clinics which we own or manage. Our clinics are on average 1,200 square feet.
The primary functions performed at our corporate headquarters are finance and accounting, treasury, marketing, operations, human resources, information systems support and legal. We are also obligated under non-cancellable leases for the clinics which we own or manage. Our clinics are on average 1,200 square feet.
The following table sets forth our average price per adjustment as of December 31, 2024 for patients who pay by single adjustment plans, multiple adjustment packages and multiple adjustment membership plans. Our price per adjustment as of December 31, 2024 averaged approximately $36 across all three groups.
We believe our pricing and service offering structure helps us to generate higher usage. The following table sets forth our average price per adjustment as of December 31, 2025 for patients who pay by single adjustment plans, multiple adjustment packages and multiple adjustment membership plans.
We intend to continue to drive awareness of our brand by continuing to locate clinics mainly at retail centers and convenience points, displaying prominent signage and employing consistent, proven and targeted marketing tools. We offer our patients the flexibility to visit our clinics without an appointment where they will receive 3 Table of Contents prompt attention.
To support our consumer-focused model, we use strong, recognizable retail approaches to stimulate brand-awareness and attract patients to our clinics. We intend to continue to drive awareness of our brand by continuing to locate clinics mainly at retail centers and convenience points, displaying prominent signage and employing consistent, proven and targeted marketing tools.
Additionally, most of our clinics offer extended hours of operation, including weekends, which is not typical among our competitors.
We offer our patients the flexibility to visit our clinics without an appointment where they will receive prompt attention. Additionally, most of our clinics offer extended hours of operation, including weekends, which is not typical among our competitors.
Our consumer-focused service model targets the non-acute treatment market, which is part of the $20.6 billion chiropractic services market, according to an IBIS market research report in September 2024. As our model does not focus on the treatment of severe or acute injury, we do not provide expensive and invasive diagnostic tools such as MRIs and X-rays.
As our model does not focus on the treatment of severe or acute injury, we do not provide expensive and invasive diagnostic tools such as MRIs and X-rays.
As the leader in this vertical, and as one of few players of scale, we believe that we occupy an 4 Table of Contents advantageous position in an otherwise highly fragmented market.
As the leader in this vertical, and as one of few players of scale, we believe that we occupy an advantageous position in an otherwise highly fragmented market. In conjunction with our scale, we have been able to achieve broad geographic diversification across the United States with clinics in 43 states as of December 2025.
We received letters of intent for the majority of our company-owned or managed clinics in January 2025, which represents a major milestone of our strategic shift to a pure-play franchisor business and our financial statements now reflect our previous company-owned or managed clinic segment as discontinued operations. Selling Additional Franchises We will continue to sell franchises.
During the year ended December 31, 2025, we completed 41 clinic divestitures and entered into an Asset Purchase Agreement for the sale of 22 additional clinics, which represents a major milestone of our strategic shift to a pure-play franchisor business and our financial statements now reflect our previous company-owned or managed clinic segment as discontinued operations. 1 Table of Contents As of December 31, 2025, we had 960 franchised or company-owned or managed clinics in operation in 43 states.
Nelles held the role of the Vice President of Technology for American Express Global Business Travel. Prior to that, he served as the Vice President of Technical Operations Support and Cloud Enablement for Western Union. Steven Knauf, D.C. was promoted to our Vice President of Chiropractic and Compliance in 2022. Dr. Knauf began working at our company in 2011.
Steven Knauf, D.C. was promoted to our Vice President of Chiropractic and Compliance in 2022. Dr. Knauf began working at our company in 2011.
Continued Growth of System Sales 5 Table of Contents System wide comparable same-store sales growth (“Comp Sales”) for 2024 was 4%, reflecting the continued resilience of our business model.
Continued Growth of System Sales System-wide same-store sales (“Comp Sales”) for 2025 increased by $2.1 million but were flat on a percentage basis, reflecting the continued resilience of our business model.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeDuring the fourth quarter of 2023, we completed our testing of the operating effectiveness of the implemented controls and found them to be effective. As a result, we have concluded the material weaknesses have been remediated as of December 31, 2023.
Biggest changeWe have undertaken and implemented remediation measures to address the material weakness, which measures will result in additional resources and other compliance expenses. During the fourth quarter of 2025, we completed our testing of the operating effectiveness of the implemented controls and found them to be effective.
Our level of debt could have important consequences to investors, including: • requiring a portion of our cash flows from operations be used for the payment of interest on our debt, thereby reducing the funds available to us for our operations or other capital needs; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate because our available cash flow, after paying principal and interest on our debt, may not be sufficient to make the capital and other expenditures necessary to address these changes; 17 Table of Contents • increasing our vulnerability to general adverse economic and industry conditions, since we will be required to devote a proportion of our cash flow to paying principal and interest on our debt during periods in which we experience lower earnings and cash flow; • limiting our ability to obtain additional financing in the future to fund working capital, capital expenditures, acquisitions, and general corporate requirements; and • placing us at a competitive disadvantage to other relatively less leveraged competitors that have more cash flow available to fund working capital, capital expenditures, acquisitions, and general corporate requirements.
Our level of debt could have important consequences to investors, including: • requiring a portion of our cash flows from operations be used for the payment of interest on our debt, thereby reducing the funds available to us for our operations or other capital needs; 17 Table of Contents • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate because our available cash flow, after paying principal and interest on our debt, may not be sufficient to make the capital and other expenditures necessary to address these changes; • increasing our vulnerability to general adverse economic and industry conditions, since we will be required to devote a proportion of our cash flow to paying principal and interest on our debt during periods in which we experience lower earnings and cash flow; • limiting our ability to obtain additional financing in the future to fund working capital, capital expenditures, acquisitions, and general corporate requirements; and • placing us at a competitive disadvantage to other relatively less leveraged competitors that have more cash flow available to fund working capital, capital expenditures, acquisitions, and general corporate requirements.
Our Annual Report on Form 10-K for the years ended December 31, 2022 and 2021 has been amended by Form 10-K/A filed on September 26, 2023 to, among other things, reflect the restatement of our financial statements for the Restated Periods.
Our Annual Report on Form 10-K for the years ended December 31, 2022 and 2021 has been amended by Form 10-K/A filed on September 26, 2023 to, among other things, reflect the restatement of our financial statements for the 2022 Restated Periods.
Our ability to operate new franchisee clinics profitably and increase average clinic sales and comparable clinic sales depends on many factors, some of which are beyond our control, including: (i) consumer awareness and understanding of our brand and changes in consumer preferences and discretionary spending; (ii) general economic conditions, which can affect clinic traffic, local rent 14 Table of Contents and labor costs and prices we pay for the supplies we use; (iii) competition, either from our competitors in the chiropractic industry or our own and our franchisees’ clinics; (iv) the identification and availability of attractive sites for new facilities and the anticipated commercial, residential and infrastructure development near our new facilities; (v) changes in government regulation; (vi) in certain regions, decreases in demand for our services due to inclement weather; and (vii) other unanticipated increases in costs, any of which could give rise to delays or cost overruns.
Our franchisee's ability to operate new clinics profitably and increase average clinic sales and comparable clinic sales depends on many factors, some of which are beyond our control, including: (i) consumer awareness and understanding of our brand and changes in consumer preferences and discretionary spending; (ii) general economic conditions, which can affect clinic traffic, local rent and labor costs and prices we 14 Table of Contents pay for the supplies we use; (iii) competition, either from our competitors in the chiropractic industry or our own and our franchisees’ clinics; (iv) the identification and availability of attractive sites for new facilities and the anticipated commercial, residential and infrastructure development near our new facilities; (v) changes in government regulation; (vi) in certain regions, decreases in demand for our services due to inclement weather; and (vii) other unanticipated increases in costs, any of which could give rise to delays or cost overruns.
Because it is in the short seller’s best interests for the price of the stock to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding an issuer, its business prospects, and similar matters which may create a negative depiction of the company.
Because it is in the short seller’s best interests for the price of the stock to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding an issuer, its business prospects, and similar matters which may create a negative depiction of our company.
We, our franchisees and the chiropractor-owned PCs to which we and our franchisees provide management services are subject to extensive federal, state and local laws, rules and regulations, including: (i) federal and state laws governing the franchisor-franchisee relationship; (ii) state regulations on the practice of chiropractic; (iii) federal and state laws governing the collection, dissemination, use, security and confidentiality of sensitive personal information; (iv) federal and state laws which contain anti-kickback and fee-splitting provisions and restrictions on referrals; (v) the federal Fair Debt Collection Practices Act and similar state laws that restrict the methods that we and third-party collection companies may use to contact and seek payment from patients regarding past due accounts; and (v) federal and state labor laws, including wage and hour laws.
We, our franchisees and the chiropractor-owned PCs to which we and our franchisees provide management services are subject to extensive federal, state and local laws, rules and regulations, including: (i) federal and state laws governing the franchisor-franchisee relationship; (ii) state regulations on the corporate practice of chiropractic; (iii) federal and state laws governing the collection, dissemination, use, security and confidentiality of sensitive personal information; (iv) federal and state laws which contain anti-kickback and fee-splitting provisions and restrictions on referrals; (v) the federal Fair Debt Collection Practices Act and similar state laws that restrict the methods that we and third-party collection companies may use to contact and seek payment from patients regarding past due accounts; and (vi) federal and state labor laws, including wage and hour laws.
If we are not able to achieve or sustain profitability, our business will be materially adversely affected and the price of our common stock may decline.
If we are not able to achieve or sustain profitability, our business may be materially adversely affected and the price of our common stock may decline.
Our management, after consultation with our independent registered accountants, concluded that our previously issued financial statements for the Restated Periods should no longer be relied upon.
Our management, after consultation with our independent registered accountants, concluded that our Previously Issued Financial Statements for the 2022 Restated Periods should no longer be relied upon.
Beginning in the fourth quarter of 2021 and through 2024, company-owned or managed clinics were negatively impacted by wage increases, which increased our general and administrative expenses and decreased profitability. A significant number of our clinic service personnel are paid at rates related to the applicable minimum wage, and increases in the minimum wage could increase our labor costs.
Beginning in the fourth quarter of 2021 and through 2025, company-owned or managed clinics were negatively impacted by wage increases, which increased our general and administrative expenses and decreased profitability. A significant number of our clinic service personnel are paid at rates related to the applicable minimum wage, and increases in the minimum wage could increase our labor costs.
The business of providing chiropractic services is highly competitive in each of the markets in which our clinics operate. The primary bases of such competition are quality of care, reputation, price of services, marketing and advertising strategy implementation, convenience, traffic flow, visibility of office locations, and hours of operation. Our clinics compete with all other chiropractors in their local market.
The business of providing chiropractic services is highly competitive in each of the markets in which our clinics operate. The primary basis of such competition are quality of care, reputation, price of services, marketing and advertising strategy implementation, convenience, traffic flow, visibility of office locations, and hours of operation. Our clinics compete with all other chiropractors in their local market.
As further disclosed under the aforementioned caption, we anticipate that fiscal 2025 will continue to be a volatile macroeconomic environment and expect elevated levels of cost inflation to persist for 2025. Reductions in discretionary spending may adversely impact our business, financial condition, or results of operations.
As further disclosed under the aforementioned caption, we anticipate that fiscal 2026 will continue to be a volatile macroeconomic environment and expect elevated levels of cost inflation to persist for 2026. Reductions in discretionary spending may adversely impact our business, financial condition, or results of operations.
As noted in a previous risk factor, the current period of high inflation, which is expected to persist through at least 2025, is likely to reduce consumer discretionary spending. Traffic in our clinics could decline if consumers choose to reduce the amount they spend on non-critical medical procedures.
As noted in a previous risk factor, the current period of high inflation, which is expected to persist through at least 2026, is likely to reduce consumer discretionary spending. Traffic in our clinics could decline if consumers choose to reduce the amount they spend on non-critical medical procedures.
Any audit by the IRS with respect to our receipt of an employee retention credit (“ERC”) under The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) could result in additional taxes or costs to our company. We received an ERC pursuant to the CARES Act.
Any audit by the IRS with respect to our receipt of an employee retention credit (“ERC”) under The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) could result in additional taxes or costs to our company. We received an ERC pursuant to the CARES Act in March 2023.
New markets may have competitive conditions, consumer tastes and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets. We may need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness.
New markets may have competitive conditions, consumer preferences and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets. We may need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness.
In the event that a continued deterioration of economic conditions causes a significant decrease in demand for our services, this could negatively impact our ability to meet the financial covenants in our credit facility, although we were in compliance as of December 31, 2024.
In the event that a continued deterioration of economic conditions causes a significant decrease in demand for our services, this could negatively impact our ability to meet the financial covenants in our credit facility, although we were in compliance as of December 31, 2025.
While we would vigorously defend against any such litigation, regardless of outcome, litigation can be costly and time-consuming, divert the attention of our management team, adversely impact our reputation and brand, and if a plaintiff claim were successful, could result in significant liability, all of which could harm our business and financial condition.
While we would vigorously defend against any such litigation, regardless of outcome, litigation can be costly and time-consuming, divert the attention of our management team, adversely impact our reputation and 25 Table of Contents brand, and if a plaintiff claim were successful, could result in significant liability, all of which could harm our business and financial condition.
Compliance with new, complex and changing laws may cause our expenses to increase, and non-compliance with such laws could result in penalties or enforcement actions against us. Please see “Part I, Item 1 - Business - Regulatory Environment – Regulation relating to franchising” for a description of other federal and state regulation related to franchising.
Compliance with new, complex and changing laws may cause our expenses to increase, and non-compliance with such laws could result in penalties or enforcement actions against us. Please see Part I, Item 1 Business Regulatory Environment – Regulation Relating to Franchising for a description of other federal and state regulation related to franchising.
We have experienced net losses and may not achieve or sustain profitability in the future. We have experienced periods of net losses in the past, and while we have achieved profitability from 2018 through 2022, we have experienced net losses in both 2023 and 2024.
We have experienced net losses and may not achieve or sustain profitability in the future. We have experienced periods of net losses in the past, and while we have achieved profitability from 2018 through 2022, and again in 2025, we have experienced net losses in both 2023 and 2024.
Any new or re-implemented accommodations and the occurrence of any of the other events described here and in 16 Table of Contents the next four risk factors could impact our ability to collect royalty payments from our franchisees, harm the goodwill associated with our brand, and materially adversely affect our business and results of operations.
Any new or re-implemented accommodations and the occurrence of any of the other events described here and in the next four risk factors could impact our ability to collect royalty payments from our franchisees, harm the goodwill associated with our brand, and materially adversely affect our business and results of operations.
As such, we cannot assure you that increases in comparable clinic sales will continue for our existing clinics or that clinics that are opened in the future will see similar results.
As such, we cannot assure you that increases in previous years in comparable clinic sales will continue for our existing clinics or that clinics that are opened in the future will see similar results.
On September 26, 2023, we restated our consolidated financial statements as of and for the years ended December 31, 2022 and 2021 and for the quarterly periods within the fiscal years ended December 31, 2022 and 2021 (the “Restated Periods”).
On September 26, 2023, we restated our consolidated financial statements as of and for the years ended December 31, 2022 and 2021 and for the quarterly periods within the fiscal years ended December 31, 2022 and 2021 (the “2022 Restated Periods”).
Further, our brand value could suffer and our business could be adversely affected if patients perceive a reduction in the quality of service or staff. Our marketing programs may not be successful. We incur costs and expend other resources in our marketing efforts to attract and retain patients.
Further, our brand value could suffer and our business could be adversely affected if patients perceive a reduction in the quality of service or staff. Our marketing programs may not be successful. 15 Table of Contents We incur costs and expend other resources in our marketing efforts to attract and retain patients.
In addition, many states impose restrictions related to the confidentiality of personal information that apply more broadly than HIPAA. Please see “Part I, Item 1 – Business – Regulatory Environment – HIPAA and State Privacy and Breach Notification Rules” for a description of some of these state privacy rules.
In addition, many states impose restrictions related to the confidentiality of personal information that apply more broadly than HIPAA. Please see Part I, Item 1 – Business – Regulatory Environment – HIPAA and State Privacy and Breach Notification Rules for a description of some of these state privacy rules.
Please see “Part I, Item 1 - Business - Regulatory Environment - State regulations on corporate practice of chiropractic” for a description of certain of these actions by states, including state legislatures, state chiropractic regulatory bodies and a state attorney general, to regulate and restrict the corporate practice of chiropractic.
Please see Part I, Item 1 – Business – Regulatory Environment – State Regulations on Corporate Practice of Chiropractic for a description of certain of these actions by states, including state legislatures, state chiropractic regulatory bodies and a state attorney general, to regulate and restrict the corporate practice of chiropractic.
As of December 31, 2024, we had active licenses and letters-of-intent for 145 clinics which we believe to be developable within the specified time periods, but we cannot be certain of this. Our regional developers are independent operators over whom we have limited control. Our regional developers are independent operators. Accordingly, their actions are outside of our control.
As of December 31, 2025, we had active licenses and letters of intent for 139 clinics which we believe to be developable within the specified time periods, but we cannot be certain of this. Our regional developers are independent operators over whom we have limited control. Our regional developers are independent operators. Accordingly, their actions are outside of our control.
As of December 31, 2024, we had access to draw $20.0 million under the Credit Agreement (defined at Note 6, Debt ).
As of December 31, 2025, we had access to draw $20.0 million under the Credit Agreement (defined at Note 6, Debt ).
Rising interest rates also will make it more expensive for potential franchisees to finance new clinic acquisitions and thus may reduce the pool of available franchisees, which also could adversely impact our business.
Elevated interest rates will also continue to make it more expensive for potential franchisees to finance new clinic acquisitions and thus may reduce the pool of available franchisees, which also could adversely impact our business.
Based on the self-assessment completed as of March 3, 2025, we are currently in compliance with the Payment Card Industry Data Security Standard, or PCI DSS, the payment card industry’s security standard for companies that collect, store or transmit certain data regarding credit and debit cards, credit and debit card holders and credit and debit card transactions.
Based on the self-assessment completed as of February 3, 2026, we are currently in compliance with the Payment Card Industry Data Security Standard, or PCI DSS, the payment card industry’s security standard for companies that collect, store or transmit certain data regarding credit and debit cards, credit and debit card holders and credit and debit card transactions.
Please see “Part I, Item 1 – Business – Regulatory Environment – HIPAA and State Privacy and Breach Notification Rules” for a description of the November 2022 data breach suffered by one of our vendors, which resulted in the release of certain information with respect to our patients and employees.
Please see Part I, Item 1 – Business – Regulatory Environment – HIPAA and State Privacy and Breach Notification Rules for a description of the November 2022 data breach suffered by one of our vendors, which resulted in the release of certain information with respect to our patients and employees.
A substantial portion of our revenues comes from royalties generated by our franchised clinics, which royalties are based on the revenues generated by those clinics. We anticipate that franchise royalties will represent a substantial part of our revenues in the future. As of December 31, 2024, we had franchisees operating or managing 842 clinics.
A substantial portion of our revenues comes from royalties generated by our franchised clinics, which royalties are based on the revenues generated by those clinics. We anticipate that franchise royalties will represent a substantial part of our revenues in the future. As of December 31, 2025, we had franchisees operating or managing 885 clinics.
The determination to restate the financial statements for the Restated Periods was made by our Audit Committee and our Board of Directors upon management’s recommendation following the identification of errors related to our method of accounting for the reacquisition of regional developer rights and transfer pricing adjustments for our VIEs.
The determination to restate the financial statements for the 2022 Restated Periods was made by our Audit Committee and our Board of Directors upon management’s recommendation following the identification of an error related to our method of accounting for the reacquisition of regional developer rights and transfer pricing adjustments for our VIEs.
Our marketing activities are principally focused on increasing brand awareness and driving patient volumes. As we open new clinics, we undertake 15 Table of Contents aggressive marketing campaigns to increase community awareness about our growing presence.
Our marketing activities are principally focused on increasing brand awareness and driving patient volumes. As we open new clinics, we undertake aggressive marketing campaigns to increase community awareness about our growing presence.
GENERAL RISK FACTORS We have restated our prior consolidated financial statements, which may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price.
GENERAL RISK FACTORS We have restated our Previously Issued Financial Statements, which may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price.
Please see “Part I, Item 1 - Business - Regulatory Environment – Joint Employer Rules” for a detailed description of the background and current status of federal and state “joint employer” laws and regulations.
Please see Part I, Item 1 – Business – Regulatory Environment – Joint Employer Rules for a detailed description of the background and current status of federal and state “joint employer” laws and regulations.
Discretionary spending is negatively impacted by, among other things, those factors disclosed in this Form 10-K under the caption “Recent Events” in Management’s Discussion and Analysis of Financial Condition and Results of Operations -- unfavorable global economic or political conditions, such as labor shortages, inflation and other cost increases, and increases in interest rates.
Discretionary spending is negatively impacted by, among other things, those factors disclosed in this Form 10-K under the caption “Significant Events and/or Recent Developments” in Management’s Discussion and Analysis of Financial Condition and Results of Operations -- unfavorable global economic or political conditions, such as labor shortages, inflation and other cost increases, and elevated interest rates.
We previously identified material weaknesses in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results, prevent fraud, or maintain investor confidence.
We have identified a material weakness in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results, prevent fraud, or maintain investor confidence.
Of our total of 16 regional developers as of December 31, 2024, six had not met their minimum franchise sales requirements within the time periods specified in their regional developer agreements. FINANCIAL RISK FACTORS Our level of debt could impair our financial condition and ability to operate.
Of our total of 15 regional developers as of December 31, 2025, five had not met their minimum franchise sales requirements within the time periods specified in their regional developer agreements. FINANCIAL RISK FACTORS Our level of debt could impair our financial condition and ability to operate.
New clinics, once opened, may not be profitable, and the increases in average clinic sales and comparable clinic sales that our franchisees have experienced in the past may not be indicative of future results. Our clinics continue to demonstrate increases in comparable clinic sales even as they mature.
New clinics, once opened, may not be profitable, and the increases in average clinic sales and comparable clinic sales that our franchisees have experienced in the past may not be indicative of future results. Our clinics continue to demonstrate increases in comparable clinic sales even as they mature. Our annual Comp Sales for the full year 2025 were flat.
Our four largest multi-unit competitors are Airrosti, which currently operates 150 clinics; HealthSource Chiropractic, which currently operates 133 clinics; 100% Chiropractic, which currently operates 106 clinics; and ChiroOne, which currently operates 102 clinics. All of these competitors are currently operating under an insurance-based model, including two of which also accept private pay.
Our four largest multi-unit competitors are Airrosti, which currently operates 154 clinics; HealthSource Chiropractic, which currently operates 143 clinics; ChiroOne, which currently operates 109 clinics; and 100% Chiropractic, which currently operates 61 clinics. All of these competitors are currently operating under an insurance-based model, including two of which also accept private pay.
As discussed in Part II, Item 9A of this Form 10-K, our management previously concluded that our internal controls over financial reporting were not effective as of December 31, 2022 due to material weaknesses in internal controls related to (i) the accounting treatment in significant complex areas, and (ii) the identification of uncertain tax positions.
As discussed in Part II, Item 9A of this Form 10-K, our management concluded that our internal controls over financial reporting were not effective as of December 31, 2024 due to a material weakness in internal controls related to the accounting treatment in significant and complex areas.
We are subject to the internal control requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which require management to assess the effectiveness of our internal control over financial reporting.
We are subject to the internal control requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which require management to assess the effectiveness of our internal control over financial reporting. Internal controls related to the operation of financial reporting and accounting systems are critical to maintaining adequate internal control over financial reporting.
As of December 31, 2024, we had 15,159,878 outstanding shares of common stock and are authorized to sell up to 20,000,000 shares of common stock. The trading volume of shares of our common stock averaged approximately 65,747 shares per day during the 25 Table of Contents year ended December 31, 2024.
As of December 31, 2025, we had 14,142,626 outstanding shares of common stock and are authorized to sell up to 20,000,000 shares of common stock. The trading volume of shares of our common stock averaged approximately 76,000 shares per day during the year ended December 31, 2025.
In 2020, for a period of time, we waived minimum royalty requirements, monthly software fees for clinics forced to close temporarily due to the pandemic, and minimum required marketing expenditures. We may need to re-implement, expand or extend these accommodations to franchisees, further reducing our revenues from franchised clinics and reducing the visibility of “The Joint” brand in the marketplace.
In 2020, for a period of time, we waived minimum royalty requirements, monthly software fees for clinics forced to close temporarily due to the pandemic, and minimum required marketing expenditures.
Please see Note 11, Employee Retention Credit in the Notes to the consolidated financial statements included in Item 8 of this Form 10-K for a description of the ERC. Our eligibility to receive the ERC remains subject to audit by the IRS for a period of five years.
Our eligibility to receive the ERC remains subject to audit by the IRS for a period of five years.
Removed
Our annual Comp Sales for the full year 2024, for clinics that have been open for at least 13 full months, was 4%. However, for clinics that have been open for greater than 48 months, our annual Comp Sales for the full 2024 year was (2)%.
Added
We may need to re-implement, expand or extend these accommodations to 16 Table of Contents franchisees, further reducing our revenues from franchised clinics and reducing the visibility of “The Joint” brand in the marketplace.
Removed
Furthermore, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404, since as of December 31, 2023, we became an accelerated filer. Internal controls related to the operation of financial reporting and accounting systems are critical to maintaining adequate internal control over financial reporting.
Added
We did not design, implement and maintain effective controls to analyze and account for non-routine, unusual or complex transactions.
Removed
We did not design and maintain effective controls over the accounting of complex areas, including accounting for revenue recognition and we did not design and maintain effective controls over the identification of uncertain tax positions.
Added
Specifically, we did not design, implement and maintain controls to timely analyze and account for the impairment associated with certain assets held for sale within discontinued operations and for the application of valuation methodologies impacting impairment charges related to assets held for sale.
Removed
During 2023, management implemented our previously disclosed remediation plan that included modifying internal controls to address completeness of documentation on uncertain tax positions, revenue and acquisition related transactions over adoptions of the appropriate respective accounting standards, specifically through the utilization of subject matter experts to review conclusions over complex accounting policies.
Added
As a result, we have concluded the material weakness has been remediated as of December 31, 2025.
Added
On August 12, 2025, we restated our consolidated financial statements as of and for the years ended December 31, 2024 and 2023 and for the quarterly period ended March 31, 2025 (the “2024/2025 Restated Periods”).
Added
The determination to restate the financial statements for the 2024/2025 Restated Periods was made by our Audit Committee and our Board of Directors upon management’s recommendation following the identification of an error over the application of asset valuation accounting related to assets held for sale reported in discontinued operations that impacted impairment charges.
Added
Our management, after consultation with our independent registered accountants, concluded that our Previously Issued Financial Statements for the 2024/2025 Restated Periods should no longer be relied upon.
Added
Our Annual Report on Form 10-K for the years ended December 31, 2024 and 2023 has been amended by Form 10-K/A filed on August 12, 2025 and our Quarterly Report on Form 10-Q for the quarters ended March 2025 and 2024 has been amended by Form 10-Q/A filed on August 12, 2025 to, among other things, reflect the restatement of our financial statements for the 2024/2025 Restated Periods .

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, we operate and are compliant under the following provisions: HIPAA attestation for the HIPAA Security Rule and the Health Information Technology for Economic and Clinical Health Act (HITECH) Breach Notification requirements. Vendors that have access to our information are required to manage such information in accordance with laws and appropriate privacy and security standards.
Biggest changeWe received our ISO 27001 certification after the successful completion of an external audit and remediation steps and will complete a regular external audit in March 2026. Additionally, we operate and are compliant under the following provisions: HIPAA attestation for the HIPAA Security Rule and the Health Information Technology for Economic and Clinical Health Act (HITECH) Breach Notification requirements.
Cybersecurity Subcommittee materials are provided to the Audit Committee as well as the full Board of Directors. The members of the Cybersecurity Subcommittee brings at least 40 years of expertise and executive-level experience in information technology and cybersecurity to successfully support the CTO to maintain strong a cybersecurity strategy within our company.
Cybersecurity Subcommittee materials are provided to the Audit Committee as well as the full Board of Directors. The members of the Cybersecurity Subcommittee collectively bring at least 40 years of expertise and executive-level experience in information technology and cybersecurity to successfully support the CTO to maintain a strong cybersecurity strategy within our company.
Depending on the nature of the vendors’ access to our information, we monitor and evaluate the controls and governance established with the vendors ranging from a continuous cadence to at least quarterly.
Depending 26 Table of Contents on the nature of the vendors’ access to our information, we monitor and evaluate the controls and governance established with the vendors ranging from a continuous cadence to at least quarterly.
Management has responsibility to manage risk and bring to the Board’s attention the most material near-term and long-term risks to the Company. The Company’s CTO leads management’s assessment and management of cybersecurity risk. The CTO reports to the Company’s Chief Executive Officer. The CTO regularly reviews cybersecurity matters with management.
Management has the responsibility to manage risk and bring to the Board of Directors attention the most material near-term and long-term risks to our Company. The CTO leads management’s assessment and management of cybersecurity risk and regularly reviews cybersecurity matters with management. The CTO reports to our Chief Executive Officer.
A dedicated team of technology professionals works throughout the year to monitor all matters of risk relating to cybersecurity. We completed our ISO 27001 Information Security Management certification project culminating in a primary and secondary audit against the standard. We expect to complete the final remediation and updates to policies and procedures and achieve our certification in March 2025.
A dedicated team of technology professionals works throughout the year to monitor all matters of risk relating to cybersecurity. We completed our ISO 27001 Information Security Management certification project culminating in a primary and secondary audit against the standard.
Risk Factors, including in the risk factor entitled “If we fail to properly maintain the integrity of our data or to strategically implement, upgrade or consolidate existing information systems, our reputation and business could be materially adversely affected” and “If our security systems are breached, we may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract and retain patients” . 26 Table of Contents We annually assess our cybersecurity programs against third-party requirements, including HIPAA and the Sarbanes-Oxley Act (SOX).
Risk Factors, including in the risk factor entitled “If we fail to properly maintain the integrity of our data or to strategically implement, upgrade or consolidate existing information systems, our reputation and business could be materially adversely affected” and “If our security systems are breached, we may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract and retain patients”.
These procedures and approach to safeguard our information and assets will be continuously monitored by management and updated to evolve with the current cyber landscape in alignment with the ISO 27001 standard mentioned above.
The response procedures are designed to identify, analyze, contain and remediate such cyber incidents expeditiously. These procedures and approach to safeguard our information and assets will be continuously monitored by management and updated to evolve with the current cyber landscape in alignment with the ISO 27001 standard mentioned above.
We test multiple aspects of cybersecurity regularly, including annual pen testing over our proprietary information systems and our technical recovery and incident response procedures annually. We maintain a robust privacy compliance program.
We annually assess our cybersecurity programs against third-party requirements, including HIPAA and the Sarbanes-Oxley Act of 2002. We test multiple aspects of cybersecurity regularly, including annual pen testing over our proprietary information systems and our technical recovery and incident response procedures annually. We maintain a robust privacy compliance program.
Standards are applied on a per-contract basis and include requirements to have an information security program and report to us any incidents in which its confidential information or systems are compromised.
Vendors that have access to our information are required to manage such information in accordance with laws and appropriate privacy and security standards. Standards are applied on a per-contract basis and include requirements to have an information security program and report to us any incidents in which its confidential information or systems are compromised.
We have established defined response procedures to effectively address any cyber threat that may occur regardless of the safeguards in place that minimize the chance of a successful cyberattack. The response procedures are designed to identify, analyze, contain and remediate such cyber incidents expeditiously.
This established process includes the use of third party partnerships to make available the distinct skill sets needed to assist in properly responding to any cybersecurity threat. We have established defined response procedures to effectively address any cyber threat that may occur regardless of the safeguards in place that minimize the chance of a successful cyberattack.
Removed
In 2025, we plan to move to a quarterly testing regimen. Currently, we rely on an established major incident management and communication process to address any potential cybersecurity incidents. This established process includes the use of third party partnerships to make available the distinct skill sets needed to assist in properly responding to any cybersecurity threat.
Added
In 2025, we completed a semi-annual security and privacy training cycle utilizing the SIMBUS360 platform. In 2026, we will re-engage the KnowBe4 system with a heightened focus on phishing awareness. Currently, we rely on an established major incident management and communication process to address any potential cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe are also obligated under non-cancellable leases for the clinics which we own or manage. Our clinics are on average 1,200 square feet.
Biggest changeThe primary functions performed at our corporate headquarters are finance and accounting, treasury, marketing, operations, human resources, information systems support and legal. We are also obligated under non-cancellable leases for the clinics that we own or manage. Our clinics are on average 1,200 square feet.
Our clinic leases generally have an initial term of five years, include one to two options to renew for terms of five years, and require us to pay a proportionate share of real estate taxes, insurance, common area maintenance charges and other operating costs. ITEM 3.
Our clinic leases generally have an initial term of five years, include one to two options to renew the term for five years each, and require us to pay a proportionate share of real estate taxes, insurance, common area maintenance charges and other operating costs. ITEM 3.
LEGAL PROCEEDINGS Information regarding our legal proceedings is discussed in Note 9 in the Notes to the consolidated financial statements, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 Table of Contents PART II
LEGAL PROCEEDINGS Information regarding our legal proceedings is discussed in Note 10, Commitments and Contingencies in the Notes to the consolidated financial statements, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 Table of Contents PART II
We are obligated under one additional lease for facilities in which we have ceased clinic operations. Our corporate headquarters are located at 16767 N. Perimeter Center Drive, Suite 110, Scottsdale, Arizona 85260. The term of our lease for this location expires on December 31, 2025.
We are obligated under three additional leases for facilities in which we have ceased clinic operations. Our corporate headquarters are located at 16767 N. Perimeter Center Drive, Suite 110, Scottsdale, Arizona 85260. The term of our lease for this location expires on May 31, 2031.
ITEM 2. PROPERTIES We lease the property for our corporate headquarters and all of the properties on which we own or manage clinics. As of December 31, 2024, we leased 129 facilities in which we operate, with our corporate headquarters being the only leased property that will remain after the completion of our refranchising strategy.
ITEM 2. PROPERTIES We lease the property for our corporate headquarters and all of the properties for our company-owned or managed clinics. As of December 31, 2025, we leased 80 facilities in which we operate, with our corporate headquarters being the only leased property that will remain after the completion of our refranchising strategy.
Removed
In February 2025, we executed an amendment to the lease agreement to extend the term of our lease commencing January 1, 2026 and terminating on May 31, 2031. The primary functions performed at our corporate headquarters are financial, accounting, treasury, marketing, operations, human resources, information systems support and legal.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Capital Market under the symbol “JYNT.” Holders As of December 31, 2024, there were approximately 36 holders of record of our common stock and 15,159,878 shares of our common stock outstanding.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Capital Market under the symbol “JYNT.” Holders As of December 31, 2025, there were approximately 38 holders of record of our common stock and 14,142,626 shares of our common stock outstanding.
Removed
Dividends Since our initial public offering, we have not declared nor paid dividends on our common stock, and we do not expect to pay cash dividends on our common stock in the foreseeable future. ITEM 6. [Reserved]
Added
Purchases of Equity Securities by the Issuer On June 3, 2025, our Board of Directors approved a stock repurchase program (the "2025 SRP") to repurchase up to $5.0 million of our common stock, par value $0.001 per share, from time to time until June 3, 2027 or such other date as we have exhausted, or the Board of Directors otherwise terminates, the repurchase authorization.
Added
On November 4, 2025, the Board of Directors authorized an additional $12.0 million for a total of $17.0 million authorized for repurchase under the 2025 SRP and extended the repurchase date through November 4, 2027. The timing, volume, price, and terms of the repurchases will depend on market and business conditions, applicable legal requirements, and other factors.
Added
The repurchases may be made on the open market, in privately negotiated transactions, or in such other manner (e.g., accelerated share repurchase transactions, block trades, derivatives, or otherwise) that complies with the terms of applicable federal and state securities laws and regulations.
Added
The following table summarizes our monthly common stock repurchase activity under the 2025 SRP during the three months ended December 31, 2025.
Added
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Repurchased Under the 2025 SRP Approximate Dollar Value of Shares that May Yet be Purchased Under the 2025 SRP Repurchases from October 1 - 31, 2025 312,571 $ 8.64 312,571 $ — Repurchases from November 1 - 30, 2025 628,234 8.38 628,234 6,734,509 Repurchases from December 1 - 31, 2025 126,680 8.36 126,680 5,675,604 Total 1,067,485 $ 8.45 1,067,485 $ 5,675,604 Dividends Since our initial public offering, we have not declared nor paid dividends on our common stock, and we do not expect to pay cash dividends on our common stock in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+24 added−21 removed45 unchanged
Biggest changeNon-GAAP Financial Measures The table below reconciles net loss from continuing operations to Adjusted EBITDA from continuing operations for the years ended December 31, 2024 and 2023. 36 Table of Contents Year Ended December 31, 2024 2023 from Continuing Operations from Discontinued Operations Net Operations from Continuing Operations from Discontinued Operations Net Operations Non-GAAP Financial Data: (Loss) Income $ (1,536,912) $ (6,992,931) $ (8,529,843) $ (10,769,405) $ 1,017,208 $ (9,752,197) Net interest (280,287) 2,114 (278,173) 64,293 3,168 67,461 Depreciation and amortization expense 1,363,453 3,358,684 4,722,137 1,278,148 7,304,055 8,582,203 Income tax expense 62,142 212,642 274,784 11,023,411 367,542 11,390,953 EBITDA (391,604) (3,419,491) (3,811,095) 1,596,447 8,691,973 10,288,420 Stock compensation expense 1,679,005 — 1,679,005 1,737,682 — 1,737,682 Acquisition related expenses 478,710 — 478,710 811,547 61,667 873,214 Net loss on disposition or impairment 14,642 10,439,967 10,454,609 (20,894) 2,653,498 2,632,604 Costs related to restatement filings — — — 380,221 — 380,221 Restructuring Costs 607,231 495,097 1,102,328 — 72,880 72,880 Litigation expenses — 1,481,000 1,481,000 — — — Other income related to the ERC — — — — (3,779,304) (3,779,304) Adjusted EBITDA $ 2,387,984 $ 8,996,573 $ 11,384,557 $ 4,505,003 $ 7,700,714 $ 12,205,717 Adjusted EBITDA from continuing operations consists of net loss from continuing operations before interest, income taxes, depreciation and amortization, acquisition related expenses (which includes contract termination costs associated with reacquired regional developer rights), stock-based compensation expense, bargain purchase gain, (gain) loss on disposition or impairment, costs related to restatement filings, restructuring costs, and litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business).
Biggest changeNon-GAAP Financial Measures The following table reconciles net income (loss) to Adjusted EBITDA for continuing operations, discontinuing operations and net operations for the years ended December 31, 2025 and 2024: 36 Table of Contents Year Ended December 31, 2025 2024 from Continuing Operations from Discontinued Operations Net Operations from Continuing Operations from Discontinued Operations Net Operations Non-GAAP Financial Data: Net (loss) income $ (268,157) $ 3,175,422 $ 2,907,265 $ (1,614,344) $ (4,182,549) $ (5,796,893) Net interest (income) expense (799,273) 239 (799,034) (280,287) 2,114 (278,173) Depreciation and amortization expense 1,644,161 69,558 1,713,719 1,371,389 3,350,748 4,722,137 Income tax expense 38,653 25,207 63,860 5,606 210,263 215,869 EBITDA 615,384 3,270,426 3,885,810 (517,636) (619,424) (1,137,060) Stock-based compensation expense 1,297,433 — 1,297,433 1,679,005 — 1,679,005 Acquisition related expense — — — 478,710 — 478,710 Net loss on disposition or impairment 7,898 5,441,010 5,448,908 66,019 7,714,555 7,780,574 Costs related to restatement filings 115,402 — 115,402 — — — Restructuring Costs 1,077,678 745,542 1,823,220 607,231 495,097 1,102,328 Litigation expense 15,000 386,439 401,439 — 1,481,000 1,481,000 Adjusted EBITDA $ 3,128,795 $ 9,843,417 $ 12,972,212 $ 2,313,329 $ 9,071,228 $ 11,384,557 Adjusted EBITDA from continuing, discontinuing and net operations and consists of net income (loss) before interest, income taxes, depreciation and amortization, acquisition related expenses (which includes contract termination costs associated with reacquired regional developer rights), stock-based compensation expense, bargain purchase gain, (gain) loss on disposition or impairment, costs related to restatement filings, restructuring costs (consisting of non-recurring refranchising costs of all company-owned or managed clinics and non-recurring expenses related to changes to our executive leadership team), and litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business).
Our services under the franchise agreement include training of franchisees and staff, site selection, construction/vendor management and ongoing operations support. We provide no financing to franchisees and generally offer no guarantees on their behalf. The services we provide are highly interrelated with the franchise license and as such are considered to represent a single performance obligation. Software Fees.
Our services under the franchise agreement include training of franchisees and staff, site selection, construction/vendor management and ongoing operations support. We provide no financing to franchisees and offer no guarantees on their behalf. The services we provide are highly interrelated with the franchise license and as such are considered to represent a single performance obligation. Software Fees.
If we determine that it is not subject to unclaimed property laws for the portion of wellness package that we do not expect to be redeemed (referred to as “breakage”), then we recognize breakage revenue in proportion to the pattern of exercised rights by the patient. Franchise Fees.
If we determine that it is not subject to unclaimed property laws for the portion of the package that we do not expect to be redeemed (referred to as “breakage”), then we recognize breakage revenue in proportion to the pattern of exercised rights by the patient. Franchise Fees.
Overview We are a rapidly growing franchisor that uses a private pay, non-insurance, cash-based model. We seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry.
Overview We are a growing franchisor that uses a private pay, non-insurance, cash-based model. We seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry.
The consolidated statement of cash flows includes cash flows related to the discontinued operations and accordingly, cash flow amounts for discontinued operations are disclosed in Note 3, Acquisitions and Divestitures, in the Notes to consolidated financial statements .
The consolidated statement of cash flows includes cash flows related to the discontinued operations and accordingly, cash flow amounts for discontinued operations are disclosed in Note 3, Divestitures in the Notes to consolidated financial statements .
As required, we perform an annual impairment test of goodwill as of the first day of the fourth quarter or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. No impairments of goodwill were recorded for the years ended December 31, 2024 and 2023.
As required, we perform an annual impairment test of goodwill as of the first day of the fourth quarter or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. No impairments of goodwill were recorded for the years ended December 31, 2025 and 2024.
We believe these indicators provide us with useful data with which to measure our performance and to measure our franchisees’ and clinics’ performance. System-wide Comp Sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
We believe these indicators provide us with useful data with which to measure our performance and to measure our franchisees’ and clinics’ performance. Comp Sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our results of operations and financial condition for the years ended December 31, 2024 and 2023 should be read in conjunction with the consolidated financial statements and the notes thereto, and other financial information contained elsewhere in this Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our results of operations and financial condition for the years ended December 31, 2025 and 2024 should be read in conjunction with the consolidated financial statements and the notes thereto, and other financial information contained elsewhere in this Form 10-K.
From time to time, we consider and evaluate transactions related to our portfolio and capital structure, including debt financings, equity issuances, purchases and sales of assets, and other transactions. Given the ongoing uncertainties described above, the levels of our cash flows from operations for 2025 may be impacted.
From time to time, we consider and evaluate transactions related to our portfolio and capital structure, including debt financings, equity issuances, purchases and sales of assets, and other transactions. Given the ongoing uncertainties described above, the levels of our cash flows from operations for 2026 may be impacted.
Off-Balance Sheet Arrangements During the year ended December 31, 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements.
Off-Balance Sheet Arrangements During the year ended December 31, 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements.
We base our accounting estimates on historical experience and other factors that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. We have discussed the development and selection of significant accounting policies and estimates with our Audit Committee.
We base our accounting estimates on historical experience and other factors that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. We have discussed the development and selection of critical accounting policies and estimates with our Audit Committee.
For 2025, we expect to use or redeploy our cash resources to support our business within the context of prevailing market conditions, which, given the ongoing uncertainties described above, could rapidly and materially deteriorate or otherwise change.
For 2026, we expect to use or redeploy our cash resources to support our business within the context of prevailing market conditions, which, given the ongoing uncertainties described above, could rapidly and materially deteriorate or otherwise change.
Evaluating and quantifying these amounts involves significant judgments. Each source of income must be evaluated based on all positive and negative evidence; this evaluation involves assumptions about future activity. The actual realization of deferred tax assets may differ from the amounts we have recorded. Significant judgment is also required in evaluating our uncertain tax positions.
Evaluating and quantifying these amounts involves significant judgments. Each source of income must be evaluated based on all positive and negative evidence; this evaluation involves assumptions about future activity. The actual realization of deferred tax assets may differ from the amounts we have recorded. 33 Table of Contents Significant judgment is also required in evaluating our uncertain tax positions.
Significant Accounting Polices and Estimates The preparation of consolidated financial statements requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
Critical Accounting Polices and Estimates The preparation of consolidated financial statements requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
We had given 28 Table of Contents initial preference to existing franchisees and in the third quarter of 2024 expanded the marketing efforts to larger multi-unit, multi-brand operators and certain private equity firms interested in purchasing and operating large market-based clinic clusters and have received significant interest to date in most markets.
We had given initial preference to existing franchisees and in the third quarter of 2024 expanded the marketing efforts to larger multi-unit, multi-brand operators and certain private equity firms interested in purchasing and operating large market-based clinic clusters and have received significant interest to date in most markets.
Our long-term capital requirements, primarily for acquisitions and other corporate initiatives, could be dependent on our ability to access additional funds through the debt and/or equity markets.
Our long-term capital requirements, primarily for corporate initiatives, could be dependent on our ability to access additional funds through the debt and/or equity markets.
Acquisitions 30 Table of Contents We allocate the purchase price of acquired companies to the assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the identifiable net assets acquired recorded as goodwill.
Acquisitions We allocate the purchase price of acquired companies to the assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the identifiable net assets acquired recorded as goodwill.
Intangible Assets Intangible assets consist primarily of reacquired franchise rights and customer relationships. We amortize the fair value of reacquired franchise rights over the remaining contractual terms of the reacquired franchise rights at the time of the acquisition, which range from one to ten years.
Intangible Assets Intangible assets consist primarily of reacquired franchise rights and customer relationships. We amortize the fair value of reacquired franchise rights over the remaining contractual terms of the reacquired franchise rights at the time of the acquisition, 31 Table of Contents which range from one to ten years.
We accounted for the termination of development rights associated with unsold or undeveloped franchises as a cancellation, and the associated upfront regional developer fee liability was netted against the aggregate purchase price. We recognized the net amount of $0.5 million as a general and administrative expense for the year ended December 31, 2024. Effective October 10, 2024, Peter D.
We accounted for the termination of development rights associated with unsold or undeveloped franchises as a cancellation, and the associated upfront regional developer fee liability was netted against the aggregate purchase price. We recognized the net amount of $0.5 million as a general and administrative expense for the year ended December 31, 2024.
Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. We look primarily to estimated undiscounted future cash flows in the assessment of whether or not long-lived assets are recoverable.
Goodwill is attributable entirely to discontinued operations. Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. We look primarily to estimated undiscounted future cash flows in the assessment of whether or not long-lived assets are recoverable.
You should review the reconciliation of Net loss to Adjusted EBITDA above and not rely on any single financial measure to evaluate our business. Liquidity and Capital Resources Sources of Liquidity As of December 31, 2024, we had cash and short-term bank deposits of $25.1 million.
You should review the reconciliation of Net Income (Loss) to Adjusted EBITDA above and not rely on any single financial measure to evaluate our business. Liquidity and Capital Resources Sources of Liquidity As of December 31, 2025, we had cash and short-term bank deposits of $23.6 million.
We regularly assess the tax risk of our tax return filing positions, and we have identified $0.9 million and $1.2 million in uncertain tax positions as of December 31, 2024 and 2023, respectively.
We regularly assess the tax risk of our tax return filing positions, and we have identified $0.6 million and $0.9 million in uncertain tax positions as of December 31, 2025 and 2024, respectively.
The results of operations of the corporate clinic business segment are reported in (Loss) income from discontinued operations before income tax expense in its consolidated income statement for all periods presented and the related assets and liabilities associated with discontinued operations are classified as discontinued operation assets and liabilities, current and net of current, in the consolidated balance sheet for all periods presented.
The results of operations of the corporate clinic business segment are reported in Income (loss) from discontinued operations before income tax expense in the consolidated income statements for all periods presented and the related assets and liabilities associated with discontinued operations are classified as discontinued operation assets and liabilities in the consolidated balance sheets for all periods presented.
Analysis of Cash Flows Net cash provided by operating activities for both continuing and discontinued operations was $9.4 million for the year ended December 31, 2024, compared to net cash provided by operating activities for both continuing and discontinued operations of $14.7 million for the year ended December 31, 2023.
Analysis of Cash Flows Net cash provided by operating activities for both continuing and discontinued operations was $1.8 million for the year ended December 31, 2025, compared to net cash provided by operating activities for both continuing and discontinued operations of $9.4 million for the year ended December 31, 2024.
The number of franchise licenses sold for the year ended December 31, 2024 was 46, compared with 55 and 75 licenses for the years ended December 31, 2023 and 2022, respectively. We ended 2024 with 16 regional developers who were responsible for 30% of the 46 licenses sold during the year.
The number of franchise licenses sold for the year ended December 31, 2025 was 31, compared with 46 and 55 licenses for the years ended December 31, 2024 and 2023, respectively. We ended 2025 with 15 regional developers who were responsible for 26% of the 31 licenses sold during the year.
The following table summarizes our material contractual obligations from continuing operations at December 31, 2024 and the effect that such obligations are expected to have on our liquidity and cash flows in future periods: Material Contractual Cash Requirements from Continuing Operations Payments Due by Fiscal Year Total 2025 2026 2027 2028 2029 Thereafter Operating leases $ 460,056 460,056 — — — — — Recent Accounting Pronouncements Please see Note 1, Nature of Operations and Summary of Significant Accounting Policies in the Notes to consolidated financial statements included in Item 8 of this Form 10-K for information regarding recently issued accounting pronouncements that may impact our financial statements.
The following table summarizes our material contractual obligations from continuing operations at December 31, 2025 and the effect that such obligations are expected to have on our liquidity and cash flows in future periods: Material Contractual Cash Requirements from Continuing Operations Payments Due by Fiscal Year Total 2026 2027 2028 2029 2030 Thereafter Operating leases $ 2,421,699 $ 268,762 $ 467,453 $ 479,129 $ 491,077 $ 503,374 $ 211,904 Recent Accounting Pronouncements Please see Note 1, Nature of Operations and Summary of Significant Accounting Policies in the Notes to consolidated financial statements included in Item 8 of this Form 10-K for information regarding recently issued accounting pronouncements that may impact our financial statements.
Holt resigned as the President and Chief Executive Officer of the Company and as a member of the Company’s Board of Directors. Effective October 14, 2024, the Board of Directors of the Company appointed Sanjiv Razdan as President and Chief Executive Officer of the Company and as a member of the Company’s Board of Directors.
Effective October 14, 2024, the Board of Directors appointed Sanjiv Razdan as our President and Chief Executive Officer and as a member of the Board of Directors.
Of the 125 company-owned or managed clinics at December 31, 2024, 58 were constructed and developed by us, and 67 were acquired from franchisees. Our current strategy is to grow through the sale and development of additional franchises.
Of the 75 company-owned or managed clinics at December 31, 2025, 30 were constructed and developed by us, and 45 were acquired from franchisees. Our current strategy is to grow through the sale and development of additional franchises.
In those states where we own and operate the clinic, revenues are recognized when services are performed. We offer a variety of membership and wellness packages which feature discounted pricing as compared with our single-visit pricing.
We earn revenue from clinics that we own and operate or manage throughout the United States. In those states where we own and operate the clinic, revenues are recognized when services are performed. We offer a variety of membership and wellness packages which feature discounted pricing as compared with our single-visit pricing.
We carried an upfront regional developer fee liability balance associated with this transaction of $0.3 million, representing the unrecognized fee collected upon the execution of the regional developer agreement.
We carried an upfront regional developer fee liability balance associated with the transaction of $42 thousand, representing the unrecognized fee collected upon the execution of the regional developer agreement.
While the interruptions, delays and/or cost increases resulting from political instability and geopolitical tensions, adverse weather conditions, economic weakness, inflationary pressures, increase in interest rates and other factors have created uncertainty as to general economic conditions for 2025, as of the date of this Form 10-K, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business.
While the interruptions, delays and/or cost increases resulting from political instability and geopolitical tensions, adverse weather conditions, economic weakness, inflationary pressures, elevated interest rates and other factors have created uncertainty as to general economic conditions for 2026, as of the date of this Form 10-K, we believe we have adequate capital resources and sufficient access to external financing sources, upon the completion of our anticipated amendment to the fixed charge coverage ratio debt covenant under our 2022 Credit Facility in the first half of 2026, to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business.
These opportunities could include, but are not limited to, reinvestment in the brand and related marketing, continued investment in our IT platforms, the repurchase of RD territories, certain merger or acquisition opportunities and/or a stock repurchase program.
These opportunities could include, but are not limited to, reinvestment in the brand and related marketing, continued investment in our IT platforms, the repurchase of regional developer territories, certain merger or acquisition opportunities and/or further repurchases of our outstanding common stock.
During the third quarter of 2024, the Company, with the authorization of the Board of Directors, expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in clusters grouped by proximity to larger private equity firms.
During the third quarter of 2024, we, with the authorization of the Board of Directors, expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped by geographic territory.
As a percentage of revenue, general and administrative expenses were 57% and 56% during the year ended December 31, 2024 and 2023, respectively.
As a percentage of revenue, general and administrative expenses were 54% and 58% during the year ended December 31, 2025 and 2024, respectively.
We delivered over 14.7 million patient visits in 2024, up from 13.6 million patient visits in 2023, generating over $530.3 million and $488 million of system-wide sales, respectively, across our highly franchised network. We will continue the rapid and franchised focused expansion of chiropractic clinics in key markets throughout North America and potentially abroad.
We delivered over 14.4 million patient visits in 2025, down from 14.7 million patient visits in 2024, generating over $532.4 million and $530.3 million 28 Table of Contents of system-wide sales, respectively, across our highly franchised network. We will continue the franchise-focused expansion of chiropractic clinics in key markets throughout North America and potentially abroad.
As discussed further in Note 3, Acquisitions and Divestitures, in the Notes to consolidated financial statements, during the fourth quarter of 2024, the Company classified its corporate clinic business segment as held for sale.
As discussed further in Note 3, Divestitures, in the Notes to consolidated financial statements, since the fourth quarter of 2024, we have classified our corporate clinic business segment as held for sale.
Moreover, even if an accrual is not required, we provide additional disclosure related to litigation and other claims when it is reasonably possible (i.e., more than remote) that the outcomes of such litigation and other claims include potential material adverse impacts on us.
Moreover, if an accrual is not required, we provide additional disclosure related to litigation and other claims when it is reasonably possible (i.e., more than remote) that the outcomes of such litigation and other claims include potential material adverse impacts on us. Legal costs to be incurred in connection with a loss contingency are expensed as such costs are incurred.
We generated $9.4 million of cash flow from operating activities from both continuing and discontinued operations in the year ended December 31, 2024.
We generated $1.8 million of cash flows from operating activities from both continuing and discontinued operations in the year ended December 31, 2025.
Additionally, as we execute on our strategy to refranchise and divest from all of our company-owned and managed clinics, we generate revenue through our company-owned or managed clinics in Loss from discontinued operations before income tax expense. Revenues from Company-Owned or Managed Clinics. We earn revenue from clinics that we own and operate or manage throughout the United States.
Additionally, as we execute on our strategy to refranchise and divest from all of our company-owned or managed clinics, revenue generated through our company-owned or managed clinics is included in Income (loss) from discontinued operations before income tax expense. Revenues from Company-Owned or Managed Clinics.
We saw 957,000 new patients in 2024, with approximately 36% of new patients visiting a chiropractor for the first time. We are not only increasing our percentage of market share, but are expanding the chiropractic market. Key Performance Measures.
We saw 797,100 new patients in 2025, and according to our patient survey conducted in 2024, approximately 36% of new patients were visiting a chiropractor for the first time. We are not only increasing our percentage of market share, but are also expanding the chiropractic market. Key Performance Measures.
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and •. Adjusted EBITDA does not reflect the (gain) loss on disposition or impairment, which represents the impairment of assets as of the reporting date.
Some of these limitations include the following: • Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; 37 Table of Contents • Adjusted EBITDA does not reflect the (gain) loss on disposition or impairment, which represents the impairment of assets as of the reporting date.
As of December 31, 2024 and 2023, there were 842 and 800 franchised clinics in operation, respectively. • Franchise fees revenue increased due to the continued increase in active franchise licenses and the impact of accelerated revenue recognition resulting from the terminated franchise license agreements, with 24 and 21 franchise license agreements terminated during the years ended December 31, 2024 and 2023, respectively. • Software fees revenue increased due to an increase in our franchised clinic base and the related revenue recognition over the term of the franchise agreement as described above. • Other revenues primarily consisted of merchant income associated with credit card transactions and during the year ended December 31, 2024 also included conference fee revenue for our national franchisee conference held in 2024.
As of December 31, 2025 and 2024, there were 885 and 842 franchised clinics in operation, respectively. • Franchise fees increased due to the continued increase in active franchise licenses and the impact of accelerated revenue recognition resulting from terminated franchise license agreements, with 34 and 24 franchise license agreements terminated during the years ended December 31, 2025 and 2024, respectively. 34 Table of Contents • Software fees increased due to an increase in our franchised clinic base and the related revenue recognition over the term of the franchise agreement as described above.
Legal costs to be incurred in connection with a loss contingency are expensed as such costs are incurred. Results of Operations The following discussion and analysis of our financial results encompasses our consolidated results and results of our business segment: Franchise Operations. All financial results and metrics discussed below are on a continuing operation basis.
Results of Operations The following discussion and analysis of our financial results encompasses our consolidated results and results of our business segment: Franchise Operations. All financial results and metrics discussed below are on a continuing operations basis.
Amounts collected in advance for membership and wellness packages are recorded as deferred revenue and 31 Table of Contents recognized when the service is performed. Any unused visits associated with monthly memberships are recognized on a month-to-month basis.
Amounts collected in advance for membership and wellness packages are recorded as deferred revenue and recognized when the service is performed. Any unused visits associated with monthly memberships are recognized on a month-to-month basis. We recognize a contract liability (or a deferred revenue liability) related to the prepaid treatment plans for which we have an ongoing performance obligation.
We recognize a contract liability (or a deferred revenue liability) related to the prepaid treatment plans for which we have an ongoing performance obligation. We recognize this contract liability, and recognize revenue, as the patient consumes his or her visits related to the package and we perform the services.
We recognize this contract liability, and recognize revenue, as the patient consumes his or her visits related to the package and we perform the services.
Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property are expensed as incurred and are also included in general and administrative expenses on the consolidated income statements. 32 Table of Contents Income Taxes We recognize deferred tax assets and liabilities for both the expected impact of differences between the financial statement amount and the tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards.
Variable lease payments, such as percentage rentals based on location sales, periodic adjustments for inflation, reimbursement of real estate taxes, any variable common area maintenance and any other variable costs associated with the leased property are expensed as incurred and are also included in general and administrative expenses on the consolidated income statements.
As of December 31, 2024, we and our franchisees operated or managed 967 clinics, of which 842 were operated or managed by franchisees and 125 were operated as company-owned or managed clinics. Our franchisees opened 57 clinics during 2024. This compares to 114 clinics opened in 2023, 104 franchised clinics and 10 company-owned or managed clinics.
Key Clinic Development Trends . As of December 31, 2025, we and our franchisees operated or managed 960 clinics, of which 885 were operated or managed by franchisees and 75 were operated as company-owned or managed clinics. Our franchisees opened 29 clinics during 2025. This compares to 57 clinics opened in 2024, all of which were franchised clinics.
The fluctuation in the effective rate was primarily attributable to state taxes, including the change in rates, stock-based compensation, the officer’s compensation limit under Section 162(m), change in valuation allowance and uncertain tax positions during the year ended December 31, 2024, as compared to the year ended December 31, 2023.
The fluctuation in the effective rate was primarily attributable to state income taxes (net of federal tax and permanent differences), changes in tax rates, stock-based compensation, shortfall/windfall on stock compensation expense, change in valuation allowance and uncertain tax positions during the year ended December 31, 2025, as compared to the year ended December 31, 2024.
After evaluating options for improvement, during 2023 the board authorized management to initiate a plan to refranchise or sell the majority of our company-owned or managed clinics. During the third quarter of 2024, the Company expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped by geographic territory.
After evaluating options for improvement, during 2023 the Board of Directors authorized management to initiate a plan to refranchise or sell the majority of our company-owned or managed clinics.
The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements. Some of these limitations include the following: •. Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; •.
The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements.
Regional Developer Fees We have a regional developer program where regional developers are granted an exclusive geographical territory and commit to a minimum development obligation within that defined territory.
These fees are recognized ratably on a straight-line basis over the term of the respective franchise agreement. 32 Table of Contents Regional Developer Fees We have a regional developer program where regional developers are granted an exclusive geographical territory and commit to a minimum development obligation within that defined territory.
In addition, the increase in interest rates and the expectation that interest rates will continue to remain elevated may adversely affect patients’ financial conditions, resulting in reduced spending on our services.
In addition, the expectation that interest rates will continue to remain elevated may adversely affect patients’ financial conditions, resulting in reduced spending on our services. While the impact of these factors continues to remain uncertain, we will continue to evaluate the extent to which these factors will impact our business, financial condition, or results of operations.
We collect a monthly fee from our franchisees for use of our proprietary chiropractic software, computer support, and internet services support. These fees are recognized ratably on a straight-line basis over the term of the respective franchise agreement.
We collect a monthly fee from our franchisees for use of our proprietary chiropractic software, computer support, and internet services support.
Cost of Revenues Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2024 2023 Cost of Revenues $ 11,516,655 $ 10,480,645 $ 1,036,010 9.9 % For the year ended December 31, 2024, as compared with the year ended December 31, 2023, the total cost of revenues increased due to an increase in regional developer royalties and sales commissions.
Cost of Revenues Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2025 2024 Cost of Revenues $ 11,225,474 $ 11,516,848 $ (291,374) (2.5) % For the year ended December 31, 2025, as compared with the year ended December 31, 2024, the total cost of revenues decreased due to a reduction in regional developer royalties and sales commissions.
For the year ended December 31, 2024, this included purchases of property and equipment for $1.2 million partially offset by proceeds from the sale of company-owned and managed clinics of $0.6 million. For the year ended December 31, 2023, this included clinic acquisitions for $1.2 million and purchases of property and equipment for $5.0 million.
For the year ended December 31, 2025, net cash provided by investing activities was driven by $7.8 million of proceeds from the sale of company-owned or managed clinics, partially offset by $1.5 million of purchases of property and equipment.
Further, should we fail to continue to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our patient service to suffer.
In 2024 and 2025, clinics owned or managed by us or our franchisees were negatively impacted by labor shortages and wage increases, which increased our general and administrative expenses. Further, should we fail to continue to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our patient service to suffer.
The fair value of customer relationships is amortized over their estimated useful life which ranges from two to four years. Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the acquisitions of franchises treated as a business combination under GAAP.
Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired in the acquisitions of franchises treated as a business combination under GAAP. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests.
We are not only increasing our percentage of market share, but expanding the chiropractic market. On June 24, 2024, we entered into an agreement pursuant to which we repurchased the right to develop franchises in various counties in Maryland. The total consideration for the transaction was $0.6 million.
We will continue to leverage the power of the regional developer program to accelerate the number of clinics sold, and eventually opened, across the country. On June 24, 2024, we entered into an agreement pursuant to which we repurchased the right to develop franchises in various counties in Maryland. The total consideration for the transaction was $0.6 million.
While gross sales from franchised clinics are not recorded as revenues by us, management believes the information is important in understanding the overall brand’s financial performance, because these sales are the basis on which we calculate and record royalty fees and are indicative of the financial health of the franchisee base. Key Clinic Development Trends .
Accordingly, system-wide sales should not be considered in isolation or as a substitute for our results reported under GAAP. Management believes the information is important in understanding the overall brand’s financial performance, because these sales are the basis on which we calculate and record royalty fees and are indicative of the financial health of the franchisee base.
Significant Events and/or Recent Developments For the year ended December 31, 2024: • Comp Sales of clinics that have been open for at least 13 full months increased 4%. • Comp Sales for mature clinics open 48 months or more decreased 2%. • System-wide sales for all clinics open for any amount of time grew 9% to $530.3 million. 29 Table of Contents We saw 957,000 new patients in 2024, compared with 932,000 new patients in 2023, with approximately 36% of new patients having never been to a chiropractor before.
For the year ended December 31, 2025: • Comp Sales of clinics that have been open for at least 13 full months were flat. • System-wide sales for all clinics open for any amount of time slightly increased to $532.4 million but remained flat on a percentage basis. • We saw 797,100 new patients in 2025, compared with 957,000 new patients in 2024.
Net Loss (Gain) on Disposition or Impairment Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2024 2023 Net Loss (Gain) on Disposition or Impairment $ 14,642 $ (20,894) $ 35,536 (170.1) % Net loss on disposition or impairment nominally changed for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to the disposal of property and equipment.
Net Loss on Disposition or Impairment 35 Table of Contents Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2025 2024 Net Loss on Disposition or Impairment $ 7,898 $ 66,019 $ (58,121) (88.0) % Net loss on disposition or impairment decreased for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to lower disposals of property and equipment.
Total Revenues Components of revenues for the year ended December 31, 2024, as compared to the year ended December 31, 2023, were as follows: 33 Table of Contents Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2024 2023 Revenues: Royalty fees 32,144,796 29,160,832 2,983,964 10.2 % Franchise fees 2,997,850 2,882,895 114,955 4.0 % Advertising fund revenue 9,180,281 8,321,043 859,238 10.3 % Software fees 5,687,326 5,086,562 600,764 11.8 % Other revenues 1,886,352 1,526,145 360,207 23.6 % Total revenues $ 51,896,605 $ 46,977,477 $ 4,919,128 10.5 % The reasons for the significant changes in our components of total revenues were as follows: • Total revenues increased by $4.9 million, primarily due to the continued expansion and revenue growth of our franchise base. • Royalty fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during 2024, along with continued sales growth in existing franchised clinics.
Total Revenues Components of revenues for the year ended December 31, 2025, as compared to the year ended December 31, 2024, were as follows: Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2025 2024 Revenues: Royalty fees 33,203,885 32,144,796 1,059,089 3.3 % Franchise fees 3,371,504 2,997,850 373,654 12.5 % Advertising fund revenue 10,451,281 9,180,281 1,271,000 13.8 % Software fees 6,037,385 5,687,326 350,059 6.2 % Other revenues 1,831,537 2,153,177 (321,640) (14.9) % Total revenues $ 54,895,592 $ 52,163,430 $ 2,732,162 5.2 % Total revenues increased by $2.7 million, primarily due to the continued expansion and revenue growth of our franchise base, and included: • Royalty fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during 2025, along with continued sales growth in existing franchised clinics.
Net cash used for financing activities was $2.0 million and net cash provided by financing activities was $0.2 million during the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, this related to the repayment of debt under the Credit Agreement of $2.0 million.
Net cash provided by investing activities was $6.3 million and net cash used in investing activities was $0.6 million during the years ended December 31, 2025 and 2024, respectively.
JP Morgan Chase waived this default until September 30, 2023. The filing of our 2023 Q2 10-Q on September 26, 2023 cured the default. Recent Events Recent events that may impact our business include unfavorable global economic or political conditions, such as uncertainties that come with changes to the presidential administration, labor shortages, and inflation and other cost increases.
Significant Events and/or Recent Developments Recent developments that may impact our business include unfavorable global economic or political conditions, such as uncertainties that come with changes to the presidential administration, labor shortages, and inflation and other cost increases. We anticipate that 2026 will continue to be a volatile macroeconomic environment. The primary inflationary factor affecting our operations is labor costs.
Income Tax Expense Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2024 2023 Income tax expense $ 62,142 $ 11,023,411 $ (10,961,269) (99.4) % For the years ended December 31, 2024 and 2023, the effective tax rates were (4.2)% and 4,339.9%, respectively.
Income Tax Expense Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2025 2024 Income Tax Expense $ 38,653 $ 5,606 $ 33,047 589.5 % For the years ended December 31, 2025 and 2024, the effective tax rates were (16.8)% and (0.3)%, respectively.
Subsequent to the balance sheet date, we have received draft letters of intent (“LOIs”) for our full portfolio of company-owned or managed clinics and as of the filing of this Form 10-K are in the financial stages of LOI term negotiations.
In early 2025, we received draft letters of intent for our full portfolio of company-owned or managed clinics.
While the impact of these factors continues to remain uncertain, we will continue to evaluate the extent to which these factors will impact our business, financial condition, or results of operations. These and other uncertainties with respect to these recent events could result in changes to our current expectations.
These and other uncertainties with respect to these recent developments could result in changes to our current expectations.
Selling and Marketing Expenses Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2024 2023 Selling and Marketing Expenses $ 10,923,342 $ 8,689,664 $ 2,233,678 25.7 % Selling and marketing expenses increased $2.2 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, driven by an increase in advertising fund expenditures from a larger franchise base and increased marketing expenditures expanding our franchise marketing efforts. 34 Table of Contents Depreciation and Amortization Expenses Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2024 2023 Depreciation and Amortization Expenses $ 1,363,453 $ 1,278,148 $ 85,305 6.7 % Depreciation and amortization expenses increased $0.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to depreciation expenses related to development of internal use software made available for use in the first half of 2024.
Selling and Marketing Expenses Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2025 2024 Selling and Marketing Expenses $ 13,299,399 $ 10,973,610 $ 2,325,789 21.2 % Selling and marketing expenses increased $2.3 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, driven by an increase in expenses associated with our digital marketing transformation efforts and the impact of a larger franchise base.
Other Income (loss), Net Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2024 2023 Other income (loss), net $ 280,287 $ (64,293) $ 344,580 (536.0) % Other income (loss), net increased during the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to decreased interest expense due to the pay down of the outstanding balance on our Debt under the Credit Agreement in the first quarter of 2024.
Other Income, Net Year Ended December 31, Change from Prior Year Percent Change from Prior Year 2025 2024 Other Income, net $ 683,872 $ 280,287 $ 403,585 144.0 % Other income, net increased during the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to the deployment of additional cash and cash equivalents during the middle of 2025 into higher interest rate money market funds resulting in increased interest income.
Subsequent to the balance sheet date, we have received draft letters of intent (“LOIs”) for our full portfolio of company-owned or managed clinics and as of the filing of this Form 10-K are in the financial stages of LOI term negotiations. Our goal will be to generate significant processes that will provide us with value creating capital allocation opportunities.
In March 2026, we signed a letter of intent with a new potential buyer for five corporate-owned or managed clinics located in northern California. Our goal will be to generate significant proceeds that will provide us with value creating capital allocation opportunities.
Royalties and other fees are collected from our franchisees semi-monthly, two working days after each sales period has ended. Net cash used in investing activities was $0.6 million and $6.2 million during the years ended December 31, 2024 and 2023, respectively.
Cash provided by operating activities is subject to variability period over period as a result of the timing of collections and payments related to accounts receivable, accrued expenses, and other operating assets and liabilities. Royalties and other fees are collected from our franchisees semi-monthly, two working days after each sales period has ended.
Removed
We will continue to leverage the power of the regional developer program to accelerate the number of clinics sold, and eventually opened, across the country.
Added
System-wide sales are neither required by, nor presented in accordance with, GAAP. System-wide sales are the sum of company-owned or managed clinics and clinics operated by our franchisees. Our GAAP total revenue in our consolidated statements of income is limited to company-owned or managed clinic revenue and franchise revenue from our franchisees.
Removed
Default Under Credit Agreement On September 8, 2023, JP Morgan Chase waived, on a one-time only basis, a default that occurred under the Credit Agreement. The default occurred as of the close of business on September 6, 2023.
Added
On June 30, 2025, we closed on the sale of 31 company-owned or managed clinics and associated franchise licenses located in Arizona and New Mexico to an existing franchisee, Joint Ventures, LLC, in exchange for $8.3 million in cash and the regional developer territory rights of the Northwest region.
Removed
The default resulted from our inability to deliver in a timely manner the financial statements in its Quarterly Report on Form 10-Q for the period ended June 30, 2023 (the “2023 Q2 10-Q”).
Added
We accounted for the acquisition of the regional developer rights as a release of liability and were included as part of the total consideration received to calculate the gain or loss on the sale. Losses on the sale were included with the loss on the sale of assets included in Net loss on disposition or impairment from discontinued operations.
Removed
Our inability to produce and file the 2023 Q2 10-Q in a timely manner (which filing constitutes delivery to JP Morgan Chase of our financial statements) was the result of the discovery of errors in the GAAP accounting treatment for reacquired regional developer rights and for transfer pricing for our VIEs.
Added
As part of the sale, Joint Ventures, LLC agreed to open an additional 10 clinics in the same region. On June 23, 2025, we also closed the sale of five clinics along with future development rights located in Kansas and Missouri to an existing franchisee, 93 Chiro, LLC.
Removed
We anticipate that 2025 will continue to be a volatile macroeconomic environment. The primary inflationary factor affecting our operations is labor costs. In 2023 and 2024, clinics owned or managed by us or our franchisees were negatively impacted by labor shortages and wage increases, which increased our general and administrative expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed0 unchanged
Biggest changeGiven the low interest income generated from our cash, any reduction in interest rates would not have a material impact on our interest income. Borrowings under the Credit Agreement bear interest at a rate equal to an applicable margin plus a variable rate. As such, the Revolver exposes us to market risk for changes in interest rates.
Biggest changeGiven the higher interest income generated from our cash after investing a portion into higher yielding money market funds, any reduction in interest rates would not have a material impact on our interest income. Borrowings under the Credit Agreement bear interest at a rate equal to an applicable margin plus a variable rate.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Financial instruments held by us as of December 31, 2024 include cash and cash equivalents and short-term borrowings. A portion of our cash is affected by short-term interest rates, which are currently low.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Financial instruments held by us as of December 31, 2025 include cash and cash equivalents. A portion of our cash is affected by short-term interest rates, which are currently low.
As we do not maintain a debt position under the Credit Agreement as of December 31, 2024, the effect of a change in interest rates would not have an impact to our interest expense.
As such, the Revolver exposes us to market risk for changes in interest rates. As we do not maintain a debt position under the Credit Agreement as of December 31, 2025, the effect of a change in interest rates would not have an impact to our interest expense.

Other JYNT 10-K year-over-year comparisons