HireQuest, Inc.

Previous wording

As of June 30, 2025 we had 413 franchisee-owned offices and 1 company-owned office in 43 states, the District of Columbia, and 13 countries outside of the United States, and we licensed our trade names to 6 offices in California. In addition, on such date, there were 12 MRI locations that provided contract staffing services only. We provide employment for an estimated 65 thousand temporary employees annually working for thousands of clients in many industries including construction, healthcare, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, retail, and dental.

Current wording

As of September 30, 2025, we had 399 franchisee-owned offices and 1 company-owned office in 43 states, the District of Columbia, and 13 countries outside of the United States, and we licensed our trade names to 6 offices in California. In addition, on such date, there were 12 MRI locations that provided contract staffing services only. We provide employment for an estimated 65 thousand temporary employees annually working for thousands of clients in many industries including construction, healthcare, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, retail, and dental.

Previous wording

The following table displays our Consolidated Statements of Operations for the three-month and six-month periods ended June 30, 2025 and June 30, 2024. Percentages reflect the line item as a percentage of total revenue (in thousands, except percentages).

Current wording

The following table displays our Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and September 30, 2024. Percentages reflect the line item as a percentage of total revenue (in thousands, except percentages).

Previous wording

Total revenue for the three months ended June 30, 2025 was approximately $7.6 million compared to $8.7 million for the three months ended June 30, 2024, a decrease of approximately 12.0%. For the quarter ended June 30, 2025, there was a $20.3 million or 13.9% decrease in underlying system-wide sales from $146.1 million for the three months ended June 30, 2024 to $125.9 million for the three months ended June 30, 2025. The decrease in system-wide sales was primarily driven by a decline at MRI of $10.3 million, HQ Direct of$5.9 million and Snelling/HQ of $3.4 million. MRI declines resulted from a combination of a depressed economic environment and loss of franchisees who exited the system due to retirement or for other reasons. Revenue as a percentage of system-wide sales was 6.1% for the three months ended June 30, 2025 compared to 5.9% for three months ended June 30, 2024.

Current wording

Total revenue for the three months ended September 30, 2025 was approximately $8.5 million compared to $9.4 million for the three months ended September 30, 2024, a decrease of approximately 9.8%. For the three months ended September 30, 2025, there was a $14.9 million or 10.0% decrease in underlying system-wide sales from $148.4 million for the three months ended September 30, 2024 to $133.5 million for the three months ended September 30, 2025. The decrease in system-wide sales was primarily driven by a decline at MRI of $9.9 million, HQ Direct of$3.6 million and Snelling/HQ of $1.4 million. MRI declines resulted from a combination of a depressed economic environment and loss of franchisees whose principals retired and exited the business due to retirement or for other reasons.

Previous wording

Service revenue for the three months ended June 30, 2025 was approximately $354 thousand, a decrease of $125 thousand from the three months ended June 30, 2024, when service revenue was approximately $479 thousand. Interest income on overdue customer accounts receivable, which is included in service revenue was $215 thousand for the three months ended June 30, 2025 and $189 thousand for the three months ended June 30, 2024. Fluctuations in interest generally follow the mix of aged accounts in our accounts receivable, although relatively few age over 42 days and result in service revenue for us. Many of our franchisees have elected tocharge back accounts early in order to avoid or reduce the interest charge. Therefore, there will not be a proportionally large increase in service revenue even when there is a large increase in accounts receivable. We pride ourselves on maintaining quality, creditworthy customers who pay timely. We view the imposition of higher interest rates on aged accounts receivable to serve as an incentive for our franchisees to select credit-worthy customers. Service revenue is expected to fluctuate from quarter-to-quarter. The increase in interest income was primarily offset by a $88 thousand decrease in liability insurance.

Current wording

Service revenue for the three months ended September 30, 2025 was approximately $387 thousand, a decrease of $41 thousand from the three months ended September 30, 2024, when service revenue was approximately $428 thousand. Interest income on overdue customer accounts receivable, which is included in service revenue was $231 thousand for the three months ended September 30, 2025 and $197 thousand for the three months ended September 30, 2024. Fluctuations in interest generally follow the mix of aged accounts in our accounts receivable, although relatively few age over 42 days and result in service revenue for us. Many of our franchisees have elected tocharge back accounts early in order to avoid or reduce the interest charge. Therefore, there will not be a proportionally large increase in service revenue even when there is a large increase in accounts receivable. We pride ourselves on maintaining quality, creditworthy customers who pay timely. We view the imposition of higher interest rates on aged accounts receivable to serve as an incentive for our franchisees to select credit-worthy customers. Service revenue is expected to fluctuate from quarter-to-quarter.

Previous wording

Workers' compensationexpensewas approximately $127 thousand for the three months ended June 30, 2025, a decrease of $420 thousand when compared to a netexpense of approximately $547 thousand recorded in the three months ended June 30, 2024. Our workers' compensation reserves provide benefits following a workplace injury. Benefits are usually statutory in nature and are generally provided in partial or complete replacement of the injured worker’s recourse to the liability system. Payments may include medical treatment, rehabilitation, lost wages, and survivor benefits. Workers compensation rating is typically based on job classification, and our workers fall in hundreds of classifications. Annually, we use third-party actuaries to ensure that the overall ratings are sound, that individual insurer rates are adequate, and that individual risks receive a fair rate that reflects both the characteristics of the job classification and the Company's risk experience. The company pays premiums, actual claims, and establishes reserves for future claims. In turn we charge our franchises a percentage of payroll as determined by our workers' compensation carrier, plus or minus certain incentives and charges we provide for good or bad workers' compensation claims history. The overall charge is an estimate of the fully developed future costs and may not always coincide with the actual costs we incur resulting in expense or benefit in a given period. Over the long-term, our workers' compensation expense should equal the amounts we collect from franchisees and essentially be a pass-through cost. In the short-term, we cannot accurately predict the effects of workers' compensation in specific future periods, and historical trends are not indicative of future results.

Current wording

Workers' compensationbenefitwas approximately $99 thousand for the three months ended September 30, 2025, a decrease of $598 thousand when compared to a netexpense of approximately $499 thousand recorded in the three months ended September 30, 2024. Our workers' compensation reserves provide benefits following a workplace injury. Benefits are usually statutory in nature and are generally provided in partial or complete replacement of the injured worker’s recourse to the liability system. Payments may include medical treatment, rehabilitation, lost wages, and survivor benefits. Workers compensation rating is typically based on job classification, and our workers fall in hundreds of classifications. Annually, we use third-party actuaries to ensure that the overall ratings are sound, that individual insurer rates are adequate, and that individual risks receive a fair rate that reflects both the characteristics of the job classification and the Company's risk experience. The company pays premiums, actual claims, and establishes reserves for future claims. In turn we charge our franchises a percentage of payroll as determined by our workers' compensation carrier, plus or minus certain incentives and charges we provide for good or bad workers' compensation claims history. The overall charge is an estimate of the fully developed future costs and may not always coincide with the actual costs we incur resulting in expense or benefit in a given period. Over the long-term, our workers' compensation expense should equal the amounts we collect from franchisees and essentially be a pass-through cost. In the short-term, we cannot accurately predict the effects of workers' compensation in specific future periods, and historical trends are not indicative of future results.

Previous wording

Compensation-related expenses include wages, payroll taxes, benefits, and stock-based compensation, and continue to be the largest component of operating expenses. Compensation and benefits for the three months ended June 30, 2025 was approximately $2.7 million which was flat compared to $2.7 million for the three months ended June 30, 2024.

Current wording

Compensation-related expenses include wages, payroll taxes, benefits, and stock-based compensation. Compensation and benefits for the three months ended September 30, 2025 was approximately $2.7 million, a decrease of $152 thousand when compared to $2.8 million for the three months ended September 30, 2024.

Previous wording

Depreciation and amortization for the three months ended June 30, 2025 was approximately $734 thousand compared to $697 thousand for the three months ended June 30, 2024. This increase is the result of an IT project being placed in service causing amortization to begin.

Current wording

Depreciation and amortization for the three months ended September 30, 2025 was approximately $752 thousand compared to $697 thousand for the three months ended September 30, 2024. This increase is primarily the result of an IT project being placed in service causing amortization to begin.

Previous wording

For the three months ended June 30, 2025, other miscellaneous* income* was approximately $28 thousand, compared to other miscellaneousincome of $39 thousand for the three months ended June 30, 2024.

Current wording

For the three months ended September 30, 2025, other miscellaneous* income* was approximately $35 thousand, compared to other miscellaneousexpense of $65 thousand for the three months ended September 30, 2024.

Previous wording

Interest income for the three months ended June 30, 2025 was approximately $129 thousand compared to $151 thousand for the three months ended June 30, 2024. Interest income represents interest related to the financing of franchised locations.

Current wording

Interest income for the three months ended September 30, 2025 was approximately $131 thousand compared to $138 thousand for the three months ended September 30, 2024. Interest income represents interest related to the financing of franchised locations.

Previous wording

Interest and other financing expense relates primarily to the Credit Agreement with Bank of America, N.A. Interest and other financing expense decreased from $253 thousand for the three months ended June 30, 2024 to $71 thousand for the three months ended June 30, 2025. Interest and other financing expense will fluctuate as we utilize the line of credit for acquisitions or other short-term liquidity needs. The decrease in interest expense is consistent with the decrease in the outstanding line of credit balance.

Current wording

Interest and other financing expense relates primarily to the Credit Agreement with Bank of America, N.A. Interest and other financing expense decreased from $268 thousand for the three months ended September 30, 2024 to $63 thousand for the three months ended September 30, 2025. Interest and other financing expense will fluctuate as we utilize the line of credit for acquisitions or other short-term liquidity needs. The decrease in interest expense is consistent with the decrease in the outstanding line of credit balance.

Previous wording

Income taxexpense was approximately $56 thousand for the three months ended June 30, 2025. We estimate an annual projected effective tax rate ("ETR") for the year to determine income tax expense or benefit in the interim periods. The estimated annual ETR does not include tax effects from significant unusual or infrequently occurring items. Such items are accounted for discretely during the period in which they occur. The ETR is primarily driven by the federal WOTC, which is included as part of income tax expense because it can be claimed only on the income tax return and can be realized only through the existence of taxable income. Other significant items affecting our tax rate are windfall tax deductions related to stock-based compensation, and overall limits on executive compensation. Our net ETR for the three months ended June 30, 2025 was 5.0%.

Current wording

Income tax expense was approximately $137 thousand for the three months ended September 30, 2025. We estimate an annual projected effective tax rate ("ETR") for the year to determine income tax expense or benefit in the interim periods. The estimated annual ETR does not include tax effects from significant unusual or infrequently occurring items. Such items are accounted for discretely during the period in which they occur. The ETR is primarily driven by the federal WOTC, which is included as part of income tax expense because it can be claimed only on the income tax return and can be realized only through the existence of taxable income. Other significant items affecting our tax rate are windfall tax deductions related to stock-based compensation, and overall limits on executive compensation. Our net ETR for the three months ended September 30, 2025 was 5.4%.

Previous wording

Income tax expense for the three months ended June 30, 2024 was approximately $557 thousand. Our net ETR for the three months ended June 30, 2024 was 21.2%. The decrease in the net ETR was driven by the level of WOTCs applied during the three months ended June 30, 2025.

Current wording

Income taxbenefit for the three months ended September 30, 2024 was approximately $725 thousand. Our net ETR for the three months ended September 30, 2024 was 25.1%. The decrease in the net ETR was driven by the level of WOTCs applied during the three months ended September 30, 2025.

Previous wording

The assets and liabilities of our discontinued operations are presented separately in the asset and liability sections, respectively, of the balance sheet for all periods presented. Similarly, cash flows and the results of operations are also removed from continuing operations in the respective financial statements. In general, assets held-for-sale are not amortized or depreciated, and are measured at the lower of carrying amount or fair value less costs to sell.

Current wording

The assets and liabilities of our discontinued operations are presented separately in the asset and liability sections, respectively, of the balance sheet for all periods presented. Similarly, cash flows and the results of operations are also removed from continuing operations in the respective financial statements. In general, assets held-for-sale are not amortized or depreciated, and are measured at the lower of carrying amount or fair value less costs to sell. During the third quarter of 2025, we reviewed the intangible assets associated with discontinued operations for any indications of impairment. As a result of this review, we concluded the carrying value of the intangible asset associated with discontinued operations exceeded its estimated fair value resulting in an impairment charge of $100 thousand.

Previous wording

Our total revenue consists of franchise royalties and service revenue we receive from our franchises. Revenue would also include staffing revenue with respect to owned locations, when applicable. Once a company-owned office is sold, disposed of, or otherwise classified as held-for-sale, it would not be reflected in revenue and instead reported as “Income from discontinued operations, net of tax.” Revenue does not include any owned locations for the six months ended June 30, 2025 or the six months ended June 30, 2024.

Current wording

Our total revenue consists of franchise royalties and service revenue we receive from our franchises. Revenue would also include staffing revenue with respect to owned locations, when applicable. Once a company-owned office is sold, disposed of, or otherwise classified as held-for-sale, it would not be reflected in revenue and instead reported as “Income from discontinued operations, net of tax.” Revenue does not include any owned locations for the nine months ended September 30, 2025 or the nine months ended September 30, 2024.

Previous wording

Total revenue for the six months ended June 30, 2025 was approximately $15.1 million compared to $17.1 million for the six months ended June 30, 2024, a decrease of approximately 11.6%. For the six months ended June 30, 2025, there was a $35.9 million or 12.8% decrease in underlying system-wide sales from $280.2 million for the six months ended June 30, 2024 to $244.3 million for the six months ended June 30, 2025. The decrease in system-wide sales was primarily driven by a decline in sales at MRI of $19.2 million, HQ Direct of $8.7 million and Snelling/HQ of $6.4 million. MRI declines resulted from a combination of a depressed economic environment and loss of franchisees who exited the system due to retirement or for other reasons. Revenue as a percentage of system-wide sales was 6.2% for the six months ended June 30, 2025 compared to 6.1% for six months ended June 30, 2024.

Current wording

Total revenue for the nine months ended September 30, 2025 was approximately $23.6 million compared to $26.5 million for the nine months ended September 30, 2024, a decrease of approximately 11.0%. For the nine months ended September 30, 2025, there was a $50.8 million or 11.9% decrease in underlying system-wide sales from $428.2 million for the nine months ended September 30, 2024 to $377.4 million for the nine months ended September 30, 2025. The decrease in system-wide sales was primarily driven by a decline in sales at MRI of $29.1 million, HQ Direct of $12.3 million and Snelling/HQ of $7.8 million. MRI declines resulted from a combination of a depressed economic environment and loss of franchisees who exited the system due to retirement or for other reasons.

Previous wording

Service revenue for the six months ended June 30, 2025 was approximately $866 thousand, a decrease of $192 thousand from the six months ended June 30, 2024, when service revenue was approximately $1.1 million. Interest income on overdue customer accounts receivable, which is included in service revenue was $455 thousand for the six months ended June 30, 2025 and $373 thousand for the six months ended June 30, 2024. Fluctuations in interest generally follow the mix of aged accounts in our accounts receivable, although relatively few age over 42 days and result in service revenue for us. Many of our franchisees have elected tocharge back accounts early in order to avoid or reduce the interest charge. Therefore, there will not be a proportionally large increase in service revenue even when there is a large increase in accounts receivable. We pride ourselves on maintaining quality, creditworthy customers who pay timely. We view the imposition of higher interest rates on aged accounts receivable to serve as an incentive for our franchisees to select credit-worthy customers. Service revenue is expected to fluctuate from quarter-to-quarter. The increase in interest income was partially offset by a $148 thousand decrease in liability insurance.

Current wording

Service revenue for the nine months ended September 30, 2025 was approximately $1.3 million, a decrease of $233 thousand from the nine months ended September 30, 2024, when service revenue was approximately $1.5 million. Interest income on overdue customer accounts receivable, which is included in service revenue was $686 thousand for the nine months ended September 30, 2025 and $570 thousand for the nine months ended September 30, 2024. Fluctuations in interest generally follow the mix of aged accounts in our accounts receivable, although relatively few age over 42 days and result in service revenue for us. Many of our franchisees have elected tocharge back accounts early in order to avoid or reduce the interest charge. Therefore, there will not be a proportionally large increase in service revenue even when there is a large increase in accounts receivable. We pride ourselves on maintaining quality, creditworthy customers who pay timely. We view the imposition of higher interest rates on aged accounts receivable to serve as an incentive for our franchisees to select credit-worthy customers. Service revenue is expected to fluctuate from quarter-to-quarter.

Previous wording

Workers' compensationexpensewas approximately $155 thousand for the six months ended June 30, 2025, a decrease of $964 thousand when compared to a netexpense of approximately $1.1 million recorded in the six months ended June 30, 2024. Our workers' compensation reserves provide benefits following a workplace injury. Benefits are usually statutory in nature and are generally provided in partial or complete replacement of the injured worker’s recourse to the liability system. Payments may include medical treatment, rehabilitation, lost wages, and survivor benefits. Workers' compensation rating is typically based on job classification, and our workers fall in hundreds of classifications. Annually, we use third-party actuaries to ensure that the overall ratings are sound, that individual insurer rates are adequate, and that individual risks receive a fair rate that reflects both the characteristics of the job classification and the Company's risk experience. The company pays premiums, actual claims, and establishes reserves for future claims. In turn we charge our franchises a percentage of payroll as determined by our workers' compensation carrier, plus or minus certain incentives and charges we provide for good or bad workers' compensation claims history. The overall charge is an estimate of the fully developed future costs and may not always coincide with the actual costs we incur resulting in expense or benefit in a given period. Over the long-term, our workers' compensation expense should equal the amounts we collect from franchisees and essentially be a pass-through cost. In the short-term, we cannot accurately predict the effects of workers' compensation in specific future periods, and historical trends are not indicative of future results.

Current wording

Workers' compensation expense was approximately $56 thousand for the nine months ended September 30, 2025, a decrease of $1.6 million when compared to a net expense of approximately $1.6 million recorded in the nine months ended September 30, 2024. Our workers' compensation reserves provide benefits following a workplace injury. Benefits are usually statutory in nature and are generally provided in partial or complete replacement of the injured worker’s recourse to the liability system. Payments may include medical treatment, rehabilitation, lost wages, and survivor benefits. Workers' compensation rating is typically based on job classification, and our workers fall in hundreds of classifications. Annually, we use third-party actuaries to ensure that the overall ratings are sound, that individual insurer rates are adequate, and that individual risks receive a fair rate that reflects both the characteristics of the job classification and the Company's risk experience. The company pays premiums, actual claims, and establishes reserves for future claims. In turn we charge our franchises a percentage of payroll as determined by our workers' compensation carrier, plus or minus certain incentives and charges we provide for good or bad workers' compensation claims history. The overall charge is an estimate of the fully developed future costs and may not always coincide with the actual costs we incur resulting in expense or benefit in a given period. Over the long-term, our workers' compensation expense should equal the amounts we collect from franchisees and essentially be a pass-through cost. In the short-term, we cannot accurately predict the effects of workers' compensation in specific future periods, and historical trends are not indicative of future results.

Previous wording

Compensation-related expenses include wages, payroll taxes, benefits, and stock-based compensation, and continue to be the largest component of operating expenses. Compensation and benefits for the six months ended June 30, 2025 was approximately $5.5 million which was slightly down compared to $5.7 million for the six months ended June 30, 2024.

Current wording

Compensation-related expenses include wages, payroll taxes, benefits, and stock-based compensation. Compensation and benefits for the nine months ended September 30, 2025 was approximately $8.2 million which was slightly down compared to $8.5 million for the nine months ended September 30, 2024.

Previous wording

Depreciation and amortization for the six months ended June 30, 2025 was approximately $1.5 million compared to $1.4 for the six months ended June 30, 2024. This increase is the result of an IT project being placed in service causing amortization to begin.

Current wording

Depreciation and amortization for the nine months ended September 30, 2025 was approximately $2.2 million compared to $2.1 for the nine months ended September 30, 2024. This increase is primarily the result of an IT project being placed in service causing amortization to begin.

Previous wording

For the six months ended June 30, 2025, other miscellaneous* income* was approximately $159 thousand, compared to other miscellaneousincome of $76 thousand for the six months ended June 30, 2024. This change was primarily driven by a gain on the disposal of a franchise business we took control of and then sold to another franchisee in the period ending June 30, 2024.

Current wording

For the nine months ended September 30, 2025, other miscellaneous* income was approximately $195 thousand, compared to other miscellaneous income of $12 thousand for the nine months ended September 30, 2024. This change was primarily driven by againof $103 thousand on the disposal of a franchise business we took control of and then sold to another franchisee during the period ended September 30, 2025 compared to aloss*of $100 thousand on the disposal of a franchise business we took control of and then sold to another franchisee in the period ended September 30, 2024.

Previous wording

Interest income for the six months ended June 30, 2025 was approximately $262 thousand compared to $287 thousand for the six months ended June 30, 2024. Interest income represents interest related to the financing of franchised locations.

Current wording

Interest income for the nine months ended September 30, 2025 was approximately $393 thousand compared to $424 thousand for the nine months ended September 30, 2024. Interest income represents interest related to the financing of franchised locations.

Previous wording

Interest and other financing expense relates primarily to the Credit Agreement with Bank of America, N.A. Interest and other financing expense decreased from $495 thousand for the six months ended June 30, 2024 to $214 thousand for the six months ended June 30, 2025. Interest and other financing expense will fluctuate as we utilize the line of credit for acquisitions or other short-term liquidity needs. The decrease in interest expense is consistent with the decrease in the outstanding line of credit balance.

Current wording

Interest and other financing expense relates primarily to the Credit Agreement with Bank of America, N.A. Interest and other financing expense decreased from $763 thousand for the nine months ended September 30, 2024 to $278 thousand for the nine months ended September 30, 2025. Interest and other financing expense will fluctuate as we utilize the line of credit for acquisitions or other short-term liquidity needs. The decrease in interest expense is consistent with the decrease in the outstanding line of credit balance.

Previous wording

Income taxexpense was approximately $224 thousand for the six months ended June 30, 2025. We estimate an annual projected effective tax rate ("ETR") for the year to determine income tax expense or benefit in the interim periods. The estimated annual ETR does not include tax effects from significant unusual or infrequently occurring items. Such items are accounted for discretely during the period in which they occur. The ETR is primarily driven by the federal WOTC, which is included as part of income tax expense because it can be claimed only on the income tax return and can be realized only through the existence of taxable income. Other significant items affecting our tax rate are windfall tax deductions related to stock-based compensation, and overall limits on executive compensation. Our net ETR for the six months ended June 30, 2025 was 8.2%.

Current wording

Income tax expense was approximately $362 thousand for the nine months ended September 30, 2025. We estimate an annual projected effective tax rate ("ETR") for the year to determine income tax expense or benefit in the interim periods. The estimated annual ETR does not include tax effects from significant unusual or infrequently occurring items. Such items are accounted for discretely during the period in which they occur. The ETR is primarily driven by the federal WOTC, which is included as part of income tax expense because it can be claimed only on the income tax return and can be realized only through the existence of taxable income. Other significant items affecting our tax rate are windfall tax deductions related to stock-based compensation, and overall limits on executive compensation. Our net ETR for the nine months ended September 30, 2025 was 6.9%.

Previous wording

Income tax expense for thesix months ended June 30, 2024 was approximately $897 thousand. Our net ETR for thesix months ended June 30, 2024 was 19.2%. The decrease in the net ETR is driven by the level of WOTCs applied during the six months ended June 30, 2025.

Current wording

Income tax expense for thenine months ended September 30, 2024 was approximately $172 thousand. Our net ETR for thenine months ended September 30, 2024 was 9.7%. The decrease in the net ETR is driven by the level of WOTCs applied during the nine months ended September 30, 2024.

Previous wording

At June 30, 2025, our current assets exceeded our current liabilities by approximately $28.6 million. Our current assets included approximately $2.7 million of cash and $42.8 million of net accounts receivable, which our franchisees have billed to customers and which we own in accordance with our franchise agreements. Our largest current liabilities as of June 30, 2025 included approximately $8.3 million due to our franchisees on pending settlement statements, $3.4 million related to our workers’ compensation claims liability, and $4.3 million of borrowings under our line of credit.

Current wording

At September 30, 2025, our current assets exceeded our current liabilities by approximately $31.3 million. Our current assets included approximately $1.1 million of cash and $46.9 million of net accounts receivable, which our franchisees have billed to customers and which we own in accordance with our franchise agreements. Our largest current liabilities as of September 30, 2025 included approximately $11.6 million due to our franchisees on pending settlement statements, $3.2 million related to our workers’ compensation claims liability, and $2.2 million of borrowings under our line of credit.

Previous wording

During the six months ended June 30, 2025, cash provided by continuing operations was approximately $4.5 million and included net income from continuing operations of approximately $2.5 million, adjusted by non-cash items (primarily depreciation and stock-based compensation) of approximately $2.3 million. These provisions were offset by changes in operating assets and liabilities requiring cash of approximately $305 thousand. During the six months ended June 30, 2024, cash used by continuing operating activities was approximately $669 thousand and included net income from continuing operations of approximately $3.8 million, adjusted by non-cash items of approximately $2.3 million. These provisions were partially offset by changes in operating assets and liabilities requiring cash (primarily accounts receivable) of approximately $6.8 million.

Current wording

During the nine months ended September 30, 2025, cash provided by continuing operations was approximately $5.5 million and included net income from continuing operations of approximately $4.9 million, adjusted by non-cash items (primarily depreciation and stock-based compensation) of approximately $3.7 million. These provisions were offset by changes in operating assets and liabilities requiring cash of approximately $3.1 million. During the nine months ended September 30, 2024, cash provided by continuing operating activities was approximately $3.5 million and included net income from continuing operations of approximately $1.6 million, adjusted by non-cash items of approximately $8.4 million (primarily goodwill and intangible asset impairment, depreciation and stock-based compensation). These provisions were partially offset by changes in operating assets and liabilities requiring cash (primarily accounts receivable) of approximately $6.5 million.

Previous wording

During the six months ended June 30, 2025, cash provided by investing activities was approximately $313 thousand, primarily from payments on notes receivable of approximately $673 thousand. These provisions were offset by cash issued for notes receivable of approximately $304 thousand. During the six months ended June 30, 2024, cash provided by investing activities was approximately $445 thousand, primarily from payments on notes receivable of approximately $762 thousand. These provisions were offset by an investments in an intangible asset of approximately $235 thousand.

Current wording

During the nine months ended September 30, 2025, cash provided by investing activities was approximately $679 thousand, primarily from payments on notes receivable of approximately $1.1 million. These provisions were offset by cash issued for notes receivable of approximately $322 thousand. During thenine months ended September 30, 2024, cash provided by investing activities was approximately $557 thousand, primarily from payments on notes receivable of approximately $1.2 million. These provisions were offset by an investment in an intangible asset of approximately $338 thousand.

Previous wording

During the six months ended June 30, 2025, cash used by financing activities was approximately $4.3 million and included net payments on our revolving line of credit of approximately $2.5 million and the payment of approximately $1.7 million in dividends. During the six months ended June 30, 2024, cash used by financing activities was approximately $394 thousand and included the payment of dividends totaling approximately $1.7 million and proceeds from our revolving line of credit of approximately $1.6 million.

Current wording

During the nine months ended September 30, 2025, cash used by financing activities was approximately $7.2 million and included net payments on our revolving line of credit of approximately $4.6 million and the payment of approximately $2.5 million in dividends. During the nine months ended September 30, 2024, cash used by financing activities was approximately $3.7 million and included the payment of dividends totaling approximately $2.5 million andnet payments on our revolving line of credit of approximately $717 thousand.

Previous wording

At June 30, 2025, availability under the Senior Credit Facility was approximately $35.9 million based on eligible collateral, less letter of credit reserves, bank product reserves, and current advances, assuming continued covenant compliance. Our all-in-rate of borrowing was 5.5%and is repriced daily.

Current wording

At September 30, 2025, availability under the Senior Credit Facility was approximately$42.5 million based on eligible collateral, less letter of credit reserves, bank product reserves, and current advances, assuming continued covenant compliance. Our all-in-rate of borrowing was 5.3% and is repriced daily.

Previous wording

On July 4, 2025, the “One Big Beautiful Bill Act” was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We are currently evaluating the provisions of the new law and the potential effects on our financial position, results of operations, and cash flows. However, the Company does not expect the new law to have a material impact on its results of operations, financial condition, or liquidity.

Current wording

On July 4, 2025, the “One Big Beautiful Bill Act” was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We are currently evaluating the provisions of the new law and the potential effects on our financial position, results of operations, and cash flows. However, we do not expect the new law to have a material impact on our results of operations, financial condition, or liquidity.

Previous wording

For the six months ended June 30, 2025, nearly all of our offices were franchised with the only exceptions being a portion of the Dubin operations acquired in the first quarter of 2022. The following table reflects our system-wide sales broken into its components for each period indicated. The Dubin operations are presented in the consolidated financial statements as discontinued operations because they are considered held-for-sale, but their system-wide sales are reflected along with all other offices in the table below. Percentages indicate the change in system-wide sales relative to the comparable prior period:

Current wording

For the nine months ended September 30, 2025, nearly all of our offices were franchised with the only exceptions being a portion of the Dubin operations acquired in the first quarter of 2022. The following table reflects our system-wide sales broken into its components for each period indicated. The Dubin operations are presented in the consolidated financial statements as discontinued operations because they are considered held-for-sale, but their system-wide sales are reflected along with all other offices in the table below. Percentages indicate the change in system-wide sales relative to the comparable prior period.

Previous wording

The following table accounts for the number of offices opened and closed or consolidated during the six months ended June 30, 2025:

Current wording

The following table accounts for the number of offices opened and closed or consolidated during the nine months ended September 30, 2025: