JOINT Corp
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 2026
JYNT$6.85-7.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001612630-26-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 3Current report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001612630-26-000079
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 86 current paragraphs.
45 unchanged; 35 reworded; 5 added; 13 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
On October 1, 2026, we entered into the Texas Purchase Agreement with the Texas Sellers, pursuant to which we reacquired from the Texas Sellers certain regional development rights in the Texas region and mutually terminated the Texas RDAs. As of October 1, 2026, the Texas region included 141 franchised clinics, and following the transaction under the Texas Purchase Agreement, the Texas Sellers will continue to franchise eight clinics in Texas through their affiliates.
Current report
The Texas RDAs were among our earliest regional developer agreements and include several negotiated terms, such as renewal rights for multiple successive 10-year terms. Pursuant to the Texas RDAs, the Texas Sellers received approximately $2.3 million in royalties paid by franchisees in the Texas region during the trailing 12 months ended August 31, 2026. Based on the foregoing, we agreed to pay to the Texas Sellers an aggregate purchase price of $8.0 million in cash that was due upon execution of the Texas Purchase Agreement, and if certain gross sales metrics are met or exceeded under the Texas RDAs during the two annual periods beginning September 1, 2026, we will also pay to the Texas Sellers up to $2.0 million in additional consideration payments, split evenly between the two years.
Current report
Total Revenues - Nine Months Ended September 30, 2026 Compared with Nine Months Ended September 30, 2025
Current report
For the three months ended September 30, 2026, as compared with the three months ended September 30, 2025, selling and marketing expenses decreased slightly due to lower system-wide sales.
Current report
Depreciation and amortization expenses decreased for the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, primarily due to lower depreciation expenses driven by the now fully depreciated IT platform used by our clinics for the management of operations, which was put into service in July 2021.
Removed paragraphs (13)
Previous report
Stock Repurchase Program
Previous report
Total Revenues - Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
Previous report
Depreciation and amortization expenses increased for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, primarily due to depreciation expenses related to internal use software enhancements and developments, including the launch of our new mobile app during the third quarter of 2025.
Previous report
(Loss) Income from Operations
Previous report
Loss from operations decreased by $0.8 million for the three months ended June 30, 2026, compared with the three months ended June 30, 2025. The decrease in the loss was primarily due to:
Previous report
•an increase of $1.9 million in total revenues;
Previous report
•a decrease of $0.3 million in our total cost of revenues; and
Previous report
•a decrease of $0.2 million in general and administrative expenses; partially offset by
Previous report
•an increase of $1.4 million in selling and marketing expenses.
Previous report
Income (loss) from operations increased by $2.3 million for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. The increase from the loss to income was primarily due to:
Previous report
•an increase of $3.7 million in total revenues; and
Previous report
•a decrease of $0.5 million in our total cost of revenues; partially offset by
Previous report
•an increase of $1.6 million in selling and marketing expenses.
Reworded paragraphs (35)
Previous wording
•Comp sales of clinics that have been open for at least 13 full months decreased 2.8%; and
Current wording
•Comp sales of clinics that have been open for at least 13 full months decreased 1.9%; and
Previous wording
•System-wide sales for all clinics open for any amount of time decreased 3.7% to $128.0 million.
Current wording
•System-wide sales for all clinics open for any amount of time decreased 3.1% to $123.3 million.
Previous wording
Key Clinic Development Trends. As of June 30, 2026, we and our franchisees operated or managed 941 clinics, of which 896 were operated or managed by franchisees and 45 were operated as company-owned or managed clinics. Our franchisees opened five clinics in the second quarter of 2026, compared to seven clinics in the second quarter of 2025.
Current wording
Key Clinic Development Trends. As of September 30, 2026, we and our franchisees operated or managed 930 clinics, of which 915 were operated or managed by franchisees and 15 were operated as company-owned or managed clinics. Our franchisees opened four clinics in the third quarter of 2026, compared to nine clinics in the third quarter of 2025.
Previous wording
Our current strategy is to grow through the sale and development of additional franchises. After evaluating options for improvement, during 2023, our Board of Directors 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, we expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped primarily by geographic location. This refined strategy will leverage our greatest strength – our capacity to build a franchise – to drive long-term growth for both our franchisees and The Joint as a public company. We have created a robust framework for the refranchising effort, organizing clinics into clusters, and generating comprehensive disclosure packets for marketing efficiency. We had given initial preference to existing franchisees and, in the third quarter of 2024, we 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. During the first quarter of 2025, we received draft letters of intent (“LOIs”) for our full portfolio of company-owned or managed clinics. During the second quarter of 2025, we refranchised 37 clinics. During the third quarter of 2025, we refranchised one clinic and we continue to remain actively engaged in refranchising the balance of the corporate portfolio. The largest cluster remaining in the corporate portfolio is the Southern California region.
Current wording
Our current strategy is to grow through the sale and development of additional franchises. After evaluating options for improvement, during 2023, our Board of Directors 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, we expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped primarily by geographic location. This refined strategy will leverage our greatest strength – our capacity to build a franchise – to drive long-term growth for both our franchisees and The Joint as a public company. During the first quarter of 2025, we received draft letters of intent (“LOIs”) for our full portfolio of company-owned or managed clinics. During the second quarter of 2025, we refranchised 37 clinics and during the third quarter of 2025, we refranchised one clinic.
Previous wording
On December 5, 2025, we entered into an Asset Purchase Agreement with Addisco Value, LLC, a North Carolina limited liability company, Triangle Chiropractic Associates P.C., a North Carolina professional corporation, and Bluffton TJ, LLC, a South Carolina limited liability company, collectively as buyers, pursuant to which we will sell the assets of, and grant franchise rights to, 22 company-owned or managed clinics located in Virginia, North Carolina and South Carolina for an aggregate purchase price of approximately $1.5 million, subject to certain adjustments. In mid-December 2025, the buyers assumed business operations under Management Service Agreements that will remain in effect until lease reassignments are completed to permit ownership transfer. During the quarter ended June 30, 2026, we closed on the sale of one clinic included in the transaction. As of June 30, 2026, the transaction as a whole had not officially closed and therefore, the net assets and liabilities of the remaining clinics remain in our consolidated balance sheets.
Current wording
On December 5, 2025, we entered into an Asset Purchase Agreement with Addisco Value, LLC, a North Carolina limited liability company, Triangle Chiropractic Associates P.C., a North Carolina professional corporation, and Bluffton TJ, LLC, a South Carolina limited liability company, collectively as buyers, pursuant to which we will sell the assets of, and grant franchise rights to, 22 company-owned or managed clinics located in Virginia, North Carolina and South Carolina for an aggregate purchase price of approximately $1.5 million, subject to certain adjustments. In mid-December 2025, the buyers assumed business operations under MSAs that will remain in effect until lease reassignments are completed to permit ownership transfer. During the quarter ended June 30, 2026, we closed on the sale of one clinic included in the transaction. During the quarter ended September 30, 2026, we closed on the sale of nine clinics included in the transaction. As of September 30, 2026, the transaction as a whole had not officially closed and therefore, the net assets and liabilities of the remaining clinics remain in our consolidated balance sheets.
Previous wording
On April 20, 2026, we entered into the Elite Chiro Group Purchase Agreement with Elite Chiro Group, pursuant to which we will sell to Elite Chiro Group the assets of, and grant franchise rights to, 45 company-owned or managed clinics located in Southern California for an aggregate purchase price of $2.3 million, subject to certain adjustments. The Purchase Price includes prorated franchise fees pursuant to 45 separate franchise agreements to be entered into between us and Elite Chiro Group and the non-exclusive development rights for 10 clinics to be developed in the metropolitan statistical areas of a development area to be agreed upon by us and Elite Chiro Group in accordance with the schedule set forth in the Elite Chiro Group Purchase Agreement. The closing of each clinic as part of the Elite Chiro Group Transaction is expressly conditioned upon the assignment of the existing lease for such clinic. On April 27, 2026, we closed on the sale of 13 clinics included in the Elite Chiro Group Transaction, at which time ownership of such clinics transferred to Elite Chiro Group. On April 27, 2026, Elite Chiro Group also assumed business operations for the remaining 32 clinics included in the Elite Chiro Group Transaction pursuant to a Management Service Agreement. During the quarter ended June 30, 2026, we closed on the sale of 15 additional clinics included in the Elite Chiro Group Transaction. As of June 30, 2026, the Elite Chiro Group Transaction as a whole had not officially closed and therefore, the net assets and liabilities of the remaining clinics remain in our consolidated balance sheets.
Current wording
On April 20, 2026, we entered into the Elite Chiro Group Purchase Agreement with Elite Chiro Group, pursuant to which we will sell to Elite Chiro Group the assets of, and grant franchise rights to, 45 company-owned or managed clinics located in Southern California for an aggregate purchase price of $2.3 million, subject to certain adjustments. The Purchase Price includes prorated franchise fees pursuant to 45 separate franchise agreements to be entered into between us and Elite Chiro Group and the non-exclusive development rights for 10 clinics to be developed in the metropolitan statistical areas of a development area to be agreed upon by us and Elite Chiro Group in accordance with the schedule set forth in the Elite Chiro Group Purchase Agreement. The closing of each clinic as part of the Elite Chiro Group Transaction is expressly conditioned upon the assignment of the existing lease for such clinic. On April 27, 2026, we closed on the sale of 13 clinics included in the Elite Chiro Group Transaction, at which time ownership of such clinics transferred to Elite Chiro Group. On April 27, 2026, Elite Chiro Group also assumed business operations for the remaining 32 clinics included in the Elite Chiro Group Transaction pursuant to an MSA. During the quarter ended June 30, 2026, we closed on the sale of 15 additional clinics included in the Elite Chiro Group Transaction. During the quarter ended September 30, 2026, we closed on the sale of 12 additional clinics included in the Elite Chiro Group Transaction. As of September 30, 2026, the Elite Chiro Group Transaction as a whole had not officially closed and therefore, the net assets and liabilities of the remaining clinics remain in our consolidated balance sheets.
Previous wording
On June 28, 2026, we entered into an Asset Purchase Agreement with Vigeo, LLC (“Vigeo APA”), a California limited liability company, as buyer, pursuant to which we will sell the assets of, and grant franchise rights to, four company-owned or managed clinics located in Northern California for an aggregate purchase price of $400 thousand. Pursuant to the Vigeo APA, the buyer will pay $150 thousand of the purchase price as a down payment upon the close of the Vigeo APA, and will pay the remaining balance of the purchase price pursuant to separate promissory notes and corresponding security agreements. The closing of each clinic as part of the transaction is expressly conditioned upon the assignment of the existing lease for such clinic.
Current wording
On June 28, 2026, we entered into an Asset Purchase Agreement (the “Vigeo Purchase Agreement”) with Vigeo, LLC, a California limited liability company (“Vigeo”), as buyer, pursuant to which we will sell the assets of, and grant franchise rights to, four company-owned or managed clinics located in Northern California for an aggregate purchase price of $400 thousand. Pursuant to the Vigeo Purchase Agreement, Vigeo paid $113 thousand of the purchase price as a down payment upon the close of the transaction under the Vigeo Purchase Agreement and will pay the remaining balance of the purchase price pursuant to separate promissory notes and corresponding security agreements. As of September 30, 2026, we have closed on the sale of the four company-owned or managed clinics included in the Vigeo Purchase Agreement and have recorded a $287 thousand note receivable that will be paid in full upon the maturity date of October 1, 2028.
Previous wording
Our goal will be to generate significant processes that will provide us with value creating capital allocation opportunities. 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 development territories, certain merger or acquisition opportunities and/or additional stock repurchase programs.
Current wording
Our goal will be to generate significant proceeds that will provide us with value creating capital allocation opportunities. 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 development territories, certain merger or acquisition opportunities and/or additional stock repurchase programs.
Previous wording
The number of franchise licenses sold for the second quarter of 2026 was 10, compared with 13 licenses sold for the second quarter of 2025. We ended the second quarter of 2026 with 11 regional developers. 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.
Current wording
The number of franchise licenses sold for the third quarter of 2026 was one, compared with 13 licenses sold for the third quarter of 2025. We ended the third quarter of 2026 with 11 regional developers who were responsible for one, or 9%, of the 11 licenses sold during the year. 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 and will continue to evaluate opportunities to bring regional development territories under our direct structure as we advance our long-term growth strategy and expands access to chiropractic care in communities nationwide.
Previous wording
In addition, although lowered slightly in recent months, 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. These and other uncertainties with respect to these recent events could result in changes to our current expectations.
Current wording
In addition, the expectation that interest rates will 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. These and other uncertainties with respect to these recent events could result in changes to our current expectations.
Previous wording
During the first half of 2026, we repurchased 219,293 shares of our common stock for approximately $1.8 million. Shares repurchased during the first half of 2026 represented 1.6% of outstanding common stock at December 31, 2025. All shares of common stock that were repurchased are held as treasury stock. As of June 30, 2026, we had a remaining $3.8 million authorized for repurchasing shares of our common stock under the 2025 SRP.
Current wording
During the nine months ended September 30, 2026, we repurchased 680,057 shares of our common stock for approximately $5.6 million. Shares repurchased during the nine months ended September 30, 2026 represented 4.8% of outstanding common stock at December 31, 2025. All shares of common stock that were repurchased are held as treasury stock. As of September 30, 2026, we had exhausted the amount authorized for repurchasing shares of our common stock under the 2025 SRP.
Previous wording
Our operating results may fluctuate significantly as a result of a variety of factors, including the timing of new clinic sales, openings, closures, markets in which they are contained and related expenses, general economic conditions, cost inflation, labor shortages, consumer confidence in the economy, consumer preferences, competitive factors, and disease epidemics and other health-related concerns.
Current wording
Our operating results may fluctuate significantly as a result of a variety of factors, including the timing of new clinic sales, openings, closures, markets in which they are contained and related expenses, general economic conditions, cost inflation, labor shortages, elevated gas prices, consumer confidence in the economy, consumer preferences, competitive factors, and disease epidemics and other health-related concerns.
Previous wording
The following discussion and analysis of our financial results encompasses the results of our Franchise Operations business segment for the three and six months ended June 30, 2026, compared with the three and six months ended June 30, 2025. All financial results and metrics discussed below are on a continuing operations basis.
Current wording
The following discussion and analysis of our financial results encompasses the results of our Franchise Operations business segment for the three and nine months ended September 30, 2026, compared with the three and nine months ended September 30, 2025. All financial results and metrics discussed below are on a continuing operations basis.
Previous wording
Total revenues increased by $1.9 million, primarily due to the continued expansion and revenue growth of our franchise base and included:
Current wording
Total revenues increased by $0.2 million, primarily due to the continued expansion and revenue growth of our franchise base and included:
Previous wording
•Royalty fees and IT-related income and software fees increased due to an increase in the number of franchised clinics in operation during the current period. As of June 30, 2026 and 2025, there were 896 and 885 franchised clinics in operation, respectively.
Current wording
•Royalty fees, software fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during the current period. As of September 30, 2026 and 2025, there were 915 and 884 franchised clinics in operation, respectively.
Previous wording
Total revenues increased by $3.7 million, primarily due to the continued expansion and revenue growth of our franchise base and included:
Current wording
Total revenues increased by $3.8 million, primarily due to the continued expansion and revenue growth of our franchise base and included:
Previous wording
•Royalty fees and IT-related income and software fees increased due to an increase in the number of franchised clinics in operation during the current period.
Current wording
•Royalty fees and software fees increased due to an increase in the number of franchised clinics in operation during the current period.
Previous wording
•Franchise fees increased primarily due to the impact of accelerated revenue recognition resulting from terminated franchise license agreements and related fees, with 36 and 32 franchise license agreements terminated during the six months ended June 30, 2026 and 2025, respectively.
Current wording
•Franchise fees increased primarily due to the impact of accelerated revenue recognition resulting from terminated franchise license agreements and related fees, with 38 and 30 franchise license agreements terminated during the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
•Advertising fund revenue increased due to additional funds contributed to the National Marketing Fund by our franchisees, in addition to the historical 2% of gross sales, that initiated in the fourth quarter of 2025.
Current wording
•Advertising fund revenue increased due to additional funds contributed to the National Marketing Fund by our franchisees, in addition to the historical 2% of gross sales, that initiated in the fourth quarter of 2025 and continued through the second quarter of 2026.
Previous wording
For the three and six months ended June 30, 2026, as compared with the three and six months ended June 30, 2025, the total cost of revenues decreased primarily due to a reduction in regional developer royalties driven by the five regional developer territory rights acquired since June 30, 2025.
Current wording
For the three and nine months ended September 30, 2026, as compared with the three and nine months ended September 30, 2025, the total cost of revenues decreased primarily due to a reduction in regional developer royalties driven by the five regional developer territory rights acquired on or after June 30, 2025.
Previous wording
For the three and six months ended June 30, 2026, as compared with the three and six months ended June 30, 2025, selling and marketing expenses increased due to an increase in expenses associated with our national marketing campaign efforts, which began late in the fourth quarter of 2025.
Current wording
For the nine months ended September 30, 2026, as compared with the nine months ended September 30, 2025, selling and marketing expenses increased due to an increase in expenses associated with our national marketing campaign efforts, which began late in the fourth quarter of 2025.
Previous wording
For the six months ended June 30, 2026, as compared with the six months ended June 30, 2025, general and administrative expenses decreased primarily due to a decrease in payroll and other employee compensation expenses including workers' compensation insurance driven by additional progress in our refranchising strategy, mostly offset by an increase in professional services, litigation and acquisition-related expenses. As a percentage of revenue, general and administrative expenses during the six months ended June 30, 2026 and 2025 were 50% and 56%, respectively.
Current wording
For the three months ended September 30, 2026, as compared with the three months ended September 30, 2025, general and administrative expenses decreased primarily due to a decrease in payroll and other employee compensation expenses including workers' compensation insurance driven by additional progress in our refranchising strategy and decreases in severance expense. As a percentage of revenue, general and administrative expenses during the three months ended September 30, 2026 and 2025 were 51% and 55%, respectively.
Previous wording
For the three months ended June 30, 2026, as compared with the three months ended June 30, 2025, general and administrative expenses decreased primarily due to a decrease in payroll and other employee compensation expenses including workers' compensation insurance driven by additional progress in our refranchising strategy, partially offset by an increase in professional services, litigation and acquisition-related expenses. As a percentage of revenue, general and administrative expenses during the three months ended June 30, 2026 and 2025 were 50% and 58%, respectively.
Current wording
For the nine months ended September 30, 2026, as compared with the nine months ended September 30, 2025, general and administrative expenses decreased primarily due to a decrease in payroll and other employee compensation expenses including workers' compensation insurance driven by additional progress in our refranchising strategy, partially offset by an increase in professional services, litigation and acquisition-related expenses. As a percentage of revenue, general and administrative expenses during the nine months ended September 30, 2026 and 2025 were 49% and 55%, respectively.
Previous wording
Included in general and administrative expenses from continuing operations above are expenses of $0.3 million and $0.5 million related to workers’ compensation insurance for the six months ended June 30, 2026 and 2025, respectively, of which we believe that approximately $0.3 million and $0.4 million, respectively, relate to expenses that will not be incurred upon the completion of our refranchising strategy.
Current wording
Included in general and administrative expenses from continuing operations above are expenses of $0.9 million related to workers’ compensation insurance for the nine months ended September 30, 2025, of which we believe that approximately $0.8 million relate to expenses that will not be incurred upon the completion of our refranchising strategy.
Previous wording
For the six months ended June 30, 2026, as compared with the six months ended June 30, 2025, other income increased primarily due to the reversal of a liability related to the employee retention credit funds we received from the Internal Revenue Service in 2023.
Current wording
For the nine months ended September 30, 2026, as compared with the nine months ended September 30, 2025, other income increased primarily due to the reversal of a liability related to the employee retention credit funds we received from the Internal Revenue Service in 2023.
Previous wording
Income tax expense decreased during the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, primarily due to a decrease in estimated state income taxes.
Current wording
Income tax expense decreased during the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, primarily due to a decrease in estimated state income taxes.
Previous wording
The table below reconcile net (loss) income to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025:
Current wording
The tables below reconcile net (loss) income to Adjusted EBITDA for the three and nine months ended September 30, 2026 and 2025:
Previous wording
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 (consisting of non-recurring refranchising costs of all company-owned or managed clinics and non-recurring expenses related to changes to our senior leadership team), and litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the normal course of our business). We have provided Adjusted EBITDA, a non-GAAP measure of financial performance, because it is commonly used for comparing companies in our industry. You should not consider Adjusted EBITDA as a substitute for operating profit as an indicator of our operating performance or as an alternative to cash flows from operating activities as a measure of liquidity. We may calculate Adjusted EBITDA differently from other companies.
Current wording
Adjusted EBITDA from continuing operations consists of net income (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 (consisting of non-recurring refranchising costs of all company-owned or managed clinics and non-recurring expenses related to changes to our senior leadership team), and litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the normal course of our business). We have provided Adjusted EBITDA, a non-GAAP measure of financial performance, because it is commonly used for comparing companies in our industry. You should not consider Adjusted EBITDA as a substitute for operating profit as an indicator of our operating performance or as an alternative to cash flows from operating activities as a measure of liquidity. We may calculate Adjusted EBITDA differently from other companies.
Previous wording
As of June 30, 2026, we had unrestricted cash and short-term bank deposits of $22.2 million. We generated $0.7 million of cash flow from operating activities from both continuing and discontinued operations in the six months ended June 30, 2026. While unfavorable global economic or political conditions create potential liquidity risks, as discussed further below, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our line of credit will be sufficient to fund our anticipated operating and investment needs for at least the next 12 months.
Current wording
As of September 30, 2026, we had unrestricted cash and short-term bank deposits of $18.3 million. We generated $0.6 million of cash flow from operating activities from both continuing and discontinued operations in the nine months ended September 30, 2026. Subsequent to quarter end, on October 1, 2026, we paid $8.0 million in cash under the Texas Purchase Agreement described in Note 13, Subsequent Events, and we may pay up to an additional $2.0 million contingent on annual gross sales metrics in the two annual periods beginning September 1, 2026, split evenly between the two years. While unfavorable global economic or political conditions create potential liquidity risks, as discussed further below, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our line of credit will be sufficient to fund our anticipated operating and investment needs for at least the next 12 months.
Previous wording
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, elevated gas prices and other factors have created uncertainty as to general economic conditions for the remainder of 2026, as of the date of this Quarterly Report on Form 10-Q, we believe that 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. For the remainder of 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. 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. If the equity and credit markets deteriorate, including as a result of economic weakness, political unrest or war, or any other reason, it may make any necessary equity or debt financing more difficult to obtain in a timely manner and on favorable terms, if at all, and if obtained, it may be more costly or more dilutive. 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 the remainder of 2026 may be impacted. There can be no assurance that we will be able to generate sufficient cash flows or obtain the capital necessary to meet our short and long-term capital requirements.
Current wording
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, labor shortages, elevated gas prices and other factors have created uncertainty as to general economic conditions for the remainder of 2026, as of the date of this Quarterly Report on Form 10-Q, we believe that 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. For the remainder of 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. 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. If the equity and credit markets deteriorate, including as a result of economic weakness, political unrest or war, or any other reason, it may make any necessary equity or debt financing more difficult to obtain in a timely manner and on favorable terms, if at all, and if obtained, it may be more costly or more dilutive. 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 the remainder of 2026 may be impacted. There can be no assurance that we will be able to generate sufficient cash flows or obtain the capital necessary to meet our short and long-term capital requirements.
Previous wording
Net cash provided by operating activities for both continuing and discontinued operations increased by $3.5 million to $0.7 million for the six months ended June 30, 2026, compared to net cash used in operating activities of $2.8 million for the six months ended June 30, 2025. The increase in net cash used in operating activities was primarily attributable to a change in accrued expenses of $3.9 million primarily related to the settlement of a medical injury claim during the first quarter of 2025, which was partially offset by a related change in accounts receivable of $1.0 million for insurance recoveries, a change in payroll liabilities of $1.1 million related to the increased payout of our annual bonuses, a change in prepaid expenses and other current assets of $0.9 million related to lower insurance premiums due to fewer company-owned or managed clinics in 2026 as compared to 2025, and a change in other liabilities related to our asset purchase agreements that are pending final closure.
Current wording
Net cash provided by operating activities for both continuing and discontinued operations increased by $1.6 million to $0.6 million for the nine months ended September 30, 2026, compared to net cash used in operating activities of $1.1 million for the nine months ended September 30, 2025. The increase in net cash provided by operating activities was primarily attributable to a change in accrued expenses of $2.2 million primarily related to a settlement payment of a medical injury claim during the first quarter of 2025 which was partially offset by a settlement payment of a employment matter during the third quarter of 2026 and a $1.7 million change in operating leases driven by the continued disposition of our corporate-owned or managed clinics and their related lease obligations as well as rent concessions during the first quarter of 2026 for our corporate headquarters. The increases in net cash provided by operating activities above were partially offset by a change in accounts receivable of $1.2 million due primarily to insurance recoveries received during the first quarter of 2025 and a change in payroll liabilities of $1.0 million related to the increased payout of our annual bonuses.
Previous wording
Net cash provided by investing activities was $0.7 million for the six months ended June 30, 2026, compared to net cash provided by investing activities of $6.9 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, this included proceeds from sales of clinics of $1.2 million, partially offset by purchases of property and equipment of $0.5 million. For the six months ended June 30, 2025, this included proceeds from sales of clinics of $7.8 million, partially offset by purchases of property and equipment of $0.8 million.
Current wording
Net cash provided by investing activities was $0.6 million for the nine months ended September 30, 2026, compared to net cash provided by investing activities of $6.6 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, this included proceeds from sales of clinics of $1.4 million, partially offset by purchases of property and equipment of $0.9 million. For the nine months ended September 30, 2025, this included proceeds from sales of clinics of $7.8 million, partially offset by purchases of property and equipment of $1.2 million.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2026 was $1.9 million, compared to net cash provided by financing activities of $0.9 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, net cash used in financing activities primarily included $1.8 million of common stock purchases under the 2025 SRP. For the six months ended June 30, 2025, net cash provided by financing activities included cash receipts from stock option exercises of $0.9 million.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2026 was $5.7 million, compared to net cash used in financing activities of $0.8 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, net cash used in financing activities primarily included $5.6 million of common stock purchases under the 2025 SRP. For the nine months ended September 30, 2025, net cash used in financing activities included $2.3 million of common stock purchases under the 2025 SRP, partially offset by cash receipts from stock option exercises of $1.5 million.
Previous wording
As discussed in the “Significant Events and/or Recent Developments” section of this MD&A, our Board of Directors approved the 2025 SRP to repurchase up to $17.0 million of our common stock. During the six months ended June 30, 2026, we repurchased 219,293 shares under the 2025 SRP. Refer to the “Significant Events and/or Recent Developments” section above for more information and Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" of this Quarterly Report on Form 10-Q for our monthly repurchase activity during the three months ended June 30, 2026.
Current wording
As discussed in the “Significant Events and/or Recent Developments” section of this MD&A, our Board of Directors approved the 2025 SRP to repurchase up to $17.0 million of our common stock. During the nine months ended September 30, 2026, we repurchased 680,057 shares under the 2025 SRP. Refer to the “Significant Events and/or Recent Developments” section above for more information and Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10-Q for our monthly repurchase activity during the three months ended September 30, 2026.
Previous wording
During the six months ended June 30, 2026, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
Current wording
During the nine months ended September 30, 2026, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•Franchise fees decreased primarily due to a lower impact of accelerated revenue recognition resulting from terminated franchise license agreements and related fees, with five and 12 franchise license agreements terminated during the three months ended September 30, 2026 and 2025, respectively.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
•Advertising fund revenue increased due to additional funds contributed to the National Marketing Fund by our franchisees, in addition to the historical 2% of gross sales, that initiated in the fourth quarter of 2025.
Previous report — wording carried elsewhere
•Other revenues increased primarily due to an increase in sponsorship revenue related to our annual conference held in April 2026.